10-K

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                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C. 20549
                                    FORM 10-K

[X]     Annual report pursuant to Section 13 or 15(d) of the Securities Exchange
        Act of 1934 for the fiscal year ended September 30, 2000, or

[ ]     Transition report pursuant to Section 13 or 15(d) of the Securities
        Exchange Act of 1934 for the transition period from
        ___________ to ____________.

COMMISSION FILE NO. 0-31020

                           GENEVA STEEL HOLDINGS CORP.
               (Exact name of Registrant as specified in charter)

                                                      
            DELAWARE                                         87-0665504
  (State or other jurisdiction                            (I.R.S. Employer
      of incorporation or                                Identification No.)
         organization)

      10 SOUTH GENEVA ROAD
         VINEYARD, UTAH                                         84058
(Address of principal executive                              (Zip Code)
            office)



       Registrant's telephone number, including area code: (801) 227-9000

        Securities registered pursuant to Section 12(b) of the Act: NONE

               Securities registered pursuant to Section 12(g) of
                     the Act: COMMON STOCK, PAR VALUE $0.01


        Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

        Yes [X] No [ ]

        Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein, and will not be contained,
to the best of the Registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]

        The aggregate market value of the voting common stock held by
non-affiliates of the registrant was approximately $22,400,000 on January 9,
2001, computed at the last price for the registrant's common stock as reported
by Nasdaq for that date. As of January 3, 2001, the registrant had 6,760,659
shares of its common stock outstanding.

        Indicate by checkmark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934, as amended, subsequent to the distribution of securities
under a plan confirmed by a court.

        Yes [X] No [ ]

                       DOCUMENTS INCORPORATED BY REFERENCE

        Parts of the Registrant's Annual Report to Shareholders for the fiscal
year ended September 30, 2000, are incorporated by reference in Parts II and IV
of this report.


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                                     PART I

ITEM 1. BUSINESS.

CAUTIONARY STATEMENT ABOUT FORWARD-LOOKING INFORMATION

        This report includes certain statements that may be deemed to be
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. All statements, other than statements of historical facts, included
in this report that address activities, events, or developments that the Company
expects, projects, believes, or anticipates will or may occur in the future,
including such matters as raw materials availability, the Company's ability to
compete against imports, the effect of imports and trade cases on the domestic
market, the Company's ability to improve and optimize operations, the Company's
ability to compete with the additional production capacity being added in the
domestic market, the Company's expectation that prices and shipments will
improve, the level of future required capital expenditures, the effect of
inflation, and any other statements in this report to the effect that the
Company "believes," "expects," "anticipates," "plans," or other similar
expressions are forward-looking statements. These statements are based on
certain assumptions and analyses made by management of the Company in light of
its experience and its perception of historical trends, current conditions,
expected future developments, and other factors it believes are appropriate in
the circumstances. Such statements are subject to a number of assumptions,
risks, and uncertainties, including those related to:

        -    competition

        -    general economic and business conditions, including changes in
             supply due to imports or new capacity and changes in demand due to
             economic conditions

        -    Company operations, including on-time delivery and customer service

        -    Company expectations and objectives

        -    prices of steel products and raw materials

        -    the business opportunities (or lack of business opportunities) that
             may be presented to and pursued by the Company

        -    changes in laws or regulations, including those affecting labor,
             employee benefits costs, and environmental and other governmental
             regulations

        -    The other factors discussed under the section titled "Certain
             Factors that Could Affect the Business and Operations of the
             Company."

        Such statements are not guarantees of future performance and actual
results or developments may differ materially and adversely from those projected
in the forward-looking statements. You should not rely on this information as an
estimate or prediction of future performance. The Company does not intend to
update any forward-looking statements, except as may occur in the regular course
of providing information in its periodic reports.

RECENT REORGANIZATION

        The Company is the successor registrant to Geneva Steel Company ("Old
Geneva"). When used herein to discuss historical business and operations, the
"Company" refers to both Geneva Steel Holdings Corp. and its predecessor, Geneva
Steel Company. Old Geneva filed a voluntary petition for relief under Chapter 11
of the United States Bankruptcy Code in the United States Bankruptcy Court for
the District of Utah, Central Division (the "Bankruptcy Court"), on February 1,
1999. On December 8, 2000, the Bankruptcy Court approved Old Geneva's plan of
reorganization and the plan was implemented on January 3, 2001,
contemporaneously with the closing of the Company's post-bankruptcy credit
facilities. These credit facilities consist of a $110 million term loan (the
"Term



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Loan") and a $125 million revolving line of credit (the "Line of Credit"). The
Term Loan is 85% guaranteed by the United States Government under the Emergency
Steel Loan Guaranty Act of 1999.

        Under the terms of the reorganization plan, Old Geneva changed its state
of domicile from Utah to Delaware, changed its form of organization from a
corporation to a limited liability company, and became a wholly-owned subsidiary
of Geneva Steel Holdings Corp. Old Geneva transferred certain real property not
used in the steel mill operations to Williams Farm Property, LLC and its iron
ore mines located in southern Utah to Iron Ore Mines, LLC, both of which are
also wholly-owned subsidiaries of Geneva Steel Holdings Corp. Old Geneva also
transferred ownership of Vineyard Iron Company and Vineyard Management Company
to Geneva Steel Holdings Corp., which made those entities wholly-owned
subsidiaries of Geneva Steel Holdings Corp.

        Under the terms of the reorganization plan approved by the Bankruptcy
Court, all rights with respect to the previously outstanding common and
preferred stock of Old Geneva were terminated. Shares of common stock of the
Company were issued to the holders of unsecured claims, which consisted
primarily of holders of $199.9 million of 9-1/2% Senior Notes due 2004,
including unpaid interest accrued prior to the bankruptcy, $140.7 million of
11-1/8% Senior Notes due 2001, including unpaid interest accrued prior to the
bankruptcy, and approximately $47 million of general unsecured debt, which
includes disputed claims. Creditors who were owed $5,000 or less will receive a
cash payment equal to 40% of their claim, and trade creditors who were owed in
excess of $5,000 could elect to receive $2,000, rather than shares of common
stock in the Company. Each holder of an allowed unsecured debt, other than
creditors electing to receive cash payments as described above, also received a
right to participate in a $25 million preferred stock rights offering by the
Company. Secured creditors of Old Geneva will be paid in full with the proceeds
of the Term Loan.

        Under the terms of an employee retention program approved by the
Bankruptcy Court, executive officers and a manager of Old Geneva received
options to purchase of 5% of the equity of the Company on a fully diluted basis.

BACKGROUND

        Geneva Steel Holdings Corp. and its subsidiaries (the "Company" or
"Geneva") owns and operates the only integrated steel mill in the western United
States and is one the larger domestic producers of flat and coiled plate
products. The steel mill and related facilities were acquired from USX
Corporation in August 1987. The Company's products, which include flat and
coiled plate, sheet, pipe and slab, are used by a wide variety of industries,
including the oil and gas, shipping and construction industries. Currently, the
Company has a total annual production capacity of approximately 2.2 million
tons.

        The properties of the Company consist primarily of an approximately
1,400-acre site near Provo, Utah, on which the steel mill and related facilities
are located, and the Company's iron ore mines, located in southern Utah. The
Company also leases a retention pond, contiguous to its steel mill, from the
State of Utah, under a lease which will expire in 2016. The pond is a
significant part of the Company's water pollution control facilities.

        The Company's facilities include four coke oven batteries, three blast
furnaces, two basic oxygen process furnaces, a continuous casting facility, a
combination continuous rolling mill and various finishing facilities. Its coke
ovens produce metallurgical coke from a blend of various grades of metallurgical
coal. Metallurgical coke is used as the principal fuel for the Company's blast
furnaces, which convert iron ore into liquid iron. Liquid iron, scrap metal, and
metallic alloys are combined and further refined in the basic oxygen process
furnaces to produce liquid steel. The liquid steel is then processed through the
continuous casting facility into steel slabs. Slabs are processed into finished
steel products (coiled and flat plate, hot rolled sheet and pipe) in the
Company's rolling and finishing mills. The Company also sells slabs to other
producers of finished steel products.

        The Company's in-line caster is among the widest in the world. The
caster, when combined with the Company's unique mill, provides significant
competitive advantages. The Company's in-line caster enhances the production
process by casting slabs to the required final product width (up to 126 inches
wide) before the slabs are directly rolled. Wide casting and direct rolling
reduces heating and handling requirements and eliminates cross rolling to obtain
final product width. The Company also produces coiled plate up to 122 inches in
width, which can be subsequently cut into flat plate.



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        The Company's wide, six-stand rolling mill is differentiated from other
mills by its ability to roll wide one-inch entry bars into finished product in a
single pass. The mill is the widest multi-stand continuous rolling mill in the
world. In contrast, other producers of wide products utilize either a single or
double stand reversing mill or a single stand reversing steckel mill to roll
entry bars, thereby requiring multiple passes. Reducing the number of passes
increases operating efficiencies, throughput, surface quality and yields, while
also reducing operating costs. The Company's modernization program was designed
to take advantage of the unique features of its rolling mill.

        The combination of the Company's caster, rolling mill and wide plate
processing capability has created an efficient production process for wide
products that few of the Company's competitors possess. These facilities enable
the Company to offer an expanded range of products; shift product mix according
to market demand; and produce wide, light-gauge plate products more efficiently
and at lower costs than many of its competitors. Although the Company's
facilities are generally suitable to its needs, the Company believes that its
facilities will continue to require significant maintenance, future
improvements, and additional modernization to remain competitive.

CAPITAL IMPROVEMENTS AND MODERNIZATION PROGRAM

        The Company has spent approximately $11 million, $8.0 million, and $13
million on capital projects during the fiscal years ended September 30, 1998,
1999, and 2000, respectively. These expenditures were made primarily in
connection with the Company's ongoing modernization and capital maintenance
efforts. Since fiscal year 1989, the Company has spent over $645 million on
plant and equipment to modernize and maintain its production facilities. The
Company's modernization program was designed to take advantage of the unique
features of the Company's rolling mill.

        The key elements of the modernization include: (i) the replacement of
the Company's open hearth furnaces with two basic oxygen process steelmaking
furnaces, improving product quality and throughput and reducing costs; (ii) the
construction of one of the widest in-line casters in the world, enabling it to
cast slabs at the desired width without cross-rolling; (iii) the completion of a
wide-plate project, positioning the Company as the only North American producer
currently offering coiled plate in widths greater than 96 inches and improving
plate production efficiencies; and (iv) the recent modernization of the
Company's rolling mill, enhancing throughput rates, quality and cost. The
Company believes its modernization efforts have reduced costs, increased
operating flexibility, broadened its product line, improved product quality, and
increased throughput rates.

        Through its modernization, the Company has improved virtually all of its
steelmaking and finishing operations. From fiscal year 1991 through the end of
fiscal year 1997, when the modernization was substantially completed, the
Company: (i) increased its annual production of liquid steel from 1.71 million
tons to 2.46 million tons, an increase of approximately 44%; (ii) increased its
annual finished tons shipped from 1.27 million tons to 2.14 million tons, an
increase of approximately 69%; and (iii) improved its annual raw steel to
finished ton yield from approximately 73% to 90%, despite a substantial product
mix shift to plate, which traditionally has a lower yield than the other
products. Certain production-related statistics since fiscal year 1997 have at
times been lower because of reduced volumes caused by poor market conditions.
Nevertheless, the Company set new production records in nearly all of its
facilities during the first calendar quarter of 1998. The Company currently
intends to construct a new walking beam furnace to reheat steel slabs as
discussed below.

        The Company has identified several large-scale capital improvement
projects that it believes could further increase its production capacity,
improve operating efficiencies and reduce costs. These include the following:

        Walking Beam Furnace. Slabs produced by the Company's caster must be
reheated prior to rolling. The Company's slab heating facilities are relatively
high cost operations and lack the capacity to heat slabs at the same rate as
they can be cast and rolled. By utilizing a combination of all the Company's
slab heating facilities, the Company has substantially, but not completely,
removed its slab heating bottleneck at higher production levels. In the long
term, the Company could greatly benefit from a walking beam furnace, at a cost
of approximately $48 million, $6.2 million of which was spent through fiscal
year 2000, that can consistently heat all its slabs, thereby eliminating the
bottleneck. The walking beam furnace will reduce costs, increase prime yields
and improve quality by enabling the Company to shut down multiple heating
facilities, and by significantly improving the temperature consistency of slabs.
In addition, the walking beam will increase the Company's capacity to produce
large coils, which are made from slabs longer than those that can be heated in
certain existing facilities. Finally, the walking beam furnace will allow the
Company to convert more scrap, secondary, and slabs into finished products.
Construction of the walking beam furnace is subject



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to the Company obtaining additional financing and generating substantial
positive cash flows. There can be no assurance that adequate capital to
construct the walking beam furnace can be obtained.

        Cokeless Ironmaking Project. The Company, through its wholly-owned
subsidiary, Vineyard Management Company, owns CPICOR ("Clean Power from
Integrated Coal/Ore Reduction") Management Company, L.L.C., a Delaware limited
liability company. CPICOR has entered into a cooperative agreement with the U.S.
Department of Energy (DOE) for the construction and demonstration of an electric
power generation and cokeless ironmaking project capable of potentially
producing 800,000 to 1.2 million tons of liquid iron per year. The cooperative
agreement provides up to $149.5 million in government cost-share funds for the
project from the U.S. Department of Energy. The two major components of the
CPICOR project are a power plant and cokeless ironmaking facility. The power
plant would likely be constructed and financed by an independent power company.
The cokeless ironmaking unit and ancillary facilities would be constructed and
financed by Vineyard Iron Company, currently a wholly owned subsidiary of the
Company.

        The Company believes that the CPICOR project could provide significant
benefit by allowing the Company to shift a large portion of its raw-material
requirements from eastern iron-ore pellets and coal to low-cost western lump
iron ore currently owned by the Company and to western coal. Under certain
circumstances, the Company may be required to repay some or all of the
government cost share funds paid to CPICOR. Project construction cannot begin
until the environmental regulatory review process is complete.

        At present, the Company anticipates using the HIsmelt cokeless
ironmaking technology for the CPICOR project. The HIsmelt technology is owned by
a subsidiary of the Rio Tinto group, HIsmelt Corporation, and has been developed
over a long period primarily in western Australia. Only a small pilot plant has
operated utilizing the technology. The Company currently intends to build a
HIsmelt unit with a smelter that is eight meters in diameter. The estimated cost
of the ironmaking unit is $250 million, and the estimated savings is expected to
exceed $15 per ton of liquid iron produced. The Company anticipates that (a) the
overall project will be managed by CPICOR, (b) Vineyard Management will manage
the ironmaking portion of the CPICOR project, and (c) Vineyard Iron will
construct and finance the ironmaking unit utilizing the government funding as
"equity." Vineyard Iron would then sell liquid iron to the Company. The Company
anticipates that the power generation plant would be constructed and financed by
a third party.

        HIsmelt Corporation has entered into a joint venture with Nucor
Corporation to build a six-meter HIsmelt unit that would have an annual capacity
of approximately 600,000 tons of liquid iron. The exact terms of the joint
venture are not known by the Company. The Company may not be able to proceed
with an eight-meter HIsmelt unit until the joint venture's six-meter unit is
completed and operational, which could require several years. The Company
remains in discussions with HIsmelt and the DOE regarding the timing of the
Company's project. Completion of the CPICOR project remains subject to several
contingencies. Ultimately, the Company may not be able to reach a satisfactory
arrangement with HIsmelt, or the DOE funding for the project could be withdrawn.
The Company could also elect to pursue a cokeless ironmaking technology other
than HIsmelt or the general parameters of the project, including the
configuration of the various elements of the project, could be changed. The
Company is currently evaluating the potential use of existing infrastructure in
connection with the project which, if possible, would significantly reduce the
overall capital cost. There can be no assurance that the Company will succeed in
its cokeless ironmaking project or that the DOE funding will actually be
provided. Nevertheless, the Company believes that the long-term benefits of this
project could be significant.

        Other Projects. Projects planned for fiscal year 2001 may include, among
others: (i) a blast furnace reline with substantial work on the associated hot
blast stoves; (ii) commencement of a stack upgrade in the coke plant; (iii)
replacement of one basic oxygen process shell; (iv) installation of high
pressure descaling pumps in the rolling mill; (v) several pipe mill upgrades;
(vi) oil/sludge handling upgrades in the rolling mill; and (vii) completion of
the upgraded mill stand drives project.

        In addition, several smaller improvements and capital maintenance
projects, many of which previously were deferred because of the Company's lack
of liquidity, are planned. The Company estimates that capital expenditures
during fiscal 2001 will be approximately $60.9 million (excluding the
approximately $24.5 million expected to be spent on the walking beam furnace).
Spending on a walking beam furnace is subject to obtaining appropriate
financing.



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        The Company estimates that its capital budgets in fiscal years 2002
through 2005 will be approximately $50 million per year (excluding walking beam
furnace expenditures). Because liquidity concerns have required the Company to
defer many needed capital projects during the past several years, the Company
believes that it would be difficult to reduce capital spending in future years
substantially below the amounts budgeted.

        Projects under consideration for future capital budgets include, among
others: (i) roll shop upgrades; (ii) a new 126" line leveler; (iii) caster
modifications; (iv) additional pipe mill upgrades; (v) installation of an
additional temper mill; (vi) the automation of the plate finishing line; (vii)
the installation of a shape meter; and (viii) the possible installation of an
electric arc furnace. These projects may or may not be included in future
capital budgets, including the budgets discussed above.

        The Company's capital plans are under continuous review, and, depending
on market, operational, liquidity and other factors, the Company may elect to
adjust the design, timing and budgeted expenditures of its capital plans and
will likely reduce its budgeted capital expenditures for fiscal year 2001. There
can be no assurance that the projected benefits of capital projects will be
fully achieved, sufficient product demand will exist for any additional
throughput capacity, or that the planned capital projects can be completed in a
timely manner or for the amounts budgeted. Notwithstanding the completion of
many capital projects, management believes that additional capital projects will
be critical to the Company's long-term ability to compete and maintain existing
operations.

PRODUCTS

        The Company's principal steel products are coiled and flat plate,
hot-rolled sheet, pipe and slabs. The Company's 132-inch combination continuous
rolling mill has the flexibility to roll either sheet or plate in response to
customer demands and changing market conditions. This flexibility maximizes the
utilization of the Company's facilities. Generally, the Company manufactures
products in response to specific customer orders. Consistent with the Company's
strategic objectives, plate as a percentage of shipments through 1999 has
increased as the modernization program has been completed and various upgrades
to plate processing and finishing equipment have been integrated into the
production process. The Company's product sales mix (including secondary
products) in tons shipped for fiscal years 1996 through 2000 is shown below
(tons in thousands):



                                           1996          1997           1998          1999          2000
                                          -------       -------        -------       -------       -------
                                                                                    
Cut-to-Length Plate                           836           881          1,189           591           568

Sheet                                         720           720            425           306           992

Pipe                                          112           169            178            94           160

Slab                                          477           365            211           109           192
                                          -------       -------        -------       -------       -------

Total                                       2,145         2,135          2,003         1,100         1,912
                                          =======       =======        =======       =======       =======



        Coiled and Flat Plate. The Company produces plate products which consist
of hot rolled carbon and high-strength low alloy steel plate in coil form,
cut-to-length from coil and flat rolled in widths varying from 42 to 122 inches
and in thicknesses varying from .1875 to 3.5 of an inch. Coiled plate can be
used for such applications as spiral-welded pipe, electric resistance welded
pipe and steel tubing. Coiled plate, once cut-to-length, and flat plate can be
used for heavy steel structures such as storage tanks, railroad cars, ships,
barges, and bridges.

        Sheet. The Company produces hot-rolled sheet steel which is sold in
sheet or coil form in thicknesses of .083 to .187 of an inch and widths of 40 to
74 inches. Maximum widths vary according to thickness. Included in the sheet
products made by the Company are cut-to-length sheet and hot-rolled bands. Sheet
is used in a variety of applications such as storage tanks, light structural
components and supports, trailers, and welded tubing.



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        Pipe. The Company produces electric resistance welded pipe ranging from
approximately 8 to 16 inches in diameter. Electric resistance welded pipe is
manufactured by heating and fusing the edges of the steel coil to form the pipe.
The Company's electric resistance welded pipe is used primarily in pipelines,
including natural gas and oil transmission and distribution systems, and in
standard and structural pipe applications.

        Slab and Non-Steel. The Company sells steel slabs as a means of
maximizing production through the continuous caster. The Company also sells
various by-products resulting from its steelmaking activities.

MARKETING; PRINCIPAL CUSTOMERS

        The Company has historically sold its plate and sheet products primarily
to steel service centers and distributors, which in recent years have become one
of the largest customer groups in the domestic steel industry. Service centers
and distributors accounted for approximately 65% of the Company's finished
product sales (excluding slabs) during fiscal year 2000. The Company also sells
its products to steel processors and various end-users, including manufacturers
of welded tubing, highway guardrail, storage tanks, railcars, barges and
agricultural and industrial equipment. The Company has developed a broad
customer base of approximately 450 customers in 40 states, Canada and Mexico.

        The Company sells its pipe to end-users and distributors primarily in
the western and central United States, where prices and demand for pipe
fluctuate with oil and gas industry cycles, import levels and other factors.

        The Company also occasionally sells its products in the export market.
Export sales, which generally have lower margins than domestic sales, accounted
for approximately 2.6%, 0.4%, and 1.2% of its net sales during fiscal years
1998, 1999, and 2000, respectively.

        The Company's principal marketing efforts are in the western and central
United States. The Company believes that it holds a significant share of the
plate, hot-rolled sheet and pipe markets in the Western states. The Company has
focused, and will in the future continue to focus, on selectively expanding its
share of the market in other areas of the United States.

        The Company has contracted with several processors to which coiled plate
can be shipped for processing into sheared plate. Through these arrangements,
the Company has significantly increased its capacity to produce and sell sheared
plate made from coils.

        In March 2000, the Company entered into an agreement with Mannesmann
Pipe and Steel ("Mannesmann") to terminate its existing sales representation
agreement. Prior to termination, Mannesmann sold the Company's products to end
customers at the same sales price Mannesmann paid the Company, plus a variable
commission. Mannesmann paid the Company in approximately three days. In
addition, the agreement required Mannesmann to purchase and pay for the
Company's finished goods inventory as soon as it was assigned to or was
otherwise identified with a particular order. The Company was responsible for
customer credit and product quality for all steel sold through Mannesmann. The
arrangement with Mannesmann was terminated beginning July 1, 2000, with a 180
day phase out of its liquidity arrangement with Mannesmann. The Company
estimates that termination of the liquidity arrangement reduced the liquidity
otherwise available to the Company by approximately $12 million.

        On February 1, 1999, the Company installed an enterprise-wide business
system that is designed to enhance customer service by increasing on-time
deliveries through a sophisticated system that will track inventory and
determine the most cost-efficient mode of transportation to the customer. The
Company has also made several organizational changes designed to improve product
distribution and on-time delivery.

        The Company generally produces steel products in response to specific
orders. As of December 31, 2000, the Company had estimated total orders on hand
for approximately 52,000 tons compared to approximately 166,800 tons as of
December 31, 1999. See "Competition and Other Market Factors."



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EMPLOYEES; LABOR AGREEMENT

        As of November 30, 2000, the Company's workforce included approximately
1,800 full-time permanent employees, of whom approximately 16% were salaried and
approximately 84% were hourly. Its operating management personnel generally have
considerable experience in the steel industry; almost half have more than 27
years of industry experience, with most of the remaining managers ranging in
experience from 12 to 20 years. The Company's senior operating managers have an
average of approximately 25 years of industry experience.

        The Company has made significant progress in implementing its strategy
to reduce its employment costs through process redesign, workplace
restructuring, modernization and severance incentives. Since December 1997, the
Company's executive, administrative and operating staff has been reduced from
473 to 292. During the same period, the Company has also reduced its hourly
workforce by 30% to 1,510 employees.

        Substantially all of the Company's hourly employees are represented by
the United Steelworkers of America under a collective bargaining agreement. In
April 1998, the Company reached a three-year agreement with the union. The
negotiations were completed without any work interruptions or labor disruption.
In fact, the hourly workforce set several production records during the pendency
of the negotiations. The Company believes that its union contract is an
important competitive advantage. Although the wage rates under the union
contract are high by local standards and comparable to regional competitors, the
total hourly labor costs are currently below recent industry averages compiled
by the American Iron and Steel Institute. Unlike labor agreements negotiated by
many other domestic integrated steel producers, the Company's union contract
does not contain many traditional work rules, significantly limits the Company's
defined benefit pension obligations, and entitles the Company to reduce its
profit sharing obligations by an annual amount equal to a portion of its capital
expenditures. The Company did not assume any pension obligations or retiree
medical obligations owed its employees by USX Corporation and has only limited
defined benefit pension obligations under the union contract.

        As part of the Company's labor agreement, the Company and the union
reached several new understandings intended to create a cooperative partnership.
The objectives of the partnership include, among others: (i) improving
productivity, quality, and customer service; (ii) expanding employee involvement
in decision making; and (iii) creating a better work environment.

        The Company's union contract expires in accordance with its terms in
April 2001. In late 1999, the Company participated in informal discussions with
the union regarding a possible extension of the union contract, but was unable
to reach agreement on terms and conditions for such an extension. Several issues
could not be resolved at that time in a manner acceptable to the parties. The
Company intends to commence formal discussions with the union in advance of the
current expiration date of the union contract. There can be no assurance,
however, that a new labor agreement satisfactory to the Company can be reached.
The Company's operations and future profitability will be adversely affected to
the extent that it is unable to reach a new labor agreement with the union on
terms and conditions satisfactory to the Company.

RAW MATERIALS AND RELATED SERVICES

        The Company is located near major deposits of several of the principal
raw materials used to make steel, including iron ore, high volatile coal,
limestone and natural gas. The Company believes that, in certain instances, this
proximity, together with the Company's importance as a customer to suppliers of
these materials, enhances its ability to obtain competitive terms for these raw
materials. As the Company evaluates emerging technologies for the production of
iron and steel, it focuses on those technologies that will facilitate increased
utilization of resources available in the western United States.

        Iron Ore. The Company's steelmaking process can use both raw iron ore
and iron ore pellets. In recent years, the Company has used iron ore pellets
exclusively in an effort to maximize the operating efficiency of its blast
furnaces. The Company has historically purchased iron ore pellets primarily from
USX Corporation. The Company's long-term pellet agreement with USX Corporation
expired on December 31, 1999. The Company has since entered into a one-year
pellet supply contract with USX Corporation that expires on March 31, 2001, but
contains provisions for extensions of the term of the contract. Management
believes that the Company will be able to complete a longer-term pellet supply
contract with either USX Corporation or a substitute vendor prior to expiration
of its existing one-year contract with



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USX Corporation. However, there can be no assurance that such a contract can be
completed or that USX Corporation will continue to supply pellets to the
Company. If the Company's pellet supply were disrupted, the Company's operating
results would be adversely affected.

        The Company currently has iron ore deposits at mines in southern Utah.
When used, the ore has been mined by an independent contractor under claims
owned by the Company and transported by rail to the steel mill. The Company
expects future costs of recovery of ore to increase gradually as the open
reserves are depleted. Because the use of lump ore adversely affects blast
furnace productivity and increases energy costs, the Company has for several
years elected to use pellets instead of lump ore in the blast furnaces. This
practice will likely continue until new ironmaking technologies can be
implemented at the Company.

        Coal and Coke. The coke batteries operated by the Company require a
blend of various grades of metallurgical coal. The Company currently obtains
high volatile coal from a mine in western Colorado operated by Oxbow Carbon and
Minerals, Inc. ("Oxbow") under a contract that expires in March 2004. The
Company also purchases various grades of coal under short-term contracts from
sources in the eastern United States and Canada. Although the Company believes
that such coal is available from several alternative eastern suppliers, the
Company is subject to price volatility resulting from fluctuations in the spot
market. There can be no assurance that the Company's blend of coal will not
change or that its overall cost of coal will not increase.

        At times of full production, the Company purchases imported coke because
the Company's coke ovens, which were build in 1944 and are declining in
productive capacity as a result of age, cannot produce all of the Company's
metallurgical coke requirements. The ability of other domestic integrated steel
mills to produce coke is also generally decreasing, thereby increasing the
demand and the price for purchased coke in the United States at times of strong
steel demand. The Company has purchased coke from sources originating in Japan
and China. As the Company's consumption of purchased coke increases, the
Company's average cost of coke also increases.

        Energy. The Company's steel operations consume large amounts of
industrial gases, electricity and natural gas. The Company purchases oxygen,
nitrogen, and argon from three facilities located on the Company's premises. Two
of the facilities are operated by Air Liquide America Corporation ("Air
Liquide") and the third by Praxair, Inc. ("Praxair"). These facilities are
capable of providing approximately 275, 800 and 550 tons of oxygen per day under
contracts which expire in 2002, 2012, and 2006, respectively.

        The Company generates a portion of its electrical requirements using a
50 megawatt rated generator located at the steel mill and currently purchases
its remaining electrical requirements from Scottish Power under a 110 to 150
megawatt interruptible power contract expiring in February 2002. The contract
provides for fixed annual price increases through the remainder of its term.

        Natural gas is purchased at the wellhead in the Rocky Mountain region
and is transported to the steel mill by pipeline utilizing firm and
interruptible transportation contracts. The Rocky Mountain region has
substantial natural gas reserves. Given the Company's recent credit and
liquidity situation, the Company has not been able to enter into hedging
agreements for natural gas, and therefore the Company currently buys natural gas
at spot market prices. Natural gas prices are often volatile and are currently
at very high levels.

        Other. The Company's mill can be directly served by both the Burlington
Northern Santa Fe Railroad and the Union Pacific Railroad Company ("UP").
Subsequent to the merger of the UP and Southern Pacific Transportation Company,
the Company negotiated a long-term transportation contract with the UP covering
a large portion of the Company's rail transportation needs and intended to
provide a competitive rate structure.

        The Company uses scrap metal obtained from its own operations and
external sources in its steelmaking process. As the Company increases its
production volume and improves yields, management anticipates that increased
amounts of scrap will be purchased.

        The cost of the Company's raw materials, particularly energy, has been
susceptible in the past to fluctuations in price and availability and is
expected to increase over time. Worldwide competition in the steel industry has
frequently limited the ability of steel producers to raise finished product
prices to recover higher raw material costs. The



                                       9
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Company's future profitability will be adversely affected to the extent it is
unable to pass on higher raw material costs to its customers or is limited in
its access to such materials.

COMPETITION AND OTHER MARKET FACTORS

        The Company faces intense competition from both domestic and foreign
producers on the basis of price, proximity to market, quality, and service.
Furthermore, both the steel industry generally and the Company specifically face
increasing competition from producers of alternative materials such as aluminum,
composites, plastics, and concrete.

        The steel industry is cyclical in nature and highly competitive, with
overall domestic throughput capacity and competition increasing due primarily to
the construction of mini-mills and improvements in production efficiencies at
existing mills. Mini-mills primarily use ferrous scrap metal as a metallic input
and tend to serve regional markets. A number of mini-mills produce plate, coil
and pipe products that compete directly with the Company's products. A few
domestic mini-mills have been completed that produce wide plate in coil form,
thereby competing with those products produced by the Company. In addition,
other mini-mills may be constructed. The Company's operations, like those of
other steel producers, are highly sensitive to price and production volume
changes. Consequently, downward movements in price and upward movements in
production volume by competitors have had, and will continue to have, an adverse
effect on the Company's results of operations.

        The Company's competition in flat-rolled products can generally be
divided into five categories: (i) a converter of slabs located in the western
market; (ii) a mini-mill located in the western market; (iii) domestic
integrated mills located outside the western market; (iv) mini-mills located
outside the western market; and (v) imports. Many of the Company's competitors
are larger than the Company and/or have greater capital resources.

        The converter (purchaser of slabs that converts slabs to finished
products) in the western market is California Steel Industries, located in
Fontana, California. California Steel Industries produces galvanized, cold
rolled, and hot rolled bands, as well as tubular products and a limited range of
strip mill plate. California Steel Industries mill can produce approximately 1.7
million tons of finished products annually. California Steel Industries competes
directly with the Company in hot rolled bands, tubular products and strip mill
plate.

        Oregon Steel, located in Portland, Oregon, is a mini-mill located in the
western market. Oregon Steel produces flat plate, specialty plate, hot rolled
bands and tubular products. Oregon Steel competes directly with the Company in
plate products and to a lesser extent in hot rolled bands. Oregon Steel's mill
recently underwent a major modernization to increase rolling range and capacity.
The mill is capable of rolling approximately 1.2 million finished tons annually.

        Integrated steel mills located outside the western market are primarily
midwestern mills owned by large domestic steel companies (e.g., USX Corporation
and Bethlehem Steel Corporation) which are high volume producers of hot rolled
bands, plate, and sheet products such as galvanized and cold rolled steel. These
mills compete with the Company in the west to the extent that they can offer
steel products at competitive prices and are direct competitors in the
midwestern and eastern regions.

        Several mini-mills located outside the western market, including
Nucor-Hickman, Gallatin and IPSCO, Inc., compete directly with the Company for
sales of hot-rolled bands (e.g., Nucor and Gallatin) or coiled and cut-to-length
carbon plate (e.g., IPSCO). IPSCO, located in Montpelier, Iowa, competes
directly with the Company in plate products primarily in the midwestern and
southwestern markets. The IPSCO mill is capable of producing over one million
tons annually of plate products in cut-to-length or coil form.

        In June of 1998, Nucor announced plans to build a plate mill in Hertford
County, North Carolina. This mill will have an annual capacity of approximately
1.0 million tons. The Hertford mill will produce plate from .375 to 2.0 inches
in thickness and up to 120 inches in width. The mill is in the initial start-up
phase.

        IPSCO has built a mini-mill in Mobile County, Alabama, which produces
coiled plate from .090 to .750 inches in thickness and up to 96 inches in width,
along with discrete plate from .187 to 2.0 inches in thickness and up to 120
inches in width. Planned capacity is 1.3 million tons annually. IPSCO has stated
in the trade press that its new mill will be operational in early 2001.



                                       10
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        The Company also competes against several domestic producers of tubular
products located throughout the U.S., including in the west.

        Foreign competition is a significant factor in the steel industry and
has adversely affected product prices in the U.S. and tonnage sold by domestic
producers. The intensity of foreign competition is significantly affected by
fluctuations in the value of the U.S. dollar against other currencies, the level
of demand for steel in the U.S. economy relative to steel demand in foreign
economies, the effect of trade cases, and world economic conditions generally.
The U.S. is one of the most open steel markets in the world, and even the
existing minimal customs duties on steel products will be eliminated by January
1, 2004. Most foreign markets are less open than the U.S. market, allowing
foreign producers to maintain higher prices in their own markets while dumping
excess production at lower prices into the U.S. market. In addition, certain
foreign steel producers are controlled or subsidized by foreign governments
whose decisions concerning production and exports may be influenced in part by
political and social policy considerations as well as by prevailing market
conditions and profit opportunities. The Company competes in all its product
lines against foreign producers located throughout the world.

        Historically, foreign steel producers have often engaged in extremely
aggressive, and often illegal, pricing policies. Foreign dumping and subsidies
have been chronic problems in the U.S. steel industry, resulting in numerous
rounds of trade cases.

        In 1993, antidumping orders were imposed against carbon steel plate from
Taiwan and cut-to-length carbon steel plate from Belgium, Brazil, Canada,
Finland, Germany, Mexico, Poland, Romania, Spain, Sweden, and the United
Kingdom. These cases recently underwent full sunset reviews at the U.S.
International Trade Commission (ITC), and in November 2000, the ITC continued
all cases except Canada for an additional five years.

        In 1996, actions by steel producers in Russia, Ukraine, South Africa and
China prompted the Company and another domestic producer to file anti-dumping
actions with the U.S. Department of Commerce (DOC) and the ITC against those
nations. Those actions charged that steel plate was being dumped into the U.S.
market. In December 1997, those cases successfully resulted in suspension
agreements on steel plate imported into the U.S. from certain of those
countries, which reduced imports from those countries by approximately 70% and
imposed minimum price floors. These agreements will remain in effect until 2002
when they will be subject to sunset review.

        On September 30, 1998, the Company and eleven other domestic steel
producers filed anti-dumping actions against hot-rolled coiled steel imports
from Russia, Japan and Brazil. The group also filed a subsidy (countervailing
duty) case against Brazil. All cases described in this paragraph are referred to
as the "Coiled Product Cases."

        In April 1999, the DOC issued a final determination that imports of
hot-rolled coiled sheet from Japan were dumped at margins ranging from 17% to
65%. In June 1999, the ITC reached an unanimous 6-0 final determination that
imports of hot-rolled sheet from Japan caused injury to the U.S. industry. As a
result, an antidumping order was issued against imports from Japan that will
last for a minimum duration of five years. During that time, the amount of
antidumping duties due from U.S. importers of such products can vary based upon
the results of annual administrative reviews. The Company believes that the
imposition of these antidumping duties will substantially eliminate hot-rolled
sheet imports from Japan, which totaled 2.7 million tons in 1998.

        In July 1999, the DOC simultaneously issued both suspension agreements
and final antidumping duty determinations as to imports of hot-rolled sheet from
Brazil and Russia, and a suspension agreement and final countervailing duty
determination as to imports of hot-rolled sheet from Brazil. Suspension
agreements generally impose price and/or quantity restrictions on imports from
the subject country for the purpose of removing the injurious impact of dumping
and/or subsidies. These agreements are entered in lieu of potentially imposing
antidumping or countervailing duties. If a suspension agreement is violated,
final antidumping or countervailing duties supported by a final affirmative
injury determination are immediately imposed.

        The Brazilian countervailing duty suspension agreement provides for a
quantitative limitation of no more than 290,000 metric tons annually of
hot-rolled sheet from Brazil, and the Brazilian antidumping suspension agreement
provides that Brazilian hot-rolled sheet can be sold at prices no lower during
the five-year period than a reference price



                                       11
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of $327 a metric ton, ex-dock duty paid, in the U.S. market. Because the
reference price was above then current domestic prices, the agreement provided
that this price would increase as domestic prices increased above $344 per
metric ton. Given that the agreement protected the U.S. industry from the
devaluation of the Brazilian currency during the five years of the agreement,
the Company and certain other petitioners supported the suspension agreement.
Also, the DOC announced countervailing duties of approximately 7% and
antidumping duties of approximately 40% as to imports from Brazil. The ITC made
a final affirmative injury determination in August 1999. Therefore, if Brazilian
producers violate the suspension agreements, these duty amounts would be
immediately imposed.

        The suspension agreement on hot-rolled sheet from Russia provided for no
shipments for the remainder of 1999, 325,000 metric tons for 2000, 500,000
metric tons for 2001, 675,000 metric tons for 2002, and 725,000 metric tons for
2003. It also set a minimum export price of $255 per metric ton F.O.B. Russia,
which is subject to quarterly changes based on a formula relating to other
import prices. All petitioners objected to the Russian suspension agreement
because it permitted the continued importation of dumped steel from Russia.
However, the quantitative restrictions represent a significant decrease from the
3.8 million tons of hot-rolled sheet imports from Russia in 1998. In addition to
the hot-rolled sheet suspension agreement, the DOC also entered into a general
steel trade agreement with Russia, which provides for reductions in imports of
other flat-rolled steel products. Simultaneously with the announcement of these
agreements, the DOC announced final antidumping duties ranging from 57% to 157%,
and the ITC made a final affirmative injury determination in August 1999.
Therefore, if the hot-rolled sheet suspension agreement with Russia is violated
during the next five years, these duty amounts would be immediately imposed.

        The Coiled Product Cases have benefited the Company and the domestic
steel industry. This benefit was, however, significantly thwarted by other
countries that have recently substantially increased exports to the U.S. market.
These increased imports into the U.S. adversely affected hot-rolled sheet prices
and order volumes and have resulted in the recent filing of additional
hot-rolled sheet cases as discussed below.

        On February 22, 1999, five domestic steel producers filed anti-dumping
actions against cut-to-length plate imports from the Czech Republic, France,
India, Indonesia, Italy, Macedonia, Japan and South Korea. Also, countervailing
duty cases were filed against France, India, Indonesia, Italy, Macedonia and
South Korea. All cases described in this paragraph are referred to as the
"Cut-to-length Plate Cases." In April 1999, the ITC made a unanimous affirmative
preliminary injury determination with respect to all the respondent countries
except the Czech Republic and Macedonia, which were dismissed from the cases.
The DOC issued final margin determinations on December 13, 1999, ranging from 0%
to 72%. On January 19, 2000, the ITC issued a final affirmative injury
determination. Consequently, antidumping duties have been imposed. The
imposition of antidumping and countervailing duties has significantly reduced
imports from these six countries.

        On June 30, 1999, the Company and seven other petitioners filed for
Section 201 relief from welded line pipe imports, referred to as the Section 201
Case. Unlike conventional antidumping and countervailing duty cases, the relief
granted in a Section 201 case can apply to imports from all sources, rather than
only against countries named as respondents. In order for relief to be granted,
the ITC must make an affirmative injury determination, after which a remedy is
recommended by the ITC to the President. The President has the discretion to
accept the ITC's recommendation or take other action, if any. The ITC made an
affirmative injury determination by a margin of 5-1, and a remedy hearing was
held on November 10, 1999. The ITC subsequently recommended to the President
that imports be reduced by approximately 45% from 1998 levels. President
Clinton, effective March 1, 2000, instead adopted a remedy that provides that
imports to the U.S. of the subject product from any country (except Mexico and
Canada) in excess of 9,000 tons in any year will be subject to duties of 19%,
15%, and 11%, for the years 2000, 2001 and 2002, respectively. Since the
imposition of relief, imports in 2000 have been approximately 50% of 1998
levels. The 201 relief has benefited the Company allowing it to increase
production and margins on line pipe sales.

        On November 13, 2000, several U.S. steel producers filed antidumping
cases against imports of hot-rolled sheet (which includes coiled plate) from
eleven countries: Argentina, China, India, Indonesia, Kazakhstan, Netherlands,
Romania, South Africa, Taiwan, Thailand and Ukraine. Countervailing duty
(subsidy) cases were also filed against imports from Argentina, India,
Indonesia, South Africa and Thailand. The International Trade Commission made
unanimous affirmative preliminary determinations of a reasonable indication of
injury on December 28, 2000. Petitioners intend to file critical circumstance
allegations if imports from the respondent countries surge, which could result
in the imposition of duties as early as the beginning of January 2001. The
Company expects that these cases will



                                       12
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ultimately have a significant beneficial effect on the market, although there
can be no assurance as to the outcome or effect.

        The Company continues to monitor imports and may file additional trade
cases or take other trade action in the future. Existing trade laws and
regulations may, however, be inadequate to prevent the adverse impact of dumped
and/or subsidized steel imports. Moreover, the preparation and prosecution of
trade cases requires several months during which the Company and other domestic
producers must continue to suffer the adverse impact of unfairly traded imports.
There is no guarantee that domestic markets will not in the future be flooded
illegally with foreign imports of products in competition with the Company's
products. While the Company intends to oppose all such imports vigorously, there
is no guarantee that it will be successful. Consequently, such imports could
pose continuing problems for the domestic steel industry and the Company.

ENVIRONMENTAL MATTERS

        Compliance with environmental laws and regulations is a significant
factor in the Company's business. The Company is subject to federal, state and
local environmental laws and regulations concerning, among other things, air
emissions, wastewater discharge, and solid and hazardous waste disposal.

        The Company has incurred substantial capital expenditures for
environmental control facilities, including the Q-BOP furnaces, the wastewater
treatment facility, the benzene mitigation equipment, the coke oven gas
desulfurization facility and other projects. The Company has budgeted a total of
approximately $8.4 million for environmental capital improvements in fiscal
years 2001 and 2002. Environmental legislation and regulations have changed
rapidly in recent years and it is likely that the Company will be subject to
increasingly stringent environmental standards in the future. Although the
Company has budgeted capital expenditures for environmental matters, it is not
possible at this time to predict the amount of capital expenditures that may
ultimately be required to comply with all environmental laws and regulations.

        The Company accrues for losses associated with environmental remediation
obligations when such losses are probable and the amount of associated costs is
reasonably determinable. Accruals for estimated losses from environmental
remediation obligations generally are recognized no later than completion of the
engineering or feasibility study or the commitment to a formal plan of action.
These accruals may be adjusted as further information becomes available or
circumstances change. If recoveries of remediation costs from third parties are
probable, a receivable is recorded. As of September 30, 2000, the Company
determined that there were no environmental compliance or remediation
obligations requiring accruals in the financial statements.

        Under the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended ("CERCLA"), the U.S. Environmental Protection
Agency and the states have authority to impose liability on waste generators,
site owners and operators and others regardless of fault or the legality of the
original disposal activity. Other environmental laws and regulations may also
impose liability on the Company for conditions existing prior to the Company's
acquisition of the steel mill.

        At the time of the Company's acquisition of the steel mill, the Company
and USX identified certain hazardous and solid waste sites and other
environmental conditions which existed prior to the acquisition. USX has agreed
to indemnify the Company (subject to the sharing arrangements described below)
for any fines, penalties, costs (including costs of clean-up, required studies,
and reasonable attorneys' fees), or other liabilities for which the Company
becomes liable due to any environmental condition existing on the Company's real
property as of the acquisition date that is determined to be in violation of any
environmental law, is otherwise required by applicable judicial or
administrative action, or is determined to trigger civil liability (the
"Pre-existing Environmental Liabilities"). The Company has provided a similar
indemnity (but without the sharing arrangement described below) to USX for
conditions that may arise after the acquisition. Although the Company has not
completed a comprehensive analysis of the extent of the Pre-existing
Environmental Liabilities, such liabilities could be material.

        Under the acquisition agreement between the two parties, the Company and
USX agreed to share on an equal basis the first $20 million of costs incurred by
either party to satisfy any government demand for studies, closure, monitoring,
or remediation at specified waste sites or facilities or for other claims under
CERCLA or the Resource Conservation and Recovery Act. The Company is not
obligated to contribute more than $10 million for the clean-up



                                       13
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of wastes generated prior to the acquisition. The Company believes that it has
paid the full $10 million necessary to satisfy its obligations under the
cost-sharing arrangement. USX has advised the Company, however, of its position
that a portion of the amount paid by the Company may not be properly credited
against Geneva's obligations. Although the Company believes that USX's position
is without merit, there can be no assurance that this matter will be resolved
without litigation. The Company and USX have similarly had several disagreements
regarding the scope and actual application of USX's indemnification obligations.
The Company's ability to obtain indemnification from USX in the future will
depend on factors which may be beyond the Company's control and may be subject
to litigation.

        The Company's used oil reclamation system has recently come under
scrutiny by the Utah Division of Solid and Hazardous Waste ("UDSHW") and the
U.S. Environmental Protection Agency ("EPA") for certain alleged violations of
Utah's used oil regulations. These assertions are contained in a UDSHW letter
addressed to the Company and supported by an attached EPA opinion letter
addressed to UDSHW. In a separate assertion, the EPA has also indicated that the
Company may be in violation of the Oil Pollution Act of 1990. The Company
believes that its longstanding used oil reclamation process qualifies for
pertinent regulatory exemptions and intends to vigorously contest any asserted
liability by either agency. Neither agency has yet issued a Notice of Violation,
but the state of Utah has indicated its intention to do so. Potential penalties
could be significant; nevertheless, UDSHW staff have indicated that the agency
is not particularly interested in collecting a large fine but would prefer to
work with the Company to upgrade the used oil system. The Company has expressed
a willingness to work with UDSHW towards such a goal. Negotiations are ongoing.
The State can impose civil penalties of up to $10,000 per day, and the Federal
Government can impose penalties up to $25,000 per day if it is not satisfied
with the State's handling of the matter.

OTHER MATTERS

        In September 2000, Utah OSHA began an audit at the Company's plant,
which has been completed. The Company has not received the report, but
understands that the inspector will recommend some violations. Utah OSHA is also
investigating the death of an employee that occurred in the Blast Furnace area
when steel pellets were released into a rail car in which he was working. A
final report or citation has not been issued and is not expected until early
2001. Because of the preliminary nature of these proceedings, the likely outcome
of these matters cannot be assessed with any certainty.

EVENTS LEADING UP TO THE BANKRUPTCY FILING

        As a result of debt incurred primarily to finance Old Geneva's
modernization program, Old Geneva's balance sheet was highly leveraged in the
spring of 1998, when the surge in imported steel products, discussed below,
began. Old Geneva had issued $325.0 million in senior notes primarily to finance
its modernization and at September 30, 1998, had $60.8 million in outstanding
borrowings under its existing line of credit, resulting in annual interest
expense of approximately $42.5 million. In addition, at September 30, 1998, Old
Geneva had $56.9 million in redeemable preferred stock outstanding, with an
additional $25.3 million in accrued and unpaid dividends. Old Geneva's highly
leveraged balance sheet limited its financial flexibility and made it vulnerable
to market disruptions.

        COLLAPSE OF THE U.S. STEEL MARKET

        In March 1998, Old Geneva completed the modernization program it had
begun in 1989. During the second fiscal quarter, which started before the
modernization program was even complete, Old Geneva set production records in
virtually all areas. The second and third fiscal quarters of 1998 were both
profitable.

        In addition to achieving relatively positive sales and production
performance, Old Geneva, in April 1998, entered into an advantageous three-year
contract with the union representing its employees. Old Geneva had also embarked
upon a streamlining process, whereby the number of administrative, executive,
and managerial personnel were reduced without a corresponding decrease in
efficiency.

        Historically, flat and coiled plate imports had represented
approximately 16% to 25% of total U.S. consumption. Beginning in 1998, however,
the U.S. steel industry experienced an unprecedented surge in imports. During
the surge, up to 40% of domestic plate consumption was supplied by imports.
Imports similarly increased in each of Old Geneva's other product lines, and
significant unsold inventories were created. The surge in imports from various
Asian, South American, and Eastern European countries was, at least partially,
the result of depressed economies and reduced steel



                                       14
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consumption in those regions, causing foreign steel producers to increase
dramatically exports to the U.S. Many of these foreign producers sold products
into the U.S. market at illegally dumped prices.

        While a previous import surge in 1996 primarily involved only flat
plate, the 1998 surge included all of Old Geneva's products. As a result, during
fiscal 1998 and early fiscal 1999, Old Geneva's product prices and order entry
rates fell dramatically. From January 1, 1998 to February 1, 1999, overall price
realization for plate, pipe, and coil declined by $94, $95, and $92 per ton,
respectively. Even without the simultaneous reduction in volume, the peak
decline in pricing alone would have resulted in an annualized margin loss of
over $200 million. Old Geneva was forced to reduce production by approximately
50%, resulting in margin losses, higher costs per ton, and production
inefficiencies. During the year ended September 30, 1999, Old Geneva's total
shipments were approximately 1.1 million tons, as compared to 2.0 million tons
for the previous year. The combined impact of the pricing and volume declines
resulted in a significant reduction in operating results and cash flows.

        The impact of the surge of cheap imports was felt not only by Old
Geneva, but by all U.S. steel producers, resulting in substantial financial
losses. A few other U.S. steel producers also filed for Chapter 11 bankruptcy
protection.

        OPERATING LOSSES AND LOSS OF LIQUIDITY

        As a consequence of record-high levels of low-priced steel imports and
the resultant deteriorating market conditions, Old Geneva's overall price
realization and shipments declined precipitously. Old Geneva responded by
significantly decreasing production and reducing costs. Nevertheless, due to
high fixed costs, Old Geneva was not able to decrease costs sufficiently to
reflect the total amount of decreased production. As a consequence, Old Geneva
experienced significant negative cash flows.

        To preserve liquidity, Old Geneva elected not to make a $9.0 million
interest payment due in January 1999 under the terms of Old Geneva's 9.5% senior
notes. Even so, by February 1, 1999, Old Geneva had minimal cash and borrowing
ability under its existing revolving credit facility. Consequently, Old Geneva
could not be assured that it would have sufficient working capital to continue
operations. Without filing bankruptcy, Old Geneva was prohibited by the terms of
its senior indebtedness from pledging any of its fixed assets to obtain
additional financing. To continue to finance its operations, Old Geneva was thus
forced to seek protection under Chapter 11. Subsequent to filing its petition on
February 1, 1999, Old Geneva was able to obtain from Congress Financial
Corporation a debtor-in-possession revolving credit facility secured by, among
other things, accounts receivable inventory and substantially all the fixed
assets of Old Geneva. Because the Congress financial revolving credit facility
included Old Geneva's fixed assets in the borrowing base, it provided sufficient
additional liquidity to allow Old Geneva to continue operations. The Congress
financial revolving credit facility was paid off in full on the effective date
of the bankruptcy plan with proceeds from the Term Loan.

        POSTPONEMENT OF CAPITAL EXPENDITURES

        Old Geneva has previously made significant capital expenditures to
maintain and modernize facilities, increase manufacturing capacity, improve
operating efficiencies, quality, and maintain environmental compliance
Nevertheless, Old Geneva's cash constraints dictated that significant capital
projects be postponed. For example, Old Geneva's capital expenditures for the
fiscal years 1999 and 2000 were $8.0 million and $13.0 million, respectively,
compared to $47.7 million and $10.9 million in fiscal years 1997 and 1998,
respectively. Deferral of these projects has had, and will continue to have, a
negative effect on the Company's operations and its ability to remain
competitive. The Company will be required to expend significant additional
amounts for capital maintenance and capital projects in future years, including
for recently deferred projects.

MAJOR EVENTS APPROVED BY THE BANKRUPTCY COURT

        Subsequent to the filing of the bankruptcy case on February 1, 1999, Old
Geneva was required to seek approval of the bankruptcy court for decisions
regarding the continued operations of Old Geneva. The following summarizes the
major matters approved during the bankruptcy case.



                                       15
   16

        RETENTION PROGRAM

        To encourage certain key employees to remain with the Company during the
reorganization process and after emergence from bankruptcy, Old Geneva proposed,
and the bankruptcy court approved, a retention program. Under the retention
program, six executives and thirty managers became entitled to emergence
bonuses. On the date the bankruptcy plan was consummated, each participating
manager is entitled to receive a cash emergence bonus of 25% of the manager's
annual salary. Each executive is entitled to receive an emergence bonus of 50%
of such executive's annual salary, half of which will be paid in cash subsequent
to consummation of the bankruptcy plan and half will be paid in new common stock
of the Company, approximately 30 business days after the consummation of the
bankruptcy plan. Mr. Cannon's 50% bonus will be paid entirely in new common
stock. The number of shares to be issued will be determined based on the trading
price of the common stock of the Company subsequent to the consummation of the
reorganization plan. In addition to an emergence bonus, each of the six
executives were entitled to a severance payment equal to 50% of his annual
salary if terminated other than for cause prior to substantial consummation of
the bankruptcy plan and is entitled to 75% of his annual salary if terminated
other than for cause within 90 days after substantial consummation of the
bankruptcy plan (subject to a deduction equal to any amount paid as an emergence
bonus).

        SALE OF THE LARGE DIAMETER PIPE FACILITY

        At the outset of the bankruptcy case, Old Geneva owned a large diameter
pipe mill and related equipment located on its facilities in Vineyard, Utah. The
pipe mill equipment had not been operated for many years. Old Geneva had
considered upgrading and restarting the pipe mill equipment. In light of its
liquidity needs, Old Geneva sold the pipe mill equipment in fiscal 1999 to
Mitsubishi International Corporation for a purchase price of approximately $4.6
million.

        SALE OF KEIGLEY QUARRY

        At the outset of the bankruptcy case, Old Geneva owned a limestone
quarry known as the Keigley quarry from which Old Geneva obtained limestone for
iron making. Due to liquidity needs, Old Geneva elected to sell the quarry for
$10.0 million. Concurrent with the sale of the quarry, Old Geneva entered into a
long-term purchase agreement with the buyer to purchase the necessary quantities
of limestone for Old Geneva's operations.

        REJECTION OF CUPOLA LEASE

        Pursuant to a Facility and Site Lease dated May 18, 1995, with GATX,
referred to as the Cupola Lease, Old Geneva leased a plasma-fired cupola
facility. The cupola was intended to supplement Old Geneva's blast furnaces by
producing liquid iron through melting scrap metal or other metallic inputs. Old
Geneva was unable to develop a cost-effective means of incorporating the cupola
into its operations. In an effort to reduce its expenses, Old Geneva elected to
reject the Cupola Lease. Prior to the rejection of the Cupola Lease, GATX filed
a proof of claim in the amount of nearly $44 million, which represented the
gross or undiscounted unpaid rental obligations and other expenses through the
remaining seven years of the Cupola Lease. GATX subsequently filed an amended
claim and motion seeking to compel payment and for an administrative claim in
the amount of approximately $7.2 million and an unsecured claim in the amount of
approximately $30 million. On August 22, and 23, 2000, the bankruptcy court
determined that, even if GATX had an administrative claim, it had been paid in
full and that GATX's allowed unsecured claim is approximately $24.2 million.
GATX has filed a timely appeal of the decision.

        PRE-BANKRUPTCY CONTRACTS AND LEASES

        The bankruptcy court approved the assumption or rejection of a number of
contracts and leases. Leases which Old Geneva elected to continue pursuant to
the bankruptcy plan include: (i) a lease with Hewlett Packard for various
computer equipment; (ii) a lease with Mellon U.S. Leasing for various mobile
equipment; (iii) a lease with Finova Capital Corp. for the 126" cut to length
line; (iv) a retention pond leased from the State of Utah; and (v) various
leases for miscellaneous equipment.



                                       16
   17

        POST PETITION CONTRACTS AND LEASES

        The bankruptcy court approved Old Geneva's post-petition contracts with
the following parties: (i) Congress Financial (debtor-in-possession financing);
(ii) AFCO (secured post-petition insurance premium financing, 1999 and 2000);
(iii) Scottish Power (secured purchase money post-petition financing of Old
Geneva's purchase of substation equipment); (iv) Duke Energy Trading and
Marketing (new master natural gas sales and purchase agreement and release of
claims under former agreement); (v) Mitsubishi International Corporation (sale
of large diameter pipe mill, amendments to purchase agreement, and compromise of
dispute); (vi) Oldcastle, Inc. (sale of Keigley quarry property); (vii) Vineyard
Management Company, Utah Clean Coal Management Company, Air Products and
Chemicals, Inc., Centerior Power Enterprises, Inc., and First Energy Corp.
(consent and transfer agreement related to CPICOR Management); and (viii)
Citicorp USA, Inc., and/or its subsidiaries or affiliates (payment of expenses
and fees in connection with proposed exit financing). The bankruptcy plan did
not modify these contracts.

CERTAIN FACTORS THAT COULD AFFECT THE FUTURE BUSINESS AND OPERATIONS OF THE
COMPANY

        An investment in the Company involves a high degree of risk. Prospective
investors should carefully consider the following risk factors, as well as the
other information contained in this report, before investing. The list of
factors set forth below is not exhaustive. Future events and the Company's
actual results could differ materially from the events and results contemplated
by the Company.

        NO PRIOR MARKET FOR COMMON STOCK OR CLASS A CONVERTIBLE PREFERRED STOCK

        As part of the plan of reorganization of Old Geneva, a newly-created
holding company, Geneva Steel Holdings Corp., issued common stock and, upon
exercise of the rights, will issue Class A Convertible Preferred Stock. Prior to
the consummation of the plan and the rights offering, there was no public market
for either the new common stock or the new Class A Convertible Preferred Stock.
The common stock commenced trading on the Nasdaq National Market System only
after the effective date of the plan of reorganization. There can be no
assurance that an active market will develop or be sustained in the common stock
or that the trading prices to date are indicative of future trading prices.

        There currently is no public market for the Class A Convertible
Preferred Stock, and the Company does not expect to be able to list the Class A
Convertible Preferred Stock on the Nasdaq National Market System or any
securities exchange. It is anticipated the Class A Convertible Preferred Stock
will trade on the over-the-counter market, although there can be no assurance
that any market for the Class A Convertible Preferred Stock will develop. To the
extent a market for the Class A Convertible Preferred Stock develops, liquidity
and price will be subject to many factors, including the number of holders,
investor expectations of the Company, and other factors, some of which will be
beyond the Company's control.

        VALUATION OF COMMON STOCK AND CLASS A CONVERTIBLE PREFERRED STOCK

        The estimated value of the common stock and the Class A Convertible
Preferred Stock for purposes of the bankruptcy plan represented a hypothetical
value reflecting the estimated intrinsic value of the equity of the Company
derived through the application of various valuation techniques. Such analysis
likely does not represent valuation levels that may be achieved in, or assigned
by, the public markets for the common stock or Class A Convertible Preferred
Stock. There can be no assurance that either the common stock or Class A
Convertible Preferred Stock will not trade below the offering price for the
Class A Convertible Preferred Stock.

        DIVIDEND PAYMENTS MADE FROM EXPECTED CASH PROCEEDS

        The Company will lend substantially all of the net cash proceeds, if
any, from its rights offering of Class A Convertible Preferred Stock to Geneva
Steel LLC, to be used for general corporate purposes. Geneva Steel LLC will pay
the Company interest on such loan. This interest will be the primary, if not
exclusive, source of the cash for dividends to be paid by the Company on the
Class A Convertible Preferred Stock. In the event Geneva Steel LLC fails or is
not permitted under the terms of its Term Loan or revolving loan, or other
applicable legal obligations, to make interest payments on the loan, the Company
will be unable pay cash dividends on the Class A Convertible Preferred Stock.



                                       17
   18

        HIGHLY CYCLICAL INDUSTRY

        The domestic steel industry and the Company's business are highly
cyclical in nature and are sensitive to general market conditions. Integrated
steel producers like the Company have high fixed costs and need to maintain high
production levels to achieve competitive unit costs. High fixed costs motivate
steel producers to maintain high output levels even in the face of falling
prices, thereby increasing downward pressures on selling prices. This can result
in circumstances in which the costs of goods sold can exceed the revenues of the
Company. The business and profitability of the Company may be adversely affected
by these factors and others in the face of general economic or industry
downturns.

        HIGHLY COMPETITIVE INDUSTRY

        The domestic and foreign steel industries are characterized by intense
global competition with respect to price, quality, and service. Many of the
Company's competitors in flat-rolled products are larger than the Company and/or
have greater capital resources. The Company also competes against several
domestic producers of tubular products located throughout the U.S. Foreign
competition is a significant factor in the domestic steel market and has
adversely affected the volume and price of the Company's products. The Company
competes in all of its product lines against foreign producers throughout the
world. Foreign competition can be a significant factor, depending upon, among
other things, the level of domestic prices, exchange rates and foreign
subsidies. One of the principal factors leading to the Company filing for
bankruptcy protection was the collapse of the domestic steel market in 1998 and
1999, due to an unprecedented surge of imports. See "Events Leading up to the
Bankruptcy Filing" for a more detailed discussion of domestic and foreign
competitive conditions affecting the Company.

        OVERCAPACITY

        Overall consumption of steel products in the U.S. steel market has not
kept pace with the growth of the economy as a whole over the past decade. There
still exists significant excess production capacity in the domestic steel market
taking into account current import levels and capacity additions. Overcapacity
intensifies competitive pricing and results in additional pressures on capacity
utilization and profit margins.

        CAPITAL REQUIREMENTS

        The Company's business is expected to have substantial capital needs,
including future improvements and modernization projects that will require
significant capital expenditures. Several capital projects were deferred prior
to and during the pendency of the bankruptcy proceeding because of the Company's
lack of liquidity. The Company's capital expenditures for the fiscal years 1999
and 2000 were $8.0 million and $13 million, respectively. In fiscal year 2001,
the Company expects to spend over $60.9 million (excluding the approximately
$24.5 needed to complete the walking beam furnace) to modernize or maintain
facilities, increase manufacturing capacity, improve operating efficiencies, and
maintain environmental compliance. The Company believes that such improvements
and modernization projects are necessary to achieve the level of productivity
and quality of its competitors and to maintain its facilities. Deferral of these
projects has had, and will continue to have, a negative effect on the Company's
operations and its ability to remain competitive. There can be no assurance that
the Company in fact will have available cash for capital expenditures or that
the projected benefits of investment in capital actually will be achieved.

        PROCEEDS FROM RIGHTS OFFERING

        At the time the bankruptcy plan was filed, two of Old Geneva's
pre-petition unsecured creditors had agreed to purchase any Class A Convertible
Preferred Stock not subscribed for in the initial offering. One of the creditors
was released from this obligation in consideration for the creditor's
participation in the term loan and one is in litigation with the Company over
the enforceability of its obligation to back-stop the rights offering.
Accordingly, proceeds from the rights offering will very likely be less, and may
be significantly less, than $25 million. Substantially all of the proceeds from
this offering, if any, will be loaned to Geneva Steel LLC and used for general
corporate purposes, which may include additional capital expenditures such as
construction of the walking beam furnace.



                                       18
   19

        AVAILABILITY AND COST OF RAW MATERIALS

        The Company's operations require substantial amounts of raw materials,
including iron ore, iron ore pellets, coal, coke, limestone, oxygen, and
particularly natural gas and electricity. The cost of these materials has been
susceptible in the past to fluctuations in price and availability and the price
is expected to increase over time. Worldwide competition in the steel industry
has frequently limited the ability of steel producers to raise finished product
prices to recover higher raw material costs. The Company's future results will
be adversely affected to the extent it is unable to pass on higher raw material
costs to its customers or is limited in its access to such materials.

        POTENTIAL COSTS OF ENVIRONMENTAL COMPLIANCE

        Compliance with environmental laws and regulations is a significant
factor in the Company's business. The Company is subject to federal, state, and
local environmental laws and regulations concerning, among other things, air
emissions, wastewater discharge, and solid and hazardous waste disposal. There
can be no assurance that material environmental liabilities will not be incurred
by the Company in the future or that future compliance with the environmental
laws currently in effect or enacted in the future will not require changes to
the Company's current operations. Any environmental liability or obligation, or
future change in environmental laws and regulations, could have a material
adverse effect on the Company's operational results and financial condition.
Environmental laws have been enacted, and in the future may be enacted, that
create liability for past actions that were lawful at the time taken, but that
have been found to affect the environment adversely. Future expenditures needed
to comply with future laws and regulations are impossible to predict, but will
be substantial.

        DISRUPTION OF OPERATIONS

        The Company's operations can be disrupted in many ways, including
equipment failures, transportation failures, power failures, supply
interruptions, and formal or informal labor unrest. Any material disruption in
the Company's operations would have a material adverse effect on the operating
results of the Company.

        VARIABILITY OF FINANCIAL RESULTS; PRODUCTION SHUTDOWNS

        The Company's results of operations are substantially affected by
variations in shipment volume and in the realized sales prices of its products,
which in turn depend both on prevailing prices for steel and demand for
particular products. Operating results have been, and in the future will be,
affected by numerous factors, including the prices and availability of raw
materials, the demand for and prices of the Company's products, the level of
competition, the level of unutilized production capacity in the steel industry,
the mix of products sold by the Company, the timing and pricing of large orders,
and other factors. There can be no assurance that these events and circumstances
or other events or circumstances, such as seasonal factors like weather,
disruptions in the transportation or energy industries or in the Company's
industry, or an economic downturn adversely affecting the steel industry,
generally, or the Company, in particular, will not occur, any of which could
have a material adverse effect on the Company.

        RESTRICTIVE COVENANTS

        The loan from Citicorp USA, Inc. to Geneva Steel LLC, the wholly-owned
subsidiary of the Company, restricts Geneva Steel LLC's ability to incur
additional indebtedness, create liens on its properties, make capital
expenditures, loans, or advances, make distributions or pay dividends to the
Company, or make an investment in other entities. The loan agreement contains
additional restrictive covenants, including, among others, covenants restricting
the Company and its subsidiaries with respect to disposing of property and
assets, paying dividends, entering into sale-leaseback transactions, providing
guarantees, entering into transactions with affiliates, mergers and
consolidations, and the modification of certain agreements. In addition, the
loan agreement requires the Company to meet certain financial tests. These
restrictions may make it more difficult for the Company to operate in a manner
that it deems necessary or appropriate to take advantage of opportunities, to
adjust to operational difficulties or to respond to other developments.



                                       19
   20

        RECENT OPERATING LOSSES

        The Company experienced significant losses before interest, taxes,
depreciation, and amortization in the recent past. There can be no assurance
that market conditions will not be such that the Company will not continue to
experience such losses.

        DEPENDENCE ON KEY PERSONNEL

        The Company depends on the continued services of certain senior
executives. The loss of the services of such key senior executives could have a
material adverse affect on the Company's business, financial condition, and
operational results.

        UNION CONTRACT

        The Company's current union contract will expire pursuant to its terms
in April 2001. The failure to reach agreement with the union on terms and
conditions satisfactory to the Company prior to the expiration of the current
union contract could have a material adverse effect on the Company's production,
financial condition, and operational results.

        OTHER RISK FACTORS

        The foregoing does not attempt to enumerate all of the potential risks
that could affect the value of the common stock and Class A Convertible
Preferred Stock. Other risks not currently contemplated by the Company or not
currently deemed significant by the Company could arise or develop and could
have a material adverse effect on the Company, its business, and/or its
outstanding securities.

ITEM 2. PROPERTIES.

        The properties of the Company consist primarily of an approximately
1,400-acre site near Provo, Utah on which the steel mill and related facilities
are located and the Company's iron ore mines in southern Utah. The Company also
leases a retention pond, contiguous to its steel mill, from the State of Utah,
under a lease which will expire in 2016. The retention pond is a significant
part of the Company's water pollution control facilities. Although the Company's
facilities are generally suitable to its needs, the Company believes that such
facilities will continue to require future improvements and additional
modernization projects in order to remain competitive. See Item 1.
"Business--Capital Projects" and "Competition and Other Market Factors."

ITEM 3. LEGAL PROCEEDINGS.

        Old Geneva filed a voluntary petition for bankruptcy on February 1,
1999, in the United States Bankruptcy Court for the District of Utah, Central
Division, Bankruptcy Case No. 99-21130 GEC. The plan of reorganization was
approved by the Bankruptcy Court on December 8, 2000, and implemented January 3,
2001. For additional information concerning the Company's Chapter 11 bankruptcy
filing, see Item 1. "Business--Events Leading up to the Bankruptcy Filing" and
"Major Events Approved by the Bankruptcy Court."

        In addition to the matters described under Item 1.
"Business--Environmental Matters," the Company is a party to routine legal
proceedings incidental to its business. In the opinion of management, after
consultation with its legal counsel, none of the proceedings to which the
Company is currently a party, other than those related to the bankruptcy
proceeding, are expected to have a material adverse effect on the Company's
financial condition or results of operation.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.

        No matters were submitted to a vote of common or preferred security
holders during the fourth quarter of the fiscal year ended September 30, 2000.
On August 24, 2000, the disclosure statement and plan of reorganization were
approved by the Bankruptcy Court. Subsequent to the approval, ballots were
mailed to each holder of the Senior Notes for approval of the plan of
reorganization. Ballots were not sent to holders of the common or preferred
security holders, as they were not entitled to vote on the plan.



                                       20
   21

                                     PART II

ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS.

        On completion of the reorganization plan, the common stock of the
Company was approved for listing on the Nasdaq SmallCapSM System. Trading opened
on January 5, 2001, but certificates for the common stock have not yet been
delivered to the stockholders and trading has been extremely sporadic to date.
The last price for the stock on January 9, 2001, was $4.00, as reported by
Nasdaq. As a result of the lack of volume to date in the market, the reported
prices should not be taken as indicative of the value of the Company or the
price at which shares of stock could be bought or sold.

        As of January 3, 2001, the Company had 6,760,659 shares of common stock
outstanding, held by approximately 660 stockholders of record.

        The Company has not paid dividends in the past. Under the terms of its
credit facilities, the operating subsidiary of the Company, Geneva Steel, LLC,
is generally prohibited from making loans, advancing funds, or paying dividends
to the Company, except under certain limited circumstances. Consequently, it is
not anticipated that the Company will have funds available to pay any cash
dividends on the common stock in the foreseeable future. The Company is
currently conducting a rights offering with respect to up to $25 million of its
Class A Convertible Preferred Stock. Shares of preferred stock issued pursuant
to this offering will receive an annual cash dividend of 8% and an annual
dividend of 4% payable in common stock. If the Company does not have the funds
necessary to pay the cash portion of the dividend, that portion is also payable
in common stock. In addition, the Company's debt covenants may restrict its
ability to pay dividends. Such dividends are required to be paid prior to paying
any dividends with respect to the common stock.

        Prior to the bankruptcy filing, the Class A Common Stock of Old Geneva
was traded on the NYSE. Subsequent to February 1, 1999, and prior to the
confirmation of the reorganization plan, the stock was traded on the
over-the-counter Bulletin Board maintained by the National Association of
Securities Dealers. All rights in the Class A Common Stock of Old Geneva were
terminated under the reorganization plan. Set forth below is information with
respect to the historical trading prices of Old Geneva Class A Common Stock as
reported on the NYSE for the first two quarters of fiscal 1999. Prices for the
last two quarters of fiscal 1999 and fiscal year 2000 reflect Bulletin Board
quotations. Such quotations reflect interdealer prices, without retail markup,
markdown, commissions, or other adjustments and may not be indicative of actual
transactions. Since the Company has a capitalization structure different from
that of Old Geneva and the security that was previously traded no longer exists,
historical trading information for the Class A Common Stock of Old Geneva is
unrelated to the common stock of the Company that has recently been issued as
part of the reorganization plan.



        Fiscal Year Ended September 30, 1999                   HIGH                   LOW
                                                                            
           First Quarter ended December 31                 $ 1 5/16               $ 15/32
           Second Quarter ended March 31                        5/8                  7/16
           Third Quarter ended June 30                          5/8                  3/16
           Fourth Quarter ended September 30                  13/32                  7/32

        Fiscal Year Ended September 30, 2000                   HIGH                   LOW

           First Quarter ended December 31                 $  13/32               $  3/16
           Second Quarter ended March 31                          1                 13/64
           Third Quarter ended June 30                        17/32                   1/4
           Fourth Quarter ended September 30                  11/32                  1/32


ITEM 6. SELECTED FINANCIAL DATA.

        The information required by this Item is incorporated by reference from
that section of the Company's Annual Report to Shareholders for the fiscal year
ended September 30, 2000, titled "Selected Financial Data."



                                       21
   22

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.

        The information required by this Item is incorporated by reference from
that section of the Company's Annual Report to Shareholders for the fiscal year
ended September 30, 2000, titled "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.

        The information required by this item is incorporated by reference from
that section of the Company's Annual Report to Shareholders for the fiscal year
ended September 30, 2000, titled "Management's Discussion and Analysis of
Financial Condition and Results of Operations--Quantitative and Qualitative
Disclosures About Market Risk."

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.

        The information required by this Item is incorporated by reference from
the Financial Statements and Supplementary Data included in the Company's Annual
Report to Shareholders for the fiscal year ended September 30, 2000.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.

None.



                                       22
   23

                                    PART III

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.

        The following table sets forth information with respect to the executive
officers and directors of the Company.



        Name            Age                            Position
- ---------------------   -----   -------------------------------------------------------
                          
Joseph A. Cannon         51     Chairman of the Board and Chief Executive Officer

Ken C. Johnsen           42     Executive Vice-President, Secretary, General Counsel,
                                and Director

Dennis L. Wanlass        51     Vice-President, Treasurer, and Chief Financial Officer

Timothy R. Clark         36     Vice-President of Operations and Customer Services,
                                Geneva Steel, LLC

Carl E. Ramnitz          53     Vice-President of Human Resources, Geneva Steel, LLC

Murray Drabkin           72     Director

Albert Fried, Jr.        70     Director

John T. LaMacchia        59     Director

Frank T. MacInnis        54     Director

Donald R. Shepherd       64     Director

R. J. Shopf              66     Director

A. Stanley West          64     Director

Michael T. Yonker        57     Director


        The following sets forth the background of each of the Company's
executive officers and directors, including the principal occupation of those
individuals for the past five years:

        JOSEPH A. CANNON has been a director of the Company since its inception
in February 1987, and has served as Chairman of the Board of Directors from
March 1987 to the present. Mr. Cannon served as President from July 1987 to May
1991 and as Chief Executive Officer from July 1987 to July 1991. Following an
absence from July 1991 to October 1992, Mr. Cannon returned to the Company as
Chief Executive Officer and currently serves in such capacity. From February
1985 to September 1987, Mr. Cannon was engaged in the private practice of law
with Pillsbury, Madison & Sutro in its Washington, D.C. office, specializing in
environmental law. From May 1981 to February 1985, he was employed in various
capacities by and became Assistant Administrator of the Environmental Protection
Agency. As Assistant Administrator, Mr. Cannon was responsible for the
development, implementation and enforcement of federal air quality and radiation
regulations throughout the United States. Mr. Cannon currently serves s a
director of the American Iron and Steel Institute ("AISI") and as a member of
the North American Steel Council. AISI is the premier industry association for
steel companies in the United States, Canada and Mexico. He also serves on
AISI's policy and planning committee.

        KEN C. JOHNSEN has been Executive Vice-President and General Counsel
since November 1997, and has served as Secretary since February 1992. He became
a director in February 1998. He served as Vice-President and General Counsel
from November 1991 to November 1997 and as Manager of Special Projects from
February 1991 through October 1991. From 1986 to 1991, Mr. Johnsen was engaged
in the private practice of law with Parr Waddoups Brown Gee & Loveless,
specializing in corporate counseling and civil litigation. Mr. Johnsen received
his law degree from Yale Law School and a B.A. degree in Finance from Utah State
University. Mr. Johnsen serves on several AISI committees.



                                       23
   24

        DENNIS L. WANLASS has been Vice-President, Treasurer and Chief Financial
Officer of the Company since September 1989 and was Controller of the Company
from January 1988 to September 1989. Before joining the Company, Mr. Wanlass was
employed by Eastman Christensen, then a joint venture of Norton Company and
Texas Eastern, in various accounting and financial capacities. From 1970 to
1975, he was employed by KPMG, an international accounting and consulting firm.
Mr. Wanlass has a B.S. in Accounting from the University of Utah and is a
certified public accountant. Mr. Wanlass serves on the AISI finance and tax
policy committee.

        TIMOTHY R. CLARK has been Vice-President of Operations and Customer
Service since April 1999. He has been employed by the Company since 1993 in
several positions, including Vice-President of Manufacturing, Project Manager of
Plate Finishing and Shipping, Director of Corporate Communications, Director of
Delta Project and Assistant to the President. Mr. Clark obtained a B.A. from
Brigham Young University, an M.A. from the University of Utah and a Ph.D. from
Oxford University.

        CARL E. RAMNITZ has been Vice-President of Human Resources since October
1988 and was Vice-President of Human Resources and Public Affairs of the Company
from September 1987 to September 1988. Prior to joining the Company, he was
employed by USX Corporation for 18 years in various employment and labor related
capacities, most recently as Manager of Employee Relations for the Geneva Steel
plant before it was acquired by the Company and for USX Corporation's
Pittsburgh, California, steel plant. Mr. Ramnitz serves on the AISI labor policy
committee.

        MURRAY DRABKIN is a nationally-known lawyer with extensive experience in
both business and government. He has served as counsel to the Committee on the
Judiciary of the United States House of Representatives, as an advisor to state
and local governments on fiscal matters, and as Special Assistant to Mayor John
V. Lindsay of New York in charge of the City's federal programs. Mr. Drabkin's
law practice has dealt primarily with corporate financial matters. Mr. Drabkin
has served on several boards of directors, including a national hotel chain and
various philanthropic organizations. Mr. Drabkin is a graduate of the Harvard
Law School and Hamilton College. He currently serves as President of the Harvard
Club of Washington, D.C. He served as a Lieutenant Commander in the United
States Navy.

        ALBERT FRIED, JR. has been a Managing Member of Albert Fried & Company,
LLC and Buttonwood Specialists, LLC (name change in 1992) for the last 38 years
and is a member of the New York Stock Exchange, Inc. Mr. Fried was Chairman of
the Board of Portec, Inc. a New York Stock Exchange listed Company from October
1989 to June 1998. He has been a Director of EMCOR Group, Inc., a New York Stock
Exchange listed company since December 1994. Mr. Fried is a Trustee of The New
York Racing Association, Inc., appointed by Governor George E. Pataki; President
and Trustee of The Fried Foundation, Co-Founder, Director and Past President of
The Charles A. and Anne Morrow Lindbergh Fund, Co-Founder and Chairman of The
Centurion Foundation, Director of The Trooper Foundation - State of New York,
and a Director of The Advisory Council of the Johnson Graduate School of
Management at Cornell University. Mr. Fried graduated from Cornell University
with a Bachelor of Arts in Finance in June 1952 and Cornell Graduate School of
Business and Public Administration with a Masters in Business Administration in
June 1953. He served as a Captain in the U.S. Air Force.

        JOHN T. LAMACCHIA retired as President and Chief Executive Officer of
Cincinnati Bell Inc. in February 1999, after 33 years in the telecommunications
industry. In December 1998, just prior to his retirement, he split Cincinnati
Bell into two NYSE companies: Convergys and Broadwing (name change in 1999).
From May 1999 to May 2000, as President, Chief Executive Officer, and a director
of CellNet Data Systems, he led the company through a financial restructuring
and sale to Schlumberger in a Chapter 11 bankruptcy proceeding. He is currently
a member of the Board of Directors of Broadwing (telecommunications services),
Kroger (food retailing), and Burlington Resources (gas and oil exploration and
production), all NYSE-listed companies. Mr. LaMacchia graduated from Catholic
University with a B.A. degree in Electrical Engineering and, in 1963, with a
Ph.D. degree in Physics. He also obtained a J.D. degree from the Indiana
University School of Law in 1976. Mr. LaMacchia is a Trustee of the University
of Cincinnati Foundation.

        FRANK T. MACINNIS is the Chairman and Chief Executive Officer of EMCOR
Group, Inc. and has more than 25 years of experience in the international
construction and facility management industry. Mr. MacInnis is a graduate of the
University of Alberta Law School. His law practice included specialties in
construction and hospital law. In 1975 Mr. MacInnis began his construction
career in Tehran, Iran as an officer of Paris-based Spie Batignolles S.A. The
following years included postings and construction projects in such diverse
locations as Baghdad, Bangkok, the United



                                       24
   25

Arab Emirates, and London, England. In 1981 he was named Chairman and Chief
Executive Officer of H.C. Price Construction, a continent-wide builder of large
diameter oil and gas pipelines. He participated in the construction of several
premier oil and gas development projects. During this period, he founded a
pioneering company in the new field of horizontal directional drilling. He later
served as the Chairman of Comstock Group, Inc., a New York-based construction
group, then joined JWP, Inc. in early 1994 and successfully managed its
reorganization and emergence from Chapter 11. EMCOR Group, Inc., is the
successor company to JWP, and one of the world's largest electrical and
mechanical constructors and facilities services providers. Mr. MacInnis also
serves as a member of the Board of Directors of The Williams Companies, The
Greater New York Chapter of the March of Dimes and Withit.com.

        DONALD R. SHEPHERD graduated from the University of Michigan in 1958
with a B.B.A. degree. He spent the next 37 years in the investment management
business until retirement in 1995. From 1972 to 1995, he worked at Loomis,
Sayles & Company where he was CEO and Chief Investment Officer (1990-1995) and
Chairman (1992-1995). Mr. Shepherd is also a director of Advantica Restaurant
Group and HVIDE Marine Corp. During the last five years, he has served on the
boards of Scripps Research Institute, San Diego Hospice and Rancho Coastal
Humane Society and has served on numerous advisory committees at the University
of Michigan.

        R.J. SHOPF has been a director of the Company since September 1989 and
served as an independent advisor to the Company from March 1988 to September
1989. Since January 2000, Mr. Shopf has served as Chairman of the Board, Senior
Vice-President and Chief Restructuring Officer of The Babcock & Wilcox Company,
a wholly-owned subsidiary of McDermott International, Inc., a NYSE-listed
company. Mr. Shopf was a director of Qualitech Steel from August 1999 through
November 2000. He is also the President of Southwest Business Associates, a
consulting company (a position which he previously held from 1984 to February
1988, and from January 1989 to October 1992). Mr. Shopf served as President and
Chief Executive Officer of Pioneer Chlor Alkali, Inc. ("Pioneer") from August
1993 until August 1994 and as President of Imperial West Chemical Company, an
affiliate of Pioneer, from January 1992 until August 1994, and as President of
All Pure Chemical Company, also an affiliate of Pioneer, from October 1992 until
August 1994. Mr. Shopf obtained an MBA degree from the Harvard Graduate School
of Business Administration in 1959 and a B.S. degree from Massachusetts
Institute of Technology in 1956.

        A. STANLEY WEST is a 41-year veteran of the iron and steel industries.
Mr. West joined Cleveland Cliffs in 1967 as Director of Information Systems
following nine years experience with U.S. Steel in its Pittsburgh Steelmaking
operations. He was named Manager of project Development in 1978; Vice-President
of Project Development in 1983; Senior Vice-President of Sales in 1986 and
Senior Vice-President of Sales and Commercial Planning in 1998. He earned his
bachelor of science degree with honors at West Virginia University, attended the
Graduate School of Business at the University of Pittsburgh and earned his
master's degree in business administration from Case Western Reserve University
in Cleveland. He is a member of the American Iron and Steel Institute, American
Iron Ore Association and the Iron and Steel Society of the America Institute of
Metallurgical Engineers. He served as an officer in U.S. Army.

        MICHAEL T. YONKER, retired as president and CEO of Protec, Inc. in 1998.
Mr. Yonker led the company successfully through a turn around, resulting in
improved operations and ultimately the sale of the business. From 1982 to 1989,
Mr. Yonker served as Vice-President of Drive Division, an LBO company formed by
FMC's Power Transmission Group. During the period 1971-1981, Mr. Yonker served
in different management capacities with FMC Corporation. He is currently a
member of the board of directors of Modine Manufacturing Company (parts
manufacturers for automotive and industrial markets) and Woodward Governor
Company (fuel control systems). Mr. Yonker received B.S. and M.S. degrees in
mechanical engineering from Michigan State University and Stanford University,
respectively. In 1971, he received his Masters of Business Administration from
the Harvard Business School.

        Prior to the effective date of the reorganization plan, the board of
directors of Old Geneva consisted of Joseph A. Cannon, Ken C. Johnsen, R. J.
Shopf, Alan C. Ashton, K. Fred Skousen, Kevin S. Flannery, and Gregory T.
Hradsky. The term of each of these directors expired January 3, 2001. Messrs.
Cannon, Johnsen, and Shopf will serve on the board of directors of the Company.



                                       25
   26

SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

        Section 16(a) of the Exchange Act requires the Company's executive
officers and directors to file initial reports of ownership and reports of
changes in ownership with the SEC. Executive officers and directors are required
by SEC regulations to furnish the Company with copies of all Section 16(a) forms
they file. Based solely on a review of the copies of such forms furnished to the
Company and written representations from the Company's executive officers and
directors, the Company believes that all required forms were timely filed during
the past fiscal year.

ITEM 11. EXECUTIVE COMPENSATION.

        The compensation of Joseph A. Cannon, the Company's Chief Executive
Officer, the four other most highly paid executive officers serving at September
30, 2000, and one additional individual who was not an executive officer at the
end of the fiscal year (collectively, the "Named Executive Officers") is
discussed in the following tables and in a report from the compensation
committee of the Board of Directors. The identified positions reflect the titles
held by the individuals in Old Geneva. Each also holds the same position in the
Company, except Mr. Ramnitz, who will serve as the Vice-President of Human
Resources of Geneva Steel, LLC, Mr. Clark, who will serve as the Vice-President
of Customer Service of Geneva Steel, LLC, and Mr. Brown, who is no longer an
employee of the Company.

SUMMARY COMPENSATION TABLE

        The following table sets forth, for the fiscal years ended September 30,
2000, 1999 and 1998, the compensation paid to the Named Executive Officers.




                                                                                       Long Term Compensation
                                                                                ----------------------------------
                                                 Annual Compensation                    Awards            Payouts
                                         ----------------------------------     ---------------------     --------     --------
          (a)                  (b)          (c)         (d)           (e)         (f)          (g)          (h)          (i)
                                                                     Other                  Securities
                                                                     Annual    Restricted   Underlying                 All Other
                                                                    Compen-      Stock       Options/       LTIP        Compen-
       Name and                           Salary       Bonus       sation(1)    Award(s)       SARs       Payouts       sation
  Principal Position          Year        ($)(1)       ($)(2)         ($)        ($)(3)        (#)          ($)         ($)(4)
- -----------------------     --------     --------     --------     --------     --------     --------     --------     --------
                                                                                               
Joseph A. Cannon                2000     $487,708     $ 39,438     $     --           --     $     --           $-     $ 17,096
   Chief Executive              1999      482,748           --       13,292           --           --           --       19,563
   Officer                      1998      487,724       44,201       12,430           --       68,771           --       17,980

Ken C. Johnsen                  2000      275,002       22,240           --           --           --           --       16,930
   Executive Vice-              1999      271,076           --        8,859           --           --           --       19,453
   President, Secretary         1998      275,010       24,455        9,073           --       31,589           --       16,724
   and General Counsel

Dennis L. Wanlass               2000      196,274       15,871           --           --           --           --       17,939
   Vice-President,              1999      194,505           --        7,122           --           --           --       18,716
   Treasurer and Chief          1998      196,275       17,788        5,757           --       29,627           --       17,837
   Financial Officer

Carl E. Ramnitz                 2000      173,836       14,062           --           --           --           --       18,162
   Vice-President of            1999      172,073           --        3,466           --           --           --       16,850
   Human Resources              1998      173,838       15,615          474           --       22,383           --       20,391

Timothy R. Clark                2000      140,010       11,323           --           --           --           --       11,874
   Vice-President of            1999      137,598           --           --           --           --           --       12,493
   Operations and               1998      140,005       12,559           --           --       22,000           --       13,228
   Customer Service

Birchel S. Brown(5)             2000      320,628       11,949       25,732                        --           --       15,106
   Vice-President of            1999       21,497           --           --           --           --           --        1,822
   Operations                   1998           --           --           --           --           --           --           --



                     (footnotes contained on following page)



                                       26
   27

- -------------------------

(1) Includes compensation deferred or accrued at the election of the Named
    Executive Officer under the Company's Management Employee Savings and
    Pension Plan (the "Management Plan").

(2) Represents payments under the Company's Performance Dividend Plan in such
    years. Amounts for fiscal years 2000 and 1998 represent only Performance
    Dividend Payments payable to all management and union employees based upon
    the Company's volume of product shipments. No discretionary bonuses were
    paid

(3) None of the Named Executive Officers received any restricted stock awards
    during the three years presented, nor did any of them hold any such stock as
    of September 30, 2000.

(4) Includes contributions made by the Company pursuant to the Management Plan
    and the dollar value of premiums paid by the Company pursuant to the
    Company's split dollar life insurance plan. For fiscal year 2000, such
    amounts were as follows: Joseph A. Cannon, $13,185 Company contributions,
    $3,281 insurance premiums; Ken C. Johnsen, $14,800 Company contributions,
    $2,130 insurance premiums; Dennis L. Wanlass, $14,789 Company contributions,
    $3,150 insurance premiums; Carl E. Ramnitz, $14,550 Company contributions,
    $3,612 insurance premiums and Timothy R. Clark, $11,874 Company
    contributions.

(5) Mr. Brown was not an officer at September 30, 2000. The compensation
    reflected for the year ended September 30, 2000, includes a severance
    payment in the amount of $155,000.

OPTION GRANTS IN LAST FISCAL YEAR

        The Company made no grants of stock options or stock appreciation rights
to the Named Executive Officers during the fiscal year ended September 30, 2000.

AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES

        The following table sets forth information with respect to the exercise
of options to acquire shares of Old Geneva's Class A Common Stock by the Named
Executive Officers during the fiscal year ended September 30, 2000, as well as
the aggregate number and value of unexercised options held by the Named
Executive Officers on September 30, 2000. On the effectiveness of Old Geneva's
reorganization plan on January 3, 2001, all rights in these options were
extinguished.

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES



         (a)                 (b)              (c)             (d)                 (e)
                                                           Number of
                                                           Securities           Value of
                                                           Underlying         Unexercised
                                                          Unexercised         In-the-Money
                                                        Options/SARs at     Options/SARs at
                           Shares                          FY End (#)          FY End ($)
        Name              Acquired                        Exercisable/        Exercisable/
                       on Exercise(#)  Value Realized($)  Unexercisable      Unexercisable
- ---------------------- --------------- ---------------- ----------------- -----------------
                                                              
Joseph A. Cannon             -               $0          141,600/51,171          $0/$0

Ken C. Johnsen               -                           125,200/23,389

Dennis L. Wanlass            -                           83,000/19,627

Carl E. Ramnitz              -                           63,400/16,483

Timothy R. Clark             -                             44,000/500




                                       27
   28

EXECUTIVE COMPENSATION

        As part of the plan of reorganization of Old Geneva, the Bankruptcy
Court approved a management incentive compensation program pursuant to which
management was granted options to acquire common stock of the Company equal to
5% of the fully diluted equity of the Company, subsequent to the completion of
the Company's rights offering. Of this percentage, Joseph A. Cannon will receive
options to acquire 1.9% of the equity of the Company; Ken C. Johnsen, 1.4%;
Timothy R. Clark, .6%; Carl E. Ramnitz, .4%; Dennis Wanlass, .4%; and Marcus
Phillips, .3%. These options vest 25% on grant and 25% on the first, second, and
third anniversaries of the date of grant. The options have a term of 10 years
from the date in which they vest. The exercise price will be based on the lower
of the initial trading price of the common stock subsequent to the effective
date or $15.43 per share.

        The Named Executive Officers who continued their employment through the
consummation of the reorganization plan, Messrs. Cannon, Johnsen, Wanlass,
Ramnitz, and Clark, earned an emergence bonus equal to 50% of their annual base
salary. This bonus is paid 50% in cash and 50% in shares of common stock, except
for Mr. Cannon, who will receive all of his bonus in shares of common stock. The
number of shares of common stock to be delivered to each of the foregoing will
be determined based on the average closing trading price for the common stock
during the 30 days subsequent to the consummation of the reorganization plan, as
reported by Nasdaq.

DIRECTORS COMPENSATION

        Directors who are not employees of the Company are paid a director's fee
of $40,000 per year for serving on the Board of Directors, $2,000 per year for
serving as chairman of any committee, $1,000 for each Board meeting attended,
$750 for each telephonic board meeting, and $500 for each committee meeting
attended. Directors may also be compensated for other services rendered to the
Company. In addition, it is anticipated that a board of directors stock option
plan will be implemented, but this matter is still under discussion. All
directors are also reimbursed by the Company for travel and related expenses
incurred in attending all Board and committee meetings. It is anticipated that
the board will adopt a plan under which options will be granted to board
members, but the terms of such plan have not been fixed to date.

COMPENSATION COMMITTEE REPORT

        This Report of the Compensation Committee (the "Committee") of the Board
of Directors describes the overall compensation goals and policies applicable to
the executive officers of Old Geneva, including the bases for determination of
the compensation of executive officers for fiscal year 2000. The Report also
discusses the setting of 2000 compensation of Mr. Cannon. The term "Executive
Officers" is used below to refer to the executive officers of Geneva other than
Mr. Cannon.

        Composition and Functions of the Committee. The Compensation Committee
of the Board of Directors of Old Geneva was comprised entirely of independent,
nonemployee directors. Subject to any action which may be taken by the full
Board of Directors, the Board of Old Geneva delegated to the Committee the
authority:

             1. To determine the compensation of Joseph A. Cannon, Chairman of
        the Board and Chief Executive Officer of Old Geneva, including
        discretionary bonuses;

             2. To approve, upon recommendations by Mr. Cannon, the compensation
        arrangements of Executive Officers of Old Geneva, including the Named
        Executive Officers identified in the Summary Compensation Table above;
        and

             3. To carry out the duties and responsibilities of the Board of
        Directors regarding Old Geneva's other compensation plans, including
        administering and making awards under Old Geneva's option plans to Mr.
        Cannon, the Executive Officers and other managers and key employees of
        Old Geneva.

        Compensation Philosophy and Objectives. The Committee of Old Geneva
believed that compensation of Old Geneva's executive officers should be set at a
competitive level and be based upon Old Geneva's overall financial performance,
achievement of strategic goals, and individual performance, with a view toward
increasing the value of



                                       28
   29

Old Geneva. Within this overall philosophy, the following principles guided Old
Geneva's compensation policies for executive officers:

             1. Provide competitive levels of compensation to enable Old Geneva
        to attract and retain experienced, talented executive officers;

             2. Compensate executive officers based on Old Geneva's progress
        toward achievement of its short and long-term strategic and financial
        goals;

             3. Compensate executive officers based on the performance of the
        individual executive officer, and his contribution to Old Geneva's
        performance; and

             4. Maintain and strengthen the incentive for executive officers to
        increase the value of Old Geneva.

The Committee believed that adherence to these objectives was essential to
attracting and retaining highly-qualified officers whose contributions are
necessary for the growth and success of Old Geneva. The Compensation Committee
has also relied on compensation surveys of executives with comparable
responsibilities at peer companies. These surveys were prepared at periodic
intervals by a compensation consulting firm. Information concerning the specific
implementation of these policies in the 2000 compensation arrangements of the
Executive Officers and Mr. Cannon is provided below.

        Annual Salaries. Salaries of Executive Officers were generally reviewed
on an annual basis at the end of the fiscal year and adjustments made based on
the Committee's subjective evaluation of the individual's performance and the
Company's performance, taking into account both qualitative and quantitative
factors. Among the factors considered by the Committee were the recommendations
of Mr. Cannon and the importance of retaining key Executive Officers. Subject to
Board approval, the Committee made compensation decisions concerning the
Executive Officers. Salary levels for fiscal year 2000 were not increased
because, in the Committee's judgment, increases were not appropriate in light of
the Company's financial situation. The Committee also concluded that, in light
of the Company's Chapter 11 filing and the need to retain its Executive Officers
through a critical period in the Company's history, a decrease in salary levels
was not appropriate despite the financial performance of Old Geneva.

        Incentive Bonuses. In fiscal 2000, Old Geneva made awards under the
Performance Dividend Plan (the "Performance Plan") established in June 1993. The
Performance Plan provides for the monthly payment of additional cash
compensation as a percentage of base compensation to all management employees
based upon Old Geneva's product shipments. Cash payments made to Executive
Officers under the Performance Plan were determined according to the same
formula used to determine payments to all other management employees. No
discretionary bonuses were paid to any Executive Officers.

        Stock Options. Old Geneva's Incentive Plan and Key Employee Plan
permitted the award of options to purchase Class A Common Stock to executive
officers, managers and key employees. The award of stock options was intended to
align the interests of Executive Officers with the shareholders by providing the
Executive Officers with an incentive to bring about increases in the price of
Class A Common Stock. Old Geneva's general policy was to award options to
purchase Class A Common Stock at a price that equals or exceeds market price on
the date of grant. Accordingly, the Executive Officers derived a financial
benefit from an option only if the price of Class A Common Stock increased.
Realization of the value provided through the options generally required the
Executive Officer to remain employed by Old Geneva until the options vested.
Historically, options vested at the rate of 40% of the underlying shares at the
end of two years following the grant and an additional 20% each year thereafter.
The Committee modified the vesting schedule of options granted in fiscal 1997
and 1998 so that 50% became vested after one year and the balance after two
years. The modification to the vesting schedule was made in recognition of the
historical volatility of Old Geneva's Common Stock and a desire to increase the
incentive represented by the grant of stock options to Executive Officers. The
options were generally exercisable for ten years from the date of grant at a
price equal to 100% of the fair market value of the underlying shares on such
date.



                                       29
   30

        In fiscal 2000, Old Geneva made no awards of options to purchase Class A
Common Stock to Executive Officers of Old Geneva. Given Old Geneva's Chapter 11
filing, the Compensation Committee determined that the granting of options would
not be appropriate at that time.

        In connection with Old Geneva's Chapter 11 proceeding, the Compensation
Committee formulated and adopted a Key Employee Retention Program (the
"Program," which was approved by Old Geneva's Board of Directors. The Program
covered the Executive Officers (which for purposes of the Program included the
corporate controller) and approximately 30 other employees. The purpose of the
program was to encourage the covered employees to remain with Old Geneva through
its emergence from Chapter 11. The Committee determined that the Program was in
the best interest of Old Geneva because of the need to retain a strong
management team and continuity throughout the pendency of the proceeding. The
Program was designed to accomplish this purpose through payment of an emergence
bonus and the provision of certain severance protection. These benefits were
intended to encourage employees to remain with Old Geneva despite the personal
and career uncertainties created by the bankruptcy filing. The Program provided
a severance benefit of 50% of annual salary to Executive Officers terminated
without cause prior to consummation of a plan of reorganization and a benefit of
75% of annual salary if terminated within 90 days after consummation of the
plan. Executive officers who remained with the Company through consummation of
the Plan of Reorganization received an emergence bonus of 50% of annual salary,
payable 50% in cash and 50% in stock of the Company (Mr. Cannon's bonus was paid
100% in stock). Employees, other than the Executive Officers who remained with
Old Geneva received an emergence bonus equal to 25% of annual salary payable in
cash.

        Compensation of Chief Executive Officer. For the reasons discussed above
with respect to the Executive Officers, there was no increase or decrease in Mr.
Cannon's base salary in fiscal 2000. During the 2000 fiscal year, Mr. Cannon
received additional compensation pursuant to the Performance Dividend Plan,
based upon the formula applicable to all Executive Officers and management
employees. Mr. Cannon was not granted options for the purchase of shares of
Class A Common Stock for the reasons stated above with respect to the Executive
Officers. Mr. Cannon did not receive a discretionary bonus.

        Other Compensation Plans. Old Geneva maintained insurance and retirement
agreements with certain of its Executive Officers and managers, including Mr.
Cannon and the Named Executive Officers, which provided for payment of a death
benefit (net of premiums paid and recovered by Old Geneva) to a designated
beneficiary or for payment of a retirement benefit upon reaching age 62. Old
Geneva also had a number of other broad-based employee benefit plans in which
Executive Officers participated on the same terms as other employees meeting the
eligibility requirements, subject to any legal limitations on amounts that may
be contributed to or benefits payable under the plans.

        Submitted by the Compensation Committee of the Board of Directors of Old
Geneva:

               R.J. Shopf
               K. Fred Skousen
               Alan C. Ashton

PERFORMANCE GRAPH

        The following graph shows a comparison of cumulative total shareholder
return on the Company's Class A Common Stock, calculated on a dividend
reinvested basis, from September 30, 1995 through September 30, 2000, compared
with the S&P 500 Index and a peer group based on United States participants in
steel works, furnaces and rolling and finishing mills, SIC Code 331.

                                     [GRAPH]

        Graphical representation of total shareholder return on the Company's
Class A Common Stock as compared with S&P 500 Index and peer group with the
following data points:



                                  SEP-95   SEP-96   SEP-97   SEP-98   SEP-99  SEP-00
- --------------------------------------------------------------------------------------
                                                            
Geneva Steel Company             $100.0   $ 39.7   $ 46.0   $ 15.9   $  3.7   $  0.6
- --------------------------------------------------------------------------------------
S&P(R) 500 Stocks                $100.0   $120.3   $169.2   $185.1   $236.3   $268.9
- --------------------------------------------------------------------------------------
NYSE Stocks (SIC 3310 -- 3319
US Companies) Steel Works,
Blast Furnaces, and Rolling and
Finishing Mills                  $100.0   $103.5   $163.4   $126.4   $121.3   $101.1




                                       30
   31

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.

        The following table sets forth information as of January 3, 2001, with
respect to the beneficial ownership of shares of the common stock of the Company
by each person known by the Company to be the beneficial owner of more than 5%
of the common stock, by each director, by each of the Named Executive Officers,
and by all directors and officers as a group. Unless otherwise noted, each
person named has sole voting and investment power with respect to the shares
indicated. The percentages set forth below have been computed based on 6,760,659
shares of common stock outstanding. The number may increase depending on the
amount of disputed claims approved by the bankruptcy court.



                                            Beneficial Ownership as of
                                                 January 3, 2001*
                                          -------------------------------
                                          Number of       Percentage of
NAME AND ADDRESS OF BENEFICIAL OWNER       Shares       Class Outstanding
- ------------------------------------      ---------     -----------------
                                                  
Albert Fried & Company, LLC(1)(2)         1,087,379            16.1%
40 Exchange Place, 5th Floor
Suite 512
New York, New York 10005

Loomis Sayles & Co., Inc.(2)                948,494            14.3%
One Financial Center
Boston, MA 02111

NAME OF DIRECTOR

Joseph A. Cannon(3)                          51,230              **

Ken C. Johnsen(3)                            30,560              **

R. J. Shopf                                       0             0.0%

Frank T. MacInnis                                 0             0.0%

Murray Drabkin                                    0             0.0%

Albert Fried, Jr.(4)                      See Albert Fried & Company above

A. Stanley West                                   0             0.0%

John LaMacchia                                    0             0.0%

Donald R. Shepherd                                0             0.0%

Michael T. Yonker                                 0             0.0%

ALL DIRECTORS AND OFFICERS AS A GROUP
(13 PERSONS)(3)(4)                        1,203,542            17.5%



- -------------------------

*   Beneficial ownership as a percentage of the class for each person holding
    options exercisable within 60 days has been calculated as though shares
    subject to such options were outstanding, but such shares have not been
    deemed outstanding for the purpose of calculating the percentage of the
    class owned by any other person.

**  Less than 1% of outstanding shares.

(1) Albert Fried & Company, LLC, also provided a portion of the Term Loan to the
    Company. In connection with this financing, Albert Fried & Company, LLC is
    entitled to receive an additional $1,400,860 worth of common stock. Of
    this amount, $885,790 will be paid by the issuance of shares within 35
    days of the loan date, using the average closing price of the common stock
    during the first 30 days subsequent to the loan. The remaining $515,070
    will be paid on the fourth anniversary of the loan date based on the average
    closing price for the 30 days of trading immediately prior to the fourth
    anniversary. These shares are not reflected in the foregoing table since the
    number of shares have not been determined.

(2) Albert Fried & Company, LLC, and Loomis Sayles & Co., Inc., each holds
    rights to acquire shares of the Company's Class A Convertible Preferred
    Stock. The preferred stock, if issued, can be converted to common stock on a
    share-for-share basis, at the election of the holder. Albert Fried &
    Company, LLC, holds the right to acquire up to 355,284 shares of preferred
    stock and Loomis Sayles & Co., Inc., holds the right to acquire up to
    309,905 shares of preferred stock. In addition, both entities could acquire
    additional shares of Class A Convertible Preferred Stock in the event that
    other holders of rights do not fully exercise their rights. These shares are
    not reflected in the foregoing table.

(3) Pursuant to a management incentive compensation program approved by the
    bankruptcy court, on completion of the reorganization plan, certain members
    of management were granted options to acquire an aggregate of


                                       31
   32



    5% of the fully diluted equity of the Company which included shares issued
    in the rights offering of the Company's Class A Convertible Preferred Stock
    and shares issued under the retention agreement described below. Until this
    offering is completed, the number of shares subject to these options will
    not be known. Of this percentage, Joseph A. Cannon will receive an option to
    acquire 1.9% of the equity of the Company; Ken C. Johnsen, 1.4%; Timothy R.
    Clark, .6%; Carl E. Ramnitz, .4%; and Dennis L. Wanlass, .4%. These options
    vest 25% at the effective date of the plan of reorganization (January 3,
    2001) and 25% on the first, second, and third anniversaries of that date.
    The exercise price will be the lower of $15.43 per share or the initial
    trading price of the common stock of the Company. The shares indicated are
    the vested portion of the approximate minimum number of shares subject to
    options, if no shares of Class A Convertible Preferred Stock are issued. In
    addition, Messrs. Cannon, Johnsen, Wanlass, Ramnitz, and Clark have the
    right to receive an undetermined number of shares of common stock according
    to a retention agreement approved by the Bankruptcy Court equal to 25% of
    their annual base salary for Messrs. Johnsen, Wanlass, Ramnitz, and Clark
    and 50% of his annual base salary for Mr. Cannon. The number of shares will
    be fixed based on the average closing price for the common stock of the
    Company as reported by Nasdaq during the 30 days subsequent to the
    consummation of the reorganization plan.

(4) Mr. Fried may be deemed to be an indirect managing member of Albert Fried &
    Company, LLC, which is the record holder of the shares indicated. Mr. Fried
    is deemed to be the beneficial owner of such shares under applicable SEC
    guidelines.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.

        Albert Fried & Company LLC is a participant in a portion of the Term
Loan to the Company in the principal amount of $9,842,105. In connection with
the financing, Albert Fried & Company, LLC is entitled to receive $1,400,860
worth of common stock of the Company. Of this amount, $885,790 will be paid by
the issuance of shares within 35 days of the loan closing. The number of shares
to be issued will be determined by using the average closing price of the common
stock during the first 30 days subsequent to the loan closing. The remaining
$515,070 will be paid by the issuance of common stock on the fourth anniversary
of the loan closing, the number of shares to be determined using the average
closing price for the 30 days of trading immediately prior to the fourth
anniversary. If approved by the Board of the Company, Albert Fried & Company,
LLC in connection with the financing, will also receive an option to acquire the
Williams Farm property, which consists of approximately 76 acres located near
the Company's Vineyard facilities and which is not currently used in the ongoing
operations of the Company. The option price is $1 million and can be exercised
subsequent to one year after the loan and closing and prior to December 1, 2006.
Notwithstanding the foregoing, this option will not be exercisable unless the
closing price of common stock of the Company is below $3 per share for five days
during any ten consecutive trading days during the period beginning 30 days
subsequent to the loan closing and ending on the expiration of the option. The
Company believes the fair market value of this property to be between $3.4 and
$5.4 million. Albert Fried & Company, LLC holds approximately 15.2% of the
issued and outstanding common stock of the Company. Albert Fried, who controls
Albert Fried & Company, LLC, is a director of the Company.

        Albert Fried & Company, LLC also provided a short-term loan to the
Company in the amount of $3.5 million pursuant to an agreement dated December
22, 2000. The proceeds of this loan were used to meet necessary operating
expenses of the Company prior to the completion of its plan of reorganization.
This loan was repaid from the proceeds of the revolving credit facility at the
time of the consummation of the plan of reorganization on January 3, 2000.
Albert Fried & Company, LLC was paid loan commitment fees of $275,000 in
connection with this transaction.



                                       32
   33

                                     PART IV

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULE, AND REPORTS ON FORM 8-K.

        (a) Documents Filed:

             1. Financial Statements. The following Financial Statements of the
        Company and Report of Independent Public Accountants included in the
        Company's Annual Report to Shareholders for the fiscal year ended
        September 30, 2000, are incorporated by reference in Item 8 of this
        Report:

             -      Report of Independent Public Accountants

             -      Balance Sheets at September 30, 2000 and 1999

             -      Statements of Operations for the years ended September 30,
                    2000, 1999 and 1998

             -      Statements of Stockholders' Equity (Deficit) for the years
                    ended September 30, 2000, 1999 and 1998

             -      Statements of Cash Flows for the years ended September 30,
                    2000, 1999 and 1998

             -      Notes to Financial Statements

             2. Financial Statement Schedule. The following Financial Statement
        Schedule of the Company for the years ended September 30, 2000, 1999,
        and 1998, is filed as part of this Report and should be read in
        conjunction with the Company's Financial Statements and Notes thereto:



                    Schedule                                                  Page
                    --------                                                  ----
                                                                           
                    II - Valuation and Qualifying Accounts                     39


             Financial statements and schedules other than those listed are
        omitted for the reason that they are not required or are not applicable,
        or the required information is shown in the Financial Statements or
        Notes thereto, or contained in this Report.

        (b) Reports on Form 8-K.

        The Company did not file any reports on Form 8-K during the three months
ended September 30, 2000. Subsequent to September 30, 2000, the Company filed a
report on Form 8-K dated December 1, 2000, reporting the confirmation of its
reorganization plan, a report on Form 8-K dated December 14, 2000, reporting
certain amendments to the reorganization plan, and a report on Form 8-K dated
January 5, 2001, reporting consummation of the reorganization plan.

        (c) Exhibits.



 EXHIBIT                                                                        INCORPORATED        FILED
   NO.                              EXHIBIT                                     BY REFERENCE      HEREWITH
- ----------------------------------------------------------------------------------------------------------
                                                                                         
   3.1         Amended and Restated Certificate of Incorporation of Geneva                            X
               Steel Holdings Corp.

   3.2         Amended and Restated Bylaws of Geneva Steel Holdings Corp.                             X

   4.1         Specimen Certificate of the Company's common stock, par value                          X




                                       33
   34



 EXHIBIT                                                                        INCORPORATED        FILED
   NO.                              EXHIBIT                                     BY REFERENCE      HEREWITH
- ----------------------------------------------------------------------------------------------------------
                                                                                         
               $0.01 per share                                                                        X

   4.2         Registration Rights Agreements by and between Albert Fried &
               Company, LLC and the Registrant, dated as of January 3, 2001

   10.1        Asset Sales Agreement between USX and the Registrant dated as         (1)
               of June 26, 1987, as Amended and Restated August 31, 1987

   10.2        Registration Rights Agreement among the signatories listed on         (1)
               the signature pages thereof and the Registrant dated November 6,
               1989

   10.3        License Agreement between ENSR Corporation and the Registrant         (1)
               dated December 8, 1988

   10.4        Amended and Restated Sales Representation Agreement between           (2)
               Mannesmann Pipe & Steel Corporation and the Registrant dated
               October 30, 1998

   10.5        Geneva Steel Key Employee Plan                                        (3)

   10.6        Amendment to Geneva Steel Key Employee Plan dated May 12,             (4)
               1991

   10.7        Form of Non-Statutory Stock Option Agreement                          (1)

   10.8        Management Employee Savings and Pension Plan, as Amended and          (5)
               Restated generally effective January 1, 1994, dated as of July 3,
               1995

   10.9        Amendment No. 1 to the Geneva Steel Management Employee               (6)
               Savings and Pension Plan, effective as of January 1, 1997, dated
               June 25, 1997

   10.10       Form of revised Executive Split Dollar Insurance Agreement            (7)

   10.11       Form of revised Executive Supplemental Retirement Agreement           (7)

   10.12       Union Employee Savings and Pension Plan, as Amended and               (8)
               Restated effective January 1, 1995, dated as of August 13, 1997

   10.13       Collective Bargaining Agreement between United Steelworkers           (2)
               of America and the Registrant ("Collective Bargaining Agreement")
               dated May 1, 1998

   10.14       Agreement between Union Carbide Industrial Gases, Inc. and            (3)
               the Registrant dated July 12, 1990, as amended August 3, 1990
               (the "Union Carbide Agreement")

   10.15       Amendment to the Union Carbide Agreement dated December 1,            (7)
               1992

   10.16       Oxygen Supply Agreement between Air Liquide America                   (8)




                                       34
   35



 EXHIBIT                                                                        INCORPORATED        FILED
   NO.                              EXHIBIT                                     BY REFERENCE      HEREWITH
- ----------------------------------------------------------------------------------------------------------
                                                                                         
               Corporation and the Registrant dated June 10, 1997

   10.17       Coilbox License Agreement between Stelco Technical Services           (1)
               Limited and the Registrant dated August 23, 1989

   10.18       License Agreement for the K-OBM Process between Klockner              (1)
               Contracting and Technologies GmbH and the Registrant dated
               November 25, 1989

   10.19       Special Use Lease Agreement No. 897 between the State of Utah         (7)
               and the Registrant dated January 13, 1992 and Amendment thereto
               dated June 19, 1992

   10.20       Indenture dated as of January 15, 1994 between the Registrant         (9)
               and Bankers Trust Company, as Trustee, including a form of 9 1/2%
               Senior Note due 2004

   10.21       Indenture dated as of March 15, 1993 between the  Registrant         (10)
               and The Bank of New York, as Trustee, including a form of 11 1/8%
               Senior Note due 2001

   10.22       License Agreement relating to the desulfurization process             (1)
               between BS&B Engineering Company, Inc. and the Registrant dated
               March 1, 1990

   10.23       Lo-Cat7 Licensing Agreement between ARI Technologies, Inc.            (3)
               and the Registrant dated April 16, 1990

   10.24       Agreement relating to the closure of hazardous waste surface          (3)
               impoundments between USX Corporation, the Registrant and Duncan
               Lagnese Associates, Incorporated dated October 22, 1990

   10.25       Agreement for Sale and Purchase of Coke between the                  (11)
               Registrant and Pacific Basin Resources (a division of Oxbow
               Carbon and Minerals, Inc.) dated April 29, 1994 (the "Oxbow Coke
               Agreement")

   10.26       First Amendment to the Oxbow Coke Agreement dated April 11,          (12)
               1996

   10.27       Agreement for the Sale and Purchase of Coal between the              (13)
               Registrant and Oxbow Carbon and Minerals, Inc. dated February 19,
               1996, effective as of April 1, 1994

   10.28       Industrial Gas Supply Agreement between Air Liquide America          (14)
               Corporation and Geneva Steel dated June 8, 1995

   10.29       Geneva Steel Company 1996 Incentive Plan                             (15)

   10.30       Form of Employment Agreement between Registrant and Certain           (8)
               Executive Officers




                                       35
   36



 EXHIBIT                                                                        INCORPORATED        FILED
   NO.                              EXHIBIT                                     BY REFERENCE      HEREWITH
- ----------------------------------------------------------------------------------------------------------
                                                                                         
   10.31       Loan and Security Agreement by and between Congress                  (16)
               Financial Corporation and Geneva Steel Company as Debtor and
               Debtor-in-Possession as Borrower, dated February 19, 2000

   10.32       Amendment No. 1 to Loan and Security Agreement by and                (17)
               between Congress Financial Corporation and Geneva Steel Company
               as Debtor and Debtor-in-Possession as Borrower, dated July 31,
               2000

   10.33       Letter Agreement between USX Corporation and Registrant              (18)
               related to Taconite Pellet Supply, dated December 16, 1999

   10.34       $110,000,000 Term Loan Agreement dated as of January 3, 2001,                          X
               among Geneva Steel LLC as Borrower and the Lender's and Citicorp
               USA, Inc., as Agent

   10.35       Credit Agreement dated as of January 3, 2001, among Geneva                             X
               Steel LLC as Borrower and the Lenders and Issuers and Citicorp
               USA, Inc., as Agent

   10.36       Bridge Loan Agreement between Geneva Steel Company and Albert                          X
               Fried & Company, LLC, dated December 22, 2000

   13          Selected portions of the Registrant's Annual Report to                                 X
               Shareholders for the year ended September 30, 2000 which are
               incorporated by reference in Parts II and IV of this Report

   22          Listing of Subsidiaries of the Registrant                                              X

   27          Financial Data Schedule                                                                X


- ------------------

        (1)  Incorporated by reference to the Registration Statement on Form S-1
             dated March 27, 1990, File No. 33-33319.

        (2)  Incorporated by reference to the Annual Report on Form 10-K for the
             year ended September 30, 1998.

        (3)  Incorporated by reference to the Registration Statement on Form S-1
             dated November 5, 1990, File No. 33-37238.

        (4)  Incorporated by reference to the Annual Report on Form 10-K for the
             fiscal year ended September 30, 1991.

        (5)  Incorporated by reference to the Annual Report on Form 10-K for the
             fiscal year ended September 30, 1995.

        (6)  Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended June 30, 1997.

        (7)  Incorporated by reference to the Annual Report on Form 10-K for the
             fiscal year ended September 30, 1992.

        (8)  Incorporated by reference to the Annual Report on Form 10-K for the
             fiscal year ended September 30, 1997.



                                       36
   37

        (9)  Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended December 31, 1993.

        (10) Incorporated by reference to the Registration Statement on Form S-4
             dated April 15, 1993, File No. 33-61072.

        (11) Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended June 30, 1994.

        (12) Incorporated by reference to the Annual Report on Form 10-K for the
             fiscal year ended September 30, 1996.

        (13) Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended March 31, 1996.

        (14) Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended June 30, 1995.

        (15) Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended March 31, 1997.

        (16) Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended December 31, 1998.

        (17) Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended June 30, 1999.

        (18) Incorporated by reference to the Quarterly Report on Form 10-Q for
             the fiscal quarter ended March 31, 2000.



                                       37
   38

                    REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS


To Geneva Steel Company:

We have audited in accordance with auditing standards generally accepted in the
United States, the financial statements incorporated by reference in Item 8 of
this Form 10-K, and have issued our report thereon dated January 4, 2001. Our
audit was made for the purpose of forming an opinion on those statements taken
as a whole. The schedule listed in Item 14(a)2 is the responsibility of the
Company's management and is presented for purposes of complying with the
Securities and Exchange Commission's rules and is not part of the basic
financial statements. This schedule has been subjected to the auditing
procedures applied in the audit of the basic financial statements and, in our
opinion, fairly states in all material respects the financial data required to
be set forth therein in relation to the basic financial statements taken as a
whole.




Arthur Andersen LLP

Salt Lake City, Utah
January 4, 2001



                                       38
   39

                              GENEVA STEEL COMPANY
                 SCHEDULE II - VALUATION AND QUALIFYING ACCOUNTS
              FOR THE YEARS ENDED SEPTEMBER 30, 2000, 1999 AND 1998
                             (Dollars in Thousands)




                                                    Additions
                                       Balance at   Charged to    Deductions,      Balance
                                       Beginning     Costs and      Net of         at End
Description                             of Year      Expenses     Recoveries       of Year
- -----------                             -------       -------       -------        -------
                                                                       
Year Ended September 30, 2000
  Allowance for doubtful accounts       $10,912       $ 5,488       $(7,821)       $ 8,579
                                        =======       =======       =======        =======

Year Ended September 30, 1999
  Allowance for doubtful accounts       $ 6,411       $ 8,775       $(4,274)       $10,912
                                        =======       =======       =======        =======

Year Ended September 30, 1998
  Allowance for doubtful accounts       $ 4,564       $ 6,923       $(5,076)       $ 6,411
                                        =======       =======       =======        =======




                                       39
   40

                                   SIGNATURES

        Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized, on January 11, 2001.

                                      GENEVA STEEL HOLDINGS CORP.


Dated:  January 11, 2001           By /s/ JOSEPH A. CANNON
                                      -----------------------------------------
                                      Joseph A. Cannon, Chairman of the Board
                                      and Chief Executive Officer

        Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, this report has been signed below by the following persons on behalf of
the Company and in the capacities and on the dates indicated:


Dated:  January 11, 2001           By /s/ JOSEPH A. CANNON
                                      -----------------------------------------
                                      Joseph A. Cannon, Chairman of the Board
                                      and Chief Executive Officer


Dated:  January 11, 2001           By /s/ KEN C. JOHNSEN
                                      -----------------------------------------
                                      Ken C. Johnsen, Executive Vice-President,
                                      Secretary, General Counsel, and Director


Dated:  January 11, 2001           By /s/ DENNIS L. WANLASS
                                      -----------------------------------------
                                      Dennis L. Wanlass, Vice-President of
                                      Finance, Treasurer and Chief Financial
                                      Officer


Dated:  January 11, 2001           By /s/ MURRAY DRABKIN
                                      -----------------------------------------
                                      Murray Drabkin, Director


Dated:  January 11, 2001           By /s/ ALBERT FRIED, JR.
                                      -----------------------------------------
                                      Albert Fried, Jr., Director


Dated:  January 11, 2001           By /s/ JOHN LAMACCHIA
                                      -----------------------------------------
                                      John LaMacchia, Director


Dated:  January 11, 2001           By /s/ FRANK T. MACINNIS
                                      -----------------------------------------
                                      Frank T. MacInnis, Director


Dated:  January 11, 2001           By /s/ DONALD R. SHEPHERD
                                      -----------------------------------------
                                      Donald R. Shepherd, Director


Dated:  January 11, 2001           By /s/ R. J. SHOPF
                                      -----------------------------------------
                                      R. J. Shopf, Director


Dated:  January 11, 2001           By /s/ A. STANLEY WEST
                                      -----------------------------------------
                                      A. Stanley West, Director


Dated:  January 11, 2001           By /s/ MICHAEL T. YONKER
                                      -----------------------------------------
                                      Michael T. Yonker, Director


                                       40

EX-3.1

   1

                                                                     EXHIBIT 3.1


                AMENDED AND RESTATED CERTIFICATE OF INCORPORATION


                                       OF


                           GENEVA STEEL HOLDINGS CORP.


                 ==============================================

             Geneva Steel Holdings Corp., a corporation organized and existing
under the laws of the State of Delaware (the "Corporation"), hereby certifies
that:

             A. The name of the Corporation is Geneva Steel Holdings Corp. The
Corporation was originally incorporated by the filing of a Certificate of
Incorporation with the Secretary of State of the State of Delaware on November
22, 2000.

             B. The United States Bankruptcy Court for the District of Utah,
Central Division, Case No. 99-21130 GEC, has confirmed a plan of reorganization
for Geneva Steel Company (the "Plan") under Chapter 11 of the United States
Bankruptcy Code. This Amended and Restated Certificate of Incorporation was duly
adopted in accordance with the provisions of Sections 241 and 245 of the
Delaware General Corporation Law and is provided for in the order confirming the
Plan. The Corporation has not received payment for any of its stock.

             C. The text of the Certificate of Incorporation of the Corporation
is hereby amended and restated to read in full as follows:



                                ARTICLE I - NAME

           The name of the corporation is Geneva Steel Holdings Corp.

              ARTICLE II -- REGISTERED AGENT AND REGISTERED OFFICE

             The address of the Corporation's registered office in the State of
Delaware is 1209 Orange Street, Wilmington, DE 1980l, in the County of New
Castle. The name of its registered agent at such address is The Corporation
Trust Company.

                             ARTICLE III -- PURPOSE

             The purpose of the Corporation is to engage in any lawful act or
activity for which corporations may be organized and incorporated under the
General Corporation Law of the State of Delaware.


   2

                           ARTICLE IV -- CAPITAL STOCK

             Section 1 Capital Stock. The Corporation shall be authorized to
issue Fifty Million (50,000,000) shares of capital stock, of which Forty Million
(40,000,000) shares shall be shares of Common Stock, $.01 par value per share
("Common Stock"), and Ten Million (10,000,000) shares shall be shares of
preferred stock, no par value per share ("Preferred Stock").

             Section 2 Preferred Stock. Shares of Preferred Stock may be issued
from time to time in one or more series. The Board of the Corporation (the
"Board") is hereby authorized to fix the voting rights, designations, powers,
preferences and the relative, participation, optional or other rights, and the
qualifications, limitations or restrictions thereof, of any unissued series of
Preferred Stock; and to fix the number of shares constituting such series, and
to increase or decrease the number of shares of any such series (but not below
the number of shares thereof then outstanding). Shares of Class A Convertible
Preferred Stock shall be issued pursuant to the Plan.

             Section 3 Voting. Except as otherwise provided by law, the holders
of Common Stock shall vote together as a single class, subject to any right
conferred upon holders of Preferred Stock to vote together with holders of
Common Stock, on all matters submitted to a vote of stockholders of the
Corporation. Each share of Common Stock shall have one vote.

                         ARTICLE V -- BOARD OF DIRECTORS

             Section 1 Board of Directors. The business and affairs of the
Corporation are managed under the direction of the Board of Directors. The
election of directors need not be by ballot.

             Section 2 Classified Board. Subject to the rights of the holders of
any series of Preferred Stock to elect directors under specified circumstances,
the number of directors shall be fixed from time to time exclusively pursuant to
a resolution adopted by a majority of the Whole Board. Commencing with the 2001
annual meeting of stockholders of the Corporation, the directors, other than
those who may be elected by the holders of any series of Preferred Stock under
specified circumstances, shall be divided, with respect to the time for which
they severally hold office, into three (3) classes, as nearly equal in number as
is reasonably possible, with the term of office of the first class to expire at
the 2002 annual meeting of stockholders, the term of office of the second class
to expire at the 2003 annual meeting of stockholders and the term of office of
the third class to expire at the 2004 annual meeting of stockholders, with each
director to hold office until his or her successor shall have been duly elected
and qualified. At each annual meeting of stockholders, commencing with the 2002
annual meeting, (i) directors elected to succeed those directors whose terms
then expire shall be elected for a term of office to expire at the third
succeeding annual meeting of stockholders after their election, with each
director to hold office until his or her successor shall have been duly elected
and qualified, and (ii) if authorized by a resolution of the Board of Directors,
directors may be elected to fill any vacancy on the Board of Directors,
regardless of how such vacancy shall have been created.

             Section 3 Changes in Number of Directors. If the number of
directors is changed, any increase or decrease shall be apportioned among the
classes in such manner as the



                                      -2-
   3

board of directors of the Corporation shall determine, but no decrease in the
number of directors may shorten the term of any incumbent director.

             Section 4 Removal. Subject to the rights of the holders of any
series of Preferred Stock with respect to such series of Preferred Stock, any
director, or the entire Board of Directors, may be removed from office at any
time, but only for cause and only by the affirmative vote of the holders of at
least two-thirds of the voting power of all of the then-outstanding shares of
Voting Stock, voting together as a single class.

             Section 5 Vacancies. Subject to applicable law and the rights of
the holders of any series of Preferred Stock with respect to such series of
Preferred Stock, and unless the Board of Directors otherwise determines,
vacancies resulting from death, resignation, retirement, disqualification,
removal from office or other cause, and newly created directorships resulting
from any increase in the authorized number of directors, may be filled only by
the affirmative vote of a majority of the remaining directors, though less than
a quorum of the Board of Directors, and directors so chosen shall hold office
for a term expiring at the annual meeting of stockholders at which the term of
office of the class to which they have been elected expires and until such
director's successor shall have been duly elected and qualified. No decrease in
the number of authorized directors constituting the Whole Board shall shorten
the term of any incumbent director. If there are no directors in office, then an
election of directors may be held in the manner provided by statute.

             Section 6 Vote Required for Amendment. Notwithstanding anything to
the contrary contained in this Amended and Restated Certificate of
Incorporation, any amendment to, deletion of or adoption of any provision
inconsistent with this Article V shall require the affirmative vote of the
holders of at least two-thirds of the voting power of the then-outstanding
shares of the Corporation entitled to vote generally in the election of
directors (the "Voting Stock"), voting together as a single class.

                        ARTICLE VI -- STOCKHOLDER ACTION

             No stockholder action may be taken except at an annual or special
meeting of stockholders of the Corporation, and stockholders may not take any
action by written consent in lieu of a meeting. Subject to the rights of the
holders of any series of Preferred Stock, special meetings of the stockholders
may be called only by the Chairman of the Board, the President or by the Board
of Directors pursuant to a resolution adopted by a majority of the total number
of directors which the Corporation would have if there were no vacancies (the
"Whole Board"). Business transacted at any special meeting of stockholders are
confined to the purpose or purposes of the meeting as stated in the notice of
the meeting. Notwithstanding anything to the contrary contained in this Amended
and Restated Certificate of Incorporation, any amendment to, deletion of or
adoption of any provision inconsistent with this Article VI shall require the
affirmative vote of the holders of at least two-thirds of the voting power of
the then-outstanding shares of Voting Stock, voting together as a class.



                                      -3-
   4

                       ARTICLE VII -- AMENDMENT OF BY-LAWS

             In furtherance and not in limitation of the powers conferred by
law, the Board is expressly authorized and empowered to adopt, amend and repeal
the By-Laws of the Corporation by a majority vote at any regular or special
meeting of the Board or by written consent, subject to the power of the
stockholders of the Corporation to alter or repeal any By-Laws made by the
Board. No adoption, amendment or repeal of a by-law by action of stockholders
shall be effective unless approved by the affirmative vote of holders of at
least two-thirds of the voting power of the then-outstanding shares of Voting
Stock, voting together as a single class, are required to amend, alter or
repeal, or to adopt any provision inconsistent with, this Article VII.

            ARTICLE VIII -- AMENDMENT OF CERTIFICATE OF INCORPORATION

             The Corporation reserves the right at any time and from time to
time to amend, alter, change or repeal any provision contained in this
Certificate of Incorporation, and any other provisions authorized by the laws of
the State of Delaware at the time in force may be added or inserted, in the
manner now or hereafter prescribed by law; and all rights, preferences and
privileges of whatsoever nature conferred upon stockholders, directors or any
other persons whomsoever by and pursuant to this Certificate of Incorporation in
its present form or as hereafter amended are granted subject to the right
reserved in this Article VIII.

            ARTICLE IX -- LIMITATION OF LIABILITY AND INDEMNIFICATION

             Section 1 Elimination of Certain Liability of Directors. A director
of the Corporation shall not be personally liable to the Corporation or its
stockholders for monetary damages for breach of fiduciary duty as a director,
except to the extent such exemption from liability or limitation thereof is not
permitted under the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but, in the case of any such amendment, only
to the extent that such amendment permits the Corporation to provide broader
elimination of liability than such law permitted the Corporation to provide
prior to such amendment). Any repeal or modification of the foregoing paragraph
shall not adversely affect any right or protection of a director of the
Corporation existing hereunder with respect to any act or omission occurring
prior to such repeal or modification.

             Section 2 Indemnification and Insurance.

             (a) Each person who was or is made a party or is threatened to be
made a party to or is involved in any action, suit, or proceeding, whether
civil, criminal, administrative or investigative (hereinafter a "proceeding"),
by reason of the fact that he or she or a person of whom he or she is the legal
representative is or was a director or officer of the Corporation or is or was
serving at the request of the Corporation as a director, officer, employee or
agent of another corporation or of a partnership, joint venture, trust or other
enterprise, including service with respect to employee benefit plans maintained
or sponsored by the Corporation, whether the basis of such proceeding is alleged
action in an official capacity as a director, officer, employee or agent or in
any other capacity while serving as a director, officer, employee or agent,
shall be indemnified and held harmless by the Corporation to the fullest extent
authorized by the General Corporation Law of the State of Delaware as the same
exists or may hereafter be amended (but,



                                      -4-
   5

in the case of any such amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than said law
permitted the Corporation to provide prior to such amendment), against all
expense, liability and loss (including attorneys' fees, judgments, fines, ERISA
excise taxes or penalties and amounts paid or to be paid in settlement)
reasonably incurred or suffered by such person in connection therewith and such
indemnification shall continue as to a person who has ceased to be a director,
officer, employee or agent and shall inure to the benefit of his or her heirs,
executors and administrators; provided, however, that except as provided in
paragraph (c) of this Section 2, the Corporation shall indemnify any such person
seeking indemnification in connection with a proceeding (or part thereof)
initiated by such person only if such proceeding (or part thereof) was
authorized by the Board. The right to indemnification conferred in this Section
2 shall be a contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in advance of
its final disposition, such advances to be paid by the Corporation within 20
days after the receipt by the Corporation of a statement or statements from the
claimant requesting such advance or advances from time to time; provided,
however, that if the General Corporation Law of the State of Delaware requires,
the payment of such expenses incurred by a director or officer in his or her
capacity as a director or officer (and not in any other capacity in which
service was or is rendered by such person while a director or officer,
including, without limitation, service to an employee benefit plan) in advance
of the final disposition of a proceeding shall be made only upon delivery to the
Corporation of an undertaking by or on behalf of such director or officer to
repay all amounts so advanced if it shall ultimately be determined that such
director or officer is not entitled to be indemnified under this Section 2 or
otherwise.

             (b) To obtain indemnification under this Section 2, a claimant
shall submit to the Corporation a written request, including therein or
therewith such documentation and information as is reasonably available to the
claimant and is reasonably necessary to determine whether and to what extent the
claimant is entitled to indemnification. Upon written request by a claimant for
indemnification pursuant to the first sentence of this paragraph (b), a
determination, if required by applicable law, with respect to the claimant's
entitlement thereto shall be made as follows: (i) by the Board by a majority
vote of a quorum consisting of Disinterested Directors (as hereinafter defined),
or (ii) if a quorum of the Board consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the Board, a copy of
which shall be delivered to the claimant. If it is so determined that the
claimant is entitled to indemnification, payment to the claimant shall be made
within 10 days after such determination.

             (c) If a claim under paragraph (a) of this Section 2 is not paid in
full by the Corporation within thirty days after a written claim pursuant to
paragraph (b) of this Section 2 has been received by the Corporation, the
claimant may at any time thereafter bring suit against the Corporation to
recover the unpaid amount of the claim and, if successful in whole or in part,
the claimant shall be entitled to be paid also the expense of prosecuting such
claim. It shall be a defense to any such action (other than an action brought to
enforce a claim for expenses incurred in defending any proceeding in advance of
its final disposition where the required undertaking, if any is required, has
been tendered to the Corporation) that the claimant has not met the standard of
conduct which makes it permissible under the General Corporation Law of the
State of Delaware for the Corporation to indemnify the claimant for the amount
claimed, but the burden



                                      -5-
   6

of proving such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board or Independent Counsel) to have made a
determination prior to the commencement of such action that indemnification of
the claimant is proper in the circumstances because he or she has met the
applicable standard of conduct set forth in the General Corporation Law of the
State of Delaware, nor an actual determination by the Corporation (including its
Board or Independent Counsel) that the claimant has not met such applicable
standard of conduct, shall be a defense to the action or create a presumption
that the claimant has not met the applicable standard of conduct.

             (d) If a determination shall have been made pursuant to paragraph
(b) of this Section 2 that the claimant is entitled to indemnification, the
Corporation shall be bound by such determination in any judicial proceeding
commenced pursuant to paragraph (c) of this Section 2.

             (e) The Corporation shall be precluded from asserting in any
judicial proceeding commenced pursuant to paragraph (c) of this Section 2 that
the procedures and presumptions of this Section 2 are not valid, binding and
enforceable and shall stipulate in such proceeding that the Corporation is bound
by all the provisions of this Section 2.

             (f) The right to indemnification and the payment of expenses
incurred in defending a proceeding in advance of its final disposition conferred
in this Section 2 shall not be exclusive of any other right which any person may
have or hereafter acquire under any statute, provision of this Certificate of
Incorporation or the By-Laws, agreement, vote of stockholders or Disinterested
Directors or otherwise. No repeal or modification of this Section 2 shall in any
way diminish or adversely affect the rights of any director, officer, employee
or agent of the Corporation hereunder in respect of any occurrence or matter
arising prior to any such repeal or modification.

             (g) The Corporation may maintain insurance, at its expense, to
protect itself and any director, officer, employee or agent of the Corporation
or another corporation, partnership, joint venture, trust or other enterprise
against any expense, liability or loss, whether or not the Corporation would
have the power to indemnify such person against such expense, liability or loss
under the General Corporation Law of the State of Delaware. To the extent that
the Corporation maintains any policy or policies providing such insurance, each
such director or officer, and each such agent or employee to which rights to
indemnification have been granted as provided in paragraph (h) of this Section
2, shall be covered by such policy or policies in accordance with its or their
terms to the maximum extent of the coverage thereunder for any such director,
officer, employee or agent.

             (h) The Corporation may, to the extent authorized from time to time
by the Board, grant rights to indemnification, and rights to be paid by the
Corporation the expenses incurred in defending any proceeding in advance of its
final disposition, to any employee or agent of the Corporation to the fullest
extent of the provisions of this Section 2 with respect to the indemnification
and advancement of expenses of directors and officers of the Corporation.

             (i) If any provision or provisions of this Section 2 shall be held
to be invalid, illegal or unenforceable for any reason whatsoever: (i) the
validity, legality and enforceability of the remaining provisions of this
Section 2 (including, without limitation, each portion of any



                                      -6-
   7

paragraph of this Section 2 containing any such provision held to be invalid,
illegal or unenforceable, that is not itself held to be invalid, illegal or
unenforceable) shall not in any way be affected or impaired thereby; and (ii) to
the fullest extent possible, the provisions of this Section 2 (including,
without limitation, each such portion of any paragraph of this Section 2
containing any such provision held to be invalid, illegal or unenforceable)
shall be construed so as to give effect to the intent manifested by the
provision held invalid, illegal or unenforceable.

             (j) For purposes of this Section 2:

                    (i) "Disinterested Director" means a director of the
Corporation who is not and was not a party to the matter in respect of which
indemnification is sought by the claimant.

                    (ii) "Independent Counsel" means a law firm, a member of a
law firm, or an independent practitioner, that is experienced in matters of
corporation law and shall include any person who, under the applicable standards
of professional conduct then prevailing, would not have a conflict of interest
in representing either the Corporation or the claimant in an action to determine
the claimant's rights under this Section 2.

             (k) Any notice, request or other communication required or
permitted to be given to the Corporation under this Section 2 shall be in
writing and either delivered in person or sent by telecopy, telex, telegram,
overnight mail or courier service, or certified or registered mail, postage
prepaid, return receipt requested, to the Secretary of the Corporation and shall
be effective only upon receipt by the Secretary.

               ARTICLE X -- SECTION 203 OF GENERAL CORPORATION LAW

             The Corporation shall not be governed by Section 203 of the General
Corporation Law of the State of Delaware.

                       ARTICLE XI -- ADDITIONAL PROVISIONS

             In accordance with the requirements of Section 1123 of the United
States Bankruptcy Code, and for so long as such section is applicable to the
Corporation, the Corporation shall be prohibited from issuing non-voting equity
securities.



                                      -7-
   8
             IN WITNESS WHEREOF, Geneva Steel Holdings Corp. has caused this
certificate to be signed by its President and Secretary, on December 14, 2000.





                                      GENEVA STEEL HOLDINGS CORP.



                                      By: /s/ JOSEPH A. CANNON
                                          -----------------------------------
                                          Name:  Joseph A. Cannon
                                          Title:  President



                                      By: /s/ KEN C. JOHNSEN
                                          -----------------------------------
                                          Name:  Ken C. Johnsen
                                          Title:  Secretary


                                      -8-

EX-3.2

   1

                                                                     EXHIBIT 3.2


                          AMENDED AND RESTATED BY-LAWS


                                       OF


                           GENEVA STEEL HOLDINGS CORP.


                 =============================================


                                    ARTICLE I

                               OFFICES AND RECORDS

             Section 1.01 Delaware Office. The principal office of the
Corporation in the State of Delaware shall be located in the City of Wilmington,
County of New Castle, and its registered agent is The Corporation Trust Company.

             Section 1.02 Other Offices. The Corporation may have such other
offices, either within or without the State of Delaware, as the Board of
Directors may designate or as the business of the Corporation may from time to
time require.

             Section 1.03 Books and Records. The books and records of the
Corporation may be kept outside the State of Delaware at such place or places as
may from time to time be designated by the Board of Directors.


                                   ARTICLE II

                                  STOCKHOLDERS

             Section 2.01 Annual Meeting. The annual meeting of the stockholders
of the Corporation shall be held on such date and at such place and time as may
be fixed by resolution of the Board of Directors.

             Section 2.02 Special Meeting. Subject to the rights of the holders
of any series of stock having a preference over the Common Stock of the
Corporation as to dividends or upon liquidation ("Preferred Stock") with respect
to such series of Preferred Stock, special meetings of the stockholders may be
called only by the Chairman of the Board, the President or by the Board of
Directors pursuant to a resolution adopted by a majority of the total number of
directors which the Corporation would have if there were no vacancies (the
"Whole Board").

             Section 2.03 Place of Meeting. The Board of Directors or the
Chairman of the Board, as the case may be, may designate the place of meeting
for any annual meeting or for any special meeting of the stockholders called by
the Board of Directors or the Chairman of the Board. If no designation is so
made, the place of meeting shall be the principal office of the Corporation.


   2

             Section 2.04 Notice of Meeting. Written or printed notice, stating
the place, day and hour of the meeting and the purpose or purposes for which the
meeting is called, shall be delivered by the Corporation not less than ten (10)
days nor more than sixty (60) days before the date of the meeting, either
personally or by mail, to each stockholder of record entitled to vote at such
meeting. If mailed, such notice shall be deemed to be delivered when deposited
in the United States mail with postage thereon prepaid, addressed to the
stockholder at his address as it appears on the stock transfer books of the
Corporation. Such further notice shall be given as may be required by law. Only
such business shall be conducted at a special meeting of stockholders as shall
have been brought before the meeting pursuant to the Corporation's notice of
meeting. Meetings may be held without notice if all stockholders entitled to
vote are present, or if notice is waived by those not present in accordance with
Section 6.04 of these By-Laws. Any previously scheduled meeting of the
stockholders may be postponed, and (unless the Certificate of Incorporation
otherwise provides) any special meeting of the stockholders may be cancelled, by
resolution of the Board of Directors upon public notice given prior to the date
previously scheduled for such meeting of stockholders.

             Section 2.05 Quorum and Adjournment. Except as otherwise provided
by law or by the Certificate of Incorporation, the holders of a majority of the
outstanding shares of the Corporation entitled to vote generally in the election
of directors, represented in person or by proxy, shall constitute a quorum at a
meeting of stockholders, except that when specified business is to be voted on
by a class or series of stock voting as a class, the holders of a majority of
the shares of such class or series shall constitute a quorum of such class or
series for the transaction of such business. The chairman of the meeting or a
majority of the shares so represented may adjourn the meeting from time to time,
whether or not there is such a quorum. No notice of the time and place of
adjourned meetings need be given except as required by law. The stockholders
present at a duly called meeting at which a quorum is present may continue to
transact business until adjournment, notwithstanding the withdrawal of enough
stockholders to leave less than a quorum.

             Section 2.06 Proxies. At all meetings of stockholders, a
stockholder may vote by proxy executed in writing (or in such manner prescribed
by the General Corporation Law of the State of Delaware) by the stockholder, or
by his duly authorized attorney in fact.

             Section 2.07 Notice of Stockholder Business and Nominations.

             (a) Annual Meetings of Stockholders.

                    (i) Nominations of persons for election to the Board of
Directors of the Corporation and the proposal of business to be considered by
the stockholders may be made at an annual meeting of stockholders (a) pursuant
to the Corporation's notice of meeting, (b) by or at the direction of the Board
of Directors or (c) by any stockholder of the Corporation who was a stockholder
of record at the time of giving of notice provided for in this By-Law, who is
entitled to vote at the meeting and who complies with the notice procedures set
forth in this By-Law. (ii) For nominations or other business to be properly
brought before an annual meeting by a stockholder pursuant to clause c) of
paragraph A)(1) of this By-Law, the stockholder must have given timely notice
thereof in writing to the Secretary of the Corporation and such other business
must otherwise be a proper matter for stockholder action. To be timely, a
stockholder's notice



                                      -2-
   3

shall be delivered to the Secretary at the principal executive offices of the
Corporation not later than the close of business on the 60th day nor earlier
than the close of business on the 90th day prior to the first anniversary of the
preceding year's annual meeting; provided, however, that in the event that the
date of the annual meeting is more than 30 days before or more than 60 days
after such anniversary date, notice by the stockholder to be timely must be so
delivered not earlier than the close of business on the 90th day prior to such
annual meeting and not later than the close of business on the later of the 60th
day prior to such annual meeting or the 10th day following the day on which
public announcement of the date of such meeting is first made by the
Corporation. In no event shall the public announcement of an adjournment of an
annual meeting commence a new time period for the giving of a stockholder's
notice as described above. Such stockholder's notice shall set forth (a) as to
each person whom the stockholder proposes to nominate for election or reelection
as a director all information relating to such person that is required to be
disclosed in solicitations of proxies for election of directors in an election
contest, or is otherwise required, in each case pursuant to Regulation 14A under
the Securities Exchange Act of 1934, as amended (the "Exchange Act") and Rule
14a-11 thereunder (including such person's written consent to being named in the
proxy statement as a nominee and to serving as a director if elected); (b) as to
any other business that the stockholder proposes to bring before the meeting, a
brief description of the business desired to be brought before the meeting, the
reasons for conducting such business at the meeting and any material interest in
such business of such stockholder and the beneficial owner, if any, on whose
behalf the proposal is made; and (c) as to the stockholder giving the notice and
the beneficial owner, if any, on whose behalf the nomination or proposal is made
(i) the name and address of such stockholder, as they appear on the
Corporation's books, and of such beneficial owner and (ii) the class and number
of shares of the Corporation which are owned beneficially and of record by such
stockholder and such beneficial owner.

                    (iii) Notwithstanding anything in the second sentence of
paragraph (A)(2) of this By-Law to the contrary, in the event that the number of
directors to be elected to the Board of Directors of the Corporation is
increased and there is no public announcement by the Corporation naming all of
the nominees for director or specifying the size of the increased Board of
Directors at least seventy (70) days prior to the first anniversary of the
preceding year's annual meeting, a stockholder's notice required by this By-Law
shall also be considered timely, but only with respect to nominees for any new
positions created by such increase, if it shall be delivered to the Secretary at
the principal executive offices of the Corporation not later than the close of
business on the 10th day following the day on which such public announcement is
first made by the Corporation.

             (b) Special Meetings of Stockholders. Only such business shall be
conducted at a special meeting of stockholders as shall have been brought before
the meeting pursuant to the Corporation's notice of meeting. Nominations of
persons for election to the Board of Directors may be made at a special meeting
of stockholders at which directors are to be elected pursuant to the
Corporation's notice of meeting (a) by or at the direction of the Board of
Directors or (b) provided that the Board of Directors has determined that
directors shall be elected at such meeting, by any stockholder of the
Corporation who is a stockholder of record at the time of giving of notice
provided for in this By-Law, who shall be entitled to vote at the meeting and
who complies with the notice procedures set forth in this By-Law. In the event
the Corporation calls a special meeting of stockholders for the purpose of
electing one or more directors to the



                                      -3-
   4

Board of Directors, any such stockholder may nominate a person or persons (as
the case may be), for election to such position(s) as specified in the
Corporation's notice of meeting, if the stockholder's notice required by
paragraph (A)(2) of this By-Law shall be delivered to the Secretary at the
principal executive offices of the Corporation not earlier than the close of
business on the 90th day prior to such special meeting and not later than the
close of business on the later of the 60th day prior to such special meeting or
the 10th day following the day on which public announcement is first made of the
date of the special meeting and of the nominees proposed by the Board of
Directors to be elected at such meeting. In no event shall the public
announcement of an adjournment of a special meeting commence a new time period
for the giving of a stockholder's notice as described above.

             (c) General.

                    (i) Only such persons who are nominated in accordance with
the procedures set forth in this By-Law shall be eligible to serve as directors
and only such business shall be conducted at a meeting of stockholders as shall
have been brought before the meeting in accordance with the procedures set forth
in this By-Law. Except as otherwise provided by law, the Certificate of
Incorporation or these By-Laws, the chairman of the meeting shall have the power
and duty to determine whether a nomination or any business proposed to be
brought before the meeting was made or proposed, as the case may be, in
accordance with the procedures set forth in this By-Law and, if any proposed
nomination or business is not in compliance with this By-Law, to declare that
such defective proposal or nomination shall be disregarded. (ii) For purposes of
this By-Law, "public announcement" shall mean disclosure in a press release
reported by the Dow Jones News Service, Associated Press or comparable national
news service or in a document publicly filed by the Corporation with the
Securities and Exchange Commission pursuant to Sections 13, 14 or 15(d) of the
Exchange Act.

                    (iii) Notwithstanding the foregoing provisions of this
By-Law, a stockholder shall also comply with all applicable requirements of the
Exchange Act and the rules and regulations thereunder with respect to the
matters set forth in this By-Law. Nothing in this By-Law shall be deemed to
affect any rights (i) of stockholders to request inclusion of proposals in the
Corporation's proxy statement pursuant to Rule 14a-8 under the Exchange Act or
(ii) of the holders of any series of Preferred Stock to elect directors under
specified circumstances.

             Section 2.08 Procedure for Election of Directors; Required Vote.
Election of directors at all meetings of the stockholders at which directors are
to be elected shall be by ballot, and, subject to the rights of the holders of
any series of Preferred Stock to elect directors under specified circumstances,
a plurality of the votes cast thereat shall elect directors. Except as otherwise
provided by law, the Certificate of Incorporation, or these By-Laws, in all
matters other than the election of directors, the affirmative vote of a majority
of the shares present in person or represented by proxy at the meeting and
entitled to vote on the matter shall be the act of the stockholders.

             Section 2.09 Inspectors of Elections; Opening and Closing the
Polls. The Board of Directors by resolution shall appoint one or more
inspectors, which inspector or inspectors may include individuals who serve the
Corporation in other capacities, including, without limitation, as officers,
employees, agents or representatives, to act at the meetings of



                                      -4-
   5

stockholders and make a written report thereof. One or more persons may be
designated as alternate inspectors to replace any inspector who fails to act. If
no inspector or alternate has been appointed to act or is able to act at a
meeting of stockholders, the chairman of the meeting shall appoint one or more
inspectors to act at the meeting. Each inspector, before discharging his or her
duties, shall take and sign an oath faithfully to execute the duties of
inspector with strict impartiality and according to the best of his or her
ability. The inspectors shall have the duties prescribed by law. The chairman of
the meeting shall fix and announce at the meeting the date and time of the
opening and the closing of the polls for each matter upon which the stockholders
will vote at a meeting.


                                   ARTICLE III

                               BOARD OF DIRECTORS

             Section 3.01 General Powers. The business and affairs of the
Corporation shall be managed under the direction of the Board of Directors,
except as may be otherwise required by law or by the Certificate of
Incorporation. In addition to the powers and authorities by these By-Laws
expressly conferred upon them, the Board of Directors may exercise all such
powers of the Corporation and do all such lawful acts and things as are not by
statute or by the Certificate of Incorporation or by these By-Laws required to
be exercised or done by the stockholders.

             Section 3.02 Number, Tenure and Qualifications. The number of
directors of the Corporation and the number of directors in each class of
directors shall be fixed only pursuant to a resolution adopted by a majority of
the Whole Board. If the holders of any class or classes of stock or series
thereof are entitled by the Certificate of Incorporation to elect one or more
directors, the preceding sentence shall not apply to such directors, and the
number of such directors shall be as provided in the terms of such stock. Each
director shall hold office until the next election of the class or category for
which such director shall have been chosen, and until his or her successor is
elected and qualified or until his or her earlier resignation or removal.

             Section 3.03 Regular Meetings. A regular meeting of the Board of
Directors shall be held without other notice than this By-Law immediately after,
and at the same place as, the Annual Meeting of Stockholders. The Board of
Directors may, by resolution, provide the time and place for the holding of
additional regular meetings without other notice than such resolution.

             Section 3.04 Special Meetings. Special meetings of the Board of
Directors shall be called at the request of the Chairman of the Board, the
President or a majority of the Board of Directors then in office. The person or
persons authorized to call special meetings of the Board of Directors may fix
the place and time of the meetings.

             Section 3.05 Notice. Notice of any special meeting of directors
shall be given to each director at his business or residence in writing by hand
delivery, first-class or overnight mail or courier service, telegram or
facsimile transmission, or orally by telephone. If mailed by first-class mail,
such notice shall be deemed adequately delivered when deposited in the United
States mails so addressed, with postage thereon prepaid, at least five (5) days
before such



                                      -5-
   6

meeting. If by telegram, overnight mail or courier service, such notice shall be
deemed adequately delivered when the telegram is delivered to the telegraph
company or the notice is delivered to the overnight mail or courier service
company at least twenty-four (24) hours before such meeting. If by facsimile
transmission, such notice shall be deemed adequately delivered when the notice
is transmitted at least twelve (12) hours before such meeting. If by telephone
or by hand delivery, the notice shall be given at least twelve (12) hours prior
to the time set for the meeting. Neither the business to be transacted at, nor
the purpose of, any regular or special meeting of the Board of Directors need be
specified in the notice of such meeting, except for amendments to these By-Laws,
as provided under Section 8.01. A meeting may be held at any time without notice
if all the directors are present or if those not present waive notice of the
meeting in accordance with Section 6.04 of these By-Laws.

             Section 3.06 Action by Consent of Board of Directors. Any action
required or permitted to be taken at any meeting of the Board of Directors or of
any committee thereof may be taken without a meeting if all members of the Board
of Directors or committee, as the case may be, consent thereto in writing, and
the writing or writings are filed with the minutes of proceedings of the Board
of Directors or committee.

             Section 3.07 Conference Telephone Meetings. Members of the Board of
Directors, or any committee thereof, may participate in a meeting of the Board
of Directors or such committee by means of conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other, and such participation in a meeting shall
constitute presence in person at such meeting.

             Section 3.08 Quorum. Subject to Section 3.09, a whole number of
directors equal to at least a majority of the Whole Board shall constitute a
quorum for the transaction of business, but if at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of the directors
present may adjourn the meeting from time to time without further notice. The
act of the majority of the directors present at a meeting at which a quorum is
present shall be the act of the Board of Directors. The directors present at a
duly organized meeting may continue to transact business until adjournment,
notwithstanding the withdrawal of enough directors to leave less than a quorum.

             Section 3.09 Vacancies. Subject to applicable law and the rights of
the holders of any series of Preferred Stock with respect to such series of
Preferred Stock, and unless the Board of Directors otherwise determines,
vacancies resulting from death, resignation, retirement, disqualification,
removal from office or other cause, and newly created directorships resulting
from any increase in the authorized number of directors, may be filled only by
the affirmative vote of a majority of the remaining directors, though less than
a quorum of the Board of Directors, and directors so chosen shall hold office
for a term expiring at the annual meeting of stockholders at which the term of
office of the class to which they have been elected expires and until such
director's successor shall have been duly elected and qualified. No decrease in
the number of authorized directors constituting the Whole Board shall shorten
the term of any incumbent director. If there are no directors in office, then an
election of directors may be held in the manner provided by statute.

             Section 3.10 Executive and Other Committees.



                                      -6-
   7

             (a) Committees. The Board of Directors may in its discretion
designate one or more committees. Each committee shall consist of one or more of
the directors of the Corporation. Such committee or committees shall have duties
and powers not inconsistent with the laws of the State of Delaware, the
Certificate of Incorporation, these By-Laws, and the respective resolution or
resolutions of the Board of Directors.

             (b) Operation of Committees. A majority of any committee may
determine its action and fix the time and place of its meetings, unless the
Board shall provide otherwise. Notice of such meetings shall be given to each
member of the committee in the manner provided for in Section 3.05 of these
By-laws. The Board shall have power at any time to fill vacancies in, to change
the membership of, or to dissolve any such committee.

             Section 3.11 Compensation. Unless otherwise restricted by the
Certificate of Incorporation or these By-Laws, the Board of Directors shall have
the authority to fix the compensation of directors. The directors may be paid
their expenses, if any, of attendance at each meeting of the Board of Directors
and may be paid a fixed sum for attendance at each meeting of the Board of
Directors or a stated salary as director. No such payment shall preclude any
director from serving the Corporation in any other capacity and receiving
compensation therefor. Members of special or standing committees may be allowed
like compensation for attending committee meetings.

             Section 3.12 Removal. No director may be removed except as provided
in the Certificate of Incorporation.

             Section 3.13 Records. The Board of Directors shall cause to be kept
a record containing the minutes of the proceedings of the meetings of the Board
and of the stockholders, appropriate stock books and registers and such books of
records and accounts as may be necessary for the proper conduct of the business
of the Corporation.


                                   ARTICLE IV

                                    OFFICERS

             Section 4.01 Elected Officers. The elected officers of the
Corporation shall be a Chairman of the Board, Chief Executive Officer,
President, Secretary, Treasurer, and such other officers (including, without
limitation, a Chief Financial Officer) as the Board of Directors from time to
time may deem proper. The Chairman of the Board shall be chosen from among the
directors. All officers elected by the Board of Directors shall each have such
powers and duties as generally pertain to their respective offices, subject to
the specific provisions of this Article IV. Such officers shall also have such
powers and duties as from time to time may be conferred by the Board of
Directors or by any committee thereof. The Board of Directors or any committee
thereof may from time to time elect, or the Chairman of the Board or Chief
Executive Officer may appoint, such other officers (including one or more
Assistant Vice Presidents, Assistant Secretaries, Assistant Treasurers, and
Assistant Controllers) and such agents, as may be necessary or desirable for the
conduct of the business of the Corporation. Such other officers and agents shall
have such duties and shall hold their offices for such terms as shall be
provided



                                      -7-
   8

in these By-Laws or as may be prescribed by the Board of Directors or such
committee or by the Chief Executive Officer, as the case may be.

             Section 4.02 Election and Term of Office. The elected officers of
the Corporation shall be elected annually by the Board of Directors at the
regular meeting of the Board of Directors held after the annual meeting of the
stockholders. If the election of officers shall not be held at such meeting,
such election shall be held as soon thereafter as convenient. Each officer shall
hold office until his successor shall have been duly elected and shall have
qualified or until his death or until he shall resign, but any officer may be
removed from office at any time by the affirmative vote of a majority of the
Whole Board. Such removal shall be without prejudice to the contractual rights,
if any, of the person so removed.

             Section 4.03 Chairman of the Board. The Chairman of the Board shall
preside at all meetings of the stockholders and of the Board of Directors.

             Section 4.04 Chief Executive Officer. The Chief Executive Officer
shall be responsible for the general management of the affairs of the
Corporation and shall perform all duties incidental to his office which may be
required by law and all such other duties as are properly required of him by the
Board of Directors. He shall make reports to the Board of Directors and the
stockholders, and shall see that all orders and resolutions of the Board of
Directors and of any committee thereof are carried into effect. The Chief
Executive Officer may also serve as Chairman of the Board, if so elected by the
Board of Directors.

             Section 4.05 President. The President shall act in a general
executive capacity and shall assist in the administration and operation of the
Corporation's business and general supervision of its policies and affairs. The
Chief Executive Officer may also serve as President, if so elected by the Board
of Directors.

             Section 4.06 Vice-Presidents. Each Vice President shall have such
powers and shall perform such duties as shall be assigned to him by the Board of
Directors or the Chief Executive Officer.

             Section 4.07 Chief Financial Officer. The Chief Financial Officer
(if any) shall be a Vice President and act in an executive financial capacity.
He shall assist the Chief Executive Officer and the President in the general
supervision of the Corporation's financial policies and affairs.

             Section 4.08 Treasurer. The Treasurer shall exercise general
supervision over the receipt, custody and disbursement of corporate funds. The
Treasurer shall cause the funds of the Corporation to be deposited in such banks
as may be authorized by the Board of Directors, or in such banks as may be
designated as depositaries in the manner provided by resolution of the Board of
Directors. He shall have such further powers and duties and shall be subject to
such directions as may be granted or imposed upon him from time to time by the
Board of Directors, the Chief Executive Officer or the President.

             Section 4.09 Secretary. The Secretary shall keep or cause to be
kept in one or more books provided for that purpose, the minutes of all meetings
of the Board of Directors, the committees of the Board of Directors and the
stockholders; he shall see that all notices are duly



                                      -8-
   9

given in accordance with the provisions of these By-Laws and as required by law;
he shall be custodian of the records and the seal of the Corporation and affix
and attest the seal to all stock certificates of the Corporation (unless the
seal of the Corporation on such certificates shall be a facsimile, as
hereinafter provided) and affix and attest the seal to all other documents to be
executed on behalf of the Corporation under its seal; and he shall see that the
books, reports, statements, certificates and other documents and records
required by law to be kept and filed are properly kept and filed; and in
general, he shall perform all the duties incident to the office of Secretary and
such other duties as from time to time may be assigned to him by the Board of
Directors, the Chief Executive Officer or the President.

             Section 4.10 Removal. Any officer elected, or agent appointed, by
the Board of Directors may be removed by the affirmative vote of a majority of
the Whole Board whenever, in their judgment, the best interests of the
Corporation would be served thereby. Any officer or agent appointed by the Chief
Executive Officer may be removed by him whenever, in his judgment, the best
interests of the Corporation would be served thereby. No elected officer shall
have any contractual rights against the Corporation for compensation by virtue
of such election beyond the date of the election of his successor, his death,
his resignation or his removal, whichever event shall first occur, except as
otherwise provided in an employment contract or under an employee deferred
compensation plan or any other employee benefit plan.

             Section 4.11 Vacancies. A newly created elected office and a
vacancy in any elected office because of death, resignation, or removal may be
filled by the Board of Directors for the unexpired portion of the term at any
meeting of the Board of Directors. Any vacancy in an office appointed by the
Chief Executive Officer because of death, resignation, or removal may be filled
by the Chief Executive Officer.


                                    ARTICLE V

                        STOCK CERTIFICATES AND TRANSFERS

             Section 5.01 Stock Certificates and Transfers. The interest of each
stockholder of the Corporation may be evidenced by certificates for shares of
stock in such form as the appropriate officers of the Corporation may from time
to time prescribe, provided that the Board of Directors may provide, by
resolution or resolutions, that some or all of any or all classes or series of
its stock shall be uncertificated shares. The shares of the stock of the
Corporation shall be transferred on the books of the Corporation by the holder
thereof in person or by his attorney, upon surrender for cancellation of
certificates for at least the same number of shares, with an assignment and
power of transfer endorsed thereon or attached thereto, duly executed, with such
proof of the authenticity of the signature as the Corporation or its agents may
reasonably require.

             The certificates of stock shall be signed, countersigned and
registered in such manner as the Board of Directors may by resolution prescribe,
which resolution may permit all or any of the signatures on such certificates to
be in facsimile. In case any officer, transfer agent or registrar who has signed
or whose facsimile signature has been placed upon a certificate has ceased to be
such officer, transfer agent or registrar before such certificate is issued, it
may be issued by the Corporation with the same effect as if he were such
officer, transfer agent or registrar at the date of issue.



                                      -9-
   10

             Within a reasonable time after the issuance or transfer of
uncertificated stock, the Corporation shall send to the registered owner thereof
a written notice containing the information required to be set forth or stated
on certificates pursuant to Sections 151, 156, 202(a) or 218(a) of the General
Corporation Law of the State of Delaware or a statement that the Corporation
will furnish without charge to each stockholder who so requests the powers,
designations, preferences and relative participating, optional or other special
rights of each class of or series thereof and the qualifications, limitations or
restrictions of such preferences and/or rights.

             Section 5.02 Lost, Stolen or Destroyed Certificates. No certificate
for shares of stock in the Corporation shall be issued in place of any
certificate alleged to have been lost, destroyed or stolen, except on production
of such evidence of such loss, destruction or theft and on delivery to the
Corporation of a bond of indemnity in such amount, upon such terms and secured
by such surety, as the Board of Directors or any financial officer may in its or
his discretion require.

             Section 5.03 Transfer of Stock. Upon surrender to the Corporation
or the transfer agent of the Corporation of a certificate for shares duly
endorsed or accompanied by proper evidence of succession, assignation or
authority to transfer, it shall be the duty of the Corporation to issue a new
certificate to the person entitled thereto, cancel the old certificate and
record the transaction upon its books. Upon receipt of proper transfer
instructions from the registered owner of uncertificated shares, such
uncertificated shares shall be cancelled and issuance of new equivalent
uncertificated shares or certificated shares shall be made to the person
entitled thereto and the transaction should be recorded upon the books of the
Corporation.

             Section 5.04 Fixing Record Date. In order that the Corporation may
determine the stockholders entitled to notice of or to vote at any meeting of
stockholders or any adjournment thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payments of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose of any other lawful action, the Board of Directors may fix, in
advance, a record date, which shall not be more than sixty (60) nor less than
ten (10) days before the date of such meeting, nor more than sixty (60) days
prior to any other action. A determination of stockholders of record entitled to
notice of or to vote at a meeting of stockholders shall apply to any adjournment
of the meeting; provided, however, that the Board of Directors may fix a new
record date for the adjourned meeting.

             Section 5.05 Registered Stockholders. The Corporation shall be
entitled to recognize the exclusive right of a person registered on its books as
the owner of shares to receive dividends, and to vote as such owner, and to hold
liable for calls and assessments a person registered on its books as the owner
of shares, and shall not be bound to recognize any equitable or other claim to
or interest in such share or shares on the part of any other person, whether or
not it shall have express or other notice thereof, otherwise provided by the
laws of the State of Delaware.



                                      -10-
   11

                                   ARTICLE VI

                            MISCELLANEOUS PROVISIONS

             Section 6.01 Fiscal Year. The fiscal year of the Corporation shall
begin on the first day of January and end on the thirty-first day of December of
each year.

             Section 6.02 Dividends. The Board of Directors may from time to
time declare, and the Corporation may pay, dividends on its outstanding shares
in the manner and upon the terms and conditions provided by law and the
Certificate of Incorporation.

             Section 6.03 Seal. The corporate seal shall have enscribed thereon
the name of the Corporation and the words "Corporate Seal, Delaware".

             Section 6.04 Waiver of Notice. Whenever any notice is required to
be given to any stockholder or director of the Corporation under the provisions
of the General Corporation Law of the State of Delaware or these By-Laws, a
waiver thereof in writing, signed by the person or persons entitled to such
notice, whether before or after the time stated therein, shall be deemed
equivalent to the giving of such notice. Neither the business to be transacted
at, nor the purpose of, any annual or special meeting of the stockholders or the
Board of Directors or committee thereof need be specified in any waiver of
notice of such meeting.

             Section 6.05 Audits. The accounts, books and records of the
Corporation shall be audited upon the conclusion of each fiscal year by an
independent certified public accountant selected by the Board of Directors, and
it shall be the duty of the Board of Directors to cause such audit to be done
annually.

             Section 6.06 Resignations. Any director or any officer, whether
elected or appointed, may resign at any time by giving written notice of such
resignation to the Chairman of the Board, the Chief Executive Officer, the
President, or the Secretary, and such resignation shall be deemed to be
effective as of the close of business on the date said notice is received by the
Chairman of the Board, the Chief Executive Officer, the President, or the
Secretary, or at such later time as is specified therein. No formal action shall
be required of the Board of Directors or the stockholders to make any such
resignation effective.


                                   ARTICLE VII

                            CONTRACTS, PROXIES, ETC.

             Section 7.01 Contracts. Except as otherwise required by law, the
Certificate of Incorporation or these By-Laws, any contracts or other
instruments may be executed and delivered in the name and on the behalf of the
Corporation by such officer or officers of the Corporation as the Board of
Directors may from time to time direct. Such authority may be general or
confined to specific instances as the Board of Directors may determine. The
Chief Executive Officer, the President or any Vice President may execute bonds,
contracts, deeds, leases and other instruments to be made or executed for or on
behalf of the Corporation. Subject to any restrictions imposed by the Board of
Directors or the Chief Executive Officer, the



                                      -11-
   12

President or any Vice President of the Corporation may delegate contractual
powers to others under his jurisdiction, it being understood, however, that any
such delegation of power shall not relieve such officer of responsibility with
respect to the exercise of such delegated power.

             Section 7.02 Proxies. Unless otherwise provided by resolution
adopted by the Board of Directors, the Chief Executive Officer, the President or
any Vice President may from time to time appoint an attorney or attorneys or
agent or agents of the Corporation, in the name and on behalf of the
Corporation, to cast the votes which the Corporation may be entitled to cast as
the holder of stock or other securities in any other corporation, any of whose
stock or other securities may be held by the Corporation, at meetings of the
holders of the stock or other securities of such other corporation, or to
consent in writing, in the name of the Corporation as such holder, to any action
by such other corporation, and may instruct the person or persons so appointed
as to the manner of casting such votes or giving such consent, and may execute
or cause to be executed in the name and on behalf of the Corporation and under
its corporate seal or otherwise, all such written proxies or other instruments
as he may deem necessary or proper in the premises.


                                  ARTICLE VIII

                                   AMENDMENTS

             Section 8.01 Amendments. These By-Laws may be amended, modified or
repealed, and new By-laws may be adopted, at any time by the Board of Directors.
Stockholders of the Corporation may adopt additional By-laws and amend, modify
or repeal any By-laws, whether or not adopted by them, but only in accordance
with Article VII of the Certificate of Incorporation.


                                      -12-

EX-4.1

   1
                                                                     EXHIBIT 4.1

NUMBER                         [GENEVA STEEL LOGO]                     SHARES

GS

                                       SEE REVERSE FOR CERTAIN DEFINITIONS AND
                                      A STATEMENT AS TO THE RIGHTS, PREFERENCES,
                                        PRIVILEGES AND RESTRICTIONS OF SHARES.

                                                  CUSIP 372257 10 5


                          GENEVA STEEL HOLDINGS CORP.

              INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE

                                  COMMON STOCK

THIS CERTIFIES THAT


IS THE RECORD HOLDER OF


  FULLY PAID AND NONASSESSABLE SHARES OF THE COMMON STOCK, $0.01 PAR VALUE, OF

Geneva Steel Holdings Corp., transferable on the books of the Corporation by
the holder hereof in person or by duly authorized attorney upon surrender of
this certificate properly endorsed. This certificate is not valid until
countersigned and registered by the Transfer Agent and Registrar.

        Witness the facsimile seal of the Corporation and the facsimile
signature of the duly authorized officers.

                              CERTIFICATE OF STOCK

Dated:


COUNTERSIGNED AND REGISTERED:

FIRST UNION NATIONAL BANK
(Charlotte, North Carolina)
                                  [GENEVA STEEL HOLDINGS CORPORATE SEAL]
TRANSFER AGENT                                 NOV. 22, 2000
AND REGISTRAR

BY
                            /s/ [Signature Illegible]  /s/ [Signature Illegible]

  AUTHORIZED SIGNATURE            SECRETARY                    PRESIDENT





   2

                          GENEVA STEEL HOLDINGS CORP.

        A statement of the designations, preferences, limitations and relative
rights granted to or imposed upon the respective classes or series of shares of
stock of the Corporation, and upon the holders thereof as established by the
Amended and Restated Certificate of Incorporation, or by any statement of
determination of preferences, and the number of shares constituting each series
or class, may be obtained by any shareholder of the Corporation upon request in
writing and without charge from the Secretary of the Corporation at the
principal office of the Corporation.

        The following abbreviations, when used in the inscription on the face
of this Certificate, shall be construed as though they were written out in full
according to applicable laws or regulations:

                                            
        TEN COM   --  as tenants in common              UNIF GIFT MIN ACT -- ...................Custodian...............
        TEN ENT   --  as tenants by the entireties                                 (Cust)                    (Minor)
        JT TEN    --  as joint tenants with right of                         under Uniform Gifts to Minors
                      survivorship and not as tenants                        Act........................................
                      in common                                                                 (State)



        


    Additional abbreviations may also be used though not in the above list.


        For Value Received,___________________________hereby sell, assign and
transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER
   IDENTIFYING NUMBER OF ASSIGNEE
- --------------------------------------

- --------------------------------------


_______________________________________________________________________________
 (PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE)

_______________________________________________________________________________

_______________________________________________________________________________

________________________________________________________________________ Shares
of the common stock represented by the within Certificate, and do hereby
irrevocably constitute and appoint

______________________________________________________________________ Attorney
to transfer the said shares on the Books of the within named Corporation
with full power of substitution in the premises.

Dated________________________



                        ________________________________________________________
                        NOTICE: THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND
                                WITH THE NAME AS WRITTEN UPON THE FACE OF THE
                                CERTIFICATE IN EVERY PARTICULAR, WITHOUT
                                ALTERATION OR ENLARGEMENT OR ANY CHANGE
                                WHATSOEVER.

Signature(s) Guaranteed:




By

THE SIGNATURE(S) SHOULD BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION
(BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH
MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO
S.E.C. RULE 17Ad-15.

EX-4.2

   1

                                                                     EXHIBIT 4.2



                          REGISTRATION RIGHTS AGREEMENT

                                 By and Between


                           ALBERT FRIED & COMPANY, LLC

                                       and

                           GENEVA STEEL HOLDINGS CORP.


                           Dated as of January 3, 2001


   2

                                TABLE OF CONTENTS



                                                                                                                     PAGE
                                                                                                                     ----
                                                                                                                  
1.       REGISTRATIONS...........................................................................................     3
         (a)      SHELF REGISTRATION.............................................................................     3
         (b)      REGISTRATION REQUESTS..........................................................................     4
         (c)      LIMITATIONS ON REQUESTED REGISTRATIONS.........................................................     5
         (d)      REGISTRATION STATEMENT FORM....................................................................     6
         (e)      REGISTRATION EXPENSES..........................................................................     6
         (f)      PRIORITY IN CUTBACK REGISTRATIONS..............................................................     6
         (g)      PREEMPTION OF REQUESTED REGISTRATION...........................................................     7
2.       PIGGYBACK REGISTRATIONS.................................................................................     7
         (a)      RIGHT TO INCLUDE REGISTRABLE SECURITIES........................................................     7
         (b)      REGISTRATION EXPENSES..........................................................................     8
         (c)      PRIORITY IN CUTBACK REGISTRATIONS..............................................................     8
3.       REGISTRATION PROCEDURES.................................................................................     8
4.       UNDERWRITTEN OFFERINGS..................................................................................    12
         (a)      UNDERWRITTEN REQUESTED OFFERINGS...............................................................    12
         (b)      UNDERWRITTEN PIGGYBACK OFFERINGS...............................................................    13
5.       HOLDBACK AGREEMENTS.....................................................................................    14
         (a)      BY THE HOLDERS OF REGISTRABLE SECURITIES.......................................................    14
         (b)      BY THE COMPANY AND OTHER SECURITYHOLDERS.......................................................    14
         (c)      EXCEPTION......................................................................................    15
6.       INDEMNIFICATION.........................................................................................    16
         (a)      INDEMNIFICATION BY THE COMPANY.................................................................    16
         (b)      INDEMNIFICATION BY THE HOLDERS.................................................................    16
         (c)      NOTICES OF CLAIMS, ETC.........................................................................    17
         (d)      CONTRIBUTION...................................................................................    18
         (e)      OTHER INDEMNIFICATION..........................................................................    19
         (f)      INDEMNIFICATION PAYMENTS.......................................................................    19
7.       COVENANT RELATING TO RULE 144...........................................................................    19
8.       OTHER REGISTRATION RIGHTS...............................................................................    19
         (a)      NO EXISTING AGREEMENTS.........................................................................    19
         (b)      FUTURE AGREEMENTS..............................................................................    20
         (c)      BEST REGISTRATION RIGHTS.......................................................................    20


                                       i
   3



                                                                                                                  
9.       DEFINITIONS............................................................................................. 20
10.      MISCELLANEOUS........................................................................................... 24
         (a)      NOTICES........................................................................................ 24
         (b)      ENTIRE AGREEMENT............................................................................... 25
         (c)      AMENDMENT...................................................................................... 25
         (d)      WAIVER......................................................................................... 25
         (e)      CONSENTS AND WAIVERS BY HOLDERS OF REGISTRABLE SECURITIES...................................... 25
         (f)      NO THIRD PARTY BENEFICIARY..................................................................... 25
         (g)      SUCCESSORS AND ASSIGNS......................................................................... 26
         (h)      HEADINGS....................................................................................... 26
         (i)      INVALID PROVISIONS............................................................................. 26
         (j)      REMEDIES....................................................................................... 26
         (k)      GOVERNING LAW.................................................................................. 26
         (l)      COUNTERPARTS................................................................................... 26



                                       ii
   4

                           GENEVA STEEL HOLDINGS CORP.
                          REGISTRATION RIGHTS AGREEMENT

        This REGISTRATION RIGHTS AGREEMENT dated as of January 3, 2001, is made
and entered into by and between Geneva Steel Holdings Corp., a Delaware
corporation (together with its predecessor and including its successors and
assigns, the "COMPANY"), and the investor that is the signatory to this
Agreement (the "INVESTOR"). Capitalized terms not otherwise defined herein have
the meanings set forth in SECTION 9.

        WHEREAS, on February 1, 1999, Geneva Steel Company filed a voluntary
petition for reorganization under Chapter 11 of title 11, 11 U.S.C. Sections 101
- - 1330 (as amended, the "BANKRUPTCY CODE"), with the United States Bankruptcy
Court for the District of Utah (the "BANKRUPTCY COURT"), commencing Chapter 11
Case No. 99 C-21130 (the "BANKRUPTCY CASE");

        WHEREAS, on July 20, 2000, Geneva Steel Company filed that certain Plan
of Reorganization (as amended and supplemented from time to time, the "PLAN") in
the Bankruptcy Case;

        WHEREAS, the Bankruptcy Court confirmed the Plan pursuant to the order
under section 1129 of the Bankruptcy Code, dated November 22, 2000, as modified
on December 8, 2000 (the "CONFIRMATION ORDER");

        WHEREAS, Investor will acquire pursuant to the Plan or the Stand-by
Commitment (as such term is defined in the Plan) shares of Common Stock ("COMMON
SHARES") and/or shares of Preferred Stock ("PREFERRED SHARES" and collectively
with the Common Shares, the "SHARES") issued by the Company;

        NOW, THEREFORE, in consideration of the mutual covenants and agreements
set forth in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

        1. REGISTRATIONS.

             (a) SHELF REGISTRATION.

                    (i) The Company shall comply with all the provisions of
SECTIONS 3(b) to 3(l) and shall use its best efforts to file as promptly as
practicable (but in no event more than 60 days after the date hereof (the "Issue
Date")) with the Commission, and thereafter shall use its reasonable best
efforts to cause to be declared effective within 120 days after the date hereof,
a Shelf Registration Statement, covering all of the Registrable Securities, and
relating to the offer and sale of the Registrable Securities, by the holders of
the Registrable Securities from time to time in accordance with the methods of
distribution set forth in the Shelf Registration Statement (unless a Shelf
Registration Statement is then not legally permitted under the applicable rules
of the Commission or otherwise, in which case the Company shall use its
reasonable best efforts to cause a Requested Registration with respect to the
Registrable Securities to become effective).


   5

                    (ii) The Company shall use its best efforts to keep the
applicable Shelf Registration Statement continuously effective in order to
permit any prospectus forming part thereof to be used by the holders of the
Registrable Securities covered thereby for a period ending on the earlier of (A)
the period that will terminate when all the Registrable Securities covered by
such Shelf Registration Statement have been sold pursuant thereto and (B) the
date on which such Registrable Securities become eligible for resale without
volume restrictions pursuant to Rule 144 under the Securities Act (in any such
case, such period being called the "SHELF REGISTRATION EFFECTIVENESS PERIOD").
The Company shall be deemed not to have used its best efforts to keep the
applicable Shelf Registration Statement effective during the Shelf Registration
Effectiveness Period (a) unless such action is taken by the Company in good
faith and for valued business reasons, or (b) unless such action is required by
applicable law.


                    (iii) Notwithstanding any other provisions hereof, the
Company will use its best efforts to ensure that (A) any Shelf Registration
Statement and any amendment thereto and any prospectus forming part thereof and
any supplement thereto complies in all material respects with the Securities Act
and the rules and regulations of the Commission thereunder, (B) any Shelf
Registration Statement and any amendment thereto (in either case, other than
with respect to information included therein in reliance upon or in conformity
with information furnished in writing or confirmed in writing to the Company by
or on behalf of the holder of such Registrable Securities specifically for use
therein (the "INVESTOR'S INFORMATION")) does not, when it becomes effective,
contain an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein not
misleading and (C) any prospectus forming part of any Shelf Registration
Statement, and any supplement to such prospectus (in either case, other than
with respect to Investor's Information), does not include an untrue statement of
a material fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.


                    (iv) The Company will pay all Registration Expenses incurred
in connection with the Shelf Registration Statement, if any.


             (b) REGISTRATION REQUESTS.

                    (i) If the Company has failed to cause the Shelf
Registration Statement to be declared effective within 120 days after the date
hereof or, if prior to such 120th day the Company shall have effected a Public
Offering, upon the written request of one or more Requesting Holders requesting
that the Company effect the registration under the Securities Act of all or part
of such Requesting Holders' Registrable Securities and specifying the number of
Registrable Securities to be registered and the intended method of disposition
thereof, the Company will promptly, and in no event more than five (5) Business
Days after receipt of such request, give written notice (a "NOTICE OF REQUESTED
REGISTRATION") of such request to all other holders of Registrable Securities
that have executed substantially



                                       4
   6

identical agreements, and thereupon will use its reasonable best efforts to
effect the registration under the Securities Act of the Registrable Securities
which the Company has been so requested to register in writing within thirty
(30) Business Days after receiving the Notice of Requested Registration by such
Requesting Holder or Holders, all to the extent requisite to permit the
disposition (in accordance with the intended methods thereof) of the Registrable
Securities so to be registered. If requested by the holders of a majority of the
Registrable Securities requested to be included in any Requested Registration,
the method of disposition of Registrable Securities and any other securities
included in such registration shall be an underwritten offering effected in
accordance with SECTION 4(a).


                    (ii) Notwithstanding the foregoing, the Company may postpone
taking action with respect to a Requested Registration for a reasonable period
of time after receipt of the original request (not exceeding forty-five (45)
days) if, in the good faith opinion of the Company's Board of Directors,
effecting the registration would adversely affect a material financing,
acquisition, disposition of assets or stock, merger or other comparable
transaction or would require the Company to make public disclosure of
information the public disclosure of which would be reasonably likely to have a
material adverse effect upon the Company, PROVIDED that the Company shall not
delay such action pursuant to this sentence more than once in any twelve (12)
month period. Neither the Company nor any of its securityholders shall have the
right to include any of the Company's securities (other than Registrable
Securities) in a registration statement to be filed as part of a Requested
Registration unless (i) such securities are of the same class or series as the
Registrable Securities covered by such registration statement, (ii) the holders
of a majority of the Registrable Securities covered by such registration
statement consent to such inclusion in writing and (iii) if such Requested
Registration is an underwritten offering, the Company or such securityholders,
as applicable, agree in writing to sell, subject to PARAGRAPH (f), their
securities on the same terms and conditions as apply to the Registrable
Securities being sold. If any securityholders of the Company (other than the
holders of Registrable Securities in such capacity) register securities of the
Company in a Requested Registration in accordance with this Section, such
holders shall pay the fees and expenses of their counsel and their PRO RATA
SHARE, on the basis of the respective amounts of the securities included in such
registration on behalf of each such holder, of the Registration Expenses if the
Registration Expenses for such registration are not paid by the Company for any
reason.


             (c) LIMITATIONS ON REQUESTED REGISTRATIONS. Investor may request a
Requested Registration no more than five (5) times in total. Notwithstanding
anything herein to the contrary, the Company shall not be required to honor a
request for a Requested Registration if:

                    (i) the Registrable Securities requested by Requesting
Holders to be so registered do not constitute at least ten percent (10%) of the
total Registrable Securities;



                                       5
   7

                    (ii) such request is received from any Requesting Holder
with respect to Registrable Securities that may immediately be sold by such
Requesting Holder under Rule 144 during any ninety (90) day period; or


                    (iii) such request is received by the Company less than one
hundred eighty (180) days following the effective date of any previous
registration statement relating to such Registrable Securities filed in
connection with a Requested Registration, regardless of whether any holder of
the Registrable Securities covered thereby exercised its rights under this
Agreement with respect to such registration, unless such previous registration
constituted a Cutback Registration in which the number of Registrable Securities
actually included in such registration was not at least ninety-five percent
(95%) of the number of Registrable Securities requested to be included in such
registration.


             (d) REGISTRATION STATEMENT FORM. A Shelf Registration Statement and
any Requested Registrations shall be on such appropriate registration form
promulgated by the Commission as shall be selected by the Company, and shall be
reasonably acceptable to the holders of a majority of the Registrable Securities
(or, if such registration involves an underwritten Public Offering, the Managing
Underwriter), as the case may be, to which such registration relates, and shall
permit the disposition of such Registrable Securities in accordance with the
intended method or methods specified in their request for such registration.

             (e) REGISTRATION EXPENSES. The Company will pay all Registration
Expenses incurred in connection with any Requested Registration, provided the
Company shall not be required to pay for costs or expenses of any registration
commenced pursuant to Section 1(b) if the request is subsequently withdrawn by
the Investor.

             (f) PRIORITY IN CUTBACK REGISTRATIONS. If a Requested Registration
becomes a Cutback Registration, the Company will include in any such
registration, to the extent of the number which the Managing Underwriter advises
the Company can be sold in such offering, (i) FIRST, Registrable Securities
requested to be included in such registration by the Requesting Holders, PRO
RATA on the basis of the number of Registrable Securities requested to be
included by such holders, (ii) SECOND, other Registrable Securities requested to
be included in such registration by the other Requesting Holders (if any), PRO
RATA on the basis of the number of Registrable Securities requested to be
included by such holders, and (iii) THIRD other securities of the Company
proposed to be included in such registration, allocated among the holders
thereof in accordance with the priorities then existing among the Company and
the holders of such other securities; and any securities so excluded shall be
withdrawn from and shall not be included in such Requested Registration. If the
Requesting Holders are unable to register at least eighty-five percent (85%) of
the Registrable Securities which they have requested to be registered, then such
registration shall not count as a Requested Registration for purposes of this
Section 1, and the Requesting Holders will be entitled to request the
registration of their Registrable Securities on an additional occasion.



                                       6
   8

             (g) PREEMPTION OF REQUESTED REGISTRATION. Notwithstanding anything
to the contrary contained herein, at any time within thirty (30) days after
receiving a written request for a Requested Registration of Registrable
Securities, the Company may elect to effect an underwritten primary registration
in lieu of the Requested Registration if the Company's Board of Directors
believes that such primary registration would be in the best interests of the
Company or if the Managing Underwriter, if any, for the Requested Registration
advises the Company in writing that in its opinion, in order to sell the
Registrable Securities to be sold, the Company should include its own
securities. If the Company so elects to effect a primary registration, the
Company shall give prompt written notice to all holders of Registrable
Securities of its intention to effect such a registration and shall afford the
holders of the Registrable Securities rights contained in SECTION 2 with respect
to Piggyback Registrations. In the event that the Company so elects to effect a
primary registration after receiving a request for a Requested Registration, the
requests for a Requested Registration shall be deemed to have been withdrawn and
such primary registration shall not be deemed to be an Effective Registration.

        2. PIGGYBACK REGISTRATIONS.

             (a) RIGHT TO INCLUDE REGISTRABLE SECURITIES. Notwithstanding any
limitation contained in SECTION 1, if the Company at any time proposes after the
date hereof to effect a Piggyback Registration, including in accordance with
SECTION l(g), it will each such time give prompt written notice (a "NOTICE OF
PIGGYBACK REGISTRATION"), at least thirty (30) days prior to the anticipated
filing date, to all holders of Registrable Securities that have executed
substantially identical agreements, of its intention to do so and of such
holders' rights under this SECTION 2, which Notice of Piggyback Registration
shall include a description of the intended method of disposition of such
securities. Upon the written request of any such holder made within twenty (20)
days after receipt of a Notice of Piggyback Registration (which request shall
specify the Registrable Securities intended to be disposed of by such holder and
the intended method of disposition thereof), the Company will, subject to the
other provisions of this Agreement, include in the registration statement
relating to such Piggyback Registration all Registrable Securities which the
Company has been so requested to register, all to the extent requisite to permit
the disposition of such Registrable Securities in accordance with the intended
method of disposition set forth in the Notice of Piggyback Registration.
Notwithstanding the foregoing, if, at any time after giving a Notice of
Piggyback Registration and prior to the effective date of the registration
statement filed in connection with such registration, the Company shall
determine for any reason not to register or to delay registration of such
securities, the Company may, at its election, give written notice of such
determination to each holder of Registrable Securities and, thereupon, (i) in
the case of a determination not to register, shall be relieved of its obligation
to register any Registrable Securities in connection with such registration (but
not from its obligation to pay the Registration Expenses in connection
therewith) without prejudice, however, to the rights of any Requesting Holder
entitled to do so to request that such registration be effected as a Requested
Registration under SECTION 1, and (ii) in the case of a determination to delay
registering, shall be permitted to delay registering any Registrable Securities
for the same period as the delay in registering such other securities. No
registration



                                       7
   9

effected under this SECTION 2 shall relieve the Company of its obligations to
effect a Requested Registration under SECTION 1.

             (b) REGISTRATION EXPENSES. The Company will pay all Registration
Expenses incurred in connection with each Piggyback Registration.

             (c) PRIORITY IN CUTBACK REGISTRATIONS. If a Piggyback Registration
becomes a Cutback Registration, the Company will include in such registration,
to the extent of the amount or kind of securities which the Managing Underwriter
advises the Company can be sold in such offering without adversely affecting the
success of such offering:

                    (i) if such registration as initially proposed by the
Company was solely a primary registration of its securities, (x) FIRST, the
securities proposed by the Company to be sold for its own account, (y) SECOND,
any Registrable Securities requested to be included in such registration by
Requesting Holders, PRO RATA on the basis of the number of Registrable
Securities requested to be included by such holders, and (z) THIRD, any other
securities of the Company proposed to be included in such registration,
allocated among the holders thereof in accordance with the priorities then
existing among the Company and such holders; and


                    (ii) if such registration as initially proposed by the
Company was in whole or in part requested by holders of securities of the
Company, other than holders of Registrable Securities in their capacities as
such, pursuant to demand registration rights, (x) FIRST, such securities held by
the holders initiating such registration and, if applicable, any securities
proposed by the Company to be sold for its own account, allocated in accordance
with the priorities then existing among the Company and such holders, (y)
SECOND, any Registrable Securities requested to be included in such registration
by Requesting Holders, PRO RATA on the basis of the number of Registrable
Securities requested to be included by such holders, and (z) THIRD, any other
securities of the Company proposed to be included in such registration,
allocated among the holders thereof in accordance with the priorities then
existing among the Company and the holders of such other securities;


and any securities so excluded shall be withdrawn from and shall not be included
in such Piggyback Registration.

        3. REGISTRATION PROCEDURES. If and whenever the Company is required to
effect the registration of any Registrable Securities under the Securities Act
pursuant to SECTION 1 or SECTION 2, the Company will use its best efforts to
effect the registration and sale of such Registrable Securities in accordance
with the intended method of disposition thereof. Without limiting the foregoing,
the Company in each such case will, as expeditiously as possible:

             (a) use its best efforts to prepare and file with the Commission,
not later than thirty (30) days after the Company's receipt of the request
therefor from the Requesting Holders (or as soon thereafter as possible) the
requisite registration statement to effect such registration and use its
reasonable best efforts to cause such registration statement to become
effective, PROVIDED that as far in advance as



                                       8
   10

practical before filing such registration statement or any amendment thereto,
the Company will furnish to the Requesting Holders of the Registrable Securities
copies of reasonably complete drafts of all such documents proposed to be filed
(including exhibits), and any such holder shall have the opportunity to object
to any information pertaining solely to such holder that is contained therein
and the Company will make the corrections reasonably requested by such holder
with respect to such information prior to filing any such registration statement
or amendment;

             (b) use its best efforts to prepare and file with the Commission
such amendments and supplements to such registration statement and any
prospectus used in connection therewith as may be necessary to maintain the
effectiveness of such registration statement and to comply with the provisions
of the Securities Act with respect to the disposition of all Registrable
Securities covered by such registration statement, in accordance with the
intended methods of disposition thereof, until (i) the Effectiveness Period or
(ii) the Shelf Registration Effectiveness Period has ended;

             (c) promptly notify each Requesting Holder and the underwriter or
underwriters, if any:

                    (i) when such registration statement or any prospectus used
in connection therewith, or any amendment or supplement thereto, has been filed
and, with respect to such registration statement or any post-effective amendment
thereto, when the same has become effective;


                    (ii) of any written comments from the Commission with
respect to any filing referred to in clause (i) and of any written request by
the Commission for amendments or supplements to such registration statement or
prospectus;


                    (iii) of the notification to the Company by the Commission
of the issuance of any stop order suspending the effectiveness of such
registration statement or the initiation of any proceeding with respect to the
issuance by the Commission of any such stop order; and


                    (iv) of the receipt by the Company of any notification with
respect to the suspension of the qualification of any Registrable Securities for
sale under the applicable securities or blue sky laws of any jurisdiction;


             (d) furnish to each seller of Registrable Securities covered by
such registration statement such number of conformed copies of such registration
statement and of each amendment and supplement thereto (in each case including
all exhibits and documents incorporated by reference), such number of copies of
the prospectus contained in such registration statement (including each
preliminary



                                       9
   11

prospectus and any summary prospectus) and any other prospectus filed under Rule
424 promulgated under the Securities Act relating to such holder's Registrable
Securities, and such other documents, as such seller may reasonably request to
facilitate the disposition of its Registrable Securities;

             (e) use its best efforts to register or qualify all Registrable
Securities covered by such registration statement under such other securities or
blue sky laws of such jurisdictions as each holder thereof shall reasonably
request, to keep such registration or qualification in effect for so long as
such registration statement remains in effect, and to take any other action
which may be reasonably necessary or advisable to enable such holder to
consummate the disposition in such jurisdictions of the Registrable Securities
owned by such holder, except that the Company shall not for any such purpose be
required (i) to qualify generally to do business as a foreign corporation in any
jurisdiction wherein it would not but for the requirements of this PARAGRAPH (e)
be obligated to be so qualified, (ii) to subject itself to taxation in any such
jurisdiction or (iii) to consent to general service of process in any
jurisdiction;

             (f) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be necessary
to enable each holder thereof to consummate the disposition of such Registrable
Securities;

             (g) furnish to each Requesting Holder a signed counterpart,
addressed to such holder (and the underwriters, if any), of

                    (i) an opinion of counsel for the Company, which may be the
general counsel of the Company, dated the effective date of such registration
statement (or, if such registration includes an underwritten Public Offering,
dated the date of any closing under the underwriting agreement), reasonably
satisfactory in form and substance to such holder, and


                    (ii) a "comfort" letter, dated the effective date of such
registration statement (and, if such registration includes an underwritten
Public Offering, dated the date of any closing under the underwriting
agreement), signed by the independent public accountants who have certified the
Company's financial statements included in such registration statement,


in each case covering substantially the same matters with respect to such
registration statement (and the prospectus included therein) and, in the case of
the accountants' letter, with respect to events subsequent to the date of such
financial statements, as are customarily covered in opinions of issuer's counsel
and in accountants' letters delivered to the underwriters in underwritten public
offerings of securities and, in the case of the accountants' letter, such other
financial matters as such holder (or the underwriters, if any) may reasonably
request;



                                       10
   12

             (h) notify each holder of Registrable Securities covered by such
registration statement, at any time when a prospectus relating thereto is
required to be delivered under the Securities Act, of the happening of any event
as a result of which any prospectus included in such registration statement, as
then in effect, includes an untrue statement of a material fact or omits to
state any material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and at the request of any such holder promptly prepare and
furnish to such holder a reasonable number of copies of a supplement to or an
amendment of such prospectus as may be necessary so that, as thereafter
delivered to the purchasers of such securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein, in
the light of the circumstances under which they were made, not misleading;

             (i) otherwise use its reasonable best efforts to comply with all
applicable rules and regulations of the Commission, and make available to its
securityholders, as soon as reasonably practicable, an earnings statement
covering the period of at least twelve (12) months, but not more than eighteen
(18) months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder;

             (j) make available for inspection by any Requesting Holder, any
underwriter participating in any disposition pursuant to such registration
statement and any attorney, accountant or other agent retained by any such
seller or underwriter (collectively, the "INSPECTORS"), all financial and other
records, pertinent corporate documents and properties of the Company
(collectively, the "RECORDS") as shall be reasonably necessary to enable them to
exercise their due diligence responsibility, and cause the Company's officers,
directors and employees to supply all information reasonably requested by any
such Inspector in connection with such registration statement, and permit the
Inspectors to participate in the preparation of such registration statement and
any prospectus contained therein and any amendment or supplement thereto.
Records which the Company determines, in good faith, to be confidential and
which it notifies the Inspectors are confidential shall not be disclosed by the
Inspectors unless (i) the disclosure of such Records is necessary to avoid or
correct a material misstatement in or omission from the registration statement,
(ii) the release of such Records is ordered pursuant to a subpoena or other
order from a court of competent jurisdiction or (iii) the information in such
Records has been made generally available to the public. The seller of
Registrable Securities agrees by acquisition of such Registrable Securities that
it will, upon learning that disclosure of such Records is sought in a court of
competent jurisdiction, give notice to the Company and allow the Company, at the
Company's expense, to undertake appropriate action to prevent disclosure of the
Records deemed confidential;

             (k) provide a transfer agent and a registrar for all Registrable
Securities covered by such registration statement not later than the effective
date of such registration statement;



                                       11
   13

             (l) use its reasonable best efforts to cause all Registrable
Securities covered by such registration statement to be listed, upon official
notice of issuance, on a national securities exchange on which the Registrable
Securities of the type covered by such Registration Statement are then listed
and obtain and maintain a ticker symbol for the Common Stock; and

             (m) use its reasonable best efforts to cause any Requested
Registration to be declared effective under the Securities Act as soon as
practicable (taking into account the legal requirements for registration from
time to time) but in any event no later than one hundred twenty (120) days
following the Company's receipt of the request therefor from the Requesting
Holders, and to use its best efforts to keep the Requested Registration
continuously effective under the Securities Act during the Effectiveness Period.

             (n) provide a CUSIP number for all Registrable Securities not later
than the effective date of the applicable Shelf Registration Statement or
Requested Registration.

             The Company may require each holder of Registrable Securities as to
which any registration is being effected to, and each such holder, as a
condition to including Registrable Securities in such registration, shall,
furnish the Company with such information and affidavits regarding such holder
and the distribution of such securities as the Company may from time to time
reasonably request in writing in connection with such registration.

             Each holder of Registrable Securities agrees by acquisition of such
Registrable Securities that upon receipt of any notice from the Company of the
happening of any event of the kind described in PARAGRAPH (h), such holder will
forthwith discontinue such holder's disposition of Registrable Securities
pursuant to the registration statement relating to such Registrable Securities
until such holder's receipt of the copies of the supplemented or amended
prospectus contemplated by PARAGRAPH (h) and, if so directed by the Company,
will deliver to the Company (at the Company's expense) all copies, other than
permanent file copies, then in such holder's possession of the prospectus
relating to such Registrable Securities current at the time of receipt of such
notice. In the event the Company shall give any such notice, the Effectiveness
Period shall be extended by a number of days equal to the number of days during
the period from and including the giving of notice pursuant to PARAGRAPH (h) and
to and including the date when each holder of any Registrable Securities covered
by such registration statement shall receive the copies of the supplemented or
amended prospectus contemplated by PARAGRAPH (h).

        4. UNDERWRITTEN OFFERINGS.

             (a) UNDERWRITTEN REQUESTED OFFERINGS. In the case of any
underwritten Public Offering being effected pursuant to any Shelf Registration
Statement or a Requested Registration, the Managing Underwriter and any other
underwriter or underwriters with respect to such offering shall be selected by
the Company with the consent of the holders of a majority of the Registrable
Securities to be included in such underwritten offering, which consent shall not
be unreasonably



                                       12
   14

withheld. The Company shall enter into an underwriting agreement in customary
form with such underwriter or underwriters, which shall include, among other
provisions, indemnities to the effect and to the extent provided in SECTION 6.
The holders of Registrable Securities to be distributed by such underwriters
shall be parties to such underwriting agreement and may, at their option,
require that any or all of the representations and warranties by, and the other
agreements on the part of, the Company to and for the benefit of such
underwriters also be made to and for their benefit and that any or all of the
conditions precedent to the obligations of such underwriters under such
underwriting agreement also be conditions precedent to their obligations. No
holder of Registrable Securities shall be required to make any representations
or warranties to or agreements with the Company or the underwriters other than
representations, warranties or agreements regarding such holder and its
ownership of the securities being registered on its behalf and such holder's
intended method of distribution and any other representation required by law.
Subject to the preceding sentence, no Requesting Holder may participate in such
underwritten offering unless such holder agrees to sell its Registrable
Securities on the basis provided in such underwriting agreement and completes
and executes all questionnaires, powers of attorney, indemnities and other
documents reasonably required under the terms of such underwriting agreement. If
any Requesting Holder disapproves of the terms of an underwriting, such holder
may elect to withdraw therefrom and from such registration by notice to the
Company and the Managing Underwriter, and each of the remaining Requesting
Holders shall be entitled to increase the amount of Registrable Securities being
registered to the extent of the Registrable Securities so withdrawn in the
proportion which the amount of Registrable Securities being registered by such
remaining Requesting Holder bears to the total amount of Registrable Securities
being registered by all such remaining Requesting Holders.

             (b) UNDERWRITTEN PIGGYBACK OFFERINGS. If the Company at any time
proposes to register any of its securities in a Piggyback Registration and such
securities are to be distributed by or through one or more underwriters, the
Company will, subject to the provisions of SECTION 2(c), use its reasonable best
efforts, if requested by any holder of Registrable Securities, to arrange for
such underwriters to include the Registrable Securities to be offered and sold
by Requesting Holders among the securities to be distributed by such
underwriters, and such holders shall be obligated to sell their Registrable
Securities in such Piggyback Registration through such underwriters on the same
terms and conditions as apply to the other Company securities to be sold by such
underwriters in connection with such Piggyback Registration. The holders of
Registrable Securities to be distributed by such underwriters shall be parties
to the underwriting agreement between the Company and such underwriter or
underwriters and may, at their option, require that any or all of the
representations and warranties by, and the other agreements on the part of, the
Company to and for the benefit of such underwriters also be made to and for
their benefit and that any or all of the conditions precedent to the obligations
of such underwriters under such underwriting agreement also be conditions
precedent to their obligations. No holder of Registrable Securities shall be
required to make any representations or warranties to or agreements with the
Company or the underwriters other than representations, warranties or agreements
regarding such holder and its ownership of the securities being registered on
its behalf and such holder's intended method of distribution and any other
representation required by



                                       13
   15

law. Subject to the preceding sentence, no Requesting Holder may participate in
such underwritten offering unless such holder agrees to sell its Registrable
Securities on the basis provided in such underwriting agreement and completes
and executes all questionnaires, powers of attorney, indemnities and other
documents reasonably required under the terms of such underwriting agreement. If
any Requesting Holder disapproves of the terms of an underwriting, such holder
may elect to withdraw therefrom and from such registration by notice to the
Company and the Managing Underwriter, and each of the remaining Requesting
Holders shall be entitled to increase the number of Registrable Securities being
registered to the extent of the Registrable Securities so withdrawn in the
proportion which the number of Registrable Securities being registered by such
remaining Requesting Holder bears to the total number of Registrable Securities
being registered by all such remaining Requesting Holders.

        5. HOLDBACK AGREEMENTS.

             (a) BY THE HOLDERS OF REGISTRABLE SECURITIES. If and to the extent
requested by the Managing Underwriter (or, in the case of a non-underwritten
Public Offering, the Company), each holder of Registrable Securities, by
acquisition of such Registrable Securities, agrees, to the extent permitted by
law, not to effect any public sale or distribution (including a sale under Rule
144) of such securities, or any securities convertible into or exchangeable or
exercisable for such securities, during the ten (10) days prior to and the
ninety (90) days after the effective date of any registration statement filed by
the Company in connection with a primary offering of Common Stock on behalf of
the Company (or for such shorter period of time as is sufficient and
appropriate, in the opinion of the Managing Underwriter (or, in the case of a
non-underwritten Public Offering, the Company), in order to complete the sale
and distribution of the securities included in such registration), except as
part of such registration statement, whether or not such holder participates in
such registration.

             (b) BY THE COMPANY AND OTHER SECURITYHOLDERS. Other than with
respect to a Shelf Registration Statement, the Company agrees (x) not to effect
any public sale or distribution of its equity securities, or any securities
convertible into or exchangeable or exercisable for such securities, during the
ten (10) days prior to and the ninety (90) days after the effective date of the
registration statement filed in connection with an underwritten offering made
pursuant to a Requested Registration (or for such shorter period of time as is
sufficient and appropriate, in the opinion of the Managing Underwriter, in order
to complete the sale and distribution of the securities included in such
registration), except as part of such underwritten registration and except
pursuant to registrations on Form S-4 or Form S-8 promulgated by the Commission
or any successor or similar forms thereto, and (y) to cause each holder of its
equity securities, or of any securities convertible into or exchangeable or
exercisable for such securities, in each case purchased from the Company at any
time after the date of this Agreement (other than in a Public Offering), to
agree, to the extent permitted by law, not to effect any such public sale or
distribution of such securities (including a sale under Rule 144), during such
period, except as part of such underwritten registration, in each case without
the written consent of the Investor and unless the Managing Underwriter
otherwise agrees.



                                       14
   16

             (c) EXCEPTION. The foregoing provisions shall not apply to any
holder of securities of the Company to the extent such holder is prohibited by
applicable law from agreeing to withhold from sale or to the extent such holder
is acting in its capacity as a fiduciary or an investment adviser. Without
limiting the scope of the term "fiduciary", a holder shall be deemed to be
acting as a fiduciary or an investment adviser if its actions or the shares
proposed to be sold are subject to the Employee Retirement Income Security Act,
the Investment Company Act 1940 or the Investment Advisers Act of 1940 or if
such shares are held in a separate account under applicable insurance law or
regulation.



                                       15
   17

        6. INDEMNIFICATION.

             (a) INDEMNIFICATION BY THE COMPANY. The Company shall, to the full
extent permitted by law, indemnify and hold harmless each holder of Registrable
Securities included in any registration statement filed in connection with a
Shelf Registration Statement, a Requested Registration or a Piggyback
Registration, its directors and officers, and each other Person, if any, who
controls any such holder within the meaning of the Securities Act, against any
losses, claims, damages, expenses or liabilities, joint or several (together,
"LOSSES"), to which such holder or any such director or officer or controlling
Person may become subject under the Securities Act or otherwise, insofar as such
Losses (or actions or proceedings, whether commenced or threatened, in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in any such registration statement, any
preliminary prospectus, final prospectus or summary prospectus contained
therein, or any amendment or supplement thereto, or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein (in the case of a prospectus, in the
light of the circumstances under which they were made) not misleading, and the
Company will reimburse such holder and each such director, officer and
controlling Person for any legal or any other expenses reasonably incurred by
them on an as incurred basis in connection with investigating or defending
against any such Loss (or action or proceeding in respect thereof); PROVIDED
that the Company shall not be liable in any such case to the extent that any
such Loss (or action or proceeding in respect thereof) arises out of or is based
upon (x) an untrue statement or alleged untrue statement or omission or alleged
omission made in any such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement in reliance upon and in
conformity with information furnished or confirmed in writing to the Company
through an instrument duly executed by such holder specifically stating that it
is for use in the preparation thereof or (y) such holder's failure to send or
give a copy of the final prospectus (including any supplements thereto) to the
Persons asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Securities to such Person if such statement or omission was
corrected in such final prospectus (including any supplements thereto). Such
indemnity shall remain in full force and effect regardless of any investigation
made by or on behalf of such holder or any such director, officer or controlling
Person, and shall survive the transfer of such securities by such holder. The
Company shall also indemnify each other Person who participates (including as an
underwriter) in the offering or sale of Registrable Securities, their officers
and directors and each other Person, if any, who controls any such participating
Person within the meaning of the Securities Act to the same extent as provided
above with respect to holders of Registrable Securities.

             (b) INDEMNIFICATION BY THE HOLDERS. Each holder of Registrable
Securities which are included or are to be included in any registration
statement filed in connection with a Shelf Registration Statement, a Requested
Registration or a Piggyback Registration, as a condition to including
Registrable Securities in such registration statement, shall, to the full extent
permitted by law, indemnify and hold harmless the Company, its directors and
officers, and each other Person, if any, who controls the Company within the
meaning of the Securities Act,



                                       16
   18

against any Losses to which the Company or any such director or officer or
controlling Person may become subject under the Securities Act or otherwise,
insofar as such Losses (or actions or proceedings, whether commenced or
threatened, in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of any material fact contained in any such
registration statement, any preliminary prospectus, final prospectus or summary
prospectus contained therein, or any amendment or supplement thereto, or any
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein (in the case of a
prospectus, in the light of the circumstances under which they were made) not
misleading, if such untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with information
furnished or confirmed in writing to the Company through an instrument duly
executed by such holder specifically stating that it is for use in the
preparation of such registration statement, preliminary prospectus, final
prospectus, summary prospectus, amendment or supplement; PROVIDED, HOWEVER,,
that the obligation to provide indemnification pursuant to this SECTION 6(b)
shall be several, and not joint and several, among such Indemnifying Parties on
the basis of the number of Registrable Securities included in such registration
statement and the aggregate amount which may be recovered from any holder of
Registrable Securities pursuant to the indemnification provided for in this
SECTION 6(b) in connection with any registration and sale of Registrable
Securities shall be limited to the total proceeds received by such holder from
the sale of such Registrable Securities. Such indemnity shall remain in full
force and effect regardless of any investigation made by or on behalf of the
Company or any such director, officer or controlling Person and shall survive
the transfer of such securities by such holder. Such holders shall also
indemnify each other Person who participates (including as an underwriter) in
the offering or sale of Registrable Securities, their officers and directors and
each other Person, if any, who controls any such participating Person within the
meaning of the Securities Act to the same extent as provided above with respect
to the Company.

             (c) NOTICES OF CLAIMS, ETC. Promptly after receipt by an
Indemnified Party of notice of the commencement of any action or proceeding
involving a claim referred to in the preceding PARAGRAPH (a) OR (b) of this
SECTION 6, such Indemnified Party will, if a claim in respect thereof is to be
made against an Indemnifying Party pursuant to such paragraphs, give written
notice to the latter of the commencement of such action, PROVIDED that the
failure of any Indemnified Party to give notice as provided herein shall not
relieve the Indemnifying Party of its obligations under the preceding paragraphs
of this SECTION 6, except to the extent that the Indemnifying Party is actually
prejudiced by such failure to give notice. In case any such action is brought
against an Indemnified Party, the Indemnifying Party shall be entitled to
participate in and to assume the defense thereof, jointly with any other
Indemnifying Party similarly notified to the extent that it may wish, with
counsel reasonably satisfactory to such Indemnified Party, and after notice from
the Indemnifying Party to such Indemnified Party of its election so to assume
the defense thereof, the Indemnifying Party shall not be liable to such
Indemnified Party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation; PROVIDED that the Indemnified Party may participate in such
defense at the Indemnified Party's expense; and PROVIDED FURTHER that the
Indemnified Party (or Indemnified Parties) shall



                                       17
   19

have the right to employ one counsel to represent it (or them, collectively) if,
in the reasonable judgment of the Indemnified Party or Indemnified Parties, it
is advisable for it (or them) to be represented by separate counsel by reason of
having legal defenses which are different from or in addition to those available
to the Indemnifying Party, and in that event the reasonable fees and expenses of
such one counsel shall be paid by the Indemnifying Party. If the Indemnifying
Party is not entitled to, or elects not to, assume the defense of a claim, it
will not be obligated to pay the fees and expenses of more than one counsel for
the Indemnified Parties with respect to such claim, unless in the reasonable
judgment of any Indemnified Party a conflict of interest may exist between such
Indemnified Party and any other Indemnified Parties with respect to such claim,
in which event the Indemnifying Party shall be obligated to pay the fees and
expenses of such additional counsel for each Indemnified Party having a conflict
of interest. No Indemnifying Party shall consent to entry of any judgment or
enter into any settlement without the consent of the Indemnified Party which
does not include as an unconditional term thereof the giving by the claimant or
plaintiff to such Indemnified Party of a release from all liability in respect
of such claim or litigation. No Indemnifying Party shall be subject to any
liability for any settlement made without its consent, which consent shall not
be unreasonably withheld. Notwithstanding the foregoing sentence, if at any time
an Indemnified Party or any person who controls an Indemnified Party shall have
requested an Indemnifying Party to reimburse an Indemnified Party or such
control person for reasonable fees and expenses actually incurred by counsel for
which such Indemnified Party or person is entitled to be so reimbursed pursuant
to this Agreement, the Indemnifying Party agrees that it shall be liable for any
settlement of any proceeding effected without its consent if (i) such settlement
is entered into more than 60 days after receipt by such Indemnifying Party of
the aforesaid request and (ii) such Indemnifying Party shall not have reimbursed
the Indemnified Party or such control person in accordance with such request
prior to the date of such settlement; PROVIDED, HOWEVER, that the Indemnifying
Party shall not be liable for any settlement effected without its consent
pursuant to this sentence if the Indemnifying Party is contesting, in good
faith, the request for reimbursement and shall have reimbursed all amounts not
so contested.

             (d) CONTRIBUTION. If the indemnity and reimbursement obligation
provided for in any paragraph of this SECTION 6 is unavailable or insufficient
to hold harmless an Indemnified Party in respect of any Losses (or actions or
proceedings in respect thereof) referred to therein, then the Indemnifying Party
shall contribute to the amount paid or payable by the Indemnified Party as a
result of such Losses (or actions or proceedings in respect thereof) in such
proportion as is appropriate to reflect the relative fault of the Indemnifying
Party on the one hand and the Indemnified Party on the other hand in connection
with the statements or omissions which resulted in such Losses, as well as any
other relevant equitable considerations. The relative fault shall be determined
by reference to, among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission to state a
material fact relates to information supplied by the Indemnifying Party or the
Indemnified Party and the parties' relative intent, knowledge, access to
information and opportunity to correct or prevent such untrue statement or
omission. The parties hereto agree that it would not be just and equitable if
contributions pursuant to this paragraph were to be determined by PRO RATA
allocation or by any other method of allocation which does not take account of
the equitable



                                       18
   20

considerations referred to in the first sentence of this paragraph. The amount
paid by an Indemnified Party as a result of the Losses referred to in the first
sentence of this paragraph shall be deemed to include any legal and other
expenses reasonably incurred by such Indemnified Party in connection with
investigating or defending any Loss which is the subject of this paragraph.

        No Indemnified Party guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from the Indemnifying Party if the Indemnifying Party was not
guilty of such fraudulent misrepresentation.

             (e) OTHER INDEMNIFICATION. Indemnification similar to that
specified in the preceding paragraphs of this SECTION 6 (with appropriate
modifications) shall be given by the Company and each holder of Registrable
Securities with respect to any required registration or other qualification of
securities under any federal or state law or regulation of any governmental
authority other than the Securities Act. The provisions of this SECTION 6 shall
be in addition to any other rights to indemnification or contribution which an
Indemnified Party may have pursuant to law, equity, contract or otherwise.

             (f) INDEMNIFICATION PAYMENTS. The indemnification required by this
SECTION 6 shall be made by periodic payments of the amount thereof during the
course of the investigation or defense, as and when bills are received or Losses
are incurred.

        7. COVENANT RELATING TO RULE 144. If at any time the Company is required
to file reports in compliance with either Section 13 or Section 15(d) of the
Exchange Act, the Company will file reports in compliance with the Exchange Act,
will comply in all material respects with the rules and regulations of the
Commission applicable in connection with the use of Rule 144 and will take such
other actions and furnish the holder of any Registrable Securities with such
other information as such holder may reasonably request in order to avail itself
of such rule or any other rule or regulation of the Commission allowing such
holder to sell any Registrable Securities without registration. If at any time
the Company is not required to file reports in compliance with either Section 13
or Section 15(d) of the Exchange Act, the Company at its expense will, forthwith
upon the written request of the holder of any Registrable Securities, make
available adequate current public information with respect to the Company within
the meaning of paragraph (c)(2) of Rule 144.

        8. OTHER REGISTRATION RIGHTS.

             (a) NO EXISTING AGREEMENTS. The Company represents and warrants to
the Investor that there is not in effect on the date hereof any agreement by the
Company (other than this Agreement and substantially identical agreements),
pursuant to which any holders of securities of the Company have a right to cause
the



                                       19
   21

Company to register or qualify such securities under the Securities Act or any
securities or blue sky laws of any jurisdiction.

             (b) FUTURE AGREEMENTS. The Company shall not hereafter agree with
the holder of any securities issued or to be issued by the Company to register
or qualify such securities under the Securities Act or any securities or blue
sky laws of any jurisdiction unless such agreement specifically provides that
(i) such holder may not participate in any Shelf Registration Statement unless
as otherwise agreed by the Company with the consent of the Investor, which
consent shall not be unreasonably withheld; (ii) such holder may not participate
in any Requested Registration except as provided in SECTION l(b); (iii) such
holder may not participate in any Piggyback Registration except as provided in
SECTION 2; and (iv) such securities may not be publicly offered or sold for the
period specified in SECTION 5(b)(y) under the circumstances described in such
Section.

             (c) BEST REGISTRATION RIGHTS. If the Company grants to any Person
other than a holder of Registrable Securities (an "OTHER HOLDER") with respect
to any debt security or equity security, as the case may be, issued by the
Company registration rights that provide for terms that, taken as a whole, are
more favorable to the Other Holder than the terms granted to the holders of the
Registrable Securities, if any (or if the Company amends or waives any provision
of any agreement providing registration rights to an Other Holder or takes any
other action whatsoever to provide for terms with respect to registration rights
that in either case results in the terms with respect to registration rights of
an Other Holder, taken as a whole, being materially more favorable to such Other
Holder than the terms provided to the holders of Registrable Securities), then
the Company shall promptly so notify the holders of Registrable Securities in
writing. If the holders of a majority of the Registrable Securities shall notify
the Company not later than 30 days after their receipt of such notice from the
Company that such holders elect to amend this Agreement as hereinafter provided,
this Agreement shall as promptly as practicable thereafter be amended to conform
the provisions of this Agreement relating to the Registrable Securities as
closely as practicable to the registration rights of such Other Holder.

        9. DEFINITIONS.

             (a) Except as otherwise specifically indicated, the following terms
will have the following meanings for all purposes of this Agreement:

             "AGREEMENT" means this Registration Rights Agreement, as the same
shall be amended from time to time.

             "BANKRUPTCY CASE" has the meaning ascribed to it in the preamble.

             "BANKRUPTCY CODE" has the meaning ascribed to it in the preamble.

             "BANKRUPTCY COURT" has the meaning ascribed to it in the preamble.



                                       20
   22

             "BUSINESS DAY" means a day other than Saturday, Sunday or any other
day on which banks located in the State of New York are authorized or obligated
to close.

             "COMMISSION" means the United States Securities and Exchange
Commission, or any successor governmental agency or authority.

             "COMMON STOCK" means shares of Common Stock, par value $0.01 per
share, of the Company, as constituted on the date hereof, and any stock into
which such Common Stock shall have been changed or any stock resulting from any
reclassification of such Common Stock.

             "COMMON SHARES" has the meaning ascribed to it in the preamble.

             "COMPANY" has the meaning ascribed to it in the preamble.

             "CONFIRMATION ORDER" has the meaning ascribed to it in the
preamble.

             "CUTBACK REGISTRATION" means any Requested Registration or
Piggyback Registration to be effected as an underwritten Public Offering in
which the Managing Underwriter with respect thereto advises the Company and the
Requesting Holders in writing that, in its opinion, the number of securities
requested to be included in such registration (including securities of the
Company which are not Registrable Securities) exceed the number which can be
sold in such offering without a material reduction in the selling price
anticipated to be received for the securities to be sold in such Public
offering.

             "EFFECTIVE DATE" has the meaning ascribed to it in the Plan.

             "EFFECTIVENESS PERIOD" means the period that begins on the date on
which a Requested Registration becomes effective and extends through the date on
which all the Registered Securities covered by such registration statement have
been disposed of in accordance with the intended methods of disposition by the
Requesting Holders set forth in such registration statement.

             "EFFECTIVE REGISTRATION" means, subject to the last sentence of
SECTION l(g), any Shelf Registration Statement or a Requested Registration which
(a) has been declared or ordered effective in accordance with the rules of the
Commission, (b) has been kept effective for the period of time contemplated by
SECTION 3(b) and (c) has resulted in the Registrable Securities requested to be
included in such registration actually being sold (except by reason of some act
or omission on the part of the Requesting Holders); PROVIDED that a Cutback
Registration in which the number of Registrable Securities actually included in
such registration is not at least eighty-five percent (85%) of the number of
Registrable Securities requested to be included in such registration shall not
be an Effective Registration for purposes of this Agreement.

             "EXCHANGE ACT" means the Securities Exchange Act of 1934, as
amended, and the rules and regulations promulgated thereunder.



                                       21
   23

             "FORM S-4" means Form S-4 promulgated by the Commission under the
Securities Act, or any successor or similar registration statement.

             "FORM S-8" means Form S-8 promulgated by the Commission under the
Securities Act, or any successor or similar registration statement.

             "INDEMNIFIED PARTY" means a party entitled to indemnity in
accordance with SECTION 6.

             "INDEMNIFYING PARTY" means a party obligated to provide indemnity
in accordance with SECTION 6.

             "INSPECTORS" has the meaning ascribed to it in SECTION 3(j).

             "INVESTOR" has the meaning ascribed to it in the preamble.

             "LOSSES" has the meaning ascribed to it in SECTION 6(a).

             "MANAGING UNDERWRITER" means, with respect to any Public Offering,
the underwriter or underwriters managing such Public Offering.

             "NASD" means the National Association of Securities Dealers, Inc.

             "NOTICE OF PIGGYBACK REGISTRATION" has the meaning ascribed to it
in SECTION 2(a).

             "NOTICE OF REQUESTED REGISTRATION" has the meaning ascribed to it
in SECTION l(b).

             "PERSON" means any natural person, corporation, general
partnership, limited partnership, proprietorship, other business organization,
trust, union or association.

             "PIGGYBACK REGISTRATION" means any registration of equity
securities of the Company under the Securities Act (other than a registration in
respect of a dividend reinvestment or similar plan for stockholders of the
Company or on Form S-4 or Form S-8 promulgated by the Commission, or any
successor or similar forms thereto), whether for sale for the account of the
Company or for the account of any holder of securities of the Company (other
than Registrable Securities), including a registration by the Company under the
circumstances described in SECTION l(g).

             "PLAN" has the meaning ascribed to it in the preamble.

             "PREFERRED STOCK" means shares of Preferred Stock, par value $_____
per share, of the Company, as constituted on the date hereof, and any stock into
which such Preferred Stock shall have been changed or any stock resulting from
any reclassification of such Preferred Stock.



                                       22
   24

             "PREFERRED SHARES" has the meaning ascribed to it in the preamble.

             "PUBLIC OFFERING" means any offering of Common Stock or preferred
stock to the public, either on behalf of the Company or any of its
securityholders, pursuant to an effective registration statement under the
Securities Act.

             "RECORDS" has the meaning ascribed to it in SECTION 3(j).

             "REGISTRABLE SECURITIES" means (i) the Common Shares, (ii) the
Preferred Shares, (iii) the shares of Common Stock for which such Preferred
Shares are convertible pursuant to their terms, and (iv) any additional shares
of Common Stock issued or distributed by way of a dividend, stock split,
conversion, or other distribution in respect of such Shares. As to any
particular Registrable Securities, once issued such securities shall cease to be
Registrable Securities when (i) a registration statement with respect to the
sale of such securities shall have become effective under the Securities Act and
such securities shall have been disposed of in accordance with such registration
statement, (ii) they shall have been sold pursuant to Rule 144, or (iii) they
shall have ceased to be outstanding.

             "REGISTRATION EXPENSES" means all expenses incident to the
Company's performance of or compliance with its obligations under this Agreement
to effect the registration of Registrable Securities in any Shelf Registration
Statement, a Requested Registration or a Piggyback Registration, including,
without limitation, all registration, filing, securities exchange listing and
NASD fees (including Nasdaq fees, if applicable), all registration, filing,
qualification and other fees and expenses of complying with securities or blue
sky laws, all word processing, duplicating and printing expenses, messenger and
delivery expenses, the fees and disbursements of counsel for the Company and of
its independent public accountants, including the expenses of any special audits
or "cold comfort" letters required by or incident to such performance and
compliance, the reasonable fees and disbursements of a single counsel and single
firm of accountants retained by the holders of a majority of the Registrable
Securities being registered, premiums and other costs of policies of insurance
against liabilities arising out of the Public Offering of the Registrable
Securities being registered and any fees and disbursements of underwriters
customarily paid by issuers or holders of securities, but excluding underwriting
discounts and commissions and transfer taxes, if any, in respect of Registrable
Securities, which shall be payable by each holder thereof, PROVIDED that, in any
case where Registration Expenses are not to be borne by the Company, such
expenses shall not include salaries of Company personnel or general overhead
expenses of the Company, auditing fees, premiums or other expenses relating to
liability insurance required by underwriters of the Company or other expenses
for the preparation of financial statements or other data normally prepared by
the Company in the ordinary course of its business or which the Company would
have incurred in any event.

             "REQUESTING HOLDERS" means, with respect to any Requested
Registration or Piggyback Registration, the holders of Registrable Securities
requesting to have Registrable Securities included in such registration in
accordance with this Agreement.



                                       23
   25

             "REQUESTED REGISTRATION" means any registration of Registrable
Securities under the Securities Act effected in accordance with SECTION l(b).

             "RULE 144" means Rule 144 promulgated by the Commission under the
Securities Act, and any successor provision thereto.

             "SECURITIES ACT" means the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.

             "SENIOR NOTES" has the meaning ascribed to it in the preamble.

             "SHARES" has the meaning ascribed to it in the preamble.

             "SHELF REGISTRATION EFFECTIVENESS PERIOD" has the meaning ascribed
to it in SECTION l(a).

             "SHELF REGISTRATION STATEMENT" means a registration statement of
the Company in compliance with the provisions of SECTION l(a)(i) of this
Agreement which registers the continuous offer and sale of all of the
Registrable Securities on an appropriate form under Rule 415 under the
Securities Act or any similar or successor rule that may be adopted by the
Commission, and all amendments to such registration statement, including
post-effective amendments, in each case including any prospectus contained
therein and any supplement to any such prospectus, all exhibits thereto and all
information incorporated by reference therein.

             (b) Unless the context of this Agreement otherwise requires, words
of any gender include each other gender; (ii) words using the singular or plural
number also include the plural or singular number, respectively; (iii) the terms
"hereof," "herein," "hereby" and derivative or similar words refer to this
entire Agreement; and (iv) the term "Section" refers to the specified Section of
this Agreement. Whenever this Agreement refers to a number of days, such number
shall refer to calendar days unless Business Days are specified.

        10. MISCELLANEOUS.

             (a) NOTICES. All notices, requests and other communications
hereunder must be in writing and will be deemed to have been duly given only if
delivered personally or by facsimile transmission or mailed (first class postage
prepaid) to the parties at the following addresses or facsimile numbers:

                                      If to the Investor, to:

                                      Albert Fried & Company, LLC
                                      40 Exchange Place
                                      New York, New York 10005
                                      Facsimile No.: (212) 422-7282
                                      Attn:       Albert Fried, Jr.



                                       24
   26

                                      If to the Company, to:

                                      Geneva Steel Holdings Corp.

                                      -----------------------------

                                      -----------------------------

                                      -----------------------------

                                      Attn:     General Counsel

With respect to any other holder of Registrable Securities, such notices,
requests and other communications shall be sent to the addresses set forth in
the stock transfer records regularly maintained by the Company. All such
notices, requests and other communications will (i) if delivered personally to
the address as provided in this Section, be deemed given upon delivery, (ii) if
delivered by facsimile transmission to the facsimile number as provided in this
Section, be deemed given upon receipt, and (iii) if delivered by mail in the
manner described above to the address as provided in this Section, be deemed
given upon receipt (in each case regardless of whether such notice, request or
other communication is received by any other Person to whom a copy of such
notice is to be delivered pursuant to this Section). Any party from time to time
may change its address, facsimile number or other information for the purpose of
notices to that party by giving notice specifying such change to the other
parties hereto.

             (b) ENTIRE AGREEMENT. This Agreement supersedes all prior
discussions and agreements between the parties with respect to the subject
matter hereof, and contains the sole and entire agreement between the parties
hereto with respect to the subject matter hereof.

             (c) AMENDMENT. This Agreement may be amended, supplemented or
modified only by a written instrument (which may be executed in any number of
counterparts) duly executed by or on behalf of each of the Company and Investor.

             (d) WAIVER. Subject to PARAGRAPH (e) of this Section, any term or
condition of this Agreement may be waived at any time by the party that is
entitled to the benefit thereof, but no such waiver shall be effective unless
set forth in a written instrument duly executed by or on behalf of the party
waiving such term or condition. No waiver by any party of any term or condition
of this Agreement, in any one or more instances, shall be deemed to be or
construed as a waiver of the same term or condition of this Agreement on any
future occasion.

             (e) CONSENTS AND WAIVERS BY HOLDERS OF REGISTRABLE SECURITIES. Any
consent of Investor pursuant to this Agreement and any waiver by Investor of any
provision of this Agreement shall be in writing.

             (f) NO THIRD PARTY BENEFICIARY. The terms and provisions of this
Agreement are intended solely for the benefit of each party hereto, their
respective successors or permitted assigns and any other holder of Registrable
Securities, and it is not the intention of the parties to confer third-party
beneficiary rights upon any other Person other than any Person entitled to
indemnity under SECTION 6.



                                       25
   27

             (g) SUCCESSORS AND ASSIGNS. This Agreement is binding upon, inures
to the benefit of and is enforceable by the Company and the Investor (or the
investor or investors for which the Investor is acting as fiduciary or agent, as
the case may be) and their respective successors and assigns, including all
subsequent holders of the Registrable Securities; PROVIDED, HOWEVER, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms hereof, the
Securities Act or any securities or blue sky laws of any jurisdiction.

             (h) HEADINGS. The headings used in this Agreement have been
inserted for convenience of reference only and do not define or limit the
provisions hereof.

             (i) INVALID PROVISIONS. If any provision of this Agreement is held
to be illegal, invalid or unenforceable under any present or future law, and if
the rights or obligations of any party hereto under this Agreement will not be
materially and adversely affected thereby, (i) such provision will be fully
severable, (ii) this Agreement will be construed and enforced as if such
illegal, invalid or unenforceable provision had never comprised a part hereof
and (iii) the remaining provisions of this Agreement will remain in full force
and effect and will not be affected by the illegal, invalid or unenforceable
provision or by its severance herefrom.

             (j) REMEDIES. Except as otherwise expressly provided for herein, no
remedy conferred by any of the specific provisions of this Agreement is intended
to be exclusive of any other remedy, and each and every remedy shall be
cumulative and shall be in addition to every other remedy given hereunder or now
or hereafter existing at law or in equity or by statute or otherwise. The
election of any one or more remedies by any party hereto shall not constitute a
waiver by any such party of the right to pursue any other available remedies.

             Damages in the event of breach of this Agreement by a party hereto
or any other holder of Registrable Securities would be difficult, if not
impossible, to ascertain, and it is therefore agreed that each such Person, in
addition to and without limiting any other remedy or right it may have, will
have the right to an injunction or other equitable relief in any court of
competent jurisdiction, enjoining any such breach, and enforcing specifically
the terms and provisions hereof and the Company and each holder of Registrable
Securities, by its acquisition of such Registrable Securities, hereby waives any
and all defenses it may have on the ground of lack of jurisdiction or competence
of the court to grant such an injunction or other equitable relief. The
existence of this right will not preclude any such Person from pursuing any
other rights and remedies at law or in equity which such Person may have.

             (k) GOVERNING LAW. THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE
WITH AND GOVERNED BY THE LAW OF THE STATE OF NEW YORK, INCLUDING SECTION 5-1401
OF THE NEW YORK GENERAL OBLIGATIONS LAW.

             (l) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.



                                       26
   28

        IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by the duly authorized officer of each party hereto as of the date first above
written.


                                      ALBERT FRIED & COMPANY, LLC


                                      By: /s/ ALBERT FRIED, JR.
                                          -----------------------------------
                                          Name: Albert Fried, Jr.
                                          Title: Managing Member

                                      GENEVA STEEL HOLDINGS CORP.


                                      By: /s/ KEN C. JOHNSEN
                                          -----------------------------------
                                          Name: Ken C. Johnsen
                                          Title: Executive Vice President




                                       27

EX-10.34

   1
                                                                   EXHIBIT 10.34



                                  $110,000,000

                               TERM LOAN AGREEMENT

                           DATED AS OF JANUARY 3, 2001

                                      AMONG

                                GENEVA STEEL LLC

                                   AS BORROWER

                                       AND

                            THE LENDERS PARTY HERETO

                                       AND

                               CITICORP USA, INC.

                                    AS AGENT




                           WEIL, GOTSHAL & MANGES LLP
                                767 FIFTH AVENUE
                          NEW YORK, NEW YORK 10153-0119


   2

              TERM LOAN AGREEMENT, dated as of January 3, 2001, among GENEVA
STEEL LLC, a Delaware limited liability company (the "Borrower"), the Lenders
(as defined below), and CITICORP USA, INC. ("Citicorp"), as agent for the
Lenders and the Secured Parties (as defined below) (in such capacity, the
"Agent").

                              W I T N E S S E T H:

              WHEREAS, the Borrower has requested that the Lenders make
available for the purposes specified in this Agreement term loans; and

              WHEREAS, the Lenders are willing to make available to the Borrower
such term loans upon the terms and subject to the conditions set forth herein;

              NOW, THEREFORE, in consideration of the premises and the covenants
and agreements contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE I

                DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

              SECTION 1.1. DEFINED TERMS. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

              "Acknowledgement and Agreement" means the Acknowledgement and
Agreement of Borrower made by the Borrower in accordance with the U.S.
Government Guarantee.

              "Affiliate" means, with respect to any Person, any other Person
which, directly or indirectly, controls, is controlled by or is under common
control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person who is the beneficial owner of
20% or more of any class of Voting Stock of such Person. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

              "Agent" has the meaning specified in the preamble to this
Agreement.

              "Agreement" means this Term Loan Agreement.

              "Applicable Lending Office" means, with respect to each Lender,
its Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.

              "Applicable Margin" means (A) with respect to the Term A Loans
maintained as (i) Base Rate Loans, 1.15% per annum and (ii) Eurodollar Rate
Loans, 2.15% per annum; (B) with respect to the Term B Loans maintained as (i)
Base Rate Loans, 0.20% per annum and (ii) Eurodollar Rate Loans, 1.20% per
annum; and (C) with respect to the Term C Loans maintained as (i) Base Rate
Loans, the difference between the Base Rate and 22% per annum and (ii)
Eurodollar Rate Loans, the difference between the Eurodollar Rate and 22% per
annum.


                    [SIGNATURE PAGES TO TERM LOAN AGREEMENT]


   3

              "Approved Fund" means, as of any date of determination and with
respect to any Lender that is a fund engaged in the ordinary course of its
business in commercial lending (including making loans which are not guaranteed
by the U.S. Government Guarantor), any other fund that is then engaged in the
ordinary course of its business in commercial lending (including making loans
which are not guaranteed by the U.S. Government Guarantor) and is advised or
managed by the same investment advisor as such Lender or by an Affiliate of such
investment advisor.

              "Asset Sale" has the meaning specified in Section 7.5.

              "Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and consented to by the
Government Guarantor, unless consummated pursuant to clause (y) of the proviso
to Section 10.2(a) and accepted by the Agent, in substantially the form of
Exhibit A.

              "Bankruptcy Court" means the United States Bankruptcy Court for
the District of Utah.

              "Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:

              (a) the rate of interest announced publicly by Citibank in New
York, New York, from time to time, as Citibank's base rate;

              (b) the sum (adjusted to the nearest 0.25% or, if there is no
nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum plus (ii) the
rate per annum obtained by dividing (A) the latest three-week moving average of
secondary market morning offering rates in the United States for three-month
certificates of deposit of major United States money market banks, such
three-week moving average being determined weekly on each Monday (or, if any
such day is not a Business Day, on the next succeeding Business Day) for the
three-week period ending on the previous Friday by Citibank on the basis of such
rates reported by certificate of deposit dealers to and published by the Federal
Reserve Bank of New York or, if such publication shall be suspended or
terminated, on the basis of quotations for such rates received by Citibank from
three New York certificate of deposit dealers of recognized standing selected by
Citibank, by (B) a percentage equal to 100% minus the average of the daily
percentages specified during such three-week period by the Federal Reserve Board
for determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) for Citibank in respect of
liabilities consisting of or including (among other liabilities) three-month
U.S. dollar non-personal time deposits in the United States, plus (iii) the
average during such three-week period of the maximum annual assessment rates
estimated by Citibank for determining the then current annual assessment payable
by Citibank to the Federal Deposit Insurance Corporation (or any successor) for
insuring Dollar deposits in the United States; and

              (c) the sum of (i) 0.5% per annum plus (ii) the Federal Funds
Rate.

              "Base Rate Loan" means any Term Loan during any period in which it
bears interest based on the Base Rate.

              "Blocked Account" has the meaning specified in the Security
Agreement.

              "Blocked Account Bank" has the meaning specified in the Security
Agreement.


                                       2
   4

              "Blocked Account Letter" has the meaning specified in the Security
Agreement.

              "Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or the State of Utah and, if
the applicable Business Day relates to notices, determinations, fundings and
payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans, a
day on which dealings in Dollar deposits are also carried on in the London
interbank market.

              "Capital Lease" means, with respect to any Person, any lease of
property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.

              "Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.

              "Cash Collateral Account" has the meaning specified in the
Security Agreement.

              "Cash Equivalents" means (a) securities issued or fully guaranteed
or insured by the United States government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any commercial bank organized under the laws of the
United States, any state thereof, the District of Columbia, any foreign bank, or
its branches or agencies (fully protected against currency fluctuations) which,
at the time of acquisition, are rated at least "A-1" by Standard & Poor's Rating
Services ("S&P") or "P-1" by Moody's Investors Services, Inc. ("Moody's"), (c)
commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by Moody's,
and (d) shares of any money market fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (a)
through (c) above, (ii) has net assets of not less than $500,000,000 and (iii)
is rated at least "A-1" by S&P or "P-1" by Moody's; provided, however, that the
maturities of all obligations of the type specified in clauses (a) through (c)
above shall not exceed 270 days from the date of acquisition.

              "Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.

              "Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as
amended) other than Permitted Holders shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of 32.5% or
more of the issued and outstanding Voting Stock of Holdings; (b) during any
period of twelve consecutive calendar months, individuals who at the beginning
of such period constituted the board of directors of Holdings (together with any
new directors whose election by the board of directors of Holdings or whose
nomination for election by the stockholders of Holdings was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose elections or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office or (c)
Holdings shall cease to own and control at least 75% of the economic and voting
rights associated with all of the outstanding Stock of the Borrower; provided,
however, that if Holdings owns and controls less than 100% of the voting rights
of the Borrower, it shall be a Change of Control if Holdings shall not own and


                                       3
   5

control sufficient voting power to approve by itself all matters requiring a
shareholder vote under the Borrower's Constituent Documents or pursuant to any
Requirement of Law.

              "Citibank" means Citibank, N.A., a national banking association.

              "Citicorp" has the meaning specified in the preamble to this
Agreement.

              "Closing Date" means any date on which a Term Loan is made.

              "Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.

              "Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any of the Collateral Documents.

              "Collateral Documents" means the Security Agreement, the Mortgages
and any other document executed and delivered by a Loan Party granting a Lien on
any of its property to secure payment of the Secured Obligations.

              "Commitment" means, with respect to any Lender, such Lender's Term
Loan Commitment, if any, and "Commitments" means the aggregate Term Loan
Commitments of all Lenders.

              "Common Collateral" has the meaning specified in the Intercreditor
Agreement in effect on the date hereof.

              "Compliance Certificate" has the meaning specified in Section
5.1(f).

              "Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan of Reorganization.

              "Consolidated Net Income" means, for any Person for any period,
the net income (or loss) of such Person and its Restricted Subsidiaries for such
period, determined on a consolidated basis in conformity with GAAP; provided,
however, that (a) the net income of any other Person in which such Person or one
of its Restricted Subsidiaries has a joint interest with a third party (which
interest does not cause the net income of such other Person to be consolidated
into the net income of such Person in accordance with GAAP) shall be included
only to the extent of the amount of dividends or distributions paid to such
Person or Subsidiary, (b) the net income of any Restricted Subsidiary of such
Person that is subject to any restriction or limitation on the payment of
dividends or the making of other distributions shall be excluded to the extent
of such restriction or limitation, (c)(i) the net income (or loss) of any Person
acquired in a pooling of interest transaction for any period prior to the date
of such acquisition and (ii) any net gain or loss resulting from an Asset Sale
by such Person or any of its Restricted Subsidiaries other than in the ordinary
course of business shall be excluded, (d) extraordinary gains and losses and any
one-time increase or decrease to net income which is required to be recorded
because of the adoption of new accounting policies, practices or standards
required by GAAP shall be excluded, and (e) all restructuring charges in
connection with the consummation of the Plan of Reorganization shall be
excluded.


                                       4
   6

              "Constituent Documents" means, with respect to any Person, (i) the
articles/certificate of incorporation (or the equivalent organizational
documents) of such Person, (ii) the by-laws (or the equivalent governing
documents) of such Person and (iii) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any)
and the designation, amount and/or relative rights, limitations and preferences
of any class or series of such Person's Stock.

              "Contaminant" means any material, substance or waste that is
regulated or forms the basis of liability under any Environmental Law as
hazardous, toxic, a contaminant or a pollutant or by other words of similar
meaning or regulatory effect, including any petroleum or petroleum-derived
substance or waste, asbestos and polychlorinated biphenyls.

              "Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement, undertaking, contract, lease, indenture, mortgage,
deed of trust or other instrument (excluding a Loan Document) to which such
Person is a party or by which it or any of its property is bound or to which any
of its properties is subject.

              "Control Account Letter" has the meaning specified in the Security
Agreement.

              "Customary Permitted Liens" means, with respect to any Person, any
of the following Liens:

              (a) Liens with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained to the
extent required by GAAP;

              (b) Liens of landlords arising by statute and liens of suppliers,
mechanics, carriers, materialman, warehousemen or workmen and other liens
imposed by law created in the ordinary course of business for amounts not yet
due or which are being contested in good faith by appropriate proceedings and
with respect to which adequate reserves or other appropriate provisions are
being maintained to the extent required by GAAP;

              (c) deposits made in the ordinary course of business in connection
with self-insurance programs, worker's compensation, unemployment insurance or
other types of social security benefits or to secure the performance of bids,
tenders, sales, leases and other contracts (other than for the repayment of
borrowed money) and surety, appeal, customs, performance or reclamation bonds;

              (d) encumbrances arising by reason of zoning restrictions,
easements, licenses, reservations, covenants, rights-of-way, utility easements,
building restrictions and other similar encumbrances on the use of real property
which do not materially detract from the value of such real property or
interfere with the ordinary conduct of the business conducted and proposed to be
conducted at such real property;

              (e) encumbrances arising under leases or subleases of real
property which do not in the aggregate materially detract from the value of such
real property or interfere with the ordinary conduct of the business conducted
and proposed to be conducted at such real property;


                                       5
   7

              (f) financing statements of a lessor's rights in and to personal
property leased to such Person in the ordinary course of such Person's business;
and

              (g) expired financing statements and financing statements filed
for precautionary purposes.

              "DAQ" has the meaning specified in Section 4.17(h).

              "Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a), (b) and (f) of the definition of "Indebtedness" by the
Borrower or any of its Subsidiaries.

              "Default" means any event which with the passing of time or the
giving of notice or both would become an Event of Default.

              "Disclosure Statement" means the Disclosure Statement of the
Borrower approved pursuant to Section 1125 of the United States Bankruptcy Code
for the Plan of Reorganization.

              "Disqualified Stock" means with respect to any Person, any Stock
which, by its terms (or by the terms of any Security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness of such Person, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to six months after the Term Loan Maturity Date.

              "Dollars" and the sign "$" each mean the lawful money of the
United States of America.

              "Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.

              "EBITDA" means, with respect to any Person for any period, an
amount equal to (a) Consolidated Net Income of such Person for such period plus
(b) the sum of, in each case to the extent included in the calculation of
Consolidated Net Income of such Person for such period in accordance with GAAP,
but without duplication, (i) any provision for income taxes, (ii) Interest
Expense, (iii) loss from extraordinary items, (iv) depreciation, depletion and
amortization of intangibles, including amortization of goodwill resulting from
fresh start accounting in connection with the consummation of the Plan of
Reorganization, or financing or acquisition costs and (v) all other non-cash
charges and non-cash losses for such period, including the amount of any
compensation deduction as the result of any grant of Stock or Stock Equivalents
to employees, officers, directors or consultants but excluding normal accruals
for cash liabilities minus (c) the sum of, in each case to the extent included
in the calculation of Consolidated Net Income of such Person for such period in
accordance with GAAP, but without duplication, (i) any credit for income tax,
(ii) gains from extraordinary items for such period and (iii) any other non-cash
items or non-cash gains which have been added in determining Consolidated Net
Income.

              "Eligible Assignee" means (a) a Lender or any Affiliate or
Approved Fund of such Lender; (b) a commercial bank having total assets in
excess of $5,000,000,000; (c) a finance


                                       6
   8

company, insurance company, other financial institution or fund reasonably
acceptable to the Agent, which is regularly engaged in making, purchasing or
investing in loans, and having a net worth, determined in accordance with GAAP,
in excess of $250,000,000 or, if the net worth is less than such amount, a
finance company, insurance company, other financial institution or fund,
reasonably acceptable to the Agent and the Borrower; or (d) a savings and loan
association or savings bank organized under the laws of the United States or any
State thereof which has a net worth, determined in accordance with GAAP, in
excess of $250,000,000; provided, however, that as long as the U.S. Government
Guarantee remains in effect, only an Eligible Lender may be an Eligible
Assignee.

              "Eligible Lender" has the meaning specified in the U.S. Government
Guarantee.

              "Environmental Laws" means all applicable Requirements of Law now
or hereafter in effect, as amended or supplemented from time to time, relating
to pollution or the regulation and protection of human health, safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Section 180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (7 U.S.C. Section 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.); the Toxic Substance
Control Act, as amended (42 U.S.C. Section 7401 et seq.); the Clean Air Act, as
amended (42 U.S.C. Section 740 et seq.); the Federal Water Pollution Control
Act, as amended (33 U.S.C. Section 1251 et seq.); the Occupational Safety and
Health Act, as amended (29 U.S.C. Section 651 et seq.); the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f et seq.); and their state and local
counterparts or equivalents and any transfer of ownership notification or
approval statute.

              "Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental, health or safety
condition or a Release or threatened Release, and result from the past, present
or future operations of, or ownership of property by, such Person or any of its
Subsidiaries.

              "Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.

              "Equity Issuance" means the issue or sale by Holdings or the
Borrower to any Person other than the Borrower, Holdings or any Restricted
Subsidiary of any Stock or Stock Equivalent of the Borrower.

              "ERISA" means the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time.

              "ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.


                                       7
   9

              "ERISA Event" means with respect to any Loan Party or ERISA
Affiliate (i) a reportable event described in Section 4043(b) or 4043(c)(1),
(2), (3), (5), (6), (8) or (9) of ERISA with respect to a Title IV Plan or a
Multiemployer Plan; (ii) the withdrawal of any Loan Party or any ERISA Affiliate
from a Title IV Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(iii) the complete or partial withdrawal of any Loan Party or any ERISA
Affiliate from any Multiemployer Plan; (iv) notice of reorganization or
insolvency of a Multiemployer Plan; (v) the filing of a notice of intent to
terminate a Title IV Plan or the treatment of a plan amendment as a termination
under Section 4041 of ERISA; (vi) the institution of proceedings to terminate a
Title IV Plan or Multiemployer Plan by the PBGC; (vii) the failure to make any
required contribution to a Title IV Plan or Multiemployer Plan; (viii) the
imposition of a lien under Section 412 of the Code or Section 302 of ERISA on
any Loan Party or any ERISA Affiliate; or (ix) any other event or condition
which might reasonably be expected to constitute grounds under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to administer, any
Title IV Plan or Multiemployer Plan or the imposition of any liability under
Title IV of ERISA, other than for PBGC premiums due but not delinquent under
Section 4007 of ERISA.

              "Eurocurrency Liabilities" has the meaning assigned to that term
in Regulation D of the Federal Reserve Board, as in effect from time to time.

              "Eurodollar Base Rate" means, with respect to any Interest Period
for any Eurodollar Rate Loan, the rate of interest determined by the Agent to be
the average (rounded upward to the nearest whole multiple of one sixteenth of
one percent (0.0625%) per annum, if such average is not such a multiple) of the
rates per annum at which deposits in Dollars are offered by the principal office
of Citibank in London, England, to major banks in the London interbank market at
11:00 A.M. (London Time) 2 Business Days before the first day of such Interest
Period for a principal amount substantially equal to the maximum principal
amount of the Eurodollar Rate Loan scheduled to be outstanding during such
Interest Period and for a period equal to such Interest Period.

              "Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.

              "Eurodollar Rate" means, with respect to any Interest Period for
any Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage equal to
100% minus the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities which includes deposits by reference to
which the Eurodollar Rate is determined) having a term equal to such Interest
Period.

              "Eurodollar Rate Loan" means any Term Loan that, for an Interest
Period, bears interest based on the Eurodollar Rate.

              "Event of Default" has the meaning specified in Section 8.1.


                                       8
   10

              "Fair Market Value" means (a) with respect to any asset or group
of assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, and (b) with respect to any marketable
Security at any date, the closing sale price of such Security on the Business
Day next preceding such date, as appearing in any published list of any national
securities exchange or the Nasdaq Stock Market or, if there is no such closing
sale price of such Security, the final price for the purchase of such Security
at face value quoted on such business day by a financial institution of
recognized standing which regularly deals in securities of such type selected by
the Agent.

              "Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

              "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.

              "Final Order" means an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, as entered on the docket in any
pending chapter 11 case or the docket of any other court of competent
jurisdiction, with respect to which 10 days have elapsed since the entry of such
order and which has not been reversed, stayed, modified or amended and is in
full force and effect.

              "Financial Covenant Debt" of any Person means Indebtedness of the
type specified in clauses (a) and (b), clause (c) in respect of letters of
credit and bankers' acceptances, and clauses (d), (e), (f) and (h) of the
definition of "Indebtedness" less any cash on such Person's balance sheet and
less the Indebtedness specified in Section 7.1(x).

              "Financial Statements" means the financial statements of the
Borrower and its Subsidiaries delivered in accordance with Sections 4.4 and 5.1.

              "Fiscal Quarter" means each of the three-month periods ending on
March 31, June 30, September 30 and December 31.

              "Fiscal Year" means the twelve-month period ending on December 31.

              "GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.

              "Government Guarantee Percentage" means: (a) with respect to Term
A Loans, 85%, (b) with respect to Term B Loans, 95%, and (c) with respect to
Term C Loans, 0%.


                                       9
   11

              "Government Guarantor" means Emergency Steel Loan Guarantee Board,
an agency or instrumentality of the United States formed pursuant to the
Emergency Steel Loan Guarantee Act of 1999, Pub. L. No. 106-51, or any
replacement or successor agency or instrumentality of the United States.

              "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

              "Guaranty" means the guaranty, in substantially the form of
Exhibit F-1.

              "Guaranty Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including, (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor, or
to provide funds for the payment or discharge of such Indebtedness (whether in
the form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, or (v) to supply funds to or in any other manner
invest in such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of clause (b) of this sentence the primary purpose or intent
thereof is as described in the preceding sentence; provided, however, that it is
understood that the transactions contemplated in the Mannesmann Agreement shall
not be deemed "Guaranty Obligations" for any purpose of this Agreement. The
amount of any Guaranty Obligation shall be equal to the amount of the
Indebtedness so guaranteed or otherwise supported.

              "Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.

              "Holdings" means Geneva Steel Holdings Corp., a Delaware
corporation.

              "Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments, (c) all
reimbursement and other obligations with respect to letters of credit, bankers'
acceptances, surety bonds and performance bonds, whether or not matured, (d) all
indebtedness for the deferred purchase price of property or services, other than
trade payables incurred in the ordinary course of business, (e) all indebtedness
of such Person


                                       10
   12

created or arising under any conditional sale or other title retention agreement
with respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (f) all Capital Lease
Obligations of such Person, (g) all Guaranty Obligations of such Person (in the
case of the Borrower or a Restricted Subsidiary, on behalf of a Restricted
Subsidiary), (h) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any Stock or Stock Equivalents of such
Person (other than for Stock or Stock Equivalents of such Person), valued, in
the case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends payable in
cash, (i) all payments that such Person would have to make in the event of an
early termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person and (j) all Indebtedness of the type
referred to above of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including accounts and general intangibles) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.

              "Indemnitees" has the meaning specified in Section 10.4.

              "Initial Closing Date" means the first date on which any Term Loan
is made.

              "Intercreditor Agreement" means the intercreditor agreement
substantially in the form of Exhibit H among the Agent, the Revolving Credit
Agent and the Borrower.

              "Interest Coverage Ratio" as of any date of determination means
the ratio of (i) the aggregate amount of EBITDA for the period of the most
recent four consecutive Fiscal Quarters ending at least 45 days prior to the
date of such determination to (ii) Interest Expense for such four Fiscal
Quarters; provided, however, that (1) if the Borrower or any Restricted
Subsidiary has incurred, assumed or become liable for any Indebtedness since the
beginning of such period that remains outstanding or if the transaction giving
rise to the need to calculate the Interest Coverage Ratio is the incurrence,
assumption or becoming liable for Indebtedness, or both, EBITDA and Interest
Expense for such period shall be calculated after giving effect on a pro forma
basis to such Indebtedness as if such Indebtedness had been incurred on the
first day of such period and the discharge of any other Indebtedness repaid,
repurchased, defeased or otherwise discharged with the proceeds of such new
Indebtedness as if such discharge had occurred on the first day of such period,
(2) if since the beginning of such period the Borrower or any Restricted
Subsidiary (by merger or otherwise) shall have made an Investment in any
Restricted Subsidiary (or any Person which becomes a Restricted Subsidiary) or
an acquisition of assets, including any acquisition of assets occurring in
connection with a transaction requiring a calculation to be made hereunder,
which constitutes all or substantially all of an operating unit of a business,
EBITDA and Interest Expense for such period shall be calculated after giving pro
forma effect thereto (including the incurrence of any Indebtedness) as if such
Investment or acquisition occurred on the first day of such period and (3) if
since the beginning of such period any Person (that subsequently became a
Restricted Subsidiary or was merged with or into the Borrower or a Restricted
Subsidiary since the beginning of such period) shall have made any Investment or
acquisition of assets that would have required an adjustment pursuant to clause
(2) above if made by the Borrower or a Restricted Subsidiary during such period,
EBITDA and Interest Expense for such period shall be calculated after giving pro
forma effect thereto as if such Investment or acquisition occurred on the first
day of such period. For purposes of this definition, whenever a pro forma effect
is to be calculated, the pro forma calculations shall be determined in good
faith by a responsible financial or accounting officer of the Borrower. If any
Indebtedness bears a floating rate of interest and is being given pro forma
effect, the interest of such


                                       11
   13

Indebtedness shall be calculated as if the rate in effect on the date of
determination had been the applicable rate for the entire period (taking into
account any Hedging Contract applicable to such Indebtedness if such Hedging
Contract has a remaining term in excess of 12 months).

              "Interest Expense" means, for the Borrower for any period, (a)
total interest expense of the Borrower and its Restricted Subsidiaries for such
period determined on a consolidated basis in conformity with GAAP and including,
in any event, interest capitalized during construction for such period and net
costs under Interest Rate Contracts for such period minus (b) the sum of (i) net
gains of the Borrower and its Restricted Subsidiaries under Interest Rate
Contracts for such period determined on a consolidated basis in conformity with
GAAP plus (ii) any interest income of the Borrower and the Restricted
Subsidiaries for such period determined on a consolidated basis in conformity
with GAAP.

              "Interest Period" means, in the case of any Eurodollar Rate Loan,
(a) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three, six or nine months thereafter, as selected by
the Borrower in its Notice of Borrowing or Notice of Conversion or Continuation
given to the Agent pursuant to Section 2.2 or 2.8, and (b) thereafter, if such
Term Loan is continued, in whole or in part, as a Eurodollar Rate Loan pursuant
to Section 2.8, a period commencing on the last day of the immediately preceding
Interest Period therefor and ending one, two, three, six or nine months
thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Agent pursuant to Section 2.8; provided, however, that
all of the foregoing provisions relating to Interest Periods in respect of
Eurodollar Rate Loans are subject to the following:

                     (i) if any Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day, unless the result of such extension would be to extend
such Interest Period into another calendar month, in which event such Interest
Period shall end on the immediately preceding Business Day;

                     (ii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;

                     (iii) the Borrower may not select any Interest Period that
ends after the date of a scheduled principal payment on the Term Loans as set
forth in Article II unless, after giving effect to such selection, the aggregate
unpaid principal amount of the Term Loans for which Interest Periods end after
such scheduled principal payment shall be equal to or less than the principal
amount to which the Term Loans are required to be reduced after such scheduled
principal payment is made;

                     (iv) the Borrower may not select any Interest Period in
respect of Term Loans having an aggregate principal amount of less than
$10,000,000; and

                     (v) there shall be outstanding at any one time no more than
six Interest Periods in the aggregate.

              "Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.


                                       12
   14

              "Investment" means, with respect to any Person, (a) any purchase
or other acquisition by that Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a majority of the assets of a business conducted by another Person, and (c)
any loan, advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable, advances to
employees and similar items made or incurred in the ordinary course of business
as presently conducted), or capital contribution by that Person to any other
Person, including all Indebtedness to such Person arising from a sale of
property by such Person other than in the ordinary course of its business unless
payable and paid within 90 days of such sale and (d) Guaranty Obligations other
than on behalf of a Restricted Subsidiary; provided, however, that the term
"Investment" shall not include the repurchase or assignment of receivables and
inventory by the Borrower from Mannesmann pursuant to the Mannesmann Agreement.

              "IRS" means the Internal Revenue Service of the United States or
any successor thereto.

              "Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such may be amended,
supplemented or otherwise modified from time to time.

              "Lender" means (a) each financial institution or other entity that
(i) is listed on the signature pages hereof as a "Lender" or (ii) from time to
time becomes a party hereto by execution of an Assignment and Acceptance with
any requisite consent required by Section 10.2 or (b) the Government Guarantor
to the extent it acquires any Term Loan as contemplated by Section 2.10(g).

              "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including any conditional sale
or other title retention agreement, the interest of a lessor under a Capital
Lease, any financing lease having substantially the same economic effect as any
of the foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction naming the owner of the
asset to which such Lien relates as debtor.

              "Loan Documents" means, collectively, this Agreement, any Notes,
the Guaranty, the Acknowledgement and Agreement, the Collateral Documents and
each certificate, agreement or document executed by a Loan Party and delivered
to the Agent or the Lenders in connection with or pursuant to any of the
foregoing.

              "Loan Party" means each of the Borrower and each Subsidiary of the
Borrower that executes and delivers a Loan Document.

              "Mannesmann" means Mannesmann Pipe & Steel Corporation, a New York
corporation, and any successor thereto or assignee thereof acceptable to the
Agent.

              "Mannesmann Agreement" means that certain Sales Representation
Agreement, dated as of October 30, 1998, between the Borrower and Mannesmann, as
amended from time to time, or a similar replacement agreement acceptable to the
Agent.


                                       13
   15

              "Material Adverse Change" means a material adverse change in any
of (a) the condition (financial or otherwise), business, performance,
operations, assets, liabilities (contingent or otherwise) or properties of the
Borrower or the Borrower and its Restricted Subsidiaries taken as a whole, (b)
the legality, validity or enforceability of any Loan Document or the U.S.
Government Guarantee, (c) the perfection or priority of the Liens granted
pursuant to the Collateral Documents, (d) the value of the Collateral or the
"Security Interests" (as defined in the U.S. Government Guarantee), (e) the
ability of the Borrower to repay the Obligations or of the Loan Parties to
perform their obligations under the Loan Documents, or (f) the rights and
remedies of the Agent or the Lenders under the Loan Documents; provided,
however, that for purposes hereof and without affecting the construction of any
of the foregoing, the net loss resulting from write downs pursuant to fresh
start accounting shall not in and of itself constitute a Material Adverse
Change.

              "Material Adverse Effect" means an effect that results in or
causes, or could reasonably be expected to result in or cause, a Material
Adverse Change.

              "Material Subsidiary" means any Restricted Subsidiary owning at
least 5% of Total Assets or contributing at least 5% of Consolidated Net Income
of the Borrower and its Subsidiaries on a consolidated basis.

              "Mergers" shall mean (a) the merger of Geneva Steel Company with
and into Geneva Steel Interim Corporation, a Delaware corporation ("Interim
Corporation"), with Interim Corporation being the surviving corporation and (b)
the merger of Interim Corporation with and into the Borrower, with the Borrower
being the surviving corporation, as described in the Plan of Reorganization.

              "Mortgages" means the mortgages, deeds of trust or other real
estate security documents made or required herein to be made by the Borrower or
any other Loan Party.

              "Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability, contingent or otherwise.

              "Net Cash Proceeds" means proceeds received by any Loan Party
after the Initial Closing Date in cash or Cash Equivalents from any (a) Asset
Sale, net of (x) the reasonable cash costs of sale, assignment or other
disposition, (y) taxes paid or payable as a result thereof and (z) any amount
required to be paid or prepaid on Indebtedness (other than the Obligations)
secured by the assets subject to such Asset Sale; provided, however, that the
evidence of each of (x), (y) and (z) are provided to the Agent in form and
substance satisfactory to it; (b) the proceeds of any Property Loss Event, to
the extent that within 360 days after the receipt thereof, replacement or repair
of such asset or property has not been commenced or, in the event that at any
time such replacement or repair is abandoned or otherwise discontinued or is
diligently pursued, the remaining awards or proceeds, as the case may be, net of
taxes paid or payable as a result thereof evidence of which is provided to the
Agent, shall constitute Net Cash Proceeds at such time; and (c) Debt Issuance
under clause (vi) of Section 7.1, in each case net of brokers' and advisors'
fees and other costs incurred in connection with such transaction; provided,
however, that evidence of such costs is provided to the Agent.

              "Non-Cash Interest Expense" means, with respect to any Person for
any period, the sum of the following amounts to the extent included in the
calculation of Interest Expense of such Person for such period: (a) the amount
of debt discount and debt issuances costs amortized,


                                       14
   16

(b) charges relating to write-ups or write-downs in the book or carrying value
of existing Financial Covenant Debt and (c) interest payable in evidences of
Indebtedness or by addition to the principal of the related Indebtedness.

              "Non-Funding Lender" has the meaning specified in Section 2.2(d).

              "Non-Recourse Indebtedness" means Indebtedness as to which (a)
neither the Borrower nor any Restricted Subsidiary (i) provides credit support
(including any undertaking, agreement or instrument which would constitute
Indebtedness), or (ii) is directly or indirectly liable and (b) no default with
respect to such Indebtedness (including any rights which the holders thereof may
have to take enforcement action against the relevant Non-Recourse Subsidiary or
its assets) would permit (upon notice, lapse of time or both) any holder of any
other Indebtedness of the Borrower or any Restricted Subsidiary to declare a
default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity.

              "Non-Recourse Subsidiary" means a Subsidiary of the Borrower which
has been designated by the Borrower as a Non-Recourse Subsidiary and (a) whose
properties and assets, to the extent they secure Indebtedness, secure only
Non-Recourse Indebtedness, (b) which has no Indebtedness other than Non-Recourse
Indebtedness and (c) the Investment in such Subsidiary is permitted by Section
7.12.

              "Non-U.S. Lender" means each Lender that is not a United States
person as defined in Section 7701(a)(30) of the Code.

              "Note" means any Term Loan Note.

              "Notice of Borrowing" has the meaning specified in Section 2.2(a).

              "Notice of Conversion or Continuation" has the meaning specified
in Section 2.8.

              "Obligations" means the Term Loans and all other advances, debts,
liabilities, obligations, covenants and duties owing by the Borrower to the
Agent, any Lender, any Affiliate of any of them or any Indemnitee, of every type
and description, present or future, arising under this Agreement or under any
other Loan Document, by reason of an extension of credit, loan, guaranty,
indemnification or otherwise, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired and whether or not evidenced
by any note, guaranty or other instrument or for the payment of money. The term
"Obligations" includes all cash management and other fees and all interest,
charges, expenses, fees, attorneys' fees and disbursements and other sums
chargeable to the Borrower under this Agreement or any other Loan Document.

              "Offer of Guarantee" means the Offer of Guarantee attached as
Exhibit B to the U.S. Government Guarantee.

              "PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.

              "Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.


                                       15
   17

              "Permitted Holder" means Albert Fried & Co. and Loomis Sayles and
Company LP and any holder of 15% or more of the issued and outstanding common
stock of Holdings as of the Initial Closing Date, each until such time as it no
longer is an Affiliate of Holdings.

              "Permitted Participant" shall mean Albert Fried & Company, LLC.

              "Person" means an individual, partnership, corporation (including
a business trust), joint stock company, estate, trust, limited liability
company, unincorporated association, joint venture or other entity, or a
Governmental Authority.

              "Plan of Reorganization" means the Third Amended Plan of
Reorganization of the Borrower, as Modified, approved by the Bankruptcy Court on
December 8, 2000.

              "Preferred Stock" means, with respect to any Person, any and all
shares, interest, participations or other equivalents (however designated) of
such Person's preferred or preference stock whether now outstanding, or issued
after the Initial Closing Date, and including, without limitation, all classes
and series of preferred or preference stock of such Person.

              "Projections" means those financial projections dated October 25,
2000 covering the fiscal years ending September 30, 2000 through 2005,
inclusive, delivered to the Lenders by the Borrower, including balance sheets,
income statements and statements of cash flow.

              "Property Loss Event" means any loss of or damage to Collateral
that results in receipt by such Person of proceeds of insurance or that results
in the receipt by such Person of a compensation payment (in condemnation
proceedings or otherwise).

              "Ratable Portion" or "ratably" means, (a) with respect to any
Lender, and any Tranche, the percentage obtained by dividing the Term Loan
Commitment of such Lender with respect to such Tranche by the aggregate Term
Loan Commitments of all Lenders with respect to such Tranche (or, at any time
after the Initial Closing Date, the percentage obtained by dividing the
principal amount of such Lender's Term Loans in such Tranche by the aggregate
Term Loans in such Tranche of all Lenders), (b) with respect to a Term Loan
Borrowing (i) in the case of Term A Loans, the percentage obtained by dividing
the aggregate Term A Loan Commitments by the aggregate Term Loan Commitments,
(ii) in the case of Term B Loans, the percentage obtained by dividing the
aggregate Term B Loan Commitments by the aggregate Term Loan Commitments, and
(iii) in the case of Term C Loans, the percentage obtained by dividing the
aggregate Term C Loan Commitments by the aggregate Term Loan Commitments, and
(c) with respect to a repayment of Term Loans, (i) in the case of Term A Loans,
the percentage obtained by dividing the aggregate outstanding principal amount
of the Term A Loans by the aggregate outstanding principal amount of the Term
Loans, (ii) in the case of Term B Loans, the percentage obtained by dividing the
aggregate outstanding principal amount of the Term B Loans by the aggregate
outstanding principal amount of the Term Loans, and (iii) in the case of Term C
Loans, the percentage obtained by dividing the aggregate outstanding principal
amount of the Term C Loans by the aggregate outstanding principal amount of the
Term Loans.

              "Register" has the meaning specified in Section 10.2.

              "Reinvestment Deferred Amount" means, with respect to any
Reinvestment Event, the aggregate Net Cash Proceeds received by the Borrower or
any of its Subsidiaries in connection therewith which are not initially applied
to prepay the Loans pursuant to Section 2.6 as a result of the delivery of a
Reinvestment Notice.


                                       16
   18

              "Reinvestment Event" means any Asset Sale to the extent that such
Asset Sale constitutes a sale or other disposition of Collateral or any Property
Loss Event in respect of which the Borrower has delivered a Reinvestment Notice.

              "Reinvestment Notice" means a written notice executed by a
Responsible Officer of the Borrower stating that no Default or Event of Default
has occurred and is continuing and that the Borrower (directly or indirectly
through one of its Subsidiaries) intends and expects to use all or a specified
portion of the Net Cash Proceeds of an Asset Sale to acquire replacement assets
useful in its or one of its Subsidiaries' businesses or to rebuild or effect
repairs in the case of a Property Loss Event.

              "Reinvestment Prepayment Amount" means, with respect to any
Reinvestment Event, the Reinvestment Deferred Amount relating thereto less any
amount expended or required to be expended pursuant to a Contractual Obligation
entered into prior to the relevant Reinvestment Prepayment Date to acquire
replacement assets useful in the Borrower's business.

              "Reinvestment Prepayment Date" means, with respect to any
Reinvestment Event, the earlier of (i) the date occurring 360 days after such
Reinvestment Event and (ii) the date five Business Days after the date on which
the Borrower shall have notified the Agent of the Borrower's determination not
to acquire replacement assets useful in the Borrower's or a Subsidiary's
business with all or any portion of the relevant Reinvestment Deferred Amount.

              "Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned by such Person,
including the movement of Contaminants through or in the air, soil, surface
water, ground water or property.

              "Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.

              "Requirement of Law" means, with respect to any Person, all
federal, state, local and foreign laws, rules and regulations, orders,
judgments, decrees and other determinations of any Governmental Authority or
arbitrator, applicable to or binding upon such Person or any of its property or
to which such Person or any of its property is subject, including ERISA, labor
and benefit laws and Environmental Laws.

              "Requisite Lenders" means, collectively, Lenders having more than
sixty percent (60%) of the Term Loan Commitments and, after the Initial Closing
Date, sixty percent (60%) of the principal amount of all Term Loans then
outstanding which shall include Citicorp as long as Citicorp is the Agent. A
Non-Funding Lender shall not be included in the calculation of "Requisite
Lenders."

              "Responsible Officer" means, with respect to any Person, any of
the Chief Executive Officer, Executive Vice Presidents and Chief Financial
Officer of such Person, but in any event, with respect to financial matters, the
Chief Financial Officer, Treasurer or Controller of such Person.


                                       17
   19

              "Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any Stock or Stock Equivalents of the Borrower
or any Restricted Subsidiary now or hereafter outstanding, except a dividend
payable solely in Stock or Stock Equivalents or a dividend or distribution
payable solely to the Borrower and/or one or more Subsidiary Guarantors, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalents of
the Borrower or any Restricted Subsidiary now or hereafter outstanding other
than one payable solely in other Stock or Stock Equivalents of such Person or
solely to the Borrower and/or one or more Subsidiary Guarantors, (c) any payment
or prepayment of principal or premium (if any), interest, fees on, or
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Indebtedness of the Borrower or any Restricted Subsidiary
(other than the Obligations or the "Obligations" as defined in the Revolving
Credit Agreement) other than any payment made solely in Stock or Stock
Equivalents of such Person or any required redemptions, retirement, purchases or
other payments, in each case to the extent permitted to be made by the terms of
such Indebtedness after giving effect to any applicable subordination
provisions.

              "Restricted Subsidiary" means any Subsidiary of the Borrower which
is not a Non-Recourse Subsidiary.

              "Revolving Credit Agent" means Citicorp as agent under the
Revolving Credit Agreement, or any successor agents thereunder.

              "Revolving Credit Agreement" means the Credit Agreement dated as
of the date hereof among Geneva Steel LLC, the lenders and issuers party
thereto, and Citicorp, as agent, as amended, restated, refinanced, replaced,
supplemented or otherwise modified from time to time.

              "Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of the Borrower of
any property, which property has been or is to be sold or transferred by the
Borrower or such Subsidiary to such Person in contemplation of such leasing.

              "Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty, the other Loan Documents to which it is a party.

              "Secured Parties" means the Lenders, the Agent and any other
holder of the Obligations, including the Government Guarantor.

              "Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.

              "Security Agreement" means an agreement, in substantially the form
of Exhibit G, executed by the Agent, the Borrower and each Subsidiary Guarantor.

              "Servicing Agreement" means an agreement in form and substance
satisfactory to the Agent made between the Borrower and Holdings pursuant to
which the Borrower makes payments to Holdings not in excess of $5,000,000 in the
aggregate in any Fiscal Year to fund ordinary operating expenses and debt
service of Holdings.


                                       18
   20

              "Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities on a net present value basis)
of such Person as of such date and that, as of such date, such Person is able to
pay all liabilities of such Person as such liabilities mature. In computing the
amount of contingent or unliquidated liabilities at any time, such liabilities
will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability on a net present value
basis.

              "Stock" means shares of capital stock (whether denominated as
common stock or preferred stock), beneficial, partnership or membership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation, partnership, limited liability company or equivalent
entity, whether voting or non-voting.

              "Stock Equivalent" means any security convertible into or
exchangeable for Stock and any warrant, option or other right to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.

              "Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of 50% or more of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person.

              "Subsidiary Guarantor" means each Subsidiary of the Borrower that
is a party to the Guaranty.

              "Tax Affiliate" means, with respect to any Person, (a) any
Subsidiary of such Person, and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary tax
returns.

              "Taxes" has the meaning specified in Section 2.13(a).

              "Term A Lender" means any Lender having a Term A Loan Commitment
or a Term A Loan.

              "Term A Loan" has the meaning specified in Section 2.1.

              "Term B Lender" means any Lender having a Term B Loan Commitment
or a Term B Loan.

              "Term B Loan" has the meaning specified in Section 2.1.

              "Term C Lender" means any Lender having a Term C Loan Commitment
or a Term C Loan.

              "Term C Loan" has the meaning specified in Section 2.1.

              "Term Loan" has the meaning specified in Section 2.1

              "Term Loan Borrowing" means Term Loans made on the same day by the
Lenders ratably according to the Term Loan Commitments.


                                       19
   21

              "Term Loan Commitment" means, with respect to any Lender, such
Lender's Term A Loan Commitment, Term B Loan Commitment and Term C Loan
Commitment, as the case may be.

              "Term A Loan Commitment" means, with respect to any Lender, the
commitment of such Lender to make Term A Loans to the Borrower in the aggregate
principal amount outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule I under the caption "Term A Loan Commitment" as
amended to reflect each Assignment and Acceptance executed by such Lender and as
such amount may be reduced pursuant to this Agreement.

              "Term B Loan Commitment" means, with respect to any Lender, the
commitment of such Lender to make Term B Loans to the Borrower in the aggregate
principal amount outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule I under the caption "Term B Loan Commitment" as
amended to reflect each Assignment and Acceptance executed by such Lender and as
such amount may be reduced pursuant to this Agreement.

              "Term C Loan Commitment" means, with respect to any Lender, the
commitment of such Lender to make Term C Loans to the Borrower in the aggregate
principal amount outstanding not to exceed the amount set forth opposite such
Lender's name on Schedule I under the caption "Term C Loan Commitment" as
amended to reflect each Assignment and Acceptance executed by such Lender and as
such amount may be reduced pursuant to this Agreement.

              "Term Loan Facility" means the Term Loan Commitments and the
provisions herein related to the Term Loans.

              "Term Loan Maturity Date" means September 30, 2005.

              "Term Loan Note" means a promissory note of the Borrower payable
to the order of any Lender in a principal amount equal to the amount of such
Lender's Term Loan Commitment evidencing the Indebtedness of the Borrower to
such Lender resulting from the Term Loan owing to such Lender.

              "Title IV Plan" means a pension plan, other than a Multiemployer
Plan, which is covered by Title IV of ERISA to which the Borrower any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent
or otherwise).

              "Total Assets" means, at any date, the total assets of the
Borrower and the Restricted Subsidiaries at such date determined on a
consolidated basis in conformity with GAAP.

              "Tranche" means the Term A Loans, the Term B Loans or the Term C
Loans.

              "UCC" has the meaning specified in the Security Agreement.

              "Unused Commitment Fee" has the meaning specified in Section
2.9(a).

              "Unused Commitment Fee Rate" means .50% per annum with respect to
the Term A Loan Commitments, .50% per annum with respect to the Term B Loan
Commitments and .50% per annum with respect to the Term C Loan Commitments.


                                       20
   22

              "U.S. Government Guarantee" means the guarantee, in substantially
the form of Exhibit F-2, executed by the Government Guarantor, the Agent and
each Lender, and acknowledged by the Borrower pursuant to the Acknowledgement
and Agreement.

              "U.S. Government Guarantee Percentage" means as to any Tranche,
the percentage set forth on Schedule I for such Tranche under the caption
"Percentage Guaranteed under U.S. Government Guarantee".

              "Voting Stock" means Stock of any Person having ordinary power to
vote in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).

              "Walking Beam Furnace" means a walking beam furnace as described
in the Disclosure Statement which the Borrower purchases, constructs and
installs at its facilities after the date hereof.

              "Withdrawal Liability" means, with respect to the Borrower at any
time, the aggregate liability incurred (whether or not assessed) with respect to
all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.

              "Year 2000 Compliant" means the ability of hardware, firmware or
software systems associated with information processing and delivery, operations
or services, operated by, provided to or otherwise necessary to the business or
operations of the Borrower or its Subsidiaries to continue to recognize and
properly perform date-sensitive functions involving certain dates prior to, and
at any date after, December 31, 1999 to the same extent in all material respects
as on January 31, 2000.

              SECTION 1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding" and the word "through" means "to and including."

              SECTION 1.3. ACCOUNTING TERMS AND PRINCIPLES.

              (a) All accounting terms not specifically defined herein shall be
construed in conformity with GAAP and all accounting determinations required to
be made pursuant hereto shall, unless expressly otherwise provided herein, be
made in conformity with GAAP.

              (b) If any change in accounting principles used in the preparation
of the most recent Financial Statements referred to in Section 4.4 or 5.1 is
hereafter required or permitted by the rules, regulations, pronouncements and
opinions of the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or any successor thereto) and such change is
adopted by the Borrower with the agreement of its independent public accountants
and results in a change in any of the calculations required by Article VII had
such accounting change not occurred, the parties hereto agree to enter into
negotiations in order to amend such provisions so as to equitably reflect such
change with the desired result that the criteria for evaluating compliance with
such covenants by the Borrower shall be the same after such change as if such
change had not been made; provided, however, that no change in GAAP that would
affect a


                                       21
   23

calculation that measures compliance with any covenant contained in Article VII
shall be given effect until such provisions are amended to reflect such changes
in GAAP.

              SECTION 1.4. CERTAIN TERMS.

              (a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole, and not to any particular Article, Section,
subsection or clause in, this Agreement.

              (b) References in this Agreement to an Exhibit, Schedule, Article,
Section, subsection or clause refer to the appropriate Exhibit or Schedule to,
or Article, Section, subsection or clause in this Agreement.

              (c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. If the prior written consent of the
Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is
obtained, references in this Agreement to such agreement shall be to such
agreement as so amended, restated, supplemented or modified.

              (d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.

              (e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.

              (f) The terms "Lender" and "Agent" include their respective
successors.

              (g) Upon the appointment of any successor Agent pursuant to
Section 9.6, references to Citicorp in Section 9.3 and to Citibank in the
definitions of Base Rate and Eurodollar Rate shall be deemed to refer to the
financial institution then acting as the Agent or one of its Affiliates if it so
designates.

                                   ARTICLE II

                            THE TERM LOAN FACILITIES

              SECTION 2.1. THE TERM LOAN COMMITMENTS.

              On the terms and subject to the conditions contained in this
Agreement, on any Business Day during the period from the Initial Closing Date
to September 30, 2001, each Term A Lender severally agrees to make a term loan
to the Borrower (each a "Term A Loan") in an amount not to exceed at any time
outstanding for all such loans by such Lender such Lender's Term A Loan
Commitment; each Term B Lender severally agrees to make a term loan to the
Borrower (each a "Term B Loan") in an amount not to exceed at any time
outstanding for all such loans by such Lender such Lender's Term B Loan
Commitment; each Term C Lender severally agrees to make a term loan to the
Borrower (each a "Term C Loan" and together with the Term A Loans and Term B
Loans, individually a "Term Loan" and collectively, the "Term Loans") in an
amount not to exceed at any time outstanding for all such loans by such Lender
such Lender's Term C Loan Commitment; provided, however, that no Term Loan shall
be made other than as part of a Term Loan Borrowing consisting of Term A Loans,
Term B Loans and Term C Loans. Amounts of Term Loans repaid may not be
reborrowed.


                                       22
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              SECTION 2.2. BORROWING PROCEDURES.

              (a) Each Term Loan Borrowing shall be made on notice given by the
Borrower to the Agent not later than 11:00 A.M. (New York City time) (i) one
Business Day, in the case of a Term Loan Borrowing of Base Rate Loans and (ii)
three Business Days, in the case of a Term Loan Borrowing of Eurodollar Rate
Loans, prior to the Closing Date. Each such notice shall be in substantially the
form of Exhibit C (a "Notice of Borrowing"), specifying (A) the Closing Date,
(B) the aggregate amount of such proposed Term Loan Borrowing, (C) whether any
portion of the proposed Term Loan Borrowing will be of Base Rate Loans or
Eurodollar Rate Loans, and (D) the initial Interest Period or Periods for any
such Eurodollar Rate Loans. The Term Loans shall be made as Base Rate Loans
unless (subject to Section 2.11) the Notice of Borrowing specifies that all or a
portion thereof shall be Eurodollar Rate Loans (which portion need not be the
same for each Tranche). Each Term Loan Borrowing shall be made in an aggregate
amount of not less than $10,000,000. No more than four Term Loan Borrowings may
be made hereunder. No Term Loan Borrowing may be made after September 30, 2001.

              (b) The Agent shall give to each Lender prompt notice of the
Agent's receipt of a Notice of Borrowing and, if Eurodollar Rate Loans are
properly requested in such Notice of Borrowing, the applicable interest rate
determined pursuant to Section 2.11(a). Each Lender shall, before 11:00 A.M.
(New York City time) on the date of the proposed Term Loan Borrowing, make
available to the Agent at its address referred to in Section 10.8, in
immediately available funds, such Lender's Ratable Portion of such proposed Term
Loan Borrowing. After the Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Sections 3.1 and 3.2, the Agent will make
such funds available to the Borrower.

              (c) Unless the Agent shall have received notice from a Lender
prior to the date of any proposed Term Loan Borrowing that such Lender will not
make available to the Agent such Lender's Ratable Portion of such Term Loan
Borrowing, the Agent may assume that such Lender has made such Ratable Portion
available to the Agent on the date of such Term Loan Borrowing in accordance
with this Section 2.2 and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If and to the
extent that such Lender shall not have so made such Ratable Portion available to
the Agent, such Lender and the Borrower severally agree to repay to the Agent
forthwith on demand such corresponding amount together with interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid to the Agent, at (i) in the case of the Borrower,
the interest rate applicable at the time to the Term Loans comprising such Term
Loan Borrowing and (ii) in the case of such Lender, the Federal Funds Rate for
the first Business Day and thereafter at the interest rate applicable at the
time to the Loans comprising such Term Loan Borrowing. If such Lender shall
repay to the Agent such corresponding amount, such amount so repaid shall
constitute such Lender's Term Loan as part of such Term Loan Borrowing for
purposes of this Agreement. If the Borrower shall repay to the Agent such
corresponding amount, such payment shall not relieve such Lender of any
obligation it may have hereunder to the Borrower.

              (d) The failure of any Lender to make the Term Loan or any payment
required by it on the date specified (a "Non-Funding Lender") shall not relieve
any other Lender of its obligations to make such Term Loan or payment on such
date but no such other Lender shall be responsible for the failure of any
Non-Funding Lender to make a Term Loan or payment required under this Agreement.


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   25

              SECTION 2.3. REPAYMENT OF TERM LOANS. The Borrower shall repay the
Term Loans, ratably in respect of each Tranche, at the dates and in the amounts
set forth below:

                                                
               June 30, 2001                            $1,100,000

               September 30, 2001                         $275,000

               December 31, 2001                          $275,000

               March 31, 2002                             $275,000

               June 30, 2002                              $275,000

               September 30, 2002                         $550,000

               December 31, 2002                          $550,000

               March 31, 2003                             $550,000

               June 30, 2003                              $550,000

               September 30, 2003                         $825,000

               December 31, 2003                          $825,000

               March 31, 2004                             $825,000

               June 30, 2004                              $825,000

               September 30, 2004                       $1,100,000

               December 31, 2004                        $1,100,000

               March 31, 2005                           $1,100,000

               June 30, 2005                            $1,100,000

               September 30, 2005                  $97,900,000 or, if less, the entire
                                                   unpaid principal amount of the Term Loans



Notwithstanding anything herein to the contrary, the Borrower shall repay the
entire unpaid principal amount of the Term Loans on the Term Loan Maturity Date.

              SECTION 2.4. EVIDENCE OF DEBT.

              (a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing Indebtedness of the Borrower to such
Lender resulting from each Term Loan of such Lender from time to time, including
the amounts of principal and interest payable and paid to such Lender from time
to time under this Agreement.


                                       24
   26

              (b) The Agent shall maintain accounts in accordance with its usual
practice in which it will record (i) the amount of each Term Loan made and, if a
Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable by the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder from
or for the account of the Borrower and each Lender's share thereof, if
applicable.

              (c) The entries made in the accounts maintained pursuant to
clauses (a) and (b) of this Section 2.4 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrower to repay the Term Loans in
accordance with their terms.

              (d) The Borrower shall execute and deliver on the Initial Closing
Date promissory notes substantially in the form of Exhibit B payable to each
Lender to evidence the Indebtedness owing with respect to each Tranche of Term
Loans to such Lender.

              SECTION 2.5. OPTIONAL PREPAYMENTS.

              (a) The Borrower may, upon at least three Business Days' prior
notice to the Agent stating the proposed date and aggregate principal amount of
the prepayment, prepay the outstanding principal amount of the Term Loans, in
whole or in part, together with accrued interest to the date of such prepayment
on the principal amount prepaid; provided, however, that if any prepayment of
any Eurodollar Rate Loan is made by the Borrower other than on the last day of
an Interest Period for such Term Loan, the Borrower shall also pay any amounts
owing pursuant to Section 2.11(e), and each partial prepayment shall be in an
aggregate amount not less than $2,500,000 or integral multiples of $500,000 in
excess thereof and that any such partial prepayment shall be applied to the
remaining installments of such outstanding principal amount of the Term Loans in
the inverse order of their maturity; provided, further, that any prepayment
shall be made ratably in respect of the Term Loans. Upon the giving of such
notice of prepayment, the principal amount of the Term Loans specified to be
prepaid shall become due and payable on the date specified for such prepayment.

              (b) The Borrower shall have no right to optionally prepay the
principal amount of any Term Loan other than as provided in this Section 2.5.

              SECTION 2.6. MANDATORY PREPAYMENTS.

              (a) Subject to the provisions of the Intercreditor Agreement, upon
receipt by any Loan Party of Net Cash Proceeds (i) arising (A) from an Asset
Sale to the extent that such Asset Sale constitutes a sale or other disposition
of Collateral other than Common Collateral, (B) from an Equity Issuance or (C)
from a Property Loss Event, the Borrower shall immediately prepay the Term Loans
in an amount equal to 100% of such Net Cash Proceeds, or (ii) arising from a
Debt Issuance, the Borrower shall immediately prepay the Term Loans in an amount
equal to 50% of such Net Cash Proceeds; provided, however, that in the case of
any Net Cash Proceeds arising from a Reinvestment Event, the Borrower shall
prepay the Term Loans in an amount equal to the Reinvestment Prepayment Amount,
if any, applicable to such Reinvestment Event no later than the Reinvestment
Prepayment Date with respect to such Reinvestment Event and, until applied in a
manner permitted by this Agreement, such Net Cash Proceeds shall be deposited in
a Cash Collateral Account. Upon receipt of proceeds of a Property Loss Event,
the Borrower shall deposit such proceeds in a Cash Collateral Account. The Agent
agrees that it will disburse funds to the Borrower from the relevant Cash
Collateral Account as requested by the Borrower to


                                       25
   27

acquire replacement assets in the case of an Asset Sale and to make repairs or
acquire replacement assets in the case of a Property Loss Event as long as no
Default or Event of Default is then occurring or would result therefrom. Any
such partial prepayment shall be applied to the remaining installments of such
outstanding principal amount of the Term Loans in the inverse order of their
maturity.

              (b) Any prepayments made by the Borrower required to be applied in
accordance with this Section 2.6 shall be applied to the outstanding principal
balance of the Term Loans ratably.

              SECTION 2.7. INTEREST.

              (a) Rate of Interest. All Term Loans and the outstanding amount of
all other Obligations shall bear interest, in the case of Term Loans, on the
unpaid principal amount thereof from the date such Term Loans are made and, in
the case of such other Obligations, from the date such other Obligations are due
and payable until, in all cases, paid in full, except as otherwise provided in
Section 2.7(c), as follows:

                     (i) if a Base Rate Loan or such other Obligation, at a rate
per annum equal to the sum of (A) the Base Rate as in effect from time to time,
plus (B) the Applicable Margin; and

                     (ii) if a Eurodollar Rate Loan, at a rate per annum equal
to the sum of (A) the Eurodollar Rate determined for the applicable Interest
Period, plus (B) the Applicable Margin.

              (b) Interest Payments. Interest accrued on each Base Rate Loan
shall be payable in arrears on the last day of each calendar month and if not
previously paid in full, at maturity (whether by acceleration or otherwise).
Interest accrued on each Eurodollar Rate Loan shall be payable in arrears on the
last day of each calendar month to occur during each Interest Period applicable
to such Loan, upon the payment or prepayment thereof in full or in part, and, if
not previously paid in full, at maturity (whether by acceleration or otherwise)
of such Eurodollar Rate Loan. Interest accrued on the amount of all other
Obligations shall be payable on demand from and after the time such Obligation
becomes due and payable (whether by acceleration or otherwise).

              (c) Default Interest. Notwithstanding the rates of interest
specified in Section 2.7(a) or elsewhere herein, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Term Loans and the
amount of all other Obligations shall bear interest at a rate which is two
percent per annum in excess of the rate of interest applicable to such
Obligations from time to time.

              SECTION 2.8. CONVERSION/CONTINUATION OPTION.

              (a) The Borrower may elect (i) at any time to convert Base Rate
Loans or any portion thereof to Eurodollar Rate Loans, or (ii) at the end of any
applicable Interest Period, to convert Eurodollar Rate Loans or any portion
thereof into Base Rate Loans or to continue such Eurodollar Rate Loans or any
portion thereof for an additional Interest Period; provided, however, that the
aggregate amount of the Eurodollar Loans for each Interest Period must consist
of all of the outstanding Term Loans in a Tranche or be in the amount of
$10,000,000 or an integral


                                       26
   28

multiple of $1,000,000 in excess thereof and the portion of a Tranche continued
or converted need not be the same for each Tranche. Each conversion or
continuation shall be allocated among the Term Loans in the same Tranche
ratably. Each such election shall be in substantially the form of Exhibit D
hereto (a "Notice of Conversion or Continuation") and shall be made by giving
the Agent at least three Business Days' prior written notice specifying (A) the
amount and type of Term Loan being converted or continued, (B) in the case of a
conversion to or a continuation of Eurodollar Rate Loans, the applicable
Interest Period, and (C) in the case of a conversion, the date of conversion
(which date shall be a Business Day and, if a conversion from Eurodollar Rate
Loans, shall also be the last day of the applicable Interest Period).

              (b) The Agent shall promptly notify each Lender of its receipt of
a Notice of Conversion or Continuation and of the options selected therein.
Notwithstanding the foregoing, no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period,
shall be permitted at any time at which (i) a Default or an Event of Default
shall have occurred and be continuing or (ii) the continuation of, or conversion
into, such would violate any of the provisions of Section 2.11. If, within the
time period required under the terms of this Section 2.8, the Agent does not
receive a Notice of Conversion or Continuation from the Borrower containing a
permitted election to continue any Eurodollar Rate Loans for an additional
Interest Period or to convert any such Term Loans, then, upon the expiration of
the applicable Interest Period, such Term Loans will be automatically converted
to Base Rate Loans. Each Notice of Conversion or Continuation shall be
irrevocable.

              SECTION 2.9. FEES.

              (a) Unused Commitment Fee. The Borrower agrees to pay to each Term
A Lender, each Term B Lender and each Term C Lender a commitment fee on the
average amount by which the Term A Loan Commitment, Term B Loan Commitment or
Term C Loan Commitment, as the case may be, of such Lender exceeds such Lender's
Ratable Portion of the outstanding Term A Loans, Term B Loans or Term C Loans,
as the case may be (the "Unused Commitment Fee"), from the date hereof until
September 30, 2001 at the Unused Commitment Fee Rate, payable in arrears (i) on
the last day of each calendar month, commencing on the first such day following
the Initial Closing Date and (ii) on September 30, 2001.

              (b) Annual Agent's Fee. The Borrower agrees to pay to the Agent
for its own account an annual agency fee in the amount of $75,000 per annum,
payable in advance on the Initial Closing Date and thereafter annually in
advance for so long as any Obligation shall be outstanding under the Loan
Documents or any Lender shall have a Commitment hereunder.

              SECTION 2.10. PAYMENTS AND COMPUTATIONS.

              (a) The Borrower shall make each payment hereunder (including fees
and expenses) not later than 12:00 noon (New York City time) on the day when
due, in Dollars, to the Agent at its address referred to in Section 10.8 in
immediately available funds without set-off or counterclaim. The Agent will
promptly thereafter cause to be distributed immediately available funds relating
to the payment of principal or interest or fees to the Lenders, in accordance
with the application of payments set forth in clauses (e) and (f) of this
Section 2.10, as applicable, for the account of their respective Applicable
Lending Offices; provided, however, that amounts payable pursuant to Section
2.11(c), 2.11(e), 2.12 or 2.13 shall be paid only to the affected Lender or
Lenders. Payments received by the Agent after 12:00 noon (New York City time)
shall be deemed to be received on the next Business Day.


                                       27
   29

              (b) All computations of interest and of fees shall be made by the
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest and fees are payable. Each determination by the
Agent of an interest rate hereunder shall be conclusive and binding for all
purposes, absent manifest error.

              (c) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of any Eurodollar Rate Loan to be made in the next calendar month, such payment
shall be made on the immediately preceding Business Day. All repayments
allocated to a Tranche of Term Loans, shall be applied first to repay the Term
Loans in such Tranche outstanding as Base Rate Loans and then to repay the Term
Loans in such Tranche outstanding as Eurodollar Rate Loans with those Eurodollar
Rate Loans which have earlier expiring Eurodollar Interest Periods being repaid
prior to those which have later expiring Eurodollar Interest Periods.

              (d) Unless the Agent shall have received notice from the Borrower
to the Lenders prior to the date on which any payment is due hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have made such payment in full to the Agent, each
Lender shall repay to the Agent forthwith on demand such amount distributed to
such Lender together with interest thereon at the Federal Funds Rate, for the
first Business Day, and, thereafter, at the rate applicable to Base Rate Loans,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent.

              (e) Subject to the provisions of clause (f) of this Section 2.10,
all payments and any other amounts received by the Agent from or for the benefit
of the Borrower shall be applied first, to pay principal of and interest on any
portion of the Term Loans which the Agent may have advanced pursuant to the
express provisions of this Agreement on behalf of any Lender and for which the
Agent has not then been reimbursed by such Lender or the Borrower; second, to
pay all other Obligations then due and payable; and third, as the Borrower so
designates. Payments in respect of the Term Loans received by the Agent shall be
allocated ratably among the Tranches and with respect to each Tranche
distributed to each Term Lender in accordance with such Term Lender's Ratable
Portion of the Term Loans in such Tranche; and all payments of fees and all
other payments in respect of any other Obligation shall be allocated among such
of the Lenders as are entitled thereto, and, if to the Lenders, in proportion to
the amount owed each.

              (f) Subject to clause (g) of this Section 2.10 and the provisions
of the Intercreditor Agreement, after the occurrence and during the continuance
of an Event of Default, the Borrower hereby irrevocably waives the right to
direct the application of any and all payments in respect of the Obligations and
any proceeds of Collateral, and agrees that the Agent may, and shall upon either
(A) the written direction of the Requisite Lenders or (B) the acceleration of
the Obligations pursuant to Section 8.1, apply all payments in respect of any
Obligations and all proceeds of Collateral in the following order:

                     (i) first, to pay Obligations in respect of any reasonable
expense reimbursements or indemnities then due the Agent;


                                       28
   30

                     (ii) second, to pay Obligations in respect of any
reasonable expense reimbursements or indemnities then due to the Lenders;

                     (iii) third, to pay Obligations in respect of any fees then
due to the Agent and the Lenders;

                     (iv) fourth, to pay interest then due and payable in
respect of the Term Loans;

                     (v) fifth, to pay or prepay principal payments on the Term
Loans ratably to the aggregate principal amount of such Term Loans and shall be
applied, ratably in respect of such Lender's Term Loans; and

                     (vi) sixth, to the ratable payment of all other
Obligations;

provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any of the Obligations described in any of the
foregoing clauses first through sixth, the available funds being applied with
respect to any such Obligation (unless otherwise specified in such clause) shall
be allocated to the payment of such Obligations pro rata, based on the
proportion of the Agent's and each Lender's interest in the aggregate
outstanding Obligations described in such clauses. The order of priority set
forth in clauses first through sixth of this Section 2.10(f) may, subject to
clause (g) of this Section 2.10, at any time and from time to time be changed by
the agreement of the Requisite Lenders without necessity of notice to or consent
of or approval by the Borrower, any Secured Party which is not a Lender, or any
other Person.

              (g) Notwithstanding the provisions set forth in clause (f) of this
Section 2.10, the priorities set forth in clause (f) of this Section 2.10 shall
be deemed modified to the extent required by Section 3.9 of the U.S. Government
Guarantee. All payments made by the Government Guarantor pursuant to the U.S.
Government Guarantee shall be applied to the payment of the outstanding
principal amount of each Tranche of the Term Loans pro rata based on an amount
equal to the U.S. Government Guarantee Percentage of the principal amount of
each such Tranche. Upon any payment to the Agent by the Government Guarantor
under the U.S. Government Guarantee, the Government Guarantor shall become
subrogated to, and the Term A Lenders and the Term B Lenders shall be deemed to
have assigned and do so hereby assign to the Government Guarantor, without
recourse and without need of any further action, such right, title and interest
in, to and under the Term Loans, the Collateral, the Security Interests (as
defined in the U.S. Government Guarantee) and the Loan Documents as is
equivalent to the Government Guarantor's right to receive Collections (as
defined in the U.S. Government Guarantee) under Sections 3.9 and 3.10 of the
U.S. Government Guarantee and, to such extent, the Government Guarantor shall
have the right to enforce and participate in any claim (including any claim in
bankruptcy), right or remedy that the Agent or the Term A Lenders and Term B
Lenders then have or may thereafter acquire against the Borrower and the
Collateral under this Agreement, the other Loan Documents or the Intercreditor
Agreement and shall thereafter be deemed a Lender hereunder under the applicable
Tranches and be entitled to the benefit of and any right to participate in any
Collateral and Collections (as defined in the U.S. Government Guarantee) then or
thereafter held or acquired by the Agent or the Lenders. The Agent and the
Lenders shall, upon request by the Government Guarantor, execute and deliver
such documents and take such other actions as may be necessary to evidence or
give effect to such subrogation and assignment. Any statute or judicial decision
to the contrary notwithstanding, no payment by the Government Guarantor to the
Agent or the Lenders under the U.S. Government Guarantee shall reduce,
discharge, satisfy or terminate any obligation of Borrower under this Agreement
or


                                       29
   31

any of the other Loan Documents or the Intercreditor Agreement or any obligation
of any Loan Party to the Collateral Documents or the Intercreditor Agreement.

              SECTION 2.11. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

              (a) Determination of Interest Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the Agent
pursuant to the procedures set forth in the definition of "Eurodollar Rate." The
Agent's determination shall be presumed to be correct, absent manifest error,
and shall be binding on the Borrower.

              (b) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that: (i) the Agent determines that adequate and fair means do not exist
for ascertaining the applicable interest rates by reference to which the
Eurodollar Rate then being determined is to be fixed; or (ii) the Requisite
Lenders notify the Agent that the Eurodollar Rate for any Interest Period will
not adequately reflect the cost to the Lenders of making or maintaining such
Term Loans for such Interest Period, the Agent shall forthwith so notify the
Borrower and the Lenders, whereupon each Eurodollar Loan will automatically, on
the last day of the current Interest Period for such Term Loan, convert into a
Base Rate Loan and the obligations of the Lenders to make Eurodollar Rate Loans
or to convert Base Rate Loans into Eurodollar Rate Loans shall be suspended
until the Agent shall notify the Borrower that the Requisite Lenders have
determined that the circumstances causing such suspension to no longer exist.

              (c) Increased Costs. If at any time any Lender shall determine
that the introduction of or any change in or in the interpretation of any law,
treaty or governmental rule, regulation or order (other than any change by way
of imposition or increase of reserve requirements included in determining the
Eurodollar Rate Reserve Percentage) or the compliance by such Lender or the
Permitted Participant, as the case may be, with any guideline, request or
directive from any central bank or other Governmental Authority (whether or not
having the force of law), there shall be any increase in the cost to such Lender
or the Permitted Participant, as the case may be, of agreeing to make or making,
funding or maintaining any Eurodollar Rate Loans (and such Lender or the
Permitted Participant, as the case may be, is unable to designate a different
Eurodollar Lending Office that would eliminate or materially reduce such cost
and would not, in the good faith judgment of such Lender or the Permitted
Participant, as the case may be, be disadvantageous to such Lender or the
Permitted Participant, as the case may be), then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender or the Permitted Participant, as the
case may be, additional amounts sufficient to compensate such Lender or the
Permitted Participant, as the case may be, for such increased cost. A
certificate as to the amount of such increased cost, submitted to the Borrower
and the Agent by such Lender or the Permitted Participant, as the case may be,
shall be conclusive and binding for all purposes, absent manifest error.

              (d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender or the Permitted Participant determines that the
introduction of or any change in or in the interpretation of any law, treaty or
governmental rule, regulation or order after the date of this Agreement shall
make it unlawful, or any central bank or other Governmental Authority shall
assert that it is unlawful, for any Lender or the Permitted Participant or its
Eurodollar Lending Office to make Eurodollar Rate Loans or to continue to fund
or maintain Eurodollar Rate Loans (and such Lender or the Permitted Participant,
as the case may be, is unable to designate a different Eurodollar Lending Office
that would not, in the good faith judgment of such Lender or the Permitted
Participant, as the case may be, be disadvantageous to such Lender or the
Permitted


                                       30
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Participant, as the case may be), then, on notice thereof and demand therefor by
such Lender to the Borrower through the Agent, (i) the obligation of such Lender
or the Permitted Participant, as the case may be, to make or to continue
Eurodollar Rate Loans and to convert Base Rate Loans into Eurodollar Rate Loans
shall be suspended, and each such Lender or the Permitted Participant, as the
case may be, shall make a Base Rate Loan as part of any requested Borrowing of
Eurodollar Rate Loans and (ii) if the affected Eurodollar Rate Loans are then
outstanding, the Borrower shall immediately convert each such Term Loan into a
Base Rate Loan. If at any time after a Lender or the Permitted Participant, as
the case may be, gives notice under this Section 2.11(d) such Lender determines
that it may lawfully make Eurodollar Rate Loans, such Lender or the Permitted
Participant, as the case may be, shall promptly give notice of that
determination to the Borrower and the Agent, and the Agent shall promptly
transmit the notice to each other Lender or the Permitted Participant, as the
case may be. The Borrower's right to request, and such Lender's or the Permitted
Participant's obligation, if any, to make Eurodollar Rate Loans shall thereupon
be restored.

              (e) Breakage Costs. In addition to all amounts required to be paid
by the Borrower pursuant to Section 2.7, the Borrower shall compensate each
Lender and the Permitted Participant (if applicable), upon demand, for all
losses, expenses and liabilities (including any loss or expense incurred by
reason of the liquidation or reemployment of deposits or other funds acquired by
such Lender or the Permitted Participant to fund or maintain such Lender's
Eurodollar Rate Loans to the Borrower but excluding any loss of the Applicable
Margin on the relevant Term Loans) which that Lender may sustain (i) if for any
reason a proposed Borrowing, conversion into or continuation of Eurodollar Rate
Loans does not occur on a date specified therefor in a Notice of Borrowing or a
Notice of Conversion or Continuation given by a Borrower or in a request by it
transmitted by it by facsimile for borrowing or conversion or continuation or a
successive Interest Period does not commence after notice therefor is given
pursuant to Section 2.8, (ii) if for any reason any Eurodollar Rate Loan is
prepaid (including mandatorily pursuant to Section 2.6) on a date which is not
the last day of the applicable Interest Period, (iii) as a consequence of a
required conversion of a Eurodollar Rate Loan to a Base Rate Loan as a result of
any of the events indicated in Section 2.11(c) or (d), or (iv) as a consequence
of any failure by a Borrower to repay Eurodollar Rate Loans when required by the
terms hereof. The Lender or the Permitted Participant making demand for such
compensation shall deliver to the Borrower concurrently with such demand a
written statement as to such losses, expenses and liabilities, and this
statement shall be conclusive as to the amount of compensation due to that
Lender or the Permitted Participant, as the case may be, absent manifest error.

              SECTION 2.12. CAPITAL ADEQUACY. If at any time any Lender or the
Permitted Participant determines that (a) the adoption of or any change in or in
the interpretation of any law, treaty or governmental rule, regulation or order
after the date of this Agreement regarding capital adequacy, (b) compliance with
any such law, treaty, rule, regulation, or order, or (c) compliance with any
guideline or request or directive from any central bank or other Governmental
Authority (whether or not having the force of law) shall have the effect of
reducing the rate of return on such Lender's or the Permitted Participant's, as
the case may be, (or any corporation controlling such Lender's or the Permitted
Participant, as the case may be) capital as a consequence of its obligations
hereunder to a level below that which such Lender or the Permitted Participant,
as the case may be, or such corporation could have achieved but for such
adoption, change, compliance or interpretation, then, upon demand from time to
time by such Lender or the Permitted Participant, as the case may be, (with a
copy of such demand to the Agent), the Borrower shall pay to the Agent for the
account of such Lender or the Permitted Participant, as the case may be, from
time to time as specified by such Lender or the Permitted Participant, as the
case may be, additional amounts sufficient to compensate such Lender or the
Permitted Participant, as the case


                                       31
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may be, for such reduction. A certificate as to such amounts submitted to the
Borrower and the Agent by such Lender or the Permitted Participant, as the case
may be, shall be conclusive and binding for all purposes absent manifest error.

              SECTION 2.13. TAXES.

              (a) Any and all payments by the Borrower under each Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) in the case of each Lender, the
Permitted Participant and the Agent (A) taxes measured by its net income, and
franchise taxes imposed on it, by the jurisdiction (or any political subdivision
thereof) under the laws of which such Lender, the Permitted Participant or the
Agent (as the case may be) is organized and (B) any United States withholding
taxes payable with respect to payments under the Loan Documents under laws
(including any statute, treaty or regulation) in effect on the Initial Closing
Date (or, in the case of an Eligible Assignee, the date of the Assignment and
Acceptance) applicable to such Lender, the Permitted Participant or the Agent,
as the case may be, but not excluding any United States withholding payable as a
result of any change in such laws occurring after the Initial Closing Date (or
the date of such Assignment and Acceptance) and (ii) in the case of each Lender,
taxes measured by its net income, and franchise taxes imposed on it, by the
jurisdiction in which such Lender's Applicable Lending Office is located (all
such non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If any Taxes shall be
required by law to be deducted from or in respect of any sum payable under any
Loan Document to any Lender or the Agent (i) the sum payable shall be increased
as may be necessary so that after making all required deductions (including
deductions applicable to additional sums payable under this Section 2.13) such
Lender, the Permitted Participant or the Agent (as the case may be) receives an
amount equal to the sum it would have received had no such deductions been made,
(ii) the Borrower shall make such deductions, (iii) the Borrower shall pay the
full amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (iv) the Borrower shall deliver to the Agent
evidence of such payment.

              (b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, which
arise from any payment made under any Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, any Loan Document
(collectively, "Other Taxes").

              (c) The Borrower will indemnify each Lender, the Permitted
Participant and the Agent for the full amount of Taxes or Other Taxes (including
any Taxes or Other Taxes imposed by any jurisdiction on amounts payable under
this Section 2.13) paid by such Lender or the Agent (as the case may be) and any
liability (including for penalties, interest and expenses) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or the Agent (as the case may be) makes written demand
therefor.

              (d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Borrower will furnish to the Agent, at its address referred to in
Section 10.8, the original or a certified copy of a receipt evidencing payment
thereof.


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              (e) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.13 shall survive the payment in full of the Obligations.

              (f) Prior to the Initial Closing Date in the case of each Non-U.S.
Lender that is a signatory hereto, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Non-U.S. Lender and from time to time thereafter if requested by the Borrower or
the Agent, each Non-U.S. Lender that is entitled at such time to an exemption
from United States withholding tax, or that is subject to such tax at a reduced
rate under an applicable tax treaty, shall provide the Agent and the Borrower
with two completed copies of either IRS Form 4224 or Form 1001, or in the case
of a Non-U.S. Lender claiming exemption under Section 871(h) or 881(c) of the
Code with respect to "portfolio interest," a Form W-8 or Form W-9, or other
applicable form, certificate or document prescribed by the IRS certifying as to
such Non-U.S. Lender's entitlement to such exemption from United States
withholding tax or reduced rate with respect to all payments to be made to such
Non-U.S. Lender under the Loan Documents. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that payments
under any Loan Document to or for a Non-U.S. Lender are not subject to United
States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Agent shall withhold taxes from such
payments at the applicable statutory rate.

              (g) Any Lender or the Permitted Participant claiming any
additional amounts payable pursuant to this Section 2.13 shall use its
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions) to change the jurisdiction of its Applicable Lending Office if the
making of such a change would avoid the need for, or reduce the amount of, any
such additional amounts which would be payable or may thereafter accrue and
would not, in the sole determination of such Lender or the Permitted
Participant, as the case may be, be otherwise disadvantageous to such Lender or
the Permitted Participant, as the case may be.

              SECTION 2.14. SUBSTITUTION OF LENDERS. In the event that (a) (i)
any Lender makes a claim under Section 2.11 (c) or Section 2.12, or (ii) it
becomes illegal for any Lender to continue to fund or make any Eurodollar Rate
Loan and such Lender notifies the Borrower pursuant to Section 2.11(d), or (iii)
the Borrower is required to make any payment pursuant to Section 2.13 that is
attributable to any Lender, or (iv) any Lender is a Non-Funding Lender, (b) in
the case of clause (a)(i) above, as a consequence of increased costs in respect
of which such claim is made, the effective rate of interest payable to such
Lender under this Agreement with respect to its Term Loans materially exceeds
the effective average annual rate of interest payable to the Requisite Lenders
under this Agreement and (c) Lenders holding at least 75% of the Commitments are
not subject to such increased costs or illegality, payment or proceedings (any
such Lender, an "Affected Lender"), the Borrower may substitute another
financial institution for such Affected Lender hereunder, upon reasonable prior
written notice (which written notice must be given within 90 days following the
occurrence of any of the events described in clauses (a)(i), (ii), (iii) or
(iv)) by the Borrower to the Agent and the Affected Lender that the Borrower
intends to make such substitution, which substitute financial institution must
be an Eligible Assignee and, if not an existing Lender, reasonably acceptable to
the Agent and acceptable to Government Guarantor; provided, however, that if
more than one Lender claims increased costs, illegality or right to payment
arising from the same act or condition and such claims are received by the
Borrower within 30 days of each other then the Borrower may substitute all, but
not (except to the extent the Borrower has already substituted one of such
Affected Lenders before the Borrower's receipt of the other Affected Lenders'
claim) less than all, Lenders making such claims. In the event that the proposed
substitute financial institution or other entity is acceptable to the


                                       33
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Government Guarantor and reasonably acceptable to the Agent and the written
notice was properly issued under this Section 2.14, the Affected Lender shall
sell and the substitute financial institution or other entity shall purchase,
pursuant to an Assignment and Acceptance, all rights and claims of such Affected
Lender under the Loan Documents and the U.S. Government Guarantee and the
substitute financial institution or other entity shall assume and the Affected
Lender shall be relieved of its Commitments and all other prior unperformed
obligations of the Affected Lender under the Loan Documents and the U.S.
Government Guarantee (other than in respect of any damages (other than exemplary
or punitive damages, to the extent permitted by applicable law) in respect of
any such unperformed obligations). Upon the effectiveness of such sale, purchase
and assumption (which, in any event shall be conditioned upon the payment in
full by the Borrower to the Affected Lender in cash of all fees, unreimbursed
costs and expenses and indemnities accrued and unpaid through such effective
date), the substitute financial institution or other entity shall become a
"Lender" hereunder for all purposes of this Agreement having a Term Loan
Commitment (if applicable) in the amount of such Affected Lender's Term Loan
Commitment assumed by it and such Term Loan Commitment (if applicable) of the
Affected Lender shall be terminated, provided that all indemnities under the
Loan Documents shall continue in favor of such Affected Lender.

              SECTION 2.15. CERTAIN LIMITATIONS ON INDEMNIFICATION. The Borrower
shall not be required to compensate any Lender or the Permitted Participant
pursuant to Sections 2.11, 2.12, 2.13 and 2.14 for any increased costs or other
amounts incurred more than 180 days prior to the date that such Lender or the
Permitted Participant notifies the Borrower of a change in law or other event
giving rise to such increased costs or other amounts for which such Lender or
the Permitted Participant is indemnified under such Sections and of such
Lender's or the Permitted Participant's intention to claim compensation or
indemnity therefor.

              SECTION 2.16. ELIGIBLE LENDER. As of the Initial Closing Date,
each Lender represents and warrants to the Agent that it is an Eligible Lender
and has not been disbarred or suspended from Federal financial and non-financial
assistance and benefits under Federal programs and activities.

                                   ARTICLE III

                            CONDITIONS TO TERM LOANS

              SECTION 3.1. CONDITIONS PRECEDENT TO INITIAL LOANS. The obligation
of each Lender to make the Term Loans requested to be made by it on the Initial
Closing Date is subject to the satisfaction of all of the following conditions
precedent before or concurrently with such Term Loan Borrowing:

              (a) Certain Documents. The Agent shall have received on the
Initial Closing Date each of the following, each dated as of the Initial Closing
Date unless otherwise indicated or agreed to by the Agent, in form and substance
satisfactory to the Agent and in sufficient copies for each Lender and the
Government Guarantor:

                     (i) this Agreement, duly executed and delivered by the
Borrower and, for the account of each Lender requesting the same, a Note or
Notes of the Borrower conforming to the requirements set forth herein;

                     (ii) the Guaranty, duly executed by each Subsidiary
Guarantor, if any;


                                       34
   36

                     (iii) the U.S. Government Guarantee, duly executed by the
parties thereto, together with the Acknowledgement and Agreement duly executed
by the Borrower;

                     (iv) the Security Agreement, duly executed by the Borrower
and each Subsidiary Guarantor, together with:

                            (A) evidence satisfactory to the Agent that the
              Agent (for the benefit of the Secured Parties) has a valid and
              perfected first priority security interest in the Collateral (or
              second priority, with respect to the Common Collateral), including
              (I) such documents duly executed by each Loan Party as the Agent
              may request with respect to the perfection of its security
              interests in the Collateral (including evidence satisfactory to
              the Agent that financing statements under the UCC (as amended or
              revised on the date hereof) and other applicable documents under
              the laws of any jurisdiction have been appropriately filed with
              respect to the perfection of Liens created by the Security
              Agreement) and (II) copies of UCC search reports as of a recent
              date listing all effective financing statements that name any Loan
              Party as debtor, together with copies of such financing
              statements, none of which shall cover the Collateral except for
              those which shall be terminated on the Closing Date or are
              permitted under the terms of this Agreement); and

                            (B) Control Account Letters from (I) all securities
              intermediaries with respect to all securities accounts and
              securities entitlements of the Borrower, and such Subsidiary
              Guarantor, if any, and (II) all futures commission agents and
              clearing houses with respect to all commodities contracts and
              commodities accounts held by the Borrower, and each Subsidiary
              Guarantor, if any;

                     (v) Mortgages covering the real property set forth on
Schedule 4.19 together with: (A) title insurance policies satisfactory in form
and substance to the Agent, in its sole discretion and (B) evidence that
counterparts of the Mortgages have been recorded in all places to the extent
necessary or desirable, in the judgment of the Agent, to create a valid and
enforceable first priority lien on property described therein in favor of the
Agent for the benefit of the Secured Parties (or in favor of such other trustee
as may be required or desired under local law);

                     (vi) a favorable opinion of (A) Cadwalader, Wickersham &
Taft, counsel to the Loan Parties, in substantially the form of Exhibit E-1
addressed to the Agent, the Lenders and the Government Guarantor and addressing
such other matters as any Lender through the Agent may reasonably request, (B)
Parr Waddoups Brown Gee & Loveless, Utah counsel to the Loan Parties, in
substantially in the form of Exhibit E-2 addressed to the Agent, the Lenders and
the Government Guarantor addressing such other matters any Lender through the
Agent may reasonably request and (C) counsel to the Agent as to the
enforceability of this Agreement and the other Loan Documents to be executed on
the Initial Closing Date;

                     (vii) the Intercreditor Agreement duly executed by the
parties thereto;

                     (viii) a copy of the articles or certificate of
incorporation (or equivalent Constituent Document) of each Loan Party, certified
as of a recent date by the Secretary of State of the state of organization of
such Loan Party, together with certificates of such official attesting to the
good standing of each such Loan Party;


                                       35
   37

                     (ix) a certificate of the Borrower signed on behalf of the
Borrower by the Secretary or an Assistant Secretary of each Loan Party
certifying (A) the names and true signatures of each officer of such Loan Party
who has been authorized to execute and deliver any Loan Document or other
document required hereunder to be executed and delivered by or on behalf of such
Loan Party, (B) the by-laws (or equivalent Constituent Document) of such Loan
Party as in effect on the date of such certification, (C) the resolutions of
such Loan Party's Board of Directors (or equivalent governing body) approving
and authorizing the execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party and (D) that there have been no
changes in the certificate of incorporation (or equivalent Constituent Document)
of such Loan Party from the certificate of incorporation (or equivalent
Constituent Document) delivered pursuant to the immediately preceding clause;

                     (x) a certificate of the Borrower signed by the Chief
Financial Officer of the Borrower on behalf of the Borrower, stating that the
Borrower is Solvent after giving effect to the initial Term Loans, the
application of the proceeds thereof in accordance with Section 6.9 and the
payment of all estimated legal, accounting and other fees related hereto and
thereto;

                     (xi) a certificate of the Borrower signed by a Responsible
Officer on behalf of the Borrower to the effect that the conditions set forth in
Sections 3.1(d), (f)(ii), (g), (i), (j), (l) and 3.2(b) have been satisfied;

                     (xii) evidence satisfactory to the Agent that the insurance
policies required by Section 6.5 and any Collateral Document are in full force
and effect, together with endorsements naming the Agent, on behalf of the
Secured Parties, as an additional insured and/or loss payee under all insurance
policies to be maintained with respect to the properties of the Borrower and its
Restricted Subsidiaries;

                     (xiii) appraisals in form and substance satisfactory to the
Agent from an appraiser designated by the Agent with respect to the real
property set forth on Schedule 4.19;

                     (xiv) file-stamped copies of certificate of mergers or
other confirmation from the Secretary of State of the State of Delaware
satisfactory to the Agent of the consummation of the Mergers; and

                     (xv) such other certificates, documents, agreements and
information respecting any Loan Party as any Lender or the Government Guarantor
through the Agent may reasonably request.

              (b) Cash Collateral Account. The Agent shall have received
evidence that, as of the Initial Closing Date, the procedures with respect to
cash management required by this Agreement or the Collateral Documents have been
established and are currently being maintained.

              (c) Fees and Expenses Paid. There shall have been paid to the
Agent, for the account of the Agent, and the Lenders, as applicable, all fees
due and payable on or before the Initial Closing Date (including the accrued
fees and expenses of counsel to the Agent and all such fees in connection with
each commitment letter issued by any Lender hereunder or the Permitted
Participant and submitted to the Bankruptcy Court on December 6, 2000 or
otherwise disclosed in full to the Agent), and all expenses due and payable on
or before the Initial Closing Date.


                                       36
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              (d) Consents, Etc. Each of the Borrower and its Subsidiaries shall
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
consents and authorizations of, and effected all notices to and filings with,
any Governmental Authority, in each case, as may be necessary to allow each of
the Borrower and its Subsidiaries lawfully (A) to execute, deliver and perform,
in all material respects, their respective obligations hereunder, the Loan
Documents to which each of them, respectively, is, or shall be, a party and each
other agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith, (B) to create and
perfect the Liens on the Collateral owned or hereafter acquired by each of them
in the manner and for the purpose contemplated by the Loan Documents.

              (e) Working Capital Facility. The initial funding of loans or
issuance of any letter of credit under the Revolving Credit Agreement shall have
occurred.

              (f) Confirmation Order. The Confirmation Order (i) shall be in
form and substance satisfactory to the Agent in the exercise of reasonable
judgment and (ii) shall not have been reversed, vacated, amended, supplemented,
modified, remanded or stayed and shall have become a Final Order.

              (g) Plan of Reorganization. The Plan of Reorganization shall be
the same in all respects as that approved by the Bankruptcy Court on December 8,
2000 and submitted in connection with the application of the Agent to the
Government Guarantor, shall not have been materially amended, supplemented or
modified, and no material provision thereof shall have been waived, in each case
without the prior written consent of the Agent, and all conditions precedent to
confirmation and the effectiveness of the Plan of Reorganization shall have been
satisfied (or the waiver thereof shall have been consented to by the Agent) and
the effectiveness of the Plan of Reorganization shall have occurred or shall be
scheduled to occur but for the initial extension of credit contemplated
hereunder and all transactions in connection with the Plan of Reorganization
shall have been or will be consummated in compliance with all Requirements of
Law.

              (h) Bankruptcy Court Jurisdiction. Except as consented to by the
Agent, the Bankruptcy Court's retention of jurisdiction under the Confirmation
Order shall not govern the enforcement of the Loan Documents or any rights or
remedies relating thereto.

              (i) Disclosure Statement. All sources and uses of funds to
consummate the Plan of Reorganization shall otherwise be substantially as
described in the Disclosure Statement.

              (j) Material Liabilities. The terms and extent of all material
liabilities of the Borrower and its Subsidiaries which are not otherwise being
discharged upon consummation of the Plan of Reorganization shall be
substantially as described in the Disclosure Statement.

              (k) Guarantee Fee. The Borrower shall have paid the Guarantee Fee,
required under the U.S. Government Guarantee, equal to one half of one percent
(0.5%) of the Term Loan Commitments.

              (l) Mergers. The Mergers shall have been consummated strictly in
accordance with the terms of the merger agreements delivered to the Agent prior
to the Initial Closing Date, in compliance with all applicable laws.


                                       37
   39

              (m) Information Provided to Board. The Borrower shall have
provided to the Agent a copy of all written materials provided to the Board by
or, to the best of Borrower's knowledge, on behalf of the Borrower, in such case
on or after November 16, 2000.

              (n) Participation Agreement. The Term C Lender and the Permitted
Participant shall have entered into a participation agreement in form and
substance satisfactory to the parties thereto.

              SECTION 3.2. CONDITIONS PRECEDENT TO EACH TERM LOAN. The
obligation of each Lender on any Closing Date (including the Initial Closing
Date) to make any Term Loan is subject to the satisfaction of all of the
following conditions precedent:

              (a) Request for Borrowing. With respect to any Term Loan, the
Agent shall have received a duly executed Notice of Borrowing.

              (b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Term Loan, both before and after
giving effect thereto and to the application of the proceeds from any such Term
Loan:

                     (i) The representations and warranties set forth in Article
IV and in the other Loan Documents shall be true and correct in all material
respects on and as of any such date with the same effect as though made on and
as of such date, except to the extent such representations and warranties
expressly relate to an earlier date; and

                     (ii) No Default or Event of Default has occurred and is
continuing.

              (c) No Legal Impediments. The making of the Term Loans on such
date does not violate any Requirement of Law on the date of or immediately
following such Term Loan and is not enjoined, temporarily, preliminarily or
permanently.

              (d) Additional Matters. The Agent or the Government Guarantor
shall have received such additional documents, information and materials as any
Lender or the Government Guarantor, through the Agent, may reasonably request.

              SECTION 3.3. Each submission by the Borrower to the Agent of a
Notice of Borrowing and the acceptance by the Borrower of the proceeds of each
Term Loan requested therein, shall be deemed to constitute a representation and
warranty by the Borrower as to the matters specified in Section 3.2(b) on the
date of the making of such Term Loan.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

              To induce the Lenders and the Agent to enter into this Agreement,
the Borrower represents and warrants to the Lenders and the Agent that, on and
as of the Initial Closing Date, after giving effect to the making of the Term
Loans and other financial accommodations on the Initial Closing Date and on and
as of each date as required by Section 3.2(b)(i):

              SECTION 4.1. ENTITY EXISTENCE; COMPLIANCE WITH LAW. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization; (b) is
duly qualified as a foreign entity and in good


                                       38
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standing under the laws of each jurisdiction where such qualification is
necessary, except where the failure to be so qualified or in good standing would
not in the aggregate have a Material Adverse Effect; (c) has all requisite power
and authority and the legal right to own, pledge, mortgage and operate its
properties, to lease the property it operates under lease and to conduct its
business as now or currently proposed to be conducted; (d) is in compliance with
its Constituent Documents; (e) is in compliance with all applicable Contractual
Obligations and Requirements of Law except where the failure to be in compliance
would not in the aggregate have a Material Adverse Effect; and (f) except as
disclosed in Section 4.17, has all necessary licenses, permits, consents or
approvals from or by, has made all necessary filings with, and has given all
necessary notices to, each Governmental Authority having jurisdiction, to the
extent required for such ownership, operation and conduct, except for licenses,
permits, consents, approvals or filings which can be obtained or made by the
taking of ministerial action to secure the grant or transfer thereof or the
failure to obtain or make would not in the aggregate have a Material Adverse
Effect.

              SECTION 4.2. ENTITY POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

              (a) The execution, delivery and performance by each Loan Party of
the Loan Documents to which it is a party and the consummation of the
transactions contemplated thereby:

                     (i) are within such Loan Party's corporate, limited
       liability company, partnership or other powers;

                     (ii) have been duly authorized by all necessary corporate,
       limited liability company or partnership action, including the consent of
       shareholders, members or partners where required;

                     (iii) do not and will not (A) contravene any Loan Party's
       or any Restricted Subsidiary's Constituent Documents, (B) violate any
       other applicable Requirement of Law applicable to any Loan Party
       (including Regulations T, U and X of the Federal Reserve Board), or any
       order or decree of any Governmental Authority or arbitrator applicable to
       any Loan Party, (C) conflict with or result in the breach of, or
       constitute a default under, or result in or permit the termination or
       acceleration of, any Contractual Obligation of any Loan Party or any of
       its Subsidiaries, or (D) result in the creation or imposition of any Lien
       upon any of the property of any Loan Party or any of its Subsidiaries,
       other than those in favor of the Secured Parties pursuant to the
       Collateral Documents; and

                     (iv) do not require the consent of, authorization by,
       approval of, notice to, or filing or registration with, any Governmental
       Authority or any other Person, other than those listed on Schedule 4.2
       and which have been or will be, prior to the Initial Closing Date,
       obtained or made, copies of which have been or will be delivered to the
       Agent pursuant to Section 3.1, and each of which on the Initial Closing
       Date will be in full force and effect and, with respect to the
       Collateral, filings required to perfect the Liens created by the
       Collateral Documents.

              (b) This Agreement has been, and each of the other Loan Documents
will have been upon delivery thereof pursuant to the terms of this Agreement,
duly executed and delivered by each Loan Party thereto. This Agreement is, and
the other Loan Documents will be, when delivered hereunder, the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with its terms, except as the same may


                                       39
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be limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
of general applicability affecting the enforcement of creditor's rights and the
application of general principles of equity, regardless of whether such
enforceability is considered in a proceeding in equity or at law.

              SECTION 4.3. OWNERSHIP OF BORROWER; SUBSIDIARIES.

              (a) All of the outstanding membership interests of the Borrower
have been validly issued, are fully paid and non-assessable and on the Initial
Closing Date 100%, and on any other date at least 75%, are owned beneficially
and of record by Holdings, free and clear of all Liens. Subject to the
foregoing, no Stock of the Borrower is subject to any option, warrant, right of
conversion or purchase or any similar right other than in favor of Holdings.

              (b) Set forth on Schedule 4.3 is a complete and accurate list
showing, as of the Initial Closing Date, all Subsidiaries of the Borrower and,
as to each such Subsidiary, the jurisdiction of its organization, the number of
shares, membership interests or partnership interests of each class of Stock
authorized (if applicable), the number outstanding on the Initial Closing Date
and the number and percentage of the outstanding shares of each such class owned
(directly or indirectly) by the Borrower. No Stock of any Restricted Subsidiary
is subject to any outstanding option, warrant, right of conversion or purchase
or any similar right. All of the outstanding Stock of each Restricted Subsidiary
owned (directly or indirectly) by the Borrower has been validly issued, is fully
paid and non-assessable and is owned by the Borrower or a Restricted Subsidiary,
free and clear of all Liens (other than the Lien in favor of the Secured Parties
created pursuant to the Security Agreement). Neither the Borrower nor any
Restricted Subsidiary is a party to, or has knowledge of, any agreement
restricting the transfer or hypothecation of any Stock of any such Restricted
Subsidiary, other than the Loan Documents. The Borrower does not own or hold,
directly or indirectly, any Stock of any Person other than Investments permitted
by Section 7.12.

              (c) There is no Material Subsidiary that is not a Subsidiary
Guarantor.

              (d) On the Initial Closing Date, there is no Non-Recourse
Subsidiary.

              SECTION 4.4. FINANCIAL STATEMENTS.

              (a) The consolidated balance sheet of the Borrower and its
Subsidiaries as at September 30, 2000, and the related consolidated statements
of income, retained earnings and cash flows of the Borrower and its Subsidiaries
for the fiscal year then ended, certified by Arthur Andersen, LLP, fairly
present the consolidated financial condition of the Borrower and its
Subsidiaries as at such date and the consolidated results of the operations of
the Borrower and its Subsidiaries for the period ended on such date, all in
conformity with GAAP.

              (b) Neither the Borrower nor any of its Subsidiaries has any
material obligation, contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitment which is not reflected in the
Financial Statements referred to in clause (a) above or in the notes thereto or
in Schedule 4.4.

              (c) The Projections have been prepared by the Borrower in light of
the past operations of its business, and reflect projections for the five-year
period beginning on October 1, 2000 on a month-by-month basis for the first year
and on a year-by-year basis thereafter, pro forma for the Plan of
Reorganization. The Projections are based upon estimates and assumptions


                                       40
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stated therein, all of which the Borrower believes to be reasonable and fair in
light of current conditions and current facts known to the Borrower and, as of
the Initial Closing Date, reflect the Borrower's good faith and reasonable
estimates of the future financial performance of the Borrower and its
Subsidiaries and of the other information projected therein for the periods set
forth therein.

              SECTION 4.5. MATERIAL ADVERSE CHANGE. Since January 31, 2000,
there has been no Material Adverse Change (other than any change disclosed to
the Agent prior to November 20, 2000), no change after November 20, 2000 that
represents a material adverse change to, or material worsening of, the business,
condition (financial or otherwise), operations, performance, assets, liabilities
(contingent or otherwise) or properties of the Borrower and its Subsidiaries
taken as a whole, or that is inconsistent in any materially adverse respect with
the financial statements and other information delivered to the Agent prior to
November 20, 2000. Since January 31, 2000, there have been no events or
developments that in the aggregate have had a Material Adverse Effect (other
than any events or developments disclosed to the Agent prior to November 20,
2000), no change after November 20, 2000 that represent a material adverse
change to, or material worsening of, the business, condition (financial or
otherwise), operations, performance, assets, liabilities (contingent or
otherwise) or properties of the Borrower and its Subsidiaries taken as a whole,
or that is inconsistent in any materially adverse respect with the financial
statements and other information delivered to the Agent prior to November 20,
2000.

              SECTION 4.6. SOLVENCY. After giving effect to the Term Loans to be
made on the Initial Closing Date and before and after each other date as Term
Loans requested hereunder are made, the disbursement of the proceeds of such
Term Loans pursuant to the instructions of the Borrower, the consummation of the
other financing transactions contemplated hereby and the payment and accrual of
all transaction costs in connection with the foregoing, each Loan Party is
Solvent.

              SECTION 4.7. LITIGATION. There are no pending or, to the knowledge
of the Borrower, threatened actions, investigations or proceedings affecting the
Borrower, or any of its Subsidiaries before any court, Governmental Authority or
arbitrator other than those that in the aggregate have no Material Adverse
Effect; provided, however, that with respect to the matters listed on Schedule
4.7 the Borrower believes that such matters will not have a Material Adverse
Effect. The performance of any action by any Loan Party required or contemplated
by any of the Loan Documents is not restrained or enjoined (either temporarily,
preliminarily or permanently). Schedule 4.7 lists all litigation pending against
any Loan Party at the date hereof which, if adversely determined, could have a
Material Adverse Effect.

              SECTION 4.8. TAXES.

              (a) All federal, and all material state, local and foreign income
and franchise and other tax returns, reports and statements (collectively, the
"Tax Returns") required to be filed by the Borrower or any of its Tax Affiliates
have been filed with the appropriate Governmental Authorities in all
jurisdictions in which such Tax Returns are required to be filed, all such Tax
Returns are true and correct in all material respects, and all taxes, charges
and other impositions reflected therein or otherwise due and payable have been
paid prior to the date on which any fine, penalty, interest, late charge or loss
may be added thereto for non-payment thereof except where contested in good
faith and by appropriate proceedings if adequate reserves therefor have been
established on the books of the Borrower or such Tax Affiliate in conformity
with GAAP or the aggregate amount thereof does not exceed for any Fiscal Year
$500,000. Proper and accurate amounts have been withheld by the Borrower and
each of its Tax Affiliates from their respective


                                       41
   43

employees for all periods in full and complete compliance with the tax, social
security and unemployment withholding provisions of applicable Requirements of
Law and such withholdings have been timely paid to the respective Governmental
Authorities.

              (b) None of the Borrower or any of its Tax Affiliates has (i) any
obligation under any tax sharing agreement or arrangement or (ii) been a member
of an affiliated, combined or unitary group other than the group of which the
Borrower (or its Tax Affiliate) is the common parent.

              SECTION 4.9. FULL DISCLOSURE. The information prepared or
furnished by or on behalf of the Borrower in connection with this Agreement, the
application made by the Agent to the Government Guarantor in connection with the
U.S. Government Guarantee or the consummation of the financing taken as a whole,
including the information contained in the Disclosure Statement, does not
contain any untrue statement of a material fact or omit to state a material fact
necessary to make the statements contained therein or herein not misleading at
the time such information was furnished. All facts known to the Borrower which
are material to an understanding of the financial condition, business,
properties or prospects of the Borrower and the Borrower and the Restricted
Subsidiaries taken as one enterprise have been disclosed to the Lenders. All
certifications, representations and warranties made by the Borrower to the
Government Guarantor remain true and correct.

              SECTION 4.10. MARGIN REGULATIONS. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Federal Reserve Board),
and no proceeds of any Borrowing will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock in contravention of Regulation T, U or X of the Federal Reserve
Board.

              SECTION 4.11. NO BURDENSOME RESTRICTIONS; NO DEFAULTS.

              (a) Neither the Borrower nor any of its Subsidiaries (i) is a
party to any Contractual Obligation the compliance with which would have a
Material Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, will result in the creation
of a Lien (other than a Lien permitted under Section 7.3) on the property or
assets of any thereof or (ii) is subject to any charter or corporate restriction
which would have a Material Adverse Effect.

              (b) Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Requirement of Law or Contractual Obligation owed
by it and, to the knowledge of the Borrower, no other party is in default under
or with respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary of a Loan Party, other than, in either case, those defaults which in
the aggregate would not have a Material Adverse Effect.

              (c) No Default or Event of Default has occurred and is continuing.

              (d) To the best knowledge of the Borrower, there is no Requirement
of Law applicable to the Borrower or any Material Subsidiary the compliance with
which by such Person would have a Material Adverse Effect.

              (e) The Borrower is not delinquent in the payment of any
Indebtedness owed by the Borrower to the federal government of the United
States.


                                       42
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              SECTION 4.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. Neither the Borrower nor any of its Subsidiaries is (a) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended or (b) a "holding company," or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," as each such term is defined and used in the Public Utility Holding
Company Act of 1935, as amended.

              SECTION 4.13. USE OF PROCEEDS. The proceeds of the Term Loans are
being used by the Borrower solely as follows: (a) to satisfy existing
Indebtedness of the Borrower and its Subsidiaries (none of which is owed to or
held by the Agent or any of the Lenders on the date hereof), including
Indebtedness that is secured by assets constituting Common Collateral, and for
the payment of related transaction costs, fees and expenses and (b) for other
general corporate purposes, including capital maintenance, and payment of the
costs, fees and expenses related to the consummation of the Plan of
Reorganization.

              SECTION 4.14. INSURANCE. All policies of insurance of any kind or
nature of the Borrower or any of its Subsidiaries, including policies of life,
fire, theft, product liability, public liability, property damage, other
casualty, employee fidelity, workers' compensation and employee health and
welfare insurance, are in full force and effect and are of a nature and provide
such coverage as is sufficient and as is customarily carried by businesses of
the size and character of such Person. None of the Borrower or any of its
Subsidiaries has been refused insurance for any material coverage which it had
applied or had any material policy of insurance terminated in the past year
(other than at its request).

              SECTION 4.15. LABOR MATTERS.

              (a) There are no strikes, work stoppages, slowdowns or lockouts
pending or, to the knowledge of the Borrower, threatened against or involving
the Borrower or any of its Subsidiaries, other than those which in the aggregate
would not have a Material Adverse Effect.

              (b) There are no unfair labor practices, grievances or complaints
pending, or, to the Borrower's knowledge, threatened against or involving the
Borrower or any of its Subsidiaries, nor are there any arbitrations or
grievances threatened involving the Borrower or any of its Subsidiaries, other
than those which, in the aggregate, if resolved adversely to the Borrower or
such Subsidiary, would not have a Material Adverse Effect.

              (c) Except as set forth on Schedule 4.15, as of the Initial
Closing Date, there is no collective bargaining agreement covering any of the
employees of the Borrower or the Restricted Subsidiaries.

              (d) The collective bargaining agreement set forth on Schedule 4.15
expires on April 30, 2001. To the Borrower's knowledge, no default exists under
such collective bargaining agreement which would have a Material Adverse Effect.

              (e) Schedule 4.15 sets forth as of the date hereof, all material
consulting agreements, executive employment agreements, executive compensation
plans, deferred compensation agreements, employee stock purchase and stock
option plans and severance plans of the Borrower and any of the Restricted
Subsidiaries.


                                       43
   45

              SECTION 4.16. ERISA.

              (a) Schedule 4.16 separately identifies as of the date hereof all
Title IV Plans, all Multiemployer Plans and all of the employee benefit plans
within the meaning of Section 3(3) of ERISA (except those already listed on
Schedule 4.15) to which the Borrower or any of its Subsidiaries has any
obligation or liability, contingent or otherwise.

              (b) Each employee benefit plan of the Borrower or any of its
Subsidiaries which is intended to qualify under Section 401 of the Code has been
the subject of a favorable determination letter from the IRS with respect to
such qualification, and any trust created thereunder is exempt from tax under
the provisions of Section 501 of the Code, except where all such failures have
no Material Adverse Effect.

              (c) Each Title IV Plan (other than a Multiemployer Plan) is in
compliance in all material respects with applicable provisions of ERISA, the
Code and other Requirements of Law except for non-compliances that in the
aggregate would not have no Material Adverse Effect.

              (d) There has been no, nor is there reasonably expected to occur,
any ERISA Event which will have a Material Adverse Effect.

              (e) Except to the extent set forth on Schedule 4.16, none of the
Borrower, any Restricted Subsidiary or any ERISA Affiliate would have any
Withdrawal Liability as a result of a complete withdrawal as of the date hereof
from any Multiemployer Plan.

              SECTION 4.17. ENVIRONMENTAL MATTERS.

              (a) The operations of the Borrower and each of its Subsidiaries
have been and are in compliance with all Environmental Laws, including obtaining
and complying with all required environmental, health and safety Permits, other
than non-compliances that in the aggregate with all matters covered by this
Section 4.17 have (i) no reasonable likelihood of causing total Environmental
Liabilities and Costs to exceed $5,000,000 in cash in any twelve-month period
and, (ii) no Material Adverse Effect.

              (b) The Borrower and its Subsidiaries have obtained and currently
possess all environmental, health and safety Permits necessary for their
operations, all such Permits are in good standing (other than a permit under the
Clean Air Act Title 5 Operating Permit, which has been timely applied for) and
the Borrower and each of its Subsidiaries is in compliance with the terms and
conditions of such Permits except for failures that in the aggregate with all
matters covered by this Section 4.17 have (i) no reasonable likelihood of
causing total Environmental Liabilities and Costs to exceed $5,000,000 in cash
in any twelve-month period and (ii) no Material Adverse Effect.

              (c) None of the currently or previously owned or leased property
or operations of the Borrower or any of its Subsidiaries is subject to any
outstanding or, to the knowledge of the Borrower, threatened claim, order,
agreement, notice of violation or potential liability or is subject to any
pending or, to its knowledge, threatened or docketed judicial or administrative
proceeding or governmental investigation (each an "Environmental Contingency")
with respect to (i) Environmental Law, (ii) a Remedial Action or (iii)
Environmental Liabilities and Costs arising from a Release or threatened
Release, other than those that in the aggregate with all matters covered by this
Section 4.17 have (A) no reasonable likelihood of causing total


                                       44
   46

Environmental Liabilities and Costs to exceed $5,000,000 in cash in any
twelve-month period and (B) no Material Adverse Effect. Schedule 4.17 lists all
Environmental Contingencies as of the date hereof that, if adversely determined,
could in the aggregate with all matters covered by this Section 4.17 cause (x)
total Environmental Liabilities and Costs to exceed $5,000,000 in cash in any
twelve-month period or (y) a Material Adverse Effect.

              (d) Except as disclosed on Schedule 4.17 none of the Borrower or
any of its Subsidiaries is a treatment, storage or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., the regulations thereunder or any state analog.

              (e) There are no facts, circumstances or conditions arising out of
or relating to the operations or ownership of real property owned or operated by
any Loan Party or any of its Subsidiaries which are not specifically included in
the financial information furnished to the Lenders other than those that in the
aggregate with all matters covered by this Section 4.17 have (i) no reasonable
likelihood of causing the Borrower and its Subsidiaries to incur Environmental
Liabilities and Costs in excess of $5,000,000 in cash in any twelve-month period
and (ii) no Material Adverse Affect.

              (f) As of the date hereof, no Environmental Lien has attached to
any property of the Borrower or any of its Subsidiaries.

              (g) The Borrower and each of its Subsidiaries has made available
to the Lenders copies of all environmental, health or safety audits, studies,
assessments, inspections, investigations or other environmental health and
safety reports relating to the operations of the Borrower and its Subsidiaries
or their real property that are in the possession, custody or control of the
Borrower or any of its Subsidiaries.

              (h) The Borrower has made a timely application for an operating
permit under Title V of the federal Clean Air Act and the Utah Conservation Act.
The Utah Division of Air Quality (the "DAQ") has acknowledged the receipt of the
application, determined the completeness of the application, and confirmed the
existence of the so-called "application shield" which authorizes the Borrower to
operate until final action is taken on the permit application. The Borrower
believes that the DAQ will issue the permit in due course.

              (i) As of the Initial Closing Date, there are no measures to
mitigate environmental impacts, as incorporated into the Finding of No
Significant Impact attached as Exhibit B to the Offer of Guarantee, that by
their terms can be satisfied on or prior to the Initial Closing Date. Except as
disclosed on Schedule 4.17, as required by Section 6 of the Offer of Guarantee,
the measures to mitigate environmental impacts incorporated into the Finding of
No Significant Impact attached as Exhibit B to the Offer of Guarantee will be
completed to the U.S. Government Guarantor's satisfaction.

              SECTION 4.18. INTELLECTUAL PROPERTY. The Borrower and the Material
Subsidiaries own or license or otherwise have the right to use all material
licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
franchises, authorizations and other intellectual property rights that are
necessary for the operations of their respective businesses, without
infringement upon or conflict with the rights of any other Person with respect
thereto, including all trade names associated with any private label brands of
the Borrower or any of the Material Subsidiaries, as set forth in Schedule 4.18.
To the Borrower's knowledge, no slogan or other advertising device,


                                       45
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product, process, method, substance, part or component, or other material now
employed, or now contemplated to be employed, by the Borrower or any of its
Material Subsidiaries infringes upon or conflicts with any rights owned by any
other Person, and no claim or litigation regarding any of the foregoing is
pending or, to the knowledge of the Borrower, threatened.

              SECTION 4.19. PROPERTIES.

              (a) Each of the Borrower and its Material Subsidiaries has good
and marketable title to, or valid leasehold interests in, all real property and
good title to all personal property purported to be owned by it, including those
reflected on the most recent Financial Statements delivered by the Borrower, and
none of such properties and assets is subject to any Lien, except Liens
permitted under Section 7.3. The Borrower and its Material Subsidiaries have
received all deeds, assignments, waivers, consents, non-disturbance and
recognition or similar agreements, bills of sale and other documents, and have
duly effected all recordings, filings and other actions necessary to establish,
protect and perfect the Borrower's and its Material Subsidiaries' right, title
and interest in and to all such property other than with respect to an
immaterial amount of owned equipment.

              (b) All Permits required to have been issued or appropriate to
enable all real property owned or leased by the Borrower or any of its
Subsidiaries to be lawfully occupied and used for all of the purposes for which
they are currently occupied and used have been lawfully issued and are in full
force and effect, other than those which in the aggregate would not have a
Material Adverse Effect.

              (c) None of the Borrower or any of its Subsidiaries has received
any notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any real property owned or leased by the
Borrower or any of its Subsidiaries or any part thereof, except those which, in
the aggregate, would not have a Material Adverse Effect.

              (d) Set forth on Schedule 4.19 is a list of all real property
owned by the Borrower or any of its Subsidiaries showing as of the Initial
Closing Date the street address, county, or other relevant jurisdiction, state
and record owner.

              SECTION 4.20. ELIGIBLE BORROWER . The Borrower (a) is a Qualified
Steel Company, as that term is defined in the 13 C.F.R. Part 400, for which (i)
credit is not otherwise available to it under reasonable terms and conditions
sufficient to meet its financing needs, as reflected in the financial and
business plans of the Borrower; and (ii) the prospective earning power of the
Borrower, together with the character and value of the Collateral, furnish
reasonable prospects for repayment of the Term Loans; and (b) has experienced
layoffs, production losses or financial losses between January 1, 1998, and
January 31, 2000, which losses can be demonstrated as a comparison between
employment, production, or net income existing on January 1, 1998 and January
31, 2000.

              SECTION 4.21. YEAR 2000 COMPLIANCE. The Borrower has reviewed the
areas within its business and operations and the business and operations of its
Subsidiaries which could be adversely affected by the risk that computer
applications used by the Borrower and its Subsidiaries may not be Year 2000
Compliant, and has developed a comprehensive program to eliminate all such
non-compliance that would have a Material Adverse Effect.


                                       46
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              SECTION 4.22. PLAN OF REORGANIZATION. The Plan of Reorganization
has been confirmed by the Bankruptcy Court and on the Initial Closing Date will
have been substantially consummated.

              SECTION 4.23. SUBSIDIARIES. As of the Initial Closing Date, there
are no Subsidiaries of the Borrower.

              SECTION 4.24. RANKING. The Obligations rank at least pari passu in
priority of payment with all other Indebtedness of the Borrower, it being
understood that different Indebtedness may have different security.

                                    ARTICLE V

                               REPORTING COVENANTS

              As long as any of the Obligations or the Commitments remain
outstanding, unless the Requisite Lenders otherwise consent in writing, the
Borrower agrees with the Lenders and the Agent that:

              SECTION 5.1. FINANCIAL STATEMENTS. The Borrower shall furnish to
the Agent and the Permitted Participant (with sufficient copies for each of the
Lenders and the Government Guarantor) the following:

              (a) Quarterly Reports. Within 50 days after the end of each Fiscal
Quarter of each Fiscal Year (except for the Fiscal Quarter ending December 31 of
each Fiscal Year), financial information regarding the Borrower and its
Subsidiaries consisting of consolidated and consolidating unaudited balance
sheets as of the close of such quarter and the related statements of income and
cash flow for such quarter and that portion of the Fiscal Year ending as of the
close of such quarter, setting forth in comparative form the figures for the
corresponding period in the prior year and the figures contained in the
Projections for the current Fiscal Year, in each case certified by a Responsible
Officer of the Borrower as fairly presenting the consolidated and consolidating
financial position of the Borrower and its Subsidiaries as at the dates
indicated and the results of their operations and cash flow for the periods
indicated in accordance with GAAP (subject to the absence of footnote disclosure
and normal year-end audit adjustments).

              (b) Annual Reports. Within 95 days after the end of each Fiscal
Year, financial information regarding the Borrower and its Subsidiaries
consisting of consolidated and consolidating balance sheets of the Borrower and
its Subsidiaries as of the end of such year and related statements of income and
cash flows of the Borrower and its Subsidiaries for such Fiscal Year, all
prepared in conformity with GAAP and certified, in the case of such consolidated
financial statements, without qualification as to the scope of the audit or as
to the Borrower being a going concern by Arthur Andersen or other "big five"
firm of independent public accountants (or their successors), together with the
report of such accounting firm stating that (i) such financial statements fairly
present the consolidated financial position of the Borrower and its Subsidiaries
as at the dates indicated and the results of their operations and cash flow for
the periods indicated in conformity with GAAP applied on a basis consistent with
prior years (except for changes with which such independent certified public
accountants shall concur and which shall have been disclosed in the notes to the
financial statements), and (ii) the examination by such accountants in
connection with such consolidated financial statements has been made in
accordance with generally accepted auditing standards, and accompanied by a
certificate stating that in the course of the regular audit of the business of
the Borrower and its Subsidiaries such


                                       47
   49

accounting firm has obtained no knowledge that a Default or Event of Default has
occurred and is continuing, or, if in the opinion of such accounting firm, a
Default or Event of Default has occurred and is continuing, a statement as to
the nature thereof.

              (c) Business Plan. Not later than 30 days prior to the end of each
Fiscal Year, and containing substantially the types of financial information
contained in the Projections, (i) forecasts prepared by management of the
Borrower for each fiscal month in the next succeeding Fiscal Year, and (ii)
forecasts prepared by management of the Borrower for each of the succeeding
Fiscal Years through the Fiscal Year in which the Term Loan Maturity Date is
scheduled to occur, including, in each instance described in clause (i) and
clause (ii) above, (A) a projected year-end consolidated balance sheet and
income statement and statement of cash flows and (B) a statement of all of the
material assumptions on which such forecasts are based and a management
discussion and analysis.

              (d) Management Letters, Etc. Within five Business Days after
receipt thereof by any Loan Party, copies of each management letter, exception
report or similar letter or report received by such Loan Party from its
independent certified public accountants.

              (e) Intercompany Loan Balances. Together with each delivery of any
financial statement pursuant to clause (a) of this Section 5.1, a summary of the
outstanding balance of all intercompany Indebtedness as of the last day of the
fiscal month covered by such financial statement, certified by a Responsible
Officer.

              (f) Compliance Certificate. Together with each delivery of any
financial statement pursuant to clauses (a) and (b) of this Section 5.1, a
certificate of the Borrower signed by a Responsible Officer on behalf of the
Borrower (each, a "Compliance Certificate") stating that no Default or Event of
Default has occurred and is continuing or, if a Default or an Event of Default
has occurred or is continuing, stating the nature thereof and the action which
the Borrower proposes to take with respect thereto.

              (g) Additional Information. Promptly, from time to time, such
other information regarding the operations, including information regarding
specific product categories and lines of business of the Borrower and its
Subsidiaries, business affairs and financial condition of the Borrower or any of
its Subsidiaries, or compliance with the terms of any Loan Document or the U.S.
Government Guarantee, as the Agent, any Lender, the Permitted Participant or the
Government Guarantor may reasonably request.

              SECTION 5.2. DEFAULT NOTICES. As soon as practicable, and in any
event within five Business Days after a Responsible Officer of any Loan Party
has actual knowledge of the existence of any default by the Borrower under the
terms of any agreement governing any of the Borrower's Indebtedness, Default,
Event of Default or other event which has had a Material Adverse Effect or which
has any reasonable likelihood of causing or resulting in a Material Adverse
Change, the Borrower shall give the Agent and the Permitted Participant notice
specifying the nature of such default, Default or Event of Default or other
event, including the anticipated effect thereof, if known, which notice, if
given by telephone, shall be promptly confirmed in writing on the next Business
Day.

              SECTION 5.3. LITIGATION. Promptly after the commencement thereof,
the Borrower shall give the Agent and the Permitted Participant written notice
of the commencement of all actions, suits and proceedings before any domestic or
foreign Governmental Authority or arbitrator, affecting the Borrower or any of
its Subsidiaries, which in the reasonable judgment of


                                       48
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the Borrower or such Subsidiary, expose the Borrower or such Subsidiary to
liability in an amount aggregating $1,000,000 or more or which, if adversely
determined, would have a Material Adverse Effect.

              SECTION 5.4. ASSET SALES. Prior to any Asset Sale (a) to the
extent such Asset Sale constitutes a sale or other disposition of any Collateral
anticipated to generate in excess of $500,000 in Net Cash Proceeds, and (b) to
the extent not encompassed within clause (a), any other Asset Sale anticipated
to generate in excess of $5,000,000 (or its Dollar Equivalent) in Net Cash
Proceeds, the Borrower shall send the Agent and the Permitted Participant a
notice describing such Asset Sale or the nature and material terms and
conditions of such transaction and stating the estimated Net Cash Proceeds
anticipated to be received by the Borrower or any of its Subsidiaries.

              SECTION 5.5. SEC FILINGS; PRESS RELEASES. Promptly after the
sending or filing thereof, the Borrower shall send the Agent and the Permitted
Participant copies of (a) all reports which Holdings sends to its security
holders generally, (b) all reports and registration statements which the
Borrower or any of its Subsidiaries files with the Securities and Exchange
Commission or any national securities exchange or the National Association of
Securities Dealers, Inc., (c) all press releases and (d) all other statements
concerning material changes or developments in the business of such Loan Party
made available by any Loan Party to the public generally.

              SECTION 5.6. LABOR RELATIONS. Promptly after becoming aware of the
same, the Borrower shall give the Agent and the Permitted Participant written
notice of (a) any material labor dispute to which the Borrower or any of its
Subsidiaries is or may become a party, including any strikes, lockouts or other
disputes relating to any of such Person's plants and other facilities, and (b)
any Worker Adjustment and Retraining Notification Act or related liability
incurred with respect to the closing of any plant or other facility of any such
Person.

              SECTION 5.7. TAX RETURNS. Upon the request of any Lender or the
Permitted Participant, through the Agent, the Borrower will provide copies of
all federal, state and local tax returns and reports filed by the Borrower or
any of its Subsidiaries in respect of taxes measured by income (excluding sales,
use and like taxes).

              SECTION 5.8. INSURANCE. As soon as is practicable and in any event
within 90 days after the end of each Fiscal Year, the Borrower will furnish the
Agent (in sufficient copies for each of the Lenders and the Permitted
Participant) with (a) a report in form and substance satisfactory to the Agent
and the Lenders and the Permitted Participant outlining all material insurance
coverage maintained as of the date of such report by the Borrower and its
Subsidiaries and the duration of such coverage and (b) an insurance broker's
statement that all premiums then due and payable with respect to such coverage
have been paid.

              SECTION 5.9. ERISA MATTERS. The Borrower shall furnish the Agent
(with sufficient copies for each of the Lenders and the Permitted Participant):

              (a) promptly and in any event within 30 days after the Borrower,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, a written statement of a Responsible Officer of
the Borrower describing such ERISA Event or waiver request and the action, if
any, which the Borrower, its Subsidiaries and ERISA Affiliates propose to take
with respect thereto and a copy of any notice filed with the PBGC or the IRS
pertaining thereto;


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              (b) promptly and in any event within 10 Business Days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that a request for a minimum funding waiver under Section 412 of the Code
has been denied with respect to any such Person regarding any Title IV Plan or
Multiemployer Plan;

              (c) simultaneously with the date that the Borrower, any of its
Subsidiaries or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.

              SECTION 5.10. ENVIRONMENTAL MATTERS. The Borrower shall provide
the Agent and the Permitted Participant promptly and in any event within 10
Business Days of the Borrower or any Subsidiary learning of any of the
following, written notice of any of the following:

              (a) that the Borrower or any Restricted Subsidiary is or may be
liable to any Person as a result of a Release or threatened Release which could
reasonably be expected to subject the Borrower and the Restricted Subsidiaries
in the aggregate for all matters covered by this Section 5.10 to total
Environmental Liabilities and Costs of $5,000,000 or more in cash in any
twelve-month period;

              (b) the receipt by the Borrower or any Restricted Subsidiary of
notification that any real or personal property of such Loan Party is subject to
any Environmental Lien;

              (c) the receipt by the Borrower or any Restricted Subsidiary of
any notice of violation of or potential liability under, or knowledge by such
Person that there exists a condition which could reasonably be expected to
result in a violation of or liability under any Environmental Law, except for
violations and liabilities the consequence of which in the aggregate would have
no reasonable likelihood of subjecting the Borrower and the Restricted
Subsidiaries in the aggregate for all matters covered by this Section 5.10 to
total Environmental Liabilities and Costs of $5,000,000 or more in cash in any
twelve-month period;

              (d) the commencement of any judicial or administrative proceeding
or investigation alleging a violation of or liability under any Environmental
Law, which in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties collectively in the aggregate for all
matters covered by this Section 5.10 to total Environmental Liabilities and
Costs of $5,000,000 or more in cash in any twelve-month period;

              (e) any proposed acquisition of stock, assets or real estate, or
any proposed leasing of property, or any other action by the Borrower or any
Restricted Subsidiary other than those the consequences of which in the
aggregate have no reasonable likelihood of subjecting the Borrower and the
Restricted Subsidiaries in the aggregate for all matters covered by this Section
5.10 to total Environmental Liabilities and Costs of $5,000,000 or more in cash
in any twelve-month period;

              (f) any proposed action by the Borrower or any Restricted
Subsidiary or any proposed change in Environmental Laws or any other act or
omission by any Governmental Authority which in the aggregate have a reasonable
likelihood of requiring the Borrower or any Restricted Subsidiary to obtain
additional environmental, health or safety Permits or make additional capital
improvements to obtain compliance with Environmental Laws that in the aggregate
would cost $5,000,000 or more in cash in any twelve-month period or subject the
Borrower and the Restricted Subsidiaries in the aggregate for all matters
covered by this Section


                                       50
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5.10 to additional total Environmental Liabilities and Costs of $5,000,000 or
more in cash in any twelve-month period; and

              (g) upon written request by any Lender through the Agent, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
delivered pursuant to this Agreement.

              SECTION 5.11. OTHER INFORMATION. The Borrower will provide the
Agent, the Permitted Participant or any Lender with such other information
respecting the business, properties, condition, financial or otherwise, or
operations of the Borrower or any of its Subsidiaries as any Lender, the
Permitted Participant or the Government Guarantor through the Agent may from
time to time reasonably request.

                                   ARTICLE VI

                              AFFIRMATIVE COVENANTS

              As long as the Obligations or the Commitments remain outstanding,
unless the Requisite Lenders otherwise consent in writing, the Borrower agrees
with the Lenders and the Agent that:

              SECTION 6.1. PRESERVATION OF CORPORATE EXISTENCE, ETC. The
Borrower shall, and shall cause each Material Subsidiary to, preserve and
maintain its corporate or limited liability company existence, rights (charter
and statutory) and franchises.

              SECTION 6.2. COMPLIANCE WITH LAWS, ETC. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable Requirements
of Law, Contractual Obligations and Permits, except where the failure so to
comply would not in the aggregate have a Material Adverse Effect.

              SECTION 6.3. CONDUCT OF BUSINESS. Except as otherwise expressly
permitted by this Agreement, the Borrower shall, and shall cause each of its
Subsidiaries to, (a) conduct its business in the ordinary course and (b) use its
reasonable efforts, in the ordinary course and consistent with past practice, to
preserve its business and the goodwill and business of the customers,
advertisers, suppliers and others having business relations with the Borrower or
any of its Subsidiaries, except in each case where the failure to comply with
the covenants in each of clauses (a) and (b) above would not in the aggregate
have a Material Adverse Effect.

              SECTION 6.4. PAYMENT OF TAXES, ETC. The Borrower shall, and shall
cause each of its Subsidiaries to, pay and discharge before the same shall
become delinquent, all lawful governmental claims, taxes, assessments, charges,
levies and judgments, except where contested in good faith, by proper
proceedings and adequate reserves therefor have been established on the books of
the Borrower or the appropriate Subsidiary in conformity with GAAP.

              SECTION 6.5. MAINTENANCE OF INSURANCE. The Borrower shall (i)
maintain, and cause to be maintained for each of its Subsidiaries insurance
coverage with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates (provided that the Borrower shall
be entitled to use reasonable and customary deductibles and, other than in
respect of the Collateral, self-insurance programs), and such other insurance as
may be reasonably


                                       51
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requested by the Requisite Lenders, and, in any event, all insurance required by
any Collateral Documents and (ii) cause all such insurance to name the Agent on
behalf of the Secured Parties as additional insured or loss payee, as
appropriate, and to provide that no cancellation, material addition in amount or
material change in coverage shall be effective until after 30 days' written
notice thereof to the Agent.

              SECTION 6.6. ACCESS. The Borrower shall from time to time, permit
the Agent and the Lenders, or any agents or representatives thereof, upon at
least two Business Days' notification of the same (except that during the
continuance of an Event of Default, no such notice shall be required) to (a)
examine and make copies of and abstracts from the records and books of account
of the Borrower and each of its Subsidiaries, (b) visit the properties of the
Borrower and each of its Subsidiaries, (c) discuss the affairs, finances and
accounts of the Borrower and each of its Subsidiaries with any of their
respective officers or directors, and (d) communicate directly with the
Borrower's independent certified public accountants. The Borrower shall
authorize its independent certified public accountants to disclose to the Agent,
the Permitted Participant or any Lender any and all financial statements and
other information of any kind, as the Agent or any Lender reasonably requests
from the Borrower and which such accountants may have, and be permitted to share
in accordance with their professional responsibilities, with respect to the
business, financial condition, results of operations or other affairs of the
Borrower or any of its Subsidiaries.

              SECTION 6.7. KEEPING OF BOOKS. The Borrower shall, and shall cause
each of its Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made in conformity with GAAP of all financial
transactions and the assets and business of the Borrower and each such
Subsidiary.

              SECTION 6.8. MAINTENANCE OF PROPERTIES, ETC. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain and preserve, (a) all of
its properties which are necessary in the conduct of its business in good
working order and condition, (b) all rights, permits, licenses, approvals and
privileges (including all Permits) which are used or useful or necessary in the
conduct of its business, and (c) all registered patents, trademarks, trade
names, copyrights and service marks with respect to its business; except in each
case where the failure to so maintain and preserve in the aggregate would have
no Material Adverse Effect.

              SECTION 6.9. APPLICATION OF PROCEEDS. The Borrower shall use the
entire amount of the proceeds of the Term Loans as provided in Section 4.13.

              SECTION 6.10. ENVIRONMENTAL. The Loan Parties shall, and shall
cause each of its Subsidiaries to, comply in all material respects with
Environmental Laws and, without limiting the foregoing, the Borrower shall, at
its sole cost and expense, upon receipt of any notification or otherwise
obtaining knowledge of any Release or other event that has any reasonable
likelihood of causing the Borrower and its Subsidiaries to incur Environmental
Liabilities and Costs in excess of $5,000,000 in cash in any twelve-month
period, (i) conduct or pay for consultants to conduct, tests or assessments of
environmental conditions at such operations or properties, including the
investigation and testing of subsurface conditions and (ii) take such Remedial
Action, investigational or other action as required by Environmental Laws or as
any Governmental Authority requires or as is appropriate and consistent with
good business practice to address the Release or event. The Loan Parties shall,
and shall cause each of their respective Subsidiaries to, ensure that the
requirements of Section 6 of the Offer of Guarantee are satisfied on an ongoing
basis and shall promptly provide the Agent (with a copy to the Government
Guarantor) with evidence that such requirement is satisfied.


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   54

              SECTION 6.11. ADDITIONAL COLLATERAL AND GUARANTIES.

              (a) At least 15 Business Days prior to the acquisition by the
Borrower or any Restricted Subsidiary of any property, plant or equipment with
proceeds of the Term Loans or Net Cash Proceeds of an Asset Sale to the extent
such Asset Sale constitutes a sale or other disposition of Collateral, the
Borrower shall provide the Agent written notice thereof. Upon written request of
the Agent, the Borrower shall, and shall cause each relevant Subsidiary of the
Borrower to, execute and deliver to the Agent, for the benefit of the Secured
Parties, immediately upon the acquisition of any such property, plant or
equipment, a mortgage, deed of trust, assignment or other appropriate instrument
evidencing a Lien upon any such asset, together with such title policies,
certified surveys, and local counsel opinions with respect thereto and such
other agreements, documents and instruments which the Agent deems necessary or
desirable, the same to be in form and substance satisfactory to the Agent and to
be subject only to Customary Permitted Liens.

              (b) To the extent not delivered to the Agent on or before the
Initial Closing Date, the Borrower agrees promptly to (i) cause each Material
Subsidiary (A) to become a party to the Guaranty and the applicable Collateral
Documents and the Intercreditor Agreement and (B) to take such actions necessary
or advisable to grant to the Agent for the benefit of the Secured parties a
perfected security interest in the Collateral described in the Collateral
Documents with respect to each new Material Subsidiary, including the filing of
Uniform Commercial Code financing statements and the recording of mortgages, in
each case, in such jurisdictions as may be required by the Collateral Documents
or by law or as may be reasonably requested by the Agent and (ii) if requested
by the Agent, deliver to the Agent legal opinions relating to the matters
described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Agent.

              SECTION 6.12. COMPENSATION OF OFFICERS AND DIRECTORS. The Borrower
shall pay to its officers and directors salaries, benefits and other
compensation which are comparable to those salaries, benefits and other
compensation which are customary in the Borrower's industry for similarly
situated officers and directors.

              SECTION 6.13. AUDITS. The Borrower shall permit periodic audits,
conducted at the request of the Government Guarantor, by the General Accounting
Office of the United States and an independent auditor acceptable to the
Emergency Steel Loan Guarantee Board.

              SECTION 6.14. U.S. GOVERNMENT GUARANTEE. The Borrower shall comply
in all material respects with the terms, requirements and conditions of the U.S.
Government Guarantee applicable to it and shall furnish the Agent, (a) with all
information regarding the Borrower as may be needed by the Agent to comply with
its obligations under the U.S. Government Guarantee and (b) prompt written
notice of (1) any change in the ownership or senior management of the Borrower,
(2) any strike or work stoppage or other material labor disruption experienced
by the Borrower and (3) any material damage to or other material production
disrupting problem with any of the production units of the Borrower, with a copy
to the Government Guarantor. The Borrower shall execute such documents and take
such actions as the Government Guarantor (through the Agent) may request.

              SECTION 6.15. POST-CLOSING MATTERS. Within 30 days after the
Initial Closing Date, the Borrower shall provide to the Agent Blocked Account
Letters from the Blocked Account Banks.


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                                   ARTICLE VII

                               NEGATIVE COVENANTS

              As long as any of the Obligations or the Commitments remain
outstanding, without the written consent of the Requisite Lenders, the Borrower
agrees with the Lenders and the Agent that:

              SECTION 7.1. INDEBTEDNESS. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, create, incur, assume or issue, directly or
indirectly, guarantee or in any manner become, directly or indirectly, liable
for or with respect to the payment of any Indebtedness except for (each of which
shall be given independent effect):

                     (i) Secured Obligations under this Agreement;

                     (ii) Indebtedness arising out of any Hedging Contract
entered into in the ordinary course of the Borrower's business;

                     (iii) Indebtedness outstanding from time to time pursuant a
working capital facility limited to 85% of Borrower's and the Restricted
Subsidiaries' accounts receivable and 65% of Borrower's and the Restricted
Subsidiaries' inventory;

                     (iv) Indebtedness of the Borrower to Mannesmann under the
Mannesmann Agreement, if incurred in the ordinary course of business consistent
with the past practice of the Borrower;

                     (v) Indebtedness of the Borrower, outstanding on the
Initial Closing Date and disclosed in the Disclosure Statement;

                     (vi) Indebtedness if, immediately after giving pro forma
effect to the incurrence thereof, the ratio of EBITDA of the Borrower to Cash
Interest Expense of the Borrower would be greater than or equal to 3.25:1.00;

                     (vii) Indebtedness not to exceed $65,000,000 in aggregate
principal amount at any one time outstanding, the proceeds of which are applied
solely to expenditures made for the acquisition, construction or improvement of
assets, in each case which are useful in the type of business of the Borrower
conducted on the Initial Closing Date, and all replacements, renewals,
refinancing and extensions of such Indebtedness;

                     (viii) Indebtedness of the Borrower to a Restricted
Subsidiary or of a Restricted Subsidiary to the Borrower or another Restricted
Subsidiary;

                     (ix) any replacements, renewals, refinancings and
extensions of Indebtedness in (v) and (vi), above, provided that any such
replacement, renewal, refinancing and extension (A) shall not provide for any
mandatory redemption, amortization or sinking fund requirement in an amount
greater than or at a time prior to the amounts and time specified in the
Indebtedness being replaced, renewed, refinanced or extended and (B) shall not
exceed the principal amount (plus accrued interest and prepayment premium, if
any) of the Indebtedness being replaced, renewed, refinanced or extended;


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                     (x) Indebtedness to Holdings not to exceed $25,000,000
principal amount in the aggregate at any one time outstanding which is
subordinated to payment of the Obligations on terms satisfactory to the Agent
and which, with respect to any principal amount incurred in excess of
$15,000,000 has repayment terms satisfactory to the Agent;

                     (xi) Indebtedness under performance bonds and surety bonds
not to exceed $10,000,000 in the aggregate at any one time outstanding to the
extent such bonds do not secure the repayment of borrowed money; and

                     (xii) other Indebtedness not to exceed $25,000,000
principal amount at any time outstanding.

              SECTION 7.2. LIMITATION ON SALE-LEASEBACK TRANSACTIONS. The
Borrower shall not enter into, renew or extend, or permit any Restricted
Subsidiary to enter into, renew or extend, any Sale-Leaseback Transaction except
to the extent that all such Sale-Leaseback Transactions do not exceed
$17,000,000 in the aggregate at any one time and such Asset Sale is permitted by
Section 7.5; provided, however, that the Borrower and the Restricted
Subsidiaries may enter into a Sale-Leaseback Transaction for a Walking Beam
Furnace with a Fair Market Value not in excess of $48,000,000.

              SECTION 7.3. LIMITATION ON LIENS. None of the Borrower or any
Restricted Subsidiary shall create, incur, assume or suffer to exist any Lien of
any kind upon any of its property or assets now owned or hereafter acquired by
it except for:

                     (i) Liens existing on the Initial Closing Date and
disclosed on Schedule 7.3 or created by this Agreement and the Collateral
Documents;

                     (ii) Liens on accounts receivable and inventory of the
Borrower and the Restricted Subsidiaries and related general intangibles
securing Indebtedness permitted by clause (iii) of Section 7.1;

                     (iii) Customary Permitted Liens;

                     (iv) Liens to secure the payment of all or a part of the
purchase price, or the cost of construction or improvement, of assets or
property (in each case which are useful in the type of business of the Borrower
conducted on the Initial Closing Date) acquired after the Initial Closing Date,
provided that (i) the aggregate principal amount of Indebtedness secured by such
Liens shall not exceed the Fair Market Value (or, if less, the cost) of the
assets or property so acquired; (ii) the incurrence of Indebtedness secured by
such Liens shall be permitted by this Agreement, and (iii) such Liens do not
encumber any other assets or property of the Borrower (other than additions
thereof) or any Restricted Subsidiary and attach to such assets or property
within 60 days of the acquisition of such assets or property;

                     (v) Liens on the assets or property of a Restricted
Subsidiary existing at the time such Restricted Subsidiary became a Restricted
Subsidiary and not incurred as a result of (or in connection with or in
anticipation of) such Restricted Subsidiary becoming a Restricted Subsidiary,
provided such Liens do not extend to or cover any property or assets of the
Borrower or of any Restricted Subsidiary (other than the property or assets to
which such Lien attached at the time such Restricted Subsidiary became a
Restricted Subsidiary and additions, improvements and accessories thereto and
replacements thereof);


                                       55
   57

                     (vi) Liens securing Indebtedness which is incurred to
refinance Indebtedness which has been secured by a Lien permitted under this
Agreement and is permitted to be refinanced under this Agreement, provided that
such Liens do not extend to or cover any property or assets of the Borrower or
any of its Subsidiaries not securing the Indebtedness so refinanced;

                     (vii) Liens existing on property at the time of its
acquisition by the Borrower or a Restricted Subsidiary if not created in
contemplation of its acquisition by the Borrower or any Subsidiary; and

                     (viii) Liens on property owned by the Borrower on the
Initial Closing Date (other than Collateral) to secure Indebtedness not to
exceed $1,000,000 in the aggregate principal amount at any time outstanding.

              SECTION 7.4. LIMITATION ON RESTRICTED PAYMENTS. (a) Subject to
Section 7.4(b), the Borrower shall not make, and shall not permit any Restricted
Subsidiary to directly or indirectly, make, any Restricted Payment.

              (b) The provisions of Section 7.4(a) shall not prohibit:

                     (i) the retirement of any shares of Stock of the Borrower
or subordinated Indebtedness by conversion into, or by an exchange for, shares
of Stock of the Borrower that are not Disqualified Stock or out of the Net Cash
Proceeds of the substantially concurrent sale (other than to a Subsidiary of the
Borrower) of Stock (other than Disqualified Stock) of the Borrower; and

                     (ii) the redemption or retirement of subordinated
Indebtedness of the Borrower in exchange for, by conversion into, or out of the
Net Cash Proceeds of, a substantially concurrent sale of subordinated
Indebtedness of the Borrower (other than to a Restricted Subsidiary) that is
contractually subordinated in right of payment to the Term Loans and that is
permitted to be incurred under Section 7.1.

              SECTION 7.5. ASSET SALES. The Borrower shall not, and shall not
permit any Restricted Subsidiary to, sell, convey, transfer, lease or otherwise
dispose of, any of its assets or any interest therein (including the sale or
factoring at maturity or collection of any accounts but excluding sales pursuant
to the Mannesmann Agreement) to any Person, or permit or suffer any other Person
to acquire any interest in any of its assets or, in the case of any Restricted
Subsidiary, issue or sell any shares of such Subsidiary's Stock or any Stock
Equivalents (any such disposition being an "Asset Sale"), except:

                     (i) the sale or disposition of inventory, by-products or
raw materials in the ordinary course of business;

                     (ii) the sale or disposition of equipment which has become
obsolete or is replaced in the ordinary course of business;

                     (iii) the lease or sublease of real property not
constituting a Sale-Leaseback Transaction, to the extent not otherwise
prohibited by this Agreement;

                     (iv) assignments and licenses of intellectual property of
the Borrower or any Restricted Subsidiary in the ordinary course of business;


                                       56
   58

                     (v) any Asset Sale to the Borrower or any Subsidiary
Guarantor;

                     (vi) as long as no Default or Event of Default is
continuing or would result therefrom, any other Asset Sale for the Fair Market
Value of the assets sold; provided, however, that to the extent that any Asset
Sale involves the sale or disposition of Collateral, the sale is in compliance
with any applicable requirements of the Collateral Documents, the non-cash
portion of the consideration for such Asset Sale has a value no greater than the
lesser of 50% of the total consideration for such Asset Sale or $2,500,000 and
all Net Cash Proceeds of such Asset Sale are applied to the prepayment of the
Obligations to the extent required by Section 2.6 and, pending application as
required in Section 2.6, are deposited in a Cash Collateral Account and the
Agent has a first priority Lien on all other consideration received in
connection with such Asset Sale; and

                     (vii) a Sale-Leaseback Transaction for a Walking Beam
Furnace with a Fair Market Value not in excess of $48,000,000.

              SECTION 7.6. LIMITATION ON TRANSACTIONS WITH AFFILIATES. The
Borrower shall not, and shall not permit, cause or suffer any Restricted
Subsidiary to, conduct any business or enter into any transaction or series of
transactions with or for the benefit of any of their respective Affiliates (each
an "Affiliate Transaction"), except in good faith and on terms that are no less
favorable to the Borrower or such Restricted Subsidiary, as the case may be,
than those that could have been obtained in a comparable transaction on an arm's
length basis from a Person not an Affiliate of the Borrower or such Restricted
Subsidiary. All Affiliate Transactions (and each series of related Affiliated
Transactions which are similar or part of a common plan) involving aggregate
payments or other market value in excess of $1,000,000 shall be approved by the
Board of Directors, such approval to be evidenced by a resolution of the Board
of Directors stating that such Board of Directors has determined that such
transaction complies with the provisions of this Section 7.6. Notwithstanding
the foregoing, the restrictions set forth in this Section 7.6 shall not apply to
any Indebtedness permitted by clause (x) of Section 7.1, customary directors'
fees and consulting fees, collective bargaining agreements and compensation paid
to the Borrower's employees, or to any transaction between the Borrower and any
Restricted Subsidiary or between Restricted Subsidiaries, in the ordinary course
of business; provided, however, that this Section 7.6 shall not apply to the
transactions relating to direct iron-making, as more fully described on Schedule
7.6 hereto or to payments made by the Borrower to Holdings, pursuant to the
Servicing Agreement.

              SECTION 7.7. LIMITATION ON DIVIDENDS AND OTHER PAYMENT
RESTRICTIONS AFFECTING RESTRICTED SUBSIDIARIES. The Borrower shall not, and
shall not permit, any Restricted Subsidiary to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective or enter into any
agreement with any Person that would cause, any consensual encumbrance or
restriction of any kind on the ability of any Restricted Subsidiary to (a) pay
dividends, in cash or otherwise, or make any other distributions on its Stock or
any other interest or participation in, or measured by, its profits owed by, or
pay any Indebtedness owed to, the Borrower or a Restricted Subsidiary, (b) make
any loans or advances to the Borrower or any Restricted Subsidiary or (c)
transfer any of its properties or assets to the Borrower or to any Restricted
Subsidiary, except, in each case, for such encumbrances or restrictions existing
under or contemplated by or by reason of (i) this Agreement and the Collateral
Documents,(ii) any restrictions existing under or contemplated by agreements in
effect on the Initial Closing Date, (iii) any restrictions, with respect to a
Restricted Subsidiary that is not a Subsidiary of the Borrower on the Initial
Closing Date, in existence at the time such Person becomes a Subsidiary of the
Borrower (but not created in contemplation of such Person becoming a
Subsidiary), or (iv)


                                       57
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any restrictions existing under any agreement that refinances or replaces an
agreement containing a restriction permitted by clause (i), (ii) or (iii) above;
provided, however, that the terms and conditions of any such restrictions under
this clause (iv) are not materially less favorable to the Lenders than those
under or pursuant to the agreement being replaced or the agreement evidencing
the Indebtedness refinanced.

              SECTION 7.8. LIMITATION ON ISSUANCE OF PREFERRED STOCK BY
RESTRICTED SUBSIDIARIES. The Borrower shall not cause or permit any Restricted
Subsidiary, directly or indirectly, to issue shares of such Restricted
Subsidiary's Preferred Stock or warrants, rights or options to acquire shares of
such Restricted Subsidiary's Preferred Stock, except to the Borrower or a
Restricted Subsidiary.

              SECTION 7.9. IMPAIRMENT OF SECURITY INTEREST. The Borrower shall
not, and shall not permit any of its Subsidiaries to, take or knowingly or
negligently omit to take any action which action or omission might or would have
the result of affecting or impairing the security interest in favor of the
Lenders, with respect to the Collateral, and the Borrower shall not grant to any
Person (other than the Agent) any interest whatsoever in the Collateral other
than Liens permitted by this Agreement or the Collateral Documents or as
specified in the Intercreditor Agreement.

              SECTION 7.10. CONFLICTING AGREEMENTS. The Borrower shall not, and
shall not permit any of its Subsidiaries to, enter into any agreement or
instrument that by its terms expressly (i) prohibits the Borrower from making
any payments on or in respect of the Term Loans in accordance with the terms
thereof or (ii) requires that the proceeds received from the sale of any
Collateral be applied to repay, redeem or otherwise retire any Indebtedness of
any Person other than the Indebtedness represented by the Term Loans, except as
expressly permitted by this Agreement or the Collateral Documents or as
specified in the Intercreditor Agreement.

              SECTION 7.11. WAIVER OF STAY, EXTENSION OR USURY LAWS. The
Borrower covenants (to the extent permitted by law) that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law that would
prohibit or forgive the Borrower from paying all or any portion of the principal
of or interest on the Term Loans as contemplated herein, wherever enacted, now
or at any time hereafter in force, or that may affect the covenants or the
performance of this Agreement, and (to the extent permitted by law) the Borrower
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Agent and the Lenders, but will suffer and permit the execution
of ever such power as though no such law had been enacted.

              SECTION 7.12. LIMITATION ON INVESTMENTS, LOANS AND ADVANCES. The
Borrower shall not, and shall not permit any Restricted Subsidiary to, make any
Investments in any Person, except: (i) Investments by the Borrower in any
Restricted Subsidiary and Investments in the Borrower or any Restricted
Subsidiary by a Restricted Subsidiary; (ii) Investments, not exceeding
$4,000,000 in the aggregate, in Non-Recourse Subsidiaries, joint ventures,
partnerships or Persons that are not Subsidiaries; (iii) Cash Equivalents; and
(iv) any Investment which satisfies all the following criteria: (A) no Default
or Event of Default shall have occurred and be continuing at the time of, or
after giving effect to, such Investment; (B) immediately after giving effect to
such Investment, the aggregate of all Investments (other than pursuant to
clauses (i), (ii) and (iii) above) made after the Initial Closing Date does not
exceed the sum of (a) 50% of the Borrower's Consolidated Net Income (or in the
event such Consolidated Net Income shall be a deficit on a cumulative basis,
minus 100% of such deficit) from the Initial Closing Date plus


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(b) 100% of the aggregate Net Cash Proceeds from the issue and sale, after the
Initial Closing Date, of Stock or Stock Equivalents (other than Disqualified
Stock) of the Borrower or any Indebtedness or other securities of the Borrower
convertible into or exercisable for Stock (other than Disqualified Stock) of the
Borrower which has been so converted or exercised, as the case may be minus (c)
the aggregate amount of Investments made under clause (ii) above; and (C) at the
time of the making of such Investment, the Interest Coverage Ratio is at least
equal to 3.25:1.00. For the purpose of this Section 7.12, the designation of a
Subsidiary as a Non-Recourse Subsidiary shall constitute an Investment in such
Non-Recourse Subsidiary equal to the Fair Market Value of such Subsidiary at the
time.

              SECTION 7.13. CERTAIN CHANGES. The Borrower shall not, and shall
not permit any Restricted Subsidiary to, (i) materially change its accounting
treatment and reporting practices or tax reporting treatment, except as required
by GAAP or any Requirement of Law and disclosed to the Lenders and the Agent,
(ii) take any action which would cause the Borrower to no longer be a Qualified
Steel Company (as defined in 13 C.F.R. part 400 et seq.), or (iii) merge or
consolidate with any Person other than a merger of Restricted Subsidiaries or of
a Restricted Subsidiary into the Borrower.

              SECTION 7.14. COMPLIANCE WITH ERISA. The Borrower shall not, and
will not permit any of its Subsidiaries to, or cause or permit any ERISA
Affiliate to, cause or permit to occur (a) an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (b) an ERISA Event that would have a Material Adverse Effect.

              SECTION 7.15. ENVIRONMENTAL. The Borrower shall not, and shall not
permit any of its Subsidiaries to, dispose of any Contaminant in violation of
any Environmental Law; provided, however, that the Borrower shall not be deemed
in violation of this Section 7.15 if, as the consequence of all such Releases,
the Borrower and the Restricted Subsidiaries would not incur Environmental
Liabilities and Costs in excess of $5,000,000 in cash in any twelve-month
period.

              SECTION 7.16. MATERIAL SUBSIDIARIES. The Borrower shall not permit
its Restricted Subsidiaries which are not Material Subsidiaries or Subsidiary
Guarantors to own, in the aggregate for all such Subsidiaries, 5% or more of the
Total Assets or contribute 5% or more than of the Consolidated Net Income of the
Borrower and its Subsidiaries on a consolidated basis.


                                  ARTICLE VIII

                                EVENTS OF DEFAULT

              SECTION 8.1. EVENTS OF DEFAULT. Each of the following events shall
be an Event of Default:

              (a) the Borrower shall fail to pay any principal of any Term Loan
when the same becomes due and payable and such non-payment continues for a
period of five Business Days after the due date therefor; or

              (b) the Borrower shall fail to pay any interest on any Term Loan,
any fee under any of the Loan Documents or any other Obligation (other than one
referred to in clause (a) above) and such non-payment continues for a period of
five Business Days after the due date therefor; or


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              (c) any representation or warranty contained herein or in any Loan
Document or made by the Borrower as a part of the application for the U.S.
Government Guarantee shall have been inaccurate or untrue in any material
respect when made; or

              (d) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Section 5.2, 6.1, 6.6, 6.11 or 6.14 or
Article VII, or (ii) any other term, covenant or agreement contained in this
Agreement or in any other Loan Document if such failure under this clause (ii)
shall remain unremedied for 30 days after the earlier of the date on which (A) a
Responsible Officer of the Borrower becomes aware of such failure or (B) written
notice thereof shall have been given to the Borrower by the Agent or any Lender;
or

              (e) (i) the Borrower or any of its Material Subsidiaries shall
fail to make any payment or payments on any Indebtedness (other than the
Obligations) of the Borrower or any such Subsidiary (or any Guaranty Obligation
in respect of Indebtedness of any other Person) having an aggregate principal
amount for all such Indebtedness of $10,000,000 or more, when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) or (ii) any such Indebtedness shall become or
be declared to be due and payable, or required to be prepaid or repurchased
(other than by a regularly scheduled required prepayment), prior to the stated
maturity thereof; or

              (f) the Borrower or any of its Material Subsidiaries shall
generally not pay its debts as such debts become due, or shall admit in writing
its inability to pay its debts generally, or shall make a general assignment for
the benefit of creditors, or any proceeding shall be instituted by or against
the Borrower or any of its Material Subsidiaries seeking to adjudicate it a
bankrupt or insolvent, or seeking liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency or reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
custodian, receiver, trustee or other similar official for it or for any
substantial part of its property and, in the case of any such proceedings
instituted against the Borrower or any of its Material Subsidiaries (but not
instituted by it), either such proceedings shall remain undismissed or unstayed
for a period of 30 days or any of the actions sought in such proceedings shall
occur; or the Borrower or any of its Material Subsidiaries shall take any
corporate action to authorize any of the actions set forth above in this
subsection (f); or

              (g) one or more judgments or orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of
$10,000,000 (in the case of a money judgment, to the extent not covered by
insurance) shall be rendered against one or more of the Loan Parties unless
enforcement of such judgment shall have been stayed by reason of a pending
appeal or otherwise; or

              (h) an ERISA Event shall occur and the amount of all liabilities
and deficiencies resulting therefrom, whether or not assessed, exceeds
$10,000,000 in the aggregate; or

              (i) any material provision of any Collateral Document, the U.S.
Government Guarantee or any Guaranty after delivery thereof pursuant to this
Agreement or any other Loan Document shall for any reason cease to be valid and
binding on, or enforceable against, any Loan Party party thereto, or any Loan
Party or the U.S. Government Guarantor shall so state in writing; or


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              (j) any Collateral Document shall for any reason cease to create a
valid Lien on any material amount of the Collateral purported to be covered
thereby or except as permitted by the Loan Documents, such Lien shall cease to
be a perfected and first priority Lien (except to the extent expressly provided
in the Intercreditor Agreement) or any Loan Party shall so state in writing; or

              (k) there shall occur a Mortgage Default, as defined in any
Mortgage; or

              (l) there shall occur any Change of Control; or

              (m) the Borrower shall not have received an addition to capital
equal to at least 25% of any net cash proceeds received by Holdings from any
issue or sale of Stock or Stock Equivalents if at the time Holdings receives
such net cash proceeds the Borrower could not incur an additional $1.00 of
Indebtedness under clause (vi) of Section 7.1;

              (n) one or more of the Borrower and its Material Subsidiaries
shall have entered into one or more consent or settlement decrees or agreements
or similar arrangements with a Governmental Authority or one or more judgments,
orders, decrees or similar actions shall have been entered against one or more
of the Borrower and its Subsidiaries based on or arising from the violation of
or pursuant to any Environmental Law, or the generation, storage,
transportation, treatment, disposal or Release of any Contaminant and, in
connection with all the foregoing, the Borrower and its Subsidiaries are likely
to incur Environmental Liabilities and Costs in excess of $5,000,000 in the
aggregate in cash in any twelve-month period that were not reflected in the
Projections or the Financial Statements delivered pursuant to Section 4.4.

              SECTION 8.2. REMEDIES. During the continuance of any Event of
Default, the Agent (i) may, and shall at the request of the Requisite Lenders,
by notice to the Borrower declare that all or any portion of the Term Loan
Commitments be terminated, whereupon the obligation of each Lender to make any
Term Loan shall immediately terminate, and/or (ii) may and shall at the request
of the Requisite Lenders, by notice to the Borrower, declare the Term Loans, all
interest thereon and all other amounts and Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Term Loans, all such
interest and all such amounts and Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all of which are hereby expressly waived by the Borrower; provided, however,
that upon the occurrence of the Event of Default specified in Section 8.1(f),
(A) the Commitments of each Lender to make Term Loans shall automatically be
terminated and (B) the Term Loans, all such interest and all such amounts and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
the Agent may exercise any remedies provided for by the Collateral Documents in
accordance with the terms thereof or any other remedies provided by applicable
law and apply any funds in a Cash Collateral Account to the Obligations.

              SECTION 8.3. RESCISSION. If at any time after acceleration of the
maturity of the Term Loans, the Borrower shall pay all arrears of interest and
all payments on account of principal of the Term Loans which shall have become
due otherwise than by acceleration (with interest on principal and, to the
extent permitted by law, on overdue interest, at the rates specified herein) and
all Events of Default and Defaults (other than non-payment of principal of and
accrued interest on the Term Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 10.1, then upon
the written consent of the Requisite Lenders and written notice to the Borrower,
the termination of the Term Loan Commitments


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and/or the acceleration and its consequences may be rescinded and annulled; but
such action shall not affect any subsequent Event of Default or Default or
impair any right or remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind the Lenders to a decision which may be made
at the election of the Requisite Lenders; they are not intended to benefit the
Borrower and do not give the Borrower the right to require the Lenders to
rescind or annul any acceleration hereunder, even if the conditions set forth
herein are met.

                                   ARTICLE IX

                                    THE AGENT

              SECTION 9.1. AUTHORIZATION AND ACTION.

              (a) Each Lender hereby appoints Citicorp as the Agent hereunder
and each Lender authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement, the other Loan Documents, the
Intercreditor Agreement and the U.S. Government Guarantee as are granted or
delegated to the Agent under such agreements and to exercise such powers as are
reasonably incidental thereto. Without limitation of the foregoing, each Lender
hereby authorizes the Agent to execute and deliver, and to perform its
obligations under, the U.S. Government Guarantee, the Intercreditor Agreement
and each of the Loan Documents to which the Agent is a party and to exercise all
rights, powers and remedies and perform all obligations that the Agent may have
under such Loan Documents, the Intercreditor Agreement and the U.S. Government
Guarantee and acknowledges that under the Collateral Documents, the
Intercreditor Agreement and the U.S. Government Guarantee, the Agent is acting
as agent for the Lenders and the other Secured Parties.

              (b) As to any matters not expressly provided for by this
Agreement, the other Loan Documents, the Intercreditor Agreement or the U.S.
Government Guarantee (including enforcement or collection), the Agent shall not
be required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders, and such
instructions shall be binding upon all Lenders; provided, however, that the
Agent shall not be required to take any action which the Agent in good faith
believes (i) exposes it to personal liability unless the Agent receives an
indemnification satisfactory to it from the Lenders with respect to such action
or (ii) is contrary to this Agreement, the U.S. Government Guarantee or
applicable law. The Agent agrees to give to each Lender, the Permitted
Participant and the Government Guarantor prompt notice of each notice given to
it by any Loan Party pursuant to the terms of this Agreement or the other Loan
Documents.

              (c) In performing its functions and duties hereunder and under the
other Loan Documents, the Agent shall act solely as agent of the Lenders. The
duties of the Agent are entirely administrative in nature and the Agent does not
assume and shall not be deemed to have assumed any obligation other than
expressly set forth herein and therein or any other relationship as the agent,
fiduciary or trustee of or for any Lender. The Agent may perform any of its
duties under any of the Loan Documents, the Intercreditor Agreement or the U.S.
Government Guarantee by or through its agents or employees.

              SECTION 9.2. AGENT'S RELIANCE, ETC. Neither the Agent nor any of
its respective Affiliates or any of the respective directors, officers, agents
or employees of the Agent or any such Affiliate shall be liable for any action
taken or omitted to be taken by it, him, her or them under or in connection with
this Agreement or the other Loan Documents or the U.S.


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Government Guarantee, except for its, his, her or their own gross negligence or
willful misconduct. Without limiting the foregoing, the Agent (a) may treat the
payee of any Note as its holder until such Note has been assigned in accordance
with Section 10.2; (b) may rely on the Register to the extent set forth in
Section 10.2(c); (c) may consult with legal counsel (including counsel to the
Borrower or any other Loan Party), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts; (d) makes no warranty or representation to any Lender or
the Permitted Participant and shall not be responsible to any Lender or the
Permitted Participant for any statements, warranties or representations made by
or on behalf of the Borrower or any of its Subsidiaries in or in connection with
this Agreement or any of the other Loan Documents, the Intercreditor Agreement
or the U.S. Government Guarantee; (e) shall not have any duty to ascertain or to
inquire either as to the performance or observance of any of the terms,
covenants or conditions of this Agreement or any of the other Loan Documents,
the Intercreditor Agreement or the U.S. Government Guarantee or the financial
condition of any Loan Party, or the existence or possible existence of any
Default or Event of Default; (f) shall not be responsible to any Lender or the
Permitted Participant for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any of the other Loan
Documents or any other instrument or document furnished pursuant hereto or
thereto (including the U.S. Government Guarantee); and (g) shall incur no
liability under or in respect of this Agreement or any of the other Loan
Documents, the Intercreditor Agreement or the U.S. Government Guarantee by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telecopy) or any telephone message believed by it to be genuine
and signed or sent by the proper party or parties. Nothing herein shall relieve
the Agent of any obligation or liability it may have under the U.S. Government
Guarantee.

              SECTION 9.3. THE AGENT INDIVIDUALLY. With respect to its Ratable
Portion, Citicorp shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders" or "Requisite
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity as a Lender or as one of
the Requisite Lenders. Citicorp and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with any Loan Party as if it were not acting as the Agent.

              SECTION 9.4. LENDER CREDIT DECISION. Each Lender acknowledges that
it shall, independently and without reliance upon the Agent or any other Lender
conduct its own independent investigation of the financial condition and affairs
of the Borrower and each other Loan Party in connection with the making and
continuance of the Term Loans. Each Lender also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and other Loan Documents.

              SECTION 9.5. INDEMNIFICATION. Each Lender agrees to indemnify the
Agent and each of its Affiliates, and each of their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Borrower), from and against such Lender's aggregate Ratable Portion of any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements (including fees and disbursements of
legal counsel) of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against, the Agent or any of their respective
Affiliates, directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement or the other Loan


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Documents or the U.S. Government Guarantee or any action taken or omitted by the
Agent under this Agreement or the other Loan Documents, the Intercreditor
Agreement or the U.S. Government Guarantee; provided, however, that no Lender
shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's or such Affiliate's gross negligence or willful
misconduct. Without limitation of the foregoing, each Lender agrees to reimburse
the Agent promptly upon demand for its ratable share of any out-of-pocket
expenses (including fees and disbursements of legal counsel) incurred by the
Agent in connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of its rights or
responsibilities under, this Agreement or the other Loan Documents, the
Intercreditor Agreement or the U.S. Government Guarantee (including any costs
and expenses incurred by the Agent in connection with the performance of its
duties and obligations under the U.S. Government Guarantee), to the extent that
the Agent is not reimbursed for such expenses by the Borrower or another Loan
Party.

              SECTION 9.6. SUCCESSOR AGENTS. The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower; provided,
however, that such resignation shall not become effective unless and until there
shall be a successor Agent that meets the qualification of an Eligible Lender
and is approved in writing by the Government Guarantor. Upon the receipt of any
such notice of resignation, the Requisite Lenders shall have the right to
designate a successor Agent. If no successor Agent shall have been so designated
by the Requisite Lenders, and shall have accepted such designation as successor
Agent, within 30 days after the retiring Agent's giving of notice of
resignation, then the retiring Agent may, on behalf of the Lenders, designate a
successor Agent, selected from among the Lenders. In either case, such
designation as successor Agent shall be subject to the prior written approval of
the Borrower (which approval may not be unreasonably withheld and shall not be
required upon the occurrence and during the continuance of an Event of Default).
Upon the acceptance of any designation as Agent by a successor Agent, such
successor Agent shall succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Agent, and the retiring Agent shall be
discharged from its duties and obligations to the Lenders under this Agreement
and the other Loan Documents, the Intercreditor Agreement and the U.S.
Government Guarantee. After any retiring Agent's resignation hereunder as Agent,
the retiring Agent shall continue to have the benefit of this Article IX as to
any actions taken or omitted to be taken by it while it was Agent under this
Agreement and the other Loan Documents and the U.S. Government Guarantee.

              SECTION 9.7. CONCERNING THE COLLATERAL AND THE COLLATERAL
DOCUMENTS.

              (a) Each Lender agrees that (subject to the provision of the
Intercreditor Agreement) any action taken by the Agent or the Requisite Lenders
(or, where required by the express terms of this Agreement or the Intercreditor
Agreement, a greater proportion of the Lenders) in accordance with the
provisions of this Agreement or of the other Loan Documents and the U.S.
Government Guarantee, and the exercise by the Agent or the Requisite Lenders
(or, where so required, such greater proportion) of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders and other
Secured Parties. Without limiting the generality of the foregoing, the Agent
shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders with respect to all payments and
collections arising in connection herewith and with the Collateral Documents;
(ii) execute and deliver each Collateral Document and accept delivery of each
such agreement delivered by the Borrower or any of its Subsidiaries; (iii) act
as collateral agent for the Lenders and the other Secured Parties for purposes
of the


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perfection of all security interests and Liens created by such agreements and
all other purposes stated therein; provided, however, the Agent hereby appoints,
authorizes and directs each Lender to act as collateral sub-agent for the Agent
and the Lenders for purposes of the perfection of all security interests and
Liens with respect to the Borrower's and its Subsidiaries' respective deposit
accounts maintained with, and cash and Cash Equivalents held by, such Lender;
(iv) manage, supervise and otherwise deal with the Collateral; (v) take such
action as is necessary or desirable to maintain the perfection and priority of
the security interests and Liens created or purported to be created by the
Collateral Documents; (vi) take such action as may be required or contemplated
under the U.S. Government Guarantee or as may be requested thereunder by the
Government Guarantor; and (vii) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, the Intercreditor
Agreement or the U.S. Government Guarantee, exercise all remedies given to the
Agent, the Lenders and the other Secured Parties with respect to the Collateral
under the Loan Documents relating thereto, applicable law or otherwise.

              (b) Each of the Lenders hereby directs, in accordance with the
terms hereof, the Agent to release or instruct the Agent to release (or, in the
case of clause (ii) below, release or subordinate) any Lien held by the Agent
for the benefit of the Lenders:

                     (i) against all of the Collateral, upon termination of the
Commitments and payment and satisfaction in full of all Term Loans and all other
Obligations which have matured and which the Agent has been notified in writing
are then due and payable;

                     (ii) against any assets that are subject to a Lien
permitted by Section 7.3(iv);

                     (iii) against any part of the Collateral sold or disposed
of by a Loan Party if such sale or disposition is permitted by this Agreement
(or permitted pursuant to a waiver or consent of a transaction otherwise
prohibited by this Agreement) or, if not pursuant to such sale or disposition,
against Collateral with a Fair Market Value, if reasonably determinable, or book
value, if Fair Market Value is not reasonably determinable, of up to $5,000,000
in the aggregate, if such release is consented to by the Agent, or any part of
the Collateral in excess of such amount, if such release is consented to by all
the Lenders and the Government Guarantor; and

                     (iv) all or any part of the Common Collateral if and to the
extent permitted under the Revolving Credit Agreement and the Intercreditor
Agreement.

Each of the Lenders hereby directs the Agent to execute and deliver or file such
termination and partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this Section 9.7 promptly
upon the effectiveness of any such release.

                                    ARTICLE X

                                  MISCELLANEOUS

              SECTION 10.1. AMENDMENTS, WAIVERS, ETC.

              (a) No amendment or waiver of any provision of this Agreement or
any other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be (i) permitted under the
terms of the U.S. Government Guarantee and (ii) in writing and signed by the
Requisite Lenders, and then any such waiver or


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consent shall be effective only in the specific instance and for the specific
purpose for which given; provided, however, that no amendment, waiver or consent
shall, unless in writing and signed by each Lender and the Government Guarantor,
do any of the following:

                     (i) waive any of the conditions specified in Section 3.1 or
3.2 except with respect to a condition based upon another provision hereof, the
waiver of which requires only the concurrence of the Requisite Lenders;

                     (ii) increase the Commitments of the Lenders or subject the
Lenders to any additional obligations;

                     (iii) extend the scheduled final maturity of any Term Loan,
or waive, reduce or postpone any scheduled date fixed for the payment or
reduction of principal (it being understood that a Section 2.6 does not provide
for scheduled dates fixed for payment) or of the Commitments;

                     (iv) reduce the principal amount of any Term Loan (other
than by the payment or prepayment thereof);

                     (v) reduce the rate of interest on any Term Loan or any fee
payable hereunder;

                     (vi) postpone any scheduled date fixed for payment of such
interest or fees;

                     (vii) change the aggregate Ratable Portions of the Lenders
which shall be required for the Lenders or any of them to take any action
hereunder;

                     (viii) release substantially all of the Collateral except
as provided in Section 9.7(b) or release any Subsidiary Guarantor from its
obligations under the Guaranty except in connection with sale or other
disposition permitted by this Agreement (or permitted pursuant to a waiver or
consent of a transaction otherwise prohibited by this Agreement);

                     (ix) amend Section 9.7(b) or this Section 10.1 or the
definition of the terms "Requisite Lenders" or "Ratable Portion"; or

                     (x) modify the application of payments to the Term Loans
pursuant to Section 2.10;

and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Persons required above to
take such action, affect the rights or duties of the Agent, as the case may be,
under this Agreement, the other Loan Documents, the Intercreditor Agreement or
the U.S. Government Guarantee.

              (b) The Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.


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              (c) Notwithstanding anything herein to the contrary, in the event
that the Borrower shall have requested each of the Lenders, in writing, to agree
to an amendment, modification, waiver or consent with respect to any particular
provision or provisions hereof, and any such Lender shall have failed to state,
in writing, that it either agrees or disagrees (in full or in part) with such
request (in the case of its statement of agreement, subject to satisfactory
documentation and such other conditions it may specify) within 30 days of such
request, then such Lender hereby irrevocably authorizes the Agent to agree or
disagree, in full or in part, and in the Agent's sole discretion, to such
requests on behalf of such Lender as such Lender's attorney-in-fact and to
execute and deliver any writing approved by the Agent which evidences such
agreement as such Lender's duly authorized agent for such purposes.

              (d) In connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of all
affected Lenders, the consent of Requisite Lenders is obtained, but the consent
of other Lenders whose consent is required is not obtained (any such Lender
whose consent is not obtained as described in this Section 10.1 being referred
to as a "Non-Consenting Lender"), then, so long as the Lender that is acting as
the Agent is not a Non-Consenting Lender, at the Borrower's request, the Agent
or an Eligible Assignee that is acceptable to the Agent and the Government
Guarantor shall have the right with the Agent's consent and in the Agent's sole
discretion (but shall have no obligation) to purchase from such Non-Consenting
Lender, and such Non-Consenting Lender agrees that it shall, upon the Agent's
request, sell and assign to the Lender that is acting as the Agent or such
Eligible Assignee, all of the Commitments and Term Loans of such Non-Consenting
Lender for an amount equal to the principal balance of all Term Loans held by
the Non-Consenting Lender and all accrued interest and fees with respect thereto
through the date of sale, such purchase and sale to be consummated pursuant to
an executed Assignment and Acceptance.

              SECTION 10.2. ASSIGNMENTS AND PARTICIPATIONS.

              (a) Each Lender may sell, transfer, negotiate or assign to one or
more Eligible Assignees all (but not less than all) of its rights and
obligations hereunder (including all of its rights and obligations with respect
to the Term Loans; provided, however, that (i) if any such assignment shall be
of the assigning Lender's Term Loans and Term Loan Commitment, such assignment
shall cover the same percentage of such Lender's Term Loans and Term Loan
Commitment, (ii) the assigning Lender shall give prompt written notice of the
terms of and the parties to any such assignment, together with copies of all
documents required under Section 5.5 of the U.S. Government Guarantee, (iii) the
proposed assignee shall provide to the Agent all documentation and certificates
as required by the Agent to confirm to the Agent's satisfaction that such
proposed assignee is an Eligible Lender, (iv) the consent to such assignment of
the Agent, the Borrower and the Government Guarantor shall have been obtained,
and (v) any Lender assigning its Term Loans and Term Loan Commitments shall
assign its ratable portion of the benefits under the U.S. Government Guarantee,
if any; provided, however, (x) that, notwithstanding any other provision of this
Section 10.2, the consent of the Borrower shall not be required for any
assignment which occurs when any Event of Default shall have occurred and be
continuing and (y) that the consent of the Government Guarantor shall not be
required for any assignment which occurs after all payments have been made under
the U.S. Government Guarantee or the U.S. Government Guarantee otherwise shall
no longer be in full force and effect in any respect. Notice in writing to the
Agent from the Government Guarantor of its consent to any proposed assignment
shall be sufficient evidence of its consent to any proposed assignment of the
Government Guarantor.


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              (b) The parties to each assignment shall execute and deliver to
the Agent, for its acceptance and recording, an Assignment and Acceptance,
together with any Note (if the assigning Lender's Term Loans are evidenced by a
Note) subject to such assignment. Upon such execution, delivery, acceptance and
recording and the receipt by the Agent from the assignee of an assignment fee in
the amount of $3,500 from and after the effective date specified in such
Assignment and Acceptance, (i) the assignee thereunder shall become a party
hereto and, to the extent that rights and obligations under the Loan Documents
have been assigned to such assignee pursuant to such Assignment and Acceptance,
have the rights and obligations of a Lender and (ii) the assignor thereunder
shall, to the extent that rights and obligations under this Agreement have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(except those which survive the payment in full of the Obligations) and be
released from its obligations under the Loan Documents and the Intercreditor
Agreement, other than those relating to events or circumstances occurring prior
to such assignment (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender's rights and obligations
under the Loan Documents and the Intercreditor Agreement, such Lender shall
cease to be a party hereto).

              (c) The Agent shall maintain at its address referred to in Section
10.8 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recording of the names and addresses of the Lenders and
the Commitments of and principal amount of the Term Loans owing to each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the Loan
Parties, the Agent and the Lenders may treat each Person whose name is recorded
in the Register as a Lender for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower, the Agent or any Lender at
any reasonable time and from time to time upon reasonable prior notice.

              (d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, the Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register, (iii) give prompt
notice thereof to the Borrower and (iv) shall give prompt written notice of the
terms of and parties to any such assignment together with copies of all
documents required under Section 5.5 of the U.S. Government Guarantee. Within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall, if requested by such assignee, execute and deliver to the Agent,
new Notes to the order of such assignee in an amount equal to the Commitments
and Term Loans assumed by it pursuant to such Assignment and Acceptance and, if
the assigning Lender has surrendered any Note for exchange in connection with
the assignment and has retained Commitments or Term Loans hereunder, new Notes
to the order of the assigning Lender in an amount equal to the Commitments and
Term Loans retained by it hereunder. Such new Notes shall be dated the same date
as the surrendered Notes and be in substantially the form of Exhibit B hereto,
as applicable.

              (e) In addition to the other assignment rights provided in this
Section 10.2, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including rights to payments of principal or
interest on the Term Loans) to any Federal Reserve Bank pursuant to Regulation A
of the Federal Reserve Board without notice to or consent of the Borrower or the
Agent; provided, however, that no such assignment shall release the assigning
Lender from any of its obligations hereunder.

              (f) Subject to the provisions of this paragraph (f), each Lender
may sell participations to one or more Persons (who, until all payments have
been made under the U.S.


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Government Guarantee or the U.S. Government Guarantee otherwise shall have been
terminated, must be an Eligible Lender, a private investment fund or an
insurance company which does not usually invest in commercial loans or a steel
company supplier or customers interested in participating as a means of
commencing or solidifying the supplier or customer relationship with the
Borrower, or other Persons acceptable to the Government Guarantor) in or to all
or a portion of its rights and obligations under the Loan Documents (including
all its rights and obligations with respect to the Term Loans). The terms of
such participation other than the participation entered into with the Permitted
Participant as of the Initial Closing Date shall not, in any event, require the
participant's consent to any amendments, waivers or other modifications of any
provision of any Loan Documents, the consent to any departure by any Loan Party
therefrom, or to the exercising or refraining from exercising any powers or
rights which such Lender may have under or in respect of the Loan Documents
(including the right to enforce the obligations of the Loan Parties), except if
any such amendment, waiver or other modification or consent would (i) reduce the
amount, or postpone any date fixed for, any amount (whether of principal,
interest or fees) payable to such participant under the Loan Documents, to which
such participant would otherwise be entitled under such participation or (ii)
result in the release of all or substantially all of the Collateral other than
in accordance with Section 9.7(b). In the event of the sale of any participation
by any Lender, (A) such Lender's obligations under the Loan Documents shall
remain unchanged, (B) such Lender shall remain solely responsible to the other
parties for the performance of such obligations, (C) such Lender shall remain
the holder of such Obligations for all purposes of this Agreement, and (D) the
Borrower, the Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Each participant shall be entitled to the
benefits of Sections 2.11(d), 2.12 and 2.13 as if it were a Lender; provided,
however, that anything herein to the contrary notwithstanding, the Borrower
shall not, at any time, be obligated to pay to any participant of any interest
of any Lender, under Section 2.11(d), 2.12 or 2.13, any sum in excess of the sum
which the Borrower would have been obligated to pay to such Lender in respect of
such interest had such participation not been sold. So long as the U.S.
Government Guaranty is outstanding the Agent shall hold and may not grant
participations in the Tranche A Term Loans. No Lender may grant participations
unless such grant is permitted by and consummated in accordance with 13 C.F.R.
400 et seq.

              SECTION 10.3. COSTS AND EXPENSES.

              (a) The Borrower agrees upon demand to pay, or reimburse the Agent
for, all of the Agent's reasonable internal and external audit, legal,
appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other reasonable out-of-pocket costs and
expenses of every type and nature (including, without limitation, the reasonable
fees, expenses and disbursements of the Agent's counsel, Weil, Gotshal & Manges
LLP and Milbank, Tweed, Hadley & McCloy, local legal counsel, auditors,
accountants, appraisers, printers, insurance and environmental advisers, and
other consultants and agents) incurred by the Agent in connection with (i) the
Agent's audit and investigation of the Borrower and its Subsidiaries in
connection with the preparation, negotiation and execution of the Loan
Documents, the Intercreditor Agreement and the U.S. Government Guarantee and the
Agent's periodic audits of the Borrower and its Subsidiaries, as the case may
be; (ii) the preparation, negotiation, execution and interpretation of this
Agreement (including, without limitation, the satisfaction or attempted
satisfaction of any of the conditions set forth in Article III), the Loan
Documents, the Intercreditor Agreement, the U.S. Government Guarantee and any
proposal letter or commitment letter issued in connection therewith and the
making of the Term Loans hereunder; (iii) the creation, perfection or protection
of the Liens under the Loan Documents (including, without limitation, any
reasonable fees and expenses for local counsel in various


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jurisdictions); (iv) the ongoing administration of this Agreement the other Loan
Documents, the Intercreditor Agreement and the Term Loans and its obligations
and duties under the U.S. Government Guarantee, including consultation with
attorneys in connection therewith and with respect to the Agent's rights and
responsibilities hereunder and under the other Loan Documents, the Intercreditor
Agreement and the U.S. Government Guarantee; (v) the protection, collection or
enforcement of any of the Obligations or the enforcement of any of the Loan
Documents or the Intercreditor Agreement; (vi) the commencement, defense or
intervention in any court proceeding relating in any way to the Obligations, any
Loan Party, any of the Borrower's Subsidiaries, this Agreement or any of the
other Loan Documents, the Intercreditor Agreement or the U.S. Government
Guarantee; (vii) the response to, and preparation for, any subpoena or request
for document production with which the Agent is served or deposition or other
proceeding in which the Agent is called to testify, in each case, relating in
any way to the Obligations, any Loan Party, any of the Borrowers' Subsidiaries,
this Agreement or any of the other Loan Documents, the Intercreditor Agreement
or the U.S. Government Guarantee; and (viii) any amendments, consents, waivers,
assignments, restatements, or supplements to any of the Loan Documents, the
Intercreditor Agreement or the U.S. Government Guarantee and the preparation,
negotiation, and execution of the same.

              (b) The Borrower further agrees to pay or reimburse the Agent,
each of the Lenders, and the Government Guarantor upon demand for all reasonable
out-of-pocket costs and expenses, including, without limitation, reasonable
attorneys' fees (including allocated costs of internal counsel and costs of
settlement), incurred by the Agent, such Lenders and the Government Guarantor
(i) in enforcing any Loan Document, the Intercreditor Agreement or Obligation or
any security therefor or the U.S. Government Guarantee or exercising or
enforcing any other right or remedy available by reason of an Event of Default;
(ii) in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to the Obligations, any Loan
Party, any of the Borrowers' Material Subsidiaries and related to or arising out
of the transactions contemplated hereby or by any of the other Loan Documents or
the U.S. Government Guarantee; and (iv) in taking any other action in or with
respect to any suit or proceeding (bankruptcy or otherwise) described in clauses
(i) through (iii) above.

              SECTION 10.4. INDEMNITIES.

              (a) The Borrower agrees to indemnify and hold harmless the Agent,
each Lender, the Permitted Participant and each of their respective Affiliates
and the Government Guarantor, and each of the directors, officers, employees,
agents, representative, attorneys, consultants and advisors of or to any of the
foregoing (including those retained in connection with the satisfaction or
attempted satisfaction of any of the conditions set forth in Article III) (each
such Person being an "Indemnitee") from and against any and all claims, damages,
liabilities, obligations, losses, penalties, actions, judgments, suits, costs,
disbursements and expenses of any kind or nature (including reasonable fees and
disbursements of counsel to any such Indemnitee) which may be imposed on,
incurred by or asserted against any such Indemnitee in connection with or
arising out of any investigation, litigation or proceeding, whether or not any
such Indemnitee is a party thereto, whether direct, indirect, or consequential
and whether based on any federal, state or local law or other statutory
regulation, securities or commercial law or regulation, or under common law or
in equity, or on contract, tort or otherwise, in any manner relating to or
arising out of this Agreement, any other Loan Document, the Intercreditor
Agreement, any Obligation, the U.S. Government Guarantee and the application
therefor, the Disclosure


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Statement or any act, event or transaction related or attendant to any thereof
(including the participation agreement referred to in Section 3.1, or the use or
intended use of the proceeds of the Term Loans in connection with any
investigation of any potential matter covered hereby (collectively, the
"Indemnified Matters"); provided, however, that the Borrower shall not have any
obligation under this Section 10.4 to an Indemnitee with respect to any
Indemnified Matter caused by or resulting from the gross negligence or willful
misconduct of that Indemnitee, as determined by a court of competent
jurisdiction in a final non-appealable judgment or order. Without limiting the
foregoing, Indemnified Matters include (i) all Environmental Liabilities and
Costs arising from or connected with the past, present or future operations of
the Borrower or any of its Subsidiaries involving any property subject to a
Collateral Document, or damage to real or personal property or natural resources
or harm or injury alleged to have resulted from any Release of Contaminants on,
upon or into such property or any contiguous real estate; (ii) any costs or
liabilities incurred in connection with any Remedial Action concerning the
Borrower or any of its Subsidiaries; (iii) any costs or liabilities incurred in
connection with any Environmental Lien; (iv) any costs or liabilities incurred
in connection with any other matter under any Environmental Law, including
CERCLA and applicable state property transfer laws, whether, with respect to any
of such matters, such Indemnitee is a mortgagee pursuant to any leasehold
mortgage, a mortgagee in possession, the successor in interest to the Borrower
or any of its Subsidiaries, or the owner, lessee or operator of any property of
the Borrower or any of its Subsidiaries by virtue of foreclosure, except, with
respect to those matters referred to in clauses (i), (ii), (iii) and (iv) above,
to the extent incurred following (A) foreclosure by the Agent, any Lender, or
any Lender having become the successor in interest to the Borrower or any of its
Subsidiaries, and (B) attributable to acts of the Agent, such Lender or any
agent on behalf of the Agent or such Lender.

              (b) The Borrower shall indemnify the Agent and the Lenders, and
hold the Agents and the Lenders harmless from and against, any and all claims
for brokerage commissions, fees and other compensation made against the Agent
and the Lenders for any broker, finder or consultant with respect to any
agreement, arrangement or understanding made by or on behalf of any Loan Party
or any of its Subsidiaries in connection with the transactions contemplated by
this Agreement.

              (c) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action and the Borrower, in any event, may participate in the
defense thereof with legal counsel of the Borrower's choice. In the event that
such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice participate in such defense. No action taken by legal counsel chosen
by such Indemnitee in defending against any such investigation, litigation or
proceeding or requested Remedial Action, shall vitiate or in any way impair the
Borrower's obligation and duty hereunder to indemnify and hold harmless such
Indemnitee.

              (d) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including
pursuant to this Section 10.4) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any Person
who was at any time an Indemnitee under this Agreement or any other Loan
Document.

              SECTION 10.5. LIMITATION OF LIABILITY. The Borrower agrees that no
individual who is an Indemnitee shall have any liability (whether direct or
indirect, in contract,


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tort or otherwise) to any Loan Party or any of their respective Subsidiaries or
any of their equity holders or creditors for or in connection with the
transactions contemplated hereby and in the other Loan Documents, except to the
extent such liability is found in a final judgment by a court of competent
jurisdiction to have resulted from such Indemnitee's gross negligence or willful
misconduct. In no event shall any Indemnified Party be liable on any theory of
liability for any special, indirect, consequential or punitive damages and the
Borrower hereby waives, releases and agrees (for itself and on behalf of its
Subsidiaries) not to sue upon any such claim for any such damages, whether or
not accrued and whether or not known or suspected to exist in its favor.

              SECTION 10.6. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default each Lender and each Affiliate of a Lender
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or its Affiliates to or for the credit or the
account of the Borrower against any and all of the Obligations now or hereafter
existing whether or not such Lender shall have made any demand under this
Agreement or any other Loan Document and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender or its Affiliates; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 10.6
are in addition to the other rights and remedies (including other rights of
set-off) which such Lender may have.

              SECTION 10.7. SHARING OF PAYMENTS, ETC.

              (a) If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) on
account of the Term Loans made by it (other than pursuant to Sections 2.10(g),
2.11, 2.12 or 2.13) in excess of its Ratable Portion of payments obtained by all
the Lenders on account of such Obligations, such Lender (a "Purchasing Lender")
shall forthwith purchase from the other Lenders (each, a "Selling Lender") such
participations in their Term Loans or other Obligations as shall be necessary to
cause such Purchasing Lender to share the excess payment ratably with each of
them.

              (b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each Selling Lender shall be rescinded and such Selling Lender shall repay to
the Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment to (ii)
the total amount so recovered from the Purchasing Lender) of any interest or
other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered.

              (c) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 10.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.

              SECTION 10.8. NOTICES, ETC. All notices, demands, requests and
other communications provided for in this Agreement shall be given in writing,
or by any telecommunication device capable of creating a written record, and
addressed to the party to be notified as follows:


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              (a) if to the Borrower:

                  Geneva Steel LLC
                  10 South Geneva Road
                  Vineyard, Utah 84058
                  Attention:  Chief Financial Officer
                  Telecopy no:  801-227-9016

                  with a copy to:

                  Parr Waddoups Brown Gee & Loveless
                  185 South State Street, Suite 1300
                  Salt Lake City, Utah 84111-1537
                  Attention:  Roger D. Henriksen, Esq.
                  Telecopy no.:  801-532-7750

              (b) if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II or on the signature page of any applicable
Assignment and Acceptance; and

              (c) if to the Agent:

                  Citicorp USA, Inc.
                  399 Park Avenue
                  New York, New York 10043
                  Attention:  Keith R. Karako
                  Telecopy no:  212-793-1290

                  with a copy to:

                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue
                  New York, New York  10153-0119
                  Attention: Ronald F. Daitz
                  Telecopy no:  212-310-8007

or at such other address as shall be notified in writing (i) in the case of the
Borrower and the Agent, to the other parties and (ii) in the case of all other
parties, to the Borrower and the Agent. All such notices and communications
shall be effective upon personal delivery (if delivered by hand, including any
overnight courier service), when deposited in the mails (if sent by mail), or
when properly transmitted (if sent by a telecommunications device); provided,
however, that notices and communications to the Agent pursuant to Article II or
IX shall not be effective until received by the Agent.

              SECTION 10.9. NO WAIVER; REMEDIES. No failure on the part of any
Lender or the Agent to exercise, and no delay in exercising, any right hereunder
shall operate as a waiver thereof; nor shall any single or partial exercise of
any such right preclude any other or further exercise thereof or the exercise of
any other right. The remedies herein provided are cumulative and not exclusive
of any remedies provided by law.

              SECTION 10.10. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agent and
when the Agent shall have been


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notified by each Lender that such Lender has executed it and thereafter shall be
binding upon and inure to the benefit of the Borrower, the Agent and each Lender
and their respective successors and assigns, except that the Borrower shall not
have the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lenders.

              SECTION 10.11. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

              SECTION 10.12. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.

              (a) Any legal action or proceeding with respect to this Agreement
or any other Loan Document may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, the Borrower hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens, which any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.

              (b) The Borrower hereby irrevocably consents to the service of any
and all legal process, summons, notices and documents in any suit, action or
proceeding brought in the United States of America arising out of or in
connection with this Agreement or any of the other Loan Documents by the mailing
(by registered or certified mail, postage prepaid) or delivering of a copy of
such process to the Borrower at its address specified in Section 10.8. The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.

              (c) Nothing contained in this Section 10.12 shall affect the right
of the Agent or any Lender to serve process in any other manner permitted by law
or commence legal proceedings or otherwise proceed against the Borrower or any
other Loan Party party in any other jurisdiction.

              SECTION 10.13. WAIVER OF JURY TRIAL. The Agent and the Lenders and
the Borrower irrevocably waives trial by jury in any action or proceeding with
respect to this Agreement or any other Loan Document.

              SECTION 10.14. MARSHALING; PAYMENTS SET ASIDE. None of the Agent
and any Lender shall be under any obligation to marshal any assets in favor of
the Borrower or any other party or against or in payment of any or all of the
Obligations. To the extent that the Borrower makes a payment or payments to
either Agent or the Lenders or any of such Persons receives payment from the
proceeds of the Collateral or exercise their rights of setoff, and such payment
or payments or the proceeds of such enforcement or setoff or any part thereof
are subsequently invalidated, declared to be fraudulent or preferential, set
aside or required to be repaid to a trustee, receiver or any other party, then
to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.


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              SECTION 10.15. SECTION TITLES. The Section titles contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.

              SECTION 10.16. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrower and the Agent.

              SECTION 10.17. ENTIRE AGREEMENT. This Agreement, together with all
of the other Loan Documents, the U.S. Government Guarantee and the Intercreditor
Agreement and all certificates and documents delivered hereunder or thereunder,
embodies the entire agreement of the parties and supersedes all prior agreements
and understandings relating to the subject matter hereof.

              SECTION 10.18. CONFIDENTIALITY. Each Lender and the Agent agree to
keep all non-public information regarding the Borrower obtained by it prior to
the Initial Closing Date and all information obtained by it pursuant hereto and
the other Loan Documents confidential in accordance with such Lender's or the
Agent's, as the case may be, customary practices and agrees that it will only
use such information in connection with the transactions contemplated by this
Agreement and not disclose any of such information other than (a) to such
Lender's or such Agent's, as the case may be, employees, representatives and
agents who are or are expected to be involved in the evaluation of such
information in connection with the transactions contemplated by this Agreement
and who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender or the Agent, as the case may be, on a non-confidential basis from a
source other than the Borrower, (c) to the extent disclosure is required by law,
regulation or judicial order or requested or required by bank regulators or
auditors, (d) to assignees or participants or potential assignees or
participants who agree to be bound by the provisions of this Section 10.18 or
(e) to the Government Guarantor.

              SECTION 10.19. NO RECOURSE AGAINST OTHERS. A current or former
director, officer, employee or stockholder, as such, of any Loan Party shall not
have any liability for any obligations of such Loan Party under the Loan
Documents or for any claim based on, in respect of or by reason of the
Obligations or their creation under any theory of recovery; provided, however,
that the foregoing shall not be deemed to relieve any such Person for any
liability arising from fraud, gross misconduct or recklessness. In no event,
however, shall a current or former director, officer, employee or stockholder,
as such, be liable on any theory of liability for any special, indirect,
consequential or punitive damages.


                                       75
   77

              IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                        GENEVA STEEL LLC


                                        By:  /s/ JOSEPH A. CANNON
                                            ------------------------------------
                                            Title: CEO


                    [SIGNATURE PAGES TO TERM LOAN AGREEMENT]


   78

                                        CITICORP USA, INC.
                                           as  Agent


                                        By:  /s/ KEITH R. KARAKO
                                            ------------------------------------
                                            Title: Vice President


                    [SIGNATURE PAGES TO TERM LOAN AGREEMENT]


   79

                                        Lenders


                                        CITICORP USA, INC.


                                        By: /s/ KEITH R. KARAKO
                                            ------------------------------------
                                            Title: Vice President


                    [SIGNATURE PAGES TO TERM LOAN AGREEMENT]
   80

                                        CITICORP NORTH AMERICA, INC.


                                        By: /s/ C. ANTHONY BOONE
                                            ------------------------------------
                                            Title: Managing Director


                    [SIGNATURE PAGES TO TERM LOAN AGREEMENT]
   81

                                TABLE OF CONTENTS



                                                                                   PAGE
                                                                                
Article I         Definitions, Interpretation And Accounting Terms...................1

        Section 1.1.     Defined Terms...............................................1

        Section 1.2.     Computation of Time Periods................................21

        Section 1.3.     Accounting Terms and Principles............................21

        Section 1.4.     Certain Terms..............................................21

Article II        The Term Loan Facilities..........................................22

        Section 2.1.     The Term Loan Commitments..................................22

        Section 2.2.     Borrowing Procedures.......................................22

        Section 2.3.     Repayment of Term Loans....................................23

        Section 2.4.     Evidence of Debt...........................................24

        Section 2.5.     Optional Prepayments.......................................25

        Section 2.6.     Mandatory Prepayments......................................25

        Section 2.7.     Interest...................................................26

        Section 2.8.     Conversion/Continuation Option.............................26

        Section 2.9.     Fees.......................................................27

        Section 2.10.    Payments and Computations..................................27

        Section 2.11.    Special Provisions Governing Eurodollar Rate Loans.........29

        Section 2.12.    Capital Adequacy...........................................31

        Section 2.13.    Taxes......................................................31

        Section 2.14.    Substitution of Lenders....................................33

        Section 2.15.    Certain Limitations on Indemnification.....................33

        Section 2.16.    Eligible Lender............................................34

Article III       Conditions To Term Loans..........................................34

        Section 3.1.     Conditions Precedent to Initial Loans......................34

        Section 3.2.     Conditions Precedent to Each Term Loan.....................37

Article IV        Representations and Warranties....................................38

        Section 4.1.     Entity Existence; Compliance with Law......................38

        Section 4.2.     Entity Power; Authorization; Enforceable Obligations.......38

        Section 4.3.     Ownership of Borrower; Subsidiaries........................39

        Section 4.4.     Financial Statements.......................................40

        Section 4.5.     Material Adverse Change....................................40

        Section 4.6.     Solvency...................................................40



                                       i
   82

                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                   PAGE
                                                                                
        Section 4.7.     Litigation.................................................40

        Section 4.8.     Taxes......................................................41

        Section 4.9.     Full Disclosure............................................41

        Section 4.10.    Margin Regulations.........................................41

        Section 4.11.    No Burdensome Restrictions; No Defaults....................42

        Section 4.12.    Investment Company Act; Public Utility Holding Company
               Act..................................................................42

        Section 4.13.    Use of Proceeds............................................42

        Section 4.14.    Insurance..................................................42

        Section 4.15.    Labor Matters..............................................43

        Section 4.16.    ERISA......................................................43

        Section 4.17.    Environmental Matters......................................44

        Section 4.18.    Intellectual Property......................................45

        Section 4.19.    Properties.................................................45

        Section 4.20.    Eligible Borrower..........................................46

        Section 4.21.    Year 2000 Compliance.......................................46

        Section 4.22.    Plan of Reorganization.....................................46

        Section 4.23.    Subsidiaries...............................................46

        Section 4.24.    Ranking....................................................46

Article V         Reporting Covenants...............................................46

        Section 5.1.     Financial Statements.......................................46

        Section 5.2.     Default Notices............................................48

        Section 5.3.     Litigation.................................................48

        Section 5.4.     Asset Sales................................................48

        Section 5.5.     SEC Filings; Press Releases................................48

        Section 5.6.     Labor Relations............................................48

        Section 5.7.     Tax Returns................................................48

        Section 5.8.     Insurance..................................................49

        Section 5.9.     ERISA Matters..............................................49

        Section 5.10.    Environmental Matters......................................49

        Section 5.11.    Other Information..........................................50

Article VI        Affirmative Covenants.............................................50



                                       ii
   83

                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                   PAGE
                                                                                
        Section 6.1.     Preservation of Corporate Existence, Etc...................50

        Section 6.2.     Compliance with Laws, Etc..................................50

        Section 6.3.     Conduct of Business........................................50

        Section 6.4.     Payment of Taxes, Etc......................................51

        Section 6.5.     Maintenance of Insurance...................................51

        Section 6.6.     Access.....................................................51

        Section 6.7.     Keeping of Books...........................................51

        Section 6.8.     Maintenance of Properties, Etc.............................51

        Section 6.9.     Application of Proceeds....................................52

        Section 6.10.    Environmental..............................................52

        Section 6.11.    Additional Collateral and Guaranties.......................52

        Section 6.12.    Compensation of Officers and Directors.....................52

        Section 6.13.    Audits.....................................................53

        Section 6.14.    U.S. Government Guarantee..................................53

Article VII       Negative Covenants................................................53

        Section 7.1.     Indebtedness...............................................53

        Section 7.2.     Limitation on Sale-Leaseback Transactions..................54

        Section 7.3.     Limitation on Liens........................................54

        Section 7.4.     Limitation on Restricted Payments..........................55

        Section 7.5.     Asset Sales................................................55

        Section 7.6.     Limitation on Transactions with Affiliates.................56

        Section 7.7.     Limitation on Dividends and Other Payment Restrictions
               Affecting Restricted Subsidiaries....................................56

        Section 7.8.     Limitation on Issuance of Preferred Stock by Restricted
               Subsidiaries.........................................................57

        Section 7.9.     Impairment of Security Interest............................57

        Section 7.10.    Conflicting Agreements.....................................57

        Section 7.11.    Waiver of Stay, Extension or Usury Laws....................57

        Section 7.12.    Limitation on Investments, Loans and Advances..............58

        Section 7.13.    Certain Changes............................................58

        Section 7.14.    Compliance with ERISA......................................58

        Section 7.15.    Environmental..............................................58

        Section 7.16.    Material Subsidiaries......................................58



                                      iii
   84

                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                   PAGE
                                                                                
Article VIII      Events of Default.................................................59

        Section 8.1.     Events of Default..........................................59

        Section 8.2.     Remedies...................................................60

        Section 8.3.     Rescission.................................................61

Article IX        The Agent.........................................................61

        Section 9.1.     Authorization and Action...................................61

        Section 9.2.     Agent's Reliance, Etc......................................62

        Section 9.3.     The Agent Individually.....................................62

        Section 9.4.     Lender Credit Decision.....................................63

        Section 9.5.     Indemnification............................................63

        Section 9.6.     Successor Agents...........................................63

        Section 9.7.     Concerning the Collateral and the Collateral Documents.....64

Article X         Miscellaneous.....................................................65

        Section 10.1.    Amendments, Waivers, Etc...................................65

        Section 10.2.    Assignments and Participations.............................66

        Section 10.3.    Costs and Expenses.........................................69

        Section 10.4.    Indemnities................................................70

        Section 10.5.    Limitation of Liability....................................71

        Section 10.6.    Right of Set-off...........................................71

        Section 10.7.    Sharing of Payments, Etc...................................71

        Section 10.8.    Notices, Etc...............................................72

        Section 10.9.    No Waiver; Remedies........................................73

        Section 10.10.   Binding Effect.............................................73

        Section 10.11.   Governing Law..............................................73

        Section 10.12.   Submission to Jurisdiction; Service of Process.............73

        Section 10.13.   Waiver of Jury Trial.......................................74

        Section 10.14.   Marshaling; Payments Set Aside.............................74

        Section 10.15.   Section Titles.............................................74

        Section 10.16.   Execution in Counterparts..................................74

        Section 10.17.   Entire Agreement...........................................74

        Section 10.18.   Confidentiality............................................74

        Section 10.19.   No Recourse Against Others.................................75



                                       iv
   85

                                TABLE OF CONTENTS
                                   (CONTINUED)



                                                                                   PAGE
                                                                                
Schedule I     -      Commitments
Schedule II    -      Applicable Lending Offices and Addresses for Notices
Schedule 4.2   -      Consents
Schedule 4.3   -      Ownership of Subsidiaries
Schedule 4.4   -      Material Obligations
Schedule 4.7   -      Litigation
Schedule 4.15  -      Labor Matters
Schedule 4.16  -      List of Plans
Schedule 4.17  -      Environmental Matters
Schedule 4.18  -      Intellectual Property
Schedule 4.19  -      Real Property
Schedule 7.3   -      Liens
Schedule 7.6   -      Direct Iron Transactions

Exhibits

Exhibit A      -      Form of Assignment and Acceptance
Exhibit B      -      Form of Term Note
Exhibit C      -      Form of Notice of Borrowing
Exhibit D      -      Form of Notice of Conversion or Continuation
Exhibit E-1    -      Form of Opinion of Counsel for the Loan Parties
Exhibit E-2    -      Form of Opinion of Utah Counsel for the Loan Parties
Exhibit F-1    -      Form of Guaranty
Exhibit F-2    -      Form of U.S. Government Guarantee
Exhibit G      -      Form of Security Agreement
Exhibit H      -      Form of Intercreditor Agreement



                                       v

EX-10.35

   1
                                                                   EXHIBIT 10.35


                               UP TO $125,000,000



                                CREDIT AGREEMENT


                           DATED AS OF JANUARY 3, 2001


                                      AMONG


                                GENEVA STEEL LLC
                                   AS BORROWER


                                       AND
                      THE LENDERS AND ISSUERS PARTY HERETO

                                       AND


                               CITICORP USA, INC.
                                    AS AGENT




                           WEIL, GOTSHAL & MANGES LLP
                                767 FIFTH AVENUE
                          NEW YORK, NEW YORK 10153-0119


   2

              CREDIT AGREEMENT, dated as of January 3, 2001, among GENEVA STEEL
LLC, a Delaware limited liability company (the "Borrower"), the Lenders (as
defined below), the Issuers (as defined below) and CITICORP USA, INC.
("Citicorp"), as agent for the Lenders and the Issuers and for the Secured
Parties (as defined below) (in such capacity, the "Agent").

                              W I T N E S S E T H:

              WHEREAS, the Borrower has requested that the Lenders and Issuers
make available for the purposes specified in this Agreement a revolving credit
and letter of credit facility; and

              WHEREAS, the Lenders and Issuers are willing to make available to
the Borrower such revolving credit and letter of credit facility upon the terms
and subject to the conditions set forth herein;

              NOW, THEREFORE, in consideration of the premises and the covenants
and agreements contained herein, the parties hereto hereby agree as follows:

                                    ARTICLE I

                DEFINITIONS, INTERPRETATION AND ACCOUNTING TERMS

              SECTION 1.1. DEFINED TERMS. As used in this Agreement, the
following terms have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):

              "Account" has the meaning specified in the Security Agreement.

              "Account Debtor" has the meaning specified in the Security
Agreement.

              "Additional Discretionary Amount" means, for any date of
determination, an amount (which shall not be less than zero) equal to (a) 90% of
the net cash proceeds received by the Borrower (after payment of fees,
commissions, expenses and the like) in respect of all Equity Issuances or
capital contributions from the Effective Date to the date of such determination
other than net cash proceeds described in clause (c) of this definition; plus
(b) 75% of the net cash proceeds received by the Borrower (after payment of
fees, commissions, expenses and the like) of Permitted Subordinated Indebtedness
incurred after the Effective Date, other than Permitted Subordinated
Indebtedness representing a loan of the proceeds of a rights offering conducted
by Holdings pursuant to the Plan of Reorganization or the re-loaned proceeds of
the repayment to Holdings of outstanding Permitted Subordinated Indebtedness;
plus (c) 100% of up to $18,000,000 of the net cash proceeds received by the
Borrower (after payment of fees, commissions, expenses and the like) in excess
of $30,000,000 of such net cash proceeds in respect of Equity Issuances or Debt
Issuances the proceeds of which are applied towards the purchase, construction
or installment of the Walking Beam Furnace; minus (d) mandatory prepayments made
in respect of Indebtedness of the Borrower or any of the Restricted Subsidiaries
that are required to be made from net cash proceeds referred to in clauses (a)
through (c) above; minus (e) the aggregate amount of Investments made after the
Effective Date pursuant to Section 8.3(h); and minus (f) the aggregate amount of
Restricted Payments made after the Effective Date pursuant to Section 8.5(e).


   3

              "Advance Rate" means (a) up to 85% in the case of Eligible
Receivables and (b) up to the percentages set forth on Schedule III in the case
of Eligible Inventory. Subject to the foregoing, any Advance Rate may be
prospectively adjusted by the Agent from time to time upon at least five
Business Days' prior written notice to the Borrower as long as such adjustment
is in good faith and in accordance with the Agent's customary practices and
criteria and is based on a collateral review by the Agent.

              "Affiliate" means, with respect to any Person, any other Person
which, directly or indirectly, controls, is controlled by or is under common
control with such Person, each officer, director, general partner or
joint-venturer of such Person, and each Person who is the beneficial owner of
20% or more of any class of Voting Stock of such Person. For the purposes of
this definition, "control" means the possession of the power to direct or cause
the direction of management and policies of such Person, whether through the
ownership of voting securities, by contract or otherwise.

              "Agent" has the meaning specified in the preamble to this
Agreement.

              "Agreement" means this Credit Agreement.

              "Applicable Margin" means (a) during the period from the Effective
Date to the first Business Day of the first calendar month after receipt by the
Agent of the financial statements required to be delivered by Section 6.1(b) for
the full Fiscal Quarter ending on June 30, 2001, with respect to the Revolving
Loans maintained as (i) Base Rate Loans, a rate equal to 1.75% per annum and
(ii) Eurodollar Rate Loans, a rate equal to 2.75% per annum and (b) thereafter,
as of any date of determination, a per annum rate equal to the rate set forth
below opposite the applicable type of Loan and the then applicable Leverage
Ratio (determined for the period ending on the last day of the most recent
Fiscal Quarter or Fiscal Year, as applicable, for which Financial Statements
have been delivered pursuant to Section 6.1) set forth below:



- --------------------------------------------------------------------------------
                                                    BASE RATE     EURODOLLAR
                   LEVERAGE RATIO                     LOANS       RATE LOANS
- --------------------------------------------------------------------------------
                                                            
Less than 1.15 to 1                                   1.25%          2.25%
- --------------------------------------------------------------------------------
Less than 1.65 to 1 and equal to or greater than
1.15 to 1                                             1.50%          2.50%
- --------------------------------------------------------------------------------
Less than 2.15 to 1 and equal to or greater than
1.65 to 1                                             1.75%          2.75%
- --------------------------------------------------------------------------------
Less than 2.85 to 1 and equal to or greater than
2.15 to 1                                             2.00%          3.00%
- --------------------------------------------------------------------------------
Greater than or equal to 2.85 to 1
                                                      2.25%          3.25%
- --------------------------------------------------------------------------------


Subsequent changes in the Applicable Margin resulting from a change in the
Leverage Ratio shall become effective as to all Loans on the first day of the
next succeeding calendar month after delivery by the Borrower to the Agent of
new financial statements pursuant to Section 6.1(b) for each of the first three
Fiscal Quarters of each Fiscal Year and Section 6.1(c) for each Fiscal Year.
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Leverage Ratio), if the Borrower shall fail to deliver such
financial statements within the time periods specified in Section 6.1(b) or (c),
as applicable, the Applicable Margin from the 50th day


                                       2
   4

after the end of such Fiscal Quarter or from the 95th day after the end of such
Fiscal Year, as the case may be, to but not including the date the Borrower
delivers to the Agent such financial statements shall equal the highest
Applicable Margin set forth above.

              "Applicable Lending Office" means, with respect to each Lender,
its Domestic Lending Office in the case of a Base Rate Loan, and its Eurodollar
Lending Office in the case of a Eurodollar Rate Loan.

              "Applicable Unused Commitment Fee Rate" means (a) during the
period from the Effective Date to the first Business Day of the first calendar
month after receipt by the Agent of the financial statements required to be
delivered by Section 6.1(b) for the Fiscal Quarter ending on June 30, 2001,
0.50% per annum and (b) thereafter, as of any date of determination, a per annum
rate equal to the rate set forth below opposite the then applicable Leverage
Ratio (determined for the period ending on the last day of the most recent
Fiscal Quarter or Fiscal Year, as applicable, for which Financial Statements
have been delivered pursuant to Section 6.1) set forth below:



- ------------------------------------------------------------
                                     APPLICABLE UNUSED
          LEVERAGE RATIO            COMMITMENT FEE RATE
- ------------------------------------------------------------
                                 
Less than 2.15 to 1                        0.50%
- ------------------------------------------------------------
Greater than or equal to                   0.625%
2.15 to 1
- ------------------------------------------------------------



Subsequent changes in the Applicable Unused Commitment Fee Rate resulting from a
change in the Leverage Ratio shall become effective on the first day of the next
succeeding calendar month after delivery by the Borrower to the Agent of new
financial statements pursuant to Section 6.1(b) for each of the first three
Fiscal Quarters of each Fiscal Year and Section 6.1(c) for each Fiscal Year.
Notwithstanding anything to the contrary set forth in this Agreement (including
the then effective Leverage Ratio), if the Borrower shall fail to deliver such
financial statements with the time periods specified in Section 6.1(b) or (c),
as applicable, the Applicable Unused Commitment Fee from the 50th day after the
end of such Fiscal Quarter or the 95th day after the end of such Fiscal Year, as
the case may be, to but not including the date the Borrower delivers to the
Agent such financial statements shall conclusively equal the highest Applicable
Unused Commitment Fee Rate set forth above.

              "Approved Fund" means, with respect to any Lender that is a fund
that invests in bank loans, any other fund that invests in bank loans and is
advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.

              "Asset Sale" has the meaning specified in Section 8.4.

              "Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an Eligible Assignee, and accepted by the Agent, in
substantially the form of Exhibit A.

              "Availability Reserves" means, as of two Business Days after the
date of written notice of any determination thereof to the Borrower by the
Agent, such amounts as the Agent may from time to time establish against the
Facility, in the Agent's sole discretion, in order either (a) to preserve the
value of the Collateral, the Agent's Lien thereon or the amount realizable


                                       3
   5

therefrom or (b) to provide for the payment of unanticipated liabilities of any
of the Loan Parties arising after the Effective Date or for the discharge of the
Loan Parties' obligations under the Collateral Documents to the extent not paid
when due.

              "Available Credit" means, at any time, an amount equal to (a) the
lesser of (i) the Revolving Credit Commitments in effect at such time and (ii)
the Borrowing Base at such time, minus (b) the sum of (i) the aggregate
Revolving Credit Outstandings at such time and (ii) any Availability Reserves in
effect at such time.

              "Bailee's Letter" means a letter in substantially the form of
Exhibit J or such other form as may be approved by the Agent executed by any
Person (other than the Borrower) who is in possession of Inventory on behalf of
the Borrower pursuant to which such Person acknowledges, among other things, the
Agent's Lien with respect thereto.

              "Bankruptcy Code" means title 11, United States Code, as amended
from time to time.

              "Bankruptcy Court" means the United States Bankruptcy Court for
the District of Utah.

              "Base Rate" means, for any period, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate per annum shall be
equal at all times to the highest of:

              (a) the rate of interest announced publicly by Citibank in New
       York, New York, from time to time, as Citibank's base rate;

              (b) the sum (adjusted to the nearest 0.25% or, if there is no
       nearest 0.25%, to the next higher 0.25%) of (i) 0.5% per annum plus (ii)
       the rate per annum obtained by dividing (A) the latest three-week moving
       average of secondary market morning offering rates in the United States
       for three-month certificates of deposit of major United States money
       market banks, such three-week moving average being determined weekly on
       each Monday (or, if any such day is not a Business Day, on the next
       succeeding Business Day) for the three-week period ending on the previous
       Friday by Citibank on the basis of such rates reported by certificate of
       deposit dealers to and published by the Federal Reserve Bank of New York
       or, if such publication shall be suspended or terminated, on the basis of
       quotations for such rates received by Citibank from three New York
       certificate of deposit dealers of recognized standing selected by
       Citibank, by (B) a percentage equal to 100% minus the average of the
       daily percentages specified during such three-week period by the Federal
       Reserve Board for determining the maximum reserve requirement (including
       any emergency, supplemental or other marginal reserve requirement) for
       Citibank in respect of liabilities consisting of or including (among
       other liabilities) three-month U.S. dollar non-personal time deposits in
       the United States, plus (iii) the average during such three-week period
       of the maximum annual assessment rates payable to the Federal Deposit
       Insurance Corporation (or any successor) by banks which are members of
       the Bank Insurance Fund for insuring Dollar deposits in the United
       States; and

              (c) the sum of (i) 0.5% per annum plus (ii) the Federal Funds
       Rate.

              "Base Rate Loan" means any Loan during any period in which it
bears interest based on the Base Rate.


                                       4
   6

              "Blocked Account" has the meaning specified in the Security
Agreement.

              "Blocked Account Bank" has the meaning specified in the Security
Agreement.

              "Blocked Account Letter" has the meaning specified in the Security
Agreement.

              "Borrowing" means a borrowing consisting of Loans made on the same
day by the Lenders ratably according to their respective Revolving Credit
Commitments.

              "Borrowing Base" means at any time (a) the product of the Advance
Rate then in effect for Eligible Receivables and the face amount of all Eligible
Receivables of the Borrower (calculated net of all finance charges, late fees
and other fees which are unearned, sales, excise or similar taxes, and credits
or allowances granted at such time) at such time, plus (b) the lesser of (i) the
sum of the products, determined for each category of Inventory, of the Advance
Rate then in effect for Eligible Inventory of such category multiplied by the
value of all Eligible Inventory in such category at such time (with value being
determined, in each case, at the lower of (y) cost determined on a basis
consistent with the past practices of the Borrower or as modified with the
consent of the Agent or (z) market) and (ii) the Inventory Availability
Sublimit, plus (c) all cash on deposit at such time in a Cash Collateral
Account, minus (d) any Eligibility Reserve then in effect.

              "Borrowing Base Certificate" means a certificate of the Borrower
substantially in the form of Exhibit E.

              "Business Day" means a day of the year on which banks are not
required or authorized to close in New York City or the State of Utah and, if
the applicable Business Day relates to notices, determinations, fundings and
payments in connection with the Eurodollar Rate or any Eurodollar Rate Loans, a
day on which dealings in Dollar deposits are also carried on in the London
interbank market.

              "Capital Expenditures" means, with respect to the Borrower and the
Restricted Subsidiaries for any period, the aggregate of amounts that would be
reflected as additions to property, plant or equipment on a consolidated balance
sheet of the Borrower and the Restricted Subsidiaries prepared in conformity
with GAAP, excluding interest capitalized during construction. For the purpose
of this definition, (a) the purchase price of equipment which is acquired
simultaneously with the trade-in of existing equipment owned by the Borrower or
any of the Restricted Subsidiaries or with insurance proceeds shall be included
in Capital Expenditures only to the extent of the gross amount of such purchase
price less the credit granted by the seller of such equipment being traded-in at
such time or the amount of such insurance proceeds, as the case may be, and (b)
the purchase price of equipment which is acquired within 180 days after the sale
of existing equipment owned by the Borrower or any of the Restricted
Subsidiaries shall be included in Capital Expenditures only to the extent of the
gross amount of such purchase price less the lower of the cash received from
such sale or the book value of such equipment being sold at such time.

              "Capital Lease" means, with respect to any Person, any lease of
property by such Person as lessee which would be accounted for as a capital
lease on a balance sheet of such Person prepared in conformity with GAAP.


                                       5
   7

              "Capital Lease Obligations" means, with respect to any Person, the
capitalized amount of all obligations of such Person or any of its Subsidiaries
under Capital Leases, as determined on a consolidated basis in conformity with
GAAP.

              "Cash Collateral Account" has the meaning specified in the
Security Agreement.

              "Cash Equivalents" means (a) securities issued or fully guaranteed
or insured by the United States government or any agency thereof, (b)
certificates of deposit, eurodollar time deposits, overnight bank deposits and
bankers' acceptances of any commercial bank organized under the laws of the
United States, any state thereof, the District of Columbia, any foreign bank, or
its branches or agencies (fully protected against currency fluctuations) which,
at the time of acquisition, are rated at least "A-1" by Standard & Poor's Rating
Services ("S&P") or "P-1" by Moody's Investors Services, Inc. ("Moody's"), (c)
commercial paper of an issuer rated at least "A-1" by S&P or "P-1" by Moody's,
and (d) shares of any money market fund that (i) has at least 95% of its assets
invested continuously in the types of investments referred to in clauses (a)
through (c) above, (ii) has net assets of not less than $500,000,000 and (iii)
is rated at least "A-1" by S&P or "P-1" by Moody's; provided, however, that the
maturities of all obligations of the type specified in clauses (a) through (c)
above shall not exceed 270 days from the date of acquisition; provided, further,
that, with respect to the Borrower, the term "Cash Equivalents" shall include
obligations of the type referred to in clauses (a) through (c) above, where the
deposit institution, issuer or money market fund having such obligations has a
rating of "A-2" by S&P or "P-2" by Moody's to the extent that Cash Equivalents
maintained with such "A-2" or "P-2" rated institutions do not exceed 40% of
total Cash Equivalents held by the Borrower.

              "Cash Interest Expense" means, with respect to any Person for any
period, the Interest Expense of such Person for such period less the Non-Cash
Interest Expense of such Person for such period.

              "Change of Control" means any of the following: (a) any person or
group of persons (within the meaning of the Securities Exchange Act of 1934, as
amended) other than Permitted Holders shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under the Securities Exchange Act of 1934, as amended) of 32.5% or
more of the issued and outstanding Voting Stock of Holdings; (b) during any
period of 12 consecutive calendar months, individuals who at the beginning of
such period constituted the board of directors of Holdings (together with any
new directors whose election by the board of directors of Holdings or whose
nomination for election by the stockholders of Holdings was approved by a vote
of at least two-thirds of the directors then still in office who either were
directors at the beginning of such period or whose elections or nomination for
election was previously so approved) cease for any reason other than death or
disability to constitute a majority of the directors then in office, or (c)
Holdings shall cease to own and control at least 75% of the economic and voting
rights associated with all of the outstanding Stock of the Borrower; provided,
however, that if Holdings owns and controls less than 100% of the voting rights
of the Borrower, it shall be a Change of Control if Holdings shall not own and
control sufficient voting power to approve by itself all matters requiring a
shareholder vote under the Borrower's Constituent Documents or pursuant to any
Requirement of Law.

              "Citibank" means Citibank, N.A., a national banking association.

              "Citicorp" has the meaning specified in the preamble to this
Agreement.


                                       6
   8

              "Code" means the Internal Revenue Code of 1986 (or any successor
legislation thereto), as amended from time to time.

              "Collateral" means all property and interests in property and
proceeds thereof now owned or hereafter acquired by any Loan Party in or upon
which a Lien is granted under any of the Collateral Documents (and not released
pursuant to the terms thereof).

              "Collateral Documents" means the Security Agreement and any other
document executed and delivered by a Loan Party granting a Lien on any of its
property to secure payment of the Secured Obligations.

              "Compliance Certificate" has the meaning specified in Section
6.1(d).

              "Confirmation Order" means the order of the Bankruptcy Court
confirming the Plan of Reorganization.

              "Consignor's Letter" means a letter in substantially the form of
Exhibit K, or such other form acceptable to the Agent, executed by any Person
(other than the Borrower) who is in possession of Inventory on behalf of the
Borrower by way of consignment pursuant to which such Person acknowledges, among
other things, the Agent's Lien with respect thereto.

              "Consolidated Cash Flow" means, for the Borrower and the
Restricted Subsidiaries for any period, EBITDA of the Borrower and the
Restricted Subsidiaries for such period plus (a) the sum of (i) the excess, if
any, of the Working Capital of the Borrower and the Restricted Subsidiaries at
the beginning of such period over the Working Capital of the Borrower and the
Restricted Subsidiaries at the end of such period, (ii) net cash proceeds to the
extent constituting Additional Discretionary Amount by reason of clause (c) of
the definition of Additional Discretionary Amount, (iii) 100% of the net cash
proceeds received by the Borrower (after payment of fees, commissions, expenses
and the like) in respect of all Equity Issuances or capital contributions from
the Effective Date to the last date of such period other than any net cash
proceeds described in clause (c) of the definition of Additional Discretionary
Amount, (iv) 100% of the net cash proceeds received by the Borrower (after
payment of fees, commissions, expenses and the like) of Permitted Subordinated
Indebtedness representing a loan of the proceeds of a rights offering conducted
by Holdings pursuant to the Plan of Reorganization or the re-loaned proceeds of
the repayment to Holdings of outstanding Permitted Subordinated Indebtedness,
and (v) unrestricted cash of the Borrower and the Restricted Subsidiaries to the
extent that such amount would be reflected as cash on a consolidated balance
sheet as of such date of the Borrower and the Restricted Subsidiaries on the
Effective Date prepared in accordance with GAAP (excluding the proceeds of the
Revolving Loans, the Swing Loans and the proceeds of the term loans made
pursuant to the Term Loan Documents), minus (b) the sum of (without duplication)
(i) scheduled and mandatory cash principal payments on the Loans during such
period and optional cash principal payments on the Loans during such period (but
only to the extent that the Revolving Credit Commitments are permanently reduced
by the amount of such payments), (ii) scheduled cash principal payments made by
the Borrower or any Restricted Subsidiary during such period on other
Indebtedness to the extent such other Indebtedness and payments are permitted by
this Agreement, (iii) scheduled and mandatory interest payments on the Loans and
other Indebtedness to the extent such other Indebtedness is permitted by this
Agreement, (iv) scheduled payments made by the Borrower or any Restricted
Subsidiary on Capital Lease Obligations to the extent such Capital Lease
Obligations and payments are permitted by this Agreement, (v) Capital
Expenditures made by the Borrower or any Restricted Subsidiary during such
period to the extent not reflected in clauses (a)(ii), (a)(iii) and (a)(iv) of


                                       7
   9

this definition, (vi) all payments in respect of Taxes measured by income made
by the Borrower and the Restricted Subsidiaries during such period, (vii) the
excess, if any, of the Working Capital of the Borrower and the Restricted
Subsidiaries at the end of such period over the Working Capital of the Borrower
and the Restricted Subsidiaries at the beginning of such period, (viii) any cash
dividends paid during such period in respect of the Stock of the Borrower, (ix)
any Restricted Payments made during such period, (x) any cash Investment made by
the Borrower or any Restricted Subsidiary during such period, and (xi) the face
amount of any Letters of Credit.

              "Consolidated Current Assets" means, with respect to any Person at
any date, the total consolidated current assets (other than cash and Cash
Equivalents) of such Person and its Subsidiaries at such date, determined in
conformity with GAAP.

              "Consolidated Current Liabilities" means, with respect to any
Person at any date, all liabilities of such Person and its Subsidiaries at such
date which should, in accordance with GAAP, be classified as current liabilities
on a consolidated balance sheet of such Person and its Subsidiaries prepared in
conformity with GAAP, but excluding, in the case of the Borrower the sum of (a)
the principal amount of any current portion of long-term Financial Covenant Debt
and (b) (without duplication of clause (a) above) the then outstanding principal
amount of the Loans.

              "Consolidated Net Income" means, for the Borrower for any period,
the net income (or loss) of the Borrower and the Restricted Subsidiaries for
such period, determined on a consolidated basis in conformity with GAAP;
provided, however, that (a) the net income of any other Person in which the
Borrower or one of the Restricted Subsidiaries has a joint interest with a third
party (which interest does not cause the net income of such other Person to be
consolidated into the net income of such Person in accordance with GAAP) shall
be included only to the extent of the amount of dividends or distributions paid
to the Borrower or any Restricted Subsidiary, (b) the net income of any
Restricted Subsidiary that is subject to any restriction or limitation on the
payment of dividends or the making of other distributions shall be excluded to
the extent of such restriction or limitation, (c)(i) the net income (or loss) of
any Person acquired in a pooling of interest transaction for any period prior to
the date of such acquisition and (ii) any net gain or loss resulting from an
Asset Sale by the Borrower or any Restricted Subsidiary other than in the
ordinary course of business shall be excluded, (d) extraordinary gains and
losses and any one-time increase or decrease to net income which is required to
be recorded because of the adoption of new accounting policies, practices or
standards required by GAAP shall be excluded and (e) all restructuring charges
in connection with the consummation of the Plan of Reorganization shall be
excluded.

              "Constituent Documents" means, with respect to any Person, (a) the
articles or certificate of incorporation (or the equivalent organizational
documents) of such Person, (b) the by-laws (or the equivalent governing
documents) of such Person and (c) any document setting forth the manner of
election and duties of the directors or managing members of such Person (if any)
and the designation, amount and/or relative rights, limitations and preferences
of any class or series of such Person's Stock.

              "Contaminant" means any material, substance or waste that is
classified, regulated or forms the basis of liability under any Environmental
Law as hazardous, toxic, a contaminant or a pollutant or by other words of
similar meaning or regulatory effect, including any petroleum or
petroleum-derived substance or waste, asbestos and polychlorinated biphenyls.

              "Contractual Obligation" of any Person means any obligation,
agreement, undertaking or similar provision of any Security issued by such
Person or of any agreement,


                                       8
   10

undertaking, contract, lease, indenture, mortgage, deed of trust or other
instrument (excluding a Loan Document) to which such Person is a party or by
which it or any of its property is bound or to which any of its properties is
subject.

              "Control Account Letter" has the meaning specified in the Security
Agreement.

              "Covenant Liquidity Event Period" means (a) any period (i)
beginning on the first date on which the Available Credit is less than
$50,000,000 for one Business Day and (ii) ending on the first date on which the
Available Credit is greater than $50,000,000.

              "Customary Permitted Liens" means, with respect to any Person, any
of the following Liens:

              (a) Liens with respect to the payment of taxes, assessments or
       governmental charges in all cases which are not yet due or which are
       being contested in good faith by appropriate proceedings and with respect
       to which adequate reserves or other appropriate provisions are being
       maintained to the extent required by GAAP;

              (b) Liens of landlords arising by statute and liens of suppliers,
       mechanics, carriers, materialmen, warehousemen or workmen and other liens
       imposed by law created in the ordinary course of business for amounts not
       yet due or which are being contested in good faith by appropriate
       proceedings and with respect to which adequate reserves or other
       appropriate provisions are being maintained to the extent required by
       GAAP;

              (c) deposits made in the ordinary course of business in connection
       with self-insurance programs, worker's compensation, unemployment
       insurance or other types of social security benefits or to secure the
       performance of bids, tenders, sales, leases and other contracts (other
       than for the repayment of borrowed money) and surety, appeal, customs,
       performance or reclamation bonds;

              (d) encumbrances arising by reason of zoning restrictions,
       easements, licenses, reservations, covenants, rights-of-way, utility
       easements, building restrictions and other similar encumbrances on the
       use of real property which do not materially detract from the value of
       such real property or interfere with the ordinary conduct of the business
       conducted and proposed to be conducted at such real property;

              (e) encumbrances arising under leases or subleases of real
       property which do not in the aggregate materially detract from the value
       of such real property or interfere with the ordinary conduct of the
       business conducted and proposed to be conducted at such real property;

              (f) financing statements of a lessor's rights in and to personal
       property leased to such Person in the ordinary course of such Person's
       business;

              (g) expired financing statements and financing statements filed
       for precautionary purposes.

              "DAQ" has the meaning specified in Section 4.17(g).


                                       9
   11

              "Debt Issuance" means the incurrence of Indebtedness of the type
specified in clause (a), (b) and (f) of the definition of "Indebtedness" by the
Borrower or any of its Subsidiaries.

              "Default" means any event which with the passing of time or the
giving of notice or both would become an Event of Default.

              "Disclosure Statement" means the Disclosure Statement of the
Borrower pursuant to section 1125 of the Bankruptcy Code for the Plan of
Reorganization.

              "Disqualified Stock" means with respect to any Person, any Stock
which, by its terms (or by the terms of any Security into which it is
convertible or for which it is exchangeable), or upon the happening of any
event, matures or is mandatorily redeemable, pursuant to a sinking fund
obligation or otherwise, or is exchangeable for Indebtedness of such Person, or
is redeemable at the option of the holder thereof, in whole or in part, on or
prior to six months after the Scheduled Termination Date.

              "Dollars" and the sign "$" each mean the lawful money of the
United States of America.

              "Domestic Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Domestic Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender or such other office of such Lender as such Lender may from time to time
specify to the Borrower and the Agent.

              "Domestic Subsidiary" means any Subsidiary of the Borrower
organized under the laws of any state of the United States of America or the
District of Columbia.

              "EBITDA" means, with respect to the Borrower for any period, an
amount equal to (a) Consolidated Net Income of the Borrower and the Restricted
Subsidiaries for such period plus (b) the sum of, in each case to the extent
included in the calculation of such Consolidated Net Income of the Borrower and
the Restricted Subsidiaries for such period in accordance with GAAP, but without
duplication, (i) any provision for income taxes, (ii) Interest Expense, (iii)
loss from extraordinary items and (iv) depreciation, depletion and amortization
of intangibles, including amortization of goodwill resulting from fresh start
accounting in connection with the consummation of the Plan of Reorganization, or
financing or acquisition costs and (v) all other non-cash charges and non-cash
losses for such period, including the amount of any compensation deduction as
the result of any grant of Stock or Stock Equivalents to employees, officers,
directors or consultants but excluding accruals for cash liabilities that will
be paid in cash minus (c) the sum of, in each case to the extent included in the
calculation of such Consolidated Net Income of the Borrower and the Restricted
Subsidiaries for such period in accordance with GAAP, but without duplication,
(i) any credit for income tax, (ii) gains from extraordinary items for such
period, and (iii) any other non-cash income items or non-cash gains which have
been added in determining Consolidated Net Income.

              "Effective Date" shall mean the first date on which any Loan is
made or Letter of Credit is issued.

              "Eligibility Reserves" means, effective as of two Business Days
after the date of written notice of any determination thereof to the Borrower by
the Agent, such amounts as the Agent, in its sole discretion, may from time to
time establish against the gross amounts of Eligible


                                       10
   12

Receivables and Eligible Inventory to reflect risks or contingencies arising
after the Effective Date which may affect any one or class of such items and
which have not already been taken into account in the calculation of the
Borrowing Base.

              "Eligible Assignee" means (a) a Lender or any Affiliate or
Approved Fund of such Lender; (b) a commercial bank having total assets in
excess of $5,000,000,000; (c) a finance company, insurance company, other
financial institution or fund reasonably acceptable to the Agent, which is
regularly engaged in making, purchasing or investing in loans, and having a net
worth, determined in accordance with GAAP, in excess of $250,000,000 or, to the
extent net worth is less than such amount, a finance company, insurance company,
other financial institution or fund, reasonably acceptable to the Agent and the
Borrower; or (d) a savings and loan association or savings bank organized under
the laws of the United States or any State thereof which has a net worth,
determined in accordance with GAAP, in excess of $250,000,000.

              "Eligible Inventory" means Inventory of the Borrower, including
raw materials, work-in-process, finished goods, parts and supplies (a) which is
owned solely by the Borrower, (b) with respect to which the Agent has a valid
and perfected first priority Lien, (c) with respect to which no representation
or warranty contained in any of the Loan Documents has been breached, (d) which
is not, in the Agent's sole discretion, obsolete or unmerchantable, and (e) with
respect to which (in respect of any Inventory labeled with a brand name or
trademark and sold by the Borrower pursuant to a trademark owned by the Borrower
or a license granted to the Borrower) the Agent would have rights under such
trademark or license pursuant to the Security Agreement or other agreement
satisfactory to the Agent to sell such Inventory in connection with a
liquidation thereof. No Inventory of the Borrower shall be Eligible Inventory if
such Inventory consists of (i) goods returned or rejected by customers other
than goods that are resaleable or usable in the normal course of business, (ii)
goods to be returned to suppliers, (iii) goods in transit (unless otherwise
determined to be eligible by the Agent in its sole discretion after a request
for such determination by the Borrower) or (iv) goods located, stored, used or
held at the premises of a third party unless (A) the Agent shall have received a
Landlord Waiver, Bailee's Letter or Consignor's Letter or (B) in the case of
Inventory not in possession of the Borrower, an Eligibility Reserve satisfactory
to the Agent shall have been established with respect thereto.

              "Eligible Receivable" means the gross outstanding balance of those
Accounts of the Borrower arising out of sales of merchandise, goods or services
in the ordinary course of business or which are repurchased by or assigned to
the Borrower upon the termination of the Mannesmann Agreement, which are made by
the Borrower to a Person that is not an Affiliate of the Borrower (except as
consented to by the Agent), and that constitute Collateral in which the Agent
has a fully perfected first priority Lien; provided, however, that an Account
shall in no event be an Eligible Receivable if:

              (a) such Account is either (i) more than 90 days past the original
       invoice date thereof, in respect of sales having payment terms not in
       excess of 60 days according to the original terms of sale, or (ii) in
       respect of sales having payment terms in excess of 60 days according to
       the original terms of sale, more than 30 days past due or 120 days past
       the original invoice date thereof; or

              (b) any warranty contained in this Agreement or any other Loan
       Document with respect to such specific Account is not true and correct
       with respect to such Account; or


                                       11
   13

              (c) the Account Debtor on such Account has disputed liability or
       made any claim with respect to any other Account due from such Account
       Debtor to the Borrower but only to the extent of such dispute or claim;
       or

              (d) the Account Debtor on such Account has: (i) filed a petition
       for bankruptcy or any other relief under the Bankruptcy Code or any other
       law relating to bankruptcy, insolvency, reorganization or relief of
       debtors; (ii) made a general assignment for the benefit of creditors;
       (iii) had filed against it any pending petition or other application for
       relief under the Bankruptcy Code or any such other law; (iv) has failed,
       suspended business operations, become insolvent, called a general meeting
       of its creditors for the purpose of obtaining any financial concession or
       accommodation; or (v) had or suffered a receiver or a trustee to be
       appointed for all or a significant portion of its assets or affairs,
       unless such Account Debtor (A) is a debtor-in-possession in a case then
       pending under chapter 11 of the Bankruptcy Code, (B) has established
       debtor-in-possession financing which is satisfactory to the Agent in its
       sole discretion and (C) otherwise satisfies each of the requirements set
       forth in this definition of Eligible Receivables; or

              (e) the Account Debtor on such Account or any of its Affiliates is
       also a supplier to or creditor of the Borrower unless such supplier or
       creditor has executed a no-offset letter satisfactory to the Agent, in
       its sole discretion; provided, however, that the ineligibility of such
       Account shall extend only to the aggregate amount owing by the Borrower
       and its Subsidiaries to such Account Debtor unless a lesser amount shall
       otherwise be approved by the Agent; or

              (f) the sale represented by such Account is to an Account Debtor
       located outside the United States, unless the sale is on letter of credit
       or acceptance terms or is otherwise guaranteed on terms acceptable to the
       Agent in its sole discretion; or

              (g) the sale to such Account Debtor on such Account is on a
       bill-and-hold, guaranteed sale, sale-and-return, sale-on-approval or
       consignment basis (unless such sale is on such terms as are acceptable to
       the Agent in its sole discretion); or

              (h) such Account is subject to a Lien in favor of any Person other
       than the Agent for the benefit of the Secured Parties; or

              (i) such Account (i) is subject to any existing deduction, offset,
       dispute, counterclaim, return privilege (other than in respect of the
       Mannesmann Agreement) or other conditions other than volume sales
       discounts given in the ordinary course of the Borrower's business;
       provided, however, that the ineligibility of such Account shall extend
       only to the amount claimed (if determinable) by the Account Debtor in
       connection with such deduction, offset, counterclaim, or return
       privilege; provided, further, that if such amount claimed is not
       determinable or with reasonable certainty, the entire Account shall be
       ineligible or (ii) is subject to other existing conditions to the extent
       they call into question the payment of such Account; or

              (j) the Account Debtor on such Account is located in New Jersey or
       Minnesota, unless the Borrower (i) has received a certificate of
       authority to do business and is in good standing in such state or (ii)
       has filed a Notice of Business Activities Report with the appropriate
       office or agency of such state for the current year; or


                                       12
   14
              (k) the Account Debtor on such Account is a Governmental
       Authority, unless the Borrower has assigned its rights to payment of such
       Account to the Agent pursuant to the Assignment of Claims Act of 1940, as
       amended, in the case of a federal Governmental Authority, and pursuant to
       applicable law, if any, in the case of any other Governmental Authority,
       and such assignment has been accepted and acknowledged by the appropriate
       government officers; or

              (l) 50% or more of the outstanding Accounts of the Account Debtor
       have become, or have been determined by the Agent, in accordance with the
       provisions hereof, not to be Eligible Receivables; or

              (m) the sale represented by such Account is denominated in a
       currency other than Dollars or the amount receivable in respect of such
       Account has not been hedged with a foreign currency contract denominated
       in Dollars on terms acceptable to the Agent in its sole discretion; or

              (n) such Account is not evidenced by an invoice or other writing
       in form acceptable to the Agent, in its sole discretion; or

              (o) the Borrower, in order to be entitled to collect such Account,
       is required to perform any additional service for, or perform or incur
       any additional obligation to, the Person to whom or to which it was made;
       or

              (p) the total Eligible Accounts (excluding the Accounts due from
       Mannesmann) of such Account Debtor to the Borrower represent more than
       20% of the Eligible Receivables individually or in the aggregate as to
       the Borrower at such time (unless otherwise approved by the Agent in its
       sole discretion), but only to the extent of such excess.

              "Environmental Laws" means all applicable Requirements of Law now
or hereafter in effect, as amended or supplemented from time to time, relating
to pollution or the regulation and protection of human health, safety, the
environment or natural resources, including the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as amended (42 U.S.C. Section
9601 et seq.); the Hazardous Material Transportation Act, as amended (49 U.S.C.
Section 180 et seq.); the Federal Insecticide, Fungicide, and Rodenticide Act,
as amended (7 U.S.C. Section 136 et seq.); the Resource Conservation and
Recovery Act, as amended (42 U.S.C. Section 6901 et seq.); the Toxic Substance
Control Act, as amended (42 U.S.C. Section 7401 et seq.); the Clean Air Act, as
amended (42 U.S.C. Section 740 et seq.); the Federal Water Pollution Control
Act, as amended (33 U.S.C. Section 1251 et seq.); the Occupational Safety and
Health Act, as amended (29 U.S.C. Section 651 et seq.); the Safe Drinking Water
Act, as amended (42 U.S.C. Section 300f et seq.); and their state and local
counterparts or equivalents and any transfer of ownership notification or
approval statute.

              "Environmental Liabilities and Costs" means, with respect to any
Person, all liabilities, obligations, responsibilities, Remedial Actions,
losses, damages, punitive damages, consequential damages, treble damages, costs
and expenses (including all fees, disbursements and expenses of counsel, experts
and consultants and costs of investigation and feasibility studies), fines,
penalties, sanctions and interest incurred as a result of any claim or demand by
any other Person, whether based in contract, tort, implied or express warranty,
strict liability, criminal or civil statute, including any thereof arising under
any Environmental Law, Permit, order or agreement with any Governmental
Authority or other Person, which relate to any environmental,


                                       13
   15

health or safety condition or a Release or threatened Release, and result from
the past, present or future operations of, or ownership of property by, such
Person or any of its Subsidiaries.

              "Environmental Lien" means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.

              "Equity Issuance" means the issue or sale of any Stock of the
Borrower or any of the Restricted Subsidiaries by the Borrower or any Restricted
Subsidiary to any Person other than the Borrower or any of such Subsidiaries.

              "ERISA" means the Employee Retirement Income Security Act of 1974
(or any successor legislation thereto), as amended from time to time.

              "ERISA Affiliate" means any trade or business (whether or not
incorporated) under common control or treated as a single employer with the
Borrower or any of its Subsidiaries within the meaning of Section 414 (b), (c),
(m) or (o) of the Code.

              "ERISA Event" means with respect to any Loan Party or ERISA
Affiliate (a) a reportable event described in Section 4043(b) or 4043(c)(1),
(2), (3), (5), (6), (8) or (9) of ERISA with respect to a Title IV Plan or a
Multiemployer Plan; (b) the withdrawal of any Loan Party or any ERISA Affiliate
from a Title IV Plan subject to Section 4063 of ERISA during a plan year in
which it was a substantial employer, as defined in Section 4001(a)(2) of ERISA;
(c) the complete or partial withdrawal of any Loan Party or any ERISA Affiliate
from any Multiemployer Plan; (d) notice of reorganization or insolvency of a
Multiemployer Plan; (e) the filing of a notice of intent to terminate a Title IV
Plan or the treatment of a plan amendment as a termination under Section 4041 of
ERISA; (f) the institution of proceedings to terminate a Title IV Plan or
Multiemployer Plan by the PBGC; (g) the failure to make any required
contribution to a Title IV Plan or Multiemployer Plan; (h) the imposition of a
lien under Section 412 of the Code or Section 302 of ERISA on any Loan Party or
any ERISA Affiliate; or (i) any other event or condition which might reasonably
be expected to constitute grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, any Title IV Plan
or Multiemployer Plan or the imposition of any liability under Title IV of
ERISA, other than for PBGC premiums due but not delinquent under Section 4007 of
ERISA.

              "Eurocurrency Liabilities" has the meaning assigned to that term
in Regulation D of the Federal Reserve Board, as in effect from time to time.

              "Eurodollar Base Rate" means, with respect to any Interest Period
for any Eurodollar Rate Loan, the rate of interest determined by the Agent to be
the average (rounded upward to the nearest whole multiple of 1/16 of one percent
per annum, if such average is not such a multiple) of the rates per annum at
which deposits in Dollars are offered by the principal office of Citibank in
London to major banks in the London interbank market at 11:00 A.M. (London time)
two Business Days before the first day of such Interest Period in an amount
substantially equal to the Eurodollar Rate Loan of Citibank for a period equal
to such Interest Period.

              "Eurodollar Lending Office" means, with respect to any Lender, the
office of such Lender specified as its "Eurodollar Lending Office" opposite its
name on Schedule II or on the Assignment and Acceptance by which it became a
Lender (or, if no such office is specified, its Domestic Lending Office) or such
other office of such Lender as such Lender may from time to time specify to the
Borrower and the Agent.


                                       14
   16

              "Eurodollar Rate" means, with respect to any Interest Period for
any Eurodollar Rate Loan, an interest rate per annum equal to the rate per annum
obtained by dividing (a) the Eurodollar Base Rate by (b) a percentage equal to
100% minus the reserve percentage applicable two Business Days before the first
day of such Interest Period under regulations issued from time to time by the
Federal Reserve Board for determining the maximum reserve requirement (including
any emergency, supplemental or other marginal reserve requirement) for a member
bank of the Federal Reserve System in New York City with respect to liabilities
or assets consisting of or including Eurocurrency Liabilities (or with respect
to any other category of liabilities which includes deposits by reference to
which the Eurodollar Rate is determined) having a term equal to such Interest
Period.

              "Eurodollar Rate Loan" means any Loan that, for an Interest
Period, bears interest based on the Eurodollar Rate.

              "Event of Default" has the meaning specified in Section 9.1.

              "Facility" means the Revolving Credit Commitments and the
provisions herein related to the Revolving Loans, Swing Loans and Letters of
Credit.

              "Fair Market Value" means (a) with respect to any asset or group
of assets (other than a marketable Security) at any date, the value of the
consideration obtainable in a sale of such asset at such date assuming a sale by
a willing seller to a willing purchaser dealing at arm's length and arranged in
an orderly manner over a reasonable period of time having regard to the nature
and characteristics of such asset, and (b) with respect to any marketable
Security at any date, the closing sale price of such Security on the Business
Day next preceding such date, as appearing in any published list of any national
securities exchange or the Nasdaq Stock Market or, if there is no such closing
sale price of such Security, the final price for the purchase of such Security
at face value quoted on such business day by a financial institution of
recognized standing acceptable to the Agent which regularly deals in securities
of such type.

              "Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to the weighted average of
the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.

              "Federal Reserve Board" means the Board of Governors of the
Federal Reserve System, or any successor thereto.

              "Fee Letter" shall mean the letter dated as of November 20, 2000,
addressed to the Borrower from Citicorp and accepted by the Borrower on November
22, 2000, with respect to certain fees to be paid from time to time to Citicorp.

              "Final Order" means an order or judgment of the Bankruptcy Court,
or other court of competent jurisdiction, as entered on the docket in any
pending chapter 11 case or the docket of any other court of competent
jurisdiction, with respect to which 10 days have elapsed since the entry of such
order and which has not been reversed, stayed, modified or amended and is in
full force and effect.


                                       15
   17

              "Financial Covenant Debt" of any Person means Indebtedness of the
type specified in clauses (a) and (b), clause (c) in respect of letters of
credit and bankers' acceptances, and clauses (d), (e), (f) and (h) of the
definition of "Indebtedness" less any cash on such Person's balance sheet and
less any Permitted Subordinated Indebtedness.

              "Financial Statements" means the financial statements of the
Borrower and its Subsidiaries delivered in accordance with Sections 4.4 and 6.1.

              "Fiscal Quarter" means each of the three-month periods ending on
March 31, June 30, September 30 and December 31.

              "Fiscal Year" means each 12-month period ending on December 31.

              "GAAP" means generally accepted accounting principles in the
United States of America as in effect from time to time set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and the statements and pronouncements
of the Financial Accounting Standards Board, or in such other statements by such
other entity as may be in general use by significant segments of the accounting
profession, which are applicable to the circumstances as of the date of
determination.

              "Governmental Authority" means any nation or government, any state
or other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

              "Guarantor" means each Subsidiary Guarantor.

              "Guaranty" means the guaranty, in substantially the form of
Exhibit H.

              "Guaranty Obligation" means, as applied to any Person, any direct
or indirect liability, contingent or otherwise, of such Person with respect to
any Indebtedness of another Person, if the purpose or intent of such Person in
incurring the Guaranty Obligation is to provide assurance to the obligee of such
Indebtedness that such Indebtedness will be paid or discharged, or that any
agreement relating thereto will be complied with, or that any holder of such
Indebtedness will be protected (in whole or in part) against loss in respect
thereof including, (a) the direct or indirect guaranty, endorsement (other than
for collection or deposit in the ordinary course of business), co-making,
discounting with recourse or sale with recourse by such Person of Indebtedness
of another Person and (b) any liability of such Person for Indebtedness of
another Person through any agreement (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such Indebtedness or any security therefor, or
to provide funds for the payment or discharge of such Indebtedness (whether in
the form of a loan, advance, stock purchase, capital contribution or otherwise),
(ii) to maintain the solvency or any balance sheet item, level of income or
financial condition of another Person, (iii) to make take-or-pay or similar
payments, if required, regardless of non-performance by any other party or
parties to an agreement, (iv) to purchase, sell or lease (as lessor or lessee)
property, or to purchase or sell services, primarily for the purpose of enabling
the debtor to make payment of such Indebtedness or to assure the holder of such
Indebtedness against loss, or (v) to supply funds to or in any other manner
invest in such other Person (including to pay for property or services
irrespective of whether such property is received or such services are
rendered), if in the case of any agreement described under subclause (i), (ii),
(iii), (iv) or (v) of clause (b) of this sentence the primary purpose or intent
thereof is as described in the preceding sentence; provided, however, that it is
understood that the transactions contemplated in the Mannesmann Agreement shall
not be deemed "Guaranty Obligations" for


                                       16
   18

any purpose of this Agreement. The amount of any Guaranty Obligation shall be
equal to the amount of the Indebtedness so guaranteed or otherwise supported.

              "Hedging Contracts" means all Interest Rate Contracts, foreign
exchange contracts, currency swap or option agreements, forward contracts,
commodity swap, purchase or option agreements, other commodity price hedging
arrangements, and all other similar agreements or arrangements designed to alter
the risks of any Person arising from fluctuations in interest rates, currency
values or commodity prices.

              "Holdings" means Geneva Steel Holdings Corp., a Delaware
corporation.

              "Indebtedness" of any Person means without duplication (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person evidenced by notes, bonds, debentures or similar instruments, (c) all
reimbursement and other obligations with respect to letters of credit, bankers'
acceptances, surety bonds and performance bonds, whether or not matured, (d) all
indebtedness for the deferred purchase price of property or services, other than
trade payables incurred in the ordinary course of business, (e) all indebtedness
of such Person created or arising under any conditional sale or other title
retention agreement with respect to property acquired by such Person (even
though the rights and remedies of the seller or lender under such agreement in
the event of default are limited to repossession or sale of such property), (f)
all Capital Lease Obligations of such Person, (g) all Guaranty Obligations of
such Person, (h) all obligations of such Person to purchase, redeem, retire,
defease or otherwise acquire for value any Stock or Stock Equivalents of such
Person (other than for Stock or Stock Equivalents of such Person), valued, in
the case of redeemable preferred stock, at the greater of its voluntary or
involuntary liquidation preference plus accrued and unpaid dividends payable in
cash, (i) all payments that such Person would have to make in the event of an
early termination on the date Indebtedness of such Person is being determined in
respect of Hedging Contracts of such Person and (j) all Indebtedness of the type
referred to above of another Person secured by (or for which the holder of such
Indebtedness has an existing right, contingent or otherwise, to be secured by)
any Lien upon or in property (including Accounts and general intangibles) owned
by such Person, even though such Person has not assumed or become liable for the
payment of such Indebtedness.

              "Indemnitees" has the meaning specified in Section 11.4.

              "Intercreditor Agreement" means the intercreditor agreement
substantially in the form of Exhibit N among the Agent, the Term Loan Agent and
the Borrower.

              "Interest Expense" means, with respect to the Borrower for any
period, (a) total interest expense of the Borrower and the Restricted
Subsidiaries for such period determined on a consolidated basis in conformity
with GAAP and including, in any event, interest capitalized during construction
for such period and net costs under Interest Rate Contracts for such period
minus (b) the sum of (i) net gains of the Borrower and the Restricted
Subsidiaries under Interest Rate Contracts for such period determined on a
consolidated basis in conformity with GAAP plus (ii) any interest income of the
Borrower and the Restricted Subsidiaries for such period determined on a
consolidated basis in conformity with GAAP.

              "Interest Period" means, in the case of any Eurodollar Rate Loan,
(a) initially, the period commencing on the date such Eurodollar Rate Loan is
made or on the date of conversion of a Base Rate Loan to such Eurodollar Rate
Loan and ending one, two, three or six months thereafter, as selected by the
Borrower in its Notice of Borrowing or Notice of Conversion or Continuation
given to the Agent pursuant to Section 2.2 or 2.11, and (b) thereafter,


                                       17
   19

if such Loan is continued, in whole or in part, as a Eurodollar Rate Loan
pursuant to Section 2.11, a period commencing on the last day of the immediately
preceding Interest Period therefor and ending one, two, three or six months
thereafter, as selected by the Borrower in its Notice of Conversion or
Continuation given to the Agent pursuant to Section 2.11; provided, however,
that all of the foregoing provisions relating to Interest Periods in respect of
Eurodollar Rate Loans are subject to the following:

                     (i) if any Interest Period would otherwise end on a day
              which is not a Business Day, such Interest Period shall be
              extended to the next succeeding Business Day, unless the result of
              such extension would be to extend such Interest Period into
              another calendar month, in which event such Interest Period shall
              end on the immediately preceding Business Day;

                     (ii) any Interest Period that begins on the last Business
              Day of a calendar month (or on a day for which there is no
              numerically corresponding day in the calendar month at the end of
              such Interest Period) shall end on the last Business Day of a
              calendar month;

                     (iii) the Borrower may not select any Interest Period that
              ends after the date of a scheduled principal payment on the Loans
              as set forth in Article II unless, after giving effect to such
              selection, the aggregate unpaid principal amount of the Loans for
              which Interest Periods end after such scheduled principal payment
              shall be equal to or less than the principal amount to which the
              Loans are required to be reduced after such scheduled principal
              payment is made;

                     (iv) the Borrower may not select any Interest Period in
              respect of Loans having an aggregate principal amount of less than
              $7,500,000; and

                     (v) there shall be outstanding at any one time no more than
              eight Interest Periods in the aggregate.

              "Interest Rate Contracts" means all interest rate swap agreements,
interest rate cap agreements, interest rate collar agreements and interest rate
insurance.

              "Investment" means, with respect to any Person, (a) any purchase
or other acquisition by that Person of (i) any Security issued by, (ii) a
beneficial interest in any Security issued by, or (iii) any other equity
ownership interest in, any other Person, (b) any purchase by that Person of all
or a majority of the assets of a business conducted by another Person, and (c)
any loan, advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, accounts receivable, advances to
employees and similar items made or incurred in the ordinary course of business
as presently conducted), or capital contribution by that Person to any other
Person, including all Indebtedness of any other Person to that Person arising
from a sale of property by that Person other than in the ordinary course of its
business unless payable and paid within 90 days of such sale or, in the case of
property which is not Collateral, within 180 days of such sale, and (d) Guaranty
Obligations incurred by that Person other than on behalf of a Restricted
Subsidiary; provided, however, that the term "Investment" shall not include the
repurchase by, or assignment to, the Borrower of receivables and Inventory from
Mannesmann pursuant to the Mannesmann Agreement; and provided, further, that for
purposes of Section 8.3 the designation of a Subsidiary of the Borrower as a
Non-Recourse Subsidiary shall be deemed to be the making of an Investment in an
amount equal to the greater of (x) the aggregate Investment by the Borrower and
the Restricted Subsidiaries in such Subsidiary at the


                                       18
   20

time of such designation or (y) the aggregate Fair Market Value of all of the
assets of such Subsidiary at the time of such designation.

              "Inventory" has the meaning specified in the Security Agreement.

              "Inventory Availability Sublimit" means $85,000,000.

              "IRS" means the Internal Revenue Service of the United States or
any successor thereto.

              "Issuer" means each Lender or Affiliate of a Lender that (a) is
listed on the signature pages hereof as an "Issuer" or (b) hereafter becomes an
Issuer with the approval of the Agent and the Borrower by agreeing pursuant to
an agreement with, and in form and substance satisfactory to, the Agent and the
Borrower to be bound by the terms hereof applicable to Issuers.

              "Landlord Waiver" means a letter in substantially the form of
Exhibit L, or such other form acceptable to the Agent, executed by a landlord in
respect of Inventory of the Borrower located at any leased premises of the
Borrower pursuant to which such landlord, among other things, waives any Lien
such landlord may have in respect of such Inventory.

              "Leases" means, with respect to any Person, all of those leasehold
estates in real property of such Person, as lessee, as such leases may be
amended, supplemented or otherwise modified from time to time.

              "Lender" means each financial institution or other entity that (a)
is listed on the signature pages hereof as a "Lender" or (b) from time to time
becomes a party hereto by execution of an Assignment and Acceptance.

              "Letter of Credit" means any letter of credit issued pursuant to
Section 2.4.

              "Letter of Credit Obligations" means, at any time, the aggregate
of all liabilities at such time of the Borrower to all Issuers with respect to
Letters of Credit, whether or not any such liability is contingent, and includes
the sum of (a) the Reimbursement Obligations at such time and (b) the Letter of
Credit Undrawn Amounts at such time.

              "Letter of Credit Reimbursement Agreement" has the meaning
specified in Section 2.4(e).

              "Letter of Credit Request" has the meaning specified in Section
2.4(c).

              "Letter of Credit Undrawn Amounts" means, at any time, the
aggregate undrawn face amount of all Letters of Credit outstanding at such time.

              "Leverage Ratio" means, with respect to the Borrower and the
Restricted Subsidiaries, for any period, the ratio of (a) Financial Covenant
Debt of the Borrower and the Restricted Subsidiaries as of the last day of such
period net of any unrestricted cash of the Borrower and the Restricted
Subsidiaries as of the last day of such period to the extent that such amount
would be reflected as cash on a consolidated balance sheet as of such date of
the Borrower and the Restricted Subsidiaries prepared in accordance with GAAP to
(b) EBITDA for the Borrower and the Restricted Subsidiaries for such period.


                                       19
   21

              "Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, charge, deposit arrangement, encumbrance, lien (statutory or other),
security interest or preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever intended to assure
payment of any Indebtedness or other obligation, including any conditional sale
or other title retention agreement, the interest of a lessor under a Capital
Lease, any financing lease having substantially the same economic effect as any
of the foregoing, and the filing of any financing statement under the Uniform
Commercial Code or comparable law of any jurisdiction naming the owner of the
asset to which such Lien relates as debtor.

              "Liquidity Event Period" means (a) any period (i) beginning on the
first date on which either (A) the Revolving Credit Outstandings are greater
than $50,000,000 for more than five consecutive Business Days or (B) the
Available Credit is less than $50,000,000 for five consecutive Business Days and
(ii) ending on the first date on which both (A) the Revolving Credit
Outstandings are less than $50,000,000 for more than five consecutive Business
Days and (B) the Available Credit is greater than $50,000,000 for more than five
consecutive Business Days, provided, however, that the initial Liquidity Event
Period shall be deemed (x) to start, notwithstanding anything to the contrary in
this definition, on the Effective Date and (y) to continue until the first date,
on or after June 30, 2001, that the Borrower is in compliance with all of the
provisions of Article V hereto or (b) any period (i) beginning on the date which
is ten Business Days (or such earlier date as the Agent and the Borrower may
agree) after the Borrower has delivered to the Agent written notice that it
requests that the Agent carry out the cash management procedures set forth in
Section 2.9(b) in respect of the Borrower and the Restricted Subsidiaries and
(ii) ending on the earlier of (A) the date specified in a notice the Borrower
has delivered to the Agent requesting termination of such cash management
procedures, which date shall be no earlier than the date which is ten Business
Days after the date on which the Agent receives such notice, provided that the
requirements of clause (a)(ii) of this definition are satisfied on such date or
(B) the payment in full of the Obligations.

              "Loan" means any loan made by any Lender pursuant to this
Agreement.

              "Loan Documents" means, collectively, this Agreement, the
Revolving Credit Notes (if any), the Guaranty, the Fee Letter, each Letter of
Credit Reimbursement Agreement, the Collateral Documents and each certificate,
agreement or document executed by a Loan Party and delivered to the Agent or any
Lender in connection with or pursuant to any of the foregoing. For avoidance of
doubt, the term "Loan Documents" does not include any of the Term Loan
Documents.

              "Loan Party" means each of the Borrower and each Subsidiary of the
Borrower that executes and delivers a Loan Document.

              "Mannesmann" means Mannesmann Pipe & Steel Corporation, a New York
corporation, and any successor thereto or assignee thereof acceptable to the
Agent.

              "Mannesmann Agreement" means that certain Sales Representation
Agreement, dated as of October 30, 1998, between the Borrower and Mannesmann, as
amended from time to time, or a similar replacement agreement acceptable to the
Agent.

              "Material Adverse Change" means a material adverse change in any
of (a) the condition (financial or otherwise), business, performance, prospects,
operations or properties of any Loan Party or the Borrower and the Restricted
Subsidiaries taken as a whole, (b) the legality, validity or enforceability of
any Loan Document, (c) the perfection or priority of the Liens


                                       20
   22

granted pursuant to the Collateral Documents, (d) the ability of the Borrower to
repay the Obligations or of the Loan Parties to perform their obligations under
the Loan Documents, or (e) the rights and remedies of the Agent, the Agent or
the Lenders under the Loan Documents; provided, however, that for purposes
hereof and without affecting the construction of any of the foregoing, the net
loss resulting from write downs pursuant to fresh start accounting shall not in
and of itself constitute a Material Adverse Change.

              "Material Adverse Effect" means an effect that results in or
causes, or could reasonably be expected to result in or cause, a Material
Adverse Change.

              "Material Subsidiary" means with respect to the Borrower, any
Restricted Subsidiary owning at least 5% of Total Assets or contributing at
least 5% of Consolidated Net Income of the Borrower and its Subsidiaries.

              "Maximum Credit" means, at any time, (a) the lesser of (i) the
Revolving Credit Commitments in effect at such time and (ii) the Borrowing Base
at such time minus (b) the aggregate amount of any Availability Reserve in
effect at such time.

              "Mergers" shall mean (a) the merger of Geneva Steel Company with
and into Geneva Steel Interim Corporation, a Delaware corporation ("Interim
Corporation"), with Interim Corporation being the surviving corporation and (b)
the merger of Interim Corporation with and into the Borrower, with the Borrower
being the surviving corporation, as described in the Plan of Reorganization.

              "Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Borrower, any of its Subsidiaries or
any ERISA Affiliate has any obligation or liability, contingent or otherwise.

              "Net Cash Proceeds" means proceeds received by any Loan Party
after the Effective Date in cash or Cash Equivalents from any Asset Sale, other
than Asset Sales permitted under clauses (a) through (e) of Section 8.4, net of
(i) the reasonable cash costs of sale, assignment or other disposition, (ii)
taxes paid or payable as a result thereof and (iii) any amount required to be
paid or prepaid on Indebtedness (other than the Obligations) secured by the
assets subject to such Asset Sale; provided, however, that the evidence of each
of the amounts in subclauses (i), (ii) and (iii) are provided to the Agent in
form and substance satisfactory to it.

              "Net Worth" of any Person means (i) the Total Assets of such
Person at such date (other than investments in moneys due from Affiliates) minus
(ii) Total Liabilities of such Person at such date.

              "Non-Cash Interest Expense" means, with respect to any Person for
any period, the sum of the following amounts to the extent included in the
calculation of Interest Expense of such Person for such period: (a) the amount
of debt discount and debt issuances costs amortized, (b) charges relating to
write-ups or write-downs in the book or carrying value of existing Financial
Covenant Debt and (c) interest payable in evidences of Indebtedness or by
addition to the principal of the related Indebtedness.

              "Non-Funding Lender" has the meaning specified in Section 2.2(d).

              "Non-Recourse Indebtedness" means Indebtedness as to which (a)
neither the Borrower nor any Restricted Subsidiary (i) provides credit support
(including any undertaking,


                                       21
   23

agreement or instrument which would constitute Indebtedness), and (ii) is
directly or indirectly liable, and (b) no default with respect to such
Indebtedness (including any rights which the holders thereof may have to take
enforcement action against the relevant Non-Recourse Subsidiary or its assets)
would permit (upon notice, lapse of time or both) any holder of any other
Indebtedness of the Borrower or any Restricted Subsidiary to declare a default
on such other Indebtedness or cause the payment thereof to be accelerated or
payable prior to its stated maturity.

              "Non-Recourse Subsidiary" means a Subsidiary of the Borrower which
has been designated by the Borrower as a Non-Recourse Subsidiary and which does
not own any Stock or Stock Equivalents of any Loan Party and (a) the properties
and assets of which, to the extent that they secure indebtedness, secure only
Non-Recourse Indebtedness, (b) which has no Indebtedness other than Non-Recourse
Indebtedness and (c) the Investment in such Subsidiary is permitted by Section
8.3.

              "Non-U.S. Lender" means each Lender or Agent that is not a United
States person as defined in Section 7701(a)(30) of the Code.

              "Notice of Borrowing" has the meaning specified in Section 2.2(a).

              "Notice of Conversion or Continuation" has the meaning specified
in Section 2.11.

              "Obligations" means the Loans, the Letter of Credit Obligations
and all other amounts, obligations, covenants and duties owing by the Borrower
to either Agent, any Lender, any Issuer, any Affiliate of any of them or any
Indemnitee, of every type and description (whether by reason of an extension of
credit, opening or amendment of a letter of credit or payment of any draft drawn
thereunder, loan, guaranty, indemnification, foreign exchange or currency swap
transaction, interest rate hedging transaction or otherwise), present or future,
arising under this Agreement, any other Loan Document, any Hedging Contract, or
agreement for cash management services entered into in connection with this
Agreement or any other Loan Document, whether direct or indirect (including
those acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired and whether or not evidenced
by any note, guaranty or other instrument or for the payment of money, and
includes all letter of credit, cash management and other fees, interest,
charges, expenses, fees, attorneys' fees and disbursements and other sums
chargeable to the Borrower under this Agreement, any other Loan Document, any
Hedging Contract or agreement for cash management services entered into in
connection with this Agreement or any other Loan Document and all obligations of
the Borrower to cash collateralize Letter of Credit Obligations.

              "Other Debt" means any Indebtedness of the Borrower other than the
Obligations.

              "PBGC" means the Pension Benefit Guaranty Corporation or any
successor thereto.

              "Pension Plan" means an employee pension benefit plan, as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan), which is not an
individual account plan, as defined in Section 3(34) of ERISA, and which any
Loan Party or, if a Title IV Plan or a Plan subject to Section 412 of the Code,
any ERISA Affiliate maintains, contributes to or has an obligation to contribute
to on behalf of participants who are or were employed by any of them.


                                       22
   24

              "Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.

              "Permitted Acquisition" means the acquisition by the Borrower or
any of its Subsidiaries of all or substantially all of the assets or Stock of
any Person or of any operating division thereof (the "Target"), or the merger of
the Target with or into the Borrower or any Subsidiary of the Borrower (with the
Borrower, in the case of a merger with the Borrower, being the surviving
corporation) subject to the satisfaction of each of the following conditions:

              (a) the Agent shall receive at least 30 days' prior written notice
of such proposed acquisition, which notice shall include a reasonably detailed
description of such proposed acquisition;

              (b) such Permitted Acquisition shall only involve assets located
in the United States and comprising a business, or those assets of a business,
of the type engaged in by the Borrower and its Subsidiaries, or of a type which
the Borrower has reasonably determined is or would be complementary to the
Borrower's business as of the Effective Date, except as otherwise approved by
the Agent;

              (c) such Permitted Acquisition shall be consensual and shall have
been approved by the Target's board of directors;

              (d) at or prior to the closing of any Permitted Acquisition, the
Borrower (or the Restricted Subsidiary making the Permitted Acquisition) and the
Target shall have executed such documents and taken such actions as may be
required under Section 7.11;

              (e) concurrently with delivery of the notice referred to in clause
(a) above, the Borrower shall have delivered to the Agent, in form and substance
satisfactory to the Agent and the Requisite Lenders, such other financial
information, financial analysis, documentation or other information relating to
such Permitted Acquisition as the Agent or any Lender shall reasonably request;

              (f) on or prior to the date of such Permitted Acquisition, the
Agent shall have received, in form and substance satisfactory to the Agent,
copies of the acquisition agreement and related agreements and instruments, and
all opinions, certificates, lien search results and other documents reasonably
requested by the Agent; and

              (g) at the time of such Permitted Acquisition and after giving
effect thereto, (i) no Default or Event of Default shall have occurred and be
continuing, and (ii) all representations and warranties contained in Article IV
and in the other Loan Documents shall be true and correct in all material
respects.

              "Permitted Subordinated Indebtedness" means, in the aggregate,
unsecured Indebtedness of the Borrower in an aggregate principal amount not to
exceed $25,000,000 that does not mature and has no required principal payments
prior to one year following the Scheduled Termination Date and all of which is
subordinated to the payment in full of the Obligations pursuant to a
Subordination Agreement substantially in the form of Exhibit M; provided,
however, that at any one time up to $10,000,000 of such Permitted Subordinated
Indebtedness, if owed from the Borrower to Holdings, may mature and have
required principal payments prior to one year following the Scheduled
Termination date so long as such Permitted


                                       23
   25

Subordinated Indebtedness is subordinated pursuant to a Subordination Agreement
substantially in the form of Exhibit M.

              "Permitted Holder" means Albert Fried & Co. and Loomis Sayles and
Company LP and any holder of 15% or more of the issued and outstanding common
stock of Holdings as of the Effective Date, each until such time as it no longer
is an Affiliate of Holdings.

              "Person" means an individual, partnership, corporation (including
a business trust), joint stock company, estate, trust, limited liability
company, unincorporated association, joint venture or other entity, or a
Governmental Authority.

              "Plan of Reorganization" means the Third Amended Plan of
Reorganization of the Borrower, as modified, approved by the Bankruptcy Court on
December 8, 2000.

              "Pro Forma Balance Sheet" has the meaning specified in Section
4.4(d).

              "Projections" means the financial projections of the Borrower
dated October 25, 2000 covering the Fiscal Year ending September 30, 2000
through the Fiscal Year ending September 30, 2005 inclusive, delivered to the
Lenders by the Borrower pursuant to Section 4.4, including balance sheets,
income statements and statements of cash flow.

              "Protective Advances" means all expenses, disbursements and
advances incurred by the Agent pursuant to the Loan Documents after the
occurrence and during the continuance of an Event of Default which the Agent, in
its sole discretion, deems necessary or desirable to preserve or protect the
Collateral or any portion thereof or to enhance the likelihood or maximize the
amount of repayment of the Obligations; provided, however, that no advance shall
be made by the Agent to the extent that the aggregate Revolving Credit
Outstandings, after giving effect to such advance, shall exceed the aggregate
Revolving Credit Commitments, unless all Lenders shall consent thereto.

              "Ratable Portion" or "ratably" means, with respect to any Lender,
the percentage obtained by dividing (a) the Revolving Credit Commitment of such
Lender by (b) the aggregate Revolving Credit Commitments of all Lenders (or, at
any time after the Revolving Credit Termination Date, the percentage obtained by
dividing the aggregate outstanding principal balance of the Revolving Credit
Outstandings owing to such Lender by the aggregate outstanding principal balance
of the Revolving Credit Outstandings owing to all Lenders).

              "Real Property" means all of those plots, pieces or parcels of
land now owned, leased or hereafter acquired or leased by the Borrower or any of
its Subsidiaries (the "Land"), together with the right, title and interest of
the Borrower, if any, in and to the streets, the land lying in the bed of any
streets, roads or avenues, opened or proposed, in front of, the air space and
development rights pertaining to the Land and the right to use such air space
and development rights, all rights of way, privileges, liberties, tenements,
hereditaments and appurtenances belonging or in any way appertaining thereto,
all fixtures, all easements now or hereafter benefiting the Land and all
royalties and rights appertaining to the use and enjoyment of the Land,
including all alley, vault, drainage, mineral, water, oil and gas rights,
together with all of the buildings and other improvements now or hereafter
erected on the Land, and any fixtures appurtenant thereto.

              "Register" has the meaning specified in Section 11.2.


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              "Reimbursement Obligations" means all matured reimbursement or
repayment obligations of the Borrower to any Issuer with respect to amounts
drawn under Letters of Credit.

              "Release" means, with respect to any Person, any release, spill,
emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal,
leaching or migration, in each case, of any Contaminant into the indoor or
outdoor environment or into or out of any property owned by such Person,
including the movement of Contaminants through or in the air, soil, surface
water, ground water or property.

              "Remedial Action" means all actions required to (a) clean up,
remove, treat or in any other way address any Contaminant in the indoor or
outdoor environment, (b) prevent the Release or threat of Release or minimize
the further Release so that a Contaminant does not migrate or endanger or
threaten to endanger public health or welfare or the indoor or outdoor
environment or (c) perform pre-remedial studies and investigations and
post-remedial monitoring and care.

              "Requirement of Law" means, with respect to any Person, the common
law and all federal, state, local and foreign laws, rules and regulations,
orders, judgments, decrees and other legal requirements or determinations of any
Governmental Authority or arbitrator, applicable to or binding upon such Person
or any of its property or to which such Person or any of its property is
subject, including ERISA, labor and benefit laws and Environmental Laws.

              "Requisite Lenders" means, collectively, Lenders having more than
50% of the aggregate outstanding amount of the Revolving Credit Commitments or,
after the Revolving Credit Termination Date, 50% of the aggregate Revolving
Credit Outstandings. A Non-Funding Lender shall not be included in the
calculation of "Requisite Lenders."

              "Responsible Officer" means, with respect to any Person, any of
the Chief Executive Officer, Executive Vice President and Chief Financial
Officer of such Person, but in any event, with respect to financial matters, the
chief financial officer, treasurer or controller of such Person.

              "Restricted Payment" means (a) any dividend or other distribution,
direct or indirect, on account of any Stock or Stock Equivalents of the Borrower
or any Restricted Subsidiary now or hereafter outstanding, except a dividend
payable solely in Stock or Stock Equivalents or a dividend or distribution
payable solely to the Borrower and/or one or more Subsidiary Guarantors, (b) any
redemption, retirement, sinking fund or similar payment, purchase or other
acquisition for value, direct or indirect, of any Stock or Stock Equivalents of
the Borrower or any of the Restricted Subsidiaries now or hereafter outstanding
other than one payable solely to the Borrower and/or one or more Subsidiary
Guarantors, and (c) any regularly scheduled payment or prepayment of principal,
premium (if any), interest, fees (including fees to obtain any waiver or consent
in connection with any Stock or Indebtedness) or other charges on, or
redemption, purchase, retirement, defeasance, sinking fund or similar payment
with respect to, any Indebtedness of the Borrower or any of the Restricted
Subsidiaries or any other Loan Party (other than the Obligations or the
"Obligations" as defined in the Term Loan Documents), other than any payment
made solely in Stock or Stock Equivalents of such Person or any required
redemptions, retirement, purchases or other payments, in each case to the extent
permitted to be made by the terms of such Indebtedness after giving effect to
any applicable subordination provisions.


                                       25
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              "Restricted Subsidiary" means any Subsidiary of the Borrower which
is not a Non-Recourse Subsidiary.

              "Revolving Credit Borrowing" means Revolving Loans made on the
same day by the Lenders ratably according to their respective Revolving Credit
Commitments.

              "Revolving Credit Commitment" means, with respect to each Lender,
the commitment of such Lender to make Revolving Loans and acquire interests in
other Revolving Credit Outstandings in the aggregate principal amount
outstanding not to exceed the amount set forth opposite such Lender's name on
Schedule I under the caption "Revolving Credit Commitment," as amended to
reflect each Assignment and Acceptance executed by such Lender and as such
amount may be reduced or modified pursuant to this Agreement.

              "Revolving Credit Note" means a promissory note of the Borrower
payable to the order of any Lender in a principal amount equal to the amount of
such Lender's Revolving Credit Commitment evidencing the aggregate Indebtedness
of the Borrower to such Lender resulting from the Revolving Loans owing to such
Lender.

              "Revolving Credit Outstandings" means, at any particular time, the
sum of (a) the principal amount of the Revolving Loans outstanding at such time
plus (b) the Letter of Credit Obligations outstanding at such time plus (c) the
principal amount of the Swing Loans outstanding at such time.

              "Revolving Credit Termination Date" shall mean the earliest of (a)
the Scheduled Termination Date, (b) the date of termination of all of the
Revolving Credit Commitments pursuant to Section 2.5 and (c) the date on which
the Obligations become due and payable pursuant to Section 9.2.

              "Revolving Loan" has the meaning specified in Section 2.1.

              "Scheduled Termination Date" means March 31, 2005.

              "Secured Obligations" means, in the case of the Borrower, the
Obligations, and, in the case of any other Loan Party, the obligations of such
Loan Party under the Guaranty and the other Loan Documents to which it is a
party.

              "Secured Parties" means the Lenders, the Issuers, the Agent and
any other holder of any of the Obligations.

              "Security" means any Stock, Stock Equivalent, voting trust
certificate, bond, debenture, note or other evidence of Indebtedness, whether
secured, unsecured, convertible or subordinated, or any certificate of interest,
share or participation in, or any temporary or interim certificate for the
purchase or acquisition of, or any right to subscribe to, purchase or acquire,
any of the foregoing, but shall not include any evidence of the Obligations.

              "Security Agreement" means an agreement, in substantially the form
of Exhibit I, executed by the Agent, the Borrower and each Subsidiary Guarantor.

              "Senior Leverage Ratio" means, with respect to the Borrower and
the Restricted Subsidiaries for any period, the ratio of (a) Financial Covenant
Debt of the Borrower and the Restricted Subsidiaries, other than Permitted
Subordinated Indebtedness, as of the last day of


                                       26
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such period net of any unrestricted cash of the Borrower and the Restricted
Subsidiaries as of the last day of such period to the extent that such amount
would be reflected as cash on a consolidated balance sheet as of such date of
the Borrower and the Restricted Subsidiaries prepared in accordance with GAAP as
of the last day of such period to (b) EBITDA for such period.

              "Servicing Agreement" means an agreement if form and substance
satisfactory to the Agent made between the Borrower and Holdings pursuant to
which the Borrower makes payments to Holdings not in excess of $5,000,000 in the
aggregate in any Fiscal Year to fund ordinary operating expenses and debt
service of Holdings.

              "Solvent" means, with respect to any Person, that the value of the
assets of such Person (both at fair value and present fair saleable value) is,
on the date of determination, greater than the total amount of liabilities
(including contingent and unliquidated liabilities on a net present value basis)
of such Person as of such date and that, as of such date, such Person is able to
pay all liabilities of such Person as such liabilities mature. In computing the
amount of contingent or unliquidated liabilities at any time, such liabilities
will be computed at the amount which, in light of all the facts and
circumstances existing at such time, represents the amount that can reasonably
be expected to become an actual or matured liability on a net present value
basis.

              "Stock" means shares of capital stock (whether denominated as
common stock or preferred stock), beneficial, partnership or membership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation, partnership, limited liability company or equivalent
entity, whether voting or non-voting.

              "Stock Equivalents" means all securities convertible into or
exchangeable for Stock and all warrants, options or other rights to purchase or
subscribe for any Stock, whether or not presently convertible, exchangeable or
exercisable.

              "Subsidiary" means, with respect to any Person, any corporation,
partnership, limited liability company or other business entity of which an
aggregate of 50% or more of the outstanding Voting Stock is, at the time,
directly or indirectly, owned or controlled by such Person and/or one or more
Subsidiaries of such Person.

              "Subsidiary Guarantor" means each Subsidiary of the Borrower that
is a party to the Guaranty.

              "Swing Loan" has the meaning specified in Section 2.3.

              "Swing Loan Borrowing" means a borrowing consisting of a Swing
Loan.

              "Swing Loan Lender" means Citicorp and each other Lender who
becomes the Agent or who agrees with the approval of the Agent and the Borrower
to act as a Swing Loan Lender hereunder.

              "Swing Loan Request" has the meaning specified in Section 2.3(b).

              "Tangible Net Worth" of any Person means, at any date, the Net
Worth of such Person at such date, excluding, however, from the determination of
the Total Assets of such Person at such date, (a) all goodwill, organizational
expenses, research and development expenses, trademarks, trade names,
copyrights, patents, patent applications, licenses and rights in


                                       27
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any thereof, and other similar intangibles, (b) all deferred charges or
unamortized debt discount and expense, (c) Securities which are not readily
marketable, (d) cash held in a sinking or other analogous fund established for
the purpose of redemption, retirement, defeasance or prepayment of any Stock or
Indebtedness, (e) any write-up in the book value of any asset resulting from a
revaluation thereof, (f) all deferred tax assets arising from income taxes net
of any deferred tax liability related to income taxes, provided that in no event
shall such amount be less than zero, and (g) any items not included in clauses
(a) through (f) above which are treated as intangibles in conformity with GAAP.

              "Tax Affiliate" means, with respect to any Person, (a) any
Subsidiary of such Person, and (b) any Affiliate of such Person with which such
Person files or is eligible to file consolidated, combined or unitary tax
returns.

              "Tax Return" has the meaning specified in Section 4.8.

              "Taxes" has the meaning specified in Section 2.16(a).

              "Term Loan Agent" means the Agent under the Term Loan Documents.

              "Term Loan Documents" means that certain Term Loan Agreement dated
as of January 3, 2001 among the Borrower, the lenders party thereto and
Citicorp, as agent for such lenders, entered into concurrently herewith (as
amended, restated, refinanced, replaced, supplemented or otherwise modified from
time to time) and the other "Loan Documents" identified therein.

              "Title IV Plan" means a pension plan, other than a Multiemployer
Plan, which is covered by Title IV of ERISA to which the Borrower any of its
Subsidiaries or any ERISA Affiliate has any obligation or liability (contingent
or otherwise).

              "Total Assets" of the Borrower and the Restricted Subsidiaries
means, at any date, the total assets of the Borrower and the Restricted
Subsidiaries determined on a consolidated basis in conformity with GAAP minus
(a) any minority interest in non-wholly-owned Restricted Subsidiaries that would
be reflected on a consolidated balance sheet of the Borrower and the Restricted
Subsidiaries at such date prepared in conformity with GAAP and (b) any
Securities issued by the Borrower and any of the Restricted Subsidiaries held as
treasury securities.

              "Total Liabilities" of the Borrower means, at any date, all
obligations which in conformity with GAAP would be included in determining total
liabilities as shown on the liabilities side of a consolidated balance sheet of
the Borrower and the Restricted Subsidiaries at such date, and in any event
includes all Indebtedness of the Borrower or any of the Restricted Subsidiaries
at such date (other than intercompany Indebtedness), whether or not the same
would be so shown, and exclusive of the greater of the liquidation preference or
the redemption price of any outstanding Disqualified Stock of the Borrower at
such date.

              "Unfunded Pension Liability" means, with respect to the Borrower
as of any date of determination, the sum of (a) the amount, if any, by which the
present value of all accrued benefits under each Title IV Plan (other than any
Title IV Plan subject to Section 4063 of ERISA) exceeds the fair market value of
all assets of such Title IV Plan allocable to such benefits in accordance with
Title IV of ERISA, as determined as of the most recent valuation date for such
Title IV Plan using the actuarial assumptions in effect under such Title IV
Plan, and (b) the aggregate amount of withdrawal liability that could be
assessed under Section 4063 with respect


                                       28
   30

to each Title IV Plan subject to such Section, separately calculated for each
such Title IV Plan as of its most recent valuation date and (c) for a period of
five years following a transaction reasonably likely to be covered by Section
4069 of ERISA, the liabilities (whether or not accrued) that could be avoided by
the Borrower, any of its Subsidiaries or any ERISA Affiliate as a result of such
transaction.

              "Unused Commitment Fee" has the meaning specified in Section
2.12(a).

              "Voting Stock" means Stock of any Person having ordinary power to
vote in the election of members of the board of directors, managers, trustees or
other controlling Persons, of such Person (irrespective of whether, at the time,
Stock of any other class or classes of such entity shall have or might have
voting power by reason of the happening of any contingency).

              "Walking Beam Furnace" means a walking beam furnace as described
in the Disclosure Statement which the Borrower purchases, constructs and
installs at its facilities after the date hereof.

              "Withdrawal Liability" means, with respect to the Borrower at any
time, the aggregate liability incurred (whether or not assessed) with respect to
all Multiemployer Plans pursuant to Section 4201 of ERISA or for increases in
contributions required to be made pursuant to Section 4243 of ERISA.

              "Welfare Benefit Plan" means an employee welfare benefit plan, as
defined in Section 3(1) of ERISA, to which any Loan Party maintains, contributes
to, or contributed to prior to the Effective Date, or has an obligation to
contribute to, on behalf of its former or active employees (or their
beneficiaries).

              "Working Capital" means, for any Person at any date, the amount by
which the Consolidated Current Assets of such Person at such date exceeds the
Consolidated Current Liabilities of such Person at such date.

              SECTION 1.2. COMPUTATION OF TIME PERIODS. In this Agreement, in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to but excluding" and the word "through" means "to and including."

              SECTION 1.3. ACCOUNTING TERMS AND PRINCIPLES.

              (a) Except as set forth below, all accounting terms not
specifically defined herein shall be construed in conformity with GAAP and all
accounting determinations required to be made pursuant hereto shall, unless
expressly otherwise provided herein, be made in conformity with GAAP.

              (b) If any change in the accounting principles used in the
preparation of the most recent Financial Statements referred to in Section 6.1
is hereafter required or permitted by the rules, regulations, pronouncements and
opinions of the Financial Accounting Standards Board or the American Institute
of Certified Public Accountants (or any successor thereto) and such change is
adopted by the Borrower with the agreement of its independent public accountants
and results in a change in any of the calculations required by Article V or
Article VIII had such accounting change not occurred, the parties hereto agree
to enter into negotiations in order to amend such provisions so as to equitably
reflect such change with the desired result that the


                                       29
   31

criteria for evaluating compliance with such covenants by the Borrower shall be
the same after such change as if such change had not been made; provided,
however, that no change in GAAP that would affect a calculation that measures
compliance with any covenant contained in Article V or Article VIII shall be
given effect until such provisions are amended to reflect such changes in GAAP.

              (c) For the avoidance of doubt, the results of operations, assets
and liabilities, any Subsidiary which is not a Restricted Subsidiary shall not
be included in any financial statements of the Borrower and the Restricted
Subsidiaries.

              SECTION 1.4. CERTAIN TERMS.

              (a) The words "herein," "hereof" and "hereunder" and similar words
refer to this Agreement as a whole, and not to any particular Article, Section,
subsection or clause in, this Agreement.

              (b) References in this Agreement to an Exhibit, Schedule, Article,
Section, subsection or clause refer to the appropriate Exhibit or Schedule to,
or Article, Section, subsection or clause in this Agreement.

              (c) Each agreement defined in this Article I shall include all
appendices, exhibits and schedules thereto. If the prior written consent of the
Requisite Lenders is required hereunder for an amendment, restatement,
supplement or other modification to any such agreement and such consent is
obtained or, if no such consent is required, references in this Agreement to
such agreement shall be to such agreement as so amended, restated, supplemented
or modified.

              (d) References in this Agreement to any statute shall be to such
statute as amended or modified and in effect at the time any such reference is
operative.

              (e) The term "including" when used in any Loan Document means
"including without limitation" except when used in the computation of time
periods.

              (f) The terms "Lender," "Issuer," "Swing Loan Lender" and "Agent"
include their respective successors.

              (g) The terms "sole discretion" when used in respect of any
determination by Agent in connection with the calculation of the Borrowing Base
means "as determined by the Agent in good faith in accordance with its customary
practices and criteria, in effect from time to time and which may be changed by
the Agent in good faith.

              (h) Upon the appointment of any successor Agent pursuant to
Section 10.6, references to Citicorp in Section 10.3 and to Citibank in the
definitions of Base Rate and Eurodollar Rate shall be deemed to refer to the
financial institution then acting as the Agent or one of its Affiliates if it so
designates.


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                                   ARTICLE II

                                  THE FACILITY

              SECTION 2.1. THE REVOLVING CREDIT COMMITMENTS. On the terms and
subject to the conditions contained in this Agreement, each Lender severally
agrees to make loans to the Borrower (each a "Revolving Loan") from time to time
on any Business Day during the period from the date hereof until the Revolving
Credit Termination Date in an aggregate amount not to exceed at any time
outstanding for all such loans by such Lender such Lender's Revolving Credit
Commitment; provided, however, that at no time shall any Lender be obligated to
make a Revolving Loan (i) in excess of such Lender's Ratable Portion of the
Available Credit and (ii) to the extent that the aggregate Revolving Credit
Outstandings, after giving effect to such Revolving Loan, would exceed the
Maximum Credit in effect at such time. Within the limits of each Lender's
Revolving Credit Commitment, amounts of Revolving Loans repaid may be reborrowed
under this Section 2.1.

              SECTION 2.2. BORROWING PROCEDURES.

              (a) Each Revolving Credit Borrowing shall be made on notice given
by the Borrower to the Agent not later than 12:00 noon (New York City time) (i)
one Business Day, in the case of a Borrowing of Base Rate Loans and (ii) three
Business Days, in the case of a Borrowing of Eurodollar Rate Loans, prior to the
date of the proposed Revolving Credit Borrowing. Each such notice shall be in
substantially the form of Exhibit C (a "Notice of Borrowing"), specifying (A)
the date of such proposed Revolving Credit Borrowing, (B) the aggregate amount
of such proposed Revolving Credit Borrowing, (C) whether any portion of the
proposed Revolving Credit Borrowing will be of Base Rate Loans or Eurodollar
Rate Loans, (D) the initial Interest Period or Periods for any such Eurodollar
Rate Loans, and (E) that the Borrower, to the knowledge of the Responsible
Officer executing such notice, will have Available Credit after giving effect to
the proposed Revolving Credit Borrowing. The Revolving Loans shall be made as
Base Rate Loans unless (subject to Section 2.14) the Notice of Borrowing
specifies that all or a portion thereof shall be Eurodollar Rate Loans. Each
Revolving Credit Borrowing shall be in an aggregate amount of not less than
$1,000,000.

              (b) The Agent shall give to each Lender prompt notice of the
Agent's receipt of a Notice of Borrowing and, if Eurodollar Rate Loans are
properly requested in such Notice of Borrowing, the applicable interest rate
determined pursuant to Section 2.14(a). Each Lender shall, before 11:00 A.M.
(New York City time) on the date of the proposed Borrowing, make available to
the Agent at its address referred to in Section 11.8, in immediately available
funds, such Lender's Ratable Portion of such proposed Borrowing. After the
Agent's receipt of such funds and upon fulfillment of the applicable conditions
set forth in Sections 3.1 and 3.2, the Agent will in accordance with its
customary practice (i) make such funds available to the Borrower or (ii) if the
Agent determines that the applicable conditions set forth in Article III are not
met, notify the Borrower of such determination.

              (c) Unless the Agent shall have received notice from a Lender
prior to the date of any proposed Borrowing that such Lender will not make
available to the Agent such Lender's Ratable Portion of such Borrowing, the
Agent may assume that such Lender has made such Ratable Portion available to the
Agent on the date of such Borrowing in accordance with this Section 2.2 and the
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount. If and to the extent that such Lender shall
not have so made such Ratable Portion available to the Agent, such Lender and
the Borrower severally agree


                                       31
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to repay to the Agent forthwith on demand such corresponding amount together
with interest thereon, for each day from the date such amount is made available
to the Borrower until the date such amount is repaid to the Agent, at (i) in the
case of the Borrower, the interest rate applicable at the time to the Loans
comprising such Borrowing and (ii) in the case of such Lender, the Federal Funds
Rate for the first Business Day and thereafter at the interest rate applicable
at the time to the Loans comprising such Borrowing. If such Lender shall repay
to the Agent such corresponding amount, such amount so repaid shall constitute
such Lender's Loan as part of such Borrowing for purposes of this Agreement. If
the Borrower shall repay to the Agent such corresponding amount, such payment
shall not relieve such Lender of any obligation it may have hereunder to the
Borrower.

              (d) The failure of any Lender to make the Loan or any payment
required by it on the date specified (a "Non-Funding Lender"), including any
payment in respect of its participation in Swing Loans and Letter of Credit
Obligations, shall not relieve any other Lender of its obligations to make such
Loan or payment on such date but no such other Lender shall be responsible for
the failure of any Non-Funding Lender to make a Loan or payment required under
this Agreement.

              SECTION 2.3. SWING LOANS.

              (a) On the terms and subject to the conditions contained in this
Agreement, the Swing Loan Lender may in its sole discretion make loans (each a
"Swing Loan") otherwise available to the Borrower under the Facility from time
to time on any Business Day during the period from the date hereof until the
Revolving Credit Termination Date in an aggregate amount outstanding at any time
not to exceed $10,000,000; provided, however, that the Swing Loan Lender shall
not make any Swing Loan to the extent that, after giving effect to such Swing
Loan, the aggregate Revolving Credit Outstandings would exceed the Maximum
Credit. The Swing Loan Lender shall be entitled to rely on the most recent
Borrowing Base Certificate delivered to the Agent. Within the limits set forth
in the first sentence of this Section 2.3(a), amounts of Swing Loans repaid may
be reborrowed under this Section 2.3(a). Each Swing Loan Borrowing shall be in
an aggregate amount of not less than $100,000. The Swing Loan Lender intends to
settle all outstanding Swing Loans on the second Business Day of every week that
the Borrower has material amounts of Swing Loans outstanding.

              (b) In order to request a Swing Loan, the Borrower shall telecopy
to the Agent a duly completed request setting forth the date, the requested
amount and date of the Swing Loan (a "Swing Loan Request"), to be received by
the Agent not later than 2:00 P.M. (New York City time) on the day of the
proposed Swing Loan Borrowing. The Agent shall promptly notify the Swing Loan
Lender of the details of the requested Swing Loan. Subject to the terms of this
Agreement, the Swing Loan Lender shall make a Swing Loan available to the Agent
which will make such amounts available to the Borrower on the date of the
relevant Swing Loan Request. The Swing Loan Lender shall not make any Swing Loan
in the period commencing on the first Business Day after it receives written
notice from any Lender that one or more of the conditions precedent contained in
Section 3.2 shall not on such date be satisfied, and ending when such conditions
are satisfied. The Swing Loan Lender shall not otherwise be required to
determine that, or take notice whether, the conditions precedent set forth in
Section 3.2 hereof have been satisfied in connection with the making of any
Swing Loan.

              (c) The Swing Loan Lender shall notify the Agent in writing (which
may be by telecopy) daily, by no later than 10:00 A.M. (New York City time) on
the first Business Day of each week, of the aggregate principal amount of its
Swing Loans then outstanding.


                                       32
   34

              (d) The Swing Loan Lender may demand at any time that each Lender
pay to the Agent, for the account of the Swing Loan Lender, in the manner
provided in subsection (e) below, such Lender's Ratable Portion of all or a
portion of the outstanding Swing Loans, which demand shall be made through the
Agent, shall be in writing and shall specify the outstanding principal amount of
Swing Loans demanded to be paid.

              (e) The Agent shall forward each notice referred to in clause (c)
above and each demand referred to in clause (d) above to each Lender on the day
such notice or such demand is received by the Agent (except that any such notice
or demand received by the Agent after 2:00 P.M. (New York City time) on any
Business Day or any such demand received on a day that is not a Business Day
shall not be required to be forwarded to the Lenders by the Agent until the next
succeeding Business Day), together with a statement prepared by the Agent
specifying the amount of each Lender's Ratable Portion of the aggregate
principal amount of the Swing Loans stated to be outstanding in such notice or
demanded to be paid pursuant to such demand, and, notwithstanding whether or not
the conditions precedent set forth in Section 3.2 shall have been satisfied
(which conditions precedent the Lenders hereby irrevocably waive), each Lender
shall, before 11:00 A.M. (New York City time) on the Business Day next
succeeding the date of such Lender's receipt of such written statement, make
available to the Agent, in immediately available funds, for the account of the
Swing Loan Lender, the amount specified in such statement. Upon such payment by
a Lender, such Lender shall, except as provided in clause (f) below, be deemed
to have made a Revolving Loan to the Borrower. The Agent shall use such funds to
repay the Swing Loans to the Swing Loan Lender. To the extent that any Lender
fails to make such payment available to the Agent for the account of the Swing
Loan Lender, the Borrower shall repay such Swing Loan on demand.

              (f) Upon the occurrence of a Default under Section 9.1(f), each
Lender shall acquire, without recourse or warranty, an undivided participation
in each Swing Loan otherwise required to be repaid by such Lender pursuant to
clause (e) above, which participation shall be in a principal amount equal to
such Lender's Ratable Portion of such Swing Loan, by paying to the Swing Loan
Lender on the date on which such Lender would otherwise have been required to
make a payment in respect of such Swing Loan pursuant to clause (e) above, in
immediately available funds, an amount equal to such Lender's Ratable Portion of
such Swing Loan. If such amount is not in fact made available by such Lender to
the Swing Loan Lender on such date, the Swing Loan Lender shall be entitled to
recover such amount on demand from such Lender together with interest accrued
from such date at the Federal Funds Rate for the first Business Day after such
payment was due and thereafter at the rate of interest then applicable to Base
Rate Loans.

              (g) From and after the date on which any Lender is deemed to have
made a Revolving Credit Loan pursuant to clause (e) above with respect to any
Swing Loan or purchases an undivided participation interest in a Swing Loan
pursuant to clause (f) above, a Swing Loan Lender shall promptly distribute to
such Lender such Lender's Ratable Portion of all payments of principal of and
interest received by the Swing Loan Lender on account of such Swing Loan other
than those received from a Lender pursuant to clause (e) or (f) above.

              SECTION 2.4. LETTERS OF CREDIT.

              (a) On the terms and subject to the conditions contained in this
Agreement, each Issuer agrees to issue one or more Letters of Credit at the
request of the Borrower for the account of the Borrower from time to time during
the period commencing on the Effective Date and ending on the earlier of the
Revolving Credit Termination Date and 30 days prior to the


                                       33
   35

Scheduled Termination Date; provided, however, that no Issuer shall be under any
obligation to issue any Letter of Credit if:

                     (i) any order, judgment or decree of any Governmental
              Authority or arbitrator shall purport by its terms to enjoin or
              restrain such Issuer from issuing such Letter of Credit or any
              Requirement of Law applicable to such Issuer or any request or
              directive (whether or not having the force of law) from any
              Governmental Authority with jurisdiction over such Issuer shall
              prohibit, or request that such Issuer refrain from, the issuance
              of letters of credit generally or such Letter of Credit in
              particular or shall impose upon such Issuer with respect to such
              Letter of Credit any restriction or reserve or capital requirement
              (for which such Issuer is not otherwise compensated) not in effect
              on the date of this Agreement or result in any unreimbursed loss,
              cost or expense which was not applicable, in effect or known to
              such Issuer as of the date of this Agreement and which such Issuer
              in good faith deems material to it and the reimbursement of which
              is not provided for hereunder;

                     (ii) such Issuer shall have received written notice from
              the Agent, any Lender or the Borrower, on or prior to the
              requested date of issuance of such Letter of Credit, that one or
              more of the applicable conditions contained in Sections 3.1 and
              3.2 is not then satisfied;

                     (iii) after giving effect to the issuance of such Letter of
              Credit, the aggregate Revolving Credit Outstandings would exceed
              the Maximum Credit at such time;

                     (iv) after giving effect to the issuance of such Letter of
              Credit, the sum of (i) the Letter of Credit Undrawn Amounts at
              such time and (ii) the Reimbursement Obligations at such time
              exceeds $25,000,000; or

                     (v) any fees due in connection with a requested issuance
              have not been paid.

None of the Lenders (other than the Issuers in their capacity as such) shall
have any obligation to issue any Letter of Credit.

              (b) In no event shall the expiration date of any Letter of Credit
(i) be more than one year (or such longer period as agreed by the Agent) after
the date of issuance thereof; provided, however, that any Letter of Credit with
a one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(ii) below), or (ii) be less than seven days prior to the Scheduled Termination
Date; provided, however, that any Letter of Credit may have a later expiry date
with the consent of the Agent.

              (c) In connection with the issuance of each Letter of Credit, the
Borrower shall give the relevant Issuer and the Agent at least two Business
Days' prior written notice, in substantially the form of Exhibit D (or in such
other written or electronic form as is acceptable to the Issuer), of the
requested issuance of such Letter of Credit (a "Letter of Credit Request"). Such
notice shall be irrevocable and shall specify the Issuer of such Letter of
Credit, the stated amount of the Letter of Credit requested, which stated amount
shall not be less than $100,000, the date of issuance of such requested Letter
of Credit (which day shall be a Business Day), the date on


                                       34
   36

which such Letter of Credit is to expire (which date shall be a Business Day),
and the Person for whose benefit the requested Letter of Credit is to be issued.
Such notice, to be effective, must be received by the relevant Issuer and the
Agent not later than 12:00 noon (New York City time) on the second Business Day
prior to the requested issuance of such Letter of Credit.

              (d) Subject to the satisfaction of the conditions set forth in
this Section 2.4, the relevant Issuer shall, on the requested date, issue a
Letter of Credit on behalf of the Borrower in accordance with such Issuer's
usual and customary business practices. No Issuer shall issue any Letter of
Credit in the period commencing on the first Business Day after it receives
written notice from any Lender that one or more of the conditions precedent
contained in Section 3.2 shall not on such date be satisfied and ending when
such conditions are satisfied. The relevant Issuer shall not otherwise be
required to determine that, or take notice whether, the conditions precedent set
forth in Section 3.2 have been satisfied in connection with the issuance of any
Letter of Credit.

              (e) If requested by the relevant Issuer, prior to the issuance of
each Letter of Credit by such Issuer, and as a condition of such issuance and of
the participation of each Lender in the Letter of Credit Obligations arising
with respect thereto, the Borrower shall have delivered to such Issuer a letter
of credit reimbursement agreement, in such form as the Issuer may employ in its
ordinary course of business for its own account (a "Letter of Credit
Reimbursement Agreement"), signed by the Borrower, and such other documents or
items as may be required pursuant to the terms thereof. In the event of any
conflict between the terms of any Letter of Credit Reimbursement Agreement and
this Agreement, the terms of this Agreement shall govern.

              (f) Each Issuer shall:

                     (i) give the Agent written notice (or telephonic notice
              confirmed promptly thereafter in writing, which may be by
              telecopier) of the issuance or renewal of a Letter of Credit
              issued by it, of all drawings under a Letter of Credit issued by
              it and the payment (or the failure to pay when due) by the
              Borrower of any Reimbursement Obligation when due (which notice
              the Agent shall promptly transmit by telecopy or similar
              transmission to each Lender);

                     (ii) upon the request of any Lender, furnish to such Lender
              copies of any Letter of Credit Reimbursement Agreement to which
              such Issuer is a party and such other documentation as may
              reasonably be requested by such Lender; and

                     (iii) no later than 10 Business Days following the last day
              of each calendar month, provide to the Agent (and the Agent shall
              provide a copy to each Lender requesting the same) and the
              Borrower separate schedules for Letters of Credit issued by it, in
              form and substance reasonably satisfactory to the Agent, setting
              forth the aggregate Letter of Credit Obligations outstanding at
              the end of each month and any information requested by the
              Borrower or the Agent relating thereto.

              (g) Immediately upon the issuance by an Issuer of a Letter of
Credit in accordance with the terms and conditions of this Agreement, such
Issuer shall be deemed to have sold and transferred to each Lender, and each
Lender shall be deemed irrevocably and unconditionally to have purchased and
received from such Issuer, without recourse or warranty, an undivided interest
and participation, to the extent of such Lender's Ratable Portion, in such


                                       35
   37

Letter of Credit and the obligations of the Borrower with respect thereto
(including all Letter of Credit Obligations with respect thereto) and any
security therefor and guaranty pertaining thereto.

              (h) The Borrower agrees to pay to the Issuer of any Letter of
Credit the amount of all Reimbursement Obligations owing to such Issuer under
any Letter of Credit issued for its account when such amounts are due and
payable, irrespective of any claim, set-off, defense or other right which the
Borrower may have at any time against such Issuer or any other Person. In the
event that any Issuer makes any payment under any Letter of Credit and the
Borrower shall not have repaid such amount to such Issuer pursuant to this
clause (h) or such payment is rescinded or set aside for any reason, such
Reimbursement Obligation shall be payable on demand with interest thereon
computed from the date on which such Reimbursement Obligation arose to the date
of repayment in full at the rate of interest applicable to past due Revolving
Credit Loans bearing interest at a rate based on the Base Rate during such
period, and such Issuer shall promptly notify the Agent, which shall promptly
notify each Lender of such failure, and each Lender shall promptly and
unconditionally pay to the Agent for the account of such Issuer the amount of
such Lender's Ratable Portion of such payment in Dollars and in immediately
available funds. If the Agent so notifies such Lender prior to 12:00 noon (New
York City time) on any Business Day, such Lender shall make available to the
Agent for the account of such Issuer its Ratable Portion of the amount of such
payment on such Business Day in immediately available funds. Upon such payment
by a Lender, such Lender shall, except upon the occurrence and during the
continuance of a Default or Event of Default under Section 9.1(f) and
notwithstanding whether or not the conditions precedent set forth in Section 3.2
shall have been satisfied (which conditions precedent the Lenders hereby
irrevocably waive) be deemed to have made a Revolving Loan to the Borrower in
the principal amount of such payment. Whenever any Issuer receives from the
Borrower a payment of a Reimbursement Obligation as to which the Agent has
received for the account of such Issuer any payment from a Lender pursuant to
this clause (h), such Issuer shall pay to the Agent and the Agent shall promptly
pay to each Lender, in immediately available funds, an amount equal to such
Lender's Ratable Portion of the amount of such payment adjusted, if necessary,
to reflect the respective amounts the Lenders have paid in respect of such
Reimbursement Obligation.

              (i) The Borrower's obligation to pay each Reimbursement Obligation
and the obligations of the Lenders to make payments to the Agent for the account
of the Issuers with respect to Letters of Credit shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement, under any and all circumstances whatsoever,
including the occurrence of any Default or Event of Default, and irrespective
of:

                     (i) any lack of validity or enforceability of any Letter of
              Credit or any Loan Document, or any term or provision therein;

                     (ii) any amendment or waiver of or any consent to departure
              from all or any of the provisions of any Letter of Credit or any
              Loan Document;

                     (iii) the existence of any claim, set off, defense or other
              right that the Borrower, any other party guaranteeing, or
              otherwise obligated with, the Borrower, any Subsidiary or other
              Affiliate thereof or any other Person may at any time have against
              the beneficiary under any Letter of Credit, Issuer, the Agent or
              any Lender or any other Person, whether in connection with this
              Agreement, any other Loan Document or any other related or
              unrelated agreement or transaction;


                                       36
   38

                     (iv) any draft or other document presented under a Letter
              of Credit proving to be forged, fraudulent, invalid or
              insufficient in any respect or any statement therein being untrue
              or inaccurate in any respect;

                     (v) payment by the Issuer under a Letter of Credit against
              presentation of a draft or other document that does not comply
              with the terms of such Letter of Credit; and

                     (vi) any other act or omission to act or delay of any kind
              of the Issuer, the Lenders, the Agent or any other Person or any
              other event or circumstance whatsoever, whether or not similar to
              any of the foregoing, that might, but for the provisions of this
              Section, constitute a legal or equitable discharge of the
              Borrower's obligations hereunder.

Any action taken or omitted to be taken by the relevant Issuer under or in
connection with any Letter of Credit, if taken or omitted in the absence of
gross negligence or willful misconduct, shall not put such Issuer under any
resulting liability to the Borrower or any Lender. In determining whether drafts
and other documents presented under a Letter of Credit comply with the terms
thereof, the Issuer may accept documents that appear on their face to be in
order, without responsibility for further investigation, regardless of any
notice or information to the contrary and, in making any payment under any
Letter of Credit the Issuer may rely exclusively on the documents presented to
it under such Letter of Credit as to any and all matters set forth therein,
including reliance on the amount of any draft presented under such Letter of
Credit, whether or not the amount due to the beneficiary thereunder equals the
amount of such draft and whether or not any document presented pursuant to such
Letter of Credit proves to be insufficient in any respect, if such document on
its face appears to be in order, and whether or not any other statement or any
other document presented pursuant to such Letter of Credit proves to be forged
or invalid or any statement therein proves to be inaccurate or untrue in any
respect whatsoever and any noncompliance in any immaterial respect of the
documents presented under such Letter of Credit with the terms thereof shall, in
each case, be deemed not to constitute willful misconduct or gross negligence of
the Issuer.

              (j) If and to the extent such Lender shall not have made its
Ratable Portion of the amount of the payment required by clause (i) above
available to the Agent for the account of such Issuer, such Lender agrees to pay
to the Agent for the account of such Issuer forthwith on demand such amount
together with interest thereon, for the first Business Day after payment was
first due at the Federal Funds Rate, and thereafter until such amount is repaid
to the Agent for the account of such Issuer, at the rate per annum applicable to
Base Rate Loans under the Facility. The failure of any Lender to make available
to the Agent for the account of such Issuer its Ratable Portion of any such
payment shall not relieve any other Lender of its obligation hereunder to make
available to the Agent for the account of such Issuer its Ratable Portion of any
payment on the date such payment is to be made, but no Lender shall be
responsible for the failure of any other Lender to make available to the Agent
for the account of the Issuer such other Lender's Ratable Portion of any such
payment.

              SECTION 2.5. REDUCTION AND TERMINATION OF THE REVOLVING CREDIT
COMMITMENTS. The Borrower may, upon at least three Business Days' prior written
notice to the Agent, terminate in whole or reduce in part ratably the unused
portions of the respective Revolving Credit Commitments of the Lenders;
provided, however, that each partial reduction shall be in an aggregate amount
not less than $5,000,000 or integral multiples of $1,000,000 in excess thereof.


                                       37
   39

              SECTION 2.6. REPAYMENT OF LOANS. The Borrower promises to repay
the entire unpaid principal amount of the Loans on the Scheduled Termination
Date.

              SECTION 2.7. EVIDENCE OF DEBT.

              (a) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing Indebtedness of the Borrower to such
Lender resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.

              (b) The Agent shall maintain accounts in accordance with its usual
practice in which it will record (i) the amount of each Loan made and, if a
Eurodollar Rate Loan, the Interest Period applicable thereto, (ii) the amount of
any principal or interest due and payable by the Borrower to each Lender
hereunder and (iii) the amount of any sum received by the Agent hereunder from
or for the account of the Borrower and each Lender's share thereof, if
applicable.

              (c) The entries made in the accounts maintained pursuant to
clauses (a) and (b) of this Section 2.7 shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations recorded therein; provided, however, that the failure of any Lender
or the Agent to maintain such accounts or any error therein shall not in any
manner affect the obligations of the Borrower to repay the Loans in accordance
with their terms.

              (d) Notwithstanding any other provision of the Agreement, the
Borrower will execute and deliver to any Lender who so requests a Revolving
Credit Note, substantially in the form of Exhibit B, to evidence the Revolving
Credit Loans of such Lender.

              SECTION 2.8. OPTIONAL PREPAYMENTS.

              (a) The Borrower may, upon at least one Business Day's prior
notice in the case of a prepayment in part, and at least three Business Days'
prior notice in the case of a prepayment in whole, to the Agent, stating the
proposed date and aggregate principal amount of the prepayment, prepay the
outstanding principal amount of the Revolving Loans in whole or in part;
provided, however, that if any prepayment of any Eurodollar Rate Loan is made by
the Borrower other than on the last day of an Interest Period for such Loan, the
Borrower shall also pay any amounts owing pursuant to Section 2.14(e); and,
provided, further, that each partial prepayment shall be in an aggregate
principal amount not less than $5,000,000 or integral multiples of $1,000,000 in
excess thereof. Upon the giving of such notice of prepayment, the principal
amount of Revolving Credit Loans specified to be prepaid shall become due and
payable on the date specified for such prepayment.

              (b) The Borrower shall have no right to optionally prepay the
principal amount of any Revolving Loan other than as provided in this Section
2.8; provided, however, that the Borrower shall have the right to make the
election under clause (b) of the definition of Liquidity Event Period.

              SECTION 2.9. MANDATORY PREPAYMENTS.

              (a) If at any time, the aggregate principal amount of Revolving
Credit Outstandings exceed the Maximum Credit at such time, the Borrower shall
forthwith prepay the Swing Loans first and then the Revolving Loans then
outstanding in an amount equal to such excess. If any such excess remains after
repayment in full of the aggregate outstanding Swing


                                       38
   40

Loans and Revolving Loans, the Borrower shall provide cash collateral for the
Letter of Credit Obligations in the manner set forth in Section 9.3 to the
extent required to eliminate such excess; provided, however, that if the excess
of the outstanding principal amount of the Loans and the Letter of Credit
Obligations over the Borrowing Base results solely from the establishment of
reserves by the Agent as contemplated by the definitions of "Borrowing Base,"
"Eligible Receivables" and "Eligible Inventory" or the adjustment of Advance
Rates by the Agent or the determination by the Agent that certain Inventory or
Accounts previously includible in the Borrowing Base no longer constitute
"Eligible Inventory" or "Eligible Receivables", then, in each case, the
mandatory prepayment required to be made by the Borrower pursuant to this
Section 2.9(a) that is attributable solely to such action or determination of
the Agent shall not be due and payable until the first Business Day that is five
days after the Borrower is notified of such action or determination by the
Agent.

              (b) Except during the continuance of an Event of Default (in which
case Section 2.13(f) shall apply), following notice from the Agent to the
Borrower during the continuance of a Liquidity Event Period arising under clause
(a) of the definition of Liquidity Event Period or following notice from the
Borrower to the Agent during the continuance of a Liquidity Event Period arising
under clause (b) of the definition of Liquidity Event Period, all available
funds in a Cash Collateral Account shall be applied on a daily basis first to
repay the outstanding principal amount of the Swing Loans until such Swing Loans
have been repaid in full; second to repay the outstanding principal balance of
the Revolving Loans until such Revolving Loans shall have been repaid in full;
and third to any other Obligation then due and payable. The Agent agrees so to
apply such funds and the Borrower agrees to such application. If, following such
application, there are no Loans outstanding and no other Obligations are then
due and payable, then the Agent shall retain funds in a Cash Collateral Account
in an amount equal to 105% of the Letter of Credit Obligations then outstanding
as long as any Event of Default is continuing. To the extent there are any
excess funds in a Cash Collateral Account after such application, such excess
shall be deposited in the Borrower's operating account with Citibank (or an
Affiliate thereof).

              SECTION 2.10. INTEREST.

              (a) Rate of Interest. All Loans and the outstanding amount of all
other Obligations shall bear interest, in the case of Loans, on the unpaid
principal amount thereof from the date such Loans are made and, in the case of
such other Obligations, from the date such other Obligations are due and payable
until, in all cases, paid in full, except as otherwise provided in Section
2.10(c), as follows:

                     (i) if a Base Rate Loan or such other Obligation, at a rate
              per annum equal to the sum of (A) the Base Rate as in effect from
              time to time, plus (B) the Applicable Margin; and

                     (ii) if a Eurodollar Rate Loan, at a rate per annum equal
              to the sum of (A) the Eurodollar Rate determined for the
              applicable Interest Period, plus (B) the Applicable Margin in
              effect from time to time during such Eurodollar Interest Period.

              (b) Interest Payments. (i) Interest accrued on each Base Rate Loan
shall be payable in arrears (A) on the first day of each calendar month,
commencing on the first such day following the making of such Base Rate Loan,
and (B) if not previously paid in full, at maturity (whether by acceleration or
otherwise) of such Base Rate Loan; (ii) interest accrued on Swing


                                       39
   41

Loans shall be payable in arrears on the first Business Day of the immediately
succeeding calendar month; (iii) interest accrued on each Eurodollar Rate Loan
shall be payable in arrears (A) on the last day of each Interest Period
applicable to such Loan and if such Interest Period has a duration of more than
three months, on each day during such Interest Period which occurs every three
months from the first day of such Interest Period, (B) upon the payment or
prepayment thereof in full or in part, and (C) if not previously paid in full,
at maturity (whether by acceleration or otherwise) of such Eurodollar Rate Loan;
and (iv) interest accrued on the amount of all other Obligations shall be
payable on demand from and after the time such Obligation becomes due and
payable (whether by acceleration or otherwise).

              (c) Default Interest. Notwithstanding the rates of interest
specified in Section 2.10(a) or elsewhere herein, effective immediately upon the
occurrence of an Event of Default, and for as long thereafter as such Event of
Default shall be continuing, the principal balance of all Loans and the amount
of all other Obligations shall bear interest at a rate which is 2% per annum in
excess of the rate of interest applicable to such Obligations from time to time.

              SECTION 2.11. CONVERSION/CONTINUATION OPTION.

              (a) The Borrower may elect (i) at any time to convert Base Rate
Loans (other than Swing Loans) or any portion thereof to Eurodollar Rate Loans,
or (ii) at the end of any applicable Interest Period, to convert Eurodollar Rate
Loans or any portion thereof into Base Rate Loans or to continue such Eurodollar
Rate Loans or any portion thereof for an additional Interest Period; provided,
however, that the aggregate amount of the Eurodollar Loans for each Interest
Period must be in the amount of $7,500,000 or integral multiples of $1,000,000
in excess thereof. Each conversion or continuation shall be allocated among the
Loans of each Lender in accordance with its Ratable Portion. Each such election
shall be in substantially the form of Exhibit F hereto (a "Notice of Conversion
or Continuation") and shall be made by giving the Agent at least three Business
Days' prior written notice specifying (A) the amount and type of Loan being
converted or continued, (B) in the case of a conversion to or a continuation of
Eurodollar Rate Loans, the applicable Interest Period, and (C) in the case of a
conversion, the date of conversion (which date shall be a Business Day and, if a
conversion from Eurodollar Rate Loans, shall also be the last day of the
applicable Interest Period).

              (b) The Agent shall promptly notify each Lender of its receipt of
a Notice of Conversion or Continuation and of the options selected therein.
Notwithstanding the foregoing, no conversion in whole or in part of Base Rate
Loans to Eurodollar Rate Loans, and no continuation in whole or in part of
Eurodollar Rate Loans upon the expiration of any applicable Interest Period,
shall be permitted at any time at which (i) a Default or an Event of Default
shall have occurred and be continuing or (ii) the continuation of, or conversion
into, would violate any of the provisions of Section 2.14. If, within the time
period required under the terms of this Section 2.11, the Agent does not receive
a Notice of Conversion or Continuation from the Borrower containing a permitted
election to continue any Eurodollar Rate Loans for an additional Interest Period
or to convert any such Loans, then, upon the expiration of the applicable
Interest Period, such Loans will be automatically converted to Base Rate Loans.
Each Notice of Conversion or Continuation shall be irrevocable.

              SECTION 2.12. FEES.

              (a) Unused Commitment Fee. The Borrower agrees to pay to each
Lender a commitment fee on the average amount by which the Revolving Credit
Commitment of such Lender exceeds such Lender's Ratable Portion of the Revolving
Credit Outstandings other than


                                       40
   42

the principal amount of Swing Loans then outstanding (the "Unused Commitment
Fee") from the date hereof until the Revolving Credit Termination Date at the
Applicable Unused Commitment Fee Rate, payable in arrears (i) on the first day
of each calendar month, commencing on the first such day following the Effective
Date and (ii) on the Revolving Credit Termination Date.

              (b) Letter of Credit Fees. The Borrower agrees to pay the
following amounts with respect to Letters of Credit issued by any Issuer:

                     (i) to the Agent for the account of each Issuer of a Letter
              of Credit, with respect to each Letter of Credit issued by such
              Issuer, an issuance fee equal to 0.25% per annum of the average
              amount available from time to time to be drawn under such Letter
              of Credit, payable in arrears (A) on the first day of each
              calendar month, commencing on the first such day following the
              issuance of such Letter of Credit and (B) on the Revolving Credit
              Termination Date;

                     (ii) to the Agent for the ratable benefit of the Lenders,
              with respect to each Letter of Credit, a fee accruing at a rate
              per annum equal to the Applicable Margin for Revolving Loans that
              are Eurodollar Rate Loans less 0.25%, of the average amount
              available from time to time to be drawn under such Letter of
              Credit, payable in arrears on the first day of each calendar
              month, commencing on the first such day following the issuance of
              such Letter of Credit and (ii) on the Revolving Credit Termination
              Date; provided, however that upon the occurrence and during the
              continuance of an Event of Default, such fee shall be increased by
              2% per annum and shall be payable on demand; and

                     (iii) to the Issuer of any Letter of Credit, with respect
              to the issuance, amendment or transfer of each Letter of Credit
              and each drawing made thereunder, documentary and processing
              charges in accordance with such Issuer's standard schedule for
              such charges in effect at the time of issuance, amendment,
              transfer or drawing, as the case may be.

              (c) Additional Fees. The Borrower has agreed to pay to Citicorp,
the Agent additional fees, the amount and dates of payment of which are embodied
in the Fee Letter.

              SECTION 2.13. PAYMENTS AND COMPUTATIONS.

              (a) The Borrower shall make each payment hereunder (including fees
and expenses) not later than 12:00 noon (New York City time) on the day when
due, in Dollars, to the Agent at its address referred to in Section 11.8 in
immediately available funds without set-off or counterclaim. The Agent will
promptly thereafter cause to be distributed immediately available funds relating
to the payment of principal or interest or fees to the Lenders, in accordance
with the application of payments set forth in clauses (e) and (f) of this
Section 2.13, as applicable, for the account of their respective Applicable
Lending Offices; provided, however, that amounts payable pursuant to Section
2.14(c), 2.14(e), 2.15 or 2.16 shall be paid only to the affected Lender or
Lenders and amounts payable with respect to Swing Loans shall be paid only to
the Swing Loan Lender. Payments received by the Agent after 12:00 noon (New York
City time) shall be deemed to be received on the next Business Day.

              (b) All computations of interest and of fees shall be made by the
Agent on the basis of a year of 360 days, in each case for the actual number of
days (including the first day but excluding the last day) occurring in the
period for which such interest and fees are payable.


                                       41
   43

Each determination by the Agent of an interest rate hereunder shall be
conclusive and binding for all purposes, absent demonstrable error.

              (c) Whenever any payment hereunder shall be stated to be due on a
day other than a Business Day, such payment shall be made on the next succeeding
Business Day, and such extension of time shall in such case be included in the
computation of payment of interest or fees, as the case may be; provided,
however, that if such extension would cause payment of interest on or principal
of any Eurodollar Rate Loan to be made in the next calendar month, such payment
shall be made on the immediately preceding Business Day. All repayments of any
Revolving Loans shall be applied first to repay such Loans outstanding as Base
Rate Loans and then to repay such Loans outstanding as Eurodollar Rate Loans
with those Eurodollar Rate Loans which have earlier expiring Eurodollar Interest
Periods being repaid prior to those which have later expiring Eurodollar
Interest Periods.

              (d) Unless the Agent shall have received notice from the Borrower
to the Lenders prior to the date on which any payment is due hereunder that the
Borrower will not make such payment in full, the Agent may assume that the
Borrower has made such payment in full to the Agent on such date and the Agent
may, in reliance upon such assumption, cause to be distributed to each Lender on
such due date an amount equal to the amount then due such Lender. If and to the
extent the Borrower shall not have made such payment in full to the Agent, each
Lender shall repay to the Agent forthwith on demand such amount distributed to
such Lender together with interest thereon at the Federal Funds Rate, for the
first Business Day, and, thereafter, at the rate applicable to Base Rate Loans,
for each day from the date such amount is distributed to such Lender until the
date such Lender repays such amount to the Agent.

              (e) Subject to the provisions of clause (f) of this Section 2.13
and (except as otherwise provided in Section 2.9), all payments and any other
amounts received by the Agent from or for the benefit of the Borrower shall be
applied first, to pay principal of and interest on any portion of the Loans
which the Agent may have advanced pursuant to the express provisions of this
Agreement on behalf of any Lender, for which the Agent has not then been
reimbursed by such Lender or the Borrower; second, to pay all other Obligations
then due and payable; and third, as the Borrower so designates. Payments in
respect of Swing Loans received by the Agent shall be distributed to the Swing
Loan Lender; payments in respect of Revolving Loans received by the Agent shall
be distributed to each Lender in accordance with such Lender's Ratable Portion;
and all payments of fees and all other payments in respect of any other
Obligation shall be allocated among such of the Lenders and Issuers as are
entitled thereto, and, if to the Lenders, in proportion to their respective
Ratable Portions.

              (f) Subject to the provisions of the Intercreditor Agreement,
after the occurrence and during the continuance of an Event of Default the
Borrower hereby irrevocably waives the right to direct the application of any
and all payments in respect of the Obligations and any proceeds of Collateral,
and agrees that the Agent may, and shall upon either (A) the written direction
of the Requisite Lenders or (B) the acceleration of the Obligations pursuant to
Section 9.1, apply all payments in respect of any Obligations and all funds on
deposit in a Cash Collateral Account and all other proceeds of Collateral in the
following order:

                     (i) first, to pay interest on and then principal of any
              portion of the Revolving Loans which the Agent may have advanced
              on behalf of any Lender for which the Agent has not then been
              reimbursed by such Lender or the Borrower;


                                       42
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                     (ii) second, to pay interest on and then principal of any
              Swing Loan;

                     (iii) third, to pay Obligations in respect of any
              reasonable expense reimbursements or indemnities then due the
              Agent;

                     (iv) fourth, to pay Obligations in respect of any
              reasonable expense reimbursements or indemnities then due to the
              Lenders and the Issuers;

                     (v) fifth, to pay Obligations in respect of any fees then
              due to the Agent, the Lenders and the Issuers;

                     (vi) sixth, to pay interest then due and payable in respect
              of the Loans and Reimbursement Obligations;

                     (vii) seventh, to pay or prepay principal payments on the
              Loans and Reimbursement Obligations and to provide cash collateral
              for outstanding Letter of Credit Undrawn Amounts in the manner
              described in Section 9.3, ratably to the aggregate principal
              amount of such Loans, Reimbursement Obligations and Letter of
              Credit Undrawn Amounts, and Obligations owing with respect to
              Hedging Contracts; and

                     (viii) eighth, to the ratable payment of all other
              Obligations;

provided, however, that if sufficient funds are not available to fund all
payments to be made in respect of any of the Obligations described in any of the
foregoing clauses first through eighth, the available funds being applied with
respect to any such Obligation (unless otherwise specified in such clause) shall
be allocated to the payment of such Obligations ratably, based on the proportion
of the Agent's and each Lender's or Issuer's interest in the aggregate
outstanding Obligations described in such clauses. The order of priority set
forth in clauses first through eighth of this Section 2.13(f) may at any time
and from time to time be changed by the agreement of the Requisite Lenders
without necessity of notice to or consent of or approval by the Borrower, any
Secured Party that is not a Lender or Issuing Bank, or any other Person. The
order of priority set forth in clauses first through fifth of this Section
2.13(f) may be changed only with the prior written consent of the Agent in
addition to the Requisite Lenders.

              (g) At the option of the Agent, principal on the Swing Loans,
Reimbursement Obligations, interest, fees, expenses and other sums due and
payable in respect of the Revolving Loans and Protective Advances may be paid
from the proceeds of Swing Loans or Revolving Loans. The Borrower hereby
authorizes the Swing Loan Lender to make Swing Loans pursuant to Section 2.3(a),
and the Lenders to make Revolving Loans pursuant to Section 2.2(a), from time to
time in such Swing Loan Lender's, or such Lender's discretion, which are in the
amounts of any and all principal payable with respect to the Swing Loans and
interest, fees, expenses and other sums payable in respect of the Revolving
Loans, and further authorizes the Agent to give the Lenders notice of any
Borrowing with respect to such Swing Loans and Revolving Loans and to distribute
the proceeds of such Swing Loans and Revolving Loans to pay such amounts. The
Borrower agrees that all such Swing Loans and Revolving Loans so made shall be
deemed to have been requested by it (irrespective of the satisfaction of the
conditions in Section 3.2, which conditions the Lenders irrevocably waive) and
directs that all proceeds thereof shall be used to pay such amounts.


                                       43
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              (h) Subject to the satisfaction of the applicable conditions set
forth in Section 3.2, the Borrower may (to avoid the incurrence of losses, costs
or expenses of the type described in clause (e) of Section 2.14) from time to
time, borrow Swing Loans and Revolving Credit Loans that are Base Rate Loans and
deposit the proceeds thereof in the Cash Collateral Account, whereupon
Eurodollar Rate Loans that are otherwise required to be prepaid may continue to
remain outstanding until the end of the Interest Period therefor but shall be
deemed for purposes of Section 7.9 to have been prepaid as long as such funds
are on deposit in a Cash Collateral Account; provided, however, that at the end
of the Interest Period for such Eurodollar Loans such funds are applied to the
prepayment of such Eurodollar Loans.

              SECTION 2.14. SPECIAL PROVISIONS GOVERNING EURODOLLAR RATE LOANS.

              (a) Determination of Interest Rate. The Eurodollar Rate for each
Interest Period for Eurodollar Rate Loans shall be determined by the Agent
pursuant to the procedures set forth in the definition of "Eurodollar Rate."

              (b) Interest Rate Unascertainable, Inadequate or Unfair. In the
event that: (i) the Agent determines that adequate and fair means do not exist
for ascertaining the applicable interest rates by reference to which the
Eurodollar Rate then being determined is to be fixed; or (ii) the Requisite
Lenders notify the Agent that the Eurodollar Rate for any Interest Period will
not adequately reflect the cost to the Lenders of making or maintaining such
Loans for such Interest Period, the Agent shall forthwith so notify the Borrower
and the Lenders, whereupon each Eurodollar Loan will automatically, on the last
day of the current Interest Period for such Loan, convert into a Base Rate Loan
and the obligations of the Lenders to make Eurodollar Rate Loans or to convert
Base Rate Loans into Eurodollar Rate Loans shall be suspended until the Agent
shall notify the Borrower that the Requisite Lenders have determined that the
circumstances causing such suspension no longer exist.

              (c) Increased Costs. If at any time any Lender shall determine
that the introduction of or any change in or in the interpretation of any law,
treaty or governmental rule, regulation or order after the date hereof (other
than any change by way of imposition or increase of reserve requirements
included in determining the Eurodollar Rate Reserve Percentage) or the
compliance by such Lender with any guideline, request or directive from any
central bank or other Governmental Authority (whether or not having the force of
law), there shall be any increase in the cost to such Lender of agreeing to make
or making, funding or maintaining any Eurodollar Rate Loans (and such Lender is
unable to designate a different Eurodollar Lending Office that would eliminate
or materially reduce such cost and would not, in the good faith judgment of such
Lender, be disadvantageous to such Lender), then the Borrower shall from time to
time, upon demand by such Lender (with a copy of such demand to the Agent), pay
to the Agent for the account of such Lender additional amounts sufficient to
compensate such Lender for such increased cost. A certificate as to the amount
of such increased cost, submitted to the Borrower and the Agent by such Lender,
shall be conclusive and binding for all purposes, absent demonstrable error. If
the Borrower so notifies the Agent within five Business Days after any Lender
notifies the Borrower of any increased cost pursuant to the foregoing provisions
of this Section 2.14, the Borrower may either (i) prepay in full all Eurodollar
Rate Loans of all Lenders then outstanding in accordance with Section 2.8(a)
and, additionally, reimburse such Lender for such increased costs and all
Lenders for breakage costs, in each case in accordance with this Section 2.14 or
(ii) convert all Eurodollar Rate Loans of all Lenders then outstanding into Base
Rate Loans, in accordance with Section 2.11 and, additionally, reimburse such
Lender for such increased costs in accordance with this Section 2.14.


                                       44
   46

              (d) Illegality. Notwithstanding any other provision of this
Agreement, if any Lender determines that the introduction of or any change in or
in the interpretation of any law, treaty or governmental rule, regulation or
order after the date of this Agreement shall make it unlawful, or any central
bank or other Governmental Authority shall assert that it is unlawful, for any
Lender or its Eurodollar Lending Office to make Eurodollar Rate Loans or to
continue to fund or maintain Eurodollar Rate Loans (and such Lender is unable to
designate a different Eurodollar Lending Office that would not, in the good
faith judgment of such Lender, be disadvantageous to such Lender), then, on
notice thereof and demand therefor by such Lender to the Borrower through the
Agent, (i) the obligation of such Lender to make or to continue Eurodollar Rate
Loans and to convert Base Rate Loans into Eurodollar Rate Loans shall be
suspended, and each such Lender shall make a Base Rate Loan as part of any
requested Borrowing of Eurodollar Rate Loans and (ii) if the affected Eurodollar
Rate Loans are then outstanding, the Borrower shall immediately convert each
such Loan into a Base Rate Loan. If at any time after a Lender gives notice
under this Section 2.14(d) such Lender determines that it may lawfully make
Eurodollar Rate Loans, such Lender shall promptly give notice of that
determination to the Borrower and the Agent, and the Agent shall promptly
transmit the notice to each other Lender. The Borrower's right to request, and
such Lender's obligation, if any, to make Eurodollar Rate Loans shall thereupon
be restored.

              (e) Breakage Costs. In addition to all amounts required to be paid
by the Borrower pursuant to Section 2.10, the Borrower shall compensate each
Lender, upon demand, for all losses, expenses and liabilities (including any
loss or expense incurred by reason of the liquidation or reemployment of
deposits or other funds acquired by such Lender to fund or maintain such
Lender's Eurodollar Rate Loans to the Borrower but excluding any loss of the
Applicable Margin on the relevant Loans) which that Lender may sustain (i) if
for any reason a proposed Borrowing, conversion into or continuation of
Eurodollar Rate Loans does not occur on a date specified therefor in a Notice of
Borrowing or a Notice of Conversion or Continuation given by a Borrower or in a
request by it transmitted by facsimile for borrowing or conversion or
continuation or a successive Interest Period does not commence after notice
therefor is given pursuant to Section 2.11, (ii) if for any reason any
Eurodollar Rate Loan is prepaid (including mandatorily pursuant to Section 2.9)
on a date which is not the last day of the applicable Interest Period, (iii) as
a consequence of a required conversion of a Eurodollar Rate Loan to a Base Rate
Loan as a result of any of the events indicated in Section 2.14(d), or (iv) as a
consequence of any failure by a Borrower to repay Eurodollar Rate Loans when
required by the terms hereof. The Lender making demand for such compensation
shall deliver to the Borrower concurrently with such demand a written statement
as to such losses, expenses and liabilities, and this statement shall be
conclusive as to the amount of compensation due to that Lender, absent
demonstrable error.

              SECTION 2.15. CAPITAL ADEQUACY. If at any time any Lender
determines that (a) the adoption of or any change in or in the interpretation of
any law, treaty or governmental rule, regulation or order after the date of this
Agreement regarding capital adequacy, (b) compliance with any such law, treaty,
rule, regulation, or order, or (c) compliance with any guideline or request or
directive from any central bank or other Governmental Authority (whether or not
having the force of law) shall have the effect of reducing the rate of return on
such Lender's (or any corporation controlling such Lender's) capital as a
consequence of its obligations hereunder or under or in respect of any Letter of
Credit to a level below that which such Lender or such corporation could have
achieved but for such adoption, change, compliance or interpretation, then, upon
demand from time to time by such Lender (with a copy of such demand to the
Agent), the Borrower shall pay to the Agent for the account of such Lender, from
time to time as specified by such Lender, additional amounts sufficient to
compensate such


                                       45
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Lender for such reduction. A certificate as to such amounts submitted to the
Borrower and the Agent by such Lender shall be conclusive and binding for all
purposes absent demonstrable error.

              SECTION 2.16. TAXES.

              (a) Any and all payments by the Borrower under each Loan Document
shall be made free and clear of and without deduction for any and all present or
future taxes, levies, imposts, deductions, charges or withholdings, and all
liabilities with respect thereto, excluding (i) in the case of each Lender, each
Issuer and the Agent (A) taxes measured by its net income, and franchise taxes
imposed on it, by the jurisdiction (or any political subdivision thereof) under
the laws of which such Lender or the Agent (as the case may be) is organized and
(B) any United States withholding taxes payable with respect to payments under
the Loan Documents under laws (including any statute, treaty or regulation) in
effect on the Effective Date (or, in the case of an Eligible Assignee, the date
of the Assignment and Acceptance) applicable to such Lender or the Agent, as the
case may be, but not excluding any United States withholding payable as a result
of any change in such laws occurring after the Effective Date (or the date of
such Assignment and Acceptance) and (ii) in the case of each Lender, taxes
measured by its net income, and franchise taxes imposed on it, by the
jurisdiction (or any political subdivision thereof) in which such Lender's
Applicable Lending Office is located (all such non-excluded taxes, levies,
imposts, deductions, charges, withholdings and liabilities being hereinafter
referred to as "Taxes"). If any Taxes shall be required by law to be deducted
from or in respect of any sum payable under any Loan Document to any Lender or
the Agent (i) the sum payable shall be increased as may be necessary so that
after making all required deductions (including deductions applicable to
additional sums payable under this Section 2.16) such Lender or the Agent (as
the case may be) receives an amount equal to the sum it would have received had
no such deductions been made, (ii) the Borrower shall make such deductions,
(iii) the Borrower shall pay the full amount deducted to the relevant taxing
authority or other authority in accordance with applicable law, and (iv) the
Borrower shall, upon the request of the Agent, deliver to the Agent evidence of
such payment.

              (b) In addition, the Borrower agrees to pay any present or future
stamp or documentary taxes or any other excise or property taxes, charges or
similar levies of the United States or any political subdivision thereof or any
applicable foreign jurisdiction, and all liabilities with respect thereto, which
arise from any payment made under any Loan Document or from the execution,
delivery or registration of, or otherwise with respect to, any Loan Document
(collectively, "Other Taxes").

              (c) The Borrower will indemnify each Lender, each Issuer and the
Agent for the full amount of Taxes and Other Taxes (including any Taxes or Other
Taxes imposed by any jurisdiction on amounts payable under this Section 2.16)
paid by such Lender, Issuer or the Agent (as the case may be) and any liability
(including for penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not such Taxes or Other Taxes were correctly or
legally asserted. This indemnification shall be made within 30 days from the
date such Lender or Issuer or the Agent (as the case may be) makes written
demand therefor. To the extent that the senior personnel of a Lender, Issuer or
the Agent having actual responsibility for the administration of this Agreement
have actual knowledge of a payment to be made by such Lender, Issuer or the
Agent in respect of which a claim will be made under this Section 2.16, such
Lender, Issuer or the Agent will seek to notify the Borrower thereof prior to
the making of such payment.


                                       46
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              (d) Within 30 days after the date of any payment of Taxes or Other
Taxes, the Borrower will furnish to the Agent, at its address referred to in
Section 11.8, the original or a certified copy of a receipt evidencing payment
thereof.

              (e) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower contained
in this Section 2.16 shall survive the payment in full of the Obligations.

              (f) Prior to the Effective Date in the case of each Non-U.S.
Lender that is a signatory hereto, and on the date of the Assignment and
Acceptance pursuant to which it becomes a Lender in the case of each other
Non-U.S. Lender and from time to time thereafter if requested by the Borrower or
the Agent, each Non-U.S. Lender that is entitled at such time to an exemption
from United States withholding tax, or that is subject to such tax at a reduced
rate under an applicable tax treaty, shall provide the Agent and the Borrower
with two completed copies of either IRS Form 4224 or Form 1001, or in the case
of a Non-U.S. Lender claiming exemption under Section 871(h) or 881(c) of the
Code with respect to "portfolio interest," a Form W-8 or Form W-9, or other
applicable form, certificate or document prescribed by the IRS certifying as to
such Non-U.S. Lender's entitlement to such exemption from United States
withholding tax or reduced rate with respect to all payments to be made to such
Non-U.S. Lender under the Loan Documents. Unless the Borrower and the Agent have
received forms or other documents satisfactory to them indicating that payments
under any Loan Document to or for a Non-U.S. Lender are not subject to United
States withholding tax or are subject to such tax at a rate reduced by an
applicable tax treaty, the Borrower or the Agent shall withhold taxes from such
payments at the applicable statutory rate.

              (g) Any Lender claiming any additional amounts payable pursuant to
this Section 2.16 shall use its reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts which would be payable
or may thereafter accrue and would not, in the sole determination of such
Lender, be otherwise disadvantageous to such Lender.

              SECTION 2.17. SUBSTITUTION OF LENDERS. In the event that (a) (i)
any Lender makes a claim under Section 2.14 (c) or Section 2.15, or (ii) it
becomes illegal for any Lender to continue to fund or make any Eurodollar Rate
Loan and such Lender notifies the Borrower pursuant to Section 2.14(d), or (iii)
the Borrower is required to make any payment pursuant to Section 2.16 that is
attributable to any Lender, or (iv) any Lender is a Non-Funding Lender, (b) in
the case of clause (a)(i) above, as a consequence of increased costs in respect
of which such claim is made, the effective rate of interest payable to such
Lender under this Agreement with respect to its Loans materially exceeds the
effective average annual rate of interest payable to the Requisite Lenders under
this Agreement and (c) Lenders holding at least 75% of the Revolving Credit
Commitments are not subject to such increased costs or illegality, payment or
proceedings (any such Lender, an "Affected Lender"), the Borrower may substitute
another financial institution for such Affected Lender hereunder, upon
reasonable prior written notice (which written notice must be given within 90
days following the occurrence of any of the events described in clauses (a)(i),
(ii), (iii) or (iv)) by the Borrower to the Agent and the Affected Lender that
the Borrower intends to make such substitution, which substitute financial
institution must be an Eligible Assignee and, if not a Lender, reasonably
acceptable to the Agent; provided, however, that if more than one Lender claims
increased costs, illegality or right to payment arising from the same act or
condition and such claims are received by the Borrower within 30 days of each
other then the Borrower may substitute all, but not (except to the extent the
Borrower has already substituted


                                       47
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one of such Affected Lenders before the Borrower's receipt of the other Affected
Lenders' claim) less than all, Lenders making such claims. In the event that the
proposed substitute financial institution or other entity is reasonably
acceptable to the Agent and the written notice was properly issued under this
Section 2.17, the Affected Lender shall sell and the substitute financial
institution or other entity shall purchase, pursuant to an Assignment and
Acceptance, all rights and claims of such Affected Lender under the Loan
Documents and the substitute financial institution or other entity shall assume
and the Affected Lender shall be relieved of its Revolving Credit Commitments
and all other prior unperformed obligations of the Affected Lender under the
Loan Documents (other than in respect of any damages (other than exemplary or
punitive damages, to the extent permitted by applicable law) in respect of any
such unperformed obligations). Upon the effectiveness of such sale, purchase and
assumption (which, in any event shall be conditioned upon the payment in full by
the Borrower to the Affected Lender in cash of all fees, unreimbursed costs and
expenses and indemnities accrued and unpaid through such effective date), the
substitute financial institution or other entity shall become a "Lender"
hereunder for all purposes of this Agreement having a Revolving Credit
Commitment in the amount of such Affected Lender's Revolving Credit Commitment
assumed by it and such Revolving Credit Commitment of the Affected Lender shall
be terminated, provided that all indemnities under the Loan Documents shall
continue in favor of such Affected Lender.

              SECTION 2.18. CERTAIN LIMITATIONS ON INDEMNIFICATION. The Borrower
shall not be required to compensate any Lender pursuant to Sections 2.14, 2.15,
2.16 and 2.17 for any increased costs or other amounts incurred more than 180
days prior to the date that such Lender notifies the Borrower of a change in law
or other event giving rise to such increased costs or other amounts for which
such Lender is indemnified under such Sections and of such Lender's intention to
claim compensation or indemnity therefor.

                                   ARTICLE III

                    CONDITIONS TO LOANS AND LETTERS OF CREDIT

              SECTION 3.1. CONDITIONS PRECEDENT TO INITIAL LOANS AND LETTERS OF
CREDIT. The obligation of each Lender to make the Loans requested to be made by
it hereunder and the obligation of each Issuer to issue Letters of Credit
hereunder is subject to the satisfaction of all of the following conditions
precedent:

              (a) Certain Documents. The Agent shall have received on the
Effective Date each of the following, each dated as of the Effective Date unless
otherwise indicated or agreed to by the Agent, in form and substance
satisfactory to the Agent and (except for the Revolving Credit Notes) in
sufficient copies for each Lender:

                     (i) this Agreement, duly executed and delivered by the
              Borrower and, for the account of each Lender requesting the same,
              a Revolving Credit Note of the Borrower conforming to the
              requirements set forth herein;

                     (ii) the Guaranty, duly executed by each Guarantor; and

                     (iii) the Security Agreement, duly executed by the Borrower
              each Guarantor, together with:

                            (A) evidence satisfactory to the Agent that the
              Agent (for the benefit of the Secured Parties) has a valid and
              perfected first priority security


                                       48
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              interest in the Collateral, including (x) such documents duly
              executed by each Loan Party as the Agent may request with respect
              to the perfection of its security interests in the Collateral
              (including evidence satisfactory to the Agent that financing
              statements under the UCC, patent, trademark and copyright security
              agreements suitable for filing with the Patent and Trademark
              Office or the Copyright Office and other applicable documents
              under the laws of any jurisdiction have been appropriately filed
              with respect to the perfection of Liens created by the Security
              Agreement) and (y) copies of UCC search reports as of a recent
              date listing all effective financing statements that name any Loan
              Party as debtor, together with copies of such financing
              statements, none of which shall cover the Collateral except for
              those which shall be terminated on the Effective Date); and

                            (B) Control Account Letters from (A) all securities
              intermediaries with respect to all securities accounts and
              securities entitlements of the Borrower, and each Subsidiary
              Guarantor, if any, and (B) all futures commission agents and
              clearing houses with respect to all commodities contracts and
              commodities accounts held by the Borrower, and each Subsidiary
              Guarantor, if any;

                     (iv) a favorable opinion of (A) Cadwalader, Wickersham &
              Taft, counsel to the Loan Parties, in substantially the form of
              Exhibit G and (B) counsel to the Agent as to the enforceability of
              this Agreement and the other Loan Documents to be executed on the
              Effective Date;

                     (v) the Intercreditor Agreement duly executed by the
              parties thereto;

                     (vi) a copy of the articles or certificate of incorporation
              (or equivalent organizational documents) of each Loan Party,
              certified as of a recent date by the Secretary of State of the
              state of organization of such Loan Party, together with
              certificates of such official attesting to the good standing of
              each such Loan Party;

                     (vii) a certificate of the Secretary or an Assistant
              Secretary of each Loan Party certifying (A) the names and true
              signatures of each officer of such Loan Party who has been
              authorized to execute and deliver any Loan Document or other
              document required hereunder to be executed and delivered by or on
              behalf of such Loan Party, (B) the by-laws (or equivalent
              Constituent Document) of such Loan Party as in effect on the date
              of such certification, (C) the resolutions of such Loan Party's
              Board of Directors (or equivalent governing body) approving and
              authorizing the execution, delivery and performance of this
              Agreement and the other Loan Documents to which it is a party and
              (D) that there have been no changes in the certificate of
              incorporation (or equivalent Constituent Document) of such Loan
              Party from the certificate of incorporation (or equivalent
              Constituent Document) delivered pursuant to the immediately
              preceding clause;

                     (viii) (A) a certificate of the Borrower signed by the
              Chief Financial Officer on behalf of the Borrower, stating that
              the Borrower is Solvent after giving effect to the initial Loans
              and Letters of Credit, if any, the application of the proceeds
              thereof in accordance with Section 7.9 and the payment of all


                                       49
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              estimated legal, accounting and other fees related hereto and
              thereto and (B) the Pro Forma Balance Sheet;

                     (ix) a certificate of the Borrower signed on behalf of the
              Borrower by a Responsible Officer to the effect that (A) the
              conditions set forth in Sections 3.1(c), (g)(ii), (h), (j), (k)
              and (l) and 3.2(b) have been satisfied and (B) no litigation not
              listed on Schedule 4.7 shall have been commenced against any Loan
              Party or any of its Subsidiaries which, if adversely determined,
              would have a Material Adverse Effect;

                     (x) evidence satisfactory to the Agent that the insurance
              policies required by Section 7.5 and any Collateral Document are
              in full force and effect, together with endorsements naming the
              Agent, on behalf of the Secured Parties, as an additional insured
              and/or loss payee under all insurance policies to be maintained
              with respect to the properties of the Borrower and its
              Subsidiaries;

                     (xi) the Geneva Steel Company's consolidated financial
              statements for the fiscal year ending September 30, 2000 certified
              by the Borrower's independent public accountants;


                     (xii) file-stamped copies of certificate of mergers or
              other confirmation from the Secretary of State of the State of
              Delaware satisfactory to the Agent of the consummation of the
              Mergers; and

                     (xiii) such other certificates, documents, agreements and
              information respecting any Loan Party as any Lender through the
              Agent may reasonably request.

              (b) Fee and Expenses Paid. There shall have been paid to the
Agent, for the account of the Agent and the Lenders, as applicable, all fees due
and payable on or before the Effective Date (including all such fees described
in the Fee Letter), and all expenses due and payable on or before the Effective
Date.

              (c) Consents, Etc. Each of the Borrower and its Subsidiaries shall
have received all consents and authorizations required pursuant to any material
Contractual Obligation with any other Person and shall have obtained all
consents and authorizations of, and effected all notices to and filings with,
any Governmental Authority, in each case, as may be necessary to allow each of
the Borrower and its Subsidiaries lawfully (A) to execute, deliver and perform,
in all material respects, their respective obligations hereunder, the Loan
Documents to which each of them, respectively, is, or shall be, a party and each
other agreement or instrument to be executed and delivered by each of them,
respectively, pursuant thereto or in connection therewith, and (B) to create and
perfect the Liens on the Collateral to be owned by each of them in the manner
and for the purpose contemplated by the Loan Documents.

              (d) Field Examination. The Agent shall be satisfied with the
results of a field examination of the Borrower and its Subsidiaries conducted by
Citicorp's internal auditors no more than 50 days prior to the Effective Date.

              (e) Borrowing Base Certificate. The Borrower shall have delivered
to the Agent a Borrowing Base Certificate showing borrowing availability and
unrestricted cash of at


                                       50
   52

least $75,000,000 after giving effect to all extensions of credit to be made
hereunder on the Effective Date.

              (f) Term Loan Facility. The initial funding under the Term Loan
Documents shall have occurred.

              (g) Confirmation Order. The Confirmation Order (i) shall be in
form and substance satisfactory to the Agent in the exercise of its reasonable
judgment and (ii) shall not have been reversed, vacated, amended, supplemented,
modified, remanded or stayed and shall have become a Final Order.

              (h) Plan of Reorganization. The Plan of Reorganization shall be
the same in all respects as that approved by the Bankruptcy Court on December 8,
2000, shall not have been materially amended, supplemented or otherwise
modified, and no material provision thereof shall have been waived, in each case
without the prior written consent of the Agent, and all conditions precedent to
confirmation and the effectiveness of the Plan of Reorganization shall have been
satisfied (or the waiver thereof shall have been consented to by the Agent) and
the effectiveness of the Plan of Reorganization shall have occurred or shall be
scheduled to occur but for the effectiveness hereof and the initial extension of
credit under the Term Loan Documents and all transactions in connection with the
Plan of Reorganization shall have been or will be consummated in compliance with
all Requirements of Law.

              (i) Bankruptcy Court Jurisdiction. Except as consented to by the
Agent, the Bankruptcy Court's retention of jurisdiction under the Confirmation
Order shall not govern the enforcement of the Loan Documents or any rights or
remedies relating thereto.

              (j) Disclosure Statement. All sources and uses of funds to
consummate the Plan of Reorganization shall otherwise be substantially as
described in the Disclosure Statement.

              (k) Material Liabilities. The terms and extent of all material
liabilities of the Borrower and its Subsidiaries which are not otherwise being
discharged upon consummation of the Plan of Reorganization shall be
substantially as described in the Disclosure Statement.

              (l) Mergers. The Mergers shall have been consummated strictly in
accordance with the terms of the merger agreements delivered to the Agent prior
to the Effective Date, in compliance with all applicable laws.

              SECTION 3.2. CONDITIONS PRECEDENT TO EACH LOAN AND LETTER OF
CREDIT. The obligation of each Lender on any date (including the Effective Date)
to make any Loan and of each Issuer on any date (including the Effective Date)
to issue any Letter of Credit is subject to the satisfaction of all of the
following conditions precedent:

              (a) Request for Borrowing or Issuance of Letter of Credit. With
respect to any Loan, the Agent shall have received a duly executed Notice of
Borrowing or, in the case of Swing Loans, a duly executed Swing Loan Request,
and with respect to any Letter of Credit, the Agent and the Issuer shall have
received a duly executed Letter of Credit Request.

              (b) Representations and Warranties; No Defaults. The following
statements shall be true on the date of such Loan or issuance, both before and
after giving effect thereto and, in the case of such Loan, to the application of
the proceeds therefrom:


                                       51
   53

                     (i) The representations and warranties set forth in Article
              IV and in the other Loan Documents shall be true and correct on
              and as of the Effective Date and shall be true and correct in all
              material respects on and as of any such date after the Effective
              Date with the same effect as though made on and as of such date,
              except to the extent such representations and warranties expressly
              relate to an earlier date; and

                     (ii) no Default or Event of Default has occurred and is
              continuing.

              (c) Borrowing Base. After giving effect to the Loans or Letters of
Credit requested to be made or issued on any such date and the use of proceeds
thereof, the Revolving Credit Obligations shall not exceed the Maximum Credit at
such time.

              (d) No Legal Impediments. The making of the Loans or the issuance
of such Letter of Credit on such date does not violate any Requirement of Law on
the date of or immediately following such Loan or issuance and is not enjoined,
temporarily, preliminarily or permanently.

              (e) Additional Matters. The Agent shall have received such
additional documents, information and materials as any Lender, through the
Agent, may reasonably request.

Each submission by the Borrower to the Agent of a Notice of Borrowing or a Swing
Loan Request and the acceptance by the Borrower of the proceeds of each Loan
requested therein, and each submission by the Borrower to an Issuer of a Letter
of Credit Request and the issuance of each Letter of Credit requested therein,
shall be deemed to constitute a representation and warranty by the Borrower as
to the matters specified in Section 3.2(b) on the date of the making of such
Loan or the issuance of such Letter of Credit.

                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

              To induce the Lenders, the Issuers and the Agent to enter into
this Agreement and to make the extensions of credit provided for hereunder, the
Borrower represents and warrants to the Lenders, the Issuers and the Agent that,
on and as of the Effective Date and on and as of each date as required by
Section 3.2(b)(i):

              SECTION 4.1. ENTITY EXISTENCE; COMPLIANCE WITH LAW. Each of the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization; (b) is
duly qualified as a foreign entity and in good standing under the laws of each
jurisdiction where such qualification is necessary, except where the failure to
be so qualified or in good standing would not in the aggregate have a Material
Adverse Effect; (c) has all requisite power and authority and the legal right to
own, pledge, mortgage and operate its properties, to lease the property it
operates under lease and to conduct its business as now or currently proposed to
be conducted; (d) is in compliance with its Constituent Documents; (e) is in
compliance with all applicable Contractual Obligations and Requirements of Law
except where the failure to be in compliance would not in the aggregate have a
Material Adverse Effect; and (f) except as disclosed in Schedule 4.17, has all
necessary licenses, permits, consents or approvals from or by, has made all
necessary filings with, and has given all necessary notices to, each
Governmental Authority having jurisdiction, to the extent required for such
ownership, operation and conduct, except for licenses, permits, consents,
approvals or filings


                                       52
   54

which can be obtained or made by the taking of ministerial action to secure the
grant or transfer thereof or the failure to obtain or make would not in the
aggregate have a Material Adverse Effect.

              SECTION 4.2. POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.

              (a) The execution, delivery and performance by each Loan Party of
the Loan Documents to which it is a party and the consummation of the
transactions contemplated thereby:

                     (i) are within such Loan Party's corporate, limited
              liability company, partnership or other powers;

                     (ii) have been or at the time of delivery thereof pursuant
              to Article III will have been duly authorized by all necessary
              corporate, partnership or limited liability company action,
              including the consent of shareholders, partners or members where
              required;

                     (iii) do not and will not (A) contravene any Loan Party's
              or any of its Subsidiaries' respective Constituent Documents, (B)
              violate any other applicable Requirement of Law applicable to any
              Loan Party (including Regulations T, U and X of the Federal
              Reserve Board), or any order or decree of any Governmental
              Authority or arbitrator applicable to any Loan Party, (C) conflict
              with or result in the breach of, or constitute a default under, or
              result in or permit the termination or acceleration of, any
              Contractual Obligation of any Loan Party or any of its
              Subsidiaries, or (D) result in the creation or imposition of any
              Lien upon any of the property of any Loan Party or any of its
              Subsidiaries, other than those in favor of the Secured Parties
              pursuant to the Collateral Documents; and

                     (iv) do not require the consent of, authorization by,
              approval of, notice to, or filing or registration with, any
              Governmental Authority or any other Person, other than those
              listed on Schedule 4.2 and which have been or will be, prior to
              the Effective Date, obtained or made, copies of which have been or
              will be delivered to the Agent pursuant to Section 3.1, and each
              of which on the Effective Date will be in full force and effect
              and, with respect to the Collateral, filings required to perfect
              the Liens created by the Collateral Documents.

              (b) This Agreement has been, and each of the other Loan Documents
will have been upon delivery thereof pursuant to the terms of this Agreement,
duly executed and delivered by each Loan Party thereto. This Agreement is, and
the other Loan Documents will be, when delivered hereunder, the legal, valid and
binding obligation of each Loan Party party thereto, enforceable against such
Loan Party in accordance with its terms, except as the same may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws of general
applicability affecting the enforcement of creditor's rights and the application
of general principles of equity, regardless of whether such enforceability is
considered in a proceeding in equity or at law.

              SECTION 4.3. OWNERSHIP OF SUBSIDIARIES.

              (a) Set forth on Schedule 4.3 hereto is a complete and accurate
list showing, as of the Effective Date, all Subsidiaries of the Borrower and, as
to each such Subsidiary, the jurisdiction of its organization, the number of
shares or ownership interests of each class of Stock


                                       53
   55

authorized (if applicable), the number outstanding on the Effective Date and the
number and percentage of the outstanding shares of each such class of Stock
owned (directly or indirectly) by the Borrower. No Stock of any Subsidiary of
the Borrower is subject to any outstanding option, warrant, right of conversion
or purchase or any similar right. All of the outstanding Stock of each
Subsidiary of the Borrower owned (directly or indirectly) by the Borrower has
been validly issued, is fully paid and non-assessable and is owned by the
Borrower or a Subsidiary of the Borrower free and clear of all Liens. Neither
the Borrower nor any such Subsidiary is a party to, or has knowledge of, any
agreement restricting the transfer or hypothecation of any Stock of any such
Subsidiary, other than the Loan Documents. The Borrower does not own or hold,
directly or indirectly, any Stock of any Person other than such Subsidiaries and
Investments permitted by Section 8.3.

              (b) There is no Material Subsidiary that is not a Subsidiary
Guarantor

              (c) As of the Effective Date, there are no Non-Recourse
Subsidiaries.

              SECTION 4.4. FINANCIAL STATEMENTS.

              (a) The consolidated balance sheet of Geneva Steel Company and its
Subsidiaries as of September 30, 2000, and the related consolidated statements
of income, retained earnings and cash flows of Geneva Steel Company and its
Subsidiaries for the fiscal year then ended, certified by Arthur Andersen, LLP,
fairly present the consolidated financial condition of Geneva Steel Company and
its Subsidiaries as at such date and the consolidated results of the operations
of Geneva Steel Company and its Subsidiaries for the period ended on such date,
all in conformity with GAAP.

              (b) Neither the Borrower nor any of its Subsidiaries has any
material obligation, contingent liability or liability for taxes, long-term
leases or unusual forward or long-term commitment which is not reflected in the
Financial Statements referred to in clause (a) above or in the notes thereto or
in Schedule 4.4.

              (c) The Projections have been prepared by the Borrower in light of
the past operations of its business, and reflect projections for the five-year
period beginning on October 1, 2000 on a month by month basis for the first year
and on a year by year basis thereafter, pro forma for the Plan of
Reorganization. The Projections are based upon estimates and assumptions stated
therein, all of which the Borrower believes to be reasonable and fair in light
of current conditions and current facts known to the Borrower and, as of the
Effective Date, reflect the Borrower's good faith and reasonable estimates of
the future financial performance of the Borrower and its Subsidiaries and of the
other information projected therein for the periods set forth therein.

              (d) The unaudited pro forma consolidated and consolidating balance
sheet of the Borrower and its Subsidiaries (the "Pro Forma Balance Sheet"), a
copy of which has been delivered to each Lender pursuant to Section 3.1, has
been prepared as of September 30, 2000, reflects as of such date, on a pro forma
basis, the consolidated financial condition of the Borrower and its
Subsidiaries, and the assumptions expressed therein were reasonable based on the
information available to the Borrower at the time so furnished and on the
Effective Date.

              SECTION 4.5. MATERIAL ADVERSE CHANGE. Since January 31, 2000,
there has been no Material Adverse Change (other than any change disclosed to
the Agent prior to November 20, 2000), no change after November 20, 2000 that
represents any material adverse


                                       54
   56

change to, or material worsening of, the business, condition (financial or
otherwise), operations, performance, properties or prospects of the Borrower and
its Subsidiaries taken as a whole, or that is inconsistent in any materially
adverse respect with the financial statements and other information delivered to
the Agent prior to November 20, 2000. Since January 31, 2000, there have been no
events or developments that in the aggregate have had a Material Adverse Effect
(other than any events or developments disclosed to the Agent prior to November
20, 2000), no events or developments after November 20, 2000 that represent any
material adverse change to, or material worsening of, the business, condition
(financial or otherwise), operations, performance, properties or prospects of
the Borrower and its Subsidiaries taken as a whole, or that is inconsistent in
any materially adverse respect with the financial statements and other
information delivered to the Agent prior to November 20, 2000.

              SECTION 4.6. SOLVENCY. After giving effect to the transactions
occurring on and before the Effective Date and the payment and accrual of all
transaction costs in connection with the foregoing, each Loan Party is Solvent.

              SECTION 4.7. LITIGATION. There are no pending or, to the knowledge
of the Borrower, threatened actions, investigations or proceedings affecting the
Borrower, or any of its Subsidiaries before any court, Governmental Authority or
arbitrator other than those that in the aggregate have no Material Adverse
Effect; provided, however, that with respect to the matters listed on Schedule
4.7, the Borrower believes that such matters will not have a Material Adverse
Effect. The performance of any action by any Loan Party required or contemplated
by any of the Loan Documents is not restrained or enjoined (either temporarily,
preliminarily or permanently). Schedule 4.7 lists all litigation pending against
any Loan Party on the date hereof which, if adversely determined, could have a
Material Adverse Effect.

              SECTION 4.8. TAXES.

              (a) All federal, and all material state, local and foreign income
and franchise and other material tax returns, reports and statements
(collectively, the "Tax Returns") required to be filed by the Borrower or any of
its Tax Affiliates have been filed with the appropriate Governmental Authorities
in all jurisdictions in which such Tax Returns are required to be filed, all
such Tax Returns are true and correct in all material respects, and all taxes,
charges and other impositions reflected therein or otherwise due and payable
have been paid prior to the date on which any fine, penalty, interest, late
charge or loss may be added thereto for non-payment thereof except where
contested in good faith and by appropriate proceedings if adequate reserves
therefor have been established on the books of the Borrower or such Tax
Affiliate in conformity with GAAP or the aggregate amount thereof does not
exceed for any Fiscal Year $500,000. Proper and accurate amounts have been
withheld by the Borrower and each of its Tax Affiliates from their respective
employees for all periods in full and complete compliance with the tax, social
security and unemployment withholding provisions of applicable Requirements of
Law and such withholdings have been timely paid to the respective Governmental
Authorities.

              (b) None of the Borrower or any of its Tax Affiliates has (i) any
obligation under any tax sharing agreement or arrangement other than that to
which the Agent has a copy prior to the date hereof; or (ii) been a member of an
affiliated, combined or unitary group other than the group of which the Borrower
(or its Tax Affiliate) is the common parent.


                                       55
   57

              SECTION 4.9. FULL DISCLOSURE. The information prepared or
furnished by or on behalf of the Borrower in connection with this Agreement or
the consummation of the financing taken as a whole, including the information
contained in the Disclosure Statement, does not contain any untrue statement of
a material fact or omit to state a material fact necessary to make the
statements contained therein or herein not misleading. All facts known to the
Borrower which are material to an understanding of the financial condition,
business, properties or prospects of the Borrower and the Restricted
Subsidiaries taken as one enterprise have been disclosed to the Lenders.

              SECTION 4.10. MARGIN REGULATIONS. The Borrower is not engaged in
the business of extending credit for the purpose of purchasing or carrying
margin stock (within the meaning of Regulation U of the Federal Reserve Board),
and no proceeds of any Borrowing will be used to purchase or carry any margin
stock or to extend credit to others for the purpose of purchasing or carrying
any margin stock in contravention of Regulation T, U or X of the Federal Reserve
Board.

              SECTION 4.11. NO BURDENSOME RESTRICTIONS; NO DEFAULTS.

              (a) Neither the Borrower nor any of its Subsidiaries (i) is a
party to any Contractual Obligation the compliance with which would have a
Material Adverse Effect or the performance of which by any thereof, either
unconditionally or upon the happening of an event, would result in the creation
of a Lien (other than a Lien permitted under Section 8.2) on the property or
assets of any of the Borrower or the Restricted Subsidiaries or (ii) is subject
to any charter or corporate restriction which would have a Material Adverse
Effect.

              (b) Neither the Borrower nor any of its Subsidiaries is in default
under or with respect to any Requirement of Law or Contractual Obligation owed
by it and, to the knowledge of the Borrower, no other party is in default under
or with respect to any Contractual Obligation owed to any Loan Party or to any
Subsidiary of a Loan Party, other than, in either case, those defaults which in
the aggregate would not have a Material Adverse Effect.

              (c) No Default or Event of Default has occurred and is continuing.

              (d) To the best knowledge of the Borrower, there is no Requirement
of Law applicable to any Loan Party the compliance with which by such Loan Party
would have a Material Adverse Effect.

              SECTION 4.12. INVESTMENT COMPANY ACT; PUBLIC UTILITY HOLDING
COMPANY ACT. Neither the Borrower nor any of its Subsidiaries is (a) an
"investment company" or an "affiliated person" of, or "promoter" or "principal
underwriter" for, an "investment company," as such terms are defined in the
Investment Company Act of 1940, as amended, or (b) a "holding company," or an
"affiliate" of a "holding company" or a "subsidiary company" of a "holding
company," as each such term is defined and used in the Public Utility Holding
Act of 1935, as amended.

              SECTION 4.13. USE OF PROCEEDS. The proceeds of the Loans and the
Letters of Credit are being used by the Borrower solely as follows: (a) to
refinance existing Indebtedness of the Borrower and its Subsidiaries and for the
payment of related transaction costs, fees and expenses; and (b) for working
capital and general corporate purposes, including Capital Expenditures.


                                       56
   58

              SECTION 4.14. INSURANCE. All policies of insurance of any kind or
nature of the Borrower or any of its Subsidiaries, including policies of fire,
theft, product liability, public liability, property damage, other casualty,
employee fidelity, workers' compensation and employee health and welfare
insurance, are in full force and effect and are of a nature and provide such
coverage as is sufficient and as is customarily carried by businesses of the
size and character of such Person. Neither the Borrower nor any of its
Subsidiaries has been unable to obtain insurance for any material coverage for
which it had applied or had any material policy of insurance terminated in the
past year (other than at its request).

              SECTION 4.15. LABOR MATTERS.

              (a) There are no strikes, work stoppages, slowdowns or lockouts
pending or, to the Borrower's knowledge, threatened against or involving the
Borrower or any of its Subsidiaries, other than those which have been disclosed
in writing to the Agent and which in the aggregate would not have a Material
Adverse Effect.

              (b) There are no unfair labor practices, grievances or complaints
pending against or involving the Borrower or any of its Subsidiaries, nor are
there any arbitrations or grievances threatened involving the Borrower or any of
its Subsidiaries, other than those which have been disclosed in writing to the
Agent and, in the aggregate, if resolved adversely to the Borrower or such
Subsidiary, would not have a Material Adverse Effect.

              (c) Except as set forth on Schedule 4.15, as of the Effective
Date, there is no collective bargaining agreement covering any of the employees
of the Borrower or its Subsidiaries.

              (d) Schedule 4.15 sets forth as of the date hereof, all material
consulting agreements, executive employment agreements, executive compensation
plans, deferred compensation agreements, employee stock purchase and stock
option plans and severance plans of the Borrower and any of its Subsidiaries.

              SECTION 4.16. ERISA.

              (a) Schedule 4.16 separately identifies as of the date hereof all
Title IV Plans, all Multiemployer Plans and all of the employee benefit plans
within the meaning of Section 3(3) of ERISA (except those already listed on
Schedule 4.15) to which the Borrower or any of its Subsidiaries has any
obligation or liability, contingent or otherwise.

              (b) Each employee benefit plan of the Borrower or any of its
Subsidiaries which is intended to qualify under Section 401 of the Code has been
the subject of a favorable determination letter from the IRS with respect to
such qualification, and any trust created thereunder is exempt from tax under
the provisions of Section 501 of the Code, except where such failures in the
aggregate would not have a Material Adverse Effect.

              (c) Each Title IV Plan is in compliance in all material respects
with applicable provisions of ERISA, the Code and other Requirements of Law
except for non-compliances that in the aggregate would not have a Material
Adverse Effect.

              (d) There has been no, nor is there reasonably expected to occur,
any ERISA Event which would have a Material Adverse Effect.


                                       57
   59

              (e) Except to the extent set forth on Schedule 4.16, none of the
Borrower, any of the Borrower's Subsidiaries or any ERISA Affiliate would have
any Withdrawal Liability as a result of a complete withdrawal as of the date
hereof from any Multiemployer Plan.

              SECTION 4.17. ENVIRONMENTAL MATTERS.

              (a) The operations of the Borrower and each of its Subsidiaries
have been and are in compliance with all Environmental Laws, including obtaining
and complying with all required environmental, health and safety Permits, other
than non-compliances that in the aggregate with all matters covered by this
Section 4.17 have (i) no reasonable likelihood of causing total Environmental
Liabilities and Costs to exceed $5,000,000 in cash in any 12-month period
commencing on or prior to the Scheduled Termination Date and (ii) no Material
Adverse Effect.

              (b) None of the Borrower or any of its Subsidiaries or any Real
Property currently or, to the knowledge of the Borrower, previously owned,
operated or leased by or for the Borrower or any of its Subsidiaries is subject
to any pending or, to the knowledge of the Borrower, threatened, claim, order,
agreement, notice of violation, notice of potential liability or is the subject
of any pending or, to the knowledge of the Borrower, threatened proceeding or
governmental investigation under or pursuant to Environmental Laws other than
those that in the aggregate with all matters covered by this Section 4.17 have
(i) no reasonable likelihood of causing total Environmental Liabilities and
Costs to exceed $5,000,000 in cash in any 12-month period commencing on or prior
to the Scheduled Termination Date and (ii) no Material Adverse Effect.

              (c) Except as disclosed on Schedule 4.17, none of the Borrower or
any of its Subsidiaries is a treatment, storage or disposal facility requiring a
permit under the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901
et seq., the regulations thereunder or any state analog.

              (d) There are no facts, circumstances or conditions arising out of
or relating to the operations or ownership of real property owned, operated or
leased by the Borrower or any of its Subsidiaries which are not specifically
included in the financial information furnished to the Lenders other than those
that in the aggregate with all matters covered by this Section 4.17 have (i) no
reasonable likelihood of causing total Environmental Liabilities and Costs to
exceed $5,000,000 in cash in any 12-month period commencing on or prior to the
Scheduled Termination Date and (ii) no Material Adverse Affect.

              (e) As of the date hereof, no Environmental Lien has attached to
any property of the Borrower or any of its Subsidiaries and, to the knowledge of
the Borrower, no facts, circumstance or conditions exist that could reasonably
be expected to result in any such Lien attaching to any such property.

              (f) The Borrower and each of its Subsidiaries has made available
the Lenders copies of all environmental, health or safety audits, studies,
assessments, inspections, investigations or other environmental health and
safety reports relating to the operations of the Borrower and Subsidiaries or
any of their real property that are in the possession, custody or control of the
Borrower or any of its Subsidiaries.

              (g) The Borrower has made a timely application for an operating
permit under Title V of the federal Clean Air Act and the Utah Conservation Act.
The Utah Division of


                                       58
   60

Air Quality (the "DAQ") has acknowledged the receipt of the application,
determined the completeness of the application, and confirmed the existence of
the so-called "application shield" which authorizes the Borrower to operate
until final action is taken on the permit application. The Borrower believes
that the DAQ will issue the permit in due course.

              SECTION 4.18. INTELLECTUAL PROPERTY. The Borrower and its
Subsidiaries own or license or otherwise have the right to use all material
licenses, permits, patents, patent applications, trademarks, trademark
applications, service marks, trade names, copyrights, copyright applications,
franchises, authorizations and other intellectual property rights (including all
Intellectual Property as defined in the Security Agreement) that are necessary
for the operations of their respective businesses, without infringement upon or
conflict with the rights of any other Person with respect thereto, including all
trade names associated with any private label brands of the Borrower or any of
its Material Subsidiaries, as set forth on Schedule 4.18. To the Borrower's
knowledge, no slogan or other advertising device, product, process, method,
substance, part or component, or other material now employed, or now
contemplated to be employed, by the Borrower or any of its Restricted
Subsidiaries infringes upon or conflicts with any rights owned by any other
Person, and no claim or litigation regarding any of the foregoing is pending or,
to the Borrower's knowledge, threatened.

              SECTION 4.19. TITLE; REAL PROPERTY.

              (a) Each of the Borrower and its Material Subsidiaries has good
and marketable title to, or valid leasehold interests in, all Real Property and
good title to all personal property purported to be owned by it, including those
reflected on the most recent Financial Statements delivered by the Borrower, and
none of such properties and assets is subject to any Lien except Liens permitted
under Section 8.2. The Borrower and its Material Subsidiaries have received all
deeds, assignments, waivers, consents, non-disturbance and recognition or
similar agreements, bills of sale and other documents, and have duly effected
all recordings, filings and other actions necessary to establish, protect and
perfect the Borrower's and its Material Subsidiaries' right, title and interest
in and to all such property other than with respect to an immaterial amount of
owned equipment.

              (b) Set forth on Schedule 4.19 hereto is a complete and accurate
list of all Real Property owned by each Loan Party and its Material Subsidiaries
showing as of the Effective Date the street address, county or other relevant
jurisdiction, state, and record owner.

              (c) Except as set forth on Schedule 4.19, neither the Borrower nor
any of its Material Subsidiaries owns or holds, or is obligated under or a party
to, any option, right of first refusal or other contractual right to purchase,
acquire, sell, assign or dispose of any real property owned or leased by the
Borrower or any of its Material Subsidiaries.

              (d) All components of all improvements included within the Real
Property owned or leased by any Loan Party or any of its Subsidiaries
(collectively, "Improvements"), including the roofs and structural elements
thereof and the heating, ventilation, air conditioning, plumbing, electrical,
mechanical, sewer, waste water, storm water, paving and parking equipment,
systems and facilities included therein, are in good working order and repair
subject to the Capital Expenditures reflected in the Projections, except where
the failure to be in such working order and repair would not have a Material
Adverse Effect. All water, gas, electrical, steam, compressed air,
telecommunication, sanitary and storm sewage lines and systems and other similar
systems serving the real property owned or leased by any Loan Party or any of
its Subsidiaries are installed and operating subject to the Capital Expenditures
reflected in the


                                       59
   61

Projections and are sufficient to enable the Real Property owned or leased by
such Loan Party or Subsidiary to continue to be used and operated in the manner
currently being used and operated, and no Loan Party nor any of its Subsidiaries
has any knowledge of any factor or condition that could result in the
termination or material impairment of the furnishing thereof that could have a
Material Adverse Effect. No material Improvement or portion thereof is dependent
for its access, operation or utility on any land, building or other Improvement
not included in the Real Property owned or leased by any Loan Party or any of
its Material Subsidiaries.

              (e) Except for insurance claims disclosed in writing to the Agent
after January 25, 1996 and except as otherwise disclosed in writing to the Agent
after June 30, 2000 and prior to the Effective Date, no portion of any Real
Property owned or leased by any Loan Party or any of its Material Subsidiaries
has suffered any material damage by fire or other casualty loss which has not
heretofore been completely repaired and restored to its original condition. No
portion of any Real Property owned or leased by any Loan Party or any of its
Material Subsidiaries is located in a special flood hazard area as designated by
any federal Governmental Authority.

              (f) All Permits required to have been issued or appropriate to
enable all real property owned or leased by the Borrower or any of its
Subsidiaries to be lawfully occupied and used for all of the purposes for which
they are currently occupied and used have been lawfully issued and are in full
force and effect, other than those which in the aggregate would not have a
Material Adverse Effect.

              (g) Neither the Borrower nor any of its Subsidiaries has received
any notice, or has any knowledge, of any pending, threatened or contemplated
condemnation proceeding affecting any Real Property owned or leased by the
Borrower or any of its Subsidiaries or any part thereof, except those which, in
the aggregate, would not have a Material Adverse Effect.

              SECTION 4.20. PLAN OF REORGANIZATION. The Plan of Reorganization
has been confirmed by the Bankruptcy Court and on the Effective Date will have
been substantially consummated.

              SECTION 4.21. MATERIAL SUBSIDIARIES. As of the Effective Date,
there are no Subsidiaries of the Borrower.

                                    ARTICLE V

                               FINANCIAL COVENANTS

              As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Requisite Lenders otherwise consent
in writing, the Borrower agrees with the Lenders and the Agent that:

              SECTION 5.1. MAINTENANCE OF CONSOLIDATED CASH FLOW. The Borrower
will maintain for each period commencing on the Effective Date and ending on the
last day of each Fiscal Quarter cumulative Consolidated Cash Flow of not less
than $(80,000,000).

              SECTION 5.2. CAPITAL EXPENDITURES. The Borrower will not permit
Capital Expenditures to exceed for each of the Fiscal Years set forth below the
maximum amount set forth below for such Fiscal Year:


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- -----------------------------------------------------------------
                                           MAXIMUM CAPITAL
            FISCAL YEAR                      EXPENDITURES
- -----------------------------------------------------------------
                                   
                2001                         $90,000,000
- -----------------------------------------------------------------
                2002                         $85,000,000
- -----------------------------------------------------------------
         2003 and following           For each such Fiscal
                                      Year, a Dollar amount
                                      equal to the greater of
                                      (i) 50% of EBITDA of the
                                      Borrower for the
                                      immediately preceding
                                      Fiscal Year or
                                      (ii) $25,000,000
- -----------------------------------------------------------------


provided, however, that to the extent that actual Capital Expenditures for any
such Fiscal Year shall be less than the maximum amount set forth above for such
Fiscal Year (without giving effect to the carryover permitted by this proviso),
75% of the difference between said stated maximum amount and such actual Capital
Expenditures shall, in addition, be available for Capital Expenditures in the
next succeeding Fiscal Year on a first-in, first-out basis; provided, further,
that (i) the Borrower may, in any Fiscal Year, make Capital Expenditures in
amounts in addition to the amounts set forth above in an aggregate amount (for
such additional amounts of Capital Expenditures) not in excess of the Additional
Discretionary Amount and (ii) the Borrower may not make Capital Expenditures
relating to the Walking Beam Furnace exceeding $3,000,000 in the aggregate
unless and until it has arranged for a fully committed financing or sale and
leaseback transaction of at least $30,000,000, and such financing or sale and
leaseback transaction shall be with a financial institution, and upon terms and
conditions, acceptable to the Agent.

              SECTION 5.3. EBITDA TO CASH INTEREST EXPENSE. During the
continuance of a Covenant Liquidity Event Period, the Borrower shall achieve as
of the last day of each Fiscal Quarter commencing with the Fiscal Quarter ending
March 31, 2001, determined on the basis of the four Fiscal Quarters ending on
the date of determination, a ratio of (a) EBITDA of the Borrower for such period
to (b) Cash Interest Expense of the Borrower for such period of not less than
the ratio set forth below:



- -------------------------------------------------------
                                    EBITDA TO CASH
                                 INTEREST EXPENSE AND
                                  PREFERRED DIVIDENDS
     FISCAL QUARTER ENDING              RATIO
- -------------------------------------------------------
                              
        March 31, 2001                 3.00 to 1
- -------------------------------------------------------
         June 30, 2001                 3.00 to 1
- -------------------------------------------------------
      September 30, 2001               3.00 to 1
- -------------------------------------------------------
       December 31, 2001               3.00 to 1
- -------------------------------------------------------
        March 31, 2002                 3.25 to 1
- -------------------------------------------------------
    June 30, 2002 and each             3.50 to 1
     Fiscal Quarter ending
          thereafter
- -------------------------------------------------------


provided, however, that for the Fiscal Quarters ending March 31, 2001, June 30,
2001 and September 30, 2001, such ratio shall be determined on a cumulative
basis of the actual number of Fiscal Quarters ending after September 30, 2000.


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              SECTION 5.4. SENIOR LEVERAGE RATIO. During the continuance of a
Covenant Liquidity Event Period, the Borrower will maintain a Senior Leverage
Ratio, as determined as of the last day of each Fiscal Quarter set forth below,
for four Fiscal Quarters ending on such day (which compliance shall be
maintained from the beginning of the first day of such measuring period through
the end of the last day of such period and provided that for the Fiscal Quarter
ending on March 31, 2001, the denominator shall be 200% of the EBITDA of the
Borrower for the first two Fiscal Quarters ending after September 30, 2000 and
for the Fiscal Quarter ended June 30, 2001, the denominator shall be 133% of the
EBITDA of the Borrower for the first three Fiscal Quarters ending after
September 30, 2000), of not more than the maximum ratio set forth opposite such
Fiscal Quarter:



- -------------------------------------------------------
                                    MAXIMUM SENIOR
     FISCAL QUARTER ENDING          LEVERAGE RATIO
- -------------------------------------------------------
                                 
        March 31, 2001                 3.50 to 1
- -------------------------------------------------------
         June 30, 2001                 3.50 to 1
- -------------------------------------------------------
      September 30, 2001               3.50 to 1
- -------------------------------------------------------
       December 31, 2001               3.50 to 1
- -------------------------------------------------------
        March 31, 2002                 3.25 to 1
- -------------------------------------------------------
    June 30, 2002 and each             3.00 to 1
     Fiscal Quarter ending
          thereafter
- -------------------------------------------------------



              SECTION 5.5. MAINTENANCE OF TANGIBLE NET WORTH. The Borrower will
maintain a Tangible Net Worth greater than or equal to (a) the Borrower's
Tangible Net Worth as of the Effective Date less (b) $35,000,000.

                                   ARTICLE VI

                               REPORTING COVENANTS

              As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, unless the Requisite Lenders otherwise consent
in writing, the Borrower agrees with the Lenders and the Agent that:

              SECTION 6.1. FINANCIAL STATEMENTS. The Borrower shall furnish to
the Agent (with sufficient copies for each of the Lenders) the following:

              (a) Monthly Reports. Within 35 days after the end of each of the
first two fiscal months in each of the four Fiscal Quarters of each Fiscal Year,
financial information regarding Holdings, the Borrower and the Restricted
Subsidiaries consisting of consolidated and consolidating unaudited balance
sheets as of the close of such month and the related statements of income and
cash flow for such month and that portion of the current Fiscal Year ending as
of the close of such month, setting forth in comparative form the figures for
the corresponding period in the prior year and the figures contained in the
Projections for the current Fiscal Year, in each case certified by a Responsible
Officer of the Borrower as fairly presenting the consolidated and consolidating
financial position of Holdings and its Subsidiaries as at the dates indicated
and the results of their operations and cash flow for the periods indicated in
accordance with GAAP (subject to the absence of footnote disclosure and normal
year-end audit adjustments); provided,


                                       62
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however, that consolidating financial information shall only be required in
respect of the Borrower and the Restricted Subsidiaries and consolidated
financial information shall be provided in respect of the Borrower and the
Restricted Subsidiaries.

              (b) Quarterly Reports. Within 50 days after the end of each Fiscal
Quarter of each Fiscal Year (except for the fourth Fiscal Quarter of each Fiscal
Year), financial information regarding Holdings and its Subsidiaries consisting
of consolidated and consolidating unaudited balance sheets as of the close of
such quarter and the related statements of income and cash flow for such quarter
and that portion of the Fiscal Year ending as of the close of such quarter,
setting forth in comparative form the figures for the corresponding period in
the prior year and the figures contained in the Projections for the current
Fiscal Year, in each case certified by a Responsible Officer of the Borrower as
fairly presenting the consolidated and consolidating financial position of the
Holdings and its Subsidiaries as at the dates indicated and the results of their
operations and cash flow for the periods indicated in accordance with GAAP
(subject to the absence of footnote disclosure and normal year-end audit
adjustments); provided, however, that consolidating financial information shall
only be required in respect of the Borrower and the Restricted Subsidiaries and
consolidated financial information shall be provided in respect of the Borrower
and the Restricted Subsidiaries.

              (c) Annual Reports. Within 95 days after the end of each Fiscal
Year, financial information regarding Holdings and its Subsidiaries and the
Borrower and its Subsidiaries consisting of consolidated and consolidating
balance sheets of Holdings and its Subsidiaries and the Borrower and its
Subsidiaries as of the end of such Fiscal Year and related statements of income
and cash flows of Holdings and its Subsidiaries and the Borrower and its
Subsidiaries for such Fiscal Year, all prepared in conformity with GAAP and
certified, in the case of such consolidated financial statements, without
qualification as to the scope of the audit or as to Holdings or the Borrower
being a going concern by Arthur Andersen, LLP or other "big five" firm of
independent public accountants (or their successors), together with the report
of such accounting firm stating that (i) such consolidated financial statements
fairly present the financial position of Holdings and its Subsidiaries and the
Borrower and its Subsidiaries, as the case may be, as of the dates indicated and
the results of their operations and cash flow for the periods indicated in
conformity with GAAP applied on a basis consistent with prior years (except for
changes with which such independent certified public accountants shall concur
and which shall have been disclosed in the notes to the financial statements),
and (ii) the examination by such accountants in connection with such
consolidated financial statements has been made in accordance with generally
accepted auditing standards, and accompanied by a certificate stating that in
the course of the regular audit of the business of Holdings and its Subsidiaries
and the Borrower and its Subsidiaries, as the case may be, such accounting firm
has obtained no knowledge that a Default or Event of Default in respect of the
financial covenants contained in Article V has occurred and is continuing, or,
if in the opinion of such accounting firm, a Default or Event of Default has
occurred and is continuing in respect of such financial covenants, a statement
as to the nature thereof; provided, however, that consolidating financial
information shall only be required in respect of the Borrower and the Restricted
Subsidiaries and consolidated financial information shall be provided in respect
of the Borrower and the Restricted Subsidiaries.

              (d) Compliance Certificate. Together with each delivery of any
financial statement pursuant to clauses (b) and (c) of this Section 6.1, a
certificate of a Responsible Officer of the Borrower (each, a "Compliance
Certificate") (i) showing in reasonable detail the calculations used in
determining the Leverage Ratio (for purposes of determining the Applicable
Margin and the Applicable Unused Commitment Fee Rate and) and demonstrating
compliance with each of the financial covenants contained in Article V which is
tested on a quarterly basis


                                       63
   65

and (ii) stating that no Default or Event of Default has occurred and is
continuing or, if a Default or an Event of Default has occurred and is
continuing, stating the nature thereof and the action which the Borrower
proposes to take with respect thereto.

              (e) Business Plan. Not later than the last day of each Fiscal Year
(other than the Fiscal Year ending on December 31, 2000), and containing
substantially the types of financial information contained in the Projections,
(i) forecasts prepared by management of the Borrower for each fiscal month in
the next succeeding Fiscal Year approved by senior management of the Borrower,
(ii) forecasts prepared by management of the Borrower for each of the succeeding
Fiscal Years through the Fiscal Year in which the Revolving Credit Termination
Date is scheduled to occur, including, in each instance described in clause (i)
and clause (ii) above, (A) a projected year-end consolidated balance sheet and
income statement and statement of cash flows and (B) a statement of all of the
material assumptions on which such forecasts are based and a management
discussion and analysis.

              (f) Management Letters, Etc. Within 10 Business Days after receipt
thereof by any Loan Party, copies of each final management letter, exception
report or similar letter or report received by such Loan Party from its
independent certified public accountants.

              (g) Intercompany Loan Balances. Together with each delivery of any
financial statement pursuant to clause (a) of this Section 6.1, a summary of the
outstanding balance of all intercompany Indebtedness as of the last day of the
fiscal month covered by such financial statement, certified by a Responsible
Officer.

              (h) Borrowing Base Certificates. No later than five Business Days
after the first day of each calendar month, a Borrowing Base Certificate as of
the last day of the next preceding calendar month executed by a Responsible
Officer on behalf of the Borrower setting forth the value of all Eligible
Inventory and the face amount of all Eligible Receivables as of such date, and
no later than (i) Wednesday of each week, a Borrowing Base Certificate as of
Friday of the immediately preceding calendar week executed by a Responsible
Officer on behalf of the Borrower setting forth the face amount of all Eligible
Receivables as of such Friday, and (ii) eight Business Days after the first day
of each calendar month, a Borrowing Base Certificate as of the last day of the
immediately preceding calendar month executed by a Responsible Officer on behalf
of the Borrower setting forth the value of all Eligible Inventory for as of such
last day.

              (i) Additional Information. Promptly, from time to time, such
other information regarding the operations, including information regarding
specific product categories and lines of business of the Borrower and its
Subsidiaries, business affairs and financial condition of the Borrower or any of
its Subsidiaries, or compliance with the terms of any Loan Document, as the
Agent or any Lender may reasonably request.

              SECTION 6.2. DEFAULT NOTICES. As soon as practicable, and in any
event within five Business Days after a Responsible Officer of any Loan Party
has actual knowledge of the existence of any Default, Event of Default or other
event which has had a Material Adverse Effect or which has any reasonable
likelihood of causing or resulting in a Material Adverse Change, the Borrower
shall give the Agent and each of the Lenders notice specifying the nature of
such Default or Event of Default or other event, including the anticipated
effect thereof, if known, which notice, if given by telephone, shall be promptly
confirmed in writing on the next Business Day.


                                       64
   66

              SECTION 6.3. LITIGATION. Promptly after the commencement thereof,
the Borrower shall give the Agent written notice of the commencement of all
actions, suits and proceedings before any domestic or foreign Governmental
Authority or arbitrator, affecting the Borrower or any of its Subsidiaries,
which in the reasonable judgment of the Borrower or such Subsidiary, expose the
Borrower or such Subsidiary to liability in an amount aggregating $1,000,000 or
more or which, if adversely determined, would have a Material Adverse Effect.

              SECTION 6.4. ASSET SALES. Prior to any Asset Sale anticipated to
generate in excess of $5,000,000 (or its Dollar Equivalent) in proceeds, the
Borrower shall send the Agent a notice (a) describing such Asset Sale or the
nature and material terms and conditions of such transaction and (b) stating the
estimated Net Cash Proceeds anticipated to be received by the Borrower or any of
its Subsidiaries.

              SECTION 6.5. SEC FILINGS; PRESS RELEASES. Promptly after the
sending or filing thereof, the Borrower shall send the Agent copies of (a) all
reports which the Holdings sends to its securityholders generally, (b) all
reports and registration statements which the Holdings or any of its
Subsidiaries files with the Securities and Exchange Commission or any national
or foreign securities exchange or the National Association of Securities
Dealers, Inc., (c) all press releases and (d) all other statements concerning
material changes or developments in the business of such Loan Party made
available by any Loan Party to the public generally.

              SECTION 6.6. LABOR RELATIONS. Promptly after becoming aware of the
same, the Borrower shall give the Agent written notice of (a) any material labor
dispute to which the Borrower or any of its Subsidiaries is or may become a
party, including any strikes, lockouts or other disputes relating to any of such
Person's plants and other facilities, and (b) any Worker Adjustment and
Retraining Notification Act or related liability incurred with respect to the
closing of any plant or other facility of any of such Person.

              SECTION 6.7. TAX RETURNS. Upon the request of any Lender, through
the Agent, the Borrower will provide copies of all federal, state and local tax
returns and reports filed by the Borrower or any of its Subsidiaries in respect
of taxes measured by income (excluding sales, use and like taxes).

              SECTION 6.8. INSURANCE. As soon as is practicable and in any event
within 90 days after the end of each Fiscal Year, the Borrower will furnish the
Agent (in sufficient copies for each of the Lenders) with (a) a report in form
and substance satisfactory to the Agent and the Lenders outlining all material
insurance coverage maintained as of the date of such report by the Borrower and
its Subsidiaries and the duration of such coverage and (b) an insurance broker's
statement that all premiums then due and payable with respect to such coverage
have been paid.

              SECTION 6.9. ERISA MATTERS. The Borrower shall furnish the Agent
(with sufficient copies for each of the Lenders):

              (a) promptly and in any event within 30 days after the Borrower,
any of its Subsidiaries or any ERISA Affiliate knows or has reason to know that
any ERISA Event has occurred, a written statement of a Responsible Officer of
the Borrower describing such ERISA Event or waiver request and the action, if
any, which the Borrower, its Subsidiaries and ERISA Affiliates propose to take
with respect thereto and a copy of any notice filed with the PBGC or the IRS
pertaining thereto;


                                       65
   67

              (b) promptly and in any event within 10 Business Days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that a request for a minimum funding waiver under Section 412 of the Code
has been filed with respect to any Title IV Plan or Multiemployer Plan;

              (c) simultaneously with the date that the Borrower, any of its
Subsidiaries or any ERISA Affiliate files a notice of intent to terminate any
Title IV Plan, if such termination would require material additional
contributions in order to be considered a standard termination within the
meaning of Section 4041(b) of ERISA, a copy of each notice.

              SECTION 6.10. ENVIRONMENTAL MATTERS. The Borrower shall provide
the Agent promptly and in any event within 10 Business Days of the Borrower or
any Subsidiary learning of any of the following, written notice of any of the
following:

              (a) that any Loan Party is or may be liable to any Person as a
result of a Release or threatened Release which could reasonably be expected to
subject the Loan Parties in the aggregate for all matters covered by this
Section 6.11 to total Environmental Liabilities and Costs of $5,000,000 or more
in cash in any 12-month period;

              (b) the receipt by any Loan Party of notification that any real or
personal property of such Loan Party is or is reasonably likely to be subject to
any Environmental Lien;

              (c) the receipt by any Loan Party of any notice of violation of or
potential liability under, or knowledge by such Loan Party that there exists a
condition which could reasonably be expected to result in a violation of or
liability under any Environmental Law, except for violations and liabilities the
consequence of which in the aggregate would have no reasonable likelihood of
subjecting the Loan Parties in the aggregate for all matters covered by this
Section 6.11 to total Environmental Liabilities and Costs of $5,000,000 or more
in cash in any 12-month period commencing on or prior to the Scheduled
Termination Date;

              (d) the commencement of any judicial or administrative proceeding
or investigation alleging a violation of or liability under any Environmental
Law, which in the aggregate, if adversely determined, would have a reasonable
likelihood of subjecting the Loan Parties in the aggregate for all matters
covered by this Section 6.11 to total Environmental Liabilities and Costs of
$5,000,000 or more in cash in any 12-month period commencing on or prior to the
Scheduled Termination Date;

              (e) any proposed acquisition of stock, assets or real estate, or
any proposed leasing of property, or any other action by any Loan Party or any
of its Subsidiaries other than those the consequences of which in the aggregate
have reasonable likelihood of subjecting the Loan Parties in the aggregate for
all matters covered by this Section 6.11 to total Environmental Liabilities and
Costs of $5,000,000 or less in cash in any 12-month period commencing on or
prior to the Scheduled Termination Date;

              (f) any proposed action by any Loan Party or any of its
Subsidiaries or any proposed change in Environmental Laws or any other act or
omission by any Governmental Authority which in the aggregate have a reasonable
likelihood of requiring the Loan Parties to obtain additional environmental,
health or safety Permits or make additional capital improvements to obtain
compliance with Environmental Laws that in the aggregate would cost $5,000,000
or more in cash in any 12-month period commencing on or prior to the Scheduled
Termination Date or subject the Loan Parties in the aggregate for all matters
covered by this


                                       66
   68

Section 6.11 to total additional Environmental Liabilities and Costs of
$5,000,000 or more in cash in any 12-month period commencing on or prior to the
Scheduled Termination Date; and

              (g) upon written request by any Lender through the Agent, a report
providing an update of the status of any environmental, health or safety
compliance, hazard or liability issue identified in any notice or report
delivered pursuant to this Agreement.

              SECTION 6.11. BORROWING BASE DETERMINATION.

              (a) The Borrower shall conduct, or shall cause to be conducted, at
its expense, and upon request of the Agent, and present to the Agent for
approval, such appraisals, investigations and reviews as the Agent shall request
for the purpose of determining the Borrowing Base, all upon notice and at such
times during normal business hours and as often as may be reasonably requested
in accordance with the Agent's customary practices. The Borrower shall furnish
to the Agent any information which the Agent may reasonably request regarding
the determination and calculation of the Borrowing Base and which is available
to the Borrower without undue cost or effort, including correct and complete
copies of any invoices, underlying agreements, instruments or other documents
and the identity of all Account Debtors in respect of Accounts referred to
therein.

              (b) The Borrower shall promptly notify the Agent in writing in the
event that at any time the Borrower receives or otherwise gains knowledge that
(i) the Borrowing Base has decreased by $10,000,000 from the Borrowing Base
reflected in the most recent Borrowing Base Certificate delivered pursuant to
Section 6.1(h) or that (ii) the outstanding Revolving Credit Outstandings exceed
the Borrowing Base as a result of a decrease therein, and the amount of such
excess.

              (c) The Agent may, at the Borrower's sole cost and expense, make
test verifications of the Accounts and physical verifications of the Inventory
in any manner and through any medium that the Agent considers advisable, and the
Borrower shall furnish all such assistance and information as the Agent may
require in connection therewith.

              SECTION 6.12. OTHER INFORMATION. The Borrower will provide the
Agent or any Lender with such other information respecting the business,
properties, condition, financial or otherwise, or operations of the Borrower or
any of its Subsidiaries as any Lender through the Agent may from time to time
reasonably request.

                                   ARTICLE VII

                              AFFIRMATIVE COVENANTS

              As long as the Obligations or the Revolving Credit Commitments
remain outstanding, unless the Requisite Lenders otherwise consent in writing,
the Borrower agrees with the Lenders and the Agent that:

              SECTION 7.1. PRESERVATION OF CORPORATE EXISTENCE, ETC. The
Borrower shall, and shall cause each of its Material Subsidiaries to, preserve
and maintain its corporate, partnership or limited liability company existence,
rights (charter and statutory) and franchises, except as permitted by Sections
8.3 and 8.4.


                                       67
   69

              SECTION 7.2. COMPLIANCE WITH LAWS, ETC. The Borrower shall, and
shall cause each of its Subsidiaries to, comply with all applicable Requirements
of Law, Contractual Obligations and Permits, except where the failure so to
comply would not in the aggregate have a Material Adverse Effect.

              SECTION 7.3. CONDUCT OF BUSINESS. Except as otherwise permitted by
this Agreement, the Borrower shall, and shall cause each of its Subsidiaries to,
(a) conduct its business in the ordinary course and (b) use its reasonable
efforts, in the ordinary course and consistent with past practice, to preserve
its business and the goodwill and business of the customers, advertisers,
suppliers and others having business relations with the Borrower or any of its
Subsidiaries, except in each case where the failure to comply with the covenants
in each of clauses (a) and (b) above would not in the aggregate have a Material
Adverse Effect.

              SECTION 7.4. PAYMENT OF TAXES, ETC. The Borrower shall, and shall
cause each of its Subsidiaries to, pay and discharge before the same shall
become delinquent, all lawful governmental claims, taxes, assessments, charges,
levies and judgments, except where contested in good faith, by proper
proceedings and adequate reserves therefor have been established on the books of
the Borrower or the appropriate Subsidiary in conformity with GAAP.

              SECTION 7.5. MAINTENANCE OF INSURANCE. The Borrower shall (i)
maintain, and cause to be maintained for each of its Subsidiaries insurance
coverage with responsible and reputable insurance companies or associations in
such amounts and covering such risks as is usually carried by companies engaged
in similar businesses and owning similar properties in the same general areas in
which the Borrower or such Subsidiary operates (provided that the Borrower shall
be entitled to use reasonable and customary deductibles and, other than in
respect of Collateral unless consented to by the Agent in writing,
self-insurance programs), and such other insurance as may be reasonably
requested by the Requisite Lenders, and, in any event, all insurance required by
any Collateral Documents and (ii) cause all such insurance to name the Agent on
behalf of the Secured Parties as additional insured or loss payee, as
appropriate, and to provide that no cancellation, material addition in amount or
material change in coverage shall be effective until after 30 days' written
notice thereof to the Agent.

              SECTION 7.6. ACCESS. The Borrower shall from time to time permit
the Agent, or any agents or representatives thereof, upon at least two Business
Days' notification of the same (except that upon the occurrence and during the
continuance of an Event of Default, no such notice shall be required) to (a)
examine and make copies of and abstracts from the records and books of account
of the Borrower and each of its Subsidiaries, (b) visit the properties of the
Borrower and each of its Subsidiaries, (c) discuss the affairs, finances and
accounts of the Borrower and each of its Subsidiaries with any of their
respective officers or directors, and (d) communicate directly with the
Borrower's independent certified public accountants. The Borrower shall
authorize its independent certified public accountants to disclose to the Agent
or any agents or representations thereof any and all financial statements and
other information of any kind, as the Agent reasonably requests from the
Borrower and which such accountants may have, and be permitted to share in
accordance with their professional responsibilities, with respect to the
business, financial condition, results of operations or other affairs of the
Borrower or any of its Subsidiaries.

              SECTION 7.7. KEEPING OF BOOKS. The Borrower shall, and shall cause
each of its Subsidiaries to keep, proper books of record and account, in which
full and correct entries shall be made in conformity with GAAP of all financial
transactions and the assets and business of the Borrower and each such
Subsidiary.


                                       68
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              SECTION 7.8. MAINTENANCE OF PROPERTIES, ETC. The Borrower shall,
and shall cause each of its Subsidiaries to, maintain and preserve, (a) all of
its properties which are necessary in the conduct of its business in good
working order and condition, (b) all rights, permits, licenses, approvals and
privileges (including all Permits) which are used or useful or necessary in the
conduct of its business, and (c) all registered patents, trademarks, trade
names, copyrights and service marks with respect to its business; except in each
case where the failure to so maintain and preserve in the aggregate would have
no Material Adverse Effect.

              SECTION 7.9. APPLICATION OF PROCEEDS. The Borrower shall use the
entire amount of the proceeds of the Loans as provided in Section 4.13.

              SECTION 7.10. ENVIRONMENTAL. The Borrower shall, and shall cause
each of its Subsidiaries to, comply in all material respects with Environmental
Laws and, without limiting the foregoing, the Borrower shall, at its sole cost
and expense, upon receipt of any notification or otherwise obtaining knowledge
of any Release or other event that has any reasonable likelihood of causing the
Borrower and its Subsidiaries to incur Environmental Liabilities and Costs in
excess of $5,000,000 in cash in any 12-month period, (a) conduct or pay for
consultants to conduct, tests or assessments of environmental conditions at such
operations or properties, including the investigation and testing of subsurface
conditions and (b) take such Remedial Action, investigational or other action as
required by Environmental Laws or as any Governmental Authority requires or as
is appropriate and consistent with good business practice to address the Release
or event.

              SECTION 7.11. ADDITIONAL COLLATERAL AND GUARANTIES. To the extent
not delivered to the Agent on or before the Effective Date, the Borrower shall
cause each Restricted Subsidiary not in existence on the Effective Date (i) (A)
to become a party to the Guaranty and the applicable Collateral Documents and
the Intercreditor Agreement and (B) to take such actions necessary or advisable
to grant to the Agent for the benefit of the Secured Parties a perfected
security interest in the Collateral described in the Collateral Documents with
respect to such Subsidiary, including the filing of Uniform Commercial Code
financing statements in such jurisdictions as may be required by the Collateral
Documents or by law or as may be reasonably requested by the Agent and (ii) if
requested by the Agent, to deliver to the Agent legal opinions relating to the
matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to the Agent.

              SECTION 7.12. INTEREST RATE CONTRACTS. The Borrower shall, no
later than 60 days after the Effective Date, enter into an Interest Rate
Contract or Contracts, on terms and with counterparties satisfactory to the
Agent, to provide protection against interest rates exceeding 8.8% per annum on
Indebtedness bearing floating interest rates for a period of four years with
respect to a notional amount of at least $75,000,000.

              SECTION 7.13. REAL PROPERTY. The Borrower shall, and shall cause
each of its Subsidiaries to, (i) comply in all material respects with all of
their respective obligations under all of their respective Leases now or
hereafter held respectively by them with respect to Real Property, including the
Leases set forth in Schedule 4.19, except to the extent that such failure to
comply would not have a Material Adverse Effect; (ii) not modify, amend, cancel,
extend or otherwise change in any manner that would have a Material Adverse
Effect any of the terms, covenants or conditions of any such Leases; (iii) not
assign or sublet any other Lease if such assignment or sublet would have a
Material Adverse Effect; (iv) provide the Agent with a copy of each notice of
default under any Lease received by the Borrower or any Restricted Subsidiary of
the Borrower immediately upon receipt thereof and deliver to the Agent a copy of
each notice of


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default sent by the Borrower or any Restricted Subsidiary under any Lease
simultaneously with its delivery of such notice under such Lease; and (v) notify
the Agent at least 14 days prior to the date the Borrower or any such Restricted
Subsidiary takes possession of, or becomes liable under, any new leased premises
or Lease, whichever is earlier.

              SECTION 7.14. POST-CLOSING MATTERS. Within 30 days after the
Initial Closing Date, the Borrower shall provide to the Agent Blocked Account
Letters from the Blocked Account Banks.

                                  ARTICLE VIII

                               NEGATIVE COVENANTS

              As long as any of the Obligations or the Revolving Credit
Commitments remain outstanding, without the written consent of the Requisite
Lenders, the Borrower agrees with the Lenders and the Agent that:

              SECTION 8.1. INDEBTEDNESS. The Borrower will not, and will not
permit any Restricted Subsidiary to, directly or indirectly create, incur,
assume or otherwise become or remain directly or indirectly liable with respect
to any Indebtedness except (each being given independent effect):

              (a) the Secured Obligations;

              (b) Indebtedness existing on the Effective Date and disclosed on
Schedule 8.1;

              (c) Guaranty Obligations incurred by the Borrower or any
Subsidiary Guarantor in respect of Indebtedness of the Borrower or any
Subsidiary Guarantor otherwise permitted by this Section 8.1;

              (d) Capital Lease Obligations and purchase money Indebtedness
incurred by the Borrower or a Restricted Subsidiary to finance the acquisition
of fixed assets in an aggregate outstanding principal amount not to exceed
$65,000,000 at any time outstanding; provided, however, that the Capital
Expenditure related thereto is otherwise permitted by Section 5.2;

              (e) Renewals, extensions, refinancings and refundings of
Indebtedness permitted by clause (b), (d) or (j) of this Section 8.1; provided,
however, that any such renewal extension, refinancing or refunding is in an
aggregate principal amount not greater than the principal amount of the
Indebtedness being renewed, extended, refinanced or refunded plus any accrued
interest, customary fees, costs and expenses relating thereto and is on terms no
less favorable to the Borrower or such Restricted Subsidiary taken as a whole
than the Indebtedness being renewed, extended, refinanced or refunded; provided,
however, that as to weighted average maturity, taken by itself, such extended,
refinanced or refunded Indebtedness shall not have a shorter term than the
Indebtedness being extended, refinanced or refunded;

              (f) Indebtedness arising from intercompany loans (i) from the
Borrower to any Subsidiary Guarantor or from any Subsidiary Guarantor to the
Borrower or any other Subsidiary Guarantor and (ii) from the Borrower or any
Subsidiary Guarantor to any Restricted Subsidiary that is not a Subsidiary
Guarantor; provided, however, that the Investment in the intercompany loan to
such Subsidiary is permitted under Section 8.3;


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              (g) Indebtedness arising under any performance or surety bond
entered into in the ordinary course of business;

              (h) Obligations under Interest Rate Contracts required by Section
7.12;

              (i) unsecured Indebtedness not otherwise permitted under this
Section 8.1 in an aggregate outstanding principal amount not to exceed
$10,000,000 at any time;

              (j) Permitted Subordinated Indebtedness;

              (k) Indebtedness to finance the payments of insurance premiums in
an aggregate amount at any one time outstanding and on terms consistent with the
Borrower's past practice;

              (l) Indebtedness of the Borrower owing to Mannesmann under the
Mannesmann Agreement; and

              (m) Indebtedness if, immediately after giving pro forma effect to
the incurrence thereof, the ratio of EBITDA of the Borrower to Cash Interest
Expense of the Borrower would be greater than or equal to 4.00 to 1.

              SECTION 8.2. LIENS, ETC. The Borrower will not, and will not
permit any Restricted Subsidiary to, create or suffer to exist, any Lien upon or
with respect to any of its properties or assets, whether now owned or hereafter
acquired, or assign, or permit Restricted Subsidiary to assign, any right to
receive income, except for:

              (a) Liens created pursuant to the Loan Documents;

              (b) Liens existing on the Effective Date and disclosed on Schedule
8.2;

              (c) Customary Permitted Liens;

              (d) purchase money Liens granted by the Borrower or any Restricted
Subsidiary (including the interest of a lessor under a Capital Lease and Liens
to which any property is subject at the time of the Borrower's or such
Restricted Subsidiary's acquisition thereof) securing Indebtedness permitted
under Section 8.1(d) and limited in each case to the property purchased with the
proceeds of such purchase money Indebtedness or subject to such Capital Lease;

              (e) any Lien securing the renewal, extension, refinancing or
refunding of any Indebtedness permitted by clauses (b), (d), (e) or (k) of
Section 8.1 to the extent such Indebtedness was secured and without any change
in the assets subject to such Lien;

              (f) Liens in favor of lessors securing operating leases;

              (g) Liens securing trustee's fees and the performance of bids,
tenders, leases, contracts (other than the payment of borrowed money), statutory
obligations, surety and appeal bonds, and other obligations of like nature,
incurred as an incident to and in the ordinary business, and judgment,
attachment and award liens; provided, however, that (i) with respect to
judgment, attachment or award liens, such Liens (A) are against property of the
Borrower or a Subsidiary other than the Collateral and (B) are terminated or
otherwise extinguished within 60 days after the


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creation thereof, and (ii) all such Liens (A) in the aggregate have no Material
Adverse Effect and (B) do not secure directly or indirectly judgments,
attachments or awards in excess of $1,000,000 in the aggregate;

              (h) Liens on the proceeds of any insurance policy in connection
with Indebtedness for premium financing to the extent such Indebtedness is
permitted under Section 8.1(k); and

              (i) Liens not otherwise permitted by the foregoing clauses of this
Section 8.2 securing obligations or other liabilities (other than Indebtedness)
of any Loan Party; provided, however, that the aggregate outstanding amount of
such obligations and liabilities secured by such Liens shall not exceed
$3,000,000 at any time.

              SECTION 8.3. INVESTMENTS. The Borrower will not, and will not
permit any Restricted Subsidiary to, directly or indirectly make or maintain any
Investment except:

              (a) Investments existing on the Effective Date and disclosed on
Schedule 8.3;

              (b) Investments in Cash Equivalents held in a Control Account as
defined in the Security Agreement or a securities account with respect to which
the Agent for the benefit of the Secured Parties has a first priority perfected
Lien;

              (c) Investments in accounts, contract rights and chattel paper
(each as defined in the Uniform Commercial Code), notes receivable and similar
items arising or acquired in the ordinary course of business consistent with the
past practice of the Borrower and its Subsidiaries;

              (d) Investments received in settlement of amounts due to the
Borrower or any Restricted Subsidiary effected in the ordinary course of
business;

              (e) Investments by (i) the Borrower in any Subsidiary Guarantor,
or by any Subsidiary Guarantor in the Borrower or any other Subsidiary
Guarantor, (ii) the Borrower or any Subsidiary Guarantor in connection with a
Permitted Acquisition, (iii) a Subsidiary that is not a Subsidiary Guarantor in
the Borrower or any other Subsidiary, (iv) the Borrower or any Subsidiary
Guarantor in a Subsidiary that is not a Subsidiary Guarantor; provided, however,
that the aggregate outstanding amount of such Investments pursuant to this
clause (iv) shall not exceed $3,000,000 at any time;

              (f) loans or advances to employees of the Borrower or any
Restricted Subsidiary in the ordinary course of business, which loans and
advances shall not exceed the aggregate outstanding principal amount of
$1,500,000 at any time;

              (g) Investments constituting proceeds of collateral under the Term
Loan Documents;

              (h) Investments by the Borrower or any Restricted Subsidiary in
Permitted Acquisitions and joint ventures (other than, in the case of the
Borrower, Investments constituting a general partnership interest which results
in the Borrower being or becoming a general partner for partnership liability
purposes) which Investments the Borrower has reasonably determined are or would
be complementary to the Borrower's business and are consistent with the
provisions of


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Sections 8.6 and 8.7; provided, however, that the aggregate amount of such
Investments made after the Effective Date, together with all Guaranty
Obligations of the Borrower and the Restricted Subsidiaries incurred after the
Effective Date with respect to the Indebtedness of the Person in whom or with
respect to whom such Investment is made shall not exceed 50% of the Additional
Discretionary Amount; and provided, further, that after giving effect to any
such Investment, no Default or Event of Default under any other provision hereof
has occurred and is continuing or is reasonably likely to result therefrom;

              (i) Investments to the extent that the consideration is the
issuance by Holdings or the Borrower of its Stock or Stock Equivalents in
respect of the Stock of Holdings or the Borrower if the cash portion of the
consideration for such Investment does not exceed 50% of the value of the total
consideration for all such Investments;

              (j) Investments made in connection with e-commerce activities
which do not violate Sections 8.6 and 8.7 which do not to exceed $3,000,000 in
the aggregate; and

              (k) Investments not otherwise permitted hereby in an aggregate
outstanding amount not to exceed $500,000 in any Fiscal Year; provided, however,
that amounts not used under this clause (k) in any Fiscal Year may be carried
forward to subsequent Fiscal Years.

              SECTION 8.4. SALE OF ASSETS. The Borrower will not, and will not
permit any Restricted Subsidiary to, sell, convey, transfer, lease or otherwise
dispose of, any of its assets or any interest therein (including the sale or
factoring at maturity or collection of any accounts) to any Person, or permit or
suffer any other Person to acquire any interest in any of its assets or, in the
case of any Restricted Subsidiary, issue or sell any shares of such Restricted
Subsidiary's Stock or Stock Equivalent (any such disposition being an "Asset
Sale"), except:

              (a) the sale or disposition of inventory (including by-products
and raw materials) in the ordinary course of business;

              (b) the sale or disposition of equipment which have become
obsolete or are replaced in the ordinary course of business;

              (c) the lease or sublease of real property not constituting a sale
and leaseback, to the extent not otherwise prohibited by this Agreement;

              (d) assignments and licenses of intellectual property of the
Borrower and the Restricted Subsidiaries in the ordinary course of business;

              (e) any Asset Sale to the Borrower or any Subsidiary Guarantor;

              (f) any sale pursuant to a sale and leaseback transaction
permitted pursuant to Section 8.15; and

              (g) as long as no Default or Event of Default is continuing or
would result therefrom, any other Asset Sale for Fair Market Value.

              SECTION 8.5. RESTRICTED PAYMENTS. The Borrower will not, and will
not permit any Restricted Subsidiary to, directly or indirectly, declare, order,
pay, make or set apart any sum for any Restricted Payment except:


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              (a) Restricted Payments by any Restricted Subsidiary of the
Borrower to the Borrower or any Subsidiary Guarantor and by the Borrower to any
Subsidiary Guarantor; and

              (b) cash dividends on the Stock of the Borrower to Holdings paid
and declared in any Fiscal Year solely for the purpose of funding the following:

                     (i) ordinary operating expenses and scheduled debt service
              of Holdings not in excess of $5,000,000 in any Fiscal Year;

                     (ii) payments by Holdings in respect of foreign, federal,
              state or local taxes owing by Holdings in respect of the Borrower
              and the Restricted Subsidiaries, but not greater than the amount
              that would be payable by the Borrower, on a consolidated basis, if
              the Borrower were the taxpayer;

provided, however, that the Restricted Payments described in clause (b) above
shall not be permitted if such Restricted Payment is prohibited under the terms
of any Indebtedness (other than the Obligations) of the Borrower or any
Restricted Subsidiary;

              (c) in connection with a refinancing or refunding permitted by
Section 8.1(e);

              (d) in respect of the Obligations; and

              (e) Restricted Payments in an aggregate amount not in excess of
50% of the Additional Discretionary Amount (without taking into account (a) any
amounts under clause (c) of the definition of Additional Discretionary Amount
and (b) any Capital Expenditures made by the Borrower or any of its Subsidiaries
by virtue of the definition of Additional Discretionary Amount).

              Notwithstanding anything in this Agreement to the contrary, no
Restricted Payment described in clauses (b)(i) (as to debt service only),
(b)(ii), (c) or (e) shall be permitted under this Section 8.5 if any Event of
Default or Default shall have occurred and be continuing at the date of
declaration or payment thereof or would result therefrom.

              SECTION 8.6. RESTRICTION ON FUNDAMENTAL CHANGES; PERMITTED
ACQUISITIONS. Except in connection with a Permitted Acquisition permitted by
Section 8.3, the Borrower will not, and will not permit any Restricted
Subsidiary to (a) merge with any Person, (b) consolidate with any Person, (c)
acquire all or substantially all of the Stock or Stock Equivalents of any
Person, (d) acquire all or substantially all of the assets of any Person or all
or substantially all of the assets constituting the business of a division,
branch or other unit operation of any Person, (e) enter into any joint venture
or partnership with any Person or (f) acquire or create any Subsidiary unless,
after giving effect thereto, in each case the Borrower is in compliance with
Section 7.11.

              SECTION 8.7. CHANGE IN NATURE OF BUSINESS. The Borrower will not,
and will not permit any Subsidiary to, make any material change in the nature or
conduct of its business as carried on at the date hereof, whether in connection
with a Permitted Acquisition or otherwise; provided, however, that the Borrower
and its Subsidiaries may engage in a type of business which the Borrower has
reasonably determined is or would be complementary to the type of business
engaged in by the Borrower on the Effective Date.


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              SECTION 8.8. TRANSACTIONS WITH AFFILIATES. The Borrower will not,
and will not permit any Restricted Subsidiary to, except as otherwise expressly
permitted herein, do any of the following: (a) make any Investment in an
Affiliate of the Borrower which is not a Subsidiary of the Borrower except as
permitted under Section 8.3; (b) transfer, sell, lease, assign or otherwise
dispose of any asset to any Affiliate of the Borrower which is not a Subsidiary
of the Borrower; (c) merge into or consolidate with or purchase or, without the
consent of the Agent, acquire assets from any Affiliate of the Borrower which is
not a Restricted Subsidiary; (d) repay any Indebtedness to any Affiliate of the
Borrower which is not a Restricted Subsidiary except for Permitted Subordinated
Indebtedness; or (e) enter into any other transaction directly or indirectly
with or for the benefit of any Affiliate of the Borrower which is not a
Subsidiary Guarantor (including guaranties and assumptions of obligations of any
such Affiliate), except for (i) transfers, sales, leases, assignments,
dispositions, purchases, or acquisitions of assets and transactions in the
ordinary course of business on a basis no less favorable to the Borrower or such
Subsidiary Guarantor as would be obtained in a comparable arm's-length
transaction with a Person not an Affiliate and (ii) salaries, fees and other
employee compensation to officers or directors of the Borrower or any Restricted
Subsidiary comparable to those salaries, fees and other employee compensation
which are customary in the Borrower's industry for similarly situated officers
and directors. Notwithstanding the foregoing, the restrictions set forth in this
Section 8.8 shall not prohibit any Indebtedness permitted by Section 8.1(j) and
customary directors' fees and consulting fees, and shall not apply to collective
bargaining agreements entered into in good faith, compensation paid to the
Borrower's salaried non-officer employees, any transaction between the Borrower
and any Subsidiary of the Borrower or between Subsidiaries of the Borrower in
the ordinary course of business consistent with past practice and to any
transaction relating to direct iron-making as more fully described on Schedule
8.8; provided, however, that this Section 8.8 shall not apply to the
transactions relating to direct iron-making, as more fully described on Schedule
8.8 hereto or to payments made by the Borrower to Holdings, pursuant to the
Servicing Agreement.

              SECTION 8.9. RESTRICTIONS ON RESTRICTED SUBSIDIARY DISTRIBUTIONS;
NO NEW NEGATIVE PLEDGE. Other than pursuant to the Loan Documents, the Term Loan
Documents and any agreements governing any purchase money Indebtedness or
Capital Lease Obligations permitted by clause (b), (d), or (e) of Section 8.1
(in which latter case, any prohibition or limitation shall only be effective
against the assets financed thereby), the Borrower will not, and will not permit
any Restricted Subsidiary to, (a) agree to enter into or suffer to exist or
become effective any consensual encumbrance or restriction of any kind on the
ability of such Subsidiary to pay dividends or make any other distribution or
transfer of funds or assets or make loans or advances to or other Investments
in, or pay any Indebtedness owed to, the Borrower or any other Subsidiary of the
Borrower or (b) enter into or suffer to exist or become effective any agreement
which prohibits or limits the ability of the Borrower or any Restricted
Subsidiary to create, incur, assume or suffer to exist any Lien upon any of its
property, assets or revenues, whether now owned or hereafter acquired, to secure
the Obligations, including any agreement which requires other Indebtedness or
Contractual Obligation to be equally and ratably secured with the Obligations.

              SECTION 8.10. PLANS. The Borrower shall not, and shall not permit
any of its Subsidiaries or ERISA Affiliates to, (a) other than for obligations
in effect on the Effective Date with respect to plans listed on Schedule 4.16,
adopt or become obligated to contribute to any Title IV Plan or any
Multiemployer Plan or any other Plan subject to Section 412 of the Code, (b)
establish or become obligated with respect to any new Welfare Benefit Plan, or
modify any existing Welfare Benefit Plan, which is reasonably likely to result
in an increase of the present value of future liabilities for post-retirement
life insurance and medical benefits under all such


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plans to increase by more than $1,000,000, or (c) establish or become obligated
to contribute to any new unfunded Pension Plan, or modify any existing unfunded
Pension Plan, which is reasonably likely to result in an increase in the present
value of future liabilities under all such plans of more than $1,000,000.

              SECTION 8.11. MODIFICATION OF CONSTITUENT DOCUMENTS. The Borrower
will not, and will not permit any Restricted Subsidiary to, change its capital
structure (including in the terms of its outstanding Stock) or otherwise amend
its Constituent Documents, except for changes and amendments which do not
materially affect the rights and privileges of the Borrower or any of the
Restricted Subsidiaries, or the interests of the Agent, the Lenders and the
Issuers under the Loan Documents or in the Collateral.

              SECTION 8.12. MODIFICATION OF OTHER DEBT AGREEMENTS. The Borrower
will not, and will not permit any Restricted Subsidiary to, change or amend the
terms of any Other Debt (or any indenture or agreement in connection therewith)
if the effect of such amendment is to: (a) increase the interest rate on such
Other Debt; (b) change the dates upon which payments of principal or interest
are due on such Other Debt other than to extend such dates; (c) change any
default or event of default other than to delete or make less restrictive any
default provision therein, or add any covenant with respect to such Other Debt;
(d) change the redemption or prepayment provisions of such Other Debt other than
to extend the dates therefor or to reduce the premiums payable in connection
therewith; or (e) change or amend any other term if such change or amendment
would materially increase the obligations of the obligor or confer additional
material rights to the holder of such Other Debt in a manner adverse to the
Borrower, any Restricted Subsidiary, the Agent or any Lender; provided, however,
to the extent that such change or amendment to Other Debt is negotiated on an
arm's-length basis and does not result in such Other Debt being on terms which
are, taken as a whole, less favorable to the Borrower and the Restricted
Subsidiaries, then such change or amendment shall not be a violation of this
Section 8.8 if such Other Debt as so changed or amended would otherwise have
been permitted to be incurred pursuant to Section 8.1 if such Other Debt had
been refinanced.

              SECTION 8.13. ACCOUNTING CHANGES; FISCAL YEAR. The Borrower will
not, and will not permit any Restricted Subsidiary to, change its (a) accounting
treatment and reporting practices or tax reporting treatment, except as required
by GAAP or any Requirement of Law and disclosed to the Lenders and the Agent or
(b) Fiscal Year.

              SECTION 8.14. MARGIN REGULATIONS. The Borrower will not, and will
not permit any of its Subsidiaries to, use all or any portion of the proceeds of
any credit extended hereunder to purchase or carry margin stock (within the
meaning of Regulation U of the Federal Reserve Board).

              SECTION 8.15. OPERATING LEASES; SALE/LEASEBACKS.

              (a) The Borrower will not, and will not permit any Restricted
Subsidiary to, become or remain liable as lessee or guarantor or other surety
with respect to any operating lease, unless that aggregate amount of all rents
paid or accrued under all such operating leases shall be on market terms as a
result of arm's length negotiations and shall not exceed $10,000,000 in any
Fiscal Year.

              (b) The Borrower will not, and will not permit any Restricted
Subsidiary to, enter into any sale and leaseback transaction covering any
property with an aggregate Fair Market Value in excess of $17,000,000 unless the
same shall be on market terms as a result of arm's


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length negotiation, and no Default or Event of Default is then continuing or
would result therefrom; provided, however, that the Borrower and the Restricted
Subsidiaries may enter into a sale and leaseback transaction for a Walking Beam
Furnace with a Fair Market Value not in excess of $48,000,000; provided further,
however, that the Borrower and the Restricted Subsidiaries may enter into a sale
and leaseback transaction with respect to a Walking Beam Furnace with a Fair
Market Value in excess of $48,000,000 if at least $30,000,000 of financing for
such transaction is received by the Borrower and the Restricted Subsidiaries
from a financial institution acceptable to the Agent in its sole discretion.

              SECTION 8.16. CANCELLATION OF INDEBTEDNESS OWED TO IT. The
Borrower will not, and will not permit any of the Restricted Subsidiaries to,
cancel any claim or Indebtedness owed to it except in the ordinary course of
business consistent with past practice.

              SECTION 8.17. NO SPECULATIVE TRANSACTIONS. The Borrower will not,
and will not permit any of its Subsidiaries to, engage in any speculative
transaction or in any transaction involving Hedging Contracts except as required
by Section 7.12 or for the sole purpose of hedging in the normal course of
business and consistent with industry practices.

              SECTION 8.18. COMPLIANCE WITH ERISA. The Borrower will not, and
will not permit any of its Subsidiaries to, or cause or permit any ERISA
Affiliate to, cause or permit to occur (a) an event which could result in the
imposition of a Lien under Section 412 of the IRC or Section 302 or 4068 of
ERISA or (b) an ERISA Event that would have a Material Adverse Effect.

              SECTION 8.19. ENVIRONMENTAL. The Borrower will not, and will not
permit any of its Subsidiaries to, allow a Release of any Contaminant in
violation of any Environmental Law; provided, however, that the Borrower shall
not be deemed in violation of this Section 8.19 if, as the consequence of all
such Releases, such Loan Party would not incur Environmental Liabilities and
Costs in excess of $5,000,000 in the aggregate in cash in any twelve-month
period commencing on or prior to the date which is four years after the
Scheduled Termination Date.

              SECTION 8.20. MATERIAL SUBSIDIARIES. The Borrower shall not permit
its Restricted Subsidiaries which are not Material Subsidiaries or Subsidiary
Guarantors to own, in the aggregate for all such Subsidiaries, 5% or more of the
Total Assets or contribute 5% or more than of the Consolidated Net Income of the
Borrower and its Subsidiaries on a consolidated basis.

                                   ARTICLE IX

                                EVENTS OF DEFAULT

              SECTION 9.1. EVENTS OF DEFAULT. Each of the following events shall
be an Event of Default:

              (a) the Borrower shall fail to pay any principal of any Loan or
any Reimbursement Obligation when the same becomes due and payable; or

              (b) the Borrower shall fail to pay any interest on any Loan, any
fee under any of the Loan Documents or any other Obligation (other than one
referred to in clause (a) above) and such non-payment continues for a period of
three Business Days after the due date therefor; or


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              (c) any representation or warranty made or deemed made by any Loan
Party in any Loan Document or by or behalf of any Loan Party in connection with
any Loan Document shall prove to have been incorrect in any material respect
when made or deemed made; or

              (d) any Loan Party shall fail to perform or observe (i) any term,
covenant or agreement contained in Article V, Section 6.1, 6.2, 7.1, 7.6, 7.11,
7.12 or 7.13 or Article VIII, and, in the case of either Section 5.3 or Section
5.4, such failure to perform or observe the covenant set forth in such Section
shall be continuing, or (ii) any other term, covenant or agreement contained in
this Agreement or in any other Loan Document if such failure under this clause
(ii) shall remain unremedied for 30 days after the earlier of the date on which
(A) a Responsible Officer of the Borrower becomes aware of such failure or (B)
written notice thereof shall have been given to the Borrower by the Agent or any
Lender; or

              (e) (i) the Borrower or any Restricted Subsidiary shall fail to
make any payment or payments on any Indebtedness (other than the Obligations) of
the Borrower or any such Restricted Subsidiary (or any Guaranty Obligation in
respect of Indebtedness of any other Person) having an aggregate principal
amount for all such Indebtedness of $10,000,000 or more, when the same becomes
due and payable (whether by scheduled maturity, required prepayment,
acceleration after the expiration of any applicable grace period, demand or
otherwise); or (ii) any other event shall occur or condition shall exist under
any agreement or instrument relating to any such Indebtedness, if the effect of
such event or condition is to accelerate, or to permit the acceleration of, the
maturity of such Indebtedness; or (iii) any such Indebtedness shall become or be
declared to be due and payable, or required to be prepaid or repurchased (other
than by a regularly scheduled required prepayment), prior to the stated maturity
thereof; or

              (f) the Borrower or any Restricted Subsidiary shall generally not
pay its debts as such debts become due, or shall admit in writing its inability
to pay its debts generally, or shall make a general assignment for the benefit
of creditors, or any proceeding shall be instituted by or against the Borrower
or any Restricted Subsidiary seeking to adjudicate it a bankrupt or insolvent,
or seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a custodian, receiver,
trustee or other similar official for it or for any substantial part of its
property and, in the case of any such proceedings instituted against the
Borrower or any Restricted Subsidiary (but not instituted by it), either such
proceedings shall remain undismissed or unstayed for a period of 45 days or any
of the actions sought in such proceedings shall occur; or the Borrower or any of
its Subsidiaries shall take any corporate action to authorize any of the actions
set forth above in this subsection (f); or

              (g) one or more judgments or orders (or other similar process)
involving, in any single case or in the aggregate, an amount in excess of
$1,000,000 in the case of a money judgment, to the extent not covered by
insurance, shall be rendered against one or more of any of the Loan Parties and
its Subsidiaries and shall remain unpaid and either (i) enforcement proceedings
shall have been commenced by any creditor upon such judgment or order or (ii)
there shall be any period of 30 consecutive days during which a stay of
enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect; or

              (h) an ERISA Event shall occur and the amount of all liabilities
and deficiencies resulting therefrom, whether or not assessed, exceeds
$10,000,000 in the aggregate;


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              (i) any material provision of any Collateral Document or any
Guaranty after delivery thereof pursuant to this Agreement or any other Loan
Document shall for any reason cease to be valid and binding on, or enforceable
against, any Loan Party thereto, or any Loan Party shall so state in writing; or

              (j) any Collateral Document shall for any reason cease to create a
valid Lien on any material amount of the Collateral purported to be covered
thereby or except as permitted by the Loan Documents, such Lien shall cease to
be a perfected and first priority Lien or any Loan Party shall so state in
writing; or

              (k) there shall occur any Change of Control; or

              (l) there shall occur a Material Adverse Change (other than any
change disclosed to the Agent prior to November 20, 2000), any change since
November 20, 2000 that represents any material adverse change to, or material
worsening of, the business, condition (financial or otherwise), operations,
performance, properties or prospects of the Borrower and its Subsidiaries taken
as a whole, or that is inconsistent in any materially adverse respect with the
financial statements and other information delivered to the Agent prior to
November 20, 2000 or any event or circumstances which would have a Material
Adverse Effect (other than any event or circumstance disclosed to the Agent
prior to November 20, 2000), any event or circumstance since November 20, 2000
that represents any material adverse change to, or material worsening of, the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries taken as a whole,
or that is inconsistent in any materially adverse respect with the financial
statements and other information delivered to the Agent prior to November 20,
2000; or

              (m) one or more of the Borrower and its Material Subsidiaries
shall have entered into one or more consent or settlement decrees or agreements
or similar arrangements with a Governmental Authority or one or more judgments,
orders, decrees or similar actions shall have been entered against one or more
of the Borrower and its Subsidiaries based on or arising from the violation of
or pursuant to any Environmental Law, or the generation, storage,
transportation, treatment, disposal or Release of any Contaminant and, in
connection with all the foregoing, the Borrower and its Subsidiaries are likely
to incur Environmental Liabilities and Costs in excess of $5,000,000 in the
aggregate in cash in any twelve-month period commencing on or prior to the
Scheduled Termination Date that were not reflected in the Projections or the
Financial Statements delivered pursuant to Section 4.4; or

              (n) the proceeds of the repayment of any of the Permitted
Subordinated Debt permitted to be repaid prior to one year following the
Scheduled Termination Date shall not have been re-loaned by Holdings to the
Borrower, unless the Agent shall have otherwise consented thereto in writing.

              SECTION 9.2. REMEDIES. Upon the occurrence and during the
continuance of any Event of Default, the Agent (a) may, and shall at the request
of the Requisite Lenders, by notice to the Borrower declare that all or any
portion of the Revolving Credit Commitments be terminated, whereupon the
obligation of each Lender to make any Loan and each Issuer to issue any Letter
of Credit shall immediately terminate, and/or (b) may and shall at the request
of the Requisite Lenders, by notice to the Borrower, declare the Loans, all
interest thereon and all other amounts and Obligations payable under this
Agreement to be forthwith due and payable, whereupon the Loans, all such
interest and all such amounts and Obligations shall become and be forthwith due
and payable, without presentment, demand, protest or further notice of any kind,
all


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of which are hereby expressly waived by the Borrower; provided, however, that
upon the occurrence of the Event of Default specified in Section 9.1(f), the (i)
the Revolving Credit Commitments of each Lender to make Loans and of each Lender
and Issuer to issue or participate in Letters of Credit shall automatically be
terminated and (ii) the Loans, all such interest and all such amounts and
Obligations shall automatically become and be due and payable, without
presentment, demand, protest or any notice of any kind, all of which are hereby
expressly waived by the Borrower. In addition to the remedies set forth above,
the Agent may exercise any remedies provided for by the Collateral Documents in
accordance with the terms thereof or any other remedies provided by applicable
law.

              SECTION 9.3. ACTIONS IN RESPECT OF LETTERS OF CREDIT. Upon the
Revolving Credit Termination Date or as required by Section 2.9(b) the Borrower
shall pay to the Agent in immediately available funds at the Agent's office
referred to in Section 11.8, for deposit in a Cash Collateral Account, an amount
equal to 105% of the sum of all outstanding Letter of Credit Obligations. The
Agent may, from time to time after funds are deposited in a Cash Collateral
Account, apply funds then held in a Cash Collateral Account to the payment of
any amounts, in accordance with Section 2.13(f), as shall have become or shall
become due and payable by the Borrower to the Issuers or Lenders in respect of
the Letter of Credit Obligations. The Agent shall promptly give written notice
of any such application; provided, however, that the failure to give such
written notice shall not invalidate any such application.

              SECTION 9.4. RESCISSION. If at any time after termination of the
Revolving Credit Commitments and/or acceleration of the maturity of the Loans,
the Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans and Reimbursement Obligations which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified herein) and all
Events of Default and Defaults (other than non-payment of principal of and
accrued interest on the Loans due and payable solely by virtue of acceleration)
shall be remedied or waived pursuant to Section 11.1, then upon the written
consent of the Requisite Lenders and written notice to the Borrower, the
termination of the Revolving Credit Commitments and/or the acceleration and its
consequences may be rescinded and annulled; but such action shall not affect any
subsequent Event of Default or Default or impair any right or remedy consequent
thereon. The provisions of the preceding sentence are intended merely to bind
the Lenders and the Issuers to a decision which may be made at the election of
the Requisite Lenders; they are not intended to benefit the Borrower and do not
give the Borrower the right to require the Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.

                                    ARTICLE X

                                    THE AGENT

              SECTION 10.1. AUTHORIZATION AND ACTION.

              (a) Each Lender and each Issuer hereby appoints Citicorp as the
Agent hereunder and each Lender and each Issuer authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement, the other Loan Documents and the Intercreditor Agreement as are
delegated to the Agent under such agreements and to exercise such powers as are
reasonably incidental thereto. Without limiting the foregoing, each Lender and
each Issuer hereby authorizes the Agent to execute and deliver, and to perform
its obligations under, the Intercreditor Agreement and each of the Loan
Documents to which such Agent is a party and to exercise all rights, powers and
remedies that such Agent may have under such Loan


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Documents and the Intercreditor Agreement and that under the Collateral
Documents and the Intercreditor Agreement, the Agent is acting as agent for the
Lenders, Issuers and the other Secured Parties.

              (b) As to any matters not expressly provided for by this
Agreement, the other Loan Documents and the Intercreditor Agreement (including
enforcement or collection), the Agent shall not be required to exercise any
discretion or take any action, but shall be required to act or to refrain from
acting (and shall be fully protected in so acting or refraining from acting)
upon the instructions of the Requisite Lenders, and such instructions shall be
binding upon all Lenders and each Issuer; provided, however, that the Agent
shall not be required to take any action which (i) the Agent in good faith
believes exposes it to personal liability unless the Agent receives an
indemnification satisfactory to it from the Lenders and the Issuers with respect
to such action or (ii) is contrary to this Agreement or applicable law. The
Agent agrees to give to each Lender and each Issuer prompt notice of each notice
given to it by any Loan Party pursuant to the terms of this Agreement or the
other Loan Documents.

              (c) In performing its functions and duties hereunder and under the
other Loan Documents and the Intercreditor Agreement, the Agent is acting solely
on behalf of the Lenders and the Issuers and its duties are entirely
administrative in nature. The Agent does not assume and shall not be deemed to
have assumed any obligation other than as expressly set forth herein and in the
other Loan Documents or the Intercreditor Agreement or any other relationship as
the agent, fiduciary or trustee of or for any Lender, Issuer or holder of any
other Obligation. The Agent may perform any of its duties under any of the Loan
Documents or the Intercreditor Agreement by or through its agents or employees.

              SECTION 10.2. AGENT'S RELIANCE, ETC. As between the Lenders,
Issuers and the Agent, neither the Agent nor any of its Affiliates or any of the
respective directors, officers, agents or employees of such Agent or any such
Affiliate shall be liable for any action taken or omitted to be taken by it,
him, her or them under or in connection with this Agreement, the Intercreditor
Agreement or the other Loan Documents, except for its, his, her or their own
gross negligence or willful misconduct. Without limiting the foregoing, the
Agent (a) may treat the payee of any Revolving Credit Note as its holder until
such Revolving Credit Note has been assigned in accordance with Section 11.2;
(b) may rely on the Register to the extent set forth in Section 11.2(c); (c) may
consult with legal counsel (including counsel to the Borrower or any other Loan
Party), independent public accountants and other experts selected by it and
shall not be liable for any action taken or omitted to be taken in good faith by
it in accordance with the advice of such counsel, accountants or experts; (d)
makes no warranty or representation to any Lender or Issuer and shall not be
responsible to any Lender or Issuer for any statements, warranties or
representations made by or on behalf of the Borrower or any of its Subsidiaries
in or in connection with this Agreement or any of the other Loan Documents; (e)
shall not have any duty to ascertain or to inquire either as to the performance
or observance of any of the terms, covenants or conditions of this Agreement,
any of the other Loan Documents or the Intercreditor Agreement or the financial
condition of any Loan Party, or the existence or possible existence of any
Default or Event of Default; (f) shall not be responsible to any Lender or
Issuer for the due execution, legality, validity, enforceability, genuineness,
sufficiency or value of this Agreement, any of the other Loan Documents or the
Intercreditor Agreement or any other instrument or document furnished pursuant
hereto or thereto; and (g) shall incur no liability under or in respect of this
Agreement or any of the other Loan Documents by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telecopy) or any
telephone message believed by it to be genuine and signed or sent by the proper
party or parties.


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              SECTION 10.3. THE AGENT INDIVIDUALLY. With respect to its Ratable
Portion, Citicorp shall have and may exercise the same rights and powers
hereunder and is subject to the same obligations and liabilities as and to the
extent set forth herein for any other Lender. The terms "Lenders" or "Requisite
Lenders" or any similar terms shall, unless the context clearly otherwise
indicates, include the Agent in its individual capacity as a Lender or as one of
the Requisite Lenders. Citicorp and its Affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with any Loan Party as if it were not acting as the Agent.

              SECTION 10.4. LENDER CREDIT DECISION. Each Lender and each Issuer
acknowledges that it shall, independently and without reliance upon the Agent or
any other Lender conduct its own independent investigation of the financial
condition and affairs of the Borrower and each other Loan Party in connection
with the making and continuance of the Loans and with the issuance of the
Letters of Credit. Each Lender and each Issuer also acknowledges that it will,
independently and without reliance upon the Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and other Loan Documents.

              SECTION 10.5. INDEMNIFICATION. Each Lender agrees to indemnify the
Agent and each of its Affiliates, and each of their respective directors,
officers, employees, agents and advisors (to the extent not reimbursed by the
Borrower), from and against such Lender's aggregate Ratable Portion of any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses and disbursements (including fees and disbursements of
legal counsel) of any kind or nature whatsoever which may be imposed on,
incurred by, or asserted against, the Agent or any of their respective
Affiliates, directors, officers, employees, agents and advisors in any way
relating to or arising out of this Agreement, the other Loan Documents or the
Intercreditor Agreement or any action taken or omitted by the Agent under this
Agreement, the Intercreditor Agreement or the other Loan Documents; provided,
however, that no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's or such Affiliate's gross
negligence or willful misconduct. Without limiting the foregoing, each Lender
agrees to reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including fees and disbursements of legal counsel)
incurred by the Agent in connection with the preparation, execution, delivery,
administration, modification, amendment or enforcement (whether through
negotiations, legal proceedings or otherwise) of, or legal advice in respect of
its rights or responsibilities under, this Agreement, the Intercreditor
Agreement or the other Loan Documents, to the extent that the Agent is not
reimbursed for such expenses by the Borrower or another Loan Party.

              SECTION 10.6. SUCCESSOR AGENTS. The Agent may resign at any time
by giving written notice thereof to the Lenders and the Borrower. Upon any such
resignation, the Requisite Lenders shall have the right to appoint a successor
Agent. If no successor Agent shall have been so appointed by the Requisite
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Agent's giving of notice of resignation, then the retiring Agent may,
on behalf of the Lenders, appoint a successor Agent, selected from among the
Lenders. In either case, such appointment shall be subject to the prior written
approval of the Borrower (which approval may not be unreasonably withheld and
shall not be required upon the occurrence and during the continuance of an Event
of Default). Upon the acceptance of any appointment as Agent by a successor
Agent, such successor Agent shall succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be


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discharged from its duties and obligations under this Agreement, the
Intercreditor Agreement and the other Loan Documents and the Intercreditor
Agreement. Prior to any retiring Agent's resignation hereunder as Agent, the
retiring Agent shall take such action as may be reasonably necessary to assign
to the successor Agent its rights as Agent under the Loan Documents. After such
resignation, the retiring Agent shall continue to have the benefit of this
Article X as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement and the other Loan Documents.

              SECTION 10.7. CONCERNING THE COLLATERAL AND THE COLLATERAL
DOCUMENTS.

              (a) Each Lender and each Issuer agrees that (subject to the
provisions of the Intercreditor Agreement) any action taken by the Agent or the
Requisite Lenders (or, where required by the express terms of this Agreement or
the Intercreditor Agreement, a greater proportion of the Lenders) in accordance
with the provisions of this Agreement or of the other Loan Documents and the
Intercreditor Agreement, and the exercise by the Agent or the Requisite Lenders
(or, where so required, such greater proportion) of the powers set forth herein
or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders, Issuers and
other Secured Parties. Without limiting the generality of the foregoing, the
Agent shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders and the Issuers with respect to
all payments and collections arising in connection herewith and with the
Collateral Documents; (ii) execute and deliver each Collateral Document and
accept delivery of each such agreement delivered by the Borrower or any of its
Subsidiaries; (iii) act as collateral agent for the Lenders, the Issuers and the
other Secured Parties for purposes of the perfection of all security interests
and Liens created by such agreements and all other purposes stated therein;
provided, however, that the Agent hereby appoints, authorizes and directs each
Lender and Issuer to act as collateral sub-agent for the Agent, the Lenders and
the Issuers for purposes of the perfection of all security interests and Liens
with respect to the Borrower's and its Subsidiaries' respective deposit accounts
maintained with, and cash and Cash Equivalents held by, such Lender or such
Issuer; (iv) except as provided in the Intercreditor Agreement with respect to
the Agent, manage, supervise and otherwise deal with the Collateral; (v) take
such action as is necessary or desirable to maintain the perfection and priority
of the security interests and Liens created or purported to be created by the
Collateral Documents; and (vi) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document or the
Intercreditor Agreement, exercise all remedies given to the Agent, the Lenders,
the Issuers and the other Secured Parties with respect to the Collateral under
the Loan Documents relating thereto, applicable law or otherwise.

              (b) Each of the Lenders and the Issuers hereby directs, in
accordance with the terms hereof, the Agent to release (or, in the case of
clause (ii) below, release or subordinate) any Lien held by the Agent for the
benefit of the Lenders and the Issuers:

                     (i) against all of the Collateral, upon termination of the
              Revolving Credit Commitments and payment and satisfaction in full
              of all Loans, Reimbursement Obligations and all other Obligations
              which have matured and which the Agent has been notified in
              writing are then due and payable (and, in respect of contingent
              Letter of Credit Obligations, with respect to which cash
              collateral has been deposited or a back-up letter of credit has
              been issued, in either case on terms satisfactory to the Agent and
              the applicable Issuers);


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                     (ii) against any assets that are subject to a Lien
              permitted by Section 8.2(d) or (e); and

                     (iii) against any part of the Collateral sold or disposed
              of by a Loan Party if such sale or disposition is permitted by
              this Agreement (or permitted pursuant to a waiver or consent of a
              transaction otherwise prohibited by this Agreement) or, if not
              pursuant to such sale or disposition, against Collateral with a
              book value of up to $10,000,000, if such release is consented to
              by the Agent, or any part of the Collateral in excess of such
              amount, if such release is consented to by all the Lenders.

Each of the Lenders and the Issuers hereby directs the Agent to execute and
deliver or file such termination and partial release statements and do such
other things as are necessary to release Liens to be released pursuant to this
Section 10.7 promptly upon the effectiveness of any such release.

              SECTION 10.8. COLLATERAL MATTERS RELATING TO RELATED OBLIGATIONS.
The benefit of the Loan Documents and of the provisions of this Agreement
relating to the Collateral shall extend to and be available in respect of any
Secured Obligation which arises under any Hedging Contract or which is otherwise
owed to Persons other than the Agent, the Lenders and the Issuers (collectively,
"Related Obligations") solely on the condition and understanding, as among the
Agent and all Secured Parties, that (i) the Related Obligations shall be
entitled to the benefit of the Loan Documents and the Collateral to the extent
expressly set forth in this Agreement and the other Loan Documents and to such
extent the Agent shall hold, and have the right and power to act with respect
to, the Guaranty and the Collateral on behalf of and as agent for the holders of
the Related Obligations, but the Agent is otherwise acting solely as agent for
the Lenders and the Issuers and shall have no fiduciary duty, duty of loyalty,
duty of care, duty of disclosure or other obligation whatsoever to any holder of
Related Obligations; (ii) all matters, acts and omissions relating in any manner
to the Guaranty, the Collateral, or the omission, creation, perfection,
priority, abandonment or release of any Lien, shall be governed solely by the
provisions of this Agreement and the other Loan Documents and no separate Lien,
right, power or remedy shall arise or exist in favor of any Secured Party under
any separate instrument or agreement or in respect of any Related Obligation;
and (iii) each Secured Party shall be bound by all actions taken or omitted, in
accordance with the provisions of this Agreement and the other Loan Documents,
by the Agent and the Requisite Lenders, each of whom shall be entitled to act at
its sole discretion and exclusively in its own interest given its own Revolving
Credit Commitments and its own interest in the Loans, Letter of Credit
Obligations and other Obligations to it arising under this Agreement or the
other Loan Documents, without any duty or liability to any other Secured Party
or as to any Related Obligation and without regard to whether any Related
Obligation remains outstanding or is deprived of the benefit of the Collateral
or becomes unsecured or is otherwise affected or put in jeopardy thereby; and
(iv) no holder of Related Obligations and no other Secured Party (except the
Agent, the Lenders and the Issuers, to the extent set forth in this Agreement)
shall have any right to be notified of, or to direct, require or be heard with
respect to, any action taken or omitted in respect of the Collateral or under
this Agreement or the Loan Documents; and (v) no holder of any Related
Obligation shall exercise any right of setoff, banker's lien or similar right
except as expressly provided in Section 11.6.


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                                   ARTICLE XI

                                  MISCELLANEOUS

              SECTION 11.1. AMENDMENTS, WAIVERS, ETC.

              (a) No amendment or waiver of any provision of this Agreement or
any other Loan Document nor consent to any departure by any Loan Party therefrom
shall in any event be effective unless the same shall be in writing and signed
by the Requisite Lenders, and then any such waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given;
provided, however, that no amendment, waiver or consent shall, unless in writing
and signed by each Lender, in addition to the Requisite Lenders, do any of the
following:

                     (i) waive any of the conditions specified in Section 3.1 or
              3.2 except with respect to a condition based upon another
              provision hereof, the waiver of which requires only the
              concurrence of the Requisite Lenders;

                     (ii) increase the Revolving Credit Commitments of the
              Lenders or subject the Lenders to any additional obligations;

                     (iii) extend the scheduled final maturity of any Loan, or
              waive, reduce or postpone any scheduled date fixed for the payment
              or reduction of principal (it being understood that Section 2.9
              does not provide for scheduled dates fixed for payment) or of the
              Revolving Credit Commitments;

                     (iv) reduce the principal amount of any Loan or
              Reimbursement Obligation (other than by the payment or prepayment
              thereof);

                     (v) reduce the rate of interest on any Loan or
              Reimbursement Obligations (without the consent of the Issuer) or
              any fee payable hereunder;

                     (vi) postpone any scheduled date fixed for payment of such
              interest or fees;

                     (vii) change the aggregate Ratable Portions of the Lenders
              which shall be required for the Lenders or any of them to take any
              action hereunder;

                     (viii) increase the Advance Rates more than five percentage
              points above the maximum rates set forth in the definition
              thereof;

                     (ix) release any of the Collateral except as provided in
              Section 10.7(b) or release any Subsidiary Guarantor from its
              obligations under the Guaranty except in connection with sale or
              other disposition permitted by this Agreement (or permitted
              pursuant to a waiver or consent of a transaction otherwise
              prohibited by this Agreement);

                     (x) amend Section 10.7(b) or this Section 11.1 or the
              definition of the terms "Requisite Lenders" or "Ratable Portion";
              or


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                     (xi) amend the Intercreditor Agreement if such amendment is
              materially adverse to the Lenders or to the Collateral;

and provided, further, that no amendment, waiver or consent shall, unless in
writing and signed by the Agent in addition to the Lenders required above to
take such action, affect the rights or duties of the Agent, as the case may be,
under this Agreement or the other Loan Documents or the Intercreditor Agreement.

              (b) The Agent may, but shall have no obligation to, with the
written concurrence of any Lender, execute amendments, modifications, waivers or
consents on behalf of that Lender. Any waiver or consent shall be effective only
in the specific instance and for the specific purpose for which it was given. No
notice to or demand on the Borrower in any case shall entitle the Borrower to
any other or further notice or demand in similar or other circumstances.

              (c) Notwithstanding anything herein to the contrary, in the event
that the Borrower shall have requested each of the Lenders, in writing, to agree
to an amendment, modification, waiver or consent with respect to any particular
provision or provisions hereof, and any such Lender shall have failed to state,
in writing, that it either agrees or disagrees (in full or in part) with such
request (in the case of its statement of agreement, subject to satisfactory
documentation and such other conditions it may specify) within 30 days of such
request, then such Lender hereby irrevocably authorizes the Agent to agree or
disagree, in full or in part, and in the Agent's sole discretion, to such
requests on behalf of such Lender as such Lender's attorney-in-fact and to
execute and deliver any writing approved by the Agent which evidences such
agreement as such Lender's duly authorized agent for such purposes.

              (d) In connection with any proposed amendment, modification,
waiver or termination (a "Proposed Change") requiring the consent of all
affected Lenders, the consent of Requisite Lenders is obtained, but the consent
of other Lenders whose consent is required is not obtained (any such Lender
whose consent is not obtained as described in this Section 11.1 being referred
to as a "Non-Consenting Lender"), then, so long as the Lender that is acting as
the Agent is not a Non-Consenting Lender, at the Borrower's request, the Agent
or an Eligible Assignee that is acceptable to the Agent shall have the right
with the Agent's consent and in the Agent's sole discretion (but shall have no
obligation) to purchase from such Non-Consenting Lender, and such Non-Consenting
Lender agrees that it shall, upon the Agent's request, sell and assign to the
Lender that is acting as the Agent or such Eligible Assignee, all of the
Commitments, Term Loans and Revolving Credit Outstandings of such Non-Consenting
Lender for an amount equal to the principal balance of all Revolving Loans held
by the Non-Consenting Lender and all accrued interest and fees with respect
thereto through the date of sale, such purchase and sale to be consummated
pursuant to an executed Assignment and Acceptance.

              SECTION 11.2. ASSIGNMENTS AND PARTICIPATIONS.

              (a) Each Lender may sell, transfer, negotiate or assign to one or
more Eligible Assignees all or a portion of its rights and obligations hereunder
(including all of its rights and obligations with respect to the Revolving
Credit Loans, the Swing Loans and the Letters of Credit); provided, however,
that (i) such assignment shall cover the same percentage of such Lender's
Revolving Credit Outstandings and Revolving Credit Commitment, (ii) the
aggregate amount being assigned pursuant to each such assignment (determined as
of the date of the Assignment and Acceptance with respect to such assignment)
shall in no event (if less than the Assignor's entire interest) be less than
$10,000,000 or an integral multiple of $1,000,000 in


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excess thereof, except, in either case, (A) with the consent of the Borrower and
the Agent or (B) if such assignment is being made to a Lender or an Affiliate or
Approved Fund of such Lender, and (iii) if such Eligible Assignee is not, prior
to the date of such assignment, a Lender or an Affiliate or Approved Fund of a
Lender, such assignment shall be subject to the prior consent of the Agent and
the Borrower (which consent shall not be unreasonably withheld or delayed);
provided, however, that notwithstanding any other provision of this Section
11.2, the consent of the Borrower shall not be required for any assignment which
occurs when any Event of Default shall have occurred and be continuing.

              (b) The parties to each assignment shall execute and deliver to
the Agent, for its acceptance and recording, an Assignment and Acceptance,
together with any Revolving Credit Note (if the assigning Lender's Loans are
evidenced by a Revolving Credit Note) subject to such assignment. Upon such
execution, delivery, acceptance and recording and the receipt by the Agent from
the assignee of an assignment fee in the amount of $3,500 from and after the
effective date specified in such Assignment and Acceptance, (i) the assignee
thereunder shall become a party hereto and, to the extent that rights and
obligations under the Loan Documents have been assigned to such assignee
pursuant to such Assignment and Acceptance, have the rights and obligations of a
Lender, and if such Lender were an Issuer, of such Issuer hereunder and
thereunder, and (ii) the assignor thereunder shall, to the extent that rights
and obligations under this Agreement have been assigned by it pursuant to such
Assignment and Acceptance, relinquish its rights (except those which survive the
payment in full of the Obligations) and be released from its obligations under
the Loan Documents and the Intercreditor Agreement, other than those relating to
events or circumstances occurring prior to such assignment (and, in the case of
an Assignment and Acceptance covering all or the remaining portion of an
assigning Lender's rights and obligations under the Loan Documents and the
Intercreditor Agreement, such Lender shall cease to be a party hereto).

              (c) The Agent shall maintain at its address referred to in Section
11.3 a copy of each Assignment and Acceptance delivered to and accepted by it
and a register for the recording of the names and addresses of the Lenders and
the Revolving Credit Commitments of and principal amount of the Loans and Letter
of Credit Obligations owing to each Lender from time to time (the "Register").
The entries in the Register shall be conclusive and binding for all purposes,
absent demonstrable error, and the Loan Parties, the Agent and the Lenders may
treat each Person whose name is recorded in the Register as a Lender for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrower, the Agent or any Lender at any reasonable time and from time to
time upon reasonable prior notice.

              (d) Upon its receipt of an Assignment and Acceptance executed by
an assigning Lender and an assignee, the Agent shall, if such Assignment and
Acceptance has been completed, (i) accept such Assignment and Acceptance, (ii)
record the information contained therein in the Register and (iii) give prompt
notice thereof to the Borrower. Within five Business Days after its receipt of
such notice, the Borrower, at its own expense, shall, if requested by such
assignee, execute and deliver to the Agent, new Revolving Credit Notes to the
order of such assignee in an amount equal to the Revolving Credit Commitments
assumed by it pursuant to such Assignment and Acceptance and, if the assigning
Lender has surrendered any Revolving Credit Note for exchange in connection with
the assignment and has retained Revolving Credit Commitments hereunder, new
Revolving Credit Notes to the order of the assigning Lender in an amount equal
to the Revolving Credit Commitments retained by it hereunder. Such new Revolving
Credit Notes shall be dated the same date as the surrendered Revolving Credit
Notes and be in substantially the form of Exhibit B.


                                       87
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              (e) In addition to the other assignment rights provided in this
Section 11.2, each Lender may assign, as collateral or otherwise, any of its
rights under this Agreement (including rights to payments of principal or
interest on the Loans) to (i) any Federal Reserve Bank pursuant to Regulation A
of the Federal Reserve Board without notice to or consent of the Borrower or the
Agent and (ii) any trustee for the benefit of the holders of such Lender's
Securities; provided, however, that no such assignment shall release the
assigning Lender from any of its obligations hereunder.

              (f) Each Lender may sell participations to one or more Persons in
or to all or a portion of its rights and obligations under the Loan Documents
(including all its rights and obligations with respect to Revolving Credit Loans
and Letters of Credit); provided, however, that the Agent shall be notified of
the terms of any participation prior to the sale thereof. The terms of such
participation shall not, in any event, require the participant's consent to any
amendments, waivers or other modifications of any provision of any Loan
Documents, the consent to any departure by any Loan Party therefrom, or to the
exercising or refraining from exercising any powers or rights which such Lender
may have under or in respect of the Loan Documents (including the right to
enforce the obligations of the Loan Parties), except if any such amendment,
waiver or other modification or consent would (i) reduce the amount, or postpone
any date fixed for, any amount (whether of principal, interest or fees) payable
to such participant under the Loan Documents, to which such participant would
otherwise be entitled under such participation or (ii) result in the release of
all or substantially all of the Collateral other than in accordance with Section
10.7(b). In the event of the sale of any participation by any Lender, (A) such
Lender's obligations under the Loan Documents and the Intercreditor Agreement
shall remain unchanged, (B) such Lender shall remain solely responsible to the
other parties for the performance of such obligations, (C) such Lender shall
remain the holder of such Obligations for all purposes of this Agreement, and
(D) the Borrower, the Agent and the other Lenders shall continue to deal solely
and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement. Each participant shall be entitled to the
benefits of Sections 2.14(d), 2.15 and 2.16 as if it were a Lender; provided,
however, that anything herein to the contrary notwithstanding, the Borrower
shall not, at any time, be obligated to pay to any participant of any interest
of any Lender, any sum in excess of the sum which the Borrower would have been
obligated to pay to such Lender in respect of such interest had such
participation not been sold.

              (g) Any Issuer may at any time assign its rights and obligations
hereunder to any other Lender by an instrument in form and substance
satisfactory to the Borrower, the Agent, such Issuer and such Lender. If any
Issuer ceases to be a Lender hereunder by virtue of any assignment made pursuant
to this Section 11.2, then, as of the effective date of such cessation, such
Issuer's obligations to issue Letters of Credit pursuant to Section 2.04 shall
terminate and such Issuer shall be an Issuer hereunder only with respect to
outstanding Letters of Credit issued prior to such date.

              SECTION 11.3. COSTS AND EXPENSES.

              (a) The Borrower agrees upon demand to pay, or reimburse Agent
(after application of any deposit given to the Agent to cover such costs and
expenses) for, all of the Agent's reasonable internal and external audit, legal,
appraisal, valuation, filing, document duplication and reproduction and
investigation expenses and for all other reasonable out-of-pocket costs and
expenses of every type and nature (including, without limitation, the reasonable
fees, expenses and disbursements of the Agent's counsel, Weil, Gotshal & Manges
LLP, local legal counsel, auditors, accountants, appraisers, printers, insurance
and environmental advisers,


                                       88
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and other consultants and agents) incurred by Agent in connection with (i) the
Agent's audit and investigation of the Borrower and its Subsidiaries in
connection with the preparation, negotiation and execution of the Loan Documents
and the Intercreditor Agreement and the Agent's periodic audits of the Borrower
and its Subsidiaries, as the case may be; (ii) the preparation, negotiation,
execution and interpretation of this Agreement (including, without limitation,
the satisfaction or attempted satisfaction of any of the conditions set forth in
Article III), the Loan Documents and the Intercreditor Agreement and any
proposal letter or commitment letter issued in connection therewith and the
making of the Loans hereunder; (iii) the creation, perfection or protection of
the Liens under the Loan Documents (including, without limitation, any
reasonable fees and expenses for local counsel in various jurisdictions); (iv)
the ongoing administration of this Agreement and the Loans, including
consultation with attorneys in connection therewith and with respect to the
Agent's rights and responsibilities hereunder and under the other Loan
Documents; (v) the protection, collection or enforcement of any of the
Obligations or the enforcement of any of the Loan Documents and the
Intercreditor Agreement; (vi) the commencement, defense or intervention in any
court proceeding relating in any way to the Obligations, any Loan Party, any of
the Borrower's Subsidiaries, this Agreement or any of the other Loan Documents
or the Intercreditor Agreement; (vii) the response to, and preparation for, any
subpoena or request for document production with which the Agent is served or
deposition or other proceeding in which an Agent is called to testify, in each
case, relating in any way to the Obligations, any Loan Party, any of the
Borrowers' Subsidiaries, this Agreement or any of the other Loan Documents or
the Intercreditor Agreement; and (viii) any amendments, consents, waivers,
assignments, restatements, or supplements to any of the Loan Documents or the
Intercreditor Agreement and the preparation, negotiation, and execution of the
same.

              (b) The Borrower further agrees to pay or reimburse the Agent and
each of the Lenders and Issuers upon demand for all out-of-pocket costs and
expenses, including, without limitation, reasonable attorneys' fees (including
allocated costs of internal counsel and costs of settlement), incurred by the
Agent, such Lenders or Issuers (i) in enforcing any Loan Document or the
Intercreditor Agreement or Obligation or any security therefor or exercising or
enforcing any other right or remedy available by reason of an Event of Default;
(ii) in connection with any refinancing or restructuring of the credit
arrangements provided hereunder in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer, motion
or other pleadings in any legal proceeding relating to the Obligations, any Loan
Party, any of the Borrowers' Subsidiaries and related to or arising out of the
transactions contemplated hereby or by any of the other Loan Documents or the
Intercreditor Agreement; and (iv) in taking any other action in or with respect
to any suit or proceeding (bankruptcy or otherwise) described in clauses (i)
through (iii) above.

              SECTION 11.4. INDEMNITIES.

              (a) The Borrower agrees to indemnify and hold harmless each Agent,
each Lender and each Issuer and each of their respective Affiliates, and each of
the directors, officers, employees, agents, representative, attorneys,
consultants and advisors of or to any of the foregoing (including those retained
in connection with the satisfaction or attempted satisfaction of any of the
conditions set forth in Article III) (each such Person being an "Indemnitee")
from and against any and all claims, damages, liabilities, obligations, losses,
penalties, actions, judgments, suits, costs, disbursements and expenses of any
kind or nature (including reasonable fees and disbursements of counsel to any
such Indemnitee) which may be imposed on, incurred by or asserted against any
such Indemnitee in connection with or arising out of any investigation,
litigation or proceeding, whether or not any such Indemnitee is a party thereto,
whether direct,


                                       89
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indirect, or consequential and whether based on any federal, state or local law
or other statutory regulation, securities or commercial law or regulation, or
under common law or in equity, or on contract, tort or otherwise, in any manner
relating to or arising out of this Agreement, any other Loan Document, the
Intercreditor Agreement, any Obligation, any Letter of Credit, the Disclosure
Documents, the Disclosure Statement, or any act, event or transaction related or
attendant to any thereof, or the use or intended use of the proceeds of the
Loans or Letters of Credit or in connection with any investigation of any
potential matter covered hereby (collectively, the "Indemnified Matters");
provided, however, that the Borrower shall not have any obligation under this
Section 11.4 to an Indemnitee with respect to any Indemnified Matter caused by
or resulting from the gross negligence or willful misconduct of that Indemnitee,
as determined by a court of competent jurisdiction in a final non-appealable
judgment or order. Without limiting the foregoing, Indemnified Matters include
(i) all Environmental Liabilities and Costs arising from or connected with the
past, present or future operations of the Borrower or any of its Subsidiaries
involving any property subject to a Collateral Document, or damage to real or
personal property or natural resources or harm or injury alleged to have
resulted from any Release of Contaminants on, upon or into such property or any
contiguous real estate; (ii) any costs or liabilities incurred in connection
with any Remedial Action concerning the Borrower or any of its Subsidiaries;
(iii) any costs or liabilities incurred in connection with any Environmental
Lien; (iv) any costs or liabilities incurred in connection with any other matter
under any Environmental Law, including CERCLA and applicable state property
transfer laws, whether, with respect to any of such matters, such Indemnitee is
a mortgagee pursuant to any leasehold mortgage, a mortgagee in possession, the
successor in interest to the Borrower or any of its Subsidiaries, or the owner,
lessee or operator of any property of the Borrower or any of its Subsidiaries by
virtue of foreclosure, except, with respect to those matters referred to in
clauses (i), (ii), (iii) and (iv) above, to the extent (A) incurred following
foreclosure by the Agent, any Lender or any Issuer, or the Agent, any Lender or
any Issuer having become the successor in interest to the Borrower or any of its
Subsidiaries, and (B) attributable solely to acts of the Agent, such Lender or
such Issuer or any agent on behalf of the Agent or such Lender.

              (b) The Borrower shall indemnify the Agent, the Lenders and each
Issuer for, and hold the Agent, the Lenders and each Issuer harmless from and
against, any and all claims for brokerage commissions, fees and other
compensation made against the Agent, the Lenders and the Issuers for any broker,
finder or consultant with respect to any agreement, arrangement or understanding
made by or on behalf of any Loan Party or any of its Subsidiaries in connection
with the transactions contemplated by this Agreement.

              (c) The Agent, each Lender and each Issuer agree that in the event
that any such investigation, litigation or proceeding set forth in subparagraph
(b) above is asserted or threatened in writing or instituted against it or any
other Indemnitee, or any Remedial Action, is requested of it or any of its
officers, directors, Agent and employees, for which any Indemnitee may desire
indemnity or defense hereunder, such Indemnitee shall promptly notify the
Borrower in writing and of any proposed settlement thereof.

              (d) The Borrower, at the request of any Indemnitee, shall have the
obligation to defend against such investigation, litigation or proceeding or
requested Remedial Action and the Borrower, in any event, may participate in the
defense thereof with legal counsel of the Borrower's choice. In the event that
such Indemnitee requests the Borrower to defend against such investigation,
litigation or proceeding or requested Remedial Action, the Borrower shall
promptly do so and such Indemnitee shall have the right to have legal counsel of
its choice participate in such defense. No action taken by legal counsel chosen
by such Indemnitee in defending against any such investigation, litigation or
proceeding or requested Remedial Action,


                                       90
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shall vitiate or in any way impair the Borrower's obligation and duty hereunder
to indemnify and hold harmless such Indemnitee.

              (e) The Borrower agrees that any indemnification or other
protection provided to any Indemnitee pursuant to this Agreement (including
pursuant to this Section 11.4) or any other Loan Document shall (i) survive
payment in full of the Obligations and (ii) inure to the benefit of any Person
who was at any time an Indemnitee under this Agreement or any other Loan
Document.

              SECTION 11.5. LIMITATION OF LIABILITY. The Borrower agrees that no
individual who is an Indemnitee shall have any liability (whether direct or
indirect, in contract, tort or otherwise) to any Loan Party or any of their
respective Subsidiaries or any of their equity holders or creditors for or in
connection with the transactions contemplated hereby and in the other Loan
Documents, except to the extent such liability is found in a final judgment by a
court of competent jurisdiction to have resulted from such Indemnitee's gross
negligence or willful misconduct. In no event, however, shall any Indemnified
Party be liable on any theory of liability for any special, indirect,
consequential or punitive damages and the Borrower hereby waives, releases and
agrees (for itself and on behalf of its Subsidiaries) not to sue upon any such
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.

              SECTION 11.6. RIGHT OF SET-OFF. Upon the occurrence and during the
continuance of any Event of Default each Lender and each Affiliate of a Lender
is hereby authorized at any time and from time to time, to the fullest extent
permitted by law, to set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness at
any time owing by such Lender or its Affiliates to or for the credit or the
account of the Borrower against any and all of the Obligations now or hereafter
existing whether or not such Lender shall have made any demand under this
Agreement or any other Loan Document and although such Obligations may be
unmatured. Each Lender agrees promptly to notify the Borrower after any such
set-off and application made by such Lender or its Affiliates; provided,
however, that the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this Section 11.6
are in addition to the other rights and remedies (including other rights of
set-off) which such Lender may have.

              SECTION 11.7. SHARING OF PAYMENTS, ETC.

              (a) If any Lender shall obtain any payment (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) on
account of the Revolving Loans made by it (other than pursuant to Sections 2.14,
2.15 or 2.16) in excess of its Ratable Portion of payments obtained by all the
Lenders on account of such Obligations, such Lender (a "Purchasing Lender")
shall (subject to the provisions of the Intercreditor Agreement) forthwith
purchase from the other Lenders (each, a "Selling Lender") such participations
in their Loans or other Obligations as shall be necessary to cause such
Purchasing Lender to share the excess payment ratably with each of them.

              (b) If all or any portion of any payment received by a Purchasing
Lender is thereafter recovered from such Purchasing Lender, such purchase from
each Selling Lender shall be rescinded and such Selling Lender shall repay to
the Purchasing Lender the purchase price to the extent of such recovery together
with an amount equal to such Selling Lender's ratable share (according to the
proportion of (i) the amount of such Selling Lender's required repayment to


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(ii) the total amount so recovered from the Purchasing Lender) of any interest
or other amount paid or payable by the purchasing Lender in respect of the total
amount so recovered.

              (c) The Borrower agrees that any Purchasing Lender so purchasing a
participation from a Selling Lender pursuant to this Section 11.7 may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of the Borrower in the amount of such
participation.

              SECTION 11.8. NOTICES, ETC. All notices, demands, requests and
other communications provided for in this Agreement shall be given in writing,
or by any telecommunication device capable of creating a written record, and
addressed to the party to be notified as follows:

              (a) if to the Borrower:

                  Geneva Steel LLC
                  10 South Geneva Road
                  Vineyard, Utah  84058
                  Attention:  Chief Financial Officer
                  Telecopy no.:  (801) 227-9016

                  with a copy to:

                  Parr Waddoups Brown Gee & Loveless
                  185 South State Street
                  Suite 1300
                  Salt Lake City, Utah  84111
                  Attention:  Roger D. Henriksen, Esq.
                  Telecopy no.:  (801) 532-7750

              (b) if to any Lender, at its Domestic Lending Office specified
opposite its name on Schedule II or on the signature page of any applicable
Assignment and Acceptance;

              (c) if to any Issuer, at the address set forth under its name on
Schedule II; and

              (d) if to the Agent:

                  Citicorp USA, Inc.
                  399 Park Avenue
                  New York, New York  10043
                  Attention:  Keith R. Karako
                  Telecopy no.:  (212) 793-1290


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                  with a copy to:

                  Weil, Gotshal & Manges LLP
                  767 Fifth Avenue,
                  New York, New York  10153-0119
                  Attention:  Ronald F. Daitz, Esq.
                  Telecopy no :  (212) 310-8007

or at such other address as shall be notified in writing (i) in the case of the
Borrower and the Agent, to the other parties and (ii) in the case of all other
parties, to the Borrower and the Agent. All such notices and communications
shall be effective upon personal delivery (if delivered by hand, including any
overnight courier service), when deposited in the mails (if sent by mail), or
when properly transmitted (if sent by a telecommunications device); provided,
however, that notices and communications to the Agent pursuant to Article II or
X shall not be effective until received by the Agent.

              SECTION 11.9. NO WAIVER; REMEDIES. No failure on the part of any
Lender, Issuer or the Agent to exercise, and no delay in exercising, any right
hereunder shall operate as a waiver thereof; nor shall any single or partial
exercise of any such right preclude any other or further exercise thereof or the
exercise of any other right. The remedies herein provided are cumulative and not
exclusive of any remedies provided by law.

              SECTION 11.10. BINDING EFFECT. This Agreement shall become
effective when it shall have been executed by the Borrower and the Agent and the
Agent shall have been notified by each Lender that such Lender has executed it
and thereafter it shall be binding upon and inure to the benefit of the
Borrower, the Agent and each Lender and their respective successors and assigns,
except that the Borrower shall not have the right to assign its rights hereunder
or any interest herein without the prior written consent of the Lenders.

              SECTION 11.11. GOVERNING LAW. This Agreement and the rights and
obligations of the parties hereto shall be governed by, and construed and
interpreted in accordance with, the law of the State of New York.

              SECTION 11.12. SUBMISSION TO JURISDICTION; SERVICE OF PROCESS.

              (a) Any legal action or proceeding with respect to this Agreement
or any other Loan Document may be brought in the courts of the State of New York
or of the United States of America for the Southern District of New York, and,
by execution and delivery of this Agreement, the Borrower hereby accepts for
itself and in respect of its property, generally and unconditionally, the
jurisdiction of the aforesaid courts. The parties hereto hereby irrevocably
waive any objection, including any objection to the laying of venue or based on
the grounds of forum non conveniens, which any of them may now or hereafter have
to the bringing of any such action or proceeding in such respective
jurisdictions.

              (b) The Borrower hereby irrevocably consents to the service of any
and all legal process, summons, notices and documents in any suit, action or
proceeding brought in the United States of America arising out of or in
connection with this Agreement or any of the other Loan Documents by the mailing
(by registered or certified mail, postage prepaid) or delivering of a copy of
such process to the Borrower at its address specified in Section 11.8. The
Borrower agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law.


                                       93
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              (c) Nothing contained in this Section 11.12 shall affect the right
of the Agent or any Lender to serve process in any other manner permitted by law
or commence legal proceedings or otherwise proceed against the Borrower or any
other Loan Party in any other jurisdiction.

              (d) If for the purposes of obtaining judgment in any court it is
necessary to convert a sum due hereunder in Dollars into another currency, the
parties hereto agree, to the fullest extent that they may effectively do so,
that the rate of exchange used shall be that at which in accordance with normal
banking procedures the Agent could purchase Dollars with such other currency at
the spot rate of exchange quoted by the Agent at 11:00 a.m. (New York time) on
the Business Day preceding that on which final judgment is given, for the
purchase of Dollars, for delivery two Business Days thereafter.

              SECTION 11.13. WAIVER OF JURY TRIAL. THE AGENT, THE LENDERS, THE
ISSUERS AND THE BORROWER IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR
PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.

              SECTION 11.14. MARSHALING; PAYMENTS SET ASIDE. None of the Agent,
any Lender or any Issuer shall be under any obligation to marshal any assets in
favor of the Borrower or any other party or against or in payment of any or all
of the Obligations. To the extent that the Borrower makes a payment or payments
to the Agent, the Lenders or the Issuers or any of such Persons receives payment
from the proceeds of the Collateral or exercise their rights of setoff, and such
payment or payments or the proceeds of such enforcement or setoff or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside or required to be repaid to a trustee, receiver or any other party,
then to the extent of such recovery, the obligation or part thereof originally
intended to be satisfied, and all Liens, right and remedies therefor, shall be
revived and continued in full force and effect as if such payment had not been
made or such enforcement or setoff had not occurred.

              SECTION 11.15. SECTION TITLES. The Section titles contained in
this Agreement are and shall be without substantive meaning or content of any
kind whatsoever and are not a part of the agreement between the parties hereto.

              SECTION 11.16. EXECUTION IN COUNTERPARTS. This Agreement may be
executed in any number of counterparts and by different parties in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Signature pages may be detached from multiple separate counterparts and attached
to a single counterpart so that all signature pages are attached to the same
document. Delivery of an executed signature page of this Agreement by facsimile
transmission shall be as effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all parties
shall be lodged with the Borrower and the Agent.

              SECTION 11.17. ENTIRE AGREEMENT. This Agreement, together with all
of the other Loan Documents, and the Intercreditor Agreement and all
certificates and documents delivered hereunder or thereunder, embodies the
entire agreement of the parties and supersedes all prior agreements and
understandings relating to the subject matter hereof.

              SECTION 11.18. CONFIDENTIALITY. Each Lender and each Agent agree
to keep information obtained by it pursuant hereto and the other Loan Documents
confidential in accordance with such Lender's or the Agent's, as the case may
be, customary practices and


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agrees that it will only use such information in connection with the
transactions contemplated by this Agreement and not disclose any of such
information other than (a) to such Lender's or such Agent's, as the case may be,
employees, representatives and agents who are or are expected to be involved in
the evaluation of such information in connection with the transactions
contemplated by this Agreement and who are advised of the confidential nature of
such information, (b) to the extent such information presently is or hereafter
becomes available to such Lender or the Agent, as the case may be, on a
non-confidential basis from a source other than the Borrower, (c) to the extent
disclosure is required by law, regulation or judicial order or requested or
required by bank regulators or auditors, or (d) to assignees or participants or
potential assignees or participants who agree to be bound by the provisions of
this Section 11.18.

              SECTION 11.19. NO RECOURSE AGAINST OTHERS. A current or former
director, officer, employee or stockholder, as such, of any Loan Party shall not
have any liability for any obligations of any Loan Party under the Loan
Documents or for any claim based on, in respect of or by reason of the
Obligations or their creation under any theory of recovery; provided, however,
that the foregoing shall not be deemed to relieve any such Person from any
liability arising from fraud, gross misconduct or recklessness. In no event,
however, shall a current or former director, officer, employee or stockholder,
as such, be liable on any theory of liability for any special, indirect,
consequential or punitive damages.


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              IN WITNESS WHEREOF, the parties hereto have caused this Agreement
to be executed by their respective officers thereunto duly authorized, as of the
date first above written.

                                        GENEVA STEEL LLC


                                        By:  /s/ JOSEPH A. CANNON
                                            ------------------------------------
                                            Title: CEO


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]


   98

                                        CITICORP USA, INC.
                                           as Agent


                                        By:  /s/ KEITH R. KARAKO
                                            ------------------------------------
                                            Title: Vice-President


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]


   99

                                        Issuer


                                        CITIBANK, N.A.


                                        By: /s/ Keith R. Karako
                                            ------------------------------------
                                            Title: Vice President


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]


   100

                                        Lenders


                                        CITICORP USA, INC.


                                        By: /s/ Keith R. Karako
                                            ------------------------------------
                                            Title: Vice President


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]


   101

                                        FOOTHILL CAPITAL CORPORATION


                                        By: /s/ Rina H. Shinoda
                                            ------------------------------------
                                            Title: Vice President


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]


   102

                                       IBJ WHITEHALL BUSINESS CREDIT CORPORATION


                                       By:  /s/ JOHN FAVALE
                                           -------------------------------------
                                           Title: AVP


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]


   103

                                        HELLER FINANCIAL, INC.


                                        By:  /s/ TOM BUKAWSKY
                                            ------------------------------------
                                            Title: Senior Vice President


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]


   104

                                        GMAC BUSINESS CREDIT, LLC


                                        By: /s/ JOHN BUFF
                                            ------------------------------------
                                            Title: Director


                      [SIGNATURE PAGE TO CREDIT AGREEMENT]
   105

                                TABLE OF CONTENTS



                                                                                   PAGE
                                                                                   ----
                                                                                
Article I         Definitions, Interpretation And Accounting Terms...................1

        Section 1.1.      Defined Terms..............................................1

        Section 1.2.      Computation of Time Periods...............................29

        Section 1.3.      Accounting Terms and Principles...........................29

        Section 1.4.      Certain Terms.............................................30

Article II        The Facility......................................................31

        Section 2.1.      The Revolving Credit Commitments..........................31

        Section 2.2.      Borrowing Procedures......................................31

        Section 2.3.      Swing Loans...............................................32

        Section 2.4.      Letters of Credit.........................................33

        Section 2.5.      Reduction and Termination of the Revolving Credit
               Commitments..........................................................37

        Section 2.6.      Repayment of Loans........................................38

        Section 2.7.      Evidence of Debt..........................................38

        Section 2.8.      Optional Prepayments......................................38

        Section 2.9.      Mandatory Prepayments.....................................38

        Section 2.10.     Interest..................................................39

        Section 2.11.     Conversion/Continuation Option............................40

        Section 2.12.     Fees......................................................40

        Section 2.13.     Payments and Computations.................................41

        Section 2.14.     Special Provisions Governing Eurodollar Rate Loans........44

        Section 2.15.     Capital Adequacy..........................................45

        Section 2.16.     Taxes.....................................................46

        Section 2.17.     Substitution of Lenders...................................47

        Section 2.18.     Certain Limitations on Indemnification....................48

Article III       Conditions To Loans And Letters Of Credit.........................48

        Section 3.1.      Conditions Precedent to Initial Loans and Letters of
               Credit...............................................................48

        Section 3.2.      Conditions Precedent to Each Loan and Letter of Credit....51

Article IV        Representations and Warranties....................................52

        Section 4.1.      Entity Existence; Compliance with Law.....................52

        Section 4.2.      Power; Authorization; Enforceable Obligations.............53

        Section 4.3.      Ownership of Subsidiaries.................................53

        Section 4.4.      Financial Statements......................................54



                                       i
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                                   (CONTINUED)



                                                                                   PAGE
                                                                                   ----
                                                                                
        Section 4.5.      Material Adverse Change...................................54

        Section 4.6.      Solvency..................................................55

        Section 4.7.      Litigation................................................55

        Section 4.8.      Taxes.....................................................55

        Section 4.9.      Full Disclosure...........................................56

        Section 4.10.     Margin Regulations........................................56

        Section 4.11.     No Burdensome Restrictions; No Defaults...................56

        Section 4.12.     Investment Company Act; Public Utility Holding Company
               Act..................................................................56

        Section 4.13.     Use of Proceeds...........................................56

        Section 4.14.     Insurance.................................................57

        Section 4.15.     Labor Matters.............................................57

        Section 4.16.     ERISA.....................................................57

        Section 4.17.     Environmental Matters.....................................58

        Section 4.18.     Intellectual Property.....................................59

        Section 4.19.     Title; Real Property......................................59

        Section 4.20.     Plan of Reorganization....................................60

        Section 4.21.     Material Subsidiaries.....................................60

Article V         Financial Covenants...............................................60

        Section 5.1.      Maintenance of Consolidated Cash Flow.....................60

        Section 5.2.      Capital Expenditures......................................60

        Section 5.3.      EBITDA to Cash Interest Expense...........................61

        Section 5.4.      Senior Leverage Ratio.....................................62

        Section 5.5.      Maintenance of Tangible Net Worth.........................62

Article VI        Reporting Covenants...............................................62

        Section 6.1.      Financial Statements......................................62

        Section 6.2.      Default Notices...........................................64

        Section 6.3.      Litigation................................................65

        Section 6.4.      Asset Sales...............................................65

        Section 6.5.      SEC Filings; Press Releases...............................65

        Section 6.6.      Labor Relations...........................................65

        Section 6.7.      Tax Returns...............................................65



                                       ii
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                                   (CONTINUED)



                                                                                   PAGE
                                                                                   ----
                                                                                
        Section 6.8.      Insurance.................................................65

        Section 6.9.      ERISA Matters.............................................65

        Section 6.10.     Environmental Matters.....................................66

        Section 6.11.     Borrowing Base Determination..............................67

        Section 6.12.     Other Information.........................................67

Article VII       Affirmative Covenants.............................................67

        Section 7.1.      Preservation of Corporate Existence, Etc..................67

        Section 7.2.      Compliance with Laws, Etc.................................68

        Section 7.3.      Conduct of Business.......................................68

        Section 7.4.      Payment of Taxes, Etc.....................................68

        Section 7.5.      Maintenance of Insurance..................................68

        Section 7.6.      Access....................................................68

        Section 7.7.      Keeping of Books..........................................68

        Section 7.8.      Maintenance of Properties, Etc............................69

        Section 7.9.      Application of Proceeds...................................69

        Section 7.10.     Environmental.............................................69

        Section 7.11.     Additional Collateral and Guaranties......................69

        Section 7.12.     Interest Rate Contracts...................................69

        Section 7.13.     Real Property.............................................69

        Section 7.14.     Post-Closing Matters......................................70

        Section 7.14.     Post-Closing Matters TC "Section 7.14.    Post-Closing
               Matters" \l "2".  Within 30 days after the Initial Closing Date, the
               Borrower shall provide to the Agent Blocked Account Letters from the
               Blocked Account Banks................................................70

Article VIII      Negative Covenants................................................70

        Section 8.1.      Indebtedness..............................................70

        Section 8.2.      Liens, Etc................................................71

        Section 8.3.      Investments...............................................72

        Section 8.4.      Sale of Assets............................................73

        Section 8.5.      Restricted Payments.......................................73

        Section 8.6.      Restriction on Fundamental Changes; Permitted Acquisitions74

        Section 8.7.      Change in Nature of Business..............................74

        Section 8.8.      Transactions with Affiliates..............................75



                                      iii
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                                   (CONTINUED)



                                                                                   PAGE
                                                                                   ----
                                                                                
        Section 8.9.      Restrictions on Restricted Subsidiary Distributions; No New
               Negative Pledge......................................................75

        Section 8.10.     Plans.....................................................75

        Section 8.11.     Modification of Constituent Documents.....................76

        Section 8.12.     Modification of  Other Debt Agreements....................76

        Section 8.13.     Accounting Changes; Fiscal Year...........................76

        Section 8.14.     Margin Regulations........................................76

        Section 8.15.     Operating Leases; Sale/Leasebacks.........................76

        Section 8.16.     Cancellation of Indebtedness Owed to It...................77

        Section 8.17.     No Speculative Transactions...............................77

        Section 8.18.     Compliance with ERISA.....................................77

        Section 8.19.     Environmental.............................................77

        Section 8.20.     Material Subsidiaries.....................................77

Article IX        Events of Default.................................................77

        Section 9.1.      Events of Default.........................................77

        Section 9.2.      Remedies..................................................79

        Section 9.3.      Actions in Respect of Letters of Credit...................80

        Section 9.4.      Rescission................................................80

Article X         The Agent.........................................................80

        Section 10.1.     Authorization and Action..................................80

        Section 10.2.     Agent's Reliance, Etc.....................................81

        Section 10.3.     The Agent Individually....................................82

        Section 10.4.     Lender Credit Decision....................................82

        Section 10.5.     Indemnification...........................................82

        Section 10.6.     Successor Agents..........................................82

        Section 10.7.     Concerning the Collateral and the Collateral Documents....83

        Section 10.8.     Collateral Matters Relating to Related Obligations........84

Article XI        Miscellaneous.....................................................85

        Section 11.1.     Amendments, Waivers, Etc..................................85

        Section 11.2.     Assignments and Participations............................86

        Section 11.3.     Costs and Expenses........................................88

        Section 11.4.     Indemnities...............................................89



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                                   (CONTINUED)



                                                                                   PAGE
                                                                                   ----
                                                                                
        Section 11.5.     Limitation of Liability...................................91

        Section 11.6.     Right of Set-off..........................................91

        Section 11.7.     Sharing of Payments, Etc..................................91

        Section 11.8.     Notices, Etc..............................................92

        Section 11.9.     No Waiver; Remedies.......................................93

        Section 11.10.    Binding Effect............................................93

        Section 11.11.    Governing Law.............................................93

        Section 11.12.    Submission to Jurisdiction; Service of Process............93

        Section 11.13.    Waiver of Jury Trial......................................94

        Section 11.14.    Marshaling; Payments Set Aside............................94

        Section 11.15.    Section Titles............................................94

        Section 11.16.    Execution in Counterparts.................................94

        Section 11.17.    Entire Agreement..........................................94

        Section 11.18.    Confidentiality...........................................94

        Section 11.19.    No Recourse Against Others................................95



                                        v
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                                   (CONTINUED)

                                    SCHEDULES

                       
Schedule I            -      Revolving Credit Commitments
Schedule II           -      Applicable Lending Offices and Addresses for Notices
Schedule III          -      Advance Rates
Schedule 4.2          -      Consents
Schedule 4.3          -      Ownership of Subsidiaries
Schedule 4.7          -      Litigation
Schedule 4.15         -      Labor Matters
Schedule 4.16         -      List of Plans
Schedule 4.17         -      Environmental Matters
Schedule 4.18         -      Intellectual Property
Schedule 8.1          -      Existing Indebtedness
Schedule 8.2          -      Existing Liens
Schedule 8.3          -      Existing Guaranty Obligations
Schedule 8.3          -      Existing Investments

                                    EXHIBITS

Exhibit A             -      Form of Assignment and Acceptance
Exhibit B             -      Form of Revolving Credit Note
Exhibit C             -      Form of Notice of Borrowing
Exhibit D             -      Form of Letter of Credit Request
Exhibit E             -      Form of Borrowing Base Certificate
Exhibit F             -      Form of Notice of Conversion or Continuation
Exhibit G             -      Form of Opinion of Counsel for the Loan Parties
Exhibit H             -      Form of Guaranty
Exhibit I             -      Form of Security Agreement
Exhibit J             -      Form of Bailee's Letter
Exhibit K             -      Form of Consignor's Letter
Exhibit L             -      Form of Landlord Waiver
Exhibit M             -      Form of Subordination Agreement
Exhibit N             -      Form of Intercreditor Agreement




                                       vi

EX-10.36

   1

                                                                   EXHIBIT 10.36


                                Bridge Loan Note


Lender:   Albert Fried & Company, LLC                         New York, New York
Principal Amount:  $3,500,000                                  December 22, 2000

        For Value Received, the undersigned, GENEVA STEEL COMPANY, a Utah
corporation (the "Borrower"), hereby promises to pay to the order of the Lender
set forth above (the "Lender") the Principal Amount set forth above, or, if
less, the aggregate unpaid principal amount of the Bridge Loan (as defined in
the Bridge Loan commitment letter between Lender and Borrower dated as of
December 13, 2000 (the "Commitment Letter")) of the Lender to the Borrower,
payable at such times, and in such amounts, as are specified in the Commitment
Letter.

        The Borrower promises to pay interest on the unpaid principal amount of
such Bridge Loan from the date made until such principal amount is paid in full,
at such interest rates, and payable at such times, as are specified in the
Commitment Letter.

        Both principal and interest are payable in Dollars to Lender in
immediately available funds.

        The Commitment Letter, among other things, provides for the making of a
Bridge Loan to the Borrower in an aggregate amount not to exceed at any time
outstanding the Principal Amount set forth above, the indebtedness of the
Borrower being evidenced by this Note.

        Demand, diligence, presentment, protest and notice of non-payment and
protest are hereby waived by the Borrower.

        This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.

        In witness hereof, Borrower agrees to the foregoing as of this 22nd day
of December 2000.


                                      By:   /s/  Ken C. Johnsen
                                      -----------------------------------
                                      Ken C. Johnsen
                                      Executive Vice President

EX-13

   1
                                                                      EXHIBIT 13

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                             SELECTED FINANCIAL DATA
            (Dollars in thousands, except per share and per ton data)



                                             2000         1999           1998           1997        1996
                                          ---------     ---------      ---------      ---------   --------
                                                                                   
OPERATING STATISTICS
Net sales                                 $ 564,233     $ 314,726      $ 720,453      $726,669    $712,657
Gross margin                                  3,782      (107,086)        61,321        60,691      50,350
Income (loss) from operations                (9,916)     (128,902)        21,394        38,204      25,729
Net loss                                     (8,971)     (185,107)       (18,943)       (1,268)     (7,238)
Net loss applicable to common shares         (9,727)     (189,936)       (30,715)      (11,608)    (16,327)
Diluted net loss per common share              (.58)       (11.33)         (1.90)         (.74)      (1.07)

BALANCE SHEET STATISTICS
Cash                                      $     --      $     --       $     --       $    --     $    597
Working capital                               2,276        (8,567)      (298,416)       67,063      71,065
Current ratio                                  1.02           .91            .39          1.66        1.64
Net property, plant and equipment           343,227       373,017        411,174       458,315     454,523
Total assets                                483,790       474,716        605,165       646,070     657,386
Long-term debt                                  --            --             --        399,906     388,431
Redeemable preferred stock                   56,757        56,001         56,917        56,169      55,437
Stockholders' equity (deficit)             (143,707)     (133,979)        53,208        82,603      92,827
Long-term debt as a percentage
   of stockholders' equity                      --            --             --            484%        418%

ADDITIONAL STATISTICS
Operating income (loss) per ton shipped   $   (5.19)    $ (117.15)     $   10.68      $  17.90    $  12.00
Capital expenditures (1)                     13,005         8,025         10,893        47,724      26,378
Depreciation and amortization                43,295        50,625         44,182        44,959      44,415
Cash flows from operating activities        (25,155)        8,095         25,847        32,070     (19,520)
Cash flows from investing activities         (2,907)       (3,341)       (10,859)      (46,465)    (37,526)
Cash flows from financing activities         28,062        (4,754)       (14,988)       13,798      44,835
Raw steel production (tons in thousands)      2,084         1,101          2,390         2,460       2,428
Steel products shipped (tons in thousands)    1,912         1,100          2,003         2,135       2,145

- ----------
(1) Capital expenditures for the year ended September 30, 1998 included an
    offset of $12.5 million relating to an insurance claim settlement.
    Absent the offset, capital expenditures were approximately $23.4 million
    for the year ended September 30, 1998.

   2

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                       SELECTED FINANCIAL DATA (continued)


PRICE RANGE OF COMMON STOCK

On completion of the reorganization plan, the common stock of Geneva Steel
Holdings Corp. (successor entity to the Company) was approved for listing on the
NASDAQ SmallCap(TM) System. Trading opened on January 4, 2001. The last reported
price for the stock on January 9, 2001 was $4.00 as reported by NASDAQ. As of
January 3, 2001 the Company had 6,760,659 shares of common stock outstanding,
held by approximately 660 stockholders of record.

Prior to the bankruptcy filing, the Class A common stock of the Company was
traded on the NYSE and the Pacific Exchange. Subsequently, the stock was traded
on the over-the-counter Bulletin Board maintained by the National Association of
Securities Dealers.

The following table sets forth, for the periods indicated, the high and low
sales prices for the Class A common stock of the Company. Prices for the first
two quarters of fiscal year 1999 were as reported on the NYSE Composite Tape.
Prices for the last two quarters of fiscal year 1999 and fiscal year 2000
reflect Bulletin Board quotations. Such quotations reflect interdealer prices,
without retail markup, markdown, commissions or other adjustments and may not
necessarily represent actual transactions. During the Company's Chapter 11
bankruptcy proceedings, the market for the Class A common stock was limited and
the quotations reported may not be indicative of prices that could be obtained
in actual transactions. The Company makes no representation as to how reflective
Internet stock quotes are of actual trading values. Under the plan of
reorganization of the Company, all interests represented by the Class A common
stock were extinguished.



Fiscal Year Ended September 30, 1999                       HIGH            LOW
                                                                
  First Quarter ended December 31                      $ 1 5/16        $ 15/32
  Second Quarter ended March 31                            5/8            7/16
  Third Quarter ended June 30                              5/8            3/16
  Fourth Quarter ended September 30                       13/32           7/32

Fiscal Year Ended September 30, 2000                       HIGH            LOW
  First Quarter ended December 31                      $  13/32        $  3/16
  Second Quarter ended March 31                               1          13/64
  Third Quarter ended June 30                             17/32           1/4
  Fourth Quarter ended September 30                       11/32           1/32

   3

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS

Overview

Foreign competition is a significant factor in the steel industry and has
adversely affected product prices in the U.S. and tonnage sold by domestic
producers. The intensity of foreign competition is significantly affected by
fluctuations in the value of the U.S. dollar against other currencies, the level
of demand for steel in the U.S. economy relative to steel demand in foreign
economies, the effect of trade cases, and world economic conditions generally.
The U.S. is one of the most open steel markets in the world, and even the
existing minimal customs duties on steel products will be eliminated by January
1, 2004. Most foreign markets are less open than the U.S. market, allowing
foreign producers to maintain higher prices in their own markets while dumping
excess production at lower prices into the U.S. market. In addition, certain
foreign steel producers are controlled or subsidized by foreign governments
whose decisions concerning production and exports may be influenced in part by
political and social policy considerations as well as by prevailing market
conditions and profit opportunities. The Company competes in all its product
lines against foreign producers located throughout the world.

Historically, foreign steel producers have often engaged in extremely
aggressive, and often illegal, pricing policies. Foreign dumping and subsidies
have been chronic problems in the U.S. steel industry, resulting in numerous
rounds of trade cases.

In 1993, antidumping orders were imposed against carbon steel plate from Taiwan
and cut-to-length carbon steel plate from Belgium, Brazil, Canada, Finland,
Germany, Mexico, Poland, Romania, Spain, Sweden, and the United Kingdom. These
cases recently underwent full sunset reviews at the U.S. International Trade
Commission (ITC), and in November 2000, the ITC continued all cases except
Canada for an additional five years.

In 1996, actions by steel producers in Russia, Ukraine, South Africa and China
prompted the Company and another domestic producer to file anti-dumping actions
with the U.S. Department of Commerce (DOC) and the ITC against those nations.
Those actions charged that steel plate was being dumped into the U.S. market. In
December 1997, those cases successfully resulted in suspension agreements on
steel plate imported into the U.S. from certain of those countries, which
reduced imports from those countries by approximately 70% and imposed minimum
price floors. These agreements will remain in effect until 2002 when they will
be subject to sunset review.

On September 30, 1998, the Company and eleven other domestic steel producers
filed anti-dumping actions against hot-rolled coiled steel imports from Russia,
Japan and Brazil. The group also filed a subsidy (countervailing duty) case
against Brazil. All cases described in this paragraph are referred to as the
"Coiled Product Cases."

In April 1999, the DOC issued a final determination that imports of hot-rolled
coiled sheet from Japan were dumped at margins ranging from 17% to 65%. In June
1999, the ITC reached a unanimous 6-0 final determination that imports of
hot-rolled sheet from Japan caused injury to the U.S. industry. As a result, an
antidumping order was issued against imports from Japan that will last for a
minimum duration of five years. During that time, the amount of antidumping
duties due from U.S. importers of such products can vary based upon the results
of annual administrative reviews. The Company believes that the imposition of
these antidumping duties will substantially eliminate hot-rolled sheet imports
from Japan, which totaled 2.7 million tons in 1998.

In July 1999, the DOC simultaneously issued both suspension agreements and final
antidumping duty determinations as to imports of hot-rolled sheet from Brazil
and Russia, and a suspension agreement and final countervailing duty
determination as to imports of hot-rolled sheet from Brazil. Suspension
agreements generally impose price and/or quantity restrictions on imports from
the subject country for the purpose of removing the injurious impact of dumping
and/or subsidies. These agreements are entered in lieu of potentially imposing
antidumping or countervailing duties. If a suspension agreement is violated,
final antidumping or countervailing duties supported by a final affirmative
injury determination are immediately imposed.

   4

The Brazilian countervailing duty suspension agreement provides for a
quantitative limitation of no more than 290,000 metric tons annually of
hot-rolled sheet from Brazil, and the Brazilian antidumping suspension agreement
provides that Brazilian hot-rolled sheet can be sold at prices no lower during
the five-year period than a reference price of $327 a metric ton, ex-dock duty
paid, in the U.S. market. Because the reference price was above then current
domestic prices, the agreement provided that this price would increase as
domestic prices increased above $344 per metric ton. Given that the agreement
protected the U.S. industry from the devaluation of the Brazilian currency
during the five years of the agreement, the Company and certain other
petitioners supported the suspension agreement. Also, the DOC announced
countervailing duties of approximately 7% and antidumping duties of
approximately 40% as to imports from Brazil. The ITC made a final affirmative
injury determination in August 1999. Therefore, if Brazilian producers violate
the suspension agreements, these duty amounts would be immediately imposed.

The suspension agreement on hot-rolled sheet from Russia provided for no
shipments for the remainder of 1999, 325,000 metric tons for 2000, 500,000
metric tons for 2001, 675,000 metric tons for 2002, and 725,000 metric tons for
2003. It also set a minimum export price of $255 per metric ton F.O.B. Russia,
which is subject to quarterly changes based on a formula relating to other
import prices. All petitioners objected to the Russian suspension agreement
because it permitted the continued importation of dumped steel from Russia.
However, the quantitative restrictions represent a significant decrease from the
3.8 million tons of hot-rolled sheet imports from Russia in 1998. In addition to
the hot-rolled sheet suspension agreement, the DOC also entered into a general
steel trade agreement with Russia, which provides for reductions in imports of
other flat-rolled steel products. Simultaneously with the announcement of these
agreements, the DOC announced final antidumping duties ranging from 57% to 157%,
and the ITC made a final affirmative injury determination in August 1999.
Therefore, if the hot-rolled sheet suspension agreement with Russia is violated
during the next five years, these duty amounts would be immediately imposed.

The Coiled Product Cases have benefitted the Company and the domestic steel
industry. This benefit was, however, significantly thwarted by other countries
that have substantially increased exports to the U.S. market. These increased
imports into the U.S. adversely affected hot-rolled sheet prices and order
volumes and have resulted in the recent filing of additional hot-rolled sheet
cases as discussed below.

On February 22, 1999, five domestic steel producers filed anti-dumping actions
against cut-to-length plate imports from the Czech Republic, France, India,
Indonesia, Italy, Macedonia, Japan and South Korea. Also, countervailing duty
cases were filed against France, India, Indonesia, Italy, Macedonia and South
Korea. All cases described in this paragraph are referred to as the
"Cut-to-length Plate Cases." In April 1999, the ITC made a unanimous affirmative
preliminary injury determination with respect to all the respondent countries
except the Czech Republic and Macedonia, which were dismissed from the cases.
The DOC issued final margin determinations on December 13, 1999, ranging from 0%
to 72%. On January 19, 2000, the ITC issued a final affirmative injury
determination. Consequently, antidumping duties have been imposed. The
imposition of antidumping and countervailing duties has significantly reduced
imports from these six countries.

On June 30, 1999, the Company and seven other petitioners filed for Section 201
relief from welded line pipe imports, referred to as the Section 201 Case.
Unlike conventional antidumping and countervailing duty cases, the relief
granted in a Section 201 case can apply to imports from all sources, rather than
only against countries named as respondents. In order for relief to be granted,
the ITC must make an affirmative injury determination, after which a remedy is
recommended by the ITC to the President. The President has the discretion to
accept the ITC's recommendation or take other action, if any. The ITC made an
affirmative injury determination by a margin of 5-1, and a remedy hearing was
held on November 10, 1999. The ITC subsequently recommended to the President
that imports be reduced by approximately 45% from 1998 levels. President
Clinton, effective March 1, 2000, instead adopted a remedy that provides that
imports to the U.S. of the subject product from any country (except Mexico and
Canada) in excess of 9,000 tons in any year will be subject to duties of 19%,
15%, and 11%, for the years 2000, 2001 and 2002, respectively. Since the
imposition of relief, imports in 2000 have been approximately 50% of 1998
levels. The 201 relief has benefitted the Company allowing it to increase
production and margins on line pipe sales.

On November 13, 2000, several U.S. steel producers filed antidumping cases
against imports of hot-rolled sheet (which includes coiled plate) from eleven
countries: Argentina, China, India, Indonesia, Kazakhstan, Netherlands, Romania,
South Africa, Taiwan, Thailand and Ukraine. Countervailing duty (subsidy) cases
were also filed against imports from

   5

Argentina, India, Indonesia, South Africa and Thailand. The International Trade
Commission made unanimous affirmative preliminary determinations of a reasonable
indication of injury on December 28, 2000. Petitioners intend to file critical
circumstance allegations if imports from the respondent counties surge, which
could result in the imposition of duties as early as January 2001. The Company
expects that these cases will ultimately have a significant beneficial effect on
the market, although there can be no assurance as to the outcome or effect.

The Company continues to monitor imports and may file additional trade cases or
take other trade action in the future. Existing trade laws and regulations may,
however, be inadequate to prevent the adverse impact of dumped and/or subsidized
steel imports. Moreover, the preparation and prosecution of trade cases requires
several months during which the Company and other domestic producers must
continue to suffer the adverse impact of unfairly traded imports. There is no
guarantee that domestic markets will not in the future be flooded illegally with
foreign imports of products in competition with the Company's products. While
the Company intends to oppose all such imports vigorously, there is no guarantee
that it will be successful. Consequently, such imports could pose continuing
problems for the domestic steel industry and the Company.

On February 1, 1999, the Company filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court for the District of Utah, Central Division (the "Bankruptcy Court"). The
filing was made necessary by a lack of sufficient liquidity. Beginning in fiscal
year 1998, the Company's operating results were severely affected by, among
other things, a dramatic surge in steel imports. As a consequence of record-high
levels of low-priced steel imports and the resultant deteriorating market
conditions, the Company's overall price realization and shipments declined
precipitously. Decreased liquidity made it impossible for the Company to service
its debt and fund ongoing operations. Therefore, the Company sought protection
under Chapter 11 of the Bankruptcy Code. Prior to the bankruptcy filing, the
Company did not make a $9 million interest payment due January 15, 1999 under
the terms of the Company's 9 1/2% senior notes due 2004. The bankruptcy code
prohibited the Company from making payments on unsecured, pre-petition debt,
including the 9 1/2% senior notes due 2004 and the 11 1/8% senior notes due 2001
(collectively, the "Senior Notes"). While in Chapter 11 bankruptcy, the Company
remained in possession of its properties and assets and continued to manage its
businesses as a debtor-in-possession, subject to the supervision of the
Bankruptcy Court. The Company had a $125 million debtor-in-possession credit
facility in place (See Liquidity and Capital Resources).

As of February 1, 1999, the Company discontinued accruing interest on the Senior
Notes and dividends on its redeemable preferred stock. Contractual interest on
the Senior Notes for both the years ended September 30, 2000 and 1999 was $33.1
million, which is $33.1 million and $22.0 million, respectively, in excess of
recorded interest expense included in the Company's financial statements.
Contractual dividends on the redeemable preferred stock as of September 30, 2000
were approximately $51.0 million and $36.9 million, respectively, which are
$22.5 million and $8.4 million, respectively, in excess of dividends accrued in
the Company's balance sheet.

Pursuant to the provisions of the Bankruptcy Code, all actions to collect upon
any of the Company's liabilities as of the petition date or to enforce
pre-petition contractual obligations were automatically stayed. Absent approval
from the Bankruptcy Court, the Company was prohibited from paying pre-petition
obligations. The Bankruptcy Court approved payment of certain pre-petition
obligations such as employee wages and benefits and customer claims and rebates.
Additionally, the Bankruptcy Court approved the retention of various legal,
financial and other professionals. As a debtor-in-possession, the Company had
the right, subject to Bankruptcy Court approval and certain other conditions, to
assume or reject any pre-petition executory contracts and unexpired leases.
Parties affected by such rejections had the right to file pre-petition claims
with the Bankruptcy Court.

On July 20, 2000, the Company and the Official Committee of Bondholders in the
Company's Chapter 11 case filed a proposed plan of reorganization (the "Plan")
and disclosure statement with the Bankruptcy Court. On December 8, 2000, the
Bankruptcy Court entered an order confirming the Plan, as amended and modified
(the "Confirmation Order"). The Plan was consummated on January 3, 2001,
together with the closing of the post-bankruptcy credit facilities.
Implementation of the Plan significantly reduced the Company's debt burden and
provided additional liquidity in the form of a $110 million term loan that is
eighty-five percent guaranteed by the United States Government under the
Emergency Steel Loan Guaranty Act of 1999, and a $125 million revolving line of
credit.

   6

Under the terms of the Plan, the Company changed its state of domicile from Utah
to Delaware, changed its form of organization from a corporation to a limited
liability company, and became a wholly-owned subsidiary of Geneva Steel Holdings
Corp. The Company transferred certain real property not used in the steel mill
operations to Williams Farm Property, LLC and its iron ore mines located in
southern Utah to Iron Ore Mines, LLC, both of which are also wholly-owned
subsidiaries of Geneva Steel Holdings Corp. The Company also transferred
ownership of Vineyard Iron Company and Vineyard Management Company to Geneva
Steel Holdings Corp., which made those entities wholly-owned subsidiaries of
Geneva Steel Holdings Corp.

Under the terms of the Plan approved by the Bankruptcy Court, all rights with
respect to the previous outstanding common and preferred stock of the Company
were terminated. Shares of common stock of Geneva Steel Holdings Corp. were
issued to the holders of unsecured claims, which primarily consisted of holders
of an aggregate $340.6 million of Senior Notes, including unpaid interest
accrued prior to the bankruptcy, and approximately $47 million of general
unsecured debt, which includes disputed claims. Creditors who were owed $5,000
or less will receive a cash payment equal to 40% of their claim, and trade
creditors who were owed in excess of $5,000 could elect to receive $2,000,
rather than shares of common stock in Geneva Steel Holdings Corp. Secured
creditors of the Company will be paid in full with the proceeds of the term
loan.

Under the terms of an employee retention program approved by the Bankruptcy
Court, the executive officers and a manager of the Company received options to
purchase an aggregate of 5% of the shares of common stock of Geneva Steel
Holdings Corp. on a fully diluted basis.

The Plan also provides each holder of unsecured debt a right to participate in a
$25 million preferred stock rights offering by Geneva Steel Holdings Corp. In
the event that prebankruptcy holders of unsecured debt do not purchase all of
the new preferred stock, Geneva Steel Holdings Corp. will not receive the full
$25 million sought. Consequently, there can be no assurance that any of the $25
million capital infusion sought by the Plan will be available. The Company
previously entered into two standby purchase agreements for the purchase of up
to $25 million of the new preferred stock. The standby purchaser that would have
purchased up to $10 million of the preferred stock funded a portion of the $110
million term loan and was released from its standby purchase agreement. The
other standby purchaser has taken the position that for a number of reasons,
including the assertion of a material adverse change, it is no longer bound by
its standby commitment to purchase up to $15 million of the preferred stock and
has filed a lawsuit seeking a declaratory judgment that it is no longer bound.
The Company disputes this position.

Although the Chapter 11 bankruptcy procedures and significant recurring net
losses raised substantial doubt about the Company's ability to continue as a
going concern, the Company's financial statements have been prepared on a going
concern basis. This basis contemplates the continuation of operations,
realization of assets, and discharge of liabilities in the ordinary course of
business. The financial statements also present the assets of the Company at
historical cost and reflect the intention that they will be realized as a going
concern and in the normal course of business. The implementation of the Plan
will materially change certain amounts currently disclosed in the Company's
financial statements. As of September 30, 2000 and 1999, pre-petition claims are
carried at face value in the financial statements. The financial statements do
not present the amounts which will ultimately be assigned to assets and amounts
paid to settle liabilities and contingencies in accordance with the Plan.

   7

Results of Operations

The following table sets forth the percentage relationship of certain cost and
expense items to net sales for the years indicated:




                                                                          Year Ended September 30,
                                                                     ----------------------------------
                                                                      2000           1999         1998
                                                                     -----          -----        -----
                                                                                        
Net sales                                                            100.0%         100.0%       100.0%
Cost of sales                                                         99.3          134.0         91.5
                                                                     -----          -----        -----
Gross margin                                                           0.7          (34.0)         8.5

Selling, general and administrative expenses                           2.5            6.9          3.0
Write-down of impaired assets                                           --             --          2.5
                                                                     -----          -----        -----

Income (loss) from operations                                         (1.8)         (40.9)         3.0

Other income (expense):
    Interest and other income                                          0.1            0.3           --
    Interest expense                                                  (1.1)          (6.2)        (5.9)
    Gain on sale of assets                                             1.7            1.5           --
                                                                     -----          -----        -----

Loss before reorganization items and benefit for income taxes         (1.1)         (45.3)        (2.9)

Reorganization items                                                   0.5           13.5           --
                                                                     -----          -----        -----

Loss before benefit for income taxes                                  (1.6)         (58.8)        (2.9)
Benefit for income taxes                                                --             --         (0.3)
                                                                     -----          -----        -----

Net loss                                                              (1.6)%        (58.8)%       (2.6)%
                                                                     =====          =====        =====


The following table sets forth the product sales mix (including secondary
products) in tons shipped for the fiscal years indicated (tons in thousands):



                                                                          Year Ended September 30,
                                                                     ----------------------------------
                                                                      2000           1999         1998
                                                                     -----          -----        -----
                                                                                        
Cut-to-Length Plate                                                    568            591        1,189
Sheet                                                                  992            306          425
Pipe                                                                   160             94          178
Slab                                                                   192            109          211
                                                                     -----          -----        -----

                                                                     1,912          1,100        2,003
                                                                     =====          =====        =====


   8

Fiscal Year Ended September 30, 2000 Compared
with Fiscal Year Ended September 30, 1999

Net sales increased 79.3% primarily due to increased shipments of approximately
811,700 tons and higher average selling prices for the year ended September 30,
2000 as compared to the previous fiscal year. The weighted average sales price
(net of transportation costs) per ton of sheet, plate, pipe and slab products
increased by 12.5%, 2.7%, 12.5% and 20.2%, respectively, in the year ended
September 30, 2000 as compared to the previous fiscal year. Shipped tonnage of
sheet, pipe and slab products increased approximately 685,300 tons or 223.7%,
66,900 tons or 71.5% and 82,100 tons or 75.0%, respectively, while shipped
tonnage of plate products decreased approximately 22,600 tons or 3.8% between
the two years. The changes in price, volume and product mix were primarily the
result of significantly improved market conditions. As a result of various trade
cases, as well as improved steel markets in several foreign economies, market
conditions for the Company's products significantly improved in the year ended
September 30, 2000 as compared to the previous fiscal year, although well below
levels existing prior to the influx of imports. Average price realization
increased despite a product mix shift to lower-priced sheet.

The Company expects in the near term that both volume and pricing will continue
to decline below fiscal year 2000 fourth quarter levels. Steel imports into the
U.S. and domestic steel inventory levels have been relatively high and are
adversely affecting the Company's order entry and pricing. Additionally, new
plate production capacity is being added in the domestic market. As a result of
the increased supply of imports and other market conditions, the Company expects
that its overall price realization and shipments will decrease significantly in
the first two quarters of fiscal 2001 and negatively impact the financial
performance of the Company during the quarters and potentially beyond that
period. Given the recent filing of additional trade cases with respect to coiled
sheet and plate, the Company expects the market for those products will improve
during fiscal year 2000, although there can be no assurance that such will be
the case. As of December 31, 2000, the Company had estimated total orders on
hand of approximately 52,000 tons compared to approximately 166,800 tons as of
December 31, 1999.

Domestic competition remains intense and imported steel continues to adversely
affect the market. The Company sells substantially all of its products in the
spot market at prevailing market prices. The Company believes its percentage of
such sales is higher than that of most other domestic integrated producers.
Consequently, the Company may be affected by price increases or decreases more
quickly than many of its competitors. The Company intends to react to price
increases or decreases in the market as required by competitive conditions.

Cost of sales includes raw materials, labor costs, energy costs, depreciation
and other operating and support costs associated with the production process.
The Company's cost of sales, as a percentage of net sales, decreased to 99.3%
for the year ended September 30, 2000, as compared to 134.0% for the previous
fiscal year. The overall average cost of sales per ton shipped decreased
approximately $90 per ton between the two years, primarily as a result of
production efficiencies associated with returning to a two-blast furnace
operating level and a shift in product mix to lower-cost coiled products, offset
in part by significantly higher natural gas costs. Operating costs per ton
decreased as production volume increased in part because fixed costs were
allocated over more tons.

As a result of weaker market conditions, as discussed above, the Company has
been operating two blast furnaces at a reduced pace. The Company expects that
order entry will remain at relatively low levels in the near term. Consequently,
the Company intends to idle one blast furnace temporarily during which time
repairs will be made which will significantly defer its next reline. During its
fourth fiscal quarter and continuing into fiscal year 2001, natural gas prices
have significantly increased. The lower production volumes and higher natural
gas costs are having an adverse impact on the Company's results of operations.

The Company's union contract expires on April 30, 2001. In late 1999, the
Company participated in informal discussions with the union regarding a possible
extension of the union contract, but was unable to reach agreement on terms and
conditions for such an extension. Several issues could not be resolved at that
time in a manner acceptable to the parties. The Company intends to commence
formal discussions with the union in advance of the current expiration date of
the union contract. There can be no assurance, however, that a new labor
agreement satisfactory to the Company can be reached. The Company's operations
and future profitability will be adversely affected to the extent that it is
unable to reach a new labor agreement with the union on terms and conditions
satisfactory to the Company.

   9

Depreciation costs included in cost of sales decreased approximately $2.1
million for the year ended September 30, 2000, compared with the same period in
the previous fiscal year. This decrease was due to a slightly lower asset base.

Selling, general and administrative expenses for the year ended September 30,
2000 decreased approximately $8.1 million as compared to the same period in the
previous fiscal year. These lower expenses were due primarily to a higher than
usual provision for the allowance for doubtful accounts of approximately $4.0
million expensed during the year ended September 30, 1999. In addition, cost
savings related to staff and support personnel reductions reduced expenses
during the current period.

Interest expense decreased approximately $13.2 million during the year ended
September 30, 2000 as compared to the previous fiscal year. As of February 1,
1999, the Company discontinued accruing interest on the Senior Notes. Interest
expense on the Senior Notes of approximately $11.1 million was included in the
year ended September 30, 1999, which reflected accrued interest prior to
February 1, 1999. In addition, lower average borrowings outstanding under the
Company's revolving credit facility in the year ended September 30, 2000 reduced
interest expense by approximately $2.1 million as compared to the previous
fiscal year.

During the years ended September 30, 2000 and 1999, the Company recorded
approximately $4.6 million and $6.0 million, respectively, in professional fees
and expenses related to its Chapter 11 reorganization efforts. These include the
professional fees and expenses of the two official committees established in the
bankruptcy proceeding. These expenses have been included in the reorganization
item in the statements of operations.

The Company will adopt, as of the effective date of the Plan, fresh-start
accounting. Under fresh-start accounting, the reorganization fair value of the
Company is allocated to the entity's assets, the Company's accumulated deficit
is eliminated, and the equity in the new company is issued according to the
Plan. As a result of adopting fresh-start accounting and emerging from Chapter
11 status, the Company's financial statements will not be comparable with those
prepared before the Plan was consummated, including the September 30, 2000
financial statements.

Fiscal Year Ended September 30, 1999 Compared
With Fiscal Year Ended September 30, 1998

Net sales decreased 56.3% primarily due to decreased shipments of approximately
902,900 tons and significantly lower average selling prices for the year ended
September 30, 1999, as compared to the previous fiscal year. The weighted
average sales price (net of transportation costs) per ton of plate, pipe, sheet
and slab products decreased by 20.8%, 17.6%, 18.9% and 23.7%, respectively, in
the year ended September 30, 1999, compared to the previous fiscal year. Shipped
tonnage of plate, pipe, sheet and slab products decreased approximately 598,900
tons or 50.3%, 84,300 tons or 47.4%, 118,600 tons or 27.9% and 101,100 tons or
48.0%, respectively, between the two years The decreases in prices and volumes
were primarily a result of increased supply from imports as discussed above, as
well as other market factors.

The Company's cost of sales, as a percentage of net sales, increased to 134.0%
for the year ended September 30, 1999, as compared to 91.5% for the previous
fiscal year. The overall average cost of sales per ton shipped increased
approximately $53 per ton between the two years, primarily as a result of
production inefficiencies associated with operating at production levels
significantly less than full capacity. As described above, the surge in steel
imports and resulting low level of orders, together with other market factors,
caused production levels to decline. Operating costs per ton increased in part
because fixed costs were allocated over fewer tons. In addition, the Company, in
response to falling prices and higher costs, wrote-down the cost of its
inventories to market prices, resulting in an adjustment of approximately $3.5
million, which increased cost of sales in the year ended September 30, 1999, as
compared to the previous year. The Company underwent several rounds of personnel
reductions and other cost cuts in an attempt to at least partially offset the
adverse cost effects of lower production rates. The Company's total headcount as
of November 30, 1999 was approximately 1,725, as compared to approximately 2,530
as of November 30, 1998. During most of fiscal year 1999, the Company attempted
to minimize production inefficiencies by limiting its production to a full,
one-blast furnace level.

Depreciation costs included in cost of sales decreased approximately $1.7
million for the year ended September 30, 1999, compared with the previous fiscal
year. This decrease was due to a lower asset base as a result of a write-down at
the end of fiscal year 1998 of approximately $16.3 million for impaired fixed
assets.

Selling, general and administrative expenses for the year ended September 30,
1999 decreased approximately $0.3 million as compared to the same period in the
previous fiscal year. These lower expenses were due in part to cost savings
related to staff and support personnel reductions. These reductions were offset
by an increase in the provision

   10

for doubtful accounts of approximately $4.0 million due in part to the depressed
steel market that negatively affected certain of the Company's customers.

Interest expense decreased approximately $22.9 million during the year ended
September 30, 1999 as compared to the previous fiscal year. As of February 1,
1999, the Company discontinued accruing interest on the Senior Notes.
Contractual interest on the Senior Notes for the year ended September 30, 2000
was $33.1 million, which is $22.0 million in excess of recorded interest expense
on the Senior Notes. In addition, lower production volumes resulting in lower
working capital needs decreased the average borrowings outstanding under the
Company's revolving credit facility as compared to the previous fiscal year.

Subsequent to the Company's filing of its voluntary petition for relief under
Chapter 11 of the Bankruptcy Code on February 1, 1999, the Company recorded
approximately $6.0 million in professional fees and expenses related to its
Chapter 11 reorganization efforts during fiscal year 1999. These include the
professional fees and expenses of the bondholders' and unsecured creditors'
committees. These expenses have not been included in selling, general and
administrative expenses, but are set out separately in the statement of
operations. In addition, the Company also recorded other reorganization expenses
of approximately $36.3 million for the write-off of deferred loan fees on the
Senior Notes and a provision for certain executory contracts rejected.

Liquidity and Capital Resources

In the past, the Company's principal sources of capital included the sale of
equity; the incurrence of long-term indebtedness, including borrowings under the
Company's credit facilities; equipment lease financings; asset sales and cash
provided by operations.

On January 3, 2001, Geneva Steel LLC entered into an agreement with Citicorp
USA, Inc., as agent, which provided Geneva Steel LLC with a $110 million term
loan ("Term Loan"). The Term Loan is 85% guaranteed by the United States
Government under the Emergency Steel Loan Guaranty Act of 1999 and secured by a
first lien on the real property and equipment of Geneva Steel LLC and by a
subordinated lien on its accounts receivable, inventory and certain other assets
and proceeds thereof. The Term Loan agreement requires relatively small
quarterly principal amortization payments beginning in June 2001 and is due and
payable on September 30, 2005. The loan structure contains various tranches
requiring different interest rates. The overall blended rate was approximately
LIBOR (6.7% at January 3, 2001), plus 2.6%. The agreement contains certain
reporting, notice and affirmative and negative covenants.

On January 3, 2001, Geneva Steel LLC entered into a revolving credit facility
with a syndicate of banks led by Citicorp USA, Inc., as agent (the "Revolving
Credit Facility"). The Revolving Credit Facility, in the amount of up to $125
million, is secured by Geneva Steel LLC's inventories, accounts receivable and
certain other assets, and proceeds thereof, and expires on March 31, 2005.
Interest is payable at the defined base rate (9.0% at January 3, 2001) plus
1.75% or the defined LIBOR rate (6.3% at January 3, 2001) plus 2.75%. The
Company pays a monthly commitment fee based on an annual rate of .50% of the
average unused portion of the borrowing limit under the Revolving Credit
Facility. The amount available to the Company under the Revolving Credit
Facility currently ranges between 50 and 60%, in the aggregate, of eligible
inventories plus 85% of eligible accounts receivable. Borrowing availability
under the Revolving Credit Facility is also subject to other financial tests and
covenants. As of January 4, 2001, the Company's eligible inventories, accounts
receivable and other assets supported access to $85.5 million under the
Revolving Credit Facility. As of January 4, 2001, the Company had $81.6 million
available under the Revolving Credit Facility, with $3.9 million in borrowings.

The terms of the Revolving Credit Facility and the Term Loan include cross
default and other customary provisions. Financial covenants contained in the
Revolving Credit Facility and/or the Term Loan also include, among others, a
limitation on dividends and distributions on capital stock of the Company, a
tangible net worth requirement, a cash interest coverage requirement, a
cumulative capital expenditure limitation, a limitation on the incurrence of
additional indebtedness unless certain financial tests are satisfied, a
limitation on mergers, consolidations and dispositions of assets and limitations
on liens.

   11

Besides the above-described financing activities, the Company's other source of
potential liquidity is cash provided by operating activities. Net cash used for
operating activities was $25.2 million for the year ended September 30, 2000, as
compared with net cash provided by operating activities of $8.1 million for the
year ended September 30, 1999. The uses of cash for operating activities during
the year ended September 30, 2000 included a net loss of $9.0 million, a gain on
asset sales of $9.8 million, an increase in accounts receivable of $42.0
million, an increase in inventories of $3.2 million, an increase in accounts
payable of $1.5 million and an increase in accrued liabilities of $4.0 million.
These uses of cash were offset by depreciation and amortization of $43.3 million
and a decrease in accrued payroll and related taxes of $1.9 million.

In March 2000, the Company entered into an agreement with Mannesmann Pipe and
Steel ("Mannesmann") to terminate its existing sales representation agreement.
Prior to termination, Mannesmann sold the Company's products to end customers at
the same sales price Mannesmann paid the Company plus a variable commission.
Mannesmann paid the Company in approximately three days. In addition, the
agreement required Mannesmann to purchase and pay for the Company's finished
goods inventory as soon as it was assigned to or was otherwise identified with a
particular order. When funds were received for inventory prior to shipment, the
Company deferred revenue recognition until the inventory was shipped. Therefore,
until shipment occurred the Company recorded the receipt of funds and a
corresponding liability representing the deferred revenue and/or inventory
reduction for the cost of the inventory in its financial statements. The Company
was responsible for customer credit and product quality for all steel sold
through Mannesmann. The arrangement with Mannesmann was terminated beginning
July 1, 2000, with a 180 day phase out of its liquidity arrangement with
Mannesmann. The Company estimates that termination of the liquidity arrangement
reduced the liquidity otherwise available to the Company by approximately $12
million.

During the bankruptcy, the Company supplemented its liquidity by the sale of
certain non-core assets. During the first quarter of fiscal year 2000, the
Company completed the sale of its quarry for $10.0 million and received $8.5
million and $1.5 million in October 1999 and September 2000, respectively.
Pursuant to the sale, the Company entered into a contract with the buyer of the
quarry for the purchase of limestone to meet its production requirements at a
per ton price that is lower than the Company's historical production cost.

Capital expenditures were $13.0 million and $8.0 million for the year ended
September 30, 2000 and 1999, respectively. These expenditures were made
primarily in connection with the Company's ongoing modernization and capital
maintenance efforts. Capital expenditures for fiscal year 2001 are budgeted at
approximately $85 million, which includes a blast furnace reline, spending on a
walking beam furnace ($24.5 million, which is subject to obtaining appropriate
financing), maintenance items and various projects designed to reduce costs and
increase product quality and throughput. Given the Company's recent emergence
from Chapter 11, current market conditions, and the uncertainties created
thereby, the Company is continuing to closely monitor and control its capital
spending levels and will likely significantly reduce its budgeted capital
expenditures for fiscal year 2001. Depending on market, operational, liquidity
and other factors, the Company may elect to adjust the design, timing and
budgeted expenditures of its capital plan.

Quantative and Qualitative Disclosures About Market Risk

The Company's earnings are affected by changes in interest rates related to the
Company's credit facility and Term Loan. Variable interest rates may rise, which
could increase the amount of interest expense. At September 30, 2000, the
Company had variable rate debt outstanding from its credit facilities totaling
$82.7 million. The impact of market risk is estimated using a hypothetical
increase in interest rates of one percentage point for the Company's variable
rate credit facility. Based on this hypothetical assumption, the Company would
have incurred approximately an additional $827,000 in interest expense for the
year ended September 30, 2000.

Factors Affecting Future Results

The Company's future operations and liquidity will be impacted by, among other
factors, pricing, product mix, throughput levels and production efficiencies.
The Company has efforts underway to increase sales volumes, shift its product
mix and improve throughput rates and production efficiencies. There can be no
assurance that the Company's efforts will be successful or that sufficient
demand will exist to support the Company's efforts. Pricing and shipment
   12

levels in future periods are key variables to the Company's future operating
results that remain subject to significant uncertainty. These variables will be
affected by several factors including the level of imports, future capacity
additions, product demand and other competitive and market conditions, including
the outcome and effect of the trade cases. Furthermore, the Chapter 11
bankruptcy filing introduced numerous uncertainties which may affect the
Company's business, asset values, results of operations and prospects. Because
of current market conditions, the Company's financial flexibility is limited.
Many of the foregoing factors, of which the Company does not have complete
control, may materially affect the performance, financial condition and future
results of the Company. Furthermore, continued weak market conditions or a
disruption in the Company's operations would likely cause the Company to
experience negative cash flow.

The short-term and long-term liquidity of the Company is also dependent upon
other factors including vendor credit support; availability of capital; foreign
currency fluctuations; competitive and market forces; capital expenditure
requirements and general economic conditions. Moreover, the United States steel
market is subject to cyclical fluctuations that may affect the amount of cash
internally generated by the Company and the ability of the Company to obtain
external financing. Although the Company believes that the anticipated cash from
future operations and borrowings under the Revolving Credit Facility will
provided sufficient liquidity for the Company to meet its debt service
requirements and to fund ongoing operations, including required capital
expenditures, there can be no assurance that these or other possible sources
will be adequate. The Company also faces labor negotiations with the expiration
of its union labor agreement on April 30, 2001. The Company is currently unable
to predict the effect such negotiations will have on the Company's operations
and financial condition.

Inflation can be expected to have an effect on many of the Company's operating
costs and expenses. Due to worldwide competition in the steel industry, the
Company may not be able to pass through such increased costs to its customers.

This report contains a number of forward-looking statements, including, without
limitation, statements contained in this report relating to the Company's
ability to compete against imports and the effect of imports and trade cases on
the domestic market, the Company's ability to improve and optimize operations,
the Company's ability to compete with the additional production capacity being
added in the domestic market, resolution of certain pending claims and of other
issues in the Company's Chapter 11 proceedings, the Company's expectation that
prices and shipments will improve, production efficiencies, the effect of higher
natural gas prices, the commercial and liquidity impact of terminating the
Mannesmann agreement, the level of future required capital expenditures, that
the anticipated cash from operations and borrowings on the Revolving Credit
Facility will provided sufficient liquidity, the effect of the labor contract
expiration and related labor negotiations, the effect of inflation and any other
statements contained herein to the effect that the Company or its management
"believes," "expects," "anticipates," "plans" or other similar expressions.
There are a number of important factors that could cause actual events or the
Company's actual results to differ materially from those indicated by such
forward-looking statements. These factors include, without limitation, those
described herein and in the Company's press releases and other filings with the
Securities and Exchange Commission.

   13

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

To Geneva Steel Company:

We have audited the accompanying balance sheets of Geneva Steel Company (a Utah
corporation) as of September 30, 2000 and 1999, and the related statements of
operations, stockholders' equity (deficit) and cash flows for each of the three
years in the period ended September 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates
made by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Geneva Steel Company as of
September 30, 2000 and 1999, and the results of its operations and its cash
flows for each of the three years in the period ended September 30, 2000 in
conformity with accounting principles generally accepted in the United States.

As discussed in Note 1 to the financial statements, on February 1, 1999, the
Company filed a voluntary petition for relief under Chapter 11 of the United
States Bankruptcy Code in the United States Bankruptcy Court for the District of
Utah. The filing was made necessary by a lack of sufficient liquidity. On
December 8, 2000, the Bankruptcy Court entered an order confirming the Company's
plan of reorganization (the "Plan"), as amended and modified. The Plan was
consummated on January 3, 2001, together with the closing of the post-bankruptcy
credit facilities. The Company will adopt, as of the effective date of the Plan,
fresh-start accounting. As a result of adopting fresh-start accounting, the
Company's financial statements will not be comparable with those prepared before
the Plan was consummated, including the accompanying financial statements.



ARTHUR ANDERSEN LLP


Salt Lake City, Utah
January 4, 2001

   14

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                                 BALANCE SHEETS
                             (Dollars in thousands)




                                                                          September 30,
                                                                  -----------------------------
ASSETS                                                               2000                1999
                                                                  ---------           ---------
                                                                                
Current Assets:
    Cash                                                          $      --           $      --
    Accounts receivable, less allowance for doubtful
       accounts of $8,579  and $10,912, respectively                 57,212              15,196
    Inventories                                                      58,691              55,460
    Deferred income taxes                                             8,373              14,609
    Prepaid expenses and other                                        5,066               4,584
                                                                  ---------           ---------

           Total current assets                                     129,342              89,849
                                                                  ---------           ---------

Property, Plant and Equipment:
    Land                                                              2,792               2,990
    Buildings                                                        16,094              16,119
    Machinery and equipment                                         643,484             645,943
                                                                  ---------           ---------
                                                                    662,370             665,052

    Less accumulated depreciation                                  (319,143)           (292,035)
                                                                  ---------           ---------

           Net property, plant and equipment                        343,227             373,017
                                                                  ---------           ---------

Other Assets                                                         11,221              11,850
                                                                  ---------           ---------

                                                                  $ 483,790           $ 474,716
                                                                  =========           =========


The accompanying notes to financial statements are an integral part of these
balance sheets.

   15

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                           BALANCE SHEETS (Continued)
                             (Dollars in thousands)
                                  September 30,




                                                                          September 30,
                                                                  -----------------------------
LIABILITIES AND STOCKHOLDERS' DEFICIT                                2000                1999
                                                                  ---------           ---------
                                                                                
Liabilities Not Subject to Compromise:
    Revolving credit facility                                     $  82,675           $  55,466
    Accounts payable                                                 19,923              16,334
    Accrued liabilities                                              14,528              18,209
    Accrued payroll and related taxes                                 9,355               7,444
    Accrued pension and profit sharing costs                            585                 963
                                                                  ---------           ---------

           Total current liabilities                                127,066              98,416
                                                                  ---------           ---------

Liabilities Subject to Compromise:
    Senior notes                                                    325,000             325,000
    Accounts payable                                                 52,658              56,632
    Accrued dividends payable                                        28,492              28,494
    Accrued interest payable                                         15,409              15,409
    Accrued liabilities                                               3,125               3,404
                                                                  ---------           ---------
                                                                    424,684             428,939
                                                                  ---------           ---------

Long-Term Employee Defined Benefits                                  10,617              10,731
                                                                  ---------           ---------

Deferred Income Tax Liabilities                                       8,373              14,609
                                                                  ---------           ---------

Commitments and Contingencies (Notes 1 and 6)

Redeemable Preferred Stock, Series B, no par value;
    388,358 shares authorized, issued and outstanding,
    with a liquidation value of $58,684                              56,757              56,001
                                                                  ---------           ---------
Stockholders' Deficit:
    Preferred stock, no par value; 3,600,000 shares authorized
       for all series, excluding Series B, none issued                   --                  --
    Common stock-
       Class A, no par value; 60,000,000 shares authorized,
         15,878,686 and 15,008,767 shares issued, respectively      100,870              92,022
       Class B, no par value; 50,000,000 shares authorized,
         9,752,158 and 18,451,348 shares issued and outstanding,
         respectively                                                 5,148               9,741
    Warrants to purchase Class A common stock                            --               4,255
    Accumulated deficit                                            (249,725)           (239,998)
                                                                  ---------           ---------
           Total stockholders' deficit                             (143,707)           (133,980)
                                                                  ---------           ---------
                                                                  $ 483,790           $ 474,716
                                                                  =========           =========



The accompanying notes to financial statements are an integral part of these
balance sheets.

   16
                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                            STATEMENTS OF OPERATIONS
                    (In thousands, except per share amounts)




                                                                       Year Ended September 30,
                                                                --------------------------------------
                                                                  2000           1999          1998
                                                                ---------      ---------     ---------
                                                                                    
Net sales                                                       $ 564,233      $ 314,726     $ 720,453
Cost of sales                                                     560,451        421,812       659,132
                                                                ---------      ---------     ---------

    Gross margin                                                    3,782       (107,086)       61,321

Selling, general and administrative expenses                       13,698         21,816        22,116
Write-down of impaired assets                                          --             --        17,811
                                                                ---------      ---------     ---------

    Income (loss) from operations                                  (9,916)      (128,902)       21,394
                                                                ---------      ---------     ---------

Other income (expense):
    Interest and other income                                         368            996           326
    Interest expense (total contractual interest of $39,435
         and $41,643 in 2000 and 1999, respectively)               (6,366)       (19,597)      (42,483)
    Gain on asset sales                                             9,808          4,666            30
                                                                ---------      ---------     ---------
                                                                    3,810        (13,935)      (42,127)
                                                                ---------      ---------     ---------

Loss before reorganization items and benefit for income taxes      (6,106)      (142,837)      (20,733)
                                                                ---------      ---------     ---------

Reorganization items:
    Provision for rejected executory contracts                     (1,750)        32,815            --
    Professional fees                                               4,615          6,025            --
    Write-off of deferred loan fees                                    --          3,430            --
                                                                ---------      ---------     ---------
                                                                    2,865         42,270            --
                                                                ---------      ---------     ---------
Loss before benefit for income taxes                               (8,971)      (185,107)      (20,733)

Benefit for income taxes                                               --            --         (1,790)
                                                                ---------      ---------     ---------

Net loss                                                           (8,971)      (185,107)      (18,943)

Less redeemable preferred stock dividends and
    accretion for original issue discount                             756          4,829        11,772
                                                                ---------      ---------     ---------

Net loss applicable to common shares                            $  (9,727)     $(189,936)    $ (30,715)
                                                                =========      =========     =========

Basic and diluted net loss per common share                     $    (.58)     $  (11.33)    $   (1.90)
                                                                =========      =========     =========

Weighted average common shares outstanding                         16,854         16,759        16,155
                                                                =========      =========     =========



The accompanying notes to financial statements are an integral part of these
statements.

   17

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                  STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
                             (Dollars in thousands)




                                    Shares Issued          Amount       WARRANTS
                                --------------------- ---------------- TO PURCHASE
                                 COMMON     COMMON    COMMON   COMMON    COMMON    ACCUMULATED TREASURY
                                 CLASS A    CLASS B   CLASS A  CLASS B   CLASS A     DEFICIT     STOCK    TOTAL
                                ---------- ---------- -------- ------- ----------- ----------- -------- ---------
                                                                                
Balance at September 30, 1997   14,705,265 19,151,348 $ 87,979 $10,110   $ 5,360    $ (11,399) $(9,447) $  82,603

 Issuance of Class A common
  stock to employee savings
  plan                                  --         --       --      --        --       (5,635)   6,955      1,320
 Redeemable preferred stock
   dividends                            --         --       --      --        --      (11,025)      --    (11,025)
 Redeemable preferred stock
   accretion for original
   issue discount                       --         --       --      --        --         (747)      --       (747)
 Net loss                               --         --       --      --        --      (18,943)      --    (18,943)
                                ---------- ---------- -------- ------- ---------    ---------  -------  ---------

Balance at September 30, 1998   14,705,265 19,151,348   87,979  10,110     5,360      (47,749)  (2,492)    53,208

 Issuance of Class A common
   stock to employee savings
   plan                                 --         --       --      --        --       (2,313)   2,492        179
 Exercise of Warrants to
   purchase Class A common
   stock                           233,502         --    3,674      --    (1,105)          --       --      2,569
 Conversion of Class B common
   stock to Class A common
   stock                            70,000   (700,000)     369    (369)       --           --       --        --
 Redeemable preferred stock
   dividends                            --         --       --      --        --       (3,986)      --     (3,986)
 Redeemable preferred stock
   accretion for original
   issue discount                       --         --       --      --        --         (843)      --       (843)
 Net loss                               --         --       --      --        --     (185,107)      --   (185,107)
                                ---------- ---------- -------- ------- ---------    ---------  -------  ---------

Balance at September 30, 1999   15,008,767 18,451,348   92,022   9,741     4,255     (239,998)      --    133,980)

 Expiration of Warrants to
  purchase Class A common
  stock                                 --         --    4,255      --    (4,255)          --       --         --
 Conversion of Class B common
   stock to Class A common
   stock                           869,919 (8,699,190)   4,593  (4,593)       --           --       --         --
 Redeemable preferred stock
  accretion for original
  issue discount                        --         --       --      --        --         (756)      --       (756)
 Net loss                               --         --       --      --        --       (8,971)      --     (8,971)
                                ---------- ---------- -------- ------- ---------    ---------  -------  ---------

Balance at September 30, 2000   15,878,686  9,752,158 $100,870 $ 5,148 $      --    $(249,725) $    --  $(143,707)
                                ========== ========== ======== ======= =========    =========  =======  =========


The accompanying notes to financial statements are an integral part of these
statements.

   18

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                            STATEMENTS OF CASH FLOWS
                             (Dollars in thousands)




                                                                      Year Ended September 30,
                                                               -------------------------------------
                                                                 2000          1999           1998
                                                               --------      ---------      --------
                                                                                   
Cash flows from operating activities:
    Net loss                                                   $ (8,971)     $(185,107)     $(18,943)
    Adjustments to reconcile net loss to net cash
       provided by (used for) operating activities:
       Depreciation                                              42,505         44,679        42,272
       Amortization and write-off of deferred loan fees             790          5,946         1,910
       Deferred income tax benefit                                   --             --        (2,049)
       Gain on asset sales                                       (9,808)        (4,666)          (30)
       Write-down of impaired assets                                 --             --        17,811
       Provision for write-off of leasehold improvements
           related to rejected executory contracts                   --          1,485            --
       (Increase) decrease in current assets -
           Accounts receivable, net                             (42,016)        48,234        (3,267)
           Inventories                                           (3,231)        58,264       (15,143)
           Prepaid expenses and other                              (482)        (1,350)       13,821
       Increase (decrease) in current liabilities -
           Accounts payable                                      (1,515)        35,243       (12,231)
           Accrued liabilities                                   (3,960)        (1,914)        1,635
           Accrued payroll and related taxes                      1,911         (1,829)         (941)
           Accrued interest payable                                  --         10,329           521
           Accrued pension and profit sharing costs                (378)        (1,219)          481
                                                               --------      ---------      --------

Net cash provided by (used for) operating activities            (25,155)         8,095        25,847
                                                               --------      ---------      --------

Cash flows from investing activities:
    Purchase of property, plant and equipment                   (13,005)        (8,025)      (10,893)
    Proceeds from sale of property, plant and equipment          10,098          4,684            34
                                                               --------      ---------      --------

Net cash used for investing activities                         $ (2,907)     $  (3,341)     $(10,859)
                                                               --------      ---------      --------


The accompanying notes to financial statements are an integral part of these
statements.

   19

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                      STATEMENTS OF CASH FLOWS (Continued)
                (Dollars in thousands, except per share amounts)




                                                                      Year Ended September 30,
                                                               -------------------------------------
                                                                 2000           1999          1998
                                                               --------       --------      --------
                                                                                   
Cash flows from financing activities:
    Borrowings from credit facilities                          $ 64,294       $ 19,794      $ 25,649
    Payments on credit facilities                               (37,085)       (25,097)      (39,785)
    Payments for deferred loan fees and other assets               (275)        (1,580)           --
    Change in bank overdraft                                      1,128          2,129          (852)
                                                               --------       --------      --------

Net cash provided by (used for) financing activities             28,062         (4,754)      (14,988)
                                                               --------       --------      --------

Net change in cash                                                   --             --            --
Cash at beginning of year                                            --             --            --
                                                               --------       --------      --------

Cash at end of year                                            $     --       $     --      $     --
                                                               ========       ========      ========

Supplemental disclosures of cash flow information:
  Cash paid during the year for:
       Interest (net of amount capitalized)                    $  5,570       $  9,268      $ 40,052



Supplemental schedule of noncash financing activities:

     For the years ended September 30, 2000, 1999 and 1998, the Company
     increased the redeemable preferred stock by $756, $843, and $747,
     respectively, for the accretion required over time to amortize the original
     issue discount on the redeemable preferred stock incurred at the time of
     issuance. At September 30, 2000, the Company had accrued dividends payable
     of $28,492 (total contractual dividends of $50,956).

     During the year ended September 30, 1999, warrants to purchase 233,502
     shares of Class A common stock were exercised at $11 per share. The
     exercise price was paid to the Company with 11,642 shares of redeemable
     preferred stock as provided for in the redeemable preferred stock
     agreement.


The accompanying notes to financial statements are an integral part of these
statements.

   20

                              GENEVA STEEL COMPANY
                             (DEBTOR-IN-POSSESSION)
                          NOTES TO FINANCIAL STATEMENTS


1    NATURE OF OPERATIONS AND BUSINESS CONDITIONS

The Company's steel mill manufactures a wide range of coiled and flat plate,
sheet, pipe and slabs for sale to various distributors, steel processors or
end-users primarily in the western and central United States.

On February 1, 1999, the Company filed a voluntary petition for relief under
Chapter 11 of the United States Bankruptcy Code in the United States Bankruptcy
Court for the District of Utah, Central Division (the "Bankruptcy Court"). The
filing was made necessary by a lack of sufficient liquidity. Beginning in fiscal
year 1998, the Company's operating results were severely affected by, among
other things, a dramatic surge in steel imports. As a consequence of record-high
levels of low-priced steel imports and the resultant deteriorating market
conditions, the Company's overall price realization and shipments declined
precipitously. Decreased liquidity made it impossible for the Company to service
its debt and fund ongoing operations. Therefore, the Company sought protection
under Chapter 11 of the Bankruptcy Code. Prior to the bankruptcy filing, the
Company did not make a $9 million interest payment due January 15, 1999 under
the terms of the Company's 9 1/2% senior notes due 2004. The bankruptcy code
prohibited the Company from making payments on unsecured, pre-petition debt,
including the 9 1/2% senior notes due 2004 and the 11 1/8% senior notes due 2001
(collectively, the "Senior Notes"). While in the Chapter 11 bankruptcy, the
Company remained in possession of its properties and assets and continued to
manage its business as a debtor-in-possession, subject to the supervision of the
Bankruptcy Court. The Company had a $125 million debtor-in-possession credit
facility in place (See Note 3).

As of February 1, 1999, the Company discontinued accruing interest on the Senior
Notes and dividends on its redeemable preferred stock. Contractual interest on
the Senior Notes for both the years ended September 30, 2000 and 1999 was $33.1
million, which is $33.1 million and $22.0 million, respectively, in excess of
recorded interest expense included in the accompanying financial statements.
Contractual dividends on the redeemable preferred stock as of September 30, 2000
and 1999, were approximately $51.0 million and $36.9 million, respectively,
which are $22.5 million and $8.4 million, respectively, in excess of dividends
accrued in the accompanying balance sheets.

Pursuant to the provisions of the Bankruptcy Code, all actions to collect upon
any of the Company's liabilities as of the petition date or to enforce
pre-petition contractual obligations were automatically stayed. Absent approval
from the Bankruptcy Court, the Company was prohibited from paying pre-petition
obligations. The Bankruptcy Court approved payment of certain pre-petition
obligations such as employee wages and benefits and customer claims and rebates.
Additionally, the Bankruptcy Court approved the retention of various legal,
financial and other professionals. As a debtor-in-possession, the Company had
the right, subject to Bankruptcy Court approval and certain other conditions, to
assume or reject any pre-petition executory contracts and unexpired leases.
Parties affected by such rejections had the right to file pre-petition claims
with the Bankruptcy Court.

On July 20, 2000, the Company and the Official Committee of Bondholders in the
Company's Chapter 11 case filed a proposed plan of reorganization (the "Plan")
and disclosure statement with the Bankruptcy Court. On December 8, 2000, the
Bankruptcy Court entered an order confirming the Plan, as amended and modified
(the "Confirmation Order"). The Plan was consummated on January 3, 2001,
together with the closing of the post-bankruptcy credit facilities.
Implementation of the Plan significantly reduced the Company's debt burden and
provided additional liquidity in the form of a $110 million term loan that is
eighty-five percent guaranteed by the United States Government under the
Emergency Steel Loan Guaranty Act of 1999, and a $125 million revolving line of
credit. (See Note 3).

Under the terms of the Plan, the Company changed its state of domicile from Utah
to Delaware, changed its form of organization from a corporation to a limited
liability company, and became a wholly-owned subsidiary of Geneva Steel Holdings
Corp. The Company transferred certain real property not used in the steel mill
operations to Williams Farm Property, LLC and its iron ore mines located in
southern Utah to Iron Ore Mines, LLC, both of which are also wholly-owned
subsidiaries of Geneva Steel Holdings Corp. The Company also transferred
ownership of Vineyard Iron Company and Vineyard Management Company to Geneva
Steel Holdings Corp., which made those entities wholly-owned subsidiaries of
Geneva Steel Holdings Corp.

   21

Under the terms of the Plan approved by the Bankruptcy Court, all rights with
respect to the previous outstanding common and preferred stock of the Company
were terminated. Shares of common stock of Geneva Steel Holdings Corp. were
issued to the holders of unsecured claims, which primarily consisted of holders
of an aggregate $340.6 million of Senior Notes, including unpaid interest
accrued prior to the bankruptcy, and approximately $47 million of general
unsecured debt, which includes disputed claims. Creditors who were owed $5,000
or less will receive a cash payment equal to 40% of their claim, and trade
creditors who were owed in excess of $5,000 could elect to receive $2,000,
rather than shares of common stock of Geneva Steel Holdings Corp. Secured
creditors of the Company will be paid in full with the proceeds of the term
loan.

Under the terms of an employee retention program approved by the Bankruptcy
Court, the executive officers and a manager of the Company received options to
purchase an aggregate of 5% of the shares of common stock of Geneva Steel
Holdings Corp. on a fully diluted basis.

The Plan also provides each holder of unsecured debt a right to participate in a
$25 million preferred stock rights offering by Geneva Steel Holdings Corp. In
the event that prebankruptcy holders of unsecured debt do not purchase all of
the new preferred stock, Geneva Steel Holdings Corp. will not receive the full
$25 million sought. Consequently, there can be no assurance that any of the $25
million capital infusion sought by the Plan will be available. The Company
previously entered into two standby purchase agreements for the purchase of up
to $25 million of the new preferred stock. The standby purchaser that would have
purchased up to $10 million of the preferred stock funded a portion of the $110
million term loan and was released from its standby purchase agreement. The
other standby purchaser has taken the position that for a number of reasons,
including the assertion of a material adverse change, it is no longer bound by
its standby commitment to purchase up to $15 million of the preferred stock and
has filed a lawsuit seeking a declaratory judgment that it is no longer bound.
The Company disputes this position.

Although the Chapter 11 bankruptcy procedures and significant recurring net
losses raised substantial doubt about the Company's ability to continue as a
going concern, the Company's financial statements have been prepared on a going
concern basis. This basis contemplates the continuation of operations,
realization of assets, and discharge of liabilities in the ordinary course of
business. The financial statements also present the assets of the Company at
historical cost and reflect the intention that they will be realized as a going
concern and in the normal course of business. The implementation of the Plan
will materially change certain amounts currently disclosed in the accompanying
financial statements (See Note 2). As of September 30, 2000 and 1999,
pre-petition claims are carried at face value in the financial statements. The
accompanying financial statements do not present the amounts which will
ultimately be assigned to assets and amounts paid to settle liabilities and
contingencies in accordance with the Plan.

The domestic steel industry and the Company's business are highly cyclical in
nature and are sensitive to general market conditions. Integrated steel
producers like the Company have high fixed costs and need to maintain high
production levels to achieve competitive unit costs. High fixed costs motivate
steel producers to maintain high output levels even in the face of falling
prices, thereby increasing downward pressures on selling prices. This can result
in circumstances in which the costs of goods sold can exceed the revenues of the
Company. The business and profitability of the Company may be adversely affected
by these factors and others in the face of general economic or industry
downturns.

Foreign competition is a significant factor in the steel industry and has
adversely affected product prices in the United States and tonnage sold by
domestic producers. The intensity of foreign competition is significantly
affected by fluctuations in the value of the United States dollar against
several other currencies, the level of demand for steel in the United States
economy relative to steel demand in foreign economies, trade litigation and
world economic conditions generally. Most foreign markets are less open than the
U.S. market, allowing foreign producers to maintain higher prices in their own
markets while dumping excess production at lower prices into the U.S. market. In
addition, certain foreign steel producers are controlled or subsidized by
foreign governments whose decisions concerning production and exports may be
influenced in part by political and social policy considerations as well as by
prevailing market conditions and profit opportunities.

On November 13, 2000, several U.S. steel producers filed antidumping cases
against imports of hot-rolled sheet (which includes coiled plate) from eleven
countries: Argentina, China, India, Indonesia, Kazakhstan, Netherlands, Romania,

   22

South Africa, Taiwan, Thailand and Ukraine. Countervailing duty (subsidy) cases
were also filed against imports from Argentina, India, Indonesia, South Africa
and Thailand. The International Trade Commission made unanimous affirmative
preliminary determinations of a reasonable indication of injury on December 28,
2000. Petitioners intend to file critical circumstance allegations if imports
from the respondent countries surge, which could result in the imposition of
duties as early as January 2001. The Company expects that these cases will
ultimately have a significant beneficial effect on the market, although there
can be no assurance as to the outcome or effect.

The Company continues to monitor imports and may file additional trade cases or
take other trade action in the future. Existing trade laws and regulations may,
however, be inadequate to prevent the adverse impact of dumped and/or subsidized
steel imports. Moreover, the preparation and prosecution of trade cases requires
several months during which the Company and other domestic producers must
continue to suffer the adverse impact of unfairly traded imports. There is no
guarantee that domestic markets will not in the future be flooded illegally with
foreign imports of products in competition with the Company's products. While
the Company intends to oppose all such imports vigorously, there is no guarantee
that it will be successful. Consequently, such imports could pose continuing
problems for the domestic steel industry and the Company.


2    SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Bankruptcy Accounting

While in Chapter 11 bankruptcy, the Company applied the provisions in Statement
of Position ("SOP") 90-7 "Financial Reporting by Entities in Reorganization
Under the Bankruptcy Code." SOP 90-7 does not change the application of
generally accepted accounting principles in the preparation of financial
statements. However, it does require that the financial statements for periods
including and subsequent to filing the Chapter 11 petition distinguish
transactions and events that are directly associated with the reorganization
from the ongoing operations of the business.

The Company will adopt, as of the effective date of the Plan, fresh-start
accounting pursuant to SOP 90-7. Under fresh-start accounting, the
reorganization fair value of the Company is allocated to the entity's assets,
the Company's accumulated deficit is eliminated, and the equity in the new
company is issued according to the Plan. As a result of adopting fresh-start
accounting and emerging from Chapter 11 status, the Company's financial
statements will not be comparable with those prepared before the Plan was
consummated, including the accompanying financial statements.

Pervasiveness of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

   23

Inventories

Inventories include costs of material, labor and manufacturing overhead.
Inventories are stated at the lower of cost (using a standard costing method
which approximates weighted average cost) or market value. The composition of
inventories as of September 30, 2000 and 1999 was as follows (dollars in
thousands):



                                                       2000                  1999
                                                     ---------             --------
                                                                     
       Raw materials                                 $  17,574             $ 17,081
       Semi-finished and finished goods                 38,808               33,762
       Operating materials                               2,309                4,617
                                                     ---------             --------

                                                     $  58,691             $ 55,460
                                                     =========             ========



Operating materials consist primarily of production molds, platforms for the
production molds and furnace lining refractories.

Insurance Claim Receivable

In August 1998, the Company settled its insurance claim related to a January
1996 plant-wide power outage associated with unusual weather conditions and an
operator error. The Company received $24.5 million in September 1998 to resolve
the claim. As a result of the settlement of the claim in fiscal year 1998, the
Company recorded a $2.1 million offset to selling, general, and administrative
expense, a reduction in property, plant and equipment of approximately $12.5
million and operating cost offsets of approximately $3.0 million primarily for
depreciation expense previously taken on the reimbursed equipment in the
accompanying financial statements.

Property, Plant and Equipment

Property, plant and equipment are stated at cost and depreciated using the
straight-line method over their estimated useful lives as follows:

                                                       
               Buildings                                  31.5 years
               Machinery and Equipment                    2-30 years




Major spare parts for machinery and equipment are capitalized and included in
machinery and equipment in the accompanying financial statements. Major spare
parts are depreciated using the straight-line method over the useful lives of
the related machinery and equipment.

Costs incurred in connection with the construction or major rebuild of
facilities are capitalized as construction in progress. No depreciation is
recognized on these assets until placed in service. As of September 30, 2000 and
1999, approximately $12.6 million and $6.2 million, respectively, of
construction in progress was included in machinery and equipment in the
accompanying balance sheets. Interest related to the construction or major
rebuild of facilities is capitalized and amortized over the estimated life of
the related asset. Capitalization of interest ceases when the asset is placed in
service. The Company did not capitalize any interest during the year ended
September 30, 2000. The Company capitalized approximately $0.1 million and $0.3
million of interest during the years ended September 30, 1999 and 1998,
respectively.

Maintenance and repairs are charged to expense as incurred and costs of
improvements and betterments are capitalized. Upon disposal, related costs and
accumulated depreciation are removed from the accounts and resulting gains or
losses are reflected in income.

Other Assets

Other assets consist primarily of a long-term defined benefit plan intangible
asset of $10.6 million and $10.7 million at September 30, 2000 and 1999,
respectively. Other assets also include deferred loan fees incurred in
connection with obtaining long-term financing. The deferred loan fees are being
amortized on a straight-line basis over the term of the applicable financing
agreement. As a result of the bankruptcy filing, the Company wrote-off
approximately $3.4 million

   24

of unamortized deferred loan fees on its Senior Notes during fiscal year 1999.
Accumulated amortization of deferred loan fees totaled $1.3 million and $0.5
million at September 30, 2000 and 1999, respectively.

Revenue Recognition

Sales are recognized when the product is shipped to the customer. Sales are
reduced by the amount of estimated customer claims. As of September 30, 2000 and
1999, reserves for estimated customer claims of $3.8 million and $4.2 million,
respectively, were included in the allowance for doubtful accounts in the
accompanying financial statements.

In April 1999, the Company implemented the practice allowed by its contract with
Mannesmann Pipe and Steel ("Mannesmann") to bill Mannesmann and receive payment
for inventory that could be assigned to Mannesmann orders prior to actually
shipping the product. When the funds were received for such inventory prior to
shipment, the Company would defer the revenue recognition until the inventory
was shipped. Until the product was shipped, the amount of the payment was
reflected as a deferred revenue liability and/or inventory reserve. At September
30, 1999, the Company had received approximately $9.5 million from Mannesmann
for inventory assigned to Mannesmann orders prior to shipment of the product.
This $9.5 million was reflected as deferred revenue and included in the
inventory reserve in the accompanying balance sheet as of September 30, 1999.

The contract with Mannesmann was terminated beginning July 1, 2000, with a 180
day phase out of the liquidity arrangement. The Company estimates that
termination of the liquidity arrangement reduced the liquidity otherwise
available to the Company by approximately $12 million. In addition, the
Company's accounts receivable has increased significantly since the contract was
terminated.

Income Taxes

The Company recognizes a liability or asset for the deferred tax consequences of
temporary differences between the tax basis of assets and liabilities and their
reported amounts in the financial statements that will result in taxable or
deductible amounts in future years when the reported amounts of the assets and
liabilities are recovered or settled.

Concentrations of Credit Risk

Financial instruments which potentially subject the Company to concentrations of
credit risk consist primarily of trade receivables. In the normal course of
business, the Company provides credit terms to its customers. Accordingly, the
Company performs ongoing credit evaluations of its customers and maintains
allowances for possible losses which, when realized, have been within the range
of management's expectations.

Long-Lived Assets

The Company evaluates its long-lived assets for impairment at each balance sheet
date for events and or changes in circumstances that may indicate the book value
of an asset may not be recoverable. The Company uses an estimate of the future
undiscounted net cash flows of the related asset or asset grouping over the
remaining life in measuring whether the assets are recoverable.

During fiscal year 1998, the Company wrote-down approximately $17.8 million of
impaired long lived assets. The write-down included $8.5 million of in-line
scarfing equipment, $6.6 million of mineral property development costs and $2.7
million of other machinery and equipment. The in-line scarfing equipment was
originally built to continuously condition the surface of slabs which allowed
the Company to direct roll slabs through its manufacturing process. Prior to the
implementation of the Company's slab caster, it was anticipated that 10% to 15%
of the Company's slabs would have to be conditioned. Based on the continued
operating performance of the Company's continuous caster, the Company determined
that sustained use of the in-line scarfing equipment was not necessary. Because
of its specialized nature and limited utility, this equipment has nominal resale
value or alternative use. Accordingly, the equipment was written-down to a zero
carrying value and will be retained by the Company as an idled facility.

In order to improve blast furnace productivity and maximize production of hot
metal, the Company shifted to the utilization of 100 percent iron ore pellets,
rather than using a blend of pellets and lump ore from its mines in Southern
Utah. Because the Company has determined to maintain this practice into the
future, the Company decreased the estimated value of the mineral development
costs associated with mining its Southern Utah ore to $1 million. The estimated
value was based on fair value of the mineral property less estimated costs to
sell. The Company will hold the

   25

mining properties and their remaining development costs with the objective to
use lump ore as new technologies are developed that allow the Company in future
years to utilize the iron ore reserves from these mines or in the event that the
productivity needs from its blast furnaces change. The Company is uncertain as
to when the reserves will be utilized, if ever. However, the mineral property is
carried at estimated fair market value.

The $2.7 million of other machinery and equipment included iron ingot molds and
engineering costs related to a COREX cokeless ironmaking development project.
The iron ingot molds are no longer used by the Company in the steelmaking
process. The iron ingot molds have been valued at the iron scrap price less
costs to break the iron molds into a size to be melted in the steelmaking
furnace. When the price of iron scrap declined due to weaker steel demand in
1998, the Company concluded that the value of the iron ingot molds had been
impaired for the foreseeable future. The engineering costs related specifically
to the COREX cokeless ironmaking project have been written-off because the
Company has elected to pursue a different cokeless ironmaking technology.

Basic and Diluted Net Income (Loss) Per Common Share Basic net income (loss) per
common share is calculated based upon the weighted average number of common
shares outstanding during the periods. Diluted net income (loss) per common
share is calculated based upon the weighted average number of common shares
outstanding plus the assumed exercise of all dilutive securities using the
treasury stock method. For the years ended September 30, 2000, 1999 and 1998,
outstanding options and warrants to purchase Class A common stock were not
included in the calculation of diluted net loss per common share because their
inclusion would be antidilutive. Pursuant to the Confirmation Order, discussed
in Note 1, all outstanding options to purchase Class A common stock were
canceled on the effective date of the bankruptcy Plan. Class B common stock is
included in the weighted average number of common shares outstanding as one
share for every ten shares outstanding because the Class B common stock was
convertible to Class A common stock at this same rate.

The net loss for the year ended September 30, 2000 was adjusted for the
accretion required over time to amortize the original issue discount on the
redeemable preferred stock incurred at the time of issuance. The net loss for
the years ended September 30, 1999 and 1998 was adjusted for redeemable
preferred stock dividends through February 1, 1999 and the accretion required
over time to amortize the original issue discount on the redeemable preferred
stock incurred at the time of issuance.

Defined Benefit Pension Plan

The Company has a defined benefit pension plan covering all of its union
employees, effective January 1, 1999. The plan provides benefits that are based
on average monthly earnings of the participants. The Company's funding policy
provides that payments to the plan shall be at least equal to the minimum
funding requirements as actuarially determined by an independent consulting
firm. The Company accounts for the plan in accordance with Statement of
Financial Accounting Standards ("SFAS") No. 132, "Employers' Disclosures about
Pensions and Other Post-retirement Benefits."

Recent Accounting Pronouncements

SFAS No. 133, "Accounting for Derivative Instruments and Hedging Activities" was
issued in June 1998. The statement establishes accounting and reporting
standards requiring that every derivative instrument be recorded on the balance
sheet as either an asset or liability measured at fair value and that changes in
the derivative's fair value be recognized currently in earnings unless specific
hedge accounting criteria are met. SFAS No. 133 is effective for fiscal years
beginning after June 15, 2000. As a result, the Company will adopt the
provisions of SFAS No. 133 in the first quarter of fiscal 2001. The adoption of
this statement is not expected to have a material impact on the Company's
financial statements.

In December 1999, the Securities and Exchange Commission ("SEC") issued Staff
Accounting Bulletin No. 101 "Revenue Recognition in Financial Statements" ("SAB
101"). SAB 101 provides guidance on the recognition, presentation, and
disclosure of revenue in financial statements. In June 2000, the SEC issued SAB
101B, which extended the implementation date to the Company's fourth quarter of
fiscal 2001. The Company does not expect the adoption of SAB 101 to have a
material impact on the Company's results of operations, financial position, or
liquidity.

Reclassifications

   26

Certain reclassifications were made in the prior periods' financial statements
to conform with the current year presentation.


3    SENIOR NOTES AND CREDIT FACILITY

The aggregate amounts of principal maturities as of September 30, 2000 and 1999
consisted of the following (dollars in thousands):



                                                                                                   2000        1999
                                                                                                ---------   ---------
                                                                                                      
    Senior term notes issued publicly, interest payable  January 15 and July 15 at
       9.5%, principal due January 15, 2004, unsecured                                          $ 190,000   $ 190,000

    Senior term notes issued publicly, interest payable March 15 and September 15 at
       11.125 %, principal due March 15, 2001, unsecured                                          135,000     135,000

    Debtor-in-possession credit facility from a syndicate of lenders, interest
       payable monthly at LIBOR (6.62% at September 30, 2000), plus 2.25%, due
       on the earlier of the consummation of a plan of reorganization or
       February 19, 2001 (see discussion below), secured by inventories,
       accounts receivable and property, plant and equipment                                       82,675      55,466
                                                                                                ---------   ---------

                                                                                                $ 407,675   $ 380,466
                                                                                                =========   =========



On January 3, 2001, Geneva Steel LLC entered into an agreement with Citicorp
USA, Inc., as agent, which provided Geneva Steel LLC with a $110 million term
loan ("Term Loan"). The Term Loan is 85% guaranteed by the United States
Government under the Emergency Steel Loan Guaranty Act of 1999 and secured by a
first lien on the real property and equipment of Geneva Steel LLC and by a
subordinated lien on its accounts receivable, inventory and certain other assets
and proceeds thereof. The Term Loan agreement requires relatively small
quarterly principal amortization payments beginning in June 2001 and is due and
payable on September 30, 2005. The loan structure contains various tranches
requiring different interest rates. The overall blended rate was approximately
LIBOR (6.7% at January 3, 2001) plus 2.6%. The agreement contains certain
reporting, notice requirements and affirmative and negative covenants.

On January 3, 2001, Geneva Steel LLC entered into a revolving credit facility
with a syndicate of banks led by Citicorp USA, Inc., as agent (the "Revolving
Credit Facility"). The Revolving Credit Facility, in the amount of up to $125
million, is secured by a first lien on Geneva Steel LLC's inventories, accounts
receivable and certain other assets, and proceeds thereof, and expires on March
31, 2005. Interest is payable at the defined base rate (9.0% at January 3, 2001)
plus 1.75% or the defined LIBOR rate (6.3% at January 3, 2001) plus 2.75%. The
Company pays a monthly commitment fee based on an annual rate of .50% of the
average unused portion of the borrowing limit under the Revolving Credit
Facility. The amount available to the Company under the Revolving Credit
Facility currently ranges between 50 and 60%, in the aggregate, of eligible
inventories plus 85% of eligible accounts receivable. Borrowing availability
under the Revolving Credit Facility is also subject to other financial tests and
covenants. As of January 4, 2001, the Company's eligible inventories, accounts
receivable and other assets supported access to $85.5 million under the
Revolving Credit Facility. As of January 4, 2001, the Company had $81.6 million
available under the Revolving Credit Facility, with $3.9 million in borrowings.

   27

The terms of the Revolving Credit Facility and the Term Loan include cross
default and other customary provisions. Financial covenants contained in the
Revolving Credit Facility and/or the Term Loan also include, among others, a
limitation on dividends and distributions on capital stock of the Company, a
tangible net worth requirement, a cash interest coverage requirement, a
cumulative capital expenditure limitation, a limitation on the incurrence of
additional indebtedness unless certain financial tests are satisfied, a
limitation on mergers, consolidations and dispositions of assets and limitations
on liens.

On February 19, 1999, the U.S. District Court for the District of Utah granted
the Company's motion to approve a $125 million debtor-in-possession credit
facility with Congress Financial Corporation (the "Credit Facility"). The Credit
Facility expired and was paid in full on the effective date of the Company's
Plan, January 3, 2001. The Credit Facility was secured by, among other things,
accounts receivable; inventory; and property, plant and equipment. Actual
borrowing availability was subject to a borrowing base calculation and the right
of the lender to establish various reserves, which it did. The amount available
to the Company under the Credit Facility was approximately 60%, in the
aggregate, of eligible inventories, plus 85% of eligible accounts receivable,
plus 80% of the orderly liquidation value of eligible equipment up to a maximum
of $40 million, less reserves on the various collateral established by the
lender. Borrowing availability under the Credit Facility was also subject to
other covenants.

Albert Fried & Company, LLC also provided a short-term loan to the Company in
the amount of $3.5 million pursuant to an agreement dated December 22, 2000. The
proceeds of this loan were used to meet necessary operating expenses of the
Company prior to the completion of its plan of reorganization. This loan was
repaid from the proceeds of the Revolving Credit Facility at the time of the
consummation of the plan of reorganization on January 3, 2000. Albert Fried &
Company, LLC was paid loan commitment fees of $275,000 in connection with this
transaction.

In connection with the Company's filing of its voluntary petition for relief
under Chapter 11 of the Bankruptcy Code on February 1, 1999, the Company
wrote-off approximately $3.4 million of unamortized deferred loan fees on its
Senior Notes during fiscal year 1999.


4    MAJOR CUSTOMER (DISTRIBUTOR) AND INTERNATIONAL SALES

During the years ended September 30, 2000, 1999, and 1998, the Company derived
approximately 83%, 72% and 33%, respectively, of its net sales through
Mannesmann, which is a distributor to other companies. The agreement with
Mannesmann to distribute the Company's products terminated on July 1, 2000.
International sales during the years ended September 30, 2000, 1999 and 1998 did
not exceed 10%.


5    INCOME TAXES

The provision (benefit) for income taxes for the years ended September 30, 2000,
1999 and 1998 consisted of the following (dollars in thousands):



                                                    2000          1999           1998
                                                  --------      --------        -------
                                                                       
    Current income tax provision
       Federal                                    $     --      $     --        $   227
       State                                            --            --             32
                                                  --------      --------        -------

                                                        --            --            259
                                                  --------      --------        -------
    Deferred income tax provision (benefit)
       Federal                                      13,571        51,418          3,461
       State                                         1,939         7,345            495
       Change in valuation allowance               (15,510)      (58,763)        (6,005)
                                                  --------      --------        -------

                                                        --            --         (2,049)
                                                  --------      --------        -------

    Benefit for income taxes                      $     --      $     --        $(1,790)
                                                  ========      ========        =======


   28

The benefit for income taxes as a percentage of loss for the years ended
September 30, 2000, 1999 and 1998 differs from the statutory federal income tax
rate due to the following:



                                                     2000          1999          1998
                                                   -------       -------        -------
                                                                        
Statutory federal income tax rate                    (35.0)%       (35.0)%        (35.0)%
State income taxes, net of federal
  income tax impact                                   (3.3)         (3.3)          (3.3)
Change in valuation allowance                         38.3          38.3           29.7
                                                   -------       -------        -------
Effective income tax rate                               -- %          -- %         (8.6)%
                                                   =======       =======        =======



As of September 30, 2000, the Company had deferred income tax assets of $148.6
million. The deferred income tax assets have been reduced by a $80.3 million
valuation allowance. This valuation allowance was established during the years
ended September 30, 2000, 1999 and 1998, for a portion of the Company's net
operating loss carryforward. The components of the net deferred income tax
assets and liabilities as of September 30, 2000 and 1999 were as follows
(dollars in thousands):



                                                         September 30,
                                                    -----------------------
                                                      2000           1999
                                                    --------       --------
                                                             
Deferred income tax assets:

Net operating loss carryforward                     $123,046       $ 89,214
Provision for rejected executory contract              9,288             --
Inventory costs capitalized                            2,870          9,481
Alternative minimum tax credit carryforward            6,464          6,464
Accrued vacation                                       1,323          1,168
Allowance for doubtful accounts                        3,286          4,179
General business credits                               1,445          2,064
Other                                                    889            374
                                                    --------       --------
Total deferred income tax assets                     148,611        112,944
Valuation allowance                                  (80,278)       (64,768)
                                                    --------       --------
                                                      68,333         48,176
                                                    --------       --------

Deferred income tax liabilities:

Accelerated depreciation                             (46,340)       (46,181)
Post bankruptcy petition interest on Senior Notes    (21,109)           --
Operating supplies                                      (884)        (1,995)
                                                    --------       --------
Total deferred income tax liabilities                (68,333)       (48,176)
                                                    --------       --------

                                                    $     --       $     --
                                                    ========       ========



As of September 30, 2000, the Company had a net operating loss carryforward for
financial reporting purposes of approximately $210.1 million. As of September
30, 2000, the Company had a net operating loss carryforward and an alternative
minimum tax credit carryforward for tax reporting purposes of approximately
$321.7 million and $6.5 million, respectively. Net operating loss carryforwards
of $45.7 million, $36.7 million, $16.4 million, $39.7 million, $142.8 million
and $40.4 million expire on December 31, 2009, 2011, 2012, 2018, 2019 and 2020,
respectively. The alternative minimum tax credit carryforward of $6.5 million at
September 30, 2000, currently does not expire.




   29



6    COMMITMENTS AND CONTINGENCIES

Capital Projects

The Company has incurred substantial capital expenditures to modernize its
steelmaking, casting, rolling and finishing facilities, thereby reducing overall
operating costs, broadening the Company's product lines, improving product
quality and increasing throughput rates. The Company spent approximately $13.0
million and $8.0 million on capital projects during the fiscal years ended
September 30, 2000 and 1999, respectively. These expenditures were made
primarily in connection with the Company's ongoing modernization and capital
maintenance efforts. Capital expenditures for fiscal year 2001 are estimated at
approximately $85 million, which includes a blast furnace reline, spending on a
walking beam furnace ($24.5 million, which is subject to obtaining appropriate
financing), maintenance items and various projects designed to reduce costs and
increase product quality and throughput. Given the Company's recent emergence
from Chapter 11, current market conditions and the uncertainties created
thereby, the Company is continuing to closely monitor and control its capital
spending levels and will likely reduce its budgeted capital expenditures for
fiscal year 2001. Depending on market, operational, liquidity and other factors,
the Company may elect to adjust the design, timing and budgeted expenditures of
its capital plan.

Legal Matters

The Company is subject to various legal matters, which it considers normal for
its business activities. Management, after consultation with the Company's legal
counsel, believes that, with the exception of matters relating to the Chapter 11
bankruptcy proceeding, these matters will not have a material impact on the
financial condition or results of operations of the Company.

Environmental Matters

Compliance with environmental laws and regulations is a significant factor in
the Company's business. The Company is subject to federal, state and local
environmental laws and regulations concerning, among other things, air
emissions, wastewater discharge, and solid and hazardous waste disposal.

The Company has incurred substantial capital expenditures for environmental
control facilities, including the Q-BOP furnaces, the wastewater treatment
facility, the benzene mitigation equipment, the coke oven gas desulfurization
facility and other projects. The Company has budgeted an aggregate total of
approximately $8.4 million for environmental capital improvements in fiscal
years 2001 and 2002. Environmental legislation and regulations have changed
rapidly in recent years and it is likely that the Company will be subject to
increasingly stringent environmental standards in the future. Although the
Company has budgeted for capital expenditures for environmental matters, it is
not possible at this time to predict the amount of capital expenditures that may
ultimately be required to comply with all environmental laws and regulations.

The Company accrues for losses associated with environmental remediation
obligations when such losses are probable and the amount of associated costs is
reasonably determinable. Accruals for estimated losses from environmental
remediation obligations generally are recognized no later than completion of the
engineering or feasibility study or the commitment to a formal plan of action.
These accruals may be adjusted as further information becomes available or
circumstances change. If recoveries of remediation costs from third parties are
probable, a receivable is recorded. As of September 30, 2000, the Company
determined that there were no environmental compliance or remediation
obligations requiring accrual in the accompanying financial statements.

Under the Comprehensive Environmental Response, Compensation and Liability Act
of 1980, as amended ("CERCLA"), the EPA and the states have authority to impose
liability on waste generators, site owners and operators and others regardless
of fault or the legality of the original disposal activity. Other environmental
laws and regulations may also impose liability on the Company for conditions
existing prior to the Company's acquisition of the steel mill.

At the time of the Company's acquisition of the steel mill, the Company and USX
Corporation ("USX") identified certain hazardous and solid waste sites and other
environmental conditions which existed prior to the acquisition. USX has agreed
to indemnify the Company (subject to the sharing arrangements described below)
for any fines, penalties, costs (including costs of clean-up, required studies
and reasonable attorneys' fees), or other liabilities for which the Company
becomes liable due to any environmental condition existing on the Company's real
property as of the

   30

acquisition date that is determined to be in violation of any environmental law,
is otherwise required by applicable judicial or administrative action, or is
determined to trigger civil liability (the "Pre-existing Environmental
Liabilities"). The Company has provided a similar indemnity (but without the
sharing arrangement described below) to USX for conditions that may arise after
the acquisition. Although the Company has not completed a comprehensive analysis
of the extent of the Pre-existing Environmental Liabilities, such liabilities
could be material.

Under the acquisition agreement between the two parties, the Company and USX
agreed to share on an equal basis the first $20 million of costs incurred by
either party to satisfy any government demand for studies, closure, monitoring,
or remediation at specified waste sites or facilities or for other claims under
CERCLA or the Resource Conservation and Recovery Act. The Company is not
obligated to contribute more than $10 million for the clean-up of wastes
generated prior to the acquisition. The Company believes that it has paid the
full $10 million necessary to satisfy its obligations under the cost-sharing
arrangement. USX has advised the Company, however, of its position that a
portion of the amount paid by the Company may not be properly credited against
the Company's obligations. Although the Company believes that USX's position is
without merit, there can be no assurance that this matter will be resolved
without litigation. The Company and USX have several disagreements regarding the
scope and actual application of USX's indemnification obligations. The Company's
ability to obtain indemnification from USX in the future will depend on factors
which may be beyond the Company's control and may also be subject to litigation.

The Company's used oil reclamation system has recently come under scrutiny by
the Utah Division of Solid and Hazardous Waste ("UDSHW") and the U.S.
Environmental Protection Agency ("EPA") for certain alleged violations of Utah's
used oil regulations. These assertions are contained in a UDSHW letter addressed
to the Company and supported by an attached EPA opinion letter addressed to
UDSHW. In a separate assertion, the EPA has also indicated that the Company may
be in violation of the Oil Pollution Act of 1990. The Company believes that its
longstanding used oil reclamation process qualifies for pertinent regulatory
exemptions and intends to vigorously contest any asserted liability by either
agency. Neither agency has yet issued a Notice of Violation, but the state of
Utah has indicated its intention to do so. Potential penalties could be
significant; nevertheless, UDSHW staff have indicated that the agency is not
particularly interested in collecting a large fine but would prefer to work with
the Company to upgrade the used oil system. The Company has expressed a
willingness to work with UDSHW towards such a goal. Negotiations are ongoing.
The State can impose civil penalties of up to $10,000 per day, and the Federal
Government can impose penalties up to $25,000 per day if it is not satisfied
with the State's handling of the matter.

Purchase Commitments

On February 10, 1989, the Company entered into an agreement, which has
subsequently been amended, to purchase interruptible and firm back-up power
through February 28, 2002. For interruptible power, the Company pays an energy
charge adjusted annually to reflect changes in the supplier's average energy
costs and facilities charge, based on 110,000 kilowatts, adjusted annually to
reflect changes in the supplier's per megawatt fixed transmission investment.
The Company's minimum purchase commitment is $2.5 million, $2.6 million and $0.7
million for fiscal years 2001, 2002 and 2003, respectively.

Effective July 12, 1990, the Company entered into an agreement, which was
subsequently amended in April 1992, to purchase 100% of the oxygen, nitrogen and
argon produced at a facility located at the Company's steel mill which is owned
and operated by an independent party. The contract expires in September 2006 and
specifies that the Company will pay a base monthly charge that is adjusted
semi-annually each January 1 and July 1 based upon a percentage of the change in
the Producer's Price Index ("PPI"). The annual base charge is approximately $5.1
million.

Effective June 6, 1995, the Company entered into an agreement to purchase 800
tons a day of oxygen from a new plant constructed at the Company's steel mill
which is owned and operated by an independent party. The new plant was completed
June 20, 1997. The Company pays a monthly facility charge which is adjusted
semi-annually each January 1 and July 1 based on an index. The contract
continues through July 2012 and includes a minimum annual facility charge of
approximately $5.3 million.

Effective June 10, 1997, the Company entered into an agreement to purchase 100%
of the oxygen, nitrogen and argon produced at a facility that is owned and
operated by an independent party. The contract expires in September 2002 and

   31

specifies that the Company will pay a monthly facility charge that is adjusted
semi-annually each January 1 and July 1 based upon a percentage of the change in
PPI. The minimum annual facility charge is approximately $1.0 million.

Effective July 1, 2000, the Company entered into an agreement to purchase 35,000
MMBtu per day of natural gas with provisions to offsell any unusable volumes to
offset other agreements with the expiration date of July 1, 2002. The price is
adjusted monthly based on the index price as reported by "Inside FERC Gas Market
Report." The Company's minimum purchase commitment is approximately $50.2
million for fiscal year 2001.

On September 12, 1997, the Company entered into an agreement to purchase natural
gas transportation service for 35,000 decatherms per day commencing October 1,
1998 and continuing through September 30, 2003. The Company's minimum purchase
commitment is approximately $1.48 million per year.

The Company has historically purchased iron ore pellets from USX. The Company's
pellet agreement with USX expired on December 31, 1999. The Company has begun
discussions with USX and other potential vendors regarding a new pellet supply
contract and has reached an interim understanding with USX for a short-term
supply arrangement. Management believes that the Company will be able to
complete a new pellet supply contract with USX or a substitute vendor. However,
there can be no assurance that a new contract can be completed or that USX will
continue to supply pellets to the Company. If the Company is unable to enter
into a new pellet supply contract, the Company's operating results could be
adversely affected.

Lease Obligations

The Company leases certain facilities and equipment used in its operations.
Management expects that, in the normal course of business, leases that expire
will be renewed or replaced by other leases. The aggregate commitments under
non-cancelable operating leases exclude executory lease contracts rejected as
part of the Chapter 11 proceedings. The aggregate commitments under
non-cancelable operating leases at September 30, 2000, were as follows (dollars
in thousands):



           Year Ending September 30,
           -------------------------
                                                         
                      2001                                  $3,374
                      2002                                     950
                      2003                                     162
                      2004                                       7
                      2005                                       7
                      Thereafter                                86
                                                            ------
                                                            $4,586
                                                            ======



Total rental expense for non-cancelable operating leases was approximately $4.4
million, $8.7 million and $9.2 million for the years ended September 30, 2000,
1999 and 1998, respectively.

Letters of Credit

As of September 30, 2000, the Company had outstanding letters of credit totaling
approximately $3.8 million.

Other Matters

In September 2000, Utah OSHA began an audit at the Company's plant, which has
been completed. The Company has not received the report, but understands that
the inspector will recommend some violations. Utah OSHA is also investigating
the death of an employee that occurred in the Blast Furnace area when steel
pellets were released into a rail car in which he was working. A final report or
citation has not been issued and is not expected until early 2001. Because of
the preliminary nature of these proceedings, the likely outcome of these matters
cannot be assessed with any certainty.

The Company's union contract expires on April 30, 2001. In late 1999, the
Company participated in informal discussions with the union regarding a possible
extension of the union contract, but was unable to reach agreement on terms and
conditions for such an extension. Several issues could not be resolved at that
time in a manner acceptable to the parties. The Company intends to commence
formal discussions with the union in advance of the current expiration date of
the

   32

union contract. There can be no assurance, however, that a new labor agreement
satisfactory to the Company can be reached. The Company's operations and future
profitability will be adversely affected to the extent that it is unable to
reach a new labor agreement with the union on terms and conditions satisfactory
to the Company.


7    REDEEMABLE PREFERRED STOCK

In March 1993, the Company issued $40 million of 14% cumulative redeemable
exchangeable preferred stock (the "Redeemable Preferred Stock") at a price of
$100 per share and related warrants to purchase an aggregate of 1,132,000 shares
of Class A common stock. As of September 30, 2000, the Redeemable Preferred
Stock consisted of 388,358 shares, no par value, with a liquidation preference
of approximately $151 per share. Pursuant to the Redeemable Preferred Stock
Agreement, 11,642 shares of Redeemable Preferred Stock have been used by the
holders thereof to pay for the exercise of warrants to purchase 233,502 shares
of Class A common stock. Upon the expiration of the warrants in March of 2000,
the Company reclassified the balance of the warrants to purchase Class A common
stock as Class A common stock. The warrants to purchase the Company's Class A
common stock were exercisable at $11 per share, subject to adjustment in certain
circumstances, and expired in March 2000. Dividends on the Redeemable Preferred
Stock accrued at a rate equal to 14% per annum of the liquidation preference and
were payable quarterly in cash from funds legally available therefor. Restricted
payment limitations under the Senior Notes precluded payment of the quarterly
preferred stock dividends beginning with the dividend due June 15, 1996. Unpaid
dividends accumulated and accrued additional dividends at a rate of 14% per
annum. As of February 1, 1999, the Company discontinued recording dividends on
the Redeemable Preferred Stock. Unpaid contractual dividends as of September 30,
2000, were approximately $51.0 million, which is $22.5 million in excess of
dividends accrued in the accompanying balance sheet. The Company did not pay
dividends on the Redeemable Preferred Stock during the pendency of its Chapter
11 proceeding. Pursuant to the Plan, as discussed in Note 1, the holders of the
redeemable preferred stock did not receive any distributions under the Plan and
all rights in the redeemable preferred stock were terminated.


8    STOCK OPTIONS

Effective July 20, 1990, the Company's Board of Directors adopted a Key Employee
Plan (the "Employee Plan") which was approved by the Company's stockholders in
January 1991. The Employee Plan provided that incentive and nonstatutory stock
options to purchase Class A common stock and corresponding stock appreciation
rights may be granted. The Employee Plan provided for issuance of up to
1,000,000 shares of Class A common stock, with no more than 750,000 shares of
Class A common stock cumulatively available upon exercise of incentive stock
options.

The Employee Plan Committee (the "Committee"), consisting of outside directors,
determined the time or times when each incentive or nonstatutory stock option
vested and became exercisable; provided no stock option could be exercisable
within six months of the date of grant (except in the event of death or
disability) and no incentive stock option could be exercisable after the
expiration of ten years from the date of grant. The exercise price of incentive
stock options to purchase Class A common stock must be at least the fair market
value of the Class A common stock on the date of grant. The exercise price of
nonstatutory options to purchase Class A common stock was determined by the
Committee.

Effective December 18, 1996, the Company's Board of Directors adopted the Geneva
Steel Company 1996 Incentive Plan (the "Incentive Plan") which was approved by
the Company's shareholders in February 1997. The Incentive Plan provided that
1,500,000 shares of class A common stock will be available for the grant of
options or awards.

The Incentive Plan was administered by a committee consisting of non-employee
directors of the Company (the "Committee"). The Committee determined, among
other things, the eligible employees, the number of options granted and the
purchase price, terms and conditions of each award, provided that the term did
not exceed ten years. The per share purchase price could not be less than 80
percent of the fair market value on the date of grant.

The Incentive Plan also provided for the non-discretionary grant of options to
non-employee directors ("Director Options"). Each non-employee director who
became a director after January 1, 1997 was granted a Director Option of 4,000
shares upon election or appointment. In addition, annually on the first business
day on or after January 1 of each calendar year that the Incentive Plan was in
effect, all non-employee directors who were members of the Board at the time
were granted a Director Option of 2,000 shares; provided, however, that a
director was not entitled to receive an

   33

annual grant during the year elected or appointed. Director Options were granted
at a purchase price equal to the fair market value of the shares on the date of
grant. Director Options vested at 40 percent on the second anniversary of the
date of grant and an additional 20 percent on the third, fourth and fifth
anniversaries of the date of grant, provided that the director remained in
service as a director on each date. The Director Options generally had a ten
year term.

Stock option activity for the years ended September 30, 2000, 1999 and 1998
consisted of the following:



                                                                       Exercise       Weighted Average
                                                   Number of           Price Per       Exercise Price
                                                    Shares            Share Range         Per Share
                                                   ---------         -------------    ----------------
                                                                             
    Outstanding at September 30, 1997              1,626,663         $ 2.25-10.91         $   4.93
    Granted                                          304,486           2.06- 2.44             2.76
    Canceled                                         (40,010)          2.25- 8.66             7.19
                                                   ---------         -------------        ---------
    Outstanding at September 30, 1998              1,891,139           2.06-10.91             4.54
    Granted                                           10,000                 0.56             0.56
    Canceled                                        (660,166)          2.2 - 7.75             4.30
                                                   ---------         -------------        ---------
    Outstanding at September 30, 1999              1,240,973           0.56-10.91             4.63
    Canceled                                        (141,850)         02.25-10.91             9.50
                                                   ---------         -------------        ---------
    Outstanding at September 30, 2000              1,099,123         $ 0.56- 7.75         $   4.00
                                                   =========         =============        =========



Options to purchase 948,827, 1,003,772 and 1,032,606 shares of Class A common
stock were exercisable on September 30, 2000, 1999 and 1998, respectively. There
were no options granted during the fiscal year 2000. As of the effective date of
the Plan, all rights in the outstanding options were terminated and the Employee
Plan and Incentive Plan will have no further force and effect. As of September
30, 2000, 661,776 shares of Class A common stock are available for grant under
the plans.

The Company applies Accounting Principles Board Opinion 25 and related
interpretations in accounting for its plans. Accordingly, no compensation
expense has been recognized for its stock option plans. Had compensation expense
for the Company's stock option plans been determined in accordance with the
provisions of SFAS No. 123, "Accounting for Stock-Based compensation," the
Company's net loss and diluted net loss per common share would have been
increased to the pro forma amounts indicated below (in thousands, except per
share data):



                                                                   Year Ended September 30,
                                                        ---------------------------------------------
                                                          2000               1999              1998
                                                        ---------          ---------         --------
                                                                                    
       Net loss as reported                             $  (8,971)         $(185,107)        $(18,943)
       Net loss pro forma                                  (8,971)          (185,254)         (19,166)

       Diluted net loss per common share as reported    $    (.58)         $  (11.33)        $  (1.90)
       Diluted net loss per common share pro forma           (.58)            (11.34)           (1.92)



The fair value of each option grant has been estimated on the grant date using
the Black-Scholes option-pricing model with the following assumptions used for
grants in 1999 and 1998, in calculating compensation cost: expected stock price
volatility of 89.6% and 71.6% for 1999 and 1998, respectively, an average risk
free interest rate of approximately 5.3% and 5.75% for 1999 and 1998,
respectively, and expected lives ranging between three years to seven years for
1999 and 1998.

The weighted average fair value of options granted during fiscal years 1999 and
1998 was $0.56 and $2.76 per share, respectively. At September 30, 2000, the
1,099,123 options outstanding had exercise prices between $0.56 and $7.75 per
share with a weighted average exercise price of $3.96 and a weighted average
remaining contractual life of 5.6 years. 948,827 of these options were
exercisable with a weighted average exercise price of $4.17.

Pursuant to the Plan, as discussed in Note 1, all outstanding options to
purchase shares of Class A common stock were canceled on January 3, 2001, the
effective date of the bankruptcy Plan. As part of the Plan,
   34
the Bankruptcy Court approved a management incentive compensation program
pursuant to which management was granted options to acquire an aggregate of 5%
of the common stock of the new Company, Geneva Steel Holdings Corp., effective
January 3, 2001. These options vest 25% immediately and 25% on the first, second
and third anniversaries of the date of grant. The options have a term of 10
years from the date in which they vest. The exercise price will be equal to the
lower of the initial trading price of the common stock subsequent to the
effective date or $15.43 per share.


9    EMPLOYEE BENEFIT PLANS

Union Savings and Pension Plan

The Company has a savings and pension plan which provides benefits for all
eligible employees covered by the collective bargaining agreement. This plan is
comprised of two qualified plans: (1) a union employee savings 401(k) plan with
a cash or deferred compensation arrangement and matching contributions and (2) a
noncontributory defined contribution pension plan.

Participants may direct the investment of funds related to their deferred
compensation in this plan. The Company matches participants' contributions not
to exceed 1% of their compensation. Beginning in December 1998, the Company
match has been made in cash. Prior to December 1998, the Company matched
participants' contributions to the savings plan in shares of class A common
stock. For the pension plan, the Company contributed 5 1/4% of each
participant's compensation to this plan for the period May 1, 1999 through
September 30, 2000. The Company contributed 5% of each participants'
compensation to this plan for the period October 1, 1997 through April 30, 1999.
Total contributions by the Company for both plans for the years ended September
30, 2000, 1999 and 1998 were $4.2 million, $2.9 million and $5.1 million,
respectively. The participants vest in these contributions at 20% for each year
of service until fully vested after five years.

Union Employee Defined Benefit Plan

The Company provides a union employee defined benefit pension plan. The plan
covers all of the Company's union employees and is effective January 1, 1999.
Benefits under the Plan are determined based upon a flat dollar formula, which
is calculated as a flat dollar amount multiplied by the years of credited
service with pro rata adjustments for the whole months of credited service.
Benefit accounts are reduced by benefits payable to the retiree from the USX
pension plan and the Company's other pension plan. The following provides a
reconciliation of the change in benefit obligation for fiscal years 2000 and
1999 (dollars in thousands):



                                                           2000               1999
                                                          -------            -------
                                                                       
Benefit obligation at beginning of fiscal year            $11,682            $12,047

    Service cost                                              246                201
    Interest cost                                             962                621
    Actual distributions                                     (532)              (486)
    Actuarial gains                                           827               (701)
                                                          -------            -------

Benefit obligation at end of fiscal year                  $13,185            $11,682
                                                          =======            =======


   35

The following provides a reconciliation for plan assets for the fiscal years
2000 and 1999 (dollars in thousands):



                                                           2000               1999
                                                          -------            -------
                                                                       
Fair value of plan assets at beginning of fiscal year     $   116            $    --

    Company contributions                                   2,475                600
    Benefits paid from plan assets                           (532)              (486)
    Actual return on plan assets                              (73)                 2
                                                          -------            -------

Fair value of plan assets at end of fiscal year           $ 1,986            $   116
                                                          =======            =======



The following provides the funded status of the plan as of September 30, 2000
and 1999 (dollars in thousands):



                                                           2000               1999
                                                         --------           --------
                                                                      
    Funded status                                        $(11,199)          $(11,566)
    Unrecognized prior service cost                        10,617             11,434
    Unrecognized net actuarial loss                           260               (703)
                                                         --------           --------
    Preliminary accrued benefit liability                    (322)              (835)
                                                         --------           --------
    Additional liability                                  (10,877)           (16,731)
                                                         --------           --------

Funded Status of plan at the end of fiscal year          $ 11,199           $ 11,566
                                                         ========           ========



Net periodic pension cost includes the following components for the years ended
September 30, 2000 and 1999 (dollars in thousands):

                                                                      
    Service cost                                         $    246           $    201
    Interest cost                                             962                621
    Amortization of prior service cost                        817                613
    Expected return on plan assets                            (63)                --
                                                         --------           --------
                                                         $  1,962           $  1,435
                                                         ========           ========




The assumptions as of September 30, 2000 and 1999 are as follows:



                                                           2000               1999
                                                         --------           --------
                                                                      
    Discount rate                                            8.00%              8.00%
    Long-term rate of return on plan assets                  8.00%              8.00%
    Rate of compensation increase                            3.00%              3.00%



Defined Contribution Union Employee Post-Retirement Medical Plan

Effective March 1, 1995, the Company established a defined contribution Union
employee post-retirement medical plan pursuant to a collective bargaining
agreement. The plan is for the benefit of eligible retirees. The Plan is funded
by Company contributions to a voluntary Employee Beneficiary Association Trust.
Company contributions to the plan are $.25 from April 1, 2000 through September
30, 2000, $.20 from April 1, 1999 through March 31, 2000, $.15 from April 1,
1998 through March 31, 1999 and $.10 prior to May 1, 1998 for each hour of work
performed by employees covered by the collective bargaining agreement. In
addition, union employees provided a contribution to the plan based on a
reduction from their performance dividend plan payment until April 30, 1998.
Beginning in February 2000, the plan provides retiree medical benefits subject
to a cost sharing arrangement with eligible retirees. The benefit cost sharing
arrangement amount is determined annually based on number of participants,
available funds in the trust and cost of the medical insurance.

   36

Management Employee Savings and Pension Plan

The Company has a savings and pension plan which provides benefits for all
eligible employees not covered by the collective bargaining agreement. This plan
is comprised of two qualified plans: (1) a management employee savings 401(k)
plan with a cash or deferred compensation arrangement and discretionary matching
contributions and (2) a noncontributory defined contribution pension plan.

Participants may direct the investment of funds related to their deferred
compensation in this plan. The employee savings plan provides for discretionary
matching contributions as determined each plan year by the Company's Board of
Directors. The Board of Directors elected to match participants' contributions
to the employee savings plan up to 4% of their compensation. Beginning in
December 1998, the Company began matching participants' contributions in cash.
Prior to December 1998, the Company matched participants' contributions to the
savings plan in shares of Class A common stock. For the pension plan, the
Company contributed 5 1/4% of each participant's compensation to this plan for
the period May 1, 1999 through September 30, 2000. The Company contributed 5% of
each participants compensation to this plan for the period October 1, 1997
through April 30, 1999. During the years ended September 30, 2000, 1999 and
1998, total contributions by the Company were $1.4 million, $1.4 million and
$1.9 million, respectively. The participants vest in the Company's contributions
at 20% for each year of service until fully vested after five years.

Profit Sharing and Bonus Programs

The Company has a profit sharing program for full-time union eligible employees.
Participants receive payments based upon operating income reduced by an amount
equal to a portion of the Company's capital expenditures. No profit sharing was
accrued or paid in the years ended September 30, 2000, 1999 and 1998.

The Company also has implemented a performance dividend plan designed to reward
employees for increased shipments. As shipments increase above an annualized
rate of 1.5 million tons, compensation under this plan increases. Payments made
under the performance dividend plan are deducted from any profit sharing
obligations to the extent such obligations exceed the performance dividend plan
payments in any given fiscal year. During the years ended September 30, 2000,
1999 and 1998, performance dividend plan expenses were $5.3 million, $0.7
million and $8.5 million, respectively.

Supplemental Executive Plans

The Company maintains insurance and retirement agreements with certain of the
management employees and executive officers. Pursuant to the insurance
agreements, the Company pays the annual premiums and receives certain policy
proceeds upon the death of the retired management employee or executive officer.
Pursuant to the retirement agreements, the Company provides for the payment of
supplemental benefits to certain management employees and executive officers
upon retirement.

   37

10   SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

A summary of selected quarterly financial information for the years ended
September 30, 2000 and 1999 is as follows (dollars in thousands, except per
share amounts):



2000 Quarters                                            First        Second        Third         Fourth
                                                       --------      --------      --------      --------
                                                                                     
Net sales                                              $126,167      $149,724      $153,939      $134,400
Gross margin                                               (694)        5,563         6,157        (7,244)
Net income (loss)                                         1,761        (1,666)          492        (9,558)
Net income (loss) applicable to common shares             1,574        (1,854)          302        (9,749)
Basic and diluted net income (loss) per common share       0.09         (0.11)         0.02         (0.58)





2000 Quarters                                            First        Second        Third         Fourth
                                                       --------      --------      --------      --------
                                                                                     
Net sales                                             $  78,699     $  59,345     $  87,000     $  89,682
Gross margin                                            (29,538)      (31,559)      (21,535)      (24,454)
Net loss                                                (49,818)      (42,279)      (29,491)      (63,519)
Net loss applicable to common shares                    (53,008)      (43,545)      (29,677)      (63,706)
Basic and diluted net loss per common share               (3.30)        (2.68)        (1.76)        (3.78)

EX-22

   1

                                                                      EXHIBIT 22


                    LISTING OF SUBSIDIARIES OF THE REGISTRANT





Subsidiary                       State of Incorporation
- -------------------------------------------------------
                              
Geneva Steel LLC                        Delaware

Iron Ore Mines LLC (DEL)                Delaware

Williams Farm LLC (DEL)                 Delaware

Vineyard Management Company (DEL)       Delaware

Vineyard Iron Company (DEL)             Delaware

CPICOR Management Company, LLC          Delaware

EX-27

 

<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM GENEVA STEEL
COMPANY'S BALANCE SHEET AND STATEMENT OF OPERATIONS AS OF AND FOR THE YEAR ENDED
SEPTEMBER 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS, INCLUDING THE NOTES THERETO.

<MULTIPLIER> 1,000

                             
<PERIOD-TYPE>                   YEAR
<FISCAL-YEAR-END>                          SEP-30-2000
<PERIOD-START>                             OCT-01-1999
<PERIOD-END>                               SEP-30-2000
<CASH>                                               0
<SECURITIES>                                         0
<RECEIVABLES>                                   57,212
<ALLOWANCES>                                     8,579
<INVENTORY>                                     58,691
<CURRENT-ASSETS>                               129,342
<PP&E>                                         662,370
<DEPRECIATION>                                 319,143
<TOTAL-ASSETS>                                 483,790
<CURRENT-LIABILITIES>                          127,066
<BONDS>                                        325,000
<PREFERRED-MANDATORY>                           56,757
<PREFERRED>                                          0
<COMMON>                                       106,018
<OTHER-SE>                                   (249,725)
<TOTAL-LIABILITY-AND-EQUITY>                   483,790
<SALES>                                        564,233
<TOTAL-REVENUES>                               564,233
<CGS>                                          560,451
<TOTAL-COSTS>                                  560,451
<OTHER-EXPENSES>                                13,698
<LOSS-PROVISION>                                 5,488
<INTEREST-EXPENSE>                             (6,366)
<INCOME-PRETAX>                                (8,971)
<INCOME-TAX>                                         0
<INCOME-CONTINUING>                                  0
<DISCONTINUED>                                       0
<EXTRAORDINARY>                                      0
<CHANGES>                                            0
<NET-INCOME>                                   (8,971)
<EPS-BASIC>                                    (.58)
<EPS-DILUTED>                                    (.58)