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-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, TeVxxSR+nJPUopae9ikpVfKYDUL/wdwyg5C//eO5mFwtYZmjj355hjX1V0Q+lgXL 4+4oAhC9o4bHYpXnoke9nw== 0000921895-01-500035.txt : 20010502 0000921895-01-500035.hdr.sgml : 20010502 ACCESSION NUMBER: 0000921895-01-500035 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20001231 FILED AS OF DATE: 20010501 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WHX CORP CENTRAL INDEX KEY: 0000106618 STANDARD INDUSTRIAL CLASSIFICATION: STEEL WORKS, BLAST FURNACES ROLLING MILLS (COKE OVENS) [3312] IRS NUMBER: 133768097 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 001-02394 FILM NUMBER: 1618338 BUSINESS ADDRESS: STREET 1: 110 EAST 59TH ST STREET 2: 30TH FL CITY: NEW YORK STATE: NY ZIP: 10022 BUSINESS PHONE: 2123555200 MAIL ADDRESS: STREET 1: 1134 MARKET STREET CITY: WHEELING STATE: WV ZIP: 26003 FORMER COMPANY: FORMER CONFORMED NAME: WHEELING PITTSBURGH CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: WHEELING PITTSBURGH STEEL CORP DATE OF NAME CHANGE: 19910130 FORMER COMPANY: FORMER CONFORMED NAME: WHEELING STEEL CORP DATE OF NAME CHANGE: 19690202 10-K 1 form10k01306_12312000.htm ANNUAL REPORT sec document

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 December 31, 2000.

/ / TRANSITION REPORT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the transition period from __________ to __________

Commission file number 1-2394

WHX CORPORATION
(Exact name of registrant as specified in its charter)

DELAWARE 13-3768097
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

110 East 59th Street 10022
New York, New York (Zip code)
(Address of principal executive offices)

Registrant's telephone number, including area code: 212-355-5200 Securities
registered pursuant to Section 12(b) of the Act:

Name of each exchange on
Title of each class which registered
------------------- ----------------

Common Stock, $.01 par value New York Stock Exchange
Series A Convertible Preferred Stock, $.10 par value New York Stock Exchange
Series B Convertible Preferred Stock, $.10 par value New York Stock Exchange

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 No |X|

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 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. |X|

Aggregate market value of Common Stock held by non-affiliates of the
Registrant as of March 31, 2001 was $20,739,054, which value, solely for the
purposes of this calculation excludes shares held by Registrant's officers,
directors, and their affiliates. Such exclusion should not be deemed a
determination by Registrant that all such individuals are, in fact, affiliates
of the Registrant. The number of shares of Common Stock issued and outstanding
as of March 31, 2001 was 14,920,183, including 244,510 shares of redeemable
Common Stock.

Documents Incorporated by Reference: None.

Item 1. Business

Overview

WHX Corporation

WHX Corporation ("WHX") is a holding company that has been
structured to invest in and/or acquire a diverse group of businesses on a
decentralized basis. WHX's primary businesses currently are: Handy & Harman
("H&H"), a diversified manufacturing company whose strategic business segments
encompass, among others, specialty wire, tubing, and fasteners, and precious
metals plating and fabrication; Unimast Incorporated ("Unimast"), a leading
manufacturer of steel framing and other products for commercial and residential
construction; and WHX Entertainment Corp., a co-owner of a racetrack and video
lottery facility located in Wheeling, West Virginia. WHX's other business
consists of Wheeling-Pittsburgh Corporation ("WPC") and its subsidiaries
including Wheeling-Pittsburgh Steel Corporation ("WPSC" and together with WPC
and its other subsidiaries, the "WPC Group"), a vertically integrated
manufacturer of value-added and flat rolled steel products. WHX, together with
all of its subsidiaries shall be referred to as the "Company," and WHX with its
subsidiaries other than the WPC Group shall be referred to as the "WHX Group."

Beginning in 1998 and continuing through 2000, record high levels of
illegally priced foreign steel imports have caused a marked deterioration of
steel prices, resulting in significant losses and irreparable harm to the
domestic steel industry. This record high level of illegally-priced foreign
steel imports over a three year period, coupled with indebtedness incurred by
the WPC Group as a result of a ten-month work stoppage which ended August 12,
1997, and approximately $200 million of capital expenditures used to modernize
its facilities to increase quality, efficiency, safety and environmental
conditions, resulted in substantial losses and the severe erosion of the WPC
Group's financial position and liquidity. These losses and erosion of liquidity
occurred notwithstanding increases in operating efficiencies resulting from the
modernization of facilities, various cost saving measures and the elimination of
20% of the hourly workforce negotiated in 1997. The WPC Group attempted to
negotiate Steel Emergency Guaranteed Loans under a Federal Loan Guarantee
Program, but such negotiations failed to produce an agreement satisfactory to
all parties, and in November of 2000 the WPC Group decided to reorganize under
the protection of the Federal Bankruptcy Code.

On November 16, 2000 (the "Petition Date"), the WPC Group filed
petitions for relief (the "Bankruptcy Filing") under Chapter 11 of the United
States Bankruptcy Code (the "Bankruptcy Code") in the United States Bankruptcy
Court for the Northern District of Ohio (the "Bankruptcy Court"). The WPC Group
commenced the Chapter 11 cases in order to restructure their outstanding debts
and to improve their access to the additional funding that the WPC Group needs
for its continued operations. The WPC Group is in possession of its properties
and assets and continues to manage its businesses with its existing directors
and officers as debtors-in-possession subject to the supervision of the
Bankruptcy Court. WPSC and the other members of the WPC Group are authorized to
operate their businesses, but may not engage in transactions outside of the
normal course of business without approval, after notice and hearing, of the
Bankruptcy Court. The Bankruptcy Court has granted the WPC Group's motion to
approve a new $290 million debtor-in-possession credit agreement (the "DIP
Credit Agreement") provided by Citibank, N.A., as initial issuing bank, Citicorp
U.S.A., Inc., as administrative agent, and certain lenders (the "DIP Lenders").
Pursuant to the DIP Credit Agreement, Citibank, N.A. has made term loan advances
to the WPC Group up to a maximum aggregate principal amount of $35 million. In
addition the DIP Lenders have agreed, subject to certain conditions, to provide
the WPC Group with revolving loans, swing loans and letter of credit
accommodations in an aggregate amount of up to $255 million. The term loans and
revolving loans are secured by first priority liens on the WPC Group's assets,
subject to valid liens existing on November 16, 2000, and have been granted
superpriority administrative status, subject to certain carve-outs for fees
payable to the United States Trustee and professional fees. The terms of the DIP
Credit Agreement include cross default and other customary provisions. For
additional information concerning these developments, see Item 7 - Management's
Discussion and Analysis of Financial Condition and Results of Operations and
Notes A, H, and K to the Consolidated Financial Statements.

Handy & Harman

WHX acquired H&H in April 1998. H&H's business groups are the (a)
manufacturing and selling of non-precious metal wire, cable and tubing products,
primarily stainless steel and specialty alloy; (b) manufacturing and selling of
precious metals products and precision electroplated materials and stamped
parts; and (c) manufacturing and selling of other specialty products supplied to
the roofing, construction, natural gas, electric, and water industries. H&H's
products are sold to industrial
2

users in a wide range of applications which include the electric, electronic,
automotive original equipment, computer equipment, oil, refrigeration, utility,
telecommunications, medical and other energy related industries.

Historically, until commencing a diversification program in 1966,
H&H was engaged primarily in the manufacture of silver and gold alloys in mill
forms and the refining of precious metals from jewelry and industrial scrap.
H&H's markets were largely among silversmiths and manufacturing jewelers, users
of silver brazing alloys, and manufacturers who required silver and gold
primarily for the properties of those metals. H&H publishes a daily New York
price for its purchases of silver and gold and also publishes a daily price for
its fabricated silver and gold. The silver price is recognized, relied on and
used by others throughout the world. The diversification program has added lines
of precious metals products and various specialty manufacturing operations,
including stainless steel and specialty metal alloy products, for industrial
users in a wide range of applications described above.

Unimast

In March 1995, the Company acquired Unimast, a leading manufacturer
of steel framing and related accessories for commercial and residential building
construction. Unimast uses galvanized steel to manufacture steel framing
components for wall, floor and roofing systems, in addition to other roll formed
expanded metal construction accessories.

WHX Entertainment

In October 1994, WHX Entertainment, a wholly owned subsidiary of
WHX, purchased a 50% interest in the operations of Wheeling-Downs Racing
Association ("Wheeling-Downs") from Sportsystems Corporation. Wheeling-Downs
operates a greyhound racetrack and video lottery facility located in Wheeling,
West Virginia.

WPC Group

WPC is a vertically integrated manufacturer of predominately
value-added flat rolled steel products. WPC sells a broad array of value-added
products, including cold rolled steel, tin and zinc-coated steels and fabricated
steel products. WPC's products are sold to the construction industry, steel
service centers, converters, processors, and the container, automotive and
appliance industries.

Business Strategy

WHX's business strategy has been to enhance the growth and
profitability of each of its businesses and to build upon the strengths of those
businesses through product line and other strategic acquisitions.

H&H will continue to focus on high margin products and innovative
technology, while seeking growth through strategic acquisitions. H&H's business
strategy is to limit exposure to low margin, capital-intensive businesses and
focus on high margin strategic businesses. In the mid 1990s, H&H exited its
commodity automotive OEM and precious metal refining businesses, and with its
strong brand name and customer recognition, expanded in specialty metals and
materials product markets. H&H focuses on its materials engineering expertise to
expand production of higher value-added products.

H&H has pursued an acquisition strategy designed to: (i) enhance its
offerings of higher value-added products; (ii) leverage its technological
capabilities; and (iii) expand its customer base. In September 1994, H&H
acquired Sumco Inc., a precision electroplating company, which does
electroplating of electronic connector and connector stock for the automotive,
telecommunications, electronic and computer industries, and in June 1996, H&H
acquired ele Corporation, which provides a value-added reel-to-reel molding
capability appropriate for the semiconductor lead frame and sensors marketplace.
In February 1997, H&H completed the acquisition of Olympic Manufacturing Group,
Inc., the leading domestic manufacturer and supplier of fasteners for the
commercial roofing industry.

Unimast will continue to expand the breadth and depth of its product
offerings and the geographic markets it serves, both by internal growth and
acquisitions. In January 1998, Unimast expanded its business through the
acquisition of Clinch-On, a manufacturer of steel cornerbead and trims for both
the non-residential and residential construction markets. Unimast continued its
expansion with the July 1999 acquisition of Vinyl Corp., a manufacturer of vinyl
construction accessories.

WHX Entertainment is a joint venture partner with Sportsystems
Corporation, which provides the operating management for the day-to-day
operations and sets the strategic direction to fully maximize the venture's
position in the emerging gaming market in the State of West Virginia. During
2000, the joint venture expanded the gaming facility by approximately 34,000-sq.
ft. and, in so doing, increased its gaming capacity by approximately 480 gaming
terminals, bringing its total to 1,200 gaming terminals. The joint venture will
benefit from this expansion in 2001 as these additional machines are in use for
the full fiscal year.

The WPC Group is engaged in discussions with the official committees
of creditors in the Chapter 11 cases, with the ultimate aim of proposing a
Chapter 11 plan of reorganization.

Products and Product Mix

Handy & Harman

H&H manufactures a wide variety of non-precious metal wire and
tubing products. Small-diameter precision-drawn tubing fabricated from stainless
steel, nickel alloy and carbon and alloy steel is produced in many sizes and
shapes to critical specifications for use in the semiconductor, aircraft,
petrochemical, automotive, appliance, refrigeration and instrumentation
industries. Additionally, tubular product is manufactured for the medical
industry for use as implants, surgical devices and instrumentation. Nickel
alloy, galvanized carbon steel and stainless steel wire products redrawn from
rods are produced for such diverse applications as bearings, cable lashing, hose
reinforcement, nails, knitted mesh, wire rope, cloth, air bags and antennas in
the aerospace, automotive, chemical, communications, marine, medical,
petrochemical, welding and other industries.

H&H's precious metals activities include the fabrication of precious
metals and their alloys into wire and rolled products, powders and grain and the
utilization of precious metals in precision electroplating. H&H's profits from
precious metal products are derived from the "value added" of processing and
fabricating and not from the purchase and resale of precious metals. In
accordance with general practice in the industry, prices to customers are a
composite of two factors: (1) the value of the precious metal content of the
product and (2) the "fabrication value", which includes the cost of base metals,
labor, overhead, financing and profit. Fabricated precious metals are used in
many applications including brazing, arts and contact materials for a wide
variety of industries including aerospace, electronics, appliance, nuclear,
automotive, jewelry, electrical, medical and silversmithing.

H&H produces precision-stamped, electroplated and molded materials
and stamped parts (often using gold, silver, palladium and various base metals
on such materials and stamped parts) for use in the semiconductor,
telecommunications, automotive, electronics and computer industries. It also
participates in the injection-molded medical plastics market.

H&H, through other subsidiaries, manufactures fasteners, fastening
systems, plastic and steel fittings and connectors, and non-ferrous thermite
welding powders for the roofing, construction, do-it-yourself, natural gas,
electric and water distribution industries.

Unimast

Unimast, a leading manufacturer of steel framing and related
accessories for residential and commercial building construction, shipped
approximately 315,000 tons of steel products in 2000 and 294,000 tons in 1999.
Unimast uses galvanized steel to manufacture steel framing components for wall,
floor and roofing systems, in addition to other roll-formed expanded metal
construction accessories. Unimast also uses non-prime galvanized substrate for a
material portion of its requirements, which historically provided the WPC Group
with an additional outlet for some portion of its non-prime products. Unimast
has facilities in Joliet, Illinois; Warren, Ohio; McDonough, Georgia; Baytown,
Texas; Boonton, New Jersey; New Brighton, Minnesota; Brooksville and Miami,
Florida; Goodyear, Arizona and East Chicago, Indiana.

WPC Group

The table below reflects the historical product mix of WPC's shipments,
expressed as a percentage of tons shipped compared to 1999 and earlier-year
levels:

Historical Product Mix
Year Ended December 31
-----------------------------------------------
Product Category: 2000 1999 1998 1997(1) 1996(1)
------- ------- ------- ------- -------
Higher Value-Added Products:
Cold Rolled Products--Trade 13.6% 10.6% 11.0% 5.6% 8.4%
Cold Rolled Products--Wheeling-Nisshin 13.9 19.4 19.0 7.7 16.6
Coated Products 11.5 16.0 17.5 12.3 21.5
Tin Mill Products 10.0 9.8 7.1 3.3 7.5
Fabricated Products 19.6 15.4 15.6 39.0 17.9
------- ------- ------- ------- -------
Higher Value-Added Products as a percentage 68.6% 71.2% 70.2% 67.9% 71.9%
of total shipments
Hot Rolled Products 30.9 28.8 29.5 20.0 28.1
Semi-Finished 0.5 -- 0.3 12.1 --
------- ------- ------- ------- -------
Total 100.0% 100.0% 100.0% 100.0% 100.0%
======= ======= ======= ======= =======
Average Net Sales Per Ton $475 $461 $511 $590 $543

(1) The allocation among product categories was affected by the strike.

Set forth below is a description of the Company's major customer categories:

WPC

Products produced by WPC are described below. These products are
sold directly to third-party customers, and to Wheeling-Nisshin (as defined
below) and OCC (as defined below) pursuant to long-term supply agreements.

Cold-Rolled Products. Cold-rolled coils are manufactured from
hot-rolled coils by employing a variety of processing techniques, including
pickling, cold reduction, annealing and temper rolling. Cold rolled processing
is designed to reduce the thickness and improve the shape, surface
characteristics and formability of the product.

Coated Products. WPC manufactures a number of corrosion-resistant,
zinc-coated products including hot-dipped galvanized and electrogalvanized
sheets for resale to trade accounts. The coated products are manufactured from a
steel substrate of cold rolled or hot rolled pickled coils by applying zinc to
the surface of the material to enhance its corrosion protection. WPC's trade
sales of galvanized products are heavily oriented to unexposed applications,
principally in the appliance, construction, service center and automotive
markets. WPC sells electrogalvanized products for application in the appliance
and construction markets.

Tin Mill Products. Tin mill products consist of blackplate and
tinplate. Blackplate is a cold-rolled substrate (uncoated), the thickness of
which is less than .0142 inches, and is utilized extensively in the manufacture
of pails and shelving and sold to OCC for the manufacture of tinplate products.
Tinplate is produced by the electro-deposition of tin to a blackplate substrate
and is utilized principally in the manufacture of food, beverage, general line
and aerosol containers. While the majority of WPC's sales of these products are
concentrated in container markets, WPC also markets products for automotive
applications, such as oil filters and gaskets. WPC has phased out its existing
tin mill facilities and produces all of its tin-coated products through OCC.
OCC's $69 million tin coating mill, which commenced commercial operations in
January 1997, has a nominal annual capacity of 250,000 net tons. WPC has the
right to supply up to 230,000 tons of the substrate requirements of the joint
venture through the year 2012, subject to quality requirements and competitive
pricing. WPC is the exclusive distributor of all of the joint venture's product.
However, Nittetsu Shoji America ("Nittetsu"), a U.S. based tin plate importer,
has agreed to market approximately 70% of the product as a distributor for WPC
pursuant to an agreement which was approved by the Bankruptcy Court on March 30,
2001. Prior to the approval of such agreement, Nittetsu had been a sales
representative for approximately 25% of OCC's product.

Hot-Rolled Products. Hot-rolled coils represent the least processed
of WPC's finished goods. Approximately 69% of WPC's 2000 production of
hot-rolled production was further processed into value-added finished products.
Hot-rolled black or pickled (acid cleaned) coils are sold to a variety of
consumers such as converters/processors, steel service centers and the appliance
industries.

Fabricated Products. Fabricated products consist of cold-rolled or
coated products further processed mainly via roll forming and sold in the
construction, highway, and agricultural products industries.

Construction Products. Construction products consist of roll-formed
sheets, which are utilized in sectors of the non-residential building market
such as commercial, institutional and manufacturing. They are classified into
three basic categories: roof deck, form deck, and composite floor deck.

Agricultural Products. Agricultural products consist of roll-formed
corrugated sheets which are used as roofing and siding in the construction of
barns, farm machinery enclosures, light commercial buildings and certain
residential roofing applications.

Highway Products. Highway products consist of bridge form, which are
roll-formed corrugated sheets utilized as concrete support forms in the
construction of highway bridges.

Wheeling-Nisshin

WPC owns a 35.7% equity interest in Wheeling-Nisshin, Inc.
("Wheeling-Nisshin") which is a joint venture between WPC and Nisshin Holding,
Incorporated, a wholly owned subsidiary of Nisshin Steel Co., Ltd. ("Nisshin").
Wheeling-Nisshin is a state-of-the-art processing facility located in
Follansbee, West Virginia which produces among the lightest-gauge galvanized
steel products available in the United States. Wheeling-Nisshin products are
marketed through trading companies, and its shipments are not consolidated into
WPC's shipments.

Wheeling-Nisshin has capacity to produce over 700,000 annual tons
and can offer the lightest-gauge galvanized steel products manufactured in the
United States for construction, heating, ventilation and air-conditioning and
after-market automotive applications.

WPC's amended and restated supply agreement with Wheeling-Nisshin
expires in 2013. Pursuant to the amended supply agreement, WPC provides not less
than 75% of Wheeling-Nisshin's steel substrate requirements, up to an aggregate
maximum of 9,000 tons per week, subject to product quality requirements and
competitive pricing. Shipments of cold-rolled steel by WPC to Wheeling-Nisshin
were approximately 330,000 tons, or 14% of WPC's total tons shipped in 2000 and
approximately 473,000 tons, or 19.4% in 1999. Pursuant to the terms of the
agreements between WPC and Nisshin, for the 180 day period following the
Petition Date, Nisshin has the right to purchase WPC's interest in
Wheeling-Nisshin for the fair value price to be agreed upon by the parties or as
otherwise determined by a third party if the parties cannot agree. To date,
Nisshin has not exercised such right.

Ohio Coatings Company

WPC has a 50% equity interest in Ohio Coatings Company ("OCC"),
which is a joint venture between WPC and Dong Yang Tinplate America, Inc., a
leading South Korea-based tin plate producer. Nittetsu Shoji America
("Nittetsu"), a U.S.-based tinplate importer, holds non-voting preferred stock
in OCC. OCC commenced commercial operations in January 1997. The OCC tin-coating
facility is the only domestic electro-tin plating facility constructed in the
past 30 years. WPC produces all of its tin coated products through OCC. As part
of the joint venture agreement, WPC has the right to supply up to 230,000 tons
of the substrate requirements of OCC through the year 2012, subject to quality
requirements and competitive pricing. WPC is the exclusive distributor of all of
OCC's products. However, Nittetsu has agreed to market approximately 70% of the
product as a distributor for the WPC Group pursuant to an agreement which was
approved by the Bankruptcy Court on March 30, 2001. Prior to the approval of
such agreement, Nittetsu had been a sales representative for approximately 25%
of OCC's product. In 2000 and 1999, OCC had an operating income of $3.8 million
and $2.1 million, respectively.

Customers

Handy & Harman

H&H is diversified across both industrial markets and customers. H&H
sells to the electronics, telecommunications, semi-conductor, computer,
aerospace, home appliance OEM, automotive, construction, utility, medical,
silversmith, and general manufacturing industries. In 2000, no customer
accounted for 5% of H&H's sales.

Unimast

Unimast is a leading manufacturer of steel framing and related
accessories for residential and commercial building construction. ___ Unimast's
10 largest customers accounted for approximately 38% of its net sales in 1998,
38.1% in 1999 and 37.2% in 2000. One customer accounted for 13.3%, 13% and 14.2%
of net sales in 1998, 1999 and 2000, respectively.

WPC Group

WPC markets an extensive mix of products to a wide range of
manufacturers, converters and processors. The WPC Group's 10 largest customers
(including Wheeling-Nisshin) accounted for approximately 39.7% of its net sales
in 1998, 43.7% in 1999, and 38.7% in 2000. Wheeling-Nisshin accounted for 10.9%,
16.2% and 14.6% of net sales in 2000, 1999 and 1998, respectively.
Geographically, the majority of the WPC Group's customers are located within a
350-mile radius of the Ohio Valley. However, the WPC Group has taken advantage
of its river-oriented production facilities to market via barge into more
distant locations such as the Houston, Texas and St. Louis, Missouri areas.

Shipments historically have been concentrated within seven major
market segments: steel service centers, converters/processors, construction,
agriculture, container, automotive, and appliances. The overall participation in
the construction and the converters/processors markets substantially exceeds the
industry average and its reliance on automotive shipments, as a percentage of
total shipments is substantially less than the industry average.

Percent of Total Net Tons Shipped
Year Ended December 31,
--------------------------------------------
2000 1999 1998 1997(1) 1996(1)
----- ----- ----- ------- -------

Steel Service Centers 33% 30% 29% 32% 26%
Converters/Processors (2) 24 27 32 16 25
Construction 21 19 19 31 22
Agriculture 5 5 6 14 7
Containers (2) 11 11 8 2 7
Automotive 1 1 1 2 5
Appliances 2 3 2 2 4
Exports -- 1 1 -- 1
Other 3 3 2 1 3
----- ----- ----- ----- -----
Total 100% 100% 100% 100% 100%
===== ===== ===== ===== =====

(1) The allocation among customer categories was affected by the strike.

(2) Products shipped to Wheeling-Nisshin and OCC are included primarily
in the Converters/Processors and Containers markets, respectively.

Set forth below is a description of the Company's major customer
categories:

Steel Service Centers. The shipments to steel service centers are
heavily concentrated in the areas of hot rolled and hot dipped galvanized coils.
Due to increased in-house costs to steel companies during the 1980's for
processing services such as slitting, shearing and blanking, steel service
centers have become a major factor in the distribution of hot rolled products to
ultimate end users. In addition, steel service centers have become a significant
factor in the sale of hot dipped galvanized products to a variety of small
consumers such as mechanical contractors, who desire not to be burdened with
large steel inventories.

Converters/Processors. The growth of shipments to the
converters/processors market is principally attributable to the increase in
shipments of cold-rolled products to Wheeling-Nisshin, which uses cold-rolled
coils as a substrate to manufacture a variety of coated products, including
hot-dipped galvanized and aluminized coils for the automotive, appliance and
construction markets. As a result of the second line expansion, the WPC Group's
shipments to Wheeling-Nisshin increased significantly beginning in 1993. The
converters/processors industry also represents a major outlet for their hot
rolled products, which are converted into finished commodities such as pipe,
tubing and cold rolled strip.

Construction. The shipments to the construction industry are heavily
influenced by fabricated product sales. WPC services the non-residential and
agricultural building and highway industries, principally through shipments of
hot dipped galvanized and painted cold rolled products. WPC has been able to
market its products into broad geographical areas due to its numerous regional
facilities.

Agriculture. The shipments to the agricultural market are
principally sales of roll-formed, corrugated sheets which are used as roofing
and siding in the construction of barns, farm machinery enclosures and light
commercial buildings.

Containers. The vast majority of shipments to the container market
are concentrated in tin mill products, which are utilized extensively in the
manufacture of food, aerosol, beverage and general line cans. The container
industry has represented a stable market. The balance of shipments to this
market consists of cold-rolled products for pails and drums. As a result of the
OCC joint venture, the WPC Group phased out its existing tin mill production
facilities. WPC and Nittetsu distribute tin products produced by OCC.

Automotive. Unlike the majority of its competitors, the WPC Group is
not heavily dependent on shipments to the automotive industry. However, the WPC
Group has established higher value-added niches in this market, particularly in
the area of hot-dipped galvanized products for deep drawn automotive underbody
parts. In addition, the WPC Group has been a supplier of tin mill products for
automotive applications, such as oil filters and gaskets.

Appliances. The shipments to the appliance market are concentrated
in hot-dipped galvanized, electrogalvanized and hot-rolled coils. These products
are furnished directly to appliance manufacturers as well as to blanking,
drawing and stamping companies that supply OEMs. The WPC Group has concentrated
on niche product applications primarily used in washer/dryer,
refrigerator/freezer and range appliances.

Raw Materials

Handy & Harman

The raw materials used by H&H in its precious metal operations
consist principally of silver, gold, copper, cadmium, zinc, nickel, tin, and the
platinum group metals in various forms. Silver, gold and palladium constitute
the major portion of the value of the raw materials involved. H&H purchased all
of its precious metals at free market prices from either customers, primary
producers or bullion dealers. The prices of silver, gold, and palladium are
subject to fluctuations and are expected to continue to be affected by world
market conditions. Nonetheless, H&H has not experienced any problem in obtaining
the necessary quantities of raw materials and, in the normal course of business,
receives precious metals from suppliers and customers. These metals are
returnable in fabricated or commercial bar form under agreed-upon terms. Since
precious metals are fungible, H&H does not physically segregate supplier and
customer metals from its own inventories. Therefore, to the extent that supplier
or customer metals are used by H&H, the amount of inventory which H&H must own
is reduced. All precious metal raw materials are readily available from several
sources. It is H&H's operating policy to maintain its precious metal inventory
levels under the last in, first out ("LIFO") method of accounting. Precious
metals are purchased at the same prices and quantities as selling commitments to
customers. From time-to-time, management reviews the appropriate inventory
levels and may elect to make adjustments.

The raw materials used by H&H in its non-precious metal operations
consist principally of stainless, galvanized, and carbon steel, nickel alloys, a
variety of high-performance alloys, and various plastic compositions. H&H
purchases all such raw materials at open market prices from domestic and foreign
suppliers. H&H has not experienced any problem in obtaining the necessary
quantities of raw materials. Prices and availability, particularly of raw
materials purchased from foreign suppliers, will be affected by world market
conditions and government policies.

Unimast

Unimast's raw material requirements consist primarily of galvanized
steel coils, which are readily available on the open market. Unimast purchases
its steel requirements from major domestic steel producers throughout the
country, including WPC. The price for steel coils tends to fluctuate during the
year due to changes in the domestic and international marketplaces. Unimast has
not experienced any problems in obtaining the necessary quantities of steel from
its suppliers, which totaled over 315,000 tons for the year ended December 31,
2000.

WPC Group

The WPC Group has the right under the Bankruptcy Code, 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 may file pre-petition claims with the Bankruptcy Court in accordance
with bankruptcy procedures. In the following discussion, certain existing
contracts of the WPC Group are described without attempting to predict whether
such contracts ultimately will be assumed or rejected in the Chapter 11 cases.

The WPC Group has a long term contract to purchase a minimum of 75%
of its iron ore needs through 2009. The iron ore price is based upon prevailing
world market prices. The WPC Group generally consumes approximately 3 million
gross tons of iron ore pellets in its blast furnace annually. The WPC Group will
obtain the balance of its iron ore from spot and medium-term purchase agreements
at prevailing world market prices. The WPC Group's 12.5% equity ownership
interest in Empire Iron Mining Partnership was terminated in November of 2000.

The WPC Group has a long-term supply agreement with a third party to
provide the WPC Group with a substantial portion of the WPC Group's
metallurgical coal requirements at competitive prices. The WPC Group's coking
operations require a substantial amount of metallurgical coal.

The WPC Group currently produces coke in excess of its requirements
and typically consumes generally all of the resultant by-product coke oven gas.
In 2000, approximately 1.6 million tons of coking coal was consumed in the
production of blast furnace coke by the WPC Group. The WPC Group sells its
excess coke and coke oven by-products to third-party trade customers.

The WPC Group's operations require material amounts of other raw
materials, including limestone, oxygen, natural gas and electricity. These raw
materials are readily available and are purchased on the open market. The WPC
Group is presently dependent on external steel scrap for approximately 8.75% of
its steel melt. The cost of these materials has been susceptible in the past to
price fluctuations, but worldwide competition in the steel industry has
frequently limited the ability of steel producers to raise finished product
prices to recover higher material costs. Certain of the WPC Group's raw material
supply contracts provide for price adjustments in the event of increased
commodity or energy prices.

Backlog

Unimast order backlog at December 31, 2000 was approximately 6,000
tons, as compared to 7,500 tons at December 31, 1999.

H&H has no material backlog.

The WPC Group's order backlog was 266,809 net tons at December 31,
2000, compared to 375,883 net tons at December 31, 1999. All orders related to
the backlog at December 31, 2000 are expected to be shipped during the first
half of 2001, subject to delays at the customers' request. The order backlog
represents orders received but not yet completed or shipped. In times of strong
demand, a higher order backlog may allow the Company to increase production
runs, thereby enhancing production efficiencies.

Capital Investments

The Company believes that its operating business segments must
continuously strive to improve productivity and product quality, and control
manufacturing costs, in order to remain competitive. Accordingly, the Company's
business segments are committed to making necessary capital investments with the
objective of reducing overall manufacturing costs, improving the quality of
products produced and broadening the array of products offered to the Company's
several markets. H&H and Unimast's capital expenditures (including capitalized
interest) for 2000 were approximately $33.4 million. From 1996 to 2000, capital
expenditures aggregated approximately $76.1 million. H&H capital expenditures
included in this total are $47.5 for 1998 to 2000, reflecting WHX's acquisition
in 1998. This level of capital expenditures was needed to maintain productive
capacity, improve productivity and upgrade selected facilities to meet
competitive requirements and maintain compliance with environmental laws and
regulations. The Company anticipates funding its capital expenditures for the
WHX Group in 2001 from cash on hand, funds generated by operations and funds
available under the revolving credit

facilities at H&H and Unimast. The Company anticipates that capital expenditures
for H&H and Unimast will approximate depreciation, on average, over the next few
years.

The WHX Group has no obligation to fund any of the WPC Group's
future capital expenditures, and does not anticipate doing so. The WPC Group
anticipates that it will fund its capital expenditures in 2001 from cash on
hand, funds generated by operations and funds available under the DIP Credit
Agreement. It is anticipated that capital expenditures will be minimized during
the Chapter 11 proceedings until liquidity is sufficient and stabilized. There
can be no assurance that such funds will be sufficient to fund required capital
expenditures. The WPC Group's capital expenditures (including capitalized
interest) for 2000 were approximately $97.3 million, including $3.4 million on
environmental projects. From 1996 to 2000 such expenditures aggregated
approximately $268 million. In the event that the WPC Group is unable to fund
its environmental capital expenditures, claims may be made against WHX for
payment of such costs.

Energy Requirements

Many of the Company's major facilities at both the WHX Group and the
WPC Group that use natural gas have been equipped to use alternative fuels.
During 2000, coal constituted approximately 69% of the WPC Group's total energy
consumption, natural gas 25% and electricity 6%. The Company continually
monitors its operations regarding potential equipment conversion and fuel
substitution to reduce energy costs.

Employment

Total active employment of the Company at December 31, 2000
aggregated 6,991 employees. At December 31, 2000, H&H had 2,381 employees,
Unimast had 675 employees and the WPC Group had 3,935 employees.

Of the 3,056 employees of the WHX Group, 934 were salaried
employees, 873 were covered by collective bargaining agreements and 1,249 were
non-union operating employees.

Of the 3,935 employees of the WPC Group, 2,866 were represented by
the United Steel Workers of America ("USWA"), 85 by other unions, 925 were
salaried employees and the remainder of 59 were non-union operating employees.
On August 12, 1997, WPSC and USWA entered into a five-year labor agreement.

In light of the Chapter 11 cases, the USWA has agreed temporarily to
waive certain provisions of the collective bargaining agreement regarding
guaranteed employment and temporarily to postpone certain "gainsharing" payments
that otherwise would be due.

Competition

Handy & Harman

H&H is one of the leading fabricators of precious metal products and
precision electroplating. Although there are no companies in the precious metals
field whose operations exactly parallel those of H&H in every area, there are a
number of competitors in each of the classes of precious metals products. Many
of these competitors also conduct activities in other product lines in which H&H
is not involved. Competition is based on quality, service and price, each of
which is of equal importance.

There are many companies, domestic and foreign, which manufacture
non-precious wire and tubing products, and other specialty products of the type
manufactured by H&H. Competition is based on quality, service, price and new
product introduction, each of which is of equal importance.

Unimast

Unimast is one of the leading manufacturers of steel construction
building products for the commercial and residential marketplace. While there
are many companies that compete directly with Unimast, there are few
manufacturers that carry a comparable variety of products. Unimast competes on a
national basis and is increasing its presence in the Western U.S. with its new
manufacturing facility in Goodyear, Arizona. Competitive factors most affecting
Unimast include service, price and quality, with price usually the leading
consideration.

WHX Entertainment

Wheeling-Downs is the largest pari-mutuel greyhound racing and
related video lottery gaming facility in West Virginia. Besides competing with
other companies in the gaming industry and state lotteries, Wheeling-Downs must
also compete for recreational dollars with various other forms of entertainment
such as professional and collegiate sporting events, theme parks, and theatrical
productions. In addition, as technology improves it may face competition from
entities simulcasting dog and horse races from around the country and various
forms of wagering over the Internet. Finally, legislation may be enacted in the
future which liberalizes state gaming laws, allowing for more entrants into the
industry in West Virginia and greater competition.

WPC Group

The steel industry is cyclical in nature and has been marked
historically by overcapacity, resulting in intense competition. WPC faces
increasing competitive pressures from other domestic integrated producers,
minimills and processors. Processors compete with WPC in the areas of slitting,
cold rolling and coating. Minimills are generally smaller-volume steel producers
that use ferrous scrap metals as their basic raw material. Compared to
integrated producers, minimills, which rely on less capital-intensive steel
production methods, have certain advantages. Since minimills typically are not
unionized, they have more flexible work rules that have resulted in lower
employment costs per net ton shipped. Since 1989, significant flat-rolled
minimill capacity has been constructed and these minimills now compete with
integrated producers in product areas that traditionally have not faced
significant competition from minimills. In addition, there has been significant
additional flat-rolled minimill capacity constructed in recent years. These
minimills and processors compete with WPC primarily in the commodity flat-rolled
steel market. In the long term, such minimills and processors may also compete
with WPC in producing value-added products. In addition, the increased
competition in commodity product markets influence certain integrated producers
to increase product offerings to compete with WPC's custom products.

As the single largest steel consuming country in the western world,
the United States has long been a favorite market of steel producers in Europe
and Japan. In addition, steel producers from Korea, Taiwan, and Brazil, and
other large economies such as Russia and China, have also recognized the United
States as a target market. Steel imports of flat-rolled products as a percentage
of domestic apparent consumption, excluding semi-finished steel, have been
approximately 20% in 1997, 27% in 1998, 23% in 1999 and 23% in 2000. Imports
surged in 1998 due to severe economic conditions in Southeast Asia, Latin
America, Japan and Russia, among others. Average import customs values in
December 2000 continued to be depressed with the average import value of some
key finished steel products below values reported in the depths of the 1998
crisis. World steel demand, world export prices, U.S. dollar exchange rates and
the international competitiveness of the domestic steel industry have all been
factors in these import levels.

Total annual steel consumption in the United States has fluctuated
between 88 million and slightly over 117 million tons since 1991. A number of
steel substitutes, including plastics, aluminum, composites and glass, have
reduced the growth of domestic steel consumption.

Item 2. Properties

Handy & Harman

H&H has 23 active operating plants in the United States, Canada,
England, Denmark and Singapore (50% owned) with a total area of approximately
1,795,000 square feet, including warehouse, office and laboratory space, but not
including the plant used by the Singapore operation. H&H also owns or leases
sales, service and warehouse facilities at two other locations in the United
States (which, with H&H's general offices, have a total area of approximately
53,000 square feet) and owns nine non-operating or discontinued locations with a
total area of approximately 507,000 square feet. H&H considers its manufacturing
plants and services facilities to be well maintained and efficiently equipped,
and therefore suitable for the work being done. The productive capacity and
extent of utilization of its facilities is dependent in some cases on general
business conditions and in other cases on the seasonality of the utilization of
its products. Capacity can be expanded readily to meet additional demands.
Manufacturing facilities of H&H are located in: Fort Smith, Arkansas; Fontana,
California; Toronto, Canada; Fairfield, Connecticut; Camden, Delaware; Kolding,
Denmark; Liversedge, England; Evansville and Indianapolis, Indiana;
Cockeysville, Maryland; Agawam and Westfield, Massachusetts; Middlesex and
Willingboro, New Jersey; Canastota and Oriskany, New York; Tulsa and Broken
Arrow, Oklahoma; Norristown, Pennsylvania; East Providence, Rhode Island;
Cudahy, Wisconsin; and Singapore (50% owned).

All plants are owned in fee except for the Canastota, Fort Smith,
Middlesex, and Westfield plants, which are leased.

Unimast

Unimast has owned facilities located at Joliet, Illinois; Warren,
Ohio; and Boonton, New Jersey; and has leased facilities located at McDonough,
Georgia; Baytown, Texas; New Brighton, Minnesota; Brooksville and Miami,
Florida; Goodyear, Arizona; and East Chicago, Indiana.

WHX Entertainment

WHX Entertainment, through its joint venture ownership in
Wheeling-Downs Racing Association, owns a greyhound racetrack and gaming
facility in Wheeling, West Virginia.

WPC Group

The WPC Group has one raw steel producing plant and various other
finishing and fabricating facilities. The Steubenville complex is an integrated
steel producing facility located at Steubenville and Mingo Junction, Ohio and
Follansbee, West Virginia. The Steubenville complex includes coke oven batteries
that produce all coke requirements, two operating blast furnaces, two basic
oxygen furnaces, a two-strand continuous slab caster with an annual slab
production capacity of approximately 2.8 million tons, an 80-inch hot strip mill
and pickling and coil finishing facilities. The Ohio and West Virginia
locations, which are separated by the Ohio River, are connected by a railroad
bridge owned by WPC. A pipeline is maintained for the transfer of coke oven gas
for use as fuel from the coke plant to several other portions of the
Steubenville complex. The Steubenville complex primarily produces hot-rolled
products, which are either sold to third parties or shipped to other of the
Company's facilities for further processing into value-added products.

The following table lists the other principal plants of the WPC
Group and the annual capacity of the major products produced at each facility:

Location and Operations Capacity Tons/Year Major Products
- ----------------------- ------------------ --------------

Allenport, Pennsylvania:
Continuous pickler, tandem mill,
temper mill and annealing lines..................... 950,000 Cold-rolled sheets
Beech Bottom, West Virginia:
Paint line.......................................... 120,000 Painted steel in coil form
Canfield, Ohio:
Electrogalvanizing line, paint line,
ribbon and oscillating rewind slitters.............. 65,000 Electrolytic galvanized sheet and strip

Martins Ferry, Ohio:
Temper mill, zinc coating lines......................... 750,000 Hot-dipped galvanized sheets and coils
Yorkville, Ohio:
Continuous pickler, tandem mill,
temper mills and annealing lines................ 660,000 Black plate and cold-rolled sheets

All of the above facilities currently owned by the WPC Group are
regularly maintained in good operating condition. However, continuous and
substantial capital and maintenance expenditures are required to maintain the
operating facilities, to modernize finishing facilities in order to remain
competitive and to meet environmental control requirements.

The WPC Group has fabricated product facilities at Fort Payne,
Alabama; Houston, Texas; Lenexa, Kansas; Louisville, Kentucky; Minneapolis,
Minnesota; Warren, Ohio; Gary, Indiana; Emporia, Virginia; Grand Junction,
Colorado; Klamath Falls and Brooks, Oregon; Chehalis, Washington; Brandenton,
Florida; Fallon, Nevada; Binghamton, New York; and Rankin, Pennsylvania.

The WPC Group maintains regional sales offices in Atlanta, Chicago,
Detroit, Philadelphia, Pittsburgh and its corporate headquarters in Wheeling,
West Virginia.

Item 3. Legal Proceedings

WHX Group

Handy & Harman

On or about April 3, 2000 a civil action was commenced under Title 3
of the United States Code ss.3729 et seq. (False Claims Act) entitled United
States of America, ex rel. Patricia Keehle v. Handy & Harman, Inc. (sic) and
Strandflex, a Division of Maryland Specialty Wire, Inc. ("Strandflex") (Civil
Action No. 5:99-CV-103). The substantive allegations in the complaint relate to
the alleged improper testing and certification of certain wire rope manufactured
at the Strandflex plant during the period 1992-1999 and sold as MILSPEC wire.
The United States Attorney's office is also conducting a criminal investigation
relating to this matter and Strandflex is a target of the criminal investigation
under title 18 of the United States Code ss.287 (Submitting False Claims) with
the focus of the investigation appearing to be whether wire rope sold to
government agencies, either directly or indirectly, was misrepresented by
Strandflex as meeting MILSPEC specifications. On March 7, 2000, H&H was informed
by the U.S. Attorney that absent a negotiated settlement, the government will
seek a criminal indictment and unspecified civil damages against H&H based on
161 sales of wire rope by Strandflex during the period June, 1995 to July 1998.
H&H has entered into discussion with the United States Attorney to seek a
negotiated settlement of all criminal and civil claims. Those discussions are
ongoing. Strandflex is cooperating in the investigation and has produced various
documents, including testing data, sales records and internal H&H
correspondence. There are no known incidents of any Strandflex wire failing and
causing personal or property damages in any application. Settlement discussion
are continuing with the government. The Company believes it is adequately
reserved for this settlement. Annual sales of this product were $209,185 in 1999
and $100,725 in 2000.

SEC Enforcement Action

On June 25, 1998, the Securities and Exchange Commission ("SEC")
instituted an administrative proceeding against the Company alleging that it had
violated certain SEC rules in connection with the tender offer for Dynamics
Corporation of America ("DCA") commenced on March 31, 1997 through the Company's
wholly-owned subsidiary, SB Acquisition Corp. (the "Offer"). The Company
previously disclosed that the SEC intended to institute this proceeding.
Specifically, the Order Instituting Proceedings (the "Order") alleges that, in
its initial form, the Offer violated the "All Holders Rule," Rule 14d-10(a)(1)
under the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
based on the Company's inclusion of a "record holder condition" in the Offer. No
shareholder had tendered any shares at the time the condition was removed. The
Order further alleges that the Company violated Rules 14d-4(c) and 14d-6(d)
under the Exchange Act upon expiration of the Offer, by allegedly waiving
material conditions to the Offer without prior notice to shareholders and
purchasing the approximately 10.6% of DCA's outstanding shares tendered pursuant
to the offer. The SEC does not claim that the Offer was intended to or in fact
defrauded any investor.

The Order institutes proceedings to determine whether the SEC should
enter an order requiring the Company (a) to cease and desist from committing or
causing any future violation of the rules alleged to have been violated and (b)
to pay approximately $1.3 million in disgorgement of profits. The Company filed
an answer denying any violations and seeking dismissal of the proceeding. On
October 6, 2000, the initial decision of the Administrative Law Judge who heard
the case dismissed all charges against the Company, with the finding that the
Company had not violated the law. The Division of Enforcement has filed a
petition for the SEC to review the decision and a brief, but only as to the All
Holders Rule Claim. The Commission, however, has authority to review any issues
on its own accord. WHX has filed its opposition brief.

General Litigation

The WHX Group is a party to various litigation matters including
general liability claims covered by insurance. In the opinion of management,
such claims are not expected to have a material adverse effect on the financial
condition or results of operations of the Company. However, it is possible that
the ultimate resolution of such litigation matters and claims could have a
material adverse effect on quarterly or annual operating results when they are
resolved in future periods.

The WPC Group

Bankruptcy Filing

On November 16, 2000, the WPC Group filed petitions for relief under
Chapter 11 of the Bankruptcy Code in the United States Bankruptcy Court for the
Northern District of Ohio. The WPC Group commenced the Chapter 11 cases in order
to restructure their outstanding debts and to improve their access to the
additional funding that the WPC Group needs for its continued operations. The
WPC Group is in possession of its properties and assets and continues to manage
its businesses with its existing directors and officers as debtors-in-possession
subject to the supervision of the Bankruptcy Court. WPSC and the other members
of the WPC Group are authorized to operate their businesses, but may not engage
in transactions outside of the normal course of business without approval, after
notice and hearing, of the Bankruptcy Court. In the Bankruptcy Filing, the WPC
Group may, with Bankruptcy Court approval, sell assets and settle liabilities,
including for amounts other than those reflected in the financial statements.
The administrative and reorganization expenses resulting from the Bankruptcy
Filing will unfavorably affect results of the WPC Group. Moreover, future
results may be adversely affected by other claims and factors resulting from the
Bankruptcy Filing. For additional information concerning these developments, see
Item 7 - Management's Discussion and Analysis of Financial Condition and Results
of Operations and Notes A, H, and K to the Consolidated Financial Statements.

Environmental Matters

WPC, as are other industrial manufacturers, is subject to
increasingly stringent standards relating to the protection of the environment.
In order to facilitate compliance with these environmental standards, WPC has
incurred capital expenditures for environmental control projects aggregating
$9.5 million, $7.7 million and $3 million for 1998, 1999 and 2000 respectively.
WPC anticipates spending approximately $26.9 million in the aggregate on major
environmental compliance projects through the year 2003, estimated to be spent
as follows: $10.8 million in 2001, $11.3 million in 2002 and $4.8 million in
2003. Due to the possibility of unanticipated factual or regulatory developments
and the Bankruptcy Filing, the amount and timing of future expenditures may vary
substantially from such estimates.

In addition, the treatment of environmental liabilities in the
pending Chapter 11 cases may differ depending on whether such liabilities are
determined to be "pre-petition" or "post-petition" liabilities of the WPC Group.
It is not possible or appropriate to predict how environmental liabilities
ultimately may be classified in the WPC Group's Chapter 11 cases, and in the
following discussion the WPC Group has not attempted to distinguish between
pre-petition and post-petition liabilities.

WPC has been identified as a potentially responsible party under the
Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")
or similar state statutes at several waste sites. WPC is subject to joint and
several liability imposed by CERCLA on potentially responsible parties. Due to
the technical and regulatory complexity of remedial activities and the
difficulties attendant to identifying potentially responsible parties and
allocating or determining liability among them, WPC is unable to reasonably
estimate the ultimate cost of compliance with CERCLA laws. WPC believes, based
upon information currently available, that its liability for clean-up and
remediation costs in connection with the Buckeye Reclamation Landfill will be
between $1.5 million and $2 million. At five other sites (MIDC Glassport,

Tex-Tin, Breslube Penn, Four County Landfill and Beazer) WPC estimates the costs
to approximate $500,000. WPC is currently funding its share of remediation
costs.

The Clean Air Act Amendments of 1990 (the "Clean Air Act") directly
affect the operations of many of WPC's facilities, including coke ovens. WPC is
presently in compliance with the provisions of the Clean Air Act. However, under
the Clean Air Act, coke ovens generally will be required to comply with
progressively more stringent standards that will result in an increase in
environmental capital expenditures and costs for environmental compliance. The
forecasted environmental expenditures include amounts that will be spent on
projects relating to compliance with these standards.

In an action brought in 1985 in the U.S. District Court for the
Northern District of West Virginia, the EPA claimed violations of the Solid
Waste Disposal Act at a surface impoundment area at the Follansbee facility. WPC
and the EPA entered into a consent decree in October 1989 requiring certain soil
and groundwater testing and monitoring. The surface impoundment has been removed
and a final closure plan has been submitted to the EPA. WPC is waiting for
approval from the EPA to implement the plan. Until the EPA responds to WPC, the
full extent and cost of remediation cannot be ascertained.

In June 1995, the EPA informally requested corrective action
affecting other areas of the Follansbee facility. The EPA sought to require WPC
to perform a site investigation of the Follansbee plant. WPC actively contested
the EPA's jurisdiction to require a site investigation, but subsequently agreed
to comply with a final administrative order issued by the EPA in June 1998 to
conduct a Resource Conservation and Recovery Act ("RCRA") Facility Investigation
("RFI") to determine the nature and extent of soil and groundwater contamination
and appropriate clean up methods. WPC anticipates spending up to $1 million in
year 2001 for sampling at the site. It is also expected that remediation
measures will be necessary. Such measures could commence as early as 2002 with
the expenditure of $1 million or more. Until the EPA responds to WPC's
investigation report, the full extent and cost of remediation cannot be
ascertained.

WPC is currently operating in substantial compliance with three
consent decrees (two with the EPA and one with the Pennsylvania Department of
Environmental Resources) with respect to wastewater discharges at Allenport,
Pennsylvania, Mingo Junction, Steubenville, and Yorkville, Ohio. All of the
foregoing consent decrees are nearing expiration. A petition to terminate the
Allenport consent decree was filed in 1998.

In March 1993, the EPA notified WPC of Clean Air Act violations
alleging particulate matter and hydrogen sulfide emissions in excess of
allowable concentrations at WPC's Follansbee coke plant. In January 1996, the
EPA and the Company entered into a consent decree. Although WPC has paid the
civil penalties due pursuant to the terms of the consent decree, WPC continues
to accrue stipulated penalties to such consent decree. As of December 2000, WPC
has accrued stipulated penalties of approximately $3.5 million.

In June 1999, the Ohio Attorney General filed a lawsuit against WPC
alleging certain hazardous waste law violations at its Steubenville and
Yorkville, Ohio facilities and certain water pollution law violations at the
Company's Yorkville, Ohio facility relating primarily to the alleged unlawful
discharge of spent pickle liquor. The lawsuit contains forty-four separate
counts and seeks preliminary and permanent injunctive relief in addition to
civil penalties. Settlement negotiations with Ohio EPA are on-going and Ohio EPA
has demanded a civil penalty of $300,000.

As part of WPC's effort to resolve disputed enforcement issues with
Ohio EPA and the Ohio Attorney General related to the June 1999 lawsuit, WPC
agreed to file a plan for closure of a spent pickle liquor storage transfer
system at WPC's Yorkville, Ohio plant. Ohio EPA made unilateral modifications to
the plan that imposed significant additional requirements on WPC. WPC timely
appealed the plan as modified to the Ohio Environmental Review Appeals
Commission (ERAC) on July 9, 1999, challenging the additional requirements
imposed by Ohio EPA. Pursuant to ongoing settlement discussions, WPC
subsequently agreed to submit a revised closure plan. Ohio EPA again made
unilateral modifications to the revised plan that imposed significant additional
requirements on WPC. WPC timely appealed the revised plan as modified to the
ERAC on May 25, 2000, challenging Ohio EPA's authority to impose the additional
requirements. WPC withdrew both plans in December 2000, and settlement
negotiations with respect to both appeals are on-going.

In January 1998, the Ohio Attorney General notified WPC of a draft
consent order and initial civil penalties in the amount of $1 million for
various air violations at its Steubenville and Mingo Junction, Ohio facilities
occurring from 1992 through 1996. In November 1999, Ohio EPA and WPC entered
into a consent decree settling the civil penalties related to this

matter for approximately $250,000. The consent decree also obligates WPC to pay
certain stipulated penalties for future air violations.

WPC has experienced discharges of oil through NPDES permitted
outfalls at its Mingo Junction, Ohio and Allenport, Pennsylvania plants. WPC
spent approximately $3 million and $1.5 million in 2000 and 1999, respectively,
to investigate and clean up oil spills at its Mingo Junction, Ohio facility. WPC
spent approximately $2 million to install a slip lined pipe in an existing sewer
at its Mingo Junction, Ohio facility. WPC has not yet received any notices of
violation from the regulatory agencies for such oil spills.

On November 8, 2000, the EPA issued a Unilateral Administrative
Order (UAO), under alleged authority of Clean Water Act ss.311, to compel WPC to
abate alleged oil discharges at its Mingo Junction plant, undertake remedial
actions, and reimburse certain expenses of the United States. WPC responded to
the UAO, and the EPA has expressed interest in resolving these issues through a
consent order. No further enforcement actions have been initiated against WPC
for any alleged oil discharges at its Mingo Junction, Ohio plant.

The EPA conducted a multimedia inspection of WPC's Steubenville,
Mingo Junction, Yorkville, and Martins Ferry, Ohio facilities in March and June
1989. The inspection covered all environmental regulations applicable to these
plants. WPC has received a Notice of Violation from the EPA for alleged air
violations, but has not yet received notice of any violations of water or waste
laws. The air Notice of Violation does not specify the amount of penalties
sought by EPA but an agreement in principle has been tentatively approved. If
this agreement is finalized, WPC would be required to upgrade certain of its air
emission control devices and such upgrades are expected to cost approximately $5
million. WPC is continuing to explore settlement with the EPA regarding such air
violations.

On May 12, 2000, the West Virginia Department of Environmental
Protection (WVDEP) issued a Unilateral Order requiring that WPC remove certain
seal tar deposits from the bed of the Ohio River. WPC timely appealed the
Unilateral Order to the West Virginia Environmental Quality Board on June 13,
2000. WPC and WVDEP subsequently entered into a Consent Order on or about
September 12, 2000, and the appeal was withdrawn. Under the consent Order, WPC
has agreed to undertake certain actions by particular dates, including
monitoring, development of work plans, and removal of certain coal tar deposits
from the bed of the Ohio River. WPC anticipates spending up to $850,000 in year
2001 to undertake actions under the Consent Order.

WPC is aware of potential environmental liabilities resulting from
operations, including leaking underground and aboveground storage tanks, and the
disposal and storage of residuals on its property. Each of these situations is
being assessed and remediated in accordance with regulatory requirements.

WPC's non-current accrued environmental liabilities totaled $17.1
million at December 31, 2000 and $14.7 million at December 31, 1999. These
accruals were initially determined by WPC in January 1991, based on all then
available information. As new information becomes available, including
information provided by third parties, and changing laws and regulations, the
liabilities are reviewed and the accruals adjusted quarterly. Management
believes, based on its best estimate, that WPC has adequately provided for its
present environmental obligations.

Based upon information currently available, including WPC's prior
capital expenditures, anticipated capital expenditures, consent agreements
negotiated with federal and state agencies, and information available to WPC on
pending judicial and administrative proceedings, WPC does not expect its
environmental compliance costs, including the incurrence of additional fines and
penalties, if any, relating to the operation of its facilities, to have a
material adverse effect on the financial condition of WPC. However, as further
information comes into WPC's possession, it will continue to reassess such
evaluations.

As discussed above, various members of the WPC Group have existing
and contingent liabilities relating to environmental matters, including
environmental capital expenditures, costs of remediation and potential fines and
penalties relating to possible violations of national and state environmental
laws. In the event the WPC Group is unable to fund these liabilities, claims may
be made against the WHX Group for payment of such liabilities.

(See Note A to the Consolidated Financial Statements)

General Litigation

The WPC Group is a party to various litigation matters including
general liability claims covered by insurance. Claims that are "pre-petition"
claims for Chapter 11 purposes will ultimately be handled in accordance with the
terms of a confirmed Plan of Reorganization in Chapter 11 cases. In the opinion
of management, litigation claims are not expected to have a material adverse
effect on the WPC Group's results of operations or its ability to reorganize.

Item 4. Submission of Matters to a Vote of Security Holders

None.

Item 5. Market for the Registrant's Common Stock and Related Security
Holder Matters

The number of shares of Common Stock issued and outstanding as of
March 31, 2001 was approximately 14,920,183 including 244,510 shares of
Redeemable Common Stock. In 1999, the Company purchased 3.6 million shares of
Common Stock in open market purchases. The repurchased shares have been retired.
There were no purchases of Common Stock made by the Company in 2000.

The prices set forth in the following table represent the high and
low sales prices for the Company's Common Stock:

Common Stock
------------
High Low
---- ---

2000
First Quarter........................................$ 8.94 $ 6.50
Second Quarter....................................... 8.69 5.31
Third Quarter........................................ 5.94 1.13
Fourth Quarter....................................... 2.56 0.69
1999
First Quarter........................................$ 11.75 $ 7.63
Second Quarter....................................... 9.00 6.38
Third Quarter........................................ 10.38 6.44
Fourth Quarter....................................... 10.06 7.81

As of March 31, 2001, there were approximately 11,516 holders of
record of WHX's Common Stock.

The Company intends to retain any future earnings for working
capital needs and to finance capital improvements, and presently does not intend
to pay cash dividends on its Common Stock for the foreseeable future. In
addition, pursuant to the terms of the Supplemental Indenture to the Company's
10 1/2% Senior Notes, the Company is prohibited from paying dividends on its
Preferred Stock until after October 1, 2002 at the earliest (see Note H to the
Consolidated Financial Statements).

Item 6. Selected Financial Data

Five-Year Statistical WHX CORPORATION
(Thousands of Dollars)

2000(a) 1999 1998(b) 1997(c) 1996(c)
------- ---- ------- ------- -------

Profit and Loss:
Net sales (d) ................................ $ 1,745,459 $ 1,764,699 $ 1,690,846 $ 662,307 $ 1,270,874
Cost of products sold (excluding
depreciation and amortization
and profit sharing) (d) ................... 1,509,393 1,483,061 1,425,920 740,933 1,134,407
Depreciation and amortization ................. 98,777 104,856 96,870 49,445 68,956
Profit sharing ................................ -- -- -- -- --
Selling, administrative and general expense (d) 142,373 137,615 116,840 68,190 70,971

Special charge ................................ -- -- 92,701 --
----------- ----------- ----------- ----------- -----------
Operating income (loss) ....................... (5,084) 39,167 51,216 (288,962) (3,460)
Interest expense on debt ...................... 86,222 87,851 78,096 29,047 25,963
Other income/(expense) ........................ (16,139) 26,420 89,696 50,668 25,974
----------- ----------- ----------- ----------- -----------
Income (loss) before taxes .................... (107,445) (22,264) 62,816 (267,341) (3,449)
Tax provision (benefit) ....................... 73,600 (6,430) 23,386 (93,569) (4,107)
----------- ----------- ----------- ----------- -----------
Income (loss) before extraordinary items ...... (181,045) (15,834) 39,430 (173,772) 658
Extraordinary items--net of tax ............... -- 896 2,241 (25,990) --
----------- ----------- ----------- ----------- -----------
Net income (loss) ............................. (181,045) (14,938) 41,671 (199,762) 658
Preferred stock dividends ..................... (20,607) 20,608 20,608 20,657 22,313
----------- ----------- ----------- ----------- -----------
Net income (loss) available to
common stock .............................. $ (201,652) $ (35,546) $ 21,063 $ (220,419) $ (21,655)
=========== =========== =========== =========== ===========
Basic income (loss) per share:
Income (loss) before extraordinary items ...... $ (14.10) $ (2.30) $ 1.04 $ (8.83) $ (.83)
Extraordinary items--net of tax ............... -- .06 .12 (1.18) --
----------- ----------- ----------- ----------- -----------
Net income (loss) per share ................... $ (14.10) $ (2.24) $ 1.16 $ (10.01) $ (.83)
=========== =========== =========== =========== ===========
Average number of common shares
outstanding (in thousands) .................... 14,304 15,866 18,198 22,028 26,176
Financial Position:
Cash, cash equivalents and short term
investments, net of short term
borrowings ................................ $ 74,516 $ 174,590 $ 230,584 $ 305,934 $ 412,359
Working capital ............................... 196,698 294,276 408,878 329,372 491,956
Property, plant and equipment--net ............ 173,790 816,501 819,077 738,660 755,412
Plant additions and improvements .............. 128,544 104,035 48,250 36,779 35,436
Total assets .................................. 913,516 2,673,566 2,712,084 2,061,920 1,718,779
Long-term debt ................................ 504,983 847,720 893,356 350,453 268,198
Stockholders' equity .......................... 174,996 377,471 446,512 453,393 714,437
Number of stockholders of record:
Common ........................................ 11,520 11,666 11,915 12,273 12,697
Series A Convertible Preferred ................ 36 32 31 42 42
Series B Convertible Preferred ................ 73 74 69 79 62
Employment
Employment costs .............................. $ 414,842 $ 443,333 $ 394,701 $ 204,004 $ 321,347
Average number of employees ................... 7,270 7,535 7,470 4,420 5,706

(a) Includes the results of WPC for the period January 1, 2000 through
November 16, 2000.
(b) Includes the results of Handy & Harman for the period April 13, 1998
through December 31, 1998.
(c) The financial results of the Company for the fourth quarter of 1996
and all of 1997 were adversely affected by the WPC strike.
(d) Net sales were restated pursuant to EITF Consensus No.
00-10 in the amounts of $47,899; $45,348; $20,211 and $38,179 for
the years 1999, 1998, 1997 and 1996, respectively. Cost of products
sold was restated in the amounts of $52,672; $49,485; $20,211 and
$38,170 for the years 1999, 1998, 1997 and 1996 respectively
selling, administrative, and general expense was restated in the
amounts of $4,773 and $4,136 for the years 1999 and 1998
respectively.

Notes to Five-Year Statistical Summary

In 1996, WPC experienced a work stoppage that began October 1, 1996
and continued through August 12, 1997 at eight of its plants in Ohio,
Pennsylvania and West Virginia. No steel products were produced or shipped from
these facilities during the strike. These facilities account for approximately
80% of the tons shipped by WPC on an annual basis.

In 1997, the Company recorded a special charge of $92.7 million
related to a new labor agreement that ended the ten-month strike. The special
charge included $66.7 million for enhanced retirement benefits, $15.5 million
for signing and retention bonuses, $3.8 million for special assistance and other
employee benefits payments and $6.7 million for a grant of one million stock
options to WPN Corp.

In 1997, the Company also recorded an extraordinary charge of $26
million, net of tax, related to premium and interest charges required to defease
its 9 3/8% Senior Unsecured Notes of $24.3 million and coal miner retiree
medical benefits of $1.7 million.

During 1998, the Company purchased and retired $48 million aggregate
principal amount of 10 1/2% Senior Notes in the open market resulting in
extraordinary income of $2.2 million, net of tax.

In April 1998, the Company acquired H&H. The transaction had a total
value of $651.4 million, including the assumption of approximately $229.6
million in debt.

During 1999, the Company purchased and retired $20.5 million
aggregate principal amount of 10 1/2% Senior Notes in the open market, resulting
in an extraordinary gain of $900,000 net of tax.

On November 16, 2000 the Company's WPC Group filed petitions seeking
reorganization under Chapter 11 of Title 11 of the United States Bankruptcy
Code, resulting in a non-cash charge of $133.8 million to provide a valuation
reserve against previously recorded net deferred tax assets. As a result of the
Bankruptcy Filing (see Note A to the Consolidated Financial Statements), the
Company has, as of November 16, 2000, deconsolidated the balance sheet of its
wholly owned subsidiary WPC. As a result of such deconsolidation, the
accompanying consolidated balance sheet at December 31, 2000 does not include
any of the assets or liabilities of WPC and the accompanying December 31, 2000
Profit and Loss data includes the operating results of WPC for the period
January 1, 2000 through November 16, 2000. As of November 16, 2000, the Company
will account for its investment in WPC on the cost method.

During 2000, the Company did not make any purchases of common or
preferred stock.

Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Results of Operations

Risk Factors and Cautionary Statements

This Report includes "forward-looking statements" within the meaning
of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"),
and Section 21E of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), including, in particular, forward-looking statements under the
headings "Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations" and "Item 8. Financial Statements and Supplementary
Data." These statements appear in a number of places in this Report and include
statements regarding WHX's intent, belief or current expectations with respect
to (i) its financing plans, (ii) trends affecting its financial condition or
results of operations, (iii) the impact of competition and (iv) the impact and
effect of the Bankruptcy Filing by the WPC Group. The words "expect,"
"anticipate," "intend," "plan," "believe," "seek," "estimate," and similar
expressions are intended to identify such forward-looking statements; however,
this Report also contains other forward-looking statements in addition to
historical information.

Any forward-looking statements made by WHX are not guarantees of
future performance and there are various important factors that could cause
actual results to differ materially from those indicated in the forward-looking
statements. This means that indicated results may not be realized.

Factors that could cause the actual results of the WHX Group in
future periods to differ materially include, but are not limited to, the
following:

o The WHX Group's businesses operate in highly competitive markets
and are subject to significant competition from other businesses;

o A decline in the general economic and business conditions and
industry trends and the other factors detailed from time to time in the
Company's filings with the Securities and Exchange Commission, including the
Company's Annual Report on Form 10-K for the year ended December 31, 2000 and
Quarterly Reports on Form 10-Q for the quarters ended March 31, 2000, June 30,
2000, and September 30, 2000, could continue to adversely affect the Company's
results of operations;

o WHX's senior management may be required to expend a substantial
amount of time and effort dealing with issues arising from the WPC Group's
Bankruptcy Filing, which could have a disruptive impact on management's ability
to focus on the operation of its businesses;

o In connection with the Bankruptcy Filing, WHX has guaranteed $30
million of the senior secured term loan portion of the DIP Credit Agreement
provided to the WPC Group. There can be no assurance that the WPC Group will be
able to repay fully the term loan portion of the DIP Credit Agreement, in which
event WHX may be called upon to fund all or a portion of its $30 million
guaranty. If the guaranty is funded, there is little likelihood that the WPC
Group would be able to repay WHX its guaranty payments under such term loan;

o Due to the Bankruptcy Filing, the operations of the WPC Group are
subject to the jurisdiction of the Bankruptcy Court and, as a result, WHX's
access to the cash flows of the WPC Group is restricted. Accordingly, the WHX
Group will have to fund its operations and debt service obligations without
access to the cash flow of the WPC Group. In addition, the WHX Group may be
called upon to satisfy certain existing inter-company obligations with the WPC
Group. The amount of such obligations is likely subject to dispute, and the
resolution of such dispute and its impact on WHX is uncertain at this time;

o The WPC Group has a large net operating loss carryforward due to
prior losses and continues to incur losses. WPC is part of the Company's
consolidated tax group. In accordance with federal tax laws and regulations,
WPC's tax attributes have been utilized by the Company's consolidated group to
reduce its consolidated federal tax obligations. Depending on the final outcome
of the WPC Group's Bankruptcy Filing, the WPC Group's tax attributes may no
longer be available to the WHX Group. During the pendency of the Chapter 11
cases, if the WHX Group continues to use the WPC Group's tax attributes to
shelter its taxable income, the WHX Group's inter-company obligations to WPC
will increase by an amount equal to the value of such tax savings;

o Various subsidiaries of the WPC Group participate in the pension
plan sponsored by the Company. While such pension plan is fully funded at
December 31, 2000, there can be no assurance that the plan will remain fully
funded. Various developments could adversely affect the funded status of the
plan. Such developments include (but are not limited to): (a) a material
reduction in the value of the pension assets; (b) a change in actuarial
assumptions relating to asset accumulation and liability discount rates; and (c)
events triggering early retirement obligations such as plant shutdowns and/or
large scale hourly workforce reductions resulting from the Bankruptcy Filing or
otherwise. Funding obligations, if they arise, may have an adverse impact on the
WHX Group's liquidity. WPC Group's ability to maintain its current operating
configurations and levels of permanent employment are dependent upon its ability
to maintain adequate liquidity. There can be no assurances that the WPC Group
will be able to maintain adequate resources;

o Various members of the WPC Group have existing and contingent
liabilities relating to environmental matters, including environmental capital
expenditures, costs of remediation and potential fines and penalties relating to
possible violations of national and state environmental laws. In the event the
WPC Group is unable to fund these liabilities, claims may be made against the
WHX Group for payment of such liabilities;

o WHX, H&H and Unimast each have a significant amount of outstanding
indebtedness, and their ability to access capital markets in the future to
refinance such indebtedness may be limited; and

o The respective credit agreements of H&H and Unimast have certain
financial covenants that limit the amount of cash distributions that can be paid
to WHX.

Bankruptcy Filing of the WPC Group

On November 16, 2000, the WPC Group filed petitions for relief under
Chapter 11 of the Bankruptcy Code. The Bankruptcy Filing was made in the United
States Bankruptcy Court for the Northern District of Ohio. As a result,
subsequent to the commencement of the Bankruptcy Filing, the WPC Group sought
and obtained several orders from the Bankruptcy Court that were intended to
enable the WPC Group to continue business operations as debtors-in-possession.
Since the Petition Date, the WPC Group's management has been in the process of
stabilizing their businesses and evaluating their operations, while continuing
to provide uninterrupted services to its customers.

The Bankruptcy Court has granted the WPC Group's motion to approve
a new $290 million DIP Credit Agreement provided by Citibank, N.A., as initial
issuing bank, Citicorp U.S.A., Inc., as administrative agent, and the DIP
Lenders. Pursuant to the DIP Credit Agreement, Citibank, N.A. has made term loan
advances to the WPC Group up to a maximum aggregate principal amount of $35
million. In addition the DIP Lenders have agreed, subject to certain conditions,
to provide the WPC Group with revolving loans, swing loans and letter of credit
accommodations in an aggregate amount of up to $255 million. In connection with
the Bankruptcy Filing, WHX has guaranteed $30 million of the term loan portion
of the DIP Credit Agreement and has deposited in a pledged asset account $33
million of funds in support of such guarantee. A portion of the earnings on the
pledged asset account accrue and are paid to WHX . The term loans and revolving
loans are secured by first priority liens on the WPC Group's assets, subject to
valid liens existing on November 16, 2000, and have been granted superpriority
administrative status, subject to certain carve-outs for fees payable to the
United States Trustee and professional fees. The DIP Credit Agreement contains
negative, affirmative and financial covenants, including a limitation on capital
expenditures through December 31, 2000 of $12.5 million, $42.5 million in fiscal
2001 and $60 million in fiscal 2002, and a requirement that the WPC Group have
$15 million of excess availability at all times. The terms of the DIP Credit
Agreement also include cross default and other customary provisions.

The DIP Credit Agreement expires November 16, 2002. Revolving
credit interest rates are based on the Citibank Base Rate plus 2% and/or
Eurodollar rate plus 3%. The margin over the prime rate and the Eurodollar rate
fluctuate based upon excess availability. The Term Loan interest rates are 13%
cash pay plus 3% deferred. Borrowings outstanding under the DIP Credit Agreement
at November 17, 2000 included the $35 million term loan, $163 million in
revolving credit borrowings and approximately $17 million of letters of credit.
Borrowings under the DIP Credit Agreement were used to repay all obligations
under the WPSC Receivables Facility, amounting to approximately $105 million,
and to repay all obligations under WPSC's Revolving Credit Facility amounting to
approximately $84.7 million. Upon repayment, the WPSC Revolving Credit Facility
and the Receivables Facility were terminated.

Under Chapter 11, certain claims against the WPC Group in existence
prior to the filing of the petitions for relief under the Federal bankruptcy
laws ("pre-petition") are stayed while the WPC Group continues business
operations as debtors-in-possession. Claims secured against the WPC Group's
assets ("secured claims") are also stayed, although the holders of such claims
have the right to move the court for relief from stay or adequate protection.
Secured claims are secured primarily by liens on the WPC Group's land, buildings
and equipment. May 16, 2001 was set by the Bankruptcy Court as the last date
creditors could file proofs of claim under the Bankruptcy Code. The Bankruptcy
Filing is an event of default under WPC's 9-1/4% Senior Notes. The Bankruptcy
Filing is not an event of default under any of the WHX Group's indentures or
credit facilities.

Pursuant to the provisions of the Bankruptcy Code, all actions to
collect upon any of the WPC Group's liabilities as of the petition date or to
enforce pre-petition date contractual obligations were automatically stayed.
Absent approval from the Bankruptcy Court, the WPC Group is prohibited from
paying pre-petition obligations, including principle and interest on WPC's
9-1/4% Senior Notes. However, the Bankruptcy Court has approved payment of
certain pre-petition liabilities such as employee wages and benefits and certain
other pre-petition obligations. Additionally, the Bankruptcy Court has approved
the retention of legal and financial professionals. As debtors-in-possession,
the WPC Group has 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 may file pre-petition
claims with the Bankruptcy Court in accordance with bankruptcy procedures.

The WPC Group is currently developing a plan of reorganization (the
"Plan of Reorganization") through, among other things, discussions with the
official creditor committees appointed in the Chapter 11 cases.

Although the WPC Group expects to file a Plan of Reorganization at
an appropriate time in the future, there can be no assurance at this time that a
Plan of Reorganization will be proposed by the WPC Group, approved or confirmed
by the Bankruptcy Court, or that such plan will be consummated. The WPC Group
has the exclusive right to file a Plan of Reorganization at any time during the
120-day period following November 16, 2000. The exclusive filing period has been
extended until June 14, 2001 by the Bankruptcy Court at the WPC Group's request,
and while the WPC Group intends to request extensions of the exclusivity period
if necessary, there can be no assurance that the Bankruptcy Court will grant
future extensions. If the exclusivity period were to expire or be terminated,
other interested parties, such as creditors of the WPC Group, would have the
right to propose alternative plans of reorganization.

After a plan of reorganization has been filed with the Bankruptcy
Court, the plan, along with a disclosure statement approved by the Bankruptcy
Court, will be sent to impaired creditors and equity security holders who are
entitled to vote. Following the solicitation period, the Bankruptcy Court will
consider whether to confirm the plan. In order to confirm a plan of
reorganization, the Bankruptcy Court, among other things, is required to find
that (i) with respect to each impaired class of creditors and equity security
holders, each holder in such class will, pursuant to the plan, receive at least
as much as such holder would receive in a liquidation, (ii) each impaired class
of creditors and equity security holders has accepted the plan by the requisite
vote (except as provided in the following sentence), and (iii) confirmation of
the plan is not likely to be followed by the liquidation of the WPC Group or a
need for its further financial reorganization or any successors to it unless the
plan proposes such liquidation or reorganization. If any impaired class of
creditors or equity security holders does not accept a plan and assuming that
all of the other requirements of the Bankruptcy Code are met, the proponent of
the plan may invoke the "cram down" provisions of the Bankruptcy Code. Under
these provisions, the Bankruptcy Court may confirm a plan notwithstanding the
non-acceptance of the plan by an impaired class of creditors or equity security
holders if certain requirements of the Bankruptcy Code are met. These
requirements may, among other things, necessitate payment in full for senior
classes of creditors before payment to a junior class can be made. WHX, as the
holder of the capital stock of WPC, does not expect to receive any value in
respect of its equity interest in WPC.

In the Bankruptcy Filing, the WPC Group may, with Bankruptcy Court
approval, sell assets and settle liabilities, including for amounts other than
those reflected in the financial statements. The administrative and
reorganization expenses resulting from the Bankruptcy Filing will unfavorably
affect results of the WPC Group. Moreover, future results may be adversely
affected by other claims and factors resulting from the Bankruptcy Filing.

As a result of the Bankruptcy Filing, the financial results of WHX
from and after November 16, 2000 exclude the results of operations of the WPC
Group. The foregoing notwithstanding, factors that could cause the WPC Group's
actual results in future periods to differ materially include, but are not
limited to, the following:

o The WPC Group continues to incur losses subsequent to
the Petition Date. The WPC Group may not generate or have enough cash on hand
from operations and from the DIP Credit Agreement to fund its operations until
it is able to propose a plan of reorganization that will be acceptable to
creditors and other parties in interest and confirmed by the Bankruptcy Court;

o The WPC Group's creditors or landlords may take actions
that prevent or unduly delays confirmation of a plan of reorganization;

o The WPC Group's suppliers may stop providing supplies
or services or provide such supplies or services only on terms that could have
an adverse impact on the WPC Group's cash flow;

o The Bankruptcy Court may not confirm the WPC Group's
plan of reorganization when proposed;

o The WPC Group may not be able to obtain sufficient
additional financing sources to meet its future obligations. The WPC Group may
not be able to comply with the covenants in the DIP Credit Agreement;

o The WPC Group's overall long-term operational
reorganization and financial restructuring plan may fail;

o The WPC Group's results of operations are sensitive to
steel prices realized in the market, and the continuation of steel prices at
current levels would continue to have a material adverse effect on the WPC
Group's business;

o The WPC Group's business requires that it expend
substantial capital to maintain its productivity and facilities. Terms of the
DIP Credit Agreement and cash flow may not permit such expenditures;

o The costs of complying with environmental standards
continues to increase and the WPC Group may be unable to meet such costs; in the
event that WPC Group is unable to fund these costs, claims may be made against
WHX for payment of such costs;

o The steel industry is very competitive, and the WPC
Group faces competition from both foreign and domestic producers who may have
lower operating costs, more modern facilities and greater access to capital;

o The WPC Group may suffer an inability to attract and
retain qualified personnel; and

o There may occur a further decline in the general
economic and business conditions and industry trends affecting the steel
industry.

Outcomes

Management of the Company cannot determine with certainty the
ultimate outcome of the Chapter 11 proceedings; however, it is reasonably
possible that the following outcomes could result:

o The WPC Group could reorganize, and their
creditors could receive all or a portion of their
claims.

o The WPC Group could be sold in its entirety or
segments could be sold, and the proceeds from such
sale(s) would be utilized to satisfy creditor
claims.

o The creditors could assume ownership of the WPC
Group and continue to operate the WPC Group
businesses.

In each of the above possible outcomes, the WHX Group would have
little or no future ownership in or involvement with the WPC Group, and the WHX
Group future cash obligations to or on behalf of the WPC Group would be minimal
to none other than the payment of the disputed inter-company account to the WPC
Group, payments that may be required pursuant to the terms of the tax sharing
agreement and any payment that may result under the Company's guarantee of the
term loan portion of the DIP Credit Agreement. It is also reasonably possible
that none of the above outcomes would occur and the WPC Group may shut down a
number of their operations. According to the Company's preliminary evaluation of
potential pension obligations, if a partial shutdown of the WPC Group's
operations were to occur in the immediate future, WHX's liability for early
retirement pension benefits could range from approximately $80 million to $100
million. It is also possible that the WPC Group could cease operations in their
entirety and this liability would then be significantly greater. However,
management does not believe this occurrence is likely. Under current pension law
and regulations based on the Company's analysis of the current funded status of
the pension plan, if a partial shutdown were to occur at the present time, the
cash funding obligations would likely not begin until 2003 and would extend over
several years. Such cash funding obligations would have a material adverse
impact on the liquidity, financial position and capital resources of the
Company. The Company's funding obligation and the impact on the Company's
liquidity, financial position and capital resources could be substantially
reduced or eliminated if (1) a partial shutdown, if it occurs, were to occur at
such a time that the fair market value of the assets of the plan approximates or
exceeds the plan's liabilities (including the early retirement benefits), (2) a
shutdown were to occur gradually over several years or (3) the number of the WPC
Group's operations shut down were less than those assumed in estimating the
above-mentioned amounts. Reference is made to Note C of the Consolidated
Financial Statements.

Overview

WHX is a holding company that has been structured to invest in
and/or acquire a diverse group of businesses on a decentralized basis. WHX's
primary businesses currently are: H&H, a diversified manufacturing company whose
strategic business segments encompass, among others, specialty wire, tubing, and
fasteners, and precious metals plating and fabrication; Unimast, a leading
manufacturer of steel framing and other products for commercial and residential
construction; and WHX Entertainment Corp., a co-owner of a racetrack and video
lottery facility located in Wheeling, West Virginia. WHX's other business
consists of WPC and its subsidiaries including WPSC, a vertically integrated
manufacturer of value-added and flat rolled steel products which sought
bankruptcy protection in November 2000.

WHX continues to pursue strategic alternatives to maximize the value
of its portfolio of businesses. Some of these alternatives have included, and
will continue to include, selective acquisitions, divestitures and sales of
certain assets. WHX has provided, and may from time to time in the future,
provide information to interested parties regarding portions of its businesses
for such purposes.

2000 Compared to 1999

The Bankruptcy Filing and the resultant deconsolidation of WPC as of
November 16, 2000 have affected comparisons between year 2000 and year 1999
results.

Net sales for 2000 decreased slightly to $1.75 billion from $1.77
billion in 1999. Sales declined by $32 million at the WPC Group operations. Net
sales of the WPC Group for the ten and a half-month period of 2000 totaled $1
billion on shipments of 2.1 million tons of steel products, compared to $1.1
billion on shipments of 2.4 million tons for the full year 1999. The decrease in
tons shipped is primarily attributable to the disparate periods, as well as a
planned outage of all aspects of its primary operations during the 2000 period.
Average sales per ton increased from $446 per ton shipped to $487 per ton
shipped primarily due to a slight increase in steel prices, a higher value-added
mix of products sold, and increased sales of coke during the 2000 period as
compared to the year of 1999. H&H sales of $469 million in 2000 equaled the same
amount of sales in 1999. Strong sales of electronic materials (aided by the
market price of palladium, which is almost double the 1999 price level) and
specialty tubing were offset by weaker sales performance of specialty wire as
well as the offset of lower silver metal prices in H&H's precious metals
division. The change in the overall economy in the fourth quarter of 2000
diluted the revenue gains achieved though the first three quarters of 2000.
Unimast sales increased $12.3 million to $239 million in 2000 compared to $227.0
in 1999, as a result of increased shipment levels to 315,000 tons of shipments
in 2000 from 294,000 tons in 1999.

Costs for 2000 increased to $1.51 billion from $1.48 billion in
1999. Costs at WPC were $955 million for 10 1/2 months of 2000, compared to $946
million for the full year 1999. Cost of goods sold for the WPC Group increased
from $395 per ton shipped in 1999 to $447 per ton shipped in the ten and
half-month period of 2000. The increase in operating costs per ton reflects
lower production levels due to a planned outage of all aspects of its primary
operations during the 2000 period, which resulted in less absorption of fixed
costs. The increase in operating costs of the WPC Group is due a higher-cost
sales mix, increased raw material and energy costs and the cost of making
increased volumes of coke sold in the open market as compared to the 1999
period. H&H costs were down slightly in 2000 at $355.7 million compared to
$360.5 million in 1999. H&H's costs decreased primarily due to lower average
prices for silver used in fabricated products and efficiencies gained in H&H's
electronic plating operations. This decrease was substantially offset by a $3
million loss realized in 2000 on the sale of precious metals. Unimast costs were
up by $15.1 million to $206.5 million in 2000 as compared to $191.4 million in
1999.

Depreciation and amortization expense decreased to $98.8 million in
2000 from $104.9 million in 1999. The decrease is caused by the WPC Group's
inclusion for only ten and one half months in 2000, declining $7.9 million,
offset by $1.2 million higher amortization at Unimast, the result of the July
1999 acquisition of Vinyl Corporation.

Selling, administrative and general expenses for 2000 increased by
$4.8 million to $142.4 million from $137.6 million in 1999. The WPC Group's
selling, administrative and general expense decreased to $60.9 million in the
ten and a half-month period of 2000 from $63.3 million in 1999. The decrease is
due primarily to the disparate periods, but is offset by additional costs due to
an increased marketing effort in 2000 and expansion of the fabricated products
division during 2000. H&H selling, administrative and general expenses for 2000
increased $8.8 million to $70.9 million as compared to $62.1 million in 1999.
H&H's selling, administrative and general expenses increases are due to a bad
debt increase related to an outside precious metal refinery bankruptcy, various
costs and reserves for legal matters and increased premium costs for health and
worker's compensation insurance. Unimast selling, administrative and general
expense for 2000 is down $.1 million to $13.3 million from $13.4 million in 1999
despite the increase in sales in 2000.

Interest expense decreased to $86.2 million in 2000 from $87.9
million in 1999. The WPC Group's interest expense decreased to $34.1 million in
the ten and a half-month period of 2000 from $37.9 million in the year of 1999
due to the disparate period comparison, offset by increased borrowings and
higher rates under the Revolving Credit Facility, as well as higher levels of
long term debt. H&H interest expense increased to $18.6 million in 2000 from
$17.8 million in 1999, reflecting higher interest rates in 2000 compared to
1999. Unimast interest expense increased to $2.9 million in 2000 from $1.9
million in 1999, reflecting increased borrowings in 2000 as well as higher
interest rates.

Other income decreased $42.5 million, creating $16.1 million of
other expense in 2000, compared to $26.4 million of other income in 1999. The
change in other income (expenses) is due primarily to declines of $18.2 million
in value in the Company's investment portfolio of fixed income securities and
marketable equity securities in 2000 compared to increases in value of $29.1
million in 1999. H&H's other expenses increased to $3.3 million in 2000 versus
$1 million in 1999 due to earnings of investments in affiliates accounted for
under the equity method of accounting, minority interest expense in a joint
venture, increased non-operating costs from the closure of a plating facility,
loss on the disposal of property, plant and equipment, the buy-out of a lease in
the U.K., and expenses and reserves for other non-operating
facilities/businesses. WHX Entertainment's other income increased $3.9 million
to $10.7 million in 2000, compared to $6.8 million in 1999. The increase is
attributable to the 2000 expansion of the video lottery gaming capacity at its
greyhound racetrack in West Virginia. The WPC Group's other income decreased $3
million to $2.6 million expense in the ten and a half-month period of 2000 as
compared to the year 1999. The decrease is due to lower equity income from joint
venture operations, lower royalty income earned and increased securitization
fees.

The tax provision for 2000 increased $80 million to $73.6, compared
to the tax benefit for 1999 of $6.4 million. The increase in the tax provision
relates primarily to the WPC Group's non-cash charge of $133.8 million to
provide a valuation reserve against previously recognized net deferred tax
assets as a result of the November 16, 2000 Bankruptcy Filing.

Loss before extraordinary items in 2000 totaled $181 million or
$14.10 loss per share of common stock, compared to loss before extraordinary
items in 1999 of $15.8 million or $2.30 loss per share of common stock. There
were no extraordinary items in 2000 as compared to $1.4 million ($.9 million net
of tax) extraordinary gain in 1999, which represents the discount on the
purchase of $20.5 million aggregate principal amount of 10 1/2% Senior Notes in
the open market.

Net loss for 2000 totaled $181 million or $14.10 loss per share of
common stock after adjusting for preferred stock dividends, as compared to a net
loss of $14.9 million, or $2.24 loss per share of common stock after adjusting
for preferred stock dividends in 1999.

1999 Compared to 1998

Net sales for 1999 increased to $1.77 billion from $1.69 billion in
1998. Sales declined by $54.7 million at the WPC Group operations, as increased
steel shipments were offset by a continued weakness in steel prices. The WPC
Group's sales were also negatively affected by reduced sales of coke during 1999
as compared to 1998, which included sales of excess coke produced during WPC's
ten-month strike that ended August 1997. Comparative sales increased by $115.8
million at H&H, as 1999 was the first full reporting year since H&H's
acquisition on April 13, 1998. On a pro forma basis, H&H sales actually declined
in 1999 compared to 1998 by $4.7 million, reflecting lower precious metal and
stainless steel pricing in 1999. Sales increased $12.9 million to $227 million
at Unimast compared to $214.1 million in 1998, reflecting record steel shipments
of over 294,000 tons in 1999.

Costs for 1999 increased to $1.48 billion from $1.43 billion in
1998. Operating costs increased by $9.9 million at the WPC Group operations,
reflecting the higher volume of shipments partially offset by lower raw material
costs and the absence of coke sales as compared to 1998. Included in the 1998
costs are unfavorable physical inventory adjustments of $4.5 million. H&H's
operating costs in 1999 increased by approximately $75.5 million, reflecting a
full reporting year in 1999 compared to a partial year in 1998. On a pro forma
basis, H&H operating costs declined by $16.8 million, reflecting lower raw
material costs in 1999 versus 1998. Unimast's operating costs in 1999 increased
by $2.6 million compared to 1998 reflecting the general increase in the level of
operating activity.

Depreciation and amortization expense increased to $104.9 million in
1999 from $96.9 million in 1998. Increased depreciation is principally due to
H&H's inclusion for a full year in 1999, compared to a partial year in 1998.
Amortization increased $1.4 million reflecting a full year of amortization of
goodwill acquired in the H&H acquisition.

Selling, administrative and general expense for 1999 increased by
$20.7 million to $137.6 million in 1999. The increase is primarily due to H&H
reporting a full year in 1999 compared to a partial year in 1998.

Interest expense increased to $87.9 million in 1999 from $78.1
million in 1998. The increase is due to the issuance of the 10 1/2% Senior Notes
in March 1998 for the purchase of H&H, as well as the assumption of H&H's
outstanding indebtedness.

Other income decreased $63.3 million to $26.4 million in 1999 as
compared to $89.7 million in 1998. The decrease is due primarily to the
difference in realized and unrealized gains on short-term investments in 1999
compared to 1998.

The tax benefit for 1999 and the provision for 1998 were $6.4
million and $23.4 million, respectively, and are based on pre-tax income or loss
before extraordinary items. The Company pays taxes under the alternative minimum
tax system and records the effect of deferred tax assets and liabilities caused
by temporary tax adjustments.

Loss before extraordinary items in 1999 totaled $15.8 million or
$2.30 per diluted share of common stock, compared to income before extraordinary
items of $39.4 million, or $.99 per diluted share of common stock in 1998. The
1999 extraordinary gain of $1.4 million ($.9 million net of tax) and the 1998
extraordinary gain of $3.4 million ($2.2 million net of tax) represents the
discount on the purchase of $20.5 million and $48 million aggregate principal
amount of 10 1/2% Senior Notes, respectively, in the open market.

Net loss for 1999 totaled $14.9 million, or $2.24 per diluted share
of common stock after deduction of preferred stock dividends. The 1998 net
income was $41.7 million, or $1.11 per diluted share of common stock after
deduction of preferred stock dividends.

Liquidity and Capital Resources

Overview

Cash flows provided by (used in) operating, investing and financing
activities for 2000 totaled $201.8 million, ($158.7 million) and ($31.3
million), respectively, of which $98.6 million, ($88.3 million) and $7.4
million, respectively, were generated (used by) the WPC Group. As a result of
the Bankruptcy Filing, any future cash flow generated or required by the WPC
Group will not be available to or provided by the WHX Group. However, while the
Company has no current intention to provide the WPC Group with additional cash
funds other than what may be required in settlement of the disputed
inter-company account (see Note A to the Consolidated Financial Statements),
amounts that may be required to be paid in future periods pursuant to the tax
sharing agreement, any payment that may result under the Company's guarantee of
the term loan portion of the DIP Credit Agreement, and the Company may elect to
provide additional funding to the WPC Group if it is in the best interest of the
Company. Short term trading investments and related short-term borrowings are
reported as cash flow from operating activities and provided a net $94.5 million
of funds in 2000 versus $59.7 million in 1999. Working capital accounts
(excluding cash, short-term investments, short-term borrowings and current
maturities of long term debt) provided $125.1 million of funds. Accounts
receivable decreased by $9.4 million, trade payables increased by $50.9 million,
and other current liabilities increased $6.1 million primarily caused by the
effect of the WPC deconsolidation. Inventories, valued principally by the LIFO
method for financial reporting purposes, totaled $150.3 million at December 31,
2000, a decrease of $57.4 million from December 31, 1999.

In connection with the term loan portion of the WPC Group's
debtor-in-possession financing, WHX deposited $33 million in escrow in support
of its $30 million guarantee of such loan. Such funds are required to remain in
escrow until November 2, 2002, the expiration date of the WPC Credit Agreement.
In the event that the WPC Group is unable to repay the Term Loan, $30 million of
these escrow funds will be paid to lenders.

The WHX Group has a significant amount of outstanding indebtedness,
and their ability to access capital markets in the future may be limited.
However, management believes that cash on hand and future operating cash flow
will enable the WHX Group to meet its cash needs for the foreseeable future. The
respective credit agreements of H&H and Unimast have certain financial covenants
that limit the amount of cash distributions that can be paid to WHX.

In 2000, $128.5 million was spent on capital improvements including
$3 million on environmental control projects. The WPC Group accounted for $95.1
million of the total capital expenditures and $3 million of the environmental
project spending. It is anticipated that capital expenditures will be minimized
during the Chapter 11 proceedings until liquidity is

sufficient and stabilized. These capital expenditures will be obligations of the
WPC Group. To the extent the WPC Group does not have the funds required to make
such expenditures, there may be a material adverse effect on the business and
operations of the WPC Group. In the event that the WPC Group is unable to fund
their environment control capital expenditures, claims may be made against WHX
for payment of such costs.

The Company's operating segments in the WHX Group and the WPC Group
maintain separate and distinct credit facilities with various financial
institutions.

WHX Group

On October 4, 2000 WHX successfully completed a solicitation of
consents from holders of its 10 1/2% Senior Notes due 2005 (the "Notes") to
amend certain covenants and other provisions of the indenture dated as of April
7, 1998 (the "Indenture") governing the Notes. The Supplemental Indenture
reflecting such amendment (the "Supplemental Indenture") provides, among other
things, for amendments to certain covenants which restrict the Company's ability
to make restricted payments (as defined in the Indenture), incur additional
indebtedness, make permitted investments or utilize proceeds from asset sales.
The Supplemental Indenture also prohibits the payment of dividends on the
Company's preferred stock until October 1, 2002, and thereafter only in the
event such payments satisfy certain conditions set forth in the Indenture, as
amended by the Supplemental Indenture. In addition, the amendments also remove
as events of default under the Indenture those relating to defaults under any
mortgage, indenture or instrument by, judgments against and bankruptcy,
insolvency and related filings and other events of, the WPC Group or any of its
direct or indirect subsidiaries. Accordingly, the Bankruptcy Filing is not an
event of default under the Notes. In connection with the solicitation the
Company made a payment equal to 2% of the principal amount of the Notes ($20 in
cash for each $1,000 principal amount of Notes) to each holder of Notes whose
consent was received and accepted prior to the expiration date. Such payments to
bond holders aggregated approximately $5.5 million.

On July 30, 1998, H&H entered into a $300 million Senior Secured
Credit facility (the "H&H Facilities") with Citibank, N.A., as agent. The H&H
Facilities are comprised of (i) a $100 million 6-year Revolving Credit Facility,
(ii) a $25 million Delayed Draw Term Loan Facility (now expired), (iii) a $50
million 6-year Term Loan A Facility, and (iv) a $125 million 8-year Term Loan B
Facility. Interest under the H&H Facilities is calculated at a rate determined
either using (i) the Citibank prime rate or (ii) LIBOR, plus the Applicable
Margin in effect from time to time. Applicable Margin means a percentage per
annum determined by reference to the total leverage ratio of H&H. The rates in
effect at December 31, 2000 are (a) in the case of the Term A Facility and the
Revolving Credit Facility, calculated at LIBOR + 1.5% and (b) in the case of the
Term B facility, calculated at LIBOR + 2.25%. Borrowings under the H&H
Facilities are secured by the pledge of 100% of the capital stock of all H&H's
active U.S. subsidiaries and 65% of the stock of H&H's non-U.S. subsidiaries. In
addition, H&H provided a perfected first priority lien on and security interest
in substantially all the assets of H&H and its subsidiaries. The H&H Facilities
have certain financial covenants restricting indebtedness, liens and limiting
cash distributions that can be made to WHX. In addition, the H&H Facilities
required H&H to procure an interest rate hedge agreement covering a notional
amount of not less than $125 million for a period of no less than three years.
H&H has entered into a cancelable interest-rate swap to convert $125 million of
its variable-rate debt to a fixed rate with Citibank, N.A. New York. The fixed
rate is 6.75% percent, effective September 22, 2000, with a termination date of
September 20, 2001. The H&H Facilities replaced H&H's $125 million Senior Notes
due 2004 and its unsecured Revolving Credit Facility. Borrowings outstanding
under the H&H Facilities at December 31, 2000 totaled $192.4 million. Letters of
credit outstanding under the H&H Facilities were $15.1 million at December 31,
2000. Total funds available under the H&H Facilities at December 31, 2000 were
$41.2 million. The Bankruptcy Filing of the WPC Group is not an event of default
under the H&H Facilities.

On June 1, 2000, Unimast entered into a loan agreement with the
Will-Kankakee Regional Development Authority to issue $6.1 million of Series
2000 Industrial Development Bonds ("Bonds"). The Bonds are 30-year variable rate
bonds (set on a weekly basis) with the current rate set at 4%. The Bonds were
issued to finance the cost of capital projects for Unimast, specifically a
150,000 square foot facility in Joliet, Illinois and related equipment. The
Bonds are tax-exempt for federal income tax purposes and are secured by a direct
pay letter of credit issued by Citibank, N.A. The Bankruptcy Filing of the WPC
Group is not an event of default under the Bonds.

On November 24, 1998, Unimast Incorporated ("Unimast") entered into
a Revolving Credit Agreement ("Unimast RCA") with Bank One, as lender and agent,
and Citicorp USA Inc., as lender and collateral agent. The Unimast RCA is for
general corporate purposes, including working capital needs and capital
expenditures up to $50 million with a $3 million sub-limit for letters of credit
("LC"). The Unimast RCA expires on November 24, 2003. Interest rates are based
on either Bank One 's current corporate base rate plus .25% or a Eurodollar rate
plus 1.75%. Each of these rates can fluctuate based upon

performance. An aggregate commitment fee of .375% is charged on the unused
portion. The letter of credit fees are .875% for a commercial LC and 1.75% for a
standby LC. The commitment fees and the LC fees are all performance based.
Borrowings are secured primarily by 100% of the eligible inventory, accounts
receivable, and fixed assets of Unimast, and its subsidiaries. The terms of the
Unimast RCA contain various restrictive covenants limiting dividend payments,
major acquisitions or other distribution of assets, as defined in the Unimast
RCA. Unimast must maintain certain financial covenants associated with leverage,
net worth, capital spending and interest coverage. Borrowings outstanding
against the Unimast RCA at December 31, 2000 totaled $21 million. Letters of
credit outstanding under the Unimast RCA totaled $6.1 million at December 31,
2000. Total funds available under the Unimast RCA at December 31, 2000 were
$19.2 million. The Bankruptcy Filing of the WPC Group is not an event of default
under the Unimast RCA.

As of December 31, 2000, the WHX Group had consolidated cash and
short-term investments, net of related investment borrowings, of $74.1 million,
as compared to $174.6 million at December 31, 1999. The decreases in cash and
short term investments includes the $33 million that was pledged in support of
the term loan portion of the WPC Group term loan, the payment of WHX term loan
interest in the amount of $29.6 million, the payment of $20.6 million of the WHX
preferred dividends and the decline in the fair market value of WHX's portfolio
trading investments.

The Company is required to record income tax expense at statutory
rates. However, it is able to use its significant income tax loss carry forwards
to minimize its actual income tax payments. However, to the extent the WHX Group
utilizes the income tax loss carryforwards of the WPC Group, the resulting tax
savings must be paid to the WPC Group pursuant to the provisions of the tax
sharing agreement.

Short-term liquidity is dependent, in large part, on cash on hand,
investments and general economic conditions. Long-term liquidity is dependent
upon the WHX Group's ability to sustain profitable operations and control costs
during periods of low demand or pricing in order to sustain positive cash flow.
The WHX Group satisfies its working capital requirements through cash on hand,
investments, the Unimast and H&H Revolving Credit Facilities and funds generated
from operations. The WHX Group believes that such sources can provide the WHX
Group with sufficient funds to satisfy its working capital and capital
expenditure requirements. External factors, such as production and demand and
currency exchange rates, could materially affect the WHX Group or its various
subsidiaries, liquidity, results of operations and financial condition.

WPC Group

The matters described under this caption, to the extent that they
relate to future events or expectations, may be significantly affected by the
Chapter 11 proceedings. Those proceedings will involve, or may result in,
various restrictions on the WPC Group's activities, limitations on financing,
the need to obtain Bankruptcy Court approval for various matters and uncertainty
as to relationships with vendors, suppliers, customers and others with whom the
WPC Group may conduct or seek to conduct business.

Net cash flow provided by the WPC Group's operating, investing and
financing activities for the period January 1 through November 16, 2000 totaled
$17.7 million. Working capital accounts (excluding cash, short-term borrowings
and current maturities of long term debt) provided $67.6 million of funds.
Accounts receivable increased by $5.8 million, excluding a $5 million sale of
trade receivables under the Receivables Facility. Inventories, valued
principally by the LIFO method for financial reporting purposes, totaled $235.4
million at November 16, 2000, a decrease of $16.8 million from December 31,
1999. Trade payables increased by $45.8 million.

In 2000, $95.1 million was spent on capital improvements including
$3 million on environmental control projects. As new information becomes
available, including information provided by third parties, and as laws and
regulations change, the liabilities are reviewed and the accruals adjusted
quarterly. Continuous and substantial capital and maintenance expenditures may
be required to maintain operating facilities, modernize finishing facilities to
remain competitive and to comply with environmental control requirements. It is
anticipated that capital expenditures will be minimized during the Chapter 11
proceedings until liquidity is sufficient and stabilized.

On November 17, 2000, members of the WPC Group entered into a DIP
Credit Agreement to provide borrowings of up to $290 million to refinance
certain prepetition obligations of the WPC Group, to provide working capital for
the WPC Group and for other general corporate purposes. The DIP Credit Agreement
includes (1) a $35 million senior secured term loan which was fully drawn at
closing and (2) a Revolving Credit Facility of up to $255 million. The DIP
Credit Agreement includes a $25 million sublimit for letters of credit. The DIP
Credit Agreement is secured by substantially all of the existing

and after-acquired assets, property and rights of the WPC Group (including, but
not limited to, cash, inventory, accounts receivable, general intangibles,
equipment, intellectual property, equity investments, owned real estate and
leaseholds), and the obligations thereunder are entitled to a super-priority
administrative claim in the Chapter 11 cases. The DIP Credit Agreement expires
November 16, 2002. Revolving credit interest rates are based on the Citibank
Base Rate plus 2% and/or Eurodollar rate plus 3%. The margin over the prime rate
and the Eurodollar rate fluctuates based upon availability levels. The Term Loan
interest rates are 13% payable in cash plus 3% payable in cash or in kind.
Borrowings outstanding under the DIP Credit Agreement at November 17, 2000
included the $35 million term loan, $163 million in revolving credit borrowings
and approximately $17 million of letters of credit. Borrowings under the DIP
Credit Agreement were used to repay all obligations under the WPSC Receivables
Facility, amounting to approximately $105 million, and to repay all obligations
under WPSC's Revolving Credit Facility, amounting to approximately $84.7
million. Upon repayment, the WPSC Revolving Credit Facility and the Receivables
Facility were terminated. In connection with the Bankruptcy Filing, WHX has
guaranteed $30 million of the term loan portion of the DIP Credit Agreement and
has deposited in a pledged asset account $33 million of funds in support of such
guarantee. A portion of the earnings on the pledged account accrue and are paid
to WHX.

On May 27, 1999, WPSC renegotiated its $100 million Receivables
Facility agreement on similar terms and conditions to its previous facility. On
June 30, 2000 WPSC amended the Receivables Facility to increase the program
limits from $100 million to $115 million and on September 22, 2000 lowered the
program limit to $105 million. Fees paid by WPSC under such agreement range from
approximately 5.91% to 9.62% of the outstanding amounts of receivables sold.
Borrowings under the DIP Credit Agreement in the amount of $105 million were
used to repay all outstanding obligations under the Receivables Facility.

On April 30, 1999, WPSC entered into a Third Amendment and Restated
Revolving Credit Facility ("WPSC Revolving Credit Facility") with Citibank, N.A.
as agent. The WPSC Revolving Credit Facility, as amended, provides for
borrowings for general corporate purposes up to $150 million including a $25
million sub-limit for letters of credit. Interest rates are based on the
Citibank Prime Rate Plus $1.25% and/or a Eurodollar rate plus 2.25%. The margin
over the prime rate and the Eurodollar rate can fluctuate based upon
performance. Borrowings under the DIP Credit Agreement in the amount of $84.7
million were used to repay and satisfy all obligations under WPSC's Revolving
Credit Facility. Upon repayment, the WPSC Revolving Credit Facility and all
related documents were terminated.

New Accounting Standards

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133"). This pronouncement requires
all derivative instruments to be reported at fair value on the balance sheet;
depending on the nature of the derivative instrument, changes in fair value will
be recognized either in net income or as an element of comprehensive income.
SFAS 133 is effective for fiscal years beginning after June 15, 2000. The
Company has not engaged in significant activity with respect to derivative
instruments or hedging activities in the past. The adoption of the standard on
January 1, 2001 did not have a significant impact on the reported results of
operations or financial position.

In December 1999, the Securities and Exchange Commission (SEC)
issued Staff Accounting Bulletin No. 101 (SAB 101), "Revenue Recognition in
Financial Statements", as amended by SAB 101A and SAB 101B, which summarizes the
SEC staff's interpretations of generally accepted accounting principles related
to revenue recognition and classification. The interpretation did not have a
significant impact on the consolidated results of operations or financial
position and related disclosure requirements.

During the third quarter 2000, the EITF issued EITF Consensus No.
99-19, "Reporting Revenue Gross as a Principal versus Net as an Agent", which
addresses whether certain cost items should be reported as a reduction of
revenue or as a component of cost of sales and EITF Consensus No. 00-10,
"Accounting for Shipping and Handling Fees and Costs" ("EITF 00-10"), which
addresses the classification of cost incurred for shipping goods to customers.
These new pronouncements are effective no later than the fourth quarter of
fiscal years beginning after December 15, 1999. As a result of adopting EITF
00-10, the Company has reclassified costs in the Consolidated Statements of
Operations for 1999 and 1998 as follows:

1999 1998
---- ----
(Dollars in Thousands)
Increased Sales $47,899 $45,348
Increased Cost of sales $52,672 $49,485
Decreased SG&A $ 4,773 $ 4,137

Quantitative and Qualitative Disclosures about Market Risks

Commodity Price Risk and Related Risks

In the normal course of business, the Company is exposed to market
risk or price fluctuation related to the purchase of natural gas, precious
metals and steel products. To a lesser extent, the Company is exposed to the
risk of price fluctuation on coal, coke, natural gas liquids, electricity and
certain nonferrous metals used as raw materials. The Company is also exposed to
the effects of price fluctuations on the value of its commodity inventories,
specifically, H&H's precious metals inventories.

The Company's market risk strategy has generally been to obtain
competitive prices for its products and services and allow operating results to
reflect market price movements dictated by supply and demand.

Foreign Currency Exchange Rate Risk

The Company is subject to the risk of price fluctuations related to
anticipated revenues and operating costs, firm commitments for capital
expenditures and existing assets or liabilities denominated in currencies other
than U.S. dollars. The Company has not generally used derivative instruments to
manage this risk.

Equity Price Risk

The Company is subject to equity price risk resulting from its
investments in certain marketable equity securities of unrelated parties. The
Company accounts for its investment in these securities in accordance with
Statement of Financial Accounting Standards No. 115, Accounting for Certain
Investments in Debt and Equity Securities ("SFAS 115").

At December 31, 2000, the WHX Group held $21.9 million in equity
securities classified as "trading" in accordance with SFAS 115. Each quarter the
Company adjusts the carrying amount of its trading securities to fair market
value, with any resulting adjustment being charged or credited to other income.
At year-end 2000, a hypothetical 10% decrease in the value of the equity trading
securities would have resulted in a $2.2 million unfavorable impact on pretax
income. Such a decrease in value might also reduce the future cash flows
generated from the ultimate liquidation of the investment in trading securities.

(See Note E to the Consolidated Financial Statements)

Interest Rate Risk

Fair value of cash and cash equivalents, receivables, short-term
borrowings, accounts payable, accrued interest and variable-rate long-term debt
approximate their carrying values and are relatively insensitive to changes in
interest rates due to the short-term maturity of the instruments or the variable
nature of underlying interest rates. Redeemable common stock is recorded at the
estimated redemption amount that approximates fair market value.

At December 31, 2000, the Company's investment portfolio included
U.S. government fixed income securities totaling $1.2 million. The fair value of
these instruments will increase or decrease as a result of changes in market
interest rates. The Company accounts for these investments as "trading
securities" as defined by SFAS 115. Accordingly, each quarter the Company
adjusts the balance of its portfolio to fair market value, with any resulting
adjustment being charged or credited to income as an unrealized loss or gain and
included in other income. Realized gains and losses resulting from the
disposition of such investments are recorded as income in the period during
which such disposition took place. During 2000, the Company recognized realized
and unrealized losses totaling $24.5 million in connection with its fixed-income
securities investment portfolio as well as its common stock investments. The
Company's exposure to increase in interest rates that might result in a
corresponding decrease in the fair value of its fixed-income securities
investment portfolio could have an unfavorable effect on the Company's results
of operations and cash flows. For additional information, see Note E to the
Consolidated Financial Statements.

The Company attempts to maintain a reasonable balance between fixed
and floating-rate debt in an attempt to keep financing costs as low as possible.
At December 31, 2000, a majority of the Company's portfolio of long-term debt
consisted of fixed-rate instruments. Accordingly, the fair value of such
instruments may be relatively sensitive to effects of interest rate
fluctuations. In addition, the fair value of such instruments is also affected
by investors' assessments of the risks associated with industries in which the
Company operates as well as the Company's overall creditworthiness and ability
to satisfy such obligations upon their maturity. However, the Company's
sensitivity to interest rate declines and other market risks that might result
in a corresponding increase in the fair value of its fixed-rate debt portfolio
would only have an unfavorable effect on the Company's result of operations and
cash flows to the extent that the Company elected to repurchase or retire all or
a portion of its fixed-rate debt portfolio at an amount in excess of the
corresponding carrying value.

The Company has entered into an interest rate swap for certain of
its variable-rate debt. The swap agreement covers a notional amount of $125
million and converts $125 million of its variable-rate debt to fixed rate with
Citibank, N.A. New York. The fixed rate is 6.75%, effective September 22, 2000,
with a termination date of September 20, 2001.

(See Note H to the Consolidated Financial Statements)

Safe Harbor

The Company's quantitative and qualitative disclosures about market
risk include forward-looking statements with respect to management's opinion
about the risk associated with the Company's financial instruments. These
statements are based on certain assumptions with respect to market prices,
interest rates and other industry-specific risk factors. To the extent these
assumptions prove to be inaccurate, future outcomes may differ materially from
those discussed above.

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT ACCOUNTANTS

To the Board of Directors and
Stockholders of WHX Corporation

In our opinion, the accompanying consolidated balance sheets and the
related consolidated statements of operations, cash flows and of changes in
stockholders' equity and comprehensive income present fairly, in all material
respects, the financial position of WHX Corporation and its subsidiaries (the
"Company") at December 31, 2000 and 1999, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 2000, in conformity with accounting principles generally accepted in the
United States of America. 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 of these
statements in accordance with auditing standards generally accepted in the
United States, which 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, assessing the
accounting principles used and the significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

As discussed in Note A, on November 16, 2000, the Company's
wholly-owned subsidiary, Wheeling-Pittsburgh Corporation and Subsidiaries filed
for reorganization under Chapter 11 of the Federal Bankruptcy Code. The
bankruptcy filing has given rise to a number of uncertainties relating to
inter-company accounts, environmental obligations and pension obligations.

PricewaterhouseCoopers LLP
New York, New York
April 26, 2001

WHX CORPORATION
Consolidated Statement of Operations

Year ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
(in thousands except per share)
Revenues:
Net sales ......................................... $ 1,745,459 $ 1,764,699 $ 1,690,846
Cost and expenses:
Cost of products sold, excluding depreciation ..... 1,509,393 1,483,061 1,425,920
Depreciation and amortization ..................... 98,777 104,856 96,870
Selling, administrative and general expense ....... 142,373 137,615 116,840
----------- ----------- -----------
1,750,543 1,725,532 1,639,630
Operating income (loss) ........................... (5,084) 39,167 51,216
Interest expense on debt .......................... 86,222 87,851 78,096
Other income (expense) ............................ (16,139) 26,420 89,696
----------- ----------- -----------
Income (loss) before taxes and extraordinary
items ......................................... (107,445) (22,264) 62,816
Tax provision (benefit) ........................... 73,600 (6,430) 23,386
----------- ----------- -----------
Income (loss) before extraordinary items .......... (181,045) (15,834) 39,430
Extraordinary items--net of tax ................... -- 896 2,241
----------- ----------- -----------
Net income (loss) ................................. (181,045) (14,938) 41,671
Dividend requirement for preferred stock .......... 20,607 20,608 20,608
----------- ----------- -----------
Net income (loss) available to common stock ....... $ (201,652) $ (35,546) $ 21,063
=========== =========== ===========
Basic income (loss) per share of common stock
Income (loss) before extraordinary item $ (14.10) $ (2.30) $ 1.04

Extraordinary item--net of tax .................... -- .06 .12
----------- ----------- -----------
Net income (loss) per share ....................... $ (14.10) $ (2.24) $ 1.16
=========== =========== ===========
Income (loss) per share of common stock
--assuming dilution

Income (loss) before extraordinary item ........... $ (14.10) $ (2.30) $ .99
Extraordinary item--net of tax .................... -- .06 .12
----------- ----------- -----------
Net income (loss) per share--assuming dilution .... $ (14.10) $ (2.24) $ 1.11
=========== =========== ===========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

WHX CORPORATION
Consolidated Balance Sheets Year ended December 31,
-----------------------
2000 1999
---- ----
(in thousands)
ASSETS
Current assets:
Cash and cash equivalents ....................................... $ 4,837 $ 10,775
Short term investments .......................................... 69,319 659,356
Trade receivables, less allowance for doubtful accounts
of $1,339 and $2,306 ........................................ 83,929 141,091
Inventories ..................................................... 150,269 441,869
Prepaid expenses and deferred charges ........................... 11,472 14,622
Due from WPC .................................................... 20,878 --
----------- -----------
Total current assets ........................................ 340,704 1,267,713
Restricted Cash ................................................. 33,000 --
Investment in associated companies .............................. 18,229 80,490
Property, plant and equipment, at cost less
accumulated depreciation and amortization ................... 173,790 816,501
Intangibles, net of amortization ................................ 282,821 280,766
Deferred income taxes ........................................... -- 123,033
Prepaid pension asset ........................................... 37,755 40,336
Deferred charges and other assets ............................... 27,217 64,727
----------- -----------
$ 913,516 $ 2,673,566
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Trade payables .................................................. $ 46,477 $ 171,229
Accrued liabilities ............................................. 32,273 40,523
Short-term debt ................................................. 6,000 599,447
Payroll and employee benefits ................................... 6,511 78,162
Federal, state and local taxes .................................. 1,362 14,473
Deferred income taxes--current .................................. 18,562 67,793
Due to WPC ...................................................... 31,952 --
Long-term debt due in one year .................................. 929 1,810
----------- -----------
Total current liabilities ................................... 144,006 973,437
Long-term debt .................................................. 504,983 847,720
Deferred income taxes-non current ............................... 21,289 --
Other employee benefit liabilities .............................. 8,404 400,425
Loss in excess of investment in WPC ............................ 39,783 --
Other liabilities ............................................... 17,409 71,181
----------- -----------
735,874 2,292,763
----------- -----------
Redeemable common stock--245 shares and 282 shares .............. 2,646 3,332
----------- -----------
Stockholders' Equity:
Preferred stock--$.10 par value; authorized 10,000
shares; issued and outstanding: 5,883 shares ................ 589 589
Common stock $.01 par value; authorized 60,000
shares; issued and outstanding: 14,590 and 14,145 shares .... 146 141
Accumulated other comprehensive income (loss) ................... (1,501) 945
Additional paid-in capital ...................................... 555,479 553,861
Accumulated earnings (deficit) ................................. (379,717) (178,065)
----------- -----------
174,996 377,471
----------- -----------
$ 913,516 $ 2,673,566
=========== ===========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

WHX CORPORATION
Consolidated Statement of Cash Flows
Year Ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
(in thousands)
Cash flows from operating activities:
Net income (loss) ....................................................... $(181,045) $ (14,938) $ 41,671
Items not affecting cash from operating activities:
Depreciation and amortization ....................................... 101,539 104,856 96,870
Other postretirement benefits ....................................... (7,871) (8,065) (8,409)
Extraordinary items, net of tax ..................................... -- (896) (2,241)
Deferred income taxes ............................................... 70,643 (9,264) 19,575
(Gain) loss on asset dispositions ................................... (65) 408 (8,998)
Pension expense ..................................................... 2,090 4,341 9,236
Equity loss (income) in affiliated companies ........................ (4,086) (4,343) (5,699)
Decrease (increase) in working capital elements, net of effect of
acquisitions:
Trade receivables ................................................... 4,383 (47,427) (7,487)
Trade receivables sold .................................................. 5,000 5,000 26,000
Inventories ......................................................... 57,376 26,214 (4,821)
Short term investments-trading ...................................... 590,037 51,638 (142,069)
Investment account borrowings ....................................... (495,542) 8,040 212,012
Other current assets ................................................ (9,253) (3,406) 38,383
Other current liabilities ........................................... 50,944 46,600 (38,661)
Other items--net ........................................................ 17,606 5,098 613
--------- --------- ---------
Net cash provided by (used in) operating activities ..................... 201,756 163,856 225,975
--------- --------- ---------
Cash flows from investing activities:
Guarantee of DIP Term Note .......................................... (33,000) -- --
Purchase of Note Receivable ......................................... (5,000) -- --
Plant additions and improvements .................................... (128,544) (104,035) (48,250)
Short term investments--available for sale .......................... (1,450) (14,971) 6,740
Handy & Harman acquisition, net of cash acquired .................... -- -- (402,632)
Clinch-on acquisition ............................................... -- -- (8,335)
Vinyl Corp acquisition, net of cash acquired ........................ -- (12,827) --
Other investments ................................................... 131 3,212 --
Proceeds from sales of assets ........................................... 5,421 11,222 835
Dividends from affiliated companies ................................. 3,750 5,594 5,000
--------- --------- ---------
Net cash provided by (used in) investing activities ................. (158,692) (111,805) (446,642)
--------- --------- ---------
Cash flows from financing activities:
Long-term debt proceeds, net of issuance cost ....................... -- -- 561,749
Long-term debt retirement ........................................... (4,519) (44,438) (267,321)
Premium on early debt retirement .................................... -- -- --
Letter of credit collateralization .................................. -- 8,229 1,520
Short-term borrowings (payments) .................................... 4,791 31,906 (18,929)
Common stock purchases .............................................. -- (30,591) (20,228)
Consent solicitation fees ........................................... (8,538) -- --
Preferred stock dividends ............................................... (20,607) (20,608) (20,608)
Redemption of equity issues ......................................... (686) (209) 300
Dividends on minority interest in consolidated
subsidiaries ...................................................... (1,731) (1,569) (814)
--------- --------- ---------
Net cash provided by (used in) financing activities ..................... (31,290) (57,280) 235,669
--------- --------- ---------
Increase (decrease) in cash and cash equivalents ........................ 11,774 (5,229) 15,002
Cash and cash equivalents at beginning of year .......................... 10,775 16,004 1,002
Effect of deconsolidation of Wheeling-Pittsburgh Corporation......... (17,712) -- --
--------- --------- ---------
Cash and cash equivalents at end of year ................................ $ 4,837 $ 10,775 $ 16,004
========= ========= =========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

WHX Corporation
Consolidated Statement of Changes in Stockholder's Equity and Comprehensive Income
(Dollars and shares in thousands)

For the Years Ended December 31, 2000 1999 1998
------------------------------------------------------------------------------
Shares Amount Shares Amount Shares Amount
------------------------------------------------------------------------------
Common Stock
Balance at the beginning and end of year 14,834 $ 146 14,145 $ 141 17,145 $ 175

Preferred Stock
Balance at the beginning and end of year 5,883 $ 589 5,883 $ 589 5,883 $ 589

Accumulated Other Comprehensive Income
(Loss)
Balance at beginning of year $ 945 $ 5,472 $ 15,754
Current period change 2,446 (4,527) (10,282)
--------- --------- ---------
Balance at end of year $ (1,501) $ 945 $ 5,472

Retained Earnings
Balance at beginning of year $(178,065) $(142,519)) $(163,582)
Net earnings (loss) (181,045) (14,938) 41,671
Dividends paid to preferred stockholders (20,607) (20,608) (20,608)
Dividends paid to common stockholders -- -- --
Treasury Stock issued at less than cost --
--------- --------- ---------
Balance at end of year $(379,717) $(178,065) $(142,519)

Treasury Stock
Balance at beginning of year $ -- $ -- $ (2,218)
Purchased -- (30,591) (20,228)
Retirement 30,591 22,446
--------- --------- ---------
Balance at end of year $ -- $ -- $ --
---------

Capital in Excess of Par Value
Balance at beginning of year $ 553,861 $ 582,795 $ 602,657
EIP shares sold 5 76 1 10 9 137
Stock options exercised - -- 11 78 161 1,339
401K contribution 440 1,542 182 1,533 89 1,088
Purchase of treasury stock - 3,594 -- 1,780 --
Retirement of treasury stock - -- 3,594 (30,555) 1,985 (22,426)
--------- --------- ---------
Balance at end of year $ 555,479 $ 553,861 $ 582,795

Total Stockholder's Equity $ 174,996 $ 377,471 $ 446,512
========= ========= =========

Net Earnings (Loss) $(181,045) $ (14,938) $ 41,671
Other Comprehensive Income (Loss)
Foreign currency translation adjustment (997) (588) 83
Unrealized gains (losses) on securities:
(net of tax)
Unrealized holding gains (losses) (13,614) 5,220 9,538
arising during the period
Tax benefit (expense) 4,765 (1,827) (3,338)
Less: reclassification of gains to net
earnings (loss) 11,383 11,820 25,485
Tax benefit (expense) (3,984) (3,948) (8,920)
--------- --------- ---------

Comprehensive Income (Loss) $(183,492) $ (19,465) $ 31,389
========= ========= =========

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Accounting Policies

The accounting policies presented below have been followed in
preparing the accompanying consolidated financial statements.

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.

Principles of Consolidation

The consolidated financial statements include the accounts of all
non-bankrupt subsidiary companies. As a result of the Bankruptcy Filing (see
Note A) the Company has, as of November 16, 2000, deconsolidated the balance
sheet of its wholly owned subsidiary, Wheeling-Pittsburgh Corporation ("WPC").
As a result of such deconsolidation, the accompanying consolidated balance sheet
at December 31, 2000 does not include any of the assets or liabilities of WPC,
and the accompanying December 31, 2000 consolidated statement of operations and
the consolidated statement of cash flows includes the operating results of WPC
for the period January 1, 2000 through November 16, 2000. As of November 16,
2000, the Company will account for its investment in WPC on the cost method. All
significant inter-company accounts and transactions are eliminated in
consolidation. The Company uses the equity method of accounting for all
investments other than the WPC Group in unconsolidated companies owned 20% or
more.

Business Segment

WHX Corporation ("WHX") is a holding company that has been
structured to invest in and/or acquire a diverse group of businesses on a
decentralized basis. WHX's primary businesses currently are: Handy & Harman
("H&H"), a diversified manufacturing company whose strategic business segments
encompass, among others, specialty wire, tubing, and fasteners, and precious
metals plating and fabrication; Unimast Incorporated ("Unimast"), a leading
manufacturer of steel framing and other products for commercial and residential
construction; and WHX Entertainment Corp., a co-owner of a racetrack and video
lottery facility located in Wheeling, West Virginia. WHX's other business
consists of Wheeling-Pittsburgh Corporation ("WPC") and its subsidiaries
including Wheeling-Pittsburgh Steel Corporation ("WPSC" and together with WPC
and its other subsidiaries, the "WPC Group"), a vertically integrated
manufacturer of value-added and flat rolled steel products. WHX, together with
all of its subsidiaries shall be referred to herein as the "Company," and the
Company and its subsidiaries other than the WPC Group shall be referred to
herein as the "WHX Group."

(See Note Q)

Use 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 the
disclosure of contingent assets and liabilities at the date of the financial
statements. Estimates also affect the reported amounts of revenues and expenses
during the reporting period. Actual results could differ from those estimates.

Cash and Cash Equivalents

Cash and cash equivalents include cash on hand and on deposit and
highly liquid debt instruments with original maturities of three months or less.

Fair Value of Financial Instruments

The recorded amounts of cash and cash equivalents, receivables,
short-term borrowings, accounts payable, accrued interest, and variable-rate
long-term debt approximate fair value because of the short maturity of those
instruments or the variable nature of underlying interest rates. Short-term
investments are recorded at fair market value based on trading in the

public market. Redeemable common stock is recorded at the estimated redemption
amount that is considered to approximate fair value. See Note H for a
description of fair value of debt instruments.

Revenue Recognition

The Company recognizes revenue upon shipment and transfer of title.

Inventories

Inventories are stated at cost that is lower than market. Cost is
determined by the last-in first-out ("LIFO") method for substantially all
inventories. H&H's non-precious metals inventories are stated at the lower of
cost (principally average) or market. For precious metals inventories no
segregation among raw materials, work in process and finished goods is
practicable.

Property, Plant and Equipment

Depreciation of property, plant and equipment is provided
principally on the straight-line method over the estimated useful lives of the
assets. Interest cost is capitalized for qualifying assets during the assets'
acquisition period. Capitalized interest cost is amortized over the life of the
asset. Maintenance and repairs are charged to income and renewals and
betterments are capitalized. Profit or loss on dispositions is credited or
charged to income.

Intangibles and Amortization

The excess of purchase price over net assets acquired in business
combinations ("goodwill") is amortized on the straight-line method for periods
ranging from 15 to 40 years. Purchased patents are stated at cost, which is
amortized over the respective remaining lives of the patents.

The Company uses estimated future undiscounted cash flows when
evaluating the recoverability of the unamortized balance of goodwill. The
recoverability of goodwill will be impacted if estimated future operating cash
flows are not achieved.

Stock-Based Compensation

Pursuant to the provisions of Statement of Financial Accounting
Standards No. 123 ("SFAS 123") "Accounting for Stock-Based Compensation," the
Company accounts for employee stock-based compensation under Accounting
Principle Board No. 25, "Accounting for Stock Issued to Employees."

Environmental Matters

The Company accrues for losses associated with environmental
remediation obligations when such losses are probable and reasonably estimable.
Accruals for estimated losses from environmental remediation obligations
generally are recognized no later than completion of the remedial feasibility
study.

Such accruals are adjusted as further information develops or
circumstances change. Costs of future expenditures for environmental remediation
obligations are not discounted to their present value. Recoveries of
environmental remediation costs from other parties are recorded as assets when
their receipt is deemed probable.

Earnings Per Share

Pursuant to SFAS 128, basic earnings per share is based on the
weighted average number of shares of Common Stock outstanding during each year,
excluding redeemable common shares. Diluted earnings per share gives effect to
dilutive potential common shares outstanding during the period.

Foreign Currency Translation

Assets and liabilities of foreign subsidiaries have been translated
at current exchange rates, and related revenues and expenses have been
translated at average rates of exchange in effect during the year. Resulting
cumulative translation adjustments have been recorded as a separate component of
accumulated other comprehensive income.

Reclassifications

Certain reclassifications have been made to prior year balances to
conform to current year presentation.

Impact of New Accounting Standards
- ----------------------------------

In June 1998, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" (SFAS133). This pronouncement requires all
derivative instruments to be reported at fair value on the balance sheet;
depending on the nature of the derivative instrument, changes in fair value will
be recognized either in net income or as an element of comprehensive income.
SFAS 133 is effective for fiscal years beginning after June 15, 2000. The
Company has not engaged in significant activity with respect to derivative
instruments or hedging activities in the past. The adoption of the standard on
January 1, 2001 did not have a significant impact on the reported results of
operations or financial position.

1999 1998
---- ----
(Dollars in Thousands)
Increased Sales $47,899 $45,348
Increased Cost of sales $52,672 $49,485
Decreased SG&A $ 4,773 $ 4,137

Note A -- WPC Group Bankruptcy

The Bankruptcy Court has granted the WPC Group's motion to approve
a new $290 million DIP Credit Agreement provided by Citibank, N.A., as initial
issuing bank, Citicorp U.S.A., Inc., as administrative agent, and the DIP
Lenders. Pursuant to the DIP Credit Agreement, Citibank, N.A. has made term loan
advances to the WPC Group up to a maximum aggregate principal amount of $35
million. In addition the DIP Lenders have agreed, subject to certain conditions,
to provide the WPC Group with revolving loans, swing loans and letter of credit
accommodations in an aggregate amount of up to $255 million. In connection with
the Bankruptcy Filing, WHX has guaranteed $30 million of the term loan portion
of the DIP Credit Agreement and has deposited in a pledged asset account $33
million of funds in support of such guarantee. A portion of the earnings on the
pledged asset account accrue and are paid to WHX . If WHX is called upon to fund
all or a portion of its $30 million guaranty, there is little likelihood that
the WPC Group would be able to repay WHX its guaranty payments under such term
loan. The term loans and revolving loans are secured by first priority liens on
the WPC Group's assets, subject to valid liens existing on November 16, 2000,
and have been granted superpriority administrative status, subject to certain
carve-outs for fees payable to

the United States Trustee and professional fees. The DIP Credit Agreement
contains negative, affirmative and financial covenants, including a limitation
on capital expenditures through December 31, 2000 of $12.5 million, $42.5
million in fiscal 2001 and $60 million in fiscal 2002, and a requirement that
the WPC Group have $15 million of excess availability at all times. The terms of
the DIP Credit Agreement also include cross default and other customary
provisions.

requirements of the Bankruptcy Code are met. These requirements may, among other
things, necessitate payment in full for senior classes of creditors before
payment to a junior class can be made. WHX, as the holder of the capital stock
of WPC, does not expect to receive any value in respect of its equity interest
in WPC.

During the period January 1, 2000 through November 16, 2000, the
WPC Group incurred a net loss of $176.6 million which is reflected in the
Company's December 31, 2000 consolidated results of operations. Approximately
$133.8 million of such net loss represents the establishment of a valuation
allowance on the WPC Group net deferred tax asset. As a result of the Bankruptcy
Filing, management has concluded that it is more likely than not that such
deferred tax asset (which is primarily related to net operating loss
carryforwards) will not be realized.

At January 1, 2000, $136.8 million of the Company's net equity
represented its investment in WPC. In addition to this investment, the Company,
on November 16, 2000, guaranteed $30 million of the WPC Group's
debtor-in-possession term loan. The recognition of the WPC Group's net loss of
$176.6 has eliminated the investment's carrying value of $136.8 million, and WHX
has recorded a liability of $39.8 million (representing the excess of the WPC
Group's loss over the carrying amount of the investment). This liability will
remain on the Company's accounts until the ultimate disposition of the
Bankruptcy Filing is determined.

The accompanying December 31, 2000 consolidated balance sheet
includes a due from the WPC Group amounting to $20.9 million and a due to the
WPC Group of $32 million. These amounts are the result of numerous transactions
that transpired between companies in the WHX Group and companies in the WPC
Group since the date WHX acquired WPC. Such transactions include cash advances
between the affiliated companies, payables and receivables arising from asset
sales and purchases, payments made to third parties on behalf of other
affiliates and billings resulting from the tax sharing agreement between WHX and
WPC.

For financial reporting purposes amounts owing to or due from the
WPC Group have been presented on a gross basis. The receivables and liabilities
remain those of the separate legal entities of the WHX Group. As part of the
Bankruptcy Filing proceedings offsetting or netting of these amounts may not
occur and certain receivables due from the WPC Group of companies may be
characterized as prepetition liabilities of the WPC Group and as such the WHX
Group due from the WPC Group may not be fully recovered.

The Company has recorded the aforementioned amounts of inter-company
receivables and payables based upon its understanding and interpretation and
those of its legal counsel of the various agreements between WHX and WPC. The
amounts recorded in the inter-company accounts represent the historical
summarization of numerous transactions amongst all of the WHX and WPC affiliated
companies. WHX is disputing the characterization, amount and legal entities
charged for certain transactions, the result of which may be more favorable to
WHX. As a result of the Bankruptcy Filing, WPC may dispute the net amount
recorded by the Company and it may make other assertions that may be unfavorable
to WHX. As WHX and WPC intend to investigate the disputed items and seek to
resolve such dispute through a negotiated settlement, the ultimate resolution of
this matter cannot presently be determined and a settlement amount could be
different from the amounts recorded in the accompanying consolidated balance
sheet.

In February 2001, WHX submitted an invoice to WPC in the amount of
$29.4 million representing revised allocations of pension costs for prior
periods. The WPC Group has contested this inter-company billing, and it is
anticipated that this item will be included in the negotiations with respect to
all contested inter-company amounts and items referred to above. The Company has
not recognized any benefit relating to this billing, and such amount is not
included in the aforementioned inter-company account balances.

The Company has no current intention to provide the WPC Group with
additional cash funding other than what may be required in the settlement of the
inter-company accounts, amounts that may be required to be paid in future
periods pursuant to the provisions of the tax sharing agreement and any payment
that may result under the Company's guarantee of the term loan portion of the
DIP Credit Agreement (see Note K). However, the Company may elect to provide
additional financing to the WPC Group should the need arise and if it is in the
best interest of the Company.

Management of the Company cannot determine with certainty the
ultimate outcome of the Chapter 11 proceedings; however it is reasonably
possible that the following outcomes could result:

o The WPC Group could reorganize, and their
creditors could receive all or a portion of their
claims.

o The WPC Group could be sold in its entirety or
segments could be sold, and the proceeds from such
sale(s) would be utilized to satisfy creditor
claims.

o The creditors could assume ownership of the WPC
Group and continue to operate the WPC Group
businesses.

In each of the above possible outcomes, the WHX Group would have
little or no future ownership in or involvement with the WPC Group, and the WHX
Group future cash obligations to or on behalf of the WPC Group would be minimal
to none other than the possible payments discussed above. It is also reasonably
possible that none of the above outcomes would occur and the WPC Group may shut
down a number of their operations. According to the Company's preliminary
evaluation of potential pension obligations, if a partial shutdown of the WPC
Group's operations were to occur in the immediate future WHX's liability for
early retirement pension benefits could range from approximately $80 million to
$100 million. It is also possible that the WPC Group could cease operations in
their entirety and this liability would then be significantly greater. However,
management does not believe this occurrence is likely. Under current pension law
and regulations based on the Company's analysis of the current funded status of
the pension plan, if a partial shutdown were to occur at the present time, the
cash funding obligations would likely not begin until 2003 and would extend over
several years. Such cash funding obligations would have a material adverse
impact on the liquidity, financial position and capital resources of the
Company. The Company's funding obligation and the impact on the Company's
liquidity, financial position and capital resources could be substantially
reduced or eliminated if (1) a partial shutdown, if it occurs, were to occur at
such a time that the fair market value of the assets of the plan approximates or
exceeds the plan's liabilities (including the early retirement benefits), (2) a
shutdown were to occur gradually over several years or (3) the number of the WPC
Group's operations shut down were less than those assumed in estimating the
above-mentioned amounts. Reference is made to Note C of the Consolidated
Financial Statements.

Note B--Handy & Harman Acquisition

On April 13, 1998, the Company completed the acquisition of Handy &
Harman ("H&H") and merged it with a wholly-owned subsidiary of the Company (the
"Merger"). The acquisition had a total value of approximately $651.4 million,
including the assumption of approximately $229.6 million in debt. The
acquisition was accounted for as a purchase business combination in accordance
with Accounting Principles Board Opinion No. 16 ("APB 16"). Accordingly, the
assets and liabilities of Handy & Harman have been adjusted to reflect their
relative fair values at the date of acquisition. The excess of the purchase
price over the fair value of the net assets acquired totaled $292 million and is
being amortized over a period of 40 years. During 2000, the Company revised
certain deferred tax liabilities that were established in the acquisition
balance sheet. This revision reduced deferred tax liabilities and goodwill by
$9.6 million. The Company financed the transaction through cash on hand and a
private placement of debt securities of the Company. See Note R.

The following unaudited pro forma disclosure is presented to
present the Company's results as if the Handy & Harman acquisition had occurred
on January 1 of 1998.

Year ended December 31,
1998
----
(in millions, except per share)

Revenue....................................... $1,765.8
Income (loss) before extra-ordinary items..... 36.5
Net income (loss)............................. 38.8
Basic income (loss) per share:................ 1.00
Diluted income (loss) per share:.............. $ .95

The results of Handy & Harman included in the pro forma have been
adjusted to exclude merger related transaction costs.

Note C--Pensions, Other Postretirement and Postemployment Benefits

The Company maintains several qualified and non-qualified pension
plans and other postretirement benefit plans covering substantially all of its
employees. The Company's domestic pension and health care benefit and
significant defined contribution plans are discussed below. The Company's
foreign plans and other defined contribution plans are not significant
individually or in the aggregate.

Pension Plans

The Company's defined benefit plan, the WHX Plan, covers
substantially all WHX, H&H and WPC employees. The WHX plan was established in
May 1998, as a result of the merger of the former Handy & Harman plans, which
covered substantially all H&H employees, and the WPC plan. The WPC plan,
covering most USWA represented employees, was created pursuant to a collective
bargaining agreement ratified on August 12, 1997. Prior to that date, benefits
were provided through a defined contribution plan, the Wheeling-Pittsburgh Steel
Corporation Retirement Security Plan ("Retirement Security Plan"). The assets of
the Retirement Security Plan were merged into the WPC plan as of December 1,
1997. Under the terms of the WHX Plan, the benefit formula and provisions for
the WPC and H&H participants continued as they were designed under each of the
respective plans prior to the merger.

Pension benefits for the H&H participants included in the WHX Plan
are based on years of services and the amount of compensation at the time of
retirement.

Pension benefits for the WPC participants include both defined
benefit and defined contribution features, since the plan includes the account
balances from the Retirement Security Plan. The gross benefit, before offsets,
is calculated based on years of service and the current benefit multiplier under
the plan. This gross amount is then offset for the benefits payable from the
Retirement Security Plan and benefits payable under by the Pension Benefit
Guaranty Corporation from previously terminated plans. Individual employee
accounts established under the Retirement Security Plan are maintained until
retirement. Upon retirement, the account balances are converted into monthly
benefits that serve as an offset to the gross benefit, as described above.
Aggregate account balances held in trust in individual employees' accounts,
which will be available upon retirement to offset the gross benefit, totaled
$135.9 million at December 31, 2000.

At the time of the merger of the pension plans, the assets in the
H&H pension plans exceeded the plans' liabilities by approximately $155 million.
At that time, the liabilities of the WPC pension plan exceeded their assets by
approximately $150 million.

The Company's funding policy is to contribute annually an amount
that satisfies the minimum funding standards of ERISA.

In 1998, WPC established a supplemental defined benefit plan
covering WPC salaried employees employed as of January 31, 1998, which provides
a guaranteed minimum benefit based on years of service and compensation. The
gross benefit from this plan is offset by the annuitized value of the defined
contribution plan account balance and any benefits payable from the Pension
Benefit Guaranty Corporation from a previously terminated defined benefit
pension plan. This supplemental plan is not funded.

The following table presents a reconciliation of beginning and
ending balances of the projected benefit obligation.

2000 1999
---- ----
(Dollars in Thousands)

Benefit obligation at January 1................ $ 289,741 $ 309,153
Service cost................................... 5,511 6,573
Interest cost.................................. 21,869 20,073
Actuarial (gain)/loss.......................... 5,542 (25,779)
Benefits paid.................................. (24,993) (23,531)
Plan amendments -implementation................ 990 10
Transfers from DC plans........................ 5,825 3,242
----------- -----------
Benefit obligation at December 31.............. $ 304,485 $ 289,741
=========== ===========

The following table presents a reconciliation of beginning and ending balances
of the fair value of plan assets.

2000 1999
---- ----
(Dollars in Thousands)

Fair value of plan assets at January 1....... $ 307,612 $ 297,740
Actual return on plan assets................. 27,188 30,161
Employer Contributions....................... -- --
Benefits paid................................ (24,993) (23,531)
Transfers from DC plans...................... 5,825 3,242
------------ -----------
Fair value of plan assets at December 31..... $ 315,631 $ 307,612
============ ===========
Funded status................................ $ 11,146 $ 17,871
Unrecognized prior service cost.............. 58,953 64,519
Unrecognized actuarial (gain)/loss........... (32,347) (42,054)
------------- -----------
Net amount recognized........................ $ 37,752 $ 40,336
============ ===========

The following table presents the amounts recognized in the statement of
financial position.

2000 1999
---- ----
(Dollars in Thousands)

Prepaid benefit cost........................ $ 37,752 $ 40,336
Intangible asset............................ -- --
Accumulated other comprehensive income...... -- --
------------ -----------
Net amount recognized....................... $ 37,752 $ 40,336
============ ===========

The following table presents the components of net periodic pension cost.

2000 1999 1998
----------- ---------- ----------
(Dollars in Thousands)

Service cost.......................... $ 5,511 $ 6,573 $ 6,163
Interest cost......................... 21,869 20,073 16,494
Expected return on plan assets........ (29,729) (28,994) (18,619)
Amortization of prior service cost.... 6,556 6,509 6,509
Recognized actuarial (gain)/loss...... (1,623) -- (1,401)
----------- ---------- ----------
Total................................. $ 2,584 $ 4,161 $ 9,146
========== ========== ==========

The following table presents the weighted-average assumptions at December 31,

2000 1999 1998
---- ---- ----

Discount rate......................... 7.75% 8.0% 6.5%
Expected return on assets............. 10.0% 10.0% 10.0%
Rate of compensation increase......... 4.0% 4.0% 4.0%

The following table presents the plans with the accumulated benefit obligation
in excess of plan assets.

2000 1999
---- ----
(Dollars in Thousands)

Projected benefit obligation........................ $ 955 $ 619
Accumulated benefit obligation...................... 455 308
Fair value of assets................................ $ 0 $ 0

401(k) Plans

The WPC salaried employees participate in a 401(k) defined
contribution plan. WPC matches 50% of the employee's contribution, and through
the date of the WPC bankruptcy (November 16, 2000) such matching contribution
was made with shares of WHX common stock. The employer contribution is limited
to a maximum of 3% of an employee's salary. The amount of such contributions
charged to WPC operations for the period January 1 through November 16, 2000 and
the years ending December 31, 1999 and 1998 were $1.1 million, $1.1 million, and
$984,346 respectively.

Certain H&H employees participate in a H&H sponsored savings plan
which qualifies under Section 401(k) of the Internal Revenue Code. This savings
plan allows eligible employees to contribute from 1% to 15% of their income on a
pretax basis. H&H matches 50% of the first 3% of the employee's contribution.
Starting with the September 1998 match, H&H's contributions are invested in
shares of WHX common stock and become immediately vested. The charge to
operations for the Company's matching contribution amounted to $529,000,
$520,000 and $389,000 for the years ending 2000, 1999 and 1998, respectively.

The number of shares of the Company's common stock held by the
401(k) plans was 882,867, 452,769 and 301,252 at December 31, 2000, 1999 and
1998, respectively.

Substantially all of the salaried and hourly employees of the
Company's Unimast subsidiary participate in a 401(k) Incentive Savings Plan.
Unimast provides a matching contribution of 50% of each employee's voluntary
contribution up to 4% of the employee's salary. Contributions charged to
operations for this plan were $781,000, $698,000 and $588,000 for the years
ending December 31, 2000, 1999 and 1998, respectively.

Postemployment Benefits

The WPC Group provides benefits to former or inactive employees
after employment but before retirement. Those benefits include, among others,
disability, severance and workers' compensation. The assumed discount rate used
to measure the benefit liability was 8.0% at December 31, 1999 and 7.75% at
December 31, 2000.

Other Postretirement Benefits

The WPC Group sponsors postretirement benefit plans that cover
certain management and hourly retirees and dependents. The plans provide medical
benefits, including hospital, physicians' services and major medical expense
benefits, and a life insurance benefit. The hourly employees' plans provide
non-contributory basic medical and a supplement to Medicare benefits, and major
medical coverage to which the WPC Group contributes 50% of the insurance premium
cost. The management plan provides basic medical and major medical benefits on a
non-contributory basis through age 65.

WPC accounts for these benefits in accordance with SFAS No. 106.
WPC funds the plans as current benefit obligations are paid.

Additionally, in 1994, the Company, for the WPC Group portion of
these plans, began funding a qualified trust in accordance with its collective
bargaining agreement. The new collective bargaining agreement provides for the
use of those funds to pay current benefit obligations and suspends additional
funding until 2002.

Certain retired employees of Handy & Harman are covered by
postretirement medical benefit plans. The benefits provided are for medical and
prescription drugs. Contributions from a majority of the participants are
required and for those retirees and spouses, the Company's payments are capped.

The following table presents a reconciliation of beginning and
ending balances of the Accumulated Postretirement Benefit Obligation ("APBO").

2000 1999
---- ----
(Dollars in Thousands)

APBO at January 1..................................$ 277,170 $ 306,839
Service cost....................................... 2,344 2,650
Interest cost...................................... 17,754 19,396
Actuarial (gain)/loss.............................. 4,042 (28,943)
Plan Amendments.................................... 428 --
Benefits paid...................................... (17,862) (22,772)
APBO of WPC plan on November 16, 2000.............. (275,889) --
----------------- ---------------
APBO at December 31................................$ 7,987 $ 277,170
================ ===============

The following table presents a reconciliation of beginning and ending balances
of the fair value of plan assets.

2000 1999
---- ----
(Dollars in Thousands)

Fair value of plan assets at January 1.............$ -- $ 424
Actual return on plan assets....................... -- 23
Benefits paid...................................... -- (447)
---------------- ----
Fair value of plan assets at December 31...........$ -- $ --
================ ===============

The following table presents the amounts recognized in the statement of
financial position as of December 31.

2000 1999
---- ----
(Dollars in Thousands)

Funded status......................................$ (283,876) $ (277,170)
Unrecognized prior service cost.................... (28,793) (32,649)
Unrecognized actuarial gain........................ (81,828) (92,572)
Funded status of WPC at November 16, 2000..........$ 386,736
================ ==============
Net amount recognized..............................$ 7,761 $ (402,391)
================ ===============

The following table presents the components of net periodic benefit cost.

2000(a) 1999 1998
------- ---- ----
(Dollars in Thousands)

Service cost.......................................$ 1,855 $ 2,650 $ 2,264
Interest cost...................................... 17,753 19,396 19,539
Expected return on plan assets..................... -- (6) (156)
Amortization of prior service cost................. (3,428) (3,309) (3,918)
Recognized actuarial (gain)........................ (6,282) (3,918) (5,696)
------------- -------------- --------------
Total..............................................$ 9,898 $ 14,813 $ 12,033
============ ============== ==============

(a) includes a pro rata portion of the annual WPC amounts to reflect such
amounts through November 16, 2000

The following table presents the weighted-average assumptions at December 31,

2000 1999 1998
---- ---- ----

Discount rate......................................7.75% 8.0% 6.5%
Expected return on assets.......................... 8.0% 8.0% 8.0%
Health care cost trend rate........................ 9.0% 8.0% 8.5%

The health care cost trend rate assumed to be 9% in 2000 and
gradually decreasing to 5% by the year 2004 and remain at that level thereafter.

Note D--Income Taxes

Year Ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
(Dollars in Thousands)

Income Taxes Before Extraordinary Items
Current
Federal tax provision (benefit).................... $ -- $ (96) $ 1,854
State tax provision................................ 2,521 3,055 1,573
Foreign tax provision (benefit).................... 436 (125) 22
-------------- -------------- ----------------
Total income taxes current................ 2,957 2,834 3,449
-------------- -------------- ----------------
Deferred
Federal tax provision (benefit).................... 70,643 (9,264) 19,575
State tax provision................................ -- -- 362
-------------- -------------- ----------------
Income tax provision (benefit)......................... $ 73,600 $ (6,430) $ 23,386
============== ============== ================

Total Income Taxes
Current
Federal tax provision (benefit).................... $ -- $ (96) $ 1,854
State tax provision................................ 2,521 3,055 1,573
Foreign tax provision (benefit).................... 436 (125) 22
-------------- -------------- ----------------
Total income taxes current................ 2,957 2,834 3,449
-------------- -------------- ----------------
Deferred
Federal tax provision (benefit).................... 70,643 (8,782) 20,781
State tax provision................................ -- -- 362
-------------- -------------- ----------------
Income tax provision (benefit)......................... $ 73,600 $ (5,948) $ 24,592
============== ============== ================

Components of Total Income Taxes
Operations ......................................... $ 73,600 $ (6,430) $ 23,386
Extraordinary items.................................... -- 482 1,206
-------------- -------------- -----------------
Income tax provision (benefit)......................... $ 73,600 $ (5,948) $ 24,592
============== ============== ================

Deferred income taxes result from temporary differences in the
financial basis and tax basis of assets and liabilities. The amounts shown on
the following table represent the total differences between the Company's
consolidated tax return basis of assets and liabilities and the basis for
financial reporting, in both instances including the respective amounts relating
to WPC. As a result of the deconsolidation of WPC as of November 16, 2000, the
deferred tax assets, liabilities and valuation allowance relating to WPC are not
recorded in the consolidated balance sheet.

Deferred Income Tax Sources

2000 1999
---- ----
(Dollars in Millions)

Assets
Postretirement and postemployment employee benefits ...... $ 139.0 $ 142.7
Operating loss carryforwards (expiring in 2005 to 2019) .. 153.2 72.8
Minimum tax credit carryforwards (indefinite carryforward) 18.9 52.0
Provision for expenses and losses ........................ 21.4 47.2
Leasing activities ....................................... 18.1 20.3
State income taxes ....................................... 1.3 1.2
Miscellaneous other ...................................... 4.8 7.5
-------- --------
Subtotal ................................................. 356.7 343.7
Less: Amount relating to WPC ............................ (341.6) --
-------- --------
Deferred Tax Assets ...................................... $ 15.1 $ 343.7
-------- --------

Liabilities
Property plant and equipment ............................. $ (151.5) $ (160.7)
Inventory ................................................ (53.1) (69.0)
Pension .................................................. (13.2) (23.4)
State income taxes ....................................... (3.8) (4.1)
Miscellaneous other ...................................... (2.7) (6.5)
-------- --------
Subtotal ................................................. (224.3) (263.7)
-------- --------
Less: Amount relating to WPC ............................ 171.3 --
-------- --------
Deferred Tax Liability ................................... (53.0) (263.7)
-------- --------

Valuation Allowance ...................................... (172.2) (24.8)
-------- --------
Less: Amount relating to WPC ............................. 170.3 --
-------- --------
Valuation Allowance ...................................... (1.9) (24.8)
-------- --------

Net Deferred Income Tax Asset (Liability) ................ $ (39.8) $ 55.2
======== ========

As a result of Bankruptcy Filing, management has assessed the
recoverability of the deferred tax assets, particularly those associated with
the net operating loss carryforwards, and has concluded that a valuation
allowance is necessary. As such, the WPC Group recorded a valuation allowance
amounting to $148.2 million, of which $133.8 million has been included in the
Company's consolidated income tax provision and represents the amount recorded
by WPC through November 16, 2000.

During 2000, the Company adjusted its tax accounts, the most
significant of which related to the reversal of prior year provisions for taxes
that are deemed no longer required. The total adjustment amounted to $32.9
million of which $7.6 million was credited to goodwill and $25.3 million was
credited to income tax expense.

The WPC Group, for tax return purposes, is consolidated with WHX
and its other subsidiaries. At December 31, 2000, WHX has $437.7 million of net
operating tax loss carryforwards of which $413.4 million pertain to the WPC
Group operations and for which no benefit has been recognized in the
accompanying consolidated financial statements.

The WPC Group operating loss carryforwards expire between 2005 and
2020 and the tax credit carryforwards expire 2001-2010. WHX can utilize these
operating loss and credit carryforwards to reduce future income tax liabilities;
however, management at the present time does not believe that any benefit from
these carryforwards will be realized. To the extent the WHX Group does utilize
the WPC Group's tax loss or credit carryforwards, the resulting tax benefit must
be paid to the WPC Group pursuant to the terms of the tax sharing agreement.
(See Note K)

During 1999, the valuation allowance decreased $3.2 million due to
the expiration of tax credit carryovers and a change in judgment about the
realizability of net operating losses in future periods.

Deferred income taxes have not been provided on the undistributed
earnings of foreign subsidiaries and other foreign investments carried at
equity. These earnings have been substantially reinvested, and the Company does
not plan to initiate any action that would precipitate the payment of income
taxes thereon.

During 1994, the Company experienced an ownership change as defined
by Section 382 of the Internal Revenue Code. As the result of this event,
pre-change of control net operating losses that can be used to offset
post-change of control pretax income will be limited to approximately $32
million in any year. Post-change of control net operating losses do not have an
annual offset limitation.

Total federal and state income taxes paid in 1998 and 1999 and 2000
were $1.2 million $3.5 million, and $3.3 million, respectively.

Federal tax returns have been examined by the Internal Revenue
Service ("IRS") through 1997. The statute of limitations has expired for years
through 1995. Management believes it has adequately provided for all taxes on
income.

The provision for income taxes differs from the amount of income
tax determined by applying the applicable U.S. statutory federal income tax rate
to pretax income as follows:

Year Ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
(Dollars in Thousands)

Income (loss) before taxes and extraordinary item............. $ (107,455) $(22,264) $ 62,816
================= ======== =================
Tax provision (benefit) at statutory rate..................... $ (37,605) $ (7,792) $ 21,986
Increase (reduction) in tax due to:
Percentage depletion...................................... (201) (530) (829)
Equity earnings........................................... (1,525) (1,300) (1,484)
Goodwill amortization..................................... 2,530 2,375 1,983
State income tax net of federal effect.................... 1,639 1,986 1,258
Recognition of pre-acquisition benefits................... -- -- (4,519)
Change in valuation allowance............................. 133,823 (3,246) 4,904
Net effect of foreign tax rate............................ (582) 624 94
Adjustment of prior year's tax............................ (25,288) 575 --
Other miscellaneous....................................... 809 878 (7)
---------------- ------------ -----------------
Tax provision (benefit)....................................... $ 73,600 $ (6,430) $ 23,386
================ ============ =================

Note E--Short Term Investments

The composition of the Company's short-term investments are as
follows:

December 31,
2000 1999
---- ----
(Dollars in Thousands)

Trading Securities:
U. S. Treasury Securities................................$ 0 $ 581,250
U. S. Government Agency Mortgage Backed Obligations.......... 1,244 2,038
Equities................................................. 21,876 45,238
Other.................................................... 46,199 13,628
Available-for-sale securities:
Equities................................................. 0 17,202
---------------- ---------------
$ 69,319 659,356
================ ===============

These investments are subject to price volatility associated with
any interest bearing instrument. Fluctuations in general interest rates affect
the value of these investments.

The Company recognizes gains and losses based on specific
identification of the securities that comprise the investment balance with the
exception of equity securities, for which average cost is used. At December 31,
1999, unrealized holding gains on available-for-sale securities of $2.2 million
were reported, net of the related tax effect, as a separate component of
accumulated other comprehensive income. Net unrealized holding gains and losses
on trading securities held at period end and included in other income for 2000
and 1999 were a loss of $24.3 million and a gain of $10.6 million, respectively.
At December 1999 the Company had short term margin borrowings of $495.5 million,
related to the short term investments.

In 2000, the Company reclassified $19.6 million of
available-for-sale investments to the trading category and recorded a realized
loss upon the subsequent sale of $13.1 million. As a result of the
reclassification, the Company recorded a favorable reclassification adjustment
within other comprehensive income of $7.2 million, net of related income tax
benefit of $3.9 million.

In 1999, the Company reclassified $26.2 million of
available-for-sale investments to the trading category and recorded an
unrealized gain upon transfer of $11.3 million. As a result of the
reclassification, the Company recorded an unfavorable reclassification
adjustment within other comprehensive income of $7.3 million, net of related
income tax benefit of $3.8 million.

Note F--Inventories

December 31,
2000 1999
---- ----
(Dollars in Thousands)

Finished products.....................................$ 29,255 $ 86,724
In-process............................................ 24,566 131,626
Raw materials......................................... 36,453 81,210
Precious metals....................................... 61,671 117,639
Other materials and supplies.......................... -- 28,033
------------------ -----------------
151,945 445,232
LIFO reserve.......................................... (1,676) (3,363)
------------------- ----------------
$ 150,269 $ 441,869
================== =================

During 1998, 1999 and 2000, certain inventory quantities were
reduced, resulting in liquidations of LIFO inventories, the effect of which
increased (decreased) income by approximately, $1.8 million, $2.1 million and
$(1.2) million in 1998, 1999 and 2000, respectively.

Note G--Property, Plant and Equipment

December 31,

2000 1999
---- ----

(Dollars in Thousands)

Land and mineral properties.........................$ 18,667 $ 42,151
Buildings, machinery and equipment.................. 196,032 1,270,212
Construction in progress............................ 9,539 51,197
------------------ -----------------
224,238 1,363,560
Accumulated depreciation and amortization........... 50,448 547,059
------------------ -----------------
$ 173,790 $ 816,501
================== =================

Depreciation expense for the years 1998, 1999 and 2000 was $89.7, $96 and $89.1 million, respectively.

Note H--Long-Term Debt

December 31,

2000 1999
---- ----

(Dollars in Thousands)

Senior Unsecured Notes due 2007, 9 1/4%...................$ -- $ 274,175

Term Loan Agreement due 2006, floating rate............... -- 75,000

Senior Unsecured Notes due 2005, 10 1/2%.................. 281,490 281,490

Handy & Harman Senior Secured Credit Facility............. 192,793 201,064

Unimast Revolving Credit Agreement........................ 21,000

Other..................................................... 16,629 17,801
------------------ -----------------

511,912 849,530

Less portion due within one year.......................... 6,929 1,810
------------------ -----------------

Total Long-Term Debt (1)..................................$ 504,983 $ 847,720
================== =================

(1) The fair value of long-term debt at December 31, 1999 and December 31, 2000
was $828,200 and $403,500, respectively. Fair value of long-term debt is
estimated based on trading in the public market.

Long-term debt maturing in each of the next five years is as
follows: 2001, $12,524; 2002, $14,400; 2003, $26,250; 2004, $53,442; and 2005,
$306,490.

A summary of the financial agreements at December 31, 2000 follows:

WHX Corporation 10 1/2% Senior Notes Due 2005:

On April 7, 1998, WHX issued $350 million principal amount of 10
1/2% Senior Notes ("the Notes"), which replaced privately placed notes of the
same amount. Interest on the Notes is payable semi-annually on April 15 and
October 15 of each year, commencing October 15, 1998. The Notes mature on April
15, 2005.

The Notes are redeemable at the option of WHX, in whole or in part,
on or after April 15, 2002 at specified prices, plus accrued interest and
liquidated damages, if any, thereon to the date of redemption.

Upon the occurrence of a Change of Control (as defined ), the
Company will be required to make an offer to repurchase all or any part of each
holder's Notes at 101% of the principal amount thereof, plus accrued interest
and liquidated damages, if any, thereon to the date of repurchase.

The Notes are unsecured obligations of WHX, ranking senior in right
of payment to all existing and future subordinated indebtedness of WHX, and pari
passu with all existing and future senior unsecured indebtedness of WHX.

The Notes indenture, dated as of April 7, 1998 (the "Indenture"),
contains certain covenants, including, but not limited to, covenants with
respect to: (i) limitations on indebtedness and preferred stock; (ii)
limitations on restricted payments; (iii) limitations on transactions with
affiliates; (iv) limitations on liens; (v) limitations on sales of assets; (vi)
limitations on dividends and other payment restrictions affecting subsidiaries;
and (vii) restrictions on consolidations, mergers and sales of assets.

During the first quarter of 1999, the Company purchased and retired
$20.5 million aggregate principal amount of the Notes in the open market
resulting in a $0.9 million gain, net of tax.

On October 4, 2000, WHX successfully completed a solicitation of
consents from holders of the Notes to amend certain covenants and other
provisions of the Indenture. The amendments are set forth in the Supplemental
Indenture and provide, among other things, for amendments to certain covenants
which restrict the Company's ability to make restricted payments, incur
additional indebtedness, make permitted investments or utilize proceeds from
asset sales. The Supplemental Indenture also prohibits the payment of dividends
on the Company's preferred stock until October 1, 2002, and thereafter only in
the event such payments satisfy certain conditions set forth in the Indenture,
as amended by the Supplemental Indenture. In addition, the amendments remove as
events of default under the Indenture those relating to defaults under any
mortgage, indenture or instrument by, judgments against and bankruptcy,
insolvency and related filings and other events of WPC, or any of its direct or
indirect subsidiaries. Accordingly, the Bankruptcy Filing is not an event of
default under the Notes. In connection with the solicitation WHX made a payment
equal to 2% of the principal amount of the Notes ($20 in cash for each $1,000
principal amount of Notes) to each holder of Notes whose consent was received
and accepted prior to the expiration date. Such payments amounted to $5.5
million and will be amortized to interest expense over the remaining term of the
Notes.

Handy & Harman Senior Secured Credit Facility

On July 30, 1998, H&H entered into a $300 million Senior Secured
Credit facility (the "Facilities") with Citibank, N.A., as agent. The Facilities
are comprised of (i) a $100 million 6-year Revolving Credit Facility, (ii) a $25
million Delayed Draw Term Loan Facility (now expired) (iii) a $50 million 6-year
Term Loan A Facility, and (iv) a $125 million 8-year Term Loan B Facility.
Interest under the Facilities is calculated at a rate determined either using
(i) the Citibank prime rate or (ii) LIBOR, plus the Applicable Margin in effect
from time to time. Applicable Margin means a percentage per annum determined by
reference to the total leverage ratio of H&H. The rates in effect at December
31, 2000 are (a) in the case of the Term A Facility and the Revolving Credit
Facility, calculated at LIBOR + 1.50% and (b) in the case of the Term B
facility, calculated at LIBOR + 2.25%. Borrowings under the Facilities are
secured by the pledge of 100% of the capital stock of all H&H's active U.S.
subsidiaries and 65% of the stock of H&H's non-U.S. subsidiaries. In addition,
H&H provided a perfected first priority lien on and security interest in
substantially all the assets of H&H and its subsidiaries. The Facilities have
certain financial covenants restricting indebtedness, liens and cash
distributions that can be made to WHX. In addition, the Facilities required H&H
to procure an interest rate hedge agreement covering a notional amount of not
less than $125 million for a period of no less than three years. H&H has entered
into a cancelable interest-rate swap to convert $125 million of its
variable-rate debt to a fixed rate with Citibank, N.A. New York. The fixed rate
is 6.75% percent, effective September 22, 2000, with a termination date of
September 20, 2001. Borrowings outstanding under the Facilities at December 31,
2000 totaled $192.4 million. Letters of credit outstanding under the facilities
totaled $15.1 million at December 31, 2000.

Unimast Revolving Credit Agreement

On November 24, 1998, Unimast Incorporated ("Unimast") entered into
a Revolving Credit Agreement ("RCA") with Bank One, as lender and agent, and
Citicorp USA Inc., as lender and collateral agent. The RCA is for general
corporate purposes, including working capital needs and capital expenditures up
to $50 million with a $3 million sub-limit for letters of credit ("LC"). The RCA
expires on November 24, 2003. Interest rates are based on either Bank One's
current corporate base rate plus .25% or a Eurodollar rate plus 1.75%. Each of
these rates can fluctuate based upon performance. An aggregate commitment fee of
.375% is charged on the unused portion. The letter of credit fees are .875% for
a commercial LC and 1.75% for a standby LC. The commitment fees and the LC fees
are all performance based.

Borrowings are secured primarily by 100% of the eligible inventory,
accounts receivable, and fixed assets of Unimast, and its subsidiaries. The
terms of the RCA contain various restrictive covenants limiting dividend
payments, major acquisitions or other distribution of assets, as defined in the
RCA. Certain financial covenants associated with leverage, net worth, capital
spending and interest coverage must be maintained. Borrowings outstanding
against the RCA at December 31, 2000 totaled $21 million. Letters of credit
outstanding under the RCA totaled $6.1 million at December 31, 2000.

WPC Group

On November 17, 2000, in connection with the Bankruptcy Filing, the
WPC Group entered into a Debtor-in-Possession Credit Agreement, which was used
to repay all obligations under WPSC's Revolving Credit Facility and WPSC's
Receivables Facility. The Bankruptcy Filing was an event of default under the 9
1/4% Senior Notes Due 2007 and the Term Loan Agreement. (See Note A)

9 1/4% Senior Notes Due 2007

On November 26, 1997, WPC issued $275 million principal amount of 9
1/4% Senior Notes. Interest on the 9 1/4% Senior Notes is payable semi-annually
on May 15 and November 15 of each year. The 9 1/4% Senior Notes mature on
November 15, 2007. The Bankruptcy Filing is an event of default under such
Notes.

The 9 1/4% Senior Notes are redeemable at the option of WPC, in
whole or in part, on or after November 15, 2002 at specified redemption prices,
plus accrued interest and liquidated damages, if any, thereon to the date of
redemption.

Upon the occurrence of a Change of Control (as defined therein),
WPC will be required to make an offer to repurchase all or any part of each
holder's 9 1/4% Senior Notes at 101% of the principal amount thereof, plus
accrued and unpaid interest and liquidated damages, if any, thereon to the date
of repurchase.

The 9 1/4% Senior Notes are unsecured obligations of WPC, ranking
senior in right of payment to all existing and future subordinated indebtedness
of WPC, and pari passu with all existing and future senior unsecured
indebtedness of WPC, including borrowings under the Term Loan Agreement.

The 9 1/4% Senior Notes are fully and unconditionally guaranteed on
a joint and several and senior basis by the guarantors, which consist of all of
the WPC Group's present and future operating subsidiaries. The 9 1/4% Senior
Notes indenture contains certain covenants, including, but not limited to,
covenants with respect to: (i) limitations on indebtedness; (ii) limitations on
restricted payments; (iii) limitations on transactions with affiliates; (iv)
limitations on liens; (v) limitations on sales of assets; (vi) limitations on
issuance and sale of capital stock of subsidiaries; (vii) limitations on
dividends and other payment restrictions affecting subsidiaries; and (viii)
restrictions on consolidations, mergers and sales of assets.

Term Loan Agreement

On November 26, 1997, WPC entered into the Term Loan Agreement with
DLJ Capital Funding Inc., as syndication agent, pursuant to which it borrowed
$75 million. The Bankruptcy Filing is an event of default under such agreement.

Interest on the Term Loan Agreement is payable on March 15, June 15,
September 15 and December 15 as to Base Rate Loans, and with respect to LIBOR
loans on the last day of each applicable interest period, and if such interest
period shall exceed three months, at intervals of three months after the first
day of such interest period. Amounts outstanding under the Term Loan Agreement
bear interest at the Base Rate (as defined therein) plus 2.25% or the LIBO Rate
(as defined ) plus 3.25%

WPC's obligations under the Term Loan Agreement are guaranteed by
its present and future operating subsidiaries. WPC may prepay the obligations
under the Term Loan Agreement after November 15, 1999, subject to a premium of
1% of the principal amount thereof or after November 15, 2000 with no premium.

Revolving Credit Facility

On April 30, 1999, WPSC entered into the Third Amended and Restated
Revolving Credit Facility (the "RCF") with Citibank, N.A., as agent. The RCF
provided for borrowings for general corporate purposes up to $150 million,
including a $25 million sub-limit for Letters of Credit.

The RCF agreement expires May 3, 2003. Interest rates are based on
the Citibank prime rate plus 1.25% and/or a Eurodollar rate plus 2.25%, but the
margin over the prime rate and the Eurodollar rate can fluctuate based upon
performance. A commitment fee of 0.5% is charged on the unused portion. The
letter of credit fee is 2.25% and is also performance based.

Borrowings outstanding against the RCF at December 31, 1999 totaled
$79.9 million, which were included within the short-term borrowings in the
consolidated balance sheet. Letters of credit outstanding under the RCF were
$100,000 at December 31, 1999. All borrowings under the RCF were repaid with
proceeds from the DIP Credit Agreement on November 17, 2000, and the RCF was
terminated.

Interest Cost

Aggregate interest costs on debt and amounts capitalized during the
three years ended December 31 are as follows:

2000 1999 1998
---- ---- ----

(Dollars in Thousands)

Aggregate interest expense on debt.........$ 91,175 $ 90,885 $ 80,159

Less: Capitalized interest................. 4,953 3,034 2,063

Interest expense...........................$ 86,222 $ 87,851 $ 78,096

Interest paid..............................$ 77,813 $ 89,006 $ 73,070

Note I--Stockholders' Equity

The authorized capital stock of WHX consists of 60,000,000 shares
of Common Stock, $.01 par value, of which 14,834,340 shares (including
redeemable Common Stock) were outstanding as of December 31, 2000, and
10,000,000 shares of Preferred Stock, $.10 par value, of which 2,907,825 shares
of Series A Convertible Preferred Stock and 2,975,100 shares of Series B
Convertible Preferred Stock were outstanding as of December 31, 2000. In 1999,
the Company purchased 3,594,300 shares of Common Stock in open market purchases.
No additional shares were purchased during 2000.

Series A Convertible Preferred Stock

In July 1993, the Company issued 3,000,000 shares of Series A
Convertible Preferred Stock for net proceeds of $145 million. On October 4,
2000, pursuant to a solicitation of consents from holders of its 10 1/2% Senior
Notes, certain covenants and other provisions of the indebtedness were amended.
The Supplemental Indenture prohibits the payment of dividends on the Company's
preferred stock until October 1, 2002, and thereafter only in the event such
payments satisfy certain conditions set forth in the Indenture, as amended by
the Supplemental Indenture. Dividends on the shares of the Series A Convertible
Preferred Stock are cumulative and are payable quarterly in arrears on January
1, April 1, July 1 and October 1 of each year, in an amount equal to $3.25 per
share per annum. The Company has accrued $2.4 million representing dividends in
arrears at December 31, 2000.

Each share of the Series A Convertible Preferred Stock is
convertible at the option of the holder thereof at any time into shares of
Common Stock of the Company, par value $.01 per share, at a conversion price of
$15.78 per share of Common Stock (equivalent to a conversion rate of
approximately 3.1686 shares of Common Stock for each share of Series A
Convertible Preferred Stock), subject to adjustment under certain conditions.

The Series A Convertible Preferred Stock is redeemable at the
option of the Company, in whole or in part, for cash, initially at $52.275 per
share and thereafter at prices declining ratably to $50 per share on and after
July 1, 2003, plus in each case accrued and unpaid dividends to the redemption
date. The Series A Convertible Preferred Stock is not entitled to the benefit of
any sinking fund. In 1996 and 1997, the Company purchased and retired 92,000
shares of Series A Convertible Preferred Stock on the open market. No additional
shares were purchased during 1999 or 2000. During 1999, 175 shares were
converted into Common Stock. There were no conversions in 2000.

Series B Convertible Preferred Stock

The Company issued 3,500,000 shares of Series B Convertible
Preferred Stock in September 1994 for net proceeds of $169.8 million. On October
4, 2000, pursuant to a solicitation of consents from holders of its 10 1/2%
Senior Notes, certain covenants and other provisions of the indebtedness were
amended. The Supplemental Indenture prohibits the payment of dividends on the
Company's preferred stock until October 1, 2002, and thereafter only in the
event such payments satisfy certain conditions set forth in the Indenture, as
amended by the Supplemental Indenture. Dividends on the shares of the Series B
Convertible Preferred Stock, are cumulative, and are payable quarterly in
arrears on January 1, April 1, July 1 and October 1 of each year, in an amount
equal to $3.75 per share per annum. The Company has accrued $2.8 million
representing dividends in arrears at December 31, 2000.

Each share of the Series B Convertible Preferred Stock is
convertible at the option of the holder thereof at any time into shares of
Common Stock of the Company, par value $.01 per share, at a conversion price of
$20.40 per share of Common Stock (equivalent to a conversion rate of
approximately 2.4510 shares of Common Stock for each share of Series B
Convertible Preferred Stock), subject to adjustment under certain conditions.

The Series B Convertible Preferred Stock is redeemable at the
option of the Company, in whole or in part, for cash, initially at $52.625 per
share and thereafter at prices declining ratably to $50 per share on and after
October 1, 2004, plus in each case accrued and unpaid dividends to the
redemption date. The Series B Convertible Preferred Stock is not entitled to the
benefit of any sinking fund. In 1996 and 1997, the Company purchased and retired
524,900 shares of Series B Convertible Preferred Stock in open market purchases.
No shares were purchased during 1999 or 2000.

Redeemable Common Stock

As of December 31, 2000 certain present and former employees of the
WPC Group hold, through an Employee Stock Ownership Plan ("ESOP"), 244,507
shares of common stock of WHX. These employees received such shares as part of
the 1991 Chapter 11 Plan of Reorganization in exchange for Series C preferred
shares of Wheeling-Pittsburgh Steel Corporation (WPC's predecessor company prior
to the 1990 bankruptcy). Beneficial owners of such shares who were active
employees on August 15, 1990 and who have either retired, died or become
disabled, or who reach 30 years of service, may sell their shares to the Company
at a price of $15 or, upon qualified retirement, $20 per share. These contingent
obligations are expected to extend over many years, as participants in the ESOP
satisfy the criteria for selling shares to the Company. In addition, each
beneficiary can direct the ESOP to sell any or all of its common stock into the
public markets at any time; provided, however, that the ESOP will not on any day
sell in the public markets more than 20% of the number of shares of Common Stock
traded during the previous day. Management has estimated the liability for
future redemptions to be approximately $2.6 million.

Stock Option Plan

The WHX Corporation Stock Option Plan ("1991 Plan") is intended to
assist the Company in securing and retaining key employees by allowing them to
participate in the ownership and growth of the Company through the grant of
incentive and non-qualified options (collectively, the "Options") to full-time
employees of the Company and its subsidiaries. Incentive stock options granted
under the Option Plan are intended to be "Incentive Stock Options" as defined by
Section 422 of the Code.

An aggregate of 3,750,000 shares of Common Stock has been reserved
for issuance upon exercise of Options under the 1991 Plan, as amended. The 1991
Plan is administered by a committee (the "Committee") consisting of not less
than three nonemployee members appointed by the Board of Directors. The term of
Options granted under the 1991 Plan may not exceed 10 years (five years in the
case of an incentive Option granted to an optionee owning more than 10% of the
voting stock of the Company (a "10% Holder")). The Option price for Options
shall not be less than 100% of the "fair market value" of the shares of Common
Stock at the time the Option is granted; provided, however, that with respect to
an incentive option, in the case of a 10% Holder, the purchase price per share
shall be at least 110% of such fair market value. The aggregate fair market
value of the shares of Common Stock as to which an optionee may first exercise
incentive stock options in any calendar year may not exceed $100,000. Payment
for shares purchased upon exercise of Options is to be made in cash, but, at the
discretion of the Committee, may be made by delivery of other shares of Common
Stock of comparable value. Unless amended, the 1991 Plan will terminate on
September 24, 2001 and may be terminated at any time by the Board of Directors
prior to that date.

Directors Option Plans

The 1993 Directors D&O Plan (the "1993 D&O Plan") is authorized to
issue shares of Common Stock pursuant to the exercise of options with respect to
a maximum of 400,000 shares of Common Stock. The options vest over three years
from the date of grant. The 1997 Directors Stock Option Plan ("1997 D&O Plan")
is authorized to issue an additional 400,000 shares of Common Stock.

Option Grants to WPN Corp.

On July 29, 1993 (the "Approval Date"), the Board of Directors
approved the grant of options to WPN Corp. to purchase 1,000,000 shares of
Common Stock (the "Option Grants"). The Option Grants were approved by the
stockholders on March 31, 1994.

On August 4, 1997 the compensation committee of the Board of
Directors granted an option to purchase 1,000,000 shares of Common Stock to WPN
Corp, at the then market price per share, subject to stockholder approval. The
Board of Directors approved such grant on September 25, 1997, and the
stockholders approved it on December 1, 1997 (measurement date).

The options under each plan are exercisable with respect to
one-third of the shares of Common Stock issuable upon the exercise thereunder at
any time on or after the date of stockholder approval of the Option Grants. The
options with respect to an additional one-third of the shares of Common Stock
may be exercised on the first and second anniversaries of the Approval Date,
respectively. The options, to the extent not previously exercised, will expire
on April 29, 2003 and August 4, 2007, respectively.

The Company is required to record a charge for the fair value of
the 1997 option grants under SFAS 123. The fair value of the option grant is
estimated on the measurement date using the Black-Scholes option-pricing model.
The following assumptions were used in the Black-Scholes calculation: expected
volatility of 48.3%, risk-free interest rate of 5.83%, an expected life of 5
years and a dividend yield of zero. The resulting estimated fair value of the
shares granted in 1997 was $6.7 million which was recorded as part of the
special charge related to the new labor agreement.

A Summary of the Option Plans:

Number of Options
-----------------
1991 D & O WPN Option Price Weighted Average
Plan Plan Grants Or Range Option Price
---- ----- ------ -------- ------------

Balance 12/31/97............. 1,636,389 486,666 2,000,000 $11.342
Granted.................. 1,198,527 25,000 -- $10.00-16.625 15.516
Cancelled................ (309,989) -- -- 8.75-14.625 13.865
Exercised................ (160,890) -- -- 6.125-14.625 8.335
-------------- ------------ --------------
Balance 12/31/98............. 2,364,037 511,666 2,000,000 12.277
-------------- ------------ --------------
Granted.................. 484,500 25,000 -- 7.625-12.4375 9.192
Cancelled................ (108,610) -- -- 8.75-14.625 13.580
Exercised................ (10,650) -- -- 7.25-8.75 7.342
-------------- ------------ --------------
Balance 12/31/99............. 2,729,277 536,666 2,000,000 12.01
-------------- ------------ --------------
Granted.................. 250,000 25,000 - 6.85 6.85

Cancelled................ (131,441) - - $8.75-14.625 11.69

Exercised................ - - -
-------------- ------------ --------------

Balance 12/31/00. 2,847,836 561,666 2,000,000 $11.91
============== ============ ==============

Options outstanding at December 31, 2000 which are exercisable
totaled 4,456,193 and have a weighted average option price of $11.91. Options
outstanding at December 31, 2000 had a weighted-average remaining life of 5.5
years.

The Company adopted SFAS No. 123, and elected to continue to
account for such stock options, under the provisions of APB 25. Therefore, no
compensation costs have been recognized for the stock option plans in 1998, 1999
or 2000. Had the Company elected to account for stock-based compensation under
the provision of SFAS No. 123 during 1998, the effect on net income would have
been an additional expense of $2.1 million, net of related income tax benefit of
$1.1 million or $.11 per share of Common Stock after deduction of Preferred
Stock Dividends on a basic and diluted basis. Had the Company elected to account
for stock-based compensation under the provision of SFAS No. 123 during 1999,
the effect on net income would have been an additional expense of $2.9 million,
net of related income tax benefit of $1.6 million, or $.18 per share of common
stock after deduction of preferred stock dividends, on a basic and diluted
basis. The fair value of the option grants is estimated on the measurement date
using the Black-Scholes option-pricing model. The following weighted-average
assumptions were used in the Black-Scholes calculation: expected volatility of
40.6%, risk-free interest rate of 6.7%, an expected life of 5 years and a
dividend yield of zero. During 2000, the effect on net income would have been an
additional expense of $1.7 million, net of related tax benefit of $1.2 million
or $0.22 per share of common stock after deduction of preferred stock dividends
on a basic and diluted basis.

Earnings Per Share

The computation of basic earnings per common share is based upon
the average shares of Common Stock outstanding. In 1999 and 2000, the conversion
of redeemable common stock and exercise of options and warrants would have had
an anti-dilutive effect. The computation of earnings per common share--assuming
dilution in 1998 assumes conversion of redeemable common stock and exercise of
outstanding stock options. A reconciliation of the income and shares used in the
computation follows:

Reconciliation of Income and Shares in EPS calculation

For the Year Ended December 31, 2000
------------------------------------
Income (loss) Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ------
(Dollars and Shares in Thousands)

Loss before extraordinary item.....................$ (181,045)
Less: Preferred stock dividends.................... 20,607
-------------------
Basic EPS and Diluted EPS
Loss available to common stockholders..........$ (201,652) 14,304 $ (14.10)
===================- ========== ==========-

The assumed conversion of stock options, preferred stock and
redeemable common stock would have an anti- dilutive effect on earnings per
share.

For the Year Ended December 31, 1999
------------------------------------
Income (loss) Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ------
(Dollars and Shares in Thousands)

Loss before extraordinary item.......................$ (15,834)
Less: Preferred stock dividends...................... 20,608
-------------
Basic EPS and Diluted EPS
Loss available to common stockholders............$ (36,442) 15,866 $ (2.30)
============= ========== ===========

The assumed conversion of stock options, preferred stock and
redeemable common stock would have an anti- dilutive effect on earnings per
share.

For the Year Ended December 31, 1998
------------------------------------
Income Shares Per-Share
(Numerator) (Denominator) Amount
----------- ------------- ------
(Dollars and Shares in Thousands)

Income before extraordinary item.....................$ 39,430
Less: Preferred stock dividends...................... 20,608
-----------
Basic EPS
Income available to common stockholders.......... 18,822 18,198 $ 1.04
Effect of Dilutive Securities
Options and warrants............................. -- 566
Convertible preferred stock...................... -- --
Redeemable common stock.......................... -- 298
----------- -----------
Diluted EPS
Income available to common stockholders
plus assumed conversions.....................$ 18,822 19,062 $ .99
=========== =========== =========

The assumed conversion of preferred stock would have an
anti-dilutive effect on earnings per share.

Note J--Commitments and Contingencies

Handy & Harman

period June, 1995 to July 1998. H&H has entered into discussion with the United
States Attorney to seek a negotiated settlement of all criminal and civil
claims. Those discussions are ongoing. Strandflex is cooperating in the
investigation and has produced various documents, including testing data, sales
records and internal H&H correspondence. There are no known incidents of any
Strandflex wire failing and causing personal or property damages in any
application. Settlement discussions are continuing with the government. The
Company believes it is adequately reserved for this settlement. Annual sales of
this product were $209,185 in 1999 and $100,725 in 2000.

SEC Enforcement Action

The WHX Group General Litigation

The WPC Group General Litigation

Environmental Matters

WPC has been identified as a potentially responsible party under
the Comprehensive Environmental Response, Compensation and Liability Act
("CERCLA") or similar state statutes at several waste sites. The WPC Group is
subject to joint and several liability imposed by CERCLA on potentially
responsible parties. Due to the technical and regulatory complexity of remedial
activities and the difficulties attendant to identifying potentially responsible
parties and allocating or determining liability among them, the WPC Group is
unable to reasonably estimate the ultimate cost of compliance with CERCLA. The
WPC Group believes, based upon information currently available, that the WPC
Group's liability for clean up and remediation costs in connection with the
Buckeye Reclamation Landfill will be between $1.5 and $2 million. At several
other sites the WPC Group estimates costs to aggregate less than $1 million. The
WPC Group is currently funding its share of remediation costs.

The WPC Group, as are other industrial manufacturers, is subject to
increasingly stringent standards relating to the protection of the environment.
In order to facilitate compliance with these environmental standards, the WPC
Group has incurred capital expenditures for environmental control projects
aggregating $9.5 million, $7.7 million and $3 million for 1998, 1999, and 2000
respectively. The Company has previously projected spending approximately $26.9
million in the aggregate on major environmental compliance projects through the
year 2003, estimated to be spent as follows: $10.8 million in 2001, $11.3
million in 2002 and $4.8 million in 2003. However, due to the possibility of
unanticipated factual or regulatory developments and in light of limitations
imposed by the pending Chapter 11 cases, the amount and timing of future
expenditures may vary substantially from such estimates.

Due to the possibility of unanticipated factual or regulatory
developments, the amount of future expenditures may vary substantially from such
estimates.

Based upon information currently available, including the WPC
Group's prior capital expenditures, anticipated capital expenditures, consent
agreements negotiated with Federal and state agencies and information available
to the WPC Group on pending judicial and administrative proceedings, the WPC
Group does not expect its environmental compliance and liability costs,
including the incurrence of additional fines and penalties, if any, relating to
the operation of its facilities, to have a material adverse effect on the
financial condition or results of operations of the WPC Group. However, as
further information comes into the WPC Group's possession, it will continue to
reassess such evaluations.

To the extent that WPC is unable to fund its liabilities with
respect to its environmental obligations, WHX may be required to provide the
necessary funding.

Note K--Related Party Transactions

The Chairman of the Board of the Company is the president and sole
shareholder of WPN Corp. ("WPN"). Pursuant to a management agreement as amended,
and approved by a majority of the non-management directors of the Company, WPN
provides certain financial, management advisory and consulting services to the
Company. Such services include, among others, identification, evaluation and
negotiation of acquisitions, responsibility for financing matters for the
Company and its subsidiaries, review of annual and quarterly budgets,
supervision and administration, as appropriate, of all the Company's accounting
and financial functions and review and supervision of reporting obligations
under Federal and state securities laws. In exchange for such services, WPN
received a monthly fee of $520,833 in 1999 and 2000. In addition, in October
1999, the Board of Directors awarded WPN an additional bonus of $3.3 million in
recognition of the returns earned by WPN on behalf of the Company in its
management of the Company's cash and marketable securities. The management
agreement has a two year term and is renewable automatically for successive one
year periods, unless terminated by either party upon 60 days' prior written
notice of the renewal date.

In 1997, the stockholders approved a grant of an option to purchase
1,000,000 shares of Common Stock to WPN for their performance in obtaining a new
labor agreement. The options have an exercise price of $9.625. The options were
valued using the Black-Scholes formula at $6.7 million and recorded as a special
charge related to the labor contract.

The WPC Group is included in the Company's consolidated federal
income tax return. WHX and the WPC Group have entered into a tax sharing
agreement, dated July 26, 1994, which provides that the WPC Group would be paid
for any reduction in the combined consolidated federal income tax liability
resulting from the utilization or deemed utilization of deductions, losses and
credits whether from current or prior years which are attributable to WPC. In
the event the combined consolidated federal income tax liability is higher than
such liability would be excluding the tax attributes of WPC or its subsidiaries,
WPC would pay WHX the amount of such excess.

The WPC Group participates in the WHX defined benefit pension plan
and WHX has allocated to WPC a portion of the plan's annual cost. WHX will
continue to administer the pension plan and incur the annual pension cost
associated with the WPC Group related participants and intends to charge the WPC
Group for their portion of the total pension cost. As a result of the Bankruptcy
Filing, WHX may not recover all amounts charged to the WPC Group in future
periods.

On October 9, 2000 and November 14, 2000, WHX transferred precious
metal to WPC with a market value of $35.2 and a tax basis of a significantly
lower amount. Such proceeds were applied to the WHX net liability due to WPC. In
connection with the precious metal transfer, WPC agreed to amend the provisions
of the tax sharing agreement relating to the

utilization, by WHX of WPC's net operating losses in an amount equal to the tax
gain realized on the sale of such metals. WPC immediately sold the precious
metals in the open market and received proceeds of $35.2 million.

As discussed in Note A, WHX has guaranteed $30 million of the $35
million term-loan portion of WPC's debtor-in-possession financing.

See Note A for other related party disclosures.

Note L-- Other Income

Year Ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
(Dollars in Thousands)

Interest and investment income/(loss)...........$ (11,754) $ 26,499 $ 88,781
Equity income (loss)............................ 5,648 4,343 5,699
Receivables securitization fees................. (6,670) (5,876) (6,192)
Other, net...................................... (3,363) 1,454 1,408
------------------ ------------------ --------------------
$ (16,139) $ 26,420 $ 89,696
================== ================== ====================

Note M--Sale of Receivables

In 1994, a special purpose wholly-owned subsidiary of WPSC entered
into an agreement to sell (up to $75 million on a revolving basis) an undivided
percentage ownership in a designated pool of accounts receivable generated by
WPSC and two of the Company's subsidiaries: WCPI and PCC (the "Receivables
Facility"). In 1995, WPSC entered into an agreement to include the receivables
generated by Unimast in the pool of accounts receivable sold. In May 1999, the
Receivables Facility was extended through May 2003 and increased to $100 million
on a revolving basis. Effective June of 1999, Unimast withdrew from
participation in the facility. Accounts receivable at December 31, 1999 exclude
$100 million representing uncollected accounts receivable sold with recourse
limited to the extent of uncollectible balances. Fees paid by WPSC under this
Receivables Facility were based upon variable rates that range from 5.91% to
9.62%. On November 17, 2000 all obligations under the Receivables Facility were
repaid and the Receivables Facility was terminated.

Note N-- Information on Significant Joint Ventures

WPC owns 35.7% of Wheeling-Nisshin Inc. ("Wheeling-Nisshin").
Wheeling-Nisshin had total debt outstanding at December 31, 1999 of
approximately $4.1million. The debt was fully repaid in September 2000. WPC
derived approximately 10.9% and 16.2% of its revenues from sale of steel to
Wheeling-Nisshin in 2000 and 1999. WPC received dividends of $3.7 million and
$5.0 million annually from Wheeling-Nisshin in 2000 and 1999, respectively.
Audited financial statements of Wheeling-Nisshin are presented under Item 14
because it is considered a significant subsidiary of the Company under SEC
regulations.

WPC owns 50.0% of Ohio Coatings Company ("OCC"). OCC had totaled
debt outstanding at December 31, 2000 and 1999 of approximately $50.0 million
and $53.6 million, respectively. WPC derived approximately 9.2% of its revenues
from sale of steel to OCC in 2000 and 1999.

Note O-- Extraordinary Items

Year Ended December 31,
-----------------------
1999 1998
---- ----
(Dollars in Thousands)

Premium (discount) on early debt retirement...........$ (1,925) $ (4,779)
Unamortized debt issuance cost........................ 547 1,332
Coal retiree medical benefits......................... -- --
Income tax effect..................................... 482 1,206
------------------ --------------------
$ (896) $ (2,241)
================== ====================

In the first quarter of 1999, the Company purchased and retired
$20.5 million aggregate principal amount of 10 1/2% Senior Notes in the open
market resulting in a $0.9 million gain, net of tax.

In the third quarter of 1998, the Company purchased and retired $48
million aggregate principal amount of 10 1/2% Senior Notes in the open market
resulting in a $2.2 million gain, net of tax.

Note P --Supplemental WHX Parent Company Summarized Financial Information

As discussed in Note H, the H&H and Unimast Credit Agreements
contain covenants that restrict the distribution of cash or other assets to the
parent company WHX. The restricted net assets of H&H and Unimast included in the
consolidated net equity amount to $330 Million at December 31, 2000.

The following table sets forth summarized financial information for
the WHX Parent Company.

Year Ended December 31,
-----------------------
2000 1999 1998
---- ---- ----
(Dollars in Thousands)

Income Data
Other income (expense)..................................... $ (11,269) $ 31,502 $ 87,056
Equity in earnings (losses) of subsidiaries................ (159,389) (11,350) 4,771
Depreciation............................................... 1,515 989 1,583
SG&A....................................................... 5,081 5,883 5,843
Interest expense on debt................................... 30,635 30,855 26,385
---------------- ------------------ -------------------
Income (loss) before tax and extraordinary item............ $ (207,889) $ (17,575) $ 58,016
Tax provision (benefit).................................... (26,844) (1,735) 18,586
------------------ ------------------- --------------------
Income (loss) before extraordinary item.................... $ (181,045) $ (15,840) $ 39,430

Extraordinary Item (net of tax)............................ $ -- 896 2,241
---------------- ------------------ --------------------
Net income (loss).......................................... $ (181,045) $ (14,944) $ 41,671
================== ================== ====================

Balance Sheet Data
Assets
Current assets............................................. $ 140,486 $ 763,489 $ 800,947
Non-current assets......................................... $ 438,504 438,904 488,799
---------------- ------------------ --------------------
Total Assets........................................... $ 578,989 $ 1,202,393 $ 1,289,746
================= ================== ====================
Liabilities and Stockholders' Equity
Current liabilities........................................ $ 57,531 $ 508,402 $ 505,207
Non-current liabilities.................................... $ 346,462 316,520 338,027
Stockholder's equity....................................... $ 174,996 377,471 446,512
---------------- ------------------ --------------------
Total Liabilities and Stockholders' Equity............. $ 578,989 $ 1,202,393 $ 1,289,746
================= ================== ====================

Note Q--Reported Segments

The Company's reportable operating segments consist of the WPC
Group, H&H, Unimast and Other, each providing their own unique products and
services. Each of these segments are independently managed and require different
production technology and marketing and distribution channels. The accounting
policies of the segments are consistent with those of the Company, as discussed
in the summary of significant accounting policies.

For the periods presented, intersegment sales and transfers were
conducted as if the sales or transfers were to third parties, that is, at
prevailing market prices. Income taxes are allocated to the segments in
accordance with the Company's tax sharing agreements, which generally require
separate segment tax calculations. The benefit, if any, of WPC NOL carryforwards
are allocated to the WPC Group.

The table below presents information about reported segments and a
reconciliation of total segment sales to total consolidated sales for the years
ending December 31:

Segment Consolidated
2000 WPC(a) H&H (b) Unimast All Other Total Adjustments Total
- ---- ------ ------- ------- --------- ----- ----------- -----
(Dollars in thousands)
Revenue............................. $1,050,590 $468,846 $239,276 $ -- $ 1,758,712 $ (13,253) $ 1,745,459
Intersegment revenues............... 13,253 -- -- -- 13,253 -- 13,253
Net interest expense................ 34,051 18,597 2,939 30,635 86,222 -- 86,222
Depreciation and amortization....... 69,778 22,499 4,985 1,515 98,777 -- 98,777
Equity income (loss)................ 2,302 406 - 2,940 5,648 -- 5,648
Income taxes........................ 90,241 8,899 4,539 (30,079) 73,600 -- 73,600
Extraordinary Item.................. -- -- -- -- -- -- --
Segment net income (loss)........... (176,581) 7,206 6,965 (18,635) (181,045) -- (181,045)
Segment assets...................... 0 653,346 111,618 666,971 1,432,302 518,420 913,516
Investment in equity -
method subsidiaries............... -- 4,604 0 13,625 18,224 -- 18,229
Capital expenditures................ $ 95,134 $ 19,838 $ 13,572 $ 0 $ 128,544 $ -- $ 128,544
1999
Revenue (c)......................... $1,117,744 $468,339 $226,993 $ -- $ 1,813,076 $ (48,377) 1,764,699
Intersegment revenues............... 48,377 -- -- -- 48,377 -- 48,377
Net interest expense................ 37,931 17,755 1,900 30,855 88,441 (590) 87,851
Depreciation and amortization....... 77,724 22,190 3,953 989 104,856 -- 104,856
Equity income (loss)................ 3,358 1,302 -- (317) 4,343 -- 4,343
Income taxes........................ (20,723) 12,270 3,758 (1,735) (6,430) -- (6,430)
Extraordinary Item.................. -- -- -- 896 896 -- 896
Segment net income (loss)........... (34,485) 10,005 13,063 (4,064) (15,481) 543 (14,938)
Segment assets...................... 1,278,022 650,452 98,411 1,333,548 3,360,433 (686,867) 2,673,566
Investment in equity -
method subsidiaries............... 64,229 5,182 -- 11,079 80,490 -- 80,490
Capital expenditures................ $ 72,146 $ 16,981 $ 3,929 $ 10,979 $ 104,035 $ -- $ 104,035
1998
Revenue (c)......................... $1,145,837 $352,685 $214,097 $ -- $ 1,712,619 $ (21,773) $ 1,690,846
Intersegment revenues............... 21,773 -- -- -- 21,773 -- 21,773
Net interest expense................ 36,699 13,188 2,462 26,385 78,734 (638) 78,096
Depreciation and amortization....... 76,321 15,585 3,381 1,583 96,870 -- 96,870
Equity income (loss)................ 5,333 588 -- (222) 5,699 -- 5,699
Income taxes........................ (3,101) 7,271 630 18,586 23,386 -- 23,386
Extraordinary item.................. -- -- -- 2,241 2,241 -- 2,241
Segment net income (loss)........... (6,503) 4,785 6,582 36,900 41,764 (93) 41,671
Segment assets...................... 1,256,367 668,362 60,697 1,408,086 3,393,512 (681,428) 2,712,084
Investment in equity -
method subsidiaries............... 69,075 4,507 -- 11,396 84,978 -- 84,978
Capital expenditures................ $ 33,595 $ 10,701 $ 3,954 $ -- $ 48,250 $ -- $ 48,250

The following table presents revenue and long-lived asset
information by geographic area as of and for the years ended December 31:

Geographic Information

Revenues Long-lived Assets
-------- -----------------
2000(a) 1999 1998 2000(a) 1999 1998
------- ---- ---- ------- ---- ----

United States........... $ 1,711,191 $ 1,738,740 $ 1,642,179 $ 192,019 $ 878,692 $ 887,659
Foreign................. 34,268 25,959 48,667 14,025 18,299 16,396
----------- ----------- ----------- --------- --------- ---------
$ 1,745,459 $ 1,764,699 $ 1,690,846 $ 206,044 $ 896,991 $ 904,055

Foreign revenue is based on the country in which the legal
subsidiary is domiciled. Revenue from no single foreign country was material to
the consolidated revenues of the Company.

(a) Year 2000 information for WPC includes income statement and capital
expenditure related information for the period January 1, through
November 16; balance sheet information has not been included due to
the deconsolidation of WPC as of November 16, 2000.

(b) Handy & Harman income statement and capital expenditure information
for 1998 are for the period April 13, 1998 through December 31, 1998.

(c) Revenue amounts have been restated for 1999 and 1998 as a result of
the implementation of EITF 00-10 Accounting for Shipping and Handling
Fees and Costs. (see Accounting Policies footnote.) The restatement
had the effect of increasing the Revenue amount for WPC by $36,087 and
$34,296 and for H&H by $2,224 and $2,399 for 1999 and 1998, and for
Unimast by $9,589 and $8,653 for 1999 and 1998, respectively.

Note R--Acquisition of Handy & Harman and Other

The fair value of the assets acquired and liabilities assumed in
acquisitions are as follows:

1999 1998
---- ----
Other Handy & Harman Other
(Dollars in Thousands)

Current assets................................. $ 2,145 $ 269,374 $ 2,188
Property, plant & equipment.................... 1,722 124,148 503
Other long-term assets......................... -- 155,426 --
Goodwill....................................... 9,627 291,931 10,121
Current liabilities............................ (667) (120,790) (157)
Debt........................................... -- (229,600) (4,320)
Other long-term liabilities.................... -- (74,635) --
--------------- -------------- ------------
Purchase price, net of cash acquired........... $ 12,827 $ 415,854 $ 8,335
=============== ============== ============

Note S--Quarterly Information (Unaudited)

Financial results by quarter for the two fiscal years ended
December 31, 2000 and 1999 are as follows:

Basic
Earnings Basic Diluted
(Loss) Earnings Earnings
Per Share (Loss) (Loss)
Gross Extra- Net Before Per Share Per Share
Net Profit ordinary Income Extraordinary On Net On Net
Sales (b) (Loss) Income (Loss) Items Income Income
--------- ------ ------ ------ ----- ------ ------
(Dollars, Except Per Share, in Thousands)
2000:
1st Quarter ...... $ 468,091 $ 80,859 $ 0 $ (6,699) $ (0.84) $ (0.84) $ (0.84)
2nd Quarter ...... 487,217 81,728 0 36,262(c) 2.19 2.19 1.17
3rd Quarter ...... 461,101 58,397 0 (21,115) (1.84) (1.84) (1.94)
4th Quarter (a)... 329,051 15,083 (189,492)(d) (13.55) (13.55) (6.09)
1999:
1st Quarter ...... $ 407,999 $ 46,684 $ 896 $ (35,596) $ (2.45) $ (2.40) $ (2.40)
2nd Quarter ...... 425,328 77,008 -- 15,432 .62 .62 .46
3rd Quarter ...... 460,095 77,972 -- 11,109 .38 .38 .34
4th Quarter ...... 471,277 79,974 -- (5,883) (.78) (.78) (.78)

(a) Includes results of the WPC Group for the period October 1, 2000
through November 16, 2000.
(b) Net sales amounts for 1999 have been restated to properly classify
revenues for shipping and handling pursuant to EITF Number 00-10.
Such restatement had the effect of increasing net sales by $11,074,
$11,545, $12,488 and $12,792 for the respective quarters of 1999.
(c) Includes $38,000 relating to the reversal of prior year provisions
for taxes no longer required.
(d) Includes $133,800 tax charge relating to the recognition of a
valuation allowance of the net deferred tax assets of WPC.

Diluted loss per share would be the same as basic loss per share in loss
quarters because conversion of stock options, convertible Series A and Series B
Preferred Stock or redeemable Common Stock would be anti-dilutive.

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosures

NOT APPLICABLE.

PART III

Item 10. Directors and Executive Officers of the Registrant

The Company's Certificate of Incorporation and Bylaws provide for
the classification of the Board of Directors into three classes. The term of the
three Class II Directors expires at the 2001 Annual Meeting of Stockholders of
the Company, the term of the three Class III Directors expires at the 2002
Annual Meeting of Stockholders of the Company and the term of the two Class I
Directors expires at the 2003 Annual Meeting of Stockholders of the Company.

The following sets for certain information concerning them are set
forth with respect to the Directors of the Company:

Principal Occupation First Year
Class of for the Past Five Years Became
Name Director and Current Public Directorships Age a Director(1)
- ---- -------- ------------------------------------- --- -------------
Neil D. Arnold III Director. Private Investor since May 52 1992
1999. Group Finance Director of Lucas
Varity plc from December 1996 to May
1999, and Executive Vice President -
Corporate Development from September
1996 to December 1996; Senior Vice
President and Chief Financial Officer
of Varity Corporation from July 1990
to September 1996. Lucas Varity plc
designs, manufactures and supplies
advanced technology systems, products
and services in the world's
automotive and aerospace industries.

Paul W. Bucha II Director. Consultant to the Company 57 1993
since December 2000. President,
B,L,H&J, Inc. an international
consulting firm since November 2000
and from July 1991 to April 1998;
Chairman of the Board of
Wheeling-Pittsburgh Steel Corporation
from April 1998 to November 2000;
President, Paul W. Bucha & Company,
Inc., an international marketing
consulting firm from 1979 to April
1999 and since November 2000;
Chairman and Chief Executive Officer
of Delta Defense from October 1997 to
April 1998. President, Congressional
Medal of Honor Society of U.S. from
September 1995 to November 1999.

Robert A. Davidow III Director and Vice Chairman of the 58 1992
Board. Private investor since January
1990. Director of Arden Group, Inc.,
a supermarket holding company.

William Goldsmith I Director. Management and Marketing 82 1987
Consultant since 1984. Chairman of
Nucon Energy Corp. since 1997 and
TMP, Inc. from January 1991 to 1993.
Chairman and Chief Executive Officer
of Overspin Golf Corp. since 1993.
Chairman and Chief Executive Officer
of Fiber Fuel International, Inc.,
from 1994 to 1997. Life Trustee to
Carnegie Mellon University since
1980.

Ronald LaBow III Chairman of the Board. President of 65 1991
Stonehill Investment Corp. since
February 1990. Director of Regency
Equities Corp., a real estate
company, and an officer and director
of WPN Corp., a financial consulting
company.

Robert D. LeBlanc I Director. Executive Vice President of 51 1999
the Company since April 1998.
President and Chief Executive Officer
of Handy & Harman ("H&H") since April
1998. (H&H was acquired by the
Company in April 1998). President,
Chief Operating Officer and Director
of H&H from July 1997 to April 1998.
Executive Vice President of H&H from
November 1996 to July 1997. Executive
Vice President of Elf Atochem North
America, Inc. from January 1994 to
November 1996. Director of Church &
Dwight Co., Inc., a consumer products
and specialty chemical company, since
July 1998.

Marvin L. Olshan II Director. Secretary of the Company 72 1991
since 1991. Partner, Olshan Grundman
Frome Rosenzweig & Wolosky LLP, since
1956.

Raymond S. Troubh II Director. Financial Consultant for in 74 1992
excess of past five years. Mr. Troubh
is also a director of ARIAD
Pharmaceuticals, Inc., Diamond
Offshore Drilling, Inc., General
American Investors Company, Gentiva
Health Services, Inc., a health
services business, Health Net, Inc.,
a managed health care company,
Starwood Hotels & Resorts, and Triarc
Companies, Inc., restaurants and soft
drinks. Trustee of Corporate
Renaissance Group Liquidating Trust,
Microcap Liquidating Trust and Petrie
Stores Liquidating Trust.

(1) The Company and its subsidiaries were reorganized into a new holding
company structure ("Corporate Reorganization") on July 26, 1994.
Prior to the Corporate Reorganization, all directors of the Company
who were directors at the time of the Corporate Reorganization were
directors of Wheeling-Pittsburgh Corporation.

Meetings and Committees

The Board of Directors met on 9 occasions and took action by
unanimous written consent on 1 occasion during the fiscal year ended December
31, 2000. There are five Committees of the Board of Directors: the Executive
Committee, the Audit Committee, the Compensation Committee, the Nominating
Committee and the Stock Option Committee (for the 1991 Stock Option Plan). The
members of the Executive Committee are Ronald LaBow, Robert A. Davidow, Marvin
L. Olshan, Raymond S. Troubh and Neil D. Arnold. The Executive Committee took
action by unanimous written consent on 3 occasions during the fiscal year ended
December 31, 2000. The Executive Committee possesses and exercises all the power
and authority of the Board of Directors in the management and direction of the
business and affairs of the Company except as limited by law and except for the
power to change the membership or to fill vacancies on the Board of Directors or
the Executive Committee. The members of the Audit Committee are Neil D. Arnold,
Robert A. Davidow and Raymond S. Troubh. The Audit Committee met on 4 occasions
during the fiscal year ended December 31, 2000. The primary purpose of the Audit
Committee is to assist the Board of Directors in fulfilling its responsibility
to oversee the Company's financial reporting activities. The Audit Committee
annually recommends to the Board of Directors independent public accountants to
serve as auditors of the Company's books, records and accounts, reviews the
scope of the audits performed by such auditors and the audit reports prepared by
them, reviews and monitors the Company's internal accounting procedures and
monitors compliance with the Company's Code of Ethics Policy and Conflict of
Interest Policy. The members of the Compensation Committee are Robert A.
Davidow, William Goldsmith and Marvin L. Olshan. The Compensation Committee met
on 4 occasions and took action by unanimous written consent on 1 occasion during
the fiscal year ended December 31, 2000. The Compensation Committee reviews
compensation arrangements and personnel matters. The members of the Nominating
Committee are Ronald LaBow, Marvin L. Olshan, Paul W. Bucha and Robert A.
Davidow. The Nominating Committee recommends nominees to the Board of Directors
of the Company. The members of the Stock Option Committee are Raymond S. Troubh
and Robert A. Davidow. The Stock Option Committee administers the granting of
stock options under the 1991 Option Plan. The Stock Option Committee took action
by unanimous written consent on 2 occasions during the fiscal year ended
December 31, 2000.

Directors of the Company who are not employees of the Company or its
subsidiaries are entitled to receive compensation for serving as directors in
the amount of $40,000 per annum and $1,000 per Board Meeting, $800 per Committee
Meeting attended in person and $500 per telephonic meeting other than the Stock
Option Committee, and $1,000 per day of consultation and other services provided
other than at meetings of the Board or Committees thereof, at the request of the
Chairman of the Board. Committee Chairmen also receive an additional annual fee
of $1,800. Directors of the Company (other than the Chairman of the Board or
directors who are employees of the Company or its subsidiaries) also receive
options to purchase 8,000 shares of Common Stock per annum on the date of each
annual meeting of Stockholders up to a maximum of 40,000 shares of Common Stock
pursuant to the Company's 1993 Directors and Non-Employee Officers Stock Option
Plan (the "1993 Plan"). All directors of the Company permitted to participate in
the 1993 Plan have received the maximum number of shares permitted to be issued
thereunder. In addition, directors of the Company (other than the Chairman of
the Board or directors who are employees of the Company or its subsidiaries)
also received options to purchase 25,000 shares of Common Stock on December 1,
1997 and receive options to purchase 5,000 shares of Common Stock per annum on
the date of each annual meeting of Stockholders (commencing with the 1998 Annual
Meeting of Stockholders) up to a maximum of 40,000 shares of Common Stock
pursuant to the Company's 1997 Directors Stock Option Plan (the "1997 Plan").
All directors of the Company permitted to participate in the 1997 Plan have
received the maximum number of shares permitted to be issued thereunder.

Pursuant to a management agreement effective as of January 3, 1991,
as amended (the "Management Agreement"), approved by a majority of the Company's
disinterested directors of the Company, WPN Corp. ("WPN"), of which Ronald
LaBow, the Chairman of the Board of the Company, is the sole stockholder and an
officer and director, provides financial, management, advisory and consulting
services to the Company, subject to the supervision and control of the Company's
disinterested directors. The Management Agreement has a two year term and is
renewable automatically for successive two year periods, unless terminated by
either party upon 60 days' notice prior to the renewal date. In 2000, WPN
received a monthly fee of $520,833.33. WPN Corp. also receives certain benefits
from financial intermediaries which it transacts business with on behalf of the
Company in the form of research materials and services, which are used by WPN
Corp. on behalf of the Company and in connection with its other activities. For
the fiscal year 2000, the amount of such reimbursement was approximately
$75,000. The Company believes that the cost of obtaining the type and quality of
services rendered by WPN under the Management Agreement is no less favorable
than that at which the Company could obtain such services from unaffiliated
entities. See "Item 11. Management Remuneration -- Executive Compensation --
Management Agreement with WPN."

Executive Officers of the Company

The following table contains the names, positions and ages of the
executive officers of the Company who are not directors.

Principal Occupation for the Past
Name Five Years and Current Public Directorships Age
- ---- ------------------------------------------- ---

James G. Bradley Executive Vice President. President and Chief 55
Executive Officer of WPSC since April 1998.
President and Chief Operating Officer of Koppel
Steel Company from October 1997 to April 1998.
Vice President of WHX from October 1995 to
October 1997; Executive Vice
President-Operations of WPSC from October 1995
to October 1997; Vice President-Operations of
International Mill Service from May 1992 to
October 1995. Director of WesBanco, Inc. since
August 1998.

Paul J. Mooney Vice President. Vice President of the Company 49
and Executive Vice President and Chief Financial
Officer of WPC and WPSC since October 1997.
National Director of Cross Border Filing
Services with the Accounting, Auditing and SEC
Services department of PricewaterhouseCoopers
LLP from July 1996 to November 1997. Accounting
and Business Advisory Services
Department--Pittsburgh Site Leader of
PricewaterhouseCoopers LLP from 1988 until June
1996. Client Service and Engagement Partner of
PricewaterhouseCoopers LLP from 1985 until
November 1997.

Howard Mileaf Vice President -- General Counsel. Vice 64
President -- General Counsel of the Company
since May 1998; Vice President -- Special
Counsel of the Company from April 1993 to April
1998. Trustee/Director of Neuberger Berman
Equity Mutual Funds, since 1984. Arnold Nance
Vice President -- Finance. Vice President -
Finance since April 1998. Vice President of 44
Development and Planning of Handy & Harman since
May 1998. Special Assistant to the Chairman of
the Board of Directors from November 1995 to
April 1998. Vice President of
Wheeling-Pittsburgh Radio Corporation from July
1993 to November 1995.

Arnold Nance Vice President -- Finance. Vice President - 44
Finance since April 1998. Vice President of
Development and Planning of Handy & Harman since
May 1998. Special Assistant to the Chairman of
the Board of Directors from November 1995 to
April 1998. Vice President of
Wheeling-Pittsburgh Radio Corporation from July
1993 to November 1995.

Item 11. Management Remuneration

EXECUTIVE COMPENSATION

Summary Compensation Table. The following table sets forth, for the
fiscal years indicated, all compensation awarded to, paid to or earned by the
following type of executive officers for the fiscal years ended 1998, 1999 and
2000: (i) individuals who served as, or acted in the capacity of, the Company's
chief executive officer for the fiscal year ended December 31, 2000 (Messrs.
Bradley and LeBlanc currently serve as Co-Principal Executive Officers, with Mr.
Bradley having primary responsibility for the operations of WPSC and Mr. LeBlanc
having primary responsibility for the operations of H&H); and (ii) the Company's
other most highly compensated executive officers, which together with the
Co-Principal Executive Officers are the five most highly compensated officers of
the Company whose salary and bonus exceeded $100,000 with respect to the fiscal

year ended December 31, 2000 and who were employed at the end of fiscal year
2000. Please note that Messrs. LeBlanc and Bradley and the executive officers
identified in (ii) above are collectively referred to as the "Named Executive
Officers."

Summary Compensation Table
Long Term
Name and Principal Position Annual Compensation Compensation
--------------------------- ------------------- ------------

Other Annual Securities All Other
Salary Bonus Compensation Underlying Compensation
Year ($) ($)(1) ($)(2) Options (#) ($)(3)
---- ------ ------ ------------ ---------- -------------

James G. Bradley ............. 2000 400,000 -- -- -- 12,350
Executive Vice President(4) .. 1999 400,000 125,000 -- -- 10,767
1998 277,436 150,000 46,445(5) 260,000 10,767

Robert D. LeBlanc ............ 2000 433,500 175,000 -- -- 2,496(7)
Executive Vice President (6) . 1999 410,774 300,000 -- -- 1,640(7)
1998 298,469 150,000 -- 260,000 121,043(8)

Arnold Nance ................. 2000 364,525 75,000 -- 10,000 8,628(9)
Vice President-Finance ....... 1999 355,654 150,000 -- -- 8,718(10)
1998 282,154 105,000 42,172(11) 100,000 7,308

Howard A. Mileaf ............. 2000 120,000 480,000 -- -- 15,300
Vice President-General Counsel 1999 120,000 500,000 -- -- 15,300
1998 120,000 1,080,000 -- -- 14,623

Paul Mooney .................. 2000 275,000 35,000 -- -- 35,996(12)
Vice President ............... 1999 275,000 30,000(13) -- -- 35,033(12)
1998 256,250 90,000(13) 44,282(14) -- 36,992(15)

- ------------------
(1) Mr. Mileaf was granted a bonus during 2000, 1999 and 1998 for his
performance relative to an insurance company settlements, as a
result of which the Company received gross proceeds of in excess of
an aggregate of approximately $38 million. Messrs. LeBlanc and Nance
were granted bonuses pursuant to the H&H Management Incentive Plan.
Messrs. LeBlanc, Nance and Mooney were granted bonuses in 2000 and
1999 for services performed in the prior year. Mr. Bradley was
granted a bonus in 2000 for services performed in the prior year.
All bonus amounts have been attributed to the year in which the
services were performed.
(2) Excludes perquisites and other personal benefits unless the
aggregate amount of such compensation exceeds the lesser of either
$50,000 or 10% of the total of annual salary and bonus reported for
such Named Executive Officer.
(3) Amounts shown, unless otherwise noted, reflect employer
contributions to pension plans.
(4) Effective April 23, 1998, Mr. Bradley returned as President and
Chief Executive Officer.
(5) Includes membership dues of $31,355.
(6) Mr. LeBlanc's employment with the Company commenced April 1998 as a
result of the Handy & Harman acquisition.
(7) Represents insurance premiums paid by the Company.
(8) Includes the value of awards under the H&H Long-Term Incentive Plan
aggregating $120,097, half of which vested in February 1999 and half
of which vested in January 2000, and insurance premiums of $946 the
Company paid in 1998.
(9) Includes insurance premiums paid by the Company in 2000 of $928.
(10) Includes insurance premiums paid by the Company in 1999 of $1,018.
(11) Includes relocation allowance of $40,411.
(12) Includes insurance premiums paid by the Company in 2000 and 1999 of
$25,000.
(13) Represents payments made pursuant to Mr. Mooney's employment
agreement.
(14) Includes membership dues of $36,233.
(15) Includes insurance premiums paid by the Company in 1998 of $28,125.

Option Grants Table. The following table sets forth certain
information regarding stock option grants made to each of the Named Executive
Officers during the fiscal year ended December 31, 2000.

Option Grants in Last Fiscal Year

Potential Realizable
Value at Assumed Annual
Rates of Stock Price
Appreciation for
Individual Grants Option Term
----------------------------------- ------------

% of Total
Options
Number of Securities Granted to Exercise
Underlying Options Employees in Price Expiration
Name Granted (#) (1) Fiscal Year ($/Sh) Date 5%($) 10%($)
---- --------------- ----------- ------ ---- ----- ------

Arnold Nance .......... 10,000 3.7% $ 6.875 2/9/10 43,236 109,570

(1) All options were granted under the Company's 1991 Incentive and
Nonqualified Stock Option Plan and vest ratably over a three-year
period. This period commenced February 9, 2000.

Aggregated Option Exercises in Last Fiscal Year
and Fiscal Year-End Option Values

The following table sets forth certain information
concerning unexercised stock options held by the Named Executive Officers as of
December 31, 2000.

Number of Securities Underlying Value of Unexercised In-the-
Unexercised Options at 2000 Fiscal Money Options at 2000 Fiscal
Year-End(#) Year-End($)(1)
Name Exercisable/Unexercisable Exercisable/ Unexercisable
- ---- ------------------------- --------------------------
James G. Bradley.............. 260,000/0 0/0
Robert D. LeBlanc............. 260,000/0 0/0
Arnold Nance.................. 103,333/6,667 0/0
Howard A. Mileaf.............. 25,000/0 0/0
Paul Mooney .................. 40,000/0 0/0

(1) On December 29, 2000, the last reported sales price of the Common
Stock as reported on the New York Stock Exchange Composite Tape was
$0.75.

Long-Term Incentive and Pension Plans. Other than as described
below, the Company does not have any long-term incentive or defined benefit
pension plans.

In January 1999, H&H amended and restated its Long Term Incentive
Plan ("LTIP"), in which the final cycle had been terminated on December 31,
1998. The current LTIP is a performance-based plan pursuant to which executives
of H&H earn the right to receive awards based on the achievement of
pre-established financial performance and other goals. The amended LTIP
established overlapping cycles with each cycle encompassing five fiscal years,
commencing on January 1, 1999. LTIP participants are selected by H&H's Chief
Executive Officer and the Compensation Committee of the Board of Directors of
the Company. Messrs. LeBlanc and Nance are the only Named Executive Officers who
are participants in the Amended and Restated LTIP.

H&H maintains the Supplemental Executive Retirement Plan ("SERP") to
provide executive officers the amount of reduction in their formula pension
benefits under the Handy & Harman Pension Plan on account of the limitation on
pay under Section 401(a)(17) of the Internal Revenue Code ("IRC") and the
limitation on benefits under Section 415 of the IRC. The SERP also applies the
Handy & Harman Pension Plan formula to the Career Average Pay

after including 100 percent of the amounts received under the Handy & Harman
Management Incentive Plan. Amounts received under the SERP are not subject to
Cost of Living increases.

The following Table shows the projected Annual Retirement Benefits,
payable on the basis of ten years of certain payments and thereafter for life,
to each of the individuals listed in the Summary Compensation Table at age 65
assuming continuation of employment until age 65. The amounts shown under Salary
reflect the December 31, 2000 rate of salary paid by H&H as plan compensation of
Messrs. LeBlanc and Nance of $433,500 and $227,500, respectively, and include
the benefits payable under both the Handy & Harman Pension Plan and the SERP.
The amount of benefits shown under Bonus would be payable under the SERP and
assumes continuation of the amount of Bonus received for 2000.

Executive Pension Benefits

Normal Retirement Annual Retirement Benefits From:
Name Date (NRD) Service at NRD Salary Bonus Total
- ---- ---------- -------------- ------ ----- -----
R.D. LeBlanc July 1, 2014 17 yrs. 8 mos. $148,547 $ 65,442 $213,989

A.G. Nance January 1, 2022 28 yrs. 6 mos. 111,706 38,125 149,831

In 1998 WPC established a supplemental defined benefit plan covering
WPC salaried employees employed as of January 31, 1998 which provides a
guaranteed minimum benefit based on years of service and compensation. The gross
benefit from this plan is offset by the annuitized value of the defined
contribution plan account balance and any benefits payable from the Pension
Benefit Guaranty Corporation from the previously terminated defined benefit
pension plan. None of the Named Executive Officers are entitled to any benefits
under such plan.

Deferred Compensation Agreements. Except as described in the next
paragraph with respect to the employment agreements of Messrs. Bradley, LeBlanc
and Nance, no plan or arrangement exists which results in compensation to a
Named Executive Officer in excess of $100,000 upon such officer's future
termination of employment or upon a change-of-control.

Employment Agreements. Mr. Robert D. LeBlanc became Executive Vice
President of the Company pursuant to a three-year employment agreement dated as
of April 7, 1998, which will be automatically extended for successive two-year
periods unless earlier terminated pursuant to the provisions of such agreement.
The agreement provides for an annual salary to Mr. LeBlanc of no less than
$400,000 and an annual bonus to be awarded at the Company's sole discretion. Mr.
LeBlanc was granted bonuses of $175,000 and $300,000 in 2001 and 2000,
respectively, for services performed in 2000 and 1999. In the event that Mr.
LeBlanc's employment is terminated by the Company other than with cause, he will
receive a payment of two year's salary at the highest rate in effect for the
twelve preceding months plus two times his average bonus during the last three
preceding years.

Mr. James G. Bradley became President and Chief Executive Officer of
WPSC and Executive Vice President of the Company pursuant to a three-year
employment agreement dated as of April 23, 1998, which will be automatically
extended for successive three-year periods unless earlier terminated pursuant to
the provisions of such agreement. The agreement provides for an annual salary to
Mr. Bradley of $400,000 and an annual bonus to be awarded at the Company's sole
discretion. Mr. Bradley was granted a bonus of $125,000 in 2000 for services
performed in 1999. In the event that Mr. Bradley's employment is terminated by
the Company other than with cause, he will receive a payment of $1,200,000.

Mr. Arnold Nance became Vice President, Planning and Development of
H&H pursuant to a one-year employment agreement with H&H dated as of May 1,
1998, which was amended as of December 21, 1998 and which will automatically be
extended for successive one-year periods unless earlier terminated pursuant to
the provisions of such agreement. The agreement provides for an annual salary to
Mr. Nance of no less than $210,000 and an annual bonus to be awarded at the
Company's sole discretion. Mr. Nance was granted bonuses of $75,000 and $150,000
in 2001 and 2000, respectively, for services performed in 2000 and 1999. In the
event that Mr. Nance's employment is terminated by the Company other than with
cause, he will receive a payment of one year's salary at the highest rate in
effect during the 12 preceding months.

Report on Repricing of Options. None of the stock options granted
under any of the Company's plans were repriced in the fiscal year ended 2000.

Compensation Committee Interlock and Insider Participation. Messrs.
Davidow, Goldsmith and Olshan each served as a member of the Compensation
Committee of the Board of Directors during the fiscal year ended December 31,
2000. Mr. Olshan is a member of Olshan Grundman Frome Rosenzweig & Wolosky LLP,
which the Company has retained as outside general counsel since January 1991.
The Company has paid such firm approximately $524,584 during the fiscal year
ended December 31, 2000.

Management Agreement with WPN Corp. Pursuant to the Management
Agreement, approved by a majority of the Company's disinterested directors, WPN,
of which Ronald LaBow, the Chairman of the Board of the Company, is the sole
stockholder and an officer and director, provides financial, management,
advisory and consulting services to the Company, subject to the supervision and
control of the disinterested directors. Such services include, among others,
identification, evaluation and negotiation of acquisitions, responsibility for
financing matters, review of annual and quarterly budgets, supervision and
administration, as appropriate, of all the Company's accounting and financial
functions and review and supervision of the Company's reporting obligations
under Federal and state securities laws. For fiscal year 2000 and 1999, WPN
received a monthly fee of $520,833.33. In 1998, WPN received a monthly fee of
$458,333.33 from January 1 until April 13 and $520,833.33 from April 14 until
December 31. In addition, in October 1999 the Board of Directors also awarded a
$3,280,000 bonus to WPN and in September 1998 the Board of Directors awarded WPN
a bonus of $3,750,000, each in recognition of the extraordinary returns earned
by WPN on behalf of the Company in its management of the Company's cash and
marketable securities. In August 1997, the Company granted WPN options to
acquire 1,000,000 shares of Common Stock. Such options are held by WPN as
nominee for Ronald LaBow, Stewart E. Tabin and Neale X. Trangucci, each of whom
is an officer of WPN, and has the right to acquire 600,000, 200,000 and 200,000
shares, respectively, of Common Stock. WPN additionally beneficially owns
options to purchase 982,500 shares of Common Stock. The weighted average
exercise price of all such options is $10.23. None of these options were
exercised in 2000. The Company provides indemnification for WPN's employees,
officers and directors against any liability, obligation or loss resulting from
their actions pursuant to the Management Agreement. The Management Agreement has
a two year term and is renewable automatically for successive two year periods,
unless terminated by either party upon 60 days' notice prior to the renewal
date. WPN Corp. also receives certain benefits from financial intermediaries
which it transacts business with on behalf of the Company in the form of
research materials and services, which are used by WPN Corp. on behalf of the
Company and in connection with its other activities. For the fiscal year 2000,
the amount of such reimbursement was approximately $75,000. WPN has not derived
any other income and has not received reimbursement of any of its expenses
(other than health benefits and standard directors' fees) from the Company in
connection with the performance of services described above. The Company
believes that the cost of obtaining the type and quality of services rendered by
WPN under the Management Agreement is no less favorable than the cost at which
the Company could obtain from unaffiliated entities.

Item 12. Security Ownership of Certain Beneficial Owners and Management

The following table sets forth information concerning ownership of
the Common Stock of WHX Corporation outstanding at April 2, 2001, by (i) each
person known by the Company to be the beneficial owner of more than five percent
of its Common Stock, (ii) each director, (iii) each of the executive officers
named in the summary compensation table and (iv) by all directors and executive
officers of the Company as a group. Unless otherwise indicated, each stockholder
has sole voting power and sole dispositive power with respect to the indicated
shares.

Shares Beneficially Percentage
Name and Address of Beneficial Owner(1) Owned of Class(2)
--------------------------------------- ----- -----------

Deutsche Bank A.G. (3)
Taunusanlage 12, D-60325
Frankfurt am Main, Federal Republic of Germany 3,936,018 21.0%

Founders Financial Group, L.P. (4)
53 Forest Avenue
Old Greenwich, Connecticut 06870 1,034,706 6.9%

WPN Corp. (5)
110 E. 59th Street
New York, New York 10022 1,694,150 10.3%

Donald Smith & Co., Inc. (6)
East 80, Route 4, Suite 360
Paramus, New Jersey 07652 830,000 5.6%

Dimensional Fund Advisors Inc. (7)
1299 Ocean Avenue, 11th Floor
Santa Monica, California 90401 1,371,625 9.2%

Gabelli Funds, LLC (8)
One Corporate Center,
Rye, New York 10580 1,827,881 11.8%

Alliance Capital Management L.P. (9)
1290 Avenue of the Americas
New York, New York 10104 1,162,100 7.8%

Dewey Square Investors Corporation (10)
One Financial Center
Boston, Massachusetts 02111 866,419 5.8%

Ronald LaBow 1,694,150(5) 10.3%

Neil D. Arnold 70,000(11) *

Paul W. Bucha 115,000(11) *

Robert A. Davidow 112,035(12) *

William Goldsmith 70,000(11) *

Robert D. LeBlanc 290,090(13) 1.9%

Marvin L. Olshan 71,000(12) *

Raymond S. Troubh 72,000(12) *

James G. Bradley 261,654(14) 1.7%

Howard A. Mileaf 27,000(15) *

Arnold Nance 109,158(16) *

All Directors and Executive Officers as a Group
(12 persons) 2,982,087(17) 16.9%

- --------------------------
* less than one percent.

(1) Each director and executive officer has sole voting power and sole
dispositive power with respect to all shares beneficially owned by
him unless otherwise indicated.
(2) Based upon shares of Common Stock outstanding at April 2, 2001 of
14,920,182 shares.
(3) Based on a Schedule 13G filed in February 2001, Deutsche Bank A.G.
beneficially owns 687,220 shares of Series A Convertible Preferred
Stock and 666,460 shares of Series B Convertible Preferred Stock
convertible into 2,177,525 and 1,633,493 shares of Common Stock,
respectively, and 125,000 shares of Common Stock.
(4) Based on a Schedule 13G/A filed in February 2000, Founders Financial
Group, L.P, Forest Investment Management LLC/ADV, Michael A. Boyd,
Inc. and Michael A. Boyd collectively beneficially hold 1,034,706
shares of Common Stock.

(5) Based on a Schedule 13D filed jointly in December 1997 by WPN Corp.,
Ronald LaBow, Stewart E. Tabin and Neale X. Trangucci. Includes
1,582,500 shares of Common Stock issuable upon exercise of options
within 60 days hereof. Ronald LaBow, the Company's Chairman, is the
sole stockholder of WPN Corp. Consequently, Mr. LaBow may be deemed
to be the beneficial owner of all shares of Common Stock owned by
WPN Corp. Mr. LaBow disclaims beneficial ownership of the options to
purchase 400,000 shares of Common Stock held by WPN Corp. as nominee
for Messrs. Tabin and Trangucci, all of which are exercisable within
60 days hereof. Messrs. Tabin and Trangucci are officers and
directors of WPN Corp. and disclaim beneficial ownership of all
shares of Common Stock owned by WPN Corp., except for options to
purchase such 400,000 shares of Common Stock held by WPN Corp. as
nominee for Messrs. Tabin and Trangucci. Each of Messrs. Tabin and
Trangucci holds options, exercisable within 60 days hereof, to
purchase 435,000 shares of Common Stock.
(6) Based on Schedule 13G filed in February 2001, Donald Smith & Co.,
Inc. beneficially holds 830,000 shares of Common Stock.
(7) Dimensional Fund Advisors, Inc. ("Dimensional"), an investment
advisor registered under Section 203 of the Investment Advisors Act
of 1940, furnishes investment advice to four investment companies
registered under the Investment Company Act of 1940, and serves as
investment manager to certain other investment vehicles, including
commingled group trusts. (These investment companies and investment
vehicles are the "Portfolios"). In its role as investment advisor
and investment manager, Dimensional possessed both investment voting
power over 1,317,625 shares of WHX Corporation stock as of December
31, 2000. The Portfolios own all securities reported in this
statement, and Dimensional disclaims beneficial ownership of such
securities.
(8) Based on a Schedule 13D/A filed in January 2001, Gabelli Funds, LLC,
GAMCO Investors, Inc., Gabelli International Limited, Gabelli
Advisers, Inc. and Gabelli Performance Partnership L.P. collectively
beneficially hold 1,827,881 shares of Common Stock. This amount
includes Common Stock issuable upon their conversion of 340,876
shares of Series A Convertible Preferred Stock and 254,658 shares of
Series B Convertible Preferred Stock.
(9) Based on a Schedule 13G filed jointly in February 1999, Alliance
Capital Management, L.P., AXA, AXA Assurances I.A.R.D. Mutuelle
("AXAAIM"), AXA Assurances Vie Mutuelle ("AXAAVM"), AXA Conseil Vie
Assurance Mutuelle ("AXACVAM"), AXA Courtage Assurance Mutuelle
("AXACAM") and The Equitable Companies, Inc. collectively
beneficially hold 1,162,100 shares of Common Stock. The address of
AXA is 9 Place Vendome 75001 Paris, France. The address of AXAAIM
and AXAAVM is 21, rue de Chateaudun 75009 Paris, France. The address
of AXACVAM is 100-101 Terrasse Boieldieu 92042 Paris La Defense,
France. The address of AXACAM is 26, rue Louis le Grand 75002 Paris,
France.
(10) Based on a Schedule 13G/A filed in January 1999, Dewey Square
Investors Corp. beneficially holds 866,419 shares of Common Stock.
This amount includes Common Stock issuable upon their conversion of
Preferred Stock.
(11) Consists of shares of Common Stock issuable upon their exercise of
options within 60 days hereof.
(12) Includes 70,000 shares of Common Stock issuable upon their exercise
of options within 60 days hereof.
(13) Includes 260,000 shares of Common Stock issuable upon their exercise
of options within 60 days hereof, 21,639 shares of Common Stock, and
approximately 2,451 shares of Common Stock issuable upon conversion
of 1,000 shares of Series B Preferred Stock owned directly by Mr.
LeBlanc, 1,000 shares of Common Stock held by Mr. LeBlanc's wife and
4,000 shares of Common Stock held by Mr. LeBlanc's children.
(14) Includes 260,000 shares of Common Stock issuable upon their exercise
of options within 60 days hereof.
(15) Includes 25,000 shares of Common Stock issuable upon their exercise
of options within 60 days hereof.
(16) Includes 103,333 shares of Common Stock issuable upon their exercise
of options within 60 days hereof, approximately 3,105 shares of
Common Stock issuable upon conversion of 980 shares of Series A
Preferred Stock, approximately 980 shares of Common Stock issuable
upon conversion of 400 shares of Series B Preferred Stock held by
Mr. Nance's children, and 1,740 shares of Common Stock.
(17) Includes 2,695,833 shares of Common Stock issuable upon their
exercise of options within 60 days hereof.

Item 13. Certain Relationships and Related Transactions

Paul W. Bucha, a director of the Company, is WPSC's designee to the
Board of Wheeling-Nisshin. James D. Hesse, a former Vice President of the
Company, is President, Chief Executive Officer and a director of
Wheeling-Nisshin. The WPC Group (as defined below) currently holds a 35.7%
equity interest in Wheeling-Nisshin. Mr. Bucha is also (i) the Chairman and a
director of Ohio Coatings Company, a joint venture 50% owned by WPSC and (ii)
the

director and a vice president of Wheeling Downs Racing Association, which is 50%
owned by WHX Entertainment Corp., a wholly-owned subsidiary of the Company.

Marvin L. Olshan, a director and Secretary of the Company, is a
member of Olshan Grundman Frome Rosenzweig & Wolosky LLP ("OGFR&W"). The Company
has retained OGFR&W as its outside general counsel since January 1991. For the
fiscal year ended December 31, 2000, the Company paid OGFR&W approximately
$524,584.

Management Agreement

Pursuant to the Management Agreement approved by a majority of the
Company's disinterested directors, WPN, of which Ronald LaBow, the Company's
Chairman, is the sole stockholder and an officer and a director, provides the
Company with financial, management, advisory and consulting services to the
Company, subject to the supervision and control of the disinterested directors.
The Management Agreement has a two year term and is renewable automatically for
successive two year periods, unless terminated by either party upon 60 days'
notice prior to the renewal date. The Company believes that the cost of
obtaining the type and quality of services rendered by WPN under the Management
Agreement is no less favorable than the cost at which the Company could obtain
from unaffiliated entities. See "Item 11. Management Remuneration - Executive
Compensation-Management Agreement with WPN Corp."

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

(a) 2. Audited Financial Statements of Wheeling-Nisshin, Inc.

The following audited Financial Statements of Wheeling-Nisshin, Inc.
are presented because Wheeling-Nisshin is considered a significant
subsidiary as defined under SEC Regulations.

Report of Independent Accountants

To the Shareholders and Board of Directors
of Wheeling-Nisshin, Inc.

In our opinion, the accompanying balance sheets and the related
statements of income, shareholders' equity and cash flows present fairly, in all
material respects, the financial position of Wheeling-Nisshin, Inc. (the
"Company") at December 31, 2000 and 1999, and the results of its operations and
its cash flows for each of the three years in the period ended December 31,
2000, in conformity with accounting principles generally accepted in the United
States of America. 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 of these
statements in accordance with auditing standards generally accepted in the
United States of America, which 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, assessing
the accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP
Pittsburgh, PA
February 12, 2001

WHEELING-NISSHIN, INC.
Balance Sheets

2000 1999
(in thousands,
except for shares amounts)
Assets
Current assets:
Cash and cash equivalents $ 15,608 $ 19,044
Short-term investments (Note 3) 42,241 39,493
Trade accounts receivable, net of allowance for
bad debts of $250 in 2000 and 1999 (Note 9) 10,355 16,856
Inventories (Note 4) 11,645 20,248
Deferred tax assets (Note 7) 3,129 3,985
Other current assets 880 841
-------- --------

Total current assets 83,858 100,467
-------- --------

Property, plant and equipment, net (Note 5) 93,538 104,389
Other assets 557 718
-------- --------

Total assets $177,953 $205,574

Liabilities and Shareholders' Equity

Current liabilities:
Accounts payable $ 5,285 $ 9,348
Due to affiliates (Note 9) 2,277 9,449
Accrued income taxes 163 809
Other accrued liabilities 3,448 3,736
Accrued profit sharing 373 2,195
Current portion of long-term debt (Note 6) -- 4,106
-------- --------

Total current liabilities 11,546 29,643
-------- --------

Deferred tax liabilities (Note 7) 25,662 27,220
Other long-term liabilities (Note 10) 3,420 3,435
-------- --------

Total liabilities 40,628 60,298
-------- --------

Contingencies (Note 10)

Shareholders' equity:
Common stock, no par value; authorized,
issued and outstanding, 7,000 shares 71,588 71,588
Retained earnings 65,737 73,688
-------- --------

Total shareholders' equity 137,325 145,276
-------- --------

Total liabilities and shareholders' equity $177,953 $205,574
======== ========

WHEELING-NISSHIN, INC.
Statement of Shareholders' Equity

2000 1999 1998
(in thousands)
Net sales (Note 9) $ 335,193 $ 365,110 $ 396,632

Cost of goods sold, including depreciation of $12,655
in 2000, $12,497 in 1999 and $12,639 in 1998 (Note 9) 328,642 346,795 358,261
--------- --------- ---------

Gross profit 6,551 18,315 38,371
--------- --------- ---------

Selling, general and administrative expenses 6,043 7,155 6,957
--------- --------- ---------

Operating income 508 11,160 31,414
--------- --------- ---------

Other income (expense):
Interest and other income 3,510 3,049 3,002
Interest expense (100) (464) (985)
--------- --------- ---------

3,410 2,585 2,017
--------- --------- ---------

Income before income taxes 3,918 13,745 33,431

Provision for income taxes (Note 7) 1,369 5,018 12,259
--------- --------- ---------

Net income $ 2,549 $ 8,727 $ 21,172
========= ========= =========

WHEELING-NISSHIN, INC.
Statements of Cash flows
Common Retained
Stock Earnings Total
(in thousands, except for per share amounts)
Balance at December 31, 1997 $ 71,588 $ 71,789 $ 143,377

Net income -- 21,172 21,172

Cash dividends ($2,000 per share) -- (14,000) (14,000)
--------- --------- ---------

Balance at December 31, 1998 71,588 78,961 150,549

Net income -- 8,727 8,727

Cash dividends ($2,000 per share) -- (14,000) (14,000)
--------- --------- ---------

Balance at December 31, 1999 71,588 73,688 145,276

Net income -- 2,549 2,549

Cash dividends ($1,500 per share) -- (10,500) (10,500)
--------- --------- ---------

Balance at December 31, 2000 $ 71,588 $ 65,737 $ 137,325
========= ========= =========

2000 1999 1998
Cash flows from operating activities: (in thousands)
Net income $ 2,549 $ 8,727 $ 21,172
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 12,841 12,772 13,002
Loss on disposal of property and equipment -- 65 6
Deferred income taxes (702) 267 545
Net change in operating assets and liabilities:
Trade accounts receivable 6,501 (6,594) 6,102
Inventories 8,603 (6,961) 2,163
Prepaid and accrued income taxes (646) 1,854 (906)
Other assets 100 (503) 190
Accounts payable (4,063) 3,967 (5,303)
Due to affiliates (7,172) 5,481 612
Other accrued and long-term liabilities (2,125) (5,551) 2,620
--------- --------- ---------

Net cash provided by operating activities 15,886 13,524 40,203
--------- --------- ---------

Cash flows from investing activities:
Capital expenditures, net (1,968) (3,431) (222)
Proceeds from sale of land -- -- 24
Purchase of investments (88,295) (113,509) (44,214)
Maturity of investments 85,547 122,675 24,055
--------- --------- ---------

Net cash (used in) provided by investing activities (4,716) 5,735 (20,357)
--------- --------- ---------

Cash flows from financing activities:
Payments on long-term debt (4,106) (7,493) (6,881)
Payment of dividends (10,500) (14,000) (14,000)
--------- --------- ---------

Net cash used in financing activities (14,606) (21,493) (20,881)
--------- --------- ---------

Net decrease in cash and cash equivalents (3,436) (2,234) (1,035)

Cash and cash equivalents:
Beginning of the year 19,044 21,278 22,313
--------- --------- ---------

End of the year $ 15,608 $ 19,044 $ 21,278

Supplemental cash flow disclosures: Cash paid during the year for:
Interest $ 100 $ 618 $ 1,115

Income taxes $ 2,795 $ 2,935 $ 12,622

WHEELING-NISSHIN, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business

Wheeling-Nisshin, Inc. (the Company) is engaged in the production and
marketing of galvanized and aluminized steel products at a manufacturing
facility in Follansbee, West Virginia. Principally all of the Company's sales
are to ten trading companies located primarily in the United States. At December
31, 2000, Nisshin Holding Incorporated, a wholly-owned subsidiary of Nisshin
Steel Co., Ltd., (Nisshin), and Wheeling-Pittsburgh Corporation
(Wheeling-Pittsburgh), a wholly-owned subsidiary of WHX Corporation, owned 64.3%
and 35.7% of the outstanding common stock of the Company, respectively.

2. Summary of Significant Accounting Policies

Cash and Cash Equivalents

Cash and cash equivalents consist of general cash accounts and highly
liquid debt instruments with maturities of three months or less when purchased.
Substantially all of the Company's cash and cash equivalents are maintained at
one financial institution. No collateral or other security is provided on these
deposits, other than $100 of deposits insured by the Federal Deposit Insurance
Corporation.

Short-Term Investments

The Company follows Statement of Financial Accounting Standards (SFAS)
No. 115, "Accounting for Certain Investments in Debt and Equity Securities,"
which requires that securities be classified as trading, held-to-maturity, or
available-for-sale. The Company's investments are classified as held-to-maturity
and are recorded at amortized cost, which approximates fair value.

Inventories

Inventories are stated at the lower of cost or market. Cost is
determined by the first-in, first-out (FIFO) method.

Property, Plant and Equipment

Property, plant and equipment is stated at cost less accumulated
depreciation.

Major renewals and improvements are charged to the property accounts,
while replacements, maintenance and repairs, which do not improve or extend the
useful lives of the respective assets are expensed. Upon disposition or
retirement of property, plant and equipment, the cost and the related
accumulated depreciation are removed from the accounts. Gains or losses on sales
are reflected in other income.

Depreciation is provided using the straight-line method over the
estimated useful lives of the assets.

The carrying value of property, plant and equipment is evaluated
periodically in relation to the operating performance and future undiscounted
cash flows of the underlying operations. Adjustments are made if the sum of
expected future net cash flows is less than book value.

Debt Issuance Costs

Debt issuance costs associated with long-term debt secured to finance
the construction of the Company's original manufacturing facility and the second
production line were capitalized and amortized using the effective interest
method over the term of the related debt. The capitalized costs were fully
amortized in 2000.

Income Taxes

The Company follows SFAS No. 109, "Accounting for Income Taxes," to
recognize deferred tax liabilities and assets for the difference between the
financial statement carrying amounts and the tax basis of assets and
liabilities using enacted tax rates in effect in the years in which the
differences are expected to reverse. Valuation allowances are established when
necessary to reduce deferred tax assets to the amount expected to be realized.

Earnings per Share

The Company follows SFAS No. 128, "Earnings per Share," which requires
the disclosure of basic and diluted earnings per share.

Earnings per share is calculated by dividing net income by the weighted
average number of shares of common stock outstanding during each period.

Reclassifications

Certain prior year amounts have been reclassified to conform to the
current year presentation. The reclassifications primarily consisted of the
inclusion of depreciation expense in cost of goods sold. Additionally, freight
costs billed to customers has been included in net sales and freight out
included in cost of goods sold. Previously, freight costs not recovered from
customers were reflected as a reduction of net sales. The Company also
reclassified equipment reserves netted in property, plant and equipment in prior
years to other long-term liabilities.

3. Short-Term Investments

The composition of the Company's short-term investments at December 31
consisted of the following:

2000 1999
Certificates of deposit $ -- $ 4,000
U.S. government bonds 6,900 900
Corporate bonds 10,244 --
Commercial paper 25,097 $34,593
------- -------
$42,241 $39,493
------- -------

4. Inventories

Inventories consisted of the following at December 31:

2000 1999
Raw materials $ 3,980 $11,043
Finished goods 7,665 9,205
------- -------
$11,645 $20,248
------- -------

5. Property, Plant and Equipment

Property, plant and equipment consisted of the following at December 31:

Estimated Useful Lives
(Years

2000 1999
Buildings and building improvements 15-31.5 $ 25,119 $ 34,773
Land improvements 15 3,097 3,097
Machinery and equipment 3-15 169,183 165,583
Office equipment 10 3,089 2,797
--------- ---------

210,488 206,250
Less accumulated depreciation
(118,920) (106,099)
--------- ---------

91,568 100,151
Land
Construction in process 1,002 1,002
968 3,236

$ 93,538 $ 104,389
========= =========

Depreciation expense was $12,820 in 2000, $12,685 in 1999 and $12,915 in
1998.

6. Long-Term Debt

Long-term debt at December 31, 1999 consisted of $4,106 due under
industrial revenue bonds for the second production line. The bonds accrued
interest at .625% over the LIBOR rate, as adjusted for periods ranging from
three months to one year, as elected by the Company. The interest rate on the
bonds was 6.65% at December 31, 1999. The bonds were payable in equal
semi-annual installments of $2,853 plus interest and were repaid in full in
September 2000.

The industrial revenue bonds were collateralized by substantially all
property, plant and equipment and were guaranteed by Nisshin. In addition, the
industrial revenue bonds provided that dividends may not be declared or paid
without the prior written consent of the lender. Such approval was obtained for
the dividends paid in years 2000, 1999 and 1998.

7. Income Taxes

The provision for income taxes for the years ended December 31 consisted
of:

2000 1999 1998
Current: $ 1,788 $ 4,445 $11,005
U.S. Federal 283 306 709
State (702) 267 545
------- ------- -------
Deferred
$ 1,369 $ 5,018 $12,259
======= ======= =======

Reconciliation of the federal statutory and effective tax rates for
2000, 1999 and 1998 is as follows:

2000 1999 1998
Federal statutory rate 35.0 % 35.0 % 35.0 %
State income taxes, net of federal income tax benefit 4.6 1.6 1.6
Federal graduated rate effect (1.0) -- --
Other, net (3.6) (.1) .1
------- ------ -------

35.0 % 36.5 % 36.7 %
======= ====== =======

The deferred tax assets and liabilities recorded on the balance sheets
as of December 31 are as follows:

2000 1999

Deferred Tax assets:
Accrued expenses $ 1,034 $ 1,897
Other 2,095 2,088
-------- --------

3,129 3,985
-------- --------
Deferred tax liabilities:
Depreciation and amortization 23,639 25,237
Other 2,023 1,983
-------- --------

25,662 27,220
------ ---------

$ 22,533 $ 23,235
========= =========

The Company has received two separate tax credits for new business
investment and jobs expansion (Supercredits) in West Virginia. The Supercredits
may only be applied to offset the West Virginia income tax liability generated
by the specific business expansion that created the credit. The first
Supercredit was granted in 1988 and expired in 1997. However, the Company had
approximately $2,500 of credit carryforwards attributed to the 1988 investment
that was available to offset the Company's West Virginia income tax liability
for the three taxable years ended 2000.

The second Supercredit granted in 1993 can be used to offset up to
$5,958 annually of West Virginia income tax attributable to the 1993 investment
through the 2002 tax year. A portion of any unused credit may be carried forward
for three taxable years thereafter.

A valuation allowance for the entire amount of the Supercredits has been
recognized in the accompanying financial statements. Accordingly, as the
Supercredits are utilized, a benefit is recognized through a reduction of the
current state income tax provision. Such benefit amounted to approximately $275
in 2000, $565 in 1999 and $1,120 in 1998.

8. Employee Benefit Plans

Retirement Plan

The Company has a noncontributory, defined contribution plan which
covers eligible employees. The plan provides for Company contributions ranging
from 2% to 6% of the participant's annual compensation based on their years of
service. The Company's contribution to the plan was $428 in 2000, $574 in 1999
and $490 in 1998.

Profit-Sharing Plan

The Company has a nonqualified profit-sharing plan for eligible
employees, providing for cash distributions to the participants in years when
income before income taxes is in excess of $500. These contributions are based
on an escalating scale from 5% to 15% of income before income taxes. The
profit-sharing expense, which includes the profit-sharing contribution and the
related employer payroll taxes, was $373 in 2000, $2,090 in 1999 and $6,290 in
1998.

Postretirement Benefits

The Company has a defined benefit postretirement plan which covers
eligible employees. Generally, the plan calls for a stated percentage of medical
expenses reduced by deductibles and other coverages. The plan is currently
unfunded. The postretirement benefit expense was $68 for 2000, 1999 and 1998.
Accrued postretirement benefits were approximately $339 and $271 at December 31,
2000 and 1999, respectively.

9. Related Party Transactions

The Company has a supply agreement with Wheeling-Pittsburgh under which
the Company has agreed to purchase a specified portion of its required raw
materials through the year 2013. The Company purchased $128,486 in 2000,
$170,458 in 1999 and $164,473 in 1998 of raw materials and processing services
from Wheeling-Pittsburgh. The amounts due Wheeling-Pittsburgh for such purchases
are included in due to affiliates in the accompanying balance sheets.

In 1999, the Company received notice from Wheeling-Pittsburgh as to a
pricing dispute under the supply agreement for amounts owed for raw material
purchases during the third and fourth quarters of 1999. On March 10, 2000, the
Company reached a settlement in the amount of approximately $2,000 with
Wheeling-Pittsburgh over the pricing dispute. The settlement amount was recorded
in the 1999 financial statements and subsequently paid by the Company in 2000.

The Company also sells products to Wheeling-Pittsburgh. Such sales
totaled $1,957 in 2000, $1,175 in 1999 and $1,916 in 1998, of which $102 and
$302 remained unpaid at December 31, 2000 and 1999, respectively, and are
included in trade accounts receivable in the accompanying balance sheets. The
Company also sells products to Unimast, Inc., an affiliate of
Wheeling-Pittsburgh. Such sales totaled $59 in 2000, $845 in 1999 and $333 in
1998, all of which were paid at December 31, 2000, 1999 and 1998.

10. Legal Matters

The Company is a party to a dispute for final settlement of charges
related to the construction of its second production line. The Company had
claims asserted against it in the amount of approximately $6,900 emerging from
civil actions alleging delays on the project. In connection with the dispute,
the Company filed a separate claim for alleged damages that it had sustained in
the amount of approximately $400.

The claims were litigated in the Court of Common Pleas of Allegheny
County, Pennsylvania, in a jury trial, which commenced on January 5, 1996. A
verdict in the amount of $6,700 plus interest of $1,900 was entered against the
Company on October 2, 1996. After the verdict, the plaintiffs requested the
trial court to award counsel fees in the amount of $2,422 against the Company.
The motions for counsel fees plus interest were granted by the court to the
plaintiffs in June 1997.

The Company filed appeals from the judgments to the Superior Court of
Pennsylvania in 1997. Post-judgment interest accrued during the appeal period.
Additionally, the Company posted a bond approximating $12,000 that was held by
the court pending the appeals. On December 31, 1998, a three-judge panel of the
Superior Court ruled in favor of the Company's appeals vacating the October 2,
1996 adverse verdict and the award of counsel fees and remanded the case for a
new trial.

In 1999, the plaintiffs requested the Pennsylvania Supreme Court to
review the order of the Superior Court in its entirety, including the vacating
of the verdict and the awarding of counsel fees. The plaintiffs' request was
granted on the limited issues of whether the trial court had jurisdiction to
rule on the plaintiffs' motions for counsel fees while the appeal was pending
and whether the Superior Court erred in ruling on the merits of the appeal
without first getting an explanatory statement from the trial court.

In January 2001, the Pennsylvania Supreme Court ruled favorably to
dismiss the plaintiffs' appeal of the Superior Court's ruling vacating the Order
of the Court of Common Pleas to reverse the original jury award and remanding
the case to the Court of Common Pleas of Allegheny County for retrial. As a
result of the dismissal, the $12,000 bond posted by the Company during the
appeals process was released by the Court.

The Company has been advised by its Special Counsel that it has various
legal bases for relief when a new trial is held. However, since litigation is
subject to many uncertainties, the Company is presently unable to predict the
outcome of this matter. In 1997, the Company recorded a liability in the amount
of $2,500 related to these matters, which was capitalized in property, plant and
equipment as cost overruns in the accompanying balance sheets. There is at least
a reasonable possibility that the ultimate resolution of these matters may have
a material effect on the Company's results of operations or cash flows in the
year of final determination. Any portion of the ultimate resolution for
interest, penalties and counsel fees will be charged to results of operations.

11. Fair Value of Financial Instruments

The estimated fair values and the methods used to estimate those values
are disclosed below:

Investments

The fair values of commercial paper, government bonds, corporate bonds
and certificates of deposit were $43,004 and $40,220 at December 31, 2000 and
1999, respectively. These amounts were determined based on the investment cost
plus interest receivable at December 31, 2000 and 1999.

Long-Term Debt

Based on borrowing rates currently available to the Company for bank
loans with similar terms and maturities, fair value approximates the carrying
value.

(a) 3. Exhibits

2.1 Confirmation Order of the United States Bankruptcy
Court for the Western District of Pennsylvania,
dated December 18, 1990, containing the Amended
Joint Plan of Reorganization of
Wheeling-Pittsburgh Steel Corporation, dated
October 18, 1990, as modified and approved --
Incorporated herein by reference to Exhibit 2.1 to
WPC's Form 8-K filed December 28, 1990.

2.2 Form of Plan and Agreement of Merger, dated as of
July 26, 1994 among WPC, WHX and
WHEELING-PITTSBURGH STEEL CORPORATION Merger Co.--
Incorporated herein by reference to Exhibit 2.2.
to Company's Form S-4 Registration Statement (No.
33-53591).

3.1 Certificate of Incorporation of the Company--
Incorporated herein by reference to Exhibit 3.2 to
the Company's Form S-4 Registration Statement (No.
33-53591).

3.2 Certificate of Designations filed with the
Delaware Secretary of State on September 22, 1994
- - Incorporated herein by reference to Exhibit
4.3 to the Company's Form S-3 Registration
Statement (No. 33-54831).

3.3 Certificate of Amendment to Certificate of
Incorporation filed with the Delaware Secretary of
State on January 23, 1997.

3.3 Certificate of Amendment to Certificate of
Incorporation filed with the Delaware Secretary of
State on January 23, 1997 - Incorporated herein by
reference to Exhibit 99.2 to the Form 8-K filed
November 11, 1999.

3.5 Amended and Restated By-Laws of the Company -
Incorporated herein by reference to Exhibit 99.2
to the Form 8-K filed November 11, 1999-K.

4.1 Indenture ("Senior Note Indenture"), between WPC
and Bank One, Columbus, NA, as Trustee--
Incorporated herein by reference to Exhibit 4.1 to
WPC's Form S-4 Registration Statement (No.
333-43867).

4.2 Term Loan Agreement dated as of November 20, 1997
between Wheeling-Pittsburgh Corporation and DLJ
Capital Funding, Inc., as syndication agent, and
the lenders party thereto-- Incorporated herein by
reference to Exhibit 4.2 to the 1997 Form 10-K.

4.3 Amendment No. 1 to Term Loan Agreement dated as of
December 31, 1997 between Wheeling-Pittsburgh
Corporation and DLJ Capital Funding, Inc., as
syndication agent, and the Lenders party thereto--
Incorporated herein by reference to Exhibit 4.3 to
the 1997 Form 10-K.

*4.4 Debtor in Possession Credit Agreement dated as of
November 17, 2000 among Wheeling-Pittsburgh
Corporation, Wheeling-Pittsburgh Steel
Corporation, W-P Steel Venture Corporation,
Consumers Mining Company, W-P Coal Company, Mingo
Oxygen Company, Monessen Southwestern Railway
Company, Wheeling-Empire Company and
Pittsburgh-Canfield Corporation, the lenders party
thereto and Citibank, N.A. as initial issuing bank
and Citicorp USA, Inc., as agent.

*4.5 Guaranty and Security Agreement dated as of
November 17, 2000 among the Company, as the
Grantor, and Citicorp USA, Inc, as the Secured
Party.

4.6 Credit Agreement dated as of July 30, 1998 among
Handy & Harman, Handy & Harman of Canada, Limited,
Handy & Harman Europe Limited, Rigby-Maryland
(Stainless) Limited and Indiana Tube Danmark A/S
and the Initial Lenders, Initial Issuing Banks and
Swing Line Bank named therein and Citicorp USA,
Inc. as collateral agent and administrative agent.
- Incorporated herein by reference to Exhibit 4.11
to the 1998 Form 10-K.

10.1 Form of Key Employee Deferred Compensation
Agreement--Incorporated herein by reference to
Exhibit 10.1 to the 1990 10-K.

10.2 Cooperation Agreement dated February 7, 1984
between the Company and Nisshin Steel Co.,
Ltd.--Incorporated herein by reference to Exhibit
10.24 to the Company's Form S-1 Registration
Statement No. 2-89295 as filed with the Securities
and Exchange Commission on February 7, 1984.

10.3 Close Corporation and Shareholder's Agreement
effective as of March 24, 1994, by and among Dong
Yang Tinplate America Corp., WPC, Nittetsu Shoji
American, Inc. and Ohio Coatings Company.

10.4 Second Amended and Restated Shareholders Agreement
dated as of November 12, 1990 between the Company
and Nisshin Steel Co. Ltd.-- Incorporated herein
by reference to Exhibit 10.9 to the 1990 10-K.

10.5 Management Agreement dated as of January 3, 1991
between the Company and WPN Corp.--Incorporated
herein by reference to Exhibit 10.11 to the 1990
10-K.

10.6 Amendment No. 1 to Management Agreement dated as
of January 1, 1993 between the Company and WPN
Corp.-- Incorporated herein by reference to
Exhibit 10.8 to the Company's Form S-2
Registration Statement filed February 23, 1993
(the "February Form S-2"). 10.7 Amendment No. 2 to
Management Agreement dated as of April 11, 1994
between the Company and WPN Corp.--Incorporated
herein by reference to Exhibit 10.9 to the 1994
Form 10-K.

10.8 Amendment No. 3 to Management Agreement dated as
of April 1, 1996 between the Company and WPN
Corporation-- Incorporated herein by reference to
Exhibit 10.9 to the 1996 Form 10-K.

10.9 Amendment No. 4 to Management Agreement dated as
of April 13, 1998 between the Company and WPN
Corporation-- Incorporated herein by reference to
Exhibit 10.9 to the 1998 Form 10-K.

*10.10 Amended and Restated 1991 Incentive and
Nonqualified Stock Option Plan of the Company.

10.11 1993 Directors and Non-Employee Officers Stock
Option Plan-- Incorporated herein by reference to
Exhibit 4.D to WPC's Form S-8 filed April 8, 1994.

10.12 1997 Directors Stock Option Plan-- Incorporated
herein by reference to Exhibit 10.11 to the 1997
Form 10-K.

10.13 WPN Corp. Stock Option Grant Letter dated July 29,
1993-- Incorporated herein by reference to Exhibit
10.13 to the 1998 Form 10-K.

10.14 WPN Corp. Stock Option Grant Letter dated August
4, 1997-- Incorporated herein by reference to
Exhibit 10.12 to the 1997 Form 10-K.

10.15 Agreement by and between Handy & Harman and Arnold
Nance dated May 1, 1998 (as amended by Amendment
No. 1 to Employment Agreement dated December 21,
1998)-- Incorporated herein by reference to
Exhibit 10.16 to the 1998 Form 10-K.

10.16 Agreement dated as of April 23, 1998 by and
between the Company and James G.
Bradley--Incorporated herein by reference to
Exhibit 10.17 to the 1998 Form 10-K.

10.17 Agreement dated as of April 17, 1998 by and
between the Company and Robert D. LeBlanc.
Incorporated herein by reference to Exhibit 10.18
to the 1998 Form 10-K.

10.18 Amended and Restated Agreement dated as of
December 24, 1998 by and between the Company and
Paul J. Mooney.- Incorporated herein by reference
to Exhibit 10.19 to the 1998 Form 10-K.

21.1 Subsidiaries of Registrant - Incorporated herein
by reference to Exhibit 21.1 to the 1999 Form
10-K.

*23.1 Consent of PricewaterhouseCoopers LLP

* - filed herewith.

(b) REPORTS ON FORM 8-K.

NONE

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has signed this report by the undersigned,
thereunto duly authorized in the City of New York, State of New York on April
30, 2001.

WHX CORPORATION

By /s/ Robert D. LeBlanc Date April 30, 2001
-------------------------------------------------
Robert D. LeBlanc, Executive Vice President
of WHX Corporation and President and Chief
Executive Officer of Handy & Harman

POWER OF ATTORNEY
WHX Corporation and each of the undersigned do hereby appoint Ronald LaBow
and Marvin Olshan, and each of them severally, its or his true and lawful
attorney to execute on behalf of WHX Corporation and the undersigned any and all
amendments to this Annual Report on Form 10-K and to file the same with all
exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission; each of such attorneys shall have the power
to act hereunder with or without the other.

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.

By /s/ Arnold G. Nance April 30, 2001
-------------------------------------------------------- -------------------------------------------
Arnold G. Nance, Vice President - Finance Date
(Principal Accounting Officer)

By /s/ Ronald LaBow April 30, 2001
-------------------------------------------------------- -------------------------------------------
Ronald LaBow, Chairman of the Board Date

By /s/ Neil D. Arnold April 30, 2001
-------------------------------------------------------- -------------------------------------------
Neil D. Arnold, Director Date

By /s/ Paul W. Bucha April 30, 2001
-------------------------------------------------------- -------------------------------------------
Paul W. Bucha, Director Date

By /s/ Robert A. Davidow April 30, 2001
-------------------------------------------------------- -------------------------------------------
Robert A. Davidow, Vice Chairman Date

By /s/ William Goldsmith April 30, 2001
-------------------------------------------------------- -------------------------------------------
William Goldsmith, Director Date

By /s/ Marvin L. Olshan April 30, 2001
-------------------------------------------------------- -------------------------------------------
Marvin L. Olshan, Director Date

By /s/ Robert D. LeBlanc April 30, 2001
-------------------------------------------------------- -------------------------------------------
Robert D. LeBlanc, Director & Executive Vice President Date

By /s/ Raymond S. Troubh April 30, 2001
-------------------------------------------------------- -------------------------------------------
Raymond S. Troubh, Director Date

EX-23 2 exhibit23.htm CONSENT CONSENT OF INDEPENDENT ACCOUNTANTS We hereby consent to the incorporation by reference in the Registration Statements listed below of WHX Corporation of our reports dated April 26, 2001 and February 12, 2001, relating to the financial statements of WHX Corporation and Wheeling-Nisshin, Inc. respectively, which appear in this Form 10-K. On Form S-3 File No. 33-54831 File No. 33-63845 On Form S-8: File No. 33-54801 File No. 33-56281 File No. 333-64217 File No. 333-36985 PricewaterhouseCoopers LLP New York, New York April 26, 2001 EX-4 3 exhibit44.htm DEBTOR IN POSSESSION CREDIT AGREEMENT sec document




                                U.S. $290,000,000

                      DEBTOR IN POSSESSION CREDIT AGREEMENT

                          Dated as of November 17, 2000

                                      Among

                         WHEELING-PITTSBURGH CORPORATION

                      WHEELING-PITTSBURGH STEEL CORPORATION

                          W-P STEEL VENTURE CORPORATION

                            CONSUMERS MINING COMPANY

                                W-P COAL COMPANY

                              MINGO OXYGEN COMPANY

                      MONESSEN SOUTHWESTERN RAILWAY COMPANY

                             WHEELING EMPIRE COMPANY

                         PITTSBURGH-CANFIELD CORPORATION

                                  as Borrowers

                                       and

                            THE LENDERS PARTY HERETO

                                   as Lenders

                                       and

                                 CITIBANK, N.A.

                             as Initial Issuing Bank

                                       and

                               CITICORP USA, INC.

                                    as Agent




                                TABLE OF CONTENTS


Section                                                                   Page
                                                                          ----



                                    ARTICLE I
                        DEFINITIONS AND ACCOUNTING TERMS

1.1.    Defined Terms.........................................................2
1.2.    Computation of Time Periods..........................................26
1.3.    Accounting Terms.....................................................27
1.4.    Certain Terms........................................................27


                                   ARTICLE II
                         AMOUNTS AND TERMS OF THE LOANS

2.1.    The Loans............................................................27
2.2.    Making the Loans.....................................................28
2.3.    Fees  29
2.4.    Reduction and Termination of the Revolving Credit Commitments........29
2.5     Termination or Reduction of the Term Commitments.....................30
2.6.    Repayment............................................................30
2.7.    Prepayments..........................................................30
2.8.    Conversion/Continuation Option.......................................32
2.9.    Interest.............................................................32
2.10.   Interest Rate Determination..........................................33
2.11.   Increased Costs......................................................33
2.12.   Illegality...........................................................34
2.13.   Capital Adequacy.....................................................34
2.14.   Payments and Computations............................................34
2.15.   Taxes 36
2.16.   Sharing of Payments, Etc.............................................38
2.17.   Letter of Credit Facility............................................38
2.18.   Settlement of Accounts...............................................43
2.19.   The Blocked Account..................................................43
2.20.   Term Commitments.....................................................44



                                   ARTICLE III
                              CONDITIONS PRECEDENT

3.1.    Conditions Precedent to the Effective Date...........................45
3.2.    Additional Conditions Precedent to the Effective Date................46
3.3.    Conditions Precedent to Each Loan and Letter of Credit...............48


                                   ARTICLE IV
                         REPRESENTATIONS AND WARRANTIES

4.1.    Corporate Existence; Compliance with Law.............................49
4.2.    Corporate Power; Authorization; Enforceable Obligations..............49
4.3.    Taxes 50
4.4.    Full Disclosure......................................................51
4.5.    Financial Matters....................................................51
4.6.    Litigation...........................................................52
4.7.    Margin Regulations...................................................52
4.8.    Ownership of the Borrowers and Subsidiaries..........................52
4.9.    ERISA 52
4.10.   Liens 54
4.11.   No Burdensome Restrictions; No Defaults..............................54
4.12.   No Other Ventures....................................................54
4.13.   Investment Company Act...............................................54
4.14.   Insurance............................................................54
4.15.   Labor Matters........................................................55
4.16.   Force Majeure........................................................55
4.17.   Use of Proceeds......................................................56
4.18.   Environmental Protection.............................................56
4.19.   Intellectual Property................................................57
4.20.   Title 57


                                    ARTICLE V
                               FINANCIAL COVENANT

5.1.    Limitation on Capital Expenditures...................................59
5.2.    Excess Availability..................................................60



                                   ARTICLE VI
                        ADDITIONAL AFFIRMATIVE COVENANTS

6.1.    Compliance with Laws, Etc............................................60
6.2.    Conduct of Business..................................................60
6.3.    Payment of Taxes, Etc................................................60
6.4.    Maintenance of Insurance.............................................61
6.5.    Preservation of Corporate Existence, Etc.............................61
6.6.    Access...............................................................61
6.7.    Keeping of Books.....................................................61
6.8.    Maintenance of Properties, Etc.......................................61
6.9.    Application of Proceeds..............................................62
6.10.   Financial Statements.................................................62
6.11.   Reporting Requirements...............................................63
6.12.   Employee Plans.......................................................66
6.13.   Fiscal Year..........................................................66
6.14.   Borrowing Base Determination.........................................66
6.15.   Environmental........................................................66
6.16.   Covenant to Guarantee Obligations and Give Security..................67
6.17.   Further Assurances...................................................68
6.18.   Performance of Related Documents.....................................69
6.19.   Priority.............................................................69
6.20.   Validity of Loan Documents...........................................69
6.21.   Conditions Subsequent................................................69


                                   ARTICLE VII
                               NEGATIVE COVENANTS

7.1.    Liens, Etc...........................................................72
7.2.    Indebtedness.........................................................73
7.3.    Lease Obligations....................................................74
7.4.    Restricted Payments..................................................75
7.5.    Mergers, Stock Issuances, Sale of Assets, Etc........................75
7.6.    Investments in Other Persons.........................................76
7.7.    Change in Nature of Business.........................................77
7.8.    Material Agreements..................................................77
7.9.    Accounting Changes...................................................77
7.10.   Transactions with Affiliates.........................................77






7.11.   Cancellation of Indebtedness Owed to It..............................78
7.12.   No New Subsidiaries..................................................78
7.13.   Capital Structure....................................................78
7.14.   No Speculative Transactions..........................................78
7.15.   Margin Regulations...................................................78
7.16.   Bank Accounts........................................................78
7.17.   Environmental Release................................................79
7.18.   Interim Order and Final Order........................................79
7.19.   Application to the Bankruptcy Court..................................79
7.20.   Chapter 11 Claims....................................................79
7.21.   Reclamation Claims; Bankruptcy Code Section 546(g)* Agreements.......79


                                  ARTICLE VIII
                                EVENTS OF DEFAULT

8.1.    Events of Default....................................................80
8.2.    Remedies.............................................................83
8.3.    Actions in Respect of Letters of Credit..............................83
8.4.    Term Loan Actionable Events..........................................85
8.5.    Application of Proceeds..............................................85


                                   ARTICLE IX
                                    THE AGENT

9.1.    Authorization and Action.............................................86
9.2.    Agent's Reliance, Etc................................................86
9.3.    Citibank, Citicorp and Affiliates....................................87
9.4.    Lender Party Credit Decision.........................................87
9.5.    Indemnification......................................................87
9.6.    Successor Agent......................................................88
9.7.    Agreement of Required Lenders........................................89


                                    ARTICLE X
                                  MISCELLANEOUS

10.1.   Amendments, Etc......................................................90
10.2.   Notices, Etc.........................................................91
10.3.   No Waiver; Remedies..................................................92
10.4.   Costs; Expenses; Indemnities.........................................92
10.5.   Right of Set-off.....................................................94






10.6.   Binding Effect.......................................................94
10.7.   Assignments and Participations.......................................94
10.8.   Governing Law........................................................97
10.9.   Submission to Jurisdiction...........................................97
10.10.  Section Titles.......................................................97
10.11.  Execution in Counterparts............................................97
10.12.  No Liability of the Issuers..........................................98
10.13.  Entire Agreement.....................................................98
10.14.  Confidentiality......................................................98
10.15.  Waiver of Jury Trial.................................................99

SCHEDULES
Schedule I       -  List of Issuers

Schedule II      -  Commitments

Schedule III     -  List of Applicable Lending Offices and Addresses for Notices

Schedule IV      -  Term Priority Collateral

Schedule 2.2     -  List of Eligible Signatories

Schedule 3.1     -  UCC Filing Jurisdictions

Schedule 4.3     -  Taxes

Schedule 4.6     -  Litigation

Schedule 4.8     -  List of Subsidiaries

Schedule 4.9     -  List of Plans

Schedule 4.10    -  List of Liens

Schedule 4.12    -  Joint Ventures

Schedule 4.15    -  Labor

Schedule 4.18    -  Environmental Protection

Schedule 4.20(a) -  List of Owned Real Estate

Schedule 4.20(b) -  List of Leased Real Estate

Schedule 4.20(c) -  Existing Options




Schedule 7.2     -  Existing Indebtedness

Schedule 7.3     -  Leases

Schedule 7.4     -  Restricted Payments

Schedule 7.6     -  Existing Investments

Schedule 7.10    -  Transactions with Affiliates

Schedule 7.16    -  Permitted Bank Accounts

EXHIBITS

Exhibit A-1 -    Form of Revolving Credit Note

Exhibit A-2 -    Form of Term Note

Exhibit B   -    Form of Notice of Borrowing

Exhibit C   -    Form of Letter of Credit Request

Exhibit D   -    Form of Notice of Conversion or Continuation

Exhibit E   -    Form of Assignment and Acceptance

Exhibit F   -    Form of Borrowing Base Certificate

Exhibit G-1 -    Form of Interim Order

Exhibit G-2 -    Form of Final Order

Exhibit H   -    Form of Security Agreement

Exhibit I   -    Form of Mortgage

Exhibit J-1 -    Opinion of Debevoise & Plimpton
              -- Special Counsel for the Borrowers

Exhibit J-2 -    Opinion of Reed Smith Shaw & McClay LLP
              -- Local Counsel for the Borrowers

Exhibit K   -    Form of Cash Collateral Account Agreement





                      DEBTOR IN POSSESSION CREDIT AGREEMENT


            DEBTOR IN  POSSESSION  CREDIT  AGREEMENT,  dated as of November  17,
2000, among  Wheeling-Pittsburgh  Corporation,  a Delaware  corporation ("WPC"),
Wheeling-Pittsburgh  Steel Corporation,  a Delaware  corporation  ("WPSC"),  W-P
Steel Venture Corporation,  a Delaware corporation ("Steel Venture"),  Consumers
Mining Company, a Pennsylvania  corporation  ("Consumers"),  W-P Coal Company, a
West Virginia corporation ("WP Coal"), Mingo Oxygen Company, an Ohio corporation
("Mingo"),  Monessen  Southwestern  Railway Company, a Pennsylvania  corporation
("Monessen"),  Wheeling-Empire  Company, a West Virginia corporation ("Empire"),
and  Pittsburgh-Canfield  Corporation,  a Pennsylvania  corporation  ("PCC", and
together with WPC, WPSC, Steel Venture,  Consumers, WP Coal, Mingo, Monessen and
Empire,   the  "Borrowers",   and  each,  a  "Borrower"),   each  a  debtor  and
debtor-in-possession  under Chapter 11 of the Bankruptcy Code 11 U.S.C.  Section
101 et seq., the  "Bankruptcy  Code") the financial  institutions  listed on the
signature  pages  hereof (each  individually  a "Lender"  and  collectively  the
"Lenders"),  Citibank,  N.A.  ("Citibank"),  as issuer of letters of credit (the
"Initial Issuing Bank"), and Citicorp USA, Inc. ("Citicorp"), as agent hereunder
for the  Lenders  (in  such  capacity,  together  with any  successor  appointed
pursuant to Article IX, the "Agent").


PRELIMINARY STATEMENTS:

            1. On November 16, 2000 (the "Filing  Date"),  the  Borrowers  filed
petitions  under  Chapter  11 of  the  Bankruptcy  Code  in  the  United  States
Bankruptcy Court for the Northern District of Ohio (the "Bankruptcy Court").

            2.  The  Borrowers  have  continued  to  operate  their   respective
businesses pursuant to Section 1107 and 1108 of the Bankruptcy Code.

            3.  The  Pre-Petition   Agent  (as  hereinafter   defined)  and  the
Pre-Petition  Lenders (as hereinafter  defined) entered into a Third Amended and
Restated  Credit  Agreement  dated  as  of  April  30,  1999,  as  amended  (the
"Pre-Petition  Credit  Agreement"),  with  WPSC  and  WPSC  and  certain  of its
Affiliates (as hereinafter defined) entered into the Pre-Petition Securitization
Program (as hereinafter  defined),  each of which  transactions  were secured by
certain of the Pre-Petition Collateral (as hereinafter defined).

            4. The Borrowers and their  Subsidiaries  have an immediate need for
funds to continue to operate their businesses.

            5.  The  Borrowers  have  requested  that  the  Lenders  lend to the
Borrowers up to $290,000,000  pursuant to Sections  105(a),  362, and 364(c)(1),
(2) and (3) of the  Bankruptcy  Code in  order  to  refinance  the  Pre-Petition
Obligations (as hereinafter defined),  provide working capital for the Borrowers
and their Subsidiaries, and for other general corporate purposes.

            6. The Borrowers have agreed to secure the Obligations  with,  inter
alia,  first priority  liens on and security  interests in (subject to Permitted
Liens (as hereinafter  defined)) all property and interests,  real and personal,
tangible and  intangible,  of the  Borrowers,  whether now owned or  hereinafter






acquired,  all on the terms and  conditions  set forth in the Loan Documents (as
hereinafter defined), in accordance with Sections 105(a), 362 and 364(c)(1), (2)
and (3) of the Bankruptcy Code.

            7. The Lenders have indicated their willingness to lend such amounts
pursuant to Sections 105(a),  362, and 364(c)(1),  (2) and (3) of the Bankruptcy
Code on the terms and conditions of this Agreement.

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

                                    ARTICLE I

                        DEFINITIONS AND ACCOUNTING TERMS

            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):

            "Affiliate"  means, as to any Person,  any Subsidiary of such Person
and any other Person which,  directly or indirectly,  controls, is controlled by
or is under  common  control  with such  Person  and  includes  each  officer or
director or general partner of such Person, and each Person who is the direct or
indirect  beneficial  owner of 15% or more of any class of voting  Stock of such
Person or,  with  respect to any  Borrower,  of WHX.  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 recital of parties to this
Agreement.

            "Agent's  Account" means the account of the Agent  maintained by the
Agent at Citibank at its office at 399 Park  Avenue,  New York,  New York 10043,
Account No. 3682 2248, Attention: Keith Karako.

            "Agreement"  means  this  Debtor  in  Possession  Credit  Agreement,
together  with all Exhibits and  Schedules  hereto,  as the same may be amended,
supplemented or otherwise modified from time to time.

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

            "Applicable  Margin"  means,  as of any date, a percentage per annum
determined by reference to the  Performance  Level in effect on such date as set
forth below:

                                       2




Performance    Applicable Margin for     Applicable Margin for     Applicable Margin for
   Level          Base Rate Loans        Eurodollar Rate Loans     Letter of Credit Fees
   -----          ---------------        ---------------------     ---------------------

    I                   1.75%                   2.75%                     2.50%
    II                  2.00%                   3.00%                     2.75%
    III                 2.25%                   3.25%                     3.00%


provided  that,  for the period  commencing on the Effective  Date and ending on
June 30, 2001, the Applicable Margin shall be as set forth opposite  Performance
Level II.  Commencing with the month ending July 31, 2001, the Applicable Margin
shall be  adjusted  monthly  as of the first day of each  month  based  upon the
Excess  Availability as of such date and the average Excess Availability for the
immediately  preceding month. If the Excess Availability on the first day of any
month   corresponds  to  the  same  Performance  Level  as  the  average  Excess
Availability  for the previous month,  such  Performance  Level shall be used to
determine the Applicable  Margin;  otherwise the Applicable Margin for any month
shall be that which  corresponds to the higher of such Performance  Levels (with
Level III being the highest level and Level I the lowest).

Notwithstanding   anything  to  the  contrary   herein   contained,   if  Excess
Availability  is less than  $30,000,000 on any day, the Applicable  Margin shall
immediately  be adjusted to that rate set forth in Level III and shall remain at
such rate  (regardless of compliance  with any  Performance  Level) until Excess
Availability has exceeded $30,000,000 for thirty (30) consecutive days.

            "Applicable  Percentage"  means,  as of any date, a  percentage  per
annum determined by reference to the Performance Level in effect on such date as
set forth below:

         Performance Level                      Applicable Percentage
         -----------------                      ---------------------
                I                                      0.500%
                II                                     0.500%
                III                                    0.625%

provided  that,  for the period  commencing on the Effective  Date and ending on
June  30,  2001,  the  Applicable  Percentage  shall  be as set  forth  opposite
Performance  Level II.  Commencing  with the month  ending  July 31,  2001,  the
Applicable  Percentage  shall be  adjusted  monthly  as of the first day of each
month based upon  Excess  Availability  as of such date and the  average  Excess
Availability for the immediately  preceding month. If the Excess Availability on
the first  day of any month  corresponds  to the same  Performance  Level as the
average daily Excess Availability for the previous month, such Performance Level
shall be used to determine the Applicable Percentage;  otherwise, the Applicable
Percentage  for any month shall be that which  corresponds to the higher of such
Performance  Levels  (with  Level III being  the  highest  level and Level I the
lowest).

Notwithstanding   anything  to  the  contrary   herein   contained,   if  Excess
Availability  is less than  $30,000,000  on any day, the  Applicable  Percentage
shall  immediately  be  adjusted  to that  rate set forth in Level III and shall
remain at such rate (regardless of compliance with any Performance  Level) until
Excess Availability has exceeded $30,000,000 for thirty (30) consecutive days.

                                       3



            "Appropriate  Lender" means,  at any time,  with respect to the Term
Facility or the Revolving Credit  Facility,  a Lender that has a Commitment with
respect to such Facility at such time.

            "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.

            "Assignment  and  Acceptance"  means an  assignment  and  acceptance
entered into by a Lender and an Eligible Assignee,  and accepted by the Agent in
accordance with Section 10.7 and in substantially the form of Exhibit E.

            "Assuming Lender" has the meaning specified in Section 2.20(d).

            "Assumption Agreement" has the meaning specified in Section 2.20(d).

            "Availability  Reserves"  means such reserves as the Agent from time
to time determines in the Agent's discretion as being appropriate to reflect the
impediments to the Agent's ability to realize upon the Collateral.

            "Bankruptcy  Code"  has the  meaning  specified  in the  Preliminary
Statements.

            "Bankruptcy  Court" has the  meaning  specified  in the  Preliminary
Statements.

            "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; and

            (b) the sum (adjusted to the nearest 1/4 of one percent or, if there
is no nearest 1/4 of one percent,  to the next higher 1/4 of one percent) of (i)
1/2 of one percent 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  (adjusted to
the basis of a year of 360 days) 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 Board of Governors of
the  Federal  Reserve  System (or any  successor)  for  determining  the maximum
reserve requirement (including, without limitation, 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
nonpersonal  time deposits in the United  States,  plus (iii) the average during
such three-week  period of the annual assessment rates estimated by Citibank for

                                       4



determining  the then  current  annual  assessment  payable by  Citibank  to the
Federal  Deposit  Insurance  Corporation  (or any  successor)  for insuring U.S.
dollar deposits of Citibank in the United States; and

            (c) the sum  (adjusted to the nearest one percent or, if there is no
nearest  one  percent,  to the next  higher one  percent) of (i) one percent per
annum plus (ii) the Federal Funds Rate.

            "Base Rate Loan" means any outstanding principal amount of the Loans
of any Lender Party that bears interest with reference to the Base Rate.

            "Blocked Account" has the meaning specified in Section 2.19.

            "Blocked  Account Letter" means the letter  agreement,  dated August
17, 1994,  executed by WPSC and the Agent and  acknowledged and agreed to by PNC
Bank,   National   Association,   as  such  letter  agreement  may  be  amended,
supplemented  or otherwise  modified  from time to time in  accordance  with the
terms hereof.

            "Borrower   Consolidated   Group"   means  each   Borrower  and  its
Subsidiaries.

            "Borrowers'  Professionals" means all Persons retained or engaged by
any Borrower as  professional  persons  within the meaning of Section 327 of the
Bankruptcy Code.

            "Borrowing" means each of a Revolving Credit Borrowing, a Swing Loan
Borrowing and a Term Borrowing.

            "Borrowing Base" means, at any time of calculation,  an amount equal
to

            (a) up to 85% of (i) the face amount of Eligible  Receivables  minus
(ii) Receivables Reserves, plus

            (b) up to a  percentage  of the  lower  of cost or  market  value of
various  categories of Eligible  Inventory at such time, as set forth in Exhibit
F, minus (ii)  Inventory  Reserves;  provided  that,  in no event shall  amounts
available  to be  borrowed  under  this  clause  (b) ever  constitute  more than
$175,000,000, minus

            (c) the then amount of all Availability Reserves, minus

            (d) the Term Loan To Value Reserve.

            "Borrowing  Base  Certificate"  means a certificate of the Borrowers
substantially in the form of Exhibit F.

            "Business  Day"  means a day of the  year  on  which  banks  are not
required or authorized  by law to close in New York City and, if the  applicable
Business Day relates to a Eurodollar Rate Loan, a day on which dealings are also
carried on in the London interbank market.




            "Capital  Expenditures"  means,  for any Person for any period,  the
aggregate  of all  expenditures  by such  Person  and its  Subsidiaries,  except
interest capitalized during construction, during such period for property, plant
or   equipment,   including,   without   limitation,   renewals,   improvements,
replacements  and capitalized  repairs,  that would be reflected as additions to
property,  plant or equipment on a consolidated balance sheet of such Person and
its  Subsidiaries  prepared  in  accordance  with GAAP.  For the purpose of this
definition,  the purchase  price of equipment  which is acquired  simultaneously
with the  trade-in  of  existing  equipment  owned by such  Person or any of its
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 amount of the credit granted by the seller of such equipment being traded in
at such time or the amount of such proceeds, as the case may be.

            "Capitalized  Lease" means, as to any Person,  any lease of property
by such Person as lessee which would be  capitalized  on a balance sheet of such
Person prepared in accordance with GAAP.

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

            "Carve-Out"  means  an  amount  not  exceeding  the  sum of (a)  the
Mandatory  Fees and (b)  $3,500,000,  which amount may be used by the  Borrowers
after  the  occurrence  and  during  the  continuance  of an Event  of  Default,
notwithstanding  the Agent's  security  interests for the benefit of the Secured
Parties in the  Collateral  and the  Agent's  rights  hereunder,  to pay fees or
expenses that have been awarded by the Bankruptcy Court (whether before or after
such Event of  Default)  and are unpaid or that are  incurred  by the  Borrowers
constituting   (i)  allowances  of   compensation   for  services   rendered  or
reimbursement or expenses awarded by the Bankruptcy Court under Sections 330 and
331 of the  Bankruptcy  Code or  otherwise,  to Borrowers'  Professionals,  (ii)
allowances of compensation  for services  rendered or  reimbursement of expenses
awarded by the Bankruptcy Court under Section 330 or 331 of the Bankruptcy Code,
to other  Professionals,  (iii)  fees  required  to be paid to the Office of the
United States Trustee under Section  1930(a),  Title 28, United States Code, and
(iv) the actual, necessary expenses, other than compensation,  and reimbursement
pursuant to Section 503(b)(4) of the Bankruptcy Code,  incurred by a member of a
committee  appointed under Section 1102 of the Bankruptcy Code, if such expenses
are incurred in the  performance of the duties of such committee and are allowed
by the Bankruptcy Court; provided,  however, that such dollar limitation on fees
and  disbursements  shall not include any retainer  fees paid to the  Borrowers'
Professionals prior to the Filing Date and shall not be reduced by the amount of
any  compensation  and  reimbursement  of expenses awarded and paid prior to the
occurrence  of the Event of Default in respect of which the Carve-Out is invoked
or any fees,  expenses,  indemnities  or other  amounts  paid to the Agent,  the
Lenders and their attorneys and agents under this Agreement or otherwise.

            "Cases" means the cases of the  Borrowers  pursuant to Chapter 11 of
the Bankruptcy Code pending in the Bankruptcy Court.

            "Cash Collateral  Account  Agreement" means the amended and restated
cash collateral agreement, dated as of the date hereof, executed by WPSC and the

                                       6



Agent,  substantially in the form of Exhibit L, as such agreement may be further
amended, supplemented or modified from time to time.

            "Cash  Equivalents" means (i) securities with maturities of one year
or less from the date of  acquisition  issued or fully  guaranteed or insured by
the United States  government or any agency thereof and backed by the full faith
and credit of the United States,  (ii) certificates of deposit,  eurodollar time
deposits,  overnight bank deposits and bankers'  acceptances of any Lender Party
having  maturities  of one  year or less  from the  date of  acquisition,  (iii)
commercial  paper of an issuer  rated at least A-1 by Standard & Poor's  Ratings
Group or P-1 by Moody's  Investors  Service,  Inc.,  or carrying  an  equivalent
rating by a nationally  recognized rating agency if both of the two named rating
agencies cease publishing ratings of investments, and (iv) repurchase agreements
and reverse  repurchase  agreements  relating to marketable  direct  obligations
issued or  unconditionally  guaranteed by the United States Government or issued
by any  agency  thereof  and  backed by the full  faith and credit of the United
States,  in each case  maturing  within  one year from the date of  acquisition,
provided that (x) the terms of such  agreements  comply with the  guidelines set
forth in the  Federal  Financial  Agreements  of  Depository  Institutions  with
Securities  and Others,  as adopted by the  Comptroller  of the Currency and (y)
such agreements are entered into with the Agent or any Lender Party.

            "Citibank"  has the meaning  specified  in the recital of parties to
this Agreement.

            "Citicorp"  has the meaning  specified  in the recital of parties to
this Agreement.

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

            "Co-Generation   Agreement"   means  that  certain  Energy  Services
Agreement  dated as of  October  3,  1994 by and  between  Air  Liquide  America
Corporation (as successor to National Power Exchange Group, Inc. pursuant to the
Asset Purchase  Agreement  between Air Liquide America  Corporation and National
Power  Exchange  Group,  Inc. dated March 25, 1996) and WPSC, as the same may be
amended, modified or supplemented from time to time.

            "Collateral"  means all  "Collateral"  referred to in the Collateral
Documents and all other property and interests in property and proceeds  thereof
that is or is  intended  to be  subject  to a Lien in favor of the Agent for the
benefit of the Secured Parties.

            "Collateral  Documents"  means  the  Security  Agreement,  the  Cash
Collateral Account Agreement,  the Blocked Account Letter, the Mortgages and any
other  document  that creates or purports to create a Lien in favor of the Agent
for the benefit of the Secured Parties in connection with the Loan Documents.

            "Commitment"   means  a  Revolving  Credit   Commitment  or  a  Term
Commitment.

            "Commitment Date" has the meaning specified in Section 2.20(b).

            "Commitment Fee" has the meaning specified in Section 2.3(a).

            "Commitment Increase" has the meaning specified in Section 2.20(a).

                                       7



            "Computation Date" has the meaning assigned to it in Section 2.18.

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

            "Consolidated" refers to the consolidation of accounts in accordance
with GAAP.

            "Contaminant"  means any substance regulated or forming the basis of
liability under any Environmental Law, including, without limitation, any waste,
pollutant, hazardous substance, toxic substance, hazardous waste, special waste,
petroleum or  petroleum-derived  substance or waste,  or any constituent of such
substance or waste.

            "Contingent  Obligation" means, as applied to any Person, any direct
or indirect liability,  contingent or otherwise,  of such Person with respect to
any Indebtedness or Contractual  Obligation of another Person, if the purpose or
intent of such  Person in  incurring  the  Contingent  Obligation  is to provide
assurance to the obligee of such  Indebtedness  or Contractual  Obligation  that
such Indebtedness or Contractual Obligation will be paid or discharged,  or that
any agreement relating thereto will be complied with, or that any holder of such
Indebtedness  or Contractual  Obligation will be protected (in whole or in part)
against loss in respect  thereof.  Contingent  Obligations of a Person  include,
without  limitation,  (a) the direct or indirect  guarantee,  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 an obligation
of another  Person,  and (b) any  liability of such Person for an  obligation of
another Person through any agreement  (contingent or otherwise) (i) to purchase,
repurchase or otherwise acquire such obligation or any security therefor,  or to
provide  funds for the payment or discharge of such  obligation  (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  obligation  or to assure the holder of such
obligation against loss, or (v) to supply funds to or in any other manner invest
in such other  Person  (including,  without  limitation,  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 this sentence the primary purpose or intent thereof is as
described in the preceding  sentence.  The amount of any  Contingent  Obligation
shall be equal to the  amount  of the  obligation  so  guaranteed  or  otherwise
supported,  except to the extent exposure of the contingent obligor is expressly
limited to a lesser amount.

            "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 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.

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

                                       8




            "DOL" means the United States  Department of Labor, or any successor
thereto.

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

            "Domestic  Lending Office" means,  with respect to any Lender Party,
the office of such Lender  Party  specified  as its  "Domestic  Lending  Office"
opposite  its  name  on  Schedule  III or in  the  Assumption  Agreement  or the
Assignment  and  Acceptance  pursuant to which it became a Lender Party,  as the
case may be, or such other  office of such Lender Party as such Lender Party may
from time to time specify in writing to the Borrowers and the Agent.

            "Effective  Date"  means the first  date that all of the  conditions
contained in Article III are satisfied.

            "Eligible  Assignee" means (a) with respect to the Revolving  Credit
Facility:  (i) a Lender, (ii) any Affiliate of a Lender, (iii) a commercial bank
or finance company organized under the laws of the United States of America,  or
any state thereof,  and having total assets in excess of $1,000,000,000;  (iv) a
commercial  bank organized under the laws of any other country which is a member
of the  Organization  for Economic  Cooperation and Development  ("OECD"),  or a
political  subdivision of any such country, and having total assets in excess of
$3,000,000,000,  provided  that such  bank is  acting  though a branch or agency
located in the country in which it is  organized or another  country  which is a
member of the OECD; (v) the central bank of any country which is a member of the
OECD;  and (vi) any other  financial  institution  approved  in  writing  by the
Borrowers and the Agent as an Eligible  Assignee for purposes of this Agreement;
provided that the  Borrowers'  approval  shall not be  unreasonably  withheld or
delayed and, if a Default shall have occurred and be continuing, approval of the
Borrower shall not be required; and (b) with respect to the Term Facility: (i) a
Lender,  (ii) any Affiliate of a Lender,  (iii) an Approved Fund of a Lender and
(iv) such other Persons that engage in or purchase loans of the same type as the
Term Loans and are acceptable to the Agent. Without limitation on the foregoing,
the Borrowers may withhold their consent of any such other financial institution
if the  proposed  assignment  of any  portion of any Lender  Party's  rights and
obligations  under this  Agreement  to such other  financial  institution  would
materially increase the amount of Taxes required to be deducted by the Borrowers
from or in respect of any sum payable under the Loan Documents (determined as of
the date on which such  other  financial  institution  is  proposed  to become a
Lender Party hereunder).

            "Eligible  Inventory"  means such of the  Inventory of the Borrowers
valued  at the  lower of  market  or cost on a first in first  out  basis as the
Agent, in its sole discretion  consistent with its customary  business practices
and generally  applicable  criteria for  comparable  secured  financings,  deems
eligible, less all reserves as the Agent, in its sole discretion consistent with
its  customary  business  practices  and  generally   applicable   criteria  for
comparable  secured  financings,  from time to time deems  appropriate.  For the
purposes of this definition, the Agent will not treat the following Inventory as
eligible:

            (a) Inventory in transit;

                                       9



            (b) Inventory held by a bailee or Inventory held on leased  premises
      where  the  landlord  thereof  has not  executed  a waiver  and  financing
      statement in form and substance satisfactory to the Agent; and

            (c)  Inventory  subject to a Lien prior in right to that of the Lien
      in favor of the Secured Parties or subject to any other Lien not permitted
      by Section 7.1.

            Nothing contained in the preceding  sentence shall limit the Agent's
right, in its sole discretion  consistent with its customary  business practices
and generally  applicable criteria for comparable secured  financings,  to treat
any item of Inventory as ineligible.

            "Eligible   Receivables"  means  such  of  the  Receivables  of  the
Borrowers as the Agent,  in its sole  discretion  consistent  with its customary
business  practices and generally  applicable  criteria for  comparable  secured
financings,  deems  eligible,  less  all  reserves  as the  Agent,  in its  sole
discretion  consistent  with its  customary  business  practices  and  generally
applicable criteria for comparable secured  financings,  from time to time deems
appropriate.  For the purposes of this definition,  the Agent will not treat the
following Receivables as eligible:

            (a) Receivables that do not arise out of sales of goods or rendering
      of services in the ordinary course of the business of the Borrowers (other
      than Receivables owing from Thyssen Inc. as the result of the provision of
      conversion services by the Borrowers);

            (b) Receivables on terms other than those normal or customary in the
      business of the Borrowers (other than Receivables  owing from Thyssen Inc.
      as the result of the provision of conversion services by the Borrowers);

            (c)  Receivables  owing from any Person that is an  Affiliate of any
      Borrower or any of its Subsidiaries, other than Wheeling-Nisshin, Unimast,
      Inc. and Subsidiaries of Handy & Harman and, when circumstances related to
      ownership, management and financial condition of Ohio Coatings Company are
      acceptable to the Agent, Ohio Coatings Company;

            (d) Receivables  more than 90 days past the original invoice date or
      more than 60 days past the date due;

            (e) Receivables owing from any Person from which an aggregate amount
      of more than 50% of the Receivables owing is more than 60 days past due;

            (f)  Receivables  owing  from  any  Person  that  (i)  has  disputed
      liability for any Receivable owing from such Person,  to the extent of the
      amount in  dispute or (ii) has  otherwise  asserted  any claim,  demand or
      liability against any Borrower,  whether by action, suit,  counterclaim or
      otherwise, to the extent of the amount of such claim, demand or liability;

            (g) Receivables  owing from any Person that is at such time a debtor
      in any action or proceeding under the Bankruptcy Code or any similar state
      statute;

                                       10



            (h) Receivables (i) owing from any Person that is also a supplier to
      or  creditor  of any  Borrower to the extent of the amount of any right of
      set-off,  unless  such Person has waived all rights of set-off in a manner
      acceptable  to the  Agent  or  (ii)  representing  any  manufacturer's  or
      supplier's  credits,  discounts,  incentive plans or similar  arrangements
      entitling any Borrower to discounts on future purchase therefrom;

            (i) Receivables  arising out of sales to account debtors outside the
      United  States or Canada  other than account  debtors in the  provinces of
      Quebec  and other  provinces  identified  by the  Agent in its  reasonable
      discretion  unless such  Receivables  are fully  backed by an  irrevocable
      letter  of  credit  on  terms,  and  issued  by a  financial  institution,
      acceptable  to the Agent and such  irrevocable  letter of credit is in the
      possession of the Agent;

            (j) Receivables arising out of sales on a bill-and-hold,  guaranteed
      sale, sale-or-return,  sale on approval or consignment basis or subject to
      any right of return or charge-back (to the extent of such right);

            (k)  Receivables  owing  from an account  debtor  that is an agency,
      department or instrumentality of the United States or any State thereof;

            (l)  Receivables  the full and timely  payment of which the Agent in
      its sole discretion believes to be doubtful; and

            (m)  Receivables in respect of which the Security  Agreement,  after
      giving  effect to the related  filings of financing  statements  that have
      then  been  made,  if any,  does not or has  ceased  to create a valid and
      perfected first priority Lien in favor of the Agent for the benefit of the
      Secured Parties securing the Secured Obligations.

            Nothing contained in the preceding  sentence shall limit the Agent's
right, in its sole discretion  consistent with its customary  business practices
and generally  applicable criteria for comparable secured  financings,  to treat
any Receivable as ineligible.

            "Environmental  Laws"  means all  federal,  state  and  local  laws,
statutes,  ordinances and regulations,  now or hereafter in effect,  and in each
case as  amended  or  supplemented  from  time to  time,  and  any  judicial  or
administrative   interpretation  thereof,  including,  without  limitation,  any
judicial or  administrative  order,  consent decree or judgment  relating to the
regulation and protection of human health,  safety,  the  environment or natural
resources   (including,   without   limitation,   ambient  air,  surface  water,
groundwater,  wetlands,  land surface or subsurface  strata,  wildlife,  aquatic
species and vegetation).

            "Environmental  Liabilities and Costs" means, as to any Person,  all
liabilities, obligations,  responsibilities,  Remedial Actions, losses, damages,
punitive  damages,  consequential  damages,  treble damages,  costs and expenses
(including, without limitation, all fees, disbursements and expenses of counsel,
experts and consultants,  and costs of investigation  and feasibility  studies),
fines, penalties, sanctions and interest incurred (either as an expense or other
charge  or as would be  included  on the  liabilities  side of the  consolidated
balance  sheet of such  Person  and its  Subsidiaries  or, if the amount and the
liability is fixed,  in a footnote  thereto) or reserved  against as a result of

                                       11



any claim or  demand  by any other  Person,  whether  based in  contract,  tort,
implied  or express  warranty,  strict  liability,  criminal  or civil  statute,
including,  without limitation, any thereof arising under any Environmental Law,
Permit, order or agreement with any Governmental  Authority or other Person, and
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
such Person or any of its Subsidiaries.

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

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

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

            "ERISA  Event" means (i) a Reportable  Event with respect to a Title
IV Plan or a Multiemployer Plan (other than the Reportable Event under PBGC Reg.
ss.4043.35 as a result of the commencement of the Cases); (ii) the withdrawal of
any Borrower or any of its  Subsidiaries  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 Borrower or any of its Subsidiaries or any
ERISA  Affiliate  from any  Multiemployer  Plan;  (iv) 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;  (v) the institution of proceedings to
terminate a Title IV Plan or Multiemployer Plan by the PBGC; (vi) the failure to
make  required  contributions  to a  Qualified  Plan;  (vii) 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  PBGC  premiums  due but not
delinquent under Section 4007 of ERISA, excluding any such event or condition to
the  extent  that the PBGC has,  prior to the date  hereof,  (A) waived any such
termination,  appointment  or  imposition as a result of such event or condition
and each of the  Borrowers  and their  respective  Subsidiaries  and each of the
ERISA Affiliates are in compliance with all applicable  requirements of any such
waiver or (B) consented to the occurrence of such event or the existence of such
condition in  circumstances  that could not  reasonably be expected to result in
any liability of any Borrower or any of its  Subsidiaries or any ERISA Affiliate
after the date hereof; (viii) a prohibited  transaction (as described in Section
4975 of the Code or Section 406 of ERISA) that occurs with  respect to any Plan;
(ix) the request by any Borrower, any of its Subsidiaries or any ERISA Affiliate
for a minimum  funding  waiver from the IRS with respect to any Pension Plan; or
(x) the  occurrence of a transaction in the  circumstances  described in Section
4069 of ERISA with respect to a Title IV Plan.

            "Equipment" has the meaning specified in the Security Agreement

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

                                       12



            "Eurodollar Lending Office" means, with respect to any Lender Party,
the office of such Lender specified as its "Eurodollar Lending Office" below its
name on Schedule III or in the Assignment  and  Acceptance  pursuant to which it
became a Lender  Party,  as the case may be (or, if no such office is specified,
its Domestic Lending Office),  or such other office of such Lender Party as such
Lender Party may from time to time specify in writing to the  Borrowers  and the
Agent.

            "Eurodollar  Rate" means, for any Interest Period,  an interest rate
per  annum  equal to the rate per annum  obtained  by  dividing  (a) the rate of
interest  determined  by the  Agent to be the  average  (rounded  upward  to the
nearest  whole  multiple of 1/16 of 1% per annum,  if such average is not such a
multiple) of the rate per annum at which  deposits in Dollars are offered by the
principal  office of  Citibank  in London,  England to prime banks in the London
interbank  market at 11:00 A.M. (London time) two Business Days before the first
day for such Interest Period in an amount  substantially equal to the Eurodollar
Rate Loan of Citicorp during such Interest Period and for a period equal to such
Interest  Period by (b) a  percentage  equal to 100% minus the  Eurodollar  Rate
Reserve Percentage for such Interest Period.

            "Eurodollar Rate Loan" means any outstanding principal amount of the
Loans of any Lender Party that, for an Interest Period, bears interest at a rate
determined with reference to the Eurodollar Rate.

            "Eurodollar  Rate Reserve  Percentage" for any Interest Period means
the reserve percentage applicable two Business Days before the first day of such
Interest  Period  under  regulations  issued  from  time to time by the Board of
Governors of the Federal  Reserve System (or any successor) for  determining the
maximum  reserve  requirement  (including,  without  limitation,  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.

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

            "Excess  Availability"  means, as of any date of determination,  the
excess of (a) the lesser of the Borrowing Base or the aggregate Revolving Credit
Commitments,  over (b) the sum of the outstanding  Revolving Credit Loans, Swing
Loans and Letter of Credit Obligations on such date.

            "Fabricating   Joint  Ventures"  means,   collectively,   the  joint
ventures,  corporations or partnerships owned by any Borrower (or a wholly owned
Subsidiary  of any Borrower)  which may make  acquisitions  of businesses  whose
primary  operations  are  fabricating,  coating  or  other  processing  of steel
products.

            "Fair Market  Value" means (i) with respect to any asset (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

                                       13




such  asset or,  if such  asset  shall  have been the  subject  of a  relatively
contemporaneous  appraisal by an independent  third party  appraiser,  the basic
assumptions  underlying which have not materially changed since its date, as set
forth in such appraisal, and (ii) with respect to any marketable security at any
date,  the closing sale price of such security on the business day (on which any
national  securities  exchange is open for the normal  transaction  of business)
next  preceding  such date, as appearing in any  published  list of any national
securities  exchange or in the National Market List of the National  Association
of Securities  Dealers,  Inc. or, if there is no such closing sale price of such
security,  the  average  of the asked and bid prices  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.

            "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.

            "Filing  Date"  has  the  meaning   specified  in  the   Preliminary
Statements.

            "Final Order" has the meaning specified in Section 3.3(b).

            "First Day Orders"  means those orders  presented to the  Bankruptcy
Court in the Cases for  consideration on the first day of the Cases,  regardless
of  whether  such  orders  are  entered on the first day of the Cases or shortly
thereafter.

            "Fiscal Month" means one calendar month.

            "Fiscal  Quarter"  means each three month period ending on March 31,
June 30, September 30 or December 31.

            "Fiscal Year" means the 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 as 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, which are applicable to the circumstances
as of the date of  determination  except  that,  for purposes of Article V, GAAP
shall be determined on the basis of such principles in effect on the date hereof
and  consistent  with those used in the  preparation  of the  audited  financial
statements referred to in Section 4.5.

            "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.

            "Increase Date" has the meaning specified in Section 2.20(a).

                                       14



            "Increasing Lender" has the meaning specified in Section 2.20(d).

            "Indebtedness"  of any  Person  means (i) all  indebtedness  of such
Person for borrowed money (including, without limitation,  reimbursement and all
other  obligations with respect to surety bonds,  letters of credit and bankers'
acceptances,  whether or not  matured)  or for the  deferred  purchase  price of
property or services,  (ii) all  obligations of such Person  evidenced by notes,
bonds, debentures or similar instruments,  (iii) 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),  (iv) all  Capitalized
Lease Obligations of such Person, (v) all Contingent Obligations of such Person,
(vi) all  obligations  of such Person to purchase,  redeem,  retire,  defease or
otherwise  acquire  for  value  any Stock or Stock  Equivalent  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,  (vii)  all  obligations  of such  Person  under  any  interest  rate
contract,  (viii) all Indebtedness referred to in clause (i), (ii), (iii), (iv),
(v),  (vi)  or  (vii)  above  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,  without  limitation,  accounts  and
general  intangibles)  owned by such  Person,  even  though  such Person has not
assumed or become liable for the payment of such  Indebtedness,  and (ix) in the
case of the Borrowers, the Obligations.

            "Indemnitee" has the meaning specified in Section 10.4.

            "Indentures"  means (a) the  Replacement  Indenture  and (b) the WPC
Term Loan Agreement.

            "Interest Period" means (a) initially,  the period commencing on the
date a Eurodollar  Rate Loan is made or on the date of conversion of a Base Rate
Loan to a Eurodollar Rate Loan and ending on the last day of the period selected
by  any  Borrower  pursuant  to  the  provisions  below  and,  thereafter,  each
subsequent  period  commencing  on the  last  day of the  immediately  preceding
Interest  Period  and  ending  on the last day of the  period  selected  by such
Borrower  pursuant to the provisions  below.  The duration of each such Interest
Period shall be seven days or one,  two,  three or six months,  as the Borrowers
may, upon notice  received by the Agent not later than 11:00 A.M. (New York City
time) on the third  Business Day prior to the first day of such Interest  Period
select; provided, however, that:

            (A) 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;

            (B) 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;

                                       15



            (C) no Borrower may select any Interest  Period which ends after the
      Termination Date;

            (D) no Borrower may select any  Interest  Period in respect of Loans
      having an aggregate principal amount of less than $5,000,000; and

            (E) there  shall be  outstanding  at any one time no more than seven
      Interest  Periods  in the  aggregate,  and not more  than  three  Interest
      Periods of a duration of seven days.

            "Interest  Rate  Contract"  means  interest rate swap, cap or collar
agreements and interest rate future or option contracts and similar agreements.

            "Interim Order" has the meaning specified in Section 3.1(a).

            "Inventory" has the meaning specified in the Security Agreement.

            "Inventory  Reserves" means such reserves as may be established from
time to time by the Agent in the Agent's  reasonable  discretion with respect to
changes in the  determination  of the  saleability of the Eligible  Inventory or
which reflect such other  factors as negatively  affect the cost or market value
of the Eligible  Inventory.  Without  limiting the  generality of the foregoing,
Inventory  Reserves  may  include  (but are not limited  to)  reserves  based on
obsolescence, industry standards or current business plans.

            "Investment" has the meaning specified in Section 7.6.

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

            "IRS" means the Internal Revenue Service, or any successor thereto.

            "Issuer" means each Person listed on Schedule I.

            "L/C Cash Collateral  Account" has the meaning  specified in Section
8.3.

            "Leases"  means,  with  respect  to any  Borrower  or  any of  their
Subsidiaries,  all of those  leasehold  estates  in real  property  now owned as
lessee or hereafter  acquired  including,  without  limitation,  those listed on
Schedule  4.20(b),  as such may be amended,  supplemented or otherwise  modified
from time to time to the extent permitted by this Agreement.

            "Lender" has the meaning specified in the recital of parties to this
Agreement and includes Assuming Lenders.

            "Lender Party" means any Lender, any Issuer or the Swing Bank.

            "Letter  of Credit"  means (a) any  letter of credit  issued for the
account of any Borrower or any of their  Subsidiaries  by an Issuer  pursuant to
Section  2.17 and (b) any  letter of credit  issued  and  outstanding  as of the
Filing Date under the Pre-Petition Credit Agreement.

                                       16



            "Letter of Credit Agreement" means the agreement, dated as of August
24,  1994,  between  WPSC and  Citibank,  as issuer,  as such  agreement  may be
amended, supplemented or otherwise modified from time to time.

            "Letter of Credit  Obligations"  means, at any time, all liabilities
at such time of the  Borrowers to all Issuers with respect to Letters of Credit,
whether or not any such liability is contingent, and includes the sum of (i) the
Reimbursement  Obligations  at such time and (ii) the  Letter of Credit  Undrawn
Amounts at such time.

            "Letter of Credit Reimbursement Agreement" has the meaning specified
in Section 2.17(c).

            "Letter of Credit  Request"  has the  meaning  specified  in Section
2.17(d).

            "Letter of Credit Undrawn Amounts" means, at any time, the aggregate
undrawn face amount of all Letters of Credit outstanding at such time.

            "Lien" means any  mortgage,  deed of trust,  pledge,  hypothecation,
assignment,  deposit  arrangement,   encumbrance,  lien  (statutory  or  other),
security  interest or other  similar  kind of  preference,  priority or security
agreement  or  preferential  arrangement,  including,  without  limitation,  any
conditional  sale or other title retention  agreement,  the interest of a lessor
under a Capitalized Lease Obligation,  any financing lease having  substantially
the same economic effect as any of the foregoing,  and the filing, under the UCC
or comparable law of any  jurisdiction,  of any financing  statement  naming the
owner of the asset to which  such Lien  relates as debtor  (other  than a filing
which does not evidence an outstanding secured obligation,  a commitment to make
advances, incur obligations or otherwise give value).

            "Loan"  means a Revolving  Credit  Loan, a Swing Loan or a Term Loan
made by a Lender to any Borrower pursuant to Article II.

            "Loan Documents"  means,  collectively,  this Agreement,  the Notes,
each Letter of Credit Reimbursement Agreement and the Collateral Documents.

            "Majority  Lenders" means, at any time, Lenders holding at least 51%
of the aggregate of the Commitments at such time.

            "Majority  Revolving  Credit Lenders"  means,  at any time,  Lenders
holding at least 51% of the aggregate of Revolving  Credit  Commitments  at such
time.

            "Majority Term Lenders"  means, at any time, Term Lenders holding at
least 51% of the aggregate Term Commitments at such time.

            "Mandatory Fees" means the statutory fees required to be paid to the
Office of the United  States  Trustee under  Section  1930(a),  Title 28, United
States Code and the fees of the Clerk of the United States Bankruptcy Court.

            "Material  Adverse Change" means a material adverse change in any of
(i) the condition (financial or otherwise),  business,  performance,  prospects,

                                       17



operations or properties  of the  Borrowers  and their  respective  Subsidiaries
taken as one enterprise,  (ii) the legality,  validity or  enforceability of any
Loan Document, (iii) the perfection or priority of the Liens granted pursuant to
the Collateral Documents,  other than solely by reason of action by the Agent or
the Lender  Parties,  (iv) the ability of the Borrowers to repay the Obligations
or of any  Borrower to perform its  obligations  under any Loan  Document in any
material  respect or (v) the rights and  remedies  of the Lender  Parties or the
Agent under the Loan Documents.

            "Material  Adverse  Effect"  means an effect  that has a  reasonable
likelihood  of resulting in or causing a material  adverse  change in any of (i)
the  condition  (financial  or  otherwise),  business,  performance,  prospects,
operations or properties  of the  Borrowers  and their  respective  Subsidiaries
taken as one enterprise,  (ii) the legality,  validity or  enforceability of any
Loan Document, (iii) the perfection or priority of the Liens granted pursuant to
the Collateral Documents,  other than solely by reason of action by the Agent or
the Lender  Parties,  (iv) the ability of the Borrowers to repay the Obligations
or of any  Borrower to perform its  obligations  under any Loan  Document in any
material  respect or (v) the rights and  remedies  of the Lender  Parties or the
Agent under the Loan Documents.

            "Material Contractual  Obligation" of any Person means such Person's
Contractual  Obligations in respect of  Indebtedness  of the types  described in
clauses  (i)  and  (ii) of the  definition  of  "Indebtedness"  and  each  other
Contractual Obligation that is material to the business,  prospects,  operations
or financial condition of such Person.

            "Mortgage   Policies"   has  the   meaning   specified   in  Section
6.21(a)(ii).

            "Mortgages" has the meaning specified in Section 3.1(g).

            "Multiemployer  Plan"  means a  multiemployer  plan,  as  defined in
Section 4001(a)(3) of ERISA, and to which any Borrower,  any of its Subsidiaries
or any  ERISA  Affiliate  is  making,  is  obligated  to make,  has made or been
obligated  to make,  contributions  on  behalf of  participants  who are or were
employed by any of them.

            "Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other  disposition  of any asset the  aggregate  amount of cash received from
time to time (whether as initial consideration or through payment or disposition
of deferred  consideration)  by or on behalf of such Person in  connection  with
such  transaction  after  deducting  therefrom  only (without  duplication)  (a)
reasonable and customary brokerage commissions, underwriting fees and discounts,
legal fees, finder's fees and other similar fees and commissions, (b) the amount
of taxes payable in connection  with or as a result of such  transaction and (c)
the amount of any  Indebtedness  secured by a Lien on such  asset  that,  by the
terms of the agreement or instrument governing such Indebtedness, is required to
be repaid upon such  disposition,  in each case to the  extent,  but only to the
extent,  that the amounts so deducted are actually  paid to a Person that is not
an Affiliate of such Person or a Borrower or any Affiliate of a Borrower and are
properly  attributable  to such  transaction or to the asset that is the subject
thereof.

            "Note" means a Revolving Credit Note or a Term Note.

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

                                       18



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

            "Obligations" means the Loans, the Letter of Credit Obligations and,
all other advances, debts, liabilities,  obligations, covenants and duties owing
by any Borrower to the Agent,  any Lender Party, any Affiliate of any of them or
any Indemnitee, of every type and description, present or future, whether or not
evidenced  by any  note,  guaranty  or  other  instrument,  arising  under  this
Agreement,  under any other Loan  Document  or under any  agreement  of the type
described in clause (iv) of the definition of Cash  Equivalents,  whether or not
for the payment of money,  whether  arising 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  transaction,
interest  rate  contract,  commodity  contract or in any other  manner,  whether
direct  or  indirect   (including,   without   limitation,   those  acquired  by
assignment),  absolute  or  contingent,  due or to become due,  now  existing or
hereafter arising and however acquired. The term "Obligations" includes, without
limitation,   all  interest,   charges,  expenses,  fees,  attorneys'  fees  and
disbursements and any other sum chargeable to the Borrowers under this Agreement
or any other Loan Document.

            "Other Taxes" has the meaning specified in Section 2.15(b).

            "Overadvance"  means, at any time of calculation,  a circumstance in
which the sum of the Revolving  Credit  Loans,  Swing Loans and Letter of Credit
Obligations exceeds the Borrowing Base.

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

            "PCC" has the  meaning  specified  in the recital of parties to this
Agreement.

            "Pension Plan" means an employee pension benefit plan, as defined in
Section 3(2) of ERISA,  which is not an  individual  account plan, as defined in
Section 3(34) of ERISA, and (a) which any Borrower or any of its Subsidiaries or
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 or (b) with
respect to which any Borrower or any of its  Subsidiaries or any ERISA Affiliate
could have  liability  under  Section 4064 or Section 4069 of ERISA in the event
such plan has been or were to be terminated.

            "Performance Level" means, as of any date, the level set forth below
then in effect,  as determined in  accordance  with the following  provisions of
this definition:

  Performance Level                    Excess Availability
  -----------------                    -------------------
         I                        Greater than $75,000,000
         II                       Less than or equal to $75,000,000 but
                                  greater than $30,000,000
         III                      Less than or equal to $30,000,000

For the purposes of this definition,  the Performance  Level shall be determined
by reference to the most recent Borrowing Base Certificates  delivered  pursuant
to Section 6.10(f) and the average outstanding principal amount of the Revolving

                                       19



Credit  Loans,  Swing  Loans  and  Letter of  Credit  Obligations  for the month
immediately preceding such date of determination.

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

            "Permitted Encumbrances" has the meaning specified in the Mortgages.

            "Permitted Liens" means Liens permitted by Section 7.1.

            "Person" means an individual,  partnership,  corporation (including,
without limitation,  a business trust),  limited liability company,  joint stock
company, trust, unincorporated association,  joint venture or other entity, or a
Governmental Authority.

            "PIK Interest" has the meaning specified in Section 2.9(c).

            "Plan" means an employee benefit plan, as defined in Section 3(3) of
ERISA, which any Borrower or any of its Subsidiaries  maintains,  contributes to
or has an obligation to contribute to on behalf of participants  who are or were
employed by any of them.

            "Pre-Petition  Agent"  means  Citibank,  N.A.  in  its  capacity  as
administrative agent and collateral agent for the Pre-Petition Lenders under the
Pre-Petition Credit Agreement.

            "Pre-Petition  Cash  Management  Program" means the cash  management
program of the Borrowers and certain of their Affiliates with Citibank.

            "Pre-Petition  Collateral"  means the "Collateral" as defined in the
Pre-Petition Credit Agreement.

            "Pre-Petition Collateral Documents" means any agreement that created
or purported to create a Lien in favor of the Pre-Petition Agent for the benefit
of  the  Pre-Petition   Lenders  in  connection  with  the  Pre-Petition  Credit
Agreement.

            "Pre-Petition  Credit  Agreement"  has the meaning  specified in the
Preliminary Statements.

            "Pre-Petition  Fee Letter" means the fee letter dated April 13, 1999
between WPC and the Pre-Petition Agent.

            "Pre-Petition  Guarantees" means the guarantees  executed by WPC and
the Guarantors (as defined in the Pre-Petition  Credit  Agreement)  guaranteeing
the  obligations  of the Loan  Parties  (as defined in the  Pre-Petition  Credit
Agreement) under the Pre-Petition Credit Agreement.

            "Pre-Petition  Lenders" means the banks,  financial institutions and
other institutional lenders under the Pre-Petition Credit Agreement.

                                       20



            "Pre-Petition  Letter of Credit  Agreement" means any application or
agreement in connection  with a letter of credit  issued under the  Pre-Petition
Credit Agreement.

            "Pre-Petition  Loan  Documents"  means (i) the  Pre-Petition  Credit
Agreement, (ii) the Pre-Petition Notes, (iii) the Pre-Petition Guarantees,  (iv)
the Pre-Petition Collateral Documents,  (v) the Pre-Petition Fee Letter and (vi)
each Pre-Petition Letter of Credit Agreement.

            "Pre-Petition  Notes" means the promissory  notes of WPSC payable to
the order of the Pre-Petition  Lenders evidencing the aggregate  indebtedness to
the Pre-Petition Lenders.

            "Pre-Petition  Obligations"  means  all  amounts  owing  to (a)  the
Pre-Petition  Agent or any  Pre-Petition  Lender  pursuant  to the  terms of the
Pre-Petition  Credit  Agreement,  any other  Pre-Petition  Loan  Document or any
agreement,  instrument or document executed and delivered in connection with any
thereof (b) the banks and other financial  institutions  that provide  liquidity
support  for  the  Pre-Petition  Securitization  Program  and  (c)  Citibank  in
connection with the Pre-Petition Cash Management  Program.  Without limiting the
generality of the foregoing, the aggregate amount from time to time available to
be drawn under  letters of credit  issued  pursuant to the  Pre-Petition  Credit
Agreement (assuming  compliance with all conditions  precedent) shall be deemed,
for  purposes  of this  definition,  to  constitute  an amount then owing to the
Pre-Petition Lenders pursuant to the terms of the Pre-Petition Credit Agreement.

            "Pre-Petition  Securitization Program" means the program pursuant to
which WPSC sold,  transferred  or  otherwise  conveyed  certain of its  accounts
receivable,  together with the accounts receivable of certain Affiliates of WPSC
to  Wheeling-Pittsburgh  Funding,  Inc.  ("Funding")  for inclusion in Funding's
receivables securitization program.

            "Professionals"   means  the   Borrowers'   Professionals   and  the
accountants,  attorneys  and  other  professionals  retained  by  one  unsecured
creditors' committee appointed in accordance with Section 1102 of the Bankruptcy
Code or any examiner appointed in accordance with Section 1104 of the Bankruptcy
Code other than an examiner of the type referred to in Section 8.1(p) hereof.

            "Projections"  means those  financial  projections  dated October 2,
2000  covering  the period  ending in  December  2000,  delivered  to the Lender
Parties by the Borrowers.

            "Qualified  Plan" means an employee pension benefit plan, as defined
in Section 3(2) of ERISA,  which is intended to be  tax-qualified  under Section
401(a) of the Code, and which any Borrower, any of its Subsidiaries or 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.

            "Ratable  Portion"  or  ratably  means,  with  respect to any Lender
Party,  the  following:  (i) in all  cases  relevant  to  the  Revolving  Credit
Facility,  the  quotient  obtained  by  dividing  the  principal  amount  of the
Revolving Credit Commitment of such Lender by the amount of the Revolving Credit
Facility  and (ii) in all cases  relevant  to the Term  Facility,  the  quotient
obtained by dividing the principal  amount of the Term Commitment of such Lender
by the amount of the Term Facility.

                                       21



            "Real  Estate"  means all of those plots,  pieces or parcels of land
now owned or  hereafter  acquired by any  Borrower or any of their  Subsidiaries
(the "Land"), including,  without limitation,  those listed on Schedule 4.20(a),
together with the right, title and interest of such Borrower or such Subsidiary,
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, adjoining or abutting the Land to
the center line thereof,  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,  without  limitation,  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.

            "Receivables" has the meaning specified in the Security Agreement.

            "Receivables  Reserves"  means such  reserves as may be  established
from time to time by the Agent in the Agent's reasonable  business judgment with
respect to the determination of the collectability in the ordinary course and of
the creditworthiness of the Eligible Receivables.

            "Register" has the meaning specified in Section 10.7.

            "Reimbursement  Obligations"  means all  reimbursement  or repayment
obligations  of the  Borrowers  to  Issuers  with  respect  to Letters of Credit
pursuant to Letter of Credit Reimbursement Agreements.

            "Release"  means, as to any Person,  any release,  spill,  emission,
leaking, pumping, injection, deposit, disposal,  discharge,  dispersal, leaching
or  migration  into the  indoor  or  outdoor  environment  or into or out of any
property owned by such Person,  including,  without limitation,  the movement of
Contaminants  through  or in the  air,  soil,  surface  water,  ground  water or
property.

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

            "Reorganization  Plan" means a plan of  reorganization  confirmed in
any of the Cases.

            "Replacement  Indenture"  means the indenture,  dated as of November
26, 1997,  among WPC, the  guarantors  named on the signature  pages thereof and
Bank One,  NA, as  trustee,  pursuant to which the  Replacement  Notes have been
issued, as the same may be amended, supplemented or modified from time to time.

                                       22



            "Replacement  Notes" means WPC's 9 1/4% Senior Notes due 2007 issued
pursuant to the Replacement Indenture, as amended prior to the Effective Date.

            "Reportable  Event" means any event  described in Section 4043(c) of
ERISA,  other than  events for which  notice to the PBGC has been  waived  under
applicable regulations.

            "Requirement  of Law" means,  as to any Person,  the  certificate of
incorporation and by-laws or other organizational or governing documents of such
Person, and all federal, state and local laws, rules and regulations, including,
without  limitation,   federal,  state  or  local  securities  laws,  ERISA  and
Environmental  Laws,  and the  disclosure  requirements  thereof and all orders,
judgments,  decrees or 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.

            "Responsible  Officer" means, with respect to any Person, any of the
principal executive officers of such Person.

            "Revolving  Credit  Borrowing"  means  a  borrowing   consisting  of
Revolving  Credit  Loans made on the same day by the  Revolving  Credit  Lenders
ratably according to their respective Revolving Credit Commitments.

            "Revolving  Credit  Commitment"  means, as to each Revolving  Credit
Lender,  the  commitment  of such Lender to make  Revolving  Credit Loans to the
Borrowers  pursuant  to  Section  2.1(a)  in  the  aggregate   principal  amount
outstanding  not to exceed the amount set forth  opposite  such Lender's name on
Schedule II under the caption  "Revolving Credit  Commitment" or, if such Lender
has  entered  into one or more  Assignments  and  Acceptances,  set forth in the
Register  maintained  by the Agent  pursuant  to Section  10.7 as such  Lender's
"Revolving  Credit  Commitment",  as such  amount  may be  reduced  or  modified
pursuant to this Agreement.

            "Revolving Credit Facility" means, at any time, the aggregate amount
of the Revolving Credit Lenders' Revolving Credit Commitments at such time.

            "Revolving  Credit  Lender"  means any Lender  that has a  Revolving
Credit Commitment.

            "Revolving  Credit  Loan"  means a Loan made by a  Revolving  Credit
Lender to any Borrower pursuant to Section 2.1(a).

            "Revolving  Credit  Note" means a promissory  note of the  Borrowers
payable to the order of any Revolving  Credit Lender in a principal amount equal
to the amount of such  Lender's  Revolving  Credit  Commitment  as originally in
effect,  in  substantially  the form of Exhibit A-1,  evidencing  the  aggregate
Indebtedness of the Borrowers to such Lender resulting from the Revolving Credit
Loans made by such Lender.

            "Secured   Parties"   means  the  Lender   Parties  and  the  Agent.

                                       23



            "Security  Agreement" means the security agreement,  dated as of the
date hereof, executed by each Borrower,  substantially in the form of Exhibit H,
as such agreement may be further  amended,  supplemented  or otherwise  modified
from time to time.

            "Settlement Date" has the meaning assigned to it in Section 2.18.

            "Stock" means shares of capital  stock,  beneficial  or  partnership
interests, participations or other equivalents (regardless of how designated) of
or in a corporation or equivalent  entity,  whether  voting or  non-voting,  and
includes, without limitation, common stock and preferred stock.

            "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 more than 50% of the outstanding Stock having ordinary voting power
to elect a  majority  of the board of  directors,  managers,  trustees  or other
controlling  persons,  is, at the time,  directly or  indirectly,  owned by such
Person and/or one or more Subsidiaries 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).

            "Super-Majority  Revolving  Credit  Lenders"  means,  at  any  time,
Revolving  Credit  Lenders  holding at least 66-2/3% of the aggregate  Revolving
Credit Commitments at such time.

            "Super-Priority  Claim" means a claim against any Borrower in any of
the Cases which is an  administrative  expense claim having priority over any or
all administrative expenses of the kind specified in Section 503(b) or 507(b) of
the Bankruptcy Code.

            "Swing  Bank" means  Citicorp or such other Lender who shall also be
the Agent or who shall agree with the Agent to act as Swing Bank.

            "Swing  Loan"  means a Loan made by the Swing  Bank to any  Borrower
pursuant to Section 2.1(b).

            "Swing Loan Borrowing" means a Borrowing consisting of a Swing Loan.

            "Tax Affiliate" means, as to any Person,  (i) any Subsidiary of such
Person,  and (ii) any  Affiliate  of such Person  with which such Person  filed,
files or is eligible to file consolidated, combined or unitary tax returns.

            "Tax Return" has the meaning specified in Section 4.3.

            "Tax Sharing  Agreement" means the agreement,  dated as of April 12,
1991,  between  WPSC and WPC,  as modified by the  Contribution  and  Assumption
Agreement  dated as of July 26, 1994  between WHX and WPC and by the Tax Sharing
Agreement, dated as of July 26, 1994, between WHX and WPC, as such agreement may
be further amended, supplemented or otherwise modified from time to time.

                                       24



            "Taxes" has the meaning specified in Section 2.15(a).

            "Term Borrowing" means a borrowing  consisting of simultaneous  Term
Loans  made by the Term  Lenders  ratably  according  to their  respective  Term
Commitments.

            "Term Commitment" means, with respect to any Term Lender or Assuming
Lender that participates in a Commitment Increase, the Commitment of such Lender
to make a Term Loan to the  Borrowers  pursuant to Section  2.1(c) in the amount
set forth  opposite  such  Lender's name on Schedule II hereto under the caption
"Term Commitment" or as otherwise determined in accordance with Section 2.20 or,
if such Lender has entered  into one or more  Assignment  and  Acceptances,  set
forth for such  Lender in the  Register  maintained  by the  Agent  pursuant  to
Section 10.7 as such Lender's "Term  Commitment",  as such amount may be reduced
at or prior to such time  pursuant  to Section  2.5 or may be  increased  by the
amount of any PIK Interest payable to such Lender.

            "Term Facility" means, at any time, the aggregate amount of the Term
Lenders' Term Commitments at such time.

            "Term Lender" means any Lender that has a Term Commitment.

            "Term Loan" has the meaning specified in Section 2.1(c).

            "Term Loan To Value  Reserve"  means a reserve in an amount equal to
the excess of the aggregate  principal  amount of the Term Loans over the sum of
10% of Eligible Inventory (net of Inventory Reserves) plus 5% of the face amount
of Eligible Receivables (net of Receivables Reserves) at any time of calculation
plus $22,500,000.

            "Term Note" means a promissory note of the Borrowers  payable to the
order of any Term  Lender,  in  substantially  the form of Exhibit  A-2  hereto,
evidencing the  Indebtedness of the Borrowers to such Lender  resulting from the
Term Loan made by such Lender and any PIK Interest payable to such Lender.

            "Term Priority  Collateral"  means the Collateral listed on Schedule
IV.

            "Termination  Date" means the earlier of (i)  November  17, 2002 and
(ii) the date of termination in whole of the Revolving  Credit  Commitments  and
the Term Commitments pursuant to Section 2.4, 2.5 or 8.2.

            "Title IV Plan"  means a Pension  Plan,  other than a  Multiemployer
Plan, which is covered by Title IV of ERISA.

            "UCC" has the meaning specified in the Security Agreement.

            "Unfunded Pension Liability" means, as to the Borrowers at any time,
the aggregate  amount, if any, of the sum of (i) the amount by which the present
value of all accrued  benefits  under each Title IV Plan exceeds the fair market

                                       25



value  of all  assets  of such  Title  IV Plan  allocable  to such  benefits  in
accordance  with  Title  IV of  ERISA,  all  determined  as of the  most  recent
valuation  date for each such Title IV Plan using the actuarial  assumptions  in
effect under such Title IV Plan, and (ii) 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 Borrowers, the
Borrowers'   Subsidiaries   and  all  ERISA  Affiliates  as  a  result  of  such
transaction.

            "USWA Right of First  Refusal" shall mean the right of first refusal
granted by WPC and WPSC pursuant to an  agreement,  dated as of August 12, 1997,
between WPC, WPSC and the United  Steelworkers  of America,  AFL-CIO-CLC and any
agreements ancillary thereto or amendments, renewals or modifications thereof.

            "Welfare  Benefit Plan" means an employee  welfare  benefit plan, as
defined in Section 3(1) of ERISA,  which any Borrower or any of its Subsidiaries
maintains,  contributes  to,  has  contributed  to  within  the six year  period
preceding the Effective  Date or has an obligation to contribute to on behalf of
their respective former or active employees (or their beneficiaries).

            "Wheeling-Nisshin"   means   Wheeling-Nisshin,   Inc.,   a  Delaware
corporation,  all the outstanding Stock and Stock Equivalents of which are owned
by WPC and Nisshin Steel Co., Ltd.

            "WHX"  means WHX Corp.,  a Delaware  corporation  and the  corporate
parent of WPC.

            "Withdrawal Liability" means, as to the Borrowers,  at any time, the
aggregate   amount  of  the   liabilities  of  the  Borrowers,   the  Borrowers'
Subsidiaries or any ERISA Affiliate  pursuant to Section 4201 of ERISA,  and any
increase in contributions required to be made pursuant to Section 4243 of ERISA,
with respect to all Multiemployer Plans.

            "WPC" has the  meaning  specified  in the recital of parties to this
Agreement.

            "WPSC" has the meaning  specified  in the recital of parties to this
Agreement

            "WPC Note" means those certain  notes,  each dated as of October 24,
1994,  of  WPSC  in  favor  of  WPC  in  the  aggregate   principal   amount  of
$[301,974,000] (as of [March 31, 1999]).

            "WPC Term Loan Agreement"  means the Term Loan Agreement dated as of
November  26,  1997 among  WPC,  various  financial  institutions,  DLJ  Capital
Funding,  Inc. and Citicorp USA, Inc., as amended by Amendment No. 1 dated as of
December  31,  1997 and as the  same may be  further  amended,  supplemented  or
otherwise modified from time to time.

            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".

                                       26



            1.3. Accounting Terms. All accounting terms not specifically defined
herein  shall  be  construed  in  accordance   with  GAAP  and  all   accounting
determinations  required to be made  pursuant  hereto  shall,  unless  expressly
otherwise provided herein, be made in accordance with GAAP.

            1.4. Certain Terms. (a) The words "herein," "hereof" and "hereunder"
and other words of similar import refer to this Agreement as a whole, and not to
any  particular  Article,  Section,  subsection  or  clause  in this  Agreement.
References  herein 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.

            (b)  The  terms   "Lender",   "Issuer"  and  "Agent"  include  their
respective  successors  and the term  "Lender"  includes  each  assignee of such
Lender who becomes a party hereto pursuant to Section 10.7.

                                   ARTICLE II

                         AMOUNTS AND TERMS OF THE LOANS

            2.1. The Loans.  (a) The Revolving  Credit  Loans.  On the terms and
subject to the conditions  contained in this  Agreement,  each Revolving  Credit
Lender  severally  agrees to make  Revolving  Credit Loans to the Borrowers from
time to time on any Business Day during the period from the Effective Date until
the  Termination  Date  in an  aggregate  amount  not  to  exceed  at  any  time
outstanding such Lender's Revolving Credit Commitment;  provided,  however, that
at no time shall any  Revolving  Credit  Lender be obligated to make a Revolving
Credit  Loan  in  excess  of  such  Lender's   Ratable  Portion  of  the  Excess
Availability. In addition, each Revolving Credit Lender agrees to make Revolving
Credit  Loans in  accordance  with  Section  2.18.  Within  the  limits  of each
Revolving Credit Lender's Revolving Credit Commitment,  amounts prepaid pursuant
to Section  2.7(c)(i) or (ii) may be reborrowed  under this Section 2.1(a).  The
Revolving  Credit Loans of each Revolving  Credit Lender shall be evidenced by a
Revolving Credit Note made payable to the order of such Revolving Credit Lender.

            (b) The Swing Loans. The Swing Bank, in its sole discretion,  on the
terms and subject to the conditions contained in this Agreement,  may make loans
(each a "Swing  Loan") to the  Borrowers  from time to time on any  Business Day
during the period  from the date  hereof  until the  Termination  Date (i) in an
aggregate amount not to exceed at any time  outstanding  $25,000,000 and (ii) in
an amount for each Swing Loan Borrowing not to exceed the Excess Availability of
the Revolving  Credit  Lenders at such time. The Swing Bank shall be entitled to
rely on the most recent Borrowing Base Certificate delivered to the Agent.

            (c) The Term  Loans.  On the terms  and  subject  to the  conditions
contained in this Agreement,  each Term Lender severally agrees to make a single
advance (a "Term Loan") to the Borrowers on the  Effective  Date and each Lender
that, as a result of a Commitment Increase made in accordance with Section 2.20,
has an unfunded Term Commitment on any Increase Date, severally agrees to make a
Term Loan to the Borrowers on such Increase  Date, in each case in an amount not
to exceed such Lender's Term Commitment on such date.  Amounts prepaid  pursuant

                                       27



to Section 2.7(c) may not be  reborrowed.  The Term Loan of each Lender shall be
evidenced by a Term Note made payable to the order of such Term Lender.

            2.2.  Making  the  Loans.  (a) Except as  provided  for in  Sections
2.2(b),  2.3(a),  2.9(b), 2.9(c), 2.17(h) and 2.18, each Borrowing shall be made
on  notice,  given by a  Borrower  to the Agent  (x) in the case of a  Revolving
Credit Borrowing  requested to refinance a Swing Loan, not later than 12:00 P.M.
(New  York  City  time)  one  Business  Day  prior to the  date of the  proposed
Revolving Credit Borrowing and (y) in the case of each other Borrowing requested
as a direct  advance to a  Borrower,  not later  than 11:00 A.M.  (New York City
time) on the date of the proposed Borrowing.  Each such notice shall be executed
by an officer of any Borrower indicated on Schedule 2.2 or such other Persons as
agreed to, in  writing,  by the Agent (a "Notice of  Borrowing"),  which  notice
shall be in substantially the form of Exhibit B, specifying therein (i) the date
of such proposed Borrowing, (ii) the aggregate amount of such proposed Borrowing
and (iii) in the case of a Revolving Credit Borrowing or a Swing Loan Borrowing,
a statement that the proposed Borrowing does not exceed the Excess Availability.
The Revolving Credit Loans shall be made as Base Rate Loans.

            (b) Each Swing Loan  Borrowing  shall be made on notice,  given by a
Borrower to the Swing Bank not later than 12:00 P.M. (New York City time) on the
Business Day of the proposed Swing Loan Borrowing. All Swing Loans shall be made
as Base Rate Loans.

            (c) The Agent shall give to each Appropriate Lender prompt notice of
the Agent's receipt of a Notice of Borrowing. Each Appropriate Lender shall, (x)
in the case of a Revolving Credit Borrowing requested to refinance a Swing Loan,
before 12:00 P.M.  (New York City time) and (y) in the case of a Loan  requested
as a direct  advance to a Borrower,  before 2:00 P.M.  (New York City time),  in
each case on the date of the proposed Borrowing,  make available for the account
of  its  Applicable  Lending  Office  to the  Agent's  Account,  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 Article III and the  absence of notice of the  Majority
Revolving Credit Lenders that one or more of the applicable conditions contained
in  Article  III is not  satisfied,  the Agent  will  promptly  make such  funds
available to such  Borrower at the Agent's  aforesaid  address.  In  determining
whether  such  applicable  conditions  have been  satisfied,  the Agent shall be
entitled to rely on the most recent Borrowing Base Certificate received from the
Borrowers.

            (d) Each Revolving  Credit Borrowing shall be in an aggregate amount
of not less than $1,000,000.  Each Swing Loan shall be in the amount of not less
than  $100,000  unless a lower amount is permitted by the Swing Bank in its sole
discretion  from time to time. The Term Borrowing  shall be in the amount of the
Term Facility on the Effective Date.

            (e) Each Notice of Borrowing shall be irrevocable and binding on all
of the Borrowers.

            (f) Unless the Agent shall have received  notice from an Appropriate
Lender prior to the date of any proposed  Borrowing under a Facility under which
such Lender has a  Commitment  that such Lender will not make  available  to the
Agent such Lender's Ratable Portion of such Borrowing, the Agent may assume that

                                       28



such Lender has made such Ratable Portion of the proposed Borrowing 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
that delivered the applicable  Notice of Borrowing on such date a  corresponding
amount.  If and to the  extent  that  such  Lender  shall  not have so made such
portion available to the Agent, such Lender and the Borrowers severally agree to
repay to the Agent forthwith on the next Business Day following the day on which
the  Lender  does not make such  portion  available  such  corresponding  amount
together with interest  thereon,  for each day from the date such amount is made
available to the Borrower  that  delivered  the  applicable  Notice of Borrowing
until the date such  amount  is repaid to the  Agent,  at (i) in the case of the
Borrowers, 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. 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 Borrowers  shall repay to the Agent such  corresponding
amount, such payment shall not relieve such Lender of any obligation it may have
to the Borrowers hereunder.

            (g) The  failure  of any  Appropriate  Lender to make the Loan to be
made by it as part of any  Borrowing  shall not relieve any other  Lender of its
obligation,  if any,  hereunder to make its Loan on the date of such  Borrowing,
but no Lender shall be  responsible  for the failure of any other Lender to make
the Loan to be made by such other Lender on the date of any Borrowing.

            2.3.  Fees.  (a) The  Borrowers  agree to pay to the  Agent  for the
benefit of each Revolving Credit Lender a commitment fee (the "Commitment  Fee")
on the daily unused portion of such Lender's  Revolving  Credit  Commitment from
the date hereof until the  Termination  Date at a rate per annum  determined  by
reference to the Applicable Percentage,  payable in arrears on (i) the first day
of each month during the term of such Lender's  Revolving Credit  Commitment and
(ii)  the  Termination  Date.  If the  Borrowers  fail to pay  (either  from the
proceeds  of a  Borrowing  or  otherwise)  any  Commitment  Fee when  due,  such
Commitment Fee shall immediately constitute, without necessity of further act or
evidence,  a Revolving Credit Loan to the Borrowers.  All Revolving Credit Loans
made pursuant to this Section 2.3 shall be made as Base Rate Loans.

            (b) The Borrowers  have agreed to pay to Citicorp  additional  fees,
the amount and dates of payment of which are embodied in a separate agreement by
and between WPSC and Citicorp dated November 15, 2000.

            2.4. Reduction and Termination of the Revolving Credit  Commitments.
(a) Optional. The Borrowers may, upon at least three Business Days' prior notice
to the Agent,  terminate in whole or reduce ratably in part the unused  portions
of the respective  Revolving Credit Commitments of the Revolving Credit Lenders;
provided,  however, that each partial reduction shall be in the aggregate amount
of not less than  $5,000,000  or an integral  multiple of  $1,000,000  in excess
thereof.

            (b) Mandatory.  The Revolving Credit Facility shall be automatically
and  permanently  reduced upon any sale,  lease,  transfer or other  disposition
(including,  without limitation,  through  condemnation or casualty loss) of any

                                       29



fixed  asset of any  Borrower  or any of its  Subsidiaries  (other than the Term
Priority  Collateral)  to the  extent  that  the Net Cash  Proceeds  of all such
transactions after the Effective Date exceeds $10,000,000 in the aggregate.

            2.5 Termination or Reduction of the Term Commitments. On the date of
the Term Borrowing, after giving effect to such Term Borrowing, and from time to
time  thereafter  upon each  repayment  or  prepayment  of the Term  Loans,  the
aggregate  Term  Commitments  of the Term  Lenders  shall be  automatically  and
permanently  reduced,  on a pro rata basis,  by an amount equal to the amount by
which the aggregate Term Commitments  immediately prior to such reduction exceed
the aggregate unpaid principal amount of the Term Loans (including PIK Interest)
then outstanding.

            2.6.  Repayment.  (a) The  Borrowers  shall repay the entire  unpaid
principal  amount of the Revolving  Credit Loans and Swing Loans on the earliest
of  (i)  the  substantial  consummation  of the  Reorganization  Plan  which  is
confirmed  pursuant to an order entered by the Bankruptcy  Court,  (ii) the date
that is 45 days after the Filing  Date,  unless the Final  Order shall have been
entered on or prior to such date and (iii) the Termination Date.

            (b) The Borrowers shall repay the entire unpaid  principal amount of
the Term  Loans  on the  earliest  of (i) the  substantial  consummation  of the
Reorganization  Plan  which is  confirmed  pursuant  to an order  entered by the
Bankruptcy  Court,  (ii) the date that is 45 days after the Filing Date,  unless
the Final Order  shall have been  entered on or prior to such date and (iii) the
Termination Date.

            2.7.  Prepayments.  (a) The Borrowers  shall have no right to prepay
the principal  amount of any Term Loan,  Revolving Credit Loan or any Swing Loan
other than as provided in this Section 2.7.

            (b) The Borrowers may at any time prepay the  outstanding  principal
amount of the Swing Loans in whole or ratably in part.

            (c)  (i)  The  Borrowers  may at any  time  prepay  the  outstanding
principal  amount of the Loans in whole or ratably in part with the  proceeds of
Collateral.

            (ii) The  Borrowers  may,  upon at least one  Business  Day's  prior
      notice to the Agent  stating the proposed date of the  prepayment,  prepay
      the  outstanding  principal  amount of the Loans in whole  (together  with
      accrued  interest to the date of such prepayment) or ratably in part. Upon
      the giving of such notice of prepayment, the principal amount of the Loans
      specified to be prepaid shall become due and payable on the date specified
      for each such prepayment.

            (iii) The Borrowers shall, on each Business Day, prepay an aggregate
      principal amount of the Revolving Credit Loans (to the extent  applicable,
      comprising part of the same Borrowing) and Swing Loans equal to the amount
      by which (A) (I) the sum of the  aggregate  principal  amount of Revolving
      Credit  Loans,   Letter  of  Credit   Obligations  and  Swing  Loans  then
      outstanding  minus  (II)  the  aggregate  amount  then on  deposit  in the
      Concentration  Account, the Investment Account and the L/C Cash Collateral
      Account exceeds (B) the lesser of the Revolving Credit Commitments and the
      Borrowing Base.







            (iv) The  Borrowers  shall,  on the date of  receipt of the Net Cash
      Proceeds by any Borrower or any of its Subsidiaries  from the sale, lease,
      transfer or other disposition of any Term Priority  Collateral,  prepay an
      aggregate  principal  amount of the Term  Loans in an amount  equal to the
      amount of such Net Cash Proceeds. To the extent such Net Cash Proceeds are
      in excess of the  Borrowers'  Obligations in respect of the Term Loan, the
      Borrowers  shall use such excess to prepay  outstanding  fees and interest
      owed in respect of Revolving  Credit Loans,  then the principal  amount of
      Revolving Credit Loans.

            (v) Any prepayment of the Revolving Credit Facility made pursuant to
      this Section  2.7(c) shall be applied  first to the  outstanding  fees and
      interest  owed in  respect  of any Swing  Loans  outstanding,  then to any
      outstanding principal in respect of any Swing Loans and, if no Swing Loans
      are outstanding,  then, to the Revolving Credit Loans outstanding.  If (A)
      the only Loans  outstanding  are Eurodollar  Rate Loans,  (B) there are no
      Letter  of  Credit  Obligations  immediately  due  and  payable,  (C)  the
      application of such  immediately  available funds will cause the Borrowers
      to incur an obligation under Section 10.4 and (D) there is no Default then
      continuing,  then such  prepayment  shall be deposited into the Investment
      Account  and shall be retained  therein  until one of the  conditions  set
      forth in clauses  (A)  through  (D) are no longer  met, in which case such
      funds  shall be applied as  provided  in this  Section  2.7(c);  provided,
      however,  that at any  time the only  condition  not met is the  condition
      specified in clause (B),  then such funds shall be applied to fund the L/C
      Cash Collateral Account.

            (d) All immediately  available funds in the  Concentration  Account,
the Blocked  Account and the Investment  Account shall be applied on the date on
which they are immediately  available first to the outstanding fees and interest
owed in respect of Swing Loans, next to the principal amount of the Swing Loans,
next to the  outstanding  fees and  interest  owed in respect  of the  Revolving
Credit Loans,  next to the principal  amount of the Revolving  Credit Loans, and
next to the other  Obligations  (other than any Letter of Credit  Obligations or
any Obligations in respect of Term Loans),  as more fully described in Section 5
of the Cash Collateral Account Agreement.  Thereafter,  the Borrowers may direct
the disposition of any funds remaining in the Concentration Account, the Blocked
Account and the  Investment  Account;  provided  that,  if a Default  shall have
occurred and be continuing,  then such funds in the Concentration  Account,  the
Blocked Account and the Investment  Account shall be used to cash  collateralize
the Letter of Credit Obligations, and thereafter, the Borrowers shall direct the
disposition of such remaining funds.

            (e) All  proceeds  of  Collateral  (other  than  the  Term  Priority
Collateral)  received by the Secured  Parties  after the giving of notice to the
Borrowers  pursuant  to clause (i) or (ii) of the first  sentence of Section 8.2
shall be applied first to fund the L/C Cash Collateral  Account,  and if the L/C
Cash  Collateral  Account  has been fully  funded  pursuant  to Section  8.3, to
outstanding  fees and  interest  owed in  respect  of Swing  Loans,  next to the
principal  amount of the Swing Loans,  next to the outstanding fees and interest
owed in respect of the Revolving  Credit Loans,  next to the principal amount of
the Revolving  Credit Loans, and next to the other  Obligations  (other than any
Letter of Credit  Obligations or any  Obligations in respect of Term Loans),  as
more fully described in Section 5 of the Cash Collateral Account Agreement.

                                       31



            2.8.  Conversion/Continuation Option. The Borrowers 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 Interest Period with respect thereto, 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 of the Eurodollar Rate
Loans for each Interest  Period  therefor must be in the amount of $5,000,000 or
an  integral  multiple of  $1,000,000  in excess  thereof.  Each  conversion  or
continuation  of Revolving  Credit Loans shall be allocated  among the Revolving
Credit Loans of all Lenders in accordance with their Ratable Portion.  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 thereof  specifying (A) the amount and
type of conversion or continuation, (B) 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  Interest  Period
therefor)  and  (C) in the  case  of a  conversion  to,  or a  continuation  of,
Eurodollar  Rate Advances,  the Interest Period  therefor.  No conversion of any
Swing Loan from a Base Rate Loan may be made.  The Agent shall  promptly  notify
each Lender of its receipt of a Notice of Conversion or Continuation  and of the
contents thereof.  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 Interest  Period
therefor,  shall be permitted at any time at which a Default shall have occurred
and be continuing.  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 Borrowers  containing a permitted  election to continue any  Eurodollar
Rate Loans for an additional Interest Period or to convert any such Loans, or on
any  date the  aggregate  unpaid  principal  amount  of  Eurodollar  Rate  Loans
comprising any Borrowing is reduced,  by payment or prepayment or otherwise,  to
less than $5,000,000, then, upon the expiration of the Interest Period therefor,
such Loans will be  automatically  converted to Base Rate Loans.  Each Notice of
Conversion or Continuation shall be irrevocable.

            2.9.  Interest.  (a)  Revolving  Credit Loans and Swing  Loans.  The
Borrowers  shall pay interest on the unpaid  principal  amount of each Revolving
Credit Loan and each Swing Loan from the date thereof until the principal amount
thereof shall be paid in full, at the following rates per annum:

            (i) Base Rate Loans.  For Base Rate Loans, at a rate per annum equal
      at all times to the  Applicable  Margin  plus the Base Rate in effect from
      time to time,  payable in  arrears  monthly on the first day of each month
      and  on  the  Termination  Date;  provided,   however,   that  during  the
      continuance  of an Event of Default,  Base Rate Loans shall bear interest,
      payable on demand,  at a rate per annum equal at all times to 2% per annum
      above  the Base  Rate in  effect  from  time to time  plus the  Applicable
      Margin.

            (ii) Eurodollar Rate Loans. For Eurodollar Rate Loans, at a rate per
      annum  equal  at all  times  to the  sum of the  Eurodollar  Rate  for the
      applicable  Interest  Period  for  such  Eurodollar  Rate  Loan  plus  the
      Applicable Margin in effect from time to time,  payable in arrears on each
      day during such  Interest  Period which occurs on the first day of a month
      and on the last  day of such  Interest  Period;  provided,  however,  that
      during the  continuance of an Event of Default,  all Eurodollar Rate Loans
      shall bear interest,  payable

                                       32



      on  demand,  at a rate  per  annum  equal at all  times  to 2%  above  the
      Eurodollar Rate for such Eurodollar Rate Loan plus the Applicable Margin.

            (b) If the  Borrowers  fail  to pay  any  interest  when  due,  such
interest  shall  immediately  constitute,  without  necessity  of further act or
evidence, a Revolving Credit Loan to the Borrowers.

            (c) Term Loans. Each Term Loan shall bear interest at 16% per annum,
payable in arrears monthly on the first day of each month and on the Termination
Date,  provided,  however,  that during the  continuance of an Event of Default,
Term Loans shall bear interest,  payable on demand,  at a rate of 18% per annum.
So long as no Default has occurred and is continuing,  the Borrowers may pay all
or a portion  of the  interest  payable  on the Term  Loans in excess of 13% per
annum by adding such excess  amount ("PIK  Interest")  to the  principal  amount
outstanding on the Term Loans on the first Business Day of each calendar  month.
The Borrowers  shall give the Agent an irrevocable  notice that it will exercise
such right at least three Business Days prior to any interest payment date as to
which such right is to be exercised.

            2.10. Interest Rate Determination.  (a) The Eurodollar Rate for each
Interest  Period for Eurodollar  Rate Loans shall be determined by the Agent two
Business Days before the first day of such Interest Period.

            (b) The Agent  shall give  prompt  notice to the  Borrowers  and the
Lenders of the applicable  interest rate determined by the Agent for purposes of
Section 2.9(a).

            (c) If, with respect to Eurodollar  Rate Loans,  any Lender notifies
the Agent that the  Eurodollar  Rate for any Interest  Period  therefor will not
adequately  reflect  the cost to such  Lender of making such Loans or funding or
maintaining its respective  Eurodollar Rate Loans for such Interest Period,  the
Agent shall forthwith so notify the Borrowers and the Lenders, whereupon;

            (i) each Eurodollar Rate Loan will automatically, on the last day of
      the then existing Interest Period therefor, convert into a Base Rate Loan;
      and

            (ii) the  obligations  of all 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  Borrowers  that such Lenders
      have determined that the  circumstances  causing such suspension no longer
      exist.

            (d) If the  Borrowers  shall  fail to  select  the  duration  of any
      Interest  Period  for any  Eurodollar  Rate Loans in  accordance  with the
      provisions  contained in the  definition  of "Interest  Period" in Section
      1.1, the Agent will  forthwith so notify the Borrowers and the Lenders and
      such  Loans  will  automatically,  on the last  day of the  then  existing
      Interest Period therefor, convert into Base Rate Loans.

            2.11.  Increased Costs. If, due to either (i) the introduction of or
any change in or in the  interpretation of any law or regulation (other than any
change by way of  imposition  or  increase of reserve  requirements  included in
determining the Eurodollar Rate Reserve  Percentage) or (ii) compliance with any
guideline  or request  from any  central  bank or other

                                       33



Governmental  Authority (whether or not having the force of law), there shall be
any  increase  in the cost to any Lender  Party of  agreeing  to make or making,
funding or maintaining  any Eurodollar  Rate Loans or of agreeing to issue or of
issuing or maintaining  Letters of Credit, then the Borrowers shall from time to
time,  upon  demand  by such  Lender  Party  (with a copy of such  demand to the
Agent), pay to the Agent for the account of such Lender Party additional amounts
sufficient  to  compensate   such  Lender  Party  for  such  increased  cost.  A
certificate as to the amount of such increased cost,  submitted to the Borrowers
and the Agent by such  Lender  Party,  shall be  conclusive  and binding for all
purposes,  absent  manifest  error.  If the Borrowers so notify the Agent within
five  Business  Days  after any  Lender  Party  notifies  the  Borrowers  of any
increased  cost pursuant to the foregoing  provisions of this Section 2.11,  the
Borrowers may convert all Eurodollar Rate Loans of all Lenders then  outstanding
into  Base  Rate  Loans,  in  accordance  with  Section  2.8 and,  additionally,
reimburse  such Lender Party for such  increased  cost in  accordance  with this
Section 2.11.

            2.12.  Illegality.  Notwithstanding  any  other  provision  of  this
Agreement,  if the  introduction  of, or any  change  in,  or any  change in the
interpretation of, any law or regulation 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, then, on notice thereof and
demand  therefor by such  Lender to the  Borrowers  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 terminate and (ii) the
Borrowers  shall  forthwith  prepay in full all  Eurodollar  Rate  Loans of such
Lender then  outstanding,  together with interest  accrued  thereon,  unless the
Borrowers,  within five  Business  Days of such  notice and demand,  convert all
Eurodollar Rate Loans of all Lenders then outstanding into Base Rate Loans.

            2.13. Capital Adequacy. If (i) the introduction of, or any change in
or in the interpretation of, any law or regulation, (ii) the compliance with any
law or regulation,  or (iii)  compliance  with any guideline or request from any
central bank or other Governmental Authority (whether or not having the force of
law),  affects or would affect the amount of capital  required or expected to be
maintained by any Lender Party or any  corporation  controlling any Lender Party
and such Lender Party  reasonably  determines that such amount is based upon the
existence of such Lender Party's  Commitment and Loans and other commitments and
loans  of  this  type  including,   without  limitation,   such  Lender  Party's
commitments in respect of Letters of Credit (or similar contingent obligations),
then,  upon  demand  by such  Lender  Party  (with a copy of such  demand to the
Agent),  the  Borrowers  shall pay to the Agent for the  account of such  Lender
Party, from time to time as specified by such Lender Party,  additional  amounts
sufficient to compensate  such Lender Party in the light of such  circumstances,
to the extent that such Lender  Party  reasonably  determines  such  increase in
capital to be allocable to the  existence of such Lender  Party's  Commitment or
Loans and such Lender Party's  agreements herein with respect to the issuance or
maintenance of Letters of Credit. A certificate as to such amounts  submitted to
the Borrowers and the Agent by such Lender Party shall be conclusive and binding
for all purposes absent manifest error.

            2.14.  Payments and Computations.  (a) The Borrowers shall make each
payment  hereunder  and under the Notes not later than 12:00 P.M. (New York City
time)  (except  for  payments  made  pursuant to Section  2.7(e)  which shall be
credited  no later  than when  received  by

                                       34



the Agent) on the day when due, in Dollars, to the Agent at its address referred
to  in  Section  10.2  in  immediately   available   funds  without  set-off  or
counterclaim.  The Agent will, on the Business Day of its receipt thereof, cause
to be  distributed  like funds (i) if such  payment is in respect of  principal,
interest, commitment fees or any other Obligation then payable hereunder to more
than one Lender Party,  to such Lender  Parties  ratably in accordance  with the
amounts of such respective  Obligations then payable to such Lender Parties, for
the account of their respective  Applicable  Lending  Offices,  and (ii) if such
payment is in respect of any Obligation then payable to any one Lender Party, to
such Lender Party for the account of its Applicable Lending Office, in each case
to be applied in accordance with the terms of this Agreement; provided, however,
that payment of principal of the Swing Loans pursuant to Section 2.7(e) need not
be distributed by the Agent prior to the Settlement  Date referred to in Section
2.18. With respect to the Swing Loans, the Agent will promptly  thereafter cause
to be distributed like funds relating to the payment of principal of or interest
on the Swing Loans to the Swing Bank for the account of its  Applicable  Lending
Office. Upon its acceptance of an Assignment and Acceptance and recording of the
information contained therein in the Register pursuant to Section 10.7, from and
after the effective date of such Assignment and Acceptance, the Agent shall make
all payments  hereunder and under the Notes in respect of the interest  assigned
thereby  to the  Lender  Party  assignee  thereunder,  and the  parties  to such
Assignment  and  Acceptance  shall  make  all  appropriate  adjustments  in such
payments for periods prior to such effective date directly  between  themselves.
Payment  received by the Agent  after  12:00 P.M.  (New York City time) shall be
deemed to be  received  on the next  Business  Day  (except  for  payments  made
pursuant to Section  2.7(e) which shall be credited no later than when  received
by the  Agent).  Prior to the  distribution  of any  funds to any  Lender  Party
pursuant to this  Section  2.14,  the Agent shall use its best efforts to notify
such Lender Party of such distribution.

            (b) All  amounts  on  deposit in each of the  Blocked  Account,  the
Concentration  Account and the Investment  Account shall be applied by the Agent
against the  outstanding  balance of the  Obligations in accordance with Section
2.7(d);  provided,  however, that in no event shall any amount be required to be
applied by the Agent against the outstanding  balance of the Obligations  unless
and until such amount shall have been credited in immediately available funds to
the Blocked Account, the Concentration Account or the Investment Account.

            (c) The Borrowers  hereby authorize each Lender Party, if and to the
extent  payment  owed to such Lender  Party is not made when due  hereunder,  to
charge from time to time against any or all of the Borrowers' accounts with such
Lender  Party any amount so due or to treat any amounts due  hereunder as having
been paid by proceeds of a Revolving  Credit  Borrowing,  provided  that no such
payment  in  respect  of any Term  Loan  shall be made  with the  proceeds  of a
Revolving  Credit  Borrowing if there exists (or would  result) a Default  under
Section 5.2. The Borrowers  and the Lender  Parties  hereby  authorize the Swing
Bank to pay  directly  any amount due  hereunder  and to treat such payment as a
Swing Loan.

            (d) All computations of interest and fees shall be made by the Agent
on the basis of a year of 360 days, and 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.

                                       35



            (e)  Whenever  any  payment  hereunder  or under the Notes  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 fee, 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 next preceding Business Day.

            (f) Unless the Agent shall have  received  notice from the Borrowers
prior to the date on which any  payment is due  hereunder  to any  Lender  Party
hereunder  that the Borrowers  will not make such payment in full, the Agent may
assume that the  Borrowers  have 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 such Lender  Party on such due date an amount  equal to the
amount then due such Lender Party.  If and to the extent the Borrowers shall not
have so made such  payment in full to the Agent,  each such  Lender  Party shall
repay to the Agent  forthwith on demand such amount  distributed  to such Lender
Party together with interest thereon,  for each day from the date such amount is
distributed  to such Lender  Party until the date such Lender  Party repays such
amount to the Agent, at the Federal Funds Rate.

            2.15.  Taxes.  (a) Any and all payments by the Borrowers  hereunder,
under the Notes and under the Letter of Credit Reimbursement Agreements shall be
made, in accordance with Section 2.14,  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 Party and the Agent,  taxes measured by its net income,  and
franchise taxes imposed on it, by the jurisdiction  under the laws of which such
Lender  Party or the Agent (as the case may be) is  organized  or any  political
subdivision  thereof,  (ii) in the case of each Lender Party,  taxes (including,
but not  limited  to,  the Branch  Profits  Tax under  Section  884 of the Code)
measured  by  its  net  income,  and  franchise  taxes  imposed  on  it,  by the
jurisdiction of such Lender Party's  Applicable  Lending Office or any political
subdivision  thereof and (iii) in the case of each Lender Party  organized under
the laws of a  jurisdiction  outside the United  States,  United States  federal
withholding  tax payable with respect to payments by the  Borrowers  which would
not have been  imposed  had such  Lender  Party,  to the  extent  then  required
thereunder,  delivered to the  Borrowers  and the Agent the forms  prescribed by
Section  2.15(f) (all such  non-excluded  taxes,  levies,  imposts,  deductions,
charges, withholdings and liabilities being hereinafter referred to as "Taxes").
If the Borrowers shall be required by law to deduct any Taxes from or in respect
of any sum  payable  hereunder  to any Lender  Party or the  Agent,  (i) the sum
payable shall be increased as may be necessary so that after making all required
deductions (including,  without limitation,  deductions applicable to additional
sums  payable  under this  Section  2.15) such Lender Party 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 Borrowers shall make such deductions,  (iii)
the  Borrowers  shall  pay the  full  amount  deducted  to the  relevant  taxing
authority or other  authority in accordance  with  applicable  law, and (iv) the
Borrowers  shall  deliver to the Agent  evidence of such payment to the relevant
taxation or other authority.

            (b) In addition,  the  Borrowers  agree 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  which  arise  from

                                       36



any  payment  made by the  Borrowers  hereunder  or under  any  Letter of Credit
Reimbursement  Agreement or from the execution,  delivery or registration of, or
otherwise with respect to, any Loan Document  (hereinafter referred to as "Other
Taxes").

            (c) The Borrowers agree to indemnify each Lender Party and the Agent
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any  jurisdiction on amounts payable under this
Section  2.15) imposed on or paid by such Lender Party or the Agent (as the case
may  be)  and any  liability  (including,  without  limitation,  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 Party or
the Agent (as the case may be) makes written  demand  therefor.  Any such demand
shall show in reasonable  detail the amount payable and the calculations used to
determine,  in good faith, such amount and shall provide  reasonably  acceptable
proof of payment of such Tax or Other Tax.

            (d) Within 30 days  after the date of any  payment of Taxes or Other
Taxes,  the Borrowers will furnish to the Agent,  at its address  referred to in
Section 10.2, the original or a certified copy of a receipt  evidencing  payment
thereof. If no Taxes are payable in respect of any payment hereunder made (i) by
or on behalf of the Borrowers  other than by a "United States person" within the
meaning of Section  7701(a)(30) of the Code or (ii) out of funds from an account
outside the United States, the Borrowers will furnish to the Agent a certificate
from each appropriate  taxing authority,  or an opinion of counsel acceptable to
the Agent,  in either  case  stating  that such  payment  is exempt  from or not
subject to Taxes.  For purposes of this  subsection (d) and subsection  (f), the
term  "United  States"  shall have the meaning  specified in Section 7701 of the
Code.

            (e) Without  prejudice to the survival of any other agreement of the
Borrowers  hereunder,  the agreements and obligations of the Borrowers contained
in this Section 2.15 shall survive the payment in full of principal and interest
hereunder and the termination of the Commitments.

            (f) Each Lender  Party  organized  under the laws of a  jurisdiction
outside the United States, on or prior to the Effective Date in the case of each
Lender  Party  listed  on the  signature  pages  hereof,  and on the date of the
Assignment  and  Acceptance  pursuant to which it becomes a Lender  Party in the
case of each other Lender Party,  and from time to time thereafter if reasonably
requested by the  Borrowers or the Agent  (unless such Lender Party is unable to
do so by reason of a change in law (including,  without limitation, any statute,
treaty,  ruling,  determination  or  regulation)  occurring  subsequent  to  the
Effective Date or date of Assignment and Acceptance,  as the case may be), shall
provide  the Agent  and the  Borrowers  with two  original  IRS Forms  W-8BEN or
W-8EC1,  as  appropriate,  or other  applicable  form,  certificate  or document
prescribed  by the IRS,  certifying  that such  Lender  Party is exempt  from or
entitled to a reduced rate of United States  withholding tax with respect to all
payments to be made to such Lender Party hereunder, under any Note and under any
Letter of Credit Reimbursement Agreement. If any form or document referred to in
this  subsection  (f)  requires  the  disclosure  of  information,   other  than
information necessary to compute the tax payable and information required on the
date hereof by Internal  Revenue  Service  Form W-8BEN or W-8EC1 that the Lender
Party  reasonably  considers  to be  confidential,  the Lender  Party shall give
notice  thereof

                                       37



to the  Borrowers and shall not be obligated to include in such form or document
such confidential information.  Unless the Borrowers and the Agent have received
forms  or  other  documents   satisfactory  to  them  indicating  that  payments
hereunder,  under any Note or under any Letter of Credit Reimbursement Agreement
are not subject to United  States  withholding  tax, the  Borrowers or the Agent
shall,  in the case of payments to or for any Lender Party  organized  under the
laws of a jurisdiction  outside the United States,  (i) withhold taxes from such
payments at the applicable statutory rate, or at a rate reduced by an applicable
tax treaty  (provided  that the Borrowers  and the Agent have received  forms or
other documents  satisfactory to them indicating that such reduced rate applies)
and (ii) pay such Lender Party such payment net of any taxes withheld; provided,
however,  that  should a Lender  Party  become  subject to Taxes  because of its
failure to deliver a form  required  hereunder,  the  Borrowers  shall take such
steps as such Lender Party shall reasonably  request to assist such Lender Party
to recover such Taxes.

            2.16. Sharing of Payments, Etc. If any Lender Party shall obtain any
payment (whether  voluntary,  involuntary,  through the exercise of any right of
set-off,  or otherwise) on account of the Loans (other than Swing Loans) made by
it (other than pursuant to Section 2.7, 2.11,  2.12,  2.13,  2.15 or 2.17(h)) in
excess of its Ratable  Portion of  payments on account of the Loans  (other than
Swing  Loans)  obtained  by all the Lender  Parties,  such  Lender  Party  shall
forthwith  purchase from the other Lender Parties such  participations  in their
Loans (other than Swing  Loans) as shall be  necessary to cause such  purchasing
Lender Party to share the excess  payment  ratably with each of them;  provided,
however,  that  if all or any  portion  of such  excess  payment  is  thereafter
recovered  from such  purchasing  Lender  Party,  such purchase from each Lender
Party shall be  rescinded  and such Lender  Party shall repay to the  purchasing
Lender Party the purchase price to the extent of such recovery  together with an
amount equal to such Lender Party's  ratable share  (according to the proportion
of (i) the amount of such Lender  Party's  required  repayment to (ii) the total
amount so recovered from the  purchasing  Lender Party) of any interest or other
amount paid or payable by the  purchasing  Lender  Party in respect of the total
amount so recovered.  The Borrowers  agree that any Lender Party so purchasing a
participation  from another  Lender Party  pursuant to this Section 2.16 may, to
the  fullest  extent  permitted  by law,  exercise  all its  rights  of  payment
(including,  without  limitation,  the right of  set-off)  with  respect to such
participation  as fully as if such Lender Party were the direct  creditor of the
Borrowers in the amount of such participation.

            2.17. Letter of Credit Facility. (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 any  Borrower  for the  account  of the
Borrowers from time to time during the period  commencing on the date hereof and
ending on the Termination Date;  provided,  however,  that no Issuer shall 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

                                       38



      date hereof or result in any unreimbursed  loss, cost or expense which was
      not  applicable,  in effect or known to such  Issuer as of the date hereof
      and which such Issuer in good faith deems material to it;

            (ii)  such  Issuer  shall  have  received  written  notice  from the
      Majority  Revolving  Credit  Lenders or any  Borrower,  on or prior to the
      Business  Day prior to the  requested  date of  issuance of such Letter of
      Credit, that one or more of the applicable conditions contained in Article
      III is not then satisfied;

            (iii) the  amount of the  Letter of  Credit  requested  exceeds  the
      Excess  Availability  or,  upon the  issuance of the  requested  Letter of
      Credit, the Letter of Credit Undrawn Amounts would exceed $25,000,000; or

            (iv) fees due in connection with a requested  issuance have not been
      paid.

None of the Revolving  Credit  Lenders  (other than the Issuers)  shall have any
obligation to issue any Letters of Credit.

            (b) In no event shall:

            (i) the  expiration  date of any  Letter  of Credit be more than one
      year after the date of issuance thereof,  nor shall the expiration date of
      any  Letter of  Credit  fall  after the date that is 60 days  prior to the
      second  anniversary  of the date of this  Agreement;  except that any such
      Letter of Credit may also be on the following terms: such Letter of Credit
      shall have an initial one year term which shall be automatically  extended
      for successive one-year terms (but in no case may such Letter of Credit be
      extended  such that its  expiration  date falls  after the date that is 60
      days prior to the Termination  Date unless at the time of issuance of such
      Letter of Credit  the  Borrowers  shall  have  delivered  to the Agent for
      deposit  into the L/C Cash  Collateral  Account an amount equal to 105% of
      the stated amount of such Letter of Credit); provided,  however, that such
      a Letter of Credit shall not be  automatically  extended if either (A) the
      beneficiary  of such  Letter of  Credit is sent a notice  that an Event of
      Default  shall have  occurred and be  continuing  at any time prior to the
      date  that is 30 days  prior  to the  date  of such  extension  or (B) any
      Borrower  requests  in  writing no later than 40 days prior to the date of
      such  extension  that the  term of such  Letter  of  Credit  shall  not be
      extended; or

            (ii) any  Issuer  issue  any  Letter of Credit  for the  purpose  of
      supporting the issuance of any letter of credit by any other Person except
      with the prior written consent of the Agent.

            (c)  Prior  to the  issuance  of each  Letter  of  Credit,  and as a
condition of such issuance and of the  participation  of each Lender (other than
the Issuer  thereof) in the Letter of Credit  Obligations  arising  with respect
thereto,  the Borrowers  shall have  delivered to the Issuer thereof a letter of
credit  reimbursement  agreement,  in a form  satisfactory to the Issuer (as the
same as may be amended or otherwise modified,  a "Letter of Credit Reimbursement
Agreement"),  signed by the Borrowers,  and such other documents or items as may
be required  pursuant to the terms thereof or otherwise  reasonably  required by
the  Issuer.  In the event of any

                                       39



conflict between the terms of any Letter of Credit  Reimbursement  Agreement and
this Agreement, the terms of this Agreement shall govern.

            (d) In  connection  with the issuance of each Letter of Credit,  the
Borrowers  shall give the  Issuer  thereof  and the Agent at least two  Business
Days' prior written  notice of its  requested  issuance of a Letter of Credit in
substantially the form of Exhibit C (a "Letter of Credit Request").  Such notice
shall be irrevocable and shall specify the stated amount of the Letter of Credit
requested,  which  stated  amount  shall not be less than  $50,000,  the date of
issuance of such requested Letter of Credit (which day shall be a Business Day),
the date on which such  Letter of Credit is to expire,  and the Person for whose
benefit  the  requested  Letter of Credit is to be issued.  Such  notice,  to be
effective,  must be  received  by such Issuer and the Agent not later than 11:00
A.M.  (New York City time) on or prior to the last  Business Day on which notice
can be given under the  immediately  preceding  sentence.  Prior to the close of
business on the Business Day following the Business Day on which the Agent first
receives  such notice,  the Agent shall  confirm to the Issuer of the  requested
Letter of Credit whether the applicable  conditions in Article III are satisfied
as of such date.

            (e) Subject to the terms and  conditions  of this  Section  2.17 and
provided  that the  applicable  conditions  set forth in  Article  III have been
satisfied, such Issuer shall, on the requested date, issue a Letter of Credit on
behalf of the  Borrowers in  accordance  with the Issuer's  usual and  customary
business practices.

            (f) 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 Revolving Credit
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  Revolving  Credit  Lender's  Ratable
Portion,  in such Letter of Credit and the  obligations  of the  Borrowers  with
respect thereto (including, without limitation, all Letter of Credit Obligations
with respect thereto) and any security therefor and guaranty  pertaining thereto
and each Lender's Revolving Credit Commitment shall be deemed used to the extent
of such Lender's Ratable Portion of such Letter of Credit Obligations.

            (g) In  determining  whether to pay under any  Letter of Credit,  no
Issuer shall have any obligation  relative to the Revolving Credit Lenders other
than to confirm that any documents required to be delivered under such Letter of
Credit  appear to have been  delivered  and that they  appear to comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by any 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 any  Revolving  Credit
Lender,  or diminish the Agent's or any Revolving  Credit  Lender's  obligations
hereunder to the Issuer.

            (h) In the event that any Issuer makes any payment  under any Letter
of Credit and the  Borrowers  shall not have  repaid  such amount to such Issuer
pursuant to Section 2.17(l),  such Issuer shall promptly notify the Agent, which
shall  promptly  notify each Revolving  Credit Lender of such failure,  and each
Revolving Credit 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

                                       41



payment  in  Dollars  and in same day funds (and upon  receipt  the Agent  shall
promptly pay the same to the Issuer);  provided,  however,  if the Swing Bank so
elects and if a Swing Loan can be made in such amount,  the Agent shall promptly
notify the Swing Bank of such failure, and the Swing Bank shall pay to the Agent
for the account of such Issuer the amount of such payment in Dollars and in same
day funds.  This  Revolving  Credit Loan shall be made, or the Swing Loan may be
made, notwithstanding the Borrowers' failure to satisfy the conditions set forth
in Section 3.3. If the Agent so notifies each  Revolving  Credit Lender prior to
11:00 A.M.  (New York City time) on any  Business  Day,  each  Revolving  Credit
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 same day
funds. If and to the extent such Revolving  Credit Lender shall not have so made
such  Lender's  Ratable  Portion of the amount of such payment  available to the
Agent for the account of such Issuer,  such Lender  agrees to repay to the Agent
for the account of such Issuer  forthwith  on demand such amount  together  with
interest  thereon,  for each day from  such date  until the date such  amount is
repaid to the Agent for the account of such Issuer,  at the Federal  Funds Rate.
The failure of any Revolving  Credit  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  Revolving  Credit 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 any Issuer such other  Lender's  Ratable  Portion of any such
payment.

            (i)  Whenever  any  Issuer  receives  a payment  of a  Reimbursement
Obligation as to which the Agent has received for the account of such Issuer any
payment from a Revolving  Credit  Lender  pursuant to Section  2.17(h) (and such
amount has been paid to such  Issuer),  the  Issuer  shall pay to the Agent such
amount so received  and the Agent shall  promptly pay to each  Revolving  Credit
Lender which has paid such Lender's Ratable Portion thereof,  in same day funds,
an amount equal to such Lender's Ratable Portion thereof.

            (j) Upon the request of any  Revolving  Credit  Lender,  each Issuer
shall  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.

            (k) The obligations of the Revolving Credit Lenders to make payments
to the Agent for the account of each Issuer and the  obligation of the Borrowers
to repay Revolving Credit Loans made to the Borrowers with respect to Letters of
Credit shall be irrevocable  and not subject to any  qualification  or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement  under all  circumstances  (except as  expressly  provided  in Section
2.17(g)), including, without limitation, any of the following circumstances:

            (i) any lack of validity or enforceability of this Agreement, any of
      the Collateral Documents, the Interim Order or the Final Order;

            (ii) the  existence  of any claim,  set-off,  defense or other right
      which any Borrower may have at any time against a  beneficiary  named in a
      Letter of Credit,  any  transferee  of any Letter of Credit (or any Person
      for whom any such transferee may be acting),  the Agent,  any Lender Party
      or any other Person, whether in connection with this Agreement, any Letter
      of  Credit,  the  transactions   contemplated   herein  or  any  unrelated

                                       41



      transactions  (including,  without limitation,  any underlying transaction
      between a Borrower and the beneficiary named in any Letter of Credit);

            (iii) any draft,  certificate or any other document  presented under
      the  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;

            (iv) the surrender or impairment of any security for the performance
      or observance of any of the terms of any of the Collateral Documents; or

            (v) the occurrence of any Default.

            (l) The  Borrowers  agree to pay to each  Issuer  the  amount of all
Reimbursement  Obligations  owing to such  Issuer  under  any  Letter  of Credit
immediately when due, irrespective of any claim, set-off, defense or other right
which any Borrower may have at any time against such Issuer or any other Person.
The Borrowers  agree to reimburse  each Issuer for all amounts which such Issuer
pays under such Letter of Credit no later than the time specified in such Letter
of Credit Reimbursement  Agreement. If the Borrowers do not pay (either from the
proceeds of a Borrowing or otherwise)  any such  Reimbursement  Obligation  when
due,  such  Reimbursement  Obligation  shall  immediately  constitute,   without
necessity of further act or evidence, a Loan made by the relevant Issuer payable
on demand or, to the extent the Agent has received any payments  from  Revolving
Credit  Lenders  for the account of such  Issuer  pursuant  to Section  2.17(h),
Revolving Credit Loans made by such Lenders (which,  in the case of each Lender,
shall be to the extent of such Lender's  Ratable  Portion of such  Reimbursement
Obligation) to the  Borrowers,  in an aggregate  principal  amount equal to such
Reimbursement  Obligation  remaining  unpaid,  or, to the  extent  the Agent has
received  any  payments  from the  Swing  Bank for the  account  of such  Issuer
pursuant to Section 2.17(h),  Swing Loans made by the Swing Bank,  computed from
the date on which such  Reimbursement  Obligation arose to the date of repayment
in full thereof at the rate of interest  applicable to past due Revolving Credit
Loans at a rate based on the Base Rate during such  period.  If any payment made
by or on behalf of the  Borrowers and received by any Issuer with respect to any
Letter of Credit is rescinded  or must  otherwise be returned by such Issuer for
any reason, each Lender shall, upon notice by such Issuer, forthwith pay over to
such Issuer an amount equal to such Lender's Ratable Portion of the amount which
must be so  returned  by such  Issuer or the Swing Bank may,  upon notice to the
Issuer,  forthwith  pay over to such Issuer an amount  equal to the amount which
must be returned by such Issuer.

            (m) The Borrowers agree to pay the following amounts with respect to
Letters of Credit issued for it:

            (i) to the Agent,  for the benefit of each  Revolving  Credit Lender
      who has purchased or has been deemed to have purchased  participations  in
      the Letters of Credit,  with respect to each  standby  Letter of Credit or
      documentary  Letter of Credit, an  administrative  fee equal to a rate per
      annum  equal at all times to the  Applicable  Margin  for Letter of Credit
      Fees multiplied by the average daily maximum amount available from time to
      time to be drawn under such Letter of Credit,  payable  monthly in arrears
      and on the  termination  of such  Letter of  Credit,  and,  in each  case,
      calculated  on the basis of a

                                       42



      360-day year and the actual  number of days  elapsed;  provided,  however,
      that, during the continuance of an Event of Default,  such  administrative
      fee shall increase by 2% per annum and shall be payable on demand;

            (ii) to each Issuer,  with respect to each standby  Letter of Credit
      or documentary Letter of Credit issued by such Issuer, 0.375% per annum of
      the average daily maximum  amount  available from time to time to be drawn
      under  such  Letter of  Credit,  payable  monthly  in  arrears  and on the
      termination of such Letter of Credit,  and, in each case calculated on the
      basis of a 360-day year and the actual number of days elapsed; and

            (iii) to each  Issuer,  with respect to the  issuance,  amendment or
      transfer  of each  Letter  of Credit  and each  drawing  made  thereunder,
      issuance,  documentary,  processing  and other 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.

            2.18. Settlement of Accounts.  The Agent shall notify each Revolving
Credit Lender periodically,  as determined by the Agent, of the principal amount
of Swing Loans  outstanding as of 1:00 P.M. (New York City time) as of such date
(the  "Computation  Date") and each Revolving  Credit  Lender's  Ratable Portion
thereof.  Each  Revolving  Credit  Lender shall before 1:00 P.M.  (New York City
time) on the next  Business Day (the  "Settlement  Date") make  available to the
Agent, in immediately available funds, the amount of its Ratable Portion of such
principal  amount of Swing Loans  outstanding.  Upon such payment by a Revolving
Credit Lender,  such Lender shall be deemed to have made a Revolving Credit Loan
to the  Borrowers,  notwithstanding  any failure by the Borrowers to satisfy the
conditions in Section 3.3. The Agent shall use such funds to repay the principal
amount of Swing Loans to the Swing  Bank.  All  interest  due on the Swing Loans
shall be payable to the Swing Bank in accordance with Sections 2.9 and 2.14.

            2.19. The Blocked  Account.  (a) The Borrowers have  established and
shall  maintain,  pursuant to the Blocked  Account  Letter,  an account with PNC
Bank, National Association, account number 0002881016, in the name and under the
sole dominion and control of the Agent (the "Blocked Account").

            (b) As collateral security for the Obligations, the Borrowers hereby
transfer,  assign  and  pledge  to the  Agent  and grant to the Agent on a first
priority  basis a Lien on and  security  interest  in,  for the  benefit  of the
Secured  Parties,  all of the right,  title and  interest of WPSC in the Blocked
Account and all cash,  deposits,  Cash Equivalents and other instruments held in
the Blocked Account,  as security for the  Obligations.  The Agent shall possess
sole  dominion and control  over the Blocked  Account as provided in the Blocked
Account  Letter.  Except as provided in Section  2.7(d) and the Blocked  Account
Letter,  as  long  as  any  of  the  Obligations  remain  unpaid  or  any of the
Commitments are  outstanding,  the Borrowers agree that neither any Borrower nor
any Person or entity  claiming by,  through or under any Borrower shall have any
control over the use of, or any right to effect a withdrawal  from,  the Blocked
Account,  other than the Agent.  All  amounts in the  Blocked  Account  shall be
applied to the Obligations by the Agent as specified in Section 2.7(d).

                                       43




            (c)  Except  for the  funds  held  in the  bank  accounts  otherwise
permitted by Section 7.16, the Borrowers shall cause all cash, Cash Equivalents,
checks,  notes,  drafts  or  similar  items  of  payments  received  by it which
constitute (i) payments from account debtors for Receivables, including, without
limitation,  all  intercompany  receivables  and  (ii)  proceeds  of  all  other
Collateral  to be deposited on the date of receipt  thereof or the next Business
Day following receipt thereof in the Blocked Account.

            2.20.  Term  Commitments.  (a) The Borrowers may, at any time but in
any event not more than twice in any one month period prior to January 15, 2001,
by notice to the Agent, request that the Term Facility be increased by an amount
of  $2,000,000 or an integral  multiple of $1,000,000 in excess  thereof (each a
"Commitment  Increase")  to be  effective  as of a date that is at least 90 days
prior to the Termination  Date (the "Increase Date") as specified in the related
notice  to the  Agent;  provided,  however  that (i) in no event  shall the Term
Facility  be more than  $35,000,000  and (ii) on the date of any  request by the
Borrowers  for a  Commitment  Increase  and on the related  Increase  Date,  the
conditions set forth in Section 3.3 shall be satisfied.

            (b) The Agent shall promptly notify such banks and other entities as
it shall identify of a request by the Borrowers for a Commitment Increase, which
notice  shall  include  (i) the  proposed  amount of such  requested  Commitment
Increase, (ii) the proposed Increase Date and (iii) the date by which such banks
or other entities wishing to participate in the Commitment  Increase must commit
to such  increase in the Term Facility (the  "Commitment  Date").  The requested
Commitment  Increase  shall be  allocated  among the  banks  and other  entities
willing to  participate  therein  in such  amounts  as are  agreed  between  the
Borrowers and the Agent.

            (c) Promptly  following each Commitment Date, the Agent shall notify
the  Borrowers as to the amount,  if any, by which the banks and other  entities
are willing to  participate  in the  requested  Commitment  Increase;  provided,
however,  that the Term Commitment of each such bank or other entity shall be in
an amount of $1,000,000 or an integral multiple thereof.

            (d) On each  Increase  Date,  each bank or other  entity that is not
prior to such date a Lender  hereunder and accepts an offer to  participate in a
requested Commitment Increase in accordance with Section 2.20(c) (each such bank
or other  entity,  an  "Assuming  Lender")  shall  become a Lender party to this
Agreement as of such Increase Date and the Term Commitment of each bank or other
entity that prior to such date is a Lender and  accepts an offer to  participate
in such  requested  Commitment  Increase (an  "Increasing  Lender")  shall be so
increased (or  established)  by such amount as of such Increase Date;  provided,
however,  that the Agent shall have received on or before such Increase Date the
following, each dated such date:

            (i) Term  Notes  dated  such  Increase  Date  duly  executed  by the
      Borrowers  payable to each Increasing Lender and each Assuming Lender in a
      principal amount equal to such Lender's new or increased Term Commitment;

            (ii) an assumption  agreement from each Assuming Lender,  if any, in
      form and  substance  satisfactory  to the Borrowers and the Agent (each an
      "Assumption Agreement"),  duly executed by such Assuming Lender, the Agent
      and the Borrowers; and

                                       44



            (iii)  confirmation from each Increasing Lender of the amount of its
      Term Commitment in a writing satisfactory to the Borrowers and the Agent.

On each Increase  Date,  upon  fulfillment  of the  conditions  set forth in the
immediately  preceding sentence of this Section 2.20(d),  the Agent shall notify
the  Lenders  (including,  without  limitation,  each  Assuming  Lender) and the
Borrowers,  on or before 1:00 P.M.,  New York City time, by telecopier or telex,
of the  occurrence  of the  Commitment  Increase to be effected on such Increase
Date and shall record in the Register the relevant  information  with respect to
each Increasing Lender and each Assuming Lender on such date.



                                   ARTICLE III

                              CONDITIONS PRECEDENT

            3.1.  Conditions  Precedent to the Effective Date. The effectiveness
of this Agreement is subject to  satisfaction  of the conditions  precedent that
the Agent shall have received,  on or before the Effective  Date, the following,
each dated as of the  Effective  Date unless  otherwise  indicated,  in form and
substance  satisfactory  to the Agent and (except  for the Notes) in  sufficient
copies for each Lender Party:

            (a) A  certified  copy  of an  order  of  the  Bankruptcy  Court  in
substantially  the form of Exhibit  G-1 (the  "Interim  Order")  and the Interim
Order shall be in full force and effect, shall not have been vacated,  reversed,
rescinded, modified or amended, and there shall be no stay of the performance of
any obligation of any of the Borrowers.  The parties hereto acknowledge that the
foregoing  shall not  preclude  the entry of any order of the  Bankruptcy  Court
approving or authorizing an amendment or  modification  of this Agreement or any
other Loan  Document  or the  Interim  Order  permitted  by  Section  10.1 which
amendment of  modification  shall be  acceptable to the Lenders whose consent is
required to approve such amendment or modification under Section 10.1.

            (b) The Notes made payable to the order of the Lenders.

            (c)  Certified  copies  of  (i)  the  resolutions  of the  Board  of
Directors of each Borrower  approving each Loan Document to which it is a party,
and (ii) all documents  evidencing other necessary corporate action and required
governmental   and  third  party   approvals,   licenses  and  consents  to  the
transactions contemplated hereby.

            (d) A copy of the articles or certificate of  incorporation  of each
Borrower certified as of a recent date by the Secretary of State of the state of
incorporation  of such  Borrower,  together with  certificates  of such official
attesting  to the  good  standing  of  each  such  Borrower,  and a copy  of the
certificate of  incorporation  and the By-Laws of each Borrower  certified as of
the Effective Date by the Secretary or an Assistant Secretary of each Borrower.

            (e) A certificate of the Secretary or an Assistant Secretary of each
Borrower  certifying  the  names and true  signatures  of each  officer  of such
Borrower who have been

                                       45



authorized to execute and deliver any Loan Document or other  document  required
to be executed and delivered hereunder by or on behalf of such Borrower.

            (f) The Security Agreement, duly executed by each Borrower, together
with:

                  (i)  certificates  representing the Pledged Shares referred to
            therein  accompanied  by undated stock powers  executed in blank and
            instruments, if any, evidencing the Pledged Debt referred to therein
            indorsed in blank, and

                  (ii) proper financing  statements  (Form UCC-1),  in each case
            duly executed to be filed  promptly  following  the  Effective  Date
            under the Uniform  Commercial  Code of the States listed on Schedule
            3.1 and all other jurisdictions that the Agent may deem necessary or
            desirable  in order to perfect and protect the Liens  created by the
            Security Agreement, and to take assignment of the security interests
            pursuant to the Interim Order,  covering the Collateral described in
            the Security Agreement and granted to the Agent,

                  (iii)  evidence of the insurance  required by the terms of the
            Security Agreement,

                  (iv) copies of the Assigned Agreements, if any, referred to in
            the Security Agreement,

                  (v) the Blocked  Account  Letter  referred  to  therein,  duly
            executed by PNC Bank, National Association.

            (g) The Cash Collateral Account Agreement, duly executed by WPSC.

            (h) A favorable opinion of (i) Debevoise & Plimpton, special counsel
to the Borrowers,  and (ii) Reed Smith Shaw & McClay LLP, special counsel to the
Borrowers in Pennsylvania, each in substantially the form of Exhibit J-1 or J-2,
respectively, and as to such other matters as any Lender Party through the Agent
may reasonably request.

            (i) A certificate,  signed by a Responsible  Officer of WPC, stating
that the  conditions  specified in Sections  3.2(c) and 3.3(a) have been met and
that Excess Availability is not less than $35,000,000.

            (j) A Notice of Borrowing or Notice of Issuance, as applicable,  and
a Borrowing  Base  Certificate  executed by an officer of WPC listed on Schedule
2.2 or by such other Person as otherwise agreed to by the Agent, in writing,  as
of the end of the preceding  month, in the case of Inventory,  and as of the end
of the preceding week, in the case of Receivables.

            (k) Such  additional  documents,  information  and  materials as any
Lender Party, through the Agent, may reasonably request.

            3.2.  Additional  Conditions  Precedent to the Effective  Date.  The
effectiveness of this Agreement is subject to the further  conditions  precedent
that:

                                       46



            (a) All  proceedings  taken in connection with the execution of this
Agreement,  the making of the Loans,  the issuance of any Letter of Credit,  and
the  execution  and delivery of all other Loan  Documents  and all documents and
papers relating thereto shall be satisfactory to the Agent and its counsel.  The
Agent and its counsel shall have received copies of such documents and papers as
the Agent or its counsel may reasonably request in connection therewith,  in all
form and substance satisfactory to the Agent and its counsel.

            (b) The First Day Orders  (i) shall be  reasonably  satisfactory  in
form  and  substance  to the  Agent,  including,  without  limitation,  an order
providing for the  continuation of the Pre-Petition  Cash Management  Program of
the Borrowers  with Citibank,  as modified in accordance  with the terms of this
Agreement,  and shall be in full force and  effect,  and (ii)  shall  include an
order  terminating the Pre-Petition  Securitization  Program and authorizing the
transfer of ownership of the  Receivables  thereunder to the  Borrowers,  all in
accordance  with  the  agreement  terminating  the  Pre-Petition  Securitization
Program.

            (c) On the Effective Date, the following statements shall be true:

                  (i) All  necessary  governmental  and  third  party  approvals
            required to be  obtained by any  Borrower,  in  connection  with the
            transactions contemplated hereby, including, without limitation, the
            obtaining of the Loans and Letters of Credit, have been obtained and
            remain in full force and effect,  and all applicable waiting periods
            have  expired  without  any  action  being  taken  by any  competent
            authority  which  restrains,  prevents,  impedes,  delays or imposes
            materially   adverse   conditions  upon,  the  consummation  of  the
            transactions  contemplated  hereby  other  than  the  entry  by  the
            Bankruptcy  Court  of the  Interim  Order  or the  Final  Order,  as
            applicable; and

                  (ii) There exists no claim,  action,  suit,  investigation  or
            proceeding pending or, to the knowledge of any Borrower,  threatened
            in any court or before  any  arbitrator  or  Governmental  Authority
            which  relates  to  the  financing  hereunder  or  those  which,  if
            adversely  determined,  would have a Material  Adverse Effect (other
            than the commencement of the Cases).

            (d) All  costs and  accrued  and  unpaid  fees  (including,  without
limitation,  all upfront fees) and expenses (including,  without limitation, the
legal fees and expenses of the Agent)  required to be paid to the Lender Parties
or the Agent on or before the Effective  Date,  including,  without  limitation,
those  referred to in Sections  2.3,  2.17 and 10.4,  to the extent then due and
payable, shall have been paid.

            (e) No Lender Party,  in its sole  judgment,  exercised  reasonably,
shall have  determined  that there is any claim,  action,  suit,  investigation,
litigation  or  proceeding  (including,   without  limitation,   shareholder  or
derivative  litigation)  pending or threatened against any Borrower in any court
or  before  any  arbitrator  or  Governmental   Authority  which,  if  adversely
determined, would have a Material Adverse Effect (other than the commencement of
the Cases).

            (f) Each Lender  Party  shall be  satisfied,  in its sole  judgment,
exercised  reasonably,  with all tax  aspects of the  transactions  contemplated
hereby, and with the corporate,  capital, tax, legal and management structure of
the  Borrowers  and  their  Subsidiaries,  and shall be  satisfied,  in its sole

                                       47



judgment  exercised  reasonably,  with the nature and status of all  Contractual
Obligations,  securities,  labor, tax, ERISA,  employee benefit,  environmental,
health and safety matters, in each case,  involving or affecting any Borrower or
any of its Subsidiaries.

            (g) The  intercompany  payable owed by WHX to any one or more of the
Borrowers shall not exceed $12,000,000.

            3.3.  Conditions  Precedent  to Each Loan and Letter of Credit.  The
obligation of each Lender to make any Loan or of each Issuer to issue any Letter
of Credit shall be subject to the further conditions precedent that:

            (a) The following  statements shall be true on the date of such Loan
or issuance,  before and after giving effect  thereto and to the  application of
the proceeds  therefrom and to such issuance (and the acceptance by any Borrower
of the proceeds of such Loan or of the issuance by such Issuer of such Letter of
Credit shall constitute a  representation  and warranty by the Borrowers that on
the date of such Loan or issuance such statements are true):

                  (i)  The  representations  and  warranties  of  the  Borrowers
            contained  in  Article  IV and of each  Borrower  in the other  Loan
            Documents  are  correct on and as of such date as though made on and
            as  of  such  date  except  insofar  as  such   representations  and
            warranties speak only as of a prior date or reflect transactions and
            events after the Effective Date permitted by the Loan Documents; and

                  (ii) No Default has occurred and is continuing or would result
            from the Loans  being made or any Letter of Credit  being  issued on
            such date..

            (b) the Interim  Order shall be in full force and effect,  shall not
have been vacated, reversed,  rescinded, modified or amended, and there shall be
no stay of the  performance of any obligation of any of the Borrowers,  provided
that if at the time of any Borrowing or the issuance of any Letter of Credit the
aggregate  amount of either of  which,  when  added to the sum of the  principal
amount  of all  Loans  then  outstanding  plus the  aggregate  Letter  of Credit
Obligations,  would exceed such amount authorized by the Bankruptcy Court in the
Interim Order  (collectively,  the  "Additional  Credit"),  the Agent shall have
received a certified copy of an order of the Bankruptcy  Court in  substantially
the form of Exhibit G-2 (the "Final  Order") and at the time of the extension of
the  Additional  Credit the Final Order  shall be in full force and effect,  and
shall not have been vacated,  reversed,  modified, amended and there shall be no
stay of the  performance  of any obligation of any of the Borrowers (the parties
hereto  acknowledge that the foregoing shall not preclude the entry of any order
of the Bankruptcy Court approving or authorizing an amendment or modification of
this  Agreement  or any other Loan  Document or the Interim  Order  permitted by
Section 10.1 which amendment or modification  shall be acceptable to the Lenders
whose  consent is required  to approve  such  amendment  or  modification  under
Section 10.1); and

            (c) The making of the Loans or the issuance of such Letter of Credit
on such  date  does not  violate  any  Requirement  of Law and is not  enjoined,
temporarily, preliminarily or permanently.

                                       48



            (d) No  Revolving  Credit Loans shall be made if any Swing Loans are
outstanding unless the proceeds of such Revolving Credit Loans are being used to
repay in full the Swing Loans or the Swing Bank otherwise consents.

            (e)  The  Agent  shall  have  received  such  additional  documents,
information and materials as any Lender Party, through the Agent, may reasonably
request.


                                   ARTICLE IV

                         REPRESENTATIONS AND WARRANTIES

            To  induce  the  Lender  Parties  and the  Agent to enter  into this
Agreement,  the Borrowers  represent  and warrant to the Lender  Parties and the
Agent that:

            4.1.  Corporate  Existence;  Compliance  with Law. Each Borrower and
each of its Subsidiaries  (i) is a corporation duly organized,  validly existing
and in good standing under the laws of the  jurisdiction  of its  incorporation;
(ii) is duly qualified or licensed as a foreign corporation and in good standing
under the laws of each  jurisdiction in which it is required to so qualify or be
licensed,  except for  failures  which in the  aggregate  would have no Material
Adverse  Effect;  (iii) has all requisite  corporate 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;  (iv)  is in  compliance  with  its  certificate  of
incorporation  and  by-laws;  (v) is in  compliance  with all  other  applicable
Requirements of Law, except for such  non-compliances  as would in the aggregate
have no Material Adverse Effect;  and (vi) except as disclosed on Schedule 4.18,
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 or
approvals  which can be obtained by the taking of  ministerial  action to secure
the grant or transfer  thereof or failures which, in the aggregate would have no
Material Adverse Effect.

            4.2. Corporate Power;  Authorization;  Enforceable Obligations.  (a)
The execution,  delivery and  performance by each Borrower of the Loan Documents
to which it is a party and the consummation of the  transactions  related to the
financing contemplated hereby:

            (i) are within such Borrower's corporate powers;

            (ii) have been duly  authorized by all necessary  corporate  action,
      including,  without limitation, the consent of stockholders where required
      and are authorized by the Interim Order or the Final Order, as applicable;
      and

            (iii)  do  not  (A)   contravene   any  Borrower's  or  any  of  its
      Subsidiaries' respective certificates of incorporation or by-laws or other
      comparable governing documents, (B) as to any Borrower,  violate any other
      applicable Requirement of Law (including, without limitation,  Regulations
      U and X of the Board of Governors of the Federal Reserve  System),  or any
      order or decree of any Governmental Authority or arbitrator,  (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 Material  Contractual

                                       49



      Obligation of any Borrower or any of its  Subsidiaries,  or (D) except for
      the Liens  created  under the Loan  Documents,  the Interim  Order and the
      Final Order,  result in the creation or imposition of any Lien upon any of
      the property of any Borrower or any of its Subsidiaries.

            (b) No  authorization  by,  approval  of,  notice  to,  or filing or
registration  with, any Governmental  Authority or any other Person,  other than
(x) the entry by the  Bankruptcy  Court of the Interim Order or the Final Order,
as  applicable,  and (y) those  which have been  obtained  or made and copies of
which  in the  case of  those  involving  a  Governmental  Authority  have  been
delivered  to the  Agent,  is  required  for (i) the  due  execution,  delivery,
recordation,  filing or performance by any Borrower of this Agreement, the Notes
or any  other  Loan  Document  to which  it is or is to be a  party,  or for the
consummation  of the  transactions  contemplated  hereby,  (ii) the grant by any
Borrower of the Liens granted by it pursuant to the Collateral Documents,  (iii)
the perfection or  maintenance of the Liens created by the Collateral  Documents
(including, as of the Effective Date, the first priority nature thereof (subject
to  Permitted  Liens)) or (iv) the  exercise by the Agent or any Lender Party of
its rights under the Loan Documents or the remedies in respect of the Collateral
pursuant to the Collateral  Documents.  On any date after the Effective Date, no
authorization  by, approval of, notice to, or filing or  registration  with, any
Governmental  Authority  or any other  Person,  other  than (x) the entry by the
Bankruptcy Court of the Interim Order or the Final Order, as applicable, and (y)
those which have been  obtained or made and copies of which in the case of those
involving a Governmental Authority have been delivered to the Agent, is required
for the  perfection  or  maintenance  of the  Liens  created  by the  Collateral
Documents (including the first priority thereof (subject to Permitted Liens)).

            (c) This  Agreement  has been and each of the other  Loan  Documents
will have been upon delivery  thereof pursuant to Section 3.1, duly executed and
delivered by each Borrower party thereto. This Agreement is, and each other Loan
Document  will be  when  delivered  hereunder,  the  legal,  valid  and  binding
obligation of each Borrower party thereto,  enforceable against it in accordance
with its terms and the Interim Order or the Final Order.

            4.3. Taxes. All federal,  and all material state,  local and foreign
tax returns, reports and statements  (collectively,  the "Tax Returns") required
to be filed by any Borrower or any of their Tax Affiliates  have been filed with
the appropriate  governmental  agencies in all  jurisdictions  in which such Tax
Returns are required to be filed, and all taxes,  charges and other  impositions
due and  payable  have  been  timely  paid  prior to the date on which any fine,
penalty,  interest,  late charge or loss may be added  thereto  for  non-payment
thereof, except (a) where contested in good faith and by appropriate proceedings
if  adequate  reserves  therefor  have  been  established  on the  books of such
Borrower  or  such  Tax  Affiliate  in   accordance   with  GAAP  and  all  such
non-payments,  in the aggregate,  if adversely determined would have no Material
Adverse  Effect  or (b) to the  extent  prohibited  by the  Bankruptcy  Code  in
connection  with the Cases.  Proper and accurate  amounts have been  withheld by
each Borrower and each of their Tax Affiliates from their  respective  employees
for all  periods  in  material  compliance  with the tax,  social  security  and
unemployment  withholding  provisions of applicable  federal,  state,  local and
foreign  law and such  withholdings  have  been  timely  paid to the  respective
Governmental  Authorities.  No Borrower nor any of their Tax  Affiliates has (i)
except as set forth on Schedule 4.3, executed or filed with the IRS or any other
Governmental Authority any agreement or other document (which agreement or other

                                       50



document is presently in effect)  extending,  or having the effect of extending,
the  period for  assessment  or  collection  of any  charges,  or agreed or been
requested to make any adjustment under Section 481(a) of the Code by reason of a
change in  accounting  method or  otherwise  which will  result in any  material
aggregate tax liability for the three taxable years  beginning  with the year of
adjustment;  or (ii) except as set forth on Schedule 4.3, any  obligation  under
any written or oral tax sharing agreement other than the Tax Sharing Agreement.

            4.4. Full Disclosure.  No written statement prepared or furnished by
or on behalf of any Borrower or any of its Affiliates in connection  with any of
the Loan Documents or the consummation of the transactions contemplated thereby,
and no financial  statement  delivered pursuant hereto or thereto,  contains any
untrue  statement of a material fact or omits to state a material fact necessary
to make the statements contained herein or therein not misleading, if, in either
case,  such fact is material to an  understanding  of the  financial  condition,
business,  properties  or prospects of any Borrower or any of its  Affiliates or
the ability of such Persons to fulfill its  obligations  under any Loan Document
to which it is a party.

            4.5.  Financial Matters.  (a) The Consolidated  balance sheet of WPC
and its  Consolidated  Subsidiaries  as at December  31,  1999,  and the related
Consolidated  statements of income,  retained  earnings and cash flow of WPC and
its  Subsidiaries  for the fiscal year then  ended,  in each case  certified  by
PricewaterhouseCoopers,  LLP, and the Consolidated balance sheet of the Borrower
Consolidated  Group  as  at  August  31,  2000,  and  the  related  Consolidated
statements  of  income,   retained  earnings  and  cash  flow  of  the  Borrower
Consolidated  Group for the eight months then ended, duly certified by the chief
financial  officer of WPC,  copies of which have been  furnished  to each Lender
Party, fairly present,  subject, in the case of said balance sheets as at August
31, 2000, and said  statements of income and cash flow for the eight months then
ended, to year-end audit adjustments,  the Consolidated  financial  condition of
such Person and its Subsidiaries as at such dates and the  Consolidated  results
of the  operations of such Person and its  Subsidiaries  for the period ended on
such date, all in conformity with GAAP.

            (b) Since  December 31, 1999 and through the Effective  Date,  there
has  been  no  Material  Adverse  Change  and  there  have  been  no  events  or
developments  that in the aggregate  have had a Material  Adverse  Effect (other
than the commencement of the Cases or as disclosed in any public disclosure made
by any Borrower or as otherwise  disclosed to the Lenders prior to the Effective
Date).

            (c)  None  of the  Borrowers  or any of  their  Subsidiaries  had at
December 31, 1999 any material obligation, contingent liability or liability for
taxes,  long-term  leases or unusual  forward or  long-term  commitment  that is
required by GAAP to be included in a balance sheet which is not reflected in the
balance sheet referred to in subsection (a) above or in the notes thereto.

            (d)  The  unaudited  projected  consolidated  balance  sheet  of the
Borrowers  and  their  Consolidated  Subsidiaries,  a copy  of  which  has  been
delivered to each Lender  Party,  has been prepared as of September 30, 2000 and
reflects as of such date the projected  Consolidated  financial condition of the
Borrowers and their Subsidiaries.  Such projected financial statement

                                       51



(including  any related  schedules  and notes) have been  prepared in accordance
with  GAAP on the  basis of the  statements  and  assumptions  set  forth in the
respective notes thereto.

            4.6.  Litigation.  Except as set forth in Schedule 4.6, there are no
pending or, to the knowledge of any Borrower,  threatened ctions, investigations
or  proceedings  affecting  any Borrower or any of its  Subsidiaries  before any
Governmental  Authority or  arbitrator  which,  in the  aggregate,  would have a
Material Adverse Effect.  The performance of any action by any Borrower required
or  contemplated  by any of the Loan  Documents  is not  restrained  or enjoined
(either  temporarily,  preliminarily  or  permanently),  and no material adverse
condition has been imposed by any Governmental  Authority or arbitrator upon any
of the foregoing transactions.

            4.7. Margin  Regulations.  No Borrower is engaged in the business of
extending  credit for the purpose of purchasing or carrying margin stock (within
the  meaning of  Regulation  U issued by the Board of  Governors  of the Federal
Reserve  System),  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 U or X of
the Board of Governors of the Federal Reserve System.

            4.8.  Ownership of the Borrowers and Subsidiaries.  (a) Set forth on
Schedule  4.8  hereto  is a  complete  and  accurate  list  showing,  as to each
Borrower,  the jurisdiction of its  incorporation,  the number of shares of each
class of Stock  authorized,  the number  outstanding  on the date hereof and the
ownership of the  outstanding  shares of each class.  No authorized but unissued
shares, no treasury shares and, to the best knowledge of each Borrower, no other
outstanding  shares of capital stock of such Borrower are subject to any option,
warrant,  right of  conversion  or purchase or any similar  right.  There are no
agreements or understandings with respect to the voting, sale or transfer of any
shares  of  capital  stock of any  Borrower  or, to the best  knowledge  of such
Borrower,  any agreement  restricting the transfer or  hypothecation of any such
shares,  except for the USWA  Right of First  Refusal  and,  in the case of each
Borrower other than WPC, under the Collateral Documents.

            (b) Set forth on Schedule 4.8 hereto is a complete and accurate list
showing all direct and indirect  Subsidiaries  of each  Borrower and, as to each
such Subsidiary, the jurisdiction of its incorporation,  the number of shares of
each class of Stock  authorized,  the number  outstanding on the date hereof and
the percentage of the  outstanding  shares of each such class owned (directly or
indirectly)  by such  Borrower.  No Stock of any  Subsidiary  of any Borrower is
subject to any outstanding option,  warrant,  right of conversion or purchase or
any similar right. All of the outstanding Stock of each such Subsidiary has been
validly issued, is fully paid and  non-assessable and is owned by such Borrower,
free and clear of all Liens other than the Liens  granted to the Agent  pursuant
to the Security  Agreement.  Neither any 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.  No Borrower owns or holds,
directly or indirectly,  any capital stock or equity  security of, or any equity
interest in, any Person other than such Subsidiaries.

            4.9.  ERISA.  (a)  Schedule  4.9  separately  identifies,  as of the
Effective  Date,  all  Plans,  all  Qualified  Plans,  all Title IV  Plans,  all
Multiemployer  Plans,  all unfunded  Pension Plans and all Welfare Benefit Plans
that provide retiree benefits.

                                       52




            (b) Except as set forth on Schedule  4.9,  each  Qualified  Plan has
been  determined by the IRS to qualify  under  Section 401 of the Code,  and the
trusts created  thereunder  have been determined to be exempt from tax under the
provisions  of  Section  501 of the  Code,  and to  the  best  knowledge  of any
Borrower,  nothing has occurred which would cause the loss of such qualification
or tax-exempt status.

            (c) Except as set forth on Schedule  4.9, each Plan is in compliance
in all  material  respects  with  applicable  provisions  of ERISA and the Code,
including,  without limitation, the filing of reports required under the Code or
ERISA which are true and correct in all material  respects as of the date filed,
and,  with  respect to each Plan  (other than a Qualified  Plan),  all  required
contributions  and benefits have been paid in accordance  with the provisions of
each such Plan.

            (d) None of the Borrowers or any of their  Subsidiaries or any ERISA
Affiliate,  with  respect  to  any  Qualified  Plan,  has  failed  to  make  any
contribution  or pay any amount due as  required  by Section  412 of the Code or
Section 302 of ERISA or the terms of any such Qualified Plan.

            (e) There has been no, nor is there reasonably expected to occur (i)
any ERISA Event that has a reasonable  possibility  of resulting in a liability,
deficiency or waiver  request of any Borrower,  any of its  Subsidiaries  or any
ERISA Affiliate,  whether or not assessed, that exceeds $5,000,000,  or (ii) any
event  described  in Section 4068 of ERISA with respect to any Title IV Plan for
which any Borrower, any of its Subsidiaries or any of its ERISA Affiliates could
reasonably be expected to have liability that exceeds $5,000,000.

            (f) There are no pending or, to the knowledge of any Borrower or any
of its  Subsidiaries  or any ERISA  Affiliate,  threatened  claims,  actions  or
lawsuits  (other than  claims for  benefits  in the normal  course)  asserted or
instituted  against (i) any Plan or its assets,  (ii) any fiduciary with respect
to any  Plan  or  (iii)  any  Borrower,  any of its  Subsidiaries  or any  ERISA
Affiliate  with  respect  to any Plan,  whether  or not  assessed,  that  exceed
$5,000,000,  other  than any such  claims,  actions  or  lawsuits  that  have no
reasonable possibility of resulting in a liability,  deficiency,  waiver request
or increase in funding requirements of any Borrower or any Subsidiary.

            (g) None of the  Borrowers or any  Subsidiary of any Borrower or any
ERISA Affiliate has incurred, or has any reasonable likelihood of incurring, any
Withdrawal  Liability  under  Section 4201 of ERISA in excess of $5,000,000 as a
result of a complete or partial  withdrawal  from a  Multiemployer  Plan (and no
event has occurred which, with the giving of notice under Section 4219 of ERISA,
would result in any such liability).

            (h) Except as set forth on Schedule 4.9,  within the last five years
none of any Borrower, any of its Subsidiaries or any ERISA Affiliate has engaged
in a  transaction  which  resulted  in a Title  IV Plan  with  Unfunded  Pension
Liabilities  being  transferred  outside of the  "controlled  group" (within the
meaning of Section 4001(a)(14) of ERISA) of any such entity.

            (i) As of the  Effective  Date,  none  of any  Borrower,  any of its
Subsidiaries  or any ERISA  Affiliate has incurred any  liability  under Section
4062, 4063, or 4064 of ERISA.

                                       53




            (j) As of the Effective Date, no Title IV Plan has unfunded  benefit
liabilities,   as  defined  in  Section  4001(a)(18)  of  ERISA,  in  excess  of
$5,000,000.

            4.10. Liens. Each of the Security  Agreement,  the Interim Order and
the Final Order, as applicable, creates in favor of the Agent for the benefit of
the Secured Parties,  a legal,  valid and enforceable  security  interest in the
Collateral and each of the Security  Agreement,  the Interim Order and the Final
Order,  as  applicable,  constitutes  the  creation of a fully  perfected  first
priority Lien on, and security interest in, all right, title and interest of the
grantors  thereunder in such Collateral in each case prior and superior in right
to any Person,  except as  otherwise  provided in the  Security  Agreement,  the
Interim Order and the Final Order,  as  applicable.  The Borrowers are the legal
and beneficial  owners of the Collateral free and clear of any Lien,  except for
the Liens and security  interests created or permitted under the Loan Documents,
the Interim Order and the Final Order.

            4.11. No Burdensome Restrictions;  No Defaults. (a) No Borrower, nor
any of their  Subsidiaries  (i) is a party to any Contractual  Obligation  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 by Section 7.1) on the property
or  assets  of any  thereof  or  (ii)  is  subject  to a  charter  or  corporate
restriction that would have a Material Adverse Effect.

            (b) No Event of Default has  occurred and is  continuing  other than
the commencement of the Cases or as disclosed in writing to the Lenders prior to
the Effective Date.

            (c) No Requirement of Law has a Material Adverse Effect.

            (d) Except as provided  in the  Indentures,  none of the  Borrowers'
Subsidiaries  is subject to any  restriction  or  limitation  on its  ability to
declare or make any  dividend  payment or other  distribution  on account of any
shares of any class of its  Stock or on its  ability  to  purchase,  redeem,  or
otherwise acquire for value or make any payment in respect of any such shares or
any shareholder rights.

            4.12.  No Other  Ventures.  Except as listed on  Schedule  4.12,  no
Borrower  nor any of their  Subsidiaries  is  engaged  in any joint  venture  or
partnership with any other Person.

            4.13. Investment Company Act. No Borrower is 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.  The making of the Loans and the  issuance of the Letters of
Credit by the Lender  Parties,  the  application  of the proceeds and  repayment
thereof by the Borrowers and the consummation of the  transactions  contemplated
by the Loan Documents on the part of any Borrower will not violate any provision
of such Act or any  rule,  regulation  or order  issued  by the  Securities  and
Exchange Commission thereunder.

            4.14. Insurance. As of the Effective Date, all policies of insurance
of  any  kind  or  nature  owned  by or  issued  to any  Borrower  or any of its
Subsidiaries,  including,  without  limitation,  policies of life, fire,  theft,
product liability,  public liability,  property damage, other casualty, employee
fidelity, workers' compensation, employee health and welfare, title and property

                                       54



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 companies of the size
and character of WPC and its Subsidiaries.

            4.15.  Labor Matters.  (a) Except as set forth on Schedule  4.15(a),
there  are no  strikes,  work  stoppages,  slowdowns  or  lockouts  pending,  or
reasonably  likely to occur in the  immediate  future,  against or involving any
Borrower or any of its  Subsidiaries,  other than those  which in the  aggregate
would have no Material Adverse Effect.

            (b)  Except  as  set  forth  on  Schedule  4.15(b),   there  are  no
arbitrations  or grievances  pending against or involving any Borrower or any of
its  Subsidiaries,  nor,  to the  best  knowledge  of the  Borrowers  and  their
Subsidiaries,  are there any arbitrations or grievances threatened involving any
Borrower or any of its  Subsidiaries,  other than those  which in the  aggregate
would have no Material Adverse Effect.

            (c) Except as set forth on  Schedule  4.15(c),  as of the  Effective
Date,  no  Borrower  or any of its  Subsidiaries  are  parties  to,  or have any
obligations under, any collective bargaining agreement.

            (d) Except as set forth on  Schedule  4.15(d),  as of the  Effective
Date, there are no representation  proceedings pending or, to the best knowledge
of any Borrower,  threatened  with the National Labor  Relations  Board,  and no
labor  organization  or  group  of  employees  of  any  Borrower  or  any of its
Subsidiaries have made a pending demand for recognition.

            (e)  Except as set forth on  Schedule  4.15(e),  there are no unfair
labor practice  charges,  grievances or complaints  pending or in process or, to
the best  knowledge of any Borrower,  threatened by or on behalf of any employee
or group of  employees  of any  Borrower or any of its  Subsidiaries  other than
those which in the aggregate would have no Material Adverse Effect.

            (f) Except as set forth on Schedule 4.15(f), there are no complaints
or charges  against any Borrower or any of its  Subsidiaries  pending or, to the
best  knowledge of any Borrower,  threatened  to be filed with any  Governmental
Authority  or  arbitrator  based on,  arising  out of, in  connection  with,  or
otherwise  relating to the employment by any Borrower or any of its Subsidiaries
of any  individual,  other  than  those  which in the  aggregate  would  have no
Material Adverse Effect.

            (g) Each  Borrower and each of its  Subsidiaries  are in  compliance
with all laws, and all orders of any court,  governmental  agency or arbitrator,
relating to the employment of labor,  including all such laws relating to wages,
hours, collective bargaining,  discrimination,  civil rights, and the payment of
withholding   and/or  social  security  and  similar  taxes,   other  than  such
non-compliances as in the aggregate would have no Material Adverse Effect.

            4.16. Force Majeure.  Neither the business nor the properties of any
Borrower or any of its  Subsidiaries is currently  suffering from the effects of
any fire, explosion, accident, drought, storm, hail, earthquake, embargo, act of
God or of the  public  enemy  or  other  casualty  (whether  or not  covered  by
insurance)  other  than those  which in the  aggregate  would  have no  Material
Adverse Effect.

                                       55




            4.17.  Use of Proceeds.  The proceeds of the Loans and  issuances of
Letters  of  Credit  are  being  used  solely  to  (i)  repay  the  Pre-Petition
Obligations,   (ii)  provide   working  capital  for  the  Borrowers  and  their
Subsidiaries  or (iii) to make other  expenditures  permitted by this Agreement,
including without limitation, after the occurrence and during the continuance of
an Event of Default, the fees and expenses of Professionals but not in excess of
the Carve-Out;  provided, further that no amounts shall be paid pursuant to this
Section  4.17(iii)  for fees and  disbursements  incurred  by the  Borrowers  in
connection  with  any  proceeding  (other  than  an  investigation)   commenced,
including, without limitation, any motion or other pleading filed to contest (a)
the attachment,  perfection or priority of the Liens created by the Pre-Petition
Loan  Documents,  (b) the  validity,  binding  effect or  enforceability  of the
Pre-Petition Loan Documents or the Loan Documents other than the reasonable fees
and expenses of the Borrowers'  Professionals  related to the enforcement of the
Borrowers'  rights under this Agreement or the Loan Documents,  or (c) any other
rights or interest of the Pre-Petition  Agent or the Pre-Petition  Lenders or of
the Agent of the Lender Parties under the Loan Documents.

            4.18.  Environmental  Protection.  Except as  disclosed  on Schedule
4.18:

            (a) The operations of each Borrower and each of its  Subsidiaries or
tenants comply with all Environmental Laws, other than such non-compliance as in
the aggregate would have no Material Adverse Effect;

            (b) Each  Borrower and each of its  Subsidiaries  have  obtained all
environmental,  health and safety Permits  necessary for their  operations other
than  those  failures  which in the  aggregate  would have no  Material  Adverse
Effect,  and all such  Permits are in good  standing,  except where such failure
would  have no  Material  Adverse  Effect,  and  each  Borrower  and each of its
Subsidiaries  are in  compliance  with the terms and  conditions of such Permits
other than for such non-compliance which in the aggregate would have no Material
Adverse Effect;

            (c)  Neither  any  Borrower  nor any of its  Subsidiaries  have  any
currently or previously  owned or leased  property or operations  subject to any
threatened  or  outstanding  order  from  or  agreement  with  any  Governmental
Authority or other Person or subject to any judicial or docketed  administrative
proceeding  respecting (i)  Environmental  Laws,  (ii) Remedial  Action or (iii)
Environmental  Liabilities  and Costs,  other than those which in the  aggregate
would have no Material Adverse Effect;

            (d)  As of the  Effective  Date,  no  Borrower  and  none  of  their
Subsidiaries  is a treatment,  storage or disposal  facility  requiring a permit
under the Resource  Conservation  and Recovery Act, 42 U.S.C.  ss. 6901 et seq.,
the  regulations  thereunder or any state analog and, as of the Effective  Date,
each Borrower and each of its  Subsidiaries is in compliance with all applicable
financial  responsibility  requirements of all  Environmental  Laws,  including,
without  limitation,  those  contained  in 40 C.F.R.,  parts  264,  265 and 280,
subparts H, and any state  equivalents,  other than those that in the  aggregate
would have no Material Adverse Effect;

            (e) No Borrower and none of their  Subsidiaries  has filed or failed
to file any notice required under any applicable  Environmental  Law reporting a
Release other than those which in the aggregate  would have no Material  Adverse
Effect;

                                       56




            (f) There are not now nor have  there  been in the past any  events,
conditions or  circumstances  associated with or arising from currently owned or
leased  properties  or  current  operations  of  any  Borrower  or  any  of  its
Subsidiaries  or, to the best of each Borrower's  knowledge,  tenants or, to the
best of each  Borrower's  knowledge,  any events,  conditions  or  circumstances
associated with or arising from any previously owned or leased properties or the
previous  operations of any Borrower or any of its  Subsidiaries or, to the best
of each Borrower's knowledge,  tenants, which may give rise to any Environmental
Liabilities  and Costs  other  than  those in the  aggregate  that would have no
Material Adverse Effect;

            (g)  As  of  the  Effective  Date,  no  Environmental  Lien  and  no
unrecorded  Environmental  Lien has  attached to any property of any Borrower or
any of its  Subsidiaries  and,  as of any date  after  the  Effective  Date,  no
Environmental  Lien and no  unrecorded  Environmental  Lien has  attached to any
property of any Borrower or any of its Subsidiaries other than those that in the
aggregate would have no Material Adverse Effect; and

            (h) With  respect to any property  owned,  leased or operated by any
Borrower or any of its Subsidiaries:  (i) there are no underground storage tanks
or surface impoundments, (ii) except to the extent that the presence thereof, in
the  aggregate,  would  not have a  Material  Adverse  Effect,  there is not any
asbestos-containing material in friable form or any airborne asbestos containing
material in excess of amounts  proscribed by Environmental  Laws, or (iii) there
is not any polychlorinated  biphenyls ("PCBs") other than those used, maintained
or disposed  of in  compliance  with all  applicable  Environmental  Laws or the
removal of which would have a Material Adverse Effect.

            4.19.  Intellectual  Property.  The Borrowers and their 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
operation of their respective businesses,  without infringement upon or conflict
with the rights of any other Person with  respect  thereto,  including,  without
limitation,  all trade names,  except where such failure  would have no Material
Adverse  Effect.  To the best  knowledge  of any  Borrower,  no  slogan or other
advertising device, product,  process, method, substance, part or other material
now employed,  or now contemplated to be employed, by any Borrower or any of its
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
threatened,  other  than those  which in the  aggregate  would have no  Material
Adverse Effect.  No patent,  invention,  device,  application,  principle or any
statute, law, rule, regulation, standard or code relating thereto is pending or,
to the knowledge of any Borrower, proposed, other than those the consequences of
which, in the aggregate would have no Material Adverse Effect.

            4.20. Title. (a) The Borrowers and their Subsidiaries own fee simple
absolute  title to all of the Real Estate  described  in Schedule  4.20(a),  and
marketable title to, or valid leasehold interests pursuant to the Leases in, all
other  properties  and assets  purported  to be owned by any  Borrower or any of
their Subsidiaries,  including,  without  limitation,  valid leasehold interests
pursuant to the Leases and all property  reflected in the balance sheet referred
to in Section 4.5(a), except for such failures which in the aggregate would have
no Material  Adverse  Effect.  None of such  properties  and assets,  including,
without  limitation,  the Real

                                       57




Estate and the Leases, is subject to any Lien, except Liens permitted hereunder.
The  Borrowers  and their  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 such  Borrower's and
its Subsidiaries'  right,  title and interest in and to all such property except
for such failures which would in the aggregate have no Material Adverse Effect.

            (b) All real property  leased,  with an annual base rent of at least
$100,000,  at  the  date  of  this  Agreement  by  any  Borrower  or  any of its
Subsidiaries is listed on Schedule 4.20(b),  setting forth information regarding
the commencement  date,  termination date,  renewal options and purchase options
(if any) and annual  base rents as  specified  therein.  Each of such  leases is
valid and  enforceable  in  accordance  with its terms and is in full  force and
effect other than those leases which if not valid and enforceable,  would in the
aggregate have no Material  Adverse  Effect.  None of any Borrower or any of its
Subsidiaries  or, to the knowledge of any Borrower,  any other party to any such
lease is in default of its  obligations  thereunder or has delivered or received
any notice of default under any such lease and no event has occurred which, with
the giving of notice,  the passage of time or both,  would  constitute a default
under any such lease,  except,  in either case, for defaults the  consequence of
which in the aggregate would have no Material Adverse Effect.

            (c) Except as listed on Schedule  4.20(c),  neither any Borrower nor
any of its 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 such Borrower or
any of its Subsidiaries.

            (d) All  components  of all  improvements  included  within the real
property   owned  or  leased  by  any  Borrower  or  any  of  its   Subsidiaries
(collectively,  "Improvements"),  including,  without limitation,  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  other than such  failures  the  consequences  of which in the
aggregate would have no 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 Borrower or any of its  Subsidiaries  are  installed  and  operating and are
sufficient to enable the real property  owned or leased by such Borrower and its
Subsidiaries  to continue to be used and operated in the manner  currently being
used and operated other than such failures which in the aggregate  would have no
Material  Adverse Effect,  and neither any Borrower nor any of its  Subsidiaries
has any knowledge of any fact or condition that could result in the  termination
or material impairment of the furnishing thereof, other than such failures which
in the  aggregate  would have no Material  Adverse  Effect.  No  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 Borrower or any of its Subsidiaries except where the consequences of such
in the aggregate would have no Material Adverse Effect.

            (e) All  Permits  required  to have been  issued or  appropriate  to
enable  all  real  property  owned  or  leased  by  any  Borrower  or any of its
Subsidiaries to be lawfully  occupied and

                                       58




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 such
failures  the  consequences  of which in the  aggregate  would have no  Material
Adverse Effect.

            (f) Neither any  Borrower nor any of its  Subsidiaries  has received
any notice,  nor has any knowledge,  of any pending,  threatened or contemplated
condemnation  proceeding  affecting  any real  property  owned or leased by such
Borrower  or any of  its  Subsidiaries  or any  part  thereof,  or any  proposed
termination  or  impairment  of any  parking  at any such  owned or leased  real
property  or of any sale or other  disposition  of any  real  property  owned or
leased by such Borrower or any of its  Subsidiaries  or any part thereof in lieu
of  condemnation,  except  for  notices  affecting  real  property  which in the
aggregate, if lost, would have no Material Adverse Effect.

            (g) No portion of any real property  owned or leased by any Borrower
or any of its  Subsidiaries  has suffered  any material  damage by fire or other
casualty loss which has not heretofore  been completely  replaced,  repaired and
restored  to its  original  condition,  except to the extent that the failure to
replace,  repair or restore such real property  would in the  aggregate  have no
Material Adverse Effect.

                                    ARTICLE V

                               FINANCIAL COVENANTS

            As  long  as  any  of  the  Obligations  or  the  Revolving   Credit
Commitments remain outstanding, unless the Majority Lenders otherwise consent in
writing:

            5.1.  Limitation on Capital  Expenditures.  The Borrowers  shall not
make, or permit any of their Subsidiaries to make, Capital  Expenditures for the
period from  November 1, 2000 through the last day of each Fiscal Year set forth
below in excess of the amount set forth opposite such date:

                                                            Maximum Amount of
            For the Fiscal Year Ending                      Capital Expenditures
            --------------------------                      --------------------

            December 31, 2000                               $12,500,000

            December 31, 2001                               $42,500,000

            December 31, 2002                               $60,000,000

provided,  however,  that if, at the end of any Fiscal Year set forth above, the
amount  specified  above for such  Fiscal  Year  exceeds  the  amount of Capital
Expenditures  actually made by the Borrowers and their Subsidiaries  during such
Fiscal Year (the amount of such excess being the "Excess Amount"), the Borrowers
and their Subsidiaries shall be entitled to make additional Capital Expenditures
in the succeeding Fiscal Year in an amount (such amount being referred to herein
as the "Carryover Amount") equal to the lesser of (i) the Excess Amount and (ii)
50% of the amount  specified  above for such prior Fiscal Year. The first amount
of Capital Expenditures spent in any such succeeding Fiscal Year shall be deemed
to be the Carryover Amount.

                                       59



            5.2. Excess Availability.  The Borrowers shall maintain at all times
Excess Availability of not less than $15,000,000.


                                   ARTICLE VI

                        ADDITIONAL AFFIRMATIVE COVENANTS

            As  long  as  any  of  the  Obligations  or  the  Revolving   Credit
Commitments remain outstanding, unless the Majority Lenders otherwise consent in
writing:

            6.1.  Compliance  with Laws,  Etc. The Borrowers  shall comply,  and
shall cause each of their Subsidiaries to comply,  with all Requirements of Law,
Contractual  Obligations,   commitments,   instruments,  licenses,  Permits  and
franchises,   including,  without  limitation,  all  Permits,  other  than  such
non-compliances  the  consequences  of which either  singly or in the  aggregate
would have no Material Adverse Effect,  provided,  however,  each Borrower shall
comply in all respects with (i) the Bankruptcy  Code,  (ii) the Federal Rules of
Bankruptcy  Procedure  and (iii) the local  rules and  orders of the  Bankruptcy
Court.

            6.2. Conduct of Business. Each Borrower shall (a) conduct, and shall
cause each of its  Subsidiaries  to conduct,  its  business in a regular  manner
consistent with sound business  practice in such Borrower's or such Subsidiary's
industry;  (b) use, and cause each of their  Subsidiaries to 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 any Borrower or any of their
Subsidiaries;  (c) preserve,  and cause each of their  Subsidiaries to preserve,
all registered patents,  trademarks,  trade names,  copyrights and service marks
necessary  for the conduct of its  business;  and (d) perform and  observe,  and
cause  each of  their  Subsidiaries  to  perform  and  observe,  all the  terms,
covenants and  conditions  required to be performed and observed by it under its
Contractual  Obligations  (including,  without  limitation,  to pay all rent and
other  charges  payable  under  any  lease  and to pay all  other  payables  and
obligations as they become due) except to the extent permitted or required under
the  Bankruptcy  Code and by the  Bankruptcy  Court,  and do,  and  cause  their
Subsidiaries to do, all things  necessary to preserve and to keep unimpaired its
rights  under  such  Contractual  Obligations,  other  than,  in the case of (a)
through (d), such failures the consequences of which in the aggregate would have
no Material Adverse Effect.

            6.3.  Payment of Taxes,  Etc. Each Borrower shall pay and discharge,
and shall cause each of its  Subsidiaries to pay and discharge,  before the same
shall become  delinquent  except to the extent  permitted or required  under the
Bankruptcy Code and by the Bankruptcy  Court,  all lawful  governmental  claims,
taxes,  assessments and charges or levies against it or any of its  Subsidiaries
or for which its or any of its Subsidiaries assets may be subject,  except where
contested in good faith, by proper  proceedings,  if adequate  reserves therefor
have  been  established  on the books of such  Borrower  or such  Subsidiary  in
conformity with GAAP and where the  consequence of all such  non-payments in the
aggregate  would have no Material  Adverse  Effect.  To the extent such  claims,
taxes, assessments,  charges or levies are computed on a consolidated,  combined
or unitary basis,  any payments by any Borrower and its  Subsidiaries  shall not
exceed their allocable share thereof.

                                       60




            6.4.  Maintenance of Insurance.  Each Borrower shall  maintain,  and
shall cause each of its Subsidiaries to maintain, insurance 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 such Borrower or
such Subsidiary operates and as otherwise satisfactory to the Agent, in its sole
judgment exercised reasonably,  and, in any event, all insurance required by any
Collateral  Document.  All insurance  required by any Collateral  Document shall
name  the  Agent  as  additional  insured  or loss  payee,  as the  Agent  shall
determine.  Each  Borrower will furnish to the Agent  (together  with copies for
each Lender) from time to time such  information as may be reasonably  requested
by the Agent as to such insurance.

            6.5.  Preservation of Corporate Existence,  Etc. Each Borrower shall
preserve and maintain,  and shall cause each of their  Subsidiaries  to preserve
and maintain,  its corporate  existence  and,  except for failures  which in the
aggregate  would  have no  Material  Adverse  Effect,  all rights  (charter  and
statutory) and franchises, except as permitted by Section 7.5.

            6.6.  Access.  Each Borrower  shall, at any reasonable time and from
time to time, upon reasonable prior notice, (i) permit the Agent, any agents and
any  representatives  thereof,  to (A) examine and make copies of and  abstracts
from  the  records  and  books  of  account  of such  Borrower  and  each of its
Subsidiaries,  (B)  visit  the  properties  of  such  Borrower  and  each of its
Subsidiaries  and (C)  communicate  directly  with such  Borrower's  independent
certified  public  accountants,  and (ii)  permit the Agent,  any agents and any
representatives  thereof, to discuss the affairs,  finances and accounts of such
Borrower  each of its  Subsidiaries  with any of their  respective  officers  or
directors.  Each Borrower  hereby  authorizes its independent  certified  public
accountants  to  disclose  to the  Agent,  any  agents  and any  representatives
thereof, which authorization shall be confirmed at the request of the Agent, any
and all  financial  statements  and other  information  of any kind,  including,
without limitation, to furnish copies of any management letter, or the substance
of any oral  information  that such  accountants  may have with  respect  to the
business,  financial  condition,  results of operations or other affairs of such
Borrower or any of its  Subsidiaries,  except that such accountants shall not be
obligated to disclose to the Agent or any agents and any representatives thereof
its work  papers or other  confidential  information,  in each case  relating to
either (1) any  preliminary  reports or studies  conducted  by such  accountants
unrelated to any information  previously  disclosed to the Agent,  any agents or
any representatives  thereof,  (2) information  provided by the attorneys of any
Borrower with respect to litigation  matters if such information is confidential
by reason of the applicable attorney work product doctrine or (3) any reports or
communications   concerning  the  negotiations  of  the  collective   bargaining
agreements with any Borrower's unions at any time prior to the execution of such
agreements.

            6.7.  Keeping of Books.  Each Borrower  shall keep,  and shall cause
each of its Subsidiaries to keep,  proper books of record and account,  in which
full and correct  entries  shall be made of all financial  transactions  and the
assets and business of such Borrower and each such Subsidiary in conformity with
GAAP and applicable law, rules and regulations.

            6.8.  Maintenance of  Properties,  Etc. Each Borrower shall maintain
and preserve, and shall cause each of its Subsidiaries to maintain and preserve,
(i) all of its  properties  which are useful or  necessary in the conduct of its
business in good  working  order and  condition,  and

                                       61



(ii) all rights, permits, licenses, approvals and privileges (including, without
limitation, all Permits) which are used or useful or necessary in the conduct of
its business,  other than those which the failure to maintain and preserve would
either singly or in the aggregate have no Material Adverse Effect.

            6.9.  Application  of Proceeds.  The Borrowers  shall use the entire
amount of the proceeds of the Loans as provided in Section 4.17.

            6.10.  Financial  Statements.  The  Borrowers  shall  furnish to the
Lender Parties:

            (a) as soon as  available  and in any event within 30 days after the
end of each month,  the  Consolidated  balance  sheet  without  footnotes of the
Borrower  Consolidated  Group as of the end of such  month and the  Consolidated
statements  of income and cash flow of the Borrower  Consolidated  Group for the
period commencing at the end of the previous Fiscal Year and ending with the end
of such  month,  certified  by the  chief  financial  officer  of WPC as  fairly
presenting  the  financial  condition  and results of operations of the Borrower
Consolidated  Group at such date and for such period  subject to normal year end
audit adjustments,  together with (A) a certificate of said officer stating that
no Default has occurred and is  continuing  or, if a Default has occurred and is
continuing,  a  statement  as to the nature  thereof  and the  action  which the
Borrowers  propose  to  take  with  respect  thereto,  (B) a  schedule  in  form
satisfactory  to the  Agent  of  the  computations  used  by  the  Borrowers  in
determining  compliance with all financial covenants contained herein, and (C) a
written  discussion  and  analysis by the  management  of the  Borrowers  of the
financial statements furnished in respect of such month;

            (b) as soon as  available  and in any event within 90 days after the
end of each Fiscal Year, the  Consolidated and  consolidating  balance sheets of
the Borrower  Consolidated Group as of the end of such year and the Consolidated
and consolidating  statements of income,  retained earnings and cash flow of the
Borrower Consolidated Group for the period commencing at the end of the previous
Fiscal Year and ending with the end of such Fiscal  Year,  certified in the case
of such Consolidated  financial statements without qualification as to the scope
of the audit by  PricewaterhouseCoopers,  LLP,  any other "Big Five"  accounting
firm or other independent public accountants acceptable to the Majority Lenders,
together  with (A) a  certificate  of such  accounting  firm stating that in the
course of the regular audit of the business of the Borrower  Consolidated Group,
which audit was conducted by such  accounting  firm in accordance with generally
accepted auditing  standards,  such accounting firm obtained no knowledge that a
Default has occurred and is continuing, or, if in the opinion of such accounting
firm,  a Default has occurred  and is  continuing,  a statement as to the nature
thereof,  (B) a schedule in form  satisfactory to the Agent of the  computations
used by such accountants in determining,  as of the end of such Fiscal Year, the
Borrowers'  compliance with all financial  covenants contained herein, and (C) a
written  discussion  and  analysis by the  management  of the  Borrowers  of the
financial statements furnished in respect of such Fiscal Year;

            (c) not later than the date on which the Borrowers  shall deliver to
the Lender Parties the financial  statements  referred to in Section 6.10(b) for
any Fiscal Year, a letter from the Borrowers'  independent public accountants in
form and substance satisfactory to the Agent;

                                       62




            (d) promptly  after the same become  available  and in any event not
later than January 31, 2001, the Borrowers'  financial plan for each Fiscal Year
ending on or before December 31, 2002.

            (e) promptly after the same are received by the Borrowers, a copy of
each  management  letter  provided  to the  Borrower  Consolidated  Group by its
independent certified public accountants which refers in whole or in part to any
material  inadequacy,  defect,  problem,  qualification  or other  lack of fully
satisfactory  accounting  controls utilized by the Borrower  Consolidated Group;
and

            (f) weekly,  or more frequently as the Agent may require in its sole
discretion, a Borrowing Base Certificate executed by an officer of WPC listed on
Schedule  2.2 or by such other Person as  otherwise  agreed to by the Agent,  in
writing, as of the end of the preceding month, in the case of Inventory,  and as
of the end of the preceding week, in the case of Receivables.

            6.11.  Reporting  Requirements.  The Borrowers  shall furnish to the
Lender Parties (unless otherwise specified below):

            (a) as soon as  available  and in any  event no  later  than 30 days
after the end of each Fiscal Year, an annual budget  (subject to finalization by
the Borrowers) of the Borrower  Consolidated  Group for the current Fiscal Year,
displaying  on  a  monthly  and  quarterly  basis  anticipated  balance  sheets,
forecasted revenues,  net income and cash flow, all on a consolidated basis, and
sales on a consolidating basis;

            (b) as soon as  available  and in any  event no  later  than 30 days
after the end of each Fiscal Year, a forecast  (subject to  finalization  by the
Borrowers) of annual sales, Capital  Expenditures,  working capital requirements
and  projected  cash  flow  results  of the  Borrower  Consolidated  Group  on a
Consolidated and consolidating basis through the Fiscal Year ending in 2002;

            (c) as soon as  available  and in any event within 45 days after the
end of each  Fiscal  Quarter,  revisions  or  updates to the  reports  delivered
pursuant to subsection (a) and (b) above;

            (d) promptly and in any event within three  Business  Days after any
Borrower,  any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know that any ERISA Event has occurred or is threatened,  a written statement of
the chief financial officer or other appropriate  officer of WPC describing such
ERISA Event or waiver request and the action, if any, which the Borrowers, their
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;

            (e)  promptly  and in any event  within  three  days  after  receipt
thereof, a copy of any adverse notice,  determination  letter, ruling or opinion
any Borrower,  any of its Subsidiaries or any ERISA Affiliate  receives from the
PBGC,  DOL or IRS with respect to any Qualified  Plan and, at the request of any
Lender, a copy of any favorable notice,  determination letter, ruling or opinion
with respect thereto from any Governmental Authority;

                                       63




            (f)  promptly  and in any event within two days after the receipt by
any  Borrower,   any  of  its   Subsidiaries  or  any  ERISA  Affiliate  of  any
communication  from the PBGC concerning any Title IV Plan or the response by any
such person to any such communication, a copy thereof;

            (g) promptly after the commencement thereof,  notice of all actions,
suits and proceedings before any domestic or foreign  Governmental  Authority or
arbitrator,  affecting  any  Borrower or any of its  Subsidiaries,  except those
which, individually or in the aggregate, if adversely determined,  would have no
Material Adverse Effect;

            (h) promptly and in any event within three  Business  Days after any
Borrower  becomes aware of the  existence of (i) any Default,  (ii) any material
breach or material  non-performance  of, or any default under,  any  Contractual
Obligation which is material to the business, prospects, operations or financial
condition  of the  Borrower  Consolidated  Group  (other than as a result of the
commencement  of the  Cases),  (iii) any  breach or  non-performance  of, or any
default  under,  any Lease of property  where  Inventory is located or any other
material  Lease (other than as a result of the  commencement  of the Cases),  or
(iv)  any  Material  Adverse  Effect  or any  Material  Adverse  Change,  or any
development or other information, including, without limitation, any development
or  information  of a type  described in Section 4.15,  which has any reasonable
likelihood of resulting in a Material Adverse  Change(other  than as a result of
the commencement of the Cases),  telephonic or telegraphic  notice in reasonable
detail  specifying  the  nature  of the  Default,  development  or  information,
including,  without  limitation,  the anticipated  effect thereof,  which notice
shall be promptly confirmed in writing within five days;

            (i)  promptly  after the  sending or filing  thereof,  copies of all
reports  which WPC sends to its security  holders  generally,  and copies of all
reports and registration  statements which WPC or any of its Subsidiaries  files
with the Securities and Exchange Commission, any national securities exchange or
the National Association of Securities Dealers, Inc.;

            (j) upon the request of any Lender Party,  through the Agent, copies
of all federal, state and local tax returns and reports filed by any Borrower or
any of its  Subsidiaries  (including  consolidated,  combined or unitary returns
filed with any of the Borrowers' Tax Affiliates) and governmental  audit reports
issued to any Borrower or any of its Tax Affiliates in respect of taxes measured
by income of any Borrower or any of its Subsidiaries  (excluding  sales, use and
like taxes);

            (k) promptly  upon,  and in any event within 30 days of any Borrower
or any of its Subsidiaries learning of any of the following, written notice of:

            (i)  the  receipt  by any  Borrower  or any of its  Subsidiaries  of
      written notice of or a claim to the effect that any Borrower or any of its
      Subsidiaries 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
      Borrowers and their Subsidiaries to Environmental Liabilities and Costs of
      $5,000,000 or more;

                                       64




            (ii) the  receipt  by any  Borrower  or any of its  Subsidiaries  of
      notification  that any real or personal property of any Borrower or any of
      its Subsidiaries is subject to any Environmental Lien;

            (iii) the receipt by any Borrower or any of its  Subsidiaries of any
      notice  of  violation  of,  or  knowledge  by any  Borrower  or any of its
      Subsidiaries  that there exists a condition which might reasonably  result
      in a  violation  by  any  Borrower  or any of  its  Subsidiaries  of,  any
      Requirement  of Law  involving  environmental,  health or safety  matters,
      except for  violations,  the  consequences of which in the aggregate would
      have no  reasonable  likelihood  of  subjecting  the  Borrowers  and their
      Subsidiaries to Environmental Liabilities and Costs of $5,000,000 or more;

            (iv) the commencement of any judicial or  administrative  proceeding
      or investigation  alleging a violation of any Requirement of Law involving
      environmental,  health or safety matters other than those the  consequence
      of  which  in  the  aggregate  would  have  no  reasonable  likelihood  of
      subjecting  the  Borrowers  and  their   Subsidiaries   to   Environmental
      Liabilities and Costs of $5,000,000 or more;

            (v) any proposed acquisition of stock, assets or real estate, or any
      proposed leasing of property,  or any other similar action by any Borrower
      or any of its Subsidiaries,  other than those the consequences of which in
      the aggregate  have no reasonable  likelihood of subjecting  the Borrowers
      and  their   Subsidiaries  to  Environmental   Liabilities  and  Costs  of
      $5,000,000 or more;

            (vi)  any  proposed  action  taken  by  any  Borrower  or any of its
      Subsidiaries to commence, recommence or cease manufacturing, industrial or
      other  operations,  other  than  those  the  consequences  of which in the
      aggregate  have no reasonable  likelihood of requiring any Borrower or any
      of its Subsidiaries to obtain additional  environmental,  health or safety
      Permits that require the  expenditure  of  $5,000,000  or more or becoming
      subject to additional Environmental Liabilities and Costs of $5,000,000 or
      more; and

            (vii)  any of  the  items  referred  to in (i)  through  (vi)  above
      regardless  of the amount of  Environmental  Liabilities  and Costs to the
      extent not already  reported  pursuant  to this  Section  6.11(j),  if the
      aggregate Environmental  Liabilities and Costs for such items would exceed
      $10,000,000 in any Fiscal Year;

            (l) upon written  request by any Lender Party  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
required  pursuant to this Section 6.11 and any other  environmental,  health or
safety compliance obligation, remedial obligation or liability, other than those
which in the aggregate have no reasonable likelihood of subjecting the Borrowers
and their  Subsidiaries to Environmental  Liabilities and Costs of $5,000,000 or
more;

            (m)  promptly  upon any  Borrower or any of its  Subsidiaries  being
refused insurance for which it applied or had any policy of insurance terminated
(other  than at its  request),  all  information  relating  to such  refusal  or
termination;

                                       65




            (n)  promptly  and in any  event  within  45 days of the end of each
Fiscal  Year,  amendments  and  supplements  to  Schedule  III to  the  Security
Agreement to the extent  required to ensure that such Schedules are accurate and
complete in all material  respects as to the subject  matter  thereof as of such
date;

            (o) promptly to the Agent copies of all filings by any Borrower made
with the Bankruptcy Court or otherwise in connection with the Cases  (including,
without limitation, all monthly reports filed with the United States Trustee);

            (p) as soon as  possible  and in any event  within 30 days after the
end of each  Fiscal  Quarter,  an  inventory  appraisal  update  prepared  by an
independent third party; and

            (q) such other  information  respecting  the  business,  properties,
condition,  financial or otherwise,  or operations of any Borrower or any of its
Subsidiaries  as any  Lender  Party  through  the  Agent  may from  time to time
reasonably request.

            6.12.  Employee  Plans.  With respect to other than a  Multiemployer
Plan, for each  Qualified Plan hereafter  adopted or maintained by any Borrower,
any of its  Subsidiaries or any ERISA  Affiliate,  such Borrower shall (i) seek,
and cause such of their  Subsidiaries  and ERISA Affiliates to seek, and receive
determination  letters  from the IRS to the effect that such  Qualified  Plan is
qualified  within the meaning of Section  401(a) of the Code;  and (ii) from and
after the adoption of any such Qualified  Plan,  cause such plan to be qualified
within the meaning of Section 401(a) of the Code and to be  administered  in all
material  respects  in  accordance  with the  requirements  of ERISA and Section
401(a) of the Code.

            6.13.  Fiscal Year.  Each Borrower shall maintain as its Fiscal Year
the twelve month period ending on December 31 of each year.

            6.14. Borrowing Base Determination.  Each 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 or reviews as
the Agent shall reasonably  request for the purpose of determining the Borrowing
Base,  all upon  reasonable  notice and at such  reasonable  times during normal
business hours and as often as may be reasonably requested.  Each Borrower shall
furnish  to the Agent any  information  which the Agent may  reasonably  request
regarding the  determination  and  calculation of the Borrowing Base  including,
without  limitation,  correct and complete  copies of any  invoices,  underlying
agreements, instruments or other documents and the identity of all obligors.

            6.15.  Environmental.  Upon receipt of any notification or otherwise
obtaining  knowledge of any Release or  Environmental  Liabilities  and Costs in
connection  with  any  property  or  operations  of any  Borrower  or any of its
Subsidiaries,   the  Borrowers  shall,  at  their  cost,  conduct,  or  pay  for
consultants to conduct,  appropriate (as reasonably determined by the Borrowers)
tests or assessments, if any, at such time and in such manner as Borrowers shall
reasonably  determine,  of  environmental   conditions  at  such  operations  or
properties   including,   without  limitation,   investigation  and  testing  of
subsurface  conditions,  and shall take such remedial,  investigational or other
action as any Governmental  Authority  lawfully requires or, if there is no such

                                       66



Governmental Authority  requirement,  as is appropriate and consistent with good
business practice (as reasonably determined by the Borrowers).

            6.16. Covenant to Guarantee Obligations and Give Security.  Upon (x)
the request of the Agent  following the occurrence and during the continuance of
a Default, or (y) the acquisition of any property by any Borrower, which, in the
judgment of the Agent,  is not already  subject to a  perfected  first  priority
security  interest in favor of the Agent for the benefit of the Secured Parties,
then the Borrowers shall, in each case at the Borrowers' expense:

            (i) within 10 days after such request or acquisition, furnish to the
      Agent a description  of the real and personal  properties of the Borrowers
      and their  respective  Subsidiaries  in detail  satisfactory to the Agent,
      (ii) within 15 days after such  request or  acquisition,  duly execute and
      deliver to the Agent mortgages, pledges,  assignments,  security agreement
      supplements,  intellectual  property  security  agreement  supplements and
      other  security  agreements,  as  specified  by and in form and  substance
      satisfactory to the Agent,  securing payment of all the Obligations of the
      applicable Borrower under the Loan Documents and constituting Liens on all
      such properties,

            (iii)  within  30 days  after  such  request  or  acquisition,  take
      whatever  action  (including,   without   limitation,   the  recording  of
      mortgages, the filing of Uniform Commercial Code financing statements, the
      giving of notices and the  endorsement of notices on title  documents) may
      be necessary or advisable in the opinion of the Agent to vest in the Agent
      (or in any  representative  of  the  Agent  designated  by it)  valid  and
      subsisting  Liens  on  the  properties  purported  to be  subject  to  the
      mortgages,   pledges,   assignments,   security   agreement   supplements,
      intellectual   property  security   agreement   supplements  and  security
      agreements  delivered pursuant to this Section 6.16,  enforceable  against
      all third parties in accordance with their terms,

            (iv) within 60 days after such  request or  acquisition,  deliver to
      the Agent, upon the request of the Agent in its sole discretion,  a signed
      copy of a favorable opinion,  addressed to the Agent and the other Secured
      Parties,  of counsel for the  Borrowers  acceptable to the Agent as to the
      matters  contained  in  clauses  (i),  (iii)  and (iv)  above,  as to such
      guaranties,   guaranty  supplements,   mortgages,   pledges,  assignments,
      security agreement  supplements,  intellectual property security agreement
      supplements  and  security  agreements  being  legal,  valid  and  binding
      obligations of each Borrower party thereto  enforceable in accordance with
      their terms, as to the matters  contained in clause (iv) above, as to such
      recordings,   filings,  notices,  endorsements  and  other  actions  being
      sufficient to create valid perfected Liens on such  properties,  and as to
      such other matters as the Agent may reasonably request,

            (v) as promptly as  practicable  after such request or  acquisition,
      deliver,  upon the  request  of the Agent in its sole  discretion,  to the
      Agent with  respect to each parcel of real  property  owned or held by the
      entity that is the

                                       67




      subject of such request,  formation or acquisition title reports,  surveys
      and engineering,  soils and other reports,  and  environmental  assessment
      reports,  each in scope,  form and  substance  satisfactory  to the Agent,
      provided,  however,  that to the extent  that any  Borrower  or any of its
      Subsidiaries shall have otherwise received any of the foregoing items with
      respect  to such real  property,  such  items  shall,  promptly  after the
      receipt thereof, be delivered to the Agent,

            (vi) upon the  occurrence  and during the  continuance of a Default,
      promptly  cause to be deposited any and all cash dividends paid or payable
      to it or any of its Subsidiaries from any of its Subsidiaries from time to
      time into the Collateral Account,  and with respect to all other dividends
      paid or  payable  to it or any of its  Subsidiaries  from  time  to  time,
      promptly execute and deliver, or cause such Subsidiary to promptly execute
      and deliver,  as the case may be, any and all further instruments and take
      or cause  such  Subsidiary  to take,  as the case may be,  all such  other
      action as the Agent may deem necessary or desirable in order to obtain and
      maintain  from and  after  the time  such  dividend  is paid or  payable a
      perfected, first priority lien on and security interest in such dividends,
      and

            (vii)  at any  time and from  time to  time,  promptly  execute  and
      deliver any and all further  instruments  and  documents and take all such
      other action as the Agent may deem necessary or desirable in obtaining the
      full  benefits  of, or in  perfecting  and  preserving  the Liens of, such
      guaranties,    mortgages,   pledges,   assignments,   security   agreement
      supplements,  intellectual  property  security  agreement  supplements and
      security agreements,  including, without limitation,  making such requests
      of the Bankruptcy Court as the Agent may deem necessary or desirable.

            6.17. Further Assurances. (a) Promptly upon request by the Agent, or
any Lender Party through the Agent, each Borrower shall correct,  and cause each
of its Subsidiaries  promptly to correct,  any material defect or error that may
be discovered in any Loan Document or in the execution,  acknowledgment,  filing
or recordation thereof, and

            (b) Promptly upon request by the Agent,  or any Lender Party through
      the Agent, each Borrower shall do, execute, acknowledge,  deliver, record,
      re-record,  file,  re-file,  register  and  re-register  any and all  such
      further acts, deeds, conveyances,  pledge agreements,  mortgages, deeds of
      trust, trust deeds,  assignments,  financing  statements and continuations
      thereof,  termination  statements,   notices  of  assignment,   transfers,
      certificates, assurances and other instruments as the Agent, or any Lender
      Party through the Agent, may reasonably require from time to time in order
      to (A) carry out more effectively the purposes of the Loan Documents,  the
      Interim  Order and the final  Order,  as  applicable,  (B) to the  fullest
      extent  permitted by applicable law,  subject any Borrower's or any of its
      Subsidiaries' properties,  assets, rights or interests to the Liens now or
      hereafter intended to be covered by any of the Collateral  Documents,  (C)
      perfect and maintain the  validity,  effectiveness  and priority of any of
      the  Collateral  Documents  and any of the Liens  intended  to be  created
      thereunder and (D) assure,  convey,  grant,  assign,  transfer,  preserve,
      protect and confirm more  effectively  unto the Secured Parties the rights
      granted or now or hereafter  intended to be granted to the Secured Parties

                                       68



      under  any Loan  Document  or  under  any  other  instrument  executed  in
      connection  with any Loan  Document  to which any  Borrower  or any of its
      Subsidiaries is or is to be a party, and cause each of its Subsidiaries to
      do so.

            6.18. Performance of Loan Documents. Each Borrower shall perform and
observe,  and cause each of its Subsidiaries to perform and observe,  all of the
terms and  provisions  of each Loan  Document to be performed or observed by it,
maintain  each such Loan  Document in full force and effect,  enforce  such Loan
Document in accordance  with its terms,  take all such action to such end as may
be from time to time requested by the Agent and, upon request of the Agent, make
to each other party to each such Loan  Document  such  demands and  requests for
information and reports or for action as any Borrower or any of its Subsidiaries
is  entitled  to make under such Loan  Document  except as  expressly  otherwise
permitted under the Bankruptcy Code.

            6.19.  Priority.  Each  Borrower  acknowledges,  pursuant to Section
364(c)(1)  of the  Bankruptcy  Code,  that  the  obligations  of  the  Borrowers
hereunder and under the other Loan Documents  constitute allowed  administrative
expense claims in the Cases having priority over all administrative  expenses of
the kind specified in Section  503(b) or 507(b) of the  Bankruptcy  Code subject
only to the Carve-Out.

            6.20. Validity of Loan Documents.  Each Borrower shall object to any
application  made on  behalf  of any  other  Borrower  or by any  Person  to the
validity of any Loan Document or the applicability or enforceability of any Loan
Document or which seeks to void, avoid, limit or otherwise  adversely affect the
security  interest  created  by or in any  Loan  Document  or any  payment  made
pursuant thereto.

            6.21. Conditions Subsequent.

            (a) As soon as  possible  and in any event  not  later  than 30 days
after  the  Effective  Date,  each  Borrower  shall  deliver  to the  Agent  the
following:

            (i) deeds of trust,  trust deeds and mortgages in substantially  the
      form of Exhibit I hereto (in each case as amended,  the "Mortgages"),  and
      covering  the  properties  listed on  Schedule  4.20(a)  (other than those
      properties  marked with an  asterisk)  duly  executed  by the  appropriate
      Borrower, together with evidence of the insurance required by the terms of
      such Mortgages,

            (ii) evidence  that  counterparts  of the  Mortgages  referred to in
      clause (i) above  have been duly  recorded  on or before  such date in all
      filing or recording offices that the Agent may deem necessary or desirable
      in order to  create a valid  first  and  subsisting  Lien on the  property
      described  therein in favor of the Agent for the  benefit  of the  Secured
      Parties and that all filing and recording taxes and fees have been paid,

            (iii) fully paid American Land Title  Association  Lender's Extended
      Coverage title  insurance  policies (the "Mortgage  Policies") in form and
      substance,  with endorsements and in amount,  reasonably acceptable to the
      Agent,  issued,  coinsured  and  reinsured  by title  insurers  reasonably
      acceptable to the Agent,  insuring the Mortgages referred to in clause (i)
      above to be valid first and  subsisting  Liens on the  property  described

                                       69



      therein,  free and clear of all  defects  (including,  but not limited to,
      mechanics'  and  materialmen's  Liens) and  encumbrances,  excepting  only
      Permitted Encumbrances, and providing for such other affirmative insurance
      (including  endorsements  for future advances under the Loan Documents and
      for mechanics' and  materialmen's  Liens) and such  coinsurance and direct
      access  reinsurance  as  the  Agent  may  deem  reasonably   necessary  or
      desirable,

            (iv) as to each property identified by the Agent,  perimeter surveys
      certified to the Agent and the issuer of the Mortgage Policies in a manner
      reasonably  satisfactory  to the Agent by a land surveyor duly  registered
      and licensed in the States in which the property described in such surveys
      is located and reasonably acceptable to the Agent, and

            (v)  opinions of local  counsel for the  Borrowers  in the states of
      Alabama, Colorado,  Kentucky,  Minnesota, Ohio, and West Virginia, related
      to the enforceability of the Mortgages referred to in clause (i) above, in
      form and substance reasonably satisfactory to the Agent.

            (b) As soon as  possible  and in any event  not  later  than 90 days
after  the  Effective  Date,  each  Borrower  shall  deliver  to the  Agent  the
following:

            (i) Mortgages covering the properties listed on Schedule 4.20(a) and
      marked  with an  asterisk,  duly  executed  by the  appropriate  Borrower,
      together  with  evidence  of the  insurance  required by the terms of such
      Mortgages,

            (ii) evidence  that  counterparts  of the  Mortgages  referred to in
      clause (i) above  have been duly  recorded  on or before  such date in all
      filing or recording offices that the Agent may deem necessary or desirable
      in order to create a valid,  first  and  subsisting  Lien on the  property
      described  therein in favor of the Agent for the  benefit  of the  Secured
      Parties and that all filing and recording taxes and fees have been paid,

            (iii)  fully paid  Mortgage  Policies  in form and  substance,  with
      endorsements  and in amount  reasonably  acceptable to the Agent,  issued,
      coinsured and  reinsured by title  insurers  reasonably  acceptable to the
      Agent, insuring the Mortgages referred to in clause (i) above to be valid,
      first and subsisting  Liens on the property  described  therein,  free and
      clear of all  defects  (including,  but not  limited  to,  mechanics'  and
      materialmen's   Liens)  and   encumbrances,   excepting   only   Permitted
      Encumbrances,   and  providing  for  such  other   affirmative   insurance
      (including  endorsements  for future advances under the Loan Documents and
      for mechanics' and  materialmen's  Liens) and such  coinsurance and direct
      access  reinsurance  as  the  Agent  may  deem  reasonably   necessary  or
      desirable,

            (iv) as to each property identified by the Agent, perimeter surveys,
      certified to the Agent and the issuer of the Mortgage Policies in a manner
      reasonably  satisfactory  to the Agent by a land surveyor duly  registered
      and licensed in the States in which the property described in such surveys
      is located and reasonably acceptable to the Agent, and

                                       70




            (v)  opinions of local  counsel for the  Borrowers  in the states of
      Alabama,  Colorado,  Kentucky,  Minnesota,  Ohio,  Pennsylvania  and  West
      Virginia,  related to the  enforceability of the Mortgages  referred to in
      clause (i) above,  in form and substance  reasonably  satisfactory  to the
      Agent;

provided, however, that the failure of the Borrowers to deliver any of the items
required  under this paragraph (b) shall not constitute a Default so long as the
Borrowers have used and continue to use their best efforts to obtain and deliver
such items.

            (c) As soon as  possible  and in any event  not  later  than 90 days
after  the  Effective  Date,  each  Borrower  shall  deliver  to the  Agent  the
following:

            (i) Mortgages covering the properties listed on Schedule 4.20(b) and
      marked  with an  asterisk,  duly  executed  by the  appropriate  Borrower,
      together  with  evidence  of the  insurance  required by the terms of such
      Mortgages,

            (ii) evidence  that  counterparts  of the  Mortgages  referred to in
      clause (i) above  have been duly  recorded  on or before  such date in all
      filing or recording offices that the Agent may deem necessary or desirable
      in order to  create a valid  first  and  subsisting  Lien on the  property
      described  therein in favor of the Agent for the  benefit  of the  Secured
      Parties and that all filing and recording taxes and fees have been paid,

            (iii)  opinions of local  counsel for the Borrowers in the states of
      Florida,  Kansas, Indiana,  Nevada, New York, Ohio, Oregon,  Pennsylvania,
      Texas,  Virginia  and  Washington,  related to the  enforceability  of the
      Mortgages  referred  to  in  clause  (i)  above,  in  form  and  substance
      reasonably satisfactory to the Agent.

            (d) As soon as  possible  and in any event  not  later  than 30 days
after the Effective Date, each Borrower shall use its best efforts to deliver to
the Agent the following:

            (i) a consent to the assignment of each Assigned Agreement,  if any,
      referred to in the Security Agreement, duly executed by each party to such
      Assigned Agreement other than a Borrower, and

            (ii) such consents and agreement of lessors and other third parties,
      and such estoppel letters and other  confirmations,  as the Agent may deem
      necessary or desirable.


                                   ARTICLE VII

                               NEGATIVE COVENANTS

            As long as any of the  Obligations or Revolving  Credit  Commitments
remain outstanding,  without the written consent of the Majority Lenders (or the
Agent, as provided in this Article VII):

                                       71




            7.1.  Liens,  Etc. No Borrower  shall create or suffer to exist,  or
permit any of its  Subsidiaries  to create or suffer to exist,  any Lien upon or
with respect to any of its or such Subsidiary's properties, whether now owned or
hereafter acquired,  or assign, or permit any of its Subsidiaries to assign, any
right to receive  income (or apply to the  Bankruptcy  Court for authority to do
so), except for the following (each of which will be given independent  effect);
provided,  however,  no such Liens  permitted by this Section 7.1 (other than as
described  in clauses  (a),  (e),  (f),  (i), (j) and (k)) shall be Liens on any
property constituting Collateral:

            (a) Liens created pursuant to the Loan Documents and contemplated by
the Interim Order and the Final Order;

            (b) Capitalized Lease Obligations,  purchase money Liens or purchase
money security interests upon or in any property of, or owned, leased,  acquired
or held by such  Borrower or any  Subsidiary  of such  Borrower in the  ordinary
course of  business  to secure the  purchase  price of such  property  and Liens
existing on such property at the time of its direct or indirect  acquisition  by
such  Borrower  or  such  Subsidiary  (other  than  any  such  Lien  created  in
contemplation  of  anticipation  of such  acquisition)  and  Liens on  specified
equipment  securing  Indebtedness  in an amount of not more than  $8,000,000  in
favor of the State of Ohio Department of Development on terms  acceptable to the
Agent;  provided,  however,  that (i) any such Lien is  created  solely  for the
purpose of securing Indebtedness representing,  or incurred to acquire, finance,
refinance  or  refund,  the cost  (including,  without  limitation,  the cost of
construction) of the property subject thereto,  (ii) the principal amount of the
Indebtedness  secured by such Lien does not exceed 100% of such cost, (iii) such
Lien does not extend to or cover any  property  other than such item of property
and any  improvements on such item and (iv) the incurrence of such  Indebtedness
is permitted by Section 7.2(g);

            (c) Liens created pursuant to the Letter of Credit Agreement;

            (d)  Any  Lien  securing  the  renewal,  extension,  refinancing  or
refunding of any Indebtedness or other obligation  secured by any Lien permitted
by  subsections  (b), (c) or (j) of this Section 7.1 without any increase in the
amount secured thereby or in the assets subject to such Lien;

            (e)  Liens  arising  by  operation  of law in favor of  materialmen,
mechanics, warehousemen,  carriers, lessors or other similar Persons incurred by
any Borrower or any of its Subsidiaries in the ordinary course of business which
secure its obligations to such Person; provided,  however, that such Borrower or
such Subsidiary (i) is not in default with respect to such payment obligation to
such Person or (ii) is in good faith and by appropriate  proceedings  diligently
contesting  such  obligation  and  adequate  provision  is made for the  payment
thereof and the  consequences  of all such liens in the aggregate  would have no
Material Adverse Effect;

            (f)  Liens   (excluding   Environmental   Liens)   securing   taxes,
assessments or governmental charges or levies; provided,  however, that (i) none
of any  Borrower  or any of its  Subsidiaries  is in  default  in respect of any
payment  obligation with respect thereto and adequate  provision is made for the
payment thereof or (ii) such Borrower or such Subsidiary is in good faith and by
appropriate   proceedings   diligently  contesting  such  obligation,   adequate
provision  is

                                       72



made for the payment  thereof and the  consequence  of all such  failures in the
aggregate would have no Material Adverse Effect;

            (g) Liens  incurred or pledges  and  deposits  made in the  ordinary
course of  business  in  connection  with  workers'  compensation,  unemployment
insurance, old-age pensions and other social security or welfare benefits;

            (h)  Liens  securing  the  performance  of  bids,  tenders,  leases,
contracts  (other  than  for  the  repayment  of  borrowed   money),   statutory
obligations,  surety  and appeal  bonds and other  obligations  of like  nature,
incurred as an incident to and in the ordinary course of business,  and judgment
liens; provided, however, that all such Liens in the aggregate (i) would have in
the  aggregate  no Material  Adverse  Effect and (ii) do not secure  directly or
indirectly judgments in excess of $5,000,000;

            (i)  Zoning   restrictions,   easements,   licenses,   reservations,
rights-of-way,  encroachments, restrictions on the use of real property or minor
defects  or  irregularities  incident  thereto  which  do not  in the  aggregate
materially  detract from the value or use, in the ordinary  conduct of business,
of the property or assets of the  Borrowers  and their  Subsidiaries  taken as a
whole;

            (j) Liens  existing on the date of this  Agreement  and disclosed on
Schedule 4.10; and

            (k) Liens  incurred  in  connection  with  transactions  of the type
described in clause (iv) of the definition of Cash Equivalents.

            7.2.  Indebtedness.  No Borrower shall create or suffer to exist, or
permit any of its  Subsidiaries to create or suffer to exist,  any  Indebtedness
except (each of which will be given independent effect):

            (a) the Obligations;

            (b) Indebtedness with respect to Contingent  Obligations incurred in
connection with transactions permitted under this Agreement;

            (c)  current  liabilities  in  respect  of  taxes,  assessments  and
governmental  charges  or levies  incurred,  or  claims  for  labor,  materials,
inventory,  services,  supplies and rentals  incurred,  or for goods or services
purchased,  in the ordinary course of business consistent with the past practice
of such Borrower and its Subsidiaries;

            (d)  Indebtedness  of  such  Borrower  or any  of  its  Subsidiaries
outstanding on the Effective Date and reflected on Schedule 7.2;

            (e)  Indebtedness  owing to such  Borrower by any of the  Borrowers'
respective Subsidiaries;

                                       73




            (f)  Indebtedness  arising under any surety,  payment or performance
bond  reimbursement  obligation  entered  into in the  ordinary  course  of such
Borrower's business and consistent with the past practice of such Borrower;

            (g)  Indebtedness of any Borrower or any of its  Subsidiaries  under
Capitalized  Lease  Obligations and  Indebtedness  secured by Liens permitted by
Section 7.1(b),  provided,  however, that the sum of (i) the aggregate principal
amount of Capitalized  Lease  Obligations and Indebtedness  secured by any Liens
permitted by Section 7.1(b)  incurred under this clause (g) by the Borrowers and
their  Subsidiaries  (and not  pursuant  to clause  7.1(b)  above)  and (ii) the
aggregate  principal amount of Indebtedness  incurred  pursuant to clause 7.1(b)
above by the Borrowers and their  Subsidiaries,  shall not exceed $15,000,000 at
any one time outstanding;

            (h) Indebtedness evidenced by the WPC Note;

            (i)  Indebtedness   arising  under  any  appeal  bond  reimbursement
obligation entered into with respect to any judgment;

            (j)  Indebtedness  of  WPSC  arising  under  the  Letter  of  Credit
Agreement;

            (k) Indebtedness constituting a renewal,  extension,  refinancing or
refunding of Indebtedness  described in Sections 7.2(d),  (g) and (m), (i) for a
principal amount not in excess of the principal amount of such  Indebtedness and
(ii) in the case of Indebtedness  described in Sections 7.2(d),  (g) and (m), on
other  terms  and  conditions  as or  more  favorable  to any  Borrower  and its
Subsidiaries  than the terms of the  Indebtedness  being  renewed,  extended  or
refunded;

            (l) Indebtedness incurred in connection with transactions  described
in clause (iv) of Cash Equivalents; and

            (m) Indebtedness of WPC arising under the Replacement  Notes and the
guaranty  by  any  other  Borrower  of the  Replacement  Notes  or any  renewal,
extension, refinancing or refunding thereof for a principal amount not in excess
of the  Replacement  Notes  outstanding  at such  time  and on other  terms  and
conditions  as  or  more   favorable  to  WPC,  such  other   Borrower  and  its
Subsidiaries.

            7.3. Lease  Obligations.  (a) Except for existing or proposed leases
listed on Schedule  7.3 or as  permitted by Section  7.5(c),  no Borrower  shall
create or suffer to exist, or permit any of its Subsidiaries to create or suffer
to exist,  any  obligations as lessee for the rental or hire of real or personal
property in connection with any sale and leaseback  transaction,  other than the
sale and leaseback of the Lenexa,  Kansas facility, or for the rental or hire of
real or personal  property of any kind under other leases or agreements to lease
having an  original  term of one year or more  which  would  cause the direct or
contingent   liabilities  of  the  Borrowers  and  their   Subsidiaries,   on  a
consolidated  basis,  in respect of all such  obligations  (other  than any such
liabilities in respect of renewals or replacements of existing leases in amounts
not in excess of those  payable  under  existing  leases) to exceed  $15,000,000
payable in any period of 12 consecutive months.

            (b)  Except  for any  lease or  agreement  authorized  or  permitted
pursuant to Section 7.3(a), no Borrower shall, or permit any of its Subsidiaries
to,  become or remain liable as

                                       74



lessee or  guarantor  or other  surety  with  respect to any  lease,  whether an
operating  lease  or a  Capitalized  Lease,  of any  property  (whether  real or
personal or mixed),  whether  now owned or  hereafter  acquired,  which (i) such
Borrower or any of its  Subsidiaries  has sold or  transferred  or is to sell or
transfer to any other Person,  or (ii) such Borrower or any of its  Subsidiaries
intends to use for  substantially  the same purposes as any other property which
has been or is to be sold or  transferred  by that entity to any other Person in
connection with such lease.

            7.4. Restricted Payments. No Borrower shall (a) declare or make, and
shall not  permit any of its  Subsidiaries  to  declare  or make,  any  dividend
payment or other distribution of assets,  properties,  cash, rights, obligations
or securities on account or in respect of any of its Stock or Stock  Equivalents
(or apply to the  Bankruptcy  Court for authority to do so, except in connection
with the Reorganization  Plan) except dividends paid to a Borrower or any wholly
owned Subsidiary of a Borrower by any Borrower or any of its Subsidiaries or (b)
except as set forth in Schedule 7.4 and except for adequate  protection payments
not to exceed $10,000,000 in the aggregate, purchase, redeem, prepay, defease or
otherwise  acquire for value or make any payment (other than required  payments)
on account or in respect of (or permit any of its Subsidiaries to do so or apply
to the  Bankruptcy  Court for authority to do so, except in connection  with the
Reorganization  Plan) any principal  amount of Indebtedness  for borrowed money,
including,  without limitation,  interest, now or hereafter outstanding,  except
(i) the Loans,  (ii) payments made by a Borrower or its  Subsidiary to any other
Borrower  on  account  of any  Indebtedness  owing to a  Borrower  by such other
Borrower or Subsidiary,  (iii) in connection with Indebtedness  being refinanced
in  accordance  with  Section  7.2(k),  (iv) in  connection  with the use of tax
attributes  pursuant to the  provisions  of the Tax Sharing  Agreement,  and (v)
payments  made to repay the WPC Note,  and loans or  advances  made prior to the
date of this Agreement as set forth on Schedule 7.4; provided, that with respect
to any  repayments,  repurchases or redemptions  made pursuant to clause (b)(iv)
above,  no Default  shall have  occurred and be  continuing or would result from
such payment.

            7.5. Mergers,  Stock Issuances,  Sale of Assets, Etc (a) No Borrower
shall, or permit any of its  Subsidiaries  (or apply to the Bankruptcy Court for
authority to do so, except in connection  with the  Reorganization  Plan) to (i)
merge,  consolidate with or into, any Person,  (ii) acquire all or substantially
all  of the  Stock  or  Stock  Equivalents  of  any  Person  or  acquire  all or
substantially  all of the  assets of any  Person or (iii)  enter  into any joint
venture or any similar transaction with any Person; provided that (x) any direct
or indirect Subsidiary of a Borrower may merge or consolidate with or into, such
Borrower or any other Subsidiary of such Borrower and (y) any Borrower may enter
into any joint venture or transaction permitted by Section 7.6(d).

            (b) No Borrower  shall (i) issue or  transfer,  or permit any of its
Subsidiaries to issue or transfer, any Stock or Stock Equivalents other than any
such  issuance or transfer (A) by a Subsidiary of a Borrower to such Borrower or
a wholly  owned  Subsidiary  of such  Borrower or (B) by a direct  wholly  owned
Subsidiary of a Borrower to such Borrower or (C) in connection with transactions
permitted by Section 7.5(a) or 7.6(d), or (ii) sell, convey,  transfer, lease or
otherwise  dispose  of, or from and after the  Effective  Date permit any of its
Subsidiaries to sell, convey, transfer, lease or otherwise dispose of, any Stock
or Stock Equivalents of any of such Borrower's  Subsidiaries unless, in any such
case, both there is transferred  all of the Stock and Stock  Equivalents of such
Subsidiary owned by such Borrower and its Subsidiaries and such issuance,  sale,
conveyance, transfer, lease or disposition would be permitted by Section 7.5(c).

                                       75




            (c) No Borrower shall, or permit any of its  Subsidiaries  to, sell,
convey,  transfer,  lease  or  otherwise  dispose  of any of its  assets  or any
interest  therein to any Person or permit or suffer any other  Person to acquire
any interest in any of assets of such Borrower or any such  Subsidiary (or apply
to the  Bankruptcy  Court for authority to do so, except in connection  with the
Reorganization  Plan),  except (i) the sale or  disposition  of inventory in the
ordinary course of business or assets which have become obsolete, (ii) leases of
personal  property  by such  Borrower  or any wholly  owned  Subsidiary  of such
Borrower to such Borrower or to any wholly owned  Subsidiary  of such  Borrower,
(iii)  the  lease or  sublease  of real  property  not  constituting  a sale and
leaseback,  to the extent not otherwise  prohibited by this Agreement,  (iv) any
such sale, conveyance, transfer, lease or other disposition to any Borrower, (v)
as long as no Default is continuing or would result therefrom,  any such sale of
any assets for the Fair Market Value  thereof and, in the case of any such sales
that are not related to trade-ins for  replacements  of existing  assets,  in an
aggregate amount not to exceed  $10,000,000 in any Fiscal Year,  payable in cash
or in notes upon such sale;  provided,  that such notes  shall not exceed 50% of
the aggregate  consideration  per Fiscal Year; and provided further that no such
sale shall include  assets which are necessary to the  continuing  operations of
any Borrower and its  Subsidiaries,  (vi) sales of assets incurred in connection
with transactions of the type described in clause (iv) of the definition of Cash
Equivalents and (vii) transfers of assets permitted under Section 7.6(d).

            (d) No  Borrower  shall sell or  otherwise  dispose of, or factor at
maturity or collection,  or permit any of its  Subsidiaries to sell or otherwise
dispose  of,  or factor  at  maturity  or  collection,  any of their  respective
accounts receivables.

            7.6.  Investments in Other Persons.  No Borrower shall,  directly or
indirectly,  make or  maintain,  or permit  any of its  Subsidiaries  to make or
maintain,  any loan or  advance  to any  Person or own,  purchase  or  otherwise
acquire,  or  permit  any of its  Subsidiaries  to own,  purchase  or  otherwise
acquire,  any Stock,  Stock Equivalents,  other equity interest,  obligations or
other  securities of, or any assets  constituting  the purchase of a business or
line of business, or make or maintain, or permit any of its Subsidiaries to make
or maintain,  any capital  contribution  to, or otherwise  invest in, any Person
(any such transaction being an "Investment"), except:

            (a) Investments in accounts, contract rights and chattel paper (each
as defined in the UCC),  notes  receivable and similar items arising or acquired
in the ordinary  course of business  consistent  with the past  practice of such
Borrower and its Subsidiaries;

            (b) loans or advances to  employees  of such  Borrower or any of its
Subsidiaries,  which  loans  and  advances  shall not in the  aggregate  for the
Borrowers and their  Subsidiaries  exceed  $2,000,000  outstanding  at any time;
provided, however, that such loans or advances in respect of relocation expenses
shall not in the aggregate exceed $1,000,000;

            (c) Investments in Cash Equivalents;

            (d)  Investments in (i) the  Fabricating  Joint  Ventures,  (ii) the
Co-Generation Agreement and (iii) joint ventures relating to the development and
construction of a bulk commodity unloading facility at the Steubenville facility
of WPSC; provided that no Default has occurred and is continuing or would result
therefrom and the amount of such Investments  permitted  pursuant to this clause
(d) made from and after the Effective  Date shall not exceed in

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the aggregate at any time $5,000,000 or such lesser amount as shall be available
for Capital Expenditures in accordance with Section 5.1;

            (e)  Investments  existing  on the  date  hereof  and set  forth  on
Schedule 7.6;

            (f) Investments in each other Borrower; and

            (g)  Investments  in Ohio  Coatings  Company  consistent  with  past
practices of the  Borrowers,  provided  that the increase in the net  Receivable
from Ohio Coatings Company shall not exceed $5,000,000 at any time outstanding.

            7.7. Change in Nature of Business.  No Borrower  shall,  directly or
indirectly, make, or permit any of its Subsidiaries to make, any material change
in the  nature or  conduct of its  business  as  carried on at the date  hereof,
except as otherwise  expressly  permitted  herein or to the extent  necessary or
appropriate  to  adapt  to  changes  or  anticipated  changes  in  the  business
environment or otherwise deemed  appropriate by management for the manufacturing
and sale of steel and steel-related products.

            7.8.  Material  Agreements.  No Borrower shall, or permit any of its
Subsidiaries to, alter, amend, modify, rescind,  terminate or waive any of their
respective  rights  under,  or fail to comply in all respects  with all of their
respective  Contractual  Obligations  (other than pursuant to Section 365 of the
Bankruptcy  Code);  provided,  however,  that,  with respect to any  Contractual
Obligations  (other than the Loan Documents,  the Replacement  Notes and the Tax
Sharing  Agreement),  such  Borrowers  and  its  Subsidiaries  may  do so if the
consequences  thereof in the aggregate have no Material Adverse Effect and, with
respect to any Contractual  Obligations  under the Replacement Notes and the Tax
Sharing  Agreement,  the  Borrowers  and their  Subsidiaries  may do so with the
Agent's consent if the effect of such action is not adverse to the Borrowers and
the Lender  Parties;  and  provided  further  that in the event of any breach or
event of default by a Person other than any Borrower or any of its  Subsidiaries
that would be reasonably  anticipated to give rise to a Material Adverse Effect,
the  Borrowers  shall  promptly  notify the Agent of any such breach or event of
default  and take all such  action as may be  reasonably  necessary  in order to
endeavor to cause such breach or event of default to be cured unless the failure
to do so would have no Material Adverse Effect.

            7.9.  Accounting  Changes.  No Borrower shall make, or permit any of
its  Subsidiaries  to make,  any change in  accounting  treatment  and reporting
practices or tax reporting treatment, except as required by GAAP or law, rule or
regulation and disclosed to the Lender Parties and the Agent.

            7.10. Transactions with Affiliates. No Borrower shall, or permit any
of its Subsidiaries to, except as otherwise  expressly  permitted herein, do any
of the following: (i) make any Investment in an Affiliate of such Borrower not a
wholly owned Subsidiary of such Borrower; (ii) transfer,  sell, lease, assign or
otherwise  dispose of any asset to any  Affiliate of such  Borrower not a wholly
owned  Subsidiary  of such  Borrower;  (iii) merge into or  consolidate  with or
purchase or acquire  assets from any  Affiliate  of such  Borrower  other than a
wholly owned  Subsidiary of such Borrower;  (iv) repay any  Indebtedness  to any
Affiliate of such Borrower;  or (v) enter into any other transaction directly or
indirectly  with or for the  benefit of any  Affiliate  of such  Borrower  not a

                                       77



wholly  owned  Subsidiary  of  such  Borrower  (including,  without  limitation,
guaranties and assumptions of obligations of any such Affiliate)  except for (A)
transactions  in the ordinary course of business on a basis no less favorable to
such  Borrower or such  Subsidiary  as would be obtained in a  comparable  arm's
length transaction with a Person not an Affiliate,  (B) reasonable  salaries and
other employee compensation,  including,  without limitation, any profit sharing
and other  established  bonus or  deferred  compensation  plans,  to officers or
directors of such Borrower or any of its Subsidiaries  commensurate with current
compensation  levels;  provided,  however that such Borrower may pay salaries or
other employee compensation at levels commensurate with industry practice to new
employees who are not Affiliates of the such Borrower  immediately  prior to the
date of hire,  (C) any  transaction  required  or  otherwise  permitted  by this
Agreement, (D) those transactions listed on Schedule 7.10, (E) transactions with
Ohio Coatings Company, Wheeling-Nisshin,  Dong Yang, Unimast, Inc., Subsidiaries
of Handy & Harman and Feralloy Ohio Corporation  previously disclosed in writing
to the  Agent  and the  Lender  Parties  on a basis  no less  favorable  to such
Borrower or such  Subsidiary  as would be obtained in a comparable  arm's-length
transaction  with a Person not an Affiliate,  (F) payments under the Tax Sharing
Agreement or (G) other  transactions  with Affiliates to the extent not included
in (A)  through  (F)  provided  that the  amounts  payable by the  Borrowers  in
connection with such  transactions  shall not in the aggregate exceed $2,000,000
per Fiscal Year.

            7.11.  Cancellation  of  Indebtedness  Owed to It. No Borrower shall
cancel,  or permit any of its Subsidiaries to cancel,  any claim or Indebtedness
owed to it except  for  adequate  consideration  and in the  ordinary  course of
business,  except to the extent that such cancellation occurs in connection with
the consummation of a plan of reorganization or liquidation of the obligor under
such  Indebtedness  and such  cancellation  would  not have a  Material  Adverse
Effect.

            7.12. No New  Subsidiaries.  No Borrower shall, or permit any of its
Subsidiaries to, acquire, incorporate or otherwise organize any Subsidiary which
was not in existence on the Effective Date (a "New Subsidiary").

            7.13. Capital Structure. Except as otherwise permitted hereunder, no
Borrower  shall make, or permit any of its  Subsidiaries  to make, any change in
its  capital  structure  (including,  without  limitation,  in the  terms of its
outstanding  Stock or as  required  in  connection  with the Cases) or amend its
certificate of incorporation or by-laws,  other than those changes which, in the
aggregate, would have no Material Adverse Effect.

            7.14. No Speculative Transactions.  No Borrower shall, or permit any
of its Subsidiaries to, engage in any speculative transaction or, except for the
sole  purpose of hedging in the normal  course of business and  consistent  with
industry  practices,  engage in any transaction  involving  commodity options or
futures contracts.

            7.15. Margin  Regulations.  The Borrowers shall not use the proceeds
of any Loans to purchase or carry any margin stock.

            7.16.  Bank  Accounts.  No Borrower  shall maintain any bank account
other than those  provided  in Section  2.19,  the  Concentration  Account,  the

                                       78




Investment  Account,  the collateral  accounts required to be maintained by WPSC
pursuant to the Letter of Credit  Agreement,  those listed on Schedule  7.16 for
the  purposes  listed  thereon  and other  operational  accounts  with the prior
written consent of the Agent. Notwithstanding the foregoing, the Borrowers shall
be entitled to open new  accounts  (i) in  replacement  of those  identified  on
Schedule 7.16 having the same purposes and (ii) for specified purposes including
payroll, trustee and escrow accounts.

            7.17. Environmental Release. No Borrower shall, or permit any of its
Subsidiaries  to, or allow any lessee or other  Person  to,  effect or suffer to
occur,  from and after the Effective Date, any Release in respect of, or dispose
of, from and after the Effective Date, any Contaminant  which creates  liability
under or is in violation of any Environmental Law if the consequence of all such
Releases and  disposals  in the  aggregate  would  result in a Material  Adverse
Effect.

            7.18.  Interim Order and Final Order.  No Borrower  shall, or permit
any of its  Subsidiaries to make or permit to be made any changes,  amendment or
modifications,  or any  application  or  motion  for any  change,  amendment  or
modification  to the Interim Order or the Final Order.  The parties  acknowledge
that the foregoing  shall not preclude the entry of any order of the  Bankruptcy
Court approving or authorizing an amendment or modification of this Agreement or
the other Loan  Documents or the Interim  Order or the Final Order  permitted by
Section 10.1 which order shall be  acceptable  to the Lenders  whose  consent is
required to approve such amendment or modification under Section 10.1.

            7.19.  Application to the Bankruptcy  Court.  No Borrower  shall, or
permit  any of its  Subsidiaries  to  apply  to the  Bankruptcy  Court  for  the
authority to take any action that is prohibited  by the terms of this  Agreement
and the other Loan  Documents or refrain from taking any action that is required
to be taken by the terms of this Agreement and the other Loan Documents.

            7.20. Chapter 11 Claims. No Borrower shall, or permit any Subsidiary
to, incur, create,  assume, suffer to exist or permit or make any application or
motion  for any other  Super-Priority  Claim or Lien which is pari passu with or
senior  to the  claims of the Agent and the  Lenders  granted  pursuant  to this
Agreement, the other Loan Documents, the Interim Order or the Final Order, other
than as expressly  contemplated  and permitted by the Interim Order or the Final
Order.

            7.21.   Reclamation   Claims;   Bankruptcy   Code  Section   546(g)*
Agreements.  (a) No  Borrower  shall,  or  permit  any  Subsidiary,  to make any
payments or transfer  any  property on account of claims  asserted by vendors of
any Borrower for  reclamation  in  accordance  with Section 2-702 of the UCC and
Section 546(c) of the Bankruptcy Code, and (b) enter into any agreements or file
any motion  seeking a Bankruptcy  Court order for the return of inventory to any
vendor  pursuant  to  Section  546(g)*  of the  Bankruptcy  Code,  other than as
expressly contemplated and permitted by the Interim Order or the Final Order.

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                                  ARTICLE VIII

                                EVENTS OF DEFAULT

            8.1.  Events of Default.  Each of the  following  events shall be an
Event of Default:

            (a)  The  Borrowers  shall  fail to pay any  principal  of any  Loan
(including,  without limitation,  mandatory prepayments of principal) or any fee
due any Lender Party or the Agent, other amount due hereunder or under the other
Loan Documents or other of the Obligations when the same becomes due and payable
(except for interest on any Loan) or the Borrowers shall fail to pay interest on
any Loan within three days after the same becomes due and payable; or

            (b)  Any  representation  or  warranty  made or  deemed  made by any
Borrower in any Loan  Document or by any  Borrower  (or any of its  officers) in
connection  with any Loan  Document  shall prove to have been  incorrect  in any
material respect when made or deemed made; or

            (c) Any  Borrower  shall fail to  perform  or observe  (i) any term,
covenant or agreement contained in Articles V, VI or VII of this Agreement, (ii)
any term,  covenant or agreement  contained in any Collateral  Document or (iii)
any other term,  covenant or  agreement  contained  in this  Agreement or in any
other Loan  Document  if such  failure  under this  clause  (iii)  shall  remain
unremedied  for ten  Business  Days after the earlier of the date on which (A) a
Responsible Officer of any Borrower becomes aware of such failure or (B) written
notice  thereof shall have been given to any Borrower by the Agent or any Lender
Party; or

            (d) Any  Borrower or any of its  Subsidiaries  shall fail to pay any
principal of or premium or interest on any  Indebtedness  for borrowed  money of
such  Borrower  or  Subsidiary  arising  on or after  the  Filing  Date  that is
outstanding in a principal amount of at least $1,000,000 (excluding Indebtedness
evidenced  by the Notes),  when the same becomes due and payable  after,  in the
case of all such  Indebtedness,  any  applicable  period  of grace  (whether  by
scheduled maturity, required prepayment,  acceleration, demand or otherwise); or
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 any such  Indebtedness  shall be  declared to be due and
payable, or required to be prepaid (other than by a regularly scheduled required
prepayment), prior to the stated maturity thereof; or

            (e) the Cases shall be  dismissed,  suspended or converted to a case
under  Chapter 7 of the  Bankruptcy  Code or a trustee shall be appointed in the
Cases; or an application  shall be filed by any Borrower for the approval of, or
there shall arise any other claim having  priority  senior to or pari passu with
the claims of the Agent and the Lenders  under the Loan  Documents  or any other
claim  having  priority  over  any or all  administrative  expenses  of the kind
specified  in Section  503(b) or 507(b) of the  Bankruptcy  Code (other than the
Carve-Out); or

            (f) the  Bankruptcy  Court shall enter an order (i) granting  relief
from the automatic stay  applicable  under Section 362 of the Bankruptcy Code to
any  holder of any  security  interest  in any  assets  in  excess  of  $500,000
individually  or in the aggregate in excess of  $1,000,000  for any and all such
holders other than as expressly  contemplated  by the Interim Order or the Final
Order  or  (ii)  approving  any  settlement  or  other   stipulation   with  any

                                       80




pre-petition  creditor of any  Borrower  other than the Agent and the Lenders or
otherwise   providing  for  payments  to  such  creditor  with  respect  to  its
prepetition claims other than (x) pursuant to the First Day Orders, (y) adequate
protection payments pursuant to Section 7.4 or (z) in the aggregate in excess of
$1,000,000 for any and all such creditors; or

            (g) Any final  judgment  or order for the payment of money in excess
of $1,000,000  shall be rendered against any Borrower or any of its Subsidiaries
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 10 consecutive
days following  entry of such judgment or order (or, in the event that the terms
of such judgment or order do not require immediate  payment,  following the date
or dates on which such  payment is to be made)  during  which such  judgment  or
order shall not have been paid, compromised or otherwise satisfied and a stay of
enforcement  of such  judgment  or  order,  by  reason  of a  pending  appeal or
otherwise,  shall not be in effect; provided,  however, that such final judgment
or order  shall not be deemed an Event of Default if (x) such final  judgment or
order is less than $1,000,000, (y) such final judgment or order is fully covered
by insurance carried by any Borrower and (z) such non-payment, non-compromise or
non-satisfaction  is solely the result of the insurance  company's  tardiness in
payment; or

            (h)  an  ERISA   Event  shall  occur   which,   in  the   reasonable
determination  of  the  Majority  Lenders,  has a  reasonable  possibility  of a
liability, deficiency or waiver request of any Borrower, any of its Subsidiaries
or any ERISA Affiliate, whether or not assessed, exceeding $5,000,000; or

            (i) Any material provision of any Collateral Document after delivery
thereof  shall for any  reason  cease to be valid and  binding  on any  Borrower
thereto, or any such Borrower shall so state in writing; or

            (j) WPC  shall  fail  to own,  directly  or  indirectly,  all of the
outstanding  Stock and Stock  Equivalents  of each  other  Borrower  (except  as
otherwise   permitted   by   Section   7.5(a)   and   other   than   non-voting,
non-participating  perpetual  preferred Stock that satisfies the requirements of
Section  1504(a)(4) of the Code), free and clear of all Liens except those Liens
created under the Collateral Documents; or

            (k) a Person or group of Persons acting in concert as partnership or
other group (other than WHX) shall,  as a result of a tender or exchange  offer,
open market purchases,  privately negotiated purchases or otherwise, have become
the beneficial  owner (within the meaning of Rule 13d-3 under the Securities and
Exchange Act of 1934, as amended) of securities of WPC  representing 26% or more
of  the  combined  voting  power  of  the  then  outstanding  securities  of WPC
ordinarily (and apart from rights accruing under special  circumstances)  having
the right to vote in the election of directors,  provided, however, ownership by
institutional or other  investors,  whose disclosed  investment  intent does not
include any of matters  (b)  through (j) (except to the extent (j)  incorporates
(a)) of Item 4 of Schedule 13D (as  required by Rule 13d-1 under the  Securities
Exchange Act of 1934, as amended),  shall not be prohibited  hereunder and shall
not be an Event of Default; or

                                       81




            (l) except as approved by the board of directors of WHX, a Person or
group of Persons acting in concert as a partnership  or other group shall,  as a
result  of  a  tender  or  exchange  offer,  open  market  purchases,  privately
negotiated purchases or otherwise,  have become the beneficial owner (within the
meaning of Rule 13d-3 under the Securities and Exchange Act of 1934, as amended)
of securities of WHX  representing  20% or more of the combined  voting power of
the then  outstanding  securities  of WHX  ordinarily  (and  apart  from  rights
accruing under special  circumstances)  having the right to vote in the election
of directors,  provided,  however, ownership by institutional or other investors
whose  disclosed  investment  intent does not include any of matters (b) through
(j) (except to the extent (j)  incorporates  (a)) of Item 4 of Schedule  13D (as
required by Rule 13d-1 under the  Securities  Exchange Act of 1934, as amended),
shall not be prohibited hereunder and shall not be an Event of Default; or

            (m) There  shall occur a Material  Adverse  Change or an event which
would have a Material Adverse Effect (other than the commencement of the Cases);
or

            (n)  The   Bankruptcy   Court   shall   enter  an  order   amending,
supplementing,  vacating or otherwise modifying the Interim Order or Final Order
(the parties  acknowledging  that the foregoing  shall not preclude the entry of
any order of the  Bankruptcy  Court  approving  or  authorizing  an amendment or
modification of this Agreement  permitted by Section 10.1,  which order shall be
acceptable to the Majority Lenders); or

            (o) The Bankruptcy Court shall enter an order appointing an examiner
with powers  beyond the duty to  investigate  and report as set forth in Section
1106(a)(3) and (4) of the Bankruptcy Code, in the Cases; or

            (p) (i) Any  Borrower  or other  Person  shall bring a motion in the
Cases: (a) to obtain working capital  financing for any Borrower from any Person
other than Lenders under  Section  364(d) of the  Bankruptcy  Code; or (b) other
than as permitted  under Section 7.2, to obtain  financing for any Borrower from
any Person other than the Lenders under Section  364(c) of the  Bankruptcy  Code
(other than with respect to a financing used, in whole or part, to repay in full
the  Obligations);  or (c) to grant any Lien other than  those  permitted  under
Section 7.1 upon or affecting any  Collateral;  or (d) to use cash Collateral of
the Agent or Lenders under  Section  363(c) of the  Bankruptcy  Code without the
prior  written  consent of the  Majority  Lenders (as  provided in Section  10.1
except to pay the  Carve-Out);  or (ii) any Borrower shall bring a motion in the
Cases (a) to recover from any portions of the  Collateral  any costs or expenses
of  preserving  or  disposing of such  Collateral  under  Section  506(c) of the
Bankruptcy  Code;  or (b) to effect any other  action or actions  adverse to the
Agent or Lenders or their rights and remedies hereunder or their interest in the
Collateral that would, individually or in the aggregate, have a Material Adverse
Effect; or

            (q) The  Bankruptcy  Court  shall  enter  an order  granting  relief
pursuant to Section 362(d) of the Bankruptcy  Code other than as permitted under
Section 8.1(f)(i); or

            (r) The entry of the Final Order shall not have  occurred  within 45
days after the Filing Date; or

                                       82




            (s) Any  challenge  by any  Borrower  to the  validity  of any  Loan
Document or the  applicability or  enforceability  of any Loan Document or which
seeks to void, avoid, limit, or otherwise adversely affect the security interest
created by or in any Loan Document or any payment made pursuant thereto; or

            (t)  The  determination  of any  Borrower,  whether  by vote of such
Borrower's  board of directors or  otherwise,  to suspend the  operation of such
Borrower's  business in the ordinary course,  liquidate all or substantially all
of such  Borrower's  assets,  or employ an agent or other third party to conduct
any so-called  "Going-Out-of-Business" sales, or the filing of a motion or other
application in the Cases, seeking authority to do any of the foregoing.

            8.2.  Remedies.  If there shall occur and be  continuing an Event of
Default,  the Agent (i) shall at the request,  or may with the  consent,  of the
Majority  Lenders,  by notice to the  Borrowers  (with a copy to counsel for any
statutory  committee  of unsecured  creditors  appointed to the Cases and to the
United States  Trustee),  terminate the  obligation of each Lender to make Loans
and of each  Issuer  to issue  Letters  of  Credit,  whereupon  the  same  shall
forthwith terminate,  and (ii) shall at the request, or may with the consent, of
the  Majority  Lenders,  by notice to the  Borrowers,  declare  the  Loans,  all
interest  thereon and all other  Obligations  payable under this Agreement to be
forthwith due and payable,  whereupon the Notes,  all such interest and all such
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  Borrowers;  provided,  however,  that upon the  occurrence of the
Event of Default specified in subparagraph (e) above, (A) the obligation of each
Lender  to make  Loans  and of each  Issuer to issue  Letters  of  Credit  shall
automatically  be terminated  and (B) the Notes,  all such interest and all such
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 Borrowers.  In addition to the remedies set forth above,
the Agent may, or at the request of the Majority Lenders shall, after the giving
of notice as provided in clause (ii) above,  exercise any remedies  provided for
by the  Collateral  Documents in accordance  with the terms thereof or any other
remedies  provided  by  applicable  law.  Upon the  occurrence  and  during  the
continuance  of an Event of Default,  the automatic stay provided in Section 362
of the Bankruptcy Code shall be deemed  automatically  vacated and the Agent, on
behalf of the Lenders,  shall,  upon five Business Days' prior written notice to
any Borrower and any  creditors'  committee  appointed in the Cases  pursuant to
Section 1102 of the Bankruptcy  Code, be  immediately  permitted to, among other
things,  pursue  any  and  all of  its  remedies  against  any  Borrower  or the
Collateral and seek payment in respect of all Obligations.

            8.3.  Actions in  Respect of Letters of Credit.  (a) If any Event of
Default shall have occurred and be continuing, the Agent may, from time to time,
irrespective of whether it is taking any of the actions described in Section 8.2
or otherwise,  make demand upon the Borrowers to, and forthwith upon such demand
the Borrowers will, pay to the Agent on behalf of the Lender Parties in same day
funds at the Agent's office,  for deposit in a special cash  collateral  account
(Account #40688567) maintained in the name of the Agent on behalf of the Secured
Parties at Citibank (the "L/C Cash Collateral Account"), an amount equal to 105%
all outstanding Letter of Credit Obligations. In the Agent's discretion, the L/C
Cash Collateral Account may be an interest or a non-interest bearing account.

                                       83




            (b) The Borrowers  hereby  pledge,  and grant to the Agent a Lien on
and security  interest in, all of their right,  title and interest in and to the
L/C Cash Collateral  Account,  all funds held in the L/C Cash Collateral Account
from time to time and all proceeds  thereof,  as security for the payment of all
amounts due and to become due from any Borrower to the Secured Parties under the
Loan Documents.

            (c) The Agent shall,  from time to time after funds are deposited in
the L/C  Cash  Collateral  Account,  apply  funds  then  held  in the  L/C  Cash
Collateral   Account  to  the  Issuer  for  the  payment  of  any  Reimbursement
Obligations owing to it and then in such order as the Agent shall determine,  as
shall have  become or shall  become  due and  payable  by the  Borrowers  to the
Secured Parties in respect of the Obligations.

            (d) Neither  any  Borrower  nor any Person  claiming on behalf of or
through any  Borrower  shall have any right to withdraw any of the funds held in
the L/C Cash Collateral Account.

            (e) Each  Borrower  agrees  that it will  not (i) sell or  otherwise
dispose of any  interest  in the L/C Cash  Collateral  Account or any funds held
therein or (ii)  create or permit to exist any Lien upon or with  respect to the
L/C Cash Collateral Account or any funds held therein,  except as provided in or
contemplated by this Agreement.

            (f) The Agent may also exercise, in its sole discretion,  in respect
of the L/C Cash Collateral Account, in addition to the other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party upon default under the UCC in effect in the State of New York at
that time, and the Agent may, without notice except as specified below, sell the
L/C Cash Collateral Account or any part thereof in one or more parcels at public
or private sale, at any of the Agent's offices or elsewhere, for cash, or credit
or for  future  delivery,  and  upon  such  other  terms as the  Agent  may deem
commercially reasonable. Each Borrower agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to the Borrowers of the time
and place of any public sale or the time after  which any private  sale is to be
made shall constitute reasonable notification.  The Agent shall not be obligated
to make any sale of the L/C Cash  Collateral  Account,  regardless  of notice of
sale having been  given.  The Agent may adjourn any public or private  sale from
time to time by announcement at the time and place fixed therefor, and such sale
may,  without further  notice,  be made at the time and place to which it was so
adjourned.

            (g) Any cash held in the L/C Cash Collateral  Account,  and all cash
proceeds  received  by the Agent in respect of any sale of,  collection  from or
other realization upon all or any part of the L/C Cash Collateral Account,  may,
in the discretion of the Agent, then or at any time thereafter be applied (after
the  expiration  of all  outstanding  Letters of Credit  and the  payment of any
amounts payable pursuant to Sections 8.3(c) and 10.4) in whole or in part by the
Agent  against  all or any  part  of the  any  outstanding  Swing  Loans  or the
Revolving  Credit Loans,  and then to all or any part of the  Obligations now or
hereafter  existing  under any of the Loan  Documents in such order as the Agent
shall  elect.  Any surplus of such cash or cash  proceeds  held by the Agent and
remaining after the indefeasible  cash payment in full of all of the Obligations
shall be paid over to the Borrowers or to whomsoever may be lawfully entitled to
receive such surplus.

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            8.4. Term Loan  Actionable  Events.  If any of the following  events
occurs:

            (a) any Event of Default  described in Section  8.1(a) (with respect
to the Term Loans); or

            (b) acceleration of the Revolving Credit Loans; or

            (c) an Overadvance shall occur and be continuing for more than three
consecutive Business Days; or

            (d) the breach of Section 5.2 shall occur and be continuing for more
than three consecutive Business Days;

then, so long as such event is  continuing,  the Agent shall at the request,  or
may with the consent of the Majority  Term  Lenders,  by notice to the Borrowers
(with a copy to each  Lender  and to  counsel  for any  statutory  committee  of
unsecured  creditors appointed to the Cases and to the United States Trustee) if
either  (i) the  Revolving  Credit  Loans  have been  declared  due and  payable
pursuant  to  Section  8.2 or (ii) ten  Business  Days  have  elapsed  since the
occurrence  of such  event (A)  declare  the Term Loans  then  outstanding,  all
interest  thereon and all other  Obligations  payable under this  Agreement with
respect to the Term Loan to be  forthwith  due and  payable  whereupon  the Term
Notes, all such interest and all such 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  Borrowers,  and (B)
exercise remedies provided by applicable law. Upon the occurrence and during the
continuance  of an Event of Default,  the automatic stay provided in Section 362
of the Bankruptcy Code shall be deemed  automatically  vacated and the Agent, on
behalf of the Lenders,  shall,  upon five Business Days' prior written notice to
any Borrower and any  creditors'  committee  appointed in the Cases  pursuant to
Section 1102 of the Bankruptcy  Code, be  immediately  permitted to, among other
things,  pursue  any  and  all of  its  remedies  against  any  Borrower  or the
Collateral  and seek  payment in respect of all  Obligations.  If the  Revolving
Credit  Loans are declared to be due and payable  pursuant to Section 8.2,  then
the Agent shall follow the  instructions of the Majority Lenders (subject to the
provisions of Section 9.7 and 10.1 hereof).

            8.5.  Application  of Proceeds.  After the occurrence of an Event of
Default and  acceleration  of the  Obligations,  all proceeds  realized from any
Borrower or on account of any Collateral  shall be applied first, to the payment
in full of amounts owing to the Agent  pursuant to Section 22(b) of the Security
Agreement,  second,  to the payment of expenses,  fees and interest  owed to the
Lenders and the Agent and third, to the payment of the principal  amounts of the
Loans, with any surplus to be deposited into the L/C Cash Collateral  Account in
accordance with Section 21(b) of the Security Agreement. All amounts required to
be applied to  Revolving  Credit  Loans  hereunder  shall be applied  ratably in
accordance with each Revolving Credit Lender's Ratable Portion,  and all amounts
required to be applied to the Term Loans  hereunder  shall be applied ratably in
accordance  with  each Term  Lender's  Ratable  Portion.  Without  limiting  the
foregoing,  the Term Lenders acknowledge that, except for proceeds realized from
the  sale  or  disposition   of  the  Term  Priority   Collateral  and  for  the
reimbursement  of any expenses to which the Term  Lenders may be  entitled,  the
Revolving  Credit  Lenders  shall be  entitled  to be repaid in full  (including

                                       85



principal,  interest,  fees,  and the cash  collateralization  of all Letters of
Credit Obligations) prior to the delivery of any proceeds to the Term Lenders.


                                   ARTICLE IX

                                    THE AGENT

            9.1.  Authorization and Action. Each Lender Party (in its capacities
as a Lender,  the Swing Bank and an Issuer,  as applicable)  hereby appoints and
authorizes  the Agent to take such action as agent on its behalf and to exercise
such powers and discretion  under this Agreement and the other Loan Documents as
are  delegated to the Agent by the terms hereof and thereof,  together with such
powers and discretion as are reasonably  incidental  thereto.  As to any matters
not  expressly  provided  for by this  Agreement  and the other  Loan  Documents
(including,  without  limitation,  enforcement or collection of the Notes),  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 Majority
Lenders or, solely in the  circumstances  requiring action by all of the Lenders
in accordance with the first proviso to Section 10.1(a), all of the Lenders, and
such  instructions  shall be binding upon all Lender  Parties and all holders of
Notes;  provided,  however,  that the Agent  shall not be  required  to take any
action which the Agent in good faith believes  exposes it to personal  liability
or is contrary to this Agreement or applicable  law. The Agent agrees to give to
each  Lender  Party  prompt  notice of each notice  given to it by any  Borrower
pursuant to the terms of this Agreement or the other Loan Documents.

            9.2.  Agent's  Reliance,  Etc  None  of  the  Agent  or  any  of its
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 or them  under or in  connection  with this  Agreement  or the
other Loan  Documents,  except for its or their own gross  negligence or willful
misconduct. Without limitation of the generality of the foregoing, the Agent (i)
may treat the payee of any Note as the holder  thereof  until such Note has been
assigned in accordance  with Section 10.7;  (ii) may rely on the Register to the
extent set forth in  Section  10.7(c),  (iii) may  consult  with  legal  counsel
(including,  without limitation,  counsel to the Borrowers),  independent public
accountants and other experts reasonably  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; (iv) makes no warranty
or representation to any Lender Party and shall not be responsible to any Lender
Party for any statement,  warranty or  representation  (whether written or oral)
made in or in connection with this Agreement or any of the other Loan Documents;
(v) shall not have any duty to ascertain or to inquire as to the  performance or
observance of any of the terms, covenants or conditions of this Agreement or any
of the other  Loan  Documents  on the part of any  Borrower  or to  inspect  the
property (including, without limitation, the books and records) of any Borrower;
unless  specifically so requested by the Lenders;  (vi) shall not be responsible
to any Lender Party for the due execution,  legality, validity,  enforceability,
genuineness,  sufficiency or value of, or the perfection or priority of any lien
or security  interest  created or purported to be created under or in connection
with any Loan Document,  of this Agreement or any of the other Loan Documents or
any other instrument or document furnished pursuant hereto or thereto; and (vii)

                                       86



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  telegram,  telecopy,  cable or telex)
believed by it to be genuine and signed or sent by the proper party or parties.

            9.3.  Citibank,   Citicorp  and  Affiliates.  With  respect  to  its
Commitments,  the Loans  (including,  without  limitation,  the Revolving Credit
Loans,  Swing  Loans and Term  Loans)  made by it,  each Note and any Letters of
Credit issued by it,  Citicorp  shall have the same rights and powers under this
Agreement  as any other Lender Party and may exercise the same as though it were
not an Affiliate of the Agent;  and the term "Lender Party" or "Lender  Parties"
shall, unless otherwise expressly indicated,  include Citicorp in its individual
capacity.  Citibank and its Affiliates may accept  deposits from, lend money to,
act as trustee under indentures of, accept investment  banking  engagements from
and generally  engage in any kind of business with, any Borrower or any of their
respective  Subsidiaries  and  any  Person  who  may  do  business  with  or own
securities of any Borrower or any of its  Subsidiaries,  all as if Citibank were
not the Agent and without any duty to account therefor to the Lender Parties.

            9.4. Lender Party Credit  Decision.  Each Lender Party  acknowledges
that it has,  independently  and  without  reliance  upon the Agent or any other
Lender Party and based on the financial statements referred to in Article IV and
such other documents and information as it has deemed appropriate,  made its own
credit  analysis  and decision to enter into this  Agreement.  Each Lender Party
also  acknowledges  that it will,  independently  and without  reliance upon the
Agent or any other Lender Party 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.

            9.5.  Indemnification.  (a) The Lender  Parties  severally  agree to
indemnify the Agent,  its Affiliates and their respective  directors,  officers,
employees,  agents and advisors (to the extent not reimbursed by the Borrowers),
from and against  such Lender  Party's  ratable  share  (determined  as provided
below) of any and all  liabilities,  obligations,  losses,  damages,  penalties,
actions, judgments, suits, costs, expenses and disbursements (including, without
limitation,  fees and  disbursements  of legal  counsel)  of any kind or  nature
whatsoever which may be imposed on, incurred by, or asserted against,  the Agent
in any way relating to or arising out of this Agreement or any of the other Loan
Documents  or any action  taken or omitted by the Agent under this  Agreement or
any of the other Loan Documents including,  without limitation,  the preparation
of reports with respect to the  Collateral;  provided,  however,  that no Lender
Party 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 any of its agent's)  gross  negligence or willful
misconduct.  Without  limitation of the  foregoing,  each Lender Party agrees to
reimburse  the  Agent  promptly  upon  demand  for  its  ratable  share  of  any
out-of-pocket expenses (including, without limitation, fees and disbursements of
legal  counsel)  incurred  by the  Agent in  connection  with  the  preparation,
execution,  delivery,   administration  (including,  without  limitation,  field
examinations of  Collateral),  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 any of the
other Loan  Documents,  to the extent that the Agent is not  reimbursed for such
expenses by the  Borrowers  except to the extent such  expenses  result from the
Agent's (or any of its agent's)  gross  negligence  or willful  misconduct.  For
purposes of this Section 9.5, the Lender Parties'  respective  ratable shares of

                                       87



any amount  shall be  determined,  at any time,  according to the sum of (a) the
aggregate  principal  amount of the Loans  outstanding at such time and owing to
the respective  Lender Parties,  (b) their  respective  Ratable  Portions of the
aggregate Letter of Credit  Obligations  outstanding at such time plus (c) their
respective Ratable Portions of the Excess Availability at such time. The failure
of any Lender Party to reimburse the Agent  promptly upon demand for its ratable
share of any  amount  required  to be paid by the  Lender  Party to the Agent as
provided  herein  shall not relieve  any other  Lender  Party of its  obligation
hereunder to reimburse  the Agent for its ratable  share of such amount,  but no
Lender Party shall be  responsible  for the failure of any other Lender Party to
reimburse the Agent for such other Lender Party's  ratable share of such amount.
Without  prejudice  to the  survival of any other  agreement of any Lender Party
hereunder,  the agreement and obligations of each Lender Party contained in this
Section 9.5(a) shall survive the payment in full of principal,  interest and all
other amounts payable hereunder and under the other Loan Documents.

            (b) Each Lender Party severally  agrees to indemnify each Issuer (to
the extent not  promptly  reimbursed  by the  Borrowers)  from and against  such
Lender  Party's  ratable  share  (determined  as provided  below) of any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs,  expenses or disbursements  of any kind or nature  whatsoever that may be
imposed on, incurred by, or asserted  against such Issuer in any way relating to
or arising  out of the Loan  Documents  or any  action  taken or omitted by such
Issuer under the Loan Documents;  provided,  however, that no Lender Party shall
be liable for any portion of such  liabilities,  obligations,  losses,  damages,
penalties, actions, judgments, suits, costs, expenses or disbursements resulting
from  such  Issuer's  (or  any of  its  agent's)  gross  negligence  or  willful
misconduct.  Without  limitation of the  foregoing,  each Lender Party agrees to
reimburse  such Issuer  promptly  upon demand for its ratable share of any costs
and  expenses  (including,  without  limitation,  fees and  expenses of counsel)
payable by the  Borrowers  under Section 10.4, to the extent that such Issuer is
not promptly  reimbursed for such costs and expenses by the Borrowers  except to
the extent such expenses result form such Issuer's (or any of its agent's) gross
negligence  or willful  misconduct.  For  purposes of this Section  9.5(b),  the
Lender Parties' respective ratable shares of any amount shall be determined,  at
any time,  according  to the sum of (a) the  aggregate  principal  amount of the
Loans outstanding at such time and owing to the respective  Lender Parties,  (b)
their respective  Ratable Portions of the aggregate Letter of Credit Obligations
outstanding  at such time  plus (c) their  respective  Ratable  Portions  of the
Excess  Availability  at such time. The failure of any Lender Party to reimburse
such Issuer promptly upon demand for its ratable share of any amount required to
be paid by the  Lender  Parties  to such  Issuer as  provided  herein  shall not
relieve any other Lender  Party of its  obligation  hereunder to reimburse  such
Issuer  for its  ratable  share of such  amount,  but no Lender  Party  shall be
responsible  for the failure of any other Lender Party to reimburse  such Issuer
for such other Lender Party's ratable share of such amount. Without prejudice to
the survival of any other agreement of any Lender Party hereunder, the agreement
and  obligations  of each Lender Party  contained  in this Section  9.5(b) shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.

            9.6.  Successor  Agent.  The Agent may  resign at any time by giving
written notice  thereof to the Lender  Parties and the Borrowers.  Upon any such
resignation,  the Majority  Lenders  shall have the right to appoint a successor
Agent; provided, that if no Default shall have occurred and be continuing,  such
successor Agent shall be reasonably  satisfactory to the Borrowers,  which shall
be (a) a  commercial  bank  organized  under  the laws of the  United  States of

                                       88




America or any State thereof and having total assets of at least  $1,000,000,000
and a combined capital and surplus of at least $50,000,000 or (b) a Lender as of
the Effective  Date.  If no successor  Agent shall have been so appointed by the
Majority Lenders, and shall have accepted such appointment, within 30 days after
the  retiring  Agent's  giving of notice of  resignation  or the  removal of the
retiring  Agent at the request of all of the  Lenders  (other than the Agent and
its  Affiliates),  then the retiring Agent may, on behalf of the Lender Parties,
appoint a successor  Agent  approved,  as long as no Default has occurred and is
continuing,  by the  Borrowers,  such approval not be  unreasonably  withheld or
delayed, which successor shall be (a) a commercial bank organized under the laws
of the United  States of America or of any State thereof and having total assets
of at least  $1,000,000,000  and a  combined  capital  and  surplus  of at least
$50,000,000 or (b) a Lender as of the Effective Date. Upon the acceptance of any
appointment as Agent  hereunder by a successor  Agent and upon the execution and
filing or recording of such financing  statements,  or amendments  thereto,  and
such other instruments or notices,  as may be necessary or desirable,  or as the
Majority  Lenders may request,  in order to continue the perfection of the Liens
granted or purported to be granted by the Collateral  Documents,  such successor
Agent shall thereupon succeed to and become vested with all the rights,  powers,
discretions, privileges and duties of the retiring Agent, and the retiring Agent
shall be discharged from its duties and obligations under this Agreement and the
other  Loan  Documents.  After  any  retiring  Agent's  resignation  or  removal
hereunder as Agent, the provisions of this Article IX shall inure to its benefit
as to any  actions  taken or omitted to be taken by it while it was Agent  under
this Agreement and the other Loan Documents.

            9.7.  Agreement  of  Required  Lenders.  (a) (i) Upon  any  occasion
requiring or permitting an approval,  consent,  waiver, election or other action
on the part of only the  Majority  Term  Lenders,  action  shall be taken by the
Agent for and on behalf or for the benefit of all Lenders upon the  direction of
the Majority Term  Lenders,  and any such action shall be binding on all Lenders
and (ii) upon any occasion requiring or permitting an approval, consent, waiver,
election or other action on the part of only the Majority Lenders,  action shall
be taken by the Agent for and on behalf or for the benefit of all  Lenders  upon
the direction of the Majority  Lenders,  and any such action shall be binding on
all Lenders. No amendment,  modification,  consent, or waiver shall be effective
except in accordance with the provisions of Section 10.01.

            (b) Upon the  occurrence  of an Event of  Default,  the Agent  shall
(subject  to the  provisions  of Section  10.1) take such  action  with  respect
thereto as may be  reasonably  directed by the Majority  Lenders or the Majority
Term Lenders  pursuant to Section 8.4, as  applicable;  provided that unless and
until the Agent shall have  received such  directions,  the Agent may (but shall
not be  obligated  to) take such action as it shall deem  advisable  in the best
interests of the Lenders. In no event shall the Agent be required to comply with
any such  directions  to the extent  that the Agent  believes  that the  Agent's
compliance with such directions would be unlawful or commercially unreasonable.

                                       89




                                    ARTICLE X

                                  MISCELLANEOUS

            10.1. Amendments, Etc (a) No amendment or waiver of any provision of
this Agreement or any other Loan Document  (including,  without limitation,  the
waiver of any Default),  the Interim Order or the Final Order nor consent to any
departure by any Borrower  therefrom shall in any event be effective  unless the
same  shall  be in  writing  and  signed  (or,  in the  case  of the  Collateral
Documents, consented to) by the Borrowers and the Majority 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

            (i) no  amendment,  waiver or consent  shall,  unless in writing and
      signed by all the Lenders,  do any of the following at any time: (A) waive
      any of the conditions specified in Sections 3.1 or 3.2 except as otherwise
      provided  therein;  (B)  change the  percentage  of the  Commitments,  the
      aggregate  unpaid  principal  amount of the Loans or the  Letter of Credit
      Obligations,  or the number of Lenders  which  shall be  required  for the
      Lenders or any of them to take any action  hereunder;  (C)  release any of
      the  Collateral  except  that,  so long as no Default has  occurred and is
      continuing or would result  therefrom,  (1) as shall otherwise be provided
      in the Collateral Documents and (2) in any Fiscal Year,  Collateral having
      an aggregate Fair Market Value not in excess of $10,000,000  shall require
      only the  consent  of the  Agent;  (D)  materially  reduce  or  limit  the
      Obligations of any material Borrower or release any material Borrower from
      any material  Obligations;  (E) approve any material change in the Interim
      Order or the Final Order;  (F) release or subordinate  any Lien in respect
      of the  Obligations;  (G) effect a change to the  Lenders'  Super-Priority
      Claim in respect of the Obligations; or (H) amend this Section 10.1;

            (ii) no amendment,  waiver or consent  shall,  unless in writing and
      signed by each  Lender  affected  thereby do any of the  following  at any
      time: (A) increase,  or extend the expiration  date of, the Commitments of
      the  Lenders or subject  the Lenders to any  additional  obligations;  (B)
      reduce (1) the amount of any payment of any  principal of, or interest on,
      the Loans due under this  Agreement,  (2) the stated rate of any  interest
      payable  hereunder or (3) the amount of any fees or other amounts  payable
      hereunder; (C) postpone any date fixed for any payment of principal of, or
      interest  on, the Loans or any fees or other  amounts  payable  hereunder,
      including any mandatory repayment or mandatory prepayment;

            (iii) no  amendment,  waiver or consent  shall  without  the written
      consent of the  Majority  Term  Lenders (A)  accelerate  the  principal or
      interest payment, or maturity,  dates of the Revolving Credit Loans (other
      than in connection with an acceleration of the Loans in connection with an
      Event of Default),  (B) waive any event described in Section 8.4 hereof or
      amend any  provision of Section 8.1,  (C) create any  additional  Event of
      Default  which is not also an event  subject to the  provisions of Section
      8.4 hereof, (D) modify the provisions of Section 5.2 hereof or (E) release
      any  portion  of the  Term  Priority  Collateral  from  the  Liens  of the
      Collateral  Documents or permit any sale thereof except as shall otherwise
      be provided in the Collateral Documents;

            (iv) no amendment,  waiver or consent  shall,  unless in writing and
      signed  by the  Super-Majority  Revolving  Credit  Lenders,  do any of the
      following  at any time:  (A)  increase the advance rate of any category of
      Collateral  by more  than 5% over  the  applicable  advance  rate for such

                                       90




      category of Collateral set forth in Exhibit F; or (B) reduce the amount of
      Excess Availability required under Section 5.2;

            (iv) no amendment,  waiver or consent  shall,  unless in writing and
      signed by the Swing Bank or each  Issuer,  as the case may be, in addition
      to the Lenders  required  above to take such action,  affect the rights or
      obligations of the Swing Bank or of the Issuers, as the case may be, under
      this Agreement, and

            (v) 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 under this  Agreement or
      the other Loan Documents.

            (b) Each Lender  Party grants (x) to the Agent the right to purchase
all (but not less than all) of such Lender Party's Commitments and Loans and all
other Obligations owing to it and the Notes held by it and all of its rights and
obligations hereunder and under the other Loan Documents at a price equal to the
aggregate  amount of outstanding  Loans and all other  Obligations  owed to such
Lender  Party  (together  with all accrued and unpaid  interest and fees and all
other amounts owed to such Lender),  and (y) to the Borrowers the right to cause
an assignment of all (but not less than all) of such Lender Party's  Commitments
and Loans and all other Obligations owing to it and the Notes held by it and all
other Obligations and all of its rights and obligations  hereunder and under the
other  Loan  Documents,  which  right  may  be  exercised  by the  Agent  or the
Borrowers,  as the case may be, if such  Lender  Party  refuses to  execute  any
amendment,  waiver or consent  which  requires  the  written  consent of all the
Lenders and to which the Agent and the Borrowers have agreed.  Each Lender Party
agrees that if the Agent or the  Borrowers,  as the case may be,  exercises  its
option  hereunder,  it shall  promptly  execute and deliver all  agreements  and
documentation  necessary to effectuate  such  assignment as set forth in Section
10.7.  Any purchase of such Lender Party's  Commitments  and Loans and all other
Obligations  owing to it and the  Notes  held by it must  (i)  occur  within  30
Business  Days from the date that such  Lender  Party  refuses  to  execute  any
amendment,  waiver or consent  which  requires  the  written  consent of all the
Lenders and to which the Agent and the Borrowers have agreed and (ii) include an
amount  payable to such Lender  Party which is  sufficient  to  compensate  such
Lender Party for any loss,  expense, or liability as a result of any purchase of
such Lender Party's  Commitments and Loans and all other Obligations owing to it
and the Notes held by it under this Section  10.1(b)  which arises out of, or is
in connection  with, any funds acquired by such Lender Party to make,  continue,
or maintain  any portion of the  principal  amount of any Loan as, or to convert
any portion of the principal amount of any Loan into, a Eurodollar Rate Loan.

            10.2. Notices, Etc All notices and other communications provided for
hereunder  shall be in  writing  (including,  without  limitation,  telegraphic,
telex,  telecopy  or cable  communication)  and  mailed,  telegraphed,  telexed,
telecopied,  cabled or delivered by hand, if to the Borrowers, at the address of
WPSC at 1134 Market Street,  Wheeling,  West Virginia  26003,  Attention:  Chief
Financial  Officer with copy to WHX or WPN Corp.  at 110 East 59th  Street,  New
York, New York 10022,  Attention:  Mr. Stewart Tabin;  if to any Lender,  at its
Domestic Lending Office specified opposite its name on Schedule III hereto or in
the  Assumption  Agreement or  Assignment  and  Acceptance  pursuant to which it
became a party hereto;  and if to the Agent,  at its address at 399 Park Avenue,
6th Floor, Zone 4, New York, New York 10043, Attention:  Keith R. Karako; or, as

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to the  Borrowers or the Agent,  at such other address as shall be designated by
such party in a written notice to the other parties and, as to each other party,
at such other address as shall be  designated by such party in a written  notice
to the Borrowers and the Agent. All such notices and communications  shall, when
mailed, telegraphed, telexed, telecopied, cabled or delivered, be effective when
deposited in the mails,  delivered to the telegraph company,  confirmed by telex
answerback,  telecopied  with  confirmation  of receipt,  delivered to the cable
company or delivered by hand to the addressee or its agent, respectively, except
that notices and  communications to the Agent pursuant to Article II or IX shall
not be effective until received by the Agent.

            Delivery by telecopier of an executed  counterpart  of any amendment
or waiver of any  provision  of this  Agreement  or the Notes or of any  Exhibit
hereto to be executed and delivered  hereunder shall be effective as delivery of
a manually executed counterpart thereof.

            10.3.  No  Waiver;  Remedies.  No  failure on the part of any Lender
Party or the Agent to exercise, and no delay in exercising,  any right hereunder
or under any Note  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.

            10.4. Costs; Expenses;  Indemnities.  (a) The Borrowers agree to pay
on demand (i) the reasonable  costs and expenses of the Agent in connection with
the preparation, execution, delivery, administration, modification and amendment
of this  Agreement,  each of the  other  Loan  Documents  and each of the  other
documents  to  be  delivered  hereunder  and  thereunder,   including,   without
limitation,   (A)   all   due   diligence,   collateral   review,   syndication,
transportation,  computer, duplication, appraisal, audit, insurance, consultant,
search,  filing and recording fees and expenses and (B) the reasonable  fees and
out-of-pocket  expenses  of counsel to the Agent with  respect  thereto and with
respect  to  advising  the Agent as to its rights  and  responsibilities  or the
perfection,  protection  or  preservation  of rights  or  interests  under  this
Agreement and the other Loan  Documents  with respect to  negotiations  with any
Borrower or with other  creditors  of any  Borrower  or any of its  Subsidiaries
arising  out of any  Default or any events or  circumstances  that may give rise
thereto and with respect to any review of pleadings and documents related to the
Cases,  attendance at meetings related to the Cases,  general  monitoring of the
Cases and any subsequent  Chapter 7 case, (ii) the per diem cost of any audit or
collateral  evaluation  (of not more than  $1000 per day) of the Agent and (iii)
the  reasonable  costs and expenses of the Lender  Parties  (including,  without
limitation,  reasonable  counsel  fees  and  expenses)  in  connection  with the
enforcement  (whether through  negotiation,  legal  proceedings or otherwise) of
this Agreement, the other Loan Documents and the other documents to be delivered
hereunder or thereunder.

            (b) The  Borrowers  agree to indemnify  and hold harmless the Agent,
each Lender Party and their respective Affiliates, and the directors,  officers,
employees,  agents,  attorneys,  consultants  and  advisors  of or to any of the
foregoing (including,  without limitation, those retained in connection with the

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satisfaction  or attempted  satisfaction  of any of the  conditions set forth in
Article III) (each of the foregoing 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, without limitation,  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,  any  Obligation,  any  Letter of  Credit  or any act,  event or
transaction  related  or  attendant  to any  thereof or in  connection  with any
investigation  by any  Governmental  Authority of any potential  matter  covered
hereby or thereby (collectively,  the "Indemnified Matters"), including, without
limitation,  (i)  all  Environmental  Liabilities  and  Costs  arising  from  or
connected with the past,  present or future operations of any Borrower or any of
its Subsidiaries, or damage to real or personal property or natural resources or
harm or injury  alleged to have  resulted  from any  Release;  (ii) any costs or
liabilities  incurred in connection  with the  investigation,  removal,  cleanup
and/or  remediation of any Contaminant  present or arising out of the operations
of any facility of any 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  affecting  any
facility pursuant to Environmental Laws, including,  without limitation,  CERCLA
and applicable  state property  transfer laws,  including,  without  limitation,
whether,  with respect to any of the foregoing,  such  Indemnitee is a mortgagee
pursuant to any mortgage,  a mortgagee in possession,  the successor in interest
to any Borrower or any of its Subsidiaries,  or the owner, lessee or operator of
any  facility  of  any  Borrower  or  any  of  its  Subsidiaries  by  virtue  of
foreclosure, except, with respect to any of the foregoing referred to in clauses
(i),  (ii),  (iii) and (iv),  to the extent  attributable  solely to acts of the
Agent or such  Indemnitee  or any agent on  behalf  of the Agent or such  Lender
following (x)  foreclosure by the Agent or any  Indemnitee,  or (y) the Agent or
any Lender having become the successor in interest to any Borrower or any of its
Subsidiaries; (v) the management of the Loans and Letters of Credit, or (vi) the
use or intended use of the proceeds of the Loans or Letters of Credit; provided,
however,  that the Borrowers  shall not have any  obligation  under this Section
10.4(b) to an  Indemnitee  with respect to any  Indemnified  Matter caused by or
resulting from the gross negligence or willful misconduct of that Indemnitee.

            (c) If any  Lender  receives  any  payment  of  principal  of, or is
subject to a conversion of, any Eurodollar Rate Loan, other than on the last day
of an  Interest  Period  relating  to such Loan,  as a result of any  payment or
conversion  made by the  Borrowers  (other  than a  payment  made  to the  Agent
pursuant  to  Section  2.2(f))  or  acceleration  of the  maturity  of the Notes
pursuant to Section 8.2 or for any other reason or a conversion  of a Eurodollar
Rate Loan does not occur by reason of the fourth  sentence of Section  2.8,  the
Borrowers  shall,  upon demand by such Lender (with a copy of such demand to the
Agent),  pay to the Agent for the account of such Lender all amounts required to
compensate such Lender for any additional losses, costs or expenses which it may
reasonably  have  incurred or in the future incur as a result of such payment or
conversion,  including,  without limitation, any actual out-of-pocket loss, cost
or expense  incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain such Loan.

            (d) The Agent and each Lender  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,  removal or response  action is requested of it or

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any of its officers,  directors,  agents and employees, for which any Indemnitee
may desire indemnity or defense hereunder, such Indemnitee shall promptly notify
the Borrowers in writing.

            (e) The Borrowers, at the request of any Indemnitee,  shall have the
obligation  to defend  against such  investigation,  litigation or proceeding or
requested remedial, removal or response action, and the Borrowers, in any event,
may control the defense thereof with legal counsel of the Borrowers'  choice. In
the event that such  Indemnitee  requests the  Borrowers to defend  against such
investigation,  litigation  or  proceeding  or  requested  remedial,  removal or
response  action,  the Borrowers shall promptly do so and such Indemnitee  shall
have the right to have legal counsel of its choice  participate  in such defense
at such Indemnitee's  expense.  If, without the Borrowers' prior written consent
which consent shall not be unreasonably withheld, an Indemnitee shall settle any
such  investigation,  litigation,  proceeding or other action,  such  Indemnitee
shall be deemed to have waived its rights to indemnity and defense hereunder.

            (f) The  obligations  of the  Borrowers  under this Section 10.4 and
under  Sections  2.10 and 2.12 shall  survive the repayment of the Loans and the
termination of the Commitments.

            10.5.  Right  of  Set-off.   Upon  the  occurrence  and  during  the
continuance  of any  Event  of  Default,  each  Lender  Party  and  each  of its
respective Affiliates 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 Party or such Affiliate to
or for the credit or the  account  of any  Borrower  against  any and all of the
Obligations now or hereafter existing irrespective of whether or not such Lender
Party  shall  have  made  any  demand  under  this  Agreement,  any  Note or any
Reimbursement Agreement or any other Loan Document and although such Obligations
may be  unmatured.  Each Lender  Party agrees  promptly to notify such  Borrower
after  any  such  set-off  and  application  made by such  Lender  Party  or its
Affiliate;  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
Party and its  respective  Affiliates  under this Section are in addition to the
other  rights and  remedies  (including,  without  limitation,  other  rights of
set-off) which such Lender Party and its respective Affiliates may have.

            10.6. Binding Effect.  This Agreement shall become effective when it
shall have been executed by the Borrowers and the Agent and when the Agent shall
have been  notified by each Lender  Party that such Lender Party has executed it
and thereafter  shall be binding upon and inure to the benefit of the Borrowers,
the Agent and each Lender  Party and their  respective  successors  and assigns,
except  that the  Borrowers  shall  not have the right to  assign  their  rights
hereunder or any interest herein without the prior written consent of the Lender
Parties.

            10.7.  Assignments  and  Participations.  (a) Each  Lender may sell,
transfer, negotiate or assign to one or more other Lenders or Eligible Assignees
all or a portion of its  Commitments,  commitment to issue Letters of Credit and
the Loans and Letter of Credit  Obligations owing to it and Notes held by it and
a  commensurate  portion of its rights and  obligations  hereunder and under the
other Loan Documents;  provided,  however,  that (i) if such an assignment is of
Loans and  Commitments  under either the Revolving  Credit  Facility or the Term

                                       94




Facility,  each  such  assignment  shall be of a  constant,  and not a  varying,
percentage of the assigning Lender's rights and obligations under this Agreement
with respect to Loans,  Letters of Credit and Commitments,  as applicable,  (ii)
the aggregate  amount of the  Commitments,  Letters of Credit,  Letter of Credit
Obligations   and  Loans  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  be less  than  $5,000,000,  in the  case of an
assignment of any Revolving Credit Commitment,  or $1,000,000, in the case of an
assignment of any Term Loan Commitment,  or, in each case, an integral  multiple
of  $1,000,000  in excess  thereof,  unless such  assignment  is of the Lender's
entire Commitment under a Facility,  and (iii) each assignee  hereunder shall be
an Eligible  Assignee.  The parties to each assignment shall execute and deliver
to the Agent,  for its acceptance  and recording in the Register,  an Assignment
and  Acceptance,  together with a fee of $3,500 and the Note (or an affidavit of
loss and indemnity with respect to such Note, satisfactory to the Agent) subject
to such  assignment.  Upon such execution,  delivery,  acceptance and recording,
from and after the effective date specified in such  Assignment and  Acceptance,
(A) 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  was an  Issuer,  of an  Issuer
hereunder  and  thereunder  with respect to Letters of Credit  issued after such
effective date, and (B) 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 for those rights which
survive the payment in full of principal and interest hereunder) and be released
from its obligations under the Loan Documents (and, in the case of an Assignment
and Acceptance covering all or the remaining portion of an assigning Lender's or
Issuer's rights and obligations under the Loan Documents,  such Lender or Issuer
shall cease to be a party hereto).

            (b) By executing and  delivering an Assignment and  Acceptance,  the
Lender assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties  hereto as follows:  (i) other than as provided
in such  Assignment  and  Acceptance,  such  assigning  Lender  Party  makes  no
representation  or warranty  and assumes no  responsibility  with respect to any
statements,  warranties or  representations  made in or in connection  with this
Agreement  or any  other  Loan  Document  or any  instrument  or other  document
furnished  pursuant  hereto or thereto  or the  execution,  legality,  validity,
enforceability,  genuineness,  sufficiency  or value  of, or the  perfection  or
priority of any lien or security  interest  created or  purported  to be created
under or in connection  with,  this  Agreement or any other Loan Document or any
other  instrument or document  furnished  pursuant hereto or thereto;  (ii) such
assigning  Lender  Party  makes no  representation  or  warranty  and assumes no
responsibility  with respect to the  financial  condition of any Borrower or the
performance or observance by any Borrower of any of its  obligations  under this
Agreement  or any other Loan  Document  or of any other  instrument  or document
furnished  pursuant hereto or thereto;  (iii) such assignee confirms that it has
received a copy of this Agreement and each of the other Loan Documents  together
with a copy of any of the  financial  statements  referred  to in Section 4.5 of
this  Agreement  and such  other  documents  and  information  as it has  deemed
appropriate  to make its own credit  analysis  and  decision  to enter into such
Assignment and Acceptance;  (iv) such assignee will,  independently  and without
reliance upon the Agent,  such assigning Lender Party or any other Lender Party,
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;  (v)  such  assignee  confirms  that  it is an  Eligible

                                       95




Assignee;  (vi) such  assignee  appoints and  authorizes  the Agent to take such
action as agent on its behalf and to exercise such powers and  discretion  under
this Agreement and the other Loan Documents as are delegated to the Agent by the
terms  hereof and  thereof,  together  with such  powers and  discretion  as are
reasonably  incidental  thereto;  and (vii) such  assignee  agrees  that it will
perform in accordance with their terms all of the obligations which by the terms
of this  Agreement  are  required  to be  performed  by it as a Lender  and,  if
appropriate, an Issuer.

            (c) The Agent shall  maintain at its address  referred to in Section
10.2 a copy of each  Assumption  Agreement and each  Assignment  and  Acceptance
delivered to and accepted by it and a register for the  recordation of the names
and  addresses of the Lender  Parties and the  Commitments  of, Letter of Credit
Obligations  owing to, and  principal  amount of the Loans  owing to each Lender
Party from time to time (the  "Register").  The entries in the Register shall be
conclusive  and  binding  for  all  purposes,  absent  manifest  error,  and the
Borrowers,  the Agent and the Lender Parties may treat each Person whose name is
recorded in the Register as a Lender  Party for all purposes of this  Agreement.
The Register shall be available for  inspection by the  Borrowers,  the Agent or
any Lender Party 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  Party and an  assignee  representing  that it is an  Eligible
Assignee,  together with the Note or Notes subject to such assignment, 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  Borrowers.  Within five
Business  Days after its receipt of such  notice,  the  Borrowers,  at their own
expense,  shall  execute  and  deliver  to  the  Agent,  in  exchange  for  such
surrendered Note, a new Note to the order of such Eligible Assignee in an amount
equal to the Commitment assumed by it pursuant to such Assignment and Acceptance
and, if the assigning  Lender Party has retained a Commitment  hereunder,  a new
Note to the  order  of the  assigning  Lender  Party in an  amount  equal to the
Commitment retained by it hereunder.  Such new Note shall be dated the same date
as the surrendered Note and be in  substantially  the form of Exhibit A-1 or A-2
hereto, as applicable.

            (e) Each Lender Party may sell  participations  to one or more banks
or other Persons in or to all or a portion of its rights and  obligations  under
the Loan  Documents  (including,  without  limitation,  all or a portion  of its
Commitment,  the Letter of Credit Obligations owing to it and the Loans owing to
it and the Note held by it). The terms of such  participation  shall not, in any
event,  require  the  participant's  consent to any  amendment,  waiver or other
modification of any provision of any Loan Document, the consent to any departure
by any Borrower therefrom,  or to the exercising or refraining from the exercise
of any powers or rights  which such Lender Party may have under or in respect of
the Loan  Documents  (including,  without  limitation,  the right to enforce the
obligations of the  Borrowers),  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 any of the
Collateral,  except  (A) as  shall  otherwise  be  provided  in  the  Collateral
Documents and (B) Collateral having an aggregate Fair Market Value not in excess

                                       96




of $25,000,000 in any Fiscal Year. In the event of the sale of any participation
by any  Lender  Party,  (i)  such  Lender  Party's  obligations  under  the Loan
Documents (including, without limitation, its Revolving Credit Commitment) shall
remain unchanged,  (ii) such Lender Party shall remain solely responsible to the
other parties hereto for the performance of such obligations,  (iii) such Lender
Party shall remain the holder of such Note and  Obligations  for all purposes of
this Agreement,  (iv) such Lender Party shall disclose to the Agent the identity
of each bank or other entity purchasing a participation and the principal amount
of such  participation  within five Business Days after the sale and purchase of
such  participation,  and (v) the  Borrowers,  the Agent  and the  other  Lender
Parties  shall  continue  to deal  solely  and  directly  with  such  Lender  in
connection with such Lender Party's rights and obligations under this Agreement.

            (f) Notwithstanding any other provision set forth in this Agreement,
any Lender may at any time  create a security  interest in all or any portion of
its rights under this Agreement (including,  without limitation, the Loans owing
to it and the Note or Notes held by it) in favor of any Federal  Reserve Bank in
accordance  with  Regulation A of the Board of Governors of the Federal  Reserve
System.

            10.8. Governing Law. This Agreement and the Notes and the rights and
obligations  of the  parties  hereto  and  thereto  shall be  governed  by,  and
construed  in  accordance  with,  the law of the State of New York  and,  to the
extent applicable, the Bankruptcy Code.

            10.9. Submission to Jurisdiction. (a) Any legal action or proceeding
with respect to this Agreement or the Notes or any document  related thereto may
be brought in the Bankruptcy  Court or 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,  each  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, without limitation, 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) Each Borrower  irrevocably consents to the service of process of
any of the aforesaid courts in any such action or proceeding by the mailing of a
copy thereof by registered or certified  mail,  postage  prepaid,  to WPC at its
address provided herein.

            (c) Nothing contained in this Section 10.9 shall affect the right of
the Agent or any Lender  Party or any  holder of a Note to serve  process in any
other manner permitted by law or commence legal proceedings or otherwise proceed
against any Borrower in any other jurisdiction.

            10.10.   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 among the parties hereto.

            10.11. Execution in Counterparts.  This Agreement may be executed in
any  number  of  counterparts  and  by  different  parties  hereto  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.

                                       97




            10.12. No Liability of the Issuers.  The Borrowers  assume all risks
of the acts or  omissions  of any  beneficiary  or  transferee  of any Letter of
Credit with respect to its use of such Letter of Credit.  Neither any Issuer nor
any of its officers or directors shall be liable or responsible for: (a) the use
that  may be made of any  Letter  of  Credit  or any  acts or  omissions  of any
beneficiary or transferee in connection therewith; (b) the validity, sufficiency
or  genuineness  of  documents,  or of any  endorsement  thereon,  even  if such
documents  should  prove  to be in any or all  respects  invalid,  insufficient,
fraudulent  or  forged;  (c)  payment by such  Issuer  against  presentation  of
documents  that do not comply  with the terms of a Letter of  Credit,  including
failure of any  documents  to bear any  reference  or adequate  reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrowers shall have
a claim against such Issuer,  and such Issuer shall be liable to the  Borrowers,
to the extent of any  direct,  but not  consequential,  damages  suffered by the
Borrowers  that the  Borrowers  prove were caused by (i) such  Issuer's  willful
misconduct or gross negligence in determining  whether documents presented under
any Letter of Credit  comply with the terms of the Letter of Credit or (ii) such
Issuer's  willful  failure to make lawful payment under a Letter of Credit after
the presentation to it of a draft and certificates  strictly  complying with the
terms  and  conditions  of the  Letter  of  Credit.  In  furtherance  and not in
limitation of the  foregoing,  such 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.

            10.13.  Entire Agreement.  This Agreement,  together with all of the
other Loan Documents and all certificates and documents  delivered  hereunder or
thereunder,  the Interim  Order,  the Final Order,  the  proposal  letter by and
between  the Agent and the  Borrowers,  and the fee  letter by and  between  the
Borrowers  and each of the Lender  Parties  embody the entire  agreement  of the
parties and supersedes all prior agreements and  understandings  relating to the
subject matter hereof.

            10.14.  Confidentiality.  Each  Lender  Party and the Agent agree to
keep  information  obtained by it pursuant  hereto and the other Loan  Documents
confidential in accordance with such Lender Party'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 (i) to such Lender Party's or the Agent's, as
the case may be, Affiliates,  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,  (ii) to the extent such  information
presently is or hereafter  becomes  available to such Lender Party or the Agent,
as the case may be, on a  non-confidential  basis  from a source  other than the
Borrowers,  (iii) to the extent  disclosure  is required by law,  regulation  or
judicial  order (which  requirement  or order shall be promptly  notified to the
Borrowers) or requested or required by bank  regulators or auditors,  or (iv) to
assignees or participants or potential assignees or participants who agree to be
bound by the provisions of this Section.

            10.15. Additional Term Loan; Amendment and Restatement.  Each of the
Borrowers and each Revolving  Credit Lender hereby agree that, at the discretion
of the Agent,  up to  $50,000,000  of the Revolving  Credit  Commitments  may be

                                       98




converted  to  commitments  under a  non-amortizing  term  loan  that  will have
substantially  the same  terms and  conditions  as,  and shall be pari  passu in
respect of Collateral and priority of payment with, the Revolving  Credit Loans.
Each Revolving Credit Lender may, at its discretion, agree to convert any or all
of its Revolving Credit  Commitment to commitments under such new term loan, and
the Agent may, in its  discretion,  request such banks and other  entities as it
shall identify to participate in such new term loan. Each Borrower,  each Lender
Party and the Agent  hereby  agree that,  prior to the entry of the Final Order,
this  Agreement  may be amended and restated in its entirety to document the new
term loan contemplated by this Section 10.15.

            10.16.  Waiver of Jury Trial.  Each of the Borrowers,  the Agent and
the Lender Parties  irrevocably waives all right to trial by jury in any action,
proceeding  or  counterclaim  (whether  based on  contract,  tort or  otherwise)
arising  out of or  relating  to any of the  Loan  Documents,  the  Loans or the
actions of the Agent or any  Lender  Party in the  negotiation,  administration,
performance or enforcement thereof.




                                       99



            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.


                                    BORROWERS

                                        WHEELING-PITTSBURGH
                                        CORPORATION


                                        By:_______________________________
                                              Name:
                                              Title:

                                        WHEELING-PITTSBURGH STEEL
                                        CORPORATION


                                        By:_______________________________
                                              Name: Paul Mooney
                                              Title: Executive Vice President and
                                                       Chief Financial Officer

                                        W-P STEEL VENTURE CORPORATION


                                        By:_______________________________
                                              Name:
                                              Title:

                                        CONSUMERS MINING COMPANY


                                        By:_______________________________
                                              Name:
                                              Title:

                                              W-P COAL COMPANY
                                        By:_______________________________
                                              Name:
                                              Title:

                                        MINGO OXYGEN COMPANY


                                        By:_______________________________
                                              Name:
                                              Title:




                                        MONESSEN SOUTHWESTERN
                                        RAILWAY COMPANY


                                        By:_______________________________
                                              Name:
                                              Title:

                                        WHEELING-EMPIRE COMPANY


                                        By:_______________________________
                                              Name:
                                              Title:

                                        PITTSBURGH-CANFIELD
                                        CORPORATION


                                        By:_______________________________
                                              Name:
                                              Title:






                                      AGENT
                                        CITICORP USA, INC., as Agent


                                        By:_______________________________
                                              Name:
                                              Title:

                                     LENDERS


                                        CITICORP USA, INC.


                                        By:_______________________________
                                              Name:
                                              Title:


                                        THE CIT GROUP/BUSINESS CREDIT, INC.


                                        By:_______________________________
                                              Name:
                                              Title:


                                        NATIONAL CITY COMMERCIAL
                                        FINANCE


                                        By:_______________________________
                                              Name:
                                              Title:


                                        FOOTHILL CAPITAL CORPORATION


                                        By:_______________________________
                                              Name:
                                              Title:



                                        HELLER FINANCIAL, INC.


                                        By:_______________________________
                                              Name:
                                              Title:




                              ISSUER (AND NOT LENDER)

                                        CITIBANK, N.A.

                                        By:_____________________________
                                              Name:
                                              Title:






                                   SCHEDULE I
                                 LIST OF ISSUERS


Name of Issuer
- --------------

Citibank, N.A.






                                   SCHEDULE II
                                   COMMITMENTS


Name of Lender                    Revolving Credit Commitment    Term Commitment
- --------------                    ---------------------------    ---------------

Citicorp USA, Inc.                      $65,000,000.00           $35,000,000.00

The CIT Group/Business Credit, Inc.     $50,000,000.00

National City Commercial Finance        $45,000,000.00

Foothill Capital Corporation            $45,000,000.00

Heller Business Credit                  $50,000,000.00








                                  SCHEDULE III
          LIST OF APPLICABLE LENDING OFFICES AND ADDRESSES FOR NOTICES


Name of Lender               Domestic Lending Office          Eurodollar Lending Office

Citicorp USA, Inc.           399 Park Avenue                  399 Park Avenue
                             New York, NY 10043               New York, NY 10043
                             Attn:  Keith Karako              Attn:  Keith Karako
                             T:  212 559-3149                 T:  212 559-3149
                             F:  212 793-1290                 F:  212 793-1290

The CIT Group/Business       1211 Avenue of the Americas
Credit                       New York, NY 10036
                             T:
                             F:

National City Commercial     National City Center
Finance                      PO Box 5756
                             Cleveland, OH  44101-0756
                             T:
                             F:

Foothill Capital Corporation 2450 Colorado Ave
                             Suite 3000 West
                             Santa Monica, CA  90404
                             T:
                             F:

Heller Business Credit       150 East 42nd Street
                             New York, NY  10017
                             T:
                             F:







                                   SCHEDULE IV
                            TERM PRIORITY COLLATERAL


         All fixed assets of all Borrowers and the related intellectual
             property of all Borrowers as described in Section 4.19.

EX-4 4 exhibit45.htm GUARANTY AND SECURITY AGREEMENT sec document





                         GUARANTY AND SECURITY AGREEMENT

                             Dated November __, 2000

                                      From

                                 WHX CORPORATION

                                   as Grantor

                                       to

                               CITICORP USA, INC.

                                as Secured Party





                          T A B L E O F C O N T E N T S

Section                                                                   Page

Section 1.  Grant of Security..................................................2

Section 2.  Security for Obligations...........................................2

Section 3.  Grantors Remain Liable.............................................3

Section 4.  Delivery and Control of Collateral.................................3

Section 5.  Representations and Warranties.....................................4

Section 6.  Further Assurances.................................................5

Section 7.  Place of Perfection; Records.......................................6

Section 8.  Voting Rights; Dividends; Etc......................................6

Section 9.  Transfers and Other Liens; Additional Shares.......................7

Section 10. Secured Party Appointed Attorney-in-Fact...........................7

Section 11. Secured Party May Perform..........................................8

Section 12. The Secured Party's Duties.........................................8

Section 13. Remedies...........................................................8

Section 14. Indemnity and Expenses.............................................9

Section 15. Amendments; Waivers; Etc..........................................10

Section 16. Notices; Etc......................................................10

Section 17. Continuing Security Interest; Assignments under the Credit
            Agreement.........................................................10

Section 18. Release; Termination..............................................10

Security Interest Absolute....................................................10

Section 20. Execution in Counterparts.........................................12

Section 21. Governing Law.....................................................13



Exhibit A   -   Form of Control Agreement (Securities Account)


                         GUARANTY AND SECURITY AGREEMENT


          GUARANTY  AND  SECURITY   AGREEMENT  dated  November  17,  2000  (this
"Agreement") made by WHX Corporation, a Delaware corporation (the "Grantor"), to
Citicorp USA, Inc. (the "Secured Party").

                        PRELIMINARY STATEMENTS.

          (1)   Wheeling-Pittsburgh   Corporation,   Wheeling-Pittsburgh   Steel
Corporation,  WP Steel Venture  Corporation,  Consumers Mining Company,  WP Coal
Company, Mingo Oxygen Company,  Monessen Southwestern Railway Company,  Wheeling
Empire   Company  and   Pittsburgh-Canfield   Corporation   (collectively,   the
"Borrowers")  have entered into a Credit Agreement dated as of November 17, 2000
(said  Agreement,  as  it  may  hereafter  be  amended,  amended  and  restated,
supplemented  or  otherwise  modified  from  time to  time,  being  the  "Credit
Agreement") with the Lender Parties and the Agent (each as defined therein).

          (2) The Secured  Party has agreed to make a Term Loan to the Borrowers
in an  amount  equal to  $5,000,000,  and has  further  agreed,  subject  to the
execution and delivery by the Grantor of this  Agreement,  to make an additional
Term Loan to the Borrowers in an amount equal to $30,000,000 in accordance  with
the terms of the Credit Agreement (the "Additional Term Loans").

          (3) The Grantor  has  security  entitlements  (the  "Pledged  Security
Entitlements")  with  respect  to all  of the  financial  assets  (the  "Pledged
Financial Assets") credited from time to time to the Grantor's account,  Account
No. 03894 14 025 (the "Securities  Account"),  with Salomon Smith Barney Inc. at
its office at 100 Jericho Quadrangle Suite 120, Jericho, New York 11753.

          (4) It is a condition  precedent to the making of the Additional  Term
Loans by the Secured  Party under the Credit  Agreement  that the Grantor  shall
have  executed and  delivered  this  Agreement  and granted the  assignment  and
security  interest  contemplated  by this  Agreement with respect to the Pledged
Financial Assets.

          (5) The Grantor will derive  substantial  direct and indirect  benefit
from the transactions contemplated by the Credit Agreement.

          (6) Terms defined in the Credit Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Credit  Agreement as
of the date hereof.  Further,  unless otherwise  defined in this Agreement or in
the Credit Agreement,  terms defined in Article 8 or 9 of the Uniform Commercial
Code in effect in the State of New York ("N.Y.  Uniform Commercial Code") and/or
in the  Federal  Book  Entry  Regulations  (as  defined  below) are used in this
Agreement  as such terms are  defined in such  Article 8 or 9 and/or the Federal
Book Entry Regulations.  The term "Federal Book Entry Regulations" means (a) the
federal  regulations  contained in Subpart B  ("Treasury/Reserve  Automated Debt
Entry System  (TRADES)")  governing  book-entry  securities  consisting  of U.S.
Treasury  bonds,  notes and bills and Subpart D ("Additional  Provisions") of 31
C.F.R.  Part 357, 31 C.F.R.  ss. 357.2,  ss.  357.10





through  ss.  357.14 and ss.  357.41  through  ss.  357.44 and (b) to the extent
substantially  identical  to the federal  regulations  referred to in clause (a)
above (as in effect from time to time), the federal regulations  governing other
book-entry securities.

         NOW, THEREFORE, in consideration of the premises and in order to induce
the Secured Party to make the Additional Term Loan under the Credit Agreement in
an amount  greater than  $5,000,000,  the Grantor hereby agrees with the Secured
Party as follows:

         Section 1. Guaranty. (a) The Grantor hereby absolutely, unconditionally
and irrevocably  guarantees the punctual  payment when due, whether at scheduled
maturity or on any date of a required  prepayment or by acceleration,  demand or
otherwise,  of the Obligations of the Borrowers now or hereafter  existing under
or in respect of the Additional Term Loans (including,  without limitation,  any
extensions, modifications,  substitutions,  amendments or renewals of any or all
of the foregoing Obligations),  whether for principal, interest, premiums, fees,
contract causes of action, costs, expenses or otherwise, to the extent that such
Obligations are owed to the Secured Party (such  Obligations  being the "Secured
Obligations"),  and  agrees  to pay  any and all  expenses  (including,  without
limitation,  reasonable fees and out-of-pocket  expenses of counsel) incurred by
the Secured Party in enforcing any rights under this Agreement. Without limiting
the generality of the  foregoing,  the Grantor's  liability  shall extend to all
amounts that constitute part of the Secured Obligations and would be owed by any
Borrower to the Secured Party under or in respect of the Loan  Documents but for
the fact that they are  unenforceable or not allowable due to the existence of a
bankruptcy, reorganization or similar proceeding involving such Borrower.

         Section 2. Grant of Security. The Grantor hereby assigns and pledges to
the Secured  Party,  and hereby grants to the Secured Party a security  interest
in, the Grantor's right, title and interest in and to the following, whether now
owned or hereafter acquired by the Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the "Collateral"):

         (a) the Securities  Account,  all Pledged  Security  Entitlements  with
     respect to all Pledged  Financial  Assets from time to time credited to the
     Securities  Account,  and all Pledged Financial Assets,  and all dividends,
     interest,  cash, instruments and other property from time to time received,
     receivable or otherwise distributed in respect of or in exchange for any or
     all of such Pledged Security Entitlements or such Pledged Financial Assets;

         (b)  all  proceeds  of any  and  all of the  Collateral  including  all
     payments  under  insurance  (whether or not the  Secured  Party is the loss
     payee thereof), or any indemnity,  warranty or guaranty,  payable by reason
     of loss or damage to or  otherwise  with  respect  to any of the  foregoing
     Collateral  and,  during the  continuance of any event described in Section
     8.4 of the Credit  Agreement or a breach of this Agreement (an "Enforcement
     Event"), cash.

         Section 3. Security for Obligations. This Agreement secures the payment
of all  obligations  of  the  Grantor  now  or  hereafter  existing  under  this
Agreement,  whether direct or indirect,  absolute or contingent, and whether for
principal,  reimbursement  obligations,  interest,

                                       2



fees, premiums, penalties,  indemnifications,  contract causes of action, costs,
expenses or otherwise as provided in this Agreement.

         Section 4.  Grantor  Remains  Liable.  Anything  herein to the contrary
notwithstanding,  (a) the Grantor  shall remain  liable under the  contracts and
agreements included in the Collateral to the extent set forth therein to perform
all of its  duties  and  obligations  thereunder  to the same  extent as if this
Agreement had not been executed, (b) the exercise by the Secured Party of any of
the rights  hereunder  shall not release  the Grantor  from any of its duties or
obligations  under the contracts and  agreements  included in the Collateral and
(c) the  Secured  Party shall not have any  obligation  or  liability  under the
contracts and agreements  included in the Collateral by reason of this Agreement
or any other Loan Document,  nor shall the Secured Party be obligated to perform
any of the obligations or duties of the Grantor thereunder or to take any action
to collect or enforce any claim for payment assigned hereunder.

         Section 5. Delivery and Control of Collateral.  (a) All certificates or
instruments representing or evidencing Collateral shall be delivered to and held
by or on behalf of the Secured  Party  pursuant  hereto and shall be in suitable
form  for  transfer  by  delivery,  or  shall be  accompanied  by duly  executed
instruments  of  transfer  or  assignment  in blank,  all in form and  substance
satisfactory  to the Secured Party.  The Secured Party shall have the right,  at
any time after the occurrence and during the continuance of an Enforcement Event
and without notice to the Grantor,  to transfer to or to register in the name of
the Secured Party or any of its nominees any or all of the  Collateral,  subject
only to the  revocable  rights  specified in Section  15(a).  In  addition,  the
Secured  Party  shall  have the right at any time to  exchange  certificates  or
instruments   representing   or  evidencing   Collateral  for   certificates  or
instruments of smaller or larger denominations.

         (b) With respect to any  Collateral in which the Grantor has any right,
title or interest and that constitutes an uncertificated  security,  the Grantor
will cause the issuer  thereof  either (i) to register the Secured  Party as the
registered  owner of such  security or (ii) to agree in writing with the Grantor
and the  Secured  Party that such issuer  will  comply  with  instructions  with
respect to such security originated by the Secured Party without further consent
of the Grantor,  such agreement to be in form and substance  satisfactory to the
Secured Party.

         (c) With respect to any  Collateral in which the Grantor has any right,
title or interest and that constitutes a security entitlement,  the Grantor will
cause the  securities  intermediary  with respect to such  security  entitlement
either (i) to  identify in its  records  the  Secured  Party as the  entitlement
holder of such security entitlement against such securities intermediary or (ii)
to agree in writing with the Grantor and the Secured Party that such  securities
intermediary  will  comply  with  entitlement  orders  (that  is,  notifications
communicated to such securities intermediary directing transfer or redemption of
the financial asset to which the Grantor has a security entitlement)  originated
by the Secured Party without further  consent of the Grantor,  such agreement to
be in  substantially  the form of  Exhibit  A hereto  or  otherwise  in form and
substance  satisfactory to the Secured Party (such agreement being a "Securities
Account Control Agreement").

         (d)  The  Grantor   covenants  and  agrees  that  (i)  the   securities
entitlements maintained in the Securities Account shall consist only of (x) cash
or (y) securities  issued or fully

                                       3



guaranteed by the United States  government or any agency  thereof and backed by
the full faith and credit of the United  States and (ii) the equity value of the
securities  entitlements  maintained in the Securities Account shall be not less
than (A) if all of such securities  entitlements consisting of securities have a
maturity  of one  year or less  from  the  date  of  determination,  105% of the
Required Amount (as defined below),  (B) if any of such securities  entitlements
have a  maturity  of more than one year from the date of  determination  but all
such security  entitlements  have a maturity of less than 10 years from the date
of determination,  110% of the Required Amount and (C) if any of such securities
entitlements have a maturity of 10 years or more from the date of determination,
120% of the Required  Amount.  For purposes of this Section,  "Required  Amount"
means the sum of the Secured  Obligations  plus, until March 16, 2000, an amount
equal to 3% of the principal  amount of the Additional  Term Loans that have not
been syndicated by the Secured Party.

         Section 6.  Representations and Warranties.  The Grantor represents and
warrants as follows:

         (a) The Grantor is a corporation  duly organized,  validly existing and
     in good standing under the laws of the State of Delaware.

         (b) The  execution,  delivery  and  performance  by the Grantor of this
     Agreement,  and the consummation of the transactions  contemplated  hereby,
     are within the Grantor's corporate powers, have been duly authorized by all
     necessary corporate action, and do not contravene (i) the Grantor's charter
     or  by-laws  or  (ii)  law or any  contractual  restriction  binding  on or
     affecting the Grantor.

         (c) This Agreement has been duly executed and delivered by the Grantor.
     This  Agreement is the legal,  valid and binding  obligation of the Grantor
     enforceable  against the Grantor in accordance  with its terms,  subject to
     the  effect  of  any  applicable  bankruptcy,  insolvency,  reorganization,
     moratorium  or similar law  affecting  creditor's  rights  generally and to
     general principles of equity.

         (d) The chief executive office of the Grantor is located at the address
     set forth  opposite the Grantor's  name on the signature  page hereof.  The
     Grantor's  federal  tax  identification  number is set forth  opposite  the
     Grantor's name on the signature page hereof.

         (e) The  Grantor is the legal and  beneficial  owner of the  Collateral
     free and clear of any Lien,  claim,  option or right of others,  except for
     the security interest created under this Agreement.  No effective financing
     statement or other instrument similar in effect covering all or any part of
     such Collateral is on file in any recording office, except such as may have
     been filed in favor of the  Secured  Party.  The  Grantor  has no the trade
     names.

         (f) All of the investment property owned by the Grantor and credited to
     the  Securities  Account  as of the date  hereof is listed  on  Schedule  I
     hereto.

         (g) All filings and other actions necessary or desirable to perfect and
     protect  the  security  interest  in  the  Collateral  created  under  this
     Agreement  have  been  authorized

                                       4



     to be duly  made or  taken  and are in full  force  and  effect,  and  this
     Agreement  creates in favor of the Secured Party a valid and, together with
     such filings and other actions when made, perfected first priority security
     interest  in  the   Collateral,   securing   the  payment  of  the  Secured
     Obligations.

         (h) No  authorization  or approval or other action by, and no notice to
     or filing with, any governmental  authority or regulatory body or any other
     third party is required for (i) the grant by the Grantor of the assignment,
     pledge  and  security  interest  granted  hereunder  or for the  execution,
     delivery  or  performance  of  this  Agreement  by the  Grantor,  (ii)  the
     perfection or maintenance of the assignment,  pledge and security  interest
     created hereunder  (including the first priority nature of such assignment,
     pledge or  security  interest),  except  for the  filing of  financing  and
     continuation  statements under the Uniform Commercial Code, which financing
     statements  have been  duly  filed and are in full  force and  effect,  and
     effect and the  actions  described  in Section 4, which  actions  have been
     taken and are in full force and  effect,  or (iii) for the  exercise by the
     Secured Party of its voting or other rights  provided for in this Agreement
     or the remedies in respect of the  Collateral  pursuant to this  Agreement,
     except as may be required in connection with the disposition of any portion
     of the  Collateral  by laws  affecting  the offering and sale of securities
     generally.

         Section 7. Further Assurances. (a) The Grantor agrees that from time to
time,  at the expense of the  Grantor,  the Grantor  will  promptly  execute and
deliver all further instruments and documents, and take all further action, that
may be necessary or desirable, or that the Secured Party may reasonably request,
in order to perfect  and protect any  pledge,  assignment  or security  interest
granted or purported to be granted  hereunder or to enable the Secured  Party to
exercise  and  enforce its rights and  remedies  hereunder  with  respect to any
Collateral.  Without limiting the generality of the foregoing,  the Grantor will
promptly:

                        (i) if any  such  Collateral  shall  be  evidenced  by a
            promissory  note or other  instrument,  deliver  and  pledge  to the
            Secured Party  hereunder  such note or instrument  duly indorsed and
            accompanied by duly executed  instruments of transfer or assignment,
            all in form and substance satisfactory to the Secured Party;

                        (ii)  execute and file such  financing  or  continuation
            statements,  or amendments  thereto,  and such other  instruments or
            notices,  as may be necessary or desirable,  or as the Secured Party
            may  reasonably  request,  in  order to  perfect  and  preserve  the
            security interest granted or purported to be granted hereunder;

                        (iii)   deliver   and  pledge  to  the   Secured   Party
            certificates  representing Collateral that constitutes  certificated
            securities,  accompanied by undated stock or bond powers executed in
            blank;

                        (iv) deliver to the Secured Party (A)  certified  copies
            of the resolutions of the Board of Directors or Executive  Committee
            of the  Grantor  approving  this  Agreement,  and  of all  documents
            evidencing   other  necessary   corporate  action  and  governmental
            approvals, if any, with respect to this Agreement, (B) a certificate
            of the Secretary or an Assistant Secretary of the Grantor certifying
            the  names  and  true  signatures  of the  officers

                                       5



            of the  Grantor  authorized  to sign  this  Agreement  and the other
            documents to be delivered  hereunder and (C) a favorable  opinion of
            counsel for the Grantor,  in form and substance  satisfactory to the
            Secured Party, and

                        (v) deliver to the Secured Party evidence that all other
            action  that the  Secured  Party may deem  reasonably  necessary  or
            desirable  in order to perfect  and protect  the  security  interest
            created under this Agreement has been taken.

         (b) The Grantor hereby authorizes the Secured Party to file one or more
financing or continuation statements, and amendments thereto, relating to all or
any part of the Collateral  without the signature of the Grantor where permitted
by law. A photocopy or other  reproduction  of this  Agreement or any  financing
statement  covering the  Collateral or any part thereof shall be sufficient as a
financing statement where permitted by law.

         (c) The Grantor  will  furnish to the  Secured  Party from time to time
statements and schedules  further  identifying  and describing the Collateral of
the Grantor and such other  reports in  connection  with such  Collateral as the
Secured Party may reasonably request, all in reasonable detail.

         Section 8. Place of  Perfection;  Records.  The  Grantor  will keep its
chief executive  office at the location  therefor  specified in Section 6(d) or,
upon 30 days' prior written notice to the Secured Party,  at such other location
in a jurisdiction  where all actions required by Section 7 shall have been taken
with  respect  to the  Collateral  of the  Grantor.  The  Grantor  will hold and
preserve its records relating to the Collateral and will permit  representatives
of the Secured  Party at any time during  normal  business  hours to inspect and
make abstracts from such records and other documents.

         Section 9. Voting Rights; Dividends; Etc. (a) So long as no Enforcement
Event shall have occurred and be continuing:

            (i) The Grantor shall be entitled to exercise any and all voting and
      other consensual  rights  pertaining to the Collateral or any part thereof
      for any purpose;  provided however,  that the Grantor will not exercise or
      refrain  from  exercising  any such  right  if such  action  would  have a
      material  adverse  effect  on the  value  of the  Collateral  or any  part
      thereof.

            (ii) The Grantor shall be entitled to receive and retain any and all
      dividends,  interest  and  other  distributions  paid  in  respect  of the
      Collateral;  provided,  however,  that after the occurrence and during the
      continuance of an Enforcement Event, any and all

                  (A)  dividends,  interest  and  other  distributions  paid  or
         payable  other than in cash in respect  of, and  instruments  and other
         property received,  receivable or otherwise  distributed in respect of,
         or in exchange for, any Collateral,

                  (B) dividends and other  distributions paid or payable in cash
         in  respect of any  Collateral  in  connection  with a partial or total
         liquidation  or  dissolution  or in  connection  with  a  reduction  of
         capital, capital surplus or paid-in-surplus and

                                       8



                  (C) cash paid, payable or otherwise  distributed in respect of
         principal of, or in redemption of, or in exchange for, any Collateral

         shall be, and shall be forthwith delivered to the Secured Party to hold
         as,  Collateral and shall,  if received by the Grantor,  be received in
         trust for the  benefit of the Secured  Party,  be  segregated  from the
         other  property or funds of the Grantor and be  forthwith  delivered to
         the Secured Party as  Collateral in the same form as so received  (with
         any necessary endorsement).

                  (iii) The Secured  Party will execute and deliver (or cause to
         be executed  and  delivered)  to the Grantor all such proxies and other
         instruments  as the Grantor may  reasonably  request for the purpose of
         enabling the Grantor to exercise the voting and other rights that it is
         entitled to exercise pursuant to paragraph (i) above and to receive the
         dividends or interest  payments  that it is  authorized  to receive and
         retain pursuant to paragraph (ii) above.

         (b) Upon the occurrence and during the  continuance of any  Enforcement
Event:

                  (i) All rights of the Grantor (x) to exercise or refrain  from
         exercising  the  voting  and  other  consensual  rights  that it  would
         otherwise be entitled to exercise  pursuant to Section  9(a)(i)  shall,
         upon  notice to the  Grantor  by the  Secured  Party,  cease and (y) to
         receive the dividends,  interest and other  distributions that it would
         otherwise  be  authorized  to receive  and retain  pursuant  to Section
         9(a)(ii) shall automatically cease, and all such rights shall thereupon
         become vested in the Secured Party, which shall thereupon have the sole
         right to  exercise  or refrain  from  exercising  such voting and other
         consensual rights and to receive and hold as Collateral such dividends,
         interest and other distributions.

                  (ii) All dividends,  interest and other distributions that are
         received by the Grantor  contrary to the provisions of paragraph (i) of
         this  Section  9(b) shall be  received  in trust for the benefit of the
         Secured Party,  shall be segregated from other funds of the Grantor and
         shall be forthwith  paid over to the Secured Party as Collateral in the
         same form as so received (with any necessary endorsement).

                  (iii) The Secured  Party shall be  authorized  to send to each
         Securities Intermediary as defined in and under any Control Agreement a
         Notice of  Exclusive  Control  as  defined  in and under  such  Control
         Agreement.

         Section 10. Other Liens.  The Grantor agrees that it will not create or
suffer to exist any Lien upon or with  respect to any of the  Collateral  of the
Grantor except for the pledge,  assignment and security  interest  created under
this Agreement.

         Section  11.  Secured  Party  Appointed  Attorney-in-Fact.  The Grantor
hereby  irrevocably  appoints the Secured Party the Grantor's  attorney-in-fact,
with full authority in the place and stead of the Grantor and in the name of the
Grantor or  otherwise,  from time to time , upon the  occurrence  and during the
continuance of an Enforcement Event, in the Secured Party's discretion,  to take
any  action  and to  execute  any  instrument  that the  Secured  Party may deem

                                       7



necessary or advisable to accomplish the purposes of this Agreement,  including,
without limitation:

            (a) to ask  for,  demand,  collect,  sue for,  recover,  compromise,
      receive and give acquittance and receipts for moneys due and to become due
      under or in respect of any of the Collateral,

            (b) to receive, indorse and collect any drafts or other instruments,
      documents and chattel paper, in connection with clause (a) above, and

            (c) to  file  any  claims  or  take  any  action  or  institute  any
      proceedings that the Secured Party may deem necessary or desirable for the
      collection of any of the  Collateral or otherwise to enforce the rights of
      the Secured Party with respect to any of the Collateral.

         Section 12. Secured Party May Perform.  If the Grantor fails to perform
any  agreement  contained  herein,  the  Secured  Party  may,  but  without  any
obligation to do so and without notice, itself perform, or cause performance of,
such  agreement,  and the expenses of the Secured  Party  incurred in connection
therewith shall be payable by the Grantor under Section 15(b).

         Section 13. The Secured  Party's  Duties.  The powers  conferred on the
Secured Party  hereunder are solely to protect the Secured  Party's  interest in
the  Collateral  and shall not  impose  any duty  upon it to  exercise  any such
powers.  Except for the safe custody of any Collateral in its possession and the
accounting for moneys actually received by it hereunder, the Secured Party shall
have no duty as to any  Collateral,  as to  ascertaining  or taking  action with
respect to calls, conversions,  exchanges,  maturities, tenders or other matters
relative to any Collateral, whether or not the Secured Party has or is deemed to
have  knowledge of such matters,  or as to the taking of any necessary  steps to
preserve  rights  against  any  parties or any other  rights  pertaining  to any
Collateral.  The Secured Party shall be deemed to have exercised reasonable care
in the custody and  preservation  of any  Collateral  in its  possession if such
Collateral is accorded  treatment  substantially  equal to that which it accords
its own property.

         Section 14. Remedies.  If any Enforcement Event shall have occurred and
be continuing:

            (a) The Secured Party may exercise in respect of the Collateral,  in
      addition to other  rights and  remedies  provided  for herein or otherwise
      available  to it, all the rights and  remedies of the  Secured  Party upon
      default under the N.Y.  Uniform  Commercial  Code (whether or not the N.Y.
      Uniform Commercial Code applies to the affected  Collateral) and also may:
      (i) require the Grantor to, and the Grantor  hereby agrees that it will at
      its expense and upon request of the Secured Party forthwith,  assemble all
      or part of the  Collateral  as directed  by the Secured  Party and make it
      available to the Secured Party at a place and time to be designated by the
      Secured  Party that is  reasonably  convenient  to both  parties  and (ii)
      without notice except as specified below,  sell the Collateral or any part
      thereof in one or more  parcels at public or private  sale,  at any of the
      Secured  Party's  offices or elsewhere,  for cash, on credit or for future
      delivery,  and  upon  such  other  terms  as the  Secured  Party  may deem

                                       8



      commercially reasonable.  The Grantor agrees that, to the extent notice of
      sale shall be required by law, at least ten days' notice to the Grantor of
      the time and place of any public  sale or the time after which any private
      sale is to be made shall constitute reasonable  notification.  The Secured
      Party shall not be obligated to make any sale of Collateral  regardless of
      notice of sale having been given. The Secured Party may adjourn any public
      or private  sale from time to time by  announcement  at the time and place
      fixed therefor,  and such sale may, without further notice, be made at the
      time and place to which it was so adjourned.

            (b) Any cash held by or on behalf of the Secured  Party and all cash
      proceeds  received by or on behalf of the Secured  Party in respect of any
      sale of, collection from, or other realization upon all or any part of the
      Collateral  may, in the  discretion of the Secured  Party,  be held by the
      Secured Party as  collateral  for,  and/or then or at any time  thereafter
      applied  (after  payment  of any  amounts  payable  to the  Secured  Party
      pursuant to Section 23) in whole or in part by the Secured Party  against,
      all or any part of the Secured Obligations.

      Any surplus of such cash or cash  proceeds held by or on the behalf of the
      Secured  Party and  remaining  after  payment  in full of all the  Secured
      Obligations  shall be paid over to the  Grantor  or to  whomsoever  may be
      lawfully entitled to receive such surplus.

            (c) All payments  received by the Grantor under or in respect of the
      Collateral  shall be  received  in trust for the  benefit  of the  Secured
      Party,  shall be  segregated  from other funds of the Grantor and shall be
      forthwith  paid over to the Secured  Party in the same form as so received
      (with any necessary endorsement).

         Section  15.  Indemnity  and  Expenses.   (a)  The  Grantor  agrees  to
indemnify,  defend and save and hold  harmless the Secured Party and each of its
Affiliates  and their  respective  officers,  directors,  employees,  agents and
advisors  (each,  an  "Indemnified  Party") from and  against,  and shall pay on
demand,  any  and  all  claims,  damages,   losses,   liabilities  and  expenses
(including,  without limitation,  reasonable fees and out-of-pocket  expenses of
counsel) that may be incurred by or asserted or awarded  against any Indemnified
Party,  in each case arising out of or in connection with or resulting from this
Agreement (including, without limitation, enforcement of this Agreement), except
to the extent  such  claim,  damage,  loss,  liability  or expense is found in a
final,  non-appealable  judgment by a court of  competent  jurisdiction  to have
resulted from such Indemnified Party's gross negligence or willful misconduct.

         (b) The Grantor will upon demand pay to the Secured Party the amount of
any and all reasonable expenses,  including,  without limitation, the reasonable
fees and expenses of its counsel and of any experts and agents, that the Secured
Party may incur in connection  with (i) the  administration  of this  Agreement,
(ii) the custody,  preservation, use or operation of, or the sale of, collection
from or other realization upon, any of the Collateral of the Grantor,  (iii) the
exercise or enforcement  of any of the rights of the Secured Party  hereunder or
(iv) the  failure by the  Grantor to  perform or observe  any of the  provisions
hereof.


                                       9



         Section 16. Amendments; Waivers; Etc. (a) No amendment or waiver of any
provision  of this  Agreement,  and no consent to any  departure  by the Grantor
herefrom,  shall in any event be  effective  unless the same shall be in writing
and  signed by the  Secured  Party,  and then such  waiver or  consent  shall be
effective only in the specific  instance and for the specific  purpose for which
given. No failure on the part of the Secured Party 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.

         Section 17. Notices; Etc. All notices and other communications provided
for hereunder shall be in writing  (including  telegraphic,  telecopier or telex
communication) and mailed, telegraphed,  telecopied, telexed or delivered to the
Secured Party or the Grantor,  addressed to it at its address set forth opposite
the its name on the signature  pages hereto;  or, as to any party, at such other
address as shall be  designated  by such party in a written  notice to the other
parties.  All  such  notices  and  other  communications   shall,  when  mailed,
telegraphed,  telecopied or telexed,  be effective  when deposited in the mails,
delivered to the telegraph company, telecopied or confirmed by telex answerback,
respectively,   addressed   as   aforesaid;   except  that   notices  and  other
communications to the Secured Party shall not be effective until received by the
Secured  Party.  Delivery  by  telecopier  of an  executed  counterpart  of  any
amendment  or waiver of any  provision of this  Agreement  shall be effective as
delivery of an original executed counterpart thereof.

         Section 18. Continuing Security Interest. This Agreement shall create a
continuing  security  interest  in the  Collateral  and shall (a) remain in full
force  and  effect  until the  later of (i) the  payment  in full in cash of the
Secured  Obligations  and (ii) the date that the Secured Party has syndicated in
full the Additional  Term Loan, (b) be binding upon the Grantor,  its successors
and assigns and (c) inure,  together with the rights and remedies of the Secured
Party hereunder, to the benefit of the Secured Party and its successors.

         Section 19. Release;  Termination. Upon the later of (i) the payment in
full in cash of the Secured Obligations and (ii) the date that the Secured Party
has  syndicated in full the  Additional  Term Loan,  the pledge,  assignment and
security  interest  granted  hereby  shall  terminate  and  all  rights  to  the
Collateral shall revert to the Grantor.  Upon any such termination,  the Secured
Party will,  at the Grantor's  expense,  execute and deliver to the Grantor such
documents as the Grantor shall reasonably  request to evidence such termination.
Upon the  reduction of the  Required  Amount (as defined in Section  5(d),  as a
result of a partial  syndication of the Additional  Term Loan or otherwise,  the
Secured Party will, at the Grantor's expense, execute and deliver to the Grantor
such documents as the Grantor shall reasonably  required to evidence the release
of the pledge,  assignment  and security  interest  granted hereby to the extent
that the equity value of the cash and other securities  entitlements  maintained
in the Securities Account exceeds the Required Amount.

         Section 20. Security Interest Absolute. The Grantor guarantees that the
Secured  Obligations  will be paid  strictly  in  accordance  with their  terms,
regardless  of any law,  regulation  or order now or  hereafter in effect in any
jurisdiction affecting any of such terms or the rights of the Secured Party with
respect  thereto.  The  obligations  of the  Grantor  under this  Agreement  are
independent of the Secured  Obligations or any other Obligations of any Borrower

                                       10



under or in respect of the Loan Documents,  and a separate action or actions may
be brought  and  prosecuted  against  the  Grantor to  enforce  this  Agreement,
irrespective  of whether any action is brought  against any  Borrower or whether
the Grantor or any Borrower is joined in any such action or actions.  All rights
of the Secured Party and the pledge, assignment and security interest hereunder,
and all obligations of the Grantor hereunder, shall be irrevocable, absolute and
unconditional irrespective of, and the Grantor hereby irrevocably waives (to the
maximum extent  permitted by applicable law) any defenses it may now have or may
hereafter acquire in any way relating to, any or all of the following:

            (a) any lack of validity or  enforceability  of any Loan Document or
      any other agreement or instrument relating thereto;

            (b) any change in the time, manner or place of payment of, or in any
      other  term  of,  all  or  any of the  Secured  Obligations  or any  other
      Obligations  of any Borrower  under or in respect of the Loan Documents or
      any other  amendment or waiver of or any consent to any departure from any
      Loan Document,  including, without limitation, any increase in the Secured
      Obligations  resulting  from the  extension  of  additional  credit to any
      Borrower or any of its Subsidiaries or otherwise;

            (c)  any  taking,   exchange,   release  or  non-perfection  of  any
      Collateral or any other collateral, or any taking, release or amendment or
      waiver of or consent to departure from any guaranty, for all or any of the
      Secured Obligations;

            (d)  any  manner  of  application  of any  Collateral  or any  other
      collateral, or proceeds thereof, to all or any of the Secured Obligations,
      or any manner of sale or other  disposition of any Collateral or any other
      collateral  for  all  or  any  of the  Secured  Obligations  or any  other
      Obligations of any Borrower under or in respect of the Loan Documents;

            (e)  any  change,  restructuring  or  termination  of the  corporate
      structure or existence of any Borrower or any of its Subsidiaries;

            (f) any failure of the Secured  Party to  disclose  any  information
      relating to the business, condition (financial or otherwise),  operations,
      performance,  assets,  nature of assets,  liabilities  or prospects of any
      Borrower now or hereafter  known to the Secured Party (the Grantor waiving
      any duty on the part of the Secured Party to disclose such information);

            (g) the failure of any other Person to execute this Agreement or any
      other  Collateral  Document,  guaranty  or  agreement  or the  release  or
      reduction of liability  of the  Borrowers or other  grantor or surety with
      respect to the Secured Obligations; or

            (h) any  other  circumstance  (including,  without  limitation,  any
      statute  of   limitations)   or  any  existence  of  or  reliance  on  any
      representation  by the Secured  Party that might  otherwise  constitute  a
      defense  available  to, or a  discharge  of, the  Grantor or a third party
      grantor of a security interest.

                                       11



This Agreement shall continue to be effective or be reinstated,  as the case may
be, if at any time any payment of any of the Secured Obligations is rescinded or
must  otherwise be returned by the Secured Party or by any other Person upon the
insolvency,  bankruptcy or reorganization  of any Borrower or otherwise,  all as
though such payment had not been made.

         Section  21.  Waivers  and  Acknowledgments.  (a)  The  Grantor  hereby
unconditionally  and  irrevocably  waives  promptness,   diligence,   notice  of
acceptance,  presentment,  demand  for  performance,  notice of  nonperformance,
default, acceleration,  protest or dishonor and any other notice with respect to
any of the Secured  Obligations and this Agreement and any requirement  that the
Secured  Party  protect,  secure,  perfect  or insure  any Lien or any  property
subject  thereto or exhaust any right or take any action against any Borrower or
any other Person or any Collateral.

            (b) The Grantor hereby  unconditionally  and irrevocably  waives any
      right to revoke this  Agreement and  acknowledges  that this  Agreement is
      continuing  in nature and  applies  to all  Secured  Obligations,  whether
      existing now or in the future.

            (c) The Grantor hereby  unconditionally  and irrevocably  waives (i)
      any defense with respect to the Grantor's obligations under this Agreement
      arising  by reason of any  claim or  defense  based  upon an  election  of
      remedies  by the  Secured  Party  that  in any  manner  impairs,  reduces,
      releases or otherwise  adversely  affects the subrogation,  reimbursement,
      exoneration,  contribution  or  indemnification  rights of the  Grantor or
      other rights of the Grantor to proceed  against any of the Borrowers,  any
      other guarantor or any other Person or any Collateral and (ii) any defense
      based on any right of set-off or counterclaim against or in respect of the
      obligations of the Grantor hereunder.

            (d) The Grantor  acknowledges  that the Secured  Party may,  without
      notice to or demand upon the Grantor and without  affecting  the liability
      of the  Grantor  under this  Agreement,  foreclose  under any  mortgage by
      nonjudicial  sale,  and the  Grantor  hereby  waives  any  defense  to the
      recovery by the Secured Party against the Grantor of any deficiency  after
      such  nonjudicial sale and any defense or benefits that may be afforded by
      applicable law.

            (e) The Grantor hereby  unconditionally  and irrevocably  waives any
      duty on the part of the  Secured  Party to  disclose  to the  Grantor  any
      matter,  fact or thing relating to the business,  condition  (financial or
      otherwise),  operations,  performance,  properties  or  prospects  of  any
      Borrower or any of its  Subsidiaries now or hereafter known by the Secured
      Party.

            (f) The Grantor acknowledges that it will receive substantial direct
      and indirect benefits from the financing arrangements  contemplated by the
      Loan  Documents  and that the  waivers  set forth in  Section  20 and this
      Section 21 are knowingly made in contemplation of such benefits.

         Section  22.  Subrogation.   The  Grantor  hereby  unconditionally  and
irrevocably  agrees not to exercise any rights that it may now have or hereafter
acquire against any Borrower or any other insider  guarantor that arise from the
existence,  payment,  performance or  enforcement  of the Grantor's  obligations

                                       12



under or in respect of this Agreement,  including, without limitation, any right
of subrogation, reimbursement,  exoneration, contribution or indemnification and
any right to participate in any claim or remedy of the Secured Party against any
Borrower or any other insider  guarantor or any Collateral,  whether or not such
claim,  remedy or right  arises in equity or under  contract,  statute or common
law,  including,  without  limitation,  the  right to take or  receive  from any
Borrower or any other  insider  guarantor,  directly or  indirectly,  in cash or
other  property  or by set-off or in any other  manner,  payment or  security on
account of such claim, remedy or right (collectively,  the "Subrogated Claims"),
unless and until all of the Secured  Obligations  and all other amounts  payable
under this  Agreement  shall have been paid in full in cash. If any amount shall
be paid to the Grantor in violation of the immediately preceding sentence at any
time  prior to the  payment  in full in cash of the  Secured  Obligations,  such
amount shall be received and held in trust for the benefit of the Secured Party,
shall be  segregated  from other  property  and funds of the  Grantor  and shall
forthwith  be paid or  delivered  to the  Secured  Party in the same  form as so
received  (with any  necessary  endorsement  or  assignment)  to be credited and
applied to the Secured  Obligations  and all other  amounts  payable  under this
Agreement,  whether  matured or unmatured,  or to be held as Collateral  for any
Secured  Obligations or other amounts  payable under this  Agreement  thereafter
arising.  If (i) the Grantor  shall make payment to the Secured  Party of all or
any part of the Secured  Obligations and (ii) all of the Secured Obligations and
all other amounts  payable under this Agreement  shall have been paid in full in
cash, the Secured Party will, at the Grantor's request and expense,  execute and
deliver to the  Grantor  appropriate  documents,  without  recourse  and without
representation or warranty, necessary to evidence the transfer by subrogation to
the  Grantor of an  interest  in the  Secured  Obligations  resulting  from such
payment made by the Grantor pursuant to this Agreement.

         Section 23. Execution in  Counterparts.  This Agreement may be executed
in any number of 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.  Delivery of an  executed  counterpart  of a  signature  page to this
Agreement by telecopier  shall be effective as delivery of an original  executed
counterpart of this Agreement.

         Section 24.  Compensation.  In  consideration  of the obligation of the
Grantor under this  Agreement,  the Secured Party hereby agrees that, so long as
no Enforcement  Event shall have occurred and be continuing,  cash interest paid
on that  portion of the  Additional  Term Loans then owed to the  Secured  Party
shall be paid over to the Grantor,  less an amount equal to the Eurodollar  Rate
plus 0.60% per annum on such portion of the Additional  Term Loans. In addition,
the  Grantor  shall be paid a fee  equal to 3% of the  principal  amount  of the
Additional Term Loans,  which the Grantor agrees may be withdrawn by the Secured
Party from the  Securities  Account  from time to time in such amounts as may be
required in connection with the syndication of the Additional Term Loans.

         Section 25.  Governing  Law. This  Agreement  shall be governed by, and
construed in accordance with, the laws of the State of New York.

                                       13



         IN WITNESS  WHEREOF,  the Grantor has caused this  Agreement to be duly
executed and delivered by its officer  thereunto duly  authorized as of the date
first above written.



Address for Notices/Chief Executive Office:      WHX CORPORATION
- ------------------------------------------
________________________
________________________
Federal Tax
Identification Number:
                                                 By_____________________________


Address for Notices:                             CITICORP USA, INC.

_________________                                By_____________________________

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

                                       14


                                                             Separately Executed
                                                                Exhibit A to the
                                                 Guaranty and Security Agreement


                            FORM OF CONTROL AGREEMENT
                              (Securities Account)


                  CONTROL  AGREEMENT  dated as of November __,  2000,  among WHX
CORPORATION,  a Delaware  corporation  (the  "Grantor"),  CITICORP USA, INC., as
Secured Party (the "Secured Party"),  and SALOMON SMITH BARNEY INC. ("SSB"),  as
securities intermediary (the "Securities Intermediary").


PRELIMINARY STATEMENTS:

                  (1) The  Grantor  has  granted  the  Secured  Party a security
interest (the "Security Interest") in account no. _______________  maintained by
the Securities  Intermediary for the Grantor (the "Account").

                  (2) Terms defined in Article 8 or 9 of the Uniform  Commercial
Code in effect in the State of New York  ("N.Y.  Uniform  Commercial  Code") are
used in this Agreement as such terms are defined in such Article 8 or 9.

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

                  Section 1. The Account. The Securities Intermediary represents
and warrants to, and agrees with, the Secured Party that:

                  (a) The Securities  Intermediary maintains the Account for the
         Grantor,  and all property held by the Securities  Intermediary for the
         account of the  Grantor is, and will  continue  to be,  credited to the
         Account.

                  (b)  The  Account  is a  securities  account.  The  Securities
         Intermediary  is  the  securities  intermediary  with  respect  to  the
         property credited from time to time to the Account.  The Grantor is the
         entitlement  holder with respect to the property  credited from time to
         time to the Account.

                  (c) The securities intermediary's jurisdiction with respect to
         the  Account is, and will  continue  to be for so long as the  Security
         Interest shall be in effect, the State of New York.

                  (d) Exhibit A attached  hereto is a statement  of the property
         credited to the Account on the date hereof.




                  (e) The Securities  Intermediary does not know of any claim to
         or  interest in the Account or any  property  credited to the  Account,
         except for claims and  interests  of the  parties  referred  to in this
         Agreement.

                  Section  2.   Control  by  Secured   Party.   The   Securities
Intermediary will (a) comply with all notifications it receives  directing it to
transfer or redeem any property in the Account (each an "Entitlement  Order") or
other  directions   concerning  the  Account  (including,   without  limitation,
directions to  distribute to the Secured Party  proceeds of any such transfer or
redemption  or interest or dividends on property in the Account)  originated  by
the Secured Party without further consent by the Grantor or any other person and
(b) provide copies of each such Entitlement  Order to the Grantor promptly after
receipt.

                  Section 3. Grantor's Rights in Account.

                  (a)  Except  as  otherwise  provided  in this  Section  3, the
Securities  Intermediary  will comply with Entitlement  Orders originated by the
Grantor without further consent by the Secured Party.

                  (b) Until the Securities  Intermediary  receives a notice from
the Secured Party that the Secured Party will  exercise  exclusive  control over
the Account (a "Notice of Exclusive Control"),  the Securities  Intermediary may
distribute to the Grantor all interest and regular cash dividends on property in
the Account.

                  (c) The  Securities  Intermediary  will  not  comply  with any
Entitlement  Order  originated by the Grantor that would require the  Securities
Intermediary to make a free delivery to the Grantor or any other person.

                  (d) If the Securities  Intermediary  receives from the Secured
Party a Notice of Exclusive  Control,  the  Securities  Intermediary  will cease
(until such Notice of Exclusive Control is withdrawn):

                  (i)  complying  with  Entitlement  Orders or other  directions
         concerning the Account originated by the Grantor and

                  (ii)  distributing  to the Grantor  interest and  dividends on
         property in the Account.

                  Section 4. Priority of Secured Party's Security Interest.  (a)
The  Securities  Intermediary  subordinates  in favor of the  Secured  Party any
security  interest,  lien, or right of setoff it may have, now or in the future,
against  the  Account or property  in the  Account,  except that the  Securities
Intermediary  will  retain its prior lien on  property  in the Account to secure
payment for property  purchased for the Account and normal  commissions and fees
for the Account.

                  (b) The Securities  Intermediary will not agree with any third
party that the  Securities  Intermediary  will  comply with  Entitlement  Orders
originated by the third party.

                                       2




                  Section 5. Statements,  Confirmations,  and Notices of Adverse
Claims.  (a) The Securities  Intermediary will send copies of all statements and
confirmations  for the  Account  simultaneously  to the  Grantor and the Secured
Party.

                  (b) When the  Securities  Intermediary  knows of any  claim or
interest in the Account or any property  credited to the Account  other than the
claims  and  interests  of  the  parties  referred  to in  this  Agreement,  the
Securities  Intermediary  will promptly notify the Secured Party and the Grantor
of such claim or interest and the  resulting  equity value of the property  then
credited to the Account.

                  Section 6. The Securities Intermediary's  Responsibility.  (a)
Except for permitting a withdrawal, delivery, or payment in violation of Section
3, the  Securities  Intermediary  will not be  liable to the  Secured  Party for
complying with  Entitlement  Orders or other  directions  concerning the Account
from the Grantor that are  received by the  Securities  Intermediary  before the
Securities  Intermediary  receives and has a reasonable  opportunity to act on a
Notice of Exclusive Control.

                  (b) The  Securities  Intermediary  will not be  liable  to the
Grantor for complying with a Notice of Exclusive  Control or with an Entitlement
Order or other direction concerning the Account originated by the Secured Party,
even if the Grantor notifies the Securities  Intermediary that the Secured Party
is not legally entitled to issue the Notice of Exclusive  Control or Entitlement
Order or such other  direction  unless  the  Securities  Intermediary  takes the
action after it is served with an injunction,  restraining order, or other legal
process enjoining it from doing so, issued by a court of competent jurisdiction,
and had a reasonable opportunity to act on the injunction,  restraining order or
other legal process.

                  (c) This  Agreement  does not  create  any  obligation  of the
Securities  Intermediary  except for those expressly set forth in this Agreement
and in Part 5 of Article 8 of the N.Y.  Uniform  Commercial Code. In particular,
the Securities  Intermediary  need not investigate  whether the Secured Party is
entitled  under the  Secured  Party's  agreements  with the  Grantor  to give an
Entitlement  Order or other  direction  concerning  the  Account  or a Notice of
Exclusive  Control.  The  Securities   Intermediary  may  rely  on  notices  and
communications it believes given by the appropriate party.

                  Section  7.   Indemnity.   The  Grantor  will   indemnify  the
Securities Intermediary,  its officers, directors,  employees and agents against
claims,  liabilities  and  expenses  arising out of this  Agreement  (including,
without limitation, reasonable attorney's fees and disbursements), except to the
extent  the  claims,  liabilities  or  expenses  are  caused  by the  Securities
Intermediary's breach of this Agreement,  gross negligence or willful misconduct
as  found  by a court  of  competent  jurisdiction  in a  final,  non-appealable
judgment.

                  Section 8.  Termination;  Survival.  (a) The Secured Party may
terminate  this  Agreement  by notice  to the  Securities  Intermediary  and the
Grantor.  If the Secured Party  notifies the  Securities  Intermediary  that the
Security Interest has terminated, this Agreement will immediately terminate.

                                       3



                  (b) The Securities  Intermediary  may terminate this Agreement
on 60 days' prior  notice to the Secured  Party and the Grantor,  provided  that
before such  termination the Securities  Intermediary and the Grantor shall make
arrangements  to transfer  the  property  in the  Account to another  securities
intermediary  that shall have  executed,  together  with the Grantor,  a control
agreement  in  favor  of the  Secured  Party  in  respect  of such  property  in
substantially  the form of this  Agreement or  otherwise  in form and  substance
satisfactory to the Secured Party.

                  (c)  Sections  6  and  7  will  survive  termination  of  this
Agreement.

                  Section 9.  Governing Law. This Agreement and the Account will
be governed by the law of the State of New York. The Securities Intermediary and
the Grantor  may not change the law  governing  the Account  without the Secured
Party's express prior written agreement.

                  Section 10.  Entire  Agreement.  This  Agreement is the entire
agreement,  and  supersedes  any  prior  agreements,  and  contemporaneous  oral
agreements, of the parties to this Agreement concerning its subject matter.

                  Section 11. Amendments.  No amendment of, or waiver of a right
under,  this Agreement will be binding unless it is in writing and signed by the
party to be charged.

                  Section 12.  Financial  Assets.  The  Securities  Intermediary
agrees  with the  Secured  Party and the Grantor  that,  to the  fullest  extent
permitted by  applicable  law, all  property  credited  from time to time to the
Account will be treated as financial  assets under Article 8 of the N.Y. Uniform
Commercial Code.

                  Section  13.  Notices.  A notice or other  communication  to a
party  under  this  Agreement  will  be in  writing  (including  telegraphic  or
telecopier  communication)  (except that Entitlement  Orders may be given orally
and promptly confirmed in writing), will be mailed,  telegraphed,  telecopied or
delivered to the party's address set forth under its name below or to such other
address as the party may  notify  the other  parties  and will be  effective  on
receipt.

                  Section  14.  Binding  Effect.  This  Agreement  shall  become
effective when it shall have been executed by the Grantor, the Secured Party and
the Securities  Intermediary,  and thereafter shall be binding upon and inure to
the benefit of the Grantor,  the Secured Party and the  Securities  Intermediary
and their respective successors and assigns.

                  Section 15. Execution in  Counterparts.  This Agreement may be
executed  in any  number of  counterparts  and by  different  parties  hereto 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.  Delivery of an  executed  counterpart  of a  signature  page to this
Agreement by telecopier  shall be effective as delivery of an original  executed
counterpart of this Agreement.

                                       4



                  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.

                                           WHX CORPORATION


                                           By__________________________________
                                              Title:

                                           Address:

                                           ____________________________________
                                           ____________________________________


                                           CITICORP USA, INC., as
                                           Secured Party


                                           By__________________________________
                                              Title:

                                           Address:

                                           ____________________________________
                                           ____________________________________


                                           SALOMON SMITH BARNEY INC.


                                           By___________________________________
                                              Title:

                                           Address:

                                           ____________________________________
                                           ____________________________________



                                       5

EX-10 5 exhibit1010.htm STOCK OPTION PLAN sec document

                              AMENDED AND RESTATED
                1991 INCENTIVE AND NONQUALIFIED STOCK OPTION PLAN
                               OF WHX CORPORATION
                                 March 15, 2000

1.       Purpose of the Plan

         This 1991 Incentive and Nonqualified  Stock Option Plan (the "Plan") is
intended  as an  incentive,  to  retain  in the  employ  of  Wheeling-Pittsburgh
Corporation  (the  "Company")  and any  Subsidiary  of the  Company  (within the
meaning of Section 424(f) of the Internal  Revenue Code of 1986, as amended (the
"Code")), persons of training,  experience and ability, to attract new employees
whose services are considered valuable, to encourage the sense of proprietorship
and to  stimulate  the active  interest of such persons in the  development  and
financial success of the Company and its Subsidiaries.

         It is further  intended that certain  options  granted  pursuant to the
Plan shall constitute  incentive stock options within the meaning of Section 422
of the Code  ("Incentive  Options") while certain other options granted pursuant
to the  Plan  will  be  nonqualified  stock  options  ("Nonqualified  Options").
Incentive  Options  and the  Nonqualified  Options are  hereinafter  referred to
collectively as "Options".

2.       Administration of the Plan

         The Board of Directors of the Company (the  "Board")  shall appoint and
maintain as administrator of the Plan a Committee (the  "Committee")  consisting
of three or more directors of the Company.  No person shall be eligible to serve
on the Committee unless he is then a  "disinterested  person" within the meaning
of  Rule  16b-3  of  the  Securities  and  Exchange   Commission  ("Rule  16b3")
promulgated under the Securities Exchange Act of 1934, as amended






(the  "Act"),  if and as Rule  16b-3  is  then in  effect.  The  members  of the
Committee,  which  initially  shall be Ronald LaBow,  Robert  Davidow and Marvin
Olshan, shall serve at the pleasure of the Board.

         The Committee,  subject to Section 3 hereof,  shall have full power and
authority  to  designate  recipients  of  Options,  to  determine  the terms and
conditions of respective  Option agreements (which need not be identical) and to
interpret the provisions and supervise the  administration of the Plan.  Subject
to Section 7 hereof, the Committee shall have the authority, without limitation,
to designate which Options granted under the Plan shall be Incentive Options and
which shall be Nonqualified  Options.  To the extent any Option does not qualify
as an Incentive  Option,  it shall  constitute a separate  Nonqualified  Option.
Notwithstanding  any  provision in the Plan to the  contrary,  no Options may be
granted  under the Plan to any  member of the  Committee  during the term of his
membership on the Committee.

         Subject to the  provisions of the Plan, the Committee  shall  interpret
the Plan and all  Options  granted  under the Plan,  shall make such rules as it
deems necessary for the proper  administration of the Plan, shall make all other
determinations  necessary or advisable  for the  administration  of the Plan and
shall correct any defects or supply any omission or reconcile any  inconsistency
in the Plan or in any  Options  granted  under the Plan in the manner and to the
extent that the Committee  deems desirable to carry the Plan or any Options into
effect.  The act or determination of a majority of the Committee shall be deemed
to be the act or  determination  of the  Committee  and any decision  reduced to
writing  and  signed  by all of the  members  of the  Committee  shall  be fully
effective as if it had been made by a majority at a meeting duly held.


                                       -2-





Subject to the provisions of the Plan, any action taken or determination made by
the  Committee  pursuant to this and the other  paragraphs  of the Plan shall be
conclusive on all parties.

3.       Designation of Optionees.

         The persons  eligible for  participation  in the Plan as  recipients of
Options  ("Optionees")  shall include only  full-time  key employees  (including
full-time  key  employees  who also serve as  directors)  of the  Company or any
Subsidiary.  The grant of an Option to a full-time  employee who is an executive
officer of the  Company,  as well as the terms and  provisions  of such  Option,
shall  require the prior  approval of a majority of the members of the Board who
are  "disinterested  persons." In selecting  Optionees,  and in determining  the
number of  shares  to be  covered  by each  Option  granted  to  Optionees,  the
Committee  may  consider  the  office  or  position  held by the  Optionee,  the
Optionee's  degree of  responsibility  for and  contribution  to the  growth and
success of the Company or any Subsidiary, the Optionee's length of service, age,
promotions,  potential  and any other  factors  which the Committee may consider
relevant.  Subject to the next  sentence,  an employee  who has been  granted an
Option  hereunder  may be  granted  an  additional  Option  or  Options,  if the
Committee shall so determine.  Notwithstanding anything contained in the Plan to
the  contrary,  no  recipient  of Options may be granted  Options to purchase in
excess  of  twenty  percent  of the  maximum  number  of  shares  of  Stock  (as
hereinafter defined) authorized to be issued under the Plan.

4.       Stock Reserved for the Plan.

         Subject to adjustment as provided in Section 7 hereof, a total of three
and  one-half  million  (3,750,000)  shares  of  common  stock,  $.01 par  value
("Stock"),  of the  Company  shall be subject  to the Plan.  The shares of Stock
subject to the Plan shall consist of unissued shares or


                                       -3-





previously issued shares reacquired and held by the Company or any Subsidiary of
the Company,  and such amount of shares of Stock shall be and is hereby reserved
for such purpose.  Any of such shares of Stock which may remain unsold and which
are not  subject to  outstanding  Options at the  termination  of the Plan shall
cease to be reserved for the purpose of the Plan,  but until  termination of the
Plan the Company  shall at all times  reserve a  sufficient  number of shares of
Stock to meet the  requirements  of the Plan.  Should  any  Option  expire or be
cancelled  prior to its exercise in full or should the number of shares of Stock
to be  delivered  upon the  exercise  in full of an  Option be  reduced  for any
reason,  the shares of Stock  theretofore  subject  to such  Option may again be
subject to an Option under the Plan.

5.       Terms and Conditions of Options.

         Options  granted  under  the Plan  shall be  subject  to the  following
conditions  and  shall  contain  such  additional  terms  and  conditions,   not
inconsistent with the terms of the Plan, as the Committee shall deem desirable:

         (a) Option Price. The purchase price of each share of Stock purchasable
under an Option shall be  determined  by the  Committee at the time of grant but
shall not be less than 100% of the fair  market  value of such share of Stock on
the date the  Option is  granted;  provided,  however,  that with  respect to an
Incentive  Option,  in the case of an  Optionee  who, at the time such Option is
granted,  owns (within the meaning of Section  424(d) of the Code) more than 10%
of the total combined  voting power of all classes of stock of the Company or of
any  Subsidiary,  then the  purchase  price per share of Stock shall be at least
110% of the Fair Market Value (as defined  below) per share of Stock at the time
of grant. The exercise price for each incentive stock option shall be subject to
adjustment as provided in Section 7 below. The fair market value


                                       -4-





("Fair Market  Value") of a share of Stock on a particular  date shall be deemed
to be the closing  price of the Stock on such date (or if no  transactions  were
reported on such date, on the next preceding date on which  transactions were so
reported) on the New York Stock Exchange  Composite Tape or, if the Stock is not
on such date listed on the New York Stock Exchange,  in the principal  market in
which such Stock is traded on such date.

         (b)  Option  Term.  The  term of each  Option  shall  be  fixed  by the
Committee, but no Option shall be exercisable more than ten years after the date
such Option is granted; provided,  however, that in the case of an Optionee who,
at the time such  Option is  granted,  owns more than 10% of the total  combined
voting power of all classes of stock of the Company or any Subsidiary, then such
Option shall not be  exercisable  with  respect to any of the shares  subject to
such Option later than the date which is five years after the date of grant.

         (c) Exercisability. Subject to paragraph (j) of this Section 5, Options
shall be  exercisable  at such  time or times  and  subject  to such  terms  and
conditions as shall be determined by the Committee at grant, provided,  however,
that except as provided in  paragraphs  (f) and (g) of this  Section 5, unless a
longer vesting period is otherwise determined by the Committee at grant, Options
shall be  exercisable  as follows:  up to one-third of the  aggregate  shares of
Stock purchasable under an Option shall be exercisable commencing one year after
the date of grant,  an  additional  one-third of the  aggregate  shares of Stock
purchasable under an Option shall be exercisable  commencing two years after the
date of grant and the balance  commencing on the third anniversary from the date
of grant.  The Committee may waive such  installment  exercise  provision at any
time in whole or in part based on performance and/or such other factors as the


                                       -5-





Committee  may  determine in its sole  discretion,  however no Options  shall be
exercisable until after six months from the date of grant.

         (d) Method of Exercise. Options may be exercised in whole or in part at
any time  during the option  period,  by giving  written  notice to the  Company
specifying the number of shares to be purchased,  accompanied by payment in full
of the purchase  price,  in cash,  by check or such other  instrument  as may be
acceptable  to the  Committee.  As  determined  by the  Committee,  in its  sole
discretion,  at or after  grant,  payment in full or in part may also be made in
the form of Stock owned by the  Optionee  (based on the Fair Market Value of the
Stock on the trading  day before the Option is  exercised);  provided,  however,
that if such Stock was issued  pursuant to the exercise of an  Incentive  Option
under the Plan,  the  holding  requirements  for such Stock under the Code shall
first have been  satisfied.  An Optionee  shall have the rights to  dividends or
other rights of a stockholder with respect to shares subject to the Option after
(i) the Optionee has given  written  notice of exercise and has paid in full for
such shares and (ii) becomes a stockholder of record.

         (e)  Non-transferability  of Options.  Options are not transferable and
may be exercised  solely by the Optionee  during his lifetime or after his death
by the person or persons  entitled thereto under his will or the laws of descent
and  distribution.  Any attempt to  transfer,  assign,  pledge,  hypothecate  or
otherwise dispose of, or to subject to execution, attachment or similar process,
any Option  contrary to the provisions  hereof shall be void and ineffective and
shall give no right to the purported transferee.

         (f) Termination by Death. Unless otherwise  determined by the Committee
at grant,  if any  Optionee's  employment  with the  Company  or any  Subsidiary
terminates by reason of death,


                                       -6-





the  Option  may  thereafter  be  immediately  exercised,  to  the  extent  then
exercisable (or on such accelerated basis as the Committee shall determine at or
after grant), by the legal representative of the estate or by the legatee of the
Optionee under the will of the Optionee,  for a period of one year from the date
of such  death  or until  the  expiration  of the  stated  term of such  Option,
whichever period is shorter.

         (g) Termination by Reason of Disability. Unless otherwise determined by
the Committee at grant,  if any  Optionee's  employment  with the Company or any
Subsidiary  terminates by reason of total and permanent disability as determined
under the Company's long term disability policy ("Disability"),  any Option held
by such Optionee may thereafter be exercised,  to the extent it was  exercisable
at the time of termination  due to Disability (or on such  accelerated  basis as
the Committee shall determine at or after grant), but may not be exercised after
one year from the date of such  termination  of employment or the  expiration of
the stated term of such Option, whichever period is shorter; provided,  however,
that, if the Optionee dies within such one-year period,  any unexercised  Option
held by such Optionee shall  thereafter be exercisable to the extent to which it
was  exercisable  at the time of death for a period of one year from the date of
such death or for the stated term of such Option, whichever period is shorter.

         (h) Termination by Reason of Retirement. Unless otherwise determined by
the Committee at grant,  if any  Optionee's  employment  with the Company or any
Subsidiary terminates by reason of Normal or Early Retirement (as such terms are
defined below),  any Option held by such Optionee may thereafter be exercised to
the extent it was  exercisable at the time of such Retirement (as defined below)
(or on such  accelerated  basis as the  Committee  shall  determine  at or after
grant), but may not be exercised after three months from the date of such


                                       -7-





termination  of employment or the  expiration of the stated term of such Option,
whichever  period is shorter;  provided,  however,  that,  if the Optionee  dies
within such  three-month  period,  any unexercised  Option held by such Optionee
shall  thereafter be  exercisable,  to the extent to which it was exercisable at
the time of death,  for a period of one year from the date of such  death or for
the stated term of such Option, whichever period is shorter.

         For  purposes  of this  paragraph  (h),  Normal  Retirement  shall mean
retirement from active employment with the Company or any Subsidiary on or after
the normal  retirement  date specified in the  applicable  Company or Subsidiary
pension plan. Early Retirement shall mean retirement from active employment with
the Company or any Subsidiary pursuant to the early retirement provisions of the
applicable Company or Subsidiary  pension plan.  Retirement shall mean Normal or
Early Retirement.

         (i) Other Termination.  Unless otherwise determined by the Committee at
grant,  if  any  Optionee's  employment  with  the  Company  or  any  Subsidiary
terminates for any reason other than death, Disability or Retirement, the Option
shall thereupon  terminate,  except that the  exercisable  portion of any Option
which was  exercisable  on the date of such  termination  of  employment  may be
exercised  for the lesser of three  months from the date of  termination  or the
balance of such Option's term if the Optionee's  employment  with the Company or
any Subsidiary is  involuntarily  terminated by the Optionee's  employer without
Cause.  Cause  shall mean a felony  conviction  or the failure of an Optionee to
contest  prosecution  for  a  felony  or an  Optionee's  willful  misconduct  or
dishonesty, any of which is harmful to the business or reputation of the Company
or any Subsidiary. The transfer of an Optionee from the employ of


                                       -8-





the Company to a Subsidiary,  or vice versa,  or from one Subsidiary to another,
shall not be deemed to  constitute a termination  of employment  for purposes of
the Plan.

         (j) Limit on Value of  Incentive  Option.  The  aggregate  Fair  Market
Value,  determined as of the date the Option is granted,  of the Stock for which
Incentive  Options are exercisable for the first time by any Optionee during any
calendar year under the Plan (and/or any other stock option plans of the Company
or any Subsidiary) shall not exceed $100,000.

         (k) Transfer of Incentive  Option  Shares.  The stock option  agreement
evidencing any Incentive  Options  granted under this Plan shall provide that if
the Optionee  makes a  disposition,  within the meaning of Section 424(c) of the
Code and  regulations  promulgated  thereunder,  of any share or shares of Stock
issued to him pursuant to his exercise of an Incentive  Option granted under the
Plan  within the  two-year  period  commencing  on the day after the date of the
grant of such Incentive Option or within a oneyear period  commencing on the day
after  the date of  transfer  of the  share or  shares  to him  pursuant  to the
exercise  of  such  Incentive  Option,  he  shall,   within  ten  days  of  such
disposition,  notify the Company thereof and immediately  deliver to the Company
any amount of federal income tax withholding required by law.

         (l) Loans to Optionees.  Subject to compliance with all applicable law,
with the  consent  of the  Committee,  the  Company  in its  sole  and  absolute
discretion,  may make,  arrange for, or guarantee a loan or loans to an Optionee
with respect to the exercise of any Option granted under the Plan. The Committee
shall have full authority to decide  whether to make a loan or loans  hereunder,
or to  guarantee  any loan or  loans,  and to  determine  the  amount,  term and
provisions of any such loan or loans,  including the interest rate to be charged
in respect of any


                                       -9-





such loan or loans, whether the loan or loans are to be with or without recourse
against  the  Optionee,  the  terms on which  the loan is to be  repaid  and the
conditions, if any, under which the loan or loans may be forgiven, and the terms
and conditions of any guarantee.

6.       Term of Plan.

         No Option  shall be granted  pursuant to the Plan on or after the tenth
anniversary of the date the Plan is approved by the Board,  but Options  granted
may extend beyond that date.

7.       Capital Change of the Company.

         In  the   event   of   any   merger,   reorganization,   consolidation,
recapitalization,  stock  dividend,  or  other  change  in  corporate  structure
affecting  the Stock,  the  Committee  shall make an  appropriate  and equitable
adjustment in the number and kind of shares reserved for issuance under the Plan
and in the number  and option  price of shares  subject to  outstanding  Options
granted  under  the Plan,  to the end that  after  such  event  each  Optionee's
proportionate  interest shall be maintained as immediately before the occurrence
of such event.

8.       Purchase of Investment.

         Unless the Options and shares covered by the Plan have been  registered
under the Securities Act of 1933, as amended, or the Company has determined that
such  registration  is unnecessary,  each person  exercising an Option under the
Plan may be required by the Company to give a representation  in writing that he
is acquiring the shares for his own account for  investment  and not with a view
to, or for sale in connection with, the distribution of any part thereof.


                                      -10-





9.       Taxes.

         The  Company  may make  such  provisions  as it may  deem  appropriate,
consistent with applicable law, in connection with any Options granted under the
Plan with respect to the withholding of any taxes or any other tax matters.

10.      Effective Date of Plan.

         The Plan shall be  effective  on the date it is  approved by the Board,
provided  however that the Plan shall  subsequently be approved by majority vote
of the Company's  stockholders  in the manner  contemplated by Rule 16b-3 of the
Act within one (1) year from the date approved by the Board.

11.      Amendment and Termination.

         The Board may amend,  suspend,  or terminate  the Plan,  except that no
amendment  shall be made which would impair the right of any Optionee  under any
Option  theretofore  granted  without his consent,  and except that no amendment
shall be made which,  without the  approval  of the  stockholders  in the manner
provided in Rule 16b-3 of the Act, would:

                  (a)  materially  increase  the  number of shares  which may be
         issued under the Plan, except as is provided in Section 7;

                  (b) materially increase the benefits accruing to the Optionees
         under the Plan;

                  (c) materially  modify the  requirements as to eligibility for
         participation in the Plan;

                  (d)  decrease the Option  exercise  price to less than 100% of
         the Fair Market Value on the date of grant thereof; or

                  (e) extend the Option term provided for in Section 5(b).


                                      -11-





         The  Committee may amend the terms of any Option  theretofore  granted,
prospectively or retroactively, but no such amendment shall impair the rights of
any Optionee without his consent.  The Committee may also substitute new Options
for previously  granted  Options,  including  options  granted under other plans
applicable to the  participant  and  previously  granted  Options  having higher
option  prices,  upon such  terms as the  Committee  may deem  appropriate.

12.      Government Regulations.

         The Plan, and the granting and exercise of Options  hereunder,  and the
obligation of the Company to sell and deliver  shares under such Options,  shall
be subject to all applicable laws, rules and regulations,  and to such approvals
by  any  governmental  agencies  or  national  securities  exchanges  as  may be
required.

13.      Rule 16b-3 Compliance.

         The Company  intends that the Plan meet the  requirements of Rule 16b-3
and that transactions of the type specified in subparagraphs (c) and (f) of Rule
16b-3 by officers of the Company (whether or not they are directors) pursuant to
the Plan will be exempt from the  operation of Section  16(b) of the Act. In all
cases,  the terms,  provisions,  conditions and limitations of the Plan shall be
construed and interpreted consistent with the Company's intent as stated in this
Section 13.

14.      General Provisions.

         (a) Certificates.  All certificates for shares of Stock delivered under
the Plan shall be subject to such stock transfer  orders and other  restrictions
as the  Committee may deem  advisable  under the rules,  regulations,  and other
requirements of the Securities and Exchange Commission,  any stock exchange upon
which the Stock is then listed, and any applicable Federal or state


                                      -12-




securities  law, and the Committee may cause a legend or legends to be placed on
any such certificates to make appropriate reference to such restrictions.

         (b) Employment Matters.  The adoption of the Plan shall not confer upon
any Optionee of the Company or any Subsidiary, any right to continued employment
(or, in case the Optionee is also a director, continued retention as a director)
with the Company or a Subsidiary,  as the case may be, nor shall it interfere in
any way with  the  right of the  Company  or any  Subsidiary  to  terminate  the
employment of any of its employees at any time.

         (c)  Limitation of Liability.  No member of the Board or the Committee,
or any officer or  employee of the Company  acting on behalf of the Board or the
Committee,  shall  be  personally  liable  for  any  action,  determination,  or
interpretation  taken or made in good  faith with  respect to the Plan,  and all
members of the Board or the  Committee  and each and any  officer or employee of
the Company  acting on their behalf  shall,  to the extent  permitted by law, be
fully  indemnified  and  protected by the Company in respect of any such action,
determination or interpretation.

                                                                 WHX CORPORATION




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