{"id":40865,"date":"2015-09-17T11:25:58","date_gmt":"2015-09-17T16:25:58","guid":{"rendered":"https:\/\/content.findlaw-admin.com\/ability-legal\/contracts\/uncategorized\/200-000-000-inventory-credit-agreement-bethlehem-steel.html"},"modified":"2015-09-17T11:25:58","modified_gmt":"2015-09-17T16:25:58","slug":"200-000-000-inventory-credit-agreement-bethlehem-steel","status":"publish","type":"corporate_contracts","link":"https:\/\/corporate.findlaw.com\/contracts\/finance\/200-000-000-inventory-credit-agreement-bethlehem-steel.html","title":{"rendered":"$200,000,000 Inventory Credit Agreement &#8211; Bethlehem Steel, Lenders, Morgan Guaranty Trust Co. of New York and J.P. Morgan Delaware."},"content":{"rendered":"<pre>\n                                 $200,000,000\n\n                          INVENTORY CREDIT AGREEMENT\n\n                                  dated as of\n\n                              September 12, 1995\n\n\n                                     among\n\n                         BETHLEHEM STEEL CORPORATION,\n\n                          THE LENDERS LISTED HEREIN,\n\n                  MORGAN GUARANTY TRUST COMPANY OF NEW YORK,\n                            as Administrative Agent\n\n                                      and\n\n                             J.P. MORGAN DELAWARE,\n                      as Structuring and Collateral Agent\n\n\n\n\n\n\n\n\n\n\n\n                          TABLE OF CONTENTS\n\n                                                          Page\n                              ARTICLE 1\n\n                             DEFINITIONS\n\n1.1. Definitions ..............................................  1\n1.2. UCC Terms ................................................ 21\n1.3. Accounting Terms and Determinations ...................... 21\n\n                              ARTICLE 2\n\n                             THE CREDITS\n\n2.1. Commitments to Lend ...................................... 22\n2.2. Letters of Credit ........................................ 23\n2.3. Method of Borrowing ...................................... 33\n2.4. Notes .................................................... 35\n2.5. Maturity of Loans ........................................ 35\n2.6. Method of Electing Interest Rates ........................ 35\n2.7. Interest Rates ........................................... 37\n2.8. Fees ..................................................... 42\n2.9. Optional Termination or Reduction of Commitments ......... 43\n2.10. Mandatory Termination of Commitments .................... 43\n2.11. Optional Prepayments .................................... 44\n2.12. Mandatory Prepayments ................................... 44\n2.13. General Provisions as to Payments ....................... 46\n2.14. Funding Losses .......................................... 47\n2.15. Computation of Interest and Fees ........................ 47\n\n                              ARTICLE 3\n\n                CONDITIONS TO BORROWINGS AND ISSUANCES\n\n3.1. Closing .................................................. 48\n3.2. All Borrowings and Issuances ............................. 50\n\n                              ARTICLE 4\n\n                    REPRESENTATIONS AND WARRANTIES\n\n4.1. Corporate Existence and Power ............................ 51\n4.2. Corporate and Governmental Authorization; No Contravention 51\n4.3. Binding Effect ........................................... 52\n4.4. Financial Information .................................... 52\n4.5. Litigation ............................................... 53\n\n                                  i\n\n\n\n\n\n\n\n\n\n4.6. Compliance with ERISA .................................... 53\n4.7. Taxes .................................................... 53\n4.8. Environmental Compliance ................................. 54\n4.9. Full Disclosure .......................................... 55\n\n                              ARTICLE 5\n\n                              COVENANTS\n\n5.1. Information .............................................. 56\n5.2. Maintenance of Property; Insurance ....................... 60\n5.3. Compliance with Laws ..................................... 61\n5.4. Inspection of Property, Books and Records ................ 62\n5.5. Compliance with Certain Covenants in the Indenture ....... 62\n5.6. Minimum Adjusted Consolidated Tangible Net Worth ......... 63\n5.7. Sale of Borrower's Collateral ............................ 63\n5.8. Use of Proceeds .......................................... 64\n5.9. Mergers and Sales of Assets .............................. 64\n5.10. Environmental Matters ................................... 64\n\n                              ARTICLE 6\n\n                               DEFAULTS\n\n6.1. Events of Default ........................................ 65\n6.2. Notice of Default ........................................ 69\n\n                              ARTICLE 7\n\n                       THE ADMINISTRATIVE AGENT\n\n7.1. Appointment and Authorization ............................ 69\n7.2. Administrative Agent and Affiliates ...................... 70\n7.3. Action by Administrative Agent ........................... 70\n7.4. Consultation with Experts ................................ 70\n7.5. Liability of Administrative Agent ........................ 70\n7.6. Indemnification .......................................... 71\n7.7. Credit Decision .......................................... 71\n7.8. Successor Administrative Agent ........................... 71\n\n                              ARTICLE 8\n\n                       CHANGE IN CIRCUMSTANCES\n\n8.1. Basis for Determining Interest Rate Inadequate or Unfair . 72\n8.2. Illegality ............................................... 73\n8.3. Increased Cost and Reduced Return ........................ 74\n8.4. Taxes .................................................... 77\n8.5. Base Rate Loans Substituted for Affected Fixed Rate Loans. 81\n\n                              ARTICLE 9\n\n                                  ii\n\n\n\n\n\n\n\n\n                            MISCELLANEOUS\n\n9.1. Notices .................................................. 82\n9.2. No Waivers ............................................... 82\n9.3. Expenses; Indemnification ................................ 83\n9.4. Sharing of Set-Offs ...................................... 85\n9.5. Amendments and Waivers ................................... 85\n9.6. Successors and Assigns ................................... 86\n9.7. Margin Stock Collateral .................................. 89\n9.8. Confidentiality .......................................... 89\n9.9. Governing Law; Submission to Jurisdiction ................ 89\n9.10. Counterparts; Integration; Effectiveness ................ 90\n9.11. Termination of Existing Credit Agreement................. 90\n9.12. WAIVER OF JURY TRIAL .................................... 91\n\n\n                                  1\n\n\n\n\n\n\n\n         AGREEMENT dated as of September 12, 1995 among BETHLEHEM\nSTEEL CORPORATION, the LENDERS listed on the signature pages hereof,\nMORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative Agent and\nJ.P.  MORGAN DELAWARE, as Structuring and Collateral Agent.\n\n                               RECITALS\n\n         WHEREAS, subject to the terms and conditions of this\nAgreement, the Borrower desires to borrow Loans and to have Letters of\nCredit issued for its account, all in an aggregate amount not to\nexceed $200,000,000;\n\n         WHEREAS, the obligations of the Borrower with respect to such\nBorrowings and such Letters of Credit will be secured by a security\ninterest in substantially all of the Borrower's Inventories, the\nPledged Securities and the Pledged Interests (as defined in the\nInventory Security Agreement);\n\n         WHEREAS, the Lenders are willing to make Loans to the\nBorrower and to issue Letters of Credit and participate in Letters of\nCredit issued for the account of the Borrower or any Subsidiary, all\non the terms and conditions set forth herein; and\n\n         WHEREAS, Morgan Guaranty has been requested and is willing to\nact as the Administrative Agent and J.P.  Morgan Delaware has been\nrequested and is willing to act as the Structuring and Collateral\nAgent;\n\n         NOW, THEREFORE, the parties hereto hereby agree as follows:\n\n                              ARTICLE 1\n\n                             DEFINITIONS\n\n         SECTION 1.1.  Definitions.  The following terms, as used\nherein, have the following meanings:\n\n         \"Adjusted CD Rate\" has the meaning set forth in Section.\n\n         \"Adjusted Consolidated Tangible Net Worth\" means, at any date\nof determination, Consolidated Tangible Net Worth adjusted upward by\nthe amount of any material non-recurring charges to income (without\ndeduction for any related income tax effect) resulting from\ndiscontinuance of operations after December 31, 1994, all determined\nas of such date of determination.\n\n                                  2\n\n\n\n\n\n\n         \"Adjusted London Interbank Offered Rate\" has the meaning set\nforth in Section .\n\n         \"Administrative Agent\" means Morgan Guaranty in its capacity\nas administrative agent for the Lenders, and its successors and\nassigns in such capacity.\n\n         \"Administrative Questionnaire\" means, with respect to each\nLender or L\/C Issuing Bank, an administrative questionnaire in the\nform prepared by the Administrative Agent and submitted to the\nAdministrative Agent (with a copy to the Borrower) duly completed by\nsuch Lender or L\/C Issuing Bank.\n\n         \"Affiliate\" means (i) any Person that directly, or indirectly\nthrough one or more intermediaries, controls the Borrower (a\n\"Controlling Person\") or (ii) any Person (other than the Borrower or a\nSubsidiary) which is controlled by or is under common control with a\nControlling Person.  As used herein, the term \"control\" means\npossession, directly or indirectly, of the power to direct or cause\nthe direction of the management or policies of a Person, whether\nthrough the ownership of voting securities, by contract or otherwise.\n\n         \"Agent\" means the Administrative Agent or the Collateral\nAgent and \"Agents\" means the Administrative Agent and the Collateral\nAgent.\n\n         \"Aggregate Letter of Credit Amount\" means, at any time, the\nsum of (i) the then aggregate outstanding face amount of the Letters\nof Credit issued pursuant to Section 2.2 hereof and (ii) the then\naggregate outstanding face amount of letters of credit issued pursuant\nto Section 2.9 of the Receivables Purchase Agreement.\n\n         \"Agreement\" means this Inventory Credit Agreement, as amended\nfrom time to time.\n\n         \"Applicable Lending Office\" means, with respect to any\nLender, (i) in the case of its Domestic Loans, its Domestic Lending\nOffice and (ii) in the case of its Euro-Dollar Loans, its Euro-Dollar\nLending Office.\n\n         \"Applicable Percentage\" means (i) 100%, if no Increased\nCoverage Event has occurred, or (ii) 105%, if an Increased Coverage\nEvent has occurred; provided that if the Secured Principal Amount does\nnot exceed 85% of the Borrowing Base for a period of six consecutive\nmonths beginning at any time after the occurrence of the most recent\nIncreased Coverage Event, the Applicable Percentage shall be decreased\nat the end of such six month period to 100% (unless and until another\nIncreased Coverage Event occurs).\n\n         \"Assessment Rate\" has the meaning set forth in Section.\n\n         \"Assignee\" has the meaning set forth in Section.\n\n         \"Base Rate\" means, for any day, a rate per annum equal to the\nhigher of (i) the Prime Rate for such day and (ii) the sum of 1\/2 of\n1% plus the Federal Funds Rate for such day.\n\n                                  3\n\n\n\n\n\n\n\n         \"Base Rate Loan\" means a loan which bears interest at the\nBase Rate pursuant to the applicable Notice of Borrowing or Notice of\nInterest Rate Election or the provisions of Section 2.6(c) or Article\n8\".\n\n         \"Base Rate Margin\" means a rate per annum determined in\naccordance with the Pricing Schedule.\n\n         \"Benefit Arrangement\" means at any time an \"employee benefit\nplan\" within the meaning of Section 3(3) of ERISA which is not a Plan\nor a Multiemployer Plan and which is maintained, or otherwise\ncontributed to, by any member of the ERISA Group.\n\n         \"Borrower\" means Bethlehem Steel Corporation, a Delaware\ncorporation, and its successors.\n\n         \"Borrower's 1994 Form 10-K\" means the Borrower's annual\nreport on Form 10-K for 1994, as filed with the Securities and\nExchange Commission pursuant to the Securities Exchange Act of 1934.\n\n         \"Borrowers Latest Form 10-Q\" means the Borrower's quarterly\nreport on Form 10-Q for the quarter ended June 30, 1995, as filed with\nthe Securities and Exchange Commission pursuant to the Securities\nExchange Act of 1934.\n\n         \"Borrowing\" means a borrowing hereunder consisting of Loans\nmade to the Borrower on the same day pursuant to Article 2, all of\nwhich Loans are of the same type (subject to Article 8\") and, except\nin the case of Base Rate Loans, have the same initial Interest Period.\nA Borrowing is a \"Domestic Borrowing\" if such Loans are Domestic Loans\nor a \"Euro-Dollar Borrowing\" if such Loans are Euro-Dollar Loans.  A\nDomestic Borrowing is a \"CD Borrowing\" if such Domestic Loans are CD\nLoans or a \"Base Rate Borrowing\" if such Domestic Loans are Base Rate\nLoans.\n\n         \"Borrowing Base\" means, at any date, an amount equal to the\nsum of (i) 55% of the aggregate amount of Eligible Inventories which\nare Finished and Semifinished Inventories at such date, and (ii) 25%\nof the aggregate amount of Eligible Inventories which are Raw\nMaterials Inventories at such date; provided that (x) the Borrowing\nBase shall at no time exceed the Receivables Maximum Purchase Price at\nsuch time and (y) if an Event of Default specified in clause (l) of\nSection 6.1 shall have been waived pursuant to Section 9.5, the\nBorrowing Base shall be reduced by the aggregate amount of claims\nsecured by Federal Liens (or by such lesser amount as the Required\nLenders may agree).\n\n         \"Borrowing Base Certificate\" means a certificate duly\nexecuted by the Chief Financial Officer, the Treasurer or the\nController of the Borrower, appropriately completed and substantially\nin the form of Exhibit F hereto.\n\n         \"BSF\" means Bethlehem Steel Funding, LLC, a Maryland limited\nliability company.\n\n         \"CD Base Rate\" has the meaning set forth in Section.\n\n                                  4\n\n\n\n\n\n\n         \"CD Loan\" means a loan which bears interest at a CD Rate\npursuant to the applicable Notice of Borrowing or Notice of Interest\nRate Election.\n\n         \"CD Margin\" means a rate per annum determined in accordance\nwith the Pricing Schedule.\n\n         \"CD Rate\" means a rate of interest determined pursuant to\nSection on the basis of an Adjusted CD Rate.\n\n         \"CD Reference Banks\" means Chemical Bank, The Long-Term\nCredit Bank of Japan, Ltd.  and Morgan Guaranty and each such other\nbank as may be appointed pursuant to Section 9.6(d).\n\n         \"CERCLA\" means the Comprehensive Environmental Response,\nCompensation and Liability Act of 1980, as amended, and regulations\npromulgated thereunder.\n\n         \"Closing Date\" means the date on or after the Effective Date\non which the conditions set forth in Section 3.1 shall have been\nsatisfied.\n\n         \"Collateral\" has the meaning set forth in Section 1 of the\nInventory Security Agreement.\n\n         \"Collateral Agent\" means J.P.  Morgan Delaware as Structuring\nand Collateral Agent for the Lenders, and its successors and assigns\nin such capacity.\n\n         \"Collateral Report\" means a report of the Collateral Agent\nwith respect to the Inventories included in the Borrowing Base\ncalculation by the Borrower referred to in such report.  Such report\nwill state that it is based upon a review (but not an audit) by the\nCollateral Agent of information supplied by the Borrower relating to\nthe Inventories (including information as to the cost, market price,\nlocation and respective categories thereof).\n\n         \"Commitment\" means (i) with respect to each Lender, the\namount set forth opposite the name of such Lender on the signature\npages hereof, or (ii) with respect to any Assignee, the amount of the\ntransferor Lenders's Commitment assigned to such Assignee pursuant to\nSection 9.6(c), in each case as such amount may be reduced from time\nto time pursuant to Section 2.9!  or changed as a result of an\nassignment pursuant to Section 9.6(c).\n\n         \"Commitment Fee\" has the meaning set forth in Section 2.8.\n\n         \"Consolidated Subsidiary\" means, at any date, any Subsidiary\nor other entity the accounts of which would be consolidated with those\nof the Borrower in its consolidated financial statements if its\nconsolidated financial statements were prepared as of such date.\n\n         \"Consolidated Tangible Net Worth\" means, at any date, the\nconsolidated stockholders' equity of the Borrower and its Consolidated\nSubsidiaries less their consolidated Intangible Assets, all determined\nas of such date.  For purposes of this definition \"Intangible Assets\"\nmeans the amount (to the extent reflected in\n\n                                  5\n\n\n\n\n\n\n\n\n\ndetermining such consolidated stockholders' equity) of (i) all\nwrite-ups (other than write-ups resulting from foreign currency\ntranslations and write-ups of assets of a going concern business made\nwithin twelve months after the acquisition of such business)\nsubsequent to December 31, 1994 in the book value of any asset owned\nby the Borrower or a Consolidated Subsidiary, and (ii) all unamortized\ndebt discount and expense, unamortized deferred charges, goodwill,\npatents, trademarks, service marks, trade names, copyrights,\norganization or developmental expenses and other intangible assets\n(but not including any deferred income tax asset or any pension\nasset).\n\n         \"Debt\" of any Person means, at any date, without duplication,\n(i) all obligations of such Person for borrowed money, (ii) all\nobligations of such Person evidenced by bonds, debentures, notes or\nother similar instruments, (iii) all obligations of such Person to pay\nthe deferred purchase price of property or services, except trade\naccounts payable arising in the ordinary course of business, (iv) all\nobligations of such Person as lessee which are capitalized in\naccordance with generally accepted accounting principles, (v) all\nnon-contingent obligations of such Person to reimburse or repay any\nlender or other Person in respect of amounts paid under a letter of\ncredit, banker's acceptance or similar instrument, and (vi) all Debt\nsecured by a Lien on any asset of such Person, whether or not such\nDebt is otherwise an obligation of such Person.\n\n         \"Default\" means any condition or event which constitutes an\nEvent of Default or which with the giving of notice or passage of time\nor both would, unless cured or waived, become an Event of Default.\n\n         \"Domestic Business Day\" means any day except a Saturday,\nSunday or other day on which commercial banks in New York City are\nauthorized by law to close.\n\n         \"Domestic Lending Office\" means, as to each Lender, its\noffice located at its address set forth in its Administrative\nQuestionnaire (or identified in its Administrative Questionnaire as\nits Domestic Lending Office) or such other office as such Lender may\nhereafter designate as its Domestic Lending Office by notice to the\nBorrower and the Administrative Agent; provided that any Lender may so\ndesignate separate Domestic Lending Offices for its Base Rate Loans,\non the one hand, and its CD Loans, on the other hand, in which case\nall references herein to the Domestic Lending Office of such Lender\nshall be deemed to refer to either or both of such offices, as the\ncontext may require.\n\n         \"Dollar\" and \"$\" means lawful currency of the United States.\n\n         \"Domestic Loan\" means a CD Loan or a Base Rate Loan and\n\"Domestic Loans\" means CD Loans or Base Rate Loans or both.\n\"Domestic Reserve Percentage\" has the meaning set forth in Section .\n\n         \"EDS\" means Electronic Data Systems Corporation, a Texas\ncorporation, and its successors and assigns.\n\n                                  6\n\n\n\n\n\n\n\n\n\n         \"Effective Date\" means the date on which this Agreement\nbecomes effective in accordance with Section 9.10(.\n\n         \"Eligible Inventories\" means, at any date, the value\n(determined at the lower of cost or market on a basis consistent with\nthe balance sheet as at December 31, 1994 referred to in Section\n4.4(a)) at such date of all Inventories which are\n\n           (a) owned by the Borrower free of all Liens, other than\n         Permitted Liens (as defined in the Inventory Security\n         Agreement),\n\n           (b) in the possession of the Borrower (i) on premises owned\n         (or, in the case of the premises leased from Twincast\n         Property Leasing, Inc.  at Burns Harbor and Sparrows Point,\n         leased) by the Borrower at its Burns Harbor, Sparrows Point,\n         Bethlehem, Steelton and Lackawanna facilities; provided that\n         in the case of leased premises the Collateral Agent has\n         received evidence satisfactory to it (including landlord\n         waivers satisfactory to it) that it may enter such leased\n         premises for the purposes specified in Section 8(C) of the\n         Inventory Security Agreement, (ii) on premises leased by the\n         Borrower at any of the locations listed on Exhibit B hereto;\n         provided that the Collateral Agent has received evidence\n         satisfactory to it (including landlord waivers satisfactory\n         to it) that it may enter such premises for the purposes\n         specified in Section 8(C) of the Inventory Security\n         Agreement, (iii) at such other premises, owned or leased by\n         the Borrower, as the Required Lenders may approve, or (iv) at\n         such other premises listed on Exhibit C-1 hereto and\n         maintained by processors or warehouses (the \"Bailees\") or as\n         the Required Lenders may approve; provided that (i) the\n         Inventories at such premises are (x) reflected on the\n         Borrower's books and records, (y) audited by the Borrower or\n         the Borrower's external auditors on a basis approved by the\n         Collateral Agent, and (z) appropriately identified and\n         monitored by the Borrower's Outside Processing Inventory\n         Control System or any successor system satisfactory to the\n         Collateral Agent, (ii) upon transfer or sale of such\n         Inventory, such Inventory is delivered on behalf of and for\n         the account of the Borrower, (iii) the form of the Inventory\n         is not fundamentally altered, and (iv) the Bailee has entered\n         into a Collateral Access Agreement substantially in the form\n         of Exhibit C-2 hereto;\n\n           (c) as to which appropriate UCC financing statements have\n         been filed naming the Borrower as \"debtor\" and the Collateral\n         Agent as \"secured party\";\n\n         provided that Eligible Inventories shall not include (i) any\nInventories which have been shipped to a customer of the Borrower,\neven on a consignment basis; (ii) any Inventories which are not Raw\nMaterials Inventories or Finished and Semifinished Inventories; (iii)\nany Inventories held by the Borrower for sale,\n\n                                  7\n\n\n\n\n\n\n\n\n\nlease or other disposition, or to be furnished by the Borrower under a\ncontract for services, or to be used or consumed by the Borrower, in\nthe Borrower's marine construction business; (iv) all Finished and\nSemifinished Inventories in any product account at a facility of the\nBorrower (a \"Facility Product Account\") included in any category or\nsubcategory of Finished and Semifinished Inventories set forth on\nExhibit D if such Facility Product Account has an Inventory Turnover\nRate lower than the rate for such category or subcategory set forth on\nExhibit D; and (v) any Inventories which the Required Lenders\nreasonably determine in good faith to be unmarketable.  For purposes\nof this definition, \"Inventory Turnover Rate\" means, with respect to\nany category or subcategory of Finished and Semifinished Inventories\nand at any date, the quotient obtained by dividing (a) the average of\nthe amount of Eligible Inventories in such category or subcategory\nsold or consumed by the Borrower during each of the three calendar\nmonths ending immediately prior to such date, expressed on an\nannualized basis, by (b) the average of the amount of Eligible\nInventories in such category or subcategory at the end of each of the\nthree calendar months ending immediately prior to such date.  The\namount of Eligible Inventories in any such category or subcategory\nshall be determined on the basis of the tonnage of such Eligible\nInventories.\n\n         \"Environmental Laws\" means any and all federal, state and\nlocal statutes, laws (including case law), regulations, ordinances,\nrules, judgments, orders, decrees, codes, plans, injunctions, permits,\nconcessions, grants, franchises, licenses, agreements and governmental\nrestrictions, whether now or hereafter in effect, relating to the\nenvironment, to the effect of the environment on human health or the\nRelease of pollutants, contaminants, Hazardous Substances, wastes or\nany other materials into the environment or the clean-up or other\nremediation thereof.\n\n         \"Environmental Liabilities\" means all liabilities of the\nBorrower and any of its Subsidiaries, whether vested or unvested,\ncontingent or fixed, actual or potential, known or unknown, which\narise under or relate to matters covered by Environmental Laws.\n\n         \"ERISA\" means the Employee Retirement Income Security Act of\n1974, as amended, or any successor statute.\n\n         \"ERISA Group\" means the Borrower and all members of a\ncontrolled group of corporations and all trades or businesses (whether\nor not incorporated) under common control which, together with the\nBorrower, are treated as a single employer under Section 414 of the\nInternal Revenue Code.\n\n         \"Euro-Dollar Business Day\" means any Domestic Business Day on\nwhich commercial banks are open for international business (including\ndealings in Dollar deposits) in London.\n\n         \"Euro-Dollar Lending Office\" means, as to each Lender, its\noffice, branch or affiliate located at its address set forth in its\nAdministrative Questionnaire (or identified in its Administrative\nQuestionnaire as its Euro-Dollar Lending Office) or such other office,\nbranch or affiliate of such Lender as it may hereafter designate as\nits Euro-Dollar Lending Office by notice to the Borrower and the\nAdministrative Agent.\n\n                                       8\n\n\n\n\n\n\n\n\n         \"Euro-Dollar Loan\" means a loan which bears interest at a\nEuro-Dollar Rate pursuant to the applicable Notice of Borrowing or\nNotice of Interest Rate Election.\n\n         \"Euro-Dollar Margin\" means a rate per annum determined in\naccordance with the Pricing Schedule.\n\n         \"Euro-Dollar Rate\" means a rate of interest determined\npursuant to Section on the basis of an Adjusted London Interbank\nOffered Rate.\n\n         \"Euro-Dollar Reference Banks\" means the principal London\noffices of Chemical Bank, The Long-Term Credit Bank of Japan, Ltd.\nand Morgan Guaranty and each such other bank as may be appointed\npursuant to Section 9.6(d).\n\n         \"Euro-Dollar Reserve Percentage\" has the meaning set forth in Section.\n\n         \"Event of Default\" has the meaning set forth in Section 6.1.\n\n         \"Existing Credit Agreement\" means the Credit Agreement dated as of\nDecember 15, 1987 among the Borrower, the lenders party thereto and Morgan\nGuaranty, as agent, as amended to the date hereof.\n\n         \"Existing Letters of Credit\" means the letters of credit issued before\nthe Closing Date and listed on Schedule 1 hereto.\n\n         \"Existing Security Agreement\" means the Security Agreement dated as of\nDecember 15, 1987 among the Borrower, J.P.  Morgan Delaware, as security agent\nand Morgan Guaranty, as concentration bank and loan agent, as amended to the\ndate hereof.\n\n         \"Federal Funds Rate\" means, for any day, the rate per annum (rounded\nupward, if necessary, to the nearest 1\/100th of 1%) equal to the weighted\naverage of the rates on overnight Federal funds transactions with members of\nthe Federal Reserve System arranged by Federal funds brokers on such day, as\npublished by the Federal Reserve Bank of New York on the Domestic Business Day\nnext succeeding such day; provided that (i) if such day is not a Domestic\nBusiness Day, the Federal Funds Rate for such day shall be such rate on such\ntransactions on the next preceding Domestic Business Day as so published on the\nnext succeeding Domestic Business Day, and (ii) if no such rate is so published\non such next succeeding Domestic Business Day, the Federal Funds Rate for such\nday shall be the average rate quoted to Morgan Guaranty on such day on such\ntransactions as determined by the Administrative Agent.\n\n         \"Federal Lien\" has the meaning set forth in Section 6.1(l).\n\n         \"Fees\" means the Commitment Fee and the Letter of Credit Fees.\n\n         \"Financing Documents\" means this Agreement (including the Schedules\nand Exhibits hereto), the Notes and the Inventory Security Agreement.\n\n                                       9\n\n\n\n\n\n\n         \"Finished and Semifinished Inventories\" means, at any date,\nall assets of the Borrower which were or would have been classified as\nfinished and semifinished products (including contract work in\nprogress less billings), in the Borrower's consolidated balance sheets\nreferred to in Section 4.4(a), except for tool steel, foundry products\nand bolts, nuts, rivets and spikes.\n\n         \"Fixed Rate Borrowing\" means a CD Borrowing or a Euro-Dollar\nBorrowing.\n\n         \"Fixed Rate Loans\" means CD Loans or Euro-Dollar Loans or\nboth.\n\n         \"Group of Loans\" means at any time a group of Loans\nconsisting of (i) all Loans which are Base Rate Loans at such time,\n(ii) all Euro-Dollar Loans having the same Interest Period at such\ntime or (iii) all CD Loans having the same Interest Period at such\ntime; provided that, if a Loan of any particular Lender is converted\nto or made as a Base Rate Loan pursuant to Article 8\", such Loan shall\nbe included in the same Group or Groups of Loans from time to time as\nit would have been in if it had not been so converted or made.\n\n         \"Guarantee\" by any Person means any obligation, contingent or\notherwise, of such Person directly or indirectly guaranteeing any Debt\nof any other Person and, without limiting the generality of the\nforegoing, any obligation, direct or indirect, contingent or\notherwise, of such Person (i) to purchase or pay (or advance or supply\nfunds for the purchase or payment of) such Debt (whether arising by\nvirtue of partnership arrangements, by agreement to keep-well, to\npurchase assets, goods, securities or services, to take-or-pay, or to\nmaintain financial statement conditions or otherwise) or (ii) entered\ninto for the purpose of assuring in any other manner the holder of\nsuch Debt of the payment thereof or to protect such holder against\nloss in respect thereof (in whole or in part); provided that the term\nGuarantee shall not include endorsements for collection or deposit in\nthe ordinary course of business.  The term \"Guarantee\" used as a verb\nhas a corresponding meaning.\n\n         \"Hazardous Substances\" means any toxic, radioactive, caustic\nor otherwise hazardous substance, including petroleum, its\nderivatives, by-products and other hydrocarbons, or any substance\nhaving any constituent elements displaying any of the foregoing\ncharacteristics, whether or not regulated under Environmental Laws.\n\n         \"Increased Coverage Event\" means any one of the following\nthree events or conditions:\n\n              (i) the maturity of Debt of the Borrower and its\n         Subsidiaries exceeding $10,000,000 in aggregate principal\n         amount is accelerated,\n\n              (ii) the maturity of Debt Guaranteed by the Borrower or\n         any Subsidiary is accelerated and the aggregate principal\n         amount which the Borrower and its Subsidiaries become\n         obligated to pay under their Guarantees of such Debt by\n         reason of such acceleration exceeds $10,000,000 in any twelve\n         month period or an aggregate of $30,000,000 at any time prior\n         to the Termination Date, or\n\n\n                                      10\n\n\n\n\n              (iii) one or more defaults occur under any agreement or\n         agreements in respect of Debt Guaranteed by the Borrower or\n         any Subsidiary and the aggregate principal amount of such\n         Guaranteed Debt exceeds $10,000,000 and as a consequence of\n         such default or defaults the Borrower or any of its\n         Subsidiaries shall make any payment or give or agree to give\n         any consideration or benefit of any kind (including, without\n         limitation, any increased compensation, prepayment,\n         shortening of maturities, security or other credit support)\n         to the holders of such Guaranteed Debt and such payment,\n         consideration or benefit is determined by the Required\n         Lenders, after taking into account any payment, consideration\n         or benefit paid, given or agreed to be given by such holders\n         to the Borrower or any of its Subsidiaries (other than a\n         waiver of such default), to be a material benefit to the\n         holders of such Guaranteed Debt.\n\n         \"Indemnitee\" has the meaning set forth in Section 9.3(c).\n\n         \"Initial Commitment\" means, with respect to any Lender, such\nLender's initial commitment under this Agreement, as reflected in such\nLender's commitment letter delivered to the Borrower, with a copy to\nthe Administrative Agent.\n\n         \"Interest Period\" means:  (i) with respect to each\nEuro-Dollar Loan, the period commencing on the date of borrowing\nspecified in the applicable Notice of Borrowing or on the date\nspecified in the applicable Notice of Interest Rate Election and\nending one, two, three or six months thereafter, as the Borrower may\nelect in the applicable notice; provided that:\n\n              (a) any Interest Period which would otherwise end on a\n         day which is not a Euro-Dollar Business Day shall be extended\n         to the next succeeding Euro-Dollar Business Day unless such\n         Euro-Dollar Business Day falls in another calendar month, in\n         which case such Interest Period shall end on the next\n         preceding Euro-Dollar Business Day;\n\n              (b) any Interest Period which begins on the last\n         Euro-Dollar Business Day of a calendar month (or on a day for\n         which there is no numerically corresponding day in the\n         calendar month at the end of such Interest Period) shall,\n         subject to clause (c) below, end on the last Euro-Dollar\n         Business Day of a calendar month; and\n\n              (c) any Interest Period which would otherwise end after\n         the Termination Date shall end on the Termination Date;\n\n         (ii) with respect to each CD Loan, the period commencing on\nthe date of borrowing specified in the applicable Notice of Borrowing\nor on the date specified in the applicable Notice of Interest Rate\nElection and ending 30, 60 or 90 days thereafter, as the Borrower may\nelect in the applicable notice; provided that:\n\n                                  11\n\n\n\n\n\n\n         (a) any Interest Period (other than an Interest Period\n              determined pursuant to clause (b) below) which would\n              otherwise end on a day which is not a Euro-Dollar\n              Business Day shall be extended to the next succeeding\n              Euro-Dollar Business Day; and\n\n         (b) any Interest Period which would otherwise end after the\n              Termination Date shall end on the Termination Date.\n\n         \"Internal Revenue Code\" means the Internal Revenue Code of\n1986, as amended, or any successor statute.\n\n         \"Inventories\" means, whether now owned or hereafter acquired\nby the Borrower, all \"inventory\" (as defined in the UCC), wherever\nlocated, and shall also mean and include, without limitation, all raw\nmaterials and other materials and supplies, work-in-process and\nfinished goods and any products made or processed therefrom and all\nsubstances, if any, commingled therewith or added thereto, or which,\nin accordance with generally accepted accounting principles, would be\nincluded in inventories on the Borrower's balance sheets, (excluding,\nhowever, any of the foregoing which (i) is located outside the United\nStates, (ii) is held at the Borrower's marine construction facilities\nat Sparrows Point, Maryland or Port Arthur, Texas for sale or other\ndisposition, or to be furnished by the Borrower under a contract for\nservices, or to be used or consumed by the Borrower, in the Borrower's\nmarine construction business or (iii) has been returned to or\nrepossessed by the Borrower or stopped in transit (including all\nadditions and accessions thereto and replacements thereof)).\n\n         \"Inventory Information Memorandum\" means the Bethlehem Steel\nCorporation Inventory Financing Facility Overview of Structure and\nCollateral dated as of July 1995.\n\n         \"Inventory Security Agreement\" means the Inventory Security\nand Pledge Agreement dated as of September 12, 1995 among the\nBorrower, the Special Purpose Members, the Collateral Agent and the\nAdministrative Agent, substantially in the form of Exhibit E hereto,\nas amended from time to time.\n\n         \"Issuance\" means the issuance of a Letter of Credit pursuant\nto Section 2.2.\n\n         \"L\/C Fee Rate\" means a rate per annum determined in\naccordance with the Pricing Schedule.\n\n         \"L\/C Issuing Bank\" means each of Morgan Guaranty, Chemical\nBank and The Long-Term Credit Bank of Japan, Ltd., each in its\ncapacity as issuing bank for the Letters of Credit hereunder, or all\nof them, as the context may require, and their respective successors\nand each such other bank as may be appointed pursuant to Section\n2.2(j); provided that when used with respect to any Syndicated Letter\nof Credit, \"L\/C Issuing Bank\" shall mean Morgan Guaranty, and when\nused with respect to any Participated Letter of Credit, \"L\/C Issuing\nBank\" shall mean whichever of Morgan Guaranty, Chemical Bank, The\nLong-\n\n                                  12\n\n\n\n\n\n\nTerm Credit Bank of Japan, Ltd.  and such other Lender as may be\nappointed pursuant to Section 2.2 (j) shall have issued such\nParticipated Letter of Credit.\n\n         \"L\/C Issuing Bank Letter of Credit Fee\" has the meaning set\nforth in Section 2.2(g).\n\n         \"Lender\" means each lender listed on the signature pages\nhereof, each Assignee which becomes a Lender pursuant to Section , and\ntheir respective successors.\n\n         \"Letter of Credit Fees\" means the Letter of Credit\nParticipation Fee and the L\/C Issuing Bank Letter of Credit Fee.\n\n         \"Letter of Credit Participation Fee\" has the meaning set\nforth in Section 2.2(g).\n\n         \"Letters of Credit\" has the meaning set forth in Section\n2.2(a)!.\n\n         \"Lien\" means, with respect to any asset, any mortgage,\npledge, lien, security interest, charge or other encumbrance or\nsecurity arrangement of any nature whatsoever, including, without\nlimitation, any conditional sale, capital lease or title retention\narrangement in respect of such asset.\n\n         \"Loan\" means a Domestic Loan or a Euro-Dollar Loan and\n\"Loans\" means Domestic Loans or Euro-Dollar Loans or both.\n\n         \"London Interbank Offered Rate\" has the meaning set forth in\nSection .\n\n         \"Maximum Letter of Credit Amount\" means at any time\n$150,000,000.\n\n         \"Morgan Guaranty\" means Morgan Guaranty Trust Company of New\nYork, a New York State banking corporation.\n\n         \"Multiemployer Plan\" means at any time an employee pension\nbenefit plan within the meaning of Section 4001(a)(3) of ERISA to\nwhich any member of the ERISA Group is then making or accruing an\nobligation to make contributions or has within the preceding five plan\nyears made contributions, including for these purposes any Person\nwhich ceased to be a member of the ERISA Group during such five year\nperiod.\n\n         \"Notes\" means promissory notes of the Borrower, substantially\nin the form of Exhibit A hereto, evidencing the obligation of the\nBorrower to repay the Loans, and \"Note\" means any one of such\npromissory notes issued hereunder.\n\n         \"Notice of Borrowing\" has the meaning set forth in Section\n2.3(a)#.\n\n         \"Notice of Interest Rate Election\" has the meaning set forth\nin Section 2.6(a)\".\n\n                                  13\n\n\n\n\n\n\n         \"Notice of Issuance\" has the meaning set forth in Section\n2.2(b).\n\n         \"Parent\" means, with respect to any Lender, any Person\ncontrolling such Lender.\n\n         \"Participant\" has the meaning set forth in Section .\n\n         \"Participated Letter of Credit\" has the meaning set forth in\nSection 2.2(a)(ii).\n\n         \"PBGC\" means the Pension Benefit Guaranty Corporation or any\nentity succeeding to any or all of its functions under ERISA.\n\n         \"Person\" means an individual, a corporation, a partnership,\nan association, a trust or any other entity or organization, including\na government or political subdivision or an agency or instrumentality\nthereof.\n\n         \"Plan\" means at any time an employee pension benefit plan\n(other than a Multiemployer Plan) which is covered by Title IV of\nERISA or subject to the minimum funding standards under Section 412 of\nthe Internal Revenue Code and either (i) is maintained, or contributed\nto, by any member of the ERISA Group for employees of any member of\nthe ERISA Group or (ii) for purposes of Section 6.1(j) only, has at\nany time within the preceding five years been maintained, or\ncontributed to, by any Person which was at such time a member of the\nERISA Group for employees of any Person which was at such time a\nmember of the ERISA Group, if any member of the ERISA Group would be\nsubject to liability pursuant to Section 4069(a) of ERISA or any other\nprovision of Title IV of ERISA relating to treatment of transactions\nto evade liability with respect to such plan.\n\n         \"Pricing Schedule\" means the Schedule attached hereto\nidentified as such.\n\n         \"Prime Rate\" means the rate of interest publicly announced by\nMorgan Guaranty in New York City from time to time as its prime rate.\n\n         \"Quarterly Date\" means each March 31, June 30, September 30\nand December 31.\n\n         \"Raw Materials Inventories\" means, at any date, all assets of\nthe Borrower which were or would have been classified by the Borrower\nas raw materials and supplies in the Borrower's consolidated financial\nstatements referred to in Section 4.4(a), except for stores supplies,\nfoundry products and supplies, initial complement of maintenance spare\nparts, brick, lubrication oils and greases, paint, cleaning mixture\n(including acids), bolts, nuts, rivets and tool steel.\n\n         \"Receivables Commitment\" means at any time with respect to\neach financial institution which is a party to the Receivables\nPurchase Agreement, the\n\n                                  14\n\n\n\n\n\n\ncommitment of such financial institution under the Receivables\nPurchase Agreement.\n\n         \"Receivables Documents\" means the Receivables Purchase\nAgreement and such other agreements, documents or instruments entered\ninto and delivered by BSF or the Borrower in connection with the\ntransactions contemplated by the Receivables Purchase Agreement.\n\n         \"Receivables Facility\" means the receivables facility\nestablished pursuant to the Receivables Documents.\n\n         \"Receivables Maximum Purchase Price\" means, at any date, the\nlevel of the Adjusted Aggregate Net Investment (as defined in the\nReceivables Purchase Agreement) under the Receivables Facility which\nwould give rise at such date to an Adjusted Buyers' Interest of 100%\nunder the Receivables Facility.\n\n         \"Receivables Purchase Agreement\" means the Receivables\nPurchase Agreement dated as of September 12, 1995 among BSF, the\nSpecial Purpose Members, the Borrower, as servicer, the financial\ninstitutions party thereto, Morgan Guaranty, as administrative agent\nand J.P.  Morgan Delaware, as structuring and collateral agent,\nsubstantially in the form delivered to the Lenders prior to the date\nhereof, and as amended from time to time.\n\n         \"Reference Banks\" means the CD Reference Banks or the\nEuro-Dollar Reference Banks, as the context may require, and\n\"Reference Bank\" means any one of such Reference Banks.\n\n         \"Regulated Activity\" means any generation, treatment,\nstorage, recycling, transportation or disposal of any Hazardous\nSubstance.\n\n         \"Regulation U\" means Regulation U of the Board of Governors\nof the Federal Reserve System, as in effect from time to time.\n\n         \"Reimbursement Obligation\" means an obligation of the\nBorrower to reimburse the L\/C Issuing Banks or the Lenders, as the\ncase may be, pursuant to Section 2.2 for the amount of a drawing under\na Letter of Credit.\n\n         \"Release\" means any discharge, emission or release, including\na Release as defined in CERCLA at 42 U.S.C.  Section 9601(22).  The\nterm \"Released\" has a corresponding meaning.\n\n         \"Required Lenders\" means, at any time, Lenders having at\nleast 66 2\/3% of the aggregate amount of the Commitments or, if the\nCommitments shall have been terminated, having at least 66 2\/3% of the\naggregate Total Exposure of all the Lenders.\n\n         \"Revolving Credit Period\" means the period from and including\nthe Closing Date to but not including the Termination\nDate.\n\n                                  15\n\n\n\n\n\n\n         \"S&amp;P\" means Standard &amp; Poor's Ratings Group, together with\nits successors.\n\n         \"Secured Principal Amount\" means, at any time, the sum of (i)\nthe aggregate principal amount of the Loans then outstanding, (ii) the\naggregate undrawn amount which is then, or may thereafter become,\navailable for drawing under outstanding Letters of Credit, (iii) the\naggregate amount of all unpaid Reimbursement Obligations for drawings\ntheretofore made under Letters of Credit and (iv) the aggregate\nprincipal amount of Secured Tax Exempt Debt then outstanding.\n\n         \"Secured Tax Exempt Debt\" means all obligations (whether\ncontingent or non-contingent) of the Borrower arising under the\nReimbursement Agreement dated as of October 1, 1994 between the\nBorrower and NBD Bank and the Tender Agent Agreement dated as of\nOctober 1, 1994 between the Borrower and NBD Bank and all documents\nand instruments executed in connection with the foregoing and all\nrenewals, extensions and amendments thereof; provided that the\naggregate principal amount of such Secured Tax Exempt Debt shall not\nat any time exceed $3,000,000.\n\n         \"Security Interests\" means the security interests in the\nCollateral granted under the Inventory Security Agreement to secure\nthe Secured Obligations and Guaranties (as defined therein).\n\n         \"Significant Subsidiary\" means at any time any Subsidiary,\nexcept Subsidiaries which at such time have been designated by the\nBorrower (by notice to the Administrative Agent, which may be amended\nfrom time to time) as nonmaterial and which, if aggregated and\nconsidered as a single subsidiary, would not meet the definition of a\n\"significant subsidiary\" contained as of the date hereof in Regulation\nS-X of the Securities and Exchange Commission.\n\n         \"Special Purpose Member\" means Bethlehem Steel Credit\nAffiliate One, Inc., a Maryland corporation, or Bethlehem Steel Credit\nAffiliate Two, Inc., a Maryland corporation, and \"Special Purpose\nMembers\" means both Bethlehem Steel Credit Affiliate One, Inc., a\nMaryland corporation and Bethlehem Steel Credit Affiliate Two, Inc., a\nMaryland corporation.\n\n         \"Subsidiary\" means, as to any Person, any corporation or\nother entity of which securities or other ownership interests having\nordinary voting power to elect a majority of the board of directors or\nother persons performing similar functions are at the time directly or\nindirectly owned by such Person; unless otherwise specified,\n\"Subsidiary\" means a Subsidiary of the Borrower.\n\n         \"Syndicated Letter of Credit\" has the meaning set forth in\nSection 2.2(a)!(i).\n\n         \"Termination Date\" means September 12, 2000, or, if such day\nis not a Euro-Dollar Business Day, the next succeeding Euro-Dollar\nBusiness Day unless such Euro-Dollar Business Day falls in another\ncalendar month, in which case the Termination Date shall be the next\npreceding Euro-Dollar Business Day.\n\n                                  16\n\n\n\n\n\n\n         \"Total Exposure\" means, with respect to any Lender at any\ntime, the sum of (i) the aggregate principal amount of its Loans then\noutstanding, (ii) its share of the undrawn amount which is then, or\nmay thereafter become, available for drawing under each outstanding\nLetter of Credit and (iii) its share of the amount of each unpaid\nReimbursement Obligation for drawings theretofore made under any\nLetter of Credit.\n\n         \"UCC\" means the Uniform Commercial Code as in effect on the\ndate hereof in the State of New York; provided that if, by reason of\nmandatory provisions of law, the perfection or the effect of\nperfection or non-perfection of the Security Interests in any\nCollateral is governed by the Uniform Commercial Code as in effect in\na jurisdiction other than New York, \"UCC\" means the Uniform Commercial\nCode as in effect in such other jurisdiction for purposes of the\nprovisions hereof relating to such perfection or effect of perfection\nor non-perfection.\n\n         \"Undrawn L\/C Amount\" shall mean, with respect to each Letter\nof Credit at any date of determination thereof, the undrawn amount of\nsuch Letter of Credit on such date.\n\n         \"Unfunded Liabilities\" means, with respect to any Plan at any\ntime, the amount (if any) by which (i) the present value of all\nbenefits under such Plan exceeds (ii) the fair market value of all\nPlan assets allocable to such benefits (excluding any accrued but\nunpaid contributions), all determined as of the then most recent\nvaluation date for such Plan, but only to the extent that such excess\nrepresents a potential liability of a member of the ERISA Group to the\nPBGC or any other Person under Title IV of ERISA.\n\n         \"United States\" means the United States of America, including\nthe States and the District of Columbia, but excluding its territories\nand possessions.\n\n         SECTION 1.2.  UCC Terms.  With respect to the Security\nInterests, terms not otherwise defined herein which are defined in the\nUCC shall, unless the context otherwise requires, have the meanings\nset forth therein.\n\n         SECTION 1.3.  Accounting Terms and Determinations.  Unless\notherwise specified herein, all accounting terms used herein shall be\ninterpreted, all accounting determinations hereunder shall be made,\nand all financial statements required to be delivered hereunder shall\nbe prepared in accordance with generally accepted accounting\nprinciples as in effect from time to time, applied on a basis\nconsistent (except for changes concurred in by the Borrower's\nindependent public accountants) with the most recent audited\nconsolidated financial statements of the Borrower and its Consolidated\nSubsidiaries delivered to the Lenders; provided that, if any change in\ngenerally accepted accounting principles after June 30, 1995 in itself\nmaterially affects Adjusted Consolidated Tangible Net Worth, the\nBorrower may by notice to the Administrative Agent, or the\nAdministrative Agent (at the request of the Required Lenders) may by\nnotice to the Borrower, require that Adjusted Consolidated Tangible\nNet Worth thereafter be calculated in accordance with generally\naccepted accounting principles as in effect, and applied by the\nBorrower, immediately before such change in generally accepted\naccounting principles occurs.  If such notice is given,\n\n                                  17\n\n\n\nthe compliance certificates delivered pursuant to Section 5.1(c) after\nsuch change occurs shall be accompanied by reconciliations of the\ndifference between the calculation set forth therein and a calculation\nmade in accordance with generally accepted accounting principles as in\neffect from time to time after such change occurs.\n\n                              ARTICLE 2\n\n                             THE CREDITS\n\n         SECTION 2.1.  Commitments to Lend.  During the Revolving\nCredit Period, each Lender severally agrees, on the terms and\nconditions set forth in this Agreement, to make Loans to the Borrower\nfrom time to time; provided that, immediately after each such Loan is\nmade, such Lender's Total Exposure shall not exceed the amount of its\nCommitment.  Each Borrowing under this Section shall be in an\naggregate principal amount of $20,000,000 or any larger multiple of\n$1,000,000 (except that any such Borrowing may be in the aggregate\namount of the unused Commitments) and shall be made from the several\nLenders ratably in proportion to their respective Commitments.  Within\nthe foregoing limits, the Borrower may borrow under this Section,\nprepay Loans to the extent permitted by Section 2.11\" and reborrow at\nany time during the Revolving Credit Period under this Section.\n\n         SECTION 2.2.  Letters of Credit.\n\n         (a) Commitment to Issue Letters of Credit.\n             -------------------------------------\n\n         (i) The Borrower may from time to time request that (A) the\nLenders, acting through the L\/C Issuing Bank in accordance with\nsubsection (iii) below, issue a letter of credit (a \"Syndicated Letter\nof Credit\") pursuant to which the Lenders shall be severally obligated\nto the beneficiary to pay any drawings made thereunder ratably in\nproportion to their respective Commitments or (B) an L\/C Issuing Bank\nissue a letter of credit (a \"Participated Letter of Credit\") pursuant\nto which such L\/C Issuing Bank shall be obligated to the beneficiary\nto pay any drawings made thereunder and the Lenders shall be obligated\nto the L\/C Issuing Bank to participate ratably in such drawings in\nproportion to their respective Commitments as hereinafter provided.\nSyndicated Letters of Credit and Participated Letters of Credit are\ncollectively referred to herein as \"Letters of Credit\".\n\n         (ii) On the Closing Date, each L\/C Issuing Bank that has\nissued an Existing Letter of Credit shall be deemed, without further\naction by any party hereto, to have issued a Participated Letter of\nCredit hereunder, and each Lender\n\n                                  18\n\n\n\n\nshall be deemed, without further action by any party hereto, to have\nagreed to participate ratably in proportion to its Commitment in any\ndrawings made under such Existing Letter of Credit.  The Borrower and\nthe Lenders party hereto that are also party to the Existing Credit\nAgreement agree that, concurrently with such issuance hereunder, the\nparticipations in the Existing Letters of Credit under the Existing\nCredit Agreement shall be automatically canceled without further\naction by any of the parties thereto.  On and after the Closing Date\neach Existing Letter of Credit shall be deemed issued hereunder and\nshall thereupon be a Letter of Credit hereunder.\n\n         (iii) Subject to subsection (v) below, and in accordance with\nits customary procedures (to the extent such procedures are not\ninconsistent with the terms of this Agreement), the L\/C Issuing Bank\nagrees, on the terms and conditions set forth in this Agreement and at\nthe request of the Borrower, to execute and deliver Syndicated Letters\nof Credit on behalf of each of the Lenders (and not as sole issuer)\nfor the account of the Borrower or any Subsidiary from time to time\nfrom and including the Effective Date to but excluding the Termination\nDate; provided that no Syndicated Letter of Credit shall be issued,\nextended or renewed if such L\/C Issuing Bank has been notified in\nwriting by the Borrower, the Administrative Agent or the Required\nLenders that any condition set forth in Section 3.2 is not satisfied\non the date such Syndicated Letter of Credit is to be issued, extended\nor renewed; provided further that if any Syndicated Letter of Credit\ncontains a provision pursuant to which it is deemed extended unless\nnotice of termination is given by the L\/C Issuing Bank, the L\/C\nIssuing Bank shall give such notice of termination on behalf of each\nof the Lenders if it has been notified as provided in the immediately\npreceding proviso.  The terms of each such Syndicated Letter of Credit\nshall provide that each Lender is obligated, severally and not\njointly, to pay any drawings under such Letter of Credit ratably in\nproportion to such Lender's Commitment as in effect when such Letter\nof Credit is issued.  Upon receipt of a Notice of Issuance pursuant to\nsubsection (b) of this Section with respect to a Syndicated Letter of\nCredit, the L\/C Issuing Bank shall prepare such Letter of Credit in a\nform customarily issued by it for its own account as issuing bank, but\nwith such changes as the L\/C Issuing Bank deems necessary or\nappropriate to reflect the fact that such Letter of Credit is a\nSyndicated Letter of Credit.  Each Lender authorizes the L\/C Issuing\nBank to execute and issue such Syndicated Letter of Credit on its\nbehalf as its attorney in fact; provided that such Syndicated Letter\nof Credit is issued in compliance with the provisions of this Section\nand within the limitations set forth in subsection (v) below.\nPromptly after issuance of any Syndicated Letter of Credit, the L\/C\nIssuing Bank will send to each of the Lenders a copy of such Letter of\nCredit in the form in which it was issued.\n\n         (iv) Subject to subsection (v) below, and in accordance with\nits customary procedures (to the extent such procedures are not\ninconsistent with the terms of this Agreement), the L\/C Issuing Bank\nagrees, on the terms and conditions set forth in this Agreement and at\nthe request of the Borrower, to issue Participated Letters of Credit\nas sole issuing bank for the account of the Borrower or any Subsidiary\nfrom time to time from and including the Effective Date to but\nexcluding the Termination Date; provided that no Participated Letter\nof Credit shall be issued, extended or renewed if such L\/C Issuing\nBank has been notified in writing by the Borrower, the Administrative\nAgent or the Required Lenders that any condition set forth in Section\n3.2 is not satisfied on the date such Participated.\n\n                                  19\n\n\n\n\nLetter of Credit is to be issued, extended or renewed; provided\nfurther that if any Participated Letter of Credit contains a provision\npursuant to which it is deemed extended unless notice of termination\nis given by the L\/C Issuing Bank, the L\/C Issuing Bank shall give such\nnotice of termination if it has been notified as provided in the\nimmediately preceding proviso.  Each Lender agrees to participate\nratably in proportion to its Commitment in any drawings made under\neach Participated Letter of Credit.\n\n         (v) The obligations of the Lenders and the L\/C Issuing Banks\nto issue Letters of Credit pursuant to clauses (iii) and (iv) above\nare subject to the following additional conditions:\n\n              (A) no Letter of Credit shall be issued (or extended or\n         renewed) if, immediately after the issuance thereof, any\n         Lender's Total Exposure would exceed the amount of its\n         Commitment;\n\n              (B) no Letter of Credit shall be issued (or extended or\n         renewed) if, immediately after the issuance thereof, the\n         Aggregate Letter of Credit Amount would exceed the Maximum\n         Letter of Credit Amount;\n\n              (C) no Letter of Credit shall expire more than 18 months\n         after its date of issuance; provided that a Letter of Credit\n         may contain a provision pursuant to which it is deemed to be\n         extended on an annual basis unless notice of termination is\n         given by the L\/C Issuing Bank; provided further that no\n         Letter of Credit shall have an expiry date later than seven\n         Domestic Business Days prior to the Termination Date;\n\n              (D) without the approval of the Required Lenders (and in\n         the case of Participated Letters of Credit, the L\/C Issuing\n         Bank), no Letter of Credit shall be issued (x) to support the\n         obligations of the Borrower or any Subsidiary with respect to\n         any Debt or Guarantee, or (y) to finance the export or import\n         of weapons;\n\n              (E) the Borrower shall have used its reasonable best\n         efforts to cause, to the extent practicable, the aggregate\n         face amount of all outstanding Participated Letters of Credit\n         issued by each L\/C Issuing Bank to be equal to the aggregate\n         face amount of all outstanding Participated Letters of Credit\n         issued by each other L\/C Issuing Bank; and\n\n              (F) the aggregate face amount of all outstanding\n         Participated Letters of Credit issued by any one L\/C Issuing\n         Bank shall not exceed $80,000,000.\n\n         (vi) The L\/C Issuing Banks and the Lenders shall not be\nobligated to issue any Letter of Credit in connection with the\nfinancing of imports into or exports from the United States if the L\/C\nIssuing Bank believes that the issuance of such Letter of Credit would\nnot meet the criteria (with regard to goods shipped, nationality of\nbeneficiary, country of origin, or other similar considerations)\ncustomarily applied by it when considering a request to issue such\nletters of credit.\n\n                                  20\n\n\n\n\n         (b) Notice of Issuance.  The Borrower shall give, at least\n             ------------------\nthree Domestic Business Days before each Letter of Credit is to be\nissued, notice (a \"Notice of Issuance\") to (x) the Administrative\nAgent and (y) to the L\/C Issuing Bank issuing such Letter of Credit\n(which, in the case of a Participated Letter of Credit, shall, subject\nto Section 2.2(a), be the L\/C Issuing Bank selected by the Borrower)\nspecifying:  (A) the date of issuance and expiry date of such Letter\nof Credit, (B) if Morgan Guaranty is the L\/C Issuing Bank, whether\nsuch Letter of Credit is to be a Syndicated Letter of Credit or a\nParticipated Letter of Credit, (C) the proposed terms of such Letter\nof Credit, including the face amount thereof, and (D) the transaction\nthat is to be supported or financed by such Letter of Credit.  The\nAdministrative Agent shall, upon receipt of a Notice of Issuance,\npromptly notify each Lender of the contents thereof and of the amount\nof such Lender's ratable share of or participation in such Letter of\nCredit and such Notice of Issuance shall not thereafter be revocable\nby the Borrower.\n\n         (c) Undrawn L\/C Amounts.  Any increase in the Undrawn L\/C\n             -------------------\nAmount with respect to any outstanding Letter of Credit may be by\namendment or replacement of such Letter of Credit, but in either event\nsuch increase shall be deemed to constitute the issuance of a new\nLetters of Credit and, therefore, subject to the satisfaction of the\nconditions set forth in Section 3.2.  Reductions in the Undrawn L\/C\nAmounts of outstanding Letters of Credit (other than by drawings\nthereunder) may occur by the terms thereof or by amendment or\nreplacement of such Letters of Credit, in which event such reduction\nshall be effective at the time of such amendment or exchange.\n\n         (d) Drawings under Letters of Credit.\n             --------------------------------\n\n              (i) Upon receipt from the beneficiary of any Letter of\n         Credit of demand for payment under such Letter of Credit, the\n         L\/C Issuing Bank shall promptly notify the Borrower and the\n         Administrative Agent of such request for payment and shall\n         determine in accordance with the terms of such Letter of\n         Credit whether such request for payment should be honored.\n\n              (ii) If the L\/C Issuing Bank determines that a demand\n         for payment by the beneficiary of a Syndicated Letter of\n         Credit should be honored, the L\/C Issuing Bank shall promptly\n         notify the Borrower, the Administrative Agent and each Lender\n         of the aggregate amount to be paid as a result of such demand\n         and shall notify each Lender of its share of such amount.\n         Each Lender shall make available its share of the amount so\n         demanded in accordance with the terms of such Syndicated\n         Letter of Credit, in Federal or other funds immediately\n         available in New York City, to the L\/C Issuing Bank at the\n         L\/C Issuing Bank's address specified in or pursuant to\n         Section 9.1.  The L\/C Issuing Bank will make the funds so\n         received from the Lenders available to the beneficiary at the\n         L\/C Issuing Bank's aforesaid address in accordance with the\n         terms of such Syndicated Letter of Credit.\n\n              (iii) If the L\/C Issuing Bank determines that a demand\n         for payment by the beneficiary of a Participated Letter of\n         Credit should be honored, the L\/C Issuing Bank shall make\n         available to the beneficiary in\n\n                                  21\n\n\n\n\n\n         accordance with the terms of such Participated Letter of\n         Credit the amount of the drawing under such Participated\n         Letter of Credit.  The L\/C Issuing Bank shall thereupon\n         notify the Borrower, the Administrative Agent and each Lender\n         of the amount of such drawing paid by it and the amount of\n         each Lender's participation therein.\n\n         (e) Reimbursement and Other Payments by the Borrower.\n             ------------------------------------------------\n\n         (i) If any amount is drawn under any Letter of Credit, the\nBorrower agrees to reimburse (A) the Administrative Agent for the\naccount of each Lender, in the case of a Syndicated Letter of Credit,\nand (B) the L\/C Issuing Bank, in the case of a Participated Letter of\nCredit, for all amounts paid by such Lender or the L\/C Issuing Bank\n(as the case may be) upon such drawing, together with any and all\nreasonable charges and expenses which any Lender or the L\/C Issuing\nBank may pay or incur relative to such drawing and (x) interest on the\namount drawn at the average rate charged to the L\/C Issuing Bank on\novernight Federal funds transactions for each day from and including\nthe date such amount is drawn to but excluding the date such\nreimbursement payment is due and payable and (y) interest on any and\nall amounts unpaid by the Borrower when due hereunder with respect to\na Letter of Credit from the date when due until such amount is paid in\nfull, whether before or after judgment, payable on demand, at a rate\nper annum equal to the sum of 2% plus the Base Rate.  Such\nreimbursement payment shall be due and payable (x) on the date the L\/C\nIssuing Bank notifies the Borrower of such drawing, if such notice is\ngiven at or before 12:00 Noon (New York City time), or (y) if such\nnotice is given after 12:00 Noon (New York City time), then not later\nthan 10:00 A.M.  (New York City time) on the first Domestic Business\nDay succeeding the date such notice is given.  Promptly upon receipt\nof a reimbursement payment with respect to a Syndicated Letter of\nCredit, the Administrative Agent shall distribute to each Lender its\npro rata share thereof, including interest, to the extent received by\nthe Administrative Agent.\n\n         (ii) In addition, the Borrower agrees to pay to each Lender\n(in the case of a Syndicated Letter of Credit) and the L\/C Issuing\nBank (in the case of a Participated Letter of Credit) upon each\ntransfer of any Letter of Credit in accordance with its terms, a sum\nequal to such amount as shall be necessary to cover the reasonable\ncosts and expenses of such Lender or the L\/C Issuing Bank (as the case\nmay be) incurred in connection with such transfer.\n\n         (f) Payments by Lenders with Respect to Participated Letters\n             --------------------------------------------------------\nof Credit.\n---------\n\n         (i) Each Lender shall make available an amount equal to its\nratable share of any drawing under a Participated Letter of Credit, in\nFederal or other funds immediately available in New York City, to the\nL\/C Issuing Bank by 3:00 P.M.  (New York City time) on the Domestic\nBusiness Day following such drawing, together with interest on such\namount at the average rate charged to the L\/C Issuing Bank on\novernight Federal funds transactions on the date of such drawing as\ndetermined by the L\/C Issuing Bank, at the L\/C Issuing Bank's address\nspecified in or pursuant to Section 9.1; provided that each Lender's\nobligation shall be reduced by its pro rata share of any reimbursement\nby the Borrower in respect of such drawing pursuant to Section\n2.2(e)(i); provided further that no Lender shall be obligated to make\nany payment under this Section with respect to.\n\n                                  22\n\n\n\n\n\nany Participat ed Letter of Credit issued, extended or renewed if such\nL\/C Issuing Bank had been notified in writing by the Borrower, the\nAdministra tive Agent or the Required Lenders that any condition set\nforth in Section 3.2 was not satisfied on the date such Participat ed\nLetter of Credit was issued, extended or renewed.  The L\/C Issuing\nBank shall notify each Lender and the Administra tive Agent of the\namount of such Lender's obligation in respect of any drawing under a\nParticipat ed Letter of Credit not later than 10:00 A.M.  (New York\nCity time) on the day such payment by such Lender is due.  Each Lender\nshall be subrogated to the rights of the L\/C Issuing Bank against the\nBorrower to the extent of all amounts paid by such Lender to the L\/C\nIssuing Bank, plus interest thereon, from and including the day such\namount is paid by such Lender to the L\/C Issuing Bank to but excluding\nthe day the Borrower makes payment to the L\/C Issuing Bank pursuant to\nsubsection (d) above, whether before or after judgment, at a rate per\nannum equal to the sum of 2% plus the Base Rate.\n\n         (ii) If any Lender fails to pay any amount required pursuant\nto clause (i) of this subsection on the date on which such payment is\ndue, interest shall accrue on such Lender's obligation to make such\npayment from and including the date such payment is due to but\nexcluding the day such Lender makes such payment, whether before or\nafter judgment, at a rate per annum equal to (A) in the case of the\nday such payment is due to and including the first succeeding Domestic\nBusiness Day (and any intervening days) following the day on which\nnotice of such Lender's obligation in respect of any drawing was\ngiven, the average rate charged to the L\/C Issuing Bank on overnight\nFederal funds transactions for each such day as determined by the L\/C\nIssuing Bank and (B) thereafter, the sum of 2% plus the Base Rate.\nAny payment made by any Lender after 3:00 P.M., New York City time, on\nany Domestic Business Day shall be deemed for purposes of the\npreceding sentence to have been made on the next succeeding Domestic\nBusiness Day.\n\n         (iii) The obligation of each Lender to pay to the L\/C Issuing\nBank its proportionate share of each drawing under a Participated\nLetter of Credit and the obligation of the Borrower to reimburse the\nLenders or the L\/C Issuing Banks for payments pursuant to this\nSection, shall be irrevocable, shall not be subject to any\nqualification or exception whatsoever and shall be binding in\naccordance with the terms and conditions of this Agreement under all\ncircumstances, including, without limitation, the following\ncircumstances:\n\n         (A) any lack of validity or enforceability of this Agreement;\n\n         (B) the existence of any claim, set-off, defense or other\n         right which the Borrower or any Lender may have at any time\n         against a beneficiary of any Letter of Credit or any\n         transferee of any Letter of Credit (or any Person for whom\n         any such transferee may be acting), any L\/C Issuing Bank, any\n         Lender or any other Person, whether in connection with this\n         Agreement, any Letter of Credit, the transactions\n         contemplated herein or any unrelated transactions;\n\n         (C) any draft, certificate or any other document presented\n         under any Letter of Credit proving to be forged, fraudulent,\n         invalid or insufficient.\n\n                                  23\n\n\n\n         in any respect or any statement therein being untrue or\n         inaccurate in any respect;\n\n         (D) the surrender or impairment of any security for the\n         performance or observance of any of the terms of this\n         Agreement; or\n\n         (E) the occurrence or continuance of any Default or Event of\n         Default.\n\n         (g) Letter of Credit Fees.  The Borrower agrees to pay to the\n             ---------------------\nAdministrative Agent for the account of each Lender a letter of credit\nfee (the \"Letter of Credit Participation Fee\") with respect to each\nLetter of Credit, computed for each day from and including the date of\nissuance of such Letter of Credit until the last day a drawing is\navailable under such Letter of Credit, at the L\/C Fee Rate on the\nUndrawn L\/C Amount.  The Borrower also agrees to pay to each L\/C\nIssuing Bank, for its own account, a fee (the \"L\/C Issuing Bank Letter\nof Credit Fee\"), computed with respect to the Undrawn L\/C Amount of\neach Participated Letter of Credit issued by such L\/C Issuing Bank as\nset forth in the preceding sentence, at a rate per annum equal to 1\/4\nof 1%.  Such Letter of Credit Fees shall be payable quarterly in\narrears on each Quarterly Date and on the Termination Date.\n\n         (h) Payment upon Acceleration.  If the Commitments shall be\n             -------------------------\nterminated or the principal of the Notes shall become immediately due\nand payable pursuant to Section 2.10 or 6.1, but the Administrative\nAgent shall not have given an Enforcement Notice (as defined in the\nInventory Security Agreement) as provided in Section 6.1, the Borrower\nshall pay to the L\/C Issuing Bank for application to drawings under\nany then outstanding Letters of Credit an amount equal to the\naggregate amount which is then, or may thereafter become, available\nfor drawing under such Letters of Credit.  The L\/C Issuing Bank shall\ninvest such amount in Liquid Investments (as defined in the Inventory\nSecurity Agreement) at the direction of the Administrative Agent.  If\nthe Administrative Agent subsequently gives an Enforcement Notice or\nan event specified in clause (h) or (i) of Section 6.1 shall have\noccurred and be continuing with respect to the Borrower, the L\/C\nIssuing Bank shall pay all amounts held by it pursuant to this\nsubsection to the Collateral Agent for application pursuant to the\nInventory Security Agreement.  If an Enforcement Notice is not then in\neffect and no event specified in clause (h) or (i) of Section 6.1\nshall have occurred and be continuing with respect to the Borrower,\nany amount so paid by the Borrower to the L\/C Issuing Bank with\nrespect to a Letter of Credit and not applied to a drawing thereunder\nshall be repaid to the Borrower, with interest or other income (to the\nextent received by the L\/C Issuing Bank on the related Liquid\nInvestments), as promptly as practicable after such Letter of Credit\nexpires or is fully drawn.\n\n         (i) Limited Liability of the L\/C Issuing Bank.  The Borrower\n             -----------------------------------------\nassumes all risks of the acts or omissions of any beneficiary and any\ntransferee of any Letter of Credit with respect to its use of such\nLetter of Credit.  The Lenders, the L\/C Issuing Banks and their\nrespective officers and directors shall not be liable or responsible\nfor:  (i) the use which may be made of any Letter of Credit or any\nacts or omissions of any beneficiary or transferee in connection\ntherewith; (ii) the validity, sufficiency or genuineness of documents\npresented under any Letter of Credit, or of any endorsements thereon,\neven if such documents should in fact.\n\n                                  24\n\n\n\n\nprove to be in any or all respects invalid, insufficient, fraudulent\nor forged; (iii) payment by the L\/C Issuing Bank or, in the case of a\nSyndicated Letter of Credit, any Lender against presentation of\ndocuments to the L\/C Issuing Bank which do not comply with the terms\nof any Letter of Credit, including failure of any documents to bear\nany reference or adequate reference to the Letter of Credit; or (iv)\nany other circumstances whatsoever in making or failing to make or\nnotifying or failing to notify any Lender that it is required to make\nany payment under any Letter of Credit.  Notwithstanding the\nforegoing, the Borrower shall have a claim against the L\/C Issuing\nBank and, in the case of clause (ii)(B) of this sentence, against any\nLender, and the L\/C Issuing Bank or a Lender, as the case may be,\nshall be liable to the Borrower, to the extent, but only to the\nextent, of any direct, as opposed to consequential, damages suffered\nby the Borrower which were caused by (i) the L\/C Issuing Bank's\nwillful misconduct or gross negligence in determining whether\ndocuments presented under any Letter of Credit comply with the terms\nthereof or (ii) (A) the L\/C Issuing Bank's willful failure to pay, or\nto notify any Lender that it is required to pay, or, (B) in the case\nof Syndicated Letters of Credit, a Lender's willful failure to pay,\nafter receipt of notice from the L\/C Issuing Bank pursuant to Section\n2.2(d)(ii) , under any Letter of Credit after the presentation to the\nL\/C Issuing Bank by any beneficiary (or a successor beneficiary to\nwhom such Letter of Credit has been transferred in accordance with\nits terms) of documents strictly complying with the terms and\nconditions of such Letter of Credit; provided that this clause (ii)\nshall not apply to any failure by the L\/C Issuing Bank or Lender to\npay under any Letter of Credit to the extent that such payment is\nprevented by injunction or other similar court order.  Subject to the\npreceding sentence, the L\/C Issuing Bank may accept documents that\nappear on their face to be in order, without responsibility for\nfurther investigation, regardless of any notice or information to\nthe contrary unless any beneficiary (or a successor beneficiary to\nwhom such Letter of Credit has been transferred in accordance with\nits terms) and the Borrower shall have notified the L\/C Issuing Bank\nthat such documents do not comply with the terms and conditions of\nsuch Letter of Credit.  Each Lender shall, ratably in accordance with\nits Commitment , indemnify the L\/C Issuing Bank (to the extent not\nreimbursed by the Borrower) against any cost, expense (including\ncounsel fees and disbursements), claim, demand, action, loss or\nliability (except such as result from the L\/C Issuing Bank's gross\nnegligence or willful misconduct ) that the L\/C Issuing Bank may\nsuffer or incur in connection with this Agreement or any action taken\nor omitted by the L\/C Issuing Bank hereunder.\n\n         (j) Appointment of L\/C Issuing Bank.  The Borrower and the\n             -------------------------------\nAdministrative Agent may, by one or more written instruments\nacceptable to and executed by each of them, appoint one or more\nLenders to perform all or any portion of the functions of an L\/C\nIssuing Bank with respect to Participated Letters of Credit under this\nAgreement.\n\n         SECTION 2.3.  Method of Borrowing.  (a) The Borrower shall\n                       -------------------\ngive the Administrative Agent notice (a \"Notice of Borrowing\") not\nlater than (x) 10:30 A.M.  (New York City time) on the date of each\nBase Rate Borrowing, (y) 12:00 Noon (New York City time) on the second\nDomestic Business Day before each CD Borrowing and (z) 12:00 Noon (New\nYork City time) on the third Euro-Dollar Business Day before each\nEuro-Dollar Borrowing, specifying:\n\n                                  25\n\n\n\n\n              (i) the date of such Borrowing, which shall be a\n         Domestic Business Day in the case of a Domestic Borrowing or\n         a Euro-Dollar Business Day in the case of a Euro-Dollar\n         Borrowing;\n\n              (ii) the aggregate amount of such Borrowing;\n\n              (iii) whether the Loans comprising such Borrowing are to\n         bear interest initially at the Base Rate, a CD Rate or a\n         Euro-Dollar Rate; and\n\n              (iv) in the case of a Fixed Rate Borrowing, the duration\n         of the initial Interest Period applicable thereto, subject to\n         the provisions of the definition of Interest Period.\n\n         A Notice of Borrowing shall not be required in connection\nwith a conversion pursuant to the second sentence of Section 2.6(c) or\na borrowing of Base Rate Loans pursuant to Section 8.1 or Section 8.2.\n\n         (b) Upon receipt of a Notice of Borrowing, the Administrative\nAgent shall promptly notify each Lender of the contents thereof and of\nsuch Lender's ratable share of such Borrowing and such Notice of\nBorrowing shall not thereafter be revocable by the Borrower.\n\n         (c) Not later than 12:00 Noon (New York City time) on the\ndate of each Borrowing, each Lender shall make available its ratable\nshare of such Borrowing, in Federal or other funds immediately\navailable in New York City, to the Administrative Agent at its address\nreferred to in Section 9.1.  Unless the Administrative Agent\ndetermines that any applicable condition specified in Article 3 has\nnot been satisfied, the Administrative Agent will make the funds so\nreceived from the Lenders available to the Borrower at the\nAdministrative Agent's aforesaid address.\n\n         (d) Unless the Administrative Agent shall have received\nnotice from a Lender prior to the date of any Borrowing that such\nLender will not make available to the Administrative Agent such\nLender's share of such Borrowing, the Administrative Agent may assume\nthat such Lender has made such share available to the Administrative\nAgent on the date of such Borrowing in accordance with subsection (c)\nof this Section and the Administrative Agent may, in reliance upon\nsuch assumption, make available to the Borrower on such date a\ncorresponding amount.  If and to the extent that such Lender shall not\nhave so made such share available to the Administrative Agent, such\nLender and the Borrower severally agree to repay to the Administrative\nAgent forthwith on demand such corresponding amount together with\ninterest thereon, for each day from the date such amount is made\navailable to the Borrower until the date such amount is repaid to the\nAdministrative Agent, at (i) in the case of the Borrower, a rate per\nannum equal to the higher of the Federal Funds Rate and the interest\nrate applicable thereto pursuant to Section 2.7 and (ii) in the case\nof such Lender, the Federal Funds Rate.  If such Lender shall repay to\nthe Administrative Agent such corresponding amount, such amount so\nrepaid shall constitute such Lender's Loan included in such Borrowing\nfor purposes of this Agreement.\n\n                                  26\n\n\n\n\n         SECTION 2.4.  Notes.  (a) The Loans of each Lender shall be\n                       -----\nevidenced by a single Note payable to the order of such Lender for the\naccount of its Applicable Lending Office in an amount equal to the\naggregate unpaid principal amount of such Lender's Loans.\n\n         (b) Each Lender may, by notice to the Borrower and the\nAdministrative Agent, request that its Loans of a particular type be\nevidenced by a separate Note in an amount equal to the aggregate\nunpaid principal amount of such Loans.  Each such Note shall be in\nsubstantially the form of Exhibit A hereto with appropriate\nmodifications to reflect the fact that it evidences solely Loans of\nthe relevant type.  Each reference in this Agreement to the \"Note\" of\nsuch Lender shall be deemed to refer to and include any or all of such\nNotes, as the context may require.\n\n         (c) Upon receipt of each Lender's Note pursuant to Section ,\nthe Administrative Agent shall forward such Note to such Lender.  Each\nLender shall record the date, amount and type of each Loan made by it\nand the date and amount of each payment of principal made by the\nBorrower with respect thereto, and may, if such Lender so elects in\nconnection with any transfer or enforcement of its Note, endorse on\nthe schedule forming a part thereof appropriate notations to evidence\nthe foregoing information with respect to each such Loan then\noutstanding; provided that the failure of any Lender to make any such\nrecordation or endorsement shall not affect the obligations of the\nBorrower hereunder or under the Notes.  Each Lender is hereby\nirrevocably authorized by the Borrower so to endorse its Note and to\nattach to and make a part of its Note a continuation of any such\nschedule as and when required.\n\n         SECTION 2.5.  Maturity of Loans.  Each Loan shall mature, and\n                       -----------------\nthe principal amount thereof shall be due and payable, on the\nTermination Date.\n\n         SECTION 2.6.  Method of Electing Interest Rates.  (a) The\n                       ---------------------------------\nLoans included in each Borrowing shall bear interest initially at the\ntype of rate specified by the Borrower in the applicable Notice of\nBorrowing.  Thereafter, the Borrower may from time to time elect to\nchange or continue the type of interest rate borne by each Group of\nLoans (subject in each case to the provisions of Article 8\"), as\nfollows:\n\n              (i) if such Loans are Base Rate Loans, the Borrower may\n         elect to convert such Loans to CD Loans or Euro-Dollar Loans;\n\n              (ii) if such Loans are CD Loans, the Borrower may elect\n         to convert such Loans to Base Rate Loans or Euro-Dollar Loans\n         or elect to continue such Loans as CD Loans for an additional\n         Interest Period, subject to Section 2.14 in the case of any\n         such conversion or continuation effective on any day other\n         than the last day of the then current Interest Period\n         applicable to such Loans; and\n\n              (iii) if such Loans are Euro-Dollar Loans, the Borrower\n         may elect to convert such Loans to Base Rate Loans or CD\n         Loans or elect to continue such Loans as Euro-Dollar Loans\n         for an additional Interest Period, subject to Section 2.14 in\n         the case of any such conversion or\n\n                                  27\n\n\n\n\n         continuation effective on any day other than the last day of\n         the then current Interest Period applicable to such Loans.\n         Each such election shall be made by delivering a notice (a\n         \"Notice of Interest Rate Election\") to the Administrative\n         Agent not later than 10:00 A.M.  (New York City time) on the\n         third Euro-Dollar Business Day before the conversion or\n         continuation selected in such notice is to be effective\n         (unless the relevant Loans are Domestic Loans to be converted\n         to Domestic Loans of the other type or are CD Rate Loans to\n         be continued as CD Rate Loans for an additional Interest\n         Period, in which case such notice shall be delivered to the\n         Administrative Agent not later than 10:00 A.M.  (New York\n         City time) on the second Domestic Business Day before such\n         conversion or continuation is to be effective).  A Notice of\n         Interest Rate Election may, if it so specifies, apply to only\n         a portion of the aggregate principal amount of the relevant\n         Group of Loans; provided that (i) such portion is allocated\n         ratably among the Loans comprising such Group and (ii) the\n         portion to which such Notice applies, and the remaining\n         portion to which it does not apply, are each $20,000,000 or\n         any larger multiple of $1,000,000.\n\n         (b) Each Notice of Interest Rate Election shall specify:\n\n              (i) the Group of Loans (or portion thereof) to which\n         such notice applies;\n\n              (ii) the date on which the conversion or continuation\n         selected in such notice is to be effective, which shall\n         comply with the applicable clause of subsection (a) above;\n\n              (iii) if the Loans comprising such Group are to be\n         converted, the new type of Loans and, if the Loans being\n         converted are to be Fixed Rate Loans, the duration of the\n         next succeeding Interest Period applicable thereto; and\n\n              (iv) if such Loans are to be continued as CD Loans or\n         Euro-Dollar Loans for an additional Interest Period, the\n         duration of such additional Interest Period.\n\n         Each Interest Period specified in a Notice of Interest Rate\nElection shall comply with the provisions of the definition of\nInterest Period.\n\n         (c) Upon receipt of a Notice of Interest Rate Election from\nthe Borrower pursuant to subsection (a) above, the Administrative\nAgent shall promptly notify each Lender of the contents thereof and\nsuch notice shall not thereafter be revocable by the Borrower.  If the\nAdministrative Agent does not receive a Notice of Interest Period\nElection for Fixed Rate Loans pursuant to subsection (a) of this\nSection within the applicable time limit specified therein prior to\nthe last day of the current Interest Period applicable to such Loans,\nand the Borrower has not\n\n\n                                  28\n\n\n\n\ndelivered a notice of prepayment relating to such Loans, then the\nBorrower shall be deemed to have elected that such Loans be converted\nto Base Rate Loans on the last day of such Interest Period.\n\n         (d) An election by the Borrower to change or continue the\nrate of interest applicable to any Group of Loans pursuant to this\nSection shall not constitute a \"Borrowing\" subject to the provisions\nof Section 3.2.\n\n         SECTION 2.7.  Interest Rates.  (a) Each Base Rate Loan shall\n                       --------------\nbear interest on the outstanding principal amount thereof, for each\nday from the date such Loan is made until it becomes due, at a rate\nper annum equal to the sum of the Base Rate Margin for such day plus\nthe Base Rate for such day.  Such interest shall be payable quarterly\non each Quarterly Date and on the Termination Date, commencing on the\nfirst such date after such Base Rate Loan is made and, with respect to\nthe principal amount of any Base Rate Loan converted to a CD Loan or a\nEuro-Dollar Loan, on each date a Base Rate Loan is so converted.  Any\noverdue principal of or interest on any Base Rate Loan shall bear\ninterest, payable on demand, for each day until paid at a rate per\nannum equal to the sum of 2% plus the rate otherwise applicable to\nBase Rate Loans for such day.\n\n         (b) Each CD Loan shall bear interest on the outstanding\nprincipal amount thereof, for each day during each Interest Period\napplicable thereto, at a rate per annum equal to the sum of the CD\nMargin for such day plus the Adjusted CD Rate applicable to such\nInterest Period; provided that if any CD Loan shall, as a result of\nclause (ii)(b) of the definition of Interest Period, have an Interest\nPeriod of less than 30 days, such CD Loan shall bear interest during\nsuch Interest Period at the rate applicable to Base Rate Loans during\nsuch period.  Such interest shall be payable for each Interest Period\non the last day thereof and, with respect to the principal amount of\nany CD Loan converted or continued pursuant to Section 2.6 on a day\nother than the last day of the Interest Period applicable thereto, on\nthe date of such conversion or continuation.  Any overdue principal of\nor interest on any CD Loan shall bear interest, payable on demand, for\neach day until paid at a rate per annum equal to the sum of 2% plus\nthe higher of (i) the rate applicable to Base Rate Loans for such day\nand (ii) the sum of the CD Margin plus the Adjusted CD Rate applicable\nto such Loan at the date such payment was due.\n\n         The \"Adjusted CD Rate\" applicable to any Interest Period\nmeans a rate per annum determined pursuant to the following formula:\n\n       [ CDBR ] 1\n\n       ACDR = [ ------- ] + AR\n\n          [ 1.00 - DRP ]\n\n    ACDR = Adjusted CD Rate\n\n       CDBR = CD Base Rate\n\n---------------------\n1 The amount in brackets being rounded upward, if necessary, to the\nnext higher 1\/100 of 1%.\n\n\n                                 29\n\n\n\n\n\n      DRP = Domestic Reserve Percentage\n\n      AR = Assessment Rate.\n\n         The \"CD Base Rate\" applicable to any Interest Period is the\nrate of interest determined by the Administrative Agent to be the\naverage (rounded upward, if necessary, to the next higher 1\/100 of 1%)\nof the prevailing rates per annum bid at 10:00 A.M.  (New York City\ntime) (or as soon thereafter as practicable) on the first day of such\nInterest Period by two or more New York certificate of deposit dealers\nof recognized standing for the purchase at face value from each CD\nReference Bank of its certificates of deposit in an amount comparable\nto the principal amount of the CD Loan of such CD Reference Bank to\nwhich such Interest Period applies and having a maturity comparable to\nsuch Interest Period.\n\n         \"Domestic Reserve Percentage\" means for any day that\npercentage (expressed as a decimal) which is in effect on such day, as\nprescribed by the Board of Governors of the Federal Reserve System (or\nany successor) for determining the maximum reserve requirement\n(including without limitation any basic, supplemental or emergency\nreserves) for a member bank of the Federal Reserve System in New York\nCity with deposits exceeding five billion dollars in respect of new\nnon-personal time deposits in dollars in New York City having a\nmaturity comparable to the related Interest Period and in an amount of\n$100,000 or more.  The Adjusted CD Rate shall be adjusted\nautomatically on and as of the effective date of any change in the\nDomestic Reserve Percentage.\n\n         \"Assessment Rate\" means for any day the annual assessment\nrate in effect on such day which is payable by a member of the Bank\nInsurance Fund classified as adequately capitalized and within\nsupervisory subgroup \"A\" (or a comparable successor assessment risk\nclassification) within the meaning of 12 C.F.R.  Sec 327.4(a) (or any\nsuccessor provision) to the Federal Deposit Insurance Corporation (or\nany successor) for such Corporation's (or such successor's) insuring\ntime deposits at offices of such institution in the United States.\nThe Adjusted CD Rate shall be adjusted automatically on and as of the\neffective date of any change in the Assessment Rate.\n\n         (c) Each Euro-Dollar Loan shall bear interest on the\noutstanding principal amount thereof, for each day during each\nInterest Period applicable thereto, at a rate per annum equal to the\nsum of the Euro-Dollar Margin for such day plus the Adjusted London\nInterbank Offered Rate applicable to such Interest Period; provided\nthat, if any Euro-Dollar Loan shall, as a result of clause (i)(c) of\nthe definition of Interest Period, have an Interest Period of less\nthan one month, such Euro-Dollar Loan shall bear interest during such\nInterest Period at the rate applicable to Base Rate Loans during such\nperiod.  Such interest shall be payable for each Interest Period on\nthe last day thereof and, if such Interest Period is longer than three\nmonths, at intervals of three months after the first day thereof and,\nwith respect to the principal amount of any Euro-Dollar Loan converted\nor continued pursuant to Section 2.6 on a day other than the last day\nof the Interest Period applicable thereto, on the date of such\nconversion or continuation.\n\n\n                                  30\n\n\n\n\n         The \"Adjusted London Interbank Offered Rate\" applicable to\nany Interest Period means a rate per annum equal to the quotient\nobtained (rounded upward, if necessary, to the next higher 1\/100 of\n1%) by dividing (i) the applicable London Interbank Offered Rate by\n(ii) 1.00 minus the Euro-Dollar Reserve Percentage.\n\n         The \"London Interbank Offered Rate\" applicable to any\nInterest Period means the average (rounded upward, if necessary, to\nthe next higher 1\/16 of 1%) of the respective rates per annum at which\ndeposits in Dollars are offered to each of the Euro-Dollar Reference\nBanks in the London interbank market at approximately 11:00 A.M.\n(London time) two Euro-Dollar Business Days before the first day of\nsuch Interest Period in an amount approximately equal to the principal\namount of the Euro-Dollar Loan of such Euro-Dollar Reference Bank to\nwhich such Interest Period is to apply and for a period of time\ncomparable to such Interest Period.\n\n         \"Euro-Dollar Reserve Percentage\" means for any day that\npercentage (expressed as a decimal) which is in effect on such day, as\nprescribed by the Board of Governors of the Federal Reserve System (or\nany successor) for determining the maximum reserve requirement for a\nmember bank of the Federal Reserve System in New York City with\ndeposits exceeding five billion dollars in respect of \"Eurocurrency\nliabilities\" (or in respect of any other category of liabilities which\nincludes deposits by reference to which the interest rate on\nEuro-Dollar Loans is determined or any category of extensions of\ncredit or other assets which includes loans by a non-United States\noffice of any Lender to United States residents).  The Adjusted London\nInterbank Offered Rate shall be adjusted automatically on and as of\nthe effective date of any change in the Euro-Dollar Reserve\nPercentage.\n\n         (d) Any overdue principal of or interest on any Euro-Dollar\nLoan shall bear interest, payable on demand, for each day until paid\nat a rate per annum equal to the higher of (i) the sum of 2% plus the\nEuro-Dollar Margin for such day plus the quotient obtained (rounded\nupward, if necessary, to the next higher 1\/100 of 1%) by dividing (x)\nthe average (rounded upward, if necessary, to the next higher 1\/16 of\n1%) of the respective rates per annum at which one day (or, if such\namount due remains unpaid more than three Euro-Dollar Business Days,\nthen for such other period of time not longer than three months as the\nAdministrative Agent may select) deposits in dollars in an amount\napproximately equal to such overdue payment due to each of the\nEuro-Dollar Reference Banks are offered to such Euro-Dollar Reference\nBank in the London interbank market for the applicable period\ndetermined as provided above by (y) 1.00 minus the Euro-Dollar Reserve\nPercentage (or, if the circumstances described in clause (a) or (b) of\nSection 8.1\" shall exist, at a rate per annum equal to the sum of 2%\nplus the rate applicable to Base Rate Loans for such day) and (ii) the\nsum of 2% plus the Euro-Dollar Margin for such day plus the Adjusted\nLondon Interbank Offered Rate applicable to such Loan at the date such\npayment was due.\n\n         (e) The Administrative Agent shall determine each interest\nrate applicable to the Loans hereunder.  The Administrative Agent\nshall give prompt notice to the Borrower and the participating Lenders\nof each rate of interest so determined, and its determination thereof\nshall be conclusive in the absence of manifest error.\n\n                                  31\n\n\n\n\n         (f) Each Reference Bank agrees to use its best efforts to\nfurnish quotations to the Administrative Agent as contemplated by this\nSection.  If any Reference Bank does not furnish a timely quotation,\nthe Administrative Agent shall determine the relevant interest rate on\nthe basis of the quotation or quotations furnished by the remaining\nReference Bank or Banks or, if none of such quotations is available on\na timely basis, the provisions of Section 8.1\" shall apply.\n\n         SECTION 2.8.  Fees.  (a) Subject to subsection (b) below, the\nBorrower shall pay to the Administrative Agent for the account of each\nLender a commitment fee (the \"Commitment Fee\") calculated at the\nCommitment Fee Rate (determined daily in accordance with the Pricing\nSchedule) on the excess of such Lender's Commitment over such Lender's\nTotal Exposure.\n\n         (b) Commitment Fees shall accrue from and including the\nClosing Date to but excluding the date of termination of the\nCommitments in their entirety and shall be payable on each Quarterly\nDate prior to the Termination Date with respect to the three month\nperiod ending one month prior to such Quarterly Date, and on the\nTermination Date.  Commitment Fees which are payable on the\nTermination Date or on any other date on which the termination of the\nCommitments in their entirety is effective (the \"Final Fee Payment\nDate\") shall be calculated with respect to the period from the most\nrecent date with respect to which such fees have been paid pursuant to\nthis Section to the Final Fee Payment Date.  The aggregate amount of\nCommitment Fees payable to the Administrative Agent for the account of\neach Lender on each Quarterly Date shall be reduced by an amount\ndetermined by the Borrower and such Lender to be equal to the product\nof (i) the amount of Net Free Balances (if any) maintained by the\nBorrower and its Subsidiaries with such Lender during the three month\nperiod ending two months prior to such Quarterly Date and (ii) the\nAverage Credit Balance Rate for the three month period ending two\nmonths prior to such Quarterly Date; provided that the portion of any\npayment of Commitment Fees due on the Final Fee Payment Date that\nrelates to a period that is more recent than two months prior to such\ndate shall not be reduced on account of any Net Free Balances.  Upon\nmaking each payment of such Commitment Fees to the Administrative\nAgent, the Borrower shall advise the Administrative Agent as to the\nportion thereof to be paid for the account of each Lender, and the\nAdministrative Agent shall distribute such payment in accordance with\nsuch advice.  For purposes of this Section 2.8, \"Net Free Balances\"\nfor any Lender during any period means the daily average amount of\ncollected balances maintained by the Borrower and its Subsidiaries in\nnon-interest bearing accounts with such Lender during such period that\nthe Borrower and such Lender have agreed do not support credit or\noperational services performed by such Lender (other than pursuant to\nthis Agreement) for the Borrower and its Subsidiaries, and \"Average\nCredit Balance Rate\" means for any period the average of the 90-day\nU.S.  Treasury Bill rate as of the end of each week or portion thereof\nduring such period as calculated by the Administrative Agent, such\ncalculation to be conclusive in the absence of manifest error.\n\n         (c) On the Closing Date, the Borrower shall pay to the\nAgents, for their own accounts, such fees and compensation in such\namounts as are set forth in the letter dated July 24, 1995.\n\n                                  32\n\n\n\n\n         (d) On the Closing Date, the Borrower shall pay to the\nAdministrative Agent for the account of each Lender, a fee equal to\n(w) 5\/8 of 1% of such Lender's Commitment, if such Lender's Initial\nCommitment was at least $30,000,000, (x) 1\/2 of 1% of such Lender's\nCommitment, if such Lender's Initial Commitment was at least\n$20,000,000 but less than $30,000,000, (y) G of 1% of such Lender's\nCommitment, if such Lender's Initial Commitment was at least\n$10,000,000 but less than $20,000,000, and (z) 1\/4 of 1% of such\nLender's Commitment, if such Lender's Initial Commitment was at least\n$6,000,000 but less than $10,000,000.\n\n         SECTION 2.9.  Optional Termination or Reduction of\n                       ------------------------------------\nCommitments.  During the Revolving Credit Period, the Borrower may,\n-----------\nupon at least three Domestic Business Days' notice to the\nAdministrative Agent, (i) terminate the Commitments at any time, if no\nLoans, Letters of Credit or Reimbursement Obligations are then\noutstanding or (ii) reduce the Commitments from time to time by an\naggregate amount of $25,000,000 or any multiple of $5,000,000 in\nexcess thereof; provided that, in connection with each such reduction\nof the Commitments, (x) the amounts by which the Commitments of the\nseveral Lenders are reduced shall be in proportion to the amounts\nshown on the signature pages hereof as their respective Commitments\nand (y) after giving effect to such reduction, the Total Exposure of\neach Lender shall not exceed the amount of its Commitment as so\nreduced.  If the Commitments are reduced, any accrued Commitment Fees\napplicable to the amount by which the Commitments were so reduced\nshall be due and payable one month after the effective date of such\nreduction.  If the Commitments are terminated in their entirety, all\naccrued Commitment Fees shall be payable on the effective date of such\ntermination.\n\n         SECTION 2.10.  Mandatory Termination of Commitments.  The\n                        ------------------------------------\nCommitments shall terminate on the earliest of (i) the Termination\nDate, (ii) the date on which commitments are terminated under the\nReceivables Purchase Agreement, and (iii) the date on which\nCommitments are terminated in accordance with this Agreement, and, in\nany case, any Loans then outstanding (together with accrued interest\nthereon) shall be due and payable on such date and any Letters of\nCredit then outstanding shall be cash collateralized on such date in\naccordance with Section 2.2(h).\n\n         SECTION 2.11.  Optional Prepayments.  (a) Subject in the case\n                        --------------------\nof any Fixed Rate Borrowing to Section 2.14, the Borrower may, (i)\nupon notice delivered to the Administrative Agent not later than 10:00\nA.M.  (New York City time) on the day of any prepayment, prepay the\nGroup of Base Rate Loans, (ii) upon notice delivered to the\nAdministrative Agent not later than 12:00 Noon (New York City time) on\nthe second Domestic Business Day before the day of prepayment, prepay\nany Group of CD Loans, and (iii) upon notice delivered to the\nAdministrative Agent not later than 12:00 Noon (New York City time) on\nthe third Euro-Dollar Business Day before the day of prepayment,\nprepay any Group of Euro-Dollar Loans, in each case, in whole at any\ntime, or from time to time in part in amounts aggregating $20,000,000\nor any larger multiple of $1,000,000, by paying the principal amount\nto be prepaid together with interest accrued thereon to the date of\nprepayment.  Each such optional prepayment shall be applied to prepay\nratably the Loans of the several Lenders included in such Group.\n\n                                  33\n\n\n\n\n\n         (b) Upon receipt of a notice of prepayment pursuant to this\nSection, the Administrative Agent shall promptly notify each Lender of\nthe contents thereof and of such Lender's ratable share of such\nprepayment and such notice shall not thereafter be revocable by the\nBorrower.\n\n         SECTION 2.12.  Mandatory Prepayments.  (a) If on the date of\n                        ---------------------\ndelivery of any Borrowing Base Certificate pursuant to Section\n5.1(e)(ii), 5.1(f), 5.1(g) or 5.1(k) or on the date of any closing\nreferred to in any certificate delivered pursuant to Section 5.7(ii),\nthe Applicable Percentage of the Secured Principal Amount shall exceed\nthe Borrowing Base reflected in the applicable certificate, the\nBorrower shall prepay the Loans (together with interest accrued\nthereon) to the extent required so that the Applicable Percentage of\nthe Secured Principal Amount on such date does not exceed the\nBorrowing Base so reflected.\n\n         (b) Each prepayment of Loans required by subsection (a) of\nthis Section shall be made with respect to such Group or Groups of\nLoans as the Borrower may specify by notice to the Administrative\nAgent at or before the time of such prepayment and shall be applied to\nprepay the Loans comprising each such Group pro rata; provided that,\nif no such timely specification is given by the Borrower, such payment\nshall be allocated to such Group or Groups as the Administrative Agent\nmay determine.\n\n         (c) If after all Loans have been repaid pursuant to\nsubsection (a) of this Section the Total Exposure of any Lender still\nexceeds the amount of such Lender's Commitment or the Applicable\nPercentage of the Secured Principal Amount still exceeds the Borrowing\nBase, the Borrower shall pay to the L\/C Issuing Bank for application\nto future drawings under any then outstanding Letters of Credit an\namount equal to such excess (or such lesser amount as the Lenders\nagree is sufficient to cover such future drawings).  Any amounts paid\nto Morgan Guaranty in its capacity as L\/C Issuing Bank with respect to\nany Syndicated Letter of Credit shall be held and invested by Morgan\nGuaranty on behalf of each of the Lenders.  The L\/C Issuing Bank shall\ninvest such amount in Liquid Investments (as defined in the Inventory\nSecurity Agreement) at the direction of the Administrative Agent, and\nshall apply such amount to drawings in the order in which such\ndrawings are made.  To the extent not applied to drawings under any\nLetter of Credit, such amount shall be repaid to the Borrower with\ninterest in the manner provided in Section 2.2(h) as promptly as\npracticable after the earlier of (i) the date on which all outstanding\nLetters of Credit have expired or been fully drawn and (ii) the date\n(\"Delivery Date\") the Collateral Agent delivers a Collateral Report,\nif the Borrowing Base on each date for which the Borrower has been\nrequired to calculate the Borrowing Base pursuant to Section 5.1(e)\nsince the date of payment by the Borrower of such amount and on any\nother date for which an estimate has been made during the thirty-day\nperiod preceding the Delivery Date exceeds the Applicable Percentage\nof the Secured Principal Amount on such date.  If the Administrative\nAgent gives an Enforcement Notice (as defined in the Inventory\nSecurity Agreement), the L\/C Issuing Bank shall pay all amounts held\nby it pursuant to this subsection to the Collateral Agent for\napplication pursuant to the Inventory Security Agreement.\n\n         (d) At any time the Borrower is required to make a payment to\nthe L\/C Issuing Banks pursuant to subsection (c), the Collateral\nAgent, if requested by the\n\n                                  34\n\n\n\nRequired Lenders, shall prepare and deliver a Collateral Report to the\nLenders, the L\/C Issuing Banks, the Administrative Agent and the\nBorrower.  The Borrower will, promptly upon notice of such request,\nprovide to the Collateral Agent all information and evidence\nreasonably requested concerning the Inventory to enable the Collateral\nAgent to prepare the Collateral Report.\n\n         SECTION 2.13.  General Provisions as to Payments.  (a) The\n                        ---------------------------------\nBorrower shall make each payment of principal of, and interest on, the\nLoans and of Fees and other amounts payable hereunder, not later than\n12:00 Noon (New York City time) on the date when due, in Federal or\nother funds immediately available in New York City, to the\nAdministrative Agent at its address referred to in Section 9.1.  The\nAdministrative Agent shall promptly distribute to each Lender its\nratable share of each such payment received by the Administrative\nAgent for the account of the Lenders.  Whenever any payment of\nprincipal of, or interest on, the Domestic Loans or of Fees or other\namounts payable hereunder shall be due on a day which is not a\nDomestic Business Day, the date for payment thereof shall be extended\nto the next succeeding Domestic Business Day.  Whenever any payment of\nprincipal of, or interest on, the Euro-Dollar Loans shall be due on a\nday which is not a Euro-Dollar Business Day, the date for payment\nthereof shall be extended to the next succeeding Euro-Dollar Business\nDay unless such Euro-Dollar Business Day falls in another calendar\nmonth, in which case the date for payment thereof shall be the next\npreceding Euro-Dollar Business Day.  If the date for any payment of\nprincipal is extended by operation of law or otherwise, interest\nthereon shall be payable for such extended time.\n\n         (b) Unless the Administrative Agent shall have received\nnotice from the Borrower prior to the date on which any payment is due\nto the Lenders hereunder that the Borrower will not make such payment\nin full, the Administrative Agent may assume that the Borrower has\nmade such payment in full to the Administrative Agent on such date and\nthe Administrative Agent may, in reliance upon such assumption, cause\nto be distributed to each Lender on such due date an amount equal to\nthe amount then due such Lender.  If and to the extent that the\nBorrower shall not have so made such payment, each Lender shall repay\nto the Administrative Agent forthwith on demand such amount\ndistributed to such Lender together with interest thereon, for each\nday from the date such amount is distributed to such Lender until the\ndate such Lender repays such amount to the Administrative Agent, at\nthe Federal Funds Rate.\n\n         SECTION 2.14.  Funding Losses.  If the Borrower makes any\n                        --------------\npayment of principal with respect to any Fixed Rate Loan or any Fixed\nRate Loan is converted or continued (pursuant to Article 2, 6, 8\" or\notherwise) on any day other than the last day of an Interest Period\napplicable thereto, or the last day of an applicable period fixed\npursuant to Section , or if the Borrower fails to borrow, prepay,\nconvert or continue any Fixed Rate Loans after notice has been given\nto any Lender in accordance with Section , 2.6 or the Borrower shall\nreimburse each Lender within 15 days after demand for any resulting\nloss or expense incurred by it (or by any existing or prospective\nParticipant in the related Loan), including (without limitation) any\nloss incurred in obtaining, liquidating or employing deposits from\nthird parties, but excluding loss of margin for the period after any\nsuch payment, conversion or continuation or failure to borrow, prepay,\nconvert or continue; provided that such Lender shall have delivered to\nthe Borrower a\n\n                                  35\n\n\n\n\ncertificate as to the amount of such loss or expense, which\ncertificate shall be conclusive in the absence of manifest error.\n\n         SECTION 2.15.  Computation of Interest and Fees.  Interest\n                        --------------------------------\nbased on the Prime Rate hereunder shall be computed on the basis of a\nyear of 365 days (or 366 days in a leap year) and paid for the actual\nnumber of days elapsed (including the first day but excluding the last\nday).  All other interest and Commitment Fees shall be computed on the\nbasis of a year of 360 days and paid for the actual number of days\nelapsed (including the first day but excluding the last day).  Letter\nof Credit Fees shall be computed on the basis of a year of 360 days\nand paid for the actual number of days elapsed, calculated for the\nrelevant period (including the first day and including the last day).\n\n                              ARTICLE 3\n\n                CONDITIONS TO BORROWINGS AND ISSUANCES\n\n         SECTION 3.1.  Closing.  The closing hereunder shall occur\n                       -------\nupon receipt by the Agents of the following, all of which shall be in\nform and substance acceptable to the Agents:\n\n         (a) a duly executed Note for the account of each Lender dated\non or before the Closing Date complying with the provisions of Section\n2.4;\n\n         (b) an opinion dated the Closing Date of the Assistant\nGeneral Counsel of the Borrower in substantially the form of Exhibit G\nhereto and covering such other matters as the Administrative Agent may\nreasonably request;\n\n         (c) an opinion dated the Closing Date of Davis Polk &amp; Wardwell, special counsel for the Agents in substantially the form of\nExhibit H hereto and covering such other matters as the Administrative\nAgent may reasonably request;\n\n         (d) evidence satisfactory to the Administrative Agent that\nthe commitments under the Existing Credit Agreement have terminated,\nall loans thereunder have been repaid in full (all Lenders hereunder\nwhich are also lenders under the Existing Credit Agreement hereby\nagreeing that such repayment may be made, whether at the end of\ninterest periods under the Existing Credit Agreement or not), all\naccrued fees and other amounts payable thereunder (including, without\nlimitation, any funding costs payable pursuant to the Existing Credit\nAgreement) have been paid in full and that all letters of credit\nissued thereunder (other than those listed on Schedule 1 and those\ndeemed to be issued under the Receivables Purchase Agreement) have\nbeen returned to the issuers thereof (or to the Administrative Agent)\nfor cancellation;\n\n                                  36\n\n\n\n\n\n         (e) a Borrowing Base Certificate dated the Closing Date\nsetting forth the Borrowing Base as of August 31, 1995;\n\n         (f) a duly executed copy of the Inventory Security Agreement,\na duly executed copy of the Perfection Certificate (as defined in the\nInventory Security Agreement); all Pledged Instruments (as defined in\nthe Inventory Security Agreement) delivered to the Collateral Agent\nand endorsed to the order of the Collateral Agent; and all\ncertificates representing Pledged Stock or Pledged Interests (in each\ncase as defined in the Inventory Security Agreement), accompanied by\nduly executed instruments of transfer or assignment in blank,\ndelivered to the Collateral Agent;\n\n         (g) acknowledgement copies of proper financing statements\n(Form UCC-1) naming the Borrower as the debtor and the Collateral\nAgent, on behalf of the Lenders, as the secured party, or other\nsimilar instruments or documents as may be necessary or, in the\nopinion of the Collateral Agent or its counsel, desirable under the\nUCC of all appropriate jurisdictions to evidence and perfect the\nLenders' Security Interests in the Borrower's Collateral (as defined\nin the Inventory Security Agreement);\n\n         (h) acknowledgement copies of proper financing statements\n(Form UCC-1) naming the Special Purpose Members as the debtors and the\nCollateral Agent, on behalf of the Lenders, as the secured party, or\nother similar instruments or documents as may be necessary or, in the\nopinion of the Collateral Agent or its counsel, desirable under the\nUCC of all appropriate jurisdictions to evidence and perfect the\nLenders' Security Interests in the Special Purpose Members' Collateral\n(as defined in the Inventory Security Agreement);\n\n         (i) executed financing statements (Form UCC-3) necessary to\nrelease all security interests and other rights of any Person\npreviously granted by the Borrower in the Borrower's Collateral;\n\n         (j) (i) requests for information or copies (Form UCC-11) (or\na similar search report certified by parties acceptable to the\nCollateral Agent or its counsel) dated a date reasonably near the\nClosing Date listing all effective financing statements which name the\nBorrower (under its present name and any previous name) as debtor,\ntogether with copies of such financing statements (none of which,\nunless subject to a release referred to in clause (h) above, shall\ncover any Collateral) and (ii) requests for information dated a date\nreasonably near the Closing Date regarding tax liens against the\nBorrower in the relevant offices in the States of Indiana, Maryland,\nNew York and Pennsylvania;\n\n         (k) from NBD Bank a certificate of an authorized officer of\nNBD Bank attaching a true and correct copy of the instrument or\ninstruments evidencing the Secured Tax Exempt Debt;\n\n         (l) a certificate as to insurance coverage as required by\nSection 5.2(b);\n\n         (m) a certificate signed by the Chief Financial Officer,\nTreasurer or Controller of the Borrower that the representations and\nwarranties of the Borrower contained in this Agreement shall be true\non and as of the Closing Date;\n\n                                  37\n\n\n\n\n         (n) the fees described in Section 2.8(c) and (d);\n\n         (o) evidence satisfactory to the Administrative Agent of the\nsatisfaction of all the conditions to the closing of the Receivables\nFacility on the Closing Date, and that all transactions contemplated\nby the Receivables Documents to be consummated on the Closing Date\nwill take place prior to or contemporaneously with the closing\ncontemplated hereunder; and\n\n         (p) all documents the Agents may reasonably request relating\nto the existence of the Borrower, the corporate authority for and the\nvalidity of the Financing Documents, and any other matters relevant\nhereto, all in form and substance satisfactory to the Agents.\n\n\n         The Administrative Agent shall promptly notify the Borrower\nand the Lenders of the date on which the foregoing conditions have\nbeen satisfied, and such notice shall be conclusive and binding on all\nparties hereto.\n\n         SECTION 3.2.  All Borrowings and Issuances.  The obligation\n                       ----------------------------\nof each Lender to make a Loan on the occasion of each Borrowing and\nthe obligation of the L\/C Issuing Bank to issue each Letter of Credit\nare subject to the satisfaction of the following conditions:\n\n         (a) (i) receipt by the Administrative Agent of a Notice of\nBorrowing as required by Section 2.3(a)# or (ii) receipt by the L\/C\nIssuing Bank of a Notice of Issuance as required by Section 2.2, as\nthe case may be;\n\n         (b) receipt by the Administrative Agent of a certificate\ndated the date of such Borrowing or Issuance and signed by the Chief\nFinancial Officer, the Treasurer or the Controller of the Borrower\ncertifying that:\n\n              (i) immediately before and after such Borrowing or\n         Issuance, no Default or Potential Termination Event or\n         Termination Event (as such terms are defined in the\n         Receivables Purchase Agreement) shall have occurred and be\n         continuing; and\n\n              (ii) the representations and warranties of the Borrower\n         contained in this Agreement (other than the representation\n         and warranty set forth in Section 4.4(c)) and the other\n         Financing Documents shall be true on and as of the date of\n         such Borrowing;\n\n         (c) the fact that immediately after such Borrowing or\nIssuance the Applicable Percentage of the Secured Principal Amount\nshall not exceed the lesser of (i) the Borrowing Base reflected in the\nmost recent Borrowing Base Certificate delivered to the Administrative\nAgent and (ii) the Receivables Maximum Purchase Price; and\n\n                                  38\n\n\n\n         (d) the fact that no Federal Lien shall have been filed\nagainst the Borrower which covers or may cover any Collateral (as\ndefined in the Inventory Security Agreement) and such Federal Lien\nremains undischarged.\n\n                              ARTICLE 4\n\n                    REPRESENTATIONS AND WARRANTIES\n\n         The Borrower represents and warrants that:\n\n         SECTION 4.1.  Corporate Existence and Power.  The Borrower is\n                       -----------------------------\na corporation duly incorporated, validly existing and in good standing\nunder the laws of the State of Delaware, and has all corporate powers\nand all material governmental licenses, authorizations, consents and\napprovals required to carry on its business as now conducted.\n\n         SECTION 4.2.  Corporate and Governmental Authorization; No\n                       --------------------------------------------\nContravention.  The execution, delivery and performance by the\n-------------\nBorrower of the Financing Documents are within the Borrower's\ncorporate powers, have been duly authorized by all necessary corporate\naction, require no action by or in respect of, or filing with, any\ngovernmental body, agency or official (except as contemplated by the\nInventory Security Agreement) and do not contravene, or constitute a\ndefault under, any provision of applicable law or regulation or of the\ncertificate of incorporation or by-laws of the Borrower or of any\nagreement, judgment, injunction, order, decree or other instrument\nbinding upon the Borrower or result in the creation or imposition of\nany Lien on any asset of the Borrower or any of its Subsidiaries\n(except the Security Interests).\n\n         SECTION 4.3.  Binding Effect.  This Agreement and the\n                       --------------\nInventory Security Agreement constitute valid and binding agreements\nof the Borrower and each Note, when executed and delivered in\naccordance with this Agreement, will constitute a valid and binding\nobligation of the Borrower, in each case enforceable in accordance\nwith their respective terms, except as the enforceability thereof may\nbe limited by bankruptcy, insolvency, reorganization or moratorium or\nother similar laws relating to the enforcement of creditors' rights\ngenerally and by general equitable principles.\n\n         SECTION 4.4.  Financial Information.  (a) The consolidated\n                       ---------------------\nbalance sheets of the Borrower and its Consolidated Subsidiaries as of\nDecember 31, 1994 and the related consolidated statements of income\nand cash flows for the fiscal year then ended, reported on by Price\nWaterhouse LLP and set forth in the Borrower's 1994 Form 10-K, a copy\nof which has been delivered to each of the Lenders, fairly present, in\nconformity with generally accepted accounting principles, the\nconsolidated financial position of the Borrower and its\n\n                                  39\n\n\n\nConsolidated Subsidiaries as of such date and their consolidated\nresults of operations and cash flows for such fiscal year.\n\n         (b) The unaudited consolidated balance sheet of the Borrower\nand its Consolidated Subsidiaries as of June 30, 1995 and the related\nunaudited consolidated statements of income and cash flows for the six\nmonths then ended, set forth in the Borrower's quarterly report for\nthe fiscal quarter ended June 30, 1995 as filed with the Securities\nand Exchange Commission on the Borrower's Latest Form 10-Q, a copy of\nwhich has been delivered to each of the Lenders, fairly present, in\nconformity with generally accepted accounting principles applied on a\nbasis consistent with the financial statements referred to in\nparagraph (a) of this Section 4.4 (except that the notes to such\nquarterly financial statements are abbreviated as permitted by the\nSecurities and Exchange Commission in its regulations relating to\ninterim financial statements), the consolidated financial position of\nthe Borrower and its Consolidated Subsidiaries as of such date and\ntheir consolidated results of operations and cash flows for such six\nmonth period (subject to normal year-end adjustments).\n\n         (c) Since June 30, 1995, there has been no material adverse\nchange in the business or financial position of the Borrower and its\nConsolidated Subsidiaries, considered as a whole.\n\n         SECTION 4.5.  Litigation.  There is no action, suit or\n                       ----------\nproceeding pending against, or to the knowledge of the Borrower\nthreatened against or affecting, the Borrower or any of its\nSubsidiaries before any court or arbitrator or any governmental body,\nagency or official in which there is a reasonable possibility of an\nadverse decision (i) which could materially adversely affect the\nability of the Borrower to perform its obligations under any of the\nFinancing Documents, or (ii) which would in any material respect draw\ninto question the validity of any of the Financing Documents.\n\n         SECTION 4.6.  Compliance with ERISA.  Each member of the\n                       ---------------------\nERISA Group has fulfilled its obligations under the minimum funding\nstandards of ERISA and the Internal Revenue Code with respect to each\nPlan and is in compliance in all material respects with the presently\napplicable provisions of ERISA and the Internal Revenue Code with\nrespect to each Plan, and has not incurred any liability under Title\nIV of ERISA (i) to the PBGC other than a liability to the PBGC for\npremiums under Section 4007 of ERISA or (ii) in respect of a\nMultiemployer Plan which has not been discharged in full when due.\n\n         SECTION 4.7.  Taxes.  United States Federal income tax\n                       -----\nreturns of the Borrower and the members of its \"affiliated group\" (as\ndefined in Section 1504(a) of the Internal Revenue Code) have been\nexamined through the taxable year ended December 31, 1987 and are\nclosed through the taxable year ended December 31, 1986.  The Borrower\nand the members of its \"affiliated group\" (as so defined) have filed\nall United States Federal income tax returns and all other material\ntax returns which are required to be filed by them and have paid all\ntaxes stated to be due in such returns or pursuant to any assessment\nreceived by them, except for taxes the amount, applicability or\nvalidity of which is being contested in good faith by appropriate\nproceedings.  The charges, accruals and reserves on the books of the\nBorrower and its Subsidiaries in respect of taxes or other similar\n\n                                  40\n\n\n\n\ngovernmental charges, additions to taxes and any penalties and\ninterest thereon are, in the opinion of the Borrower, adequate.\n\n         SECTION 4.8.  Environmental Compliance.\n\n         (a) Except as disclosed on Schedule 4.8,\n\n              (i) the Borrower and its Subsidiaries have obtained, or\n         made timely application for, all permits, certificates,\n         licenses, approvals, registrations and other authorizations\n         (collectively \"Permits\") which are required under all\n         applicable Environmental Laws and are necessary for their\n         operations and are in compliance with the terms and\n         conditions of all such Permits, except where the failure to\n         obtain such Permits or to comply with their terms would not\n         have, individually or in the aggregate, a material adverse\n         effect on the Borrower and its Consolidated Subsidiaries,\n         considered as a whole;\n\n              (ii) no notice, notification, demand, request for\n         information, citation, summons, complaint or order has been\n         issued, no complaint has been filed, no penalty has been\n         assessed and no investigation or review is pending, or to the\n         Borrower's knowledge, threatened by any governmental entity\n         or other Person with respect to any (A) alleged violation by\n         the Borrower or any Subsidiary of any Environmental Law,\n\n              (B) alleged failure by the Borrower or any Subsidiary to\n         have any Permits required in connection with the conduct of\n         its business or to comply with the terms and conditions\n         thereof, (C) Regulated Activity or (D) Release of Hazardous\n         Substances, except where such event or events would not have,\n         individually or in the aggregate, a material adverse effect\n         on the Borrower and its Consolidated Subsidiaries, considered\n         as a whole;\n\n              (iii) to the knowledge of the Borrower, all oral or\n         written notifications of a Release of a Hazardous Substance\n         required to be filed under any applicable Environmental Law\n         have been filed or are in the process of being filed by or on\n         behalf of the Borrower or any Subsidiary;\n\n              (iv) no property now owned or coal mining operation or\n         steel facility which is now leased by the Borrower or any\n         Subsidiary and, to the knowledge of the Borrower, no such\n         property previously owned or leased or any property to which\n         the Borrower or any Subsidiary has, directly or indirectly,\n         transported or arranged for the transportation of any\n         Hazardous Substances is listed or, to the Borrower's\n         knowledge, proposed for listing, on the National Priorities\n         List promulgated pursuant to CERCLA, on CERCLIS (as defined\n         in CERCLA) or any similar state list or is the subject of\n         federal, state or local enforcement actions or, to the\n         knowledge of the Borrower, other investigations which may\n         lead to claims against the Borrower or any Subsidiary for\n         clean-up costs, remedial work, damage to natural resources or\n         personal injury claims, including, but not limited to, claims\n         under CERCLA, except where such listings or investigations\n         would not have,\n\n                                      41\n\n\n\n\n         individually or in the aggregate, a material adverse effect\n         on the Borrower and its Consolidated Subsidiaries, considered\n         as a whole; and\n\n              (v) there are no Liens under or pursuant to any\n         applicable Environmental Laws on any real property or other\n         assets owned or leased by the Borrower or any Subsidiary, and\n         no government actions have been taken or, to the knowledge of\n         the Borrower, are in process which could subject any of such\n         properties or assets to such Liens.\n\n         (b) For purposes of this Section, the terms \"Borrower\" and\n\"Subsidiary\" shall include any business or business entity (including\na corporation) which is a predecessor, in whole or in part, of the\nBorrower or any Subsidiary.\n\n         SECTION 4.9.  Full Disclosure.  All information, including\n                       ---------------\nthe Inventory Information Memorandum, furnished by the Borrower to the\nAgents or any Lender for purposes of or in connection with this\nAgreement or any transaction contemplated hereby is, taken as whole\nand in light of the circumstances under which such information is\nfurnished, true and accurate in all material respects on the date as\nof which such information is stated or certified.  It is understood\nthat the foregoing is limited to the extent that (i) information\nrelating to the steel industry generally is to the best of the\nBorrower's knowledge, (ii) projections have been made in good faith by\nthe management of the Borrower and in the view of the Borrower's\nmanagement are reasonable in light of all information known to\nmanagement as of the Closing Date, and (iii) no representation or\nwarranty is made as to whether the projected results will be realized.\nThe Borrower has disclosed to the Lenders in writing any and all facts\nwhich materially and adversely affect or may so affect (to the extent\nthat the Borrower can now reasonably foresee), the business,\noperations or financial condition of the Borrower and its Consolidated\nSubsidiaries, taken as a whole, or the ability of the Borrower to\nperform its obligations under any of the Financing Documents.\n\n                                   ARTICLE 5\n\n                                   COVENANTS\n\n         The Borrower agrees that, as long as any Lender has any\nCommitment hereunder or any Letter of Credit remains outstanding or\nany amount payable under any Note or any Reimbursement Obligation\nremains unpaid:\n\n         SECTION 5.1.  Information.  The Borrower will deliver to each\n                       -----------\nof the Lenders:\n\n                                  42\n\n\n\n\n         (a) as soon as available and in any event within 95 days\nafter the end of each fiscal year of the Borrower, a consolidated\nbalance sheet of the Borrower and its Consolidated Subsidiaries as of\nthe end of such fiscal year and the related consolidated statements of\nincome and cash flows for such fiscal year, setting forth in each case\nin comparative form the figures for the previous fiscal year, all\nreported on in a manner acceptable to the Securities and Exchange\nCommission by Price Waterhouse LLP or other independent public\naccountants of nationally recognized standing (the Borrower being\npermitted to satisfy the requirements of this clause (a) by delivery\nof its annual report on Form 10-K (or any successor form), and all\nsupplements or amendments thereto, as filed with the Securities and\nExchange Commission);\n\n         (b) as soon as available and in any event within 60 days\nafter the end of each of the first three quarters of each fiscal year\nof the Borrower, consolidated balance sheets of the Borrower and its\nConsolidated Subsidiaries as of the end of such quarter and the\nrelated consolidated statements of income for such quarter and for the\nportion of the Borrower's fiscal year ended at the end of such quarter\nand statements of cash flow for the portion of the Borrower's fiscal\nyear ended at the end of such quarter, setting forth in each case, in\ncomparative form the figures for the corresponding quarter and the\ncorresponding portion of the Borrower's previous fiscal year, all\ncertified (subject to normal year-end adjustments) as to fairness of\npresentation, generally accepted accounting principles and consistency\n(except for the notes to such quarterly statements, which may be\nabbreviated as permitted by the Securities and Exchange Commission in\nits regulations relating to interim financial statements) by the Chief\nFinancial Officer, the Treasurer or the Controller of the Borrower\n(the Borrower being permitted to satisfy the requirements of this\nclause (b) by delivery of its quarterly report on Form 10-Q (or any\nsuccessor form), and all supplements or amendments thereto, as filed\nwith the Securities and Exchange Commission);\n\n         (c) simultaneously with the delivery of each set of financial\nstatements referred to in clauses (a) and (b) above, a certificate of\nthe Chief Financial Officer, the Treasurer or the Controller of the\nBorrower (i) setting forth in reasonable detail the calculations\nrequired to establish whether the Borrower was in compliance with the\nrequirements of Section 5.6 on the date of such financial statements\nand (ii) stating whether any Default or Increased Coverage Event\nexists on the date of such certificate and, if any Default or\nIncreased Coverage Event then exists, setting forth the details\nthereof and the action which the Borrower is taking or proposes to\ntake with respect thereto and (iii) in the case of the certificate\ndelivered simultaneously with each set of financial statements\nreferred to in clause (a) above, showing in reasonable detail the\namount of insurance coverage for the Borrower and its Subsidiaries\nthen in effect;\n\n         (d) simultaneously with the delivery of each set of financial\nstatements referred to in clause (a) above, a statement of the firm of\nindependent public accountants which reported on such statements (i)\nwhether anything has come to their attention relating to accounting\nmatters in the course of their audit to cause them to believe that any\nDefault or Increased Coverage Event existed on the date of such\nstatements and (ii) confirming the calculations required by clause\n(c)(i) above and set forth in the officer's certificate delivered\nsimultaneously therewith pursuant to clause (c)\nabove;\n\n                                  43\n\n\n\n\n         (e) within 20 days after the end of each month, (i) a\nBorrowing Base Certificate (the \"Monthly Borrowing Base Certificate\")\nsetting forth a calculation of the Borrowing Base as of the end of\nsuch month and (ii) if the Applicable Percentage of the Secured\nPrincipal Amount at the time of the delivery of the Monthly Borrowing\nBase Certificate exceeds the Borrowing Base as set forth in such\ncertificate, simultaneously with the delivery of such certificate a\ncertificate of the Chief Financial Officer, the Treasurer or the\nController of the Borrower dated as of one Domestic Business Day prior\nto the delivery of the Monthly Borrowing Base Certificate setting\nforth in the form of the Borrowing Base Certificate the Borrowing Base\nas of the close of business on such date and specifying whether the\nBorrower is required to take any action to comply with Section 2.12;\n\n         (f) if on any date any officer of the Borrower becomes aware\nthat the Applicable Percentage of the Secured Principal Amount exceeds\nthe Borrowing Base on such date, a Borrowing Base Certificate, to be\ndated as of and delivered to the Administrative Agent one Domestic\nBusiness Day after such date, setting forth the Borrower's good faith\nestimate as to the calculation of the Borrowing Base as of the close\nof business on such date;\n\n         (g) promptly, but in no event later than five Domestic\nBusiness Days after any officer of the Borrower becomes aware of any\noccurrence which such officer knows to constitute a Default or an\nIncreased Coverage Event, a certificate of the Chief Financial\nOfficer, the Treasurer or the Controller of the Borrower setting forth\nthe details thereof and the action which the Borrower is taking or\nproposes to take with respect thereto and, in the case of an Increased\nCoverage Event, setting forth in the form of the Borrowing Base\nCertificate the Borrower's good faith estimate as to the calculation\nof the Borrowing Base as of the close of business on the Domestic\nBusiness Day prior to the date of delivery of such certificate;\n\n         (h) promptly upon the mailing thereof to the shareholders of\nthe Borrower generally, copies of all financial statements, reports\nand proxy statements so mailed;\n\n         (i) promptly upon the filing thereof, copies of all\nregistration statements (other than the exhibits thereto and any\nregistration statements on Form S-8 or its equivalent) and reports on\nForms 10-K, 10-Q and 8-K (or their equivalents) which the Borrower\nshall have filed with the Securities and Exchange Commission;\n\n         (j) if and when any member of the ERISA Group (i) gives or is\nrequired to give notice to the PBGC of any \"reportable event\" (as\ndefined in Section 4043 of ERISA) with respect to any Plan which might\nconstitute grounds for a termination of such Plan under Title IV of\nERISA, or knows that the plan administrator of any Plan has given or\nis required to give notice of any such reportable event, a copy of the\nnotice of such reportable event given or required to be given to the\nPBGC; (ii) receives notice of complete or partial withdrawal liability\nunder Title IV of ERISA or notice that any Multiemployer Plan is in\nreorganization, is insolvent or has been terminated, a copy of such\nnotice; (iii) receives notice from the PBGC under Title IV of ERISA of\nan intent to terminate, impose liability (other than for premiums\nunder Section 4007 of ERISA) in respect of, or appoint a trustee to\nadminister any Plan, a copy of such notice; (iv) applies for a waiver\nof the\n\n                                      44\n\n\n\nminimum funding standard under Section 412 of the Internal Revenue\nCode, a copy of such application; (v) gives notice of intent to\nterminate any Plan under Section 4041(c) of ERISA, a copy of such\nnotice and other information filed with the PBGC; (vi) gives notice\nunder Section 4063(a) of ERISA of withdrawal from any Plan as\ndescribed in Section 4063 of ERISA, a copy of such notice; (vii) fails\nto make any payment or contribution to any Plan which results in the\nimposition of a Lien, notice of such failure; or (viii) makes any\namendment to any Plan which requires posting a bond or other security\nunder Section 307 of ERISA, a copy of the notice required under\nSection 307(e) of ERISA; and\n\n         (k) from time to time such additional information regarding\nthe Borrowing Base or the financial position or business of the\nBorrower as the Required Lenders may reasonably request, which may\ninclude a Borrowing Base Certificate, to be dated as of and delivered\nto the Administrative Agent one Domestic Business Day after the date\non which such request is effective, setting forth the Borrower's good\nfaith estimate as to the calculation of the Borrowing Base as of the\nclose of business on the date of such request.\n\n         SECTION 5.2.  Maintenance of Property; Insurance.  (a) The\n                       ----------------------------------\nBorrower will keep, and will cause each Significant Subsidiary to\nkeep, all property useful and necessary in its business as then\nconducted in good working order and condition, ordinary wear and tear\nexcepted.\n\n         (b) The Borrower will maintain, to the extent commercially\navailable, (i) physical damage insurance on substantially all its real\nand personal property in the United States (including all Inventories\nand books and records relating to any proceeds of Inventories) on an\n\"All Risks\" form subject to normal exclusions (including the perils of\nflood and quake) on a repair and replacement cost basis (or, in the\ncase of idle properties, actual cash value basis) for all such\nproperty in an amount not less than $90,000,000 (subject to a\ndeductible amount or retention not to exceed $10,000,000) and\nconsequential loss coverage for extra expense, (ii) public liability\ninsurance (including products liability coverage) in an amount not\nless than $50,000,000 (subject to a deductible amount or retention not\nto exceed $10,000,000), and (iii) such other insurance coverage in\nsuch amounts and with respect to such risks relating to the Borrower's\nCollateral as the Required Lenders may reasonably request.  All such\ninsurance shall be provided by insurers having an A.M.  Best\npolicyholders rating of not less than A- or by the insurers set forth\nin Exhibit I hereto, as such exhibit may be modified from time to time\nby the Administrative Agent (with the consent of the Required\nLenders).  Prior to the Closing Date, the Borrower will cause the\nCollateral Agent to be named as an insured party and loss payee, on\nbehalf of the Secured Parties, on each insurance policy covering risks\nrelating to any of its Inventories and books and records relating to\nany proceeds of Inventories.  Each such insurance policy in effect\nduring the term of this Agreement shall include effective waivers by\nthe insurer of all claims for insurance premiums against the\nCollateral Agent or any other Secured Party, provide that all\ninsurance proceeds in excess of deductible amounts or retentions which\nare payable in respect of losses relating to Inventories and books and\nrecords shall be adjusted with and payable to the Collateral Agent,\nand provide that no cancellation or termination thereof shall be\neffective until at least 30 days (or, if such cancellation or\ntermination is for non-payment of premiums, 10 days) after receipt by\nthe Collateral Agent of written notice thereof.  The\n\n                                  45\n\n\n\n\nCollateral Agent will consult with the Borrower before agreeing to any\nadjustment of insurance proceeds covered by the preceding sentence.\nIf, in the opinion of the Borrower, commercially available insurance\nis not available on reasonable terms, the Borrower shall so notify the\nAgents and the Lenders and, with the consent of the Required Lenders\n(which consent shall not be unreasonably withheld), may elect not to\npurchase such insurance; provided that if the Borrower shall not have\nreceived notice of disapproval from the Required Lenders within 60\ndays of receipt by the Lenders of such notice from the Borrower, the\nLenders shall be deemed to have consented, for purposes of this\nSection 5.2(b), to the election not to purchase such insurance.  The\nBorrower will deliver to the Lenders (i) on the date of the first\nBorrowing or Issuance hereunder and within 95 days after the end of\neach fiscal year of the Borrower, a certificate dated such date\nshowing the total amount of insurance coverage as of such date, (ii)\nfrom time to time true and complete copies of such insurance policies\nof the Borrower (or, if the Borrower does not have such insurance\npolicies in its possession, evidence thereof) relating to such\ninsurance coverage as the Required Lenders through the Administrative\nAgent may request, (iii) within 15 days of receipt of notice from any\ninsurer, a copy of any notice of cancellation or material adverse\nchange in coverage from that existing on the date of this Agreement\nand (iv) within 15 days of any cancellation or nonrenewal of coverage\nby the Borrower, notice of such cancellation or nonrenewal.\n\n         SECTION 5.3.  Compliance with Laws.  The Borrower will\n                       --------------------\ncomply, and cause each Significant Subsidiary to comply, with all\napplicable laws, ordinances, rules, regulations, and requirements of\ngovernmental authorities (including, without limitation, Environmental\nLaws and ERISA and the rules and regulations thereunder) except where\nfailure to comply would not have a material adverse effect on the\nBorrower and its Significant Subsidiaries, considered as a whole, or\nwhere the necessity of compliance therewith is being contested in good\nfaith by appropriate proceedings.\n\n         SECTION 5.4.  Inspection of Property, Books and Records.  The\n                       -----------------------------------------\nBorrower will keep, and will cause each Subsidiary to keep, proper\nbooks of record and account reflecting its business and activities;\nand will permit, and will cause each Subsidiary to permit,\nrepresentatives of any Lender at such Lender's expense to visit and\ninspect any of their respective properties, to examine and make\nabstracts from any of their respective books and records (including\nthose books and records, whether or not located on its property, which\nare under the control of or in the possession of EDS) and to discuss\ntheir respective affairs, finances and accounts with their respective\nofficers, employees, independent public accountants and with EDS, all\nduring normal business hours and as often as may reasonably be\ndesired; provided that the Borrower may, at its option, have one or\nmore employees or representatives present at any such inspection,\nexamination or discussion.\n\n         SECTION 5.5.  Compliance with Certain Covenants in the\n                       ----------------------------------------\nIndenture.  The Borrower will fully comply with the terms and\n---------\nprovisions of Sections 5.04, 5.05 and 5.07 of the Indenture dated\nMarch 1, 1976 between the Borrower and Chemical Bank, as Trustee,\nrelating to the Borrower's 8 3\/8% Debentures due March 1, 2001, as in\neffect on the date hereof (the \"Indenture\").  The definitions\ncontained in the Indenture of any and all terms or words employed.\n\n                                      46\n\n\n\n\nin the above enumerated provisions of the Indenture shall be fully\napplicable for purposes of this Section 5.5 except that:\n\n              (i) the reference to the \"Corporation\" in Sections 5.04,\n         5.05 and 5.07 shall be read as the \"Borrower\";\n\n              (ii) the reference to the \"Indenture\" in Section 5.04\n         shall be read as \"Agreement\"; and\n\n              (iii) the references to \"Debentures\" in Sections 5.04\n         and 5.07 shall be read as \"Secured Obligations (as defined in\n         the Inventory Security Agreement)\".\n\n         The foregoing covenant shall continue in full force and\neffect as though the above-enumerated provisions of the Indenture were\nset forth in full herein notwithstanding any waiver of performance\nthereof pursuant to the Indenture or any modification, amendment or\ntermination of such provisions or the redemption, retirement or\nrepayment in full of the 8 3\/8% Debentures issued under the Indenture\nor the satisfaction and discharge of the Indenture pursuant to Article\nTen thereof or otherwise.\n\n         SECTION 5.6.  Minimum Adjusted Consolidated Tangible Net\n                       ------------------------------------------\nWorth.  Adjusted Consolidated Tangible Net Worth will not be, at the\n-----\nend of any calendar quarter, less than the sum of (i) $600,000,000 and\n(ii) 50% of consolidated net income (if positive) of the Borrower and\nits Consolidated Subsidiaries for each fiscal quarter of the Borrower,\ncommencing with the fiscal quarter ended June 30, 1995.\n\n         SECTION 5.7.  Sale of Borrower's Collateral.  From and after\n                       -----------------------------\nthe date of the first Borrowing, the Borrower will not sell or\notherwise transfer any Borrower's Collateral without the consent of\nall of the Lenders, which consent shall not be unreasonably withheld,\nunless\n\n              (i) no Enforcement Notice or Automatic Release\n         Termination (as defined in the Inventory Security Agreement)\n         is in effect and no event specified in clause (h) or (i) of\n         Section 6.1 has occurred and is continuing with respect to\n         the Borrower;\n\n              (ii) (A) such sale or transfer is of Inventories in the\n         ordinary course of business or\n\n              (B) if such sale occurs in connection with the\n         disposition by the Borrower of all or any significant portion\n         of a facility at which, or a business in connection with\n         which, Inventories are held, such sale is of such\n         Inventories, and the Borrower has delivered to the\n         Administrative Agent prior to, but no more than three\n         Domestic Business Days before, the date of closing of such\n         sale or transfer a\n\n                                      47\n\n\n\n         certificate signed by the Chief Financial Officer, the\n         Treasurer or the Controller of the Borrower certifying:\n\n                   (x) that immediately after such closing the\n              Applicable Percentage of the Secured Principal Amount\n              will not exceed the attached good faith projection of\n              the Borrowing Base (set forth in the form of the\n              Borrowing Base Certificate) on the date of such closing,\n              adjusted to exclude the Borrower's Collateral being sold\n              or transferred,\n\n                   (y) the amount, if any, by which the Secured\n              Principal Amount will have to be reduced in order for\n              such certificate to be true and correct and the\n              arrangements that have been made for such reduction, and\n\n                   (z) that attached is a true and correct copy of the\n              portion of the contract of sale or transfer which\n              contains as a condition to closing a condition that the\n              Borrower shall have complied with this Section; and\n\n              (iii) in the case of a sale or transfer described in\n         clause (ii)(B) above, immediately after the closing referred\n         to therein the Applicable Percentage of the Secured Principal\n         Amount will not exceed the Borrowing Base.\n\n         SECTION 5.8.  Use of Proceeds.  The proceeds of the Loans\n                       ---------------\nmade under this Agreement will be used by the Borrower for general\ncorporate purposes.  None of such proceeds will be used, directly or\nindirectly, for the purpose, whether immediate, incidental or\nultimate, of buying or carrying any \"margin stock\" within the meaning\nof Regulation U.\n\n         SECTION 5.9.  Mergers and Sales of Assets.  The Borrower will\n                       ---------------------------\nnot (i) consolidate or merge with or into any other Person or (ii)\nexcept as permitted by Section 5.7, sell, lease or otherwise transfer,\ndirectly or indirectly, all or substantially all of the assets of the\nBorrower and its Subsidiaries, taken as a whole, to any other Person;\nprovided that the Borrower may merge with another Person (other than\nthe Special Purpose Members) if the Borrower is the corporation\nsurviving such merger and after giving effect to such merger, no\nDefault shall have occurred and be continuing.\n\n         SECTION 5.10.  Environmental Matters.  The Borrower will\n                        ---------------------\npromptly give to the Lenders notice in writing of any complaint,\norder, citation or notice of violation with respect to, or if the\nBorrower becomes aware of, (i) the existence or alleged existence of a\nviolation of any applicable Environmental Law, (ii) any Release into\nthe environment, (iii) the commencement of any cleanup pursuant to or\nin accordance with any applicable Environmental Law of any Hazardous\nSubstances, (iv) any pending legislative or threatened proceeding for\nthe termination, suspension or non-renewal of any permit required\nunder any applicable Environmental Law, (v) any property of the\nBorrower or any\n\n                                      48\n\n\n\n\nSubsidiary that is or will be subject to a Lien imposed pursuant to\nany Environmental Law, (vi) any pending legislative changes to\nexisting Environmental Laws, and (vii) any proposed acquisitions or\nleasing of property, which, in each of cases (i) through (vii) above,\nindividually or in the aggregate, could have a material adverse effect\non the Borrower and its Consolidated Subsidiaries, considered as a\nwhole.\n\n                                   ARTICLE 6\n\n                                   DEFAULTS\n\n         SECTION 6.1.  Events of Default.  If one or more of the\n                       -----------------\nfollowing events (\"Events of Default\") shall have occurred and be\ncontinuing:  (a) the Borrower shall fail to pay (i) any principal of\nany Loan or any Reimbursement Obligation when due, (ii) any interest\non any Loan or Reimbursement Obligation or any Letter of Credit Fees\nwithin two Domestic Business Days after the due date thereof, (iii)\nany Commitment Fees within five Domestic Business Days after the due\ndate thereof or (iv) any other amount payable hereunder within five\nDomestic Business Days after the later of the due date thereof and the\ndate on which the Borrower is notified of the amount thereof; or\n\n         (b) the Borrower shall fail to observe or perform any\ncovenant contained in Section 5.1(e), 5.1(f), 5.6, 5.7 or 5.9, or\nshall fail to deliver a Borrowing Base Certificate pursuant to Section\n5.1(g) or 5.1(k); or\n\n         (c) the Borrower shall fail to observe or perform any\ncovenant contained in Section 5.5 for 60 days after written notice\nthereof has been given to the Borrower by the Administrative Agent at\nthe request of any Lender; or\n\n         (d) the Borrower shall fail to observe or perform any\ncovenant or agreement contained in any of the Financing Documents\n(other than those covered by clause (a), (b) or (c) above) for 30 days\nafter written notice thereof has been given to the Borrower by the\nAdministrative Agent at the request of any Lender; or\n\n         (e) any representation, warranty, certification or statement\nmade by the Borrower in any of the Financing Documents or in any\ncertificate, financial statement or other document delivered pursuant\nto the Financing Documents shall prove to have been incorrect in any\nmaterial respect when made; or\n\n                                      49\n\n\n\n\n         (f) the Borrower and its Subsidiaries shall fail to pay when\ndue, or within any applicable grace period, (i) any payment in respect\nof Secured Tax Exempt Debt or (ii) payments aggregating more than\n$1,000,000 in respect of Debt of the Borrower or any of its\nSubsidiaries (other than the Loans, the Reimbursement Obligations and\nSecured Tax Exempt Debt) and Guarantees by the Borrower or any of its\nSubsidiaries; or\n\n         (g) one or more events or conditions shall occur which result\nin a default under any agreement or agreements in respect of Debt of\nthe Borrower or any Subsidiary and the aggregate principal amount of\nsuch Debt exceeds $10,000,000 and as a consequence of such default or\ndefaults the Borrower or any of its Subsidiaries shall make any\npayment or give or agree to give any consideration or benefit of any\nkind (including, without limitation, any increased compensation,\nprepayment, shortening of maturities, security or other credit\nsupport) to the holders of such Debt and such payment, consideration\nor benefit is determined by the Required Lenders, after taking into\naccount any payment, consideration or benefit made, given or agreed to\nbe given by such holders to the Borrower or any of its Subsidiaries\n(other than a waiver of such default), to be a material benefit to the\nholders of such Debt; or\n\n         (h) the Borrower or any Significant Subsidiary shall commence\na voluntary case or other proceeding seeking liquidation,\nreorganization or other relief with respect to itself or its debts\nunder any bankruptcy, insolvency or other similar law now or hereafter\nin effect or seeking the appointment of a trustee, receiver,\nliquidator, custodian or other similar official of it or any\nsubstantial part of its property, or shall consent to any such relief\nor to the appointment of or taking possession by any such official in\nan involuntary case or other proceeding commenced against it, or shall\nmake a general assignment for the benefit of creditors, or shall fail\ngenerally to pay its debts as they become due, or shall take any\ncorporate action to authorize any of the foregoing; or\n\n         (i) an involuntary case or other proceeding shall be\ncommenced against the Borrower or any Significant Subsidiary seeking\nliquidation, reorganization or other relief with respect to it or its\ndebts under any bankruptcy, insolvency or other similar law now or\nhereafter in effect or seeking the appointment of a trustee, receiver,\nliquidator, custodian or other similar official of it or any\nsubstantial part of its property, and such involuntary case or other\nproceeding shall remain undismissed and unstayed for a period of 60\ndays; or an order for relief shall be entered against the Borrower or\nany Significant Subsidiary under the federal bankruptcy laws as now or\nhereafter in effect; or\n\n         (j) any member of the ERISA Group shall fail to pay when due\nan amount or amounts aggregating in excess of $5,000,000 which it\nshall have become liable to pay under Title IV of ERISA; or notice of\nintent to terminate a Plan or Plans having aggregate Unfunded\nLiabilities in excess of $10,000,000 (collectively, a \"Material Plan\")\nshall be filed under Title IV of ERISA by any member of the ERISA\nGroup, any plan administrator or any combination of the foregoing; or\nthe PBGC shall institute proceedings under Title IV of ERISA to\nterminate or to cause a trustee to be appointed to administer any\nMaterial Plan; or a \"default\", within the meaning of Section\n4219(c)(5) of ERISA, shall occur with respect to one or more\nMultiemployer Plans which could cause one or more members of the\n\n                                      50\n\n\n\n\nERISA Group to incur an immediate payment obligation under Title IV of\nERISA for an amount or amounts aggregating in excess of $5,000,000; or\nany applicable law, rule or regulation is adopted, changed or\ninterpreted, or the interpretation or administration thereof is\nchanged, in each case after the date hereof, by any governmental\nauthority or agency or by any court (a \"Change in Law\"), or, as a\nresult of a Change in Law, an event occurs following a Change in Law,\nwith respect to or otherwise affecting one or more Plans,\nMultiemployer Plans or Benefit Arrangements, which in the reasonable\nopinion of the Required Lenders, would have a material adverse effect\non the priority of the Security Interests; or\n\n         (k) a judgment or order for the payment of money in excess of\n$5,000,000 shall be entered by a court of record against the Borrower\nor any Subsidiary and such judgment or order shall continue\nunsatisfied and unstayed for a period of 10 days (or such other period\nof time as may be provided under applicable state law for obtaining a\nstay of judgment); or\n\n         (l) a federal tax lien under Section 6321 of the Internal\nRevenue Code or a Lien under Title I or Title IV of ERISA or Section\n412 of the Internal Revenue Code shall have arisen against any member\nof the ERISA Group (a \"Federal Lien\") and the aggregate amount secured\nby Federal Liens exceeds $500,000; or\n\n         (m) the Lien created by the Inventory Security Agreement\nshall at any time and for any reason not constitute a valid and\nperfected Lien subject to no prior or equal Lien (other than Permitted\nLiens) or the Borrower shall so assert in writing;\n\n         then, and in every such event, the Administrative Agent shall\n(i) if requested by Lenders having more than 66 2\/3% in aggregate\namount of the Commitments, by notice to the Borrower terminate the\nCommitments and they shall thereupon terminate and (ii) if requested\nby Lenders holding Notes evidencing more than 66 2\/3% in aggregate\nprincipal amount of the Loans, by notice to the Borrower declare the\nNotes (and any Reimbursement Obligations together with accrued\ninterest thereon and all Fees and other amounts payable by the\nBorrower hereunder) to be, and the same shall thereupon become,\nimmediately due and payable without presentment, demand, protest or\nother notice of any kind, all of which are hereby waived by the\nBorrower; provided that in the case of any of the Events of Default\nspecified in clause (h) or (i) above with respect to the Borrower,\nwithout any notice to the Borrower or any other act by the\nAdministrative Agent or the Lenders, the Commitments shall thereupon\nterminate and the Notes (together with accrued interest thereon and\nall Fees and other amounts payable by the Borrower hereunder) shall\nbecome immediately due and payable without presentment, demand,\nprotest or other notice of any kind, all of which are hereby waived by\nthe Borrower.  If any Event of Default shall occur and be continuing\nor Commitments are terminated pursuant to Section 2.10(ii) and, in\neach case, any Loans, Letters of Credit or Reimbursement Obligations\nare then outstanding, the Administrative Agent shall, upon written\nrequest of the Required Lenders, give an Enforcement Notice (as\ndefined in the Inventory Security\n\n                                  51\n\n\n\n\n\nAgreement) pursuant to the Inventory Security Agreement.  The Borrower\nshall comply with Section 2.2(h) with respect to Letters of Credit.\nWhether or not Commitments are terminated, the Administrative Agent\nshall, upon written request of the Required Lenders, instruct the L\/C\nIssuing Banks to timely give notice that outstanding Letters of Credit\nhaving automatic renewal provisions will not be renewed.  The\nAdministrative Agent shall promptly advise the Borrower, each Lender,\nMorgan Guaranty, as administrative agent and J.P.  Morgan Delaware, as\nstructuring and collateral agent under the Receivable Purchase\nAgreement of the giving of such Enforcement Notice.\n\n         SECTION 6.2.  Notice of Default.  The Administrative Agent\n                       -----------------\nshall give notice to the Borrower under Section 6.1(c) or (d) promptly\nupon being requested to do so by any Lender and shall thereupon notify\nall the Lenders thereof.\n\n                                   ARTICLE 7\n\n                           THE ADMINISTRATIVE AGENT\n\n         SECTION 7.1.  Appointment and Authorization.  Each Lender\n                       -----------------------------\nirrevocably appoints and authorizes the Agents to take such action as\nagent on its behalf and to exercise such powers under the Financing\nDocuments as are delegated to the Agents by the terms hereof or\nthereof, together with all such powers as are reasonably incidental\nthereto.  Each Lender hereby irrevocably grants the Collateral Agent\nor its designated agent, if any, an irrevocable power of attorney,\nwith full power of substitution, coupled with an interest, at any time\nand from time to time, to take in the name of such Lender all actions\nwith respect to any Collateral which the Collateral Agent may deem\nnecessary or advisable to realize upon the Security Interest in any\nCollateral.  Each Lender hereby agrees to be bound by the provisions\nof the Inventory Security Agreement.\n\n         SECTION 7.2.  Administrative Agent and Affiliates.  Morgan\n                       -----------------------------------\nGuaranty shall have the same rights and powers under this Agreement as\nany other Lender and may exercise or refrain from exercising the same\nas though it were not the Administrative Agent, and Morgan Guaranty\nand its affiliates may accept deposits from, lend money to, and\ngenerally engage in any kind of business with the Borrower or any\nSubsidiary or Affiliate of the Borrower as if it were not the\nAdministrative Agent.\n\n         SECTION 7.3.  Action by Administrative Agent.  The\n                       ------------------------------\nobligations of the Administrative Agent hereunder are only those\nexpressly set forth herein.  Without limiting the generality of the\nforegoing, the Administrative Agent shall\n\n                                  52\n\n\n\n\nnot be required to take any action with respect to any Default, except\nas expressly provided in Article 6.\n\n         SECTION 7.4.  Consultation with Experts.  The Administrative\n                       -------------------------\nAgent may consult with legal counsel (who may be counsel for the\nBorrower), independent public accountants and other experts selected\nby it and shall not be liable for any action taken or omitted to be\ntaken by it in good faith in accordance with the advice of such\ncounsel, accountants or experts.\n\n         SECTION 7.5.  Liability of Administrative Agent.  Neither the\n                       ---------------------------------\nAdministrative Agent nor any of its affiliates nor any of their\nrespective directors, officers, agents or employees shall be liable\nfor any action taken or not taken by it in connection herewith (i)\nwith the consent or at the request of the Required Lenders (or, where\nrequired by the terms hereof, the Lenders) or (ii) in the absence of\nits own gross negligence or willful misconduct.  Neither the\nAdministrative Agent nor any of its affiliates nor any of their\nrespective directors, officers, agents, affiliates or employees shall\nbe responsible for or have any duty to ascertain, inquire into or\nverify (i) any statement, warranty or representation made in\nconnection with this Agreement or any Borrowing hereunder or in\nconnection with any of the other Financing Documents; (ii) the\nperformance or observance of any of the covenants or agreements of the\nBorrower herein or in any of the other Financing Documents; (iii) the\nsatisfaction of any condition specified in Article 3 or in any of the\nother Financing Documents, except receipt of items required to be\ndelivered to the Administrative Agent; (iv) the validity,\neffectiveness or genuineness of any of the Financing Documents or any\nother instrument or writing furnished in connection herewith; or (v)\nthe existence, genuineness or value of any of the Collateral or the\nvalidity, perfection, priority or enforceability of the Security\nInterests.  The Administrative Agent shall not incur any liability by\nacting in reliance upon any notice, consent, certificate, statement,\nor other writing (which may be a bank wire, telecopy or similar\nwriting) believed by it to be genuine or to be signed by the proper\nparty or parties.\n\n         SECTION 7.6.  Indemnification.  Each Lender shall, ratably in\n                       ---------------\naccordance with its Commitment, indemnify the Administrative Agent,\nits affiliates and their respective directors, officers, agents and\nemployees (to the extent not reimbursed by the Borrower) against any\ncost, expense (including counsel fees and disbursements), claim,\ndemand, action, loss or liability (except such as result from such\nindemnitees' gross negligence or willful misconduct) that such\nindemnitees may suffer or incur in connection with the Financing\nDocuments or any action taken or omitted by such indemnitees\nhereunder.\n\n         SECTION 7.7.  Credit Decision.  Each Lender acknowledges that\n                       ---------------\nit has, independently and without reliance upon the Administrative\nAgent or any other Lender, and based on such documents and information\nas it has deemed appropriate, made its own credit analysis and\ndecision to enter into this Agreement.  Each Lender also acknowledges\nthat it will, independently and without reliance upon the\nAdministrative Agent or any other Lender, and based on such documents\nand information as it shall deem appropriate at the time, continue to\nmake its own credit decisions in taking or not taking any action under\nany of the Financing Documents.\n\n                                  53\n\n\n\n\n\n         SECTION 7.8.  Successor Administrative Agent.  The\n                       ------------------------------\nAdministrative Agent may resign at any time by giving written notice\nthereof to the Lenders and the Borrower.  Upon any such resignation,\nthe Required Lenders shall have the right, after consultation with the\nBorrower, to appoint a successor Administrative Agent.  If no\nsuccessor Administrative Agent shall have been so appointed by the\nRequired Lenders, and shall have accepted such appointment, within 30\ndays after the retiring Administrative Agent gives notice of\nresignation, then the retiring Administrative Agent may, on behalf of\nthe Lenders, appoint a successor Administrative Agent, which shall be\na commercial bank organized or licensed under the laws of the United\nStates of America or of any State thereof and having a combined\ncapital and surplus of at least $100,000,000.  Upon the acceptance of\nits appointment as Administrative Agent hereunder by a successor\nAdministrative Agent and not before, such successor Administrative\nAgent shall thereupon succeed to and become vested with all the rights\nand duties of the retiring Administrative Agent, and the retiring\nAdministrative Agent shall be discharged from its duties and\nobligations hereunder.  After any retiring Administrative Agent's\nresignation hereunder as Administrative Agent, the provisions of this\nArticle shall inure to its benefit as to any actions taken or omitted\nto be taken by it while it was Administrative Agent.\n\n                              ARTICLE 8\n\n                       CHANGE IN CIRCUMSTANCES\n\n         SECTION 8.1.  Basis for Determining Interest Rate Inadequate\nor Unfair.  If on or prior to the first day of any Interest Period for\nany CD Loan or Euro-Dollar Loan:\n\n              (a) the Administrative Agent is advised by the Reference\n         Lenders that deposits in Dollars (in the applicable amounts)\n         are not being offered to the Reference Banks in the relevant\n         market for such Interest Period, or\n\n              (b) Lenders having 50% or more of the aggregate\n         principal amount of the affected Loans advise the\n         Administrative Agent that the Adjusted CD Rate or the\n         Adjusted London Interbank Offered Rate, as the case may be,\n         as determined by the Administrative Agent will not adequately\n         and fairly reflect the cost to such Lenders of funding their\n         CD Loans or Euro-Dollar Loans, as the case may be, for such\n         Interest Period,\n\n                                      54\n\n\n\n         the Administrative Agent shall forthwith give notice thereof\nto the Borrower and the Lenders, whereupon until the Administrative\nAgent notifies the Borrower that the circumstances giving rise to such\nsuspension no longer exist, (i) the obligations of the Lenders to make\nCD Loans or Euro-Dollar Loans, as the case may be, or to continue or\nconvert outstanding Loans as or into CD Loans or Euro-Dollar Loans, as\nthe case may be, shall be suspended and (ii) the Borrower shall repay\nin full the then outstanding principal amount of each CD Loan or\nEuro-Dollar Loan, as the case may be, together with accrued interest\nthereon, on the last day of the then current Interest Period\napplicable to such Loan.  Concurrently with repaying each such Fixed\nRate Loan of each Lender pursuant to this Section, the Borrower shall\nborrow a Base Rate Loan in an equal principal amount from such Lender,\nand such Lender shall make such a Base Rate Loan, unless the Borrower\nnotifies the Administrative Agent at least two Domestic Business Days\nbefore the date of such repayment that it elects not to borrow any\nBase Rate Loans on such date.  Unless the Borrower notifies the\nAdministrative Agent at least two Domestic Business Days before the\ndate of any Fixed Rate Borrowing for which a Notice of Borrowing has\npreviously been given that it elects not to borrow on such date, such\nBorrowing shall instead be made as a Base Rate Borrowing.\n\n         SECTION 8.2.  Illegality.  If, after the date of this\n                       ----------\nAgreement, the adoption of any applicable law, rule or regulation, or\nany change in any applicable law, rule or regulation, or any change in\nthe interpretation or administration thereof by any governmental\nauthority, central bank or comparable agency charged with the\ninterpretation or administration thereof, or compliance by any Lender\n(or its Euro-Dollar Lending Office) with any request or directive\n(whether or not having the force of law) of any such authority,\ncentral bank or comparable agency shall make it unlawful or impossible\nfor any Lender (or its Euro-Dollar Lending Office) to make, maintain\nor fund its Euro-Dollar Loans and such Lender shall so notify the\nAdministrative Agent, the Administrative Agent shall forthwith give\nnotice thereof to the other Lenders and the Borrower, whereupon until\nsuch Lender notifies the Borrower and the Administrative Agent that\nthe circumstances giving rise to such suspension no longer exist, the\nobligation of such Lender to make Euro-Dollar Loans, or to convert\noutstanding Loans into Euro-Dollar Loans, shall be suspended.  Before\ngiving any notice to the Administrative Agent pursuant to this\nSection, such Lender shall designate a different Euro-Dollar Lending\nOffice if such designation will avoid the need for giving such notice\nand will not, in the judgment of such Lender, be otherwise\ndisadvantageous to such Lender.  If such Lender shall determine that\nit may not lawfully continue to maintain and fund any of its\noutstanding Euro-Dollar Loans to maturity and shall so specify in such\nnotice, the Borrower shall immediately repay in full the then\noutstanding principal amount of each such Euro-Dollar Loan, together\nwith accrued interest thereon.  Concurrently with repaying each such\nEuro-Dollar Loan, the Borrower shall borrow a Base Rate Loan in an\nequal principal amount from such Lender (on which interest and\nprincipal shall be payable contemporaneously with the related\nEuro-Dollar Loans of the other Lenders), and such Lender shall make\nsuch a Base Rate Loan.\n\n         SECTION 8.3.  Increased Cost and Reduced Return.  (a) If\n                       ---------------------------------\nafter the date hereof, the adoption of any applicable law, rule or\nregulation, or any change in any applicable law, rule or regulation,\nor any change in the interpretation or\n\n                                  55\n\n\n\nadministration thereof by any governmental authority, central bank or\ncomparable agency charged with the interpretation or administration\nthereof, or compliance by any Lender (or its Applicable Lending\nOffice) with any request or directive (whether or not having the force\nof law) of any such authority, central bank or comparable agency shall\nimpose, modify or deem applicable any reserve (including, without\nlimitation, any such requirement imposed by the Board of Governors of\nthe Federal Reserve System, but excluding (i) with respect to any CD\nLoan any such requirement included in the applicable Domestic Reserve\nPercentage and (ii) with respect to any Euro-Dollar Loan any such\nrequirement included in the applicable Euro-Dollar Reserve\nPercentage), special deposit, insurance assessment (excluding, with\nrespect to any CD Loan, any such requirement reflected in the\napplicable Assessment Rate) or similar requirement against assets of,\ndeposits with or for the account of, or credit extended by, any Lender\n(or its Applicable Lending Office) or shall impose on any Lender (or\nits Applicable Lending Office) or on the United States market for\ncertificates of deposit or the London interbank market any other\ncondition affecting its Fixed Rate Loans, its Note or its obligation\nto make Fixed Rate Loans and the result of any of the foregoing is to\nincrease the cost to such Lender (or its Applicable Lending Office) of\nmaking or maintaining any Fixed Rate Loan, or to reduce the amount of\nany sum received or receivable by such Lender (or its Applicable\nLending Office) under this Agreement or under its Note with respect\nthereto, by an amount deemed by such Lender to be material, then,\nwithin 15 days after demand by such Lender (with a copy to the\nAdministrative Agent), the Borrower shall pay to such Lender such\nadditional amount or amounts as will compensate such Lender for such\nincreased cost or reduction.\n\n         (b) If, after the date hereof, the adoption of any applicable\nlaw, rule or regulation, or any change in any applicable law, rule or\nregulation, or any change in the interpretation or administration\nthereof by any governmental authority, central bank or comparable\nagency charged with the interpretation or administration thereof, or\ncompliance by the L\/C Issuing Bank or any Lender with any request or\ndirective (whether or not having the force of law) of any such\nauthority, central bank or comparable agency shall either (i) impose,\nmodify or deem applicable any reserve, special deposit or similar\nrequirement (including, without limitation, any such requirement\nimposed by the Board of Governors of the Federal Reserve System)\nagainst letters of credit issued by the L\/C Issuing Bank or any\nLender, or participations in letters of credit by any Lender or (ii)\nimpose on the L\/C Issuing Bank or any Lender any other condition\n(including, without limitation, any assessment for Federal deposit\ninsurance) regarding any Letter of Credit or the L\/C Issuing Bank's or\nany Lender's obligation to issue, maintain or fund any Letter of\nCredit, and the result of any event referred to in clause (i) or (ii)\nof this subsection (b) is to increase the cost to the L\/C Issuing Bank\nor such Lender of issuing, maintaining, participating in or funding\nany Letter of Credit (which increase in cost shall be determined on\nthe basis of the L\/C Issuing Bank's or such Lender's reasonable\nallocation of the aggregate of such cost increases resulting from such\nevents), then, within 15 days after demand by the L\/C Issuing Bank or\nsuch Lender (with a copy to the Administrative Agent), the Borrower\nshall pay to the L\/C Issuing Bank or such Lender such additional\namount or amounts as will compensate the L\/C Issuing Bank or such\nLender for such increased cost.\n\n56\n\n\n\n         (c) If any Lender or L\/C Issuing Bank shall have determined\nthat, after the date hereof, the adoption of any applicable law, rule\nor regulation regarding capital adequacy, or any change in any such\nlaw, rule or regulation, or any change in the interpretation or\nadministration thereof by any governmental authority, central bank or\ncomparable agency charged with the interpretation or administration\nthereof, or compliance by any Lender or L\/C Issuing Bank (or its\nApplicable Lending Office) with any request or directive regarding\ncapital adequacy (whether or not having the force of law) of any such\nauthority, central bank or comparable agency, has or would have the\neffect of reducing the rate of return on capital of such Lender or L\/C\nIssuing Bank (or its Parent) as a consequence of such Lender's or L\/C\nIssuing Bank's obligations hereunder to a level below that which such\nLender or L\/C Issuing Bank (or its Parent) could have achieved but for\nsuch adoption, change, request or directive (taking into consideration\nits policies with respect to capital adequacy) by an amount deemed by\nsuch Lender or L\/C Issuing Bank to be material, then from time to\ntime, within 15 days after demand by such Lender or L\/C Issuing Bank\n(with a copy to the Administrative Agent), the Borrower shall pay to\nsuch Lender or L\/C Issuing Bank such additional amount or amounts as\nwill compensate such Lender or L\/C Issuing Bank (or its Parent) for\nsuch reduction.\n\n         (d) Each L\/C Issuing Bank and each Lender will promptly\nnotify the Borrower and the Administrative Agent of any event of which\nit has knowledge, occurring after the date hereof, which will entitle\nsuch Lender or L\/C Issuing Bank to compensation pursuant to this\nSection and will designate a different Lending Office if such\ndesignation will avoid the need for, or reduce the amount of, such\ncompensation and will not, in the judgment of such Lender, be\notherwise disadvantageous to such Lender.  A certificate of an L\/C\nIssuing Bank or a Lender claiming compensation under this Section and\nsetting forth the additional amount or amounts to be paid to it\nhereunder shall be conclusive in the absence of manifest error.  In\ndetermining such amount, such L\/C Issuing Bank or Lender may use any\nreasonable averaging and attribution methods.  (e) If any Lender\ndemands compensation under this Section with respect to a Fixed Rate\nLoan, the Borrower may at any time, upon at least five Euro-Dollar\nBusiness Days' prior notice to such Lender through the Administrative\nAgent, repay in full, without premium (other than as provided in\nSection 2.14) or penalty, the then outstanding CD Loans or Euro-Dollar\nLoans, as the case may be, of such Lender, together with interest\naccrued thereon to the date of repayment.  Concurrently with repaying\nsuch Fixed Rate Loans of such Lender, the Borrower shall borrow from\nsuch Lender a Base Rate Loan in an amount equal to the aggregate\nprincipal amount of such Fixed Rate Loans, and such Lender shall make\nsuch a Base Rate Loan.\n\n         SECTION 8.4.  Taxes.  (a) For the purposes of this Section ,\n                       -----\nthe following terms have the following meanings:\n\n              \"Taxes\" means any and all present or future taxes,\n         duties, levies, imposts, deductions, charges or withholdings\n         imposed with respect to or imposed on any payment by the\n         Borrower pursuant to this Agreement or under any Note, any\n         penalties, fines, additions to tax or interest thereon, and\n         the reasonable costs of defending against the same\n\n                                  57\n\n\n\n\n         excluding (i) in the case of each Lender, each L\/C Issuing\n         Bank and the Agents, taxes imposed on its net income, and\n         franchise, capital or doing business taxes (other than taxes\n         imposed by a jurisdiction solely as a result of the\n         Borrower's connection with such jurisdiction), (ii) in the\n         case of each Lender or L\/C Issuing Bank, any United States\n         withholding tax imposed on such payments except to the extent\n         of any United States withholding tax imposed as a result of a\n         change of law (including a change in any tax treaty to which\n         the United States is a party) after the later of the date of\n         this Agreement and the date such person shall become a Lender\n         or L\/C Issuing Bank and (iii) in the case of each Lender,\n         each L\/C Issuing Bank and the Agents, any taxes imposed by a\n         jurisdiction under the laws of which such Lender, L\/C Issuing\n         Bank or the Agents (as the case may be) is organized or in\n         which its principal executive office is located or, in the\n         case of each Lender or L\/C Issuing Bank, in which its\n         Applicable Lending Office is located.\n\n              \"Other Taxes\" means any present or future stamp or\n         documentary taxes and any other excise or property taxes, or\n         similar charges or levies, which arise from any payment made\n         pursuant to this Agreement or from the execution or delivery\n         of, or otherwise with respect to, this Agreement, the other\n         Financing Documents, and any penalties, fines, additions to\n         tax or interest thereon, and the reasonable costs and\n         expenses in defending against the same, whether arising by\n         reason of the acts to be performed by the Borrower hereunder\n         or imposed against the Borrower, any Affiliate of the\n         Borrower, the property involved or otherwise.\n\n         (b) Any and all payments by the Borrower to or for the\naccount of any Lender, any L\/C Issuing Bank or the Agents hereunder or\nunder any Note shall be made without deduction for any Taxes or Other\nTaxes; provided that, if the Borrower shall be required by law to\nwithhold or deduct any Taxes or Other Taxes from any such payments,\n(i) the sum payable shall be increased as necessary so that after\nmaking all required withholdings or deductions (including withholdings\nor deductions applicable to additional sums payable under this\nSection) such Lender, L\/C Issuing Bank or the Agents (as the case may\nbe) receives an amount equal to the sum it would have received had no\nsuch withholdings or deductions been made, (ii) the Borrower shall\nmake such withholdings or deductions, (iii) the Borrower shall pay the\nfull amount withheld or deducted to the relevant taxation authority or\nother authority in accordance with applicable law and (iv) the\nBorrower shall furnish to the Administrative Agent, at its address\nreferred to in Section 9.1, the original or a certified copy of a\nreceipt evidencing payment thereof.\n\n         (c) The Borrower agrees to indemnify each Lender, each L\/C\nIssuing Bank and each Agent for the full amount of Taxes or Other\nTaxes (including, without limitation, any Taxes or Other Taxes imposed\nor asserted by any jurisdiction on amounts payable under this Section\n8.4) paid by such Lender, L\/C Issuing Bank or such Agent (as the case\nmay be).  This indemnification shall be paid within 15 days after such\nLender, L\/C Issuing Bank or such Agent (as the case may be) makes\nwritten demand therefor; provided that the Borrower shall not\n\n                                  58\n\n\n\nbe required to make any payment pursuant to this Section 8.4(c) more\nthan five days prior to the due date of the Taxes or Other Taxes\nindemnified against hereunder.  If a Lender, L\/C Issuing Bank or Agent\n(as the case may be) shall become aware that it is entitled to claim a\nrefund (or refund in the form of a credit) (each a \"Refund\") from a\ntaxing authority of such Taxes or Other Taxes for which it has been\nindemnified by the Borrower or with respect to which the Borrower has\npaid additional amounts, pursuant to this Section 8.4, it shall\npromptly notify the Borrower of the availability of such Refund and\nshall, or if it shall be furnished by the Borrower with an opinion of\ncounsel selected by the Borrower and reasonably acceptable to it to\nthe effect that there is a strong likelihood such a Refund is\nobtainable it shall, within 15 days after receipt of a written request\nby the Borrower, make a claim to such taxing authority for such Refund\nat the Borrower's expense if the expected financial costs to such\nLender, L\/C Issuing Bank or Agent (as the case may be) of making such\nclaim will not be substantial taking into account any reimbursement of\nsuch costs by the Borrower; provided that nothing in this subsection\n(c) shall be construed to require any Lender, L\/C Issuing Bank or\nAgent to institute any administrative proceeding (other than the\nfiling of a claim for any such Refund) or judicial proceeding to\nobtain any such Refund.  If a Lender, L\/C Issuing Bank or Agent (as\nthe case may be) receives a Refund from a taxing authority of any such\nTaxes or Other Taxes for which it has been indemnified by the Borrower\nor with respect to which the Borrower has paid additional amounts,\npursuant to this Section 8.4, it shall promptly pay to the Borrower\nthe amount so received (but only to the extent of indemnity payments\nmade, or additional amounts paid, by the Borrower under this Section\n8.4 with respect to the Taxes or Other Taxes giving rise to such\nRefund), net of all reasonable out-of-pocket expenses (including the\nnet amount of taxes, if any, imposed on such Lender, L\/C Issuing Bank\nor such Agent with respect to such Refund and the making of such\npayment) of such Lender, L\/C Issuing Bank or such Agent, and without\ninterest (other than interest paid by the relevant taxing authority\nwith respect to such Refund); provided that the Borrower upon the\nrequest of such Lender, L\/C Issuing Bank or such Agent, agrees to\nrepay the amount paid over to the Borrower (plus penalties, interest\nor other charges) to such Lender, L\/C Issuing Bank or such Agent in\nthe event such Lender, L\/C Issuing Bank or such Agent is required to\nrepay such Refund to such taxing authority.  Nothing contained in this\nSection 8.4 shall require any Lender, L\/C Issuing Bank or Agent to\nmake available any of its tax returns (or any other information that\nit deems to be confidential or proprietary).\n\n         (d) Each Lender or L\/C Issuing Bank organized under the laws\nof a jurisdiction outside the United States, on or prior to the date\nof its execution and delivery of this Agreement in the case of each\nLender or L\/C Issuing Bank listed on the signature pages hereof and on\nor prior to the date on which it becomes a Lender or L\/C Issuing Bank\nin the case of each other Lender or L\/C Issuing Bank, and from time to\ntime thereafter if requested in writing by the Borrower (but only so\nlong as such Lender or L\/C Issuing Bank remains lawfully able to do\nso), shall provide the Borrower and the Administrative Agent with\nInternal Revenue Service form 1001 or 4224, as appropriate, or any\nsuccessor form prescribed by the Internal Revenue Service, certifying\nthat such Lender or L\/C Issuing Bank is entitled to benefits under an\nincome tax treaty to which the United States is a party which exempts\nthe Lender or the L\/C Issuing Bank from United States withholding tax\nor reduces the rate of withholding tax on payments of interest for\n\n\n                                  59\n\n\nthe account of such Lender or L\/C Issuing Bank or certifying that the\nincome receivable pursuant to this Agreement is effectively connected\nwith the conduct of a trade or business in the United States.\n\n         (e) For any period with respect to which a Lender or L\/C\nIssuing Bank has failed to provide the Borrower or the Administrative\nAgent with the appropriate form pursuant to Section 8.4(d) (unless\nsuch failure is due to a change in treaty, law or regulation occurring\nsubsequent to the date on which such form originally was required to\nbe provided), such Lender or L\/C Issuing Bank shall not be entitled to\nindemnification under Section 8.4(b) or (c) with respect to Taxes\nimposed by the United States; provided that if a Lender or L\/C Issuing\nBank, which is otherwise exempt from or subject to a reduced rate of\nwithholding tax, becomes subject to Taxes because of its failure to\ndeliver a form required hereunder, the Borrower shall take such steps\nas such Lender or L\/C Issuing Bank shall reasonably request to assist\nsuch Lender or L\/C Issuing Bank to recover such Taxes.\n\n         (f) Notwithstanding anything to the contrary in this Section\n8.4, if the Internal Revenue Service determines that any Lender, L\/C\nIssuing Bank or Agent is a conduit entity participating in a conduit\nfinancing arrangement as defined in Section 7701(1) of the Internal\nRevenue Code and any current or future regulation thereunder (a\n\"Conduit Financing Arrangement\") with respect to the Loans or the\nLetters of Credit, without the involvement of the Borrower or any of\nits Affiliates, then the Borrower shall have no obligation under this\nSection 8.4 to pay additional amounts or indemnify any Lender, L\/C\nIssuing Bank or Agent for any Taxes or Other Taxes to the extent the\namount of such additional amounts, Taxes or Other Taxes exceeds the\namount that would otherwise have been payable, withheld or deducted\nhad the Internal Revenue Service not made such a determination.  Each\nLender, L\/C Issuing Bank and Agent hereby represents that it is not a\nconduit entity participating in a Conduit Financing Arrangement with\nrespect to the Loans or the Letters of Credit.\n\n         (g) If the Borrower is required to pay any indemnification or\nadditional amounts to, with respect to or for the account of any\nLender, L\/C Issuing Bank or Agent pursuant to this Article, then such\nBorrower, L\/C Issuing Bank or Agent will change the jurisdiction of\nits Applicable Lending office or take other appropriate steps if, in\nthe judgment of such Lender, L\/C Issuing Bank or Agent, such change or\nsteps (i) will eliminate or reduce any such indemnification or\nadditional payment which may thereafter accrue and (ii) is not\notherwise disadvantageous to such Lender, L\/C Issuing Bank or Agent.\nIf such Lender, L\/C Issuing Bank or Agent does not change its\nApplicable Lending Office or take other appropriate steps, the\nBorrower may replace such Lender, L\/C Issuing Bank or Agent; provided\nthat the Borrower has paid to such Lender, L\/C Issuing Bank or Agent\nany amounts accrued under this Section 8.4.\n\n         SECTION 8.5.  Base Rate Loans Substituted for Affected Fixed\n                       ----------------------------------------------\nRate Loans.  If (i) the obligation of any Lender to make, or convert\n----------\noutstanding Loans to, Euro-Dollar Loans has been suspended pursuant to\nSection 8.2 or (ii) any Lender has demanded compensation under Section\n8.3 or 8.4 with respect to its CD Loans or Euro-Dollar Loans and the\nBorrower shall, by at least five Euro-Dollar Business Days' prior\nnotice to such Lender through the\n\n\n                                  60\n\n\n\nAdministrative Agent, have elected that the provisions of this Section\nshall apply to such Lender, then, unless and until such Lender\nnotifies the Borrower that the circumstances giving rise to such\nsuspension or demand for compensation no longer exist:\n\n         (a) all Loans which would otherwise be made by such Lender as\n(or continued as or converted into) CD Loans or Euro-Dollar Loans, as\nthe case may be, shall instead be Base Rate Loans (on which interest\nand principal shall be payable contemporaneously with the related\nFixed Rate Loans of the other Lenders); and\n\n         (b) after each of its CD Loans or Euro-Dollar Loans, as the\ncase may be, has been repaid (or converted to a Base Rate Loan), all\npayments of principal which would otherwise be applied to repay such\nFixed Rate Loans shall be applied to repay its Base Rate Loans\ninstead.\n\n         If such Lender notifies the Borrower that the circumstances\ngiving rise to such notice no longer apply, the Borrower shall have\nthe option to borrow a CD Loan or a Euro-Dollar Loan, as the case may\nbe, from such Lender on the first day of the next succeeding Interest\nPeriod applicable to each related Borrowing in the amount of the Fixed\nRate Loan which would have been outstanding from such Lender as part\nof such Borrowing if the provisions of Section 8.2, 8.3 or 8.4 had\nnever applied, and concurrently with each such Borrowing shall repay\nan equal principal amount of such Lender's outstanding Base Rate\nLoans.\n\n                              ARTICLE 9\n\n                            MISCELLANEOUS\n\n         SECTION 9.1.  Notices.  All notices, requests and other\n                       -------\ncommunications to any party hereunder shall be in writing (including\nbank wire, facsimile transmission or similar writing) and shall be\ngiven to such party:  (a) in the case of the Borrower or either Agent,\nat its address or facsimile number set forth on the signature pages\nhereof, (b) in the case of any L\/C Issuing Bank or any Lender, at its\naddress or facsimile number set forth in its Administrative\nQuestionnaire or (c) in the case of any party, such other address or\nfacsimile number as such party may hereafter specify for the purpose\nby notice to the Administrative Agent and the Borrower.  Each such\nnotice, request or other communication shall be effective (i) if given\nby facsimile transmission, when transmitted to the facsimile number\nspecified in this Section and confirmation of receipt is received,\n(ii) if given by mail, 72 hours after such communication is deposited\nin the mails with first class postage prepaid, addressed as aforesaid\nor\n\n\n                                  61\n\n\n\n(iii) if given by any other means, when delivered at the address\nspecified in this Section; provided that notices to the Administrative\nAgent under Article 2 or Article 8\" shall not be effective until\nreceived.\n\n         SECTION 9.2.  No Waivers.  No failure or delay by either\n                       ----------\nAgent, any L\/C Issuing Bank or any Lender in exercising any right,\npower or privilege hereunder or under any other Financing Document\nshall operate as a waiver thereof nor shall any single or partial\nexercise thereof preclude any other or further exercise thereof or the\nexercise of any other right, power or privilege.  The rights and\nremedies of the Agents, the L\/C Issuing Banks and the Lenders under\nthe Financing Documents are cumulative and not exclusive of any rights\nor remedies which the Agents, the L\/C Issuing Bank and the Lenders\nwould otherwise have.\n\n         SECTION 9.3.  Expenses; Indemnification.  (a) The Borrower\n                       -------------------------\nshall pay (i) all reasonable out-of-pocket expenses of the Agents,\nincluding fees and disbursements of special counsel for the Agents, in\nconnection with the preparation and interpretation of this Agreement\nand the other Financing Documents, any waiver or consent hereunder or\nthereunder or any amendment hereof or thereof, any Default or alleged\nDefault hereunder or any Increased Coverage Event or alleged Increased\nCoverage Event and (ii) if an Event of Default occurs, all reasonable\nout-of-pocket expenses incurred by the Agents, each L\/C Issuing Bank\nand each Lender, including (without duplication) the fees and\ndisbursements of outside counsel and the allocated cost of inside\ncounsel, in connection with such Event of Default and collection,\nbankruptcy, insolvency and other enforcement proceedings resulting\ntherefrom, including out-of-pocket expenses incurred in enforcing any\nof the Financing Documents.\n\n         (b) The Borrower shall pay the Collateral Agent upon demand\nfor all amounts arising out of (i) the preparation of Collateral\nReports, if any, and (ii) the preparation of analyses, if any, of the\ncurrent market value of the Inventories included in the Borrowing Base\nas of the end of each quarter of the Borrower's fiscal year.\n\n         (c) The Borrower agrees to indemnify and hold harmless, the\nAgents, the L\/C Issuing Banks and each Lender and each of their\nrespective directors, officers, affiliates, shareholders, employees,\nagents and each legal entity, if any, who controls any such Person\n(each, an \"Indemnitee\") forthwith on demand, from and against any and\nall losses, claims, damages, liabilities, costs and expenses\n(including, without limitation, all reasonable fees and disbursements\nof counsel, expenses incurred by their respective credit recovery\ngroups, expenses of settlement or litigation or preparation therefor\nand the reasonable expenses of investigation by engineers,\nenvironmental consultants and similar technical personnel) which any\nIndemnitee may incur or which may be asserted against any Indemnitee\nby any Person in connection with any investigative, administrative or\njudicial notice or proceeding (whether or not such Indemnitee shall be\na designated party thereto) relating to, arising out of or in\nconnection with (i) any of the Financing Documents or any actual or\nproposed use of Letters of Credit issued pursuant hereto or of\nproceeds of Loans hereunder or (ii) any and all Environmental\nLiabilities; provided that no Indemnitee shall have the right to be\nindemnified hereunder for (x) its own gross negligence or willful\nmisconduct as determined by a court of competent jurisdiction, (y) any\nbreach of its obligations\n\n\n                                  62\n\n\n\nhereunder or (z) any liabilities or expenses for which the Borrower is\nobligated to make any payment to such Indemnitee under any other\nprovision of this Agreement or any of the other Financing Documents;\nand provided further that the Borrower shall not be liable for any\nsettlements entered into by any Indemnitee without its consent.\nWithout limiting the generality of the foregoing, the Borrower hereby\nwaives all rights for contribution or any other rights of recovery\nwith respect to liabilities, losses, damages, costs and expenses\narising under or related to Environmental Laws that it might have by\nstatute or otherwise against any Lender by reason of its being a\nsignatory Lender under this Agreement.\n\n         Promptly after receipt by an Indemnitee of notice of the\ncommencement of any action, such Indemnitee shall, if a claim in\nrespect thereof is to be made against the Borrower under this\nsubsection (c), notify the Borrower of the commencement thereof.  In\ncase any such action is brought against any Indemnitee and it notifies\nthe Borrower of the commencement thereof, the Borrower shall be\nentitled to participate therein and, to the extent that it may wish,\nto assume the defense thereof, with counsel reasonably satisfactory to\nsuch Indemnitee, and after notice from the Borrower to such Indemnitee\nof its election so to assume the defense thereof, the Borrower shall\nnot be liable to such Indemnitee under this subsection (c) for any\nlegal or other expenses subsequently incurred by such Indemnitee in\nconnection with the defense thereof other than reasonable costs of\ninvestigation; provided that if the named parties in any such action\ninclude both the Borrower and any Indemnitee and representation of\nboth parties by the same counsel would be inappropriate due to actual\nor potential differing interests between them then the Indemnitees\nshall have the right to separate counsel (the fees and expenses of\nwhich shall be at the expense of the Borrower) and the Borrower shall\nnot have the right to assume the defense of any such action.  It is\nunderstood that the Borrower shall not in connection with any action\nor related actions be liable for the fees and expenses of more than\none separate firm for all Indemnitees.\n\n         SECTION 9.4.  Sharing of Set-Offs.  Each Lender agrees that\n                       -------------------\nif it shall, by exercising any right of set-off or counterclaim or\notherwise, receive payment of a proportion of the aggregate amount\nthen due to it with respect to the principal of and interest on the\nNotes held by it and its participation in the Reimbursement\nObligations and interest (if any) thereon or Commitment or Letter of\nCredit Participation Fees (collectively, its \"Relevant Obligations\")\nwhich is greater than the proportion received by any other Lender in\nrespect of the Relevant Obligations of such other Lender, the Lender\nreceiving such proportionately greater payment shall purchase such\nparticipations in the Relevant Obligations held by or owing to the\nother Lenders, and such other adjustments shall be made, as may be\nrequired so that all such payments with respect to the Relevant\nObligations of the Lenders shall be shared by the Lenders pro rata;\nprovided that nothing in this Section shall impair the right of any\nLender to exercise any right of set-off or counterclaim it may have\nand to apply the amount subject to such exercise to the payment of\nindebtedness of the Borrower other than its Relevant Obligations.  The\nBorrower agrees, to the fullest extent it may effectively do so under\napplicable law, that any holder of a participation in a Note or Letter\nof Credit, whether or not acquired pursuant to the foregoing\narrangements, may exercise rights of set-off or counterclaim and other\nrights with respect to such\n\n                                  63\n\n\n\n\nparticipation as fully as if such holder of a participation were a\ndirect creditor of the Borrower in the amount of such participation.\n\n         SECTION 9.5.  Amendments and Waivers.  Any provision of this\n                       ----------------------\nAgreement or the Notes may be amended or waived if, but only if, such\namendment or waiver is in writing and is signed by the Borrower and\nthe Required Lenders (and, if the rights or duties of either Agent or\nany L\/C Issuing Bank are affected thereby, by such Person); provided\nthat no such amendment or waiver shall, unless signed by all the\nLenders, (i) increase or decrease the Commitment of any Lender (except\nfor a ratable decrease in the Commitments of all Lenders) or subject\nany Lender to any additional obligation, except as provided in Section\n9.6, (ii) reduce the principal of or rate of interest on any Loan or\nany Fees hereunder, (iii) postpone the date fixed for any payment of\nprincipal of or interest on any Loan or any Fees hereunder, (iv)\nchange the definition of \"Borrowing Base\", \"Eligible Inventories\",\n\"Finished and Semifinished Inventories\", \"Inventories\", \"Raw Materials\nInventories\", \"Applicable Percentage\", \"Secured Principal Amount\" or\nchange Section 2.12, (v) extend the Termination Date or (vi) change\nthe percentage of the Commitments or of the aggregate unpaid principal\namount of the Notes, or the number of Lenders, which shall be required\nfor the Lenders or any of them to take any action under this Section\nor any other provision of this Agreement.\n\n         SECTION 9.6.  Successors and Assigns.  (a) The provisions of\n                       ----------------------\nthis Agreement shall be binding upon and inure to the benefit of the\nparties hereto and their respective successors and assigns, except\nthat the Borrower may not assign or otherwise transfer any of its\nrights under this Agreement without the prior written consent of all\nLenders.  (b) Any Lender may at any time grant to one or more lenders\nor other institutions (each a \"Participant\") participating interests\nin its Commitment or any or all of its Loans.  In the event of any\nsuch grant by a Lender of a participating interest to a Participant,\nwhether or not upon notice to the Borrower and the Administrative\nAgent, such Lender shall remain responsible for the performance of its\nobligations hereunder, and the Borrower and the Administrative Agent\nshall continue to deal solely and directly with such Lender in\nconnection with such Lender's rights and obligations under this\nAgreement.  Any agreement pursuant to which any Lender may grant such\na participating interest shall provide that such Lender shall retain\nthe sole right and responsibility to enforce the obligations of the\nBorrower hereunder including, without limitation, the right to approve\nany amendment, modification or waiver of any provision of this\nAgreement; provided that such participation agreement may provide that\nsuch Lender will not agree to any modification, amendment or waiver of\nthis Agreement described in clause (i), (ii), (iii) or (v) of Section\n9.5# without the consent of the Participant.  The Borrower agrees that\neach Participant shall, to the extent provided in its participation\nagreement, be entitled to the benefits of Article 8\" with respect to\nits participating interest.  An assignment or other transfer which is\nnot permitted by subsection (c) or (e) below shall be given effect for\npurposes of this Agreement only to the extent of a participating\ninterest granted in accordance with this subsection (b).  In the event\nof any such grant by a Lender of a participating interest to a\nParticipant, the Lender shall give notice of such participation to the\nBorrower and the Administrative Agent.\n\n                                  64\n\n\n\n\n         (c) Any Lender may at any time assign to one or more lenders,\ninstitutions or Persons (each an \"Assignee\") all, or a proportionate\npart of all (such portion to comprise a Commitment and Receivables\nCommitment of not less than $5,000,000 and to be for an equal\npercentage of such Lender's Commitment hereunder and its Receivables\nCommitment under the Receivables Purchase Agreement and after giving\neffect to such assignment, the aggregate Commitment and Receivables\nCommitment retained by the assigning Lender shall be in an aggregate\namount of not less than $5,000,000) of its rights and obligations\nunder this Agreement and the Receivables Purchase Agreement and such\nAssignee shall assume such rights and obligations, pursuant to an\nAssignment and Assumption Agreement in substantially the form of\nExhibit J hereto executed by such Assignee and such transferor Lender,\nwith (and subject to) the subscribed consent of the Borrower, which\nshall not be unreasonably withheld, the Administrative Agent and the\nL\/C Issuing Banks; provided that if (i) an Assignee is a creditworthy\naffiliate of such transferor Lender or was a Lender immediately prior\nto such assignment, or (ii) an Event of Default has occurred and is\ncontinuing and the Commitments have been terminated in their entirety,\nand, such Assignee is not substantially engaged in the manufacture or\nsale of steel or steel products, either directly or through a\nSubsidiary or Affiliate then, in each such case, no consent of the\nBorrower shall be required.  Upon execution and delivery of such\ninstrument and payment by such Assignee to such transferor Lender of\nan amount equal to the purchase price agreed between such transferor\nLender and such Assignee, such Assignee shall be a Lender party to\nthis Agreement and shall have all the rights and obligations of a\nLender with a Commitment as set forth in such instrument of\nassumption, and the transferor Lender shall be released from its\nobligations hereunder to a corresponding extent, and no further\nconsent or action by any party shall be required; provided that, if at\nthe time of such assignment, any Syndicated Letter of Credit is then\noutstanding, then the transferor Lender, Morgan Guaranty, in its\ncapacity as L\/C Issuing Bank, the Administrative Agent and the\nBorrower shall make appropriate arrangements so that (i) a new\nSyndicated Letter of Credit (a \"Replacement Letter of Credit\") is\nissued by Morgan Guaranty, in its capacity as L\/C Issuing Bank,\nproviding that the Assignee and the transferor Lender, to the extent\nof its retained Commitment hereunder, if any, are severally obligated\nto the beneficiary to pay any drawings thereunder ratably in\nproportion to their respective Commitments (their respective\n\"Percentages\"), or (ii) in the event that a Replacement Letter of\nCredit is not issued, the Assignee shall agree in writing with the\ntransferor Lender and the Borrower that, upon any draw under a\nSyndicated Letter of Credit, the Assignee shall pay to the transferor\nLender the Assignee's Percentage of such draw.  Upon the consummation\nof any assignment pursuant to this subsection (c), the transferor\nLender, the Administrative Agent and the Borrower shall make\nappropriate arrangements so that, if required, a new Note is issued to\nthe Assignee.  In connection with any such assignment, the transferor\nLender shall pay to the Administrative Agent an administrative fee for\nprocessing such assignment in the amount of $2,500.  If the Assignee\nis not incorporated under the laws of the United States or a state\nthereof, it shall deliver to the Borrower and the Administrative Agent\ncertification as to exemption from deduction or withholding of any\nUnited States Federal income taxes in accordance with Section 8.4.\nEach Lender may furnish any confidential information concerning the\nBorrower in the possession of such Lender from time to time to\nAssignees and Participants (including prospective Assignees and\nParticipants)\n\n                                  65\n\n\n\nwhich have agreed in a writing delivered to the Borrower to be bound\nby the provisions of Section 9.8 hereof.\n\n         (d) If any Reference Bank assigns its Notes to an\nunaffiliated institution, the Administrative Agent shall in\nconsultation with the Borrower and with the consent of the Required\nLenders, appoint another bank to act as a Reference Bank hereunder.\n\n         (e) Any Lender may at any time assign all or any portion of\nits rights under this Agreement and its Note to a Federal Reserve\nBank.  No such assignment shall release the transferor Lender from its\nobligations hereunder.\n\n         (f) No Assignee, Participant or other transferee of any\nLender's rights shall be entitled to receive any greater payment under\nSection 8.3 or 8.4 than such Lender would have been entitled to\nreceive with respect to the rights transferred, unless such transfer\nis made with the Borrower's prior written consent or by reason of the\nprovisions of Section 8.2, 8.3 or 8.4 requiring such Lender to\ndesignate a different Applicable Lending Office under certain\ncircumstances or at a time when the circumstances giving rise to such\ngreater payment did not exist.\n\n         SECTION 9.7.  Margin Stock Collateral.  Each of the Lenders\n                       -----------------------\nrepresents to the Administrative Agent and each of the other Lenders\nthat it in good faith is not relying upon any \"margin stock\" (as\ndefined in Regulation U) as collateral in the extension or maintenance\nof the credit provided for in this Agreement.\n\n         SECTION 9.8.  Confidentiality.  The Agents and each Lender\n                       ---------------\nagree for the benefit of the Borrower to keep confidential any\nproprietary or financial information obtained by the Agents or such\nLender, as the case may be, based on a review of the books and records\nof the Borrower or any Subsidiary pursuant to Section 5.4 and any\nother information to the extent such information has been stated by\nthe Borrower to be confidential; provided that nothing herein shall\nprevent the Agents or any Lender from disclosing such information (i)\nto the Agents or any other Lender in connection with the transactions\ncontemplated by the Financing Documents, (ii) to its officers,\ndirectors, employees, agents, attorneys and accountants who have a\nneed to know such information in accordance with customary banking\npractices and to any of its Affiliates who need to know such\ninformation in connection with administering the transactions\ncontemplated by the Financing Documents and, in any case, who receive\nsuch information having been made aware of the restrictions set forth\nin this Section, (iii) upon the order of any court or administrative\nagency, (iv) upon the request or demand of any regulatory agency or\nauthority having jurisdiction over such party, (v) which has been\npublicly disclosed, (vi) which has been obtained from any Person other\nthan the Borrower and its Affiliates; provided that such Person is not\nknown to it to be bound by a confidentiality agreement with the\nBorrower or its Affiliates or known to it to be otherwise prohibited\nfrom transmitting the information to it by a contractual, legal or\nfiduciary obligation, (vii) in connection with the exercise of any\nremedy hereunder or under any of the other Financing Documents, (viii)\nto S&amp;P or (ix) to any prospective Assignee or Participant which has\nagreed in a writing delivered to the Borrower to be bound by this\nSection.\n\n                                  66\n\n\n\n\n         SECTION 9.9.  Governing Law; Submission to Jurisdiction.\n                       -----------------------------------------\nThis Agreement, each Note and each Letter of Credit (except Letters of\nCredit to the extent therein stated to be governed by the Uniform\nCustoms and Practice for Documentary Credits issued by the\nInternational Chamber of Commerce) shall be governed by and construed\nin accordance with the laws of the State of New York.  The Borrower\nhereby submits to the nonexclusive jurisdiction of the United States\nDistrict Court for the Southern District of New York and of any New\nYork State court sitting in New York City for purposes of all legal\nproceedings arising out of or relating to this Agreement or the\ntransactions contemplated hereby.  The Borrower irrevocably waives, to\nthe fullest extent permitted by law, any objection which it may now or\nhereafter have to the laying of the venue of any such proceeding\nbrought in such a court and any claim that any such proceeding brought\nin such a court has been brought in an inconvenient forum.\n\n         SECTION 9.10.  Counterparts; Integration; Effectiveness.\n                        ----------------------------------------\nThis Agreement may be signed in any number of counterparts, each of\nwhich shall be an original, with the same effect as if the signatures\nthereto and hereto were upon the same instrument.  This Agreement\nconstitutes the entire agreement and understanding among the parties\nhereto and supersedes any and all prior agreements and understandings,\noral or written, relating to the subject matter hereof.  This\nAgreement shall become effective upon receipt by the Administrative\nAgent of counterparts hereof signed by each of the parties hereto (or,\nin the case of any party as to which an executed counterpart shall not\nhave been received, receipt by the Administrative Agent in form\nsatisfactory to it of telegraphic, facsimile or other written\nconfirmation from such party of execution of a counterpart hereof by\nsuch party).\n\n         SECTION 9.11.  Termination of Existing Credit Agreement.\n                        ----------------------------------------\nEach party hereto agrees that effective as of the Closing Date the\nExisting Credit Agreement and Existing Security Agreement shall\nterminate (and hereby waives any requirement of separate notice of\nsuch termination) and the security interests created by the Existing\nSecurity Agreement shall be released; provided that expense and\nindemnity provisions (but not letter of credit reimbursement\nobligations) contained in the Existing Credit Agreement shall survive\nin respect of periods prior to the Closing Date.  The Lenders party\nhereto expressly instruct Morgan Guaranty and\/or J.P.  Morgan Delaware\nto take all actions necessary to release the security interests under\nthe Existing Credit Agreement effective as of the Closing Date.\n\n         SECTION 9.12.  WAIVER OF JURY TRIAL.  EACH OF THE PARTIES\n                        --------------------\nHERETO IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY\nLEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE\nTRANSACTIONS CONTEMPLATED HEREBY.\n\n                                  67\n\n\n\n\n\n         IN WITNESS WHEREOF, the parties hereto have caused this\nAgreement to be duly executed by their respective authorized officers\nas of the day and year first above written.\n\n                           BETHLEHEM STEEL CORPORATION\n\n\n\n                           By \/s\/ Gary L. Millenbruch\n                              ---------------------------------\n                              Title: Executive Vice President,\n                                     Chief Financial Officer and\n                                     Treasurer\n\n                              1170 Eighth Avenue\n                              Bethlehem, PA 18016\n                              Telephone: 610-694-4581\n                              Facsimile: 610-694-3356\n                              Attention: Edmund P. Reybitz\n\n                                  68\n\n\n\n                              MORGAN GUARANTY TRUST\n                              COMPANY OF NEW YORK,\n                                as Administrative Agent\n\n\n                              By \/s\/ Laura Reim\n                                 ---------------------------------\n                                 Title: Vice President\n\n                              60 Wall Street\n                              New York, NY 10260\n                              Telephone: 212-648-6793\n                              Facsimile: 212-648-5336\n                              Attention: Laura E. Reim\n\n\n                              J. P. MORGAN DELAWARE,\n                                as Structuring and Collateral\n                                Agent\n\n\n                              By \/s\/ Robert S. Jones\n                                 ---------------------------------\n                                 Title: Associate\n\n                              902 Market Street\n                              Wilmington, DE 19801\n                              Telephone: 302-651-2402\n                              Facsimile: 302-652-7416\n                              Attention: Robert J. Henchey\n\n                                  69\n\n\n\n                              MORGAN GUARANTY TRUST\n                              COMPANY OF NEW YORK,\n                                as L\/C Issuing Bank\n\n\n                              By \/s\/ Laura Reim\n                                 ---------------------------------\n                                 Title: Vice President\n\n\n                              CHEMICAL BANK,\n                                as L\/C Issuing Bank\n\n\n                              By \/s\/ James H. Ramage\n                                 ---------------------------------\n                                 Title: Vice President\n\n\n                              THE LONG-TERM CREDIT BANK OF\n                              JAPAN, LTD.,\n                                as L\/C Issuing Bank\n\n\n                              By \/s\/ Noboru Kubota\n                                 ---------------------------------\n                                 Title: Deputy General Manager\n\n\n                                  70\n\n\n\n\n                               LENDERS:\n\nCommitment: $34,000,000       J.P. MORGAN DELAWARE\n\n\n                              By \/s\/ Robert S. Jones\n                                 ---------------------------------\n                                 Title: Associate\n\n\nCommitment: $26,000,000       CHEMICAL BANK\n\n\n                              By \/s\/ James H. Ramage\n                                 ---------------------------------\n                                 Title: Vice President\n\n\nCommitment: $26,000,000       THE LONG-TERM CREDIT BANK\n                              OF JAPAN, LTD.\n\n\n                              By \/s\/ Noboru Kubota\n                                 ---------------------------------\n                                 Title: Deputy General Manager\n\n\nCommitment: $16,000,000       THE BANK OF NEW YORK\n\n\n                              By \/s\/ Peter H. Abdill\n                                 ---------------------------------\n                                 Title: Vice President\n\n\n                                  71\n\n\n\n\nCommitment: $16,000,000       NATIONSBANK, N.A.\n                              (CAROLINAS)\n\n\n                              By \/s\/ Michael D. Monte\n                                 ---------------------------------\n                                 Title: Vice President\n\n\n\n                                  72\n\n\n\n\nCommitment: $14,000,000       BANK OF AMERICA ILLINOIS\n\n\n                              By \/s\/ Donald J. Chin\n                                 ---------------------------------\n                                 Title: Authorized Officer\n\n\nCommitment: $8,000,000        BANK AUSTRIA\n                              AKTIENGESELLSCHAFT\n\n\n                              By \/s\/ Robert Tenhave\n                                 ---------------------------------\n                                 Title: Senior Vice President\n\n\n                              By \/s\/ Amy Rick\n                                 ---------------------------------\n                                 Title: Vice President\n\n\nCommitment: $8,000,000        CORESTATES BANK, N.A.\n\n\n                              By \/s\/ Joseph M. Finley\n                                 ---------------------------------\n                                 Title: Vice President\n\n\nCommitment: $8,000,000        THE FIRST NATIONAL BANK OF\n                              CHICAGO\n\n\n                              By \/s\/ Amy R. Howatt\n                                 ---------------------------------\n                                 Title: Vice President\n\n\n                                  73\n\n\n\nCommitment: $8,000,000        THE FUJI BANK, LIMITED\n\n\n                              By \/s\/ Yoshihiko Shiotsugu\n                                 ---------------------------------\n                                 Title: Vice President &amp; Manager\n\n\nCommitment: $8,000,000        THE INDUSTRIAL BANK OF\n                              JAPAN, LIMITED\n\n\n                              By \/s\/ Robert W. Ramage, Jr.\n                                 ---------------------------------\n                                 Title: Senior Vice President\n\n\nCommitment: $8,000,000        MERIDIAN BANK\n\n\n                              By \/s\/ Barbara T. Lampe\n                                 ---------------------------------\n                                 Title: Vice President\n                                        Corporate Banking\n\n\nCommitment: $8,000,000        THE SUMITOMO BANK, LIMITED\n                              NEW YORK BRANCH\n\n\n                              By \/s\/ Yoshinori Kawamura\n                                 ---------------------------------\n                                 Title: Joint General Manager\n\n                                  74\n\n\n\nCommitment: $6,000,000        FIRST VALLEY BANK\n\n\n                              By \/s\/ David B. Kennedy\n                                 ---------------------------------\n                                 Title: Regional Vice President\n\n\n                                  75\n\n\n\n\nCommitment: $6,000,000        NBD BANK\n\n\n                              By \/s\/ Nancy L. Russell\n                                 ---------------------------------\n                                 Title: Vice President\n\n\nTOTAL COMMITMENTS: $200,000,000\n\n\n                                  76\n\n\n\n                           PRICING SCHEDULE\n\n         Each of \"Euro-Dollar Margin\", \"CD Margin\", \"Base Rate\nMargin\", \"Commitment Fee Rate\" and \"L\/C Fee Rate\" means, for any date,\nthe rates set forth below in the row opposite such term and in the\ncolumn corresponding to the \"Pricing Level\" that applies at such date:\n\n\n                Level I   Level II   Level III   Level IV   Level V\nCD Margin           1.2        1.52      1.825       2.12         2\n               25%         5%           %         5%          .625%\n\nEuro-Dollar         1.1        1.40      1.70%       2.0%         2\nMargin          0%          %                                 .5%\n\nBase Rate           .10        .40%       .70%       1.0%         1\nMargin           %                                            .5%\n\nCommitment          .31        .375      .3750       .50%\nFee Rate       25%         0%           %                   6250%\n\nL\/C Fee            1.1         1.40      1.70%       2.0%         2\nRate           0%           %                                   %\n\n         For purposes of this Schedule, the following terms have the\nfollowing meanings:\n\n         \"Level I Pricing\" applies at any date if, at such date, the\nBorrower's long-term debt is rated BB+ or higher by S&amp;P and Ba1 or\nhigher by Moody's.\n\n         \"Level II Pricing\" applies at any date if, at such date, (i)\nthe Borrower's long-term debt is rated BB or higher by S&amp;P and Ba2 or\nhigher by Moody's and (ii) Level I Pricing does not apply.\n\n         \"Level III Pricing\" applies at any date if, at such date, (i)\nthe Borrower's long-term debt is rated BB- or higher by S&amp;P and Ba3 or\nhigher by Moody's and (ii) neither Level I Pricing nor Level II\nPricing applies.\n\n         \"Level IV Pricing\" applies at any date if, at such date, (i)\nthe Borrower's long-term debt is rated B+ or higher by S&amp;P and B1 or\nhigher by Moody's and (ii) none of Level I Pricing, Level II Pricing\nand Level III Pricing applies.\n\n                                  77\n\n\n\n\n         \"Level V Pricing\" applies at any date if, at such date, no\nother Pricing Level applies.\n\n         \"Pricing Level\" refers to the determination of which of Level\nI, Level II, Level III, Level IV or Level V applies at any date.\n\n         The credit ratings to be utilized for purposes of this\nSchedule are those assigned to the senior unsecured long-term debt\nsecurities of the Borrower without third-party credit enhancement, and\nany rating assigned to any other debt security of the Borrower shall\nbe disregarded.  The rating in effect at any date is that in effect at\nthe close of business on such date.\n\n\n                                  78\n\n\n\n\n                              Schedule 1\n\n                      Existing Letter of Credit\n\n\n             Beneficiary                        Amount\n               None\n\n                                  79\n\n\n\n\n                             Schedule 4.8\n\n                        Environmental Matters\n                                 None\n\n\n\n                                  80\n\n\n\n\n                                                          EXHIBIT A\n\n                                 NOTE\n\n                          New York, New York\n\n                                          September 12, 1995\n\n         For value received, Bethlehem Steel Corporation, a Delaware\ncorporation (the \"Borrower\"), promises to pay to the order of\n______________________ (the \" Lender\"), for the account of its\nApplicable Lending Office, the unpaid principal amount of each Loan\nmade by the Lender to the Borrower pursuant to the Inventory Credit\nAgreement referred to below on the maturity date provided for in the\nInventory Credit Agreement and at the other times provided in the\nInventory Credit Agreement.  The Borrower promises to pay interest on\nthe unpaid principal amount of each such Loan on the dates and at the\nrate or rates provided for in the Inventory Credit Agreement.  All\nsuch payments of principal and interest shall be made in lawful money\nof the United States in Federal or other immediately available funds\nat the office of Morgan Guaranty Trust Company of New York, 60 Wall\nStreet, New York, New York.\n\n         All Loans made by the Lender, the respective types thereof\nand all repayments of the principal thereof shall be recorded by the\nLender and, if the Lender so elects in connection with any transfer or\nenforcement hereof, appropriate notations to evidence the foregoing\ninformation with respect to each such Loan then outstanding may be\nendorsed by the Lender on the schedule attached hereto, or on a\ncontinuation of such schedule attached to and made a part hereof;\nprovided that the failure of the Lender to make any such recordation\nor endorsement shall not affect the obligations of the Borrower\nhereunder or under the Inventory Credit Agreement.\n\n                                  1\n\n\n\n\n         The Loans evidenced hereby are secured as provided in the\nInventory Security and Pledge Agreement dated as of September 12, 1995\namong the Borrower, the Special Purpose Members, J.P.  Morgan\nDelaware, as Structuring and Collateral Agent and Morgan Guaranty\nTrust Company of New York, as Administrative Agent.\n\n         This note is one of the Notes referred to in the Inventory\nCredit Agreement dated as of September 12, 1995 among the Borrower,\nthe lenders listed on the signature pages thereof, Morgan Guaranty\nTrust Company of New York, as Administrative Agent and J.P.  Morgan\nDelaware, as Structuring and Collateral Agent (as the same may be\namended from time to time, the \"Inventory Credit Agreement\").  Terms\ndefined in the Inventory Credit Agreement are used herein with the\nsame meanings.  Reference is made to the Inventory Credit Agreement\nfor provisions for the prepayment hereof and the acceleration of the\nmaturity hereof.\n\n                                 Bethlehem Steel Corporation\n\n\n\n                                 By ________________________________\n                                    Name:\n                                    Title:\n\n\n                                  2\n\n\n\n\n\n                   LOANS AND PAYMENTS OF PRINCIPAL\n____________________________________________________________________\n\n            Amount                Amount of\n              of                  Principal           Notation\nDate         Loan                  Repaid             Made By\n____________________________________________________________________\n____________________________________________________________________\n____________________________________________________________________\n____________________________________________________________________\n____________________________________________________________________\n____________________________________________________________________\n____________________________________________________________________\n\n\n                                  3\n\n\n\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n_______________________________________________________________________\n\n                                  4\n\n\n\n_______________________________________________________________________\n_______________________________________________________________________\n\n\n6\n\n\n\n\n                                                         EXHIBIT B\n\n\n                           Leased Premises\n\n\n                                 None\n\n\n                                  6\n\n\n\n                                                       EXHIBIT C-1\n\n\n                            Approved Sites\n\nName                              Location\n----                              --------\n\nDouble G. Coatings, L.P.          Jackson, Mississippi\n\nWalbridge Coatings,\nan Illinois Partnership           Walbridge, Ohio\n\nIndiana Pickling and\nProcessing                        Portage, Indiana\n\nHS Processing LP                  Baltimore, Maryland\nMetal Coaters of\n\nGeorgia, Inc.                     Marietta, Georgia\n\nDoubleCote, L.L.C.                Jackson, Mississippi\n\nMetro Metals Corporation          Portage, Indiana\n\n\n                                  7\n\n\n\nRoll &amp; Hold Warehouse\n&amp; Distribution Corp.              Indianapolis, Indiana\n\n\n\n\n                                  8\n\n\n\n\n\n                                                         EXHIBIT C-2\n\n                [Form of Collateral Access Agreement]\n\n         This Collateral Access Agreement (the \" Agreement\") is made\nby and between [Name of Warehouse\/Processor] (the \"Bailee\") and J.P.\nMorgan Delaware, as Structuring and Collateral Agent (the \"Collateral\nAgent\");\n\n                           R E C I T A L S\n\n         WHEREAS, the Bailee presently holds Inventory (as defined\nbelow) of the Company (as defined below) and may in the future hold\nInventory, in each case, at the facility located at the address set\nforth below (the \" Facility\");\n\n         WHEREAS, the Company has entered into an Inventory Credit\nAgreement (the \"Inventory Credit Agreement\") dated as of September 12,\n1995 among Bethlehem Steel Corporation (the \"Company\"), the lenders\nlisted on the signature pages thereof (the \"Lenders\"), Morgan Guaranty\nTrust Company of New York, as Administrative Agent and J.P.  Morgan\nDelaware, as Collateral Agent, and, as a condition to the loans and\nother financial accommodations to the Company, the Lenders require,\namong other things, liens on the Company's present and future\ninventory (the \"Inventory\"), including all inventory held by the\nBailee and all inventory which may be shipped to and handled by the\nBailee from time to time in the future; and\n\n         WHEREAS, the Collateral Agent, on behalf of the Lenders, and\nthe Bailee desire to enter into an agreement in order to establish the\nrights and obligations respecting the Inventory as between the\nCollateral Agent and the Bailee, in order to assure mutual cooperation\nand protection of their respective interests;\n\n                                  9\n\n\n\n\n         NOW, THEREFORE, in consideration of the premises hereof and\nmutual promises and agreements herein contained, and for other good\nand valuable consideration, the receipt and sufficiency of which are\nhereby acknowledged, the parties agree as follows:\n\n         1.  Representations and Warranties.  The Bailee represents\nand warrants that:\n\n              (i) its correct legal name and address are set forth on\n         the signature page hereof;\n\n              (ii) it does not have title to any of the Company's\n         Inventory, nor does it have any claim to or lien upon any of\n         the Company's Inventory (other than for customary\n         [warehousing] [processing] charges);\n\n              (iii) none of the Company's Inventory is reflected on\n         its books and records as an asset; and\n\n              (iv) the only receivables of the Bailee from the Company\n         relating to the Company's Inventory have been or will be\n         originated solely as a result of the services provided by the\n         Bailee with respect to the Inventory.\n\n         2.  Covenants.  The Bailee agrees that:\n\n              (i) in the future, if it changes the legal form in which\n         it does business (for example, changes from a sole\n         proprietorship to a partnership, a partnership to a\n         corporation, or forms a new corporation) or changes its\n         business name, the Bailee will give the Collateral Agent\n         prompt written notice of the change so that the Collateral\n         Agent can update its records and, if necessary, correct and\n         refile any security documents;\n\n              (ii) it will allow the Collateral Agent, its auditors\n         and its other designees, access to the Facility, upon\n         reasonable prior notice, during ordinary business hours in\n         order to inspect the Company's Inventory and verify the\n         amount.  In addition, if the Collateral Agent elects to\n         remove the Company's Inventory from the Facility itself, the\n         Bailee will grant the Collateral Agent access to the\n         Facility, upon reasonable prior notice, during ordinary\n         business hours to do so and will not hinder the Collateral\n         Agent's actions in removing the Inventory, but the Collateral\n         Agent shall have no\n\n                                  10\n\n\n\n\n         obligation to remove any Inventory from the Facility or,\n         having commenced such removal, to complete such removal.  The\n         Collateral Agent will not interfere with the Bailee's\n         business operations and all costs of inspection, verification\n         and removal shall be for the account of the Lenders;\n\n              (iii) if the Collateral Agent notifies the Bailee in\n         writing that an event of default has occurred under the\n         Inventory Credit Agreement, then, without any responsibility\n         on the Bailee's part to verify the existence of such default,\n         it will release the Inventory to the Collateral Agent on\n         demand; provided that the Collateral Agent tenders payment of\n         any unpaid [warehousing] [processing] charges on the\n         Inventory being released;\n\n              (iv) if the Company defaults under any agreement it has\n         with the Bailee, the Bailee agrees not to exercise any remedy\n         under such agreement or applicable law or in equity, unless\n         it shall have provided the Collateral Agent written notice of\n         such default and given the Collateral Agent 20 business days\n         to cure a monetary default and 60 business days to cure a\n         non-monetary default and during such time, the Bailee will\n         allow the Collateral Agent to enter the Facility and remove\n         the Inventory as set forth in Section 2(ii) above.  If any\n         default is cured during the applicable period, the Bailee\n         agrees to rescind the notice of default, but the Collateral\n         Agent shall have no obligation to cure any default of the\n         Company or, having commenced such cure, to complete such\n         cure.  Notwithstanding the foregoing, the Bailee's failure to\n         provide such notice shall not render the Bailee liable to the\n         Collateral Agent in any manner or diminish or otherwise\n         affect the Bailee's rights under any such agreement with the\n         Company or with respect to the Inventory; and\n\n              (v) the Collateral Agent, on behalf of the secured\n         parties, has a perfected security interest in the Company's\n         Inventory now or in the future located at the Facility.\n\n         3.  Notices.  All notices, requests and other communications to either\nparty hereunder shall be in writing (including bank wire, telex, facsimile\ntransmission or similar writing) and shall be given to such party at its\naddress, facsimile number or telex number set forth on the signature pages\nhereof.  Each such notice, request or other communication shall be effective\n(i) if given by telex, when\n\n                                      11\n\n\n\n\nsuch telex is transmitted to the telex number specified in this\nSection and the appropriate answerback is received, (ii) if given by\nfacsimile transmission, when transmitted to the facsimile number\nspecified in this Section and confirmation of receipt is received,\n(iii) if given by mail, 72 hours after such communication is deposited\nin the mails with first class postage prepaid, addressed as aforesaid\nor (iv) if given by any other means, when delivered at the address\nspecified in this Section.\n\n         4.  Amendments.  The agreements contained herein may not be\n             ----------\nmodified or terminated orally and shall be binding upon and inure to\nthe benefit of parties and their respective successors or assigns.\n\n         5.  Term of Agreement.  This Agreement shall continue in full\n             -----------------\nforce and effect until the date on which the Collateral Agent has\nconfirmed in writing that all of the Company's obligations and\nliabilities to the secured parties are paid and satisfied in full and\nall financing arrangements between the secured parties and the Company\nhave been terminated.\n\n         6.  Company's Obligations.  All of the Bailee's charges to\n             ---------------------\nthe Company of any nature whatsoever shall continue to be charged to\nand paid by the Company in accordance with the agreements under which\nsuch charges arose.  The Collateral Agent shall not be directly or\nindirectly liable or responsible for any of said charges whether due\nor to become due.\n\n         The arrangement and instructions outlined herein shall\ncontinue without any change or modification until the Collateral Agent\nhas given written notification to the contrary to the Bailee at the\naddress set forth below, which notification need only be signed by the\nCollateral Agent.  Upon delivery of any such written notification, the\nBailee agrees to take the Collateral Agent's instructions as to any\nprocessing, holding or delivery of the Inventory.\n\n         7.  Agreement of the Company.  The Company has signed below\n             ------------------------\nto indicate its confirmation of and agreement with the foregoing.\n\n                                      12\n\n\n\n\n\n         Executed and delivered as of the ____ day of _____, 199_.\n\n                                 [NAME OF BAILEE]\n\n\n                                  By____________________________\n\n                                     Name:\n                                     Title:\n                                     Address:\n                                     Telex:\n                                     Facsimile:\n\n                                  J.P.  MORGAN DELAWARE,\n                                  as Structuring and Collateral Agent\n\n\n                                  By____________________________\n\n                                  Name:\n                                  Title:\n                                  Address:\n                                  Telex:\n                                  Facsimile:\n\nAcknowledged and Agreed to:\n\nBETHLEHEM STEEL CORPORATION\n\n\n\n                                  13\n\n\n\n\nBy____________________________\nName:\n\n\n\n                                  14\n\n\n\n\n\n                                                     EXHIBIT D\n\n                     INVENTORY TURNOVER RATES FOR\n                FINISHED AND SEMIFINISHED INVENTORIES\n\n\n\nCATEGORY OR\nSUBCATEGORY      DESCRIPTION          INVENTORY TURNOVER RATE*\n-----------      -----------          --------- --------------\n\nGroup#30      Ingots                       4.0         31\n              Slabs, Blooms &amp; Billets      2.0         32\n              Structural                   2.0         33\n              Plates                       2.0         34\n              Bars\n\nSubcategories:\n\n              Alloy Bars                   3.0\n              Carbon Bars                  2.5         36\n              Rails &amp; Accessories          2.0         38\n              Pipe                         2.0         39\n              Sheet &amp; Strip\n\nSubcategories:\n              Hot Rolled Sheet             2.0\n\n                                  15\n\n\n\n\n              Cold Rolled Sheet            2.5\n              Coated Sheet                 2.0         40\n              Tin Coated Sheet and Strip1   .5\n__________\n\n*The Inventory Turnover Rate applicable to each category and\nsubcategory of Finished and Semifinished Inventories set forth above\nshall be the rate set forth opposite such category and subcategory or\nsuch other rate as the Borrower and the Administrative Agent (with the\nconsent of the Required Lenders) may agree.  The Borrower may request\nthat the rate be adjusted or that its application be waived in the\nevent of a strike or fire or other event beyond the Borrower's control\nor while a facility is closed for periodic maintenance work such as\nthe relining of a blast furnace or for any other\nreason..27009\/075\/CA\/agt.inventory.conf\n\n\n\n                                  16\n\n\n\n                                                         EXHIBIT E\n\n               INVENTORY SECURITY AND PLEDGE AGREEMENT\n\n                             dated as of\n\n                          September 12, 1995\n\n\n                                among\n\n\n                     BETHLEHEM STEEL CORPORATION,\n\n             BETHLEHEM STEEL CREDIT AFFILIATE ONE, INC.,\n\n              BETHLEHEM STEEL CREDIT AFFILIATE TWO, INC.\n\n\n\n\n\n\n\n                        J.P. MORGAN DELAWARE,\n\n                 as Structuring and Collateral Agent\n\n\n                                 and\n\n\n              MORGAN GUARANTY TRUST COMPANY OF NEW YORK,\n\n                       as Administrative Agent\n\n\n\n                                  2\n\n\n\n               INVENTORY SECURITY AND PLEDGE AGREEMENT\n\n         AGREEMENT dated as of September 12, 1995 among BETHLEHEM\nSTEEL CORPORATION (with its successors, the \"Borrower\"), BETHLEHEM\nSTEEL CREDIT AFFILIATE ONE, INC., BETHLEHEM STEEL CREDIT AFFILIATE\nTWO, INC., J.P.  MORGAN DELAWARE, as Structuring and Collateral Agent,\nand MORGAN GUARANTY TRUST COMPANY OF NEW YORK, as Administrative\nAgent.\n\n\n                         W I T N E S E T H :\n                         - - - - - - - - -\n\n         WHEREAS, the Borrower, certain lenders (with their successors\nand assigns, the \"Lenders\"), Morgan Guaranty Trust Company of New\nYork, as administrative agent for such lenders (with its successors\nand assigns in such capacity, the \"Administrative Agent\") and J.P.\nMorgan Delaware, as structuring and collateral agent (with its\nsuccessors and assigns in such capacity, the \"Collateral Agent\") are\nparties to an Inventory Credit Agreement of even date herewith (as the\nsame may be amended from time to time, the \"Inventory Credit\nAgreement\"), pursuant to which the Borrower may incur obligations with\nrespect to Borrowings and Letters of Credit; and\n\n         WHEREAS, in order to induce the Lenders, the Agents and the\nL\/C Issuing Banks to enter into the Inventory Credit Agreement, (i)\nthe Borrower has agreed to grant a continuing security interest in and\nto the Borrower's Collateral (as hereafter defined) to secure (x) its\nobligations under the Inventory Credit Agreement, the Notes issued\npursuant thereto and any Reimbursement Obligations and (y) certain\nother obligations as described herein and in the Inventory Credit\nAgreement; and (ii) the Special Purpose Members have agreed to grant a\ncontinuing security interest in and to the Special Purpose Members'\nCollateral to secure their obligations under the Guaranties;\n\n         NOW, THEREFORE, in consideration of the premises and other\ngood and valuable consideration, the receipt and sufficiency of which\nare hereby acknowledged, the parties hereto agree as follows:\n\n\n                                  3\n\n\n\n\n                        SECTION 1. Definitions\n                                   -----------\n\n         Terms defined in the Inventory Credit Agreement and not\notherwise defined herein have, as used herein, the respective meanings\nprovided for therein.  The following additional terms, as used herein,\nhave the following respective meanings:\n\n         \"Agreement\" means this Inventory Security and Pledge\nAgreement as amended from time to time.\n\n         \"Automatic Release Termination\" has the meaning set forth in\nSection 5(C).\n\n         \"Borrower's Collateral\" means the collateral described in\nSection 3(A).\n\n         \"BSF\" means Bethlehem Steel Funding, LLC, a Maryland limited\nliability company.\n\n         \"BSF Note\" means the note of BSF payable to the Borrower in\nconnection with the Receivables Facility.\n\n         \"Collateral\" means the Borrower's Collateral and the Special\nPurpose Members' Collateral.\n\n         \"Documents\" means all \"documents\" (as defined in the UCC) or\nother receipts covering, evidencing or representing Inventories, now\nowned or hereafter acquired by the Borrower.\n\n         \"Enforcement Notice\" means a written notice delivered by the\nAdministrative Agent to the Collateral Agent stating that it is an\nEnforcement Notice (as defined in this Agreement) and that the\nRequired Lenders have instructed the Administrative Agent to deliver\nsuch notice.\n\n         \"Grantors\" means the Borrower and the Special Purpose\nMembers.\n\n         \"Guaranties\" has the meaning set forth in Section 15.\n\n         \"Instruments\" means all \"instruments\", \"chattel paper\" or\n\"letters of credit\" (each as defined in the UCC) evidencing,\nrepresenting, arising from or existing in respect of, relating to,\nsecuring or otherwise supporting\n\n                                  4\n\n\n\n\nthe payment of, any accounts receivable, including (but not limited\nto) promissory notes, drafts, bills of exchange and trade acceptances,\nnow owned or hereafter acquired by the Borrower.\n\n         \"Letter of Credit Obligation\" means at any time any\nReimbursement Obligation or other obligation of the Borrower to make a\npayment in connection with a Letter of Credit, including contingent\nobligations with respect to amounts which are then, or may thereafter\nbecome, available for drawing under Letters of Credit then\noutstanding.\n\n         \"Liquid Investment\" means (i) direct obligations of the\nUnited States or any agency thereof, or obligations guaranteed by the\nUnited States or any agency thereof, (ii) commercial paper rated in\nthe highest grade by a nationally recognized credit rating agency or\n(iii) time deposits with, including certificates of deposit issued by,\nany Lender or any other bank or trust company which is organized under\nthe laws of the United States or any state thereof, which bank or\ntrust company has, or the holding company of which bank or trust\ncompany together with its consolidated subsidiaries has, (A) capital,\nsurplus and undivided profits aggregating at least $500,000,000 and\n(B) publicly traded debt securities outstanding which are rated in one\nof the four highest rating categories by a nationally recognized\ncredit rating agency; provided in each case that (x) such Liquid\nInvestment matures within 90 days from the date of acquisition thereof\nand (y) in order to provide the Collateral Agent, for the benefit of\nthe Secured Parties, with a perfected security interest therein, such\nLiquid Investment is either:\n\n         (1) evidenced by a certificate or instrument which is\nnegotiable, or if non-negotiable is issued in the name of the\nCollateral Agent, and which (together with any appropriate instruments\nof transfer) is delivered to, and held by, the Collateral Agent or an\nagent thereof (which shall not be the Borrower or any of its\nAffiliates) in the State of New York; or\n\n         (2) in book-entry form and issued by the United States and\nsubject to pledge under applicable state law and Treasury regulations\nand as to which (in the written opinion of counsel to the Borrower,\nwhich counsel shall be satisfactory to the Collateral Agent)\nappropriate measures shall have been taken to perfect the Security\nInterests.\n\n                                  5\n\n\n\n\n         \"Operating Agreement\" means the Operating Agreement of BSF.\n\n         \"Perfection Certificate\" means a certificate substantially in\nthe form of Annex A, completed and supplemented with the schedules and\nattachments contemplated thereby to the satisfaction of the Collateral\nAgent, and duly executed by the chief financial officer and the chief\naccounting officer of the Borrower.\n\n         \"Permitted Liens\" means the Security Interests and Liens\n(including mechanics' and warehousemens' liens) which (i) arise by\noperation of law in the ordinary course of the conduct of the\nBorrower's business or the ownership of its assets, (ii) do not secure\nDebt and (iii) either (x) secure amounts not yet due and payable or\n(y) secure amounts being contested in good faith by appropriate\nproceedings so long as enforcement thereof is effectively stayed and\nreserves therefor are maintained in accordance with generally accepted\naccounting principles (it being understood that Permitted Liens do not\ninclude Federal Liens to the extent such Federal Liens give rise to an\nEvent of Default (as defined in the Inventory Credit Agreement)).\n\n         \"Pledged Interest\" means, with respect to each Grantor, such\nGrantor's (i) interest in BSF, (ii) right to inspect the books and\nrecords of BSF, (iii) right to participate in the management of and\nvote on matters coming before BSF, and (iv) unless otherwise provided,\nright to act for BSF in accordance with Section 5.1 of the Operating\nAgreement.\n\n         \"Pledged Instruments\" means (i) the BSF Note and (ii) any\nInstrument required to be pledged to the Collateral Agent pursuant to\nSection 4(B).\n\n         \"Pledged Securities\" means the Pledged Instruments and the\nPledged Stock.\n\n         \"Pledged Stock\" means (i) the Subsidiary Shares and (ii) any\nother interests required to be pledged to the Collateral Agent\npursuant to Section 4(B).\n\n                                  6\n\n\n\n\n         \"Proceeds\" means all cash and other proceeds of, and all\nother profits, rentals or receipts, in whatever form, arising from the\ncollection, sale, lease, exchange, assignment, licensing or other\ndisposition of, or other realization upon, Collateral, including\nwithout limitation all claims of the Borrower or either Special\nPurpose Member against third parties for loss of, damage to or\ndestruction of, or for proceeds payable under, or unearned premiums\nwith respect to, policies of insurance in respect of, any Collateral,\nand any condemnation or requisition payments with respect to any\nCollateral, in each case whether now existing or hereafter arising.\n\n         \"Required Secured Parties\" means the Required Lenders;\nprovided that, at any time when an Automatic Release Termination is in\neffect, \"Required Secured Parties\" shall mean Persons holding\nobligations which represent at least 66 2\/3% of the Secured Principal\nAmount.\n\n         \"Secured Obligations\" means, whether now outstanding or\nhereafter arising, (i) all principal of and interest on any Loan made\nunder, or any Note issued pursuant to, the Inventory Credit Agreement,\n(ii) all Letter of Credit Obligations, (iii) all other amounts payable\nby the Borrower hereunder or under the Inventory Credit Agreement,\n(iv) all amounts payable by the Borrower under or in respect of\nSecured Tax Exempt Debt and (v) any renewals or extensions of the\nforegoing.  The Secured Obligations shall include, without limitation,\nany interest, costs, fees and expenses which accrue on or with respect\nto any of the foregoing, whether before or after the commencement of\nany case, proceeding or other action relating to the bankruptcy,\ninsolvency or reorganization of the Borrower; provided that, for the\npurposes of payments and allocations pursuant to Section 10 after the\ncommencement of any case, action or other proceeding relating to the\nbankruptcy, insolvency or reorganization of the Borrower, each Secured\nObligation shall be deemed to include interest accrued thereon after\nthe commencement of such proceeding only to the extent that such\ninterest is allowed in such proceeding (pursuant to Section 506(b) of\nthe United States Bankruptcy Code or otherwise).\n\n         \"Secured Parties\" means the Lenders, the L\/C Issuing Banks,\nthe Administrative Agent, the Collateral Agent and the holder of the\nSecured Tax Exempt Debt.\n\n         \"Special Purpose Members' Collateral\" means the collateral\ndescribed in Section 3(B).\n\n                                  7\n\n\n\n\n         \"Subsidiary Shares\" means the shares of capital stock of the\nSpecial Purpose Members owned by the Borrower.\n\n         \"UCC\" means the Uniform Commercial Code as in effect on the\ndate hereof in the State of New York; provided that if by reason of\nmandatory provisions of law, the perfection or the effect of\nperfection or non-perfection of the Security Interests in any\nCollateral is governed by the Uniform Commercial Code as in effect in\na jurisdiction other than New York, \"UCC\" means the Uniform Commercial\nCode as in effect in such other jurisdiction for purposes of the\nprovisions hereof relating to such perfection or effect of perfection\nor non-perfection.\n\n              SECTION 2. Representations and Warranties\n                         ------------------------------\n         (A) The Borrower represents and warrants as follows:\n\n         (i) The Borrower has good and marketable title to all of the\nBorrower's Collateral, free and clear of any Liens other than\nPermitted Liens.\n\n         (ii) Neither the Borrower nor any of its Subsidiaries has\nperformed or will perform any acts which might prevent the Collateral\nAgent from enforcing any of the terms of this Agreement or which would\nlimit the Collateral Agent in any such enforcement.  Other than (x)\nfinancing statements on file with respect to the Existing Credit\nAgreement (which will be terminated in accordance with the provisions\nof Section 3.1 of the Inventory Credit Agreement) and (y) financing\nstatements or other similar or equivalent documents or instruments\nwith respect to the Security Interests and Permitted Liens, no\nfinancing statement, mortgage, security agreement or similar or\nequivalent document or instrument covering all or any part of the\nCollateral is on file or of record in any jurisdiction in which such\nfiling or recording would be effective to perfect a Lien on such\nCollateral.  None of the Borrower's Collateral is in the possession of\nany Person (other than the Borrower) asserting any claim thereto or\nsecurity interest therein, except that the Collateral Agent or its\ndesignee may have possession of Collateral as contemplated hereby and\nwarehousemen, carriers or other bailees may from time to time assert\nclaims to or security interests in Inventory in their possession.\n\n         (iii) Not less than five Domestic Business Days prior to the\nClosing Date under the Inventory Credit Agreement, the Borrower shall\ndeliver the Perfection Certificate to the\n\n                                  8\n\n\n\n\n\nCollateral Agent.  The information set forth therein shall be correct\nand complete.  Not later than 60 days following the Closing Date, the\nBorrower shall furnish to the Collateral Agent certified file search\nreports on file in each UCC filing office set forth in Schedule 7 to\nthe Perfection Certificate confirming the filing information set forth\nin such Schedule.\n\n         (iv) The Security Interests constitute valid security\ninterests under the UCC securing the Secured Obligations.  When UCC\nfinancing statements in the form specified in the Perfection\nCertificate or pursuant to Section 4(F) shall have been filed in the\noffices specified in the Perfection Certificate or pursuant to Section\n4(F), the Security Interests shall constitute perfected security\ninterests in the Collateral (except Inventory in transit) to the\nextent that a security interest therein may be perfected by filing\npursuant to the UCC, prior to all other Liens and rights of others\ntherein except for Permitted Liens.\n\n         (v) The Inventory is insured in accordance with the\nrequirements of the Inventory Credit Agreement.  (vi) All Inventories\nproduced by the Borrower have or will have been produced in compliance\nwith the applicable requirements of (i) the Fair Labor Standards Act,\nas amended, and (ii) where the failure to comply would subject any of\nthe Secured Parties to any obligation or liability or affect the\npriority or existence of the Security Interests, all applicable\nfederal and state environmental and waste disposal laws.\n\n         (vii) The Borrower owns all of the Pledged Stock, free and\nclear of any Liens other than the Security Interests.  The Pledged\nStock includes all of the issued and outstanding capital stock of the\nSpecial Purpose Members.  The Pledged Stock has been duly authorized\nand validly issued, and is fully paid and non-assessable, and is\nsubject to no options to purchase or similar rights of any Person.\n\n         (viii) Upon the delivery of the Pledged Instruments, and\ncertificates representing the Pledged Stock to the Collateral Agent in\naccordance with Section 4(A) hereof, the Collateral Agent will have\nvalid and perfected security interests in the Pledged Securities\nsubject to no prior Lien.\n\n\n                                  9\n\n\n\n\n         (B) Each Grantor represents and warrants as follows:\n\n         (i)The Grantor owns all of its Pledged Interest, free and\nclear of any Liens other than Permitted Liens.  The Grantor is not and\nwill not become a party to or otherwise bound by any agreement, other\nthan this Agreement, which restricts in any manner the rights of any\npresent or future holder of any of the Pledged Interests with respect\nthereto.\n\n         (ii) Upon the execution of this Agreement by the parties\nhereto, the delivery to the Collateral Agent of certficates\nrepresenting the Pledged Interests and the filing of financing\nstatements on Form UCC-1 in substantially the form of Schedule\n2(B)(ii) hereto in the jurisdiction identified in or pursuant to\nSection 16, the Collateral Agent, on behalf of the Lenders, will have\nvalid and perfected security interests in the Pledged Interests prior\nto all other Liens and rights of others therein except for Permitted\nLiens.  Except for the financing statements referred to above, no\nregistration, recordation or filing with any governmental body, agency\nor official is required in connection with the execution or delivery\nof this Agreement or is necessary for the validity or enforceability\nhereof or for the perfection or enforcement of the Security Interests\nin the Pledged Interests.  The Grantor has not performed and will not\nperform any acts which might prevent the Collateral Agent from\nenforcing any of the terms and conditions of this Agreement or which\nwould limit the Collateral Agent in any such enforcement.\n\n         (iii) The chief executive office of the Grantor is located at\nits address set forth in or pursuant to Section 16.\n\n                  SECTION 3. The Security Interests\n                             ----------------------\n\n         (A) In order to secure the full and punctual payment of the\nSecured Obligations in accordance with the terms thereof, and to\nsecure the performance of all of the obligations of the Borrower\nhereunder, under the Inventory Credit Agreement and under the\nagreements and other instruments evidencing Secured Tax Exempt Debt,\nthe Borrower hereby grants to the Collateral Agent for the ratable\nbenefit of the Secured Parties a continuing security interest in and\nto all of the following property of the\n\n                                  10\n\n\n\n\n         Borrower, whether now owned or existing or hereafter acquired\nor arising and regardless of where located:\n\n                            (1) Inventories;\n\n                            (2) Documents;\n\n         (3) all books and records (including, without limitation,\ncustomer lists, credit files, computer programs, printouts and other\ncomputer materials and records) of the Borrower pertaining to any of\nthe Borrower's Collateral;\n\n         (4) the Liquid Investments and other monies and property of\nany kind of the Borrower in the possession or under the control of the\nCollateral Agent;\n\n         (5)the Pledged Securities, and all of the Borrower's rights\nand privileges with respect to the Pledged Securities, and all income\nand profits thereon, and all interest, dividends and other payments\nand distributions with respect thereto;\n\n         (6) its Pledged Interest and all of its rights and privileges\nwith respect thereto (including, without limitation, all rights under\nthe Operating Agreement) and all certificates evidencing its Pledged\nInterest; and\n\n         (7) all Proceeds of all or any of the Borrower's Collateral\ndescribed in Clauses 1 through 6 hereof;\n\n         provided that Collateral shall not include any of the\nBorrower's Collateral released pursuant to Section 5 hereof.\n\n         (B) In order to secure the full and punctual payment of the\nGuaranties in accordance with the terms thereof, and to secure the\nperformance of all of the obligations of such Special Purpose Member\nhereunder, each Special Purpose Member hereby grants to the Collateral\nAgent for the ratable benefit of the Secured Parties a continuing\nsecurity interest in and to all of the following property of such\nSpecial Purpose Member, whether now owned or existing or hereafter\nacquired or arising and regardless of where located:\n\n         (1) its Pledged Interest and all of its rights and privileges\nwith respect thereto (including, without\n\n\n                                  11\n\n\n\n\nlimitation, all rights under the Operating Agreement) and all\ncertificates evidencing its Pledged Interest; and\n\n         (2) all Proceeds of all or any of the Special Purpose\nMember's Collateral described in Clause 1 hereof.\n\n         (C) The Security Interests are granted as security only and\nshall not subject the Collateral Agent or any other Secured Party to,\nor transfer or in any way affect or modify, any obligation or\nliability of the Grantors with respect to any of the Collateral or any\ntransaction in connection therewith.\n\n         SECTION 4. Pledged Securities and Pledged Interests\n                    ----------------------------------------\n\n         (A)All Pledged Instruments shall be delivered to the\nCollateral Agent by the Borrower pursuant hereto indorsed to the order\nof the Collateral Agent, and accompanied by any required transfer tax\nstamps, all in form and substance satisfactory to the Collateral\nAgent.  All certificates representing Pledged Stock and Pledged\nInterests shall be delivered to the Collateral Agent by the applicable\nGrantor pursuant hereto and shall be in suitable form for transfer by\ndelivery, or shall be accompanied by duly executed instruments of\ntransfer or assignment in blank, with signatures appropriately\nguaranteed, and accompanied by any required transfer tax stamps, all\nin form and substance satisfactory to the Collateral Agent.\n\n         (B) In the event that either Special Purpose Member at any\ntime issues any additional or substitute shares of capital stock of\nany class or any note, or owes any Debt, to the Borrower, the Borrower\nwill immediately pledge and deposit with the Collateral Agent\ncertificates representing all such shares and such note, or an\ninstrument evidencing such Debt, as additional security for the\nSecured Obligations.  All such shares, notes and instruments\nconstitute Pledged Securities and are subject to all provisions of\nthis Agreement.  In the event that BSF at any time issues any\nsubstitute note or owes any other Debt to the Borrower, the Borrower\nwill immediately pledge and deposit with the Collateral Agent such\nnotes or other instrument evidencing such other debt as additional\nsecurity for the Secured Obligations.\n\n                                  12\n\n\n\n\n         (C) If directed to do so by the Required Lenders, the\nCollateral Agent shall cause any or all of the Pledged Stock and\/or\nthe Pledged Interests to be transferred of record into the name of the\nCollateral Agent or its nominee.  The applicable Grantor will promptly\ngive to the Collateral Agent copies of any notices or other\ncommunications received by it with respect to Pledged Stock and\/or\nPledged Interests registered in the name of such Grantor and the\nCollateral Agent will promptly give to the applicable Grantor copies\nof any notices and communications received by the Collateral Agent\nwith respect to Pledged Stock and\/or Pledged Interests registered in\nthe name of the Collateral Agent or its nominee.\n\n         (D) (i) Unless an Enforcement Notice is in effect, the\nrelevant Grantor shall be entitled to receive and retain all\ndividends, interest and other payments and distributions made upon or\nwith respect to the Pledged Securities or Pledged Interests; provided\nthat\n\n         (x) dividends, interest and other distributions paid or\npayable other than in cash in respect of, and instruments and other\nproperty received, receivable or otherwise distributed in respect of,\nor in exchange for, any Pledged Securities or Pledged Interests; and\n\n         (y) dividends and other distributions paid or payable in cash\nin respect of any Pledged Securities or Pledged Interests in\nconnection with a partial or total liquidation or dissolution;\n\n         shall be received in trust for the benefit of the Secured\nParties, shall be segregated from other funds of the relevant Grantor\nand shall be paid over to the Collateral Agent as Collateral in the\nsame form as received (with any necessary endorsement).\n\n         (ii) If an Enforcement Notice is in effect,\n\n         (x) all rights of any Grantor to receive dividends, interest\nand other payments and distributions which it would otherwise be\nauthorized to receive and retain pursuant to subsection (D)(i) shall\ncease, and all such rights shall thereupon become vested in the\nCollateral Agent who shall thereupon have the sole right to receive\nand hold as Collateral such dividends, interest and other payments and\ndistributions; and\n\n                                  13\n\n\n\n\n         (y) all dividends, interest and other payments and\ndistributions which are received by any Grantor shall be received in\ntrust for the benefit of the Secured Parties, shall be segregated from\nother funds of such Grantor and shall be paid over to the Collateral\nAgent as Collateral in the same form as received (with any necessary\nendorsement).\n\n         After an Enforcement Notice has been canceled, the Collateral\nAgent's right to retain dividends, interest and other payments and\ndistributions under this subsection 4(D)(ii) shall cease and the\nCollateral Agent shall pay over to the relevant Grantor any such\nCollateral retained by it while such Enforcement Notice was in effect.\n\n         (E) Unless an Enforcement Notice is in effect, the Borrower\nshall have the right, from time to time, to vote and to give consents,\nratifications and waivers with respect to the Pledged Stock, and the\nCollateral Agent shall, upon receiving a written request from the\nBorrower accompanied by a certificate signed by its principal\nfinancial officer stating that no Event of Default has occurred and is\ncontinuing, deliver to the Borrower or as specified in such request\nsuch proxies, powers of attorney, consents, ratifications and waivers\nin respect of any of the Pledged Stock which is registered in the name\nof the Collateral Agent or its nominee as shall be specified in such\nrequest and be in form and substance satisfactory to the Collateral\nAgent.  If an Enforcement Notice is in effect, the Collateral Agent\nshall have the right to the extent permitted by law and the Borrower\nshall take all such action as may be necessary or appropriate to give\neffect to such right, to vote and to give consents, ratifications and\nwaivers, and take any other action with respect to any or all of the\nPledged Stock with the same force and effect as if the Collateral\nAgent were the absolute and sole owner thereof.\n\n         (F) Each Grantor agrees that it will, at its expense and in\nsuch manner and form as the Collateral Agent may require, execute,\ndeliver, file and record any financing statement, specific assignment\nor other paper and take any other action that may be necessary or\ndesirable, or that the Collateral Agent may reasonably request, in\norder to create, preserve, perfect or validate any Security Interest\nin the Pledged Interests or to enable the Collateral Agent to exercise\nand enforce its rights hereunder with respect to any of the Pledged\nInterests.  To the extent permitted by applicable law, each Grantor\nhereby authorizes the Collateral Agent to execute and file Uniform\nCommercial Code\n\n                                  14\n\n\n\n\nfinancing statements (which may be carbon, photographic, photostatic\nor other reproductions of this Agreement or of a financing statement\nrelating to this Agreement) which the Collateral Agent in its sole\ndiscretion may deem necessary or appropriate to further perfect the\nSecurity Interests in the Pledged Interests.  In furtherance of the\nforegoing, each Grantor hereby constitutes and appoints the Collateral\nAgent its true and lawful attorney, with full power of substitution,\nin the name of such Grantor, to execute and file financing statements\nand continuation statements.\n\n         (G)Each Special Purpose Member agrees that it will not change\n(i) its name, identity or corporate structure in any manner or (ii)\nthe location of its chief executive office or chief place of business\nunless it shall have given (x) the Collateral Agent not less than 30\ndays' prior notice thereof and (y) delivered an opinion of counsel\nwith respect thereto in accordance with Section 6(I).\n\n         (H)Unless an Enforcement Notice is in effect, each Grantor\nshall have all rights to vote and to give consents, ratifications and\nwaivers with respect to the Pledged Interests as and to the extent\nprovided in the Operating Agreement.  If an Enforcement Notice is in\neffect, the Collateral Agent shall have the right to the extent\npermitted by law and the Grantors shall take all such action as may be\nnecessary or appropriate to give effect to such right, to vote and to\ngive consents, ratifications and waivers, and take any other action\nwith respect to any or all of the Pledged Interests with the same\nforce and effect as if the Collateral Agent were the absolute and sole\nowner thereof.\n\n         (I) In the event that BSF issues any additional or substitute\nlimited liability company interests of any class or type to any\nGrantor, such Grantor will immediately pledge and deposit with the\nCollateral Agent certificates representing all such interests, as\nadditional security for the Guaranties.  All such interests constitute\nPledged Interests and are subject to all provisions of this Agreement.\n\n                  SECTION 5. Releases of Collateral\n                             ----------------------\n\n         (A) At any time and from time to time prior to the\ntermination of the Security Interests pursuant to Section 14, the\nCollateral Agent (i) may release any of the\n\n                                  15\n\n\n\n\nCollateral with the prior written consent of all of the Lenders, which\nconsent shall not be unreasonably withheld, and (ii) shall release\nInventory which is being sold or transferred by the Borrower if the\nBorrower has complied with the provisions of clauses (i), (ii) and (if\nrequired) (iii) of Section 5.7 of the Inventory Credit Agreement with\nrespect to such sale or transfer.  Upon any such release of\nCollateral, the Collateral Agent will, at the expense of the\napplicable Grantor, execute and deliver to such Grantor such documents\nas such Grantor shall reasonably request to evidence the release of\nthe Collateral.\n\n         (B) Subject to the provisions of Section 5(C) of this\nAgreement, the Proceeds of Inventory, including accounts receivable\narising from the sale thereof (and any books and records of the\nBorrower pertaining to such accounts receivable), shall automatically\nbe released without the need for any action on the part of the\nCollateral Agent, upon the sale of such Inventory by the Borrower.\n\n         (C) Upon the occurrence of either of the Events of Default\nspecified in clauses (h) or (i) of Section 6.1 of the Inventory Credit\nAgreement with respect to the Borrower (and without any further act or\nnotice) or the giving by the Collateral Agent of an Enforcement Notice\nto the Borrower, the automatic release set forth in Section 5(B) of\nthis Agreement shall terminate (an \"Automatic Release Termination\")\nwith respect to all Proceeds from (i) the sale of Inventory subsequent\nto the second Domestic Business Day after the day on which the\nEnforcement Notice is given or, if an Event of Default specified in\nclause (h) or (i) of Section 6.1 of the Inventory Credit Agreement has\noccurred, subsequent to the day after which such Event of Default\noccurs, and (ii) the sale of Inventory during the period after the day\non which the Enforcement Notice is given to and including the second\nDomestic Business Day after the day on which the Enforcement Notice is\ngiven to the extent the aggregate amount of sales of Inventory during\nsuch period are not made in the ordinary course of business of the\nBorrower or exceed 10% of the Borrowing Base as of the date the\nAutomatic Release Termination occurs.\n\n               SECTION 6. Further Assurances; Covenants\n                          -----------------------------\n\n         (A) The Borrower will not change (i) the location of its\nchief executive office or chief place of business or (ii) the\nlocations where it keeps or holds any of the Borrower's Collateral,\nother than Inventories or books and records relating to any Borrower's\nCollateral, from the\n\n                                  16\n\n\n\n\napplicable locations described in the Perfection Certificate unless it\nshall have (a) given the Collateral Agent not less than 30 days' prior\nnotice thereof and (b) delivered an opinion of counsel with respect\nthereto in accordance with Section 6(I).  Not later than 90 days after\nthe Borrower changes any location where it keeps or holds Inventories\nor books and records relating to any Borrower's Collateral from a\nlocation described in the Perfection Certificate to a location not\ndescribed in the Perfection Certificate, the Borrower will (a) give\nthe Collateral Agent notice thereof and (b) deliver an opinion of\ncounsel with respect thereto in accordance with Section 6(I); provided\nthat if all such Inventories are sold during such 90 day period then\nno such notice or opinion need be delivered with respect to such\nInventories.  No Grantor shall in any event change the location of any\nCollateral if such change would cause the Security Interests in such\nCollateral to lapse or cease to be perfected.\n\n         (B) The Borrower will not change its name, identity or\ncorporate structure (as the terms \"identity\" and \"corporate structure\"\nare used in Section 9-402(7) of the UCC) in any manner unless it shall\nhave (i) given the Collateral Agent not less than 30 days' prior\nnotice thereof and (ii) if the Collateral Agent so requests, delivered\nan opinion of counsel with respect thereto in accordance with Section\n6(I).\n\n         (C) The Borrower will, from time to time, at its expense,\nexecute, deliver, file and record any statement, assignment,\ninstrument, document, agreement or other paper and take any other\naction (including, without limitation, any filings of financing or\ncontinuation statements under the UCC) that from time to time may be\nnecessary or desirable, or that the Collateral Agent may request, in\norder to create, preserve, perfect, confirm or validate the Security\nInterests or to enable the Collateral Agent and the other Secured\nParties to obtain the full benefits of this Agreement, or to enable\nthe Collateral Agent to exercise and enforce any of its rights, powers\nand remedies hereunder with respect to any of the Borrower's\nCollateral.  To the extent permitted by applicable law, the Borrower\nhereby authorizes the Collateral Agent to execute and file financing\nstatements or continuation statements without the Borrower's signature\nappearing thereon.  In furtherance of the foregoing, the Borrower\nhereby constitutes and appoints the Collateral Agent its true and\nlawful attorney, with full power of substitution, in the name of the\nBorrower, to execute and file financing statements and continuation\nstatements.  The Borrower agrees that a carbon, photographic,\nphotostatic or other reproduction of this Agreement or of a\n\n                                  17\n\n\n\n\nfinancing statement is sufficient as a financing statement.  The\nBorrower shall pay the costs of, or incidental to, any recording or\nfiling of any financing or continuation statements concerning the\nBorrower's Collateral.\n\n         (D) If any Borrower's Collateral is at any time in the\npossession or control of any warehouseman, bailee or any of the\nBorrower's agents or processors, the Borrower shall, if requested to\ndo so by the Collateral Agent, notify such warehouseman, bailee, agent\nor processor of the Security Interests created hereby and instruct\nsuch warehouseman, bailee, agent or processor to hold all such\nBorrower's Collateral for the Collateral Agent's account subject to\nthe Collateral Agent's instructions.\n\n         (E) The Borrower shall keep full and accurate books and\nrecords relating to the Borrower's Collateral, and stamp or otherwise\nmark such books and records in such manner as the Required Lenders may\nreasonably require in order to reflect the Security Interests.\n\n         (F) (i) Without the prior written consent of the Required\nLenders, no Grantor will create, incur or suffer to exist any Lien\nwith respect to any Collateral, except for Permitted Liens, and (ii)\nwithout the prior written consent of the Lenders, which consent shall\nnot be unreasonably withheld, no Grantor will sell, lease, exchange,\nassign or otherwise dispose of, or grant any option with respect to,\nany Collateral unless the Security Interests created hereby in such\nCollateral have been released pursuant to Section 5 or Section 14.\n\n         (G) The Borrower will maintain insurance policies in\naccordance with the terms of the Inventory Credit Agreement and all\ninsurance proceeds shall be paid in accordance with the terms of the\nInventory Credit Agreement.\n\n         (H) Each Grantor will, promptly upon request, provide to the\nCollateral Agent all information and evidence it may reasonably\nrequest concerning the Collateral to enable the Collateral Agent to\nenforce the provisions of this Agreement and, if the Collateral Agent\nhas been requested to do so by the Required Lenders, to prepare a\nCollateral Report.  Each Grantor will permit the representatives of\nthe Collateral Agent to call at its places of business at any time and\nfrom time to time during ordinary business hours, without hindrance or\ndelay, and will, at such Grantor's cost and expense but without undue\ninterference with its operations, permit such representatives to\ninspect the Collateral and to inspect, audit, check and make extracts\nfrom and copies of the books, records, journals, orders, receipts and\n\n                                  18\n\n\n\n\ncorrespondence which relate to the Collateral.  Each Grantor will\nprovide each Secured Party with such information as to the Collateral\nas such Secured Party may reasonably request.  Each Secured Party\nshall have the right to observe the annual physical inventory of\nInventories performed by the Borrower's independent public accountants\nand the semi-annual physical inventory performed by the Borrower's\naudit staff at each plant location.  Any proprietary or financial\ninformation provided pursuant to this subsection shall be kept\nconfidential in accordance with Section 9.8 of the Inventory Credit\nAgreement.\n\n         (I) (i) Not more than six months nor less than 30 days prior\nto (or, in the case of any action contemplated by the second sentence\nof Section 6(A), more than 90 days after) each date on which the\nBorrower proposes to take any action contemplated by Section 6(A) or\n(B) or a Special Purpose Member prepares to take any action\ncontemplated by Section 4(G) and (ii) simultaneously with the delivery\nof each set of financial statements referred to in Section 5.1(a) of\nthe Inventory Credit Agreement and in any event within 95 days after\nthe end of each fiscal year of the Borrower during the term of this\nAgreement, the Grantors shall, at their cost and expense, jointly and\nseverally, cause to be delivered to the Lenders an opinion of counsel,\nsatisfactory to the Collateral Agent, substantially in the form of\nAnnex B hereto, to the effect that all financing statements and\namendments or supplements thereto, continuation statements and other\ndocuments required to be recorded or filed in order to perfect and\nprotect the Security Interests for a period, specified in such\nopinion, continuing until a date not earlier than eighteen months\nafter the date of such opinion, have been filed in each filing office\nnecessary for such purpose and that all filing fees and taxes, if any,\npayable in connection with such filings have been paid in full.\n\n         (J) From time to time upon request by the Collateral Agent,\nthe Grantors shall, at their cost and expense, jointly and severally,\ncause to be delivered to the Lenders an opinion of counsel\nsatisfactory to the Collateral Agent as to such matters relating to\nthe transactions contemplated hereby as the Required Lenders may\nreasonably request.\n\n                                  19\n\n\n\n\n                     SECTION 7. General Authority\n                                -----------------\n\n         Each Grantor hereby irrevocably appoints the Collateral Agent\nits true and lawful attorney, with full power of substitution, in the\nname of such Grantor, the other Secured Parties or otherwise, for the\nsole use and benefit of the Secured Parties, but at such Grantor's\nexpense, to the extent permitted by law to exercise, at any time and\nfrom time to time, but only while an Enforcement Notice or Automatic\nRelease Termination is in effect, all or any of the following powers\nwith respect to all or any of the Collateral:\n\n         (i) to demand, sue for, collect, receive and give acquittance\nfor any and all monies due or to become due thereon or by virtue\nthereof,\n\n         (ii) to settle, compromise, compound, prosecute or defend any\naction or proceeding with respect thereto,\n\n         (iii) subject to Section 6 of the Operating Agreement, to\nsell, transfer, assign or otherwise deal in or with the same or the\nproceeds or avails thereof, as fully and effectually as if the\nCollateral Agent were the absolute owner thereof, and\n\n         (iv) to extend the time of payment of any or all thereof and\nto make any allowance and other adjustments with reference thereto;\n\n         provided that the Collateral Agent shall give each Grantor\nnot less than ten days' prior notice of the time and place of any sale\nor other intended disposition of any of the Collateral, except any\nCollateral which is perishable or threatens to decline speedily in\nvalue or is of a type customarily sold on a recognized market.  The\nCollateral Agent and each Grantor agree that such notice constitutes\n\"reasonable notification\" within the meaning of Section 9-504(3) of\nthe UCC.\n\n        SECTION 8. Remedies Relating to Giving of Enforcement\n                   ------------------------------------------\n                   Notice\n                   ------\n\n         (A) (i) The Administrative Agent shall give an Enforcement\nNotice to the Collateral Agent promptly after having been instructed\nto do so in accordance with Section\n\n                                  20\n\n\n\n\n         6.1 of the Inventory Credit Agreement.  An Enforcement Notice\ndelivered by the Administrative Agent must include a certification by\nthe Administrative Agent of the principal amount (or, in the case of\ndoubt, an estimate of such amount) of Secured Obligations outstanding\nunder the Inventory Credit Agreement in respect of each Secured Party,\nbut shall be effective notwithstanding any inaccuracies in such\ncertification.\n\n         (ii) Upon receipt of an Enforcement Notice pursuant to\nSection 8(A)(i), the Collateral Agent shall (i) forthwith notify each\nGrantor of the receipt and contents thereof and (ii) promptly\nthereafter, notify each other Secured Party thereof.  The Collateral\nAgent's notice shall advise each Secured Party that, if it does not\nnotify the Collateral Agent forthwith of the amount of its Secured\nObligations (including the interest rate or rates applicable thereto),\nthe Collateral Agent may rely on the information or documents (if any)\nsupplied to it by (1) the Administrative Agent pursuant to Section\n8(A)(i) and (2) the holder of Secured Tax Exempt Debt pursuant to\nSection 3.1(j) of the Inventory Credit Agreement in determining the\namount of any distribution to such Secured Party with respect to the\nCollateral.  So long as such Enforcement Notice or Automatic Release\nTermination is in effect, the Collateral Agent may exercise the rights\nand remedies provided in this Section.  The Collateral Agent is not\nempowered to exercise any remedy under this Section unless an\nEnforcement Notice or Automatic Release Termination is in effect.\n\n         (iii) An Enforcement Notice shall become effective when the\nCollateral Agent shall have received such Enforcement Notice.  An\nEnforcement Notice, once effective, shall remain in effect unless and\nuntil it is canceled as provided in Section 8(A)(iv).\n\n         (iv) If after an Enforcement Notice becomes effective the\nBorrower establishes to the satisfaction of the Required Secured\nParties that no Event of Default is continuing, the Administrative\nAgent or the Required Secured Parties shall cancel such Enforcement\nNotice by delivering a written notice of cancellation to the\nCollateral Agent; provided that such notice is given (i) before the\nCollateral Agent takes any action to exercise any remedy with respect\nto the Collateral or (ii) thereafter, if the Collateral Agent believes\nthat all actions it has taken to exercise any remedy or remedies with\nrespect to the Collateral can be reversed without undue difficulty.  A\nnotice of cancellation shall become effective one Domestic Business\nDay after such notice is given as provided in this Section 8(A)(iv),\nit being understood that after receipt of a notice of\n\n                                  21\n\n\n\n\ncancellation but before such notice becomes effective the Collateral\nAgent shall not enforce any remedy for the disposition of Collateral\nprovided hereunder or make any distributions hereunder.  The\nCollateral Agent shall promptly notify each Grantor and each other\nSecured Party of the cancellation of any Enforcement Notice.\n\n         (B) If an Enforcement Notice or Automatic Release Termination\nis in effect, the Collateral Agent, at the request of the Required\nSecured Parties, may exercise on behalf of the Secured Parties (i) all\nrights of a secured party under the UCC (whether or not in effect in\nthe jurisdiction where such rights are exercised) and (ii) all of the\nrights and remedies provided for in this Agreement.  In addition, the\nCollateral Agent may, without being required to give any notice,\nexcept as herein provided or as may be required by mandatory\nprovisions of law, (i) withdraw all Liquid Investments and apply such\nLiquid Investments and other cash, if any, then held by it as\nCollateral as specified in Section 10 and (ii) if there shall be no\nsuch monies, Liquid Investments or cash or if such monies, Liquid\nInvestments or cash shall be insufficient to pay all the Secured\nObligations in full, sell the Collateral or any part thereof at public\nor private sale, for cash, upon credit or for future delivery, and at\nsuch price or prices as the Collateral Agent may deem satisfactory;\nprovided that the Collateral Agent shall not sell the BSF Note to any\npurchaser or purchasers unless the rating then assigned to the Buyers'\nCertificates (as defined in the Receivables Purchase Agreement) is\nreaffirmed by S&amp;P if such Buyers' Certificates are then outstanding.\nThe Collateral Agent or any other Secured Party may be the purchaser\nof any or all of the Collateral so sold at any public sale (or, if the\nCollateral is of a type customarily sold in a recognized market or is\nof a type which is the subject of widely distributed standard price\nquotations, at any private sale).  Subject to Section 6 of the\nOperating Agreement with respect to the Pledged Interests, the\nCollateral Agent is authorized in connection with any sale of the\nPledged Securities or the Pledged Interests, if it deems it advisable\nso to do, (i) to restrict the prospective bidders on or purchasers of\nany of the Pledged Securities or Pledged Interests to a limited number\nof sophisticated investors who will represent and agree that they are\npurchasing for their own account for investment and not with a view to\nthe distribution or sale of any of such Pledged Securities or Pledged\nInterests, (ii) to cause to be placed on certificates for any or all\nof the Pledged Securities or Pledged Interests or on any other\nsecurities pledged hereunder a legend to the effect that such security\nhas not been registered under the Securities Act of 1933 and may not\nbe disposed of in violation of the\n\n                                  22\n\n\n\n\nprovision of said Act, and (iii) to impose such other limitations or\nconditions in connection with any such sale as the Collateral Agent\nreasonably deems necessary or advisable in order to comply with said\nAct or any other law.  Each Grantor will execute and deliver such\ndocuments and take such other action as the Collateral Agent deems\nnecessary or advisable in order that any such sale may be made in\ncompliance with law.  Upon any such sale the Collateral Agent shall\nhave the right to deliver, assign and transfer to the purchaser\nthereof the Collateral so sold.  Each purchaser at any such sale shall\nhold the Collateral so sold to it absolutely free from any claim or\nright of whatsoever kind created by or through any Grantor, including\nany equity or right of redemption of any Grantor which may be waived,\nand each Grantor, to the extent permitted by law, hereby specifically\nwaives all rights of redemption, stay or appraisal which it has or may\nhave under any law now existing or hereafter adopted.  The notice (if\nany) of such sale required by Section 7 shall (1) in case of a public\nsale, state the time and place fixed for such sale, (2) in the case of\na private sale, state the day after which such sale may be consummated\nand (3) in the case of a sale at a broker's board or on a securities\nexchange, state the board or exchange at which such sale is to be made\nand the day on which the Collateral, or the portion thereof so being\nsold, will first be offered for sale at such board or exchange.  Any\nsuch public sale shall be held at such time or times within ordinary\nbusiness hours and at such place or places as the Collateral Agent may\nfix in the notice of such sale.  At any such sale the Collateral may\nbe sold in one lot as an entirety or in separate parcels, as the\nCollateral Agent may determine.  The Collateral Agent shall not be\nobligated to make any such sale pursuant to any such notice.  The\nCollateral Agent may, without notice or publication, adjourn any\npublic or private sale or cause the same to be adjourned from time to\ntime by announcement at the time and place fixed for the sale, and\nsuch sale may be made at any time or place to which the same may be so\nadjourned.  In case of any sale of all or any part of the Collateral\non credit or for future delivery, the Collateral so sold may be\nretained by the Collateral Agent until the selling price is paid by\nthe purchaser thereof, but the Collateral Agent shall not incur any\nliability in case of the failure of such purchaser to take up and pay\nfor the Collateral so sold and, in case of any such failure, such\nCollateral may again be sold upon like notice.  The Collateral Agent,\ninstead of exercising the power of sale herein conferred upon it, may\nproceed by a suit or suits at law or in equity to foreclose the\nSecurity Interests and sell the Collateral, or any portion thereof,\nunder a judgment or decree of a court or courts of competent\njurisdiction.\n\n                                  23\n\n\n\n\n         (C) For the purpose of enforcing any and all rights and\nremedies under this Agreement, the Collateral Agent may (i) require\nthe Borrower to, and the Borrower agrees that it will, at its expense\nand upon the request of the Collateral Agent, forthwith assemble all\nor any part of the Collateral as directed by the Collateral Agent and\nmake it available at a place designated by the Collateral Agent which\nis, in its opinion, reasonably convenient to the Collateral Agent and\nthe Borrower, whether at the premises of the Borrower or otherwise,\n(ii) to the extent permitted by applicable law, enter, with or without\nprocess of law and without breach of the peace, any premises where any\nof the Collateral is or may be located, and without charge or\nliability to it seize and remove such Collateral from such premises,\n(iii) have access to and use such Grantor's books and records relating\nto the Collateral and (iv) prior to the disposition of the Collateral,\nstore or transfer it without charge in or by means of any storage or\ntransportation facility owned or, to the extent the Borrower is\npermitted to use a leased facility, leased by the Borrower, process,\nrepair or recondition it or otherwise prepare it for disposition in\nany manner and to the extent the Collateral Agent deems appropriate\nand, in connection with such preparation and disposition, use without\ncharge any trademark, trade name, copyright, patent or technical\nprocess used by the Borrower, but only to the extent the Borrower is\npermitted to use such trademark, trade name, copyright, patent or\ntechnical process.\n\nSECTION 9. Limitation on Duty of Collateral Agent in\n           -----------------------------------------\n           Respect of Collateral\n           ---------------------\n\n         Beyond the exercise of reasonable care in the custody\nthereof, the Collateral Agent shall have no duty as to any Collateral\nin its possession or control or in the possession or control of any\nagent or bailee or any income thereon or as to the preservation of\nrights against prior parties or any other rights pertaining thereto.\nThe Collateral Agent shall be deemed to have exercised reasonable care\nin the custody of the Collateral in its possession if the Collateral\nis accorded treatment substantially equal to that which it accords its\nown property, and shall not be liable or responsible for any loss or\ndamage to any of the Collateral, or for any diminution in the value\nthereof, by reason of the act or omission of any warehouseman,\ncarrier, forwarding agency, consignee or other agent or bailee\nselected by the Collateral Agent in good faith.\n\n                                  24\n\n\n\n\n                 SECTION 10. Application of Proceeds\n                             -----------------------\n\n         (A) If an Enforcement Notice or an Automatic Release\nTermination is in effect, the proceeds of any sale of, or other\nrealization upon, all or any part of the Collateral and any cash\notherwise held by the Collateral Agent pursuant to this Agreement\nshall be applied by the Collateral Agent in the following order of\npriorities:\n\n         first, to payment of the expenses of such sale or other\n         -----\nrealization, including reasonable compensation to agents and counsel\nfor the Collateral Agent, and all expenses, liabilities and advances\nincurred or made by the Collateral Agent in connection therewith, and\nany other unreimbursed expenses for which the Collateral Agent, the\nAdministrative Agent, or any Lender is to be reimbursed pursuant to\nSection 13 hereof and unpaid fees owing to the Collateral Agent under\nSection 13 hereof;\n\n         second, to the ratable payment of accrued but unpaid\n         ------\ninterest, calculated from the interest payment date immediately\npreceding the giving of the Enforcement Notice or the effectiveness of\nthe Automatic Release Termination, or such other date as shall have\nbeen notified to the Collateral Agent, on all amounts included in the\nSecured Principal Amount;\n\n         third, subject to the next to the last sentence of this\n         -----\nsubsection (A), to the ratable payment of all amounts included in the\nSecured Principal Amount; fourth, to the ratable payment of all other\nSecured Obligations, until all Secured Obligations shall have been\npaid in full; and\n\n         finally, to payment to the relevant Grantor or Grantors or\n         -------\nsuch Grantor's successors or assigns, or as a court of competent\njurisdiction may direct, of any surplus then remaining from such\nproceeds.\n\n         The Collateral Agent may make distributions hereunder in cash\nor in kind or, on a ratable basis, in any combination thereof.  If at\nany time any monies collected or received by the Collateral Agent are\ndistributable pursuant to this Section in respect of a Letter of\nCredit Obligation or Secured Tax Exempt Debt, and if the\nAdministrative Agent or the holder of such Secured Tax Exempt Debt\nshall notify the Collateral Agent that no provision is made under the\nrelevant agreement or other instrument for the application\n\n                                  25\n\n\n\n\nof such moneys (whether because such Letter of Credit Obligation is\ncontingent or such Secured Tax Exempt Debt has not become due and\npayable or otherwise), then the Collateral Agent shall invest such\namounts in Liquid Investments at the direction of the Administrative\nAgent or such holder and shall hold all such amounts so distributable\nand all such investments and the net proceeds thereof in trust until\nsuch time as the Administrative Agent or such holder shall request the\ndelivery thereof by the Collateral Agent for application to amounts\npayable with respect to such Letter of Credit Obligation or Secured\nTax Exempt Debt.  If the Collateral Agent holds any amounts which were\ndistributable in respect of a Letter of Credit Obligation or any\nSecured Tax Exempt Debt after the relevant obligation has terminated\nor matured and all amounts payable with respect thereto have been\npaid, such amounts shall be applied by the Collateral Agent in the\norder of priorities set forth in this subsection (A).\n\n         (B) In making the determinations and allocations required by\nthis Section, the Collateral Agent shall have no liability to any of\nthe Secured Parties for actions taken in reliance on information\nsupplied by the Secured Parties as to the amounts of the Secured\nObligations held by them.  All distributions made by the Collateral\nAgent pursuant to this Section shall be final and the Collateral Agent\nshall have no duty to inquire as to the application by the Secured\nParties of any amount distributed to them.  However, if at any time\nthe Collateral Agent determines that an allocation or distribution\npreviously made pursuant to this Section was based on a mistake of\nfact (including, without limiting the generality of the foregoing,\nmistakes based on an assumption that principal or interest has been\npaid by payments which are subsequently recovered from the recipient\nthereof through the operation of any bankruptcy, reorganization,\ninsolvency or other laws or otherwise), the Collateral Agent may in\nits discretion, but shall not be obligated to, adjust subsequent\nallocations and distributions hereunder so that, on a cumulative\nbasis, the Secured Parties receive the distributions to which they\nwould have been entitled if such mistake of fact had not been made.\n\n             SECTION 11. Concerning the Collateral Agent\n                         -------------------------------\n\n         (A) The Collateral Agent is authorized to take all such\naction as is provided to be taken by it as Collateral Agent hereunder\nand all other action reasonably incidental thereto.  As to any matters\nnot expressly provided for herein (including, without limitation, the\ntiming and\n\n                                  26\n\n\n\n\nmethods of realization upon the Collateral) the Collateral Agent shall\nact or refrain from acting in accordance with written instructions\nfrom the Required Secured Parties or, in the absence of such\ninstructions, in accordance with its discretion; provided that the\nCollateral Agent shall not be required to act (i) if upon advice of\ncounsel the Collateral Agent concludes that any such action creates\npotential liability on its part or constitutes a violation of law or\n(ii) the Collateral Agent shall not be indemnified to its satisfaction\nin advance in respect of its costs and expenses in connection\ntherewith.\n\n         (B) J.P.  Morgan Delaware and its Affiliates may accept\ndeposits from, lend money to, and generally engage in any kind of\nbusiness with the Borrower or any Subsidiary or Affiliate of the\nBorrower as if it were not the Collateral Agent hereunder.\n\n         (C) The obligations of the Collateral Agent hereunder are\nonly those expressly set forth herein.  Without limiting the\ngenerality of the foregoing, the Collateral Agent shall not be\nrequired to take any action with respect to any Enforcement Notice or\nAutomatic Release Termination, except as expressly provided herein.\n\n         (D) The Collateral Agent may consult with legal counsel (who\nmay be counsel for the Borrower), independent public accountants and\nother experts selected by it and shall not be liable for any action\ntaken or omitted to be taken by it in good faith in accordance with\nthe advice of such counsel, accountants or experts.\n\n         (E) Neither the Collateral Agent nor any director, officer,\nagent, or employee of the Collateral Agent shall be liable for any\naction taken or not taken by it in connection herewith (i) with the\nconsent or at the request of the Required Secured Parties (or, where\nrequired by the terms hereof, the Lenders) or (ii) in the absence of\nits own gross negligence or willful misconduct.  Neither the\nCollateral Agent nor any director, officer, agent or employee of the\nCollateral Agent shall be responsible for or have any duty to\nascertain, inquire into or verify (i) any statement, warranty or\nrepresentation made in connection with this Agreement; (ii) the\nperformance or observance of any of the covenants or agreements of any\nGrantor herein; or (iii) the validity, effectiveness or genuineness of\nthis Agreement or any instrument or writing furnished in connection\nherewith.  The Collateral Agent shall not incur any liability by\nacting in reliance upon any notice, consent, certificate, statement,\nor other writing (which may be a bank wire, facsimile or similar\nwriting) believed by it to be genuine\n\n                                  27\n\n\n\n\nor to be signed by the proper party or parties.  The Collateral Agent\nshall not be responsible for the existence, genuineness or value of\nany of the Collateral or for the validity, perfection, priority or\nenforceability of the Security Interests in any of the Collateral,\nwhether impaired by operation of law or by reason of any action or\nomission to act on its part hereunder.  The Collateral Agent shall\nhave no duty to ascertain or inquire as to the performance or\nobservance of any of the terms of this Agreement by any Grantor.\n\n         (F) The Lenders shall, ratably in accordance with their\nrespective shares of the Secured Principal Amount on the relevant\nDetermination Date (as defined below), indemnify the Collateral Agent\n(to the extent not reimbursed by the Borrower) against any cost,\nexpense (including counsel fees and disbursements), claim, demand,\naction, loss or liability (except such as result from the Collateral\nAgent's gross negligence or willful misconduct) that the Collateral\nAgent may suffer or incur in connection with this Agreement or any\naction taken or omitted by the Collateral Agent hereunder or\nthereunder.  The Determination Date for any such indemnification shall\nbe the earliest date (as determined by the Collateral Agent) on which\nany of the acts, omissions or other events giving rise to the relevant\ncost, expense, claim, demand, action, loss or liability occurred.\n\n         (G) The Collateral Agent may resign at any time (and, if so\nrequested by the Required Lenders after refusing to act on behalf of\nthe relevant Grantor pursuant to the first sentence of Section 13(B),\nshall resign) by giving written notice thereof to the other Secured\nParties and the Borrower.  Upon any such resignation, the Required\nLenders shall have the right, after consultation with the Borrower, to\nappoint a successor Collateral Agent.  If no successor Collateral\nAgent shall have been so appointed by the Required Lenders, and shall\nhave accepted such appointment, within 30 days after the retiring\nCollateral Agent gives such notice of resignation, then the retiring\nCollateral Agent may, on behalf of the other Secured Parties, appoint\na successor Collateral Agent, which shall be a bank organized under\nthe laws of the United States or of any State thereof and having a\ncombined capital and surplus of at least $200,000,000.  Upon the\nacceptance of its appointment as Collateral Agent hereunder by a\nsuccessor Collateral Agent, such successor Collateral Agent shall\nthereupon succeed to and become vested with all the rights and duties\nof the retiring Collateral Agent, and the retiring Collateral Agent\nshall be discharged from its duties and obligations hereunder.  After\nany retiring Collateral Agent's\n\n                                  28\n\n\n\n\nresignation hereunder as Collateral Agent, the provisions of this\nSection shall inure to its benefit as to any actions taken or omitted\nto be taken by it while it was Collateral Agent.\n\n                 SECTION 12. Appointment of Co-Agents\n                             ------------------------\n\n         At any time or times, in order to comply with any legal\nrequirement in any jurisdiction or, with the consent of the Borrower,\nfor any other reason, the Collateral Agent may appoint another bank or\ntrust company or one or more other persons, either to act as co-agent\nor co-agents, jointly with the Collateral Agent, or to act as separate\nagent or agents on behalf of the Secured Parties with such power and\nauthority as may be necessary for the effectual operation of the\nprovisions hereof and may be specified in the instrument of\nappointment (which may, in the discretion of the Collateral Agent,\ninclude provisions for the protection of such co-agent or separate\nagent similar to the provisions of Sections 11 and 13).\n\n             SECTION 13. Collateral Agent's Fee; Expenses\n                         --------------------------------\n\n         (A) The Borrower shall pay to the Collateral Agent, as\ncompensation for its services hereunder, from time to time a fee in\nthe amount previously agreed between the Borrower and the Collateral\nAgent.\n\n         (B) If any Grantor fails to comply with the provisions of the\nInventory Credit Agreement or this Agreement, such that the value of\nany Collateral or the validity, perfection, rank or value of any\nSecurity Interest is thereby diminished or potentially diminished or\nput at risk, the Collateral Agent, if requested by the Required\nLenders, may, but shall not be required to, effect such compliance on\nbehalf of such Grantor, and such Grantor shall reimburse the\nCollateral Agent for the costs thereof on demand.  All insurance\nexpenses and all expenses of protecting, storing, warehousing,\nappraising, insuring, handling, maintaining and shipping the\nCollateral and any and all excise, property, sales and use taxes\nimposed by any state, federal, or local authority on any of the\nCollateral, or in respect of periodic appraisals (if an Enforcement\nNotice or Automatic Release Termination is in effect) and inspections\nof the Collateral to the extent the same may be reasonably requested\nby the Required Lenders from time to time, or in respect of the sale\nor other disposition thereof, shall be\n\n                                  29\n\n\n\nborne and paid by such Grantor; and if such Grantor fails to promptly\npay any portion thereof when due, the Collateral Agent or any other\nSecured Party may, at its option, but shall not be required to, pay\nthe same and charge such Grantor's account therefor, and such Grantor\nagrees to reimburse the Collateral Agent or such other Secured Party\ntherefor on demand.  All sums so paid or incurred by the Collateral\nAgent or any other Secured Party for any of the foregoing and any and\nall other sums for which such Grantor may become liable hereunder and\nall costs and expenses (including attorneys' fees, legal expenses and\ncourt costs) reasonably incurred by the Collateral Agent or any other\nSecured Party in enforcing or protecting the Security Interests or any\nof their rights or remedies under this Agreement, shall, together with\ninterest thereon until paid at the rate applicable to Base Rate Loans\nunder the Inventory Credit Agreement, be additional Secured\nObligations hereunder.\n\n        SECTION 14. Termination of Security Interests; Release\n                    ------------------------------------------\n                            of Collateral\n                            -------------\n         The Security Interests shall terminate upon (i) the repayment\nin full of (x) all principal of and interest on any Loan made under,\nor any Note issued pursuant to, the Inventory Credit Agreement, (y)\nall Reimbursement Obligations and (z) all other amounts payable by the\nBorrower hereunder or under the Inventory Credit Agreement, (ii) the\nexpiration of all Letters of Credit and (iii) the termination of the\nCommitments under the Inventory Credit Agreement; provided that, if\nany Secured Tax Exempt Debt is outstanding on the date of such\ntermination, the Borrower shall grant to the holders of such Secured\nTax Exempt Debt a first priority security interest (x) in Liquid\nInvestments (or caused to be issued by a bank acceptable to such\nholders a letter of credit naming such holders as beneficiaries) in an\namount exceeding 115% of the amount of Secured Tax Exempt Debt\noutstanding on the date of such termination, or (y) in other\ncollateral, with a fair market value (as determined by such holders)\nexceeding 125% of the amount of Secured Tax Exempt Debt outstanding on\nthe date of such termination, in each case on the terms and conditions\nand pursuant to documentation reasonably satisfactory to such holders.\nWhen the Security Interests terminate, all rights to any remaining\nCollateral shall revert to the relevant Grantor.  Prior to such\ntermination of the Security Interests, Collateral may be released\npursuant to Section 5.  Upon any such termination of the Security\nInterests, the Collateral Agent will, at the expense of the relevant\nGrantor, execute\n\n                                  30\n\n\n\n\nand deliver to such Grantor such documents as such Grantor shall\nreasonably request to evidence the termination of the Security\nInterests.\n\n                        SECTION 15. Guaranties\n                                    ----------\n\n         (A)The Special Purpose Members, jointly and severally,\nunconditionally guarantee the full and punctual payment (whether at\nstated maturity, upon acceleration or otherwise) of the Secured\nObligations (the \"Guaranties\").  Upon failure by the Borrower to pay\npunctually any such amount, the Grantors shall forthwith on demand pay\nthe amount not so paid at the place and in the manner specified in\nthis Agreement.\n\n         (B) The obligations of the Special Purpose Members hereunder\nshall be unconditional and absolute and, without limiting the\ngenerality of the foregoing, shall not be released, discharged or\notherwise affected by:\n\n         (i) any extension, renewal, settlement, compromise, waiver or\nrelease in respect of any obligation of the Borrower under this\nAgreement, the Inventory Credit Agreement or any Secured Obligation,\nby operation of law or otherwise;\n\n         (ii) any modification or amendment of or supplement to this\nAgreement, the Inventory Credit Agreement or any Secured Obligation;\n\n         (iii) any release, impairment, non-perfection or invalidity\nof any direct or indirect security for any obligation of the Borrower\nunder this Agreement, the Inventory Credit Agreement or any Secured\nObligation;\n\n         (iv) any change in the corporate existence, structure or\nownership of the Borrower, or any insolvency, bankruptcy,\nreorganization or other similar proceeding affecting the Borrower or\nits assets or any resulting release or discharge of any obligation of\nthe Borrower contained in this Agreement, the Inventory Credit\nAgreement or any Secured Obligation;\n\n         (v) the existence of any claim, set-off or other rights which\nthe Special Purpose Member may have at any time against the Borrower,\nthe Agents, the L\/C Issuing Banks or any Lender or any other\ncorporation or person, whether in\n\n                                  31\n\n\n\n\nconnection herewith or any unrelated transactions, provided that\nnothing herein shall prevent the assertion of any such claim by\nseparate suit or compulsory counterclaim; (vi) any invalidity or\nunenforceability relating to or against the Borrower for any reason of\nthis Agreement, the Inventory Credit Agreement or any Secured\nObligation, or any provision of applicable law or regulation\npurporting to prohibit the payment by the Borrower of any Secured\nObligation; or\n\n         (vii) any other act or omission to act or delay of any kind\nby the Borrower, the Agents, the L\/C Issuing Banks or any Lender or\nany other Person or any other circumstance whatsoever which might, but\nfor the provisions of this paragraph, constitute a legal or equitable\ndischarge of or defense to the Special Purpose Members' obligations\nhereunder.\n\n         (C) The Special Purpose Members' obligations hereunder shall\nremain in full force and effect until the Commitments shall have\nterminated and all Secured Obligations have been paid in full.  If at\nany time any payment of any Secured Obligation is rescinded or must be\notherwise restored or returned upon the insolvency, bankruptcy or\nreorganization of the Borrower or otherwise, the Special Purpose\nMembers' obligations hereunder with respect to such payment shall be\nreinstated as though such payment had been due but not made at such\ntime.\n\n         (D) The Special Purpose Members irrevocably waive acceptance\nhereof, presentment, demand, protest and any notice not provided for\nherein, as well as any requirement that at any time any action be\ntaken by any Person against any Borrower or any other person.\n\n         (E) Upon making any payment with respect to the Borrower\nhereunder, each Special Purpose Member shall be subrogated to the\nrights of the payee against the Borrower with respect to such payment;\nprovided that such Special Purpose Member shall not enforce any\npayment by way of subrogation until all Secured Obligations have been\npaid in full.\n\n         (F) If acceleration of the time for payment of any amount\npayable by the Borrower under this Agreement, the Inventory Credit\nAgreement or the Secured Obligations is stayed upon the insolvency,\nbankruptcy or reorganization of the Borrower, all such amounts\notherwise subject to acceleration under the terms of the Inventory\nCredit Agreement shall nonetheless be payable by the Special\n\n                                  32\n\n\n\nPurpose Member hereunder forthwith on demand by the Administrative\nAgent made at the request of the Required Lenders.\n\n         (G) Notwithstanding any other provision of this Section 15,\nrecourse against the Special Purpose Members in respect of the\nGuaranties shall be limited to the Special Purpose Members'\nCollateral.\n\n                          SECTION 16. Notices\n                                      -------\n\n         All notices, communications and distributions hereunder shall\nbe given (i) in the case of the Borrower, the Agents, the L\/C Issuing\nBanks and the Lenders, in accordance with Section 9.1 of the Inventory\nCredit Agreement, and (ii) in the case of each Special Purpose Member,\nat its address or facsimile number set forth on the signature pages\nhereof.\n\n             SECTION 17. Waivers, Non-Exclusive Remedies\n                         -------------------------------\n\n         No failure on the part of the Collateral Agent to exercise,\nand no delay in exercising and no course of dealing with respect to,\nany right under this Agreement shall operate as a waiver thereof; nor\nshall any single or partial exercise by the Collateral Agent of any\nright under this Agreement preclude any other or further exercise\nthereof or the exercise of any other right.  The rights and remedies\nin this Agreement shall be cumulative and are not exclusive of any\nother remedies provided by law.\n\n                  SECTION 18. Successors and Assigns\n                              ----------------------\n\n         This Agreement is for the benefit of the Secured Parties and\ntheir successors and assigns, and in the event of an assignment of all\nor any of the Secured Obligations, the rights of the assignor\nhereunder, to the extent applicable to the indebtedness so assigned,\nshall automatically be transferred with such indebtedness.  This\nAgreement shall be binding on each Grantor and its successors and\nassigns.\n\n                                  33\n\n\n\n                    SECTION 19. Changes in Writing\n                                ------------------\n\n         Neither this Agreement nor any provision hereof may be\nchanged, waived, discharged or terminated orally, but only by one or\nmore writings signed by each Grantor and by the Collateral Agent with\nthe consent of the Required Lenders (and, if the rights or duties of\nthe Administrative Agent are affected thereby, by the Administrative\nAgent); provided that (i) the allocations and priorities set forth in\nSection 10 may only be changed with the consent of each Secured Party\nadversely affected thereby, and (ii) the definition of \"Secured\nObligations\", Section 5, Section 14, Section 15 and the percentage of\nthe Commitments or the aggregate unpaid principal amount of the Notes\nor the Secured Principal Amount which shall be required for the\nLenders or any of them to take any action under this Section or any\nother provision of this Agreement may only be changed with the consent\nof all the Lenders.\n\n                       SECTION 20. New York Law\n                                   ------------\n\n         This Agreement shall be construed in accordance with and\ngoverned by the laws of the State of New York, except as otherwise\nrequired by mandatory provisions of law and except to the extent that\nremedies provided by the laws of any jurisdiction other than New York\nare governed by the laws of such jurisdiction.\n\n                       SECTION 21. Severability\n                                   ------------\n\n         If any provision hereof is invalid or unenforceable in any\njurisdiction, then, to the fullest extent permitted by law, (i) the\nother provisions hereof shall remain in full force and effect in such\njurisdiction and shall be liberally construed in favor of the Secured\nParties in order to carry out the intentions of the parties hereto as\nnearly as may be possible; and (ii) the invalidity or unenforceability\nof any provision hereof in any jurisdiction shall not affect the\nvalidity or enforceability of such provision in any other\njurisdiction.\n\n                                  34\n\n\n\n\n         IN WITNESS WHEREOF, the parties hereto have caused this\nAgreement to be duly executed by their respective authorized officers\nas of the day and year first above written.\n\n                         BETHLEHEM STEEL CORPORATION\n\n\n                         By___________________________\n                           Name:\n                           Title:\n\n\n                         BETHLEHEM STEEL CREDITAFFILIATE ONE, INC.\n\n\n                         By___________________________\n                           Name:\n                           Title:\n\n                         5111 North Point Boulevard\n                         Sparrows Point, MD 21219-1014\n                         Telephone: 410-388-7781\n                         Facsimile: 410-388-7783\n                         Attention: Edmund P. Reybitz\n\n\n                         BETHLEHEM STEEL CREDITAFFILIATE TWO, INC.\n\n\n                         By___________________________\n                           Name:\n                           Title:\n\n                           5111 North Point Boulevard\n                           Sparrows Point, MD 21219-1014\n                           Telephone: 410-388-7782\n\n\n                                  35\n\n\n\n\n                           Facsimile: 410-388-7783\n                           Attention: Edmund P. Reybitz\n\n\n\n                                  36\n\n\n\n                           J.P. MORGAN DELAWARE, as\n                             Structuring and Collateral\n                             Agent\n\n\n                           By___________________________\n                             Name:\n                             Title:\n\n\n                           MORGAN GUARANTY TRUST COMPANY\n                           OF NEW YORK, as\n                             Administrative Agent\n\n\n                           By___________________________\n                             Name:\n                             Title:\n\n\n                                  37\n\n\n\n\n                          Schedule 2(B)(ii)\n\n                      Description of Collateral\n\n         [Bethlehem Steel Credit Affiliate One, Inc.] [Bethlehem\nSteel Credit Affiliate Two, Inc.], as Debtor, J.P. Morgan\nDelaware, as Structuring and Collateral Agent. All of the\ndebtors' right, title and interest in and to the limited\nliability company interest in Bethlehem Steel Funding, LLC,\na Maryland limited liability company, and its successors,\nnow owned or hereafter acquired by debtor, and all of\ndebtor's rights and privileges with respect thereto\n(including, without limitation, all rights under the\nOperating Agreement of Bethlehem Steel Funding, LLC), all\ncertificates evidencing any limited liability company\ninterest, and all income and profits thereon, and all\npayments and distributions with respect thereto, and all\nproceeds of the foregoing, including all cash proceeds and\nall accounts, chattel paper, contract rights, general\nintangibles, inventory and documents constituting noncash\nproceeds, in each case now owned or hereafter acquired and\nwherever located.\n\n\n\n\n\n                               ANNEX A\n                             to EXHIBIT E\n\n\n                        PERFECTION CERTIFICATE\n\n         The undersigned, the chief financial officer and chief\naccounting officer of Bethlehem Steel Corporation, a Delaware\ncorporation (the \"Borrower\"), hereby certify with reference to the\nInventory Security and Pledge Agreement dated as of September 12, 1995\namong the Borrower, the Special Purpose Members, J.P.  Morgan\nDelaware, as Structuring and Collateral Agent and Morgan Guaranty\nTrust Company of New York, as Administrative Agent (terms defined\ntherein being used herein as therein defined), to the Structuring and\nCollateral Agent, the Administrative Agent and each Lender as follows:\n\n         1.  Names.  (a) The exact corporate name of the Borrower as\nit appears in its restated certificate of incorporation is as follows:\n\n                     Bethlehem Steel Corporation\n         (b) The following is a list of all other names\n(including trade names or similar appellations) used by the\nBorrower or any of its divisions or other unincorporated\nbusiness units which produce or have produced goods which\nwould be included in the definition of Inventories at any\ntime during the past five years:\n\n\n\n\n\n\n         2.  Current Locations.  (a) The chief executive office of the\nBorrower is located at the following address:\n\n                 Mailing\n                 Address    County     State\n                 -------    ------     -----\n\n\n         (b) The following are all the locations where the Borrower\nmaintains any Inventories in the United States not identified above:\n\n                 Mailing\n                 Address    County     State\n                 -------    ------     -----\n\n         (c) The following are the names and addresses of all Persons\nother than the Borrower which have possession of any of the Borrower's\nInventories in the United States:\n\n                 Mailing\n                 Address    County     State\n                 -------    ------     -----\n\n         (d) The following are all the places of business of the\nBorrower not identified above which are located in states in which the\nchief executive office of the Borrower or any Inventories are located:\n\n                 Mailing\n                 Address    County     State\n                 -------    ------     -----\n\n\n\n                                  2\n\n\n\n\n\n         3.  Prior Locations.  (a) Set forth below is the information\nrequired by subparagraphs (a) and (d) of paragraph 2 with respect to\neach location or place ofbusiness not identified in paragraph 2 and\nmaintained by the Borrower at any time during the past five years in a\nstate in which it has maintained a location or place of business\nduring the past four months:\n\n\n\n\n\n         (b) Set forth below is the information required by\nsubparagraphs (b) and (c) of paragraph 2 with respect to each location\nor bailee where or with whom Inventories have been lodged at any time\nduring the past four months:\n\n\n\n         4.  Unusual Transactions.  All Inventories of the Borrower\nhave been acquired by the Borrower in the ordinary course of its\nbusiness.\n\n         5.  File Search Reports.  Attached hereto as Schedule 5(A) is\na true copy of a file search report from the Uniform Commercial Code\nfiling officer in each jurisdiction identified in paragraph 2 or 3\nabove with respect to each name set forth in paragraph 1 above.\nAttached hereto as Schedule 5(B) is a true copy of each financing\nstatement or other filing identified in such file search reports.\n\n         6.  UCC Filings.  A duly signed financing statement on Form\nUCC-1 in substantially the form of Schedule 6(A) hereto has been duly\nfiled in the Uniform Commercial Code filing office in each\njurisdiction identified in paragraph 2 hereof.  Attached hereto as\nSchedule 6(B) is a true copy of each such filing duly acknowledged by\nthe filing officer.\n\n         7.  Schedule of Filings.  Attached hereto as Schedule 7 is a\nschedule setting forth filing information with respect to the filings\ndescribed in paragraph 6 above.\n\n\n\n                                  3\n\n\n\n\n         8.  Filing Fees.  All filing fees and taxes payable in\nconnection with the filings described in paragraph 6 above have been\npaid.\n\n\n                                  4\n\n\n\n\n\n\n         IN WITNESS WHEREOF, we have hereunto set our hands this ___\nday of September, 1995.\n\n                       _______________________________\n                                   Title:\n\n                       ________________________________\n                                   Title:\n\n\n\n                                  5\n\n\n\n                                                   SCHEDULE 6(A)\n\n                      Description of Collateral\n                      -------------------------\n\n         All (i) Inventories and documents, books and records\npertaining to Inventories, documents and proceeds thereof, in each\ncase, whether now owned or hereafter acquired or arising and wherever\nlocated, and the proceeds of the foregoing, (ii) shares of capital\nstock and debt instruments issued by Bethlehem Steel Credit Affiliate\nOne, Inc.  and Bethlehem Steel Credit Affiliate Two, Inc., and each of\ntheir successors to the debtor, now owned or hereafter acquired, and\nall rights and privileges with respect thereto, and all income and\nprofits thereon, and all dividends, interest and other payments and\ndistributions with respect thereto, and all proceeds of the foregoing,\nincluding, without limitation, all cash proceeds and all accounts,\nchattel paper, contract rights, general intangibles, inventory and\ndocuments constituting noncash proceeds of the foregoing, in each case\nnow owned or hereafter acquired and wherever located, and (iii) of the\ndebtor's right, title and interest in and to the limited liability\ncompany interest in, and debt instruments issued by, Bethlehem Steel\nFunding, LLC, a Maryland limited liability company, and its\nsuccessors, now owned or hereafter acquired, and all rights and\nprivileges with respect thereto (including, without limitation, all\nrights under the Operating Agreement of Bethlehem Steel Funding, LLC),\nall certificates evidencing any limited liability company interest,\nand all income and profits thereon, and all payments, distributions,\ninterest and other payments with respect to the limited liability\ncompany interest or the debt instruments, and all proceeds of the\nforegoing, including, without limitation, all cash proceeds and all\naccounts, chattel paper, contract rights, general intangibles,\ninventory and documents constituting noncash\n\n                                  1\n\n\n\n\nproceeds of the foregoing, in each case now owned or hereafter\nacquired and wherever located.\n\n\n         \"Inventories\" means now owned or hereafter acquired by\nthe debtor, all \"inventory\" (as defined in the UCC),\nwherever located, and shall also mean and include, without\nlimitation, all raw materials and other materials and\nsupplies, work-in-process and finished goods and any\nproducts made or processed therefrom and all substances, if\nany, commingled therewith or added thereto, or which, in\naccordance with generally accepted accounting principles,\nwould be included in inventories on the debtor's balance\nsheet, (excluding, however, any of the foregoing which (i)\nis located outside the United States of America, (ii) is\nheld at the debtor's marine construction facilities at\nSparrows Point, Maryland or Port Arthur, Texas for sale or\nother disposition, or to be furnished by the debtor under a\ncontract for services, or to be used or consumed by the\ndebtor, in the debtor's marine construction business or\n(iii) has been returned to or repossessed or stopped in\ntransit by the debtor (including all additions and\naccessions thereto and replacements thereof)).\n\n\n                                  2\n\n\n\n\n                                               SCHEDULE 7\n\n                         SCHEDULE OF FILINGS\n\n\nDebtor         Filing Officer        File NumberDate of Filing*\n------         --------------        -------------------------\n\n\n\n_______________\n* Indicate lapse date, if other than fifth anniversary.\n\n\n\n\n\n                                                  ANNEX B\n                                             TO EXHIBIT E\n\n\n                          FORM OF OPINION OF\n                         COUNSEL FOR BORROWER\n                         --------------------\n\n         1.  The Inventory Security and Pledge Agreement creates a\nvalid security interest, for the benefit of the Secured Parties, in\nall the Grantors' right, title and interest in all Collateral to the\nextent the UCC is applicable thereto (the \"Security Interest\").\n\n         2.  UCC financing statements and amendments thereto\n(collectively, the \"Financing Statements\") have been filed in the\nfiling offices in the jurisdictions listed in Schedule 7 to the\nPerfection Certificate (the \" Filing Jurisdictions\") and in the\njurisdiction identified in or pursuant to Section 16 of the Inventory\nSecurity Agreement, which are all of the offices in which filings are\nrequired to perfect the Security Interest, to the extent the Security\nInterest may be perfected by filing under the UCC, and no further\nfiling or recording of any document or instrument or other action will\nbe required so to perfect the Security Interest, except that (i)\ncontinuation statements with respect to each Financing Statement must\nbe filed within the respective time periods set forth on Schedule 7 to\nthe Perfection Certificate; (ii) additional filings may be necessary\nif any Grantor changes its name, identity or corporate structure or\nthe jurisdiction in which its places of business, its chief executive\noffice or the Collateral are located; and (iii) I express no opinion\non the perfection of, or need for further filing or recording to\nperfect, the Security Interest in Collateral now or hereafter located\nin any jurisdiction other than the Filing Jurisdictions.\n\n         3.  There are\n\n         (i) based solely on information provided to us by [Access\nInformation Services, Inc.] through the dates of searches in each of\nthe respective filing offices as set\n\n\n\n\n\nforth in Schedule A hereto and made a part hereof, no UCC financing\nstatements which name the Borrower as debtor or seller and cover any\nof the Collateral, other than the Financing Statements, listed in the\navailable records in the UCC filing offices set forth in such filing\noffices, which include all of the offices prescribed under the UCC as\nthe offices in which filings should have been made to perfect security\ninterests in the Collateral; and\n\n         (ii) no notices of the filing of any federal tax lien\n(arising under Section 6321 of the Internal Revenue Code) or any lien\nof the Pension Benefit Guaranty Corporation (arising under ERISA)\ncovering any of the Collateral listed in the available records in the\noffices listed in Schedule B attached hereto and made a part hereof,\nwhich include all of the offices having files which must be searched\nin order to fully determine the existence of notices of the filing of\nfederal tax liens (arising under Section 6321 of the Internal Revenue\nCode) and liens of the Pension Benefit Guaranty Corporation (arising\nunder ERISA) on the Collateral.\n\n         4.  The Security Interest validly secures the payment of all\nfuture Loans made by the Lenders to the Borrower and all Reimbursement\nObligations arising in connection with Letters of Credit issued by the\nL\/C Issuing Banks, whether or not at the time such Loans are made or\nLetters of Credit are issued an Event of Default or other event not\nwithin the control of the Lenders or the L\/C Issuing Banks has\nrelieved or may relieve the Lenders from their obligations to make\nsuch Loans or the L\/C Issuing Banks from their obligations to issue\nLetters of Credit, and is perfected to the extent set forth in\nparagraph 2 above with respect to such future Loans and Reimbursement\nObligations.  Except for (i) Instruments (and money) which must be in\nthe possession of the Collateral Agent in order to perfect the\nSecurity Interest therein, (ii) Liquid Investments in book-entry form,\nas to which the Inventory Security Agreement requires an opinion of\ncounsel that appropriate measures have been taken to perfect the\nSecurity Interest therein and (iii) Proceeds (other than Proceeds in\nwhich the Security Interest is perfected by reason of Section 9-306 of\nthe UCC), I am not aware of the existence of any Collateral as to\nwhich the Security Interest cannot be perfected by filing under the\nUCC.  Insofar as the priority thereof is governed by the UCC, the\nSecurity Interest has the same priority with respect to future Loans\nand Reimbursement Obligations on the date such Loans are made and such\nReimbursement Obligations are incurred as it will have on such date\nwith respect to Loans made and Letters of Credit issued on the date\nhereof.  I call to your attention that notwithstanding the priorities\n\n                                  2\n\n\n\n\ngoverned by the UCC, the Security Interest may not have priority in\ncertain circumstances over a Federal Lien.  To the extent the Security\nInterest secures Loans, (i) the Security Interest in Collateral\nacquired after the filing of a Federal Lien has priority over such\nFederal Lien only with respect to Collateral that is commercial\nfinancing security under Section 6323(c)(2)(C) of the Internal Revenue\nCode acquired by the Borrower in the ordinary course of its trade or\nbusiness before the 46th day following such filing and (ii) the\nSecurity Interest has priority over such Federal Lien to the extent it\nsecures Loans made after the date of filing of such Federal Lien only\nif such future Loans are made before the earlier of the 46th day after\nsuch Federal Lien is filed or the time that the relevant Lender or\nLenders have actual notice or knowledge, within the meaning of Section\n6323(i)(1) of the Internal Revenue Code, that such Federal Lien was\nfiled.  To the extent the Security Interest secures Reimbursement\nObligations arising in connection with Letters of Credit, (i) the\nSecurity Interest in Collateral acquired after the filing of a Federal\nLien may have priority over such Federal Lien only with respect to\nCollateral whose acquisition is directly traceable to a disbursement\nunder such Letters of Credit and (ii) the Security Interest may have\npriority over a Federal Lien only to the extent such Security Interest\nsecures Reimbursement Obligations arising under irrevocable Letters of\nCredit issued prior to the filing of such Federal Lien for the benefit\nof a party not affiliated with the Borrower.\n\n                                  3\n\n\n\n\n\n                                                         EXHIBIT F\n\n                      BORROWING BASE CERTIFICATE\n\n         I, _________________, [Chief Financial\nOfficer\/Treasurer\/Controller], for Bethlehem Steel Corporation (the\n\"Borrower\") DO HEREBY CERTIFY, in accordance with Section 5.1 of the\nInventory Credit Agreement dated as of September 12, 1995 among the\nBorrower, the Lenders listed therein, Morgan Guaranty Trust Company of\nNew York, as Administrative Agent, and J.P.  Morgan Delaware, as\nStructuring and Collateral Agent (the \" Credit Agreement\", capitalized\nterms used herein and not otherwise defined herein having the meanings\nassigned to them in the Credit Agreement), that attached hereto is the\nBorrower's good faith estimate as to the calculation of the Borrowing\nBase as of _____________.\n\n         IN WITNESS WHEREOF, I have signed this certificate as of this\n______ day of ___________.\n\n\n                              __________________________\n                              Name:\n                              Title:\n\n\n\n\n\n\n\n                                                    EXHIBIT G\n\n                    Form of Opinion of Counsel to\n                     Bethlehem Steel Corporation\n\n             [Letterhead of Bethlehem Steel Corporation]\n                          September 12, 1995\n\n\n                        Morgan Guaranty Trust\n                       Company of New York, as\n                         Administrative Agent\n                            60 Wall Street\n                       New York, New York 10260\n\n\n                 J.P. Morgan Delaware, as Structuring\n                         and Collateral Agent\n                          902 Market Street\n                      Wilmington, Delaware 19801\n\n\n                    The Lenders (as defined in the\n                      Inventory Credit Agreement\n                        as referred to below)\n\n\n                        Ladies and Gentlemen:\n\n\n\n\n\n         I have acted as counsel for Bethlehem Steel Corporation (the\n\"Borrower\") in connection with (i) the Inventory Credit Agreement (the\n\"Inventory Credit Agreement\") dated as of September 12, 1995 among the\nBorrower, the lenders listed on the signature pages thereof (the\n\"Lenders\"), Morgan Guaranty Trust Company of New York, as\nAdministrative Agent (the \"Administrative Agent\") and J.P.  Morgan\nDelaware as Structuring and Collateral Agent (the \" Collateral\nAgent\"), (ii) the Notes and (iii) the Inventory Security and Pledge\nAgreement (the \"Inventory Security Agreement\") dated as of September\n12, 1995 among the Borrower, the Special Purpose Members, J.P.  Morgan\nDelaware, the Collateral Agent and the Administrative Agent (documents\n(i) through (iii) are referred to herein as the \"Financing\nDocuments\").  Terms defined in the Inventory Credit Agreement are used\nherein as therein defined.  This opinion is being rendered to you\npursuant to Section 3.1 of the Inventory Credit Agreement.\n\n         I have examined originals or copies, certified or otherwise\nidentified to my satisfaction, of such documents, corporate records,\ncertificates of public officials and other instruments and have\nconducted such other investigations of fact and law as I have deemed\nnecessary or advisable for purposes of this opinion.\n\n         Upon the basis of the foregoing, I am of the opinion that:\n\n         1.  The Borrower is a corporation duly incorporated, validly\nexisting and in good standing under the laws of Delaware and has all\ncorporate powers and all material governmental licenses,\nauthorizations, consents and approvals required to carry on its\nbusiness as now conducted.\n\n         2.  Each Special Purpose Member is a corporation duly\nincorporated, validly existing and in good standing under the laws of\nMaryland and has all corporate powers and all material governmental\nlicenses, authorizations, consents and approvals required to carry on\nits business as now conducted.\n\n         3.  The execution, delivery and performance by the Borrower\nof the Financing Documents are within the Borrower's corporate powers,\nhave been duly authorized by all necessary corporate action, require\nno action by or in respect of, or filing with, any governmental body,\nagency or official (except for the filing of UCC financing statements\nas contemplated by the Inventory Security Agreement) and do not\ncontravene, or constitute a default under, any provision\n\n                                  2\n\n\n\n\nof applicable law or regulation or of the certificate of incorporation\nor by-laws, as amended, of the Borrower or of any agreement, judgment,\ninjunction, order, decree or other instrument binding upon the\nBorrower and known to me after due inquiry, or result in the creation\nor imposition of any Lien on any asset of the Borrower or any of its\nSubsidiaries (except the Security Interest as hereinafter defined).\n\n         4.  The execution, delivery and performance by each Special\nPurpose Member of the Inventory Security Agreement are within the such\nMember's corporate powers, have been duly authorized by all necessary\ncorporate action, require no action by or in respect of, or filing\nwith, any governmental body, agency or official (except for the filing\nof UCC financing statements as contemplated by the Inventory Security\nAgreement) and do not contravene, or constitute a default under, any\nprovision of applicable law or regulation or of the articles of\nincorporation or by-laws, as amended, of such Member or of any\nagreement, judgment, injunction, order, decree or other instrument\nbinding upon such Member and known to me after due inquiry, or result\nin the creation or imposition of any Lien on any asset of such Member\n(except the Security Interest as hereinafter defined).\n\n         5.  The Financing Documents constitute valid and binding\nagreements of the Borrower, enforceable against the Borrower in\naccordance with its terms, except to the extent that the (i) the\nenforceability thereof may be limited by bankruptcy, reorganization,\ninsolvency, moratorium or other similar laws relating to the\nenforcement of creditors' rights generally from time to time in effect\nand by general equitable principles regardless of whether such\nenforceability is considered in a proceeding in equity or at law and\n(ii) certain of the remedial provisions of the Inventory Security\nAgreement may be limited by applicable law, although such limitations\ndo not in my opinion make the remedies provided for therein (taken as\na whole) inadequate for the practical realization of the benefits\nintended to be afforded thereby.\n\n         6.  The Inventory Security Agreement constitutes a valid and\nbinding agreement of each of the Special Purpose Members, enforceable\nagainst such Member in accordance with its terms, except to the extent\nthat the (i) the enforceability thereof may be limited by bankruptcy,\nreorganization, insolvency, moratorium or other similar laws relating\nto the enforcement of creditors' rights generally from time to time in\neffect and by general equitable principles regardless of whether such\nenforceability is considered in a proceeding in equity or at law and\n(ii) certain of the remedial provisions may be limited by\n\n                                  3\n\n\n\n\napplicable law, although such limitations do not in my opinion make\nthe remedies provided for therein (taken as a whole) inadequate for\nthe practical realization of the benefits intended to be afforded\nthereby.\n\n         7.  To the best of my personal knowledge after due inquiry,\nthere is no action, suit or proceeding pending against the Borrower or\nany of its Subsidiaries before any court or arbitrator or any\ngovernmental body, agency or official, in which there is a reasonable\npossibility of an adverse decision which could materially adversely\naffect the ability of the Borrower or such Subsidiary to perform its\nobligations under the Financing Documents or which in any manner draws\ninto question the validity of the Financing Documents.\n\n         8.  The Inventory Security Agreement creates a valid security\ninterest, for the benefit of the Secured Parties, in all the Grantors'\nright, title and interest in all Collateral to the extent the UCC is\napplicable to the creation of a security interest therein (the \"\nSecurity Interest\").\n\n         9.  UCC financing statements (collectively, the \"Financing\nStatements\") have been filed in the filing offices in the\njurisdictions listed in Schedule 7 to the Perfection Certificate dated\nas of the date hereof (the \"Perfection Certificate\") and delivered to\nyou and in the jurisdiction identified in or pursuant to Section 16 of\nthe Inventory Security Agreement (the \"Filing Jurisdictions\"), which\nare all of the offices in which filings are required so to perfect the\nSecurity Interest, to the extent the Security Interest may be\nperfected by any filing under the UCC, and no further filing or\nrecording of any document or instrument or other action is currently\nrequired to perfect the Security Interest, except that (i)\ncontinuation statements with respect to each Financing Statement must\nbe filed within the respective time periods set forth on Schedule 7 to\nthe Perfection Certificate; (ii) additional filings may be necessary\nif any Grantor changes its name, identity or corporate structure or\nthe jurisdiction in which its places of business, its chief executive\noffice or the Collateral are located; and (iii) I express no opinion\non the perfection of, or need for further filing or recording to\nperfect, the Security Interest in Collateral now or hereafter located\nin any jurisdiction other than the Filing Jurisdictions.\n\n         10.Assuming that each of the Collateral Agent and the Secured\nParties is without notice of any adverse claim (as defined in Section\n8-302 of the UCC), the delivery to and\n\n                                  4\n\n\n\n\ncontinued possession by the Collateral Agent in the State of New York\nof the certificates, related stock powers executed in blank and the\nBSF Note representing the Pledged Securities (as defined in the\nInventory Security Agreement) is effective to create in favor of the\nCollateral Agent for the benefit of the secured parties named therein\na perfected and first priority security interest in the Pledged\nSecurities under the Uniform Commercial Code as in effect in the State\nof New York prior to any other security interest that must be\nperfected by possession or filing under the UCC.  No registration,\nrecordation or filing with any governmental body, agency or official\nis required in connection with the execution or delivery of the\nInventory Security Agreement with respect to the Pledged Securities or\nnecessary for the validity or enforceability thereof or for the\nperfection of the security interest in the Pledged Securities.\n\n         11.Assuming that each of the Collateral Agent and the Secured\nParties is without notice of any adverse claim (as defined in Section\n8-302 of the UCC), the delivery to and continued possession by the\nCollateral Agent in the State of New York of the certificates\nrepresenting the Pledged Interests (as defined in the Inventory\nSecurity Agreement) and filing of Financing Statements in the\njurisdiction identified in or pursuant to Section 16 of the Inventory\nSecurity Agreement is effective to create in favor of the Collateral\nAgent for the benefit of the secured parties named therein a perfected\nand first priority security interest in the Pledged Interests under\nthe Uniform Commercial Code prior to any other security interest that\nmust be perfected by possession or filing under the UCC.\n\n         12.  There are\n\n         (i) based solely on information provided to us by Access\nInformation Services, Inc.  through the dates of searches in each of\nthe respective filing offices as set forth in Schedule A hereto and\nmade a part hereof, other than financing statements on file with\nrespect to the Existing Credit Agreement (which will be terminated in\naccordance with the provisions of Section 3.1 of the Inventory Credit\nAgreement), no UCC financing statements which name the Borrower as\ndebtor or seller and cover any of the Collateral, other than the\nFinancing Statements, listed in the available records in the UCC\nfiling offices set forth in such filing offices, which include all of\nthe offices prescribed under the UCC as the offices in which filings\nshould have been made to perfect security interests in the\n\n                                  5\n\n\n\n\nCollateral to the extent Security Interests may be perfected by\nfiling; and\n\n         (ii) no notices of the filing of any federal tax lien\n(arising under Section 6321 of the Internal Revenue Code) or any lien\nof the Pension Benefit Guaranty Corporation (arising under ERISA)\ncovering any of the Collateral listed in the available records in the\noffices listed in Schedule B attached hereto and made a part hereof,\nwhich include all of the offices having files which must be searched\nin order to fully determine the existence of notices of the filing of\nfederal tax liens (arising under Section 6321 of the Internal Revenue\nCode) and liens of the Pension Benefit Guaranty Corporation (arising\nunder ERISA) on the Collateral.\n\n         13.  The Security Interest validly secures the payment of all\nfuture Loans made by the Lenders to the Borrower and all Reimbursement\nObligations arising in connection with Letters of Credit issued by the\nL\/C Issuing Banks, whether or not at the time such Loans are made or\nLetters of Credit are issued an Event of Default or other event not\nwithin the control of the Lenders or the L\/C Issuing Banks has\nrelieved or may relieve the Lenders from their obligations to make\nsuch Loans or the L\/C Issuing Banks from their obligations to issue\nLetters of Credit, and is perfected to the extent set forth in\nparagraph 9 above with respect to such future Loans and Reimbursement\nObligations.  Except for (i) Pledged Securities, Instruments (and\nmoney) which must be in the possession of the Collateral Agent in\norder to perfect the Security Interest therein, (ii) Liquid\nInvestments in book-entry form, as to which the Inventory Security\nAgreement requires an opinion of counsel that appropriate measures\nhave been taken to perfect the Security Interest therein and (iii)\nProceeds (other than Proceeds in which the Security Interest is\nperfected by reason of Section 9-306 of the UCC), I am not aware of\nthe existence of any Collateral as to which the Security Interest\ncannot be perfected by filing under the UCC.  Insofar as the priority\nthereof is governed by the UCC, the Security Interest has the same\npriority with respect to future Loans and Reimbursement Obligations on\nthe date such Loans are made and such Reimbursement Obligations are\nincurred as it will have on such date with respect to Loans made and\nLetters of Credit issued on the date hereof.  I call to your attention\nthat notwithstanding the priorities governed by the UCC, the Security\nInterest may not have priority in certain circumstances over a Federal\nLien.  To the extent the Security Interest secures Loans, (i) the\nSecurity Interest\n\n                                  6\n\n\n\nin Collateral acquired after the filing of a Federal Lien has priority\nover such Federal Lien only with respect to Collateral that is\ncommercial financing security under Section 6323(c)(2)(C) of the\nInternal Revenue Code acquired by the Borrower in the ordinary course\nof its trade or business before the 46th day following such filing and\n(ii) the Security Interest has priority over such Federal Lien to the\nextent it secures Loans made after the date of filing of such Federal\nLien only if such future Loans are made before the earlier of the 46th\nday after such Federal Lien is filed or the time that the relevant\nLender or Lenders have actual notice or knowledge, within the meaning\nof Section 6323(i)(1) of the Internal Revenue Code, that such Federal\nLien was filed.  To the extent the Security Interest secures\nReimbursement Obligations arising in connection with Letters of\nCredit, (i) the Security Interest in Collateral acquired after the\nfiling of a Federal Lien may have priority over such Federal Lien only\nwith respect to Collateral whose acquisition is directly traceable to\na disbursement under such Letters of Credit and (ii) the Security\nInterest may have priority over a Federal Lien only to the extent such\nSecurity Interest secures Reimbursement Obligations arising under\nirrevocable Letters of Credit issued prior to the filing of such\nFederal Lien for the benefit of a party not affiliated with the\nBorrower.\n\n         I am a member of the bar of the Commonwealth of Pennsylvania\nand I express no opinion as to any matters governed by any laws other\nthan the General Corporation Law of the State of Delaware, the laws of\nthe Commonwealth of Pennsylvania and the Federal laws of the United\nStates of America.  I have made no independent examination of Indiana,\nMaryland or New York law, and have retained special counsel in\nMaryland, Pennsylvania and New York with respect to certain matters\nrelating to the Security Interest.  In giving the opinions in\nparagraphs 2, 4, 5, 6, 8, 9, 10, 11, 12 and 13 hereof I have relied\nupon the opinions, each dated of even date herewith, of Cravath,\nSwaine &amp; Moore, Pepper, Hamilton &amp; Scheetz, Venable, Baetjer and\nHoward, LLP and Barnes &amp; Thornburg, respectively.  In giving the\nopinion expressed in paragraphs 9 and 12(i) hereof with respect to\nstates other than Indiana, Maryland, Pennsylvania and New York, I have\nrelied solely upon a review of Part 4 (or the equivalent provisions)\nof the Uniform Commercial Code in effect in each such state.\n\nVery truly yours,\n\n\n\n\n                                                     EXHIBIT H\n\n              Form of Opinion of Davis Polk &amp; Wardwell,\n                    Special Counsel for the Agents\n\n\n                [Letterhead of Davis Polk &amp; Wardwell]\n                          September 12, 1995\n\n\n                        Morgan Guaranty Trust\n                       Company of New York, as\n                         Administrative Agent\n                            60 Wall Street\n                       New York, New York 10260\n\n\n                 J.P. Morgan Delaware, as Structuring\n                         and Collateral Agent\n                          902 Market Street\n                      Wilmington, Delaware 19801\n\n\n                    The Lenders (as defined in the\n                      Inventory Credit Agreement\n                        as referred to below)\n\n\n\n\n\nLadies and Gentlemen:\n\n         We have participated in the preparation of the Inventory\nCredit Agreement (the \"Inventory Credit Agreement\") dated as of\nSeptember 12, 1995 among Bethlehem Steel Corporation (the \"Borrower\"),\nthe lenders listed on the signature pages thereof, as Lenders, Morgan\nGuaranty Trust Company of New York, as Administrative Agent and J.P.\nMorgan Delaware, as Structuring and Collateral Agent.  Terms defined\nin the Agreement and not otherwise defined herein are used in this\nopinion with the meanings so defined.\n\n         We have examined originals or copies, certified or otherwise\nidentified to our satisfaction, of such documents, corporate records,\ncertificates of public officials and other instruments and have\nconducted such other investigations of fact and law as we have deemed\nnecessary or advisable for purposes of this opinion.\n\n         Upon the basis of the foregoing, we are of the opinion that:\n\n         1.  The execution, delivery and performance by the Borrower\nof the Inventory Credit Agreement and the Notes are within the\nBorrower's corporate powers and have been duly authorized by all\nnecessary corporate action.\n\n         2.  The Inventory Credit Agreement constitutes a valid and\nbinding agreement of the Borrower and each Note constitutes a valid\nand binding obligation of the Borrower, in each case enforceable in\naccordance with its terms except as the same may be limited by\nbankruptcy, insolvency or similar laws affecting creditors' rights\ngenerally and by general principles of equity.\n\n         We are members of the Bar of the State of New York and the\nforegoing opinion is limited to the laws of the State of New York, the\nfederal laws of the United States of America and the General\nCorporation Law of the State of Delaware.  In giving the foregoing\nopinion, we express no opinion as to the effect (if any) of any law of\nany jurisdiction (except the State of New York) in which any Lender is\nlocated which limits the rate of interest that such Lender may charge\nor collect.\n\n         This opinion is rendered solely to you in connection with the\nabove matter.  This opinion may not be relied upon by you for any\nother purpose or relied upon by any other person without our prior\nwritten consent.\n\nVery truly yours,\n\n                                  2\n\n\n\n\n                                                  EXHIBIT I\n\n\n\n                         ACCEPTABLE INSURERS\n\n\n\nX.L. Insurance Company, Ltd.\n\n\n\n\n\n                                                   EXHIBIT J\n\n                 ASSIGNMENT AND ASSUMPTION AGREEMENT\n\n\n\n         AGREEMENT dated as of _________, 19__ among [NAME OF\nASSIGNOR] (the \"Assignor\"), [NAME OF ASSIGNEE] (the \"Assignee\"),\nBETHLEHEM STEEL CORPORATION (the \" Borrower\") and MORGAN GUARANTY\nTRUST COMPANY OF NEW YORK, as Administrative Agent (the\n\"Administrative Agent\").\n\n         WHEREAS, this Assignment and Assumption Agreement (the\n\"Agreement\") relates to the Inventory Credit Agreement dated as of\nSeptember 12, 1995 among the Borrower, the Assignor and the other\nLenders party thereto, as Lenders, the Administrative Agent and J.P.\nMorgan Delaware, as Structuring and Collateral Agent (the \" Inventory\nCredit Agreement\");\n\n         WHEREAS, as provided under the Inventory Credit Agreement,\nthe Assignor has a Commitment to make Loans to the Borrower in an\naggregate principal amount at any time outstanding not to exceed\n$__________;\n\n         WHEREAS, Loans made to the Borrower by the Assignor under the\nInventory Credit Agreement in the aggregate principal amount of\n$__________ are outstanding at the date hereof;\n\n         WHEREAS, the Assignor proposes to assign to the Assignee all\nof the rights of the Assignor under the Inventory Credit Agreement in\nrespect of a portion of its Commitment thereunder in an amount equal\nto $__________ (the \"Assigned Amount\"), together with a corresponding\nportion of its outstanding Loans, and the Assignee proposes to accept\n\n\n\n\n\n\n\n\nassignment of such rights and assume the corresponding obligations\nfrom the Assignor on such terms; and\n\n         WHEREAS, the Assignor concurrently proposes to assign all of\nthe rights of the Assignor under the Receivables Purchase Agreement in\nrespect of a portion of its Commitment thereunder, together with a\ncorresponding portion of its pro rata share of the Aggregate Net\nInvestment.\n\n         NOW, THEREFORE, in consideration of the foregoing and the\nmutual agreements contained herein, the parties hereto agree as\nfollows:\n\n         SECTION 1.  Definitions.  All capitalized terms not otherwise\n                     -----------\ndefined herein shall have the respective meanings set forth in the\nInventory Credit Agreement.\n\n         SECTION 2.  Assignment.  The Assignor hereby assigns and\n                     ----------\nsells to the Assignee all of the rights of the Assignor under the\nInventory Credit Agreement to the extent of the Assigned Amount, and\nthe Assignee hereby accepts such assignment from the Assignor and\nassumes all of the obligations of the Assignor under the Inventory\nCredit Agreement to the extent of the Assigned Amount, including the\npurchase from the Assignor of the corresponding portion of the\nprincipal amount of the Loans made by the Assignor outstanding at the\ndate hereof.  Upon the execution and delivery hereof by the Assignor,\nthe Assignee, and if required pursuant to Section 4, the Borrower and\nthe Administrative Agent, and the payment of the amounts specified in\nSection 3 required to be paid on the date hereof (i) the Assignee\nshall, as of the date hereof, succeed to the rights and be obligated\nto perform the obligations of a Lender under the Inventory Credit\nAgreement with a Commitment in an amount equal to the Assigned Amount,\nand (ii) the Commitment of the Assignor shall, as of the date hereof,\nbe reduced by a like amount and the Assignor released from its\nobligations under the Inventory Credit Agreement to the extent such\nobligations have been assumed by the Assignee.  The assignment\nprovided for herein shall be without recourse to the Assignor.\n\n         SECTION 3.  Payments.  As consideration for the assignment\n                     --------\nand sale contemplated in Section 2 hereof, the Assignee shall pay to\nthe Assignor on the date hereof in\n\n                                  2\n\n\n\n\nFederal funds the amount heretofore agreed between them.(1) It is\nunderstood that commitment and\/or facility fees accrued to the date\nhereof are for the account of the Assignor and such fees accruing from\nand including the date hereof are for the account of the Assignee.\nEach of the Assignor and the Assignee hereby agrees that if it\nreceives any amount under the Inventory Credit Agreement which is for\nthe account of the other party hereto, it shall receive the same for\nthe account of such other party to the extent of such other party's\ninterest therein and shall promptly pay the same to such other party.\n\n         SECTION 4.  Consent of the Borrower and the Administrative\nAgent.  This Agreement is conditioned upon the consent of the Borrower\nand the Administrative Agent pursuant to Section 9.6(c) of the\nInventory Credit Agreement.  The execution of this Agreement by the\nBorrower and the Administrative Agent is evidence of this consent.\nPursuant to Section 9.6(c), the Borrower agrees to execute and deliver\na Note payable to the order of the Assignee to evidence the assignment\nand assumption provided for herein.\n\n         SECTION 5.  Non-Reliance on Assignor.  The Assignor makes no\nrepresentation or warranty in connection with, and shall have no\nresponsibility with respect to, the solvency, financial condition, or\nstatements of the Borrower, or the validity and enforceability of the\nobligations of the Borrower in respect of the Inventory Credit\nAgreement or any Note.  The Assignee acknowledges that it has,\nindependently and without reliance on the Assignor, and based on such\ndocuments and information as it has deemed appropriate, made its own\ncredit analysis and decision to enter into this Agreement and will\ncontinue to be responsible for making its own independent appraisal of\nthe business, affairs and financial condition of the Borrower.\n\n         SECTION 5.  Governing Law.  This Agreement shall be governed\nby and construed in accordance with the laws of the State of New York.\n\n---------------\n(1) Amount should combine principal together with accrued\ninterest and breakage compensation, if any, to be paid by the\nAssignee, net of any portion of any upfront fee to be paid by the\nAssignor to the Assignee.  It may be preferable in an appropriate case\nto specify these amounts generically or by formula rather than as a\nfixed sum.\n\n                                  3\n\n\n\n\n         SECTION 6.  Counterparts.  This Agreement may be signed in\nany number of counterparts, each of which shall be an original, with\nthe same effect as if the signatures thereto and hereto were upon the\nsame instrument.\n\n         IN WITNESS WHEREOF, the parties have caused this Agreement to\nbe executed and delivered by their duly authorized officers as of the\ndate first above written.\n\n                                  [NAME OF ASSIGNOR]\n\n\n                                  By_________________________\n                                    Name:\n                                    Title:\n\n\n                                  [NAME OF ASSIGNEE]\n\n\n                                  By__________________________\n                                    Name:\n                                    Title:\n\n\n                                  [BETHLEHEM STEEL CORPORATION\n\n\n                                  By__________________________\n                                    Name:\n                                    Title:]\n\n\n                                  MORGAN GUARANTY TRUST COMPANY\n                                  OF NEW YORK,\n                                  as Administrative Agent\n\n\n                                  By__________________________\n                                    Name:\n\n                                  4\n\n\n\n                                    Title:\n\n\n                                  MORGAN GUARANTY TRUST COMPANY\n                                  OF NEW YORK, as\n                                  L\/C Issuing Bank\n\n\n                                  By___________________________\n                                    Name:\n                                    Title:\n\n\n                                  CHEMICAL BANK, as L\/C Issuing\n                                  Bank\n\n\n                                  By___________________________\n                                    Name:\n                                    Title:\n\n\n                                  THE LONG-TERM CREDIT BANK OF\n                                  JAPAN, LTD., as L\/C\n                                  Issuing Bank\n\n\n                                  By___________________________\n                                    Name:\n                                    Title:\n\n<\/pre>\n","protected":false},"template":"","meta":{"_acf_changed":false,"_stopmodifiedupdate":true,"_modified_date":"","_cloudinary_featured_overwrite":false},"corporate_contracts_companies":[6846,6893],"corporate_contracts_industries":[9415,9453],"corporate_contracts_types":[9561,9560],"class_list":["post-40865","corporate_contracts","type-corporate_contracts","status-publish","hentry","corporate_contracts_companies-bank-of-america-corp","corporate_contracts_companies-bethlehem-steel-corp","corporate_contracts_industries-financial__banks","corporate_contracts_industries-manufacturing__fabrication","corporate_contracts_types-finance__credit","corporate_contracts_types-finance"],"acf":[],"_links":{"self":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts\/40865","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts"}],"about":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/types\/corporate_contracts"}],"wp:attachment":[{"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/media?parent=40865"}],"wp:term":[{"taxonomy":"corporate_contracts_companies","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_companies?post=40865"},{"taxonomy":"corporate_contracts_industries","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_industries?post=40865"},{"taxonomy":"corporate_contracts_types","embeddable":true,"href":"https:\/\/corporate.findlaw.com\/legal-api\/wp-json\/wp\/v2\/corporate_contracts_types?post=40865"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}