S-4

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As filed with the Securities and Exchange Commission on August 16, 2002

Registration No. 333-            

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM S-4
REGISTRATION STATEMENT
Under
The Securities Act of 1933

OREGON STEEL MILLS, INC.
(Exact name of registrant as specified in its charter)

Delaware	3312	94-0506370
(State or other jurisdiction of incorporation or organization)	(Primary Standard Industrial Classification Code Number)	(I.R.S. Employer Identification No.)

1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205
(503) 223-9228
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

L. RAY ADAMS
Vice President, Finance, Chief Financial Officer and Treasurer
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205
(503) 223-9228
(Name, address, including zip code, and telephone number, including area code, of agent for service)

It is respectfully requested that the Commission send copies of all notices, orders and communications to:

ROBERT J. MOORMAN
STEVEN H. HULL
Stoel Rives LLP
900 SW Fifth Avenue, Suite 2600
Portland, Oregon 97204
(503) 224-3380

Approximate date of commencement of proposed sale to the public: As promptly as practicable after this registration statement becomes effective.

        If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box. o

        If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

        If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. o

CALCULATION OF REGISTRATION FEE

Title of each class of securities to be Registered	Amount to be registered	Proposed maximum offering price per unit	Proposed maximum aggregate offering price	Amount of registration fee
10% First Mortgage Notes due 2009	$305,000,000	100%(1)	$305,000,000	$27,716(2)
Guarantees of 10% First Mortgage Notes due 2009	$305,000,000	—		—(3)

(1)

Estimated solely for the purpose of calculating the registration fee under Rule 457 of the Securities Act of 1933.

(2)

The registration fee for the securities offered hereby has been calculated under Rule 457(f)(2) under the Securities Act based on a book value of the securities of $301,254,600.

(3)

Pursuant to Rule 457(n) under the Securities Act, no separate fee is payable for the Guarantees.

The Registrants hereby amend this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrants shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such a date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

Exact name of registrant as specified in its charter; address, including zip code, and telephone number, including area code, of principal executive offices	State or other jurisdiction of incorporation or organization	Primary Standard Industrial Classification Code Number	I.R.S. Employer Identification Number
New CF&I, Inc. 1000 S.W. Broadway, Suite 2200 Portland, OR 97205 (503) 240-5787	Delaware	3310	93-1086900
CF&I Steel, L.P. 1000 S.W. Broadway, Suite 2200 Portland, OR 97205 (503) 240-5787	Delaware	3310	93-1103440

Information contained herein is subject to completion or amendment. A registration statement relating to these securities has been filed with the Securities and Exchange Commission. These securities may not be sold nor may offers to buy be accepted prior to the time the registration statement becomes effective. This prospectus shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

SUBJECT TO COMPLETION, DATED AUGUST 16, 2002

Offer for all Outstanding
10% First Mortgage Notes due 2009
in Exchange for
10% First Mortgage Notes due 2009, which have been registered under the Securities Act of 1933,
of

OREGON STEEL MILLS, INC.

         The Exchange Offer will expire at 5:00 p.m. New York City time, on                        , 2002, unless extended.

        We are offering to exchange all of our $305,000,000 10% first mortgage notes due 2009, which we refer to as the original notes, for $305,000,000 in registered 10% first mortgage notes due 2009, which we refer to as the exchange notes. The original notes and the exchange notes are collectively referred to as the notes. The original notes were issued on July 15, 2002. The exchange notes represent the same indebtedness as the original notes. The terms of the exchange notes are substantially identical to the terms of the original notes except that the exchange notes are registered under the Securities Act of 1933 and therefore are freely transferable, subject to certain conditions.

        You should consider the following:

•

Participating in the exchange offer involves risks. See "Risk Factors" beginning on page    of this prospectus.



•

Our offer to exchange the original notes for exchange notes will expire at 5:00 p.m. New York City time on                        , 2002 unless we extend the time of expiration.



•

You may withdraw your tender of original notes at any time before the expiration of this exchange offer.



•

All original notes that are validly tendered in the exchange offer and not validly withdrawn will be exchanged.



•

The exchange of original notes for exchange notes in the exchange offer will not be a taxable event for U.S. federal income tax purposes.



•

The exchange offer is subject to customary conditions, including that it does not violate applicable law or any applicable interpretation of the staff of the Securities and Exchange Commission.



•

We will not receive any proceeds from the exchange offer.



•

The exchange notes may be sold in the over-the-counter market, in negotiated transactions or through a combination of such methods. The exchange notes will not be listed on any securities exchange.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

        The date of this prospectus is            , 2002.

You should rely only on the information contained in this prospectus. We have not authorized any person to provide you with any information or represent anything about us or this offering that is not contained in this prospectus, and, if any person gives you any other information or makes other representations, you should not rely upon that information or representation as having been authorized by us. We are not making an offer to sell these securities in any jurisdiction where an offer or sale is not permitted. You should be aware that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

TABLE OF CONTENTS

	Page
Incorporation of Documents by Reference	1
Disclosure Regarding Forward-Looking Statements	2
Industry and Market Data	3
Where You Can Find Additional Information	4
Prospectus Summary	5
Summary of the Exchange Offer	7
The Exchange Notes	12
Risk Factors	15
Use of Proceeds	33
Ratio of Earnings to Fixed Charges	33
Selected Historical Consolidated Financial Data	34
The Exchange Offer	36
Description of Notes	47
Certain United States Federal Income Tax Considerations	120
Plan of Distribution	120
Legal Matters	121
Experts	121

        Each broker-dealer that receives exchange notes for its own account pursuant to the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. The Letter of Transmittal states that by so acknowledging and by delivering a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act. This prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where such original notes were acquired by such broker-dealer as a result of market-making activities or other trading activities. The Company has agreed that, for a period of 180 days after the Expiration Date (as defined herein), it will make this prospectus available to any broker-dealer for use in connection with any such resale. See "Plan of Distribution" on page 120.

INCORPORATION OF DOCUMENTS BY REFERENCE

        We are "incorporating by reference" the information we file with the Securities and Exchange Commission, or SEC, into this prospectus, which means that this prospectus incorporates important business and financial information about our company that is not included in or delivered with this prospectus. The information incorporated by reference is considered to be part of this prospectus, and information in documents that we file later with the SEC will automatically update and supersede

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information in this prospectus. We incorporate by reference the documents listed below into this prospectus, and any future filings made by us, CF&I Steel, L.P. or New CF&I, Inc. with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended, until we close this Exchange Offer. The documents we incorporate by reference are:

•

our quarterly report on Form 10-Q for the quarter ended June 30, 2002;



•

the quarterly report of New CF&I, Inc. on Form 10-Q for the quarter ended June 30, 2002;



•

the quarterly report of CF&I Steel, L.P. on Form 10-Q for the quarter ended June 30, 2002;



•

our current report on Form 8-K filed with the SEC on July 11, 2002;



•

our current report on Form 8-K filed with the SEC on June 26, 2002;



•

the current report of New CF&I, Inc. on Form 8-K filed with the SEC on June 26, 2002;



•

the current report of CF&I Steel, L.P. on Form 8-K filed with the SEC on June 26, 2002;



•

our quarterly report on Form 10-Q for the quarter ended March 31, 2002;



•

the quarterly report of New CF&I, Inc. on Form 10-Q for the quarter ended March 31, 2002;



•

the quarterly report of CF&I Steel, L.P. on Form 10-Q for the quarter ended March 31, 2002;



•

our annual report on Form 10-K for the fiscal year ended December 31, 2001, as amended;



•

the annual report of New CF&I, Inc. on Form 10-K for the fiscal year ended December 31, 2001; and



•

the annual report of CF&I Steel, L.P. on Form 10-K for the fiscal year ended December 31, 2001.

DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS

        This prospectus contains "forward-looking statements," as defined by federal securities laws, with respect to our financial condition, results of operations and business and our expectations or beliefs concerning future events. Statements made in this prospectus that are not statements of historical fact are forward-looking statements. In addition, from time to time, we and our representatives may make statements that are forward-looking. This section provides you with cautionary statements identifying, for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, important factors that could cause our actual results to differ materially from those contained in forward-looking statements made in this prospectus or otherwise made by us or on our behalf. You can identify these forward-looking statements by forward-looking words such as, but not limited to, "expect", "anticipate", "believe", "intend", "plan", "seek", "estimate", "continue", "may", "will", "would", "could", "likely", and similar expressions. You are cautioned not to place undue reliance on these forward-looking statements.

        All forward-looking statements involve risks and uncertainties. Many risks and uncertainties are inherent in the steel industry. Others are more specific to our operations. The occurrence of any of the events described, and the achievement of the expected results, depend on many events, some or all of which are not predictable or within our control. Because of such risks, uncertainties and assumptions, actual results may differ materially from expected results, and the forward-looking events described in the forward-looking statements may not occur. The following are some of the factors that could cause actual results to differ from our expectations, may affect our ability to pay timely amounts due under the notes and/or may affect the value of the notes:

•

Availability and adequacy of our cash flow to meet our requirements, including payment of amounts due under the notes;

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•

Changes in market supply and demand for steel, including the effect of changes in general economic conditions;



•

Changes in U.S. or foreign trade policies affecting steel imports or exports;



•

Changes in the availability and costs of steel scrap, steel scrap substitute materials, steel slab and billets and other raw materials or supplies used by us, as well as the availability and cost of electricity and other utilities;



•

Unplanned equipment failures and plant outages;



•

Actions by our domestic and foreign competitors;



•

Excess production capacity at our facilities or within the steel industry;



•

Costs of environmental compliance and the impact of governmental regulations;



•

Changes in our relationship with our workforce;



•

Our substantial indebtedness, debt service requirements and liquidity constraints;



•

Risks related to the notes (including the value of the collateral) and to high-yield securities generally;



•

Our highly leveraged capital structure and the effect of restrictive covenants in our debt instruments on our operating and financial flexibility;



•

Changes in our business strategies or development plans, and any difficulty or inability to successfully consummate or implement as planned any projects;



•

Availability of additional capital to support capital improvements and developments;



•

Risks related to pending environmental matters, including the risk that costs associated with such matters may exceed our expectations or available insurance coverage, if any, and the risk that we may not be able to resolve any matter as expected;



•

Risks related to the outcome of the pending union dispute;



•

The effect of other existing and possible future litigation filed by or against us; and



•

Other factors disclosed under "Risk Factors" in this prospectus and that may be disclosed from time to time in our SEC filings or otherwise.

        All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. We caution you that any forward-looking statement reflects only our belief at the time the statement is made. We undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which the statement is made.

INDUSTRY AND MARKET DATA

        In this prospectus we rely on and refer to information and statistics regarding our markets. We obtained such information and statistics from various sources, including discussions with our customers and our own internal estimates. We believe these sources and estimates are reliable, but we have not independently verified such information and statistics and cannot guarantee the accuracy or completeness of such information and statistics.

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WHERE YOU CAN FIND ADDITIONAL INFORMATION

        We file annual, quarterly and other reports, proxy statements and other information with the Securities and Exchange Commission. Our SEC filings are available over the Internet at the SEC's web site at http://www.sec.gov. You may also read and copy any document we file with the SEC at its public reference facility:

Public Reference Room Office
450 Fifth Street, N.W.
Room 1024
Washington, D.C. 20549

        You may also obtain copies of the documents at prescribed rates by writing to the Public Reference Section of the SEC at 450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549. Please call 1-800-732-0330 for further information on the operations of the public reference facilities. Our SEC filings are also available at the offices of the New York Stock Exchange, 20 Broad Street, New York, New York 10005.

This prospectus incorporates documents by reference which are not presented herein or delivered herewith. These documents are available upon request from Oregon Steel Mills, Inc., 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205, Attention: Vice President, Corporate Affairs (telephone number (503) 240-5787). To ensure timely delivery of the documents, any request should be made no later than            , 2002, which is five business days before the expiration of the Exchange Offer.

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SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that may be important to you. We urge you to read carefully this entire prospectus and all of the information incorporated by reference into this prospectus, including the "Risk Factors" section and our consolidated financial statements and related notes. In this prospectus (i) except with respect to the notes and unless the context requires otherwise, "Oregon Steel," the "Company," "we," "our" and "us" refer to Oregon Steel Mills, Inc. and its subsidiaries and (ii) EBITDA is defined as the sum of consolidated net income (loss), consolidated depreciation and amortization expenses, consolidated interest expense and consolidated income tax expense or benefit.

GENERAL

        On July 15, 2002, we issued an aggregate principal amount of $305 million of 10% first mortgage notes due 2009 in an offering exempt from registration under the Securities Act. We refer to the notes issued in July 2002 as the "original notes." The term "exchange notes" refers to the 10% first mortgage notes due 2009 newly offered under this prospectus. The original notes and the exchange notes are collectively referred to as the "notes."

        In connection with the private offering of the original notes, we entered into a registration rights agreement. Under the registration rights agreement, we are obligated, among other things, to deliver to you this prospectus and complete the exchange offer. This exchange offer allows you to exchange your original notes for newly registered exchange notes with substantially similar terms. If the exchange offer is not completed as contemplated in the registration rights agreement, we will be required to pay liquidated damages pursuant to the terms of the registration rights agreement. You should read the registration rights agreement in its entirety for more information. Refer to the section in this prospectus entitled "Where You Can Find More Information" for information on how to obtain a copy of the registration rights agreement.

THE COMPANY

        Oregon Steel Mills, Inc. ("Oregon Steel" or the "Company") manufactures and markets one of the broadest lines of specialty and commodity steel products of any domestic minimill company. The Company's specialty products include large diameter pipe, electric resistance welded ("ERW") pipe, seamless pipe, deep-head hardened ("DHH") rail, specialty plate, including coiled plate, and specialty rod. The Company also produces commodity plate, including coiled plate, rail, rod, bar and semifinished blooms and billets. The Company targets a diverse customer base located primarily west of the Mississippi River and in western Canada. The Company's primary customers include energy transmission companies, major U.S. railroads, steel service centers, and heavy equipment manufacturers.

        Oregon Steel operates two steel minimills and seven finishing facilities in the western United States and Canada. The Company is organized into two business units known as the Oregon Steel Division and the Rocky Mountain Steel Mills ("RMSM") Division. The Oregon Steel Division is centered on the Company's steel plate minimill in Portland, Oregon (the "Portland Mill"). The Portland Mill is the only hot-rolled steel plate and coil minimill in the eleven western states. The Oregon Steel Division's facility in Napa, California (the "Napa Pipe Mill") is a large diameter steel pipe mill and fabrication facility. The Oregon Steel Division also produces large diameter pipe and ERW pipe at its 60-percent owned pipe mill in Camrose, Alberta, Canada (the "Camrose Pipe Mill"). The annual production capacities of the Portland Mill, Napa Pipe Mill and Camrose Pipe Mill are 1.2 million, 400,000, and 320,000 tons, respectively. The RMSM Division consists of steelmaking and finishing facilities of CF&I Steel, L.P. ("CF&I") located in Pueblo, Colorado (the "Pueblo Mill"). The

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Pueblo Mill is a minimill which supplies steel for the Company's rail, rod and bar, and seamless tubular finishing mills. The annual production capacity of the Pueblo Mill is 1.2 million tons.

        The Company was founded in 1926 by William G. Gilmore and was incorporated in California in 1928. The Company was reincorporated in Delaware in 1974. Its executive offices are located at 1000 SW Broadway, Suite 2200, Portland, Oregon 97205, and its telephone number is (503) 223-9228.

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SUMMARY OF THE EXCHANGE OFFER

        The following summary is provided solely for your convenience. This summary is not intended to be complete. You should read the full text and more specific details contained in "The Exchange Offer" section of this prospectus. For a more detailed description of the exchange notes, see "Description of Notes."

        On July 15, 2002, we completed the private offering of the original notes. In this exchange offer, we are offering to exchange, for the original notes, exchange notes that are identical in all material respects to the original notes, except that the exchange notes have been registered under the Securities Act.

        Any original notes that you do not tender or we do not accept will, following the exchange offer, continue to be restricted securities. Therefore, you may transfer or resell them only in a transaction registered under or exempt from the Securities Act and applicable state securities laws. We will issue the exchange notes in exchange for the original notes under the exchange offer only following the satisfaction of the procedures and conditions described in "The Exchange Offer."

        Because we anticipate that most holders of the original notes will elect to exchange their original notes, we expect that the liquidity of the markets, if any, for any original notes remaining after the completion of the exchange offer will be substantially limited. Any original notes tendered and exchanged in the exchange offer will reduce the aggregate principal amount outstanding of the original notes.

Registration Rights Agreement	We sold the original notes on July 15, 2002 to the initial purchaser—Goldman, Sachs & Co. The original notes were issued pursuant to an indenture dated as of July 15, 2002. In connection with the sale of the original notes, we entered into a registration rights agreement that provides for the exchange offer.
	In the registration rights agreement we agreed to file a registration statement for the exchange offer within 60 days of the issue date for the original notes and to use our reasonable best efforts to cause the registration statement to become effective as soon as practicable, but no later than 180 days after the issue date for the original notes, and complete the exchange offer within 45 days of the date the registration statement is declared effective.
	We will pay liquidated damages on the original notes if we do not file the required registration statement on time, or if the Securities and Exchange Commission, or SEC, does not declare the required registration statement effective on time, or we do not complete the exchange offer on or prior to 45 days of the date the registration statement is declared effective.
	The exchange offer satisfies your rights under the registration rights agreement. After the exchange is over, you will not be entitled to any exchange or, with limited exceptions, registration rights with respect to your original notes.
The Exchange Offer	We are offering to exchange up to $305,000,000 aggregate principal amount of our 10% first mortgage notes due 2009 for up to $305,000,000 aggregate principal amount of our 10% first mortgage exchange notes due 2009.

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Purpose and Effect	The purpose of the exchange offer is to give you the opportunity to exchange your original notes for exchange notes that have been registered under the Securities Act.
Resale	We believe that the exchange notes may be offered for resale, resold and otherwise transferred by you (unless you are our "affiliate" within the meaning of Rule 405 under the Securities Act) without compliance with the registration or prospectus delivery provisions of the Securities Act if:
	•	you are acquiring the exchange notes in the ordinary course of your business; and
	•	you are not participating, do not intend to participate, and have no arrangement or understanding with any person to participate, in a distribution of the exchange notes.
	Each participating broker-dealer that receives exchange notes for its own account under the exchange offer in exchange for original notes that were acquired by the broker-dealer as a result of market-making or other trading activity must acknowledge that it will deliver a prospectus in connection with any resale of the exchange notes. See "Plan of Distribution."
	Any holder of original notes who:
	•	is our affiliate;
	•	does not acquire exchange notes in the ordinary course of its business; or
	•	exchanges original notes in the exchange offer with the intention to participate, or for the purpose of participating, in a distribution of exchange notes
	must, in the absence of an exemption, comply with the registration and prospectus delivery requirements of the Securities Act in connection with the resale of the exchange notes.
Record Date	There will be no fixed record date for determining registered holders of original notes entitled to participate in the exchange offer.
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on , 2002, unless we decide to extend the expiration date. We do not currently intend to extend the expiration of the exchange offer.
Withdrawal Rights	You may withdraw the tender of your original notes at any time before the expiration date of the exchange offer.

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Conditions to the Exchange Offer	The exchange offer is subject to customary conditions, which we may waive. Please refer to the section in this prospectus entitled "The Exchange Offer—Conditions to the Exchange Offer."
Procedures for Tendering Original Notes	If you wish to tender your original notes for exchange in this exchange offer, you must transmit to the exchange agent on or before the expiration date either:
	•	an original or a facsimile of a properly completed and duly executed letter of transmittal, which accompanies this prospectus, together with your original notes and any other documentation required by the letter of transmittal, at the address provided on the cover page of the letter of transmittal; or
	•	if the original notes you own are held of record by The Depositary Trust Company, or DTC, in book-entry form and you are making delivery by book-entry transfer, a computer-generated message transmitted by means of the Automated Tender Offer Program System of DTC, or ATOP, in which you acknowledge and agree to be bound by the terms of the letter of transmittal and which, when received by the exchange agent, forms a part of a confirmation of book-entry transfer. As part of the book-entry transfer, DTC will facilitate the exchange of your original notes and update your account to reflect the issuance of the exchange notes to you. ATOP allows you to electronically transmit your acceptance of the exchange offer to DTC instead of physically completing and delivering a letter of transmittal to the exchange agent.
	In addition, you must deliver to the exchange agent on or before the expiration date:
	•	if you are effecting delivery by book-entry transfer, a timely confirmation of book-entry transfer of your original notes into the account of the exchange agent at DTC; or
	•	if necessary, the documents required for compliance with the guaranteed delivery procedures.
Special Procedures for Beneficial Owners	If you are the beneficial owner of book-entry interests and your name does not appear on a security position listing of DTC as the holder of the book-entry interests, or if you hold original notes registered in the name of a broker, dealer, commercial bank, trust company or other nominee, you should contact the person in whose name your book-entry interests or original notes are registered promptly if you wish to tender original notes. Please refer to the section in this prospectus entitled, "The Exchange Offer—Procedures for Tendering Original Notes."

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Guaranteed Delivery Procedures	If you wish to tender your original notes and you cannot complete the procedure for book-entry transfer on time, you may tender your original notes according to the guaranteed delivery procedures described in this prospectus under the heading "The Exchange Offer—Procedures for Tendering Original Notes."
Effect on Holders of Original Notes	If you are a holder of original notes and you do not tender your original notes in the exchange offer, you will continue to hold your original notes and will be entitled to all the rights and subject to all the limitations applicable to the original notes in the indenture.
	The trading market for original notes could be adversely affected if some but not all of the original notes are tendered and accepted in the exchange offer.
Consequences of Failure to Exchange Your Original Notes	All untendered original notes will remain subject to the restrictions on transfer provided for in the original notes and in the indenture. Generally, the original notes that are not exchanged for exchange notes pursuant to the exchange offer will remain restricted securities and may not be offered or sold, unless registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. Other than in connection with the exchange offer, we do not currently anticipate that we will register the original notes under the Securities Act.
	Because we anticipate that most holders of the original notes will elect to exchange their original notes, we expect that the liquidity of the markets, if any, for any original notes remaining after the completion of the exchange offer will be substantially limited.
Use of Proceeds; Expenses	We will not receive any cash proceeds from the exchange offer. We will pay all of our expenses related to the exchange offer.
Federal Income Tax Consequences	The exchange of the original notes for exchange notes will not be a taxable event to you for U.S. federal income tax purposes. Please refer to the section in this prospectus entitled "Certain U.S. Federal Tax Considerations."
Exchange Agent	U.S. Bank National Association is serving as exchange agent in the exchange offer. Please refer to the section in this prospectus entitled "The Exchange Offer—Exchange Agent." You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery, as well as deliver all executed letters of transmittal and any other required documents, to the exchange agent at the addresses listed below:

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By Mail U.S. Bank National Association 180 E. Fifth Street St. Paul, MN 55101	By Overnight Carrier U.S. Bank National Association 180 E. Fifth Street St. Paul, MN 55101	By Hand U.S. Bank National Association 180 E. Fifth Street St. Paul, MN 55101
Attn: Specialized Finance Group 4th Floor	Attn: Specialized Finance Group 4th Floor	Attn: Specialized Finance Group 4th Floor Bond Drop Window
By Facsimile Transmission
(For Eligible Institutions Only) (651) 244-1537
To confirm by Telephone (800) 934-6802

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THE EXCHANGE NOTES

The summary below describes the principal terms of the exchange notes. Certain of the terms and conditions described below are subject to important limitations and exceptions. The "Description of Notes" section of this prospectus contains a more detailed description of the terms and conditions of the exchange notes.

Issuer	Oregon Steel Mills, Inc., a Delaware corporation.
Securities Offered	$305,000,000 aggregate principal amount of 10% First Mortgage Notes due July 15, 2009.
Maturity Date	July 15, 2009.
Interest Payment Dates	January 15 and July 15 of each year, beginning January 15, 2003.
Optional Redemption	We may redeem the notes, in whole or in part, at our option at any time on or after July 15, 2006, at the redemption prices listed in "Description of Notes—Optional Redemption," plus accrued and unpaid interest to the date of redemption.
	In addition, before July 15, 2005, we may, at our option, use the net cash proceeds from one or more public equity offerings to redeem up to 35% of the original aggregate principal amount of the notes at a price equal to 110% of the principal amount thereof, plus accrued and unpaid interest to the date of redemption.
Sinking Fund	None.
Ranking	•	The notes will be our senior secured obligations and, except as described in the following two paragraphs, will be senior in right of payment to all of our and the subsidiary guarantors' existing and future subordinated debt and equal in right of payment with all of our and the subsidiary guarantors' existing and future senior debt.
	•	Because of the security interests in the note collateral described below, the notes will be effectively senior to all of our and the subsidiary guarantors' existing and future indebtedness to the extent of the value of the note collateral.
	•	The notes will be effectively subordinated to all of our and the subsidiary guarantors' indebtedness (including our new credit facility) secured by assets other than the note collateral (to the extent of the value of such assets) and to indebtedness of any of our subsidiaries that is not a guarantor of the notes.
	At June 30, 2002, after giving effect to the sale of the original notes and the application of the net proceeds therefrom as described in "Use of Proceeds" (including the discharge and redemption of all of our outstanding 11% First Mortgage Notes due 2003 and the refinancing of our previous revolving credit facility) as if such transactions had occurred on that date and assuming no borrowings under our new credit facility, we would have had outstanding an aggregate of $311.7 million of consolidated debt (including current portion of $9.9 million). The notes would have been effectively subordinated in right of payment to $0.5 million of indebtedness of our non-guarantor subsidiaries and pari passu (not taking into account the note collateral) with $9.9 million of such indebtedness.

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Guarantees	The notes will be unconditionally guaranteed on a senior secured basis by two of our subsidiaries, CF&I Steel, L.P., a Delaware limited partnership, and New CF&I, Inc., a Delaware corporation. The guarantees, except as described in the following two sentences, will be senior in right of payment to all of the subsidiary guarantors' existing and future subordinated debt and equal in right of payment with all of the subsidiary guarantors' existing and future senior debt. Because of the security interests in the note collateral described below, the guarantees will be effectively senior to all of the subsidiary guarantors' existing and future indebtedness to the extent of the value of the note collateral. The guarantees will be effectively subordinated to all of the subsidiary guarantors' indebtedness (including their obligations under our new credit facility) secured by assets other than the note collateral (to the extent of the value of such assets). In the aggregate, our non-guarantor subsidiaries accounted for approximately 6.8% of our consolidated total assets as of June 30, 2002 and approximately 9.5% and 3.1% of our consolidated EBITDA and consolidated net income, respectively, for the twelve months ended June 30, 2002. See "Description of Notes—Guarantees."
Security	The notes will be secured by a lien on substantially all of the buildings, fixtures and equipment that comprise our mills located in Portland, Oregon and Napa, California, together with the real property on which the buildings are located. The guarantee of CF&I Steel, L.P. will be secured by a lien on substantially all of the buildings, fixtures and equipment which comprise the mill located in Pueblo, Colorado, together with the real property on which the buildings are located. We and our subsidiary guarantors are required to grant a first priority lien on such property and assets to secure our obligations under the notes and the obligations of our subsidiary guarantors under the guarantees, respectively. The collateral for the notes and the guarantees does not include any partnership interests in CF&I Steel, L.P. or Camrose Pipe Company or any capital stock in New CF&I. New CF&I will not pledge any collateral for its guarantee. See "Description of Notes—Security."
Change of Control	If we experience a change of control, we must offer to repurchase all of the Notes at a price of 101% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase. See "Description of Notes—Repurchase at the Option of Holders—Change of Control."

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Asset Sale Offer	If we sell assets, we may have to use the proceeds to offer to purchase some of the notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest to the date of repurchase.
Certain Covenants	The indenture governing the notes contains covenants that, among other things, will limit our ability and the ability of any of the subsidiary guarantors to, among other things:
	•	pay dividends, redeem stock or make other distributions or restricted payments;
	•	incur indebtedness or issue preferred shares;
	•	make certain investments;
	•	create liens;
	•	enter into sale and leaseback transactions;
	•	agree to payment restrictions affecting the subsidiary guarantors;
	•	consolidate or merge;
	•	sell or otherwise transfer or dispose of assets, including equity interests of our subsidiaries;
	•	enter into transactions with our affiliates;
	•	designate our subsidiaries as unrestricted subsidiaries; and
	•	use the proceeds of permitted sales of our assets.
	These covenants will be subject to important exceptions and qualifications, which are described under "Description of Notes—Certain Covenants."
Trustee	The trustee under the indenture governing the rates is U.S. Bank, National Association.
No Public Market	The notes are a new issue of securities and will not be listed on any securities exchange or included in any automated quotation system. The initial purchaser has advised us that it intends to make a market in the notes. The initial purchaser is not obligated, however, to make a market in the notes, and any such market-making may be discontinued by the initial purchaser in its discretion at any time without notice.

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RISK FACTORS

Holders of the original notes should carefully consider the following risk factors, as well as all other information set forth in this prospectus, before tendering their original notes in the Exchange Offer. The risk factors set forth below (other than "Risks Relating to the Exchange Offer") are generally applicable to the original notes as well as the exchange notes.

RISKS RELATING TO THE EXCHANGE OFFER

Because there is no public market for the exchange notes, you may not be able to resell your exchange notes.

        The exchange notes will be registered under the Securities Act, but will constitute a new issue of securities with no established trading market, and there can be no assurance as to:

•

the liquidity of any trading market that may develop;



•

the ability of holders to sell their exchange notes; or



•

the price at which the holders would be able to sell their exchange notes.

        If a trading market were to develop, the exchange notes might trade at higher or lower prices than their principal amount or purchase price, depending on many factors, including prevailing interest rates, the market for similar notes and our financial performance.

        We understand that the initial purchaser presently intends to make a market in the exchange notes. However, the initial purchaser may stop its market-making activities at any time. Any market-making activity will be subject to the limits imposed by the Securities Act and the Securities Exchange Act of 1934, or the Exchange Act, and may be limited during the exchange offer or the pendency of an applicable shelf registration statement. In addition, the liquidity of the trading market in the exchange notes, and the market price quoted for the exchange notes, may be adversely affected by changes in the overall market for high-yield securities and by changes in our financial performance or prospects or in the prospects for companies in our industry generally. As a result, an active trading market may not develop for the exchange notes.

        In addition, any holder of original notes who tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes may be deemed to have received restricted securities, and if so, will be required to comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction. For a description of these requirements, see "Exchange Offer."

Your original notes will not be accepted for exchange if you fail to follow the exchange offer procedures and, as a result, your original notes will continue to be subject to existing transfer restrictions and you may not be able to sell your original notes.

        We will not accept your original notes for exchange if you do not follow the exchange offer procedures. We will issue exchange notes as part of this exchange offer only after a timely receipt of your original notes, a properly completed and duly executed letter of transmittal or computer generated message from DTC and all other required documents. Therefore, if you want to tender your original notes, please allow sufficient time to ensure timely delivery. If we do not receive your original notes, letter of transmittal and other required documents by the expiration date of the exchange offer, we will not accept your original notes for exchange. We are under no duty to give notification of defects or irregularities with respect to the tenders of original notes for exchange. If there are defects or irregularities with respect to your tender of original notes, we intend not to accept your original notes for exchange.

15

If you do not exchange your original notes, your original notes will continue to be subject to the existing transfer restrictions and you may not be able to sell your original notes.

        We did not register the original notes, nor do we intend to do so following the exchange offer. Original notes that are not tendered will therefore continue to be subject to the existing transfer restrictions and may be transferred only in limited circumstances under the securities laws. If you do not exchange your original notes, you will lose your right to have such original notes registered under the federal securities laws. As a result, if you hold original notes after the exchange offer, you may not be able to sell your original notes.

RISKS RELATED TO OUR SUBSTANTIAL DEBT

Our substantial amount of debt could materially and adversely affect our financial health and prevent us from fulfilling our obligations under the notes and our other outstanding debt.

        After giving effect to the sale of the original notes and the application of the net proceeds therefrom as described in "Use of Proceeds" (including the discharge and redemption of all of the outstanding 11% First Mortgage Notes due 2003 and the refinancing of our previous revolving credit facility) and assuming no borrowings under our new credit facility, as of June 30, 2002, we would have had $311.7 million of total debt (including current portion of $9.9 million), $851.2 million of total assets and $304.3 million of total stockholders' equity, and our total debt as a percentage of total capitalization would have been approximately 48.7%.

        This debt, the subsidiary guarantees and the related security interests in our assets and the assets of the subsidiary guarantors could have material adverse consequences for you and for us, including but not limited to:

•

making it more difficult for us to satisfy our obligations with respect to the notes and our other outstanding debt;



•

increasing our vulnerability to adverse economic and industry conditions or a downturn in our business;



•

limiting our ability to obtain additional financing;



•

requiring a substantial portion of our cash flow from operations to be used for debt payments and reducing our ability to use cash flow to fund working capital, capital expenditures, development projects, acquisitions and other general corporate purposes;



•

limiting our flexibility in planning for, or reacting to, changes in our business and our industry; and



•

placing us at a disadvantage to competitors with less debt or greater resources.

        If we are unable to satisfy our obligations under the notes or our other debt, it could result in all of the notes and our other debt becoming immediately due and payable and could permit our lenders to foreclose on our assets securing the debt.

        Subject to the terms of the notes and our other debt, we may be able to incur additional debt in the future. If we incur additional debt, the related risks that we now face could increase.

We may not be able to generate sufficient cash flow to service our debt.

        We may not be able to generate sufficient cash flow to service our debt, to repay the notes or our other debt when due or to meet unanticipated capital needs or shortfalls in our projections. We plan to service interest payments on our debt with cash from operations. Our cash from operations, however, may not be sufficient to repay the principal of the notes or our other debt when due. After giving

16

effect to the sale of the original notes and the application of the net proceeds therefrom as described in "Use of Proceeds" (including the discharge and redemption of all of the outstanding 11% First Mortgage Notes due 2003 and the refinancing of our previous revolving credit facility) and assuming no borrowings under our new credit facility, for the twelve months ended June 30, 2002, our ratio of total debt to EBITDA would have been approximately 3.2x, our ratio of EBITDA to interest expense would have been approximately 2.5x and our ratio of earnings to fixed charges would have been approximately 1.3x.

        Our ability to generate sufficient cash flow to satisfy our obligations will depend on our future performance, which is subject to many economic, political, competitive, regulatory and other factors that are beyond our control. In addition, we face potential costs and liabilities associated with environmental compliance and remediation issues and the labor dispute at the Pueblo Mill. Please refer to the risk factors on pages 28 through 32 under "Risks Related to Our Business" for a description of risks related to those matters. If cash from operations is not sufficient to satisfy our obligations, we may need to seek additional financing in the debt or equity markets, refinance the notes and our other debt, sell selected assets or reduce or delay planned activities and capital expenditures. Any such financing, refinancing or sale of assets might not be available on economically favorable terms, if at all. If we cannot meet our debt service requirements an event of default would occur under the indenture and our other debt instruments. This could result in all of the notes and our other debt becoming immediately due and payable and could permit our lenders to foreclose on our assets securing the debt.

RISKS RELATED TO THE NOTES

The fair market value of the collateral securing the notes may not be sufficient to pay the amounts owed under the notes. As a result, you may not receive full payment on your notes following an event of default.

        The proceeds of any sale of collateral following an event of default with respect to the notes may not be sufficient to satisfy, or may be substantially less than, amounts due on the notes. No appraisal of any of the collateral has been prepared in connection with this offering. The consolidated book value (net of depreciation) of the real property and existing machinery and equipment at the Portland, Pueblo and Napa facilities as of June 30, 2002 was approximately $521.3 million.

        The value of the collateral in the event of a liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. The collateral does not include contracts, agreements, licenses (including software licenses) and other rights that by their express terms prohibit the assignment thereof or the grant of a security interest therein. Some of these may be material to us or to the subsidiary guarantors or may be necessary to operate our steel making, finishing or other production facilities, and such exclusion could have a material adverse effect on the value of the collateral. By its nature, some or all of the collateral will be illiquid and may have no readily ascertainable market value.

        The collateral may not be saleable or, if saleable, there may be substantial delays in its liquidation. To the extent that liens, rights and easements granted to other parties encumber assets located on property owned by us or any subsidiary guarantor, those parties have or may exercise rights and remedies with respect to the property subject to their liens that could adversely affect the value of the collateral located at the site and the ability of the trustee under the indenture or the holders of the notes to realize or foreclose on collateral at the site.

        In addition, under the intercreditor agreement between the trustee and the agent for the lenders under the new credit facility, if action has been taken to enforce the rights of holders of the notes with respect to the collateral and the trustee has obtained possession and control of the collateral, the lenders' agent may enter upon our property or the property of any of the subsidiary guarantors for a period of up to 120 days in order to collect accounts receivable and remove, sell or otherwise dispose

17

of collateral securing the new credit facility and may also store collateral securing the new credit facility on our property or any property of the subsidiary guarantors for such period. This right of the lenders' agent to enter the property could delay liquidation of the collateral securing the notes.

        If the proceeds of any sale of collateral are not sufficient to repay all amounts due on the notes, the holders of the notes (to the extent not repaid from the proceeds of the sale of the collateral), as discussed below, would have only an unsecured claim against our and our subsidiary guarantors' remaining assets.

State law may limit the ability of the trustee and the noteholders to foreclose on the collateral securing the notes.

        The notes and the guarantees are secured by, among other things, liens on real property and improvements located in California, Oregon and Colorado. The laws of California, Oregon and Colorado may limit the ability of the trustee and the noteholders to foreclose on the real property collateral located in those states. The notes, because they will be secured in part by liens on certain real property (including improvements) at the Napa Pipe Mill, which is located in California, may be subject to California's "one form of action rule" and "anti-deficiency laws," among other California laws applicable to real property collateral. Section 726 of the California Code of Civil Procedure provides that "[t]here can be but one form of action for the recovery of any debt or the enforcement of any right secured by mortgage upon real property." Under judicial decisions construing that statute, a creditor whose claim is secured by a mortgage or deed of trust (i) must first exhaust all of its real property collateral in California if it wishes to preserve a claim against the debtor for a deficiency and (ii) may be required to realize upon its real property collateral before it may exercise other remedies. If the secured creditor obtains a personal judgment on the debt before exhausting its real property collateral in California, the secured creditor may lose its lien on the real property collateral located in California. Similarly, if the secured creditor employs another form of action in an attempt to realize upon assets of the debtor, such as exercising a right of set-off against funds of the debtor that are on deposit with the secured creditor, the secured creditor may lose both its lien on the real property located in California and its right to obtain a judgment for the portion of the obligation remaining unpaid after such action.

        Section 580d of the California Code of Civil Procedure provides that "[n]o judgment shall be rendered for any deficiency upon a note secured by a deed of trust or mortgage upon real property . . . in any case in which the real property . . . has been sold by the mortgagee or trustee under power of sale contained in the mortgage or deed of trust." Accordingly, if a secured creditor wishes to preserve its claim against the debtor for any deficiency, it may be required to first proceed by judicial foreclosure (rather than a non-judicial foreclosure sale) against the real property collateral located in California. Judicial foreclosure can take considerably longer than a non-judicial foreclosure sale. Under Section 726 of the California Code of Civil Procedure, the amount of any deficiency will, in general, be based upon the amount of secured debt less an amount equal to the court's determination of the fair value of the real property collateral (and not the amount realized upon the sale of that collateral in the foreclosure proceeding) unless the amount realized in such foreclosure proceeding is greater than such fair value.

        Under Oregon law a creditor holding a trust deed on real property (such as the trust deed which we will grant on certain real property and improvements at the Portland Mill to secure the notes) may enforce the lien of the trust deed through a judicial foreclosure or a non-judicial sale. Oregon law provides, however, that if the creditor proceeds by non-judicial sale, the creditor may not thereafter enforce any unpaid portion of the debt as a personal liability of the debtor, although the creditor would be entitled to proceed against any guarantor of such indebtedness or any other collateral pledged as security for the debt. Accordingly, any election by the trustee to proceed by non-judicial sale of real property collateral located in Oregon (such as the real property and improvements at the Portland

18

Mill) could preclude recourse by the trustee or the holders of the notes against us as unsecured creditors or otherwise. Judicial foreclosure can take considerably longer than a non-judicial sale.

        The applicability of the foregoing provisions of California or Oregon law to real property located in other states is uncertain. A California court could take the position that legal proceedings brought against us or a subsidiary guarantor in Oregon, Colorado or another state could violate the one form of action rule and anti-deficiency laws of California, with the consequences described above. Similarly, an Oregon court could take the position that a non-judicial sale of real property owned by us or a subsidiary guarantor in California, Colorado or another state could preclude the trustee or the holders of the notes from proceeding against us or a subsidiary guarantor for any deficiency as an unsecured creditor. In the event that a California or Oregon court were to take either of these positions, it could have a material adverse effect on the ability of holders to collect amounts due under the notes following an event of default under the indenture.

        Under Colorado law, a deed of trust to a public trustee covering real property (including improvements) located in Colorado (such as the deed of trust which CF&I will grant on certain property and improvements at the Pueblo Mill to secure its guarantee) may be foreclosed through a sale by the public trustee only if it secures an "evidence of debt." We do not believe that there has been any definitive judicial interpretation of what constitutes an "evidence of debt" under the applicable Colorado statute and, as a result, CF&I's guarantee may not be found to constitute such an "evidence of debt" and the deed of trust on the real property, buildings, improvements and fixtures at the Pueblo Mill may not be able to be foreclosed through a sale by a public trustee following an event of default under the indenture. If such deed of trust cannot be foreclosed through sale by a public trustee, foreclosure must be made through a judicial foreclosure, which can take considerably longer than the sale by a public trustee. To seek to address the foregoing concerns, CF&I has delivered to the trustee a promissory note evidencing its obligations under its guarantee; however, the promissory note may not be found to constitute an "evidence of debt" within the meaning of the applicable Colorado statute.

        In addition, under Colorado law, in order to foreclose a deed of trust to a public trustee which secures an "evidence of debt," the holder of the debt secured thereby must file with the public trustee, among other things, the original "evidence of debt." As a result, if the notes (rather than, or in addition to, the CF&I promissory note) are deemed to constitute the "evidence of debt," the statute would require holders of the notes to deliver the original notes (or a corporate surety bond in lieu thereof) in order to foreclose the deed of trust granted by CF&I on the real property and improvements at the Pueblo Mill. To seek to address the foregoing concern, the notes will initially be represented by one or more global notes which the trustee could present to the public trustee in connection with a foreclosure of the deed of trust.

        The noteholders and the trustee also may be limited in their ability to enforce a breach of the "no liens" covenant. Some decisions of the California and Oregon state courts have placed limits on a lender's ability to accelerate debt as a result of a breach of this type of covenant. Under these decisions, a lender seeking to accelerate debt secured by real property upon a breach of covenants prohibiting the creation of certain junior liens or leasehold estates may need to demonstrate that enforcement is reasonably necessary to protect against impairment of the lender's security or to protect against an increased risk of default. Although the foregoing court decisions may have been preempted, at least in part, by certain federal laws, the scope of such preemption, if any, is uncertain. Accordingly, a California or Oregon court could prevent the trustee and the holders of notes from declaring a default and accelerating the notes by reason of a breach of this covenant, which could have a material adverse effect on the ability of holders to enforce the covenant.

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Not all of our assets are pledged as collateral for the notes and not all of our subsidiaries are guarantors; therefore, if the notes are undersecured, your right to receive payments on the notes will be effectively subordinated to some of our and our subsidiaries' other liabilities, including our new credit facility, to the extent of the collateral securing these other liabilities.

        The notes and the related guarantees are secured by substantially all of the buildings, fixtures and equipment that comprise the Portland Mill, the Pueblo Mill and the Napa Pipe Mill, together with the real property on which the buildings are located. The collateral securing the notes and the guarantees, however, do not include, among other things, the following (the "excluded assets"):

•

inventory and accounts receivable and related books and records;



•

any partnership interests in CF&I or Camrose Pipe Company ("Camrose") or any capital stock of (or other equity interests in) New CF&I, Inc. ("New CF&I") or any of our other subsidiaries;



•

any intercompany debt;



•

the approximately 7,900 acres of real property outside the Pueblo Mill that are unrelated to the operation of the mill and any contracts of sale or lease for any of this property;



•

the approximately 67 acres of real property in Camrose, Alberta, on which the Camrose Pipe Mill is located, together with all buildings, improvements and fixtures thereon, and all related leases, rents and other rights;



•

motor vehicles and mobile equipment owned by us and our subsidiaries;



•

intellectual property and other intangibles unrelated to production property, plant and equipment, its operation or the production and manufacturing process; and



•

rights under contracts, agreements, licenses and other instruments that by their express terms prohibit the assignment thereof or the grant of a security interest therein.

        The notes and the guarantees are effectively subordinated to all of our other existing and future liabilities to the extent that any of these excluded assets are collateral for those other liabilities. Each guarantee likewise will be effectively subordinated to all other existing and future liabilities of the respective subsidiary guarantors to the extent that any excluded assets are collateral for those other liabilities. In particular, the notes and the guarantees are effectively subordinated to $75 million principal amount of debt under our new credit facility to the extent of the collateral securing that debt. This collateral includes accounts receivable and inventory and related books and records owned by us, New CF&I and CF&I, intercompany debt and the capital stock of or other equity interests in our subsidiaries. Borrowings under our new credit facility may in the future be secured by similar collateral owned by our other subsidiaries and the amounts borrowed may be increased from time to time. In addition, the indenture permits us and the subsidiary guarantors to create liens on other assets, including liens securing purchase money debt, and the notes and the guarantees also would be effectively subordinated to that purchase money debt and other obligations secured by such permitted liens. As a result, upon any distribution to our creditors or the creditors of any subsidiary guarantors in bankruptcy, liquidation, reorganization or similar proceedings, or following acceleration of our debt or an event of default under that debt, the lenders under our new credit facility, our purchase money debt and any of our or our subsidiary guarantors' other secured debt will be entitled to be repaid in full from the proceeds of the assets securing such debt before any payment is made to you from such proceeds, and you would share pari passu with such creditors in any remaining proceeds.

        Some of our subsidiaries, including Camrose, did not guarantee the notes or pledge any collateral to secure the notes or the guarantees. The notes and the guarantees are effectively subordinated to all existing and future liabilities of these non-guarantor subsidiaries. As a result, upon any distribution to the creditors of any non-guarantor subsidiary in bankruptcy, liquidation, reorganization or similar

20

proceedings, or following acceleration of our debt or an event of default under that debt, those creditors would be entitled to be repaid in full before any payment is made to you, and you would share pari passu with our other creditors in any remaining proceeds.

        In the aggregate, our non-guarantor subsidiaries accounted for approximately 6.8% of our consolidated total assets as of June 30, 2002 and approximately 9.5% and 3.1% of our consolidated EBITDA and consolidated net income, respectively, for the twelve months ended June 30, 2002. After giving effect to the sale of the original notes and the application of the net proceeds as described in "Use of Proceeds" (including the discharge and redemption of all of the outstanding 11% First Mortgage Notes due 2003 and the refinancing of our previous revolving credit facility) and assuming no borrowings under our new credit facility, as of June 30, 2002, our non-guarantor subsidiaries would have had an aggregate of $0.5 million of total long-term debt (none of which would be classified as short-term) and $26.1 million of other liabilities. This total long-term debt represents US$0.5 million of borrowings by Camrose under the Can$15 million Camrose credit facility which is secured by Camrose's assets. Furthermore, New CF&I is a holding company whose only material assets consist of the general partnership interest in CF&I and the capital stock of Colorado and Wyoming Railway Company, a subsidiary, none of which will be pledged as collateral for its guarantee. As a result, the guarantee of New CF&I will initially not be secured by any assets and will only be secured if and to the extent that New CF&I acquires any assets (other than excluded assets) in the future.

        The notes and the guarantees will rank pari passu in right of payment with all other existing and future senior debt of the Company and the subsidiary guarantors, including borrowings under our new credit facility, with respect to proceeds from assets not constituting collateral for the notes or for such other debt. After giving effect to the sale of the original notes and the application of the net proceeds therefrom as described in "Use of Proceeds" (including the discharge and redemption of all of the outstanding 11% First Mortgage Notes due 2003 and the refinancing of our previous revolving credit facility) and assuming no borrowings under our new credit facility, as of June 30, 2002, we and the subsidiary guarantors would have had, in addition to the notes and our new credit facility and excluding intercompany liabilities, no long-term debt and $194.0 million of other liabilities.

        After providing for all senior claims and all pari passu claims, there may not be sufficient assets available to satisfy our obligations and the obligations of the subsidiary guarantors under the notes and the guarantees. An event of default under or acceleration of our other senior secured debt also may prohibit us and the subsidiary guarantors from paying the notes or the guarantees.

We conduct substantial operations through our subsidiaries, and therefore our ability to make payments on the notes and service our other debt depends on cash flow from our subsidiaries.

        We conduct substantial operations through our subsidiaries, particularly CF&I and Camrose. Consequently, we will depend on distributions or other intercompany transfers of funds from our subsidiaries to make payments on the notes and service our other debt. Distributions and intercompany transfers to us from our subsidiaries will depend on:

•

their earnings;



•

covenants contained in our debt agreements (including our new credit facility and the indenture governing the notes) and the debt agreements of our subsidiaries;



•

covenants contained in other agreements to which we or our subsidiaries are or may become subject;



•

business and tax considerations; and



•

applicable law, including state laws regulating the payment of dividends and distributions.

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        The operating results of our subsidiaries at any given time may not be sufficient to make distributions or other payments to us and any distributions may not be adequate to pay principal and interest and any other amounts on the notes or our other debt when due.

        Our subsidiaries are separate and distinct legal entities and, except for the subsidiary guarantors, have no obligation, contingent or other, to pay any amounts due on the notes or our other debt or to make any funds available to make these payments. In addition, some of our subsidiaries (including CF&I, New CF&I and Camrose) are not wholly owned. As a result, we may owe a fiduciary duty to the holders of minority interests in those subsidiaries and may therefore be unable to exercise unrestricted control of such subsidiaries.

The agreements governing the notes and our other debt impose restrictions on our business.

        The agreement governing our new credit facility and the indenture governing the notes contain covenants imposing financial and operating restrictions on our business. These restrictions may affect our ability to operate our business and may limit our ability to take advantage of potential business opportunities as they arise. These restrictions limit our ability to, among other things:

•

pay dividends, redeem stock or make other distributions or restricted payments;



•

incur indebtedness or issue preferred shares;



•

make certain investments;



•

create liens;



•

enter into sale and leaseback transactions;



•

agree to payment restrictions affecting the subsidiary guarantors;



•

consolidate or merge;



•

sell or otherwise transfer or dispose of assets, including equity interests of our subsidiaries;



•

enter into transactions with our affiliates;



•

designate our subsidiaries as unrestricted subsidiaries; and



•

use the proceeds of permitted sales of our assets.

        Our new credit facility also requires us to meet a number of financial ratios and tests. Our ability to comply with these financial covenants and the restrictions described above may be affected by events beyond our control, including prevailing economic, financial and industry conditions. The breach of any of these covenants or restrictions could result in an event of default under the indenture governing the notes and under our new credit facility. An event of default under our debt agreements would permit some of our lenders to declare all amounts borrowed from them to be due and payable and could permit them to foreclose on our assets securing such debt.

A court could cancel the guarantees of the notes by our subsidiaries under fraudulent transfer law.

        CF&I and New CF&I have guaranteed the notes, and each subsidiary guarantor has granted a security interest in its material assets to secure its guarantee. Although the guarantees provide you with a direct claim against the assets of the subsidiary guarantors, under federal bankruptcy law and comparable provisions of state fraudulent transfer laws, in certain circumstances a court could cancel a guarantee and order the return of any payments made thereunder to the subsidiary guarantor or to a fund for the benefit of its creditors.

        A court might take these actions if it found, among other things, that when the subsidiary guarantor incurred the debt evidenced by its guarantee (i) it received less than reasonably equivalent

22

value or fair consideration for the incurrence of the guarantee and (ii) that any one of the following conditions was satisfied:

•

the subsidiary guarantor was insolvent or rendered insolvent by reason of the incurrence;



•

the subsidiary guarantor was engaged in a business or transaction for which its remaining assets constituted unreasonably small capital; or



•

the subsidiary guarantor intended to incur, or believed (or reasonably should have believed) that it would incur, debts beyond its ability to pay as those debts matured.

        In applying the above factors, a court would likely find that a subsidiary guarantor did not receive fair consideration or reasonably equivalent value for its guarantee, except to the extent that it benefited directly or indirectly from the notes' issuance. The determination of whether a subsidiary guarantor was or was rendered "insolvent" when it entered into its guarantee will vary depending on the law of the jurisdiction being applied. Generally, an entity would be considered insolvent if the sum of its debts (including contingent or unliquidated debts) is greater than all of its property at a fair valuation or if the present fair salable value of its assets is less than the amount that will be required to pay its probable liability on its existing debts, including contingent or unliquidated debts, as they become absolute and matured.

        If a court canceled a subsidiary guarantor's guarantee, you would no longer have a claim against that subsidiary guarantor. Our assets and the assets of the remaining subsidiary guarantor may not be sufficient to pay amounts then due under the notes.

We may be unable to repurchase the notes upon a change of control.

        Upon the occurrence of specific change of control events, we will be required to offer to repurchase your notes at 101% of their principal amount, plus accrued and unpaid interest to the date of repurchase. The lenders under our new credit facility will have a similar right to be repaid upon a change of control. Any of our future debt agreements also may contain a similar provision. Our ability to pay cash to the holders of the notes in connection with a repurchase will be limited by our then existing financial resources. Accordingly, it is possible that we will not have sufficient funds at the time of the change of control to make the required repurchase of notes. The terms of our new credit facility also will limit our ability to purchase your notes until all debt under our new credit facility is paid in full. Any of our future debt agreements may contain similar restrictions. Accordingly, it is possible that restrictions in our new credit facility will not allow these repurchases. If we fail to repurchase any notes submitted in a change of control offer, it would constitute an event of default under the indenture which would, in turn, constitute an event of default under our new credit facility and could constitute an event of default under our other debt, even if the change in control itself would not cause a default.

There is currently no public market for the notes, and an active trading market may not develop for the notes.

        The notes are a new issue of securities and there is no existing market for the notes. An active market may not develop for the notes and any market that may develop may not be liquid. If an active market does not develop, the market price and liquidity of the notes may be adversely affected. Future trading prices of the notes will depend on many factors, including, among other things, prevailing interest rates, our operating results and the market for similar securities. Historically, the market for high-yield debt has been subject to disruptions that have caused substantial fluctuations in the prices of these securities. The market for the notes may be subject to these disruptions, and may be subject to this volatility, either of which could have an adverse effect on the price and liquidity of the notes. The initial purchaser has advised us that it presently intends to make a market in the notes, although it is under no obligation to do so and may discontinue any market-making activities at any time without

23

notice. We do not intend to apply for listing of the notes on any securities exchange or for quotation of the notes in any automated dealer quotation system, but the notes have been designated for trading in The Portal Market. See "Description of Notes—Registration Rights, Exchange Offer".

The trustee and holders of the notes may face potential "owner or operator" environmental liability as a result of a foreclosure on the collateral securing the notes.

        The notes and the guarantee of CF&I are secured by liens on real property. Under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), a secured lender, in certain circumstances, may be held to have an obligation to remediate or may be held liable for the costs of remediating releases or threatened releases of hazardous substances at a mortgaged property. The costs of environmental remediation are often substantial. In general, secured lenders are excluded from CERCLA's definition of "owner or operator," particularly in light of recent amendments to CERCLA specifically setting forth "safe harbor" provisions for lenders and other secured creditors. State laws, in many cases, have followed suit, including California.

        Under the indenture, the trustee may, prior to taking certain actions, request that holders of notes provide an indemnification against its costs, expenses and liabilities. It is possible CERCLA (or analogous) cleanup costs could become a liability of the trustee and cause a loss to any holder of notes that provided an indemnification. In addition, such holders may act directly rather than through the trustee, in specified circumstances, in order to pursue a remedy under the Indenture. If holders of notes exercise that right, they could be deemed to be lenders that are subject to the risks discussed above if they act outside the safe harbor provisions of the statutes.

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RISKS RELATING TO OUR BUSINESS

Until recently, the steel industry had been experiencing weak demand for products, excess capacity and low prices, and if those conditions return we could be required to reduce prices for our products and our profitability could be adversely impacted.

        Recently implemented import protection measures, improving conditions in the manufacturing economy and reduced U.S. steel production capacity have significantly reduced domestic oversupply and excess capacity, and have resulted in increased prices for steel products in the U.S. In recent years, however, the steel industry had faced weakened demand, overcapacity and low prices for products, and these conditions caused a significant number of companies in the steel industry to file for bankruptcy, including some that are substantially larger than Oregon Steel. Excess supply continues to be a problem globally, as worldwide steel production remains high.

        If the domestic steel industry again experiences weak demand and overcapacity, this will further intensify competitive pricing and result in additional pressures on capacity utilization and profit margins. In addition, service centers, which play a significant role in determining steel prices in the spot market, could look to liquidate inventories in the face of weakened demand, thereby causing prices to drop quickly and sharply. Price decreases also could result from the liquidation of inventory by bankrupt steel manufacturers. If the steel industry experiences weak demand and overcapacity in the future, the price of our steel products will likely decrease and our ability to realize our target profit margins will be impaired.

We service cyclical industries and do not generally have long-term contracts with our customers, and therefore any downturn in these industries could reduce our revenue and profitability.

        We sell many products to cyclical industries, such as the rail transportation, construction, capital equipment, oil and gas and durable goods segments. Their demand for our products changes as a result of economic conditions, energy prices or other factors beyond our control. For example, the demand for our rail products is impacted by seasonal demand, as dictated by the major railroads' procurement schedules. Demand for oil country tubular goods, which include both seamless pipe and ERW pipe, can be subject to seasonal factors, particularly for sales to Canadian customers. Overall demand for these goods also is subject to significant fluctuations due to the volatility of the oil and gas prices and North American drilling activities, which have generally declined since June 2001, as well as other factors such as competition from imports.

        We generally do not have long-term contracts with our customers. We do have contracts ranging from one year to three years with the major railroads, but these customers may not take delivery of their projected requirements. In addition, many of our contracts, such as our contract to supply 370,000 tons of large-diameter pipe to Kern River Gas Transmission Co., may be terminated by the customer before delivery of the full contracted amount. Our large diameter pipe contracts, however, generally subject a customer to significant penalties for early termination. Failure of the railroads to take delivery of their full projected requirements or early termination of the Kern River contract could reduce our sales or force us to change to a less profitable product mix, either of which could have a material adverse effect on our business.

        Our product mix and levels of production and sales therefore are subject to fluctuations and curtailments in the demands of our customers for our products. For example, we made the decision to shut down our seamless pipe operation from May 1999 until September 2000 and again from November 2001 until April 2002 because of weakened demand in the oil and gas sector. Changes in our product mix can materially affect our operating results due to variation in selling prices and profit margins of products. For example, we experienced a decline in average selling price and total sales in 2000 compared to 1999 due in part to the shift in product mix from higher priced welded pipe products to lower priced plate and coil products. As a result of the volatility of the industries we serve, we may

25

have difficulty increasing or maintaining our sales and profitability if we are not able to divert sales of our products to customers in other industries when one or more of our customers' industries is experiencing a decline.

We face significant competition in our principal markets, and increased competition could reduce our gross margins and net income.

        The principal markets that we serve are highly competitive. We compete with other steel manufacturers primarily on the basis of product quality, price and responsiveness to customer needs. Many of our competitors are larger and have substantially greater capital resources, more modern technology and lower labor and raw material costs than we do. Consolidation of our competitors and the purchase by our competitors of assets of producers that have exited the industry could further increase the size and resources of these competitors. In addition, competition from foreign producers has had and may in the future have a significant negative impact on our operations, depending upon various factors, including the level of domestic prices, global and regional steel demand, exchange rates and foreign subsidies. Until recently we had been experiencing competition from foreign suppliers of semi-finished and finished products in addition to steel. This competition has been significantly reduced as a result of recently implemented import restrictions, but could reemerge when the import restrictions end. While we are one of two North American manufacturers of rail for the major railroads, foreign suppliers compete with us in the domestic rail market. In addition, one U.S. steel company has announced that it plans to start shipping non-specialty rail in the first quarter of 2003 and another U.S. steel company has expressed an interest publicly in manufacturing rail, either of which will increase competition in the rail market. Increased competition, especially combined with excess production capacity in some products, could force us to lower our prices or to offer increased services at a higher cost to us, which would reduce our gross margins and net income.

Unplanned repairs or equipment outages could interrupt production and reduce income or cash flow.

        Our operations depend upon critical pieces of equipment, such as electric arc furnaces and semifinished casters, that may occasionally be out of service due to routine scheduled maintenance or equipment failures. Any unplanned unavailability of critical equipment would interrupt our production capabilities and reduce our sales and profitability. Although we have not recently experienced any equipment failures that have resulted in the complete shutdown of a major portion of our steelmaking production for a significant period, we have experienced unscheduled equipment outages in the past and we could have material shutdowns in the future.

The inputs used to produce our products are subject to price fluctuations that could increase our costs of production and adversely affect our profitability.

        Our principal raw material for the steel minimills at the Portland and Pueblo Mills is ferrous scrap metal derived from, among other sources, junked automobiles, railroad cars and railroad track materials and demolition scrap from obsolete structures, containers and machines. In addition, direct-reduction iron, hot-briquetted iron and pig iron (collectively "alternate metallics") can substitute for a limited portion of the scrap used in minimill steel production, although the sources and availability of alternate metallics are substantially more limited than those of scrap. The purchase prices for scrap and alternate metallics are affected by cyclical, seasonal and other market factors. Prices also fluctuate on the basis of factors affecting supply, such as demand from domestic and foreign steel producers, periodic shortages, freight costs, speculation by brokers, export markets and other conditions. Most of these factors are beyond our control. The cost of scrap and alternate metallics to us can vary significantly, and our product prices often cannot be adjusted, especially in the short-term, to recover the costs of increases in scrap and alternate metallics prices.

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        In recent years, we purchased material quantities of semi-finished steel slabs on the open market for use in the production of finished plate and coiled plate. These purchases are made on the spot market. While prices on the international slab market have been generally favorable and slab availability has not been restricted, and while we believe the recently announced import restrictions will not materially impact either the supply or cost of steel slabs, the slab market and pricing are subject to significant volatility, and slabs may not be available at reasonable prices in the future. We expect semifinished slab purchases to represent approximately 60% of our production needs for finished plate and coiled plate in 2002.

The western United States experienced a shortage of electricity in late 2000 and early 2001, and any future shortage could disrupt our business and reduce our profitability.

        Steel manufacturing is an energy intensive industry. In the fourth quarter of 2000 and the first quarter of 2001, the western United States experienced repeated episodes of diminished electrical power supply. As a result of these episodes, certain areas were subject to "rolling blackouts" or other unscheduled interruptions of electrical power. In addition, the cost of electrical power increased significantly during this period. Although there have been no recent episodes of diminished electrical power supply and we do not expect any to occur in the foreseeable future, electrical shortages and the related unscheduled interruptions in supply and increased costs may occur nonetheless. Any disruption in supply could reduce our manufacturing levels and consequently our sales and profitability. In addition, a substantial increase in specific utility or service costs could have a material adverse effect on our margins if we are unable to pass along the higher costs to our customers.

Supply limitations, including as a result of trade tariffs or quotas, would constrain our production and could materially and adversely affect our sales and profitability.

        As described above, we purchase material quantities of semifinished steel slabs on the open market for use in the production of finished plate and coiled plate because, following the addition of the Steckel Combination Mill to the Portland Mill in 1998, the production of finished specialty steel plate and coiled plate has exceeded the steel slab production of the Portland Mill. We expect semifinished slab purchases to represent approximately 60% of our production needs for finished steel plate and coiled plate in 2002.

        From time to time the Napa Pipe Mill purchases specialty steel plate from outside suppliers. We expect specialty steel plate purchases from outside parties to represent approximately 8% of the Napa Pipe Mill's production needs in 2002.

        On March 5, 2002, President Bush announced the imposition of restrictions on a wide range of steel imports for three years, including a 30% tariff on steel plate and a 30% tariff on imports of steel slabs in excess of 5.4 million tons in year one. The tariffs on steel plate and slabs decline to 24% in year two and 18% in year three. The tariffs on steel slabs in years two and three are on imports in excess of 5.9 million tons and 6.4 million tons in those years, respectively. Imports from Mexico, a large exporter of slab to the U.S., and Canada and certain developing countries are exempted from these restrictions. While we expect these restrictions will not materially impact either the supply or the cost of steel slabs, this may not be the case.

        In addition, while we expect near-term supplies of scrap and alternative metallics, the raw materials for our minimills, to continue to be available in sufficient quantities, there may be interruption or limitations in supply in the future. A disruption or curtailment in the supply of any of these inputs could constrain our production in general or require us to reallocate resources, thereby constraining our production of more profitable products. These constraints could have a material adverse effect on our production and sales levels and our profitability.

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Our cash flow from operations and available credit may not be sufficient to meet our capital requirements, and as a result we may need additional financing in the future, which may not be available.

        We believe our anticipated cash needs for budgeted capital expenditures and for working capital through the end of 2002 will be met from funds generated by operations. In addition, we closed on a new $75 million revolving credit facility concurrently with the closing of the sale of the original notes. This facility will expire on the third anniversary of its closing date.

        The amounts available from these sources and from proceeds of this offering, borrowings under our new credit facility and existing cash balances, however, may not be sufficient to meet our cash requirements if our results of operations are materially lower than anticipated, if our available borrowings under our new credit facility are less than anticipated or if our cash needs are greater than anticipated. The amount of borrowings which may be outstanding under our new credit facility at any time will be limited to a specified percentage of our eligible accounts receivable and eligible inventory. Moreover, our ability to borrow under our new credit facility will require compliance with its financial and other covenants. In addition, the Company faces potential costs and liabilities associated with environmental compliance and remediation issues and the labor dispute at the Pueblo Mill. Please refer to the risk factors on pages 28 through 32 under "Risks Related to Our Business" for a description of risks related to those matters. As a result, or for other reasons, we may need to enter into new financing arrangements and raise additional capital in the future.

        Any debt that we incur in the future will increase the amount of our outstanding debt, our debt service requirements and the related risks that we face. See "—Risks Related to Our Substantial Debt." We may not be able to obtain the necessary sources of liquidity and financing on satisfactory terms, or at all. If we are unable to secure additional financing or raise additional capital on satisfactory terms, we may not be able to take advantage of future opportunities or respond to demands of customers and competitors.

The resolution of pending environmental actions and our costs of compliance with environmental orders and regulations may materially and adversely affect our competitiveness and profitability

        We are subject to extensive federal, state and local environmental laws and regulations concerning, among other things, wastewater, air emissions, toxic use reduction and hazardous materials storage, handling and disposal. The Portland and Pueblo Mills, like other similar steel mills in the industry, generate hazardous waste from the melting operation of the electric arc furnaces, primarily dust containing heavy metals. We are subject to increasingly stringent environmental standards, including those relating to air emissions, waste water and stormwater discharge and hazardous materials use, storage, handling and disposal, and will likely be required to make additional expenditures, which could be significant, relating to environmental matters on an ongoing basis. Furthermore, although we have established reserves for environmental remediation, the cost of remedial measures that might eventually be required by environmental authorities may exceed those reserves. In addition, additional environmental claims, requiring further remedial expenditures in excess of our reserves, might be asserted by environmental authorities or private parties. We also may be subject to legal proceedings brought by private parties or governmental agencies with respect to environmental matters. Expenditures related to these matters could have a material adverse effect on our business.

        Expenditures or proceedings of the nature described above, or other expenditures or liabilities resulting from hazardous substances located on our property or used or generated in the conduct of our business, or resulting from circumstances, actions, proceedings or claims relating to environmental matters, may have a material adverse effect on us. At June 30, 2002, our financial statements reflected total accrued liabilities of $38.6 million to cover future costs arising from environmental issues relating to our properties. Our actual future expenditures, however, for installation of and improvements to

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environmental control facilities, remediation of environmental conditions existing at our properties and other similar matters cannot be conclusively determined and expenditures in excess of our accrual could have a material adverse effect on our business.

        We own or have owned properties and conduct or have conducted operations at properties which have been assessed as contaminated with hazardous or other controlled substances or as otherwise requiring remedial action under federal, state or local environmental laws or regulations. As a result, we are subject to several actual or potential environmental remediation obligations and potential environmental related liabilities, including the following:

•

We entered a Voluntary Clean-up Agreement with the Oregon Department of Environmental Quality ("DEQ") in May 2000 committing us to conduct a full remedial investigation of, whether and to what extent, past or present operations at the Portland Mill might have affected sediment quality in the Willamette River. Based on preliminary findings, the DEQ has requested that we begin a full remedial investigation, including areas of investigation throughout the Portland Mill, and implement source control as required. We estimate costs of that investigation could range from $732,000 to $1,872,000 over the next two years. Based on the results of the investigation, the DEQ may require us to incur costs associated with additional phases of investigation, remedial action or implementation of source controls. While insurance is covering the costs of the investigation, subject to a standard reservation of rights, any additional actions we are required to take by the DEQ could cause us to incur costs either in excess of available insurance amounts or not covered by insurance, which could have a material adverse effect on our results of operations.



•

We, along with 68 other entities, have been identified by the U.S. Environmental Protection Agency ("EPA") as a potentially responsible party ("PRP") under CERCLA with respect to contamination in a portion of the Willamette River that has been designated as the "Portland Harbor Superfund Site." The letter advised us that we may be liable for costs of remedial investigation and remedial action at the site, which liability, under CERCLA, may be joint and several with other PRPs. The letter also advised us that we may be liable for natural resource damages that may be associated with any releases of contaminants, principally at the Portland Mill site, for which we have liability. While a decision regarding liability is not expected from the EPA for three to five years, a determination that we are a PRP could cause us to incur costs associated with remedial action, natural resource damage and natural resource restoration, which could have a material adverse effect on our results of operations.



•

In connection with the acquisition of the Pueblo Mill our subsidiary, CF&I, accrued a liability of $36.7 million for environmental remediation related to the prior owner's operations. In addition, as part of the postclosure permit requirements for hazardous waste units at the Pueblo Mill, CF&I must conduct a corrective action program for the 82 solid waste management units at the facility and continue to address projects on a prioritized corrective action schedule. At June 30, 2002, the accrued liability was $30.5 million, of which $26.6 million was classified as non-current in the consolidated balance sheet. If the cost of remediation exceeds our accrual, or if regulatory authorities decide to accelerate the corrective action program schedule, our results of operations could be materially and adversely affected.



•

In May 2000, the EPA issued a final determination that one of the two electric arc furnaces at the Pueblo Mill was subject to federal New Source Performance Standards Subpart AA ("NSPS AA"). CF&I has offered, however, to voluntarily exceed the NSPS AA requirements at issue by converting to a new single furnace that will meet NSPS AAA standards, which are stricter than NSPS AA standards. CF&I has reached an agreement in principal with the EPA that will allow for a compliance schedule to accommodate the conversion to the new single furnace. CF&I expects that, to resolve the EPA matter, it will be required to commit to the conversion to the

29

new furnace (to be completed approximately two years after permit approval and expected to cost, with all related emission control improvements, approximately $20.0 million) and to pay approximately $450,000 in penalties and fund certain supplemental environmental projects valued at approximately $1.1 million, including the installation of additional pollution control equipment at the Pueblo Mill. CF&I has already agreed to convert to a single NSPS AAA compliant furnace as part of its settlement of a related matter with the Colorado Department of Public Health and Environment. If CF&I is unable to reach a resolution with the EPA accommodating conversion to a new furnace or if CF&I is required to pay additional penalties or fund additional supplemental environmental projects as part of the resolution, our results of operations and cash flows could be materially and adversely affected.

        We are also subject to environmental claims asserted by private parties, including the following:

•

In April 2000 the United Steel Workers of America (the "Union") filed a "citizen" suit against us and CF&I under the Clean Air Act alleging violations of several air emission limits and standards at the Pueblo Mill and seeking declaratory judgment regarding the applicability of certain emission standards, injunctive relief, civil penalties and attorney's fees. The suit was dismissed in July 2001, but the Union has appealed the dismissal. If the Union prevails on appeal, and we or CF&I is determined to have any liability in any subsequent proceedings, our business could be materially and adversely affected.



•

We are the defendant in a "citizen" lawsuit brought in April 2001 under the Clean Air Act by the Union, along with two other environmental groups, alleging that we violated various air emission limits and conditions of our operating air contaminant discharge permits at the Portland Mill. The suit seeks injunctive relief and an unspecified amount of civil penalties. While we believe we have factual and legal defenses to the allegations and intend to defend the matter vigorously, the outcome of litigation such as this is difficult to predict and an adverse determination could have an adverse effect on our business.



•

We have received a letter from a private party asserting that we may be a potentially responsible party under CERCLA for a site allegedly contaminated in part from a commodity by-product that was sent by us to a prior site owner. We deny any liability because the material was not a waste, but rather was a useful product exempt from liability under CERCLA. In addition, we understand that this by-product material was a very small fraction of the total amount of material processed at the site. We do not have any information on the nature of the contamination, the estimated costs of remediation or how either relates to the material supplied by us and consequently we are unable to assess the likelihood or amount of any potential liability. We cannot assure you, therefore, that this matter will not have a material adverse effect on our business.

Most of the employees of CF&I belong to unions; any labor disruptions, work stoppages or significant negotiated wage increases could have an adverse effect on our business.

        Most of CF&I's employees belong to unions. Accordingly, CF&I negotiates collective bargaining agreements with these unions. Any failure to reach agreement on new labor agreements when required might result in a work stoppage that could, depending upon the operations affected and the length of the work stoppage, have a material adverse effect on our operations. In addition, a contract may be renegotiated with significant increases in wages or other adverse economic terms, which would increase our costs and could reduce our profitability. As more fully explained in the section immediately below, we do not have collective bargaining agreements at the Pueblo Mill due to a labor dispute.

        CF&I is party to a dispute stemming from a strike at the Pueblo Mill and a related job action of certain bargaining unit employees of the Colorado and Wyoming Railway Company. See the following Risk Factor for a discussion of the risks related to this dispute.

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Adverse determination of the dispute relating to the strike by the United Steel Workers of America at the Pueblo Mill and a related job action at the Colorado and Wyoming Railway could have a material adverse effect on our financial condition.

        CF&I is party to a dispute stemming from the 1997 strike by the Union at the Pueblo Mill (the "Pueblo Strike") and the related job action of certain bargaining unit employees of the Colorado and Wyoming Railway Company ("C&W"), a wholly owned subsidiary of New CF&I (the "C&W Action"). The strike occurred in October 1997 after the expiration of the labor contracts between CF&I and the employees at our Pueblo Mill. There are no collective bargaining agreements in place with the employees at the Pueblo Mill, and the parties are operating under the terms of the expired collective bargaining agreements and changes implemented by CF&I after negotiations with the Union. The Union has filed charges with the National Labor Relations Board ("NLRB") challenging CF&I's practice in this regard.

        The Pueblo Strike involved approximately 1,000 bargaining unit employees. On December 30, 1997, the Union called off the Pueblo Strike and made an unconditional offer to return to work. Because CF&I had hired permanent replacement workers to replace the striking union members, CF&I refused to reinstate the strikers. Instead, the striking union members were put on a preferential hiring list to be reinstated to their former jobs as positions became available. As of June 30, 2002, approximately 222 of the formerly striking employees had not been offered reinstatement.

        In February 1998, the Regional Director of the NLRB Denver office issued a complaint against CF&I, alleging violations of several provisions of the National Labor Relations Act. After a hearing on these allegations before an Administrative Law Judge (the "ALJ"), the ALJ ruled in May 2000 that CF&I, among other things, was liable for unfair labor practices and ordered as a remedy the reinstatement of all 1,000 striking employees, effective as of December 30, 1997, with back pay and benefits, plus interest, less interim earnings. CF&I has appealed this decision to the NLRB in Washington, D.C. Either party may appeal the decision of the NLRB to an appropriate federal Circuit Court of Appeals and may also appeal subsequently to the U.S. Supreme Court. Back pay is generally determined by the quarterly earnings of those employees who otherwise would have retained their employment at CF&I less interim wages earned elsewhere by those unreinstated employees. While the final determination of the case could result in back pay being awarded to all striking workers, we believe that such an outcome is improbable. While the amount of damages is difficult to calculate, if the ALJ's determination is upheld throughout the appeals process, the damages that CF&I may be required to pay could have a material adverse effect on our consolidated financial condition results of operations or cash flows. CF&I has not established a reserve for any liability that may result from an adverse determination in this matter. CF&I does not intend to agree to any settlement of this matter that will have a material adverse effect on our business. An ultimate adverse determination against CF&I in this matter, however, may have a material adverse effect on our consolidated financial condition, results of operations, or cash flows. In addition, in connection with this labor dispute, the Union has undertaken certain activities designed to exert public pressure on CF&I. Although such activities have generated some publicity in the news media, CF&I believes that they have had little or no negative impact on its operations, but such activities may have a negative impact in the future.

        During the strike by the Union at the Pueblo Mill, 36 members of several bargaining units who were employed by C&W refused to report to work for an extended period of time, claiming that concerns for their safety prevented them from crossing the picket line. The bargaining unit employees of C&W were not on strike, and because the other C&W employees reported to work without incident, C&W considered those employees to have quit their employment and, accordingly, C&W declined to allow those individuals to return to work. The unions representing those individuals filed claims with C&W asserting that C&W had violated certain provisions of the applicable collective bargaining agreement, the Federal Railroad Safety Act ("FRSA"), or the Railway Labor Act. In all of the claims, the unions demanded reinstatement of the former employees with their seniority intact, back pay and

31

benefits. In January 2001 an arbitration award was rendered against C&W with respect to 30 former employees represented by the United Transportation Board, ordering the reinstatement of those claimants who intend to return to work for C&W at their prior seniority with back pay and benefits, net of interim wages earned elsewhere. In February 2001 C&W filed a petition for review of that arbitration award in the District Court for the District of Colorado, and intends to pursue this matter through the appropriate United States appellate court, if necessary. Given the inability to determine the number of former employees who intend to return to work at C&W and the extent to which mitigating and other factors may impact the liability for back pay and benefits, it is difficult to estimate the liability if there is ultimately an adverse determination against C&W.

        Six of the former C&W employees pursued separate claims against C&W under the terms of a collective bargaining agreement. In March 2001 an award was rendered against C&W, ordering the reinstatement of those claimants who intend to return to work for C&W at their prior seniority with back pay and benefits, net of interim wages earned elsewhere. As of June 30, 2002, two of the six former employees had accepted a settlement from C&W. The remaining four do not agree with the award amount from the Public Labor Board. We do not believe an adverse determination against C&W with regard to the four remaining former employees would have a material adverse effect on our results of operations.

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USE OF PROCEEDS

        We will not receive any proceeds from the issuance of the exchange notes offered pursuant to the Exchange Offer. In consideration for issuing the exchange notes as contemplated in this prospectus, we will receive in exchange original notes in like principal amount, the terms of which are identical in all respects to the exchange notes except for certain transfer restrictions and registration rights. The original notes surrendered in exchange for exchange notes will be retired and canceled and cannot be reissued. Accordingly, issuance of the exchange notes will not result in any increase in our indebtedness.

        The net proceeds that we received from the sale of the original notes on July 15, 2002 were approximately $291.4 million, after deduction of discounts, commissions and offering expenses. We used a portion of the net proceeds to discharge our 11% First Mortgage Notes due 2003 and to redeem those notes on August 15, 2002. We also used a portion of the net proceeds to repay our prior revolving credit facility, which we replaced on July 15, 2002. We will use the remainder of the net proceeds for working capital and other general corporate purposes.

RATIO OF EARNINGS TO FIXED CHARGES

        The following table sets forth our historical consolidated ratio of earnings to fixed charges for the periods indicated.

Years Ended December 31,					Six Months Ended
1997	1998	1999	2000	2001	June 30, 2002
—	1.6x	1.9x	—	—	1.5x

        This ratio is computed by dividing earnings by fixed charges. For the purpose of determining the ratio of earnings to fixed charges, earnings consist of consolidated income (loss) before income taxes plus fixed charges (net of capitalized interest) and minority interest in income of majority-owned subsidiaries. Fixed charges consist of consolidated interest on indebtedness, adding back capitalized interest and amortization of debt issue costs. Fixed charges exceeded earnings by $3,301,000, $30,268,000 and $8,432,000 in the years ended December 31, 1997, 2000 and 2001, respectively.

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SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA

        We present below our selected historical consolidated financial data. We derived the financial data as of the end of and for each of the five years in the period ended December 31, 2001 from the audited consolidated financial statements of the Company as of those dates and for those periods. The selected historical financial data as of the end of and for the six months ended June 30, 2001 and June 30, 2002 have been derived from the unaudited consolidated financial statements of the Company as of those dates and for those periods. The unaudited financial statements have been prepared on a basis consistent with the audited financial statements. All adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the interim consolidated financial statements, have been included. Results for the six months ended June 30, 2001 and June 30, 2002 are not necessarily indicative of results for the fiscal year ending December 31, 2002. You should read the selected historical consolidated financial data together with "Management's Discussion and Analysis of Financial Condition and Results of Operations" in our Annual Report on Form 10-K and Quarterly Report on Form 10-Q and our consolidated financial statements and related notes as of the end of and for such periods.

		Year Ended December 31,															Six Months Ended June 30,
		1997			1998			1999			2000			2001			2001			2002
		(In thousands, except ratios and per share, ton and per ton amounts)
Income Statement Data:
Sales		$	789,380		$	937,400		$	884,649		$	672,017		$	780,887		$	383,914		$	430,385
Cost of sales			702,220			826,606			756,461			619,016			694,941			352,175			374,812
Settlement of litigation			—			(7,037	)		(7,027	)		—			(3,391	)		—			—
Loss (gain) on sale of assets			(2,228	)		(4,746	)		501			(290	)		(10	)		29			(1,069	)
Selling, general and administrative expenses			51,749			56,189			55,992			51,486			64,300			29,113			29,907
Incentive compensation			7,157			2,890			10,540			698			244			44			1,643
	Operating income (loss)		30,482			63,498			68,182			1,107			24,803			2,553			25,092
Interest expense			(10,216	)		(38,485	)		(35,027	)		(34,936	)		(35,595	)		(17,854	)		(16,940	)
Other income (expense), net			4,249			(484	)		1,290			4,355			3,044			562			1,471
Minority interests			(5,898	)		(4,213	)		(1,475	)		(7	)		(339	)		(27	)		(364	)
Income tax benefit (expense)			(6,662	)		(8,387	)		(13,056	)		11,216			2,159			4,704			(4,179	)
Income (loss) before cumulative accounting change																					5,080
Cumulative accounting change																					(17,967	)
	Net income (loss)	$	11,955		$	11,929		$	19,914		$	(18,265	)	$	(5,928	)	$	(10,062	)	$	(12,887	)
	Net income (loss), adjusted(1)	$	12,495		$	12,462		$	20,475		$	(17,707	)	$	(5,370	)	$	(9,772	)	$	(12,887	)
Common Stock Information:
Basic and diluted net income (loss) per share		$	0.45		$	0.45		$	0.76		$	(0.69	)	$	(0.22	)	$	(0.38	)	$	0.19
Basic and diluted net income (loss) per share, adjusted(1)		$	0.48		$	0.47		$	0.78		$	(0.67	)	$	(0.20	)	$	(0.37	)	$	(0.49	)
Weighted average common shares and common equivalents outstanding			26,292			26,368			26,375			26,375			26,378			26,375			26,387

34

Balance Sheet Data (at end of period):
Working capital			$	115,322		$	34,427		$	101,177		$	108,753		$	53,462		$	37,817		$	76,106
Total assets				986,620			993,970			877,254			880,354			869,576			873,500			803,788
Current liabilities				147,496			252,516			101,660			126,748			205,607			210,698			166,513
Long-term debt (excluding current portion)				367,473			270,440			298,329			314,356			233,542			238,956			228,775
Total stockholders' equity				349,007			345,117			352,402			331,645			318,586			321,258			306,778
Other Data:
Depreciation and amortization			$	28,642		$	45,164		$	47,411		$	46,506		$	46,097		$	23,008		$	23,443
Capital expenditures			$	81,670		$	27,754		$	15,908		$	16,684		$	12,933		$	5,736		$	9,884
Total tonnage sold:
	Oregon Steel Division			567,000			808,800			969,800			871,500			829,700			424,800			465,600
	RMSM Division			907,600			861,700			734,900			757,000			780,900			388,000			432,000
		Total tonnage sold		1,474,600			1,670,500			1,704,700			1,628,500			1,610,600			812,800			897,600
Operating margin				3.9	%		6.8	%		7.7	%		0.1	%		3.2	%		0.0	%		5.8	%
Operating income (loss) per ton sold			$	21		$	38		$	40		$	1		$	15		$	3		$	28

(1)

The Company adopted SFAS 142 effective January 1, 2002. Income was adjusted to exclude goodwill amortization, net of tax and minority interest, of $540,000, $533,000, $561,000, $558,000 and $558,000 for the years ended December 31, 1997, 1998, 1999, 2000 and 2001, respectively, and of $290,000 for the six months ended June 30, 2001. See Note 6 to the Consolidated Financial Statements included in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2002.

35

THE EXCHANGE OFFER

General

        We are offering to exchange up to $305,000,000 in aggregate principal amount of exchange notes for the same aggregate principal amount of original notes, properly tendered before the expiration date and not withdrawn. We are making the exchange offer for all of the original notes. Your participation in the exchange offer is voluntary, and you should carefully consider whether to accept this offer.

        On the date of this prospectus, $305,000,000 in aggregate principal amount of original notes are outstanding. Our obligations to accept original notes for exchange pursuant to the exchange offer are limited by the conditions listed below under "—Conditions to the Exchange Offer."

        We currently expect that each of the conditions will be satisfied and that no waivers will be necessary.

Purpose of the Exchange Offer

        We issued and sold $305,000,000 in aggregate principal amount of the original notes on July 15, 2002 in a transaction exempt from the registration requirements of the Securities Act. The initial purchaser of original notes subsequently resold the original notes to qualified institutional buyers in reliance on Rule 144A and to non-U.S. persons under Regulation S under the Securities Act.

        Because the transaction was exempt from registration under the Securities Act, you may reoffer, resell or otherwise transfer the original notes only if registered under the Securities Act or if an applicable exemption from the registration and prospectus delivery requirements of the Securities Act is available.

        In connection with the issuance and sale of the original notes, we entered into the registration rights agreement, which requires us to complete this exchange offer on or before February 25, 2003, which is 45 days after this registration statement on Form S-4 is required to be declared effective pursuant to the agreement, to avoid incurring liquidated damages on the original notes.

        In addition, there are circumstances under which we are required to use our best efforts to file a shelf registration statement with respect to resales of the original notes.

        We are making the exchange offer to satisfy our obligations under the registration rights agreement. Otherwise, we are not required to file any registration statement to register any original notes. Holders of original notes that do not tender their original notes or whose original notes are tendered but not accepted will have to rely on exemptions to registration requirements under the securities laws, including the Securities Act, if they wish to sell their original notes. For a more detailed description of the registration rights agreement, see "Description of Notes—Registration Rights, Exchange Offer." We have filed a copy of the registration rights agreement as an exhibit to the Form S-4 filed with the SEC on August 16, 2002.

Resale of Exchange Notes

        We have not requested, and do not intend to request, an interpretation by the staff of the SEC as to whether the exchange notes issued pursuant to the exchange offer in exchange for the original notes may be offered for sale, resold or otherwise transferred by any holder without compliance with the registration and prospectus delivery provisions of the Securities Act. Instead, based on an interpretation by the staff in a series of no-action letters issued to third parties, we believe that exchange notes issued pursuant to the exchange offer in exchange for original notes may be offered for sale, resold and otherwise transferred by any holder of exchange notes if:

•

the holder is not our affiliate within the meaning of Rule 405 under the Securities Act;

36

•

the exchange notes are acquired in the ordinary course of the holder's business; and



•

the holder does not intend to participate in a distribution of the exchange notes.

        Any holder who exchanges original notes in the exchange offer with the intention of participating in any manner in a distribution of the exchange notes must comply with the registration and prospectus delivery requirements of the Securities Act in connection with a secondary resale transaction and such secondary resale transaction must be covered by an effective registration statement under the Securities Act containing the selling holder's information required by Item 507 or Item 508, as applicable, of Regulation S-K under the Securities Act.

        Because the SEC has not considered our exchange offer in the context of a no-action letter, we cannot assure you that the staff would make a similar determination with respect to the exchange offer. Any holder that is an affiliate of ours or that tenders in the exchange offer for the purpose of participating in a distribution of the exchange notes may be deemed to have received restricted securities and will not be allowed to rely on this interpretation by the staff and must comply with the registration and prospectus delivery requirements of the Securities Act in connection with any resale transaction.

        If you participate in the exchange offer, you must acknowledge, among other things, that you are not participating in, and do not intend to participate in, a distribution of exchange notes. If you are a broker-dealer that receives exchange notes for your own account in exchange for original notes, and you acquired your original notes as a result of your market-making activities or other trading activities, you must acknowledge that you will deliver a prospectus in connection with any resale of the exchange notes. Please refer to the section in this prospectus entitled "Plan of Distribution."

Terms of the Exchange Offer

        Upon the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal, we will accept for exchange any original notes properly tendered and not withdrawn before expiration of the exchange offer. The date of acceptance for exchange of the original notes and completion of the exchange offer, is the exchange date, which will be the first business day following the expiration date unless we extend the date as described in this prospectus. We will issue $1,000 principal amount of exchange notes in exchange for each $1,000 principal amount of original notes surrendered under the exchange offer. The original notes may be tendered only in integral multiples of $1,000. The exchange notes will be delivered on the earliest practicable date following the exchange date.

        The form and terms of the exchange notes will be substantially identical to the form and terms of the original notes, except the exchange notes:

•

will be registered under the Securities Act; and



•

will not bear legends restricting their transfer.

        The exchange notes will evidence the same debt as the original notes. The exchange notes will be issued under and entitled to the benefits of the same indenture that authorized the issuance of the original notes.

        The exchange offer is not conditioned upon any minimum aggregate principal amount of original notes being tendered for exchange.

        As of the date of this prospectus, $305,000,000 aggregate principal amount of the original notes are outstanding. This prospectus and the letter of transmittal are being sent to all registered holders of original notes. There will be no fixed record date for determining registered holders of original notes entitled to participate in the exchange offer.

37

        We intend to conduct the exchange offer in accordance with the provisions of the registration rights agreement, the indenture, the applicable requirements of the Securities Act, the Exchange Act, and the rules and regulations of the SEC. Original notes that are not exchanged in the exchange offer will remain outstanding and continue to accrue interest and will be entitled to the rights and benefits their holders have under the indenture relating to the original notes and the exchange notes and, under limited circumstances, the registration rights agreement.

        We will be deemed to have accepted for exchange properly tendered original notes when we have given oral or written notice of the acceptance to the exchange agent. The exchange agent will act as agent for the holders of original notes who surrender them in the exchange offer for the purposes of receiving the exchange notes from us and delivering the exchange notes to the holders. The exchange agent will make the exchange as promptly as practicable on or after the date of acceptance for exchange of the original notes. The exchange date will be the first business day following the expiration date unless it is extended as described in this prospectus. We expressly reserve the right to amend or terminate the exchange offer, and not to accept for exchange any original notes not previously accepted for exchange, upon the occurrence of any of the conditions specified below under "—Conditions to the Exchange Offer."

        Holders who tender original notes in the exchange offer will not be required to pay brokerage commissions or fees or, subject to the instructions in the letter of transmittal, transfer taxes with respect to the exchange of original notes. We will pay all charges and expenses, other than applicable taxes described below, in connection with the exchange offer. It is important that you read "—Solicitation of Tenders; Fees and Expenses" and "—Transfer Taxes" below for more details regarding fees and expenses incurred in the exchange offer.

        We will return any original notes that we do not accept for exchange for any reason without expense to the tendering holder as promptly as practicable after the expiration or termination of the exchange offer.

Expiration Date; Extension; Termination; Amendment

        The exchange offer will expire at 5:00 p.m., New York City time, on                        , 2002, unless we have extended the period of time that the exchange offer is open. The expiration date will be at least 20 business days after the beginning of the exchange offer as required by Rule 14e-1(a) under the Exchange Act.

        We reserve the right to extend the period of time that the exchange offer is open, and delay acceptance for exchange of any original notes, by giving oral or written notice to the exchange agent and by timely public announcement no later than 9:00 a.m., New York City time, on the next business day after the previously scheduled expiration date. During any extension, all original notes previously tendered will remain subject to the exchange offer unless properly withdrawn.

        We also reserve the right to:

•

end or amend the exchange offer and not to accept for exchange any original notes not previously accepted for exchange upon the occurrence of any of the events specified below under "—Conditions to the Exchange Offer" that have not been waived by us; and



•

amend the terms of the exchange offer in any manner whether before or after any tender of the original notes.

        If any termination or amendment occurs, we will notify the exchange agent and will either issue a press release or give oral or written notice to you as promptly as practicable.

38

Procedures for Tendering Original Notes

        We have forwarded to you, along with this prospectus, a letter of transmittal relating to this exchange offer. Because all of the original notes are held in book-entry accounts maintained by the exchange agent at DTC, a holder need not submit a letter of transmittal if the holder tenders original notes in accordance with the procedures mandated by DTC's Automated Tender Offer Program ("ATOP"). To tender original notes without submitting a letter of transmittal, the electronic instructions sent to DTC and transmitted to the exchange agent must contain your acknowledgment of receipt of and your agreement to be bound by and to make all of the representations contained in the letter of transmittal. In all other cases, a letter of transmittal must be manually executed and delivered as described in this prospectus.

        Only a holder of record of original notes may tender original notes in the exchange offer. To tender in the exchange offer, a holder must comply with the procedures of DTC, and either:

•

complete, sign and date the letter of transmittal, or a facsimile of the letter of transmittal, have the signature on the letter of transmittal guaranteed if the letter of transmittal so requires and deliver the letter of transmittal or facsimile to the exchange agent prior to the expiration date; or



•

in lieu of delivering a letter of transmittal, instruct DTC to transmit on behalf of the holder an agent's message, which agent's message shall be received by the exchange agent prior to 5:00 p.m., New York City time, on the expiration date. The term "agent's message" means a message, transmitted by DTC and received by the exchange agent and forming part of a book-entry confirmation, which states that DTC has received an express acknowledgment from a participant tendering original notes that are the subject of the book-entry confirmation that the participant has received and agrees to be bound by the terms of the letter of transmittal, and that we may enforce that agreement against the participant.

        In addition, either:

•

with respect to the original notes, the exchange agent must receive, before expiration of the exchange offer, timely confirmation of book-entry transfer of the original notes into the exchange agent's account at DTC, according to the procedure for book-entry transfer described below; or



•

the holder must comply with the guaranteed delivery procedures described below.

        To be tendered effectively, the exchange agent must receive any physical delivery of the letter of transmittal and other required documents at the address set forth below under "—Exchange Agent" before expiration of the exchange offer. To receive confirmation of valid tender of original notes, a holder should contact the exchange agent at the telephone number listed under "—Exchange Agent."

        The tender by a holder that is not withdrawn before expiration of the exchange offer will constitute an agreement between that holder and us in accordance with the terms and subject to the conditions set forth in this prospectus and in the letter of transmittal. Only a registered holder of original notes may tender the original notes in the exchange offer. If a holder completing a letter of transmittal tenders less than all of the original notes held by this holder, this tendering holder should fill in the applicable box of the letter of transmittal. The amount of original notes delivered to the exchange agent will be deemed to have been tendered unless otherwise indicated.

        If original notes, the letter of transmittal or any other required documents are physically delivered to the exchange agent, the method of delivery is at the holder's election and risk. Rather than mail these items, we recommend that holders use an overnight or hand delivery service. In all cases, holders should allow sufficient time to assure delivery to the exchange agent before expiration of the exchange offer. Holders should not send the letter of transmittal or original notes to us. Holders may request

39

their respective brokers, dealers, commercial banks, trust companies or other nominees to effect the above transactions for them.

        Any beneficial owner whose original notes are registered in the name of a broker, dealer, commercial bank, trust company or other nominee and who wishes to tender should contact the registered holder promptly and instruct it to tender on the owner's behalf. If the beneficial owner wishes to tender on its own behalf, it must, prior to completing and executing the letter of transmittal and delivering its original notes, either:

•

make appropriate arrangements to register ownership of the original notes in the owner's name; or



•

obtain a properly completed bond power from the registered holder of original notes.

        The transfer of registered ownership may take considerable time and may not be completed prior to the expiration date.

        If the applicable letter of transmittal is signed by the record holder(s) of the original notes tendered, the signature must correspond with the name(s) written on the face of the original note without alteration, enlargement or any change whatsoever. If the applicable letter of transmittal is signed by a participant in DTC the signature must correspond with the name as it appears on the security position listing as the holder of the original notes.

        Except as described below, a signature on a letter of transmittal or a notice of withdrawal must be guaranteed by an eligible guarantor institution. Eligible guarantor institutions include banks, brokers, dealers, municipal securities dealers, municipal securities brokers, government securities dealers, government securities brokers, credit unions, national securities exchanges, registered securities associations, clearing agencies and savings associations. The signature need not be guaranteed by an eligible guarantor institution if the original notes are tendered:

•

by a registered holder who has not completed the box entitled "Special Issuance Instructions" or "Special Delivery Instructions" on the letter of transmittal; or



•

for the account of an eligible institution.

        If the letter of transmittal is signed by a person other than the registered holder of any original notes, the original notes must be endorsed or accompanied by a properly completed bond power. The bond power must be signed by the registered holder as the registered holder's name appears on the original notes and an eligible institution must guarantee the signature on the bond power.

        If the letter of transmittal or any original notes or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, these persons should so indicate when signing. Unless we waive this requirement, they should also submit evidence satisfactory to us of their authority to deliver the letter of transmittal.

        We will determine in our sole discretion all questions as to the validity, form, eligibility, including time of receipt, acceptance and withdrawal of tendered original notes. Our determination will be final and binding. We reserve the absolute right to reject any original notes not properly tendered or any original notes the acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive any defects, irregularities or conditions of tender as to particular original notes. Our interpretation of the terms and conditions of the exchange offer, including the instructions in the letter of transmittal, will be final and binding on all parties.

        Unless waived, any defects or irregularities in connection with tenders of original notes must be cured within the time that we determine. Although we intend to notify holders of defects or irregularities with respect to tenders of original notes, neither we, the exchange agent nor any other

40

person will incur any liability for failure to give notification. Tenders of original notes will not be deemed made until those defects or irregularities have been cured or waived. Any original notes received by the exchange agent that are not properly tendered and as to which the defects or irregularities have not been cured or waived will be returned by the exchange agent without cost to the tendering holder, unless otherwise provided in the letter of transmittal, as soon as practicable following the expiration date.

        In all cases, we will issue exchange notes for original notes that we have accepted for exchange under the exchange offer only after the exchange agent timely receives:

•

original notes or a timely book-entry confirmation that original notes have been transferred into the exchange agent's account at DTC; and



•

a properly completed and duly executed letter of transmittal and all other required documents or a properly transmitted agent's message.

        Holders should receive copies of the letter of transmittal with the prospectus. A holder may obtain additional copies of the letter of transmittal from the exchange agent at its offices listed under "—Exchange Agent." By signing the letter of transmittal, or causing DTC to transmit an agent's message to the exchange agent, each tendering holder of original notes will represent to us that, among other things:

•

any exchange notes that the holder receives will be acquired in the ordinary course of its business;



•

the holder has no arrangement or understanding with any person or entity to participate in the distribution of the exchange notes;



•

if the holder is not a broker-dealer, that it is not engaged in and does not intend to engage in the distribution of the exchange notes;



•

if the holder is a broker-dealer, that it will receive exchange notes for its own account in exchange for original notes that were acquired as a result of market-making activities or other trading activities, that it will deliver a prospectus, as required by law, in connection with any resale of those exchange notes (see "Plan of Distribution"); and



•

the holder is not an "affiliate," as defined in Rule 405 of the Securities Act, of us or, if the holder is an affiliate, it will comply with any applicable registration and prospectus delivery requirements of the Securities Act.

DTC Book-Entry Transfer

        The exchange agent has established an account with respect to the original notes at DTC for purposes of the exchange offer.

        With respect to the original notes, the exchange agent and DTC have confirmed that any financial institution that is a participant in DTC may utilize DTC ATOP procedures to tender original notes.

        With respect to the original notes, any participant in DTC may make book-entry delivery of original notes by causing DTC to transfer the original notes into the exchange agent's account in accordance with DTC's ATOP procedures for transfer.

        However, the exchange for the original notes so tendered will be made only after a book-entry confirmation of such book-entry transfer of original notes into the exchange agent's account, and timely receipt by the exchange agent of an agent's message and any other documents required by the letter of transmittal.

41

Guaranteed Delivery Procedures

        Holders wishing to tender their original notes but whose original notes are not immediately available or who cannot deliver their original notes, the letter of transmittal, or any other required documents to the exchange agent, or cannot comply with the applicable procedures described above before expiration of the exchange offer, may tender if:

•

the tender is made through an eligible guarantor institution;



•

before expiration of the exchange offer, the exchange agent receives from the eligible guarantor institution either a properly completed and duly executed notice of guaranteed delivery, by facsimile transmission, mail or hand delivery, or a properly transmitted agent's message and notice of guaranteed delivery:



•

setting forth the name and address of the holder and the registered number(s) and the principal amount of original notes tendered;



•

stating that the tender is being made by guaranteed delivery; and



•

guaranteeing that, within three New York Stock Exchange trading days after expiration of the exchange offer, the letter of transmittal, or facsimile thereof, together with the original notes or a book-entry transfer confirmation, and any other documents required by the letter of transmittal will be deposited by the eligible guarantor institution with the exchange agent; and




•

the exchange agent receives the properly completed and executed letter of transmittal, or facsimile thereof, as well as all tendered original notes in proper form for transfer or a book-entry transfer confirmation, and all other documents required by the letter of transmittal, within three New York Stock Exchange trading days after expiration of the exchange offer.

        Upon request to the exchange agent, a notice of guaranteed delivery will be sent to holders who wish to tender their original notes according to the guaranteed delivery procedures set forth above.

Withdrawal Rights

        You may withdraw your tender of original notes at any time before 5:00 p.m., New York City time, on the expiration date.

        For a withdrawal to be effective, the exchange agent must receive a computer generated notice of withdrawal, transmitted by DTC on behalf of the holder in accordance with the standard operating procedure of DTC or a written notice of withdrawal, sent by facsimile transmission, receipt confirmed by telephone, or letter, before the expiration date.

        Any notice of withdrawal must:

•

specify the name of the person that tendered the original notes to be withdrawn;



•

identify the original notes to be withdrawn, including the certificate number or numbers and principal amount of such original notes;



•

specify the principal amount of original notes to be withdrawn;



•

include a statement that the holder is withdrawing its election to have the original notes exchanged;



•

be signed by the holder in the same manner as the original signature on the letter of transmittal by which the original notes were tendered or as otherwise described above, including any required signature guarantees, or be accompanied by documents of transfer sufficient to have

42

the trustee under the indenture register the transfer of the original notes into the name of the person withdrawing the tender; and

•

specify the name in which any of the original notes are to be registered, if different from that of the person that tendered the original notes.

        The exchange agent will return the properly withdrawn original notes promptly following receipt of notice of withdrawal. If original notes have been tendered pursuant to the procedure for book-entry transfer, any notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawn original notes or otherwise comply with DTC's procedures.

        Any original notes withdrawn will not have been validly tendered for exchange for purposes of the exchange offer. Any original notes that have been tendered for exchange but which are not exchanged for any reason will be returned to the holder without cost to the holder as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. In the case of original notes tendered by book-entry transfer into the exchange agent's account at DTC pursuant to its book-entry transfer procedures, the original notes will be credited to an account with DTC specified by the holder, as soon as practicable after withdrawal, rejection of tender or termination of the exchange offer. Properly withdrawn original notes may be retendered by following one of the procedures described under "—Procedures for Tendering Original Notes" above at any time on or before the expiration date.

Acceptance of Original Notes for Exchange; Delivery of Exchange Notes

        Upon satisfaction or waiver of all of the conditions to the exchange offer, we will accept, promptly after the exchange date, all original notes properly tendered and will issue the exchange notes promptly after the acceptance. Please refer to the section in this prospectus entitled "—Conditions to the Exchange Offer" below. For purposes of the exchange offer, we will be deemed to have accepted properly tendered original notes for exchange when we give notice of acceptance to the exchange agent.

        For each original note accepted for exchange, the holder of the original note will receive an exchange note having a principal amount at maturity equal to that of the surrendered original note.

        In all cases, we will issue exchange notes for original notes that are accepted for exchange pursuant to the exchange offer only after the exchange agent timely receives certificates for the original notes or a book-entry confirmation of the original notes into the exchange agent's account at DTC, a properly completed and duly executed letter of transmittal, or an agent's message, and all other required documents.

Conditions to the Exchange Offer

        We will not be required to accept for exchange, or to issue exchange notes in exchange for, any original notes and may terminate or amend the exchange offer, by notice to the exchange agent or by a timely press release, at any time before accepting any of the original notes for exchange, if, in our reasonable judgment the exchange notes to be received will not be tradable by the holder without restriction under the Securities Act.

        In addition, we will not be obligated to accept for exchange the original notes of any holder that has not made to us:

•

the representations described under "—Procedures for Tendering Original Notes" and "Plan of Distribution"; and



•

such other representations as may be reasonably necessary under applicable SEC rules, regulations or interpretations to make available an appropriate form for registration of the exchanges notes under the Securities Act.

43

        We expressly reserve the right, at any time or at various times, to extend the period of time during which the exchange offer is open. Consequently, we may delay acceptance of any original notes by giving oral or written notice of such extension to their holders. During any such extensions, all original notes previously tendered will remain subject to the exchange offer, and we may accept them for exchange. We will return any original notes that we do not accept for exchange for any reason without expense to their tendering holders as promptly as practicable after the expiration or termination of the exchange offer.

        In addition, we expressly reserve the right to amend or terminate the exchange offer and to reject for exchange any original notes not previously accepted for exchange, upon the occurrence of any of the conditions of the exchange offer specified above. We will give oral or written notice of any extension, amendment, nonacceptance or termination to the holders of the original notes as promptly as practicable. In the case of any extension, such notice will be issued no later than 9:00 a.m., New York City time, on the business day after the previously scheduled expiration date.

        These conditions are for our sole benefit, and we may assert them regardless of the circumstances that may give rise to them or waive them in whole or in part at any or at various times in our sole discretion. If we fail at any time to exercise any of the foregoing rights, this failure will not constitute a waiver of such right. Each such right will be deemed an ongoing right that we may assert at any time or at various times.

        In addition, we will not accept for exchange any original notes tendered, and will not issue exchange notes in exchange for any such original notes, if at such time any stop order will be threatened or in effect with respect to the registration statement of which this prospectus constitutes a part or the qualification of the indenture under the Trust Indenture Act of 1939.

        The exchange offer is not conditioned upon any minimum principal amount of original notes being tendered for exchange.

Exchange Agent

        We have appointed U.S. Bank, National Association as the exchange agent for the exchange offer. You should direct questions and requests for assistance, requests for additional copies of this prospectus or of the letter of transmittal and requests for the notice of guaranteed delivery, as well as deliver all executed letters of transmittal and any other required documents, to the exchange agent at the addresses listed below:

By Mail	By Overnight Carrier	By Hand
U.S. Bank National Association	U.S. Bank National Association	U.S. Bank National Association
150 E. Fifth Street	150 E. Fifth Street	150 E. Fifth Street
St. Paul, MN 55101	St. Paul, MN 55101	St. Paul, MN 55101
Attn: Specialized Finance Group 4th Floor	Attn: Specialized Finance Group 4th Floor	Attn: Specialized Finance Group 4th Floor Bond Drop Window
By Facsimile Transmission
(For Eligible Institutions Only) (651) 244-1537
To confirm by Telephone (800) 934-6802

Delivery to an address other than as listed above, or transmissions of instructions to a facsimile number other than as listed above, will not constitute a valid delivery.

        U.S. Bank National Association is the trustee under the indenture governing the notes.

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Solicitation of Tenders; Fees and Expenses

        We have not retained any dealer-manager in connection with the exchange offer and will not make any payments to brokers, dealers or others soliciting acceptances of the exchange offer. However, we will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable out-of-pocket expenses in connection with the exchange offer.

        We will pay the estimated cash expenses to be incurred in connection with the exchange offer, including the following:

•

fees and expenses of the exchange agent and trustee;



•

SEC registration fees;



•

accounting and legal fees, including fees of one counsel for the holders of the original notes; and



•

printing and mailing expenses.

Transfer Taxes

        We will pay all transfer taxes, if any, applicable to the exchange of original notes under the exchange offer. The tendering holder, however, will be required to pay any transfer taxes, whether imposed on the registered holder or any other person, if:

•

certificates representing original notes for principal amounts not tendered or accepted for exchange are to be delivered to, or are to be issued in the name of, any person other than the registered holder of original notes tendered;



•

exchange notes are to be delivered to, or issued in the name of, any person other than the registered holder of the original notes;



•

tendered original notes are registered in the name of any person other than the person signing the letter of transmittal; or



•

a transfer tax is imposed for any reason other than the exchange of original notes under the exchange offer.

        If satisfactory evidence of payment of transfer taxes is not submitted with the letter of transmittal, the amount of any transfer taxes will be billed to the tendering holder.

Accounting Treatment

        We will record the exchange notes at the same carrying value of the original notes reflected in our accounting records on the date the exchange offer is completed. Accordingly, we will not recognize any gain or loss for accounting purposes upon the exchange of exchange notes for original notes. We will expense the costs incurred in connection with the issuance of the exchange notes.

Consequences of Failure to Exchange

        If you do not exchange your original notes for exchange notes pursuant to the exchange offer, you will continue to be subject to the restrictions on transfer of the original notes as described in the legend on the original notes. In general, the original notes may be offered or sold only if registered under the Securities Act, except pursuant to an exemption from, or in a transaction not subject to, the Securities Act and applicable state securities laws. We do not currently anticipate that we will register the original notes under the Securities Act. However, under limited circumstances we may be required to file with the SEC a shelf registration statement to cover resales of the original notes by the holders of notes who satisfy conditions relating to the provision of information in connection with the shelf

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registration statement. Please refer to the section in this prospectus entitled "Description of Notes—Registration Rights, Exchange Offer."

        Your participation in the exchange offer is voluntary, and you should carefully consider whether to participate. We urge you to consult your financial and tax advisors in making a decision whether or not to tender your original notes. Please refer to the section in this prospectus entitled "Certain U.S. Federal Tax Considerations."

        As a result of the making of, and upon acceptance for exchange of all validly tendered original notes pursuant to the terms of, this exchange offer, we will have fulfilled a covenant contained in the registration rights agreement. If you do not tender your original notes in the exchange offer, you will be entitled to all the rights and limitations applicable to the original notes under the indenture, except for any rights under the registration rights agreement that by their terms end or cease to have further effectiveness as a result of the making of this exchange offer. To the extent that original notes are tendered and accepted in the exchange offer, the trading market for untendered, or tendered but unaccepted, original notes could be adversely affected. Please refer to the section in this prospectus entitled "Risk Factors—If you do not exchange your original notes, your original notes will continue to be subject to the existing transfer restrictions and you may not be able to sell your original notes."

        We may in the future seek to acquire untendered original notes in open market or privately negotiated transactions, through subsequent exchange offers or otherwise. However, we have no present plans to acquire any original notes that are not tendered in the exchange offer or to file a registration statement to permit resales of any untendered original notes.

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DESCRIPTION OF NOTES

        As used below in this "Description of Notes" section, reference to "Notes" refer to the original notes and the exchange notes, unless the context otherwise requires.

        The original notes were issued and the exchange notes will be issued under an indenture (the "Indenture") among the Company, the Guarantors and U.S. Bank National Association, as trustee (the "Trustee"). The terms of the Notes include those stated in the Indenture and the Security Documents and those made a part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (the "Trust Indenture Act").

        The following summarizes provisions of the Indenture, the Security Documents, the Intercreditor Agreement and the Registration Rights Agreement. The following summary does not purport to be complete and is subject to, and is qualified in its entirety by reference to, all of the provisions of the Indenture, the Security Documents, the Intercreditor Agreement and the Registration Rights Agreement, and terms made a part of the Indenture by reference to the Trust Indenture Act. We urge you to read the Indenture, the Security Documents, the Intercreditor Agreement, the Registration Rights Agreement and the Trust Indenture Act because they, and not this description, define your rights as a holder of Notes. Copies of the Indenture, the Security Documents and the Registration Rights Agreement are available from the Company as described below under "—Additional Information."

        You can find the definitions of certain terms used in this Description of Notes below under "—Certain Definitions." As used in this Description of Notes, all references to the "Company" mean Oregon Steel Mills, Inc. and its successors in accordance with the terms of the Indenture, and not any of its Subsidiaries. As of the date of the Indenture, all of the Company's existing Subsidiaries, other than New CF&I and CF&I, will be Unrestricted Subsidiaries (as such term is defined below under "—Certain Definitions"). Unrestricted Subsidiaries will not be subject to the restrictive covenants of the Indenture and the Security Documents.

General

        The Notes will be senior secured obligations of the Company limited to $305,000,000 aggregate principal amount, all of which were issued in the offering of the original notes. The Guarantors have, jointly and severally, unconditionally guaranteed, on a senior secured basis the Company's obligations under the Notes. See "—Guarantees." The obligations of the Company under the Notes and the obligations of the Guarantors under the Guarantees are secured by a lien on substantially all of the buildings, improvements, fixtures and equipment that comprise the mills located in Portland, Oregon, Pueblo, Colorado, and Napa, California, together with the real property on which the buildings are located, and certain other assets of the Company and the Guarantors, respectively, other than inventory, accounts receivable, equity interests in our Subsidiaries, intercompany indebtedness and other excluded assets, all as described below under "—Security." The Company and the Guarantors, respectively, are required to grant a first priority lien (subject only to "Permitted Liens" as such term is defined below under "—Certain Definitions") on such property and assets to secure the obligations of the Company under the Notes and the obligations of the Guarantors under the Guarantees.

Maturity, Interest And Principal

        The Notes will mature on July 15, 2009.

        Interest on the Notes will accrue at the rate of 10% per annum and will be payable semiannually on each January 15 and July 15, commencing January 15, 2003, to the holders of record of Notes at the close of business on January 1st and July 1st immediately preceding such interest payment date. Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no

47

interest has been paid, from the Issue Date. Interest will be computed on the basis of a 360-day year comprised of twelve 30-day months.

Security

Collateral

        The obligations of the Company under the Notes and the obligations of the Guarantors under the Guarantees are secured by a lien on substantially all of the buildings, improvements, fixtures and equipment that comprise the mills located in Portland, Oregon, Pueblo, Colorado, and Napa, California, together with the real property on which the buildings are located, and certain other assets of the Company and the Guarantors, respectively, other than inventory, accounts receivable, equity interests in our Subsidiaries, intercompany indebtedness and other excluded assets, all as described below. The Company and the Guarantors, respectively, are required to grant a first priority lien (subject only to "Permitted Liens" as such term is defined below under "—Certain Definitions") on such property and assets to secure the obligations of the Company under the Notes and the obligations of the Guarantors under the Guarantees.

        The Collateral includes the following property and assets owned by the Company and the Guarantors, as the case may be:

•

all of the real property in Portland, Oregon on which the Portland Mill and related heat treatment facility are located, together with all existing and future buildings, improvements and fixtures and all other real property of the Company located on such real property,



•

all of the real property in Pueblo County, Colorado on which the Pueblo Mill is located, commonly known as the Pueblo Inside the Fence Property, together with all existing and future buildings, improvements and fixtures and all other real property of CF&I located on such real property,



•

all of the real property in Napa, California on which the Napa Pipe Mill is located, together with all existing and future buildings, improvements and fixtures and all other real property of the Company located on such real property,



•

easements outside of but appurtenant to the Pueblo Inside the Fence Property running over and across certain real property in Pueblo County, Colorado, and Fremont County, Colorado, on which the canals or ditches for bringing industrial water to and for related access and utility service for the Pueblo Inside the Fence Property are located,



•

the Company's interest, as tenant, under a lease of office space for our headquarters located at 1000 SW Broadway, Portland, Oregon,



•

all industrial water rights appurtenant to and used on the Pueblo Inside the Fence Property,



•

all existing and future machinery and equipment (to the extent it constitutes personal property), other than motor vehicles and mobile equipment, owned by the Company and the Guarantors,



•

existing and future intangibles (other than rights under certain non-assignable contracts),



•

all other existing and future personal property of the Company and the Guarantors that is not Excluded Collateral, and



•

all proceeds and products of any of the foregoing (excluding inventory).

        The Company and the Guarantors also are required by the Indenture to secure the Notes with additional real property they acquire after the Issue Date, together with any improvements and fixtures thereon, except to the extent that such property, improvements and fixtures are Excluded Collateral.

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Excluded Collateral

        The Collateral does not include the following (collectively, the "Excluded Collateral"):

•

any Revolver Collateral,



•

the approximately 67 acres of real property in Camrose, Alberta, on which the Camrose Pipe Mill is located, together with all buildings, improvements and fixtures thereon, and all related leases, rents and other rights,



•

the real property in Pueblo County, Colorado and Fremont County, Colorado commonly known as Pueblo Outside the Fence Property, and any contracts of sale or lease for any of the Pueblo Outside the Fence Property,



•

motor vehicles and mobile equipment owned by the Company and the Guarantors;



•

the two trailers located on the Pueblo Inside the Fence Property;



•

the condominiums located at 170 S. Del Monte Place, Pueblo, CO 81007-3644 and 769 Cottage Drive, Napa, CA 94558-1247,



•

any other Excluded Assets (as defined under "—Certain Definitions"),



•

any proceeds or products of any of the foregoing, except to the extent that such proceeds or products are invested in any property or assets described above as "Collateral."

        Notwithstanding anything to the contrary above, none of the property or assets described in the first five bullet points under "Collateral" above shall in any circumstances constitute or be deemed to constitute "Excluded Collateral."

        Furthermore, New CF&I is a holding company whose only material assets consist of the general partnership interest in CF&I and the capital stock of CWR, a Subsidiary of New CF&I, none of which general partnership interest or capital stock will be pledged as collateral for its Guarantee. As a result, the Guarantee of New CF&I initially will not be secured by any assets and will only be secured if and to the extent that New CF&I acquires any assets (other than Excluded Collateral) in the future.

        In addition, other than CF&I and New CF&I, none of the Company's existing Subsidiaries are Guarantors, and the Collateral does not include any assets of such Subsidiaries, and, as to CF&I and New CF&I, none of the Pueblo Outside the Fence Property or interests therein, other than the water rights appurtenant to and used on the Pueblo Inside the Fence Property described above and the easements appurtenant to the Pueblo Inside the Fence Property referenced above, or proceeds therefrom (except as described in the last bullet point above), is Collateral. The Company's existing Subsidiaries which are not Guarantors are Unrestricted Subsidiaries. In the aggregate, the Unrestricted Subsidiaries accounted for approximately 6.8% of the Company's consolidated total assets as of June 30, 2002 and approximately 9.5% and 3.1% of the Company's consolidated EBITDA and consolidated net income for the twelve months ended June 30, 2002.

Certain Limitations on the Collateral

        Value of the Collateral.    There can be no assurance that the proceeds of any sale of Collateral following an Event of Default with respect to the Notes would be sufficient to satisfy, or would not be substantially less than, amounts due on the Notes. See "Risk Factors—Risks Related to the Notes."

        No appraisals of any of the Collateral have been prepared by or on behalf of the Company in connection with this offering. The consolidated book value (net of depreciation) of the property, plant and equipment included in the Collateral as of June 30, 2002 was approximately $521.3 million.

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        The value of the Collateral in the event of a liquidation will depend upon market and economic conditions, the availability of buyers and similar factors. By its nature, some or all of the Collateral will be illiquid and may have no readily ascertainable market value. There also can be no assurance that the Collateral will be saleable and, even if saleable, the timing of its liquidation could be uncertain.

        The Collateral does not include any assets that constitute Excluded Collateral. Among other things, the Collateral does not include contracts, agreements, licenses, (including software grants) and other rights that by their express terms prohibit the assignment thereof or the grant of a security interest therein. Some of these may be material to the Company or to the Guarantors or may be necessary to operate our steelmaking, finishing or other production facilities, and such exclusion could have a material adverse effect on the Collateral. In addition, to the extent that liens, rights and easements granted to third parties encumber assets located on property owned by the Company or any Guarantor, such third parties have or may exercise rights and remedies with respect to the property subject to such liens that could adversely affect the value of the Collateral located at such site and the ability of the Trustee or the holders of the Notes to realize or foreclose on Collateral at such site.

        If an Event of Default occurs under the Indenture, the Trustee, on behalf of the holders of the Notes, in addition to any rights or remedies available to it under the Indenture, may take such actions as it deems advisable to protect and enforce its rights in the Collateral, including the institution of foreclosure proceedings. Except as may otherwise be required by applicable law, the proceeds received by the Trustee from any foreclosure will be applied by the Trustee first to pay costs and expenses of foreclosure (and related costs and expenses), fees and other amounts then payable to the Trustee under the Indenture and the Intercreditor Agreement and amounts due under the Security Documents, and thereafter to pay the principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes.

        The real property pledged as Collateral is subject to environmental risks, and these risks may reduce or eliminate the value of such Collateral. The Portland Mill and the Pueblo Mill are classified in the same manner as other similar steel mills in the industry as generating hazardous waste materials because the melting operation of the electric arc furnace produces dust that contains heavy metals. The Company and its Subsidiaries have been required to undertake certain actions to remediate environmental conditions at the Portland Mill, the Pueblo Mill and the Napa Pipe Mill. See "Risk Factors—Risks Related to Our Business." Under the Indenture, the Trustee may, prior to taking certain actions, request that holders of Notes provide an indemnification against the Trustee's costs, expenses and liabilities, which could include liabilities under environmental laws. See "Risk Factors—Risks Related to the Notes" and "—Concerning the Trustee."

        Accordingly, there can be no assurance that the proceeds of any sale of the Collateral pursuant to the Indenture and the Security Documents following an Event of Default would be sufficient to satisfy, or would not be substantially less than, amounts due on the Notes. If the proceeds of any sale of the Collateral were not sufficient to repay all amounts due on the Notes, the holders of the Notes (to the extent not repaid from the proceeds of the sale of the Collateral) would have only an unsecured claim against the remaining assets of the Company and the Guarantors. See "Risk Factors—Risks Related to the Notes" and "—Ranking."

        Release of Collateral.    The Collateral release provisions of the Indenture permit the release of Collateral without the substitution of additional Collateral under certain circumstances, including in connection with certain Asset Sales and Events of Loss. See "—Possession, Use and Release of Collateral" and "—Trust Moneys." As described under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales," the Net Cash Proceeds of Asset Sales and Events of Loss may be required to be used to make an offer to purchase Notes, and, to the extent permitted thereunder, any unused Net Cash Proceeds will be retained by the Company, free and clear of the Liens of the Indenture and the Security Documents.

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        In addition, the Collateral will be released as security for the Notes and the Guarantees upon a Legal Defeasance or a Covenant Defeasance of the Notes or upon discharge of the Indenture (see "—Legal Defeasance and Covenant Defeasance" and "—Satisfaction and Discharge") and, upon the release of any Guarantor as described in the fifth paragraph under "—Guarantees" below, the Collateral pledged by such Guarantor will be released as security for its Guarantee.

        Certain Bankruptcy Limitations.    The right of the Trustee to repossess and dispose of the Collateral upon the occurrence of an Event of Default is likely to be significantly impaired by applicable bankruptcy law if a bankruptcy proceeding were to be commenced by or against the Company or any of its Subsidiaries (including any Guarantor) prior to the Trustee having repossessed and disposed of the Collateral. Under the Bankruptcy Code, a secured creditor is prohibited from repossessing its security from a debtor in a bankruptcy case, or from disposing of security repossessed from such debtor, without bankruptcy court approval. Moreover, the bankruptcy court may permit the debtor in certain circumstances to continue to retain and to use collateral owned as of the date of the bankruptcy filing (and the proceeds, products, offspring, rents or profits of the collateral, to the extent provided by the applicable security documents and nonbankruptcy law) even though the debtor is then in default, so long as the court determines that the interest of the secured creditor in its collateral is "adequately protected," either as of the case's commencement or by the delivery of additional collateral, or otherwise, against diminution in the collateral's value while the case is pending.

        The bankruptcy court has broad discretion in determining whether and to what extent to require a debtor to provide additional "adequate protection" to a creditor. It is therefore impossible to predict how, in the event of the Company's or a Guarantor's bankruptcy, a court would rule on a request to use the Collateral or a request for additional "adequate protection."

        In addition, in the event of such a bankruptcy, it is impossible to predict how long payments under the Notes would be delayed, whether the Trustee would be permitted to repossess and dispose of any of the Collateral, or whether or to what extent Noteholders would be compensated for any diminution in the Collateral's value while the case was pending.

        Furthermore, if a bankruptcy court determines the value of the Collateral is not sufficient to repay all amounts due on the Notes, the holders of Notes would hold secured claims to the extent of the value of the Collateral to which the holders of Notes are entitled, and would hold unsecured claims with respect to any such shortfall. The Bankruptcy Code does not permit the payment and/or accrual of post-petition interest, costs and attorneys' fees during a debtor's bankruptcy case unless the claims are oversecured or the debtor is solvent at the time of reorganization.

        The obligations of each Guarantor under its Guarantee of the Notes, and the grant by each Guarantor of a lien on certain of its assets to secure its obligations under its Guarantee, may be subject to review under various federal and state laws for the protection of creditors, including, without limitation, laws governing fraudulent transfers. To the extent that the obligations of any Guarantor under its Guarantee, or the lien on Collateral granted by any Guarantor, were held to be unenforceable as a fraudulent transfer or for any other reason, the holders of Notes would cease to have any direct claim against that Guarantor and or a lien against its assets. See "Risk Factors—Risks Related to the Notes—A court could cancel our subsidiaries' guarantees of the notes under fraudulent transfer law" and "—Ranking."

        In an attempt to avoid this result, the Indenture will limit the liability of each Guarantor on its Guarantee to the maximum amount that the Guarantor can incur without risk that the Guarantee will be subject to avoidance as a fraudulent transfer. We cannot assure you that this limitation will protect the Guarantees from fraudulent transfer attack or, if it does, that the guarantees will be in amounts sufficient, if necessary, to pay the Notes when due. In addition, any limitation on the amounts payable by a Guarantor under its Guarantee under that provision will result in a corresponding limitation on the Trustee's ability to realize on the Collateral pledged by that Guarantor.

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        Other Limitations.    The right of the Trustee to repossess and dispose of the Collateral upon the occurrence of an Event of Default under the Indenture, in the case of real property Collateral, also could be significantly impaired by restrictions under state law. See "Risk Factors—Risks Related to the Notes."

        Dispositions of Collateral also may be subject to delay pursuant to the Intercreditor Agreement to be entered into with the Revolver Agent under the Credit Facility. See "—Intercreditor Agreement." Under the Intercreditor Agreement, in the event that action has been taken to enforce the rights of holders of the Notes with respect to the Collateral and the Trustee has obtained possession and control of the Collateral, the Revolver Agent may enter upon all or any portion of the property of the Company or any of the Guarantors for 120 days in order to collect accounts receivable and remove, sell or otherwise dispose of the Revolver Collateral, and may also store such Revolver Collateral on the property of the Company or any of the Guarantors. The right of the Revolver Agent to enter upon the property as aforesaid could delay liquidation of the Collateral.

Guarantees

        The Company's obligations under the Notes are unconditionally guaranteed, jointly and severally, on a senior secured basis by the Guarantors. See "—Security" above. Under the Indenture, each of our existing and future Subsidiaries that is not designated as an Unrestricted Subsidiary must be a Guarantor.

        CF&I and New CF&I are the initial Guarantors. In addition, the Indenture provides that any person which would become a Subsidiary of the Company after the Issue Date is required to become a Guarantor, unless such Subsidiary is designated as an Unrestricted Subsidiary. See "—Certain Covenants—Additional Guarantors," "—Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries" and the definition of Unrestricted Subsidiary under "—Certain Definitions."

        However, the Company's other existing Subsidiaries which will not be Guarantors will be Unrestricted Subsidiaries. In the aggregate, the Company's existing Unrestricted Subsidiaries accounted for approximately 6.8% of the Company's consolidated total assets as of June 30, 2002 and approximately 9.5% and 3.1% of the Company's consolidated EBITDA and consolidated net income for the twelve months ended June 30, 2002.

        The Notes will be effectively subordinated to Indebtedness of any Unrestricted Subsidiaries. See "—Ranking" below.

        Except as provided under "—Certain Covenants" and "—Merger, Sale of Assets, Etc." below, the Company is not restricted from selling or otherwise disposing of any Guarantor. The Indenture will provide that, in the event of a sale, transfer or other disposition of all of the Capital Stock of any Guarantor (or its parent) owned by the Company and its Subsidiaries, by way of merger, consolidation or otherwise, in each case to a person which is not the Company or a Subsidiary or Affiliate of the Company, such Guarantor will be released from all of its obligations under its Guarantee, the Indenture, its Security Documents and the Intercreditor Agreement; provided, that:

        (a)  such transaction complies with the other provisions of the Indenture, including without limitation the provisions described below under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales" (including the use of the Net Cash Proceeds of such Asset Sale in accordance therewith); and

        (b)  any such release shall occur only if (i) all Indebtedness owing by such Guarantor to the Company or any Subsidiaries of the Company shall have been paid in full, and (ii) all obligations of such Guarantor under all of its guarantees of, and under all of its pledges of assets or Capital Stock or other Liens which secure, Indebtedness of the Company or any Subsidiaries of the Company also shall terminate.

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        Prior to any transaction which will result in the release of a Guarantor from its Guarantee as described above, the Company will deliver an Officers' Certificate to the Trustee stating that such transaction will be effected in accordance with the provisions of the Indenture in order to obtain the release of such Guarantor.

Ranking

        The Notes are senior secured obligations of the Company (to the extent of the value of the Collateral owned by the Company), and the Guarantees are senior secured obligations of the Guarantors (in each case, to the extent of the value of the Collateral owned by such Guarantor). The Notes and the Guarantees, except as described below, rank senior in right of payment to all existing and future subordinated indebtedness of the Company and the Guarantors, respectively, and pari passu in right of payment with all existing and future senior indebtedness of the Company and the Guarantors, respectively.

        The Notes will be effectively subordinated to all of the Company's and the Guarantors' existing and future Indebtedness (including the Credit Facility) secured by assets other than the Collateral (to the extent of the value of such assets). The Notes and the Guarantees will be effectively subordinated to Indebtedness under the Credit Facility to the extent of the value of the Revolver Collateral. Borrowings and other obligations under the new $75 million Credit Facility will be secured by a first priority lien on the Revolver Collateral owned by the Company, New CF&I, CF&I and CWR, the borrowers under the Credit Facility, and such borrowings may in the future be secured by a lien on Revolver Collateral owned by other Subsidiaries of the Company. Borrowings and other obligations under the Credit Facility initially will be guaranteed by Oregon Steel de Guayana, Inc., a Delaware corporation, OSM Glassification, Inc., an Oregon corporation, OSM Distribution, Inc., a Delaware corporation, and Oregon Steel Mills Processing, Inc., a Delaware corporation. Such guarantees initially will be secured by the Revolver Collateral owned by such guarantors, and may in the future be guaranteed by other Subsidiaries of the Company and secured by Revolver Collateral owned by such other Subsidiaries.

        In addition, the Indenture permits the Company and the Guarantors to create Liens on certain of their assets, including Liens securing purchase money indebtedness, and the Notes and the Guarantees will be effectively subordinated to such obligations secured by such Permitted Liens, and any assets secured by permitted purchase money indebtedness shall constitute Excluded Collateral. See the definitions of "Permitted Liens" and "Excluded Assets" under "—Certain Definitions."

        The Notes also will be effectively subordinated to Indebtedness of any Unrestricted Subsidiaries. The Company's rights and the rights of its creditors, including holders of the Notes, to participate in the assets of any Unrestricted Subsidiary upon such Unrestricted Subsidiary's liquidation or recapitalization will be subject, in the case of any Unrestricted Subsidiary, to the prior claims of such Unrestricted Subsidiary's creditors. To the extent that the Company itself may be a creditor with recognized claims against the Unrestricted Subsidiary, the claims of the Company still would be effectively subordinated to any mortgage or other liens on the assets of such Unrestricted Subsidiary and would be subordinated to any Indebtedness of such Unrestricted Subsidiary senior to that held by the Company.

        The Company also is and will be dependent upon the distribution of the earnings of its Subsidiaries, whether in the form of dividends, advances or payments on account of intercompany obligations, to service its debt obligations, including the Notes. The Company's Subsidiaries are separate and distinct legal entities and, except for the Guarantors, have no obligation, contingent or otherwise, to pay any amounts due on the Notes or to make any funds available therefor. In addition, dividends, loans and advances from Subsidiaries to the Company may be subject to contractual and

53

other restrictions and are contingent upon the results of operations of such Subsidiaries and are subject to various business considerations. See "Risk Factors—Risks Related to the Notes."

        Some of the Company's active Subsidiaries are not wholly owned. Specifically, at June 30, 2002: (1) a Subsidiary of Stelco Inc., a Canadian steel producer, held a 40% general partnership interest in Camrose, the Subsidiary of the Company which owns the Camrose Pipe Mill; (2) Nippon Steel and Nissho Iwai, directly or through Subsidiaries, held, in the aggregate, 13% of the outstanding common stock of New CF&I, the Subsidiary of the Company through which the Company holds its general partnership interest in CF&I (0.48% of which is owned by Nippon Steel); and (3) Oregon Feralloy Partners, a joint venture between a wholly owned Subsidiary of the Company and Feralloy Oregon Corporation ("Feralloy") is owned 60% by the Company and 40% by Feralloy, the managing partner of the joint venture. As a result, the Company may owe a fiduciary duty to the holders of minority interests in those Subsidiaries and therefore may be unable to exercise unfettered control over such Subsidiaries. In addition, dividends or other distributions paid or made by such Subsidiaries generally must be paid or made on a pro rata basis to all holders of equity interests in such Subsidiaries.

        At June 30, 2002, after giving effect to the sale of the original notes, the application of the net proceeds therefrom as described in "Use of Proceeds" (including the redemption of all of our outstanding 11% First Mortgage Notes due 2003 and the refinancing of the Old Credit Agreement), as if such transactions had occurred on that date, we would have had outstanding an aggregate of $311.7 million of Indebtedness, including the Notes. The Notes would have ranked pari passu in right of payment with $9.9 million of such Indebtedness, but because of the security interests in the Collateral described above, the Notes would have been effectively senior to all of such Indebtedness to the extent of the value of the Collateral. With respect to amounts due on the Notes in excess of the value of the Collateral, the Notes would have been effectively subordinated in right of payment to $525,000 of Indebtedness of the Company and its Subsidiaries. Such Indebtedness represents US$525,000 of borrowings by Camrose outstanding under its Can$15 million credit facility which is secured by Camrose's assets. Any Indebtedness the Company incurs under the Credit Facility will be senior in right of payment to the Notes to the extent of the value of the Revolver Collateral.

Intercreditor Agreement

        Concurrently with the closing of the offering of the original notes, the Trustee, on behalf of the holders of Notes, entered into an Intercreditor Agreement with the Company, New CF&I, CF&I, CWR and the Revolver Agent under the Credit Facility. The Intercreditor Agreement provides, among other things, that:

        (a)  the Trustee and the Revolver Agent will provide notices to each other with respect to the acceleration of the Notes or the Indebtedness under the Credit Facility, as the case may be, and the commencement of any action to enforce the rights of the holders of Notes, the Trustee, the lenders under the Credit Facility or the Revolver Agent with respect to the Collateral or the Revolver Collateral, as the case may be;

        (b)  if the Revolver Agent or any lender under the Credit Facility obtains possession of any of the Note Collateral or receives any proceeds with respect thereto, or if the Trustee or any Noteholder obtains possession of any of the Revolver Collateral or receives any proceeds with respect thereto, then the party receiving such proceeds will hold such proceeds in trust for the other party and as soon as practicable will pay such proceeds over to the other party; and

        (c)  in the event that action has been taken to enforce the rights of holders of the Notes with respect to the Collateral and the Trustee has obtained possession and control of the Collateral, the Revolver Agent may enter upon all or any portion of the premises of the Company or any of the Guarantors for 120 days in order to collect accounts receivable and remove, sell or otherwise

54

dispose of the Revolver Collateral, and may also store such Revolver Collateral on the premises of the Company or any of the Guarantors.

        The right of the Revolver Agent to enter upon the property as aforesaid could delay liquidation of the Collateral. See "Risk Factors—Risks Related to the Notes" and "—Security."

Optional Redemption

        The Notes are not redeemable at the option of the Company except as provided in the immediately succeeding two paragraphs.

Optional Redemption

        At any time on or after July 15, 2006, the Notes will be redeemable at the option of the Company, in whole or in part, on not less than 30 days' nor more than 60 days' prior notice, at the redemption prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, if redeemed during the 12-month period beginning July 15th of the years indicated below:

Redemption Year	Redemption Price
2006	105.000%
2007	102.500%
2008 and thereafter	100.000%

Redemption Upon Qualified Equity Offering

        At any time on or prior to July 15, 2005, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes at a redemption price of 110.000% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the redemption date, with the Net Cash Proceeds of one or more Qualified Equity Offerings; provided, that:

        (i)    at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries); and

        (ii)  the redemption occurs within 60 days of the date of the closing of such Qualified Equity Offering.

Mandatory Redemption

        The Notes will not be entitled to the benefit of any mandatory sinking fund.

Repurchase at the Option of Holders

Change of Control

        Upon the occurrence of a Change of Control, the Company shall be obligated to make an offer to purchase (a "Change of Control Offer"), on a business day (the "Change of Control Purchase Date") not more than 60 days nor less than 30 days following the date of mailing of the Change of Control Notice (as defined below) to holders of Notes, all of the then outstanding Notes at a purchase price (the "Change of Control Purchase Price") equal to 101% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the Change of Control Purchase Date. The Company shall be required to purchase all Notes properly tendered into the Change of Control Offer

55

and not withdrawn. The Change of Control Offer is required to remain open for at least 20 business days and until 5:00 p.m., New York City time, on the Change of Control Purchase Date.

        In order to effect such Change of Control Offer, the Company shall, not later than the 30th day after the occurrence of the Change of Control, mail to each holder of Notes notice of the Change of Control Offer (the "Change of Control Notice"), describing the transaction or transactions that constitute the Change of Control and offering to repurchase the Notes on the Change of Control Purchase Date, pursuant to the procedures required by the Indenture and described in such notice.

        On the Change of Control Purchase Date, the Company will, to the extent lawful:

•

accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;



•

deposit with the paying agent an amount equal to the Change of Control Purchase Price (including accrued and unpaid interest and Liquidated Damages, if any) in respect of all Notes or portions thereof so tendered; and



•

deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes of portions thereof being purchased by the Company.

        The paying agent shall promptly mail to each holder of Notes or portions thereof so tendered the Change of Control Purchase Price (including accrued and unpaid interest and Liquidated Damages, if any) for such Notes, and the Trustee will promptly authenticate and mail (or cause to be transferred by book entry) to each holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each such new Note will be in a principal amount of $1,000 or an integral multiple thereof.

        The occurrence of the events constituting a Change of Control under the Indenture could result in an event of default under the Credit Facility (which will permit borrowings up to the aggregate principal amount of the Credit Facility, but under which no borrowings are expected to be outstanding upon completion of this offering) and under other credit facilities and debt instruments of the Company and its Subsidiaries (under which borrowings of approximately $525,000 in aggregate principal amount (excluding amounts outstanding under the Old Credit Agreement and excluding intercompany debt) were outstanding as of June 30, 2002). Following such an event of default under the Credit Facility, the lenders under the Credit Facility or such other credit facilities and debt instruments would have the right to require the immediate repayment of the indebtedness thereunder in full, and might have the right to require such repayment prior to the Change of Control Purchase Date on which the Company would be required to repurchase the Notes.

        The Credit Facility also expressly provides that the occurrence of a "change of control" (as defined in the Credit Facility) will constitute an event of default under the Credit Facility. The definition of "change of control" under the Credit Facility is broader than that in the Indenture. Thus, the lenders under the Credit Facility would be entitled to require repayment of the indebtedness thereunder due to events constituting a "change of control" (as defined therein) without such events constituting a Change of Control for purposes of the Indenture. However, such events may constitute an Event of Default under the Indenture.

        In addition, the Credit Facility will prohibit the Company from purchasing any of the Notes. Any future credit agreements or other debt instruments may contain similar prohibitions. In the event a Change of Control occurs at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of the lenders of such indebtedness to the purchase of Notes or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes.

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In such a case, the Company's failure to purchase tendered Notes would constitute an immediate Event of Default under the Indenture.

        An Event of Default under the Indenture would result in an event of default under the Credit Facility and could result in the acceleration of other indebtedness pursuant to cross-default clauses in other credit facilities and debt instruments. Acceleration of such indebtedness, pursuant to an event of default, change of control or otherwise, or requirements that such indebtedness be repaid prior to payment of the Change of Control Purchase Price, could have a material adverse effect on the Company's ability to pay the Change of Control Purchase Price (including accrued and unpaid interest and Liquidated Damages) with respect to the Notes. There also can be no assurance that the Company and the Guarantors will have adequate resources to repay or refinance all indebtedness owing under the Credit Facility or other indebtedness upon the occurrence of any "change of control" or other event of default thereunder or upon any Event of Default under the Indenture or to fund the purchase of the Notes upon a Change of Control. See "Risk Factors—Risks Related to the Notes."

        The provisions described above that require the Company to make a Change of Control Offer following a Change of Control will be applicable regardless of whether or not any other provisions of the Indenture are applicable.

        The provisions of the Indenture relating to a Change of Control in and of themselves may not afford holders of the Notes protection in the event of a highly leveraged transaction, reorganization, restructuring, merger or similar transaction involving the Company that may adversely affect holders of the Notes if such transaction is not the type of transaction included within the definition of a Change of Control. See "—Certain Definitions." A transaction involving the Company's management or its affiliates likewise will result in a Change of Control only if it is the type of transaction specified by such definition. The existence of the foregoing provisions relating to a Change of Control may or may not deter a third party from seeking to acquire the Company in a transaction which constitutes a Change of Control.

        The definition of Change of Control includes a phrase relating to the sale, assignment, conveyance, transfer, lease or other disposition of "all or substantially all" of the assets of the Company or of the Company and the Guarantors, taken as a whole. The phrase "all or substantially all" likely will be interpreted under applicable state law and will be dependent upon particular facts and circumstances. As a result, there may be a degree of uncertainty in ascertaining whether a sale, assignment, conveyance, transfer, lease or other disposition of "all or substantially all" of the assets of the Company or of the Company and the Guarantors, taken as a whole, has occurred. Accordingly, the ability of a holder of Notes to require the Company to repurchase such Notes as a result of a sale, assignment, conveyance, transfer, lease or other disposition of less than all of the assets of the Company or of the Company and the Guarantors, taken as a whole, may be uncertain.

        There can be no assurance that the Company will have sufficient funds available to acquire Notes tendered upon the occurrence of a Change of Control.

        The Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements applicable to a Change of Control Offer made by the Company (including the same or a higher Change of Control Purchase Price) and has purchased all Notes validly tendered and not withdrawn pursuant to such Change of Control Offer.

        Any Change of Control Offer will comply with Regulation 14E under the Exchange Act and any other applicable federal and state securities laws and regulations. To the extent that the provisions of any applicable securities laws or regulations conflict with the provisions of this covenant, the Company and its Subsidiaries shall comply with such applicable securities laws and regulations and shall not be deemed by virtue of such compliance to have breached their obligations under this covenant.

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Disposition of Proceeds of Asset Sales

        The Company will not, and will not permit any of the Guarantors to, make any Asset Sale unless:

        (a)  the Company or such Guarantor, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the Capital Stock or other property or assets sold or otherwise disposed of;

        (b)  at least 75% of such consideration received by the Company or such Guarantor, as the case may be, consists of cash, Cash Equivalents or Replacement Assets (as defined below); provided, that any such Replacement Assets (A) shall be owned by the Company or a Guarantor and shall not be subject to any Liens except as expressly permitted by the Indenture, the Guarantees and the Security Documents (and the Company or such Guarantor, as the case may be, shall execute and deliver to the Trustee such Security Documents and other documents and instruments as shall be necessary to cause all such Replacement Assets to become subject to a Lien in favor of the Trustee (or, in the case of any Replacement Asset subject to a Mortgage, the Trustee or another trustee under such Mortgage), for the benefit of the holders of the Notes, securing its obligations under the Notes or its Guarantee, as the case may be, and otherwise shall comply with the provisions of the Indenture, the Guarantees and the Security Documents applicable to After-Acquired Property), (B) shall not include any Excluded Collateral and (C) shall not include any Capital Stock or other securities in any person unless that person becomes a Guarantor at the time of such Asset Sale;

        (c)  if such Asset Sale involves Collateral, it shall be in compliance with the provisions described under "—Possession, Use and Release of Collateral;" and

        (d)  the Company or such Guarantor, as the case may be, shall apply such Net Cash Proceeds as provided in the immediately succeeding paragraph.

        The foregoing subparagraphs (a) and (b) shall not apply to an Event of Loss; provided, however, that Net Cash Proceeds from an Event of Loss shall be used as follows: (1) first, the Company may use any or all of such Net Cash Proceeds to restore, rebuild, repair or replace the assets subject to such Event of Loss with a comparable asset and (2) then, to the extent any Net Cash Proceeds from an Event of Loss are not used as described in the preceding clause (1), all such remaining Net Cash Proceeds from such Event of Loss shall be reinvested or used as provided in subparagraphs (i) and (ii) of the next succeeding paragraph.

        Any such Net Cash Proceeds from an Asset Sale shall be applied within 365 days of the Asset Sale which generated such Net Cash Proceeds as follows:

        (i)    to the extent that such Net Cash Proceeds are derived from property or assets (including Capital Stock) which do not constitute Collateral or are not deemed (pursuant to the provisions described below) to constitute Collateral Proceeds ("Non-Collateral Proceeds"), such Non-Collateral Proceeds may, at the option of the Company, be applied to repay Indebtedness outstanding under the Credit Facility; and

        (ii)  with respect to (x) any Net Cash Proceeds derived from property or assets (including Capital Stock) which constitute Collateral ("Collateral Proceeds"), derived from a transaction as a result of which a Guarantor is released from its Guarantee as provided in the fifth paragraph under "—Guarantees" or which (pursuant to the provisions described below) are deemed to be Collateral Proceeds, and (y) any Non-Collateral Proceeds remaining after application as described in subparagraph (i) above (all Collateral Proceeds and amounts deemed to be Collateral Proceeds, together with any such remaining Non-Collateral Proceeds, and all Net Cash Proceeds from any Event of Loss, being hereinafter called, collectively, the "Available Amount"), such Available Amount shall, if the Company so elects, be applied to make an investment in properties and assets

58

that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the Company and the Guarantors existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets"); provided, that any Replacement Assets acquired with any such Collateral Proceeds or amounts deemed to constitute Collateral Proceeds (A) shall be owned by the Company or a Guarantor and shall not be subject to any Liens except as expressly permitted by the Indenture, the Guarantees and the Security Documents (and the Company or such Guarantor, as the case may be, shall execute and deliver to the Trustee such Security Documents and other documents and instruments as shall be necessary to cause all such Replacement Assets to become subject to a Lien in favor of the Trustee (or, in the case of any Replacement Asset subject to a Mortgage, the Trustee or another trustee under such Mortgage), for the benefit of the holders of the Notes, securing its obligations under the Notes or its Guarantee, as the case may be, and otherwise shall comply with the provisions of the Indenture, the Guarantees and the Security Documents applicable to After-Acquired Property), (B) shall not include any Excluded Collateral and (C) shall not include any Capital Stock or other securities in any person unless that person becomes a Guarantor at the time of such Asset Sale.

        During such 365 day period, pending the final application of the Net Cash Proceeds from the Asset Sale, the Company may use such Net Cash Proceeds to temporarily reduce borrowings under the Credit Facility or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by the Indenture. Notwithstanding the immediately preceding sentence, any portion of the Net Cash Proceeds that is not used as described in subparagraph (i) or (ii) of the immediately preceding paragraph within such 365 day period shall constitute "Excess Proceeds" subject to disposition as provided below.

        When the aggregate amount of Excess Proceeds equals or exceeds $10,000,000, the Company shall make an offer to purchase (an "Asset Sale Offer"), from all holders of the Notes, on a date (the "Asset Sale Purchase Date") not more than 40 business days after the date that the amount of Excess Proceeds equals or exceeds $10,000,000, the maximum aggregate principal amount (expressed as a multiple of $1,000) of the outstanding Notes that may be purchased with such Excess Proceeds, at a price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the purchase date. The Asset Sale Offer is required to remain open for at least 20 business days and until 5:00 p.m., New York City time, on the Asset Sale Purchase Date.

        To the extent that the aggregate principal amount of Notes tendered pursuant to an Asset Sale Offer is less than the maximum aggregate principal amount which may be purchased with such Excess Proceeds, any such remaining Excess Proceeds shall be retained by the Company, free and clear of the Liens of the Indenture and the Security Documents, any such Excess Proceeds shall not be subject to the provisions of this covenant and the Company may use such remaining Excess Proceeds for any purposes not otherwise prohibited by the Indenture. If the aggregate principal amount of Notes validly tendered and not withdrawn by holders thereof exceeds the maximum aggregate principal amount which may be purchased with such Excess Proceeds, Notes to be purchased will be selected on a pro rata basis. Upon completion of such Asset Sale Offer in accordance with this covenant, the amount of Excess Proceeds shall be reset to zero.

        All Collateral Proceeds and amounts which are deemed to be Collateral Proceeds shall be paid directly by the purchaser thereof to the Trustee and shall be deposited by the Trustee in the Collateral Account pending their application in accordance with this covenant or their release in accordance with the provisions described under "—Possession, Use and Release of Collateral" and "—Trust Moneys."

        Any Asset Sale Offer will comply with Regulation 14E under the Exchange Act and any other applicable federal and state securities laws and regulations. To the extent that the provisions of any applicable securities laws or regulations conflict with the provisions of this covenant, the Company and its Subsidiaries shall comply with such applicable securities laws and regulations and shall not be deemed by virtue of such compliance to have breached their obligations under this covenant.

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        Deemed Asset Sales.    In the event that the Company shall, in any transaction or series of transactions, sell, assign, convey, transfer, lease or otherwise dispose of substantially all (but not all) of its properties and assets as an entirety in a transaction permitted under "—Merger, Sale of Assets, Etc.," or if the Company shall cause or permit any of the Guarantors to enter into any such transaction or series of transactions if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or other disposition of substantially all (but not all) of the properties and assets of the Company or of the Company and the Guarantors taken as a whole in a transaction permitted under "—Merger, Sale of Assets, Etc.," the Surviving Entity (as described under "—Merger, Sale of Assets, Etc.") shall be deemed to have sold the properties and assets of the Company and the Guarantors not so transferred for purposes of this covenant and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. The Fair Market Value of such properties and assets of the Company and the Guarantors deemed to be sold shall be deemed to be the Net Cash Proceeds for purposes of the Asset Sale provisions of the Indenture. In the event that any Guarantor shall, in any transaction or series of transactions, sell, assign, convey, transfer, lease or otherwise dispose of substantially all (but not all) of its properties and assets in a transaction permitted under the fifth paragraph under "—Guarantees," the Surviving Person shall be deemed to have sold the properties and assets of such Guarantor not so transferred for purposes of this covenant and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. The Fair Market Value of such properties and assets of such Guarantor deemed to have been sold shall be deemed to be the Net Cash Proceeds for purposes of the Asset Sale provisions of the Indenture.

        In the event of a merger or consolidation of a Guarantor, sale of the Capital Stock of a Guarantor or other transactions as a result of which a Guarantor will be released from its Guarantee as provided in the fifth paragraph under "—Guarantees," then, anything in the Indenture to the contrary notwithstanding, (a) such transaction shall be deemed to be an Asset Sale and shall be subject to and shall be made only in compliance with the foregoing covenant and (b) the Net Cash Proceeds of such transaction shall be allocated between Collateral Proceeds and Non-Collateral Proceeds as follows: (i) such Net Cash Proceeds shall be multiplied by a fraction (A) the numerator of which is the Fair Market Value of the Collateral owned by such Guarantor and (B) the denominator of which is the Fair Market Value of all property and assets (including Collateral) owned by such Guarantor, and the resulting amount shall be deemed Collateral Proceeds, and (ii) the remainder of such Net Cash Proceeds shall be deemed Non-Collateral Proceeds.

        The Credit Facility prohibits the Company from purchasing any Notes. Any future credit agreements or other debt instruments may contain similar prohibitions. In the event that the Company is required to make an Asset Sale Offer at a time when the Company is prohibited from purchasing Notes, the Company could seek the consent of the lenders of such indebtedness to the purchase of Notes, use the proceeds of the Asset Sale (to the extent permitted by the Indenture) to pay down such indebtedness or could attempt to refinance the borrowings that contain such prohibition. If the Company does not obtain such a consent or repay such borrowings, the Company will remain prohibited from purchasing Notes. In such a case, the Company's failure to purchase tendered Notes would constitute an immediate Event of Default under the Indenture. An Event of Default under the Indenture would result in an event of default under the Credit Facility and could result in the acceleration of other indebtedness pursuant to cross-default clauses in other credit facilities and debt instruments.

        The Credit Agreement also prohibits the Company and the Guarantors from selling, transferring, conveying or leasing any of their properties, assets or rights other than sales in the ordinary course of business of inventory and other than certain other permitted sales. As a result, some Asset Sales permitted by the Indenture may not be permitted by the Credit Facility and therefore would constitute

60

an event of default under the Credit Facility. Any future credit agreements or other debt instruments may contain similar prohibitions.

Selection and Notice

        In the event that less than all of the Notes are to be redeemed at any time, selection of such Notes for redemption or other repurchase shall be made by the Trustee on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided, however, that no Notes shall be redeemed or otherwise repurchased except in a principal amount of $1,000 or an integral multiple of $1,000. Notice of redemption or other repurchase shall be mailed by first class mail at least 30 days but not more than 60 days before the redemption or other repurchase date to each holder of Notes to be redeemed or repurchased at its registered address. If any Note is to be redeemed or repurchased in part only, the notice of redemption or other repurchase that relates to such Note shall state the portion of the principal amount thereof to be redeemed or repurchased. A new Note in a principal amount equal to the portion not redeemed or repurchased will be issued in the name of the holder upon surrender for cancellation of the original Note. On and after the redemption or other repurchase date, interest will cease to accrue on Notes or portions of Notes called for redemption or repurchase, unless the Company defaults in the payment of the redemption or other repurchase price.

Certain Covenants

        The Indenture also contains the following covenants, among others:

Limitation on Indebtedness

        The Company will not, and will not permit any of the Guarantors to, directly or indirectly, incur any Indebtedness (including, without limitation, any Redeemable Capital Stock or any Acquired Indebtedness) unless, at the time of such incurrence:

        (1)  the Consolidated Fixed Charge Coverage Ratio of the Company for the Four Quarter Period immediately preceding the date of such incurrence would have been at least equal to 2.0 to 1, calculated on a Pro Forma basis (including Pro Forma application of the net proceeds therefrom) in accordance with the definition thereof, and

        (2)  no Default or Event of Default shall have occurred and shall be continuing at the time of such incurrence or would occur after giving Pro Forma effect to such incurrence (including Pro Forma application of the net proceeds therefrom).

        Notwithstanding the foregoing, the Company and the Guarantors may, to the extent specifically set forth below, incur any or all of the following:

        (a)  Indebtedness of the Company evidenced by the Notes and the Indenture, and Indebtedness of any Guarantor evidenced by its Guarantee of the Notes, in each case, up to the amount being issued on the Issue Date less any amounts repaid, retired or refinanced, and including obligations arising under the Security Documents to the extent that such obligations would constitute Indebtedness;

        (b)  Indebtedness of the Company and the Guarantors outstanding on the Issue Date, in the respective amounts outstanding on the Issue Date less any amounts repaid, retired or refinanced (other than (i) Indebtedness under, or guarantees of Indebtedness under, the Credit Facility, the Notes, the Guarantees, the Indenture and the Security Documents and (ii) Indebtedness under, or guarantees of Indebtedness under, the Old Bank Documents and the Old Note Documents);

        (c)  Indebtedness of the Company and the Guarantors under the Credit Facility; provided, that the aggregate principal amount of all Indebtedness (with letters of credit deemed to have a

61

principal amount equal to the maximum potential liability of the Company and the Guarantors thereunder) outstanding under the Credit Facility after giving effect to such incurrence does not exceed an aggregate principal amount at any time outstanding (including amounts outstanding on the Issue Date) equal to: the greater of (x) $100,000,000 and (y) the sum of 50% of the amount of inventory and 80% of the amount of accounts receivable of the Company and the Guarantors determined on a consolidated basis in accordance with GAAP;

        (d)  (i) Interest Rate Protection Obligations of the Company covering Indebtedness of the Company or a Guarantor and (ii) Interest Rate Protection Obligations of any Guarantor covering Indebtedness of such Guarantor; provided, that in the case of each of clauses (i) and (ii):

        (A)  any Indebtedness to which any such Interest Rate Protection Obligation relates bears interest at fluctuating interest rates and is otherwise permitted to be incurred under the Indenture,

        (B)  such Interest Rate Protection Obligation is entered into in the ordinary course of business in connection with the operations of the business of the Company or the Guarantors, and not for speculative purposes, to hedge against fluctuations in interest rates of such Indebtedness, and

        (C)  the notional principal amount of any such Interest Rate Protection Obligation does not exceed the principal amount of the Indebtedness to which such Interest Rate Protection Obligation relates; provided, however, that the Company and the Guarantors may enter into Interest Rate Protection Obligations relating to Indebtedness which they anticipate will be incurred within thirty days of the incurrence of such Interest Rate Protection Obligation so long as (x) the aggregate notional principal amount of such Interest Rate Protection Obligations does not exceed the lesser of (I) $50,000,000 and (II) the aggregate principal amount of such Indebtedness the Company and the Guarantors anticipate will be incurred, (y) such Interest Rate Protection Obligations are treated as a hedge under GAAP and (z) such Interest Rate Protection Obligations otherwise comply with clauses (A) and (B) above and the other provisions of this subparagraph (d);

        (e)  Indebtedness under Currency Agreements entered into by the Company or any of the Guarantors in the ordinary course of business in connection with the operations of the business of the Company or the Guarantors, and not for speculative purposes, to hedge against fluctuations in foreign exchange rates; provided, that in the case of Currency Agreements which relate to Indebtedness, (i) such Indebtedness is otherwise permitted to be incurred under the Indenture and (ii) such Currency Agreements do not increase the Indebtedness of the Company and the Guarantors outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;

        (f)    Indebtedness of a Guarantor owed to and held by the Company or a Guarantor; provided, that

        (i)    any such Indebtedness shall be unsecured,

        (ii)  any such Indebtedness also shall be contractually subordinated in all respects to the Guarantee of such Guarantor, and

        (iii)  (A) any transfer of such Indebtedness by the Company or by a Guarantor (other than to the Company or to a Guarantor and other than to the Revolver Agent as a result of the grant of a security interest therein to secure the obligations of the Company and the Guarantors under the Credit Facility) and (B) any event that causes the Guarantor lender to no longer be a Guarantor shall, in each case under clause (A) or (B), be deemed to be a new incurrence of Indebtedness by the Guarantor borrower (and any guarantors of such

62

Indebtedness) at the time of such transfer, issuance, sale or other disposition, and such incurrence shall be subject to all of the provisions of this covenant;

        (g)  Indebtedness of the Company owed to and held by a Guarantor; provided, that:

        (i)    such Indebtedness shall be unsecured and contractually subordinated to the prior payment in full in cash of, and in all other respects to, the Notes, and

        (ii)  (A) any transfer of such Indebtedness by the Company or by a Guarantor (other than to another Guarantor and other than to the Revolver Agent as a result of the grant of a security interest therein to secure the obligations of the Company and the Guarantors under the Credit Facility) and (B) any event that causes the Guarantor lender to no longer be a Guarantor shall, in each case under clause (A) or (B), be deemed to be a new incurrence of Indebtedness by the Company (and any guarantors of such Indebtedness) at the time of such transfer, issuance, sale or other disposition, and such incurrence shall be subject to all of the provisions of this covenant;

        (h)  Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within two business days of incurrence;

        (i)    Indebtedness (including Indebtedness represented by letters of credit) incurred in respect of bid or performance bonds provided by the Company or the Guarantors in the ordinary course of business consistent with customary industry practices and not in connection with or in respect of liabilities for borrowed money, obligations evidenced by notes, debentures or other similar instruments, Capital Leases or guarantees in respect thereof or other Indebtedness;

        (j)    Indebtedness of the Company or any of the Guarantors represented by letters of credit for the account of the Company or such Guarantor, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements provided by the Company or the Guarantors in the ordinary course of business consistent with customary industry practices and not in connection with or in respect of liabilities for borrowed money, obligations evidenced by notes, debentures or other similar instruments, Capital Leases or guarantees in respect thereof or other Indebtedness;

        (k)  unsecured Indebtedness of CF&I evidenced by any promissory note which CF&I is required to deliver to the limited partner of CF&I pursuant to Section 7.1 of the CF&I Partnership Agreement (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) or incurred pursuant to Section 7.3-2(ii)(2) of the CF&I Partnership Agreement (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) to finance a shortfall in a required cash distribution to the limited partner of CF&I, less the aggregate amount of any payments or deemed payments in respect thereof out of Distributable Cash (as defined in the CF&I Partnership Agreement) or otherwise;

        (l)    Permitted Refinancing Indebtedness;

        (m)  Acquired Indebtedness; provided, that with respect to any Acquired Indebtedness incurred and outstanding pursuant to this clause (m), (i) it shall have been in existence prior to the contemplation of the acquisition, consolidation, merger or other transaction, and not incurred in connection with, or in contemplation of, such transaction, and (ii) either (A) the aggregate amount of such Acquired Indebtedness (together with any Indebtedness incurred to refinance, replace, refund, renew or extend any such Indebtedness, including Permitted Refinancing Indebtedness) shall not exceed $10,000,000 outstanding at any time or (B) immediately after giving effect to such

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transaction, the Company shall be able to incur an additional $1.00 of Indebtedness under the first paragraph of this covenant;

        (n)  Capitalized Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of development, construction, installation or improvement of property, plant or equipment used in the business of the Company or the Guarantors, in an aggregate amount (together with any Indebtedness incurred to refinance, replace, refund, renew or extend any such Indebtedness, including Permitted Refinancing Indebtedness) not to exceed $10,000,000 at any time outstanding pursuant to this clause (n); provided, that the principal amount of the Indebtedness incurred with respect to any particular property, plant or equipment does not exceed 100% of the cost of such acquisition, development, construction, installation or improvement of such property, plant or equipment; and

        (o)  Indebtedness of the Company or any Guarantor, in addition to that described in clauses (a) through (n) above, in an aggregate principal amount outstanding at any time not exceeding $50,000,000.

        For purposes of determining compliance with this covenant, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (d) through (n) above, or is entitled to be incurred pursuant to the first paragraph of this covenant, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this covenant (provided, that all Indebtedness under the Credit Facility outstanding on the Issue Date shall be deemed to have been incurred pursuant to clause (c) above and all Indebtedness evidenced by the Notes, the Indenture, the Guarantees and the Security Documents shall be deemed to have been incurred pursuant to clause (a) above) and may later reclassify such Indebtedness into any one or more of the categories described in any of clauses (d) through (n) above (provided, that at the time of reclassification it meets the criteria in such category or categories).

Limitation on Restricted Payments

        The Company will not, and will not permit any of the Guarantors to, directly or indirectly:

        (a)  declare or pay any dividend or make any other distribution or payment on or in respect of Capital Stock of the Company or any of the Guarantors or to the direct or indirect holders (in their capacities as such) of Capital Stock of the Company or any of the Guarantors (other than (i) dividends or distributions payable solely in Capital Stock of the Company (other than Redeemable Capital Stock) or in options, warrants or other rights to purchase Capital Stock of the Company (other than Redeemable Capital Stock) or (ii) the declaration or payment of dividends or other distributions to the extent declared or paid to the Company or a Guarantor),

        (b)  purchase, redeem, defease or otherwise acquire or retire for value any Capital Stock of the Company or any of the Guarantors (other than any such Capital Stock owned by the Company or by a Guarantor),

        (c)  make any principal payment on, or purchase, defease, repurchase, redeem or otherwise acquire or retire for value, prior to any scheduled maturity, scheduled repayment, scheduled sinking fund payment or other Stated Maturity, any Subordinated Indebtedness or Pari Passu Indebtedness (other than any such Indebtedness owned by the Company or a Guarantor and other than any such Pari Passu Indebtedness under the Credit Agreement), or

        (d)  make any Investment (other than any Permitted Investment) in any person,

(such payments or Investments described (and not excluded) in the preceding clauses (a), (b), (c) and (d) are collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect

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to the proposed Restricted Payment (the amount of any such Restricted Payment, if other than cash, shall be the Fair Market Value on the date of such Restricted Payment of the property, assets or securities proposed to be transferred or issued by the Company or such Guarantor, as the case may be, pursuant to such Restricted Payment):

        (A)  no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof,

        (B)  immediately prior to and after giving effect on a Pro Forma basis to such Restricted Payment as if it had been made at the beginning of the applicable Four Quarter Period, the Company would have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of the covenant described under "—Limitation on Indebtedness" above (assuming a market rate of interest with respect to such additional Indebtedness), and

        (C)  such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made on and after the Issue Date (excluding Restricted Payments permitted by clauses (ii), (iii), (iv), (v), (vi), (vii) and (viii) of the following paragraph but including Restricted Payments permitted by clause (i) of the following paragraph), would not exceed the sum (without duplication) of:

        (1)  50% of the aggregate Consolidated Net Income of the Company for the period (taken as one accounting period) (or, if Consolidated Net Income of the Company for such period shall be a negative number, 100% of such negative number) beginning on the first day of the fiscal quarter of the Company during which the Issue Date occurs and ending on the last day of the fiscal quarter of the Company (for which internal financial statements are available) immediately preceding the date of such proposed Restricted Payment, plus

        (2)  100% of the aggregate Net Cash Proceeds received by the Company after the Issue Date either (x) as Capital Contributions to the Company after the Issue Date from any person (other than a Subsidiary of the Company) or (y) from the issuance or sale of Capital Stock (excluding Redeemable Capital Stock, but including Capital Stock (other than Redeemable Capital Stock) issued upon the conversion of convertible Indebtedness or from the exercise of options, warrants or rights to purchase Capital Stock (other than Redeemable Capital Stock)) of the Company to any person (other than to a Subsidiary of the Company) after the Issue Date, plus

        (3)  to the extent not otherwise included in the calculation of Consolidated Net Income for purposes of clause (1) above, in the case of the disposition or repayment in cash of any Investment (which Investment was made after the Issue Date and which constituted a Restricted Payment (excluding any Investment described in clause (x) of the definition of "Permitted Investments"), an amount equal to the lesser of the (x) "cash return of capital" (as defined below) with respect to such Investment and (y) the initial amount of such Investment, in each case, less the cost of the disposition of such Investment, plus

        (4)  to the extent not otherwise included in clause (1), (2) or (3) above of this subparagraph (C), to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Guarantor after the Issue Date, the lesser of (x) the Fair Market Value of the Company's Investment in such Guarantor as of such date of redesignation and (y) the Company's actual Investment in such Subsidiary as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary, to the extent such Investment originally constituted a Restricted Payment.

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For purposes of clause (C)(2) above, the value of the aggregate Net Cash Proceeds received by the Company upon the issuance of Capital Stock upon the conversion of convertible Indebtedness or upon the exercise of options, warrants or rights will be the Net Cash Proceeds received upon the issuance of such Indebtedness, options, warrants or rights plus the incremental cash amount received by the Company upon the conversion or exercise thereof, in each case, after the Issue Date. As used in clause (C)(3) above, "cash return of capital" with respect to an Investment means the sum of (x) the aggregate amount of any dividends, payments of interest on Indebtedness, repayments of loans or advances or other distributions, in each case, in cash, with respect to, and (y) the aggregate net proceeds received by the Company and the Guarantors upon the sale or other disposition of, such Investment after the Issue Date.

        None of the foregoing provisions will prohibit:

        (i)    the payment of any dividend within 60 days after the date of its declaration, if at the date of declaration such payment would be permitted by the foregoing paragraph;

        (ii)  so long as no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase or other acquisition or retirement of any shares of any class of Capital Stock of the Company or any Guarantor in exchange for, or out of the Net Cash Proceeds of, a substantially concurrent (x) Capital Contribution to the Company from any person (other than a Subsidiary of the Company) or (y) issue and sale of other shares of Capital Stock (other than Redeemable Capital Stock) of the Company to any person (other than to a Subsidiary of the Company); provided, however, that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase or other acquisition or retirement shall be excluded from clause (C)(2) of the preceding paragraph;

        (iii)  so long as no Default or Event of Default shall have occurred and be continuing, any redemption, repurchase or other acquisition or retirement of Subordinated Indebtedness by exchange for, or out of the Net Cash Proceeds of, a substantially concurrent (x) Capital Contribution to the Company from any person (other than a Subsidiary of the Company) or (y) issue and sale of:

        (1)  Capital Stock (other than Redeemable Capital Stock) of the Company to any person (other than to a Subsidiary of the Company); provided, however, that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase or other acquisition or retirement shall be excluded from clause (C)(2) of the preceding paragraph; or

        (2)  Indebtedness of the Company issued to any person (other than a Subsidiary of the Company), so long as such Indebtedness is permitted to be incurred by the other provisions of the Indenture and is Subordinated Indebtedness which (x) has a final Stated Maturity after the 123rd day after the Final Maturity Date, (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Notes and (z) is subordinated to the Notes in the same manner and at least to the same extent as the Subordinated Indebtedness so purchased, exchanged, redeemed, acquired or retired;

        (iv)  so long as no Default or Event of Default shall have occurred and be continuing, any redemption, repurchase or other acquisition or retirement of Pari Passu Indebtedness by exchange for, or out of the Net Cash Proceeds of, a substantially concurrent (x) Capital Contribution to the Company from any person (other than a Subsidiary of the Company) or (y) issue and sale of:

        (1)  Capital Stock (other than Redeemable Capital Stock) of the Company to any person (other than to a Subsidiary of the Company); provided, however, that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase or other acquisition or retirement shall be excluded from clause (C)(2) of the preceding paragraph; or

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        (2)  Indebtedness of the Company issued to any person (other than a Subsidiary of the Company), so long as such Indebtedness is permitted to be incurred by the other provisions of the Indenture and is Subordinated Indebtedness or Pari Passu Indebtedness which (x) has a final Stated Maturity after the 123rd day after the Final Maturity Date and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Notes;

        (v)  application of the net proceeds from the issuance and sale of the Notes to discharge Indebtedness under the Old Notes and to repay Indebtedness under the Old Credit Agreement in accordance with the "Use of Proceeds" section of this offering circular;

        (vi)  the declaration or payment of distributions by CF&I to the limited partner and the general partner of CF&I in accordance with the terms of the CF&I Partnership Agreement as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof);

        (vii) (A) the purchase by the Company or New CF&I of all of the interest of the limited partner in CF&I (including any promissory note delivered to such limited partner by CF&I pursuant to Section 7.1 of the CF&I Partnership Agreement) pursuant to and in accordance with Section 14 of the CF&I Partnership Agreement (in each case, as such agreement is in effect on the Issue Date without giving effect to any subsequent amendment or modification thereto), and (B) the purchase by the Company or CF&I of all of the Capital Stock of CF&I owned by Nippon Steel Corporation, NS Finance III, Inc., Nissho Iwai Corporation or Nissho Iwai American Corporation pursuant to and in accordance with paragraph 4(e), (f) or (g) of the CF&I Stockholders Agreement (as in effect on the Issue Date without giving effect to any subsequent amendment or modification thereto); and

        (viii) other Restricted Payments pursuant to this clause (viii) not to exceed $20,000,000 in the aggregate from and after the Issue Date.

        In addition, none of the foregoing provisions will prohibit the Company or any of the Guarantors from continuing to own any Investment which it owned on the Issue Date.

        Not later than the date of making any Restricted Payment pursuant to clause (a), (b) or (c) of the first paragraph of this covenant or any Restricted Payment in excess of (or series of Restricted Payments in the aggregate in excess of) $2,500,000, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this "Limitation on Restricted Payments" covenant were computed, together with a copy of any opinion or appraisal required by the Indenture.

Limitation on Liens

        The Company will not, and will not permit any of the Guarantors to, directly or indirectly, (a) incur or suffer to exist or become effective any Lien of any kind against or upon (i) any item of Collateral (whether owned on the Issue Date or thereafter acquired) or any income, profit or proceeds therefrom or (ii) any other property or assets of the Company or any of the Guarantors (whether owned on the Issue Date or thereafter acquired) or any income, profit or proceeds therefrom, or (b) assign or convey any right to receive any such income, profit or proceeds therefrom, except, in the case of each of clauses (a) and (b), for Permitted Liens.

        Notwithstanding the foregoing, the Company and the Guarantors may incur Liens on property or assets referred to in clause (a)(ii) above or income, profit or proceeds therefrom if (x) in the case of Liens securing Subordinated Indebtedness, the Notes and the Guarantees are secured contemporaneously therewith or prior thereto by a Lien on such property, assets, income, profits and proceeds and each such Lien securing such Subordinated Indebtedness is by its terms expressly subordinate to and junior in right of payment and in all other respects to the Liens on such property,

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assets, income, profits and proceeds securing the Notes and the Guarantees with the same relative subordination that such Subordinated Indebtedness has with respect to the Notes and the Guarantees and (y) in all other cases, the Notes are equally and ratably secured contemporaneously therewith or prior thereto with the obligations so secured.

Limitations on Layering Indebtedness

        The Company will not, and will not permit any of the Guarantors to, incur any Indebtedness that is contractually subordinated to any Indebtedness of the Company or any Guarantor unless the Indebtedness being incurred is contractually subordinated to the Notes at least to the same extent as it is to such other Indebtedness.

Limitation on Issuances and Sale of Capital Stock by Guarantors

        The Company (a) will not permit any of the Guarantors to issue any Capital Stock (other than to the Company or to a Guarantor) and (b) will not permit any person (other than the Company or a Guarantor) to own any Capital Stock of any Guarantor; provided, that:

        (i)    this covenant shall not prohibit the issuance and sale of (x) all, but not less than all, of the issued and outstanding Capital Stock of any Guarantor owned by the Company and any other Guarantor in compliance with the other provisions of the Indenture (including, without limitation, the terms of the covenant described under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales," including, without limitation, the application of the Net Cash Proceeds from such Asset Sale in accordance with such covenant) or (y) directors' qualifying shares or investments by foreign nationals mandated by applicable law;

        (ii)  clause (b) of this covenant shall not apply to any Capital Stock of CF&I or New CF&I which, on the Issue Date, was not owned by the Company or a Guarantor, so long as there is no increase in the percentage of the outstanding Capital Stock of CF&I or New CF&I which is owned by persons other than the Company and the Guarantors (it being understood that an increase in the capital account of the limited partner of CF&I pursuant to the terms of the CF&I Partnership Agreement (otherwise than pursuant to an additional contribution by the limited partner to the partnership) shall not be deemed, in and of itself, to be an increase in the percentage of CF&I's Capital Stock owned by persons other than the Company and the Guarantors); and

        (iii)  clause (b) of this covenant shall not apply to any Capital Stock of any Guarantor acquired by the Company after the Issue Date if less than all of the Capital Stock is acquired by the Company, so long as there is no increase in the percentage of the outstanding Capital Stock of that Guarantor which is owned by persons other than the Company and any other Guarantor.

Limitation on Transactions with Affiliates

        The Company will not, and will not permit any of the Guarantors to, directly or indirectly, make, enter into or suffer to exist any transaction or series of related transactions (including without limitation (i) any sale, transfer, disposition, purchase, exchange or lease of assets, property or services, (ii) any contracts, agreements or other arrangements, (iii) any payments, Investments, loans or advances, (iv) any other transaction or series of related transactions or (v) any amendments, supplements, modifications or waivers of or with respect to any of the foregoing), in each case, to, from, with, or for the benefit of, any Affiliate of the Company (other than an Affiliate which is a Guarantor) or any Interested Person (each of the foregoing, an "Affiliate Transaction"), unless:

        (a)  such Affiliate Transaction or series of Affiliate Transactions is on terms that are no less favorable to the Company or such Guarantor, as the case may be, than those which could have been obtained in a comparable transaction at such time from persons who are not Affiliates of the Company or Interested Persons, and

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        (b)  the Company delivers to the Trustee:

        (x)  with respect to an Affiliate Transaction or series of Affiliate Transactions involving aggregate payments, consideration or value equal to or greater than $2,500,000, a resolution of the Board of Directors of the Company set forth in an Officers' Certificate certifying that such Affiliate Transaction or series of Affiliate Transactions complies with the preceding clause (a), that such Affiliate Transaction or series of Affiliate Transactions was approved by a majority of disinterested members of the Board of Directors of the Company (if any) and, if applicable, certifying that the opinion referred to in the following clause (b)(y) has been delivered; and

        (y)  with respect to an Affiliate Transaction or series of Affiliate Transactions involving aggregate payments, consideration or value equal to or greater than $5,000,000 (or any Affiliate Transaction or series of Affiliate Transactions involving aggregate payments or value greater than $2,500,000 if the approval of a majority of disinterested members of the Board of Directors has not been obtained, as described in the foregoing paragraph (b)(x)), a written opinion from an Independent Financial Advisor stating that the terms of such Affiliate Transaction or series of Affiliate Transactions are fair to the Company or the Guarantor, as the case may be, from a financial point of view;

provided, that clauses (b)(x) and (y) of this covenant shall not be applicable with respect to transactions entered into in the ordinary course of business (A) between the Company or any of the Guarantors, on the one hand, and Camrose, on the other hand, or (B) between or among any of the Company, Camrose, Canadian National Steel, CPC, New CF&I or CF&I; in each case under clause (A) or (B), provided that such transactions are permitted pursuant to the terms of the Camrose Partnership Agreement, the New CF&I Stockholders Agreement and the CF&I Partnership Agreement, as applicable, in each case as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof).

        Notwithstanding the foregoing, the following shall not be deemed to be Affiliate Transactions:

        (i)    paying dividends or making other distributions in respect of its Capital Stock permitted under the covenant described under "—Limitation on Restricted Payments" above,

        (ii)  paying reasonable and customary fees to directors of the Company or any of the Guarantors who are not employees of the Company or any of the Guarantors,

        (iii)  making loans or advances to officers, employees or consultants of the Company and the Guarantors (including travel and moving expenses) in the ordinary course of business consistent with industry practices for bona fide business purposes of the Company or such Guarantor not in excess of $2,000,000 in the aggregate at any one time outstanding,

        (iv)  making contributions of Common Stock of the Company to the Company's employee stock ownership plan, or

        (v)  making payments in the ordinary course of business consistent with past practices to employees of the Company and its Subsidiaries pursuant to any profit participation plan or other employee compensation arrangements approved by a majority of independent (as to such transaction) members of the Board.

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Limitation on Dividends and Other Payment Restrictions Affecting Guarantors

        The Company will not, and will not permit any of the Guarantors to, directly or indirectly, incur, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Guarantor to:

        (a)  pay dividends or make any other distributions (whether such dividends or distributions are in cash or otherwise) on or in respect of its Capital Stock or any other interest or participation in, or measured by, its profits,

        (b)  pay any Indebtedness owed to the Company or any other Guarantor,

        (c)  make loans or advances to, or any investment in, the Company or any other Guarantor,

        (d)  transfer any of its properties or assets to the Company or any other Guarantor, or

        (e)  guarantee any Indebtedness of the Company or of any other Guarantor.

        However, the preceding restrictions will not apply to any such encumbrances or restrictions existing under or by reason of:

        (i)    applicable law,

        (ii)  customary non-assignment provisions of any lease or any contract governing a leasehold interest of the Company or any Guarantor, in each case, entered into in the ordinary course of business and consistent with past practice,

        (iii)  customary restrictions on transfers of property subject to a Lien permitted under the Indenture which could not materially adversely affect the Company's ability to satisfy its obligations under the Indenture and the Notes or any Guarantors' ability to satisfy its obligations under the Indenture and its Guarantee,

        (iv)  any agreement or other instrument of a person acquired by the Company or any Guarantor in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any person, or the properties or assets of any person, other than the person, or the properties or assets of the person, so acquired; provided, that in the case of Indebtedness, such Indebtedness was permitted by the terms of the Indenture to be incurred,

        (v)  provisions contained in agreements or instruments relating to Indebtedness which prohibit the transfer of all or substantially all of the assets of the obligor thereunder unless the transferee shall assume the obligations of the obligor under such agreement or instrument; provided, that such Indebtedness was permitted by the terms of the Indenture to be incurred,

        (vi)  provisions contained in the Indenture, the Notes, the Guarantees, the Intercreditor Agreement or any Security Documents,

        (vii) (A) provisions contained in the Credit Facility and in security agreements or similar documents permitted by the Indenture entered into by the Company, CF&I and New CF&I pledging Revolver Collateral to secure their respective obligations thereunder (in each case, which are no more restrictive, and no less favorable, to the holders of the Notes than the provisions in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof), and (B) provisions contained in such additional guarantees of the Company's obligations under the Credit Facility permitted by the Indenture and in such additional security agreements or similar documents permitted by the Indenture pledging Revolver Collateral pursuant to the Credit Facility which may be entered into after the Issue Date by other Guarantors (and in amendments thereto and replacements thereof) which in each case are permitted by the Indenture and are no more restrictive, and no less favorable to the holders of the Notes, than the provisions of the guarantees, security agreements or similar documents, as the case may be, referred to in clause (A)

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above (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof);

        (viii)(A) provisions contained in other agreements or instruments relating to Indebtedness in effect on the Issue Date (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) and (B) provisions contained in amendments thereto and permitted refinancings or replacements thereof, which in each case are permitted by the Indenture and are no more restrictive, and no less favorable to the holders of the Notes, than the provisions of the agreements or instruments, as the case may be, referred to in clause (A) above (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof); and

        (ix)  encumbrances and restrictions created by the CF&I Partnership Agreement and the New CF&I Stockholders Agreement (each as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) and in any amendments thereto which are permitted by the Indenture and which encumbrances and restrictions contained in any such amendment are no more restrictive and are no less favorable to the holders of the Notes than those contained in such agreement prior to such amendment.

Limitation on Sale-Leaseback Transactions

        The Company will not, and will not permit any of the Guarantors to, enter into any Sale-Leaseback Transaction with respect to any property or assets of the Company or any of the Guarantors.

        Notwithstanding the foregoing, the Company and the Guarantors may enter into Sale-Leaseback Transactions with respect to property or assets which do not constitute Collateral and which property or assets are acquired or constructed after the Issue Date if:

        (a)  the Company or such Guarantor could have (i) incurred Indebtedness in an amount equal to the Attributable Indebtedness relating to such Sale-Leaseback Transaction pursuant to the first paragraph under "—Limitation on Indebtedness" above and (ii) incurred a Lien to secure such Indebtedness pursuant to the covenant described under "—Limitation on Liens" above,

        (b)  the gross cash proceeds of such Sale-Leaseback Transaction are at least equal to the Fair Market Value of the property that is the subject of such transaction, and

        (c)  the transfer of assets in such Sale-Leaseback Transaction is permitted by, and the Company applies the Net Cash Proceeds of such transaction in compliance with, the covenant described under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales" above.

Additional Guarantors

        The Indenture provides that the Company will not, and will not permit any Guarantor to, directly or indirectly, establish or acquire a new Subsidiary, as the case may be, unless either:

        (a)  such new Subsidiary is designated as an Unrestricted Subsidiary as described under "Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries" below or

        (b)  (i)    such new Subsidiary simultaneously (x) executes and delivers to the Trustee a supplemental indenture, in form reasonably satisfactory to the Trustee, pursuant to which such new Subsidiary becomes a Guarantor and unconditionally guarantees the obligations of the Company under the Notes on the same terms as the other Guarantors and as set forth in the Indenture and (y) executes and delivers a written instrument pursuant to which it shall become a party to the Intercreditor Agreement;

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        (ii)  to the extent that such new Subsidiary owns (or thereafter acquires) any property or assets of the types which would constitute "Trust Property" (as such term is defined in the form of Mortgage attached as an exhibit to the Indenture) or "Collateral" (as such term is defined in the form of Security Agreement attached as an exhibit to the Indenture), such new Subsidiary shall execute and deliver to the Trustee such Security Documents as shall be necessary to cause such property and assets to become subject to a Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage), for the benefit of the holders of the Notes, securing such new Subsidiary's obligations under its Guarantee and otherwise shall comply with the provisions of the Indenture applicable to After-Acquired Property; and

        (iii)  the Company shall deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each in a form reasonably satisfactory to the Trustee, stating that the Company has complied with clauses (i) and (ii) of this subparagraph (b) in connection with the establishment or acquisition of such new Subsidiary.

        Following compliance with clauses (b)(i), (ii) and (iii) above, and thereafter, such Subsidiary shall be a Guarantor for all purposes of the Indenture.

        For purposes of this covenant, the designation of any Unrestricted Subsidiary as a Guarantor shall be deemed to be the establishment of a new Subsidiary and shall be required to comply with subparagraph (b) above. The Indenture provides that the Company will not permit to exist any Subsidiary unless either (a) such Subsidiary has been designated as an Unrestricted Subsidiary as described under "Unrestricted Subsidiaries; Designation of Subsidiaries" below or (b) such Subsidiary has become a Guarantor in accordance with the Indenture. The Indenture also provides that the Company will not permit any Unrestricted Subsidiary to own any Capital Stock of a Guarantor.

Impairment of Security Interests

        The Indenture provides that the Company will not, and will not permit any of the Guarantors to, take or omit to take any action which action or omission could reasonably be expected to have the result of adversely affecting or impairing the Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the holders of the Notes in the Collateral, except for the incurrence or existence of Permitted Liens as expressly permitted by the Indenture, the Intercreditor Agreement and the Security Documents. The Indenture further provides that the Company will not, and will not permit any of the Guarantors, to grant to any person (other than the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the holders of the Notes) any interest whatsoever in the Collateral except as expressly permitted by the Indenture, the Intercreditor Agreement and the Security Documents.

Limitation on Amendments to CF&I Agreements

        The Indenture provides that the Company will not, and will not permit any Guarantor to, enter into or consent to any amendment, supplement, waiver or other modification of the CF&I Partnership Agreement or the New CF&I Stockholders Agreement which (i) in any manner would be adverse to the interests of the holders of the Notes or the Trustee (it being understood that the admission by CF&I of one or more additional or substitute limited partners shall not be deemed adverse to the interests of the holders of the Notes or the Trustee so long as made in compliance with the other provisions of the Indenture, including the immediately following clause (ii)) or (ii) in the case of the CF&I Partnership Agreement, would increase the amount of cash or other property distributable to, or the amount of profits allocated to, or any voting or management rights of, any limited partner of CF&I or the limited partners of CF&I in the aggregate, or decrease the amount of cash or other property distributable to, or the amount of profits allocated to, or any voting or management rights of, the general partner of CF&I.

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Reporting Requirements

        The Indenture provides that, whether or not required by the Commission, so long as any notes are outstanding, the Company will furnish to the holders of Notes, within the time periods specified in the Commission's rules and regulations:

        (a)  all quarterly and annual financial information that would be required to be contained in a filing with the Commission on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations," any and all separate financial information of the Guarantors required under Rule 3-10 of Regulation S-X under the Securities Act, and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants; and

        (b)  all current reports that would be required to be filed with the Commission on Form 8-K if the Company were required to file such reports.

        In addition, whether or not required by the Commission, the Company will file a copy of all of the information and reports referred to in subparagraphs (a) and (b) above with the Commission for public availability within the time periods specified in the Commission's rules and regulations (unless the Commission will not accept such a filing) and make such information available to securities analysts and prospective investors upon request; provided, that any information accepted for filing by the Commission shall be deemed to have been provided to the holders of Notes for purposes hereof.

Merger, Sale of Assets, Etc.

Merger, Sale of Assets, Etc. of the Company or a Guarantor

        The Company will not (a) directly or indirectly, in any transaction or series of transactions, merge, consolidate or amalgamate with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to, any person or persons, or (b) permit any of the Guarantors to enter into any such transaction or series of transactions if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the properties and assets of the Company or of the Company and the Guarantors, taken as a whole, to any other person or persons, unless at the time of and after giving effect thereto:

        (a)  either:

        (i)    the Company shall be the surviving person, or

        (ii)  the person formed by or surviving such consolidation, merger or amalgamation (if other than the Company) or into which the Company or such Guarantor, as the case may be, is merged or to which the properties and assets of the Company or such Guarantor, as the case may be, are transferred (any such surviving person or transferee person being the "Surviving Entity"),

        (A)  shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and

        (B)  shall expressly assume by a supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all the obligations of the Company (and such Guarantor, as the case may be) under the Notes, the Indenture and the Guarantees (and such supplemental indenture shall also be executed by each Guarantor and shall further provide that each Guarantor confirms that its obligations under the Indenture and its Guarantee remain in full force and effect), and

        (C)  shall expressly assume, by amendment, supplement or other appropriate instrument executed and delivered to the Trustee, in form reasonably satisfactory to the

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Trustee, all of the obligations of the Company (and such Guarantor, as the case may be) under the Registration Rights Agreement, the Intercreditor Agreement and the Security Documents (and such amendment, supplement or other instrument shall also be executed by each Guarantor and shall further provide that each Guarantor confirms that its obligations under the Registration Rights Agreement, the Intercreditor Agreement and its Security Documents remain in full force and effect), and

        (D)  shall cause such amendments, supplements or other instruments to be filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by the Company and, if applicable, such Guarantor (in the case of a merger or consolidation) or on the Collateral transferred to the Surviving Entity (in the case of a transfer of assets), together with such financing statements as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant states);

        (b)  the Collateral owned by the Company and, if applicable, such Guarantor (in the case of a merger or consolidation) or the Collateral transferred to the Surviving Entity (in the case of a transfer of assets) (1) shall continue to constitute Collateral under the Indenture and the Security Documents, (2) shall be subject to the Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the holders of the Notes and (3) shall not be subject to any Lien other than Liens expressly permitted by the Indenture and the Security Documents;

        (c)  the property and assets of the person which is merged or consolidated with or into the Company or such Guarantor, or to which the properties and assets of the Company or such Guarantor are transferred, to the extent that they are property or assets of the types which would constitute "Trust Property" (as defined in the form of Mortgage attached as an exhibit to the Indenture) or "Collateral" (as defined in the form of Security Agreement attached as an exhibit to the Indenture) shall be treated as After-Acquired Property and the Company and the Guarantors or the Surviving Entity, as the case may be, shall take such actions as may be necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by the Indenture and the Security Documents;

        (d)  (1) immediately before and immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing, and (2) the Company or the Surviving Entity, as the case may be, after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), could incur $1.00 of additional Indebtedness pursuant to the first paragraph of the covenant described under "—Certain Covenants—Limitation on Indebtedness" above (assuming a market rate of interest with respect to such additional Indebtedness);

        (e)  immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), the Consolidated Net Worth of the Company or the Surviving Entity, as the case may be, is at least equal to the Consolidated Net Worth of the Company immediately before such transaction or series of transactions; and

        (f)    if, as a result of any such transaction or series of transactions, any property or assets of the Company or any of the Guarantors would become subject to a Lien, such Lien is permitted by

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the provisions of the Indenture described under "—Certain Covenants—Limitation on Liens" above.

        In connection with any such transaction or series of transactions, the Company shall deliver, or cause to be delivered, to the Trustee an Officers' Certificate and an Opinion of Counsel, each in form reasonably satisfactory to the Trustee, each stating that such transaction or series of transactions and any supplemental indenture, amendments, supplements or other instruments or agreements required by clause (a) or (c) above comply with the requirements of the Indenture and that all conditions precedent therein provided for relating to such transaction or series of transactions have been complied with (except that such Opinion of Counsel need express no opinion as to the matters referred to in clauses (b)(3), (d)(2) and (e) above).

        Upon any consolidation or merger or any transfer of all or substantially all of the assets of the Company in accordance with the foregoing, in which the Company is not the Surviving Entity, the Surviving Entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under the Indenture, the Notes, the Registration Rights Agreement, the Intercreditor Agreement, and the relevant Security Documents with the same force and effect as if such Surviving Entity had been named as the Company therein. Thereafter, except in the case of a lease, the predecessor corporation shall be released from its obligations thereunder, except with respect to any obligations that arise from, or are related to, such transaction; provided, however, that solely for purposes of computing amounts described in subclause (C) of the first paragraph under "—Certain Covenants—Limitation on Restricted Payments" above, any such Surviving Entity shall only be deemed to have succeeded to and be substituted for the Company with respect to periods subsequent to the effective time of such transaction or series of transactions.

Merger, Sale of Assets, Etc. of a Guarantor

        No Guarantor will, (a) directly or indirectly, in any transaction or series of transactions, merge, consolidate or amalgamate with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to, any person or persons, or (b) permit any of its Subsidiaries that are Guarantors (each, a "Subsidiary Guarantor") to enter into any such transaction or series of transactions if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the properties and assets of such Guarantor or of such Guarantor and its Subsidiary Guarantors, taken as a whole, to any other person or persons, unless at the time of and after giving effect thereto:

        (a)  either:

        (i)    such Guarantor shall be the surviving person, or

        (ii)  the person formed by or surviving such consolidation, merger or amalgamation (if other than such Guarantor) or into which such Guarantor or such Subsidiary Guarantors, as the case may be, is merged or to which the properties and assets of such Guarantor or such Subsidiary Guarantors, as the case may be, are transferred (any such surviving person or transferee being the "Surviving Person"),

        (A)  shall be the Company or another Guarantor (with the percentage of outstanding Capital Stock owned by the Company to be equal to the percentage of outstanding Capital Stock of such Guarantor owned by the Company immediately prior to such merger, consolidation or transfer) and shall be a corporation (or if such Guarantor is CF&I, a corporation or a limited partnership) organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and

        (B)  shall expressly assume (except in the case of a merger into or the transfer of properties and assets to the Company), by a supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the

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obligations of such Guarantor under its Guarantee and the Indenture (and such supplemental indenture shall also be executed by the Company and each other Guarantor and shall further provide that the Company confirms that its obligations under the Notes and the Indenture and each other Guarantor confirms that its obligations under the Indenture and its Guarantee, remain in full force and effect), and

        (C)  shall expressly assume, by amendment, supplement or other appropriate instrument, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of such Guarantor under the Intercreditor Agreement, the Registration Rights Agreement and its Security Documents (and such amendment, supplement or other instrument shall also be executed by the Company and each other Guarantor and shall further provide that the Company and each Guarantor confirms that its obligations under the Registration Rights Agreement, the Intercreditor Agreement and the Security Documents remain in full force and effect), and

        (D)  shall cause such amendments, supplements or other instruments to be filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by such Guarantor and, if applicable, such Subsidiary Guarantor (in the case of a merger or consolidation) or on the Collateral transferred to the Surviving Person (in the case of a transfer of assets), together with such financing statements as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant states);

        (b)  the Collateral owned by such Guarantor and, if applicable, such Subsidiary Guarantor (in the case of a merger or consolidation) or the Collateral transferred to the Surviving Person (in the case of a transfer of assets) (1) shall continue to constitute Collateral under the Indenture and the Security Documents, (2) shall be subject to the Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the holders of the Notes and (3) shall not be subject to any Lien other than Liens expressly permitted by the Indenture and the Security Documents;

        (c)  the property and assets of the person which is merged or consolidated with or into such Guarantor or such Subsidiary Guarantor or to which the properties and assets of such Guarantor or such Subsidiary Guarantor are transferred, to the extent that they are property and assets of the types which would constitute "Trust Property" (as defined in the form of Mortgage attached as an exhibit to the Indenture) or "Collateral" (as defined in the form of Security Agreement attached as an exhibit to the Indenture) shall be treated as After-Acquired Property and such Guarantor and its Subsidiary Guarantors or the Surviving Person, as the case may be, shall take such actions as may be necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by the Indenture and the Security Documents;

        (d)  except in the case of a merger into or the transfer of properties and assets to the Company, (1) immediately before and immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing and (2) the Company, after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), could incur $1.00 of additional Indebtedness pursuant to the first paragraph of the covenant described under "—Certain Covenants—Limitation on Indebtedness" above (assuming a market rate of interest with respect to such additional Indebtedness);

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        (e)  except in the case of a merger into or the transfer of properties and assets to the Company, immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), the Consolidated Net Worth of such Guarantor or the Surviving Person, as the case may be, is at least equal to the Consolidated Net Worth of such Guarantor immediately before such transaction or series of transactions; and

        (f)    if, as a result of any such transaction or series of transactions, any property or assets of such Guarantor or any of its Subsidiary Guarantors would become subject to a Lien, such Lien is permitted by the provisions of the Indenture described under "—Certain Covenants—Limitation on Liens" above.

        In connection with any such transaction or series of transactions, the Company shall deliver, or cause to be delivered, to the Trustee an Officers' Certificate and an Opinion of Counsel, each in form reasonably satisfactory to the Trustee, each stating that such transaction or series of transactions and any supplemental indenture, amendments, supplements or other instruments or agreements required by clause (a) or (c) above or by this sentence comply with the requirements of the Indenture and that all conditions precedent therein provided for relating to such transaction or series of transactions have been complied with (except that such Opinion of Counsel need express no opinion as to the matters referred to in clauses (b)(3), (d)(2) or (e) above), and the Company and each other Guarantor will be required to confirm, by supplemental indenture executed and delivered to the Trustee in form reasonably satisfactory to the Trustee, that its obligations under the Indenture, the Intercreditor Agreement, its Guarantee, the Registration Rights Agreement and its Security Documents remain in full force and effect.

        Upon any consolidation, merger or transfer of all or substantially all of the assets of a Guarantor in accordance with the foregoing in which such Guarantor is not the Surviving Person, the Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of, such Guarantor under the Indenture, the Registration Rights Agreement, the Intercreditor Agreement, its Guarantee and the relevant Security Documents with the same force and effect as if such Surviving Person had been named as a Guarantor therein. Thereafter, except in the case of a lease, the predecessor Guarantor shall be released from its obligations thereunder, except with respect to any obligations that arise from, or are related to, such transaction; provided, however, that solely for purposes of computing amounts described in subclause (C) of the first paragraph under "—Certain Covenants—Limitation on Restricted Payments" above, any such Surviving Person shall only be deemed to have succeeded to and be substituted for such Guarantor with respect to periods subsequent to the effective time of such transaction or series of transactions.

Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries

        As of the date of the Indenture, all of the Company's existing Subsidiaries, other than New CF&I and CF&I, were Unrestricted Subsidiaries. Unrestricted Subsidiaries will not be subject to the restrictive covenants of the Indenture and the Security Documents.

        As of the Issue Date, the Unrestricted Subsidiaries were: Camrose Pipe Corporation, a Delaware corporation; Canadian National Steel Corporation, an Alberta, Canada corporation; Camrose Pipe Company, an Alberta, Canada partnership; Oregon Steel de Guayana, Inc., a Delaware corporation; OSM Glassification Inc., an Oregon corporation; Glassification International, Ltd., an Oregon partnership; Colorado and Wyoming Railway Company, a Delaware corporation; The Union Ditch and Water Company, a Colorado corporation; OSM Distribution, Inc., a Delaware corporation; Oregon Steel Mills Processing, Inc., a Delaware corporation; Oregon Feralloy Partners, an Oregon partnership; and LSI Plate, an Oregon partnership.

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        In addition, the Board of Directors of the Company may designate any Subsidiary acquired or established after the Issue Date to be an Unrestricted Subsidiary if: (a) none of the properties or assets of such Subsidiary were owned by the Company or any of the Guarantors prior to the Issue Date, other than any such assets as are transferred to such Unrestricted Subsidiary in accordance with the covenant described above under "—Certain Covenants—Limitation on Restricted Payments;" and (b) at the time of such designation:

        (i)    the properties and assets of such Subsidiary, to the extent that they secure Indebtedness, secure only Non-Recourse Indebtedness,

        (ii)  such Subsidiary has no Indebtedness other than Non-Recourse Indebtedness, and

        (iii)  such Subsidiary is not a Guarantor and does not own, directly or indirectly, any Capital Stock of a Guarantor.

        As used above, "Non-Recourse Indebtedness" means Indebtedness as to which:

        (a)  neither the Company nor any of the Guarantors:

        (i)    provides credit support (including any undertaking, agreement or instrument which would constitute Indebtedness),

        (ii)  guarantees or is otherwise directly or indirectly liable, or

        (iii)  constitutes the lender

(in each case, other than Investments made pursuant to and in compliance with the covenant described above under "—Certain Covenants—Limitation on Restricted Payments"), and

        (b)  no default with respect to such Indebtedness (including any rights which holders thereof may have to take enforcement action against the relevant Unrestricted Subsidiary or its assets) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or the Guarantors to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.

        The Board of Directors of the Company may designate an Unrestricted Subsidiary to be a Guarantor if after giving Pro Forma effect to such designation:

        (i)    the Company would be permitted to incur $1.00 of additional Indebtedness under the first paragraph of the covenant described above under "—Certain Covenants—Limitation on Indebtedness" (assuming a market rate of interest with respect to such Indebtedness),

        (ii)  all Indebtedness and Liens of such Unrestricted Subsidiary would be permitted to be incurred by a Guarantor under the Indenture, and

        (iii)  such Unrestricted Subsidiary shall have entered into a supplemental indenture pursuant to which it shall have become a Guarantor and complied with the other obligations described under "—Certain Covenants—Additional Guarantors."

        A designation of an Unrestricted Subsidiary as a Guarantor may not thereafter be rescinded.

        Any designation of a Subsidiary as an Unrestricted Subsidiary, and any designation of an Unrestricted Subsidiary as a Guarantor, shall be evidenced to the Trustee by written notice delivered by the Company to the Trustee at the time of such designation, accompanied by a certified copy of the resolution of the Board of Directors of the Company giving effect to such designation and an Officers' Certificate to the effect that such designation complied with the applicable conditions set forth above and was permitted by the Indenture, including the covenant described under "—Certain Covenants—Limitations on Restricted Payments."

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Events of Default

        Each of the following will be an "Event of Default" under the Indenture:

        (i)    default in the payment of the principal of or premium, if any, on any Note, when the same becomes due and payable (upon Stated Maturity, acceleration, optional redemption, required purchase, scheduled principal payment or otherwise); or

        (ii)  default in the payment of an installment of interest (or Liquidated Damages, if any) on any Note, when the same becomes due and payable, which default continues for a period of 30 days; or

        (iii)  default by the Company or any Guarantor in the performance or observance of any term, covenant or agreement contained in the Notes, any Security Document, the Indenture, the Intercreditor Agreement or any Guarantee (other than a default specified in clause (i) or (ii) above) and, except for a default of provisions under "—Repurchase at the Option of Holders—Change of Control," "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales," and "—Merger, Sale of Assets, Etc.," such default continues for a period of 30 days after written notice of such default requiring the Company to remedy the same shall have been given (x) to the Company by the Trustee or (y) to the Company and the Trustee by holders of at least 25% in aggregate principal amount of the Notes then outstanding; or

        (iv)  default or defaults under one or more agreements, instruments, mortgages, bonds, debentures or other evidences of Indebtedness under which the Company or any Guarantor then has outstanding Indebtedness, or guarantees the payment of outstanding Indebtedness, in excess of $5,000,000, individually or in the aggregate, and either (A) that default is caused by a failure to pay principal or premium, if any, or interest or Liquidated Damages, if any, on such Indebtedness at final Stated Maturity prior to the expiration of any grace period provided in such Indebtedness on the date of such default, or (B) such Indebtedness is already due and payable in full or such default or defaults have resulted in the acceleration of the maturity of such Indebtedness;

        (v)  failure by the Company or any Guarantor to pay one or more judgments, orders or decrees of any court or regulatory or administrative agency of competent jurisdiction entered against the Company or any Guarantor or any of their property or assets, aggregating at any one time in excess of $5,000,000, which judgments, orders or decrees shall not be discharged or fully bonded within a period of 60 days after the date on which any period for appeal has expired and during which a stay of enforcement of such judgment, order or decree shall not be in effect; or

        (vi)  either (a) any agent or lender under the Credit Facility or (b) any holder of at least $5,000,000 in aggregate principal amount of Indebtedness of the Company or any of the Guarantors shall commence judicial proceedings to foreclose upon assets of the Company or any of the Guarantors having an aggregate Fair Market Value, individually or in the aggregate, in excess of $5,000,000 or shall have exercised any right under applicable law or applicable security documents to take ownership of any such assets in lieu of foreclosure; or

        (vii) certain events of bankruptcy, insolvency or reorganization with respect to the Company or any Guarantor shall have occurred; or

        (viii) any Guarantee ceases to be in full force and effect, or becomes unenforceable or invalid, or is declared null and void, or any Guarantor denies that it has any further liability under its Guarantee or the Security Documents, disaffirms its obligations under its Guarantee or the Security Documents, or gives notice to such effect (in each case, other than by reason of the termination of the Indenture or the release of any such Guarantee in accordance with the Indenture); or

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        (ix)  any of the Security Documents ceases to be in full force and effect or any of the Security Documents ceases to give the Trustee (or, in the case of a Mortgage, ceases to give the Trustee or any other trustee under such Mortgage) any of the Liens, rights, powers or privileges purported to be created thereby, or any of the Security Documents is declared null and void, or the Company or any Guarantor denies that it has any further liability under any Security Document to which it is a party or gives notice to such effect (in each case other than by reason of the termination of the Indenture or any such Security Document in accordance with its terms or the release of any Guarantor in accordance with the Indenture).

        If an Event of Default (other than as specified in clause (vii) above) shall occur and be continuing, either the Trustee, by written notice to the Company, or the holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Trustee and the Company, may declare the Notes (including, without limitation, the principal of, premium, if any, and accrued and unpaid interest and Liquidated Damages, if any, on all of the outstanding Notes) to be due and payable immediately, upon which declaration all amounts payable in respect of the Notes shall be immediately due and payable. If an Event of Default specified in clause (vii) above occurs, then the principal of, premium, if any, and accrued and unpaid interest and Liquidated Damages, if any, on all of the outstanding Notes shall ipso facto be immediately due and payable without any declaration or other act on the part of the Trustee or any holder of Notes.

        At any time after a declaration of acceleration under the Indenture as described in the preceding paragraph, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the holders of not less than a majority in aggregate principal amount of the outstanding Notes, by written notice to the Company and the Trustee, may, on behalf of the holders of all the Notes, rescind and cancel such declaration and its consequences if:

        (a)  the Company has paid or deposited with the Trustee a sum sufficient to pay:

        (i)    all sums paid or advanced by the Trustee under the Indenture, the Intercreditor Agreement and the Security Documents and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel,

        (ii)  all interest and Liquidated Damages, if any, on the Notes which has become due otherwise than by such declaration of acceleration and (to the fullest extent permitted by law) interest thereon at the rate of interest borne by the Notes, and

        (iii)  the principal of and premium, if any, on any Notes which have become due otherwise than by such declaration of acceleration and interest thereon at the rate of interest borne by the Notes;

        (b)  the rescission would not conflict with any judgment, order or decree of a court of competent jurisdiction; and

        (c)  all then existing Events of Default, other than the nonpayment of principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes that have become due solely by such declaration of acceleration, have been cured or waived.

        No such rescission or cancellation will affect any subsequent Default or impair any right consequent thereto.

        Prior to the declaration of acceleration under the Indenture, the holders of not less than a majority in aggregate principal amount of the outstanding Notes may, on behalf of the holders of all the Notes, waive any past default under the Indenture, the Intercreditor Agreement, the Notes, the Guarantees or any Security Document and its consequences, except a default in the payment of the principal of, premium, if any, or interest or Liquidated Damages, if any, on any Note not yet cured, or

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a default in respect of a covenant or provision which under the Indenture cannot be modified or amended without the consent of the holder of each outstanding Note affected.

        In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of the Company or any of the Guarantors with the intention of avoiding payment of the premium that the Company would have had to pay if the Company had then elected to redeem the Notes pursuant to the optional redemption provisions of the Indenture, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to July 15, 2006 by reason of any willful action or inaction taken or not taken by or on behalf of the Company or any of the Guarantors with the intention of avoiding the prohibition on redemption of the Notes prior to July 15, 2006, then the premium specified in the Indenture for redemptions during the 12-month period beginning July 15, 2006 shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes.

        Subject to certain limitations, holders of not less than a majority in aggregate principal amount of the outstanding Notes may direct the Trustee in its exercise of any trust or power. No holder of any of the Notes has any right to institute any proceeding or pursue any remedy with respect to the Indenture, the Intercreditor Agreement, the Notes, the Guarantees or the Security Documents, unless the holder gives written notice to the Trustee of a continuing Event of Default, the holders of at least 25% in aggregate principal amount of the outstanding Notes have made written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as Trustee under the Notes and the Indenture, the Trustee has failed to institute such proceeding within 30 days after receipt of such notice and the Trustee, within such 30-day period, has not received directions inconsistent with such written request by holders of a majority in aggregate principal amount of the outstanding Notes. Such limitations do not apply, however, to a suit instituted by a holder of a Note for the enforcement of the payment of the principal of, premium, if any, or interest or Liquidated Damages, if any, on such Note on or after the respective due dates expressed in such Note.

        During the existence of an Event of Default, the Trustee is required to exercise such rights and powers vested in it under the Indenture, the Intercreditor Agreement and the Security Documents with the same degree of care and skill in its exercise thereof as a prudent person would exercise under the circumstances in the conduct of such person's own affairs.

        Subject to the provisions of the Indenture relating to the duties of the Trustee, whether or not an Event of Default shall occur and be continuing, the Trustee under the Indenture is not under any obligation to exercise any of its rights or powers under the Indenture, the Intercreditor Agreement or the Security Documents at the request or direction of any of the holders unless such holders shall have offered to the Trustee reasonable security or indemnity. Subject to all provisions of the Indenture and applicable law, the holders of not less than a majority in aggregate principal amount of the outstanding Notes have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee under the Indenture, the Intercreditor Agreement or the Security Documents. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture.

        If a Default or an Event of Default occurs and is continuing and is known to the Trustee, the Trustee shall mail to each holder of the Notes notice of the Default or Event of Default within 30 days after obtaining knowledge thereof. Except in the case of a default in payment of principal of, premium, if any, or interest or Liquidated Damages, if any, on any Notes, the Trustee may withhold the notice to the holders of such Notes if a committee of its trust officers in good faith determines that withholding the notice is in the interest of the holders of the Notes.

        The Company is required to furnish to the Trustee annual and quarterly statements as to the performance by the Company of its obligations under the Indenture and as to any default in such

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performance. The Company is also required to notify the Trustee within ten days of the Company's becoming aware of any event which is, or after notice or lapse of time or both would become, an Event of Default. Failure of the Company to give such notice shall constitute an immediate Event of Default.

Legal Defeasance and Covenant Defeasance

        The Company may, at its option and at any time, elect to have all of its obligations discharged with respect to the outstanding Notes, and all obligations of the Guarantors discharged with respect to the outstanding Guarantees (upon which discharge the Company may obtain the release of the Collateral as security for the Notes and the Guarantees) ("Legal Defeasance"), except for, among other things:

        (a)  the rights of holders of outstanding Notes to receive payment in respect of the principal of, premium, if any, and interest and Liquidated Damages, if any, on such Notes when such payments are due from the trust referred to below,

        (b)  the Company's obligations to issue temporary Notes, register the transfer or exchange of any Notes, replace mutilated, destroyed, lost or stolen Notes and maintain an office or agency for payments in respect of the Notes and money for security payments held,

        (c)  the rights, powers, trusts, duties and immunities of the Trustee and the obligations of the Company and the Guarantors in connection therewith, and

        (d)  the Legal Defeasance provisions of the Indenture.

        In addition, the Company may, at its option and at any time, elect to have the obligations of the Company and the Guarantors released with respect to most of the covenants that are set forth in the Indenture (except as described therein) ("Covenant Defeasance"), and thereafter any failure to comply with such covenants shall not constitute a Default or Event of Default with respect to the Notes. In the event Covenant Defeasance occurs, certain events (not including non-payment, bankruptcy and insolvency events) described under "Events of Default" will no longer constitute an Event of Default with respect to the Notes.

        In order to exercise either Legal Defeasance or Covenant Defeasance:

        (a)  the Company must irrevocably deposit with the Trustee (or other qualifying trustee), in trust, for the benefit of the holders of the Notes, cash in United States dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the written opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest and Liquidated Damages, if any, on the outstanding Notes on the Stated Maturity thereof or applicable redemption date, as the case may be, and the Company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

        (b)  in the case of Legal Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee confirming that (i) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (ii) after the Issue Date, there has been a change in the applicable federal income tax laws, in either case to the effect that the holders of outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to income tax on the same amounts, in the same manner and at the same time(s) as would have been the case if such Legal Defeasance had not occurred;

        (c)  in the case of Covenant Defeasance, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee confirming that the holders of outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Covenant Defeasance and will be subject to income tax on the same amounts, in the

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same manner and at the same time(s) as would have been the case if such Covenant Defeasance had not occurred;

        (d)  no Default or Event of Default shall have occurred and be continuing either (i) on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or (ii) insofar as Events of Default from bankruptcy or insolvency events are concerned, at any time during the period ending on the 123rd day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period);

        (e)  the Company shall have delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is bound;

        (f)    the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that after the 123rd day following the deposit, the trust funds will not be subject to avoidance as a preference or recovery under any applicable bankruptcy laws; and

        (g)  the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel confirming the satisfaction of all conditions set forth in clauses (a) through (f) above.

Satisfaction and Discharge

        The Indenture provides that the Company may terminate its obligations and the obligations of the Guarantors under the Indenture, the Notes, the Guarantees and the Security Documents (except as described below) (whereupon the Company may obtain the release of the Collateral as security for the Notes and the Guarantees) when:

        (a)  all the Notes previously authenticated and delivered (except lost, stolen or destroyed Notes which have been replaced and Notes for whose payment money has theretofore been deposited with the Trustee or the paying agent in trust or segregated and held in trust by the Company and thereafter repaid to the Company or a Guarantor) have been delivered to the Trustee for cancellation, or

(b)  (i) all Notes have been called for redemption pursuant to the provisions under "—Optional Redemption" above by mailing to holders a notice of redemption or all Notes otherwise have become due and payable;

        (ii)  the Company has irrevocably deposited or caused to be irrevocably deposited with the Trustee funds in an amount sufficient to pay and discharge the entire Indebtedness on the Notes not theretofore delivered to the Trustee for cancellation, for principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes to the date of redemption or maturity, as the case may be, together with irrevocable instructions from the Company directing the Trustee to apply such funds to the payment thereof at maturity or redemption, as the case may be;

        (iii)  each of the Company and the Guarantors has paid all other sums payable by it under the Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Security Documents;

        (iv)  no Default or Event of Default shall have occurred and be continuing on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit);

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        (v)  such deposit shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than the Indenture) to which the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is bound; and

        (vi)  the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel confirming the satisfaction of all conditions set forth in clauses (i) through (v) above.

Possession, Use and Release of Collateral

        Subject to and in accordance with the provisions of the Security Documents and the Indenture, and so long as no Event of Default shall have occurred and be continuing, the Company and the Guarantors will have the right to remain in possession and retain exclusive control of the Collateral (other than Trust Moneys held by the Trustee and other than as set forth in the Security Documents and in the Indenture), to operate the Collateral, to alter or repair the Collateral and to collect, invest and dispose of any income thereon.

        The Company and the Guarantors, as the case may be, will have the right to request a release of Collateral (the "Released Interests") in the following circumstances:

        (a)  Collateral that is sold, transferred or otherwise disposed of in accordance with the provisions of the Indenture;

        (b)  Collateral that is released with the requisite consent of the holders of Notes as provided under "—Amendments, Supplements and Waivers" below;

        (c)  all Collateral (except the funds in the trust account and except as otherwise provided) upon defeasance of the Indenture in accordance with the provisions under "—Legal Defeasance and Covenant Defeasance" or discharge of the Indenture in accordance with the provisions under "—Satisfaction and Discharge;"

        (d)  all Collateral upon payment in full of all obligations of the Company and the Guarantors with respect to the Notes; and

        (e)  Collateral of a Guarantor whose Guarantee is released in accordance with the Indenture and the Security Documents.

        The Released Interests may be released from the Lien created by the Indenture and the Security Documents at any time or from time to time upon the request of the Company pursuant to an Officers' Certificate certifying that all terms and conditions precedent for release under the Indenture and the Security Documents have been met and:

        (i)    specifically describing the proposed Released Interests;

        (ii)  specifying the provisions of the Indenture and the Security Documents which authorize such release;

        (iii)  in the case of a release of Collateral pursuant to paragraph (a) above:

        (A)  specifying the Fair Market Value of such Released Interests on the date that the Fair Market Value of the Released Interests sold was determined for purposes of determining whether the provisions under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales" were complied with, which date shall be within 60 days of such Company request (the "Valuation Date"),

        (B)  stating that the consideration to be received is at least equal to the Fair Market Value of the Released Interests,

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        (C)  certifying that the release of such Collateral will not impair the value of the remaining Collateral or interfere with the Trustee's ability to realize such value and will not impair the maintenance and operation of the remaining Collateral,

        (D)  confirming the sale of, or an agreement to sell, the Released Interests in a bona fide sale to a person that is not an Affiliate of the Company or, in the event that such sale is to a person that is an Affiliate, confirming that such sale is made in compliance with the provisions under "—Certain Covenants—Limitation on Transactions with Affiliates,"

        (E)  certifying that such sale covers only the Released Interests (or other property which is not Collateral),

        (F)  certifying that such sale complies with the terms and conditions of the Indenture with respect thereto, including, without limitation, the provisions (and the use of Net Cash Proceeds) under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales,"

        (G)  in the event there is to be a substitution of property for the Collateral subject to the sale, specifying the property intended to be substituted for the Collateral to be disposed of,

        (H)  certifying that all Collateral Proceeds (including amounts deemed to be Collateral Proceeds) from the sale of any of the Released Interests will be deposited in the Collateral Account, and that all Net Cash Proceeds from the sale of any of the Released Interests (and any other property which is not Collateral) will be applied pursuant to the provisions of the Indenture in respect of Asset Sales, and

        (I)  certifying that there is no Default or Event of Default in effect or continuing on the Valuation Date or on the date that the Asset Sale was consummated;

        (iv)  certifying that there is no Default or Event of Default in effect or continuing on the date of such release and that the release of the Collateral will not result in a Default or Event of Default under the Indenture;

        (v)  certifying that all documentation required by the Trust Indenture Act, if any, prior to the release of Collateral by the Trustee and, in the event that there is to be a substitution of property for the Collateral subject to the Asset Sale, all documentation necessary to effect the substitution of such new Collateral and to subject such new Collateral to the Lien of the relevant Security Documents, has been executed, acknowledged, delivered and filed, as the case may be; and

        (vi)  certifying that any other conditions precedent in the Indenture relating to the release in question have been complied with.

Disposition of Collateral Without Release

        Notwithstanding the provisions of "—Release of Collateral" above, so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Company and the Guarantors may, without any release or consent by the Trustee, conduct the following activities, in the ordinary course of business and consistent with past practice, with respect to the Collateral (such activities, the "Permitted Dispositions"):

        (a)  selling or otherwise disposing of, in any transaction or series of related transactions, any property subject to the Lien of the Security Documents which has become worn out or obsolete and which either (i) has an aggregate Fair Market Value of $100,000 or less, or (ii) is replaced by property of substantially equivalent or greater value which becomes subject to the Lien of the Security Documents as After-Acquired Property;

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        (b)  altering, repairing, replacing, changing the location or position of and adding to its structures, machinery, systems, equipment, fixtures and appurtenances;

        (c)  demolishing, dismantling, tearing down, scrapping or abandoning any Collateral if, in the good faith opinion of the Board of Directors of the Company, such demolition, dismantling, tearing down, scrapping or abandonment is in the best interest of the Company; and

        (d)  abandoning intellectual property which has become obsolete and not used in the business.

Use of Trust Moneys

        All Trust Moneys (including, without limitation, all Collateral Proceeds, all deemed Collateral Proceeds and all Net Awards required to be deposited with the Trustee) shall be held by the Trustee as a part of the Collateral securing the Notes.

        So long as no Event of Default shall have occurred and be continuing, such Trust Moneys may either (i) be released as contemplated under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales" if such Trust Moneys represent Collateral Proceeds or deemed Collateral Proceeds or (ii) at the direction of the Company be applied by the Trustee from time to time to the payment of the principal of, premium, if any, and interest and Liquidated Damages, if any, on any Notes at Stated Maturity or upon redemption or retirement, or to the purchase of Notes upon tender or in the open market or otherwise, in each case in compliance with the Indenture. The Company also may withdraw Trust Moneys constituting Net Cash Proceeds from an Event of Loss with respect to all or any portion of the Collateral or Net Awards to repair or replace the relevant Collateral, subject to certain conditions set forth in the Indenture.

        The Trustee shall be entitled to apply any Trust Moneys to cure any Event of Default. Trust Moneys deposited with the Trustee shall be invested in cash and Cash Equivalents pursuant to the direction of the Company and, so long as no Default or Event of Default shall have occurred and be continuing, the Company shall be entitled to any interest or dividends accrued, earned or paid on such cash and Cash Equivalents.

Amendments, Supplements and Waivers

        From time to time, the Company, the Guarantors and the Trustee may, without the consent of the holders of any outstanding Notes, amend, waive or supplement the Indenture, the Security Documents, the Guarantees, the Intercreditor Agreement or the Notes for certain specified purposes, including, among other things, to:

        (a)  cure ambiguities, defects or inconsistencies;

        (b)  to qualify, or to maintain the qualification of, the Indenture under the Trust Indenture Act;

        (c)  to give effect to the release of any Released Interests or any other release of Collateral, in each case permitted by the Indenture or the relevant Security Documents;

        (d)  to provide for the assumption of the Company's or any Guarantor's obligations in the case of a merger, consolidation or sale of all or substantially all of its assets in accordance with the Indenture and the Security Documents;

        (e)  to evidence the pledge of additional or substitute assets or property as Collateral in accordance with the Indenture and the Security Documents;

        (f)    to evidence the release of any Guarantor in accordance with the Indenture, or the addition of any new Guarantor in accordance with the Indenture;

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        (g)  to comply with the requirements of the Trustee and DTC (including its nominees) with respect to transfers of beneficial interests in the Notes or to provide for issuance of the Exchange Notes; or

        (h)  to make any other change that would provide any additional rights or benefits to the holders of the Notes, or that does not adversely affect the rights of any holder of Notes under the Indenture, the Notes, the Guarantees, the Registration Rights Agreement or the Security Documents or, in the case of any other change to the Intercreditor Agreement, that does not adversely affect the rights of any holder of Notes in any material respect.

        Other amendments and modifications of the Indenture, the Security Documents, the Guarantees, the Intercreditor Agreement or the Notes may be made by the Company, the Guarantors and the Trustee with the consent of the holders of not less than a majority of the aggregate principal amount of the outstanding Notes and the holders of not less than a majority in aggregate principal amount of the outstanding Notes may waive future compliance by the Company or any Guarantor with any provision of the Indenture, the Security Documents, the Guarantees, the Intercreditor Agreement or the Notes; provided, however, that no such modification, amendment or waiver may, without the consent of the holder of each outstanding Note affected thereby shall:

        (a)  reduce the principal amount of, or the premium (including, without limitation, the amount of premium, if any, payable upon redemption, except as permitted by subparagraph (g) below) on, or change or have the effect of changing the fixed maturity of, any Note,

        (b)  change the currency in which any Notes or any premium, interest or Liquidated Damages, if any, thereon is payable or make the principal of, premium, if any, or interest or Liquidated Damages, if any, on any Note payable in money other than that stated in the Note,

        (c)  reduce the principal amount of outstanding Notes whose holders must consent to an amendment, supplement or waiver under the Indenture, the Guarantees, the Security Documents, the Notes or the Intercreditor Agreement,

        (d)  impair the right to institute suit for the enforcement of any payment on or with respect to the Notes,

        (e)  waive a Default or Event of Default in the payment of principal of, or premium, if any, or interest or Liquidated Damages, if any, on the Notes (except a rescission of acceleration of the Notes by the holders of a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration),

        (f)    make any change in the provisions of the Indenture relating to waivers of past Defaults or Events of Default or the rights of holders of the Notes to receive scheduled payments of principal of or premium, if any, or interest or Liquidated Damages, if any, on the Notes,

        (g)  alter or waive any provisions with respect to the redemption of the Notes (including any redemption payment with respect to any Note) (other than a payment required by or other provisions relating to the covenants described under "—Repurchase at the Option of Holders"),

        (h)  reduce the rate or change the time for payment of interest on the Notes,

        (i)    modify or change any provision of the Indenture affecting the ranking of the Notes or any Guarantee in a manner adverse to the holders of the Notes,

        (j)    release any Guarantor from any of its obligations under its Guarantee or Security Documents or the Indenture other than in compliance with the Indenture and the Security Documents,

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        (k)  directly or indirectly release the Liens created by the Security Documents on all or substantially all of the Collateral (except as expressly permitted by the Indenture and the Security Documents), or

        (l)    make any change in the foregoing amendment, supplement and waiver provisions.

Concerning the Trustee

        The Indenture contains certain limitations on the rights of the Trustee, should it become a creditor of the Company or any Guarantor, to obtain payment of claims in certain cases, or to realize on certain property received in respect of any such claim as security or otherwise. The Trustee will be permitted to engage in other transactions; however, if it acquires any conflicting interest it must eliminate such conflict within 90 days, apply to the Commission for permission to continue or resign.

        The holders of not less than a majority in aggregate principal amount of the then outstanding Notes will have the right to direct the time, method and place of conducting any proceeding for exercising any remedy available to the Trustee, subject to certain exceptions. The Indenture provides that in case an Event of Default shall occur and be continuing, the Trustee will be required, in the exercise of its power, to use the degree of care of a prudent person in the conduct of such person's own affairs. Subject to such provisions, the Trustee will be under no obligation to exercise any of its rights or powers under the Indenture at the request of any holder of Notes, unless such holder shall have offered to the Trustee security and indemnity satisfactory to it against any loss, liability or expense.

Governing Law

        The Indenture, the Notes and the Guarantees are governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed in the State of New York. The Security Documents are governed by, and construed in accordance with, the laws of the State of New York applicable to contracts made and to be performed in the State of New York, except to the extent that validity or perfection of security interests in respect of certain items of Collateral, including without limitation, real property, is governed by the laws of the jurisdiction where such Collateral is located.

No Personal Liability of Directors, Officers, Employees and Stockholders

        No director, officer, employee, incorporator or stockholder (other than the Company and the Guarantors) of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under the Notes, the Indenture, the Guarantees, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liabilities under federal securities laws.

Additional Information

        Anyone who receives this offering circular may obtain a copy of the Indenture, the Security Documents and the Registration Rights Agreement without charge by requesting them in writing or by telephone from the Company at the following address: Oregon Steel Mills, Inc., 1000 SW Broadway, Suite 2200, Portland, Oregon 97205, Attn: Vice President, Corporate Affairs, Telephone: (503) 240-5787.

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Certain Definitions

        Set forth below are certain defined terms used in the Indenture. Reference is made to the Indenture for a full disclosure of all such terms, as well as any other capitalized terms used herein for which no definition is provided.

        "Acquired Indebtedness" means:

        (a)  Indebtedness of any other person assumed in connection with an Asset Acquisition from such other person, including Indebtedness incurred with, or in contemplation of, such Asset Acquisition,

        (b)  Indebtedness of any other person existing at the time such other person is merged with or into the Company or any Guarantor or becomes a Guarantor (including by designation), including Indebtedness incurred with, or in contemplation of, such other person merging with or into the Company or any Guarantor or becoming a Guarantor, and

        (c)  Indebtedness secured by a Lien encumbering any asset acquired by the Company or any Guarantor.

        "Affiliate" means, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For purposes of this definition, "control," as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "controlling," "controlled by" and "under direct or indirect or common control with" shall have correlative meanings.

        "amend" means to amend, supplement, restate, amend and restate, replace or otherwise modify; and "amendment" shall have a correlative meaning.

        "asset" means any asset or property, whether real or personal, tangible, intangible or mixed.

        "Asset Acquisition" means:

        (a)  an Investment by the Company or any Guarantor in any other person pursuant to which such person shall become a Guarantor, or shall be merged with or into the Company or any Guarantor,

        (b)  the acquisition (including by merger or consolidation) by the Company or any Guarantor of the assets of any person (other than a Guarantor) which constitute all or substantially all of the assets of such person, or

        (c)  the acquisition (including by merger or consolidation) by the Company or any Guarantor of any division or line of business of any person (other than a Guarantor).

        "Asset Sale" means:

        (1)  any direct or indirect sale, issuance, conveyance, transfer, lease or other disposition (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) to any person, in one transaction or a series of related transactions, of:

        (a)  any Capital Stock of any Guarantor (other than in respect of director's qualifying shares or investments by foreign nationals mandated by applicable law);

        (b)  all or substantially all of the properties and assets of any division or line of business of the Company or any Guarantor; or

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        (c)  any properties or assets of the Company or any Guarantor other than in the ordinary course of business;

        (2)  any transaction which results in a Guarantor being released from its Guarantee as provided in the fifth paragraph under "—Guarantees" above; and

        (3)  any Event of Loss.

        For the purposes of this definition, the term "Asset Sale" shall not include:

        (i)    any sale, issuance, conveyance, transfer, lease or other disposition of property or assets (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) that is governed by and complies with the provisions described under "—Merger, Sale of Assets, Etc." above or the fifth paragraph under "—Certain Covenants—Guarantees" above (except in each case to the extent provided under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales");

        (ii)  any sale, issuance, conveyance, transfer, lease or other disposition of property or assets (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) by the Company or any of the Guarantors in one or a series of related transactions (A) that have an aggregate Fair Market Value of $150,000 or less or (B) in respect of which the Company or such Guarantor receives gross proceeds (whether in cash or property) with an aggregate Fair Market Value of $150,000 or less; provided, however, that this clause (ii) shall only apply to the extent that the sum of (x) the aggregate Fair Market Value as described in the immediately preceding subclause (A) and (y) the aggregate gross proceeds received by the Company and any Guarantor as described in the immediately preceding subclause (B) is less than or equal to $1,500,000 in any fiscal year (the "Yearly Cap"); provided further, that notwithstanding the other provisions of this clause (ii), any such transaction which results in a Guarantor being released from its Guarantee as provided in the fifth paragraph under "—Guarantees" above shall nonetheless be deemed to constitute an Asset Sale);

        (iii)  in any fiscal year after the sale, issuance, conveyance, transfer, lease or other disposition of property or assets of the Company or any of the Guarantors satisfying the Yearly Cap contemplated by the proviso to clause (ii) above, any sale, issuance, conveyance, transfer, lease or other disposition of property or assets (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) by the Company or any of the Guarantors in one or a series of related transactions (A) that have an aggregate Fair Market Value of $25,000 or less or (B) in respect of which the Company or such Guarantor receives gross proceeds (whether in cash or property) with an aggregate Fair Market Value of $25,000 or less;

        (iv)  any sale, transfer or other disposition of Excluded Assets (other than property or assets of the type referred to in clause (i) of the definition of Excluded Assets), any Motor Vehicles/Mobile Equipment or any Revolver Collateral;

        (v)  any Restricted Payment or Permitted Investment that is not prohibited by the covenant described under "—Certain Covenants—Limitation on Restricted Payments;"

        (vi)  any conversion of Cash Equivalents into cash or any other form of Cash Equivalents;

        (vii) any Permitted Disposition;

        (viii) the conveyance, sale, transfer, assignment or other disposition of inventory, accounts receivable and other assets acquired and held for resale in the ordinary course of business, in each case made in the ordinary course of business, consistent with past practices of the Company and the Guarantors; and

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        (ix)  any transfer of assets by the Company or a Guarantor to the Company or to a Guarantor; provided that there is no adverse effect on any of the existing Liens on such property for the benefit of holders of the Notes.

        For purposes of determining whether a lease or sublease described in paragraph (g) of the definition of "Permitted Liens" is excluded from the definition of Asset Sale pursuant to clause (ii) above, the Fair Market Value or gross proceeds from such lease or sublease in a particular fiscal year shall be determined by the sum of the lease payments (and in the case of a triple net lease, to the extent applicable, exclusive of taxes, insurance, maintenance expenses and other net lease items) received by the Company and the Guarantors in such fiscal year.

        "Attributable Debt" means in respect of a Sale-Leaseback Transaction, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale-Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

        "Average Life to Stated Maturity" means, with respect to any Indebtedness, as of any date of determination, the quotient obtained by dividing (i) the sum of the products of (a) the number of years (or any fraction thereof) from such date to the date or dates of each successive scheduled principal payment (including, without limitation, any sinking fund requirements) of such Indebtedness multiplied by (b) the amount of each such principal payment by (ii) the sum of all such principal payments.

        "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act (except that a person shall be deemed to have Beneficial Ownership of all securities that such person has the right to acquire, whether such right is exercisable immediately, only after the passage of time, upon the happening of an event or otherwise); and "Beneficially Own" shall have a correlative meaning.

        "Board of Directors" means:

        (i)    in the case of a corporation, the board of directors of such person or any duly authorized committee of such board,

        (ii)  in the case of a partnership, the board of directors of a direct corporate general partner (or, if there is no direct corporate general partner, an indirect corporate general partner) of such partnership or any duly authorized committee of such board or, if there is no such direct or indirect corporate general partner, the appropriate governing body of any general partner of such partnership, and

        (iii)  in the case of any other person, a body performing substantially similar functions as a board of directors.

        "business day" means any day, other than a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

        "Camrose" means Camrose Pipe Company, a general partnership organized under the laws of the Province of Alberta, Canada, and its successors.

        "Camrose Partnership Agreement" means the Partnership Agreement dated as of January 2, 1992 and as amended June 30, 1992, by and between Camrose Pipe Corporation and Stelcam Holding, Inc., as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof except for such amendments or modifications thereof permitted by the terms of the Indenture and such agreement).

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        "Camrose Pipe" means Camrose Pipe Corporation, a corporation organized under the laws of Delaware, and its successors.

        "Canadian National Steel" means Canadian National Steel Corporation, a corporation organized under the laws of the Province of Alberta, Canada, and its successors.

        "Capital Contribution" means any contribution to the equity of the Company for which no consideration is given other than the issuance of Capital Stock (other than Redeemable Capital Stock) of the Company, including Capital Stock (other than Redeemable Capital Stock) of the Company issued upon the conversion of convertible Indebtedness or from the exercise of options, warrants or rights to purchase Capital Stock (other than Redeemable Capital Stock) of the Company.

        "Capital Stock" means, with respect to any specified person:

        (i)    any and all shares, interests (including, without limitation, common stock, preferred stock, limited partnership interests, general partnership interests, membership interests and joint venture interests), participations, rights or other equivalents (however designated and whether voting or nonvoting) that confer on a person the right to receive a share of the profits and/or losses of, or distributions of assets of, such specified person, and

        (ii)  any rights (other than debt securities convertible into or exchangeable for an equity interest), warrants or options exchangeable for or convertible into any Capital Stock of such person.

        "Capitalized Lease Obligation" of a specified person means any obligation under a lease of (or other agreement conveying the right to use) any property (whether real, personal or mixed) that is required by GAAP to be classified and accounted for as a capital lease on the balance sheet of such specified person, and the amount of such obligation at any date shall be the capitalized amount thereof at such date, determined in accordance with GAAP.

        "Cash Equivalents" means, at any time:

        (i)    any evidence of indebtedness with a maturity of 180 days or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);

        (ii)  certificates of deposit or acceptances with a maturity of 180 days or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500,000,000;

        (iii)  certificates of deposit with a maturity of 180 days or less of any financial institution that is not organized under the laws of the United States, any state thereof or the District of Columbia that are rated at least A-2 by S&P or at least P-2 by Moody's or at least an equivalent rating category of another nationally recognized securities rating agency; and

        (iv)  repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the government of the United States of America or issued by any agency thereof and backed by the full faith and credit of the United States of America, in each case maturing within 180 days from the date of acquisition.

        "CF&I" means CF&I Steel, L.P., a Delaware limited partnership and its successors pursuant to the Indenture.

        "CF&I Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of CF&I Steel, L.P. dated March 3, 1993, as amended December 1, 2000, as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof except for such amendments or modifications thereof permitted by the terms of the Indenture and such agreement).

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        "Change of Control" means the occurrence of any of the following events:

        (a)  any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company's employee stock ownership plan, is or becomes the Beneficial Owner, directly or indirectly, of more than 30% of the total Voting Stock of the Company (measured by voting power rather than number of shares);

        (b)  the Company (whether in one transaction or a series of related transactions) consolidates with, or merges with or into, another person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of the Company or of the Company and the Guarantors, taken as a whole, to any person, or any person consolidates with, or merges with or into, the Company, in any such event pursuant to one transaction or a series of related transactions in which the outstanding Voting Stock of the Company is converted into or exchanged for cash, securities or other property, other than any such transaction where:

        (i)    the outstanding Voting Stock of the Company is converted into or exchanged for (1) Voting Stock (other than Redeemable Capital Stock) of the surviving or transferee corporation or (2) cash, securities and other property in an amount which could then be paid by the Company as a Restricted Payment under the Indenture, or a combination thereof; and

        (ii)  immediately after such transaction no "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company's employee stock ownership plan, is the Beneficial Owner, directly or indirectly, of more than 30% of the total Voting Stock of the surviving or transferee corporation (measured by voting power rather than number of shares); provided, however, that in the event of a merger in which the Voting Stock of the Company is exchanged for Voting Stock of a holding company which owns all of the outstanding Capital Stock of the Company immediately after the merger, a Change of Control shall not be deemed to occur solely as a result of such ownership of the Company by such holding company and such holding company shall be deemed to be the surviving corporation in the merger for purposes of determining whether a Change of Control has occurred.

        (c)  at any time during any consecutive two-year period, individuals who at the beginning of such period constituted the board of directors of the Company (together with any new directors whose election by such board of directors or whose nomination for election by the stockholders of the Company was approved by a vote of 66²/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Company then in office; or

        (d)  the Company is liquidated or dissolved or adopts a plan of liquidation.

        "Collateral" means, collectively, all of the property and assets that are from time to time subject to the Lien of the Security Documents.

        "Collateral Account" means the Collateral account established pursuant to the Indenture.

        "Common Stock" means, with respect to any person:

        (i)    any and all shares, interests (including, without limitation, limited and general partnership interests, membership interests and joint venture interests), participations, rights or other equivalents (however designated and whether voting or nonvoting) in the common stock of such person (including, without limitation, all series and classes of such Common Stock), and

        (ii)  any rights (other than debt securities convertible into or exchangeable for an equity interest), warrants or options exchangeable for or convertible into any Common Stock of such person.

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        "Consolidated Cash Flow Available for Fixed Charges" means, with respect to the Company for any period, Consolidated Net Income of the Company for such period.

        (i)    plus (in each case, only to the extent deducted in computing such Consolidated Net Income and without duplication), the amounts for such period, taken as a single accounting period, of:

        (a)  Consolidated Non-Cash Charges,

        (b)  Consolidated Interest Expense, and

        (c)  Consolidated Income Tax Expense;

        (ii)  less, non-cash items increasing Consolidated Net Income for such period, other than items that were accrued in the ordinary course of business,

in each case, on a consolidated basis and determined in accordance with GAAP; provided that Consolidated Income Tax Expense and Consolidated Non-Cash Charges of a Guarantor that is less than a Wholly Owned Subsidiary of the Company shall only be added to the extent of the equity interest of the Company in such Guarantor.

        "Consolidated Fixed Charge Coverage Ratio" means, with respect to the Company, the ratio of:

        (a)  the aggregate amount of Consolidated Cash Flow Available for Fixed Charges of the Company (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of) for the Four Quarter Period immediately preceding the date of the transaction (the "Transaction Date") giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio, to

        (b)  the aggregate amount of Consolidated Fixed Charges of the Company (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of, but only to the extent that the obligations giving rise to such Consolidated Fixed Charges would no longer be obligations contributing to the Company Consolidated Fixed Charges subsequent to the Transaction Date) for such Four Quarter Period immediately preceding the Transaction Date.

        In addition to and without limitation of the foregoing, for purposes of this definition, "Consolidated Cash Flow Available for Fixed Charges" and "Consolidated Fixed Charges" shall be calculated after giving effect on a Pro Forma basis for the period of such calculation to, without duplication:

        (a)  the incurrence of the Indebtedness giving rise to the need to make such calculation and any other incurrence of Indebtedness (and, in each case, the application of the net proceeds from such incurrence, to the extent such net proceeds are used to take one or more of the actions described in the following clauses (b) and (c)), as if such incurrence (and application) occurred on the first day of the Four Quarter Period to and including the Transaction Date (the "Reference Period");

        (b)  the defeasance, repayment, repurchase, redemption, retirement or other acquisition of any Indebtedness (other than revolving credit borrowings or ordinary working capital borrowings) of the Company or any of the Guarantors during the Reference Period, as if such transaction occurred on the first day of the Reference Period, and

        (c)  any Asset Sales or Asset Acquisitions (whether by merger, consolidation, sale-leaseback or otherwise and including any related financing transactions, and including, without limitation, any such transaction giving rise to the need to make such calculation as a result of the Company or any of the Guarantors (including any person who becomes a Guarantor as a result of such

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transaction) incurring Acquired Indebtedness) occurring during the Reference Period, as if such transaction had been consummated on the first day of the Reference Period.

        Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining this "Consolidated Fixed Charge Coverage Ratio":

        (i)    interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; and

        (ii)  if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Reference Period.

        If and to the extent the Company or any of the Guarantors directly or indirectly guarantees Indebtedness of a third person, the calculation of the "Consolidated Fixed Charge Coverage Ratio" shall give effect to the incurrence of such guaranteed Indebtedness as if the Company or such Guarantor had directly incurred such guaranteed Indebtedness.

        "Consolidated Fixed Charges" means, with respect to the Company for any period, the sum, without duplication, of the amounts for such period of:

        (i)    Consolidated Interest Expense, and

        (ii)  the product of (a) the aggregate amount of dividends and other distributions paid or accrued (or guaranteed) by the Company and the Guarantors on a consolidated basis during such period in respect of Preferred Stock and Redeemable Capital Stock and (b) a fraction, the numerator which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of the Company, expressed as a decimal.

        "Consolidated Income Tax Expense" means, with respect to the Company for any period, the provision for federal, state, local and foreign income taxes of the Company and the Guarantors for such period as determined on a consolidated basis in accordance with GAAP.

        "Consolidated Interest Expense" means, with respect to the Company for any period, without duplication, the sum of:

        (i)    the aggregate amount of cash and non-cash interest expense of the Company and the Guarantors, whether paid, accrued and/or scheduled to be paid or accrued and whether or not capitalized, during such period as determined on a consolidated basis in accordance with GAAP, including, without limitation, the following (whether or not reflected as an expense on the consolidated income statement of the Company):

        (a)  any amortization of debt discount (but excluding amortization of debt issuance costs),

        (b)  the net payments (if any) under Interest Rate Protection Obligations or Currency Agreements,

        (c)  the interest portion of any deferred payment obligation,

        (d)  all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing,

        (e)  all accrued interest,

        (f)    all capitalized interest,

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        (g)  all imputed interest with respect to Attributable Debt, and

        (h)  the interest component of Capitalized Lease Obligations; and

        (ii)  any interest expense on Indebtedness of another person that is guaranteed by the Company or any of the Guarantors or secured by a Lien on the assets of the Company or any of the Guarantors, whether or not such guarantee or Lien is called upon (the amount of such interest expense shall be the amount of interest that would have been paid by the Company or any such Guarantor under such guarantee or Lien if such guarantee or Lien had been called upon).

        "Consolidated Net Income" means, with respect to the Company, for any period, the net income (loss) of the Company and its Subsidiaries for such period as determined in accordance with GAAP, adjusted, to the extent included in calculating such net income (loss) by excluding, without duplication:

        (i)    any extraordinary (as determined in accordance with GAAP) or unusual or nonrecurring gain or loss (including any gain or loss from the sale or other disposition of assets outside the ordinary course of business or from the issuance or sale of capital stock), together with any related provision for taxes on any such extraordinary, unusual or nonrecurring gain or loss,

        (ii)  net income (but not loss) of any person (including an Unrestricted Subsidiary) (x) which is not a Guarantor or (y) which is accounted for by the equity method of accounting, except, in each case, to the extent of the cash dividends and cash distributions actually paid in cash by such person to the Company or (subject to clause (vi) below) a Guarantor,

        (iii)  net income (loss) of any person combined with the Company or a Guarantor on a "pooling of interests" basis attributable to any period prior to the date of combination,

        (iv)  any gain or loss realized upon the termination of any employee pension benefit plan, on an after-tax basis,

        (v)  any gain or loss, together with any related provision for taxes on such gain or loss, in respect of: (x) any Asset Sale by the Company or a Guarantor or (y) the disposition of any securities by the Company or a Guarantor or the extinguishment of any Indebtedness of the Company or a Guarantor,

        (vi)  net income (but not loss) of any Guarantor to the extent that the declaration of dividends or similar distributions by that Guarantor of that net income is not at the date of determination permitted, directly or indirectly, by operation of the terms of its charter or partnership agreement or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Guarantor or its stockholders or limited or general partners, as the case may be,

        (vii) any restoration to any contingency reserve of an extraordinary, nonrecurring or unusual nature, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued in any period for which Consolidated Net Income is required to be calculated for purposes of the Indenture, and

        (viii) for purposes of the "Restricted Payments" covenant, in the case of a successor to the Company by consolidation or merger or as a transferee of the specified person's assets, any earnings of the successor entity prior to such consolidation, merger or transfer of assets.

        "Consolidated Net Worth" means, with respect to any person at any date, the consolidated stockholders', members' or partners' equity, as the case may be, of such person (determined on a consolidated basis in accordance with GAAP), adjusted to exclude (to the extent included in calculating such equity) the amount of any such stockholders', members' or partners' equity, as the case may be, attributable to Redeemable Capital Stock of such person and its Subsidiaries, as determined on a consolidated basis in accordance with GAAP.

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        "Consolidated Non-Cash Charges" means, with respect to the Company for any period, the aggregate depreciation and amortization and other non-cash expenses of the Company and its Subsidiaries, to the extent deducted in computing Consolidated Net Income of the Company and its Subsidiaries for the subject period, determined on a consolidated basis in accordance with GAAP (i) including, without limitation, (A) amortization of debt issuance costs, (B) compensation expenses recognized for the contribution of shares to an employee stock option plan, (C) amortization of goodwill and other intangibles and (D) any write-offs or impairment charges; (ii) but excluding (A) any such charges constituting an extraordinary item or loss or (B) any such charge which required or which represents an accrual of or a reserve for cash charges for any future period or amortization of a prepaid cash expense that was paid in a prior period;

        "contractually subordinated" means, with respect to any specified Indebtedness relative to any other Indebtedness, expressly subordinated in right of payment to such other Indebtedness by the terms of such specified Indebtedness or the terms of any document or instrument relating thereto.

        "CPC" means Camrose Pipe Corporation, a Delaware corporation, and its successors.

        "Credit Facility" means (a) the Credit Agreement, dated as of the Issue Date, by and among the Company, New CF&I, CF&I, CWR and Textron Financial Corporation, a Delaware corporation, as Revolver Agent (and any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith), and (b) any amendment, modification, supplement, refunding or refinancing thereof or any replacement Credit Facility, in each case, that is entered into in compliance with the Indenture.

        "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any of the Guarantors against fluctuations in currency values.

        "CWR" means Colorado and Wyoming Railway Company, a Delaware corporation, and its successors.

        "Default" means any event or condition that is, or after notice or passage of time or both would be, an Event of Default.

        "Event of Default" has the meaning set forth under "—Events of Default" above.

        "Event of Loss" means, with respect to any property or asset (or any portion thereof), any (i) loss or destruction of or damage to such property or asset (or any portion thereof), (ii) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset (or any portion thereof), or confiscation or requisition of the use of such property or asset (or any portion thereof), or (iii) any settlement in lieu of clause (ii) above.

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

        "Excluded Assets" means:

        (i)    property acquired or constructed with Indebtedness described in and which complies with, and which Indebtedness is secured by a Lien on such property permitted under, clause (h) of the definition of Permitted Liens (but only so long as such purchase money Indebtedness or Indebtedness incurred solely to refinance, replace or refund such purchase money Indebtedness in accordance with such clause (h) is outstanding and, in either such case, is secured by such Lien); and

        (ii)  Excluded Contracts.

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        With respect to any property securing Indebtedness as described in clause (i) of the foregoing sentence, at such time as the purchase money Indebtedness or Indebtedness incurred to refinance, replace or refund such purchase money Indebtedness referred to in clause (i) of the foregoing sentence shall no longer be outstanding, or at such time as such purchase money Indebtedness or any such Indebtedness incurred to refinance, replace or refund such purchase money Indebtedness shall no longer be secured by a Lien on such property permitted under clause (h) of the definition of Permitted Liens, then, in each of the foregoing cases, to the extent that such property is of the type which would constitute "Trust Property" (as defined in the form of Mortgage attached as an exhibit to the Indenture) or "Collateral" (as defined in the form of Security Agreement attached as an exhibit to the Indenture), such property shall be treated as After-Acquired Property and the Company shall, or shall cause the relevant Guarantor to, cause such property to be made subject to the Lien of the Security Documents in the manner and to the extent required by the Indenture. For the avoidance of doubt, notwithstanding anything to the contrary in this definition or any other definition, none of the property or assets described in the first five bullet points under "Security—Collateral" above shall in any circumstances constitute or be deemed to constitute "Excluded Assets."

        "Excluded Contracts" means any right, title or interest of the Company or any Guarantor in, to or under any contract, agreement or other instrument entered into with, or any license granted by or to, any person that is not the Company or a Subsidiary of the Company and which contract, agreement, instrument or license by its express terms prohibits the assignment thereof or the grant of a security interest therein by the Company or such Guarantor, as the case may be, or by its express terms permits such assignment or grant of a security interest only with the consent of such person, provided, that any such right, title and interest shall cease to be an Excluded Contract to the extent that an appropriate consent to such assignment or grant of a security interest has been obtained or the provisions which prohibit the assignment thereof or the grant of a security interest therein cease to be valid and enforceable; and provided, further, that Excluded Contracts shall not include (i) the leasehold interest in the Company's office space located at 1000 SW Broadway, Portland, Oregon or (ii) any contracts, agreements, licenses or other instruments specifically identified in any Security Document as being subject to the Lien created by or granted in such Security Document.

        "Excluded Securities" means the Capital Stock of any of the Company's Subsidiaries.

        "Fair Market Value" means, with respect to any property or assets, the price which could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction. "Fair Market Value" shall (i) except for purposes of clause (vi) of the definition of "Event of Default" and except for purposes of the covenants described under "Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales" (including the $1,500,000 determination, but other than the $150,000 per transaction determination, contemplated by clause (ii) of the definition of "Asset Sale" and other than the $25,000 per transaction determination contemplated by clause (iii) of the definition of "Asset Sale") and "Certain Covenants—Limitation on Sale-Leaseback Transactions," be determined by a Financial Officer of the Company with respect to any property or assets with a Fair Market Value of less than $2,500,000 and shall be evidenced by an Officers' Certificate signed by such Financial Officer and one other officer of the Company certifying such determination and delivered to the Trustee, and (ii) otherwise, shall be determined by the Board of Directors of the Company acting in good faith and shall be evidenced by a resolution of the Board of Directors of the Company set forth in an Officers' Certificate certifying such determination and delivered to the Trustee; provided, that any determination of Fair Market Value made with respect to any parcel of real property with a value in excess of $10,000,000 shall (except for purposes of clause (vi) of the definition of "Event of Default") be made by an Independent Appraiser.

        "Final Maturity Date" means July 15, 2009.

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        "Financial Officer" of a person means any of the Chief Executive Officer, the President, the Chief Financial Officer and the Vice President of Finance.

        "Four Quarter Period" means, with respect to a particular date of determination, the Company's most recently ended four fiscal quarters for which internal financial statements are available.

        "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States of America, which are applicable from time to time and are consistently applied.

        "Guarantee" means, with respect to any Guarantor, its irrevocable and unconditional guarantee of the Company's payment obligations under the Indenture and the Notes, created pursuant to the Indenture, and its guarantee endorsed on the Notes. In the case of CF&I, such term also includes the promissory note of CF&I, in substantially the form attached as an exhibit to the Indenture, delivered to the Trustee in connection with CF&I's aforesaid guarantee, in each case as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of the Indenture.

        "guarantee" means, as applied to any obligation:

        (i)    a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner, of any part or all of such obligation, and

        (ii)  an agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of non-performance) of all or any part of such obligation, including, in each case, without limiting the foregoing, by way of any pledge of assets, through any letter of credit or reimbursement agreement in respect thereof or by the payment of amounts drawn down by letters of credit.

        "Guarantors" means (i) each of New CF&I and CF&I and (ii) each of the Company's other Subsidiaries which, after the Issue Date, becomes a Guarantor, including those who become Guarantors after the Issue Date as required by the covenant described under "—Certain Covenants—Additional Guarantors" or who are designated as Guarantors as described under "Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries" above.

        "incur" means to directly or indirectly create, incur, issue, assume, guarantee, suffer to exist or become effective, or in any manner become directly or indirectly liable, contingently or otherwise, for the payment of or otherwise with respect to any Indebtedness; and "incurrence" shall have a correlative meaning; provided, however, that regular accrual on discount notes shall not constitute an incurrence.

        "Indebtedness" means, with respect to any person (as used in this definition, the "obligor"), without duplication, and whether or not contingent:

        (a)  all liabilities, obligations and indebtedness of the obligor, to the extent such liabilities, obligations or indebtedness would appear as a liability upon the consolidated balance sheet in accordance with GAAP:

        (i)    for borrowed money,

        (ii)  for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business and which are not overdue by more than 90 days,

        (iii)  evidenced by bonds, notes, debentures or other similar instruments, or

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        (iv)  arising under any conditional sale or other title retention agreement with respect to property acquired by the obligor (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade accounts payable arising in the ordinary course of business,

        (b)  all obligations, contingent or otherwise, of the obligor in connection with any letters of credit (or reimbursement agreements in respect thereof), banker's acceptance or other similar credit transaction,

        (c)  all Capitalized Lease Obligations of the obligor and all Attributable Debt in respect of Sale-Leaseback Transactions,

        (d)  all Indebtedness referred to in the preceding clauses of other persons and all dividends of other persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon property (including, without limitation, accounts and contract rights) owned by the obligor, whether or not the obligor has assumed or become liable for the payment of such Indebtedness (the amount of such Indebtedness shall be deemed to be the lesser of (x) the fair market value of such property or asset and (y) the amount of such Indebtedness so secured),

        (e)  all guarantees of Indebtedness referred to in this definition by the obligor,

        (f)    all Redeemable Capital Stock of the obligor,

        (g)  all net payment obligations under or in respect of Currency Agreements and Interest Rate Protection Obligations of the obligor at the date of determination, and

        (h)  any amendment, supplement, modification, deferral, renewal, extension, refinancing or refunding, whether direct or indirect, to or of any liability of the types referred to in clauses (a) through (g) above or this clause (h).

        The amount of any Indebtedness outstanding as of any date shall be:

        (1)  the accreted value thereof, in the case of any Indebtedness issued with original issue discount;

        (2)  the greater of the voluntary or involuntary maximum fixed repurchase price (plus any accrued and unpaid dividends), in the case of Redeemable Capital Stock; and

        (3)  the principal amount thereof in the case of any other Indebtedness.

        For purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to the Indenture, and if such price is based upon, or measured by, the fair market value of such Redeemable Capital Stock, such fair market value shall be determined in good faith by the Board of Directors of the issuer of such Redeemable Capital Stock.

        "Independent Appraiser" means a person:

        (i)    who in the course of its business appraises property;

        (ii)  where real property is involved, is a member in good standing of the American Institute of Real Estate Appraisers, recognized and licensed to do business in the jurisdiction where the applicable real property is situated;

        (iii)  who does not have a direct or indirect financial interest in the Company (apart from receiving from the Company a customary appraisal fee for the task for which it is engaged) and

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        (iv)  who, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is engaged.

        "Independent Financial Advisor" means an accounting, appraisal or investment banking firm of nationally recognized standing:

        (i)    which does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company (apart from receiving from the Company a customary fee for the task for which it is engaged) (it being understood that securities of the Company acquired in the ordinary course of trading operations shall not be deemed to give rise to such direct or indirect financial interest in the Company) and

        (ii)  which, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is engaged.

        "Intercompany Indebtedness" means (i) any Indebtedness owed by the Company to any Subsidiary of the Company or (ii) any Indebtedness owed by any Subsidiary of the Company to the Company or any other Subsidiary of the Company.

        "Intercreditor Agreement" means the Intercreditor Agreement, dated as of the Issue Date, by and among the Company, CF&I, New CF&I, CWR, the Trustee and the Revolver Agent, substantially in the form attached as an exhibit to the Indenture, as the same may be amended, supplemented or modified from time to time in accordance with its terms or the terms of the Indenture, and any successor or replacement agreement, the terms of which are no less favorable to the holders of the Notes in any material respect (as evidenced by an Officers' Certificate delivered to the Trustee) than those contained in the Intercreditor Agreement as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof).

        "Interest Rate Protection Agreement" means any arrangement with any other person whereby, directly or indirectly, such person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include without limitation, interest rate swaps, caps, floors, collars and similar agreements.

        "Interest Rate Protection Obligations" means the obligations of any person pursuant to an Interest Rate Protection Agreement.

        "Interested Person" means, with respect to a specified person, any Beneficial Owner of 5% or more of the outstanding Common Stock of such person or 5% or more of the outstanding Common Stock of any Subsidiary of such person.

        "Investment" means, with respect to any person, any direct or indirect loan, advance or other extension of credit or Capital Contribution, purchase, other acquisition or ownership of (or direct or indirect obligation to subscribe for) any Capital Stock, Indebtedness, bonds, notes, debentures or other securities (including, without limitation, any interests in any partnership, limited liability company or joint venture) or evidences of Indebtedness (by means of any transfer of cash or other property to another person, or any payment for property or services for the account or use of another person, or any guarantee of any Indebtedness or other obligations of another person, or creation or assumption of any other contingent liability in respect of any Indebtedness of another person, or otherwise), together with any item that is or would be classified as an investment on a balance sheet prepared in accordance with GAAP.

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        In addition:

        (1)  if the Company or any Subsidiary of the Company sells or otherwise disposes of any Capital Stock of a Guarantor such that, after giving effect to any such sale or disposition, such person is no longer a Guarantor, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Capital Stock of such Guarantor not sold or disposed of in an amount determined as provided in the final paragraph under "—Certain Covenants—Limitation on Restricted Payments" above;

        (2)  the Fair Market Value of the assets of any Subsidiary of the Company at the time that such Subsidiary is designated as an Unrestricted Subsidiary shall be deemed to be an Investment made by the Company in such Unrestricted Subsidiary at such time; and

        (3)  "Investments" shall exclude extensions of trade credit by the Company and the Guarantors in the ordinary course of business in accordance with normal trade practices of the Company or such Guarantor, as the case may be.

        "Issue Date" means the closing date for the sale and original issuance of the Notes.

        "Lien" means any mortgage, charge, pledge, lien (statutory or other), security interest, hypothecation, assignment for security, claim, preference, priority or other encumbrance of any kind, regardless of whether filed, recorded or otherwise perfected under applicable laws, including any conditional sale, capital lease or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

        "LSI Plate" means LSI Plate, a partnership organized under the laws of Oregon, and its successors.

        "Maturity Date" means, with respect to any Note, the date on which any principal of such Note becomes due and payable as provided therein or in the Indenture, whether at the Stated Maturity with respect to such principal or by declaration of acceleration, call for redemption or purchase or otherwise.

        "Moody's" means Moody's Investors Service, Inc. and its successors.

        "Mortgage" means a deed of trust (or mortgage), assignment of rents and leases and security agreement substantially in the form attached as an exhibit to the Indenture (including such changes to such form as may be necessary or desirable to conform to applicable laws or customs regarding property in the jurisdiction where such instrument is to be recorded), as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of the Indenture and such instrument.

        "Motor Vehicles/Mobile Equipment" means (i) motor vehicles and mobile equipment of the types listed on a schedule to the Security Agreements entered into by the Company, CF&I and New CF&I owned by the Company and the Guarantors and (ii) Motor Vehicles (as defined in the form of Security Agreement attached as an exhibit to the Indenture).

        "Net Award" means all proceeds, awards or payments for any Collateral (including any portion thereof) which is taken by eminent domain, expropriation or similar governmental actions or sold pursuant to the exercise by the United States of America or any State, municipality, province or other governmental authority of any right which it may have to purchase, or to designate a purchaser or to order a sale of, all or any part of the Collateral, in each case less collection expenses.

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        "Net Cash Proceeds" means, with respect to any Asset Sale, or sale, or Capital Contribution in respect of, Capital Stock, the aggregate proceeds thereof received by the Company or any of the Guarantors in the form of cash or Cash Equivalents (including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Guarantor), and including, in the case of an Event of Loss, the insurance proceeds (excluding any liability insurance proceeds payable to the Trustee for any loss, liability or expense incurred by it) paid as the result of any Event of Loss with respect to all or any portion of the Collateral), plus, in the case of an issuance of Capital Stock, upon any exercise, exchange or conversion or securities (including options, warrants and convertible or exchangeable debt) of the Company that were issued for cash on or after the Issue Date, the amount of cash originally received by the Company upon the issuance of such securities, net of in each case:

        (i)    the reasonable and customary out-of-pocket costs relating to such sale, issuance or Event of Loss (including legal, accounting and investment banking fees and brokerage commissions and, in the case of an Event of Loss, collection expenses), and

        (ii)  in the case of an Asset Sale only:

        (A)  the amount (estimated reasonably and in good faith by the Company) of income, franchise, sales and other applicable taxes required to be paid by the Company or any Guarantor in connection with such Asset Sale in the taxable year that such sale is consummated or in the immediately succeeding taxable year, the computation of which shall take into account the reduction in tax liability resulting from any available operating losses and net operating loss carryovers, tax credits and tax credit carryforwards, and similar tax attributes,

        (B)  amounts required to be paid to any person (other than the Company or any Guarantor) owning a beneficial interest in the assets subject to the Asset Sale,

        (C)  appropriate amounts to be provided by the Company or any Guarantor, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the Company or any Guarantor, as the case may be, after such Asset Sale (including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale), in each case as determined by the Board of Directors and as reflected in an Officers' Certificate delivered to the Trustee (provided, however, that any reduction in such reserve within 12 months following the consummation of such Asset Sale shall be treated for all purposes of the Indenture and the Notes as a new Asset Sale at the time of such reduction with Net Cash Proceeds equal to the amount of such reduction), and

        (D)  repayment of Indebtedness (excluding Indebtedness under the Credit Facility) secured by a Lien on the property or assets subject to such Asset Sale (but only if such Lien is permitted by the Indenture and the relevant Security Documents and only to the extent such repayment is required by the terms of such Indebtedness and the aggregate amount of such cash and Cash Equivalents applied to repay such Indebtedness does not exceed the Fair Market Value of such property or assets or, if less, the total amount of cash and Cash Equivalents received for such property and assets in such Asset Sale).

        "New CF&I" means New CF&I, Inc., a Delaware corporation, and its successors pursuant to the Indenture.

        "New CF&I Stockholders Agreement" means the Restated Stockholders Agreement, dated as of November 16, 1995, among the Company, New CF&I, Nippon Steel Corporation, NS Finance III, Inc.,

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Nissho Iwai Corporation, and Nissho Iwai American Corporation, as in effect on the Issue Date, not giving effect to any subsequent amendment or modification thereof except for such amendments or modifications thereof permitted by the terms of the Indenture and such agreement.

        "Officers' Certificate" of a person means a certificate signed on behalf of such person by any two of the following: the Chief Executive Officer, the President, the Chief Financial Officer, the Vice President of Finance, the Corporate Controller, the Treasurer or the Secretary of such person and delivered to the Trustee.

        "Old Bank Documents" means, collectively, the Old Credit Agreement, any and all guarantees related thereto, and all mortgages, deeds of trust, pledge agreements, security agreements and similar agreements entered into by the Company or any of its present or former Subsidiaries to secure their obligations under, or otherwise in connection with, the Old Credit Agreement.

        "Old Credit Agreement" means the Credit Agreement, dated as of December 1, 2000, by and among the Company, New CF&I, CF&I, PPM Finance, Inc., as agent, and the other financial institutions party thereto, as lenders, as amended by Amendment No. 1 thereto dated as of August 13, 2001. References to Indebtedness under the Old Credit Agreement shall be deemed to include any and all guarantees of such Indebtedness and any and all obligations under the Old Bank Documents.

        "Old Indenture" means the Indenture, dated as of June 1, 1996, among the Company, CF&I and New CF&I, as guarantors, and JPMorgan Chase Bank (as successor to Chemical Bank), as trustee.

        "Old Note Documents" means, collectively, the Old Indenture, any and all guarantees related thereto, and all mortgages, deeds of trust, pledge agreements, security agreements and similar agreements entered into by the Company or any of its present or former Subsidiaries to secure their obligations under, or otherwise in connection with, the Old Indenture and the Old Notes.

        "Old Notes" means the 11% First Mortgage Notes due 2003 of the Company, together with any and all guarantees thereof.

        "Opinion of Counsel" means a written opinion from legal counsel who is reasonably satisfactory to the Trustee. The counsel may be an employee of or counsel for the Company, a Guarantor or the Trustee. The opinion may be subject to reasonable and customary assumptions and conclusions.

        "Oregon Feralloy" means Oregon Feralloy Partners, a partnership organized under the laws of Oregon, and its successors.

        "Pari Passu Indebtedness" means Indebtedness of the Company or any Guarantor which ranks pari passu in right of payment with the Notes or the Guarantee of such Guarantor, as the case may be.

        "Permitted Investments" means any of the following:

        (i)    Investments in any Guarantor (including any person that pursuant to such Investment becomes a Guarantor) and any person that is merged into or consolidated with, or transfers or conveys all or substantially all of its assets to, the Company or any Guarantor at the time such Investment is made;

        (ii)  Investments in cash and Cash Equivalents;

        (iii)  Investments in deposits with respect to leases, utilities, bid or performance bonds, self-insurance or similar requirements provided to third parties in the ordinary course of business and otherwise permitted by the Indenture;

        (iv)  Investments in the Notes;

        (v)  Investments in Currency Agreements permitted by paragraph (e) of the covenant described under "—Certain Covenants—Limitation on Indebtedness;"

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        (vi)  Investments in evidences of Indebtedness, securities or other property received from another person by the Company or any of the Guarantors in connection with any bankruptcy case or by reason of a composition or readjustment of debt or a reorganization of such person or as a result of foreclosure, perfection or enforcement of any Lien in exchange for evidences of Indebtedness, securities or other property of such person held by the Company or any of the Guarantors, or in settlement of other liabilities or obligations of such other person to the Company or any of the Guarantors, that were created in accordance with the terms of the Indenture;

        (vii) Investments in Interest Rate Protection Obligations permitted by paragraph (d) of the covenant described under "—Certain Covenants—Limitation on Indebtedness;"

        (viii) Investments in partnerships, joint ventures or other entities engaged in steelmaking, finishing or fabrication or other steel-related businesses in an aggregate amount not to exceed $50,000,000;

        (ix)  Investments, as in existence on the Issue Date, in Unrestricted Subsidiaries; and

        (x)  Investments made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with the covenant described above under "—Repurchase at the Option of Holders—Disposition of Proceeds of Asset Sales."

        "Permitted Liens" means the following types of Liens:

        (a)  Liens for taxes, assessments or governmental charges or claims (i) which are either (A) not yet delinquent or (B) being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and (ii) as to which the Company shall have set aside on its books such reserves as may be required in conformity with GAAP;

        (b)  statutory Liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other like Liens imposed by law, in each case, (i) which were incurred in the ordinary course of business consistent with industry practice, (ii) which either are for sums not yet delinquent or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and (iii) as to which the Company shall have set aside on its books such reserves as may be required in conformity with GAAP;

        (c)  Liens incurred or deposits made in the ordinary course of business consistent with industry practice to secure obligations of the Company and the Guarantors under workers' compensation, unemployment insurance and other types of governmental insurance, governmental benefits or social security (exclusive, in each case, of obligations for the payment of borrowed money); provided, that, the obligations in connection with which such Liens were incurred or deposits made shall have been incurred in the ordinary course of business consistent with industry practice and shall otherwise be permitted by the Indenture;

        (d)  Liens incurred or deposits made in the ordinary course of business consistent with industry practice to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations (exclusive, in each case, of obligations for the payment of borrowed money); provided, that, the obligations in connection with which such Liens were incurred or deposits made shall have been incurred in the ordinary course of business consistent with industry practice and shall otherwise be permitted by the Indenture;

        (e)  Liens arising out of judgments or awards not giving rise to an Event of Default so long as (i) such Lien is adequately bonded and (ii) any appropriate legal proceedings which may have been duly initiated for the review of such judgment or award shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

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        (f)    easements, rights of way, zoning restrictions and other similar charges or encumbrances in respect of real property (i) that do not interfere in any material respect with the ordinary conduct of the business of the Company or any of the Guarantors and (ii) in the case of any of the foregoing which are created or incurred after the Issue Date, do not materially detract from the value of the property subject thereto (as such property is used by the Company and the Guarantors); provided, that such Liens are not incurred in connection with any borrowing of money, any commitment to loan any money or to extend any credit or any similar transaction or obligation;

        (g)  leases and subleases granted by the Company or any Guarantor to others (i) which do not interfere in any material respect with the ordinary conduct of the business of the Company or any of the Guarantors and (ii) which, in the case of any of the foregoing which are granted after the Issue Date, do not materially detract from the value of the property subject thereto;

        (h)  Liens securing Capitalized Lease Obligations, mortgage financings or purchase money obligations incurred in accordance with subparagraph (n) under "—Certain Covenants—Limitation on Indebtedness;" provided, however, that:

        (i)    such Lien (including any replacement, renewal or extension thereof) shall extend to or cover solely property and assets so acquired, developed, constructed, installed or improved, and the property or assets so acquired, developed, constructed, installed or improved do not constitute Replacement Assets and are not acquired, developed, constructed, installed or improved with Net Cash Proceeds from Asset Sales (or with amounts which, pursuant to the Indenture, are deemed to constitute Collateral Proceeds),

        (ii)  the Lien securing such Indebtedness attaches solely to such assets (and not to any Collateral) concurrently with or within 180 days after such acquisition or the completion of such development, construction installation or improvement,

        (iii)  the principal amount of the Indebtedness secured by such Lien does not exceed 100% of the cost of such acquisition, development, construction, installation or improvement and such Indebtedness and any Indebtedness incurred to refinance such Indebtedness is incurred in accordance with the Indenture, and

        (iv)  prior to initially granting any such Lien (but not in connection with any replacements, renewals or extensions thereof), the Company shall provide the Trustee with an Officers' Certificate stating that (x) the property and assets subject to such Lien do not constitute Replacement Assets and were not acquired or constructed with Net Cash Proceeds from Asset Sales (or with amounts which, pursuant to the Indenture are deemed to constitute Collateral Proceeds) and (y) the Collateral could be operated independently of such property and assets or such property and assets could be disposed of independently of the Collateral without interfering with the continued operation and maintenance of the Collateral and without impairing the value of the Collateral (without taking into account any incremental increase in the value of the Collateral attributable to such property and assets) or interfering with the Trustee's ability to realize such value;

        (i)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

        (j)    Liens on Revolver Collateral securing Interest Rate Protection Obligations and obligations under Currency Agreements, in each case which obligations are permitted to be incurred under the Indenture;

        (k)  Liens on the Revolver Collateral securing Indebtedness and other obligations under the Credit Facility permitted by the Indenture to be incurred and any guarantees of the obligations

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under the Credit Facility permitted by the Indenture to be incurred, in each case, other than Liens created by or pursuant to the Old Bank Documents;

        (l)    Liens in favor of the Company or any Guarantor; provided, that if such Liens are on any Collateral, such Liens are either collaterally assigned to the Trustee or contractually subordinate to the Lien in favor of the Trustee securing the Notes or the Guarantees, as the case may be;

        (m)  Liens securing obligations in respect of the Indenture, the Notes, the Security Documents, the Intercreditor Agreement and the Guarantees; provided, that such obligations are permitted by the covenant described above under "—Certain Covenants—Limitation on Indebtedness;"

        (n)  Liens in favor of the Trustee in accordance with the Indenture and the Security Documents;

        (o)  Liens on the assets or property of any person existing at the time such person becomes a Guarantor after the Issue Date or is merged or consolidated with or into, or is wound up into, the Company or any Guarantor after the Issue Date; provided, that such Liens (i) were in existence prior to the contemplation of such person becoming a Guarantor or such merger or consolidation or winding up, and (ii) do not extend to or cover any property or assets of the Company or any Guarantor (other than property or assets of the person so acquired by, merged or consolidated with or into, or wound up into the Company or such Guarantor); provided, further, that the incurrence of Indebtedness to which such Liens relate was permitted by the covenant described above under "—Certain Covenants—Limitation on Indebtedness;" and provided, further, that the property or assets so acquired do not constitute Replacement Assets or otherwise constitute a replacement of all or part of the Collateral;

        (p)  Liens on assets or property existing at the time of acquisition thereof by the Company or a Guarantor after the Issue Date; provided, that such Liens (i) were in existence prior to the contemplation of such acquisition and (ii) do not extend to or cover any property or assets of the Company or any Guarantor (other than property or assets of the person so acquired by the Company or such Guarantor); provided, further, that the incurrence of Indebtedness to which such Liens relate was permitted by the covenant described above under "—Certain Covenants—Limitation on Indebtedness;" and provided, further, that the property or assets so acquired do not constitute Replacement Assets or otherwise constitute a replacement of all or part of the Collateral;

        (q)  Liens securing Permitted Refinancing Indebtedness which is incurred to refinance any Indebtedness which has been secured by a Lien permitted under the Indenture and which has been incurred in accordance with the provisions of the Indenture;

        (r)  restrictions on the sale, assignment, transfer, mortgage, pledge, hypothecation, encumbrance or change of legal or beneficial ownership with respect to any Common Stock of New CF&I created by the New CF&I Stockholders Agreement (provided, that, in the case of any amendment, supplement or modification of the New CF&I Stockholders Agreement entered into after the Issue Date, the restrictions thereunder are no more restrictive to the Company and New CF&I than those in the New CF&I Stockholders Agreement as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof); and

        (s)  Liens upon specific items of property securing obligations of the Company or a Guarantor in respect of a commercial letter of credit issued by a financial institution in favor of the seller or supplier of such property; provided, that:

        (i)    such letter of credit is issued to facilitate the purchase of such property by, and shipment of such property to, the Company or any Guarantor in the ordinary course of its business,

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        (ii)  such letter of credit is payable against delivery to the relevant financial institution of appropriate documents,

        (iii)  such Lien and letter of credit (and all obligations of the Company and any Guarantor in respect thereof) shall be terminated at or prior to the time that such property is delivered to the premises of the Company or a Guarantor and, in any event, no later than 365 days after the issuance of such letter of credit,

        (iv)  such letter of credit is not issued in respect of liabilities for borrowed money, obligations evidenced by bonds, notes, debentures or other instruments, Capital Leases or guarantees in respect of any of the foregoing,

        (v)  such Lien does not extend to or cover any property or assets other than the specific items of property to be purchased by and shipped to the Company or a Guarantor as aforesaid (together with proceeds of such property), and

        (vi)  the aggregate amount payable by the Company or any of the Guarantors in respect of such letter of credit shall not exceed 100% of the cost of such property (plus interest, freight, insurance and other customary expenses).

        "Permitted Refinancing Indebtedness" means (i) Indebtedness of the Company issued in exchange for, or the proceeds of which are used solely to refinance (whether by amendment, renewal, extension, replacement or refunding), outstanding Indebtedness of the Company or any of the Guarantors and (ii) Indebtedness of any Guarantor issued in exchange for, or the proceeds of which are used solely to refinance (whether by amendment, renewal, extension, replacement or refunding), outstanding Indebtedness of such Guarantor (any and all such Indebtedness issued in exchange for, or the proceeds of which are used to solely to refinance outstanding Indebtedness, as described in clauses (i) and (ii), is referred to in this definition as "Refinancing Indebtedness"), in each case other than refinancing Indebtedness in respect of (I) Indebtedness under (or guarantees of Indebtedness under) the Old Bank Documents, the Old Note Documents or any other Indebtedness refinanced, redeemed or retired with the proceeds from the sale of the Notes and (II) Indebtedness under clause (c), (d), (e), (f), (g), (h), (i), (j), (k) or (o) of the covenant described under "—Certain Covenants—Limitation on Indebtedness;" provided, however, that in each case:

        (w)  the principal amount (or, in the case of Redeemable Capital Stock, the liquidation preference) of Refinancing Indebtedness (or, if such Refinancing Indebtedness provides for an amount less than the principal amount (or liquidation preference) thereof to be due and payable upon a declaration of acceleration of the maturity thereof, the original issue price of such Indebtedness) shall not exceed the sum of:

        (A)  the principal amount (or, in the case of Redeemable Capital Stock, the liquidation preference) of Indebtedness so exchanged or refinanced (or, if such Indebtedness being refinanced was issued with an original issuance discount, the lesser of the principal amount and the accreted value as determined in accordance with GAAP at the time of such exchange or refinancing), plus

        (B)  the amount of any premium required to be paid in connection with such exchange or refinancing pursuant to the terms of such Indebtedness or the amount of any premium reasonably determined by the Board of Directors of the Company as necessary to accomplish such exchange or refinancing by means of a tender offer or privately negotiated purchase, plus

        (C)  the amount of reasonable fees and expenses incurred in connection therewith,

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        (x)  in the case of Refinancing Indebtedness incurred by the Company or a Guarantor to exchange or refinance Subordinated Indebtedness, such Refinancing Indebtedness (including any guarantees thereof):

        (A)  has a final Stated Maturity after the 123rd day after the Final Maturity Date,

        (B)  has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of the Notes, and

        (C)  is contractually subordinated to the Notes and to the Guarantee of such Guarantor, as the case may be, in the same manner and at least to the same extent that the Subordinated Indebtedness (including any guarantees thereof) being exchanged or refinanced is subordinated to the Notes and to the Guarantee of such Guarantor, as the case may be;

        (y)  in the case of Refinancing Indebtedness incurred by the Company or a Guarantor to exchange or refinance Pari Passu Indebtedness, such Refinancing Indebtedness (including any guarantees thereof);

        (A)  has a final Stated Maturity after the 123rd day after the Final Maturity Date,

        (B)  has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of the Notes, and

        (C)  constitutes Pari Passu Indebtedness or Subordinated Indebtedness; and

        (z)  in the case of any Liens securing such Refinancing Indebtedness, (A) no such Lien extends to or covers any property or assets of the Company or any of the Guarantors other than the property or assets covered by the Lien securing the Indebtedness so exchanged or refinanced, (B) the amount of Refinancing Indebtedness secured by such Lien shall not exceed the amount of Indebtedness so exchanged or refinanced that was secured by the predecessor Lien and (C) the terms of such Lien are no less favorable to the holders of the Notes and no more favorable to the lienholders with respect to such Lien than the predecessor Lien."

        "person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, charitable foundation, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

        "Preferred Stock" means, with respect to any person, any Capital Stock of such person of any class or series (however designated) that ranks prior, as to (i) payment of dividends or distributions, (ii) distributions upon voluntary or involuntary liquidation, dissolution or winding up or (iii) redemption, to shares of Capital Stock of any other class or series of such person. For purposes of this definition, the term "Capital Stock" shall not include rights, warrants or options.

        "Pro Forma" means pro forma calculated on a basis consistent with Regulation S-X under the Securities Act.

        "Pueblo Inside the Fence Property" means the real property in Pueblo County, Colorado as described in the Boundary and Improvement Survey of "Inside the Fence Property" of CF&I Steel, L.P., dated as of May 8, 2002, by Valley Engineering, Inc.

        "Pueblo Outside the Fence Property" means the real property of the Company and the Guarantors in Pueblo County, Colorado and Fremont County, Colorado other than (i) the Pueblo Inside the Fence Property, (ii) the easements outside of but appurtenant to the Pueblo Inside the Fence Property running over and across certain real property in Pueblo County, Colorado and Fremont County, Colorado on which the canals or ditches for bringing industrial water to and related access and utility service for the Pueblo Inside the Fence Property are located, and (iii) all industrial water rights appurtenant to and used on the Pueblo Inside the Fence Property.

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        "Qualified Equity Offering" means any sale of Common Stock (other than Redeemable Capital Stock) of the Company for cash, other than pursuant to Form S-8 (or any successor thereto) under the Securities Act and other than shares of Common Stock of the Company issued pursuant to employee benefit plans or as compensation to employees.

        "Redeemable Capital Stock" means any shares of any class or series of Capital Stock that, by the terms thereof (or by the terms of any security into which it is convertible or for which it is exchangeable), by contract, upon the happening of any event, by the passage of time or otherwise:

        (a)  matures, or would be required to be redeemed, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 123 days after the Final Maturity Date, or

        (b)  is convertible into or exchangeable for debt securities in whole or in part, at any time on or prior to the date that is 123 days after the Final Maturity Date.

        Notwithstanding the foregoing:

        (1)  to the extent that any Common Stock of New CF&I is either (i) subject to the terms of the New CF&I Stockholders Agreement as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof) or (ii) subject to the terms of any similar instrument or agreement (including any amendment, supplement or restatement to the New CF&I Stockholders Agreement entered into in accordance with the terms of the Indenture and the New CF&I Stockholders Agreement) which provides for repurchase or redemption of such Common Stock by the Company or New CF&I on terms no less favorable to the Company and New CF&I than those set forth in the New CF&I Stockholders Agreement as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof), then such Common Stock of New CF&I shall not be deemed Redeemable Capital Stock solely by virtue of being subject to the New CF&I Stockholders Agreement or such other instrument or agreement, and

        (2)  any Capital Stock that would constitute Redeemable Capital Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control shall not constitute Redeemable Capital Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions prior to the Company's purchase of such Notes as are required to be purchased pursuant to the provisions of the Indenture as described above under "—Repurchase at the Option of Holders—Repurchase Upon a Change of Control."

        "refinancing" means, with respect to specified Indebtedness, any refinancing of such Indebtedness, whether by amendment, renewal, extension, replacement, refunding or otherwise; and "refinance" shall have a correlative meaning.

        "Revolver Agent" means the person or any or all of the persons as, from time to time, may be named as agent or agents for the lenders under the Credit Facility in accordance with the terms thereof.

        "Revolver Collateral" means, all rights, title and interest in, to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of, the Company, New CF&I, CF&I or CWR: (i) accounts receivable (including, without limitation, accounts receivable evidenced by chattel paper and instruments and chattel paper and instruments into which any accounts have been or are converted) and rights under contracts relating to inventory or to accounts receivable, inventory, and all books, records, writings, databases and other information relating to the accounts receivable and inventory, (ii) any instruments evidencing Intercompany Indebtedness, (iii) Excluded Securities (other than Camrose, Camrose Pipe, Canadian National Steel, Oregon Feralloy and LSI Plate) (including a negative pledge on certain of the shares of The Union Ditch and Water Company

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held by CF&I), (iv) other than the Collateral Account, all bank accounts, deposit accounts and cash collateral accounts and investment property, (v) general intangibles (including but not limited to trade names, trademarks, patents, copyrights and related goodwill), excluding any intellectual property or other general intangibles related to production, property, plant and equipment, the operation thereof or the production and manufacturing processes, (vi) documents, supporting obligations (including without limitation letter of credit rights), software, customer lists, computer systems and books and records relating to the property or assets described in (and not excluded from) clauses (i) through (v) above, and (vii) all other related personal property and proceeds and products therefrom, proceeds deposited from time to time in any lock box or blocked account and, to the extent not otherwise included, all payments under insurance with respect to the foregoing Revolver Collateral (except to the extent that such personal property constitutes, or such proceeds or products are invested in, real property or improvements thereon, machinery and equipment (to the extent it constitutes personal property), or other property and assets owned by the Company and the Guarantors which constitute Collateral), to the extent that any of the foregoing is collateral securing the Credit Facility, or any indemnity, warranty or guarantee payable by reason of loss or damage to, or with respect to, any of the foregoing Revolver Collateral.

        "Sale-Leaseback Transaction" of any person means an arrangement with any lender or investor or to which such lender or investor is a party providing for the leasing by such person or any of its Subsidiaries of any property or asset of such person or any of its Subsidiaries which has been or is being sold or transferred by such person or any of its Subsidiaries to such lender or investor or to any person to whom funds have been or are to be advanced by such lender or investor on the security of such property or asset; provided, that the term Sale-Leaseback Transaction shall not include any such transaction pursuant to which CF&I shall sell or transfer any of the water rights and related water system owned by it on the Issue Date in conjunction with an agreement or other arrangement pursuant to which CF&I receives the right to purchase or receive water represented by any portion of the water rights so sold or transferred (it being understood that this proviso shall not prevent any such sale or transfer of water rights or water system from constituting an Asset Sale).

        "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations thereunder.

        "Security Agreement" means a security agreement, substantially in the form attached as an exhibit to the Indenture (including such changes to such form as may be necessary or desirable to conform to applicable laws in the jurisdiction or jurisdictions whose laws are applicable to the Lien created by such agreement), as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of such instrument or the Indenture.

        "Security Documents" means, collectively:

        (i)    the Mortgages executed by the Company and CF&I,

        (ii)  the Security Agreements executed by the Company, New CF&I and CF&I,

        (iii)  all other Mortgages or Security Agreements executed after the Issue Date by the Company or any Guarantor, and

        (iv)  all other mortgages, deeds of trust, security agreements, pledge agreements and other agreements, instruments, financing statements and other documents evidencing, creating, setting forth or limiting any Lien on Collateral in favor of the Trustee (or, in the case of mortgages, deeds of trust or similar agreements, in favor of the Trustee or another trustee thereunder), for the benefit of the holders of the Notes, in each case as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of such instrument and the Indenture.

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        "S&P" means Standard & Poor's Corporation, and its successors.

        "Stated Maturity" means:

        (a)  when used with respect to any payment of principal or any installment of interest on any Indebtedness, the date specified or set forth in the instrument governing such Indebtedness as the date on which such principal or installment of interest is due and payable, and

        (b)  when used with respect to any Sale-Leaseback Transaction, the date of the last payment of rent or any other amount due under such arrangement prior to the first date on which such arrangement may be terminated by the lessee without payment of a penalty.

The term "final Stated Maturity" when used with respect to any Indebtedness, means the date specified or set forth in the instrument governing such Indebtedness as the final maturity date of such Indebtedness.

        "Subordinated Indebtedness" means Indebtedness of the Company or a Guarantor which is contractually subordinated to the Notes or the Guarantee of such Guarantor, as the case may be.

        "Subsidiary" means, with respect to any person:

        (i)    a corporation, more than 50% of whose voting power or Voting Stock is at the time, directly or indirectly, owned or controlled by such person, by one or more Subsidiaries of such person or by such person and one or more Subsidiaries thereof; and

        (ii)  any person (other than a corporation), including, without limitation, a joint venture, limited partnership, general partnership, association or other business entity, in which such person, one or more Subsidiaries of such person or such person and one or more Subsidiaries of such person, directly or indirectly, at the date of determination thereof, owns or controls more than 50% of the outstanding Capital Stock, Voting Stock, ownership interest or voting power of such person.

        For purposes of this definition, any directors' qualifying shares or investments by foreign nationals mandated by applicable law shall be disregarded in determining the ownership of a Subsidiary.

        "transfer" means any direct or indirect sale, assignment, mortgage, encumbrance, pledge, gift, bequeath, hypothecation or other disposition or transfer, whether (unless expressly stated otherwise) for or without consideration, or voluntary or involuntary or by operation of law); the term "transfer" used as a verb shall have a corresponding meaning.

        "Trust Moneys" means all cash and Cash Equivalents received by the Trustee:

        (i)    upon the release of Collateral from the Lien of the Indenture and the Security Documents, including all Collateral Proceeds (and amounts deemed, pursuant to the Indenture, to constitute Collateral Proceeds) and all moneys received in respect of the principal of all purchase money, governmental and other obligations;

        (ii)  as Net Cash Proceeds from any Event of Loss of all or any portion of the Collateral and Net Awards (other than any liability insurance proceeds payable to the Trustee for any loss, liability or expense incurred by it);

        (iii)  pursuant to the Security Documents;

        (iv)  as proceeds of any sale or other disposition of all or any part of the Collateral by or on behalf of the Trustee or any collection, recovery, receipt, appropriation or other realization of or from all or any part of the Collateral pursuant to the Indenture or any of the Security Documents or otherwise;

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        (v)  which constitute Collateral Proceeds or are deemed pursuant to the Indenture to constitute Collateral Proceeds from any transaction which results in a Guarantor being released from its Guarantee pursuant to the Indenture; or

        (vi)  for application as provided in the relevant provisions of the Indenture or any Security Document or whose disposition is not otherwise specifically provided for in the Indenture or in any Security Document;

provided, however, that Trust Moneys shall in no event include any property deposited with the Trustee for any redemption, legal defeasance or covenant defeasance of Notes, for the satisfaction and discharge of the Indenture or to pay the purchase price of (including all principal of, and premium, interest and Liquidated Damages, if any, on) Notes pursuant to a Change of Control Offer or delivered to or received by the Trustee pursuant to the Indenture in connection with an Event of Default.

        "Unrestricted Subsidiary" means (a) Camrose Pipe Corporation, a Delaware corporation; Canadian National Steel Corporation, an Alberta, Canada corporation; Camrose Pipe Company, an Alberta, Canada partnership; Oregon Steel de Guayana, Inc., a Delaware corporation; OSM Glassification Inc., an Oregon corporation; Glassification International, Ltd., an Oregon partnership; Colorado and Wyoming Railway Company, a Delaware corporation; The Union Ditch and Water Company, a Colorado corporation; OSM Distribution, Inc., a Delaware corporation; Oregon Steel Mills Processing, Inc., a Delaware corporation; Oregon Feralloy Partners, an Oregon partnership; and LSI Plate, an Oregon partnership; and (b) any other Subsidiary of the Company that, at the date of determination, shall be designated as an Unrestricted Subsidiary by the Board of Directors of the Company (all as described above under "—Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries"); provided, however, that any such Unrestricted Subsidiary shall cease to constitute an Unrestricted Subsidiary upon its designation by the Board of Directors of the Company as a Guarantor as described above under "—Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries."

        "Voting Stock" of any person means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees of any person (irrespective of whether or not, at the time, Capital Stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).

        "Wholly Owned Subsidiary" means any Subsidiary of the Company of which 100% of the outstanding Capital Stock is owned by the Company, by one or more Wholly Owned Subsidiaries of the Company or by the Company and one or more Wholly Owned Subsidiaries of the Company. For purposes of this definition:

        (i)    any directors' qualifying shares or investments by foreign nationals mandated by applicable law shall be disregarded in determining the ownership of a Subsidiary, and

        (ii)  the limited partnership interests in CF&I and the Common Stock of New CF&I owned by persons other than the Company and the Guarantors on the Issue Date likewise shall be disregarded in determining ownership of such Subsidiaries (it being understood that any increase in the capital account of a limited partner of CF&I pursuant to the terms of the CF&I Partnership Agreement shall not, in and of itself, cause such limited partnership interest not to qualify under this clause (ii)).

        For purposes of the foregoing definition, neither CF&I nor New CF&I shall be deemed not to be a Wholly Owned Subsidiary of the Company solely by virtue of (A) any sale, transfer or assignment after the Issue Date of any limited partnership interests or Common Stock referred to in clause (ii) of the preceding sentence (including, without limitation, by admission of additional limited partners to CF&I), so long as such sale, transfer or assignment is otherwise made in compliance with the provisions of the Indenture or (B) any merger or consolidation of CF&I or New CF&I, respectively, so long as

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such merger or consolidation is in compliance with the provisions of the Indenture and the ownership of the limited partnership interests in CF&I and the Common Stock of New CF&I, after giving effect to such merger or consolidation, is the same as the ownership of such limited partnership interests and Common Stock immediately prior to such merger or consolidation.

Registration Rights, Exchange Offer

        The Company, the Guarantors and the Initial Purchaser entered into an Exchange and Registration Rights Agreement (the "Registration Rights Agreement") pursuant to which the Company and the Guarantors agreed, for the benefit of the holders of the Notes to file under the Securities Act a registration statement relating to an offer to exchange (such registration statement, the "Exchange Registration Statement," and such offer, the "Exchange Offer") any and all of the Notes for a like aggregate principal amount of debt securities issued by the Company and guaranteed by the Guarantors, which debt securities and guarantees are substantially identical to the Notes and the Guarantees, except that such securities have been registered pursuant to an effective registration statement under the Securities Act and do not contain provisions for the Liquidated Damages described below (such new debt securities, the "Exchange Notes").

        The Registration Rights Agreement will provide that the Company:

        (a)  will file the Exchange Registration Statement with the Commission as soon as practicable, but no later than 60 days after the Issue Date;

        (b)  will use its reasonable best efforts to cause the Exchange Registration Statement to become effective under the Securities Act as soon as practicable, but no later than 180 days after the Issue Date; and

        (c)  will use its reasonable best efforts to commence and complete the Exchange Offer promptly, but no later than 45 days after the date on which the Exchange Offer Registration Statement has become effective, and hold the Exchange Offer open for at least 30 days and exchange Exchange Notes for all Registrable Securities that have been properly tendered and not withdrawn on or prior to the expiration of the Exchange Offer.

        "Registrable Securities" mean the Notes (together with the Guarantees); provided, however, that any such security shall cease to be a Registrable Security when (i) it has been exchanged for an Exchange Note in an Exchange Offer as contemplated in Section 2(a) of the Registration Rights Agreement (provided that any Exchange Note that, as described in the following paragraph, is included in a prospectus for use in connection with resales by broker-dealers shall be deemed to be a Registrable Security with respect to specified sections of the Registration Rights Agreement until resale of such Registrable Security has been effected within the 180-day period referred to in the following paragraph); (ii) a Shelf Registration Statement registering such security under the Securities Act has been declared or becomes effective and such security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration Statement; (iii) such security is sold pursuant to Rule 144 under the Securities Act under circumstances in which any legend borne by such security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; (iv) such security is eligible to be sold pursuant to paragraph (k) of Rule 144 under the Securities Act; or (v) such security shall cease to be outstanding.

        Under existing Commission interpretations, the Company believes that the Exchange Notes would in general be freely transferable after the Exchange Offer without further registration under the Securities Act, except that broker-dealers receiving Exchange Notes in the Exchange Offer will be subject to a prospectus delivery requirement with respect to resales of those Exchange Notes. The Commission has taken the position that such broker-dealers may fulfill their prospectus delivery

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requirements with respect to the Exchange Notes (other than a resale of an unsold allotment from the original sale of the Notes) by delivery of the prospectus contained in the Exchange Registration Statement. Under the Registration Rights Agreement, the Company has agreed to allow such broker-dealers to use the prospectus contained in the Exchange Registration Statement in connection with the resale of the Exchange Notes. The Exchange Registration Statement will be kept effective for a period ending upon the earlier of 180 days after the Exchange Offer has been consummated and such time as such broker-dealers no longer own any Registrable Securities.

        If (i) on or prior to the time the Exchange Offer is completed existing Commission interpretations are changed such that the Exchange Notes received in the Exchange Offer would not in general be, upon receipt, transferable by holders thereof without restrictions under the Securities Act; (ii) the Exchange Offer has not been completed within 225 days following the Issue Date; or (iii) the Exchange Offer is not available to any holder of the Notes, the Company and the Guarantors shall, in lieu of (or, in the case of clause (iii), in addition to) conducting the Exchange Offer, file under the Securities Act a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities (the "Shelf Registration Statement").

        The Registration Rights Agreement will provide that the Company:

        (a)  will file the Shelf Registration Statement with the Commission as soon as practicable, but no later than 30 days after the time such obligation to file arises;

        (b)  will use its reasonable best efforts to cause the Shelf Registration Statement to become or be declared effective under the Securities Act no later than 120 days after the date such Shelf Registration Statement is filed; and

        (c)  will use its reasonable best efforts to keep such Shelf Registration Statement continuously effective for a period ending on the earlier of the second anniversary of the date such Shelf Registration Statement became or was declared effective or such time as there are no longer any Registrable Securities outstanding.

        A Holder that sells Notes pursuant to the Shelf Registration Statement generally would be required to be named as a selling security-holder in the related prospectus and to deliver a prospectus to purchasers, will be subject to certain of the civil liability provisions under the Securities Act in connection with such sales and will be bound by the provisions of the Registration Rights Agreement which are applicable to such a Holder (including certain indemnification obligations). The Company will provide a copy of the Registration Rights Agreement to prospective investors upon request.

        In the event that:

        (a)  the Company has not filed the Exchange Registration Statement or Shelf Registration Statement on or before the date on which such registration statement is required to be filed, or

        (b)  such Exchange Registration Statement or Shelf Registration Statement has not become effective or been declared effective by the Commission on or before the date on which such registration statement is required to become or be declared effective, or

        (c)  the Exchange Offer has not been completed within 45 days after the initial effective date of the Exchange Registration Statement relating to the Exchange Offer (if the Exchange Offer is then required to be made), or

        (d)  any Exchange Registration Statement or Shelf Registration Statement is filed and declared effective but shall thereafter either be withdrawn by the Company or shall become subject to an effective stop order suspending the effectiveness of such registration statement without being succeeded immediately by an additional registration statement filed and declared effective

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(each such event referred to in clauses (a) through (d), a "Registration Default" and, each period during which a Registration Default has occurred and is continuing, a "Registration Default Period"), then, in addition to the interest on the Notes, liquidated damages ("Liquidated Damages") shall accrue at a per annum rate of 0.25% for the first 90 days of the Registration Default Period, at a per annum rate of 0.50% for the second 90 days of the Registration Default Period, at a per annum rate of 0.75% for the third 90 days of the Registration Default Period and at a per annum rate of 1.0% thereafter, for the remaining portion of the Registration Default Period. Liquidated Damages shall be paid on interest payment dates to holders of record for the payment of interest.

        Holders of Notes will be required to make certain representations to the Company and to deliver information to be used in connection with the Shelf Registration Statement (in each case, as described in the Registration Rights Agreement) and will be required to provide comments on the Shelf Registration Statement within the time periods set forth in the Registration Rights Agreement in order to have their Notes included in the Shelf Registration Statement and benefit from the provisions regarding Liquidated Damages set forth above.

        The Notes and the Exchange Notes will be considered collectively to be a single class for all purposes under the Indenture, including, without limitation, waivers, amendments, redemptions and offers to purchase, and for purposes of this Description of Notes (except in this "Registration Rights; Exchange Offer" section), all references herein to "Notes" shall be deemed to refer collectively to Notes and any Exchange Notes, unless the context otherwise requires.

Form, Denomination, Transfer, Exchange and Book-Entry Procedures

        The original notes were offered only to qualified institutional buyers in reliance on Rule 144A (the "Rule 144A Notes") and in offshore transactions in reliance on Regulation S (the "Regulation S Notes"). The Company will issue Notes only in fully registered form, without interest coupons, in denominations of $1,000 and integral multiples of $1,000. The Company will not issue Notes in bearer form.

Global Notes

        The Exchange Notes will be represented by one or more notes in registered, global form without interest coupons (collectively, the "Global Notes"). The Global Notes will be deposited upon issuance with the Trustee as custodian for The Depository Trust Company ("DTC"), in New York, New York, and registered in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC, including Euroclear Bank S.A./N.V. (as operator of the Euroclear system, "Euroclear") and Clearstream Banking Luxembourg ("Clearstream").

        Except as set forth below, the Global Notes may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. Beneficial interests in the Global Notes may not be exchanged for Notes in certificated form except in the limited circumstances described below under "—Exchange of Book-Entry Notes for Certificated Notes." Except in the limited circumstances described below, owners of beneficial interests in the Global Notes will not be entitled to receive physical delivery of Notes in certificated form.

        Transfers of beneficial interests in the Global Notes will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.

        The Notes may be presented for registration of transfer and exchange at the offices of the Registrar.

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Exchange of Book-Entry Notes for Certificated Notes

        You may not exchange your beneficial interest in a Global Note for a definitive Note in registered certificated form unless:

        (1)  DTC (a) notifies the Company that it is unwilling or unable to continue as depositary for the Global Notes or (b) has ceased to be a clearing agency registered under the Exchange Act, and in either case, the Company thereupon fails to appoint a successor depositary within 90 days; or

        (2)  the Company, at its option, notifies the Trustee in writing that it is electing to issue the Notes in certificated form; or

        (3)  an Event of Default shall have occurred and be continuing with respect to the Notes.

        In addition, beneficial interests in a Global Note may be exchanged for certificated Notes upon request but only upon at least 20 days' prior written notice given to the Trustee by or on behalf of DTC in accordance with customary procedures. In all cases, certificated Notes delivered in exchange for any Global Note or beneficial interest therein will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).

Certain Book-Entry Procedures

        The description of the operations and procedures of DTC, Euroclear and Clearstream contained in this prospectus is provided solely as a matter of convenience. These operations and procedures are solely within their control and are subject to change by them from time to time. The Company takes no responsibility for these operations and procedures and urges you to contact the system or its participants directly to discuss these matters.

        DTC has advised the Company as follows: DTC is a limited purpose trust company organized under the laws of the State of New York, a member of the Federal Reserve System, a "clearing corporation" with the meaning of the Uniform Commercial Code and a "Clearing Agency" registered pursuant to the provisions of Section 17A of the Exchange Act. DTC was created to hold securities for its participating organizations (collectively, "participants") and to facilitate the clearance and settlement of securities transactions between participants through electronic book-entry changes in accounts of participants. The participants include securities brokers and dealers, banks, trust companies, clearing corporations and certain other organizations. Indirect access to DTC's system is also available to other entities such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly (collectively, "indirect participants"). Persons who are not participants may beneficially own securities held by or on behalf of DTC only through the participants or indirect participants. The ownership interest and transfer of ownership interest of each actual purchaser of each security held by or on behalf of DTC are recorded on the records of the participants and indirect participants.

        DTC has advised the Company that pursuant to procedures established by it, (i) upon deposit of the Global Notes, DTC will credit the respective principal amounts of the individual beneficial interests represented by such Global Notes to the accounts with DTC of participants designated by the Initial Purchaser as holding such interests and (ii) ownership of such interests in the Global Notes will be shown on, and the transfer of ownership thereof will be effected only through, records maintained by DTC or its nominees (with respect to interests of participants) or by participants and the indirect participants (with respect to other owners of beneficial interests in the Global Notes).

As long as DTC, or its nominee, is the registered holder of a Global Note, DTC or such nominee, as the case may be, will be considered the sole owner and holder of the Notes represented by such Global Note for all purposes under the Indenture and the Notes. Except in the limited circumstances

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described above under "—Exchanges of Book-Entry Notes for Certificated Notes," you will not be entitled to have any portion of a Global Notes registered in your name, will not be entitled to receive physical delivery of Notes in certificated form and will not be considered the registered owners or holder of a Global Note (or any Note represented thereby) under the Indenture or the Notes for any purpose.

        You may hold your interests in the Global Notes directly through DTC, if you are a participant in such system, or indirectly through organizations (including Euroclear and Clearstream) which are participants in such system. All interests in a Global Note, including those held through Euroclear or Clearstream, will be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream also will be subject to the procedures and requirements of such system.

        The laws of some states require that certain persons take physical delivery in definitive form of securities that they own. Consequently, your ability to transfer your beneficial interest in a Global Note to such persons may be limited to that extent. Because DTC can act only on behalf of participants which in turn act on behalf of indirect participants and certain banks, your ability to pledge your interest in a Global Note to persons or entities that do not participate in the DTC system, or to otherwise take actions in respect of such interest, may be affected by the lack of a physical certificate evidencing such interest. For certain other restrictions on the transferability of the Notes, see "—Exchange of Book-Entry Notes for Certificated Notes."

        Payments in respect of the principal, premium, interest and Liquidated Damages (if any) on a Global Note registered in the name of DTC or its nominee will be payable by the Trustee to DTC or its nominee in its capacity as the registered Holder under the Indenture. Under the terms of the Indenture, the Company and the Trustee will treat the persons in whose names the Notes, including the Global Notes, are registered as the owners thereof for the purpose of receiving such payments and for any and all other purposes whatsoever. Consequently, none of the Company, the Trustee or any agent of the Company or the Trustee has or will have any responsibility or liability for (i) any aspect of DTC's records or any participant's or indirect participant's records relating to or payments made on account of beneficial ownership interests in the Global Notes, or for maintaining, supervising or reviewing any of DTC's records or any participant's or indirect participant's records relating to the beneficial ownership interests in the Global Notes or (ii) any other matter relating to the actions and practices of DTC or any of its participants or indirect participants.

        DTC has advised the Company that its current practices, upon receipt of any payment (including principal and interest) in respect of securities such as a Global Note representing any Notes held by it or its nominees, is to credit the accounts of the relevant participants with the payment on the payment date, in amounts proportionate to their respective beneficial interests in the principal amount of such Global Notes as shown on the records of DTC. Payments by participants and indirect participants to the beneficial owners of Notes will be governed by standing instructions and customary practices and will not be the responsibility of DTC, the Trustee or the Company. None of the Company or the Trustee will be liable for any delay by DTC or its participants in identifying the beneficial owners of the Notes, and the Company and the Trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee as the registered owner of the Notes for all purposes.

        Except for the trades involving only Euroclear and Clearstream participants, interests in the Global Note will trade in DTC's settlement system, and secondary market trading activity in such interests will therefore settle in immediately available funds, subject in all cases to the rules and procedures of DTC and its participants. Transfers between participants in DTC will be effected in accordance with DTC's procedures, and will be settled in same-day funds. Transfers between participants in Euroclear and Clearstream will be effected in the ordinary way in accordance with their respective rules and operating procedures.

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        Subject to compliance with the transfer and exchange provisions applicable to the Notes described elsewhere herein, cross-market transfers between DTC participants, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected by DTC in accordance with DTC's rules on behalf of Euroclear and Clearstream, as the case may be, by its respective depository; however, such cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in such system in accordance with the rules and procedures and within the established deadlines (Brussels time) of such system. Euroclear or Clearstream, as the case may be, will, if the transaction meets its settlement requirements, deliver instructions to its respective depository to take action to effect final settlement on its behalf by delivering or receiving interests in the relevant Global Note in DTC, and making or receiving payment in accordance with normal procedures for same-day funds settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.

        Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in a Global Note from a DTC participant will be credited, and any such crediting will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following the DTC settlement date. Cash received in Euroclear or Clearstream as a result of sales of interests in a Global Note by or through a Euroclear or Clearstream participant to a DTC participant will be received with value on the DTC settlement date but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following the DTC settlement date.

        DTC has advised the Company that it will take any action permitted to be taken by a holder of Notes (including the presentation of Notes for exchange as described below) only at the direction of one or more participants to whose account DTC interests in the Global Notes are credited and only in respect of such portion of the aggregate principal amount of the Notes as to which such participant or participants has or have given direction. However, if there is an Event of Default under the Notes, DTC reserves the right to exchange Global Notes for legended Notes in certificated form, and to distribute such Notes to its participants.

        The information in this section concerning DTC and its book-entry system, as well as Euroclear and Clearstream, has been obtained from sources believed to be reliable, but the Company takes no responsibility for the accuracy thereof.

        Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Notes among participants in DTC, they are under no obligation to perform or to continue to perform such procedures, and such procedures may be discontinued at any time. Neither the Company, the Trustee or any of their respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their participants or indirect participants of their respective obligations under the rules and procedures governing their operations, including maintaining, supervising or reviewing the records relating to, or payments made on account of, beneficial ownership interests in the Global Notes.

Same Day Settlement and Payment

        The Indenture requires that payments in respect of the Notes represented by a Global Note (including principal, premium, if any, interest and liquidated damages, if any, thereon) be made by wire transfer of immediately available next day funds to the accounts specified by the Global Note Holder. With respect to Certificated Notes, the Company will make all payments of principal, premium, if any, interest and liquidated damages, if any, thereon by wire transfer of immediately available funds to the accounts specified by the Holders thereof or, if no such account is specified, by mailing a check to each such Holder's registered address.

119

CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES

        The following is a summary of certain U.S. federal income tax consequences associated with the exchange of the original notes for the exchange notes pursuant to the Exchange Offer. This summary is based upon the Internal Revenue Code of 1986, as amended (the "Code"), Treasury Department regulations, administrative pronouncements of the Internal Revenue Service and judicial decisions, all of which are subject to change, possibly with retroactive effect. This summary does not address all of the U.S. federal income tax consequences that may be applicable to particular holders, including dealers in securities, financial institutions, insurance companies, foreign corporations, tax-exempt entities and individuals who are not citizens or residents of the U.S. In addition, this summary does not include any description of the effect of any state, local, foreign or other tax laws that may be applicable to a holder.

        Exchange of the original notes for the exchange notes pursuant to the Exchange Offer will not be treated as a taxable exchange for U.S. federal income tax purposes because the exchange notes do not differ materially in either kind or extent from the original notes and because the exchange will occur pursuant to and in accordance with the terms of the original notes. Rather, for U.S. federal tax purposes, the exchange notes received by a holder will be treated as a continuation of the original notes in the hands of the holder. As a result, there generally will be no U.S. federal income tax consequences to holders that exchange the original notes for the exchange notes pursuant to the Exchange Offer. In addition, any "market discount" on the original notes should carry over to the exchange notes. Holders should consult their tax advisors regarding application of the market discount rules to the exchange notes received in exchange for the original notes pursuant to the Exchange Offer.

        Interest accruing throughout the term of the exchange notes at a rate of 10% per annum generally will be taxable to the holder as ordinary interest income at the time it accrues or is received in accordance with the holder's regular method of accounting for U.S. federal tax purposes. If Liquidated Damages are paid on the original notes (in addition to payment of interest at a rate of 10% per annum) as described above under "Description of Notes—Registration Rights, Exchange Offer," such Liquidated Damages payments generally should be includable in the holder's gross income at the time the payment accrues or is received by the holder in accordance with the holder's regular method of accounting for U.S. federal tax purposes.

THIS SUMMARY DOES NOT DISCUSS ALL ASPECTS OF UNITED STATES FEDERAL INCOME TAXATION THAT MAY BE RELEVANT TO A PARTICULAR HOLDER OF THE NOTES BECAUSE OF HIS, HER OR ITS PARTICULAR CIRCUMSTANCES AND INCOME TAX SITUATION. EACH HOLDER OF THE NOTES SHOULD CONSULT HIS, HER OR ITS TAX ADVISOR AS TO THE SPECIFIC TAX CONSEQUENCES TO SUCH HOLDER OF THE EXCHANGE OF ORIGINAL NOTES FOR EXCHANGE NOTES AND OF THE OWNERSHIP AND DISPOSITION OF THE NOTES, INCLUDING APPLICATION AND EFFECT OF STATE, LOCAL, FOREIGN AND OTHER TAX LAWS OR CHANGES IN THOSE LAWS.

PLAN OF DISTRIBUTION

        Each broker-dealer that receives exchange notes for its own account in connection with the Exchange Offer must acknowledge that it will deliver a prospectus in connection with any resale of such exchange notes. This Prospectus, as it may be amended or supplemented from time to time, may be used by a broker-dealer in connection with resales of exchange notes received in exchange for original notes where the original notes were acquired as a result of market-making activities or other trading activities. We have agreed that for a period ending on the earlier of (i) 180 days after the exchange offer has been completed and (ii) the date on which a broker-dealer is no longer required to deliver a prospectus in connection with market making or other trading activities, we will make available and provide promptly upon reasonable request this prospectus (as amended or supplemented),

120

in a form meeting the requirements of the Securities Act to any broker-dealer for use in connection with any such resale.

        We will receive no proceeds in connection with the Exchange Offer. Exchange notes received by broker-dealers for their own account pursuant to the Exchange Offer may be sold from time to time in one or more transactions in the over-the-counter market, in negotiated transactions, through the writing of options on the exchange notes or a combination of such methods of resale, at market prices prevailing at the time of resale, at prices related to such prevailing market prices or negotiated prices. Any such resale may be made directly to purchasers or through brokers or dealers who may receive compensation in the form of commissions or concessions from any such broker-dealer and/or the purchasers of any such exchange notes. Any broker-dealer that resells exchange notes that were received by it for its own account pursuant to the Exchange Offer and any broker or dealer that participates in a distribution of such exchange notes may be deemed to be an "underwriter" within the meaning of the Securities Act, and any profit on any such resale of exchange notes and any commissions or concessions received by any such persons may be deemed to be underwriting compensation under the Securities Act. The Letter of Transmittal states that by acknowledging that it will deliver, and by delivering, a prospectus, a broker-dealer will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        We have agreed to indemnify the holders of the notes, including any broker-dealers, against certain liabilities, including liabilities under the Securities Act.

LEGAL MATTERS

        The validity of the issuance of the exchange notes will be passed upon for the Company by Stoel Rives LLP, Portland, Oregon and Holme Roberts & Owen LLP, Denver, Colorado.

EXPERTS

        The consolidated financial statements of Oregon Steel Mills, Inc. incorporated in this Prospectus by reference to the Annual Report on Form 10-K of Oregon Steel Mills, Inc. for the year ended December 31, 2001 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

        The consolidated financial statements of New CF&I, Inc. incorporated in this Prospectus by reference to the Annual Report on Form 10-K of New CF&I Inc. and CF&I Steel L.P. for the year ended December 31, 2001 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

        The consolidated financial statements of CF&I Steel L.P. incorporated in this Prospectus by reference to the Annual Report on Form 10-K of New CF&I Inc. and CF&I Steel L.P. for the year ended December 31, 2001 have been so incorporated in reliance on the report of PricewaterhouseCoopers LLP, independent accountants, given on the authority of said firm as experts in auditing and accounting.

121

No dealer, sales representative, or any other person has been authorized to give any information or to make any representations in connection with this offering other than those contained in this prospectus and, if given or made, such information or representations must not be relied upon as having been authorized by the Company or the Initial Purchaser. This prospectus does not constitute an offer to sell or a solicitation of any offer to buy any securities other than the notes to which it relates or an offer to, or a solicitation of, any person in any jurisdiction where such an offer or solicitation would be unlawful. Neither the delivery of this prospectus nor any sale made hereunder shall, under any circumstances, create an implication that there has been no change in the affairs of the Company or that information contained herein is correct as of any time subsequent to the date hereof.

TABLE OF CONTENTS

	Page
Incorporation of Certain Documents by Reference	1
Where You Can Find Additional Information	4
Summary	5
Risk Factors	15
Use of Proceeds	33
Ratio of Earnings to Fixed Charges	33
Selected Historical Consolidated Financial Data	34
The Exchange Offer	36
Description of Notes	47
Certain United States Federal Income Tax Consequences	120
Plan of Distribution	120
Legal Matters	121
Experts	121

$305,000,000

OREGON STEEL MILLS, INC.

10% First Mortgage Notes due 2009

PROSPECTUS

, 2002

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20. Indemnification of Officers and Directors

        Section 145 of the General Corporation Law of the State of Delaware (the "GCL") provides, in summary, that a corporation may indemnify a director, officer, employee or agent of a corporation (i) in the case of third-party claims, against certain expenses incurred by such person in connection with any action, suit or proceeding brought or threatened against such person by reason of the fact that he or she is or was a director, officer, employee or agent of the corporation, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation, and (ii) in the case of actions by or in the right of the corporation, against certain expenses incurred by such person in connection with the defense or settlement of such an action, if such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the best interests of the corporation; provided, however, that, in the case of actions by or in the right of the corporation, if such person is adjudged to be liable to the corporation, no indemnification can be made unless a court determines that such person is fairly and reasonably entitled to indemnification. Indemnification also is authorized with respect to any criminal action or proceeding where, in addition to the criteria stated under (i) above, a director, officer, employee or agent had no reasonable cause to believe that his or her conduct was unlawful. Section 145 of the GCL furthermore provides that a corporation must indemnify a director, officer, employee or agent of the corporation to the extent that he or she is successful on the merits or otherwise in defending any of the actions, suits or proceedings described above. Oregon Steel's Restated Certificate of Incorporation (the "Restated Certificate") and Bylaws and New CF&I, Inc.'s Certificate of Incorporation (the "Certificate") and Bylaws provide for the indemnification by Oregon Steel and New CF&I, Inc. of their respective directors, officers, employees and agents to the fullest extent permitted by Section 145 of the Delaware GCL. Additionally, Section 145 of the Delaware GCL permits a corporation to purchase and maintain insurance on behalf of its directors, officers, employees and agents against any liability asserted against such persons and incurred by such persons, or arising out of such persons' status as such. Oregon Steel maintains an insurance policy covering its directors and officers against such liability. Oregon Steel also has entered into indemnification agreements with certain executive officers.

        Section 102 of the Delaware GCL provides that a corporation, in its Certificate of Incorporation, may eliminate the personal liability of its directors to the corporation or its stockholders for monetary damages for breach of fiduciary duty as a director, other than liability for (1) any breach of the director's duty of loyalty to the corporation or its stockholders, (2) acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) any transaction from which the director derived an improper personal benefit and (4) unlawful payment of dividends or unlawful stock purchases or redemptions. The Restated Certificate of Oregon Steel and the Certificate of New CF&I each provide for the elimination, to the fullest extent permitted by law, of personal liability of its directors for monetary damages for breach of fiduciary duty as a director. Reference is made to the Restated Certificate of Oregon Steel and the Certificate of New CF&I filed as Exhibits 3.1 and 3.2, respectively.

Item 21. Exhibits and Financial Statement Schedules

2.0

Asset Purchase Agreement dated as of January 2, 1992, by and between Camrose Pipe Company (a partnership) and Stelco Inc. (Filed as exhibit 2.0 to Form 8-K dated June 30, 1992 and incorporated by reference herein.)



2.1

Asset Purchase Agreement dated as of March 3, 1993, among CF&I Steel Corporation, Denver Metals Company, Albuquerque Metals Company, CF&I Fabricators of Colorado, Inc., CF&I Fabricators of Utah, Inc., Pueblo Railroad Service Company, Pueblo Metals Company,

II-1

Colorado & Utah Land Company, the Colorado and Wyoming Railway Company, William J. Westmark as trustee for the estate of The Colorado and Wyoming Railway Company, CF&I Steel, L.P., New CF&I, Inc. and Oregon Steel Mills, Inc. (filed as exhibit 2.1 to Form 8-K dated March 3, 1993, and incorporated by reference herein.)

4.1

Indenture, dated as of July 15, 2002, by and among Oregon Steel Mills, U.S. Bank National Association, as trustee, and New CF&I, Inc., and CF&I Steel, L.P., as guarantors.



4.2

Exchange and Registration Rights Agreement, dated July 15, 2002, between Oregon Steel Mills and Goldman, Sachs & Co.



4.3

Security Agreement, dated as of July 15, 2002, between Oregon Steel Mills and U.S. Bank National Association.



4.4

Security Agreement, dated as of July 15, 2002, between CF&I Steel, L.P. and U.S. Bank National Association.



4.5

Security Agreement, dated as of July 15, 2002, between New CF&I, Inc. and U.S. Bank National Association.



4.6

Intercreditor Agreement, dated July 15, 2002 between U.S. Bank National Association and Textron Financial Corporation.



4.7

Form of Deed of Trust, Assignment of Rents and Leases and Security Agreement.



4.8

Form of Global Note.



4.9

Guarantee of CF&I Steel, L.P.



4.10

Guarantee of New CF&I, Inc.



5.1

Opinion of Stoel Rives LLP.



5.2

Opinion of Holme Roberts & Owen, LLP.



10.1

Credit Agreement dated as of July 12, 2002 among Oregon Steel Mills, Inc., New CF&I, Inc., CF&I Steel L.P. and Colorado and Wyoming Railway Company, as borrowers, and various financial institutions, as Lenders, and the Agents for the Lenders.



10.2

Security Agreement dated as of August 12, 2002 among Oregon Steel Mills, Inc., New CF&I, Inc., CF&I Steel, L.P. and the Agent for the Lenders.



12.1

Statement re computation of ratios.



23.1

Consent of PricewaterhouseCoopers LLP.



23.2

Consent of PricewaterhouseCoopers LLP.



23.3

Consent of PricewaterhouseCoopers LLP.



23.4

Consent of Stoel Rives LLP (included in Exhibit 5.1).



23.5

Consent of Holme Roberts & Owen, LLP (included in Exhibit 5.2).



24.1

Powers of Attorney (included on Pages II-5 through II-8 of the Registration Statement).



25.1

Statement of Eligibility of Trustee.



99.0

Partnership Agreement dated as of January 2, 1992, by and between Camrose Pipe Corporation and Stelcam Holding, Inc. (Filed as exhibit 28.0 to Form 8-K dated June 30, 1992, and incorporated by reference herein.)



99.1

Form of Letter of Transmittal.

II-2

99.2

Form of Notice of Guaranteed Delivery.



99.3

Form of Instruction to Registered Holder.

Item 22. Undertakings

        (a)  The undersigned registrant hereby undertakes:

        (1)  To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement:

        (i)    To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities Act");

        (ii)  To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20 percent change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement.

        (iii)  To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement;

        (2)  That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        (3)  To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

        (b)  Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Act and will be governed by the final adjudication of such issue.

        (c)  The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11 or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed

II-3

subsequent to the effective date of the registration statement through the date of responding to the request.

        (d)  The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective.

        (e)  The undersigned registrant hereby undertakes that, for purposes of determining any liability under the Securities Act of 1933, each filing of the registrant's annual report pursuant to section 13(a) or section 15(d) of the Securities Exchange Act of 1934 (and, where applicable, each filing of an employee benefit plan's annual report pursuant to section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in the registration statement shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

II-4

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Portland, State of Oregon, on August 15, 2002.

OREGON STEEL MILLS, INC.
By:	L. RAY ADAMS L. Ray Adams Vice President-Finance, Chief Financial Officer and Treasurer

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on August 15, 2002 in the capacities indicated.

POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Joe E. Corvin, L. Ray Adams and Jeff S. Stewart or any one of them, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any amendments (whether pre-effective or post-effective) to this Registration Statement and any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person,

II-5

hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or their substitute or substitutes, may do or cause to be done by virtue hereof.

Signature	Title
JOE E. CORVIN Joe E. Corvin	President and Chief Executive Officer and Director (Principal Executive Officer)
L. RAY ADAMS L. Ray Adams	Vice President-Finance, Chief Financial Officer and Treasurer (Principal Financial Officer)
JEFF S. STEWART Jeff S. Stewart	Corporate Controller (Principal Accounting Officer)
WILLIAM SWINDELLS William Swindells	Chairman of the Board
JAMES E. DECLUSIN James E. Declusin	Director
HARRY L. DEMOREST Harry L. Demorest	Director
CARL W. NEUN Carl W. Neun	Director
DAVID L. PARKINSON David L. Parkinson	Director
STEPHEN P. REYNOLDS Stephen P. Reynolds	Director
JOHN A. SPROUL John A. Sproul	Director
FRANK M. WALKER Frank M. Walker	Director

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Portland, State of Oregon, on August 15, 2002.

NEW CF&I, INC.
By:	L. RAY ADAMS L. Ray Adams Vice President-Finance, Chief Financial Officer and Treasurer

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on August 15, 2002 in the capacities indicated.

II-6

POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Joe E. Corvin, L. Ray Adams and Jeff S. Stewart or any one of them, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any amendments (whether pre-effective or post-effective) to this Registration Statement and any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or their substitute or substitutes, may do or cause to be done by virtue hereof.

Signature	Title
JOE E. CORVIN Joe E. Corvin	President and Chief Executive Officer and Director (Principal Executive Officer)
L. RAY ADAMS L. Ray Adams	Vice President-Finance, Chief Financial Officer, Treasurer and Director (Principal Financial Officer)
JEFF S. STEWART Jeff S. Stewart	Corporate Controller (Principal Accounting Officer)
STEVEN M. ROWAN Steven M. Rowan	Director
KEIICHIRO SHIMAKAWA Keiichiro Shimakawa	Director

SIGNATURES

        Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this registration statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Portland, State of Oregon, on August 15, 2002.

CF&I STEEL, L.P.
By:	NEW CF&I, INC., its General Partner
By:	L. RAY ADAMS L. Ray Adams Vice President-Finance, Chief Financial Officer and Treasurer

        Pursuant to the requirements of the Securities Act of 1933, this registration statement has been signed below by the following persons on August 15, 2002 in the capacities indicated.

II-7

POWER OF ATTORNEY

        KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Joe E. Corvin, L. Ray Adams and Jeff S. Stewart or any one of them, his true and lawful attorneys-in-fact and agents, each with full power of substitution and resubstitution, for him and in his name, place and stead, in any and all capacities, to sign any amendments (whether pre-effective or post-effective) to this Registration Statement and any registration statement for the same offering that is to be effective upon filing pursuant to Rule 462(b) under the Securities Act of 1933, and to file the same with all exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, granting unto each of said attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that each of said attorneys-in-fact and agents, or their substitute or substitutes, may do or cause to be done by virtue hereof.

Signature	Title
JOE E. CORVIN Joe E. Corvin	President and Chief Executive Officer and Director (Principal Executive Officer)
L. RAY ADAMS L. Ray Adams	Vice President-Finance, Chief Financial Officer, Treasurer and Director (Principal Financial Officer)
JEFF S. STEWART Jeff S. Stewart	Corporate Controller New CF&I Inc. (Principal Accounting Officer)
STEVEN M. ROWAN Steven M. Rowan	Director
KEIICHIRO SHIMAKAWA Keiichiro Shimakawa	Director

II-8

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TABLE OF ADDITIONAL REGISTRANTS
TABLE OF CONTENTS
INCORPORATION OF DOCUMENTS BY REFERENCE
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
INDUSTRY AND MARKET DATA
WHERE YOU CAN FIND ADDITIONAL INFORMATION
SUMMARY
GENERAL
THE COMPANY
SUMMARY OF THE EXCHANGE OFFER
THE EXCHANGE NOTES
RISK FACTORS
RISKS RELATING TO THE EXCHANGE OFFER
RISKS RELATED TO OUR SUBSTANTIAL DEBT
RISKS RELATED TO THE NOTES
RISKS RELATING TO OUR BUSINESS
USE OF PROCEEDS
RATIO OF EARNINGS TO FIXED CHARGES
SELECTED HISTORICAL CONSOLIDATED FINANCIAL DATA
THE EXCHANGE OFFER
DESCRIPTION OF NOTES
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
PLAN OF DISTRIBUTION
LEGAL MATTERS
EXPERTS
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
POWER OF ATTORNEY
SIGNATURES
POWER OF ATTORNEY
SIGNATURES
POWER OF ATTORNEY

EX-4.1

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Exhibit 4.1

OREGON STEEL MILLS, INC., as Issuer,
U.S. BANK NATIONAL ASSOCIATION, as Trustee,
and
NEW CF&I, INC. and
CF&I STEEL, L.P.
as Guarantors

INDENTURE
Dated as of July 15, 2002

$305,000,000
10% First Mortgage Notes due 2009

Reconciliation and tie between Trust Indenture Act of 1939
and Indenture dated as of July 15, 2002

Trust Indenture Act Section		Indenture Section
§ 310	(a)(1)	7.11
	(a)(2)	7.11
	(a)(3)	N.A.
	(a)(4)	N.A.
	(a)(5)	7.11
	(b)	7.09; 7.11; 13.02
	(c)	N.A.
§ 311	(a)	7.13
	(b)	7.13
	(c)	N.A.
§ 312	(a)	2.05
	(b)	13.03
	(c)	13.03
§ 313	(a)	7.07
	(b)	7.07
	(c)	7.07; 13.02
	(d)	7.07
§ 314	(a)	4.07; 13.02
	(b)	11.02
	(c)(1)	13.04
	(c)(2)	13.04
	(c)(3)	N.A.
	(d)	11.02; 11.03; 11.04; 11.05
	(e)	13.05
§ 315	(a)	7.01(b)
	(b)	7.05; 13.02
	(c)	7.01(a)
	(d)	7.01(c)
	(e)	6.11
§ 316	(a) (last sentence)	2.09
	(a)(1)(A)	6.05
	(a)(1)(B)	6.04
	(a)(2)	N.A.
	(b)	6.07
§ 317	(a)(1)	6.08
	(a)(2)	6.09
	(b)	2.04
§ 318	(a)	13.01
	(c)	13.01

Note: This reconciliation and tie shall not, for any purpose, be deemed to be a part of this Indenture.

TABLE OF CONTENTS

		Page
ARTICLE ONE DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION		1
1.01	Definitions	1
1.02	Incorporation by Reference of Trust Indenture Act	31
1.03	Rules of Construction	31
ARTICLE TWO THE NOTES		31
2.01	Form and Dating	31
2.02	Execution and Authentication	33
2.03	Registrar and Paying Agent	34
2.04	Paying Agent To Hold Money in Trust	34
2.05	Holder Lists	35
2.06	Transfer and Exchange	35
2.07	Replacement Notes	43
2.08	Outstanding Notes	43
2.09	Treasury Notes	44
2.10	Temporary Notes	44
2.11	Cancellation	44
2.12	Defaulted Interest	44
2.13	CUSIP Number	45
2.14	Deposit of Moneys	45
ARTICLE THREE REDEMPTION OF NOTES		45
3.01	Notices to the Trustee	45
3.02	Selection of Notes To Be Redeemed	45
3.03	Notice of Redemption	46
3.04	Effect of Notice of Redemption	46
3.05	Deposit of Redemption Price	47
3.06	Notes Redeemed or Purchased in Part	47
3.07	Optional Redemption	47
3.08	Mandatory Redemption	48
ARTICLE FOUR COVENANTS		48
4.01	Payment of Notes	48
4.02	Maintenance of Office or Agency	48
4.03	Corporate Existence	49
4.04	Payment of Taxes and Other Claims	49
4.05	Maintenance of Properties; Insurance; Books and Records; Compliance with Law	49
4.06	Compliance Certificate	50
4.07	SEC Reports	51
4.08	Limitation on Indebtedness	52
4.09	Limitation on Restricted Payments	55
4.10	Limitation on Issuances and Sale of Capital Stock by Guarantors	58
4.11	Limitation on Liens	59
4.12	Change of Control	59
4.13	Disposition of Proceeds of Asset Sales	61
4.14	Limitation on Transactions with Affiliates	66
4.15	Limitation on Dividends and Other Payment Restrictions Affecting Guarantors	67
4.16	Limitations on Sale-Leaseback Transactions	68

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4.17	Additional Guarantors; Additional Security Documents	69
4.18	Impairment of Security Interests	70
4.19	Limitation on Amendments to CF&I Agreements	70
4.20	Waiver of Stay, Extension or Usury Laws	70
4.21	Limitations on Layering Indebtedness	70
4.22	Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries	71
ARTICLE FIVE SUCCESSOR CORPORATION		72
5.01	When Company May Merge, etc.	72
5.02	Successor Substituted	74
ARTICLE SIX EVENTS OF DEFAULT AND REMEDIES		74
6.01	Events of Default	74
6.02	Acceleration	76
6.03	Other Remedies	77
6.04	Waiver of Past Defaults	77
6.05	Control by Majority	77
6.06	Limitation on Suits	77
6.07	Right of Holders to Receive Payment	78
6.08	Collection Suit by Trustee	78
6.09	Trustee May File Proofs of Claims	78
6.10	Priorities	79
6.11	Undertaking for Costs	79
6.12	Restoration of Rights and Remedies	79
ARTICLE SEVEN TRUSTEE		79
7.01	Duties	79
7.02	Rights of Trustee	80
7.03	Individual Rights of Trustee	81
7.04	Trustee's Disclaimer	82
7.05	Notice of Default	82
7.06	Money Held in Trust	82
7.07	Reports by Trustee to Holders	82
7.08	Compensation and Indemnity	82
7.09	Replacement of Trustee	83
7.10	Successor Trustee by Merger, etc.	84
7.11	Eligibility	84
7.12	Co-Trustee	85
7.13	Preferential Collection of Claims Against Company	86
ARTICLE EIGHT SATISFACTION AND DISCHARGE OF INDENTURE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE		86
8.01	Termination of the Company's Obligations	86
8.02	Legal Defeasance and Covenant Defeasance	87
8.03	Application of Trust Money	90
8.04	Repayment to Company or Guarantors	90
8.05	Reinstatement	91
ARTICLE NINE AMENDMENTS, SUPPLEMENTS AND WAIVERS		91
9.01	Without Consent of Holders	91
9.02	With Consent of Holders	92
9.03	Compliance with Trust Indenture Act	93

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9.04	Revocation and Effect of Consents	93
9.05	Notation on or Exchange of Notes	94
9.06	Trustee May Sign Amendments, etc.	94
ARTICLE TEN GUARANTEE OF NOTES		94
10.01	Guarantee	94
10.02	Execution and Delivery of Guarantee	95
10.03	Merger or Consolidation of a Guarantor	96
10.04	Release of a Guarantor	99
10.05	Waiver of Subrogation	99
10.06	Limitation of Guarantor's Liability	100
10.07	Contribution	100
ARTICLE ELEVEN COLLATERAL AND SECURITY		101
11.01	Collateral and Security Documents; Additional Collateral	101
11.02	Recording, Registration and Opinions	103
11.03	Release of Collateral	104
11.04	Possession and Use of Collateral	104
11.05	Specified Releases of Collateral	105
11.06	Disposition of Collateral Without Release	110
11.07	Form and Sufficiency of Release	110
11.08	Purchaser Protected	111
11.09	Authorization of Actions To Be Taken by the Trustee Under the Security Documents	111
11.10	Authorization of Receipt of Funds by the Trustee Under the Security Documents	111
ARTICLE TWELVE APPLICATION OF TRUST MONEYS		112
12.01	Note Collateral Account	112
12.02	Withdrawal of Insurance Proceeds and Condemnation Awards	112
12.03	Withdrawal of Net Cash Proceeds to Fund an Asset Sale Offer	114
12.04	Withdrawal of Trust Moneys for Investment in Replacement Assets	114
12.05	Withdrawal of Trust Moneys on Basis of Retirement of Notes	115
12.06	Investment of Trust Moneys	116
ARTICLE THIRTEEN MISCELLANEOUS		116
13.01	Trust Indenture Act of 1939	116
13.02	Notices	117
13.03	Communication by Holders with Other Holders	117
13.04	Certificate and Opinion as to Conditions Precedent	118
13.05	Statements Required in Certificate or Opinion	118
13.06	Rules by Trustee, Paying Agent, Registrar	118
13.07	Legal Holidays	118
13.08	Governing Law	118
13.09	No Interpretation of Other Agreements	119
13.10	No Recourse Against Others	119
13.11	Successors	119
13.12	Duplicate Originals	119
13.13	Separability	119
13.14	Table of Contents, Headings, etc.	119
13.15	True Copy	119
13.16	Benefits of Indenture	120
13.17	Intercreditor Agreement	120

iii

EXHIBITS
Exhibit A-1	Form of Note	A-1-1
Exhibit A-2	Form of Regulation S Temporary Note	A-2-1
Exhibit B	Form of Certificate of Transfer	B-1
Exhibit C	Form of Certificate of Exchange	C-1
Exhibit D	Form of Certificate from Acquiring Institutional Accredited Investor	D-1
Exhibit E	Form of Guarantee	E-1
Exhibit F	Form of Security Agreement	F-1
Exhibit G	Form of Mortgage	G-1
Exhibit H	Form of Intercreditor Agreement	H-1
Exhibit I	Form of CF&I Note	I-1

Note: This table of contents shall not, for any purpose, be deemed to be a part of this Indenture.

iv

        INDENTURE, dated as of July 15, 2002, among OREGON STEEL MILLS, INC., a corporation incorporated under the laws of the State of Delaware (the "Company"), U.S. BANK NATIONAL ASSOCIATION, a national banking association, organized and existing under the laws of the United States, as trustee (the "Trustee"), and NEW CF&I, INC., a Delaware corporation, and CF&I STEEL, L.P., a Delaware limited partnership, as guarantors.

        Each party hereto agrees as follows for the benefit of each other party and for the equal and ratable benefit of the Holders of the Notes.

ARTICLE ONE

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

        1.01    Definitions.

        "144A Global Note" means a global note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of, and registered in the name of, the Depository or its nominee that will be issued in a denomination equal to the outstanding principal amount of the Notes sold in reliance on Rule 144A.

        "Acquired Indebtedness" means:

        (a)  Indebtedness of any other person assumed in connection with an Asset Acquisition from such other person, including Indebtedness incurred with, or in contemplation of, such Asset Acquisition,

        (b)  Indebtedness of any other person existing at the time such other person is merged with or into the Company or any Guarantor or becomes a Guarantor (including by designation), including Indebtedness incurred with, or in contemplation of, such other person merging with or into the Company or any Guarantor or becoming a Guarantor, and

        (c)  Indebtedness secured by a Lien encumbering any asset acquired by the Company or any Guarantor.

        "Affiliate" means, with respect to any specified person, any other person directly or indirectly controlling or controlled by or under direct or indirect common control with such specified person. For purposes of this definition, "control," as used with respect to any person, shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person, whether through the ownership of voting securities, by agreement or otherwise. For purposes of this definition, the terms "controlling," "controlled by" and "under direct or indirect or common control with" shall have correlative meanings.

        "After-Acquired Property" shall have the meaning set forth in Section 11.01 hereof.

        "Agent" means any Registrar or Paying Agent of the Notes.

        "amend" means to amend, supplement, restate, amend and restate, replace or otherwise modify; and "amendment" shall have a correlative meaning.

        "Applicable Procedures" means, with respect to any transfer or exchange of or for beneficial interests in any Global Note, the rules and procedures of the Depository, Euroclear and Clearstream that apply to such transfer or exchange.

        "asset" means any asset or property, whether real or personal, tangible, intangible or mixed.

        "Asset Acquisition" means:

        (a)  an Investment by the Company or any Guarantor in any other person pursuant to which such person shall become a Guarantor, or shall be merged with or into the Company or any Guarantor,

        (b)  the acquisition (including by merger or consolidation) by the Company or any Guarantor of the assets of any person (other than a Guarantor) which constitute all or substantially all of the assets of such person, or

        (c)  the acquisition (including by merger or consolidation) by the Company or any Guarantor of any division or line of business of any person (other than a Guarantor).

        "Asset Sale" means:

(1)

any direct or indirect sale, issuance, conveyance, transfer, lease or other disposition (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) to any person, in one transaction or a series of related transactions, of:



(A)

any Capital Stock of any Guarantor (other than in respect of director's qualifying shares or investments by foreign nationals mandated by applicable law);



(B)

all or substantially all of the properties and assets of any division or line of business of the Company or any Guarantor; or



(C)

any properties or assets of the Company or any Guarantor other than in the ordinary course of business;




(1)

any transaction which results in a Guarantor being released from its Guarantee as provided in Section 10.04 hereof; and



(3)

any Event of Loss.

        For the purposes of this definition, the term "Asset Sale" shall not include:

        (i)    any sale, issuance, conveyance, transfer, lease or other disposition of property or assets (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) that is governed by and complies with the provisions of Article Five or Section 10.03 hereof (except in each case to the extent provided under Section 4.13) hereof;

        (ii)  any sale, issuance, conveyance, transfer, lease or other disposition of property or assets (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) by the Company or any of the Guarantors in one or a series of related transactions (A) that have an aggregate Fair Market Value of $150,000 or less or (B) in respect of which the Company or such Guarantor receives gross proceeds (whether in cash or property) with an aggregate Fair Market Value of $150,000 or less; provided, however, that this clause (ii) shall only apply to the extent that the sum of (x) the aggregate Fair Market Value as described in the immediately preceding subclause (A) and (y) the aggregate gross proceeds received by the Company and any Guarantor as described in the immediately preceding subclause (B) is less than or equal to $1,500,000 in any fiscal year (the "Yearly Cap"); provided further, that notwithstanding the other provisions of this clause (ii), any such transaction which results in a Guarantor being released from its Guarantee as provided under Section 10.04 hereof shall nonetheless be deemed to constitute an Asset Sale);

        (iii)  in any fiscal year after the sale, issuance, conveyance, transfer, lease or other disposition of property or assets of the Company or any of the Guarantors satisfying the Yearly Cap contemplated by the proviso to clause (ii) above, any sale, issuance, conveyance, transfer, lease or other disposition of property or assets (including, without limitation, by sale-leaseback, merger or consolidation or sale of shares of Capital Stock of a Guarantor) by the Company or any of the Guarantors in one or a series of related transactions (A) that have an aggregate Fair Market Value of $25,000 or less or (B) in respect of which the Company or

2

such Guarantor receives gross proceeds (whether in cash or property) with an aggregate Fair Market Value of $25,000 or less;

        (iv)  any sale, transfer or other disposition of Excluded Assets (other than property or assets of the type referred to in clause (i) of the definition of Excluded Assets), any Motor Vehicles/Mobile Equipment or any Revolver Collateral;

        (v)  any Restricted Payment or Permitted Investment that is not prohibited by Section 4.09 hereof;

        (vi)  any conversion of Cash Equivalents into cash or any other form of Cash Equivalents;

        (vii) any Permitted Disposition;

        (viii)  the conveyance, sale, transfer, assignment or other disposition of inventory, accounts receivable and other assets acquired and held for resale in the ordinary course of business, in each case made in the ordinary course of business, consistent with past practices of the Company and the Guarantors; and

        (ix)  any transfer of assets by the Company or a Guarantor to the Company or to a Guarantor; provided that there is no adverse effect on any of the existing Liens on such property for the benefit of holders of the Notes.

        For purposes of determining whether a lease or sublease described in paragraph (g) of the definition of "Permitted Liens" is excluded from the definition of Asset Sale pursuant to clause (ii) above, the Fair Market Value or gross proceeds from such lease or sublease in a particular fiscal year shall be determined by the sum of the lease payments (and in the case of a triple net lease, to the extent applicable, exclusive of taxes, insurance, maintenance expenses and other net lease items) received by the Company and the Guarantors in such fiscal year.

        "Asset Sale Offer" shall have the meaning set forth in Section 4.13(c) hereof.

        "Asset Sale Offer Price" shall have the meaning set forth in Section 4.13(c) hereof.

        "Asset Sale Purchase Date" shall have the meaning set forth in Section 4.13(c) hereof.

        "Attributable Debt" means in respect of a Sale-Leaseback Transaction, at the time of determination, the present value of the obligation of the lessee for net rental payments during the remaining term of the lease included in such Sale-Leaseback Transaction, including any period for which such lease has been extended or may, at the option of the lessor, be extended. Such present value shall be calculated using a discount rate equal to the rate of interest implicit in such transaction, determined in accordance with GAAP.

        "Authentication Order" shall have the meaning set forth in Section 2.02 hereof.

        "Average Life to Stated Maturity" means, with respect to any Indebtedness, as of any date of determination, the quotient obtained by dividing (a) the sum of the products of (i) the number of years (or any fraction thereof) from such date to the date or dates of each successive scheduled principal payment (including, without limitation, any sinking fund requirements) of such Indebtedness multiplied by (ii) the amount of each such principal payment by (b) the sum of all such principal payments.

        "Bankruptcy Law" means Title 11 of the United States Code and any similar applicable state or federal law for the relief of debtors generally.

        "Beneficial Owner" has the meaning assigned to such term in Rule 13d-3 and Rule 13d-5 under the Exchange Act (except that a person shall be deemed to have Beneficial Ownership of all securities that such person has the right to acquire, whether such right is exercisable immediately, only after the

3

passage of time, upon the happening of an event or otherwise); and "Beneficially Own" shall have a correlative meaning.

        "Board of Directors" means:

        (i)    in the case of a corporation, the board of directors of such person or any duly authorized committee of such board,

        (ii)  in the case of a partnership, the board of directors of a direct corporate general partner (or, if there is no direct corporate general partner, an indirect corporate general partner) of such partnership or any duly authorized committee of such board or, if there is no such direct or indirect corporate general partner, the appropriate governing body of any general partner of such partnership, and

        (iii)  in the case of any other person, a body performing substantially similar functions as a board of directors.

        "Board Resolution" means a copy of a resolution certified by the Secretary or an Assistant Secretary of the Company or any Guarantor, as the case may be, to have been duly adopted by the Board of Directors of the Company or such Guarantor, as the case may be, and to be in full force and effect on the date of such certification, and delivered to the Trustee; provided that in the case of any Guarantor which is a partnership, the copy of such resolution shall be certified by the Secretary or an Assistant Secretary of a direct or indirect corporate general partner of such Guarantor or, if there is no such direct or indirect corporate general partner, by an appropriate signatory of any general partner of such Guarantor.

        "Broker-Dealer" means any broker or dealer registered with the SEC under the Exchange Act.

        "Business Day" means any day, other than a Saturday, a Sunday or a day on which banking institutions in the City of New York or at a Place of Payment are authorized by law, regulation or executive order to remain closed.

        "Camrose" means Camrose Pipe Company, a general partnership organized under the laws of the Province of Alberta, Canada, and its successors.

        "Camrose Partnership Agreement" means the Partnership Agreement dated as of January 2, 1992, and as amended June 30, 1992, by and between Camrose Pipe Corporation and Stelcam Holding, Inc., as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof except for such amendments or modifications thereof permitted by the terms of this Indenture and such agreement).

        "Canadian National Steel" means Canadian National Steel Corporation, a corporation organized under the laws of the Province of Alberta, Canada, and its successors.

        "Capital Contribution" means any contribution to the equity of the Company for which no consideration is given other than the issuance of Capital Stock (other than Redeemable Capital Stock) of the Company, including Capital Stock (other than Redeemable Capital Stock) of the Company issued upon the conversion of convertible Indebtedness or from the exercise of options, warrants or rights to purchase Capital Stock (other than Redeemable Capital Stock) of the Company.

        "Capital Stock" means, with respect to any specified person:

        (i)    any and all shares, interests (including, without limitation, common stock, preferred stock, limited partnership interests, general partnership interests, membership interests and joint venture interests), participations, rights or other equivalents (however designated and whether voting or nonvoting) that confer on a person the right to receive a share of the profits and/or losses of, or distributions of assets of, such specified person, and

4

        (ii)  any rights (other than debt securities convertible into or exchangeable for an equity interest), warrants or options exchangeable for or convertible into any Capital Stock of such person.

        "Capitalized Lease Obligation" of a specified person means any obligation under a lease of (or other agreement conveying the right to use) any property (whether real, personal or mixed) that is required by GAAP to be classified and accounted for as a capital lease on the balance sheet of such specified person, and the amount of such obligation at any date shall be the capitalized amount thereof at such date, determined in accordance with GAAP.

        "Cash Equivalents" means, at any time:

        (a)  any evidence of indebtedness with a maturity of 180 days or less issued or directly and fully guaranteed or insured by the United States of America or any agency or instrumentality thereof (provided that the full faith and credit of the United States of America is pledged in support thereof);

        (b)  certificates of deposit or acceptances with a maturity of 180 days or less of any financial institution that is a member of the Federal Reserve System having combined capital and surplus and undivided profits of not less than $500,000,000;

        (c)  certificates of deposit with a maturity of 180 days or less of any financial institution that is not organized under the laws of the United States, any state thereof or the District of Columbia that are rated at least A-2 by S&P or at least P-2 by Moody's or at least an equivalent rating category of another nationally recognized securities rating agency;

        (d)  repurchase agreements and reverse repurchase agreements relating to marketable direct obligations issued or unconditionally guaranteed by the government of the United States of America or issued by any agency thereof and backed by the full faith and credit of the United States of America, in each case maturing within 180 days from the date of acquisition; and

        (e)  money market funds whose investments consist of the investments listed in (a) through (d) above.

        "CF&I" means CF&I Steel, L.P., a Delaware limited partnership, and its successors pursuant to this Indenture.

        "CF&I Note" means the promissory note of CF&I, substantially in the form attached as Exhibit I to this Indenture, as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of this Indenture and such instrument.

        "CF&I Partnership Agreement" means the Amended and Restated Agreement of Limited Partnership of CF&I Steel, L.P. dated March 3, 1993, as amended December 1, 2002 and July 12, 2002, as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof except for such amendments or modifications thereof permitted by the terms of this Indenture and such agreement).

        "Change of Control" means the occurrence of any of the following events:

        (a)  any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company's employee stock ownership plan, is or becomes the Beneficial Owner, directly or indirectly, of more than 30% of the total Voting Stock of the Company (measured by voting power rather than number of shares);

        (b)  the Company (whether in one transaction or a series of related transactions) consolidates with, or merges with or into, another person or sells, assigns, conveys, transfers, leases or otherwise disposes of all or substantially all of the assets of the Company or of the Company and the

5

Guarantors, taken as a whole, to any person, or any person consolidates with, or merges with or into, the Company, in any such event pursuant to one transaction or a series of related transactions in which the outstanding Voting Stock of the Company is converted into or exchanged for cash, securities or other property, other than any such transaction where:

        (i)    the outstanding Voting Stock of the Company is converted into or exchanged for (1) Voting Stock (other than Redeemable Capital Stock) of the surviving or transferee corporation or (2) cash, securities and other property in an amount which could then be paid by the Company as a Restricted Payment under this Indenture, or a combination thereof; and

        (ii)  immediately after such transaction no "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Exchange Act), other than the Company's employee stock ownership plan, is the Beneficial Owner, directly or indirectly, of more than 30% of the total Voting Stock of the surviving or transferee corporation (measured by voting power rather than number of shares); provided, however, that in the event of a merger in which the Voting Stock of the Company is exchanged for Voting Stock of a holding company which owns all of the outstanding Capital Stock of the Company immediately after the merger, a Change of Control shall not be deemed to occur solely as a result of such ownership of the Company by such holding company and such holding company shall be deemed to be the surviving corporation in the merger for purposes of determining whether a Change of Control has occurred.

        (c)  at any time during any consecutive two-year period, individuals who at the beginning of such period constituted the board of directors of the Company (together with any new directors whose election by such board of directors or whose nomination for election by the stockholders of the Company was approved by a vote of 66²/3% of the directors then still in office who were either directors at the beginning of such period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of the board of directors of the Company then in office; or

        (d)  the Company is liquidated or dissolved or adopts a plan of liquidation.

        "Change of Control Notice" shall have the meaning set forth in Section 4.12 hereof.

        "Change of Control Offer" shall have the meaning set forth in Section 4.12 hereof.

        "Change of Control Purchase Date" shall have the meaning set forth in Section 4.12 hereof.

        "Change of Control Purchase Price" shall have the meaning set forth in Section 4.12 hereof.

        "Clearstream" means Clearstream Banking, S.A.

        "Collateral" means, collectively, all of the property and assets that are from time to time subject to the Lien of the Security Documents.

        "Collateral Proceeds" shall have the meaning set forth in Section 4.13 hereof.

        "Common Stock" means, with respect to any person:

        (i)    any and all shares, interests (including, without limitation, limited and general partnership interests, membership interests and joint venture interests), participations, rights or other equivalents (however designated and whether voting or nonvoting) in the common stock of such person (including, without limitation, all series and classes of such Common Stock), and

        (ii)  any rights (other than debt securities convertible into or exchangeable for an equity interest), warrants or options exchangeable for or convertible into any Common Stock of such person.

6

        "Company" means the party named as such in the introductory paragraph of this Indenture until a successor replaces it (or any previous successor) pursuant to this Indenture, and thereafter means such successor.

        "Company Order" means a written order signed in the name of the Company by any two Officers or by an Officer and an Assistant Treasurer or Assistant Secretary of the Company or such Guarantor, as the case may be, and delivered to the Trustee.

        "Consolidated Cash Flow Available for Fixed Charges" means, with respect to the Company for any period, Consolidated Net Income of the Company for such period

        (i)    plus (in each case, only to the extent deducted in computing such Consolidated Net Income and without duplication), the amounts for such period, taken as a single accounting period, of:

        (A)  Consolidated Non-Cash Charges,

        (B)  Consolidated Interest Expense, and

        (C)  Consolidated Income Tax Expense;

        (i)    less, non-cash items increasing Consolidated Net Income for such period, other than items that were accrued in the ordinary course of business,

in each case, on a consolidated basis and determined in accordance with GAAP; provided that Consolidated Income Tax Expense and Consolidated Non-Cash Charges of a Guarantor that is less than a Wholly Owned Subsidiary of the Company shall only be added to the extent of the equity interest of the Company in such Guarantor.

        "Consolidated Fixed Charge Coverage Ratio" means, with respect to the Company, the ratio of:

        (a)  the aggregate amount of Consolidated Cash Flow Available for Fixed Charges of the Company (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of) for the Four Quarter Period immediately preceding the date of the transaction (the "Transaction Date") giving rise to the need to calculate the Consolidated Fixed Charge Coverage Ratio, to

        (b)  the aggregate amount of Consolidated Fixed Charges of the Company (exclusive of amounts attributable to operations and businesses permanently discontinued or disposed of, but only to the extent that the obligations giving rise to such Consolidated Fixed Charges would no longer be obligations contributing to the Company Consolidated Fixed Charges subsequent to the Transaction Date) for such Four Quarter Period immediately preceding the Transaction Date.

        In addition to and without limitation of the foregoing, for purposes of this definition, "Consolidated Cash Flow Available for Fixed Charges" and "Consolidated Fixed Charges" shall be calculated after giving effect on a Pro Forma basis for the period of such calculation to, without duplication:

        (a)  the incurrence of the Indebtedness giving rise to the need to make such calculation and any other incurrence of Indebtedness (and, in each case, the application of the net proceeds from such incurrence, to the extent such net proceeds are used to take one or more of the actions described in the following clauses (b) and (c)), as if such incurrence (and application) occurred on the first day of the Four Quarter Period to and including the Transaction Date (the "Reference Period");

        (b)  the defeasance, repayment, repurchase, redemption, retirement or other acquisition of any Indebtedness (other than revolving credit borrowings or ordinary working capital borrowings) of

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the Company or any of the Guarantors during the Reference Period, as if such transaction occurred on the first day of the Reference Period, and

        (c)  any Asset Sales or Asset Acquisitions (whether by merger, consolidation, sale-leaseback or otherwise and including any related financing transactions, and including, without limitation, any such transaction giving rise to the need to make such calculation as a result of the Company or any of the Guarantors (including any person who becomes a Guarantor as a result of such transaction) incurring Acquired Indebtedness) occurring during the Reference Period, as if such transaction had been consummated on the first day of the Reference Period.

        Furthermore, in calculating "Consolidated Fixed Charges" for purposes of determining this "Consolidated Fixed Charge Coverage Ratio":

        (i)    interest on outstanding Indebtedness determined on a fluctuating basis as of the Transaction Date and which will continue to be so determined thereafter shall be deemed to have accrued at a fixed rate per annum equal to the rate of interest on such Indebtedness in effect on the Transaction Date; and

        (ii)  if interest on any Indebtedness actually incurred on the Transaction Date may optionally be determined at an interest rate based upon a factor of a prime or similar rate, a eurocurrency interbank offered rate, or other rates, then the interest rate in effect on the Transaction Date will be deemed to have been in effect during the Reference Period.

        If and to the extent the Company or any of the Guarantors directly or indirectly guarantees Indebtedness of a third person, the calculation of the "Consolidated Fixed Charge Coverage Ratio" shall give effect to the incurrence of such guaranteed Indebtedness as if the Company or such Guarantor had directly incurred such guaranteed Indebtedness.

        "Consolidated Fixed Charges" means, with respect to the Company for any period, the sum, without duplication, of the amounts for such period of:

        (i)    Consolidated Interest Expense, and

        (ii)  the product of (a) the aggregate amount of dividends and other distributions paid or accrued (or guaranteed) by the Company and the Guarantors on a consolidated basis during such period in respect of Preferred Stock and Redeemable Capital Stock and (b) a fraction, the numerator which is one and the denominator of which is one minus the then current combined federal, state and local statutory tax rate of the Company, expressed as a decimal.

        "Consolidated Income Tax Expense" means, with respect to the Company for any period, the provision for federal, state, local and foreign income taxes of the Company and the Guarantors for such period as determined on a consolidated basis in accordance with GAAP.

        "Consolidated Interest Expense" means, with respect to the Company for any period, without duplication, the sum of:

        (i)    the aggregate amount of cash and non-cash interest expense of the Company and the Guarantors, whether paid, accrued and/or scheduled to be paid or accrued and whether or not capitalized, during such period as determined on a consolidated basis in accordance with GAAP, including, without limitation, the following (whether or not reflected as an expense on the consolidated income statement of the Company):

(A)

any amortization of debt discount (but excluding amortization of debt issuance costs),



(B)

the net payments (if any) under Interest Rate Protection Obligations or Currency Agreements,



(C)

the interest portion of any deferred payment obligation,

8

(D)

all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers' acceptance financing,



(E)

all accrued interest,



(F)

all capitalized interest,



(G)

all imputed interest with respect to Attributable Debt, and



(H)

the interest component of Capitalized Lease Obligations; and

        (ii)  any interest expense on Indebtedness of another person that is guaranteed by the Company or any of the Guarantors or secured by a Lien on the assets of the Company or any of the Guarantors, whether or not such guarantee or Lien is called upon (the amount of such interest expense shall be the amount of interest that would have been paid by the Company or any such Guarantor under such guarantee or Lien if such guarantee or Lien had been called upon).

        "Consolidated Net Income" means, with respect to the Company, for any period, the net income (loss) of the Company and its Subsidiaries for such period as determined in accordance with GAAP, adjusted, to the extent included in calculating such net income (loss) by excluding, without duplication:

        (i)    any extraordinary (as determined in accordance with GAAP) or unusual or nonrecurring gain (or loss) (including any gain or loss from the sale or other disposition of assets outside the ordinary course of business or from the issuance or sale of capital stock), together with any related provision for taxes on any such extraordinary, unusual or nonrecurring gain (or loss),

        (ii)  net income (but not loss) of any person (including an Unrestricted Subsidiary) (x) which is not a Guarantor or (y) which is accounted for by the equity method of accounting, except, in each case, to the extent of the cash dividends and cash distributions actually paid in cash by such person to the Company or (subject to clause (vi) below) a Guarantor,

        (iii)  net income (loss) of any person combined with the Company or a Guarantor on a "pooling of interests" basis attributable to any period prior to the date of combination,

        (iv)  any gain or loss realized upon the termination of any employee pension benefit plan, on an after-tax basis,

        (v)  any gain or loss, together with any related provision for taxes on such gain or loss, in respect of: (x) any Asset Sale by the Company or a Guarantor or (y) the disposition of any securities by the Company or a Guarantor or the extinguishment of any Indebtedness of the Company or a Guarantor,

        (vi)  net income (but not loss) of any Guarantor to the extent that the declaration of dividends or similar distributions by that Guarantor of that net income is not at the date of determination permitted, directly or indirectly, by operation of the terms of its charter or partnership agreement or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Guarantor or its stockholders or limited or general partners, as the case may be,

        (vii) any restoration to any contingency reserve of an extraordinary, nonrecurring or unusual nature, except to the extent that provision for such reserve was made out of Consolidated Net Income accrued in any period for which Consolidated Net Income is required to be calculated for purposes of this Indenture, and

9

        (viii)  for purposes of Section 4.09 hereof, in the case of a successor to the Company by consolidation or merger or as a transferee of the specified person's assets, any earnings of the successor entity prior to such consolidation, merger or transfer of assets.

        "Consolidated Net Worth" means, with respect to any person at any date, the consolidated stockholders', members' or partners' equity, as the case may be, of such person (determined on a consolidated basis in accordance with GAAP), adjusted to exclude (to the extent included in calculating such equity) the amount of any such stockholders', members' or partners' equity, as the case may be, attributable to Redeemable Capital Stock of such person and its Subsidiaries, as determined on a consolidated basis in accordance with GAAP.

        "Consolidated Non-Cash Charges" means, with respect to the Company for any period, the aggregate depreciation and amortization and other non-cash expenses of the Company and its Subsidiaries, to the extent deducted in computing Consolidated Net Income of the Company and its Subsidiaries for the subject period, determined on a consolidated basis in accordance with GAAP; (i) including, without limitation, (A) amortization of debt issuance costs, (B) compensation expenses recognized for the contribution of shares to an employee stock option plan, (C) amortization of goodwill and other intangibles and (D) any write-offs or impairment charges; (ii) but excluding (A) any such charges constituting an extraordinary item or loss or (B) any such charge which required or which represents an accrual of or a reserve for cash charges for any future period or amortization of a prepaid cash expense that was paid in a prior period.

        "contractually subordinated" means, with respect to any specified Indebtedness relative to any other Indebtedness, expressly subordinated in right of payment to such other Indebtedness by the terms of such specified Indebtedness or the terms of any document or instrument relating thereto.

        "control" means, with respect to any specified person, the power to direct the management and policies of such person, directly or indirectly, whether through the ownership of Voting Stock, by contract or otherwise; and the terms "controlling" and "controlled" have meanings correlative to the foregoing.

        "Corporate Trust Office" means the office of the Trustee at which at any particular time its corporate trust business shall be principally administered, which on the date hereof is located in St. Paul, Minnesota.

        "Covenant Defeasance" shall have the meaning set forth in Section 8.02 hereof.

        "CPC" means Camrose Pipe Corporation, a Delaware corporation, and its successors.

        "Credit Facility" means (a) the Credit Agreement, dated as of July 12, 2002, by and among the Company, New CF&I, CF&I, CWR and Textron Financial Corporation, a Delaware corporation, as Revolver Agent (and any related notes, guarantees, collateral documents, instruments and agreements executed in connection therewith), and (b) any amendment, modification, supplement, refunding or refinancing thereof or any replacement Credit Facility, in each case, that is entered into in compliance with this Indenture.

        "Currency Agreement" means any foreign exchange contract, currency swap agreement or other similar agreement or arrangement designed to protect the Company or any of the Guarantors against fluctuations in currency values.

        "Custodian" means any receiver, trustee, assignee, liquidator, sequestrator or similar person under any Bankruptcy Law.

        "CWR" means Colorado and Wyoming Railway Company, a Delaware corporation, and its successors.

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        "Default" means any event or condition that is, or after notice or passage of time or both would be, an Event of Default.

        "Definitive Note" means a certificated Note registered in the name of the Holder thereof and issued in accordance with Section 2.06 hereof, in the form of Exhibit A-1 hereto except that such Note shall not bear the Global Note Legend and shall not have the "Schedule of Exchanges of Interests in the Global Note" attached thereto.

        "Depository" means, with respect to the Notes issuable or issued in whole or in part in global form, the Person specified in Section 2.03 hereof as the Depository with respect to the Notes, and any and all successors thereto appointed as depository hereunder and having become such pursuant to the applicable provision of this Indenture.

        "Euroclear" means Euroclear Bank S.A/N.V., as operator of the Euroclear system.

        "Event of Default" shall have the meaning set forth under Section 6.01 hereof.

        "Event of Loss" means, with respect to any property or asset (or any portion thereof), any (i) loss or destruction of or damage to such property or asset (or any portion thereof), (ii) any actual condemnation, seizure or taking, by exercise of the power of eminent domain or otherwise, of such property or asset (or any portion thereof), or confiscation or requisition of the use of such property or asset (or any portion thereof), or (iii) any settlement in lieu of clause (ii) above.

        "Excess Proceeds" shall have the meaning set forth in Section 4.13(b)(ii) hereof.

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

        "Exchange Notes" means the Notes issued in exchange for the Initial Notes in the Exchange Offer pursuant to Section 2.06(f) hereof or, with respect to Initial Notes issued under this Indenture subsequent to the date of this Indenture pursuant to Section 2.02 hereof, the exchange offer contemplated by the registration rights agreement relating thereto substantially identical to the Registration Rights Agreement.

        "Exchange Offer" has the meaning set forth in the Registration Rights Agreement.

        "Exchange Offer Registration Statement" has the meaning set forth in the Registration Rights Agreement.

        "Excluded Assets" means:

        (i)    property acquired or constructed with Indebtedness described in and which complies with, and which Indebtedness is secured by a Lien on such property permitted under, clause (h) of the definition of Permitted Liens (but only so long as such purchase money Indebtedness or Indebtedness incurred solely to refinance, replace or refund such purchase money Indebtedness in accordance with such clause (h) is outstanding and, in either such case, is secured by such Lien); and

        (ii)  Excluded Contracts.

        With respect to any property securing Indebtedness as described in clause (i) of the foregoing sentence, at such time as the purchase money Indebtedness or Indebtedness incurred to refinance, replace or refund such purchase money Indebtedness referred to in clause (i) of the foregoing sentence shall no longer be outstanding, or at such time as such purchase money Indebtedness or any such Indebtedness incurred to refinance, replace or refund such purchase money Indebtedness shall no longer be secured by a Lien on such property permitted under clause (h) of the definition of Permitted Liens, then, in each of the foregoing cases, to the extent that such property is of the type which would constitute "Trust

11

Property" (as defined in the form of Mortgage attached as Exhibit G to this Indenture) or "Collateral" (as defined in the form of Security Agreement attached as Exhibit F to this Indenture), such property shall be treated as After-Acquired Property and the Company shall, or shall cause the relevant Guarantor to, cause such property to be made subject to the Lien of the Security Documents in the manner and to the extent required by this Indenture.

        "Excluded Collateral" shall mean (i) the approximately 67 acres of real property in Camrose, Alberta, on which the Camrose Pipe Mill is located, together with all buildings, improvements and fixtures thereon, and all related leases, rents and other rights, (ii) the real property in Pueblo County, Colorado and Fremont County, Colorado commonly known as the Pueblo Outside the Fence Property, and any contracts of sale or lease for any of the Pueblo Outside the Fence Property, (iii) Motor Vehicles and Mobile Equipment, (iv) the two trailers located on the Pueblo Inside the Fence Property, (v) the condominiums located at 170 S. Del Monte Place, Pueblo, CO 81007-3644 and 769 Cottage Drive, Napa, CA 94558-1247, (vi) the Excluded Assets, (vii) the Excluded Securities, (viii) Intercompany Indebtedness and (ix) any proceeds or products of any of the foregoing, except to the extent that such proceeds or products are invested in real property or improvements thereon, machinery and equipment (to the extent that it constitutes personal property) or other property and assets owned by the Company and the Guarantors which constitute Collateral.

        "Excluded Contracts" means any right, title or interest of the Company or any Guarantor in, to or under any contract, agreement or other instrument entered into with, or any license granted by or to, any person that is not the Company or a Subsidiary of the Company and which contract, agreement, instrument or license by its express terms prohibits the assignment thereof or the grant of a security interest therein by the Company or such Guarantor, as the case may be, or by its express terms permits such assignment or grant of a security interest only with the consent of such person; provided, that any such right, title and interest shall cease to be an Excluded Contract to the extent that an appropriate consent to such assignment or grant of a security interest has been obtained or the provisions which prohibit the assignment thereof or the grant of a security interest therein cease to be valid and enforceable; and provided, further, that Excluded Contracts shall not include (i) the leasehold interest in the Company's office space located at 1000 SW Broadway, Portland, Oregon or (ii) any contracts, agreements, licenses or other instruments specifically identified in any Security Document as being subject to the Lien created by or granted in such Security Document.

        "Excluded Securities" means the Capital Stock of any of the Company's Subsidiaries.

        "Fair Market Value" means, with respect to any property or assets, the price which could be negotiated in an arm's-length free market transaction, for cash, between a willing seller and a willing buyer, neither of which is under pressure or compulsion to complete the transaction. "Fair Market Value" shall (i) except for purposes of Section 6.01(f) hereof and except for purposes of Section 4.13 hereof (including the $1,500,000 determination, but other than the $150,000 per transaction determination, contemplated by clause (ii) of the definition of "Asset Sale" and other than the $25,000 per transaction determination contemplated by clause (iii) of the definition of "Asset Sale") and Section 4.16 hereof be determined by a Financial Officer of the Company with respect to any property or assets with a Fair Market Value of less than $2,500,000 and shall be evidenced by an Officers' Certificate signed by such Financial Officer and one other officer of the Company certifying such determination and delivered to the Trustee, and (ii) otherwise, shall be determined by the Board of Directors of the Company acting in good faith and shall be evidenced by a Board Resolution set forth in an Officers' Certificate certifying such determination and delivered to the Trustee; provided, that any determination of Fair Market Value made with respect to any parcel of real property with a value in excess of $10,000,000 shall (except for purposes of Section 6.01(f) hereof be made by an Independent Appraiser.

        "Final Maturity Date" means July 15, 2009.

12

        "Financial Officer" of a person means any of the Chief Executive Officer, the President, the Chief Financial Officer and the Vice President of Finance.

        "Four Quarter Period" means, with respect to a particular date of determination, the Company's most recently ended four fiscal quarters for which internal financial statements are available.

        "GAAP" means generally accepted accounting principles set forth in the opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession of the United States of America, which are applicable from time to time and are consistently applied.

        "Global Note Legends" means the legends set forth in Section 2.06(g)(ii) hereof which are required to be placed on all Global Notes issued under this Indenture.

        "Global Notes" means, individually and collectively, each of the Restricted Global Notes and the Unrestricted Global Notes, in the form of Exhibit A-1 or Exhibit A-2 hereto issued in accordance with this Indenture.

        "Guarantee" means, with respect to any Guarantor, its irrevocable and unconditional guarantee of the Company's payment obligations under this Indenture and the Notes, created pursuant to this Indenture, and its guarantee endorsed on the Notes. In the case of CF&I, such term also includes the CF&I Note, in substantially the form attached as Exhibit I to this Indenture, delivered to the Trustee in connection with CF&I's aforesaid guarantee, in each case as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of this Indenture.

        "guarantee" means, as applied to any obligation:

        (i)    a guarantee (other than by endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner, of any part or all of such obligation, and

        (ii)  an agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of non-performance) of all or any part of such obligation,

including, in each case, without limiting the foregoing, by way of any pledge of assets, through any letter of credit or reimbursement agreement in respect thereof or by the payment of amounts drawn down by letters of credit.

        "Guarantors" means (i) each of New CF&I and CF&I and (ii) each of the Company's other Subsidiaries which, after the Issue Date, becomes a Guarantor, including those who become Guarantors after the Issue Date as required by Section 4.17 hereof or who are designated as Guarantors as described under Section 4.22 hereof.

        "Holder" means the person in whose name a Note is registered on the Registrar's books.

        "incur" means to directly or indirectly create, incur, issue, assume, guarantee, suffer to exist or become effective, or in any manner become directly or indirectly liable, contingently or otherwise, for the payment of or otherwise with respect to any Indebtedness; and "incurrence" shall have a correlative meaning; provided, however, that regular accrual on discount notes shall not constitute an incurrence.

13

        "Indebtedness" means, with respect to any person (as used in this definition, the "obligor"), without duplication, and whether or not contingent:

        (a)  all liabilities, obligations and indebtedness of the obligor, to the extent such liabilities, obligations or indebtedness would appear as a liability upon the consolidated balance sheet in accordance with GAAP:

        (i)    for borrowed money,

        (ii)  for the deferred purchase price of property or services, excluding any trade payables and other accrued current liabilities incurred in the ordinary course of business and which are not overdue by more than 90 days,

        (iii)  evidenced by bonds, notes, debentures or other similar instruments, or

        (iv)  arising under any conditional sale or other title retention agreement with respect to property acquired by the obligor (even if the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), but excluding trade accounts payable arising in the ordinary course of business,

        (b)  all obligations, contingent or otherwise, of the obligor in connection with any letters of credit (or reimbursement agreements in respect thereof), banker's acceptance or other similar credit transaction,

        (c)  all Capitalized Lease Obligations of the obligor and all Attributable Debt in respect of Sale-Leaseback Transactions,

        (d)  all Indebtedness referred to in the preceding clauses of other persons and all dividends of other persons, the payment of which is secured by (or for which the holder of such Indebtedness has an existing right, contingent or otherwise, to be secured by) any Lien upon property (including, without limitation, accounts and contract rights) owned by the obligor, whether or not the obligor has assumed or become liable for the payment of such Indebtedness (the amount of such Indebtedness shall be deemed to be the lesser of (x) the fair market value of such property or asset and (y) the amount of such Indebtedness so secured),

        (e)  all guarantees of Indebtedness referred to in this definition by the obligor,

        (f)    all Redeemable Capital Stock of the obligor,

        (g)  all net payment obligations under or in respect of Currency Agreements and Interest Rate Protection Obligations of the obligor at the date of determination, and

        (h)  any amendment, supplement, modification, deferral, renewal, extension, refinancing or refunding, whether direct or indirect, to or of any liability of the types referred to in clauses (a) through (g) above or this clause (h).

        The amount of any Indebtedness outstanding as of any date shall be:

(1)

the accreted value thereof, in the case of any Indebtedness issued with original issue discount;



(2)

the greater of the voluntary or involuntary maximum fixed repurchase price (plus any accrued and unpaid dividends), in the case of Redeemable Capital Stock; and



(3)

the principal amount thereof in the case of any other Indebtedness.

        For purposes hereof, the "maximum fixed repurchase price" of any Redeemable Capital Stock which does not have a fixed repurchase price shall be calculated in accordance with the terms of such Redeemable Capital Stock as if such Redeemable Capital Stock were purchased on any date on which Indebtedness shall be required to be determined pursuant to this Indenture, and if such price is based

14

upon, or measured by, the fair market value of such Redeemable Capital Stock, such fair market value shall be determined in good faith by the Board of Directors of the issuer of such Redeemable Capital Stock.

        "Indenture" means this Indenture, as amended, modified or supplemented from time to time.

        "Independent Appraiser" means a person:

        (i)    who in the course of its business appraises property;

        (ii)  where real property is involved, is a member in good standing of the American Institute of Real Estate Appraisers, recognized and licensed to do business in the jurisdiction where the applicable real property is situated;

        (iii)  who does not have a direct or indirect financial interest in the Company (apart from receiving from the Company a customary appraisal fee for the task for which it is engaged) and

        (iv)  who, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is engaged.

        "Independent Financial Advisor" means an accounting, appraisal or investment banking firm of nationally recognized standing:

        (i)    which does not, and whose directors, officers and employees or Affiliates do not, have a direct or indirect financial interest in the Company (apart from receiving from the Company a customary fee for the task for which it is engaged) (it being understood that securities of the Company acquired in the ordinary course of trading operations shall not be deemed to give rise to such direct or indirect financial interest in the Company) and

        (ii)  which, in the judgment of the Board of Directors of the Company, is otherwise independent and qualified to perform the task for which it is engaged.

        "Indirect Participant" means a person who holds a beneficial interest in a Global Note through a Participant.

        "Intercompany Indebtedness" means (i) any Indebtedness owed by the Company to any Subsidiary of the Company or (ii) any Indebtedness owed by any Subsidiary of the Company to the Company or any other Subsidiary of the Company.

        "Intercreditor Agreement" means the Intercreditor Agreement, dated as of the Issue Date, by and among the Company, CF&I, New CF&I, CWR, the Trustee and the Revolver Agent, substantially in the form attached as Exhibit H to this Indenture, as the same may be amended, supplemented or modified from time to time in accordance with its terms or the terms of this Indenture, and any successor or replacement agreement, the terms of which are no less favorable to the holders of the Notes in any material respect (as evidenced by an Officers' Certificate delivered to the Trustee) than those contained in the Intercreditor Agreement as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof).

        "interest" means, with respect to any Note, the amount of all interest accruing on such Note, including all interest accruing subsequent to the occurrence of any events specified in Sections 6.01(g) or (h) or which would have accrued but for any such event, whether or not such claims are allowable under applicable law.

        "Interest Payment Date" means the Stated Maturity of an installment of interest (or Liquidated Damages, if any) on the Note, as set forth therein.

15

        "Interest Rate Protection Agreement" means any arrangement with any other person whereby, directly or indirectly, such person is entitled to receive from time to time periodic payments calculated by applying either a floating or a fixed rate of interest on a stated notional amount in exchange for periodic payments made by such person calculated by applying a fixed or a floating rate of interest on the same notional amount and shall include without limitation, interest rate swaps, caps, floors, collars and similar agreements.

        "Interest Rate Protection Obligations" means the obligations of any person pursuant to an Interest Rate Protection Agreement.

        "Interested Person" means, with respect to a specified person, any Beneficial Owner of 5% or more of the outstanding Common Stock of such person or 5% or more of the outstanding Common Stock of any Subsidiary of such person.

        "Investment" means, with respect to any person, any direct or indirect loan, advance or other extension of credit or Capital Contribution, purchase, other acquisition or ownership of (or direct or indirect obligation to subscribe for) any Capital Stock, Indebtedness, bonds, notes, debentures or other securities (including, without limitation, any interests in any partnership, limited liability company or joint venture) or evidences of Indebtedness (by means of any transfer of cash or other property to another person, or any payment for property or services for the account or use of another person, or any guarantee of any Indebtedness or other obligations of another person, or creation or assumption of any other contingent liability in respect of any Indebtedness of another person, or otherwise), together with any item that is or would be classified as an investment on a balance sheet prepared in accordance with GAAP.

        In addition:

(1)

if the Company or any Subsidiary of the Company sells or otherwise disposes of any Capital Stock of a Guarantor such that, after giving effect to any such sale or disposition, such person is no longer a Guarantor, the Company shall be deemed to have made an Investment on the date of any such sale or disposition equal to the Fair Market Value of the Capital Stock of such Guarantor not sold or disposed of in an amount determined as provided in Section 4.09 hereof.



(2)

the Fair Market Value of the assets of any Subsidiary of the Company at the time that such Subsidiary is designated as an Unrestricted Subsidiary shall be deemed to be an Investment made by the Company in such Unrestricted Subsidiary at such time; and



(3)

"Investments" shall exclude extensions of trade credit by the Company and the Guarantors in the ordinary course of business in accordance with normal trade practices of the Company or such Guarantor, as the case may be.

        "Issue Date" means July 15, 2002.

        "Legal Defeasance" shall have the meaning set forth in Section 8.02 hereof.

        "Letter of Transmittal" means the letter of transmittal to be prepared by the Company and sent to all Holders of the Notes for use by such Holders in connection with the Exchange Offer.

        "Lien" means any mortgage, charge, pledge, lien (statutory or other), security interest, hypothecation, assignment for security, claim, preference, priority or other encumbrance of any kind, regardless of whether filed, recorded or otherwise perfected under applicable laws, including any conditional sale, capital lease or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

16

        "Liquidated Damages" means all liquidated damages, if any, then owing pursuant to Section 2(c) of the Registration Rights Agreement.

        "LSI Plate" means LSI Plate, a partnership organized under the laws of Oregon, and its successors.

        "Maturity Date" means, with respect to any Note, the date on which any principal of such Note becomes due and payable as provided therein or in this Indenture, whether at the Stated Maturity with respect to such principal or by declaration of acceleration, call for redemption or purchase or otherwise.

        "Moody's" means Moody's Investors Service, Inc. and its successors.

        "Mortgage" means a deed of trust (or mortgage), assignment of rents and leases and security agreement substantially in the form attached as Exhibit G to this Indenture (including such changes to such form as may be necessary or desirable to conform to applicable laws or customs regarding property in the jurisdiction where such instrument is to be recorded), as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of this Indenture and such instrument.

        "Motor Vehicles/Mobile Equipment" means (i) motor vehicles and mobile equipment of the types listed on a schedule to the Security Agreements entered into by the Company, CF&I and New CF&I owned by the Company and the Guarantors, and (ii) Motor Vehicles (as defined in the form of Security Agreement attached as Exhibit F to this Indenture).

        "Net Award" means all proceeds, awards or payments for any Collateral (including any portion thereof) which is taken by eminent domain, expropriation or similar governmental actions or sold pursuant to the exercise by the United States of America or any State, municipality, province or other governmental authority of any right which it may have to purchase, or to designate a purchaser or to order a sale of, all or any part of the Collateral, in each case less collection expenses.

        "Net Cash Proceeds" means, with respect to any Asset Sale, or sale, or Capital Contribution in respect of, Capital Stock, the aggregate proceeds thereof received by the Company or any of the Guarantors in the form of cash or Cash Equivalents (including payments in respect of deferred payment obligations when received in the form of cash or Cash Equivalents (except to the extent that such obligations are financed or sold with recourse to the Company or any Guarantor), and including, in the case of an Event of Loss, the insurance proceeds (excluding any liability insurance proceeds payable to the Trustee for any loss, liability or expense incurred by it) paid as the result of any Event of Loss with respect to all or any portion of the Collateral), plus, in the case of an issuance of Capital Stock, upon any exercise, exchange or conversion or securities (including options, warrants and convertible or exchangeable debt) of the Company that were issued for cash on or after the Issue Date, the amount of cash originally received by the Company upon the issuance of such securities, net of in each case:

        (i)    the reasonable and customary out-of-pocket costs relating to such sale, issuance or Event of Loss (including legal, accounting and investment banking fees and brokerage commissions and, in the case of an Event of Loss, collection expenses), and

        (ii)  in the case of an Asset Sale only:

        (a)  the amount (estimated reasonably and in good faith by the Company) of income, franchise, sales and other applicable taxes required to be paid by the Company or any Guarantor in connection with such Asset Sale in the taxable year that such sale is consummated or in the immediately succeeding taxable year, the computation of which shall take into account the reduction in tax liability resulting from any available operating losses and net operating loss carryovers, tax credits and tax credit carryforwards, and similar tax attributes,

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        (b)  amounts required to be paid to any person (other than the Company or any Guarantor) owning a beneficial interest in the assets subject to the Asset Sale,

        (c)  appropriate amounts to be provided by the Company or any Guarantor, as the case may be, as a reserve required in accordance with GAAP against any liabilities associated with such Asset Sale and retained by the Company or any Guarantor, as the case may be, after such Asset Sale (including, without limitation, pension and other post-employment benefit liabilities, liabilities related to environmental matters and liabilities under any indemnification obligations associated with such Asset Sale), in each case as determined by the Board of Directors and as reflected in an Officers' Certificate delivered to the Trustee (provided, however, that any reduction in such reserve within 12 months following the consummation of such Asset Sale shall be treated for all purposes of this Indenture and the Notes as a new Asset Sale at the time of such reduction with Net Cash Proceeds equal to the amount of such reduction), and

        (d)  repayment of Indebtedness (excluding Indebtedness under the Credit Facility) secured by a Lien on the property or assets subject to such Asset Sale (but only if such Lien is permitted by this Indenture and the relevant Security Documents and only to the extent such repayment is required by the terms of such Indebtedness and the aggregate amount of such cash and Cash Equivalents applied to repay such Indebtedness does not exceed the Fair Market Value of such property or assets or, if less, the total amount of cash and Cash Equivalents received for such property and assets in such Asset Sale).

        "New CF&I" means New CF&I, Inc., a Delaware corporation, and its successors pursuant to this Indenture.

        "New CF&I Stockholders Agreement" means the Restated Stockholders Agreement, dated as of November 16, 1995, among the Company, New CF&I, Nippon Steel Corporation, NS Finance III, Inc., Nissho Iwai Corporation, and Nissho Iwai American Corporation, as in effect on the Issue Date, not giving effect to any subsequent amendment or modification thereof except for such amendments or modifications thereof permitted by the terms of this Indenture and such agreement.

        "Non-Collateral Proceeds" shall have the meaning set forth in Section 4.13 hereof.

        "Non-Recourse Indebtedness" shall have the meaning set forth in Section 4.22.

        "Note Collateral Account" means the collateral account established pursuant to Section 12.01.

        "Notes" means the10% First Mortgage Notes due 2009 that are issued under this Indenture, as amended or supplemented from time to time pursuant to this Indenture.

        "Notes Custodian" means, with respect to the Notes issuable or issued in whole or in part, the person specified in Section 2.03 hereof as the Notes Custodian with respect to the Notes, and any and all successors thereto appointed as Notes Custodian hereunder and having become such pursuant to the applicable provision of this Indenture..

        "Officer" means, with respect to the Company or any Guarantor, the Chairman, the Chief Executive Officer, the President, any Executive Vice President, any Senior Vice President, any Vice President, the Treasurer, the Secretary or the Controller of the Company or such Guarantor, as the case may be, and, in any instance where this Indenture calls for a second Officer to attest or countersign or otherwise execute any instrument or document, the term "Officer" shall also include any Assistant Secretary, Assistant Treasurer or Assistant Controller; provided that in the case of any Guarantor which is a partnership, the term "Officer" shall mean any Officer of a direct corporate general partner (or, if there is no direct corporate general partner, an indirect corporate general partner) of such partnership or, if there is no such direct or indirect corporate general partner, any duly authorized signatory of a general partner of such partnership.

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        "Officers' Certificate" of a person means a certificate signed on behalf of such person by any two of the following: the Chief Executive Officer, the President, the Chief Financial Officer, the Vice President of Finance, the Corporate Controller, the Treasurer or the Secretary of such person and delivered to the Trustee.

        "Old Bank Documents" means, collectively, the Old Credit Agreement, any and all guarantees related thereto, and all mortgages, deeds of trust, pledge agreements, security agreements and similar agreements entered into by the Company or any of its present or former Subsidiaries to secure their obligations under, or otherwise in connection with, the Old Credit Agreement.

        "Old Credit Agreement" means the Credit Agreement, dated as of December 1, 2000, by and among the Company, New CF&I, CF&I, PPM Finance, Inc., as agent, and the other financial institutions party thereto, as lenders, as amended by Amendment No. 1 thereto dated as of August 13, 2001 and Amendment No. 2 thereto, dated as of November 20, 2001. References to Indebtedness under the Old Credit Agreement shall be deemed to include any and all guarantees of such Indebtedness and any and all obligations under the Old Bank Documents.

        "Old Indenture" means this Indenture, dated as of June 1, 1996, among the Company, CF&I and New CF&I, as guarantors, and JPMorgan Chase Bank (as successor to Chemical Bank), as trustee.

        "Old Note Documents" means, collectively, the Old Indenture, any and all guarantees related thereto, and all mortgages, deeds of trust, pledge agreements, security agreements and similar agreements entered into by the Company or any of its present or former Subsidiaries to secure their obligations under, or otherwise in connection with, the Old Indenture and the Old Notes.

        "Old Notes" means the 11% First Mortgage Notes due 2003 of the Company, together with any and all guarantees thereof.

        "Opinion of Counsel" means a written opinion from legal counsel who is reasonably satisfactory to the Trustee. The counsel may be an employee of or counsel for the Company, a Guarantor or the Trustee. The opinion may be subject to reasonable and customary assumptions and conclusions.

        "Oregon Feralloy" means Oregon Feralloy Partners, a partnership organized under the laws of Oregon, and its successors.

        "Pari Passu Indebtedness" means Indebtedness of the Company or any Guarantor which ranks pari passu in right of payment with the Notes or the Guarantee of such Guarantor, as the case may be.

        "Participant" means, with respect to the Depository, Euroclear or Clearstream, a Person who has an account with the Depository, Euroclear or Clearstream, respectively (and, with respect to The Depository Trust Company, shall include Euroclear and Clearstream).

        "Paying Agent" means, with respect to the Notes issuable or issued in whole or in part, the Person specified in Section 2.03 hereof as the Paying Agent with respect to the Notes, and any and all successors thereto appointed as Paying Agent hereunder and having become such pursuant to the applicable provisions of this Indenture, except that, for the purposes of Section 4.12 and Section 4.13 and Articles Three and Eight hereof, the Paying Agent shall not be the Company or a Subsidiary of the Company or any of their respective Affiliates..

        "Permitted Investments" means any of the following:

        (i)    Investments in any Guarantor (including any person that pursuant to such Investment becomes a Guarantor) and any person that is merged into or consolidated with, or transfers or conveys all or substantially all of its assets to, the Company or any Guarantor at the time such Investment is made;

        (ii)  Investments in cash and Cash Equivalents;

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        (iii)  Investments in deposits with respect to leases, utilities, bid or performance bonds, self-insurance or similar requirements provided to third parties in the ordinary course of business and otherwise permitted by this Indenture;

        (iv)  Investments in the Notes;

        (v)  Investments in Currency Agreements permitted by Section 4.08(e);

        (vi)  Investments in evidences of Indebtedness, securities or other property received from another person by the Company or any of the Guarantors in connection with any bankruptcy case or by reason of a composition or readjustment of debt or a reorganization of such person or as a result of foreclosure, perfection or enforcement of any Lien in exchange for evidences of Indebtedness, securities or other property of such person held by the Company or any of the Guarantors, or in settlement of other liabilities or obligations of such other person to the Company or any of the Guarantors, that were created in accordance with the terms of this Indenture;

        (vii) Investments in Interest Rate Protection Obligations permitted by Section 4.08(d);

        (viii)  Investments in partnerships, joint ventures or other entities engaged in steelmaking, finishing or fabrication or other steel-related businesses in an aggregate amount not to exceed $50,000,000;

        (ix)  Investments, as in existence on the Issue Date, in Unrestricted Subsidiaries; and

        (x)  Investments made as a result of the receipt of non-cash consideration from an Asset Sale that was made pursuant to and in compliance with Section 4.13 hereof.

        "Permitted Liens" means the following types of Liens:

        (a)  Liens for taxes, assessments or governmental charges or claims (i) which are either (A) not yet delinquent or (B) being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and (ii) as to which the Company shall have set aside on its books such reserves as may be required in conformity with GAAP;

        (b)  statutory Liens of landlords, carriers, warehousemen, mechanics, suppliers, materialmen, repairmen and other like Liens imposed by law, in each case, (i) which were incurred in the ordinary course of business consistent with industry practice, (ii) which either are for sums not yet delinquent or are being contested in good faith by appropriate proceedings promptly instituted and diligently conducted and (iii) as to which the Company shall have set aside on its books such reserves as may be required in conformity with GAAP;

        (c)  Liens incurred or deposits made in the ordinary course of business consistent with industry practice to secure obligations of the Company and the Guarantors under workers' compensation, unemployment insurance and other types of governmental insurance, governmental benefits or social security (exclusive, in each case, of obligations for the payment of borrowed money); provided, that, the obligations in connection with which such Liens were incurred or deposits made shall have been incurred in the ordinary course of business consistent with industry practice and shall otherwise be permitted by this Indenture;

        (d)  Liens incurred or deposits made in the ordinary course of business consistent with industry practice to secure the performance of tenders, statutory obligations, surety and appeal bonds, bids, leases, governmental contracts, performance and return-of-money bonds and other similar obligations (exclusive, in each case, of obligations for the payment of borrowed money); provided, that, the obligations in connection with which such Liens were incurred or deposits made shall have been incurred in the ordinary course of business consistent with industry practice and shall otherwise be permitted by this Indenture;

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        (e)  Liens arising out of judgments or awards not giving rise to an Event of Default so long as (i) such Lien is adequately bonded and (ii) any appropriate legal proceedings which may have been duly initiated for the review of such judgment or award shall not have been finally terminated or the period within which such proceedings may be initiated shall not have expired;

        (f)    easements, rights of way, zoning restrictions and other similar charges or encumbrances in respect of real property (i) that do not interfere in any material respect with the ordinary conduct of the business of the Company or any of the Guarantors and (ii) in the case of any of the foregoing which are created or incurred after the Issue Date, do not materially detract from the value of the property subject thereto (as such property is used by the Company and the Guarantors); provided, that such Liens are not incurred in connection with any borrowing of money, any commitment to loan any money or to extend any credit or any similar transaction or obligation;

        (g)  leases and subleases granted by the Company or any Guarantor to others (i) which do not interfere in any material respect with the ordinary conduct of the business of the Company or any of the Guarantors and (ii) which, in the case of any of the foregoing which are granted after the Issue Date, do not materially detract from the value of the property subject thereto;

        (h)  Liens securing Capitalized Lease Obligations, mortgage financings or purchase money obligations incurred in accordance with Section 4.08(n) hereof; provided, however, that:

        (i)    such Lien (including any replacement, renewal or extension thereof) shall extend to or cover solely property and assets so acquired, developed, constructed, installed or improved, and the property or assets so acquired, developed, constructed, installed or improved do not constitute Replacement Assets and are not acquired, developed, constructed, installed or improved with Net Cash Proceeds from Asset Sales (or with amounts which, pursuant to this Indenture, are deemed to constitute Collateral Proceeds),

        (ii)  the Lien securing such Indebtedness attaches solely to such assets (and not to any Collateral) concurrently with or within 180 days after such acquisition or the completion of such development, construction, installation or improvement,

        (iii)  the principal amount of the Indebtedness secured by such Lien does not exceed 100% of the cost of such acquisition, development, construction, installation or improvement and such Indebtedness and any Indebtedness incurred to refinance such Indebtedness is incurred in accordance with this Indenture, and

        (iv)  prior to initially granting any such Lien (but not in connection with any replacements, renewals or extensions thereof), the Company shall provide the Trustee with an Officers' Certificate stating that (x) the property and assets subject to such Lien do not constitute Replacement Assets and were not acquired or constructed with Net Cash Proceeds from Asset Sales (or with amounts which, pursuant to this Indenture are deemed to constitute Collateral Proceeds) and (y) the Collateral could be operated independently of such property and assets or such property and assets could be disposed of independently of the Collateral without interfering with the continued operation and maintenance of the Collateral and without impairing the value of the Collateral (without taking into account any incremental increase in the value of the Collateral attributable to such property and assets) or interfering with the Trustee's ability to realize such value;

        (i)    Liens in favor of customs and revenue authorities arising as a matter of law to secure payment of customs duties in connection with the importation of goods;

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        (j)    Liens on Revolver Collateral securing Interest Rate Protection Obligations and obligations under Currency Agreements, in each case which obligations are permitted to be incurred under this Indenture;

        (k)  Liens on the Revolver Collateral securing Indebtedness and other obligations under the Credit Facility permitted by this Indenture to be incurred and any guarantees of the obligations under the Credit Facility permitted by this Indenture to be incurred, in each case, other than (i) Liens created by or pursuant to the Old Bank Documents;

        (l)    Liens in favor of the Company or any Guarantor; provided, that if such Liens are on any Collateral, such Liens are either collaterally assigned to the Trustee or contractually subordinate to the Lien in favor of the Trustee securing the Notes or the Guarantees, as the case may be;

        (m)  Liens securing obligations in respect of this Indenture, the Notes, the Security Documents, the Intercreditor Agreement and the Guarantees; provided, that such obligations are permitted by Section 4.08 hereof;

        (n)  Liens in favor of the Trustee in accordance with this Indenture and the Security Documents;

        (o)  Liens on the assets or property of any person existing at the time such person becomes a Guarantor after the Issue Date or is merged or consolidated with or into, or is wound up into, the Company or any Guarantor after the Issue Date; provided, that such Liens (i) were in existence prior to the contemplation of such person becoming a Guarantor or such merger or consolidation or winding up, and (ii) do not extend to or cover any property or assets of the Company or any Guarantor (other than property or assets of the person so acquired by, merged or consolidated with or into, or wound up into the Company or such Guarantor); provided, further, that the incurrence of Indebtedness to which such Liens relate was permitted by Section 4.08 hereof; and provided, further, that the property or assets so acquired do not constitute Replacement Assets or otherwise constitute a replacement of all or part of the Collateral;

        (p)  Liens on assets or property existing at the time of acquisition thereof by the Company or a Guarantor after the Issue Date; provided, that such Liens (i) were in existence prior to the contemplation of such acquisition and (ii) do not extend to or cover any property or assets of the Company or any Guarantor (other than property or assets of the person so acquired by the Company or such Guarantor); provided, further, that the incurrence of Indebtedness to which such Liens relate was permitted by Section 4.08; and provided, further, that the property or assets so acquired do not constitute Replacement Assets or otherwise constitute a replacement of all or part of the Collateral;

        (q)  Liens securing Permitted Refinancing Indebtedness which is incurred to refinance any Indebtedness which has been secured by a Lien permitted under this Indenture and which has been incurred in accordance with the provisions of this Indenture;

        (r)  restrictions on the sale, assignment, transfer, mortgage, pledge, hypothecation, encumbrance or change of legal or beneficial ownership with respect to any Common Stock of New CF&I created by the New CF&I Stockholders Agreement (provided, that, in the case of any amendment, supplement or modification of the New CF&I Stockholders Agreement entered into after the Issue Date, the restrictions thereunder are no more restrictive to the Company and New CF&I than those in the New CF&I Stockholders Agreement as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof) and restrictions on the sale, assignment, transfer, mortgage, pledge, hypothecation, encumbrance or change of legal or beneficial ownership with respect to any partnership interest in CF&I created by the CF&I Partnership Agreement (provided, that, in the case of any amendment, supplement or modification of the CF&I Partnership Agreement entered into after the Issue Date, the restrictions thereunder

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are no more restrictive to the Company and CF&I than those in the CF&I Partnership Agreement as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof); and

        (s)  Liens upon specific items of property securing obligations of the Company or a Guarantor in respect of a commercial letter of credit issued by a financial institution in favor of the seller or supplier of such property; provided, that:

        (i)    such letter of credit is issued to facilitate the purchase of such property by, and shipment of such property to, the Company or any Guarantor in the ordinary course of its business,

        (ii)  such letter of credit is payable against delivery to the relevant financial institution of appropriate documents,

        (iii)  such Lien and letter of credit (and all obligations of the Company and any Guarantor in respect thereof) shall be terminated at or prior to the time that such property is delivered to the premises of the Company or a Guarantor and, in any event, no later than 365 days after the issuance of such letter of credit,

        (iv)  such letter of credit is not issued in respect of liabilities for borrowed money, obligations evidenced by bonds, notes, debentures or other instruments, Capital Leases or guarantees in respect of any of the foregoing,

        (v)  such Lien does not extend to or cover any property or assets other than the specific items of property to be purchased by and shipped to the Company or a Guarantor as aforesaid (together with proceeds of such property), and

        (vi)  the aggregate amount payable by the Company or any of the Guarantors in respect of such letter of credit shall not exceed 100% of the cost of such property (plus interest, freight, insurance and other customary expenses).

        "Permitted Refinancing Indebtedness" means (i) Indebtedness of the Company issued in exchange for, or the proceeds of which are used solely to refinance (whether by amendment, renewal, extension, replacement or refunding), outstanding Indebtedness of the Company or any of the Guarantors and (ii) Indebtedness of any Guarantor issued in exchange for, or the proceeds of which are used solely to refinance (whether by amendment, renewal, extension, replacement or refunding), outstanding Indebtedness of such Guarantor (any and all such Indebtedness issued in exchange for, or the proceeds of which are used to solely to refinance outstanding Indebtedness, as described in clauses (i) and (ii), is referred to in this definition as "Refinancing Indebtedness"), in each case other than refinancing Indebtedness in respect of (I) Indebtedness under (or guarantees of Indebtedness under) the Old Bank Documents, the Old Note Documents or any other Indebtedness refinanced, redeemed or retired with the proceeds from the sale of the Notes and (II) Indebtedness under Section 4.08(c), (d), (e), (f), (g), (h), (i), (j), (k) or (o) hereof; provided, however, that in each case:

        (w)  the principal amount (or, in the case of Redeemable Capital Stock, the liquidation preference) of Refinancing Indebtedness (or, if such Refinancing Indebtedness provides for an amount less than the principal amount (or liquidation preference) thereof to be due and payable upon a declaration of acceleration of the maturity thereof, the original issue price of such Indebtedness) shall not exceed the sum of:

        (A)  the principal amount (or, in the case of Redeemable Capital Stock, the liquidation preference) of Indebtedness so exchanged or refinanced (or, if such Indebtedness being refinanced was issued with an original issuance discount, the lesser of the principal amount and the accreted value as determined in accordance with GAAP at the time of such exchange or refinancing), plus

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        (B)  the amount of any premium required to be paid in connection with such exchange or refinancing pursuant to the terms of such Indebtedness or the amount of any premium reasonably determined by the Board of Directors of the Company as necessary to accomplish such exchange or refinancing by means of a tender offer or privately negotiated purchase, plus

        (C)  the amount of reasonable fees and expenses incurred in connection therewith,

        (x)  in the case of Refinancing Indebtedness incurred by the Company or a Guarantor to exchange or refinance Subordinated Indebtedness, such Refinancing Indebtedness (including any guarantees thereof):

        (A)  has a final Stated Maturity after the 123rd day after the Final Maturity Date,

        (B)  has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of the Notes, and

        (C)  is contractually subordinated to the Notes and to the Guarantee of such Guarantor, as the case may be, in the same manner and at least to the same extent that the Subordinated Indebtedness (including any guarantees thereof) being exchanged or refinanced is subordinated to the Notes and to the Guarantee of such Guarantor, as the case may be;

        (y)  in the case of Refinancing Indebtedness incurred by the Company or a Guarantor to exchange or refinance Pari Passu Indebtedness, such Refinancing Indebtedness (including any guarantees thereof);

        (A)  has a final Stated Maturity after the 123rd day after the Final Maturity Date,

        (B)  has an Average Life to Stated Maturity greater than the remaining Average Life to Stated Maturity of the Notes, and

        (C)  constitutes Pari Passu Indebtedness or Subordinated Indebtedness; and

        (z)  in the case of any Liens securing such Refinancing Indebtedness, (A) no such Lien extends to or covers any property or assets of the Company or any of the Guarantors other than the property or assets covered by the Lien securing the Indebtedness so exchanged or refinanced, (B) the amount of Refinancing Indebtedness secured by such Lien shall not exceed the amount of Indebtedness so exchanged or refinanced that was secured by the predecessor Lien and (C) the terms of such Lien are no less favorable to the holders of the Notes and no more favorable to the lienholders with respect to such Lien than the predecessor Lien.

        "person" means any individual, corporation, limited liability company, partnership, joint venture, association, joint-stock company, trust, charitable foundation, unincorporated organization, government or any agency or political subdivision thereof or any other entity.

        "Place of Payment" means (i) the Borough of Manhattan, the City of New York and (ii) such other places where the Company may maintain an office or agency in accordance with Section 4.02 hereof where Notes may be presented or surrendered for payment; provided that, for purposes of payment of interest, Liquidated Damages, if any, and principal on any Global Note for which the Depository is The Depository Trust Company, the Place of Payment with respect to such Global Note shall be deemed to be the Borough of Manhattan, the City of New York.

        "Predecessor Notes" means, with respect to any particular Note, every previous Note evidencing all or a portion of the same debt as that evidenced by such particular Note; and, for the purposes of this definition, any Note authenticated and delivered under Section 2.07 hereof in exchange for a mutilated

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Note or in lieu of a lost, destroyed or stolen Note shall be deemed to evidence the same debt as the mutilated, lost, destroyed or stolen Note.

        "Preferred Stock" means, with respect to any person, any Capital Stock of such person of any class or series (however designated) that ranks prior, as to (i) payment of dividends or distributions, (ii) distributions upon voluntary or involuntary liquidation, dissolution or winding up or (iii) redemption, to shares of Capital Stock of any other class or series of such person. For purposes of this definition, the term "Capital Stock" shall not include rights, warrants or options.

        "principal" means, with respect to any debt security (including, without limitation, the Notes), the principal of the security plus, when applicable, the premium, if any, on the security. The fact that there may be references in this Indenture to the "principal of and premium, if any (or similar phrases) on any security (including, without limitation, the Notes) shall not limit or be construed to limit the effect of the foregoing definition.

        "Private Placement Legend" means the legend set forth in Section 2.06(g)(i) hereof to be placed on all Notes issued under this Indenture except where otherwise permitted by the provisions of this Indenture.

        "Pro Forma" means pro forma calculated on a basis consistent with Regulation S-X under the Securities Act.

        "Pueblo Inside the Fence Property" means the real property in Pueblo County, Colorado as described in the Boundary and Improvement Survey of "Inside the Fence Property" of CF&I Steel, L.P., dated as of May 8, 2002, by Valley Engineering, Inc.

        "Pueblo Outside the Fence Property" means the real property of the Company and the Guarantors in Pueblo County, Colorado and Fremont County, Colorado other than (i) the Pueblo Inside the Fence Property, (ii) the easements outside of but appurtenant to the Pueblo Inside the Fence Property running over and across certain real property in Pueblo County, Colorado and Fremont County, Colorado on which the canals or ditches for bringing industrial water to and related access and utility service for the Pueblo Inside the Fence Property are located, and (iii) all industrial water rights appurtenant to and used on the Pueblo Inside the Fence Property.

        "QIB" means a "qualified institutional buyer" as defined in Rule 144A.

        "Qualified Equity Offering" means any sale of Common Stock (other than Redeemable Capital Stock) of the Company for cash, other than pursuant to Form S-8 (or any successor thereto) under the Securities Act and other than shares of Common Stock of the Company issued pursuant to employee benefit plans or as compensation to employees.

        "Redeemable Capital Stock" means any shares of any class or series of Capital Stock that, by the terms thereof (or by the terms of any security into which it is convertible or for which it is exchangeable), by contract, upon the happening of any event, by the passage of time or otherwise:

        (A)  matures, or would be required to be redeemed, or is redeemable at the option of the holder thereof, in whole or in part, on or prior to the date that is 123 days after the Final Maturity Date, or

        (B)  is convertible into or exchangeable for debt securities in whole or in part, at any time on or prior to the date that is 123 days after the Final Maturity Date.

        Notwithstanding the foregoing:

        (1)  to the extent that any Common Stock of New CF&I is either (i) subject to the terms of the New CF&I Stockholders Agreement as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof) or (ii) subject to the terms of any similar

25

instrument or agreement (including any amendment, supplement or restatement to the New CF&I Stockholders Agreement entered into in accordance with the terms of this Indenture and the New CF&I Stockholders Agreement) which provides for repurchase or redemption of such Common Stock by the Company or New CF&I on terms no less favorable to the Company and New CF&I than those set forth in the New CF&I Stockholders Agreement as in effect on the Issue Date (not giving effect to any subsequent amendment or modification thereof), then such Common Stock of New CF&I shall not be deemed Redeemable Capital Stock solely by virtue of being subject to the New CF&I Stockholders Agreement or such other instrument or agreement, and

        (2)  any Capital Stock that would constitute Redeemable Capital Stock solely because the holders thereof have the right to require the Company to repurchase such Capital Stock upon the occurrence of a change of control shall not constitute Redeemable Capital Stock if the terms of such Capital Stock provide that the Company may not repurchase or redeem any such Capital Stock pursuant to such provisions prior to the Company's purchase of such Notes as are required to be purchased pursuant to Section 4.12 hereof.

        "Redemption Date" means, with respect to any Note to be redeemed, the date fixed by the Company for such redemption pursuant to this Indenture and the Notes.

        "Redemption Price" means, with respect to any Note to be redeemed, the price (expressed as a percentage of the principal amount thereof) fixed for such redemption pursuant to the terms of this Indenture and the Notes, not taking into account any accrued and unpaid interest and Liquidated Damages, if any, thereon..

        "refinancing" means, with respect to specified Indebtedness, any refinancing of such Indebtedness, whether by amendment, renewal, extension, replacement, refunding or otherwise; and "refinance" shall have a correlative meaning.

        "Registrar" means with respect to the Notes issuable or issued in whole or in part, the person specified in Section 2.03 hereof as the Registrar with respect to the Notes, and any and all successors thereto appointed as Registrar hereunder and having become such pursuant to the applicable provision of the Indenture.

        "Registration Rights Agreement" means the Exchange and Registration Rights Agreement, dated as of the date of this Indenture, by and among the Company, the Guarantors and the other parties named on the signature pages thereof, as such agreement may be amended, modified or supplemented from time to time, and, with respect to Initial Notes issued under this Indenture subsequent to the date of this Indenture pursuant to Section 2.02, the registration rights agreement relating thereto substantially identical to the Exchange and Registration Rights Agreement.

        "Regulation S" means Regulation S under the Securities Act.

        "Regulation S Global Note" means a Regulation S Temporary Global Note or Regulation S Permanent Global Note, as appropriate.

        "Regulation S Permanent Global Note" means a permanent global Note in the form of Exhibit A-1 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depository or its nominee, issued in a denomination equal to the outstanding principal amount of the Regulation S Temporary Global Note upon expiration of the Restricted Period.

        "Regulation S Temporary Global Note" means a temporary global Note in the form of Exhibit A-2 hereto bearing the Global Note Legend and the Private Placement Legend and deposited with or on behalf of and registered in the name of the Depository or its nominee, issued in a denomination equal to the outstanding principal amount of the Notes initially sold in reliance on Rule 903.

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        "Released Interests" shall have the meaning set forth in Section 11.05 hereof.

        "Released Trust Moneys" shall have the meaning set forth in Section 12.04 hereof.

        "Replacement Assets" shall have the meaning set forth in Section 4.13 hereof.

        "Restricted Definitive Note" means a Definitive Note bearing the Private Placement Legend.

        "Restricted Global Note" means a Global Note bearing the Private Placement Legend.

        "Restricted Payment" shall have the meaning set forth in Section 4.09 hereof.

        "Restricted Period" means the 40-day distribution compliance period as defined in Regulation S.

        "Revolver Agent" means the person or any or all of the persons as, from time to time, may be named as agent or agents for the lenders under the Credit Facility in accordance with the terms thereof.

        "Revolver Collateral" shall have the meaning assigned to it in the Security Agreements.

        "Rule 144" means Rule 144 under the Securities Act.

        "Rule 144A" means Rule 144A under the Securities Act.

        "Rule 903" means Rule 903 under the Securities Act.

        "Rule 904" means Rule 904 under the Securities Act.

        "Sale-Leaseback Transaction" of any person means an arrangement with any lender or investor or to which such lender or investor is a party providing for the leasing by such person or any of its Subsidiaries of any property or asset of such person or any of its Subsidiaries which has been or is being sold or transferred by such person or any of its Subsidiaries to such lender or investor or to any person to whom funds have been or are to be advanced by such lender or investor on the security of such property or asset; provided, that the term Sale-Leaseback Transaction shall not include any such transaction pursuant to which CF&I shall sell or transfer any of the water rights and related water system owned by it on the Issue Date in conjunction with an agreement or other arrangement pursuant to which CF&I receives the right to purchase or receive water represented by any portion of the water rights so sold or transferred (it being understood that this proviso shall not prevent any such sale or transfer of water rights or water system from constituting an Asset Sale). The Stated Maturity of such arrangement shall be the date of the last payment of rent or any other amount due under such arrangement prior to the first date on which such arrangement may be terminated by the lessee without payment of a penalty.

        "SEC" means the Securities and Exchange Commission, as from time to time constituted, or if at any time after the execution of this Indenture such Commission is not existing and performing the applicable duties now assigned to it, then the body or bodies performing such duties at such time.

        "Securities Act" means the Securities Act of 1933, as amended from time to time, and the rules and regulations thereunder.

        "Security Agreement" means a security agreement, substantially in the form attached as Exhibit F to this Indenture (including such changes to such form as may be necessary or desirable to conform to applicable laws in the jurisdiction or jurisdictions whose laws are applicable to the Lien created by such agreement), as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of such instrument or this Indenture.

        "Security Documents" means, collectively:

        (i)    the Mortgages executed by the Company and CF&I,

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        (ii)  the Security Agreements executed by the Company, New CF&I and CF&I,

        (iii)  all other Mortgages or Security Agreements executed after the Issue Date by the Company or any Guarantor, and

        (iv)  all other mortgages, deeds of trust, security agreements, pledge agreements and other agreements, instruments, financing statements and other documents evidencing, creating, setting forth or limiting any Lien on Collateral in favor of the Trustee (or, in the case of mortgages, deeds of trust or similar agreements, in favor of the Trustee or another trustee thereunder), for the benefit of the Holders of the Notes,

in each case as the same may be amended, supplemented or otherwise modified from time to time in accordance with the terms of such instrument and this Indenture.

        "Shelf Registration Statement" means the Shelf Registration Statement as defined in the Registration Rights Agreement.

        "S&P" means Standard & Poor's Corporation, and its successors.

        "Stated Maturity," means:

        (A)  when used with respect to any payment of principal or any installment of interest or Liquidated Damages, if any, on any Indebtedness, the date specified or set forth in the instrument governing such Indebtedness as the date on which such principal or installment of interest or Liquidated Damages is due and payable, and

        (B)  when used with respect to any Sale-Leaseback Transaction, the date of the last payment of rent or any other amount due under such arrangement prior to the first date on which such arrangement may be terminated by the lessee without payment of a penalty.

        The term "final Stated Maturity" when used with respect to any Indebtedness, means the date specified or set forth in the instrument governing such Indebtedness as the final maturity date of such Indebtedness.

        "Subordinated Indebtedness" means Indebtedness of the Company or a Guarantor which is contractually subordinated to the Notes or the Guarantee of such Guarantor, as the case may be.

        "Subsidiary" means, with respect to any person:

        (i)    a corporation, more than 50% of whose voting power or Voting Stock is at the time, directly or indirectly, owned or controlled by such person, by one or more Subsidiaries of such person or by such person and one or more Subsidiaries thereof; and

        (ii)  any person (other than a corporation), including, without limitation, a joint venture, limited partnership, general partnership, association or other business entity, in which such person, one or more Subsidiaries of such person or such person and one or more Subsidiaries of such person, directly or indirectly, at the date of determination thereof, owns or controls more than 50% of the outstanding Capital Stock, Voting Stock, ownership interest or voting power of such person.

        For purposes of this definition, any directors' qualifying shares or investments by foreign nationals mandated by applicable law shall be disregarded in determining the ownership of a Subsidiary.

        "Surviving Entity" shall have the meaning set forth in Section 5.01 hereof.

        "Surviving Person" shall have the meaning set forth in Section 10.03 hereof.

        "TIA" means the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the Issue Date.

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        "Title Policy" shall have the meaning set forth in Section 11.02(c) hereof.

        "transfer" means any direct or indirect sale, assignment, mortgage, encumbrance, pledge, gift, bequeath, hypothecation or other disposition or transfer, whether (unless expressly stated otherwise) for or without consideration, or voluntary or involuntary or by operation of law); the term "transfer" used as a verb shall have a corresponding meaning.

        "Trust Moneys" means all cash and Cash Equivalents received by the Trustee:

        (i)    upon the release of Collateral from the Lien of this Indenture and the Security Documents, including all Collateral Proceeds (and amounts deemed, pursuant to this Indenture, to constitute Collateral Proceeds) and all moneys received in respect of the principal of all purchase money, governmental and other obligations;

        (ii)  as Net Cash Proceeds from any Event of Loss of all or any portion of the Collateral and Net Awards (other than any liability insurance proceeds payable to the Trustee for any loss, liability or expense incurred by it);

        (iii)  pursuant to the Security Documents;

        (iv)  as proceeds of any sale or other disposition of all or any part of the Collateral by or on behalf of the Trustee or any collection, recovery, receipt, appropriation or other realization of or from all or any part of the Collateral pursuant to this Indenture or any of the Security Documents or otherwise;

        (v)  which constitute Collateral Proceeds or are deemed pursuant to this Indenture to constitute Collateral Proceeds from any transaction which results in a Guarantor being released from its Guarantee pursuant to this Indenture; or

        (vi)  for application as provided in the relevant provisions of this Indenture or any Security Document or whose disposition is not otherwise specifically provided for in this Indenture or in any Security Document;

provided, however, that Trust Moneys shall in no event include any property deposited with the Trustee pursuant to Section 3.05, Section 4.12 or Article Eight hereof or delivered to or received by the Trustee pursuant to Section 6.10.

        "Trust Moneys Release Notice" shall have the meaning set forth in Section 12.04 hereof.

        "Trust Officer" means any officer in the Corporate Trust Office of the Trustee or any other officer of the Trustee customarily performing functions similar to those performed by any of the above-designated officers and also means, with respect to a particular corporate trust matter, any other officer to whom such matter is referred because of his knowledge of and familiarity with the particular subject.

        "Trustee" means the party named as such in this Indenture until a successor replaces such party (or any previous successor) in accordance with the provisions of this Indenture, and thereafter means such successor.

        "Unrestricted Definitive Notes" means one or more Definitive Notes that do not bear and are not required to bear the Private Placement Legend.

        "Unrestricted Global Note" means a permanent global Note in the form of Exhibit A-1 attached hereto that bears the Global Note Legend and that has the "Schedule of Exchanges of Interests in the Global Note" attached thereto, and that is deposited with or on behalf of and registered in the name of the Depository, representing a series of Notes that do not and are not required to bear the Private Placement Legend.

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        "Unrestricted Notes" means one or more Unrestricted Global Notes and/or Unrestricted Definitive Notes, including, without limitation, the Exchange Notes.

        "Unrestricted Subsidiary" means (a) CPC; Canadian National Steel; Camrose; Oregon Steel de Guayana, Inc., a Delaware corporation; OSM Glassification Inc., an Oregon corporation; Glassification International, Ltd., an Oregon partnership; Colorado and Wyoming Railway Company, a Delaware corporation; The Union Ditch and Water Company, a Colorado corporation; OSM Distribution, Inc., a Delaware corporation; Oregon Steel Mills Processing, Inc., a Delaware corporation; Oregon Feralloy Partners, an Oregon partnership; and LSI Plate, an Oregon partnership; and (b) any other Subsidiary of the Company that, at the date of determination, shall be designated as an Unrestricted Subsidiary by the Board of Directors of the Company (all as set forth in Section 4.22 hereof); provided, however, that any such Unrestricted Subsidiary shall cease to constitute an Unrestricted Subsidiary upon its designation by the Board of Directors of the Company as a Guarantor as set forth in Section 4.22 hereof.

        "U.S. Government Obligations" means direct non-callable obligations of, or non-callable obligations guaranteed by, the United States of America for the payment of which guarantee or obligation the full faith and credit of the United States is pledged.

        "U.S. Person" means a U.S. person as defined in Rule 902(o) under the Securities Act.

        "Valuation Date" shall have the meaning set forth in Section 11.05 hereof.

        "Voting Stock" of any person means any class or classes of Capital Stock pursuant to which the holders thereof have the general voting power under ordinary circumstances to elect a majority of the board of directors, managers or trustees of any person (irrespective of whether or not, at the time, Capital Stock of any other class or classes shall have, or might have, voting power by reason of the happening of any contingency).

        "Wholly Owned Subsidiary" means any Subsidiary of the Company of which 100% of the outstanding Capital Stock is owned by the Company, by one or more Wholly Owned Subsidiaries of the Company or by the Company and one or more Wholly Owned Subsidiaries of the Company. For purposes of this definition:

        (i)    any directors' qualifying shares or investments by foreign nationals mandated by applicable law shall be disregarded in determining the ownership of a Subsidiary, and

        (ii)  the limited partnership interests in CF&I and the Common Stock of New CF&I owned by persons other than the Company and the Guarantors on the Issue Date likewise shall be disregarded in determining ownership of such Subsidiaries (it being understood that any increase in the capital account of a limited partner of CF&I pursuant to the terms of the CF&I Partnership Agreement shall not, in and of itself, cause such limited partnership interest not to qualify under this clause (ii)).

        For purposes of the foregoing definition, neither CF&I nor New CF&I shall be deemed not to be a Wholly Owned Subsidiary of the Company solely by virtue of (A) any sale, transfer or assignment after the Issue Date of any limited partnership interests or Common Stock referred to in clause (ii) of the preceding sentence (including, without limitation, by admission of additional limited partners to CF&I), so long as such sale, transfer or assignment is otherwise made in compliance with the provisions of this Indenture or (B) any merger or consolidation of CF&I or New CF&I, respectively, so long as such merger or consolidation is in compliance with the provisions of this Indenture and the ownership of the limited partnership interests in CF&I and the Common Stock of New CF&I, after giving effect to such merger or consolidation, is the same as the ownership of such limited partnership interests and Common Stock immediately prior to such merger or consolidation.

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        1.02    Incorporation by Reference of Trust Indenture Act.

        Whenever this Indenture refers to a provision of the TIA, the provision is incorporated by reference in and made a part of this Indenture. The following TIA terms used in this Indenture have the following meanings:

        "Commission" means the SEC;

        "indenture securities" means the Notes and the Guarantees;

        "indenture security holder" means a Holder;

        "indenture to be qualified" means this Indenture;

        "indenture trustee" or "institutional trustee" means the Trustee; and

        "obligor" on the indenture securities means the Company, any Guarantor or any other obligor on the Notes or the Guarantees, if any.

        All other TIA terms used in this Indenture that are defined by the TIA, defined by TIA reference to another statute or defined by SEC rule and not otherwise defined herein have the meanings assigned to them therein.

        1.03    Rules of Construction.

        For all purposes of this Indenture, except as otherwise expressly provided or unless the context otherwise requires:

        1.    a term has the meaning assigned to it;

        2.    words in the singular include the plural, and words in the plural include the singular;

        3.    "or" is not exclusive;

        4.    provisions apply to successive events and transactions;

        5.    all accounting terms not otherwise defined herein have the meanings assigned to them in accordance with GAAP;

        6.    the words "herein", "hereof" and "hereunder" and other words of similar import refer to this Indenture as a whole and not to any particular Article, Section or other subdivision;

        7.    all references to $ or dollars shall refer to the lawful currency of the United States of America; and

        8.    references to sections of or rules under the Securities Act or the Exchange Act shall be deemed to include substitute, replacement or successor sections or rules adopted by the SEC from time to time.

ARTICLE TWO

THE NOTES

        2.01    Form and Dating.

        (a)    General.    The Notes (including Global Notes) and the Trustee's certificate of authentication thereon shall be in substantially the form of Exhibit A-1 or A-2 hereto as applicable, with such appropriate insertions, omissions, substitutions and other variations as are required or permitted by this Indenture and may have such letters, numbers or other marks of identification and such legends or endorsements placed thereon as may be required to comply with any applicable law or with the rules of any securities exchange or as may, consistently herewith, be

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determined by the Officers of the Company executing such Notes, as evidenced by their execution thereof. The Notes shall be issuable only in registered form without coupons and only in denominations of $1,000 and integral multiples thereof.

        If so provided in an Authentication Order pursuant to Section 2.02 or if otherwise required pursuant to this Section 2.01, the Notes shall be issued under this Indenture in the form of Global Notes. Global Notes will be registered in the name of the Depository or a nominee of the Depository.

        The terms and provisions contained in the form of the Notes annexed hereto as Exhibits A-1 and A-2 and the form of Guarantee annexed hereto as Exhibit E and, in the case of the CF&I Note, Exhibit I shall constitute, and are hereby expressly made, a part of this Indenture and, to the extent applicable, the Company, the Guarantors and the Trustee, by their execution and delivery of this Indenture, expressly agree to such terms and provisions and to be bound thereby. However, to the extent any provision of any Note conflicts with the express provisions of this Indenture, the provisions of this Indenture shall govern and be controlling.

        (b)    Global Notes.    Notes issued in global form shall be substantially in the form of Exhibit A-1 or A-2 attached hereto (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Each Global Note shall represent such of the outstanding Notes as shall be specified therein and each Global Note shall provide that it shall represent the aggregate principal amount of outstanding Notes from time to time endorsed thereon and that the aggregate principal amount of outstanding Notes represented thereby may from time to time be reduced or increased, as appropriate, to reflect exchanges and redemptions. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the aggregate principal amount of outstanding Notes represented thereby shall be made by the Trustee or the Notes Custodian, at the direction of the Trustee, in accordance with instructions given by the Holder thereof as required by Section 2.06 hereof.

        (c)    Temporary Global Notes.    Notes offered and sold in reliance on Regulation S shall be issued initially in the form of the Regulation S Temporary Global Note, which shall be deposited on behalf of the purchasers of the Notes represented thereby with the Trustee, at its Corporate Trust Office, as custodian for the Depository, and registered in the name of the Depository or the nominee of the Depository for the accounts of designated agents holding on behalf of Euroclear or Clearstream, duly executed by the Company and authenticated by the Trustee as hereinafter provided. Following the termination of the Restricted Period, beneficial interests in the Regulation S Temporary Global Note shall be exchanged for beneficial interests in Regulation S Permanent Global Notes pursuant to the Applicable Procedures, provided that the Trustee shall have received a written certificate from the Depository, together with copies of certificates from Euroclear and Clearstream certifying that they have received certification of non-United States beneficial ownership of 100% of the aggregate principal amount of the Regulation S Temporary Global Note (except to the extent of any beneficial owners thereof who acquired an interest therein during the Restricted Period pursuant to another exemption from registration under the Securities Act and who will take delivery of a beneficial ownership interest in a 144A Global Note bearing a Private Placement Legend, all as contemplated by Section 2.06(a)(ii) hereof). Simultaneously with the authentication of Regulation S Permanent Global Notes, the Trustee shall cancel the Regulation S Temporary Global Note. The aggregate principal amount of the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee and the Depository or its nominee, as the case may be, in connection with transfers of interest as hereinafter provided.

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        (d)    Euroclear and Clearstream Procedures Applicable.    The operating procedures, terms and conditions of Euroclear and Clearstream shall be applicable to transfers of beneficial interests in the Regulation S Temporary Global Note and the Regulation S Permanent Global Notes that are held by Participants through Euroclear or Clearstream.

        (e)    Definitive Notes.    Notes issued in definitive form shall be substantially in the form of Exhibit A-1 attached hereto (but without the Global Note Legend thereon and without the "Schedule of Exchanges of Interests in the Global Note" attached thereto). Definitive Notes and Guarantees shall be printed, typewritten, lithographed or engraved or produced by any combination of these methods or may be produced in any other manner permitted by the rules of any securities exchange on which the Notes may be listed, all as determined by the Officers of the Company executing such Notes, as evidenced by their execution of such Notes. Each Note shall be dated the date of its authentication.

        2.02    Execution and Authentication.

        One Officer of the Company shall execute the Notes on behalf of the Company by either manual or facsimile signature under the Company's seal (which may be a facsimile of the genuine seal), attested by the manual or facsimile signature of any other Officer of the Company. The Company's seal (or a facsimile thereof) shall be impressed, affixed, imprinted or reproduced on the Notes. Typographical and other minor errors and defects in any such reproduction of the seal or any such signature shall not affect the validity or enforceability of any Note that has been duly authenticated and delivered by the Trustee.

        If an Officer of the Company whose signature is on a Note no longer holds that office at the time the Trustee authenticates the Note or at any time thereafter, the Note shall be valid nevertheless.

        A Note shall not be valid until an authorized signatory of the Trustee manually signs the certificate of authentication on the Note. Such signature shall be conclusive evidence that the Note has been authenticated under this Indenture.

        The Trustee shall authenticate Notes for issue in an aggregate principal amount not to exceed $305,000,000 upon receipt of a Company Order directing the Trustee to authenticate the Notes and certifying that all conditions precedent to the issuance of the Notes contained herein have been complied with (an "Authentication Order"). The aggregate principal amount of Notes outstanding at any time may not exceed $305,000,000.

        The Authentication Order directing the authentication and delivery of Notes shall specify whether such Notes shall be issued in the form of Definitive Notes or Global Notes. If the Authentication Order specifies that the Notes are to be issued in the form of one or more Global Notes, then the Company shall execute and the Trustee shall, in accordance with this Section and such Authentication Order, authenticate and deliver one or more Global Notes that:

        (a)  shall represent and shall be denominated in an aggregate amount equal to the aggregate principal amount of the Notes;

        (b)  shall be registered in the name of the Depository or a nominee of such Depository;

        (c)  shall, at the instruction of the Company, be delivered by the Trustee to the Depository or held by the Trustee on behalf of the Depository, and

        (d)  shall be in the form specified in Sections 2.01(b) and (c) hereof (including the Global Note Legend thereon and the "Schedule of Exchanges of Interests in the Global Note" attached thereto).

        The Depository must, at the time of its designation and at all times while it serves as Depository, be a clearing agency registered under the Exchange Act and any other applicable statute or regulation.

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        With the prior written approval of the Company, the Trustee may appoint an authenticating agent acceptable to the Company to authenticate Notes. Unless limited by the terms of such appointment, an authenticating agent may authenticate Notes whenever the Trustee may do so. Each reference in this Indenture to authentication by the Trustee includes authentication by such agent. Such authenticating agent shall have the same rights as the Trustee in any dealings hereunder with the Company or with any of the Company's Affiliates.

        2.03    Registrar and Paying Agent.

        The Company shall maintain an office or agency (which shall be located in the Borough of Manhattan, the City of New York, State of New York) where Notes may be presented for registration of transfer or for exchange (the "Registrar"), an office or agency (which shall be located in the Borough of Manhattan, the City of New York, State of New York) where Notes may be presented for payment of principal, interest and Liquidated Damages, if any (the "Paying Agent") and an office or agency (which shall be located in the Borough of Manhattan, the City of New York, State of New York) where notices and demands to or upon the Company and the Guarantors in respect of the Notes, the Guarantees and this Indenture may be served, and the Company may from time to time designate one or more other offices or agencies for any such purposes as provided in Section 4.02 hereof. The Registrar shall keep a register of the Notes and of their transfer and exchange. At the option of the Company, interest and Liquidated Damages, if any, may be paid by check mailed to the persons entitled thereto as shown on such register. The Company may have one or more co-Registrars and one or more additional paying agents. The term "Registrar" includes any co-Registrar and the term "Paying Agent" includes any additional paying agent. Except as otherwise expressly provided in this Indenture, the Company or any Affiliate thereof may act as Paying Agent.

        The Company may change any Paying Agent or Registrar without notice to any Holder. The Company shall notify the Trustee in writing of the name and address of any Registrar or Paying Agent not a party to this Indenture.

        The Company initially appoints The Depository Trust Company to act as Depository with respect to the Global Notes.

        The Company initially appoints the Trustee to act as the Registrar and Paying Agent and to act as Notes Custodian with respect to the Global Notes.

        The Company shall, prior to each interest record date, notify the Paying Agent of any wire transfer instructions for payments that it receives from Holders.

        The Company shall enter into an appropriate agency agreement with any Registrar or Paying Agent not a party to this Indenture, which shall incorporate the provisions of the TIA. The agreement shall implement the provisions of this Indenture that relate to such Registrar or Paying Agent. The Company shall give prompt written notice to the Trustee of the name and address of any such Registrar or Paying Agent or agent for service of notices and demand. If the Company fails to maintain a Registrar, Paying Agent or agent for service of notices and demands, or fails to give the foregoing notice, the Trustee shall act as such and shall be entitled to appropriate compensation in accordance with Section 7.08 hereof.

        2.04    Paying Agent To Hold Money in Trust.

        Each Paying Agent shall hold in trust for the benefit of Holders or the Trustee all money held by the Paying Agent for the payment of principal of, or interest (and Liquidated Damages, if any) on, the Notes (whether such money has been distributed to it by the Company, any Guarantor or any other obligor on the Notes or the Guarantees), and the Company (or any other obligor on the Notes or the Guarantees) and the Paying Agent shall notify the Trustee of any default by the Company (or any other obligor on the Notes or the Guarantees) in making any such payment. If the Company or an Affiliate of the Company acts as Paying Agent, it shall segregate the money and hold it as a separate trust fund. The Company at any time may require a Paying Agent to distribute all money held by it to the Trustee

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and account for any funds disbursed and the Trustee may at any time during the continuance of any Event of Default, upon written request to a Paying Agent, require such Paying Agent to pay all money held by it to the Trustee and to account for any funds distributed. Upon doing so, the Paying Agent (other than an obligor on the Notes or any Guarantees) shall have no further liability for the money so paid over to the Trustee. Upon any bankruptcy or reorganization proceedings relating to the Company, the Trustee shall serve as Paying Agent for the Notes.

        2.05    Holder Lists.

        The Trustee shall preserve in as current a form as is reasonably practicable the most recent list available to it of the names and addresses of Holders and shall otherwise comply with TIA § 312(a). If the Trustee is not the Registrar, the Company shall furnish to the Trustee at least ten Business Days before each Interest Payment Date and at such other times as the Trustee may request in writing a list in such form and as of such date as the Trustee may reasonably require of the names and addresses of Holders, which list may be conclusively relied upon by the Trustee.

        2.06    Transfer and Exchange.

        (a)    Transfer and Exchange of Global Notes.    A Global Note may not be transferred as a whole except by the Depository to a nominee of the Depository, by a nominee of the Depository to the Depository or to another nominee of the Depository, or by the Depository or any such nominee to a successor Depository or a nominee of such successor Depository. Global Notes will not be exchanged by the Company for Definitive Notes unless:

        (i)    the Company delivers to the Trustee notice from the Depository that it is unwilling or unable to continue to act as Depository or that it is no longer a clearing agency registered under the Exchange Act and, in either case, a successor Depository is not appointed by the Company within 120 days after the date of such notice from the Depository;

        (ii)  the Company in its sole discretion determines that the Global Notes (in whole but not in part) should be exchanged for Definitive Notes and delivers a written notice to such effect to the Trustee (provided, that in no event shall the Regulation S Temporary Global Note be exchanged by the Company for Definitive Notes prior to (x) the expiration of the Restricted Period and (y) the receipt by the Registrar of any certificates required pursuant to Rule 903(b)(3)(ii)(B) under the Securities Act and provided further, there shall be no continuing Default or Event of Default);

        (iii)  an Event of Default shall have occurred and be continuing with respect to the Notes and the Trustee has received a request from the Depository or any Holder to issue Definitive Notes.

        In addition, beneficial interests in a Global Note may be exchanged for a Definitive Note upon request but only upon 20 days' prior written notice by or on behalf of the Depository in accordance with its customary procedures. Upon the occurrence of any of the events described in this Section 2.06(a), Definitive Notes shall be issued in such names as the Depository shall instruct the Trustee. Global Notes also may be exchanged or replaced, in whole or in part, as provided in Sections 2.07 and 2.10 hereof. Every Note, other than a Definitive Note, authenticated and delivered in exchange for, or in lieu of, a Global Note or any portion thereof, pursuant to this Section 2.06 or Section 2.07 or 2.10 hereof, shall be authenticated and delivered in the form of, and shall be, a Global Note. A Global Note may be exchanged for another Note only upon compliance with the applicable provisions of this Section 2.06(a) and Sections 2.07 and 2.10 hereof. Beneficial interests in a Global Note may be transferred and exchanged only upon compliance with the applicable provisions of Sections 2.06(b),(c),(d) and (f) hereof.

        (b)    Transfer and Exchange of Beneficial Interests in Global Notes.    The transfer and exchange of beneficial interests in the Global Notes shall be effected through the Depository, in accordance with the provisions of this Indenture and the Applicable Procedures. Beneficial interests in the

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Restricted Global Notes shall be subject to restrictions on transfer comparable to those set forth herein to the extent required by the Securities Act. Transfers of beneficial interests in the Global Notes also shall require compliance with either subparagraph (i) or (ii) below, as applicable, as well as the other applicable paragraphs and subparagraphs of this Section 2.06:

        (i)    Transfer of Beneficial Interests in the Same Global Note.    Beneficial interests in any Restricted Global Note may be transferred to persons who take delivery thereof in the form of a beneficial interest in the same Restricted Global Note in accordance with the transfer restrictions set forth in the Private Placement Legend; provided, however, that prior to the expiration of the Restricted Period, transfers of beneficial interests in the Temporary Regulation S Global Note may not be made to a U.S. Person or for the account or benefit of a U.S. Person (other than the Purchaser (as defined in the Registration Rights Agreement)). Beneficial interests in any Unrestricted Global Note may be transferred to persons who take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note. No written orders or instructions shall be required to be delivered to the Registrar to effect the transfers described in this Section 2.06(b)(i).

        (ii)    All Other Transfers and Exchanges of Beneficial Interests in Global Notes.    In connection with all transfers and exchanges of beneficial interests in any Global Note that is not subject to Section 2.06(b)(i) above, the transferor of such beneficial interest must deliver to the Registrar (1) a written order from a Participant or an Indirect Participant given to the Depository in accordance with the Applicable Procedures directing the Depository to credit or cause to be credited a beneficial interest in another Global Note in an amount equal to the beneficial interest to be transferred or exchanged and (2) instructions given in accordance with the Applicable Procedures containing information regarding the Participant account to be credited with such increase. Upon consummation of the Exchange Offer by the Company in accordance with Section 2.06(f) hereof, the requirements of this Section 2.06(b)(ii) shall be deemed to have been satisfied upon receipt by the Registrar of the instructions contained in the Letter of Transmittal delivered by the holder of such beneficial interests in the Restricted Global Notes. Upon satisfaction of all of the requirements for transfer or exchange of beneficial interests in Global Notes contained in this Indenture and the Notes or otherwise applicable under the Securities Act, the Trustee shall adjust the principal amount of the relevant Global Note(s) pursuant to Section 2.06(h) hereof.

        (iii)    Transfer of Beneficial Interests to Another Restricted Global Note.    A beneficial interest in any Restricted Global Note may be transferred to a person who takes delivery thereof in the form of a beneficial interest in another Restricted Global Note if the transfer complies with the requirements of Section 2.06(b)(ii) above and the Registrar receives the following:

        (A)  if the transferee will take delivery in the form of a beneficial interest in a 144A Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof; and

        (B)  if the transferee will take delivery in the form of a beneficial interest in a Regulation S Global Note, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof.

        (iv)    Transfer and Exchange of Beneficial Interests in a Restricted Global Note for Beneficial Interests in an Unrestricted Global Note.    A beneficial interest in any Restricted Global Note may be exchanged by any holder thereof for a beneficial interest in an Unrestricted Global Note or transferred to a person who takes delivery thereof in the form of a beneficial interest

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in an Unrestricted Global Note if the exchange or transfer complies with the requirements of Section 2.06(b)(ii) above and:

        (A)  such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the holder of the beneficial interest to be transferred, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a person participating in the distribution of the Exchange Notes or (3) a person who is an affiliate (as defined in Rule 144) of the Company;

        (B)  such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

        (C)  such transfer is effected by a Broker-Dealer pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement; or

        (D)  the Registrar receives the following:

        (1)  if the holder of such beneficial interest in a Restricted Global Note proposes to exchange such beneficial interest for a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit C hereto, including the certifications in item (1)(a) thereof; or

        (2)  if the holder of such beneficial interest in a Restricted Global Note proposes to transfer such beneficial interest to a person who shall take delivery thereof in the form of a beneficial interest in an Unrestricted Global Note, a certificate from such holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

        If any such transfer is effected pursuant to subparagraph (B) or (D) of this Section 2.06(b)(iv) at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the aggregate principal amount of beneficial interests transferred pursuant to subparagraph (B) or (D) of this Section 2.06(b)(iv).

        Beneficial interests in an Unrestricted Global Note cannot be exchanged for, or transferred to persons who take delivery thereof in the form of, a beneficial interest in a Restricted Global Note.

        (c)    Transfer and Exchange of Beneficial Interests in Global Notes for Definitive Notes.    A beneficial interest in a Global Note may not be exchanged for a Definitive Note except under the circumstances described in Section 2.06(a) hereof. A beneficial interest in a Global Note may not be transferred to a person who takes delivery thereof in the form of a Definitive Note except under the circumstances described in Section 2.06(a) hereof.

        (d)    Transfer and Exchange of Definitive Notes for Beneficial Interests in Global Notes.

        (i)    Restricted Definitive Notes to Beneficial Interests in Restricted Global Notes.    If any Holder of a Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note or to transfer such Restricted Definitive Note to a person

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who takes delivery thereof in the form of a beneficial interest in a Restricted Global Note, then, upon receipt by the Registrar of the following documentation:

        (A)  if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in a Restricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (2)(a) thereof;

        (B)  if such Restricted Definitive Note is being transferred to a QIB in accordance with Rule 144A, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (1) thereof;

        (C)  if such Restricted Definitive Note is being transferred to a Non-U.S. Person in an offshore transaction in accordance with Rule 903 or Rule 904, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (2) thereof;

        (D)  if such Restricted Definitive Note is being transferred pursuant to an exemption from the registration requirements of the Securities Act in accordance with Rule 144, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(a) thereof;

        (E)  if such Restricted Definitive Note is being transferred to an Institutional Accredited Investor in reliance on an exemption from the registration requirements of the Securities Act other than those listed in subparagraphs (B) through (D) of this Section 2.06(d)(i), a certificate to the effect set forth in Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3)(d) thereof, if applicable;

        (F)  if such Restricted Definitive Note is being transferred to the Company or any of its Subsidiaries, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(b) thereof; or

        (G)  if such Restricted Definitive Note is being transferred pursuant to an effective registration statement under the Securities Act, a certificate to the effect set forth in Exhibit B hereto, including the certifications in item (3)(c) thereof,

the Trustee shall cancel such Restricted Definitive Note, and increase or cause to be increased the aggregate principal amount of, in the case of clause (A) above, the appropriate Restricted Global Note, in the case of clause (B) above, the 144A Global Note, and in the case of clause (C) above, the Regulation S Global Note.

        (ii)    Restricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.    A Holder of a Restricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Restricted Definitive Note to a person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note only if:

        (A)  such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a person participating in the distribution of the Exchange Notes or (3) a person who is an affiliate (as defined in Rule 144) of the Company;

        (B)  such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

        (C)  such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

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        (D)  the Registrar receives the following:

        (1)  if the Holder of such Restricted Definitive Note proposes to exchange such Note for a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(b) thereof; or

        (2)  if the Holder of such Restricted Definitive Note proposes to transfer such Note to a person who shall take delivery thereof in the form of a beneficial interest in the Unrestricted Global Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so requests or if the Applicable Procedures so require, an Opinion of Counsel in form reasonably acceptable to the Registrar to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

Upon satisfaction of the conditions of any of the subparagraphs in this Section 2.06(d)(ii), the Trustee shall cancel such Restricted Definitive Note and increase or cause to be increased the aggregate principal amount of the Unrestricted Global Note.

        (iii)    Unrestricted Definitive Notes to Beneficial Interests in Unrestricted Global Notes.    A Holder of an Unrestricted Definitive Note may exchange such Note for a beneficial interest in an Unrestricted Global Note or transfer such Unrestricted Definitive Note to a person who takes delivery thereof in the form of a beneficial interest in an Unrestricted Global Note at any time. Upon receipt of a request for such an exchange or transfer, the Trustee shall cancel the applicable Unrestricted Definitive Note and increase or cause to be increased the aggregate principal amount of the applicable Unrestricted Global Note.

        If any exchange or transfer from a Definitive Note to a beneficial interest in a Global Note is effected pursuant to subparagraph (ii)(B), (ii)(D) or (iii) of this Section 2.06(d) at a time when an Unrestricted Global Note has not yet been issued, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of Definitive Notes so transferred.

        (e)    Transfer and Exchange of Definitive Notes for Definitive Notes.    Upon request by a Holder of Definitive Notes and such Holder's compliance with the provisions of this Section 2.06(e), the Registrar shall register the transfer or exchange of Definitive Notes. Prior to such registration of transfer or exchange, the requesting Holder shall present or surrender to the Registrar the Definitive Notes duly endorsed or accompanied by a written instruction of transfer in form satisfactory to the Registrar duly executed by such Holder or by its attorney, duly authorized in writing. In addition, the requesting Holder shall provide any additional certifications, documents and information, as applicable, required pursuant to the following provisions of this Section 2.06(e).

        (i)    Restricted Definitive Notes to Restricted Definitive Notes.    Any Restricted Definitive Note may be transferred to and registered in the name of persons who take delivery thereof in the form of a Restricted Definitive Note if the Registrar receives the following:

        (A)  if the transfer will be made pursuant to Rule 144A, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (1) thereof;

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        (B)  if the transfer will be made pursuant to Rule 903 or Rule 904, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications in item (2) thereof; and

        (C)  if the transfer will be made pursuant to any other exemption from the registration requirements of the Securities Act, then the transferor must deliver a certificate in the form of Exhibit B hereto, including the certifications, certificates and Opinion of Counsel required by item (3)(d) thereof, if applicable.

        (ii)    Restricted Definitive Notes to Unrestricted Definitive Notes.    Any Restricted Definitive Note may be exchanged by the Holder thereof for an Unrestricted Definitive Note or transferred to a person or persons who take delivery thereof in the form of an Unrestricted Definitive Note if:

        (A)  such exchange or transfer is effected pursuant to the Exchange Offer in accordance with the Registration Rights Agreement and the Holder, in the case of an exchange, or the transferee, in the case of a transfer, certifies in the applicable Letter of Transmittal that it is not (1) a Broker-Dealer, (2) a person participating in the distribution of the Exchange Notes or (3) a person who is an affiliate (as defined in Rule 144) of the Company;

        (B)  any such transfer is effected pursuant to the Shelf Registration Statement in accordance with the Registration Rights Agreement;

        (C)  any such transfer is effected by a Broker-Dealer pursuant to the Exchange Offer Registration Statement in accordance with the Registration Rights Agreement; or

        (D)  the Registrar receives the following:

        (1)  if the Holder of such Restricted Definitive Note proposes to exchange such Note for an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit C hereto, including the certifications in item (1)(c) thereof; or

        (2)  if the Holder of such Restricted Definitive Note proposes to transfer such Note to a person who shall take delivery thereof in the form of an Unrestricted Definitive Note, a certificate from such Holder in the form of Exhibit B hereto, including the certifications in item (4) thereof;

and, in each such case set forth in this subparagraph (D), if the Registrar so requests, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such exchange or transfer is in compliance with the Securities Act and that the restrictions on transfer contained herein and in the Private Placement Legend are no longer required in order to maintain compliance with the Securities Act.

        (iii)    Unrestricted Definitive Notes to Unrestricted Definitive Notes.    A Holder of an Unrestricted Definitive Note may transfer such Note to a person who takes delivery thereof in the form of an Unrestricted Definitive Note. Upon receipt of a request to register such a transfer, the Registrar shall register the Unrestricted Definitive Note pursuant to the instructions from the Holder thereof.

        (f)    Exchange Offer.    Upon the occurrence of the Exchange Offer in accordance with the Registration Rights Agreement, the Company shall issue and, upon receipt of an Authentication Order in accordance with Section 2.02 hereof, the Trustee shall authenticate (i) one or more Unrestricted Global Notes in an aggregate principal amount equal to the principal amount of the beneficial interests in the Restricted Global Notes tendered for acceptance by persons that certify in the applicable Letters of Transmittal that (x) they are not broker-dealers, (y) they are not participating in a distribution of the Exchange Notes and (z) they are not affiliates (as defined in Rule 144) of the Company, and accepted for exchange in the Exchange Offer and (ii) Definitive

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Notes in an aggregate principal amount equal to the principal amount of the Restricted Definitive Notes accepted for exchange in the Exchange Offer. Concurrently with the issuance of such Notes, the Trustee shall cause the aggregate principal amount of the applicable Restricted Global Notes to be reduced accordingly, and the Company shall execute and the Trustee shall authenticate and deliver to the persons designated by the Holders of Definitive Notes so accepted Definitive Notes in the appropriate principal amount.

        (g)    Legends.    The following legends shall appear on the face of all Global Notes and Definitive Notes issued under this Indenture unless specifically stated otherwise in the applicable provisions of this Indenture.

        (i)    Private Placement Legend.

        (A)  Except as permitted by subparagraph (B) below, each Global Note and each Definitive Note (and all Notes issued in exchange therefor or substitution thereof) shall bear the legend in substantially the following form:

        "THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2), (3) or (7) OF REGULATION D IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (5) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION AVAILABLE UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES."

        (B)  Notwithstanding the foregoing, any Global Note or Definitive Note issued pursuant to subparagraph (b)(iv), (d)(ii), (d)(iii), (e)(ii), (e)(iii) or (f) of this Section 2.06 (and all Notes issued in exchange therefor or substitution thereof) shall not bear the Private Placement Legend.

        (ii)    Global Note Legends.    Each Global Note shall bear legends in substantially the following form:

        "THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE,

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(III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF ITS ISSUER."

"UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN."

        (iii)    Regulation S Temporary Global Note Legend.    The Regulation S Temporary Global Note shall bear a legend in substantially the following form:

        "THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN)."

        (h)    Cancellation and/or Adjustment of Global Notes.    At such time as all beneficial interests in a particular Global Note have been exchanged for Definitive Notes or a particular Global Note has been redeemed, repurchased or canceled in whole and not in part, each such Global Note shall be returned to, or retained, and canceled by the Trustee in accordance with Section 2.11 hereof. At any time prior to such cancellation, if any beneficial interest in a Global Note is exchanged for or transferred to a person who will take delivery thereof in the form of a beneficial interest in another Global Note or for Definitive Notes, the principal amount of Notes represented by such Global Note shall be reduced accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such reduction; and if the beneficial interest is being exchanged for or transferred to a person who will take delivery thereof in the form of a beneficial interest in another Global Note, such other Global Note shall be increased accordingly and an endorsement shall be made on such Global Note by the Trustee or by the Depository at the direction of the Trustee to reflect such increase.

        (i)    General Provisions Relating to Transfers and Exchanges.

        (i)    To permit registrations of transfers and exchanges, the Company shall execute and the Trustee shall authenticate Global Notes and Definitive Notes upon receipt of an Authentication Order or at the Registrar's request.

        (ii)  No service charge shall be made to a holder of a beneficial interest in a Global Note or to a Holder of a Definitive Note for any registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any transfer tax or similar governmental charge payable in connection therewith (other than any such transfer taxes or similar governmental charge payable upon exchange or transfer pursuant to Sections 2.07, 2.10, 3.06, and 9.05 hereof).

        (iii)  All Global Notes and Definitive Notes issued upon any registration of transfer or exchange of Global Notes or Definitive Notes shall be the valid obligations of the Company, evidencing the same debt, and entitled to the same benefits under this Indenture, as the Global Notes or Definitive Notes surrendered upon such registration of transfer or exchange.

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        (iv)  The Registrar shall not be required (A) to issue, to register the transfer of or to exchange any Notes during a period beginning at the opening of business 15 days before the day of any selection of Notes for redemption under Section 3.02 hereof and ending at the close of business on the day of selection, (B) to register the transfer of or to exchange any Note so selected for redemption in whole or in part, except the unredeemed portion of any Note being redeemed in part or (C) to register the transfer of or to exchange a Note between a record date and the next succeeding Interest Payment Date.

        (v)  Prior to due presentment for the registration of a transfer of any Note, the Trustee, any Agent and the Company may deem and treat the person in whose name any Note is registered as the absolute owner of such Note for the purpose of receiving payment of principal of and interest on such Notes and for all other purposes, and none of the Trustee, any Agent or the Company shall be affected by notice to the contrary.

        (vi)  The Trustee shall authenticate Global Notes and Definitive Notes in accordance with the provisions of Section 2.02 hereof.

        (vii) All certifications, certificates and Opinions of Counsel required to be submitted to the Registrar pursuant to this Section 2.06 to effect a registration of transfer or exchange may be submitted by facsimile.

        (viii)  Each Holder of a Note agrees to indemnify the Company and the Trustee against any liability that may result from the transfer, exchange or assignment of such Holder's Note in violation of any provision of this Indenture and/or applicable United States federal or state securities law.

The Trustee shall have no obligation or duty to monitor, determine or inquire as to compliance with any restrictions on transfer imposed under this Indenture or under applicable law with respect to any transfer of any interest in any Note (including any transfers between or among Depository Participants or beneficial owners of interests in any Global Note) other than to require delivery of such certificates and other documentation or evidence as are expressly required by, and to do so if and when expressly required by the terms of, this Indenture, and to examine the same to determine substantial compliance as to form with the express requirements hereof.

        2.07    Replacement Notes.

        If a mutilated Note is surrendered to the Trustee or the Company or if the Holder of a Note claims that the Note has been lost, destroyed or wrongfully taken and the Trustee receives evidence to its satisfaction of such loss, destruction or wrongful taking, the Company shall issue and the Trustee, upon receipt of an Authentication Order, shall authenticate a replacement Note if the Trustee's requirements are met. If required by the Trustee or the Company, such Holder must provide an indemnity bond or other indemnity, sufficient in the judgment of both the Company and the Trustee, to protect the Company, the Trustee or any Paying Agent or Registrar from any loss which any of them may suffer if a Note is replaced. The Company may charge such Holder for its reasonable out-of-pocket expenses in replacing a Note, including reasonable fees and disbursements of counsel. Every replacement Note is an additional obligation of the Company and the Guarantors.

        The provisions of this Section 2.07 are (to the extent permitted by law) exclusive and shall preclude (to the extent lawful) all other rights and remedies with respect to the replacement of mutilated, lost, destroyed or wrongfully taken Notes.

        2.08    Outstanding Notes.

        The Notes outstanding at any time are all the Notes that have been authenticated by the Trustee except those cancelled by it, those delivered to it for cancellation, those reductions in the interest in a Global Note effected by the Trustee in accordance with the provisions hereof and those described in this Section as not outstanding. Except as set forth in Section 2.09 hereof, a Note does not cease to be outstanding because the Company or any of its Affiliates holds the Note; however, Notes held by the Company or a Subsidiary of the Company shall not be deemed to be outstanding for purposes of Section 3.07(b) hereof.

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        If a Note is replaced pursuant to Section 2.07 hereof (other than a mutilated Note surrendered for replacement), it ceases to be outstanding unless the Trustee receives proof satisfactory to it that the replaced Note is held by a bona fide purchaser. A mutilated Note ceases to be outstanding upon surrender of such Note and replacement thereof pursuant to Section 2.07 hereof.

        If the principal amount of any Note is considered paid under Section 4.01 hereof, it ceases to be outstanding and interest and Liquidated Damages, if any, on it ceases to accrue.

        If on a Redemption Date or a Maturity Date the Paying Agent (other than the Company, a Subsidiary of the Company or an Affiliate of the Company or of a Subsidiary of the Company) holds cash designated and set aside for and sufficient to pay all of the principal, interest, Liquidated Damages (if any) and all other amounts due on the Notes payable on that date, and is not prohibited from paying such cash to the holders of such Notes pursuant to the terms of this Indenture, then on and after that date such Notes cease to be outstanding and interest on them shall cease to accrue.

        2.09    Treasury Notes.

        In determining whether the Holders of the required principal amount of Notes have concurred in any direction, waiver or consent, Notes owned by the Company or any of its Affiliates shall be disregarded, except that, for the purposes of determining whether the Trustee shall be protected in relying on any such direction, waiver or consent, only Notes that the Trustee knows or has reason to know are so owned shall be so disregarded.

        2.10    Temporary Notes.

        Until certificates representing permanent Notes are prepared and ready for delivery, the Company may prepare and the Trustee, upon receipt of an Authentication Order, shall authenticate temporary Notes. Temporary Notes shall be substantially in the form of permanent Notes but may have variations that the Company considers appropriate for temporary Notes and as shall be reasonably acceptable to the Trustee. Without unreasonable delay, the Company shall prepare and the Trustee shall authenticate permanent Notes in exchange for temporary Notes. Until such exchange, temporary Notes shall be entitled to the same rights, benefits and privileges as permanent Notes and shall be entitled to all of the benefits of this Indenture.

        2.11    Cancellation.

        The Company at any time may deliver Notes to the Trustee for cancellation. The Registrar and the Paying Agent shall forward to the Trustee any Notes surrendered to them for transfer, exchange or payment. The Trustee, or at the direction of the Trustee, the Registrar or the Paying Agent (other than the Company or an Affiliate of the Company), and no one else, shall promptly cancel all Notes surrendered for transfer, exchange, payment, replacement or cancellation and shall dispose of the Notes in accordance with its customary procedures (subject to the record retention requirement of the Exchange Act). Subject to Section 2.07 hereof, the Company may not issue new Notes to replace Notes that it has paid or delivered to the Trustee for cancellation. If the Company or any of its Affiliates shall acquire any of the Notes, such acquisition shall not operate as a redemption or satisfaction of the Indebtedness represented by such Notes unless and until the same are surrendered to the Trustee for cancellation pursuant to this Section 2.11.

        2.12    Defaulted Interest.

        If the Company defaults on a payment of interest or Liquidated Damages, if any, on the Notes, it shall pay the defaulted interest or Liquidated Damages, if any, plus (to the extent permitted by law) any interest payable on the defaulted interest and Liquidated Damages, if any, at the rate provided in the Notes and in Section 4.01 hereof and in accordance with the terms hereof, to the persons who are Holders on a subsequent special record date, which date shall be at least five Business Days prior to the payment date. The Company shall fix such special record date and payment date in a manner

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satisfactory to the Trustee. At least 15 days before such special record date, the Company (or, upon the written request of the Company, the Trustee in the name and at the expense of the Company) shall mail to each Holder a notice that states the special record date, the payment date and the amount of defaulted interest and Liquidated Damages, if any, and interest payable on such defaulted interest and Liquidated Damages, if any, to be paid. Notwithstanding the foregoing provisions of this Section 2.12, defaulted interest and Liquidated Damages, if any, may also be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange.

        2.13    CUSIP Number.

        The Company, in issuing the Notes, may use a "CUSIP" number (if then generally in use), and if so, the Trustee may use the CUSIP numbers in notices of redemption or exchange as a convenience to holders; provided, however, that any such notice may state that no representation is made as to the correctness or accuracy of the CUSIP numbers printed in the notice or on the Notes, and that reliance may be placed only on the other identification numbers printed on the Notes, and any such redemption shall not be affected by any defect in or omission of such CUSIP numbers. The Company will promptly notify the Trustee of any change in the CUSIP numbers.

        2.14    Deposit of Moneys.

        On or before each Interest Payment Date, Change of Control Purchase Date, Asset Sale Purchase Date and Maturity Date, the Company shall deposit or cause to be deposited with the Trustee or Paying Agent in immediately available funds money sufficient to make cash payments, if any, due on such Interest Payment Date, Change of Control Purchase Date, Asset Sale Purchase Date or Maturity Date, as the case may be, in a timely manner which permits the Paying Agent to remit timely payment to the Holders on such Interest Payment Date, Change of Control Purchase Date, Asset Sale Purchase Date or Maturity Date, as the case may be.

ARTICLE THREE

REDEMPTION OF NOTES

        3.01    Notices to the Trustee.

        If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, it shall furnish the Trustee an Officers' Certificate setting forth (i) the clause of this Indenture pursuant to which the redemption shall occur, (ii) the Redemption Date, (iii) the principal amount of Notes to be redeemed and (iv) the Redemption Price, and stating that such redemption will comply with the provisions hereof and of the Notes, at least 45 days but not more than 90 days (unless a shorter or longer period is acceptable to the Trustee) before the Redemption Date.

        3.02    Selection of Notes To Be Redeemed.

        In the event that less than all of the Notes are to be redeemed at any time, selection of the particular Notes or portions thereof for redemption will be made by the Trustee in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are then listed or, if the Notes are not so listed, on a pro rata basis, by lot or by such method as the Trustee shall deem fair and appropriate; provided, however, that, except as described in the following paragraph, no Notes shall be redeemed except in a principal amount of $1,000 or an integral multiple of $1,000. In the event of partial redemption by lot pursuant to Section 3.07 hereof, the particular Notes to be redeemed shall be selected, unless otherwise provided herein, not less than 30 nor more than 60 days prior to the redemption date by the Trustee from the outstanding Notes not previously called for redemption.

        The Trustee shall promptly notify the Company and the Registrar in writing of the Notes selected for redemption and, in the case of any Notes selected for partial redemption, the principal amount

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thereof to be redeemed. Notes and portions of Notes selected shall be in amounts of $1,000 or whole multiples of $1,000; no Notes of $1,000 or less shall be redeemed in part. Notwithstanding anything in this Section 3.02 to the contrary, if all of the Notes of a Holder are to be redeemed, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be redeemed. Except as provided in the preceding sentence, provisions of this Indenture that apply to Notes called for redemption also apply to portions of Notes called for redemption.

        3.03    Notice of Redemption.

        If the Company elects to redeem Notes pursuant to the optional redemption provisions of Section 3.07 hereof, notice of redemption shall be given by first-class mail, postage prepaid, mailed not less than 30 nor more than 60 days prior to the Redemption Date, to each Holder of Notes to be redeemed, at the address of such Holder appearing in the list of Holders of Notes maintained by the Registrar.

        All notices of redemption shall identify the Notes to be redeemed and shall state:

        (a)  the Redemption Date;

        (b)  the Redemption Price and the amount of accrued interest, if any, and Liquidated Damages, if any, to be paid;

        (c)  that, unless the Company defaults in making the redemption payment, interest on Notes called for redemption ceases to accrue on and after the Redemption Date, and the only remaining right of the Holders of such Notes is to receive payment of the Redemption Price and accrued interest and Liquidated Damages, if any, upon surrender to the Paying Agent of the Notes redeemed;

        (d)  if any Note is to be redeemed in part, the portion of the principal amount of such Note to be redeemed and that on and after the Redemption Date, upon surrender for cancellation of such original Note to the Paying Agent, a new Note or Notes in the aggregate principal amount equal to the unredeemed portion thereof will be issued without charge to the Holder;

        (e)  that Notes called for redemption must be surrendered to the Paying Agent to collect the Redemption Price and the name and address of the Paying Agent;

        (f)    the CUSIP number, if any, relating to such Notes, but that no representation is made as to the correctness or accuracy of any such CUSIP numbers; and

        (g)  the paragraph of the Notes and/or Section of this Indenture pursuant to which the Notes are being redeemed.

        Notice of redemption of Notes to be redeemed at the election of the Company shall be given by the Company or, at the Company's written request, by the Trustee in the name and at the expense of the Company; provided, however, that the Company shall have delivered to the Trustee, at least 45 days prior to the Redemption Date, an Officers' Certificate requesting that the Trustee give such notice and setting forth the information to be stated in such notice as provided in the preceding paragraph, unless the Trustee has waived this requirement of 45 days' written notice.

        3.04    Effect of Notice of Redemption.

        Once notice of redemption is mailed in accordance with Section 3.03, Notes called for redemption become irrevocably due and payable on the Redemption Date and at the Redemption Price. A notice of redemption may not be conditional. Upon surrender to the Paying Agent, such Notes called for redemption shall be paid at the Redemption Price plus accrued interest (and Liquidated Damages, if any) to the Redemption Date, but installments of interest (and Liquidated Damages, if any) whose maturity is on or prior to such Redemption Date shall be payable on the relevant Interest Payment

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Dates to the Holders of record at the close of business on the relevant record dates referred to in the Notes.

        3.05    Deposit of Redemption Price.

        On or prior to any Redemption Date, the Company shall deposit with the Paying Agent an amount of money in same day funds sufficient to pay the Redemption Price of, and accrued interest and Liquidated Damages, if any, on, all the Notes or portions thereof which are to be redeemed on that date, other than Notes or portions thereof called for redemption on that date which have been delivered by the Company to the Trustee for cancellation.

        If the Company complies with the preceding paragraph, then, unless the Company defaults in the payment of such Redemption Price plus accrued interest (and Liquidated Damages, if any) on the Notes (or portions thereof) called for redemption to the Redemption Date, interest (and Liquidated Damages, if any) on the Notes (or portions thereof) called for redemption will cease to accrue on and after the applicable Redemption Date, whether or not such Notes are presented for payment. If any Note (or portion thereof) called for redemption shall not be so paid upon surrender thereof for redemption, the principal thereof and, to the extent lawful, accrued interest (and Liquidated Damages, if any) thereon shall, until paid, bear interest from the Redemption Date at the interest rate provided in the Notes and in Section 4.01 hereof.

        3.06    Notes Redeemed or Purchased in Part.

        Upon surrender to the Paying Agent of a Note which is to be redeemed in part, the Company shall execute and, upon receipt of an Authentication Order, the Trustee shall authenticate and deliver to the Holder of such Note, at the expense of the Company and without service charge, a new Note or Notes with a Guarantee duly endorsed thereon and executed by each Guarantor, of any authorized denomination as requested by such holder in aggregate principal amount equal to the unredeemed portion of the principal of the Note so surrendered.

        3.07    Optional Redemption.

        (a)  Except as set forth in clause (b) of this Section 3.07, the Company shall not have the option to redeem the Notes pursuant to this Section 3.07 prior to July 15, 2006. On or after July 15, 2006, the Notes will be redeemable at any time at the option of the Company, in whole or in part, on not less than 30 days' nor more than 60 days' prior notice, at the Redemption Prices (expressed as percentages of principal amount) set forth below, plus accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date, if redeemed during the twelve-month period beginning on July 15th of the years indicated below:

Redemption Year	Redemption Price
2006	105.000	%
2007	102.500	%
2008 and thereafter	100.000	%

        (b)  Notwithstanding the provisions of clause (a) of this Section 3.07, at any time on or prior to July 15, 2005, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes at a Redemption Price equal to110.000% of the principal amount thereof, plus accrued and unpaid interest and Liquidated Damages, if any, to the Redemption Date, with the Net Cash Proceeds of one or more Qualified Equity Offerings; provided that (i) at least 65% of the aggregate principal amount of Notes issued under this Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and (ii) such redemption shall occur within 60 days of the date of the closing of such Qualified Equity Offering.

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        (c)  Any redemption pursuant to this Section 3.07 shall be made pursuant to the provisions of Sections 3.01 through 3.06 hereof.

        3.08    Mandatory Redemption.

        The Company shall not be required to make mandatory redemption payments with respect to the Notes (however, the Company is required to offer to repurchase Notes in accordance with the provisions of Sections 4.12 and 4.13 hereof). For avoidance of doubt, an offer to purchase pursuant to Section 4.12 or 4.13 hereof shall not be deemed a redemption. The Notes shall not have the benefit of any mandatory sinking fund.

ARTICLE FOUR

COVENANTS

        4.01    Payment of Notes.

        The Company shall pay, or cause to be paid, the principal of and interest and Liquidated Damages, if any, on the Notes on the dates and in the manner provided in the Notes and this Indenture. An installment of principal, interest or Liquidated Damages shall be considered paid on the date due if the Trustee or Paying Agent (other than the Company, a Subsidiary of the Company or any Affiliate thereof) holds as of 3:00 p.m. Eastern time, on the due date money deposited by the Company, in immediately available funds, designated and set aside for and sufficient to pay all principal, interest and Liquidated Damages, if any, then due and is not prohibited from paying such money to the Holders of the Notes pursuant to the terms of this Indenture. The Company shall pay all Liquidated Damages, if any, in the same manner and in the amounts set forth in the Registration Rights Agreement.

        The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal at the then applicable interest rate on the Notes and in the manner provided in the Notes and this Indenture, to the extent lawful; it shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest and Liquidated Damages, if any, at the same rate and in the same manner, to the extent lawful.

        4.02    Maintenance of Office or Agency.

        The Company shall maintain in the Borough of Manhattan, the City of New York, an office or agency (which may be an office of the Trustee or an Affiliate of the Trustee, Registrar or co-registrar) where Notes may be surrendered for registration of transfer or exchange or for presentation for payment and where notices and demands to or upon the Company and the Guarantors in respect of the Notes, the Guarantees and this Indenture may be served. The Company shall give prompt written notice to the Trustee of the location, and any change in the location, of such office or agency. If at any time the Company shall fail to maintain any such required office or agency or shall fail to furnish the Trustee with the address thereof, such presentations, surrenders, notices and demands may be made or served at the address of the Trustee as set forth in Section 13.02 hereof.

        The Company may also from time to time designate one or more other offices or agencies where the Notes may be presented or surrendered for any or all such purposes and may from time to time rescind such designations; provided, however, that no such designation or rescission shall in any manner relieve the Company of its obligation to maintain an office or agency in the Borough of Manhattan, the City of New York for such purposes. The Company shall give prompt written notice to the Trustee of any such designation or rescission and of any change in the location of any such other office or agency.

        The Company hereby designates the Corporate Trust Office of the Trustee in New York City as one such office or agency of the Company in accordance with Section 2.03 hereof.

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        4.03    Corporate Existence.

        Subject to Article Five and Section 10.03 hereof, the Company shall do or cause to be done all things necessary to, and will cause each of the Guarantors to, preserve and keep in full force and effect (i) the corporate, partnership or other, as the case may be, existence of the Company and each of the Guarantors, in accordance with their respective organizational documents (as the same may be amended from time to time) and (ii) the rights (charter and statutory), licenses and franchises of the Company and each of the Guarantors; provided, however, that the Company or any of the Guarantors shall not be required to preserve any such rights, licenses or franchises if the Board of Directors of the Company shall reasonably determine that (a) the preservation thereof is no longer desirable in the conduct of the business of the Company and the Guarantors taken as a whole and (b) the loss thereof is not materially adverse to either the Company and the Guarantors taken as a whole or to the ability of the Company or any of the Guarantors to otherwise satisfy its obligations hereunder.

        4.04    Payment of Taxes and Other Claims.

        The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (a) all taxes, assessments and governmental charges levied or imposed upon the Company or any of the Guarantors or upon the income, profits or property of the Company or any of the Guarantors, and (b) all lawful claims for labor, materials and supplies which, if unpaid, might by law become a Lien upon the property of the Company or any Guarantor; provided, however, that, except as otherwise provided herein or in any Security Document, the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim, the amount, applicability or validity of which is being contested in good faith by appropriate proceedings and for which adequate provision for the payment thereof has been made or where the failure to effect such payment or discharge is not adverse in any material respect to either the Company and the Guarantors taken as a whole or to the ability of the Company or any of the Guarantors to otherwise satisfy its obligations hereunder.

        4.05    Maintenance of Properties; Insurance; Books and Records; Compliance with Law.

        (a)  The Company shall, and shall cause each of the Guarantors to, cause all properties and assets to be maintained and kept in good condition, repair and working order (reasonable wear and tear excepted) and supplied with all necessary equipment, and shall cause to be made all necessary repairs, renewals, replacements, additions, betterments and improvements thereto, as shall be reasonably necessary for the proper conduct of its business; provided, however, that nothing in this Section 4.05(a) shall prevent the Company or any of the Guarantors from discontinuing the operation and maintenance of any of its properties or assets if such discontinuance is, in the judgment of the Board of Directors of the Company or such Guarantor, desirable in the conduct of its business and if such discontinuance is not materially adverse to either the Company and the Guarantor taken as a whole or the ability of the Company or any of the Guarantors to otherwise satisfy its obligations hereunder.

        (b)  The Company shall, and shall cause each of the Guarantors to, maintain with financially sound and reputable insurers such insurance as may be required by law and such other insurance (other than with respect to any environmental impairment liability insurance not commercially available) to such extent and against such hazards and liabilities as is customarily maintained by companies similarly situated (which may include self-insurance in the same form as is customarily maintained by companies similarly situated).

        (c)  The Company shall, and shall cause each of the Guarantors to, keep proper books of record and account, in which full and correct entries shall be made of all business and financial transactions of the Company and each Guarantor and reflect on its financial statements adequate accruals and appropriations to reserves, all in accordance with GAAP.

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        (d)  The Company shall and shall cause each of the Guarantors to comply with all statutes, laws, ordinances, or government rules and regulations to which it is subject, non-compliance with which would materially adversely affect either the Company and the Guarantors taken as a whole or the ability of the Company or any of the Guarantors to otherwise satisfy its obligations hereunder.

        (e)  Nothing in this Section 4.05 shall be deemed to limit any obligations of the Company or any Guarantor under any of the Security Documents.

        4.06    Compliance Certificate.

        (a)  The Company (for itself and each Guarantor) shall deliver to the Trustee within 60 days after the end of each of its first three fiscal quarters and within 90 days after the end of each of its fiscal years an Officers' Certificate stating whether or not the signers know of any Default or Event of Default under this Indenture that occurred during such fiscal period. If they do know of such a Default or Event of Default, the certificate shall describe any such Default or Event of Default and its status (including, without limitation, what action any of the Company and the Guarantors are taking or propose to take with respect thereto). The first certificate to be delivered pursuant to this Section 4.06(a) shall be for the first fiscal quarter of the Company and the Guarantors beginning after the Issue Date. The Company (for itself and each Guarantor) also shall deliver a certificate to the Trustee at least annually from its principal executive, financial or accounting officer (which, in the case of any Guarantor which is a partnership, shall be the principal executive, financial or accounting officer of a direct corporate general partner (or, if there is no such direct corporate general partner, of an indirect corporate general partner) of such partnership or, if there is no such direct or indirect corporate general partner, from any individual performing similar duties on behalf of such partnership) stating that a review of the activities of the Company and the Guarantors during the preceding fiscal year has been made under the supervision of the signing officers with a view to determining whether each of the Company and the Guarantors has kept, observed, performed and fulfilled its obligations under this Indenture and the Security Documents applicable to it, and further stating, as to each such officer signing such certificate, that to the best of his or her knowledge each of the Company and the Guarantors has kept, observed, performed and fulfilled each and every covenant contained in this Indenture and the Security Documents applicable to it and is not in default in the performance or observance of any of the terms, provisions and conditions of this Indenture or the Security Documents applicable to it (or, if a Default shall have occurred and be continuing, describing all such Defaults of which he or she may have knowledge and what action any of the Company and the Guarantors are taking or propose to take with respect thereto) and that to the best of his or her knowledge no event has occurred and remains in existence by reason of which payments on account of the principal of or interest or Liquidated Damages, if any, on the Notes is prohibited or if such event has occurred, a description of the event and what action any of the Company and the Guarantors are taking or proposes to take with respect thereto, such compliance, in each case, to be determined without regard to any period of grace or requirement of notice provided herein or therein. The Company shall provide the Trustee with timely written notice of any change in the fiscal year end of the any of the Company or any Guarantor, which, in each case, as of the Issue Date is December 31.

        (b)  The Company shall deliver to the Trustee within 90 days after the end of each fiscal year a written statement by the Company's and each Guarantor's independent certified public accountants stating (i) that their audit examination has included a review of the terms of this Indenture and the form of Notes as they relate to accounting matters, and (ii) whether, in connection with their audit examination, any Default or Event of Default under this Indenture has come to their attention and, if such a Default or Event of Default has come to their attention, specifying the nature and period of existence thereof; provided, however, that, without any restriction as to the scope of the audit examination, such independent certified public accountants

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shall not be liable by reason of any failure to obtain knowledge of any such Default or Event of Default that would not be disclosed in the course of an audit examination conducted in accordance with GAAP.

        (c)  The Company or any of the Guarantors shall deliver to the Trustee as soon as possible, and in any event within 10 days after the Company or any of the Guarantors becomes aware of the occurrence of any Default or Event of Default, an Officers' Certificate specifying such Default or Event of Default and what action the Company and the Guarantors are taking or proposes to take with respect thereto.

        4.07    SEC Reports.

        (a)  Whether or not required by the SEC, so long as any Notes are outstanding, the Company shall furnish to the holders of Notes, within the time periods specified in the SEC's rules and regulations:

        (i)    all quarterly and annual financial information that would be required to be contained in a filing with the SEC on Forms 10-Q and 10-K if the Company were required to file such Forms, including a "Management's Discussion and Analysis of Financial Condition and Results of Operations," any and all separate financial information of the Guarantors required under Rule 3-10 of Regulation S-X under the Securities Act, and, with respect to the annual information only, a report on the annual financial statements by the Company's certified independent accountants; and

        (ii)  all current reports that would be required to be filed with the SEC on Form 8-K if the Company were required to file such reports.

provided, that any information accepted for filing by the SEC shall be deemed to have been furnished to the Holders of Notes for purposes hereof; and provided further, that the Company shall be deemed to have furnished to the Holders of the Notes for purposes hereof the information and reports referred to in clauses (i) and (ii) above upon the Company's delivery to the Trustee of such information and reports, together with a Company Order instructing the Trustee to deliver such information and reports to the Holders of Notes at the Company's expense.

        (b)  In addition, whether or not required by the SEC, the Company shall file a copy of all of the information and reports referred to in clauses (i) and (ii) above with the SEC for public availability within the time periods specified in the SEC's rules and regulations (unless the SEC will not accept such a filing) and make such information available to securities analysts and prospective investors upon request; In accordance with the provisions of TIA § 314(a), the Company, at its expense, shall file with the Trustee, within 15 days after it files them with the SEC (or if any such filing is not permitted under the Exchange Act, 15 days after the Company would have been required to make such filing), copies of such reports and documents.

        (c)  In addition, the Company shall cause the Guarantors to file with the SEC the annual reports, quarterly reports and other documents required to be filed by them pursuant to Sections 13 and 15 of the Exchange Act and, at the Company's expense, to file with the Trustee, within 15 days after filing them with the SEC, copies of such reports and documents which the Guarantors are required to file with the SEC, and to comply, to the extent required, with the provisions of TIA §314(a).

        (d)  So long as any of the Notes are evidenced by Global Notes, the Company also agrees to promptly make available any such reports and documents filed by the Company or any Guarantor to any beneficial owner of Notes upon written request by such beneficial owner.

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        4.08    Limitation on Indebtedness.

        The Company shall not, and shall not permit any of the Guarantors to, directly or indirectly, incur any Indebtedness (including, without limitation, any Redeemable Capital Stock or any Acquired Indebtedness) unless, at the time of such incurrence:

        (1)  the Consolidated Fixed Charge Coverage Ratio of the Company for the Four Quarter Period immediately preceding the date of such incurrence would have been at least equal to 2.0 to 1, calculated on a Pro Forma basis (including Pro Forma application of the net proceeds therefrom) in accordance with the definition thereof, and

        (2)  no Default or Event of Default shall have occurred and shall be continuing at the time of such incurrence or would occur after giving Pro Forma effect to such incurrence (including Pro Forma application of the net proceeds therefrom).

        Notwithstanding the foregoing, the Company and the Guarantors may, to the extent specifically set forth below, incur any or all of the following:

        (a)  Indebtedness of the Company evidenced by the Notes and this Indenture, and Indebtedness of any Guarantor evidenced by its Guarantee of the Notes, in each case, up to the amount being issued on the Issue Date less any amounts repaid, retired or refinanced, and including obligations arising under the Security Documents to the extent that such obligations would constitute Indebtedness;

        (b)  Indebtedness of the Company and the Guarantors outstanding on the Issue Date, in the respective amounts outstanding on the Issue Date less any amounts repaid, retired or refinanced (other than (i) Indebtedness under, or guarantees of Indebtedness under, the Credit Facility, the Notes, the Guarantees, this Indenture and the Security Documents and (ii) Indebtedness under, or guarantees of Indebtedness under, the Old Bank Documents and the Old Note Documents);

        (c)  Indebtedness of the Company and the Guarantors under the Credit Facility; provided, that the aggregate principal amount of all Indebtedness (with letters of credit deemed to have a principal amount equal to the maximum potential liability of the Company and the Guarantors thereunder) outstanding under the Credit Facility after giving effect to such incurrence does not exceed an aggregate principal amount at any time outstanding (including amounts outstanding on the Issue Date) equal to: the greater of (x) $100,000,000 and (y) the sum of 50% of the amount of inventory and 80% of the amount of accounts receivable of the Company and the Guarantors determined on a consolidated basis in accordance with GAAP;

        (d)  (i) Interest Rate Protection Obligations of the Company covering Indebtedness of the Company or a Guarantor and (ii) Interest Rate Protection Obligations of any Guarantor covering Indebtedness of such Guarantor; provided, that in the case of each of clauses (i) and (ii):

        (A)  any Indebtedness to which any such Interest Rate Protection Obligation relates bears interest at fluctuating interest rates and is otherwise permitted to be incurred under this Indenture,

        (B)  such Interest Rate Protection Obligation is entered into in the ordinary course of business in connection with the operations of the business of the Company or the Guarantors, and not for speculative purposes, to hedge against fluctuations in interest rates of such Indebtedness, and

        (C)  the notional principal amount of any such Interest Rate Protection Obligation does not exceed the principal amount of the Indebtedness to which such Interest Rate Protection Obligation relates; provided, however, that the Company and the Guarantors may enter into Interest Rate Protection Obligations relating to Indebtedness which they

52

anticipate will be incurred within thirty days of the incurrence of such Interest Rate Protection Obligation so long as (x) the aggregate notional principal amount of such Interest Rate Protection Obligations does not exceed the lesser of (I) $50,000,000 and (II) the aggregate principal amount of such Indebtedness the Company and the Guarantors anticipate will be incurred, (y) such Interest Rate Protection Obligations are treated as a hedge under GAAP and (z) such Interest Rate Protection Obligations otherwise comply with clauses (A) and (B) above and the other provisions of this subparagraph (d);

        (e)  Indebtedness under Currency Agreements entered into by the Company or any of the Guarantors in the ordinary course of business in connection with the operations of the business of the Company or the Guarantors, and not for speculative purposes, to hedge against fluctuations in foreign exchange rates; provided, that in the case of Currency Agreements which relate to Indebtedness, (i) such Indebtedness is otherwise permitted to be incurred under this Indenture and (ii) such Currency Agreements do not increase the Indebtedness of the Company and the Guarantors outstanding other than as a result of fluctuations in foreign currency exchange rates or by reason of fees, indemnities and compensation payable thereunder;

        (f)    Indebtedness of a Guarantor owed to and held by the Company or a Guarantor; provided, that

        (i)    any such Indebtedness shall be unsecured,

        (ii)  any such Indebtedness also shall be contractually subordinated in all respects to the Guarantee of such Guarantor, and

        (iii)  (A) any transfer of such Indebtedness by the Company or by a Guarantor (other than to the Company or to a Guarantor and other than to the Revolver Agent as a result of the grant of a security interest therein to secure the obligations of the Company and the Guarantors under the Credit Facility) and (B) any event that causes the Guarantor lender to no longer be a Guarantor shall, in each case under clause (A) or (B), be deemed to be a new incurrence of Indebtedness by the Guarantor borrower (and any guarantors of such Indebtedness) at the time of such transfer, issuance, sale or other disposition, and such incurrence shall be subject to all of the provisions of this Section 4.08;

        (g)  Indebtedness of the Company owed to and held by a Guarantor; provided, that:

        (i)    such Indebtedness shall be unsecured and contractually subordinated to the prior payment in full in cash of, and in all other respects to, the Notes, and

        (ii)  (A) any transfer of such Indebtedness by the Company or by a Guarantor (other than to another Guarantor and other than to the Revolver Agent as a result of the grant of a security interest therein to secure the obligations of the Company and the Guarantors under the Credit Facility) and (B) any event that causes the Guarantor lender to no longer be a Guarantor shall, in each case under clause (A) or (B), be deemed to be a new incurrence of Indebtedness by the Company (and any guarantors of such Indebtedness) at the time of such transfer, issuance, sale or other disposition, and such incurrence shall be subject to all of the provisions of this Section 4.08;

        (h)  Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar instrument inadvertently (except in the case of daylight overdrafts) drawn against insufficient funds in the ordinary course of business; provided, however, that such Indebtedness is extinguished within two Business Days of incurrence;

        (i)    Indebtedness (including Indebtedness represented by letters of credit) incurred in respect of bid or performance bonds provided by the Company or the Guarantors in the ordinary course

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of business consistent with customary industry practices and not in connection with or in respect of liabilities for borrowed money, obligations evidenced by notes, debentures or other similar instruments, Capital Leases or guarantees in respect thereof or other Indebtedness;

        (j)    Indebtedness of the Company or any of the Guarantors represented by letters of credit for the account of the Company or such Guarantor, as the case may be, in order to provide security for workers' compensation claims, payment obligations in connection with self-insurance or similar requirements provided by the Company or the Guarantors in the ordinary course of business consistent with customary industry practices and not in connection with or in respect of liabilities for borrowed money, obligations evidenced by notes, debentures or other similar instruments, Capital Leases or guarantees in respect thereof or other Indebtedness;

        (k)  unsecured Indebtedness of CF&I evidenced by any promissory note which CF&I is required to deliver to the limited partners of CF&I pursuant to Section 7.1 of the CF&I Partnership Agreement (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) or incurred pursuant to Section 7.3-2(ii)(2) of the CF&I Partnership Agreement (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) to finance a shortfall in a required cash distribution to the limited partners of CF&I, less the aggregate amount of any payments or deemed payments in respect thereof out of Distributable Cash (as defined in the CF&I Partnership Agreement) or otherwise;

        (l)    Permitted Refinancing Indebtedness;

        (m)  Acquired Indebtedness; provided, that with respect to any Acquired Indebtedness incurred and outstanding pursuant to this clause (m), (i) it shall have been in existence prior to the contemplation of the acquisition, consolidation, merger or other transaction, and not incurred in connection with, or in contemplation of, such transaction, and (ii) either (A) the aggregate amount of such Acquired Indebtedness (together with any Indebtedness incurred to refinance, replace, refund, renew or extend any such Indebtedness, including Permitted Refinancing Indebtedness) shall not exceed $10,000,000 outstanding at any time or (B) immediately after giving effect to such transaction, the Company shall be able to incur an additional $1.00 of Indebtedness under the first paragraph of this Section 4.08;

        (n)  Capitalized Lease Obligations, mortgage financings or purchase money obligations, in each case, incurred for the purpose of financing all or any part of the purchase price or cost of development, construction, installation or improvement of property, plant or equipment used in the business of the Company or the Guarantors, in an aggregate amount (together with any Indebtedness incurred to refinance, replace, refund, renew or extend any such Indebtedness, including Permitted Refinancing Indebtedness) not to exceed $10,000,000 at any time outstanding pursuant to this clause (n); provided, that the principal amount of the Indebtedness incurred with respect to any particular property, plant or equipment does not exceed 100% of the cost of such acquisition, development, construction, installation or improvement of such property, plant or equipment; and

        (o)  Indebtedness of the Company or any Guarantor, in addition to that described in clauses (a) through (n) above, in an aggregate principal amount outstanding at any time not exceeding $50,000,000;

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        For purposes of determining compliance with this Section 4.08, in the event that an item of Indebtedness meets the criteria of more than one of the categories of permitted Indebtedness described in clauses (d) through (o) of this Section 4.08, or is entitled to be incurred pursuant to the first paragraph of this Section 4.08, the Company shall, in its sole discretion, classify such item of Indebtedness in any manner that complies with this Section 4.08 (provided, that all Indebtedness under the Credit Facility outstanding on the Issue Date shall be deemed to have been incurred pursuant to clause (c) of this Section 4.08 and all Indebtedness evidenced by the Notes, this Indenture, the Guarantees and the Security Documents shall be deemed to have been incurred pursuant to clause (a) of this Section 4.08) and may later reclassify such Indebtedness into any one or more of the categories described in any of clauses (d) through (o) of this Section 4.08 (provided, that at the time of reclassification it meets the criteria in such category or categories).

        4.09    Limitation on Restricted Payments.

        The Company shall not, and shall not permit any of the Guarantors to, directly or indirectly:

        (a)  declare or pay any dividend or make any other distribution or payment on or in respect of Capital Stock of the Company or any of the Guarantors or to the direct or indirect holders (in their capacities as such) of Capital Stock of the Company or any of the Guarantors (other than (i) dividends or distributions payable solely in Capital Stock of the Company (other than Redeemable Capital Stock) or in options, warrants or other rights to purchase Capital Stock of the Company (other than Redeemable Capital Stock) or (ii) the declaration or payment of dividends or other distributions to the extent declared or paid to the Company or a Guarantor),

        (b)  purchase, redeem, defease or otherwise acquire or retire for value any Capital Stock of the Company or any of the Guarantors (other than any such Capital Stock owned by the Company or by a Guarantor),

        (c)  make any principal payment on, or purchase, defease, repurchase, redeem or otherwise acquire or retire for value, prior to any scheduled maturity, scheduled repayment, scheduled sinking fund payment or other Stated Maturity, any Subordinated Indebtedness or Pari Passu Indebtedness (other than any such Indebtedness owned by the Company or a Guarantor and other than any such Pari Passu Indebtedness under the Credit Facility), or

        (d)  make any Investment (other than any Permitted Investment) in any person, (such payments or Investments described (and not excluded) in the preceding clauses (a), (b), (c) and (d) are individually referred to as a "Restricted Payment" and collectively referred to as "Restricted Payments"), unless, at the time of and after giving effect to the proposed Restricted Payment (the amount of any such Restricted Payment, if other than cash, shall be the Fair Market Value on the date of such Restricted Payment of the property, assets or securities proposed to be transferred or issued by the Company or such Guarantor, as the case may be, pursuant to such Restricted Payment):

        (A)  no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof,

        (B)  immediately prior to and after giving effect on a Pro Forma basis to such Restricted Payment as if it had been made at the beginning of the applicable Four Quarter Period, the Company would have been permitted to incur at least $1.00 of additional Indebtedness pursuant to the first paragraph of Section 4.08 (assuming a market rate of interest with respect to such additional Indebtedness), and

        (C)  such Restricted Payment, together with the aggregate amount of all other Restricted Payments declared or made on and after the Issue Date (excluding Restricted Payments permitted by clauses (ii), (iii), (iv), (v), (vi), (vii) and (viii) of the following

55

paragraph but including Restricted Payments permitted by clause (i) of the following paragraph), would not exceed the sum (without duplication) of:

        (1)  50% of the aggregate Consolidated Net Income of the Company for the period (taken as one accounting period) (or, if Consolidated Net Income of the Company for such period shall be a negative number, 100% of such negative number) beginning on the first day of the fiscal quarter of the Company during which the Issue Date occurs and ending on the last day of the fiscal quarter of the Company (for which internal financial statements are available) immediately preceding the date of such proposed Restricted Payment, plus

        (2)  100% of the aggregate Net Cash Proceeds received by the Company after the Issue Date either (x) as Capital Contributions to the Company after the Issue Date from any person (other than a Subsidiary of the Company) or (y) from the issuance or sale of Capital Stock (excluding Redeemable Capital Stock, but including Capital Stock (other than Redeemable Capital Stock) issued upon the conversion of convertible Indebtedness or from the exercise of options, warrants or rights to purchase Capital Stock (other than Redeemable Capital Stock)) of the Company to any person (other than to a Subsidiary of the Company) after the Issue Date, plus

        (3)  to the extent not otherwise included in the calculation of Consolidated Net Income for purposes of clause (1) above, in the case of the disposition or repayment in cash of any Investment (which Investment was made after the Issue Date and which constituted a Restricted Payment (excluding any Investment described in clause (x) of the definition of "Permitted Investments")), an amount equal to the lesser of the (x) "cash return of capital" (as defined below) with respect to such Investment and (y) the initial amount of such Investment, in each case, less the cost of the disposition of such Investment, plus

        (4)  to the extent not otherwise included in clause (1), (2) or (3) above of this subparagraph (C), to the extent that any Unrestricted Subsidiary of the Company is redesignated as a Guarantor after the Issue Date, the lesser of (x) the Fair Market Value of the Company's Investment in such Guarantor as of such date of redesignation and (y) the Company's actual Investment in such Subsidiary as of the date on which such Subsidiary was originally designated as an Unrestricted Subsidiary, to the extent such Investment originally constituted a Restricted Payment.

For purposes of clause (C)(2) above, the value of the aggregate Net Cash Proceeds received by the Company upon the issuance of Capital Stock upon the conversion of convertible Indebtedness or upon the exercise of options, warrants or rights will be the Net Cash Proceeds received upon the issuance of such Indebtedness, options, warrants or rights plus the incremental cash amount received by the Company upon the conversion or exercise thereof, in each case, after the Issue Date. As used in clause (C)(3) above, "cash return of capital" with respect to an Investment means the sum of (x) the aggregate amount of any dividends, payments of interest on Indebtedness, repayments of loans or advances or other distributions, in each case, in cash, with respect to, and (y) the aggregate net proceeds received by the Company and the Guarantors upon the sale or other disposition of, such Investment after the Issue Date.

        None of the foregoing provisions will prohibit:

          (i)  the payment of any dividend within 60 days after the date of its declaration, if at the date of declaration such payment would be permitted by the foregoing paragraph;

        (ii)  so long as no Default or Event of Default shall have occurred and be continuing, the redemption, repurchase or other acquisition or retirement of any shares of any class of Capital

56

Stock of the Company or any Guarantor in exchange for, or out of the Net Cash Proceeds of, a substantially concurrent (x) Capital Contribution to the Company from any person (other than a Subsidiary of the Company) or (y) issue and sale of other shares of Capital Stock (other than Redeemable Capital Stock) of the Company to any person (other than to a Subsidiary of the Company); provided, however, that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase or other acquisition or retirement shall be excluded from clause (C)(2) of the preceding paragraph;

        (iii)  so long as no Default or Event of Default shall have occurred and be continuing, any redemption, repurchase or other acquisition or retirement of Subordinated Indebtedness by exchange for, or out of the Net Cash Proceeds of, a substantially concurrent (x) Capital Contribution to the Company from any person (other than a Subsidiary of the Company) or (y) issue and sale of:

        (1)  Capital Stock (other than Redeemable Capital Stock of the Company to any person (other than to a Subsidiary of the Company); provided, however, that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase or other acquisition or retirement shall be excluded from clause (C)(2) of the preceding paragraph; or

        (2)  Indebtedness of the Company issued to any person (other than a Subsidiary of the Company), so long as such Indebtedness is permitted to be incurred by the other provisions of this Indenture and is Subordinated Indebtedness which (x) has a final Stated Maturity after the 123rd day after the Final Maturity Date, (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Notes and (z) is subordinated to the Notes in the same manner and at least to the same extent as the Subordinated Indebtedness so purchased, exchanged, redeemed, acquired or retired;

        (iv)  so long as no Default or Event of Default shall have occurred and be continuing, any redemption, repurchase or other acquisition or retirement of Pari Passu Indebtedness by exchange for, or out of the Net Cash Proceeds of, a substantially concurrent (x) Capital Contribution to the Company from any person (other than a Subsidiary of the Company) or (y) issue and sale of:

        (1)  Capital Stock (other than Redeemable Capital Stock of the Company to any person (other than to a Subsidiary of the Company); provided, however, that the amount of any such Net Cash Proceeds that are utilized for any such redemption, repurchase or other acquisition or retirement shall be excluded from clause (C)(2) of the preceding paragraph; or

        (2)  Indebtedness of the Company issued to any person (other than a Subsidiary of the Company), so long as such Indebtedness is permitted to be incurred by the other provisions of this Indenture and is Subordinated Indebtedness or Pari Passu Indebtedness which (x) has a final Stated Maturity after the 123rd day after the Final Maturity Date and (y) has an Average Life to Stated Maturity equal to or greater than the remaining Average Life to Stated Maturity of the Notes;

        (v)  application of the net proceeds from the issuance and sale of the Notes to discharge Indebtedness under the Old Notes and to repay Indebtedness under the Old Credit Agreement;

        (vi)  the declaration or payment of distributions by CF&I to the limited partners and the general partner of CF&I in accordance with the terms of the CF&I Partnership Agreement as

57

in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof); and

      (vii)  (A) the purchase by the Company or New CF&I of all of the interest of the limited partners in CF&I (including any promissory note delivered to such by CF&I pursuant to Section 7.1 of the CF&I Partnership Agreement) pursuant to and in accordance with Section 14 of the CF&I Partnership Agreement (in each case, as such agreement is in effect on the Issue Date without giving effect to any subsequent amendment or modification thereto), and (B) the purchase by the Company or CF&I of all of the Capital Stock of New CF&I owned by Nippon Steel Corporation, NS Finance III, Inc., Nissho Iwai Corporation or Nissho Iwai American Corporation pursuant to and in accordance with paragraph 4(e), (f) or (g) of the CF&I Stockholders Agreement (as in effect on the Issue Date without giving effect to any subsequent amendment or modification thereto); and

      (viii)  other Restricted Payments pursuant to this clause (viii) not to exceed $20,000,000 in the aggregate from and after the Issue Date.

        In addition, none of the foregoing provisions will prohibit the Company or any of the Guarantors from continuing to own any Investment which it owned on the Issue Date.

        Not later than the date of making any Restricted Payment pursuant to clause (a), (b) or (c) of the first paragraph of this Section 4.09 or any Restricted Payment in excess of (or series of Restricted Payments in the aggregate in excess of) $2,500,000, the Company shall deliver to the Trustee an Officers' Certificate stating that such Restricted Payment is permitted and setting forth the basis upon which the calculations required by this Section 4.09 were computed, together with a copy of any opinion or appraisal required by this Indenture.

        4.10    Limitation on Issuances and Sale of Capital Stock by Guarantors.

        The Company (a) will not permit any of the Guarantors to issue any Capital Stock (other than to the Company or to a Guarantor) and (b) will not permit any person (other than the Company or a Guarantor) to own any Capital Stock of any Guarantor; provided, that:

          (i)  this covenant shall not prohibit the issuance and sale of (x) all, but not less than all, of the issued and outstanding Capital Stock of any Guarantor owned by the Company and any other Guarantor in compliance with the other provisions of this Indenture (including, without limitation, Section 4.13 hereof, including, without limitation, the application of the Net Cash Proceeds from such Asset Sale in accordance with Section 4.13 hereof) or (y) directors' qualifying shares or investments by foreign nationals mandated by applicable law;

        (ii)  clause (b) of this Section 4.10 shall not apply to any Capital Stock of CF&I or New CF&I which, on the Issue Date, was not owned by the Company or a Guarantor, so long as there is no increase in the percentage of the outstanding Capital Stock of CF&I or New CF&I which is owned by persons other than the Company and the Guarantors (it being understood that an increase in the capital account of the limited partners of CF&I pursuant to the terms of the CF&I Partnership Agreement (otherwise than pursuant to an additional contribution by the limited partners to the partnership) shall not be deemed, in and of itself, to be an increase in the percentage of CF&I's Capital Stock owned by persons other than the Company and the Guarantors); and

        (iii)  clause (b) of this Section 4.10 shall not apply to any Capital Stock of any Guarantor acquired by the Company after the Issue Date if less than all of the Capital Stock is acquired by the Company, so long as there is no increase in the percentage of the outstanding Capital Stock of that Guarantor which is owned by persons other than the Company and any other Guarantor.

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        4.11    Limitation on Liens.

        The Company shall not, and shall not permit any of the Guarantors to, directly or indirectly, (a) incur or suffer to exist or become effective any Lien of any kind against or upon (i) any item of Collateral (whether owned on the Issue Date or thereafter acquired) or any income, profit or proceeds therefrom or (ii) any other property or assets of the Company or any of the Guarantors (whether owned on the Issue Date or thereafter acquired) or any income, profit or proceeds therefrom, or (b) assign or convey any right to receive any such income, profit or proceeds therefrom, except, in the case of each of clauses (a) and (b), for Permitted Liens.

        Notwithstanding the foregoing, the Company and the Guarantors may incur Liens on property or assets referred to in clause (a)(ii) above or income, profit or proceeds therefrom if (x) in the case of Liens securing Subordinated Indebtedness, the Notes and the Guarantees are secured contemporaneously therewith or prior thereto by a Lien on such property, assets, income, profits and proceeds and each such Lien securing such Subordinated Indebtedness is by its terms expressly subordinate to and junior in right of payment and in all other respects to the Liens on such property, assets, income, profits and proceeds securing the Notes and the Guarantees with the same relative subordination that such Subordinated Indebtedness has with respect to the Notes and the Guarantees and (y) in all other cases, the Notes are equally and ratably secured contemporaneously therewith or prior thereto with the obligations so secured.

        4.12    Change of Control.

        Upon the occurrence of a Change of Control, the Company shall make an offer to purchase (a "Change of Control Offer"), on a Business Day (the "Change of Control Purchase Date") not more than 60 days nor less than 30 days following the date of mailing of the Change of Control Notice (as defined below) to holders of Notes, all of the then outstanding Notes at a purchase price (the "Change of Control Purchase Price") equal to 101% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the Change of Control Purchase Date.

        In order to effect such Change of Control Offer, the Company shall, not later than the 30th day after the occurrence of the Change of Control, mail to each Holder a notice of the Change of Control Offer (the "Change of Control Notice") describing the transaction or transactions that constitute the Change of Control and offering to repurchase the Notes on the Change of Control Purchase Date, pursuant to the procedures required by the Indenture as described in such notice. Such Change of Control Notice shall be mailed to Holders at their last registered addresses with a copy to the Trustee and the Paying Agent, the copy mailed to the Trustee to be accompanied by an Officers' Certificate stating that a Change of Control has occurred and that the Company is required to make a Change of Control Offer. The Change of Control Offer shall remain open from the time of mailing for at least 20 Business Days and until 5:00 p.m., New York City time, on the Change of Control Purchase Date. The Change of Control Notice, which shall govern the terms of the Change of Control Offer, shall include such disclosures as are required by law and shall state:

        (a)  that the Change of Control Offer is being made pursuant to this Section 4.12 and that all Notes validly tendered into the Change of Control Offer and not withdrawn will be accepted for payment;

        (b)  the Change of Control Purchase Price (including the amount of accrued interest and Liquidated Damages, if any) for each Note, the Change of Control Purchase Date and the date and time on which the Change of Control Offer expires;

        (c)  that any Note not tendered for payment will continue to accrue interest and Liquidated Damages, if any, in accordance with the terms thereof;

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        (d)  that, unless the Company shall default in the payment of the Change of Control Purchase Price, any Note accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest and Liquidated Damages, if any, after the Change of Control Purchase Date;

        (e)  that Holders electing to have Notes purchased pursuant to a Change of Control Offer will be required to surrender such Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse side of the Note duly completed, to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the Change of Control Purchase Date and must complete any form of letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent;

        (f)    that Holders of Notes will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the Change of Control Purchase Date, a facsimile transmission or letter (which may be delivered by mail, air courier, hand delivery or otherwise) setting forth the name of the Holder, the principal amount of Notes the Holder delivered for purchase, the Note certificate number (if any) and a statement that such Holder is withdrawing its election to have such Notes purchased;

        (g)  that Notes and portions of Notes purchased shall be in amounts of $1,000 or whole multiples of $1,000, except that if all of the Notes of a Holder are to be purchased, the entire outstanding amount of Notes held by such Holder, even if not a multiple of $1,000, shall be purchased;

        (h)  that Holders whose Notes are purchased only in part will be issued Notes equal in principal amount to the unpurchased portion of the Notes surrendered;

        (i)    the instructions that Holders must follow in order to tender their Notes; and

        (j)    information concerning the business of the Company and the Guarantors, the most recent annual and quarterly reports of the Company and the Guarantors filed with the SEC pursuant to the Exchange Act (or, if any of the Company and the Guarantors are not then required to file any such reports with the SEC, the comparable reports prepared pursuant to Section 4.07 hereof), a description of material developments in the Company's and the Guarantors' businesses, information with respect to pro forma historical financial information after giving effect to such Change of Control and such other information concerning the circumstances and relevant facts regarding such Change of Control Offer as would be material to a Holder of Notes in connection with the decision of such Holder as to whether or not it should tender Notes pursuant to the Change of Control Offer.

        Notwithstanding the foregoing paragraph, as long as any Notes are evidenced by Global Notes, (i) Notes may be tendered or surrendered for payment upon a Change of Control Offer, tendered Notes may be withdrawn, and letters of transmittal (or electronic messages in lieu thereof) may be completed and delivered, in accordance with the then current procedures of the Depository (and the Company shall appropriately amend the notice described in the preceding paragraph to incorporate a description of such procedures) and (ii) the Company shall otherwise comply with the then current rules and procedures of the Depository in connection with such Change of Control Offer.

        On the Change of Control Purchase Date, the Company shall, to the extent lawful:

          (i)  accept for payment all Notes or portions thereof properly tendered pursuant to the Change of Control Offer;

        (ii)  deposit with the Paying Agent an amount equal to the Change of Control Purchase Price (including accrued and unpaid interest and Liquidated Damages, if any) in respect of all Notes or portions thereof so tendered; and

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        (iii)  deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions thereof being purchased by the Company.

        The Paying Agent shall promptly mail to each Holder of Notes or portions thereof so tendered the Change of Control Purchase Price (including accrued and unpaid interest and Liquidated Damages, if any) for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each such new Note shall be in a principal amount of $1,000 or an integral multiple thereof. Any Notes not so accepted shall be promptly mailed or delivered by the Company to the Holders thereof. The Company will publicly announce the results of the Change of Control Offer not later than the first Business Day following the Change of Control Purchase Date. For purposes of this Section 4.12, the Trustee shall act as Paying Agent.

        The provisions described above that require the Company to make a Change of Control Offer following a Change of Control shall be applicable regardless of whether or not any other provisions of this Indenture are applicable.

        Notwithstanding anything to the contrary in this Section 4.12, the Company shall not be required to make a Change of Control Offer upon a Change of Control if a third party makes the Change of Control Offer in the manner, at the times and otherwise in compliance with the requirements applicable to a Change of Control Offer made by the Company (including the same or a higher Change of Control Purchase Price) and has purchased all Notes validly tendered and not withdrawn pursuant to such Change of Control Offer.

        Any Change of Control Offer shall comply with Regulation 14E under the Exchange Act and any other applicable federal and state securities laws and regulations. To the extent that the provisions of any applicable securities laws or regulations conflict with the provisions of this Section 4.12, the Company and the Guarantors shall comply with such applicable securities laws and regulations and shall not be deemed by virtue of such compliance to have breached their obligations under this Section 4.12.

        If the Change of Control Purchase Date is on or after an interest record date and on or before the related Interest Payment Date, any accrued and unpaid interest and Liquidated Damages, if any, shall be paid to the person in whose name a Note is registered at the close of business on such record date, and no additional interest shall be payable to Holders who tender Notes pursuant to the Change of Control Offer.

        4.13    Disposition of Proceeds of Asset Sales.

        (a)  The Company shall not, and shall not permit any of the Guarantors to, make any Asset Sale unless:

          (i)  the Company or such Guarantor, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value of the Capital Stock or other property or assets sold or otherwise disposed of;

        (ii)  at least 75% of such consideration received by the Company or such Guarantor, as the case may be, consists of cash, Cash Equivalents or Replacement Assets (as defined below); provided, that any such Replacement Assets (A) shall be owned by the Company or a Guarantor and shall not be subject to any Liens except as expressly permitted by this Indenture, the Guarantees and the Security Documents (and the Company or such Guarantor, as the case may be, shall execute and deliver to the Trustee such Security Documents and other documents and instruments as shall be necessary to cause all such Replacement Assets to become subject to a Lien in favor of the Trustee (or, in the case of any Replacement Asset

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subject to a Mortgage, the Trustee or another trustee under such Mortgage), for the benefit of the Holders, securing its obligations under the Notes or its Guarantee, as the case may be, and otherwise shall comply with the provisions of this Indenture, the Guarantees and the Security Documents applicable to After-Acquired Property), (B) shall not include any Excluded Collateral or Revolver Collateral and (C) shall not include any Capital Stock or other securities in any person unless that person becomes a Guarantor at the time of such Asset Sale;

        (iii)  if such Asset Sale involves Collateral, it shall be in compliance with the provisions of Article Eleven; and

        (iv)  the Company or such Guarantor, as the case may be, shall apply such Net Cash Proceeds as provided in Section 4.13(b) hereof.

        The foregoing subparagraphs (i) and (ii) shall not apply to an Event of Loss; provided, however, that Net Cash Proceeds from an Event of Loss shall be used as follows: (1) first, the Company may use any or all of such Net Cash Proceeds to restore, rebuild, repair or replace the assets subject to such Event of Loss with a comparable asset and (2) then, to the extent any Net Cash Proceeds from an Event of Loss are not used as described in the preceding clause (1), all such remaining Net Cash Proceeds from such Event of Loss shall be reinvested or used as provided in subparagraphs (i) and (ii) of Section 4.13(b) hereof.

        (b)  Any such Net Cash Proceeds from an Asset Sale shall be applied within 365 days of the Asset Sale which generated such Net Cash Proceeds as follows:

          (i)  to the extent that such Net Cash Proceeds are derived from property or assets (including Capital Stock) which do not constitute Collateral or are not deemed (pursuant to the provisions of this Section 4.13 set forth below) to constitute Collateral Proceeds ("Non-Collateral Proceeds"), such Non-Collateral Proceeds may, at the option of the Company, be applied to repay Indebtedness outstanding under the Credit Facility; and

        (ii)  with respect to (x) any Net Cash Proceeds derived from property or assets (including Capital Stock) which constitute Collateral ("Collateral Proceeds"), derived from a transaction as a result of which a Guarantor is released from its Guarantee as provided in Section 10.04 or which (pursuant to the provisions of this Section 4.13 set forth below) are deemed to be Collateral Proceeds, and (y) any Non-Collateral Proceeds remaining after application as described in subparagraph (i) of this Section 4.13(b) (all Collateral Proceeds and amounts deemed to be Collateral Proceeds, together with any such remaining Non-Collateral Proceeds, and all Net Cash Proceeds from any Event of Loss, being hereinafter called, collectively, the "Available Amount"), such Available Amount shall, if the Company so elects, be applied to make an investment in properties and assets that replace the properties and assets that were the subject of such Asset Sale or in properties and assets that will be used in the business of the Company and the Guarantors existing on the Issue Date or in businesses reasonably related thereto ("Replacement Assets"); provided, that any Replacement Assets acquired with any such Collateral Proceeds or amounts deemed to constitute Collateral Proceeds (A) shall be owned by the Company or a Guarantor and shall not be subject to any Liens except as expressly permitted by this Indenture, the Guarantees and the Security Documents (and the Company or such Guarantor, as the case may be, shall execute and deliver to the Trustee such Security Documents and other documents and instruments as shall be necessary to cause all such Replacement Assets to become subject to a Lien in favor of the Trustee (or, in the case of any Replacement Asset subject to a Mortgage, the Trustee or another trustee under such Mortgage), for the benefit of the Holders of the Notes, securing its obligations under the Notes or its Guarantee, as the case may be, and otherwise shall comply with the provisions of this Indenture, the Guarantees and the Security Documents applicable to After-Acquired

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Property), (B) shall not include any Excluded Collateral or Revolver Collateral and (C) shall not include any Capital Stock or other securities in any person unless that person becomes a Guarantor at the time of such Asset Sale.

        During such 365 day period, pending the final application of the Net Cash Proceeds from the Asset Sale, the Company may use such Net Cash Proceeds to temporarily reduce borrowings under the Credit Facility or otherwise invest such Net Cash Proceeds in any manner that is not prohibited by this Indenture. Notwithstanding the immediately preceding sentence, any portion of the Net Cash Proceeds that is not used as described in subparagraph (i) or (ii) of this Section 4.13(b) within such 365 day period shall constitute "Excess Proceeds" subject to disposition as provided in Section 4.13(c) below.

        (c)  When the aggregate amount of Excess Proceeds equals or exceeds $10,000,000, the Company shall make an offer to purchase (an "Asset Sale Offer"), from all Holders of the Notes, on a date (the "Asset Sale Purchase Date") not more than 40 Business Days after the date that the amount of Excess Proceeds equals or exceeds $10,000,000, the maximum aggregate principal amount (expressed as a multiple of $1,000) of the outstanding Notes that may be purchased with such Excess Proceeds, at a price in cash equal to 100% of the principal amount thereof plus accrued and unpaid interest and Liquidated Damages, if any, to the purchase date (the "Asset Sale Offer Price").

        To the extent that the aggregate principal amount of Notes tendered pursuant to an Asset Sale Offer is less than the maximum aggregate principal amount which may be purchased with such Excess Proceeds, any such remaining Excess Proceeds shall be retained by the Company, free and clear of the Liens of this Indenture and the Security Documents, any such Excess Proceeds shall not be subject to the provisions of this Section 4.13 and the Company may use such remaining Excess Proceeds for any purposes not otherwise prohibited by this Indenture. If the aggregate principal amount of Notes validly tendered and not withdrawn by Holders thereof exceeds the maximum aggregate principal amount which may be purchased with such Excess Proceeds, Notes to be purchased shall be selected on a pro rata basis by the Trustee (with such adjustments as may be deemed appropriate by the Company, and are acceptable to the Trustee, so that only Notes in denominations of $1,000 or integral multiples of $1,000 shall be acquired). Upon completion of such Asset Sale Offer in accordance with this Section 4.13, the amount of Excess Proceeds shall be reset to zero.

        (d)  All Collateral Proceeds and amounts which are deemed to be Collateral Proceeds shall be paid directly by the purchaser thereof to the Trustee and shall be deposited by the Trustee in the Note Collateral Account pending their application in accordance with this Section 4.13 or the release thereof in accordance with Articles Eleven and Twelve hereof.

        (e)  In the event that the Company shall, in any transaction or series of transactions, sell, assign, convey, transfer, lease or otherwise dispose of substantially all (but not all) of its properties and assets as an entirety in a transaction permitted under the terms of Section 5.01 hereof, or if the Company shall cause or permit any of the Guarantors to enter into any such transaction or series of transactions if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or other disposition of substantially all (but not all) of the properties and assets of the Company or of the Company and the Guarantors taken as a whole in a transaction permitted under the terms of Section 5.01 hereof, the Surviving Entity shall be deemed to have sold the properties and assets of the Company and the Guarantors not so transferred for purposes of this Section 4.13 and shall comply with the provisions of this Section 4.13 with respect to such deemed sale as if it were an Asset Sale. The Fair Market Value of such properties and assets of the Company and the Guarantors deemed to be sold shall be deemed to be the Net Cash Proceeds for purposes of this Section 4.13. In the event that any

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Guarantor shall, in any transaction or series of transactions, sell, assign, convey, transfer, lease or otherwise dispose of substantially all (but not all) of its properties and assets in a transaction permitted under Section 10.03 hereof, the Surviving Person shall be deemed to have sold the properties and assets of such Guarantor not so transferred for purposes of this covenant and shall comply with the provisions of this covenant with respect to such deemed sale as if it were an Asset Sale. The Fair Market Value of such properties and assets of such Guarantor deemed to have been sold shall be deemed to be the Net Cash Proceeds for purposes of the Asset Sale provisions of this Indenture.

        (f)    In the event of a merger or consolidation of a Guarantor, sale of Capital Stock of a Guarantor or other transactions as a result of which a Guarantor will be released from its Guarantee as provided in Section 10.04 hereof, then, anything in this Indenture to the contrary notwithstanding, (i) such transaction shall be deemed to be an Asset Sale and shall be subject to and shall be made only in compliance with the terms of this Section 4.13 and (ii) the Net Cash Proceeds of such transaction shall be allocated between Collateral Proceeds and Non-Collateral Proceeds as follows: (A) such Net Cash Proceeds shall be multiplied by a fraction (1) the numerator of which is the Fair Market Value of the Collateral owned by such Guarantor and (2) the denominator of which is the Fair Market Value of all property and assets (including Collateral) owned by such Guarantor, and the resulting amount shall be deemed Collateral Proceeds, and (B) the remainder of such Net Cash Proceeds shall be deemed Non-Collateral Proceeds.

        (g)  Notice of an Asset Sale Offer shall be mailed by the Company to all Holders of Notes not less than 20 Business Days nor more than 40 Business Days before the Asset Sale Purchase Date at their last registered address with a copy to the Trustee and the Paying Agent, the copy mailed to the Trustee to be accompanied by an Officers' Certificate stating that an Asset Sale has occurred and that the Company is required to make an Asset Sale Offer for the principal amount of Notes set forth in such certificate. The Asset Sale Offer shall remain open from the time of mailing for at least 20 Business Days and until at least 5:00 p.m., New York City time, on the Asset Sale Purchase Date. The notice, which shall govern the terms of the Asset Sale Offer, shall include such disclosures as are required by law and shall state:

          (i)  that the Asset Sale Offer is being made pursuant to this Section 4.13 and the aggregate principal amount of Notes which the Company is offering to purchase thereby;

        (ii)  the Asset Sale Offer Price (including the amount of accrued interest and Liquidated Damages, if any) for each Note, the Asset Sale Purchase Date and the date and time on which the Asset Sale Offer expires;

        (iii)  that any Note not tendered or accepted for payment will continue to accrue interest and Liquidated Damages, if any, in accordance with the terms thereof;

        (iv)  that, unless the Company shall default in the payment of the Asset Sale Offer Price, any Note accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest and Liquidated Damages, if any, after the Asset Sale Purchase Date;

        (v)  that Holders electing to have Notes purchased pursuant to an Asset Sale Offer will be required to surrender such Notes, with the form entitled "Option of Holder to Elect Purchase" on the reverse side of the Note duly completed, to the Paying Agent at the address specified in the notice prior to 5:00 p.m., New York City time, on the Asset Sale Purchase Date and must complete any form of letter of transmittal proposed by the Company and acceptable to the Trustee and the Paying Agent;

        (vi)  that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than 5:00 p.m., New York City time, on the Asset Sale Purchase Date, a facsimile

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transmission or letter (which may be delivered by mail, air courier, hand delivery or otherwise) setting forth the name of the Holder, the principal amount of Notes the Holder delivered for purchase, the Notes certificate number (if any) and a statement that such Holder is withdrawing its election to have such Notes purchased;

      (vii)  that if Notes in an aggregate principal amount in excess of the maximum aggregate principal amount which may be purchased with such Excess Proceeds are tendered pursuant to the Asset Sale Offer, the Company shall purchase Notes on a pro rata basis, as determined by the Trustee, among the Holders whose Notes have been tendered (with such adjustments as may be deemed appropriate by the Company, and are acceptable to the Trustee, so that only Notes in denominations of $1,000 or integral multiples of $1,000 shall be acquired);

      (viii)  that Holders whose Notes are purchased only in part will be issued new Notes equal in principal amount to the unpurchased portion of the Notes surrendered;

        (ix)  the instructions that Holders must follow in order to tender their Note; and

        (x)  information concerning the business of the Company and the Guarantors, the most recent annual and quarterly reports of the Company and the Guarantors filed with the SEC pursuant to the Exchange Act (or, if any of the Company and the Guarantors is not required to file any such reports with the SEC, the comparable reports prepared pursuant to Section 4.07 hereof), a description of material developments in the Company's and the Guarantors' businesses, information with respect to pro forma historical financial information after giving effect to such Asset Sale and Asset Sale Offer and such other information concerning the circumstances and relevant facts regarding such Asset Sale Offer as would be material to a Holder of Notes in connection with the decision of such Holder as to whether or not it should tender Notes pursuant to the Asset Sale Offer.

        Notwithstanding the foregoing paragraph, as long as any Notes are evidenced by Global Notes, (i) Notes may be tendered or surrendered for payment upon an Asset Sale Offer, tendered Notes may be withdrawn, and letters of transmittal (or electronic messages in lieu thereof) may be completed and delivered, in accordance with the then current procedures of the Depository (and the Company shall appropriately amend the notice described in the preceding paragraph to incorporate a description of such procedures) and (ii) the Company shall otherwise comply with the then current rules and procedures of the Depository in connection with such Asset Sale Offer.

        (h)  On the Asset Sale Purchase Date, the Company shall, to the extent lawful:

          (i)  accept for payment, on a pro rata basis (if necessary) as described in Section 4.13(g)(vii) above, Notes or portions thereof properly tendered pursuant to the Asset Sale Offer;

        (ii)  deposit with the Paying Agent an amount equal to the Asset Sale Offer Price (including accrued and unpaid interest and Liquidated Damages, if any) in respect of all Notes or portions thereof so tendered; and

        (iii)  deliver or cause to be delivered to the Trustee the Notes so accepted together with an Officers' Certificate stating the aggregate principal amount of Notes or portions being purchased by the Company.

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        The Paying Agent shall promptly mail to each Holder of Notes or portions thereof so tendered the Asset Sale Offer Price (including accrued and unpaid interest and Liquidated Damages, if any) for such Notes, and the Trustee shall promptly authenticate and mail (or cause to be transferred by book entry) to each Holder a new Note equal in principal amount to any unpurchased portion of the Notes surrendered, if any; provided, that each such new Note shall be in a principal amount of $1,000 or an integral multiple thereof. Any Notes not so accepted shall be promptly mailed or delivered by the Company to the Holders thereof. The Company will publicly announce the results of the Asset Sale Offer not later than the first Business Day following the Asset Sale Purchase Date. For purposes of this Section 4.13, the Trustee shall act as Paying Agent.

        Any Asset Sale Offer shall comply with Regulation 14E under the Exchange Act, to the extent applicable, and any other applicable federal and state securities laws and regulations. To the extent that the provisions of any applicable securities laws or regulations conflict with the provisions of this Section 4.13, the Company and the Guarantors shall comply with such applicable securities laws and regulations and shall not be deemed by virtue of such compliance to have breached their obligations under this Section 4.13.

        4.14    Limitation on Transactions with Affiliates.

        The Company shall not, and shall not permit any of the Guarantors to, directly or indirectly, make, enter into or suffer to exist any transaction or series of related transactions (including without limitation (i) any sale, transfer, disposition, purchase, exchange or lease of assets, property or services, (ii) any contracts, agreements or other arrangements, (iii) any payments, Investments, loans or advances, (iv) any other any transaction or series of related transactions or (v) any amendments, supplements, modifications or waivers of or with respect to any of the foregoing), in each case, to, from, with, or for the benefit of, any Affiliate of the Company (other than an Affiliate which is a Guarantor) or any Interested Person (each of the foregoing, an "Affiliate Transaction"), unless:

        (a)  such Affiliate Transaction or series of Affiliate Transactions is on terms that are no less favorable to the Company or such Guarantor, as the case may be, than those which could have been obtained in a comparable transaction at such time from persons who are not Affiliates of the Company or Interested Persons, and

        (b)  the Company delivers to the Trustee:

        (x)  with respect to an Affiliate Transaction or series of Affiliate Transactions involving aggregate payments, consideration or value equal to or greater than $2,500,000, a Board Resolution set forth in an Officers' Certificate certifying that such Affiliate Transaction or series of Affiliate Transactions complies with the preceding clause (a), that such Affiliate Transaction or series of Affiliate Transactions was approved by a majority of disinterested members of the Board of Directors of the Company (if any) and, if applicable, certifying that the opinion referred to in the following clause (b)(y) has been delivered; and

        (y)  with respect to an Affiliate Transaction or series of Affiliate Transactions involving aggregate payments, consideration or value equal to or greater than $5,000,000 (or any Affiliate Transaction or series of Affiliate Transactions involving aggregate payments or value greater than $2,500,000 if the approval of a majority of disinterested members of the Board of Directors has not been obtained, as described in the foregoing paragraph (b)(x)), a written opinion from an Independent Financial Advisor stating that the terms of such Affiliate Transaction or series of Affiliate Transactions are fair to the Company or the Guarantor, as the case may be, from a financial point of view;

provided, that clauses (b)(x) and (y) of this Section 4.14 shall not be applicable with respect to transactions entered into in the ordinary course of business (A) between the Company or any of the

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Guarantors, on the one hand, and Camrose, on the other hand, or (B) between or among any of the Company, Camrose, Canadian National Steel, CPC, New CF&I or CF&I; in each case under clause (A) or (B), provided that such transactions are permitted pursuant to the terms of the Camrose Partnership Agreement, the New CF&I Stockholders Agreement and the CF&I Partnership Agreement, as applicable, in each case as in effect on the Issue Date (and not giving effect to any subsequent amendment or modification thereof).

        Notwithstanding the foregoing, the following shall not be deemed to be Affiliate Transactions:

          (i)  paying dividends or making other distributions in respect of its Capital Stock permitted under Section 4.09 hereof,

        (ii)  paying reasonable and customary fees to directors of the Company or any of the Guarantors who are not employees of the Company or any of the Guarantors,

        (iii)  making loans or advances to directors, officers, employees or consultants of the Company and the Guarantors (including travel and moving expenses) in the ordinary course of business consistent with industry practices for bona fide business purposes of the Company or such Guarantor not in excess of $2,000,000 in the aggregate at any one time outstanding,

        (iv)  making contributions of Common Stock of the Company to the Company's employee stock ownership plan, director stock option plan or employee compensation plan, or

        (v)  making payments in the ordinary course of business consistent with past practices to employees of the Company and its Subsidiaries pursuant to any profit participation plan or other employee compensation arrangements approved by a majority of independent (as to such transaction) members of the Compensation Committee of the Board of Directors of the Company.

        4.15    Limitation on Dividends and Other Payment Restrictions Affecting Guarantors.

        The Company shall not, and shall not permit any of the Guarantors to, directly or indirectly, incur, create or otherwise cause or suffer to exist or become effective any encumbrance or restriction on the ability of any Guarantor to:

        (a)  pay dividends or make any other distributions (whether such dividends or distributions are in cash or otherwise) on or in respect of its Capital Stock or any other interest or participation in, or measured by, its profits,

        (b)  pay any Indebtedness owed to the Company or any other Guarantor,

        (c)  make loans or advances to, or any investment in, the Company or any other Guarantor,

        (d)  transfer any of its properties or assets to the Company or any other Guarantor, or

        (e)  guarantee any Indebtedness of the Company or of any other Guarantor. However, the preceding restrictions will not apply to any such encumbrances or restrictions existing under or by reason of:

          (i)  applicable law,

        (ii)  customary non-assignment provisions of any lease or any contract governing a leasehold interest of the Company or any Guarantor, in each case, entered into in the ordinary course of business and consistent with past practice,

        (iii)  customary restrictions on transfers of property subject to a Lien permitted under this Indenture which could not materially adversely affect the Company's ability to satisfy its obligations under this Indenture and the Notes or any Guarantors' ability to satisfy its obligations under this Indenture and its Guarantee,

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        (iv)  any agreement or other instrument of a person acquired by the Company or any Guarantor in existence at the time of such acquisition (but not created in contemplation thereof), which encumbrance or restriction is not applicable to any person, or the properties or assets of any person, other than the person, or the properties or assets of the person, so acquired; provided, that in the case of Indebtedness, such Indebtedness was permitted by the terms of this Indenture to be incurred,

        (v)  provisions contained in agreements or instruments relating to Indebtedness which prohibit the transfer of all or substantially all of the assets of the obligor thereunder unless the transferee shall assume the obligations of the obligor under such agreement or instrument; provided, that such Indebtedness was permitted by the terms of this Indenture to be incurred,

        (vi)  provisions contained in this Indenture, the Notes, the Guarantees, the Intercreditor Agreement or any Security Documents,

      (vii)  (A)provisions contained in the Credit Facility and in security agreements or similar documents permitted by this Indenture entered into by the Company, CF&I and New CF&I pledging Revolver Collateral to secure their respective obligations thereunder (in each case, which are no more restrictive, and no less favorable, to the Holders of the Notes than the provisions as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof), and (B) provisions contained in such additional guarantees of the Company's obligations under the Credit Facility permitted by this Indenture and in such additional security agreements or similar documents permitted by this Indenture pledging Revolver Collateral pursuant to the Credit Facility which may be entered into after the Issue Date by other Guarantors (and in amendments thereto and replacements thereof) which in each case are permitted by this Indenture and are no more restrictive, and no less favorable to the Holders of the Notes, than the provisions of the guarantees, security agreements or similar documents, as the case may be, referred to in clause (A) of this paragraph (vii) (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof);

      (viii)  (A) provisions contained in other agreements or instruments relating to Indebtedness in effect on the Issue Date (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) and (B) provisions contained in amendments thereto and permitted refinancings or replacements thereof, which in each case are permitted by this Indenture and are no more restrictive, and no less favorable to the Holders of the Notes, than the provisions of the agreements or instruments, as the case may be, referred to in clause (A) of this paragraph (viii) (as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof); and

        (ix)  encumbrances and restrictions created by the CF&I Partnership Agreement and the New CF&I Stockholders Agreement (each as in effect on the Issue Date and not giving effect to any subsequent amendment or modification thereof) and in any amendments thereto which are permitted by this Indenture and which encumbrances and restrictions contained in any such amendment are no more restrictive and are no less favorable to the Holders of the Notes than those contained in such agreement prior to such amendment.

        4.16    Limitations on Sale-Leaseback Transactions.

        The Company shall not, and shall not permit any of the Guarantors to, enter into any Sale-Leaseback Transaction with respect to any property or assets of the Company or any of the Guarantors.

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        Notwithstanding the foregoing, the Company and the Guarantors may enter into Sale-Leaseback Transactions with respect to property or assets which do not constitute Collateral and which property or assets are acquired or constructed after the Issue Date if:

        (a)  the Company or such Guarantor could have (i) incurred Indebtedness in an amount equal to the Attributable Indebtedness relating to such Sale-Leaseback Transaction pursuant to the first paragraph of Section 4.08 hereof and (ii) incurred a Lien to secure such Indebtedness pursuant to Section 4.11 hereof,

        (b)  the gross cash proceeds of such Sale-Leaseback Transaction are at least equal to the Fair Market Value of the property that is the subject of such transaction, and

        (c)  the transfer of assets in such Sale Leaseback Transaction is permitted by, and the Company applies the Net Cash Proceeds of such transaction in compliance with, Section 4.13 hereof.

        4.17    Additional Guarantors; Additional Security Documents.

        The Company shall not, and shall not permit any Guarantor to, directly or indirectly, establish or acquire a new Subsidiary, as the case may be, unless either:

        (a)  such new Subsidiary is designated as an Unrestricted Subsidiary pursuant to Section 4.22 hereof, or

        (b)  (i) such new Subsidiary simultaneously (x) executes and delivers to the Trustee a supplemental indenture, in form reasonably satisfactory to the Trustee, pursuant to which such new Subsidiary becomes a Guarantor and unconditionally guarantees the obligations of the Company under the Notes on the same terms as the other Guarantors and as set forth in this Indenture and (y) executes and delivers a written instrument pursuant to which it shall become a party to the Intercreditor Agreement;

        (ii)  to the extent that such new Subsidiary owns (or thereafter acquires) any property or assets of the types which would constitute "Trust Property" (as such term is defined in the form of Mortgage attached as Exhibit G to this Indenture) or "Collateral" (as such term is defined in the form of Security Agreement attached as Exhibit F to this Indenture), such new Subsidiary shall execute and deliver to the Trustee such Security Documents as shall be necessary to cause such property and assets to become subject to a Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage), for the benefit of the Holders of the Notes, securing such new Subsidiary's obligations under its Guarantee and otherwise shall comply with the provisions of this Indenture applicable to After-Acquired Property; and

        (iii)  the Company shall deliver to the Trustee an Officers' Certificate and an Opinion of Counsel, each in form reasonably satisfactory to the Trustee, each stating that the establishment or acquisition of such new Subsidiary complies with clauses (i) and (ii) of this subsection 4.17(b) in connection with the establishment or acquisition of such new Subsidiary.

Following compliance with clauses (b)(i), (ii) and (iii) of this Section 4.17, and thereafter, such Subsidiary shall be a Guarantor for all purposes of this Indenture.

        (c)  For purposes of this Section 4.17, the designation of any Unrestricted Subsidiary as a Guarantor shall be deemed to be the establishment of a new Subsidiary and shall be required to comply with Section 4.17(b) hereof. The Company shall not permit to exist any Subsidiary unless either (i) such Subsidiary has been designated as an Unrestricted Subsidiary pursuant to Section 4.22 hereof or (ii) such Subsidiary has become a Guarantor in accordance with this

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Indenture. The Company shall not permit any Unrestricted Subsidiary to own any Capital Stock of a Guarantor.

        4.18    Impairment of Security Interests.

        The Company shall not, and shall not permit any of the Guarantors to, take or omit to take any action which action or omission could reasonably be expected to have the result of adversely affecting or impairing the Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the Holders of the Notes in the Collateral, except for the incurrence or existence of Permitted Liens as expressly permitted by this Indenture, the Intercreditor Agreement and the Security Documents. The Company shall not, and shall not permit any of the Guarantors to grant to any person (other than the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the Holders of the Notes) any interest whatsoever in the Collateral except as expressly permitted by this Indenture, the Intercreditor Agreement and the Security Documents.

        4.19    Limitation on Amendments to CF&I Agreements.

        The Company shall not, and shall not permit any Guarantor to, enter into or consent to any amendment, supplement, waiver or other modification of the CF&I Partnership Agreement or the New CF&I Stockholders Agreement which (i) in any manner would be adverse to the interests of the Holders of the Notes or the Trustee (it being understood that the admission by CF&I of one or more additional or substitute limited partners shall not be deemed adverse to the interests of the holders of the Notes or the Trustee so long as made in compliance with the other provisions of this Indenture, including the immediately following clause (ii) of this Section 4.19) or (ii) in the case of the CF&I Partnership Agreement, would increase the amount of cash or other property distributable to, or the amount of profits allocated to, or any voting or management rights of, any limited partners of CF&I or the limited partners of CF&I in the aggregate, or decrease the amount of cash or other property distributable to, or the amount of profits allocated to, or any voting or management rights of, the general partner of CF&I.

        4.20    Waiver of Stay, Extension or Usury Laws.

        The Company and each Guarantor each covenants (to the extent that it may lawfully do so) that it shall not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive the Company or such Guarantor, as the case may be, from paying all or any portion of the principal of or interest or Liquidated Damages, if any, on the Notes as contemplated herein or in the Notes, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company and each Guarantor each hereby expressly waives all benefit or advantage of any such law and covenants that it shall not hinder, delay or impede the execution of any power herein granted to the Trustee, but shall suffer and permit the execution of every such power as though no such law had been enacted.

        4.21    Limitations on Layering Indebtedness.

        The Company shall not, and shall not permit any of the Guarantors to, incur any Indebtedness that is contractually subordinated to any Indebtedness of the Company or any Guarantor unless the Indebtedness being incurred is contractually subordinated to the Notes at least to the same extent as it is to such other Indebtedness.

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        4.22    Unrestricted Subsidiaries; Designation of Unrestricted Subsidiaries.

        The Board of Directors of the Company may designate any Subsidiary acquired or established after the Issue Date to be an Unrestricted Subsidiary if:

        (a)  none of the properties or assets of such Subsidiary were owned by the Company or any of the Guarantors prior to the Issue Date, other than any such assets as are transferred to such Unrestricted Subsidiary in accordance with Section 4.09 hereof; and

        (b)  at the time of such designation: (i) the properties and assets of such Subsidiary, to the extent that they secure Indebtedness, secure only Non-Recourse Indebtedness, (ii) such Subsidiary has no Indebtedness other than Non-Recourse Indebtedness, and (iii) such Subsidiary is not a Guarantor and does not own, directly or indirectly, any Capital Stock of a Guarantor.

        As used above, "Non-Recourse Indebtedness" means Indebtedness as to which:

        (a)  neither the Company nor any of the Guarantors: (i) provides credit support (including any undertaking, agreement or instrument which would constitute Indebtedness), (ii) guarantees or is otherwise directly or indirectly liable, or (iii) constitutes the lender (in each case, other than Investments made pursuant to and in compliance with Section 4.09 hereof), and

        (b)  no default with respect to such Indebtedness (including any rights which holders thereof may have to take enforcement action against the relevant Unrestricted Subsidiary or its assets) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the Company or the Guarantors to declare a default on such other Indebtedness or cause the payment thereof to be accelerated or payable prior to its Stated Maturity.

        The Board of Directors of the Company may designate an Unrestricted Subsidiary to be a Guarantor if after giving Pro Forma effect to such designation:

          (i)  the Company would be permitted to incur $1.00 of additional Indebtedness under the first paragraph of Section 4.08 hereof (assuming a market rate of interest with respect to such Indebtedness),

        (ii)  all Indebtedness and Liens of such Unrestricted Subsidiary would be permitted to be incurred by a Guarantor under this Indenture, and

        (iii)  such Unrestricted Subsidiary shall have entered into a supplemental indenture pursuant to which it shall have become a Guarantor and complied with the other obligations described in Section 4.17 hereof.

        A designation of an Unrestricted Subsidiary as a Guarantor may not thereafter be rescinded. Any designation of a Subsidiary as an Unrestricted Subsidiary, and any designation of an Unrestricted Subsidiary as a Guarantor, shall be evidenced to the Trustee by written notice delivered by the Company to the Trustee at the time of such designation, accompanied by a certified copy of the Board Resolution giving effect to such designation and an Officers' Certificate to the effect that such designation complied with the applicable conditions set forth above and was permitted by this Indenture, including Section 4.09 hereof.

        For the avoidance of doubt, Unrestricted Subsidiaries shall not be subject to the restrictive covenants in this Indenture, the Intercreditor Agreement, the Registration Rights Agreement or the Security Documents.

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ARTICLE FIVE

SUCCESSOR CORPORATION

        5.01    When Company May Merge, etc.

        The Company shall not (a) directly or indirectly, in any transaction or series of transactions, merge, consolidate or amalgamate with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to, any person or persons, or (b) permit any of the Guarantors to enter into any such transaction or series of transactions if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the properties and assets of the Company or of the Company and the Guarantors, taken as a whole, to any other person or persons, unless at the time of and after giving effect thereto:

        (a)  either

          (i)  the Company shall be the surviving person, or

        (ii)  the person formed by or surviving such consolidation, merger or amalgamation (if other than the Company) or into which the Company or such Guarantor, as the case may be, is merged or to which the properties and assets of the Company or such Guarantor, as the case may be, are transferred (any such surviving person or transferee person being the "Surviving Entity"),

        (A)  shall be a corporation organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and

        (B)  shall expressly assume by a supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, the Company (and such Guarantor, as the case may be) under the Notes, this Indenture and the Guarantees (and such supplemental indenture shall also be executed by each Guarantor and shall further provide that each Guarantor confirms that its obligations under the Indenture and its Guarantee remain in full force and effect), and

        (C)  shall expressly assume, by amendment, supplement or any other appropriate instrument executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of the Company (and such Guarantor, as the case may be) under the Registration Rights Agreement, the Intercreditor Agreement and the Security Documents (and such amendment, supplement or other instrument shall also be executed by each Guarantor and shall further provide that each Guarantor confirms that its obligations under the Registration Rights Agreement, the Intercreditor Agreement and its Security Documents remain in full force and effect), and,

        (D)  shall cause such amendments, supplements or other instruments to be filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by the Company and, if applicable, such Guarantor (in the case of a merger or consolidation) or on the Collateral transferred to the Surviving Entity (in the case of a transfer of assets), together with such financing statements as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant states);

        (b)  the Collateral owned by the Company and, if applicable, such Guarantor (in the case of a merger or consolidation) or the Collateral transferred to the Surviving Entity (in the case of a transfer of assets) (1) shall continue to constitute Collateral under this Indenture and the Security

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Documents, (2) shall be subject to the Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the Holders of the Notes and (3) shall not be subject to any Lien other than Liens expressly permitted by this Indenture and the Security Documents;

        (c)  the property and assets of the person which is merged or consolidated with or into the Company or such Guarantor, or to which the properties and assets of the Company or such Guarantor are transferred, to the extent that such property or assets are of the types which would constitute "Trust Property" (as defined in the form of Mortgage attached as an Exhibit G to this Indenture) or "Collateral" (as defined in the form of Security Agreement attached as an Exhibit F to this Indenture) (assuming, in the case of real property or a leasehold interest in real property, that an appropriate description of such property or leasehold interest were included as a schedule to such form of Mortgage and assuming, in the case of fixtures, improvements and other types of Trust Property, that a description of the related real property or leasehold interest in real property, as the case may be, were included as a schedule to such form of Mortgage) shall be treated as After-Acquired Property and the Company and the Guarantors or the Surviving Entity, as the case may be, shall take such actions as may be necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent specified by this Indenture (including without limitation Section 11.01 hereof (including delivery of such documents, Officers' Certificates and Opinions of Counsel as may be required by Section 11.01 hereof)) and the Security Documents;

        (d)  (1) immediately before and immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing, and (2) the Company, or the Surviving Entity, as the case may be, after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), could incur $1.00 of additional Indebtedness pursuant to the first paragraph of Section 4.08 hereof (assuming a market rate of interest with respect to such additional Indebtedness);

        (e)  immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), the Consolidated Net Worth of the Company or the Surviving Entity, as the case may be, is at least equal to the Consolidated Net Worth of the Company immediately before such transaction or series of transactions; and

        (f)    if, as a result of any such transaction or series of transactions, any property or assets of the Company or any of the Guarantors would become subject to a Lien, such Lien is permitted by Section 4.11 hereof;

        (g)  in connection with such transaction or series of transactions, the Company shall have delivered, or caused to be delivered, to the Trustee an Officers' Certificate and an Opinion of Counsel, each in form reasonably satisfactory to the Trustee, each stating that such transaction or series of transactions and any supplemental indenture, amendments, supplements or other instruments or agreements required by clause (a) or (c) of this Section 5.01 complies with the requirements of this Indenture and that all conditions precedent herein provided for relating to such transaction or series of transactions have been complied with (except that such Opinion of Counsel need express no opinion as to the matters referred to in clauses (b)(3), (d)(2) and (e) above).

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        5.02    Successor Substituted.

        Upon any consolidation, merger or amalgamation, or any sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the properties and assets of the Company in accordance with Section 5.01 hereof, in which the Company is not the Surviving Entity, the Surviving Entity shall succeed to, and be substituted for, and may exercise every right and power of, the Company under this Indenture, the Notes, the Registration Rights Agreement, the Intercreditor Agreement, and the relevant Security Documents with the same force and effect as if such Surviving Entity had been named as the Company herein and therein. Thereafter, except in the case of a lease, the predecessor corporation shall be released from all of its obligations hereunder and thereunder, except with respect to any obligations that arise from, or are related to, such transaction; provided, however, that solely for purposes of computing amounts described in subclause (c) of the first paragraph of Section 4.09 hereof, any such Surviving Entity shall only be deemed to have succeeded to and be substituted for the Company with respect to periods subsequent to the effective time of such transaction or series of transactions.

ARTICLE SIX

EVENTS OF DEFAULT AND REMEDIES

        6.01    Events of Default.

        An "Event of Default" means any of the following events:

        (a)  default in the payment of the principal of or premium, if any, on any Note when the same becomes due and payable (upon Stated Maturity, acceleration, optional redemption, required purchase, scheduled principal payment or otherwise); or

        (b)  default in the payment of an installment of interest (or Liquidated Damages, if any) on any Note, when the same becomes due and payable (upon Stated Maturity, acceleration, optional redemption, required purchase, scheduled principal payment or otherwise), which default continues for a period of 30 days; or

        (c)  default by the Company or any Guarantor in the performance or observance of any term, covenant or agreement contained in the Notes, any Security Document, this Indenture, the Intercreditor Agreement or any Guarantee (other than a default specified in clause (a) or (b) above of this Section 6.01) and, except for a default under Section 4.12, Section 4.13 or Article Five hereof, such default continues for a period of 30 days after written notice of such default requiring the Company to remedy the same and stating that such notice is a "Notice of Default" hereunder shall have been given (i) to the Company by the Trustee or (ii) to the Company and the Trustee by Holders of at least 25% in aggregate principal amount of the Notes then outstanding; or

        (d)  default or defaults under one or more agreements, instruments, mortgages, bonds, debentures or other evidences of Indebtedness under which the Company or any Guarantor then has outstanding Indebtedness, or guarantees the payment of outstanding Indebtedness, in excess of $5,000,000, individually or in the aggregate, and either (i) that default is caused by a failure to pay principal of, or premium, if any, or interest or Liquidated Damages, if any, on such Indebtedness at final Stated Maturity prior to the expiration of any grace period provided in such Indebtedness on the date of such default, or (ii) such Indebtedness is already due and payable in full or such default or defaults have resulted in the acceleration of the maturity of such Indebtedness;

        (e)  failure by the Company or any Guarantor to pay one or more judgments, orders or decrees of any court or regulatory or administrative agency of competent jurisdiction entered against the Company or any Guarantor or any of their property or assets, aggregating at any one

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time in excess of $5,000,000, which judgments, orders or decrees shall not be discharged or fully bonded within a period of 60 days after the date on which any period for appeal has expired and during which a stay of enforcement of such judgment, order or decree shall not be in effect; or

        (f)    either (i) any agent or lender under the Credit Facility or (ii) any holder of at least $5,000,000 in aggregate principal amount of Indebtedness of the Company or any of the Guarantors shall commence judicial proceedings to foreclose upon assets of the Company or any of the Guarantors having an aggregate Fair Market Value, individually or in the aggregate, in excess of $5,000,000 or shall have exercised any right under applicable law or applicable security documents to take ownership of any such assets in lieu of foreclosure; or

        (g)  the commencement by the Company or any Guarantor of a voluntary case or proceeding under any Bankruptcy Law or the consent by the Company or any Guarantor to the entry of an order for relief or similar decree in respect of the Company or such Guarantor in an involuntary case or proceeding under any Bankruptcy Law or the filing by the Company or any Guarantor of a petition, answer or consent seeking reorganization or relief under any Bankruptcy Law, or the consent by the Company or any Guarantor to the filing of any such petition or to the appointment of or taking possession by a Custodian of the Company, any Guarantor, or of any substantial part of the property of the Company or of any Guarantor, or the making by the Company or any Guarantor of an assignment for the benefit of creditors, or the admission by the Company or any Guarantor in writing that it is bankrupt, insolvent or unable to pay its debts generally as they become due, or the taking of corporate action or partnership action, as the case may be, by the Company or any Guarantor in furtherance of any such action; or

        (h)  the entry by a court having jurisdiction in the premises of a judgment, decree or order for relief in respect of the Company or any Guarantor in an involuntary case or proceeding under any applicable Bankruptcy Law, or determining that the Company or any Guarantor is bankrupt or insolvent or that the Company or any Guarantor is entitled to seek reorganization, arrangement, adjustment or composition of its indebtedness, or appointing a Custodian of or for the Company, any Guarantor or any substantial part of properties of the Company or any Guarantor, or ordering the winding up or liquidation of the affairs of the Company or any Guarantor, and any such judgment, order, or decree shall remain unstayed and in effect for a period of 60 consecutive days; or

        (i)    any Guarantee ceases to be in full force and effect, or becomes unenforceable or invalid, or is declared null and void, or any Guarantor denies that it has any further liability under its Guarantee or the Security Documents, disaffirms its obligations under its Guarantee or the Security Documents, or gives notice to such effect (in each case, other than by reason of the termination of this Indenture or the release of any such Guarantee in accordance with Section 10.04 hereof); or

        (j)    any of the Security Documents ceases to be in full force and effect, or any of the Security Documents ceases to give the Trustee (or, in the case of a Mortgage, ceases to give the Trustee or any other trustee under such Mortgage) any of the Liens, rights, powers or privileges purported to be created thereby, or any of the Security Documents is declared null and void, or the Company or any Guarantor denies that it has any further liability under any Security Document to which it is a party or gives notice to such effect (in each case other than by reason of the termination of this Indenture or any such Security Document in accordance with its terms or the release of any Guarantor in accordance with Section 10.04 hereof).

        Subject to the provisions of Sections 7.01 and 7.02 hereof, the Trustee shall not be charged with knowledge of any Default or Event of Default unless written notice thereof shall have been given to a Trust Officer at the Corporate Trust Office of the Trustee by the Company, the Paying Agent, any Holder, any Guarantor or any of their respective agents.

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        6.02    Acceleration.

        (a)  If an Event of Default (other than as specified in Section 6.01(g) or (h) hereof) shall occur and be continuing, either the Trustee, by written notice to the Company, or the Holders of at least 25% in aggregate principal amount of the Notes then outstanding, by written notice to the Trustee and the Company, may declare the Notes (including, without limitation, the principal of, premium, if any, and accrued and unpaid interest and Liquidated Damages, if any, on all of the outstanding Notes) to be due and payable immediately, upon which declaration all amounts payable in respect of the Notes shall be immediately due and payable. If an Event of Default specified in Section 6.01(g) or 6.01(h) hereof occurs, then the principal of, premium, if any, and accrued and unpaid interest and Liquidated Damages, if any, on all of the Notes shall ipso facto be immediately due and payable without any declaration or other act on the part of the Trustee or any Holder of Notes.

        (b)  At any time after a declaration of acceleration under this Indenture as described in Section 6.02(a) hereof, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of not less than a majority in aggregate principal amount of the outstanding Notes, by written notice to the Company and the Trustee, may on behalf of the holders of all the Notes, rescind and cancel such declaration and its consequences if:

        (a)  the Company has paid or deposited with the Trustee a sum sufficient to pay:

          (i)  all sums paid or advanced by the Trustee under Section 7.08, the Intercreditor Agreement and the Security Documents and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel,

        (ii)  all interest and Liquidated Damages, if any, on the Notes which has become due otherwise than by such declaration of acceleration and (to the fullest extent permitted by law) interest thereon at the rate of interest borne by the Notes, and

        (iii)  the principal of and premium, if any, on any Notes which have become due otherwise than by such declaration of acceleration and interest thereon at the rate of interest borne by the Notes;

        (b)  the rescission would not conflict with any judgment or decree of a court of competent jurisdiction; and

        (c)  all then existing Events of Default, other than the nonpayment of principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes that has become due solely by such declaration of acceleration, have been cured or waived as provided in Section 6.04 hereof.

        No such rescission or cancellation shall affect any subsequent Default or Event of Default or impair any right consequent thereto.

        (c)  In the case of any Event of Default occurring by reason of any willful action or inaction taken or not taken by or on behalf of the Company or any of the Guarantors with the intention of avoiding payment of the premium that the Company would have had to pay if the Company had then elected to redeem the Notes pursuant to Section 3.07 hereof, an equivalent premium shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes. If an Event of Default occurs prior to July 15, 2006 by reason of any willful action or inaction taken or not taken by or on behalf of the Company or any of the Guarantors with the intention of avoiding the prohibition on redemption of the Notes prior to July 15, 2006, then the premium specified in this Indenture for redemptions during the 12-month period beginning July 15, 2006 shall also become and be immediately due and payable to the extent permitted by law upon the acceleration of the Notes.

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        6.03    Other Remedies.

        If an Event of Default occurs and is continuing, the Trustee may pursue any available remedy by proceeding at law or in equity to collect the payment of principal of, premium, if any, or interest or Liquidated Damages, if any on the Notes or to enforce the performance of any provision of the Notes, the Guarantees, the Security Documents, the Intercreditor Agreement, the Registration Rights Agreement or this Indenture.

        All rights of action and claims under this Indenture, the Security Documents, the Intercreditor Agreement, the Registration Rights Agreement, the Guarantees or the Notes may be enforced by the Trustee even if it does not possess any of the Notes or Guarantees or does not produce any of them in the proceeding. A delay or omission by the Trustee or any Holder in exercising any right or remedy accruing upon an Event of Default shall not impair the right or remedy or constitute a waiver of or acquiescence in the Event of Default. No remedy is exclusive of any other remedy. All available remedies are cumulative to the extent permitted by law.

        6.04    Waiver of Past Defaults.

        Subject to the provisions of Section 6.07 and 9.02 hereof, prior to the declaration of acceleration under Section 6.02 hereof, the Holders of not less than a majority in aggregate principal amount of the outstanding Notes may, on behalf of the Holders of all the Notes, waive any past default under this Indenture, the Intercreditor Agreement, the Registration Rights Agreement, the Notes, the Guarantees, or any Security Document and its consequences, except an Event of Default specified in Section 6.01(a) or (b) hereof not yet cured or a default in respect of any covenant or provision hereof or thereof which cannot be modified or amended without the consent of each Holder so affected pursuant to Section 9.02 hereof. When a default is so waived, it shall be deemed cured and shall cease to exist.

        6.05    Control by Majority.

        The Holders of not less than a majority in aggregate principal amount of the outstanding Notes shall have the right to direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee under this Indenture, the Notes, the Guarantees, the Intercreditor Agreement or the Security Documents; provided, however, that the Trustee may refuse to follow any direction (a) that conflicts with any rule of law or this Indenture, (b) that the Trustee determines may be unduly prejudicial to the rights of another Holder, or (c) that may expose the Trustee to personal liability unless the Trustee has been provided reasonable indemnity against any loss or expense caused by its following such direction; and provided, further, that the Trustee may take any other action deemed proper by the Trustee that is not inconsistent with such direction.

        6.06    Limitation on Suits.

        No Holder of any Notes shall have any right to institute any proceeding or pursue any remedy with respect to this Indenture, the Intercreditor Agreement, the Registration Rights Agreement, the Notes, the Guarantees or the Security Documents unless:

        (a)  the Holder gives written notice to the Trustee of a continuing Event of Default;

        (b)  the Holder or Holders of at least 25% in aggregate principal amount of the outstanding Notes make a written request, and offered reasonable indemnity, to the Trustee to institute such proceeding as Trustee under the Notes and this Indenture;

        (c)  the Trustee has failed to institute such proceedings within 30 days after receipt of such notice; and

        (d)  the Trustee, within such 30-day period has not received directions inconsistent with such written request by Holders of a majority in aggregate principal amount of the outstanding Notes.

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        The foregoing limitations shall not apply to a suit instituted by a Holder for the enforcement of the payment of principal of, premium, if any, or interest or Liquidated Damages, if any, on any such Note on or after the respective due dates expressed in such Note, this Indenture or the Registration Rights Agreement.

        A Holder may not use this Indenture to prejudice the rights of any other Holders or to obtain priority or preference over such other Holders.

        6.07    Right of Holders to Receive Payment.

        Notwithstanding any other provision in this Indenture, the right of any Holder of a Note to receive payment of the principal of, premium, if any, and interest and Liquidated Damages, if any, on such Note, on or after the respective Stated Maturities expressed in such Note, this Indenture or the Registration Rights Agreement or upon redemption or upon repurchase pursuant to Section 4.12 or 4.13 hereof, or to bring suit for the enforcement of any such payment on or after its Stated Maturity or the relevant Redemption Date, Change of Control Purchase Date or Asset Sale Purchase Date, as the case may be, is absolute and unconditional and shall not be impaired or affected without the consent of the Holder.

        6.08    Collection Suit by Trustee.

        If an Event of Default specified in clause (a) or (b) of Section 6.01 hereof occurs and is continuing, the Trustee may recover judgment in its own name and as trustee of an express trust against the Company, any Guarantor or any other obligor on the Notes or the Guarantees for the whole amount of principal of, premium, if any, and interest and Liquidated Damages, if any, remaining unpaid, together with interest on overdue principal and premium and, to the extent that payment of such interest is lawful, on overdue installments of interest and Liquidated Damages, if any, in each case at the rate per annum borne by the Notes and such further amount as shall be sufficient to cover the costs and expenses of collection, including the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel.

        6.09    Trustee May File Proofs of Claims.

        The Trustee may file such proofs of claim and other papers or documents as may be necessary or advisable in order to have the claims of the Trustee (including any claim for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel) and the holders allowed in any judicial proceedings relative to the Company or the Guarantors (or any other obligor upon the Notes or the Guarantees), their creditors or their property and shall be entitled and empowered to collect and receive any monies or other property payable or deliverable on any such claims and to distribute the same, and any Custodian in any such judicial proceedings is hereby authorized by each Holder to make such payments to the Trustee and, in the event that the Trustee shall consent to the making of such payments directly to the Holders, to pay to the Trustee any amount due to it for the reasonable compensation, expenses, disbursements and advances of the Trustee, its agent and counsel, and any other amounts due the Trustee under Section 7.08 hereof. To the extent that the payment of any such compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, and any other amounts due the Trustee under Section 7.08 hereof out of the estate in any such proceeding, shall be denied for any reason, payment of the same shall be secured by a Lien on, and shall be paid out of, any and all distributions, dividends, money, securities and other properties that the Holders may be entitled to receive in such proceeding whether in liquidation or under any plan of reorganization or arrangement or otherwise. Nothing herein contained shall be deemed to authorize the Trustee to authorize or consent to or accept or adopt on behalf of any holder any plan of reorganization, arrangement, adjustment or composition affecting the Notes or the rights of any holder thereof, or to authorize the Trustee to vote in respect of the claim of any holder in any such proceeding.

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        6.10    Priorities.

        If the Trustee collects any money pursuant to this Article Six, it shall pay out such money in the following order:

        First:    to the Trustee for amounts due to it under Section 7.08 hereof and for any amounts due under the Security Documents (other than payments of interest, Liquidated Damages, if any, and principal described in the next two subclauses);

        Second:    to Holders for interest and Liquidated Damages, if any, accrued on the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for interest and Liquidated Damages, if any;

        Third:    to Holders for principal amounts (including any premium) owing under the Notes, ratably, without preference or priority of any kind, according to the amounts due and payable on the Notes for principal (including any premium); and

        Fourth:    the balance, if any, to the Company or, to the extent the Trustee collects any amount from any Guarantor, to such Guarantor, or to such party as a court of competent jurisdiction shall direct.

        The Trustee, upon prior written notice to the Company, may fix a record date and payment date for any payment to Holders pursuant to this Section 6.10.

        6.11    Undertaking for Costs.

        In any suit for the enforcement of any right or remedy under this Indenture or in any suit against the Trustee for any action taken or omitted by it as Trustee, a court may in its discretion require the filing by any party litigant in the suit of an undertaking to pay the costs of the suit, and the court in its discretion may assess reasonable costs, including reasonable attorneys' fees, against any party litigant in the suit, having due regard to the merits and good faith of the claims or defenses made by the party litigant. This Section 6.11 does not apply to any suit by the Trustee, any suit by a Holder pursuant to Section 6.07 hereof, or a suit by Holders of more than 10% in aggregate principal amount of the then outstanding Notes.

        6.12    Restoration of Rights and Remedies.

        If the Trustee or any Holder has instituted any proceeding to enforce any right or remedy under this Indenture or under any Security Document, the Intercreditor Agreement, the Registration Rights Agreement, any Note or any Guarantee and such proceeding has been discontinued or abandoned for any reason, or has been determined adversely to the Trustee or to such Holder, then and in every such case the Company, each Guarantor, the Trustee and the Holders shall, subject to any determination in such proceeding, be restored severally and respectively to their former positions hereunder and thereunder, and thereafter all rights and remedies of the Trustee and the Holders shall continue as though no such proceeding had been instituted.

ARTICLE SEVEN

TRUSTEE

        7.01    Duties.

        (a)  During the existence of an Event of Default, the Trustee shall exercise such rights and powers vested in it by this Indenture, the Intercreditor Agreement and the Security Documents, with the same degree of care and skill in its exercise thereof, as a prudent person would exercise or use under the circumstances in the conduct of such person's own affairs.

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        (b)  Except during the continuance of an Event of Default,

        (i)    the Trustee need perform only such duties as are specifically set forth in this Indenture, the Intercreditor Agreement and the Security Documents, and no implied covenants or obligations shall be read into this Indenture, the Intercreditor Agreement or the Security Documents against the Trustee; and

        (ii)  in the absence of bad faith on its part, the Trustee may conclusively rely, as to the truth of the statements and the correctness of the opinions expressed therein, upon certificates or opinions furnished to the Trustee and conforming to the requirements of this Indenture, the Intercreditor Agreement or the Security Documents, as the case may be; but in the case of any such certificates or opinions which by any provision hereof or thereof are specifically required to be furnished to the Trustee, the Trustee shall be under a duty to examine the same to determine whether or not they conform to the requirements of this Indenture, the Intercreditor Agreement or the relevant Security Document.

        (c)  No provision of this Indenture, the Intercreditor Agreement or any Security Document shall be construed to relieve the Trustee from liability for its own negligent action, its own negligent failure to act, or its own willful misconduct, except that:

        (i)    this paragraph (c) does not limit the effect of paragraph (b) of this Section 7.01;

        (ii)  the Trustee shall not be liable for any error of judgment made in good faith by a Trust Officer, unless it is proved that the Trustee was negligent in ascertaining the pertinent facts; and

        (iii)  the Trustee shall not be liable with respect to any action it takes or omits to take in good faith in accordance with a direction received by it pursuant to Section 6.05.

        (d)  No provision of this Indenture, the Intercreditor Agreement or any Security Document shall require the Trustee to expend or risk its own funds or otherwise incur any liability. The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture, the Intercreditor Agreement or the Security Documents at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against any loss, liability or expense.

        (e)  Upon request by the Company, the Trustee is hereby authorized to enter into the Intercreditor Agreement in connection with the Credit Facility or any amendment, restatement, supplement, renewal, replacement or other modification thereof, entered into in accordance with the terms of this Indenture, including Section 4.08 hereof.

        (f)    The Trustee shall not be liable for interest on any money received by it except as provided by Section 12.06 hereof or as otherwise agreed to by the Company and the Trustee in writing. Money held in trust by the Trustee need not be segregated from other funds except to the extent required by law.

        (g)  Whether or not therein expressly so provided, every provision of this Indenture, the Intercreditor Agreement and the Security Documents that in any way relates to the Trustee is subject to this Section 7.01 and Section 7.02 hereof.

        7.02    Rights of Trustee.

        Subject to Section 7.01 hereof and the provisions of TIA § 315:

        (a)  The Trustee may rely on any document reasonably believed by it to be genuine and to have been signed or presented by the proper person. The Trustee need not investigate any fact or matter stated in the document.

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        (b)  Before the Trustee acts or refrains from acting, it may consult with counsel and require an Officers' Certificate or an Opinion of Counsel, or both, which shall (if applicable) conform to Sections 13.04 and 13.05 hereof. The Trustee shall not be liable for any action it takes or omits to take in good faith in reliance on such certificate or opinion.

        (c)  The Trustee may act through its attorneys and agents and shall not be responsible for the misconduct or negligence of any agent appointed with due care.

        (d)  The Trustee shall not be liable for any action taken or omitted by it in good faith and reasonably believed by it to be authorized or within the discretion, rights or powers conferred upon it by this Indenture, the Intercreditor Agreement or the relevant Security Document.

        (e)  The Trustee may consult with counsel of its own choosing and the advice or opinion of such counsel as to matters of law shall be full and complete authorization and protection in respect of any action taken, omitted or suffered by it under this Indenture, the Intercreditor Agreement or any Security Document, as the case may be, in good faith and in accordance with the advice or opinion of such counsel.

        (f)    The Trustee shall not be bound to make any investigation into the facts or matters stated in any resolution, certificate, statement, instrument, opinion, notice, request, direction, consent, order, bond, debenture, or other paper or document, but the Trustee, in its discretion, may make such further inquiry or investigation into such facts or matters as it may see fit.

        (g)  No provision of this Indenture, the Intercreditor Agreement or any Security Document shall require the Trustee to expend or risk its own funds or incur any liability. The Trustee shall be under no obligation to exercise any of its rights or powers under this Indenture, the Intercreditor Agreement or the Security Documents at the request or direction of any of the Holders unless such Holders shall have offered to the Trustee reasonable security or indemnity satisfactory to it against any loss, liability or expense.

        (h)  Unless otherwise specifically provided in this Indenture, any demand, request, direction or notice from the Company shall be sufficient if signed by an Officer of the Company.

        (i)    The Trustee may execute any of the trusts or powers hereunder or perform any duties hereunder either directly or by or through agents or attorneys and the Trustee shall not be responsible for any misconduct or negligence on the part of any agent or attorney appointed with due care by it hereunder.

        (j)    The Trustee shall not be deemed to have notice of any Default or Event of Default unless a Trust Officer of the Trustee has actual knowledge thereof or unless written notice of any event which is in fact such a default is received by the Trustee at the Corporate Trust Office of the Trustee, and such notice references the Notes and this Indenture.

        (k)  The rights, privileges, protections, immunities and benefits given to the Trustee, including, without limitation, its right to be indemnified, are extended to, and shall be enforceable by, the Trustee in each of its capacities hereunder, and to each agent, custodian and other person employed to act hereunder.

        7.03    Individual Rights of Trustee.

        The Trustee, any Paying Agent, Registrar or any other agent of the Company, in its individual or any other capacity, may become the owner or pledgee of Notes and, subject to Sections 7.11 and 7.13 hereof and TIA §§ 310 and 311, may otherwise deal with the Company and its Subsidiaries or any Affiliate of the Company with the same rights it would have if it were not the Trustee, Paying Agent, Registrar or such other agent.

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        7.04    Trustee's Disclaimer.

        The Trustee makes no representations as to the validity or sufficiency of this Indenture, the Intercreditor Agreement, any Security Document, the Registration Rights Agreement, the Notes or any Guarantee, it shall not be accountable for the Company's use or application of the proceeds from the Notes, it shall not be responsible for the use or application of any money received by any Paying Agent other than the Trustee and it shall not be responsible for any recital contained herein or any statement in the Notes other than the Trustee's certificate of authentication. The Trustee shall not be responsible for perfecting or maintaining the perfection of any security interest granted to it under any Security Document or for filing, refiling, recording or rerecording any document, Mortgage, notice or instrument in any public office at any time or times and shall not be responsible for seeing to the insurance on or the payment of any taxes with respect to any property subject to any Security Document.

        7.05    Notice of Default.

        If a Default or an Event of Default occurs and is continuing and if it is known to the Trustee, the Trustee shall mail to each Holder notice of the Default or Event of Default within 30 days after obtaining knowledge thereof; provided, however, that, except in the case of a default in the payment of the principal, premium, if any, or interest or Liquidated Damages, if any, on any Notes, the Trustee shall be protected in withholding such notice if and so long as the board of directors, the executive committee of the board of directors or a committee of the directors of the Trustee and/or Trust Officers in good faith determines that the withholding of such notice is in the interest of the Holders.

        7.06    Money Held in Trust.

        All moneys received by the Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, but need not be segregated from other funds except to the extent required by this Indenture, the Intercreditor Agreement or any Security Document or by law. The Trustee shall not be under any liability for interest on any moneys received by it hereunder or under the Intercreditor Agreement or any Security Document, except as the Trustee may agree with the Company.

        7.07    Reports by Trustee to Holders.

        Within 60 days after each May 15th, beginning with the May 15th following the date of this Indenture, the Trustee shall, to the extent that any of the events described in TIA § 313(a) shall have occurred within the previous twelve months, but not otherwise, mail to each Holder a brief report dated as of such reporting date that complies with TIA § 313(a). The Trustee also shall comply with TIA §§ 313(b) and 313(c).

        A copy of each report at the time of its mailing to Holders shall be mailed to the Company and filed with the SEC and each securities exchange, if any, on which the Notes are listed in accordance with TIA § 313(d).

        The Company shall notify the Trustee in writing if the Notes become listed on any securities exchange after the Issue Date and of any delisting thereof.

        7.08    Compensation and Indemnity.

        The Company and each Guarantor, jointly and severally, covenant and agree to pay the Trustee from time to time reasonable compensation for its services. The Trustee's compensation shall not be limited by any law on compensation of a trustee of an express trust. The Company and each Guarantor, jointly and severally, shall reimburse the Trustee upon request for all reasonable disbursements, expenses and advances incurred or made by it in addition to the compensation for its

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services. Such expenses shall include the reasonable compensation, disbursements and expenses of the Trustee's agents and counsel.

        The Company and each Guarantor, jointly and severally, shall indemnify the Trustee or any predecessor Trustee against any and all losses, damages, claims, liabilities or expenses incurred by it including taxes (other than taxes based upon, measured by or determined by the income of the Trustee) arising out of or in connection with the acceptance or administration of its duties under this Indenture, including the costs and expenses of enforcing this Indenture against the Company and the Guarantors (including this Section 7.08) (provided, however, that if the Trustee brings a claim against the Company or any Guarantor to enforce this Indenture and, after final adjudication of such claim, it is determined that the Trustee is not the prevailing party, the Trustee shall pay its own costs and expenses of enforcing this Indenture against the Company and the Guarantors) and defending itself against any claim (whether asserted by the Company or any Holder or any other person) or liability in connection with the acceptance, exercise or performance of any of its powers or duties hereunder, except to the extent any such loss, damage, claim, liability or expense may be attributable to its negligence, bad faith or willful misconduct. The Trustee shall notify the Company promptly of any claim for which it may seek indemnity. Failure by the Trustee to so notify the Company shall not relieve the Company of its obligations hereunder, except to the extent that the Company is actually prejudiced thereby. The Company shall defend the claim and the Trustee shall cooperate in the defense. The Trustee may have separate counsel and the Company shall pay the reasonable fees and expenses of such counsel (provided, however, that if the Trustee brings a claim against the Company or any Guarantor to enforce this Indenture and, after final adjudication of such claim, it is determined that the Trustee is not the prevailing party, the Trustee shall pay its own costs and expenses, including fees and expenses of counsel, of enforcing this Indenture against the Company and the Guarantors). The Company need not pay for any settlement made without its consent, which consent shall not be unreasonably withheld.

        To secure the Company's and the Guarantors' payment obligations in this Section 7.08, the Trustee shall have a Lien prior to the Notes on all assets held or collected by the Trustee, in its capacity as Trustee, except assets held in trust to pay principal of, premium, if any, or interest or Liquidated Damages, if any, on particular Notes.

        Without prejudice to any other rights available to the Trustee under applicable law, when the Trustee incurs expenses or renders services in connection with an Event of Default specified in Section 6.01(g) or (h) hereof, the expenses and the compensation for the services (including the fees and expenses of its agents and counsel) are intended to constitute expenses of administration under any Bankruptcy Law.

        The Company's and the Guarantors' obligations under this Section 7.08 and any Lien arising hereunder shall survive the resignation or removal of any Trustee, the discharge of the Company's and the Guarantors' obligations pursuant to Article Eight and/or the termination of this Indenture.

        The Trustee shall comply with the provisions of TIA § 313(b)(2) to the extent applicable.

        7.09    Replacement of Trustee.

        A resignation or removal of the Trustee and appointment of a successor Trustee shall become effective only upon the successor Trustee's acceptance of appointment as provided in this Section 7.09.

        The Trustee may resign at any time and be discharged from the trust hereby created by so notifying the Company in writing. The Holders of at least a majority in principal amount of the outstanding Notes may remove the Trustee by so notifying the Company and the Trustee. The Company may remove the Trustee if:

        (a)  the Trustee fails to comply with Section 7.11 hereof or TIA § 310(b);

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        (b)  the Trustee is adjudged a bankrupt or an insolvent or an order for relief is entered with respect to the Trustee under any Bankruptcy Law;

        (c)  a receiver or other public officer takes charge of the Trustee or its property; or

        (d)  the Trustee becomes incapable of acting.

        If the Trustee resigns or is removed or if a vacancy exists in the office of Trustee for any reason, the Company shall notify each Holder of such event and shall promptly appoint a successor Trustee. Within one year after the successor Trustee takes office, the Holders of at least a majority in principal amount of the then outstanding Notes may appoint a successor Trustee to replace the successor Trustee appointed by the Company.

        A successor Trustee shall deliver a written acceptance of its appointment to the retiring Trustee and to the Company. Immediately after that, the retiring Trustee shall, upon the payment of its charges, transfer all property held by it as Trustee to the successor Trustee; provided, that all sums owing to the Trustee hereunder have been paid and subject to the Lien provided for in Section 7.08 hereof. Thereupon, the resignation or removal of the retiring Trustee shall become effective, and the successor Trustee shall have all the rights, powers and duties of the Trustee under this Indenture, the Security Documents and the Intercreditor Agreement. The Company and the Guarantors shall take such action as shall be necessary so that all Collateral (including all Trust Moneys and other property in the Note Collateral Account) shall continue to be subject to the Lien of the Security Documents in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the Holders of the Notes. A successor Trustee shall mail notice of its succession to each Holder.

        If a successor Trustee does not take office within 60 days after the retiring Trustee resigns or is removed, the retiring Trustee, the Company or the Holders of at least 10% in principal amount of the then outstanding Notes may petition any court of competent jurisdiction for the appointment of a successor Trustee, at the expense of the Company.

        If the Trustee fails to comply with Section 7.11 hereof or TIA § 310(b), any holder who has been a bona fide holder of a Note for at least six months may petition any court of competent jurisdiction for the removal of the Trustee and the appointment of a successor Trustee.

        Notwithstanding replacement of the Trustee pursuant to this Section 7.09, the Company's obligations under Section 7.08 hereof shall continue for the benefit of the retiring Trustee.

        7.10    Successor Trustee by Merger, etc.

        If the Trustee consolidates with, merges or converts into, or transfers all or substantially all of its corporate trust business to, another corporation or national banking association, the resulting, surviving or transferee corporation or national banking association without any further act shall, if such resulting, surviving or transferee corporation or national banking association is otherwise eligible hereunder, be the successor Trustee.

        7.11    Eligibility.

        There shall at all times be a Trustee hereunder which shall be eligible to act as Trustee under TIA §§ 310(a)(1), 310(a)(2) and 310(a)(5) and which shall have a combined capital and surplus of at least $100,000,000. If such corporation publishes reports of condition at least annually, pursuant to law or to the requirements of federal, state, territorial or District of Columbia supervising or examining authority, then for the purposes of this Section, the combined capital and surplus of such corporation shall be deemed to be its combined capital and surplus as set forth in its most recent report of condition so published. If at any time the Trustee shall cease to be eligible in accordance with the provisions of this

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Section, the Trustee shall resign immediately in the manner and with the effect hereinafter specified in this Article. The Trustee is subject to TIA § 310(b).

        7.12    Co-Trustee.

        (a)  If at any time or times it shall be necessary or prudent in order to conform to any law of any jurisdiction in which any of the Collateral shall be located, or the Trustee shall be advised by counsel satisfactory to it that it is necessary or prudent in the interest of the Holders, or the Holders of at least 25% in aggregate principal amount of the outstanding Notes shall in writing so request the Trustee and the Company, or the Trustee shall deem it desirable for its own protection in the performance of its duties hereunder, the Trustee, the Company and the Guarantors shall execute and deliver all instruments and agreements necessary or proper to constitute another bank or trust company, or one or more persons approved by the Trustee and the Company, either to act as co-trustee or co-trustees (each a "co-trustee") of all or any of the Collateral, jointly with the Trustee, or to act as separate trustee or trustees of any such property. If the Company or the Guarantors shall not have joined in the execution of such instruments and agreements within 10 days after the Company receives a written request from the Trustee to do so, or if an Event of Default has occurred and is continuing, the Trustee may act under the foregoing provisions of this Section 7.12 without the concurrence of the Company or any Guarantor. The Company and each of the Guarantors each hereby appoint the Trustee as its agent and attorney to act for it under the foregoing provisions of this Section 7.12 in either of such contingencies.

        (b)  Every separate trustee and every co-trustee, other than any successor Trustee appointed pursuant to Section 7.09 hereof, shall, to the extent permitted by law, be appointed and act and be such, subject to the following provisions and conditions:

        (i)    all rights, powers, duties and obligations conferred or imposed upon the Trustee hereunder shall be conferred or imposed and exercised or performed by the Trustee and such separate trustee or separate trustees or co-trustee or co-trustees, jointly, as shall be provided in the instrument appointing such separate trustee or separate trustees or co-trustee or co-trustees, except to the extent that under any law of any jurisdiction in which any particular act or acts are to be performed the Trustee shall be incompetent or unqualified to perform such act or acts, in which event such rights, powers, duties and obligations shall be exercised and performed singly by such separate trustee or separate trustees or co-trustee or co-trustees, but solely at the direction of the Trustee;

        (ii)  no trustee or co-trustee hereunder shall be personally liable by reason of any act or omission of any other trustee or co-trustee hereunder; and

        (iii)  the Company, the Guarantors and the Trustee, at any time by an instrument in writing executed by them jointly, may accept the resignation of or remove any such separate trustee or co-trustee and, in that case by an instrument in writing executed by them jointly, may appoint a successor to such separate trustee or co-trustee, as the case may be, anything contained herein to the contrary notwithstanding. If the Company or the Guarantors shall not have joined in the execution of any such instrument within 10 days after the Company receives a written request from the Trustee to do so, or if an Event of Default has occurred and is continuing, the Trustee shall have the power to accept the resignation of or remove any such separate trustee or co-trustee and to appoint a successor without the concurrence of the Company or any Guarantor, the Company and each of the Guarantors each hereby appointing the Trustee its agent and attorney to act for it in such connection in such contingency. If the Trustee shall have appointed a separate trustee or co-trustee as above provided, the Trustee may at any time, by an instrument in writing, accept the resignation of or remove any such separate trustee or co-trustee and the successor to any such separate trustee or co-trustee

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shall be appointed by the Company, the Guarantors and the Trustee, or by the Trustee alone pursuant to this Section 7.12.

        7.13    Preferential Collection of Claims Against Company.

        The Trustee shall comply with TIA § 311(a), excluding any creditor relationship listed in TIA § 311(b). If the present or any future Trustee shall resign or be removed, it shall be subject to TIA § 311(a) to the extent provided therein.

ARTICLE EIGHT

SATISFACTION AND DISCHARGE OF INDENTURE; LEGAL DEFEASANCE AND COVENANT DEFEASANCE

        8.01    Termination of the Company's Obligations.

        (a)  The Company may terminate its obligations under the Notes, the Security Documents and this Indenture, except those obligations referred to in Section 8.01(b) hereof (whereupon the obligations of the Guarantors under the Notes, this Indenture, the Guarantees and their Security Documents except those obligations referred to in Section 8.01(b) hereof, shall also terminate, and the Company may, by complying with the provisions of Section 11.05(a) hereof, obtain the release of the Collateral as security for the Notes and the Guarantees), when:

        (1)  all Notes previously authenticated and delivered (except destroyed, lost or stolen Notes which have been replaced and Notes for whose payment money has theretofore been deposited with the Trustee or the Paying Agent in trust or segregated and held in trust by the Company and thereafter repaid to the Company or a Guarantor, as provided in Section 8.04 hereof) have been delivered to the Trustee for cancellation, the Company and each Guarantor shall have paid all sums payable by it under this Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Security Documents and the Company shall have delivered an Officers' Certificate and an Opinion of Counsel stating that all conditions precedent herein provided for the termination of the Company's and each Guarantor's obligations under the Notes, this Indenture, the Guarantees and their Security Documents have been complied with, or:

        (2)  (i)    all Notes have been called for redemption pursuant to Article Three hereof, by the Company giving notice to the Trustee and mailing to each Holder a notice of redemption in accordance with the terms of Article Three or all Notes otherwise have become due and payable hereunder;

        (ii)  the Company shall have irrevocably deposited or caused to be deposited with the Trustee, under the terms of an irrevocable trust agreement in form satisfactory to the Trustee, as trust funds in trust solely for the benefit of the Holders for that purpose, money in U.S. dollars in such amount as is sufficient, without consideration of investment or reinvestment of such monies, to pay and discharge the entire indebtedness on the Notes then outstanding not theretofore delivered to the Trustee for cancellation for principal, premium, if any, and interest and Liquidated Damages, if any, to maturity or redemption, as the case may be, as certified in a certificate of a nationally recognized firm of independent public accountants delivered to the Trustee; provided that the Trustee shall have been irrevocably instructed by Company Order to apply such money to the payment of said principal, premium, if any, and interest and Liquidated Damages, if any, with respect to the Notes;

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        (iii)  no Default or Event of Default shall have occurred and be continuing on the date of such deposit or shall occur as a result of such deposit (other than a Default or Event of Default resulting from the borrowing of such deposit);

        (iv)  such deposit shall not result in a breach or violation of, or constitute a default under, any other material instrument (other than this Indenture) to which the Company or any Guarantor is a party or by which it is bound;

        (v)  each of the Company and each Guarantor shall have paid all other sums payable by it under this Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Security Documents; and

        (vi)  the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel specifying the provisions of this Indenture and the Security Documents which authorize such release, confirming the satisfaction of all conditions set forth in clauses (i) through (v) above, and certifying that all documentation required by the TIA, if any, prior to the release of the Collateral, has been executed, acknowledged, delivered and filed, as the case may be.

        (b)  Notwithstanding Section 8.01(a) hereof, the Company's obligations under and the other provisions of Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01, 4.02, 4.20, 7.07, 7.08 and 7.09 hereof and this Article Eight and each Guarantor's obligations in respect thereof under Article Ten hereof shall survive until the Notes are no longer outstanding pursuant to the last paragraph of Section 2.08 hereof. After the Notes are no longer outstanding, the Company's obligations under and the other provisions of Sections 7.08, 8.03, 8.04 and 8.05 hereof and each Guarantor's obligations under Article Ten hereof in respect thereof shall survive.

        (c)  After such delivery or irrevocable deposit, the Trustee, upon request, shall acknowledge in writing the discharge of the Company's and each Guarantor's obligations under the Notes, this Indenture, the Security Documents and its Guarantee, as the case may be, except for those surviving obligations specified in Section 8.01(b) hereof.

        8.02    Legal Defeasance and Covenant Defeasance.

        (a)  The Company may, at its option by Board Resolution, at any time, with respect to the Notes, elect to have either Section 8.02(b) or Section 8.02(c) below be applied to the outstanding Notes and Guarantees upon compliance with the conditions set forth in Section 8.02(d) below.

        (b)    Legal Defeasance.    Upon the Company's exercise under Section 8.02(a) hereof of the option applicable to this Section 8.02(b), the Company and each Guarantor shall be deemed to have been released and discharged from their respective obligations with respect to the outstanding Notes and Guarantees on the date the conditions set forth below are satisfied (hereinafter, "Legal Defeasance") (whereupon the Company may, by complying with the requirements of Section 11.05(a) hereof, obtain the release of the Collateral as security for the Notes and the Guarantees). For this purpose, such Legal Defeasance means that the Company shall be deemed to have paid and discharged the entire Indebtedness represented by the outstanding Notes, which shall thereafter be deemed to be "outstanding" only for the purposes of Section 8.02(e) below and the other Sections of and matters under this Indenture referred to in (i) and (ii) below, and to have satisfied all its other obligations under such Notes and this Indenture insofar as such Notes are concerned (and the Trustee, at the expense of the Company, shall execute proper instruments acknowledging the same), except for the following which shall survive until otherwise terminated or discharged hereunder:

        (i)    the rights of Holders of outstanding Notes to receive solely from the trust fund described in Section 8.02(d) below and as more fully set forth in such Section 8.02(d),

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payments in respect of the principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes when such payments are due,

        (ii)  the Company's obligations under and the other provisions of Sections 2.02, 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.02, 4.20, 7.07, 7.08 and 7.09 hereof and each Guarantor's obligations in respect thereof under Article Ten hereof,

        (iii)  the rights, powers, trusts, duties and immunities of the Trustee hereunder and the obligations of the Company and the Guarantors in connection therewith, and

        (iv)  this Article Eight and each Guarantor's obligations in respect thereof under Article Ten.

        Subject to compliance with this Section 8.02, the Company may exercise its option under this Section 8.02(b) notwithstanding the prior exercise of its option under Section 8.02(c) with respect to the Notes.

        (c)    Covenant Defeasance.    Upon the Company's exercise under Section 8.02(a) hereof of the option applicable to this Section 8.02(c), the Company shall be released and discharged from its obligations under any covenant contained in Sections 4.08 through 4.19 and 4.21 and 4.22 hereof and under the provisions set forth in clauses (a) (but only to the extent that such clause (a) requires the execution and delivery of documents in order to assume or to confirm obligations under the Intercreditor Agreement, the Security Documents or the CF&I Note or the filing or recording of such documents or of financing statements), (b), (c), (d)(2) and (e) of Section 5.01 hereof and each Guarantor shall be released and discharged from its obligations under clauses (a) (but only to the extent that such clause (a) requires the execution and delivery of documents in order to assume or to confirm obligations under the Intercreditor Agreement, the Security Documents or the CF&I Note or the filing or recording of such documents or of financing statements), (b), (c), (d)(2) and (e) of the first sentence of Section 10.03 hereof and the penultimate sentence of Section 10.03 hereof (but only to the extent that such penultimate sentence requires the execution and delivery of documents to confirm obligations under the Intercreditor Agreement, the Security Documents or the CF&I Note), on and after the date the conditions set forth below are satisfied (hereinafter, "Covenant Defeasance") (whereupon the Company may, by complying with the requirements of Section 11.05(a) hereof, obtain the release of the Collateral as security for the Notes and the Guarantees, and upon any such release the Company shall also be released and discharged from its obligations under Article Eleven hereof), and the Notes shall thereafter be deemed to be not "outstanding" for the purpose of any direction, waiver, consent or declaration or act of Holders (and the consequences of any thereof) in connection with such covenants, but shall continue to be deemed "outstanding" for all other purposes hereunder. For this purpose, such Covenant Defeasance means that, with respect to the outstanding Notes, the Company and each Guarantor may omit to comply with and shall have no liability in respect of any term, condition or limitation set forth in any such covenant, whether directly or indirectly, by reason of any reference elsewhere herein to any such covenant or by reason of any reference in any such covenant to any other provision herein or in any other document and such omission to comply shall not constitute a Default or an Event of Default, but, except as specified above, the remainder of this Indenture, the Guarantees and such Notes shall be unaffected thereby.

        (d)    Conditions to Legal or Covenant Defeasance.    The following shall be the conditions to application of either Section 8.02(b) or Section 8.02(c) hereof to the outstanding Notes:

        In order to exercise either Legal Defeasance or Covenant Defeasance:

        (i)    the Company shall irrevocably have deposited with the Trustee (or other qualifying trustee), in trust, for the benefit of the Holders of the Notes, cash in United

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States dollars, U.S. Government Obligations, or a combination thereof, in such amounts as will be sufficient, in the written opinion of a nationally recognized firm of independent public accountants, to pay the principal of, premium, if any, and interest and Liquidated Damages, if any, on the outstanding Notes on the Stated Maturity thereof or applicable redemption date, as the case may be, and the company must specify whether the Notes are being defeased to maturity or to a particular redemption date;

        (ii)  no Default or Event of Default shall have occurred and be continuing either (A) on the date of such deposit (other than a Default or Event of Default resulting from the borrowing of funds to be applied to such deposit) or (B) insofar as Section 6.01(g) or (h) hereof is concerned, at any time during the period ending on the 123rd day after the date of such deposit (it being understood that this condition shall not be deemed satisfied until the expiration of such period);

        (iii)  the Company shall have delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee to the effect that such Legal Defeasance or Covenant Defeasance shall not result in a breach or violation of, or constitute a default under, any material agreement or instrument (other than this Indenture) to which the Company or any of the Guarantors is a party or by which the Company or any of the Guarantors is bound;

        (iv)  in the case of an election under Section 8.02(b) hereof, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee confirming that (A) the Company has received from, or there has been published by, the Internal Revenue Service a ruling or (B) after the Issue Date, there has been a change in the applicable federal income tax laws, in either case to the effect that the Holders of outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such Legal Defeasance and will be subject to income tax on the same amounts, in the same manner and at the same time(s) as would have been the case if such Legal Defeasance had not occurred;

        (v)  in the case of an election under Section 8.02(c) hereof, the Company shall have delivered to the Trustee an Opinion of Counsel reasonably satisfactory to the Trustee confirming that the holders of outstanding Notes will not recognize income, gain or loss for federal income tax purposes as a result of such covenant defeasance and will be subject to income tax on the same amounts, in the same manner and at the same time(s) as would have been the case if such covenant defeasance had not occurred;

        (vi)  the Company shall have delivered to the Trustee an Opinion of Counsel to the effect that (A) the trust funds will not be subject to any rights of any other holders of Indebtedness of the Company and (B) after the 123rd day following the deposit, the trust funds will not be subject to avoidance as a preference or recovery under any applicable Bankruptcy Law and nothing in any such Bankruptcy Law shall prohibit the Trustee from distributing the trust funds to the Holders;

      (vii)  the Company shall have delivered to the Trustee an Officers' Certificate and an Opinion of Counsel confirming the satisfaction of all conditions to either Legal Defeasance under Section 8.02(b) hereof or Covenant Defeasance under Section 8.02(c) hereof;

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      (viii)  if the cash and U.S. Government Obligations deposited with the Trustee under subparagraph (i) of this Section 8.02(d) are sufficient to pay and discharge the principal of, premium, if any, and interest and Liquidated Damages if any, on the outstanding Notes, provided such Notes are redeemed on a particular Redemption Date, the Company shall have given the Trustee irrevocable instructions to redeem such Notes on such date and to provide notice of such redemption to holders as provided in this Indenture;

        (ix)  if the trust funds referred to in subparagraph (i) of this Section 8.02(d) shall have been deposited with another trustee in accordance with the provisions thereof, such other trustee shall have delivered to the Trustee a certificate (on which certification the Trustee may conclusively rely) that such other trustee is holding and will continue to hold and will apply such trust funds in accordance with the requirements of Sections 8.02 and 8.03 hereof; and

        (x)  the Company shall have delivered to the Trustee an Officers' Certificate stating that the deposit was not made by the Company with the intent of preferring the Holders over other creditors of the Company or of defeating, hindering, delaying or defrauding any other creditors of the Company or others.

        (e)  All money and U.S. Government Obligations (including the proceeds thereof) deposited with the Trustee (or other qualifying trustee, collectively for purposes of this Section 8.02(e), the "Trustee") pursuant to Section 8.02(d) hereof in respect of the outstanding Notes shall be held in trust and applied by the Trustee, in accordance with the provisions of the Notes and this Indenture, to the payment, either directly or through any Paying Agent (other than the Company or any Subsidiary or Affiliate of the Company) as the Trustee may determine, to the Holders of such Notes of all sums due and to become due thereon in respect of principal, premium and interest and Liquidated Damages, if any, but such money need not be segregated from other funds except to the extent required by law.

        The Company and the Guarantors, jointly and severally, shall pay and indemnify the Trustee against any tax, fee or other charge imposed on or assessed against the U.S. Government Obligations deposited pursuant to Section 8.02(d) hereof or the principal, premium, if any, and interest and Liquidated Damages, if any, received in respect thereof other than any such tax, fee or other charge which by law is for the account of the Holders of the outstanding Notes.

        Anything in this Section 8.02 to the contrary notwithstanding, the Trustee shall deliver or pay to the Company from time to time upon Company Order any money or U.S. Government Obligations held by it as provided in Section 8.02(d) hereof which, in the opinion of a nationally recognized firm of independent public accountants expressed in a written certification thereof delivered to the Trustee, are in excess of the amount thereof which would then be required to be deposited to effect an equivalent Legal Defeasance or Covenant Defeasance.

        8.03    Application of Trust Money.

        The Trustee (or any other qualifying trustee) shall hold in trust money and U.S. Government Obligations deposited with it pursuant to Sections 8.01 and 8.02 hereof, and shall apply the deposited money and the money from U.S. Government Obligations in accordance with this Indenture to the payment of principal of, premium, if any, and interest and Liquidated Damages, if any, on the Notes.

        8.04    Repayment to Company or Guarantors.

        The Trustee and the Paying Agent shall pay to the Company or any applicable Guarantor, upon receipt by the Trustee or the Paying Agent, as the case may be, of an Officers' Certificate, any money held by it for the payment of principal, premium, if any, or interest or Liquidated Damages, if any, that

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remains unclaimed for two years after payment to the Holders is required; provided, however, that the Trustee and the Paying Agent before being required to make any payment may, but need not, at the expense of the Company cause to be published once in a newspaper of general circulation in the City of New York or mail to each Holder entitled to such money notice that such money remains unclaimed and that after a date specified therein, which shall be at least 30 days from the date of such publication or mailing, any unclaimed balance of such money then remaining will be repaid to the Company or any applicable Guarantor. After payment to the Company or any Guarantor, Holders entitled to money must look solely to the Company for payment as general creditors unless an applicable abandoned property law designates another person, and all liability of the Trustee or Paying Agent with respect to such money shall thereupon cease.

        8.05    Reinstatement.

        If the Trustee (or other qualifying trustee) or Paying Agent is unable to apply any money or U.S. Government Obligations in accordance with this Indenture by reason of any legal proceeding or by reason of any order or judgment of any court or governmental authority enjoining, restraining or otherwise prohibiting such application, then and only then, the Company's and each Guarantor's obligations under this Indenture, the Guarantees and the Notes shall be revived and reinstated as though no deposit had been made pursuant to this Indenture, until such time as the Trustee is permitted to apply all such money or U.S. Government Obligations in accordance with this Indenture; provided, however, that if the Company or a Guarantor has made any payment of principal of, premium, if any, or interest or Liquidated Damages, if any, on any Notes because of the reinstatement of its obligations, the Company or such Guarantor, as the case may be, shall be subrogated to the rights of the Holders of such Notes to receive such payment from the money or U.S. Government Obligations held by the Trustee (or other qualifying trustee) or Paying Agent.

ARTICLE NINE

AMENDMENTS, SUPPLEMENTS AND WAIVERS

        9.01    Without Consent of Holders.

        Notwithstanding Section 9.02 hereof, the Company and the Guarantors, each when authorized by a Board Resolution of its Board of Directors, and the Trustee may, without the consent of the Holders of any outstanding Notes, amend, waive or supplement this Indenture, the Notes, the Security Documents, the Guarantees, the Intercreditor Agreement or the Notes:

        (a)  to cure any ambiguity, defect or inconsistency;

        (b)  to evidence the succession of another person to the Company in accordance with Article Five hereof or the succession of another person to a Guarantor in accordance with Section 10.03 hereof, and the assumption by any such successor of the obligations of the Company or such Guarantor, as the case may be, in accordance with this Indenture and the Security Documents;

        (c)  to qualify, or maintain the qualification of, this Indenture under the TIA;

        (d)  to give effect to the release of any Released Interests or any other release of Collateral, in each case permitted to be released in accordance with the terms of this Indenture or the relevant Security Documents;

        (e)  to evidence or effect the pledge of additional or substitute assets or property as Collateral in accordance with this Indenture and the Security Documents;

        (f)    to evidence the release of any Guarantor in accordance with Section 10.04 hereof or the addition of any new Guarantor in accordance with Sections 4.17 and 4.22 hereof;

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        (g)  to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee with respect to the Notes and to make such additions or changes as shall be necessary or appropriate to provide for or facilitate the administration of the trusts hereunder by more than one trustee pursuant to the requirements of Section 7.12 hereof;

        (h)  to comply with the requirements of the Trustee and the Depository (including their respective nominees) with respect to transfers of beneficial interests in the Notes or to provide for issuance of the Exchange Notes; and

        (i)    to make any other change that would provide any additional rights or benefits to the Holders of the Notes, or that does not adversely affect the rights of any Holder of Notes under this Indenture, the Notes, the Guarantees, the Registration Rights Agreement or the Security Documents or, in the case of any other change to the Intercreditor Agreement, that does not adversely affect the rights of any Holder of Notes in any material respect.

        9.02    With Consent of Holders.

        Subject to Section 6.04 hereof, and except as expressly stated otherwise in this Section 9.02, the Company and the Guarantors, each when authorized by a Board Resolution of its Board of Directors, and the Trustee may amend or supplement this Indenture, the Guarantees, the Security Documents, the Intercreditor Agreement or the Notes with the written consent of the Holders of not less than a majority in aggregate principal amount of the Notes then outstanding, and the Holders of not less than a majority in aggregate principal amount of the Notes then outstanding by written notice to the Trustee may waive future compliance by the Company or any Guarantor with any provision of this Indenture, the Guarantees, the Security Documents, the Registration Rights Agreement, the Intercreditor Agreement or the Notes. Notes issued and outstanding under this Indenture shall vote and consent together on all matters as one class and no series of Notes will have the right to vote or consent as a separate class on any matter.

        Notwithstanding the provisions of the preceding paragraph of this Section 9.02, without the consent of each Holder affected, an amendment, supplement or waiver, including a waiver pursuant to Section 6.04 hereof, may not (with respect to any Notes held by a non-consenting Holder):

        (a)  reduce the principal amount of outstanding Notes whose Holders must consent to an amendment, supplement or waiver under this Indenture, the Guarantees, the Security Documents, the Registration Rights Agreement, the Notes or the Intercreditor Agreement;

        (b)  reduce the rate or change the time for payment of interest on any Note;

        (c)  change the currency in which any Note or any premium, interest or Liquidated Damages, if any, thereon is payable or make the principal of, premium, if any, or interest or Liquidated Damages, if any, on any Note payable in money other than that stated in the Note;

        (d)  reduce the principal amount of, or the premium (including, without limitation, the amount of premium, if any, payable upon redemption, except as permitted by subparagraph (g) below) on, or change or have the effect of changing the fixed maturity of, any Note;

        (e)  waive a Default or Event of Default in the payment of principal of, or premium, if any, or interest or Liquidated Damages, if any, on the Notes (except a rescission of acceleration of the Notes by the Holders of a majority in aggregate principal amount of the Notes and a waiver of the payment default that resulted from such acceleration);

        (f)    modify this Section 9.02 or Section 6.04 or Section 6.07;

        (g)  alter or waive any provisions with respect to the redemption of the Notes (including any redemption payment with respect to any Note) (other than a payment required by, or other provisions of, Section 4.12 or 4.13);

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        (h)  modify or change any provision of this Indenture affecting the ranking of the Notes or any Guarantee in a manner adverse to the Holders of the Notes;

        (i)    impair the right to institute suit for the enforcement of any payment on or with respect to the Notes;

        (j)    release any Guarantor from any of its obligations under its Guarantee or Security Documents or this Indenture other than in compliance with Section 10.04 hereof and the Security Documents; or

        (k)  directly or indirectly release or terminate the Liens created by the Security Documents on all or substantially all of the Collateral (except as expressly permitted by this Indenture and the Security Documents).

        It shall not be necessary for the consent of the Holders under this Section 9.02 to approve the particular form of any proposed amendment, supplement or waiver, but it shall be sufficient if such consent approves the substance thereof.

        After an amendment, supplement or waiver under this Section 9.02 becomes effective, the Company shall mail to the Holder of each Note affected thereby, with a copy to the Trustee, a notice briefly describing the amendment, supplement or waiver. Any failure of the Company to mail such notice, or any defect therein, shall not, however, in any way impair or affect the validity of any amendment, supplement or waiver.

        9.03    Compliance with Trust Indenture Act.

        Every amendment of or supplement to this Indenture, any Guarantee, any Security Document, the Intercreditor Agreement or the Notes shall comply with the TIA as then in effect.

        9.04    Revocation and Effect of Consents.

        Until an amendment, supplement or waiver becomes effective, a consent to it by a Holder of a Note is a continuing consent by such Holder and every subsequent Holder of that Note or portion of that Note that evidences the same debt as the consenting Holder's Note, even if notation of the consent is not made on any Note. However, any such Holder or subsequent Holder may revoke the consent as to his Note or portion of a Note prior to such amendment, supplement or waiver becoming effective. Such revocation shall be effective only if the Trustee receives the notice of revocation before the date the amendment, supplement or waiver becomes effective. Notwithstanding the above, nothing in this paragraph shall impair the right of any Holder under TIA § 316(b).

        The Company may, but shall not be obligated to, fix a record date for the purpose of determining the Holders entitled to consent to any amendment, supplement or waiver. If a record date is fixed, then notwithstanding the second and third sentences of the immediately preceding paragraph, those persons who were Holders at such record date (or their duly designated proxies), and only those persons, shall be entitled to consent to such amendment, supplement or waiver or to revoke any consent previously given, whether or not such persons continue to be Holders after such record date. Such consent shall be effective only for actions taken within 90 days after such record date.

        After an amendment, supplement or waiver becomes effective, it shall bind every Holder unless it makes a change described in any of clauses (a) through (k) of the second paragraph of Section 9.02 hereof; if it makes such a change, the amendment, supplement or waiver shall bind only each Holder of a Note who has consented to it and every subsequent holder of a Note or portion of a Note that evidences the same debt as the consenting Holder's Note.

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        9.05    Notation on or Exchange of Notes.

        If an amendment, supplement or waiver changes the terms of a Note, the Trustee shall (in accordance with the specific direction, if any, of the Company) request the Holder of the Note to deliver it to the Trustee. The Trustee shall (in accordance with the specific direction, if any, of the Company) place an appropriate notation on the Note and on Notes issued on registration of transfer or exchange of such Note about the changed terms and return it to the Holder. Alternatively, if the Company or the Trustee so determines, the Company in exchange for the Note shall issue and the Trustee shall authenticate a new Note that reflects the changed terms. Failure to make the appropriate notation or issue a new Note shall not affect the validity and effect of such amendment, supplement or waiver.

        9.06    Trustee May Sign Amendments, etc.

        The Trustee shall sign any amendment, supplement or waiver authorized pursuant to this Article Nine if the amendment, supplement or waiver does not adversely affect the rights, duties, liabilities or immunities of the Trustee. If it does, the Trustee may, but need not, sign it. In signing or refusing to sign such amendment, supplement or waiver, the Trustee shall be entitled to receive, and shall be fully protected in relying upon, an Officers' Certificate and an Opinion of Counsel stating that any amendment, supplement or waiver is authorized or permitted by this Indenture, the Notes, the Guarantees, the Security Documents, the Registration Rights Agreement and the Intercreditor Agreement, that it is not inconsistent herewith or therewith and that it will be valid and binding upon the Company and the Guarantors in accordance with its terms.

ARTICLE TEN

GUARANTEE OF NOTES

        10.01    Guarantee.

        Subject to the provisions of this Article Ten, each Guarantor hereby, jointly and severally, unconditionally guarantees to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns, irrespective of the validity and enforceability of this Indenture, the Notes, the Registration Rights Agreement, the Security Documents or the Intercreditor Agreement or the obligations of the Company or any other Guarantors to the Holders or the Trustee hereunder or thereunder, that:

        (a)  the principal of and interest and Liquidated Damages, if any, on the Notes shall be duly and punctually paid in full when due, whether at Stated Maturity, upon acceleration, upon optional redemption, upon required purchase or otherwise, and interest on the overdue principal and (to the extent permitted by law) interest and Liquidated Damages, if any, on the Notes and all other obligations of the Company and the Guarantors to the Holders or the Trustee under this Indenture, the Notes, the Registration Rights Agreement, the Security Documents and the Intercreditor Agreement (including fees, expenses, indemnities or other amounts payable thereunder) shall be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and

        (b)  in case of any extension of time of payment or renewal of any Notes or any of such other obligations, the same shall be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at Stated Maturity, upon acceleration, upon optional redemption, upon required purchase or otherwise.

        Failing payment when due of any amount so guaranteed, or failing performance of any other obligation of the Company to the Holders or the Trustee, for whatever reason, each Guarantor shall be obligated, jointly and severally, to pay, or to perform or cause the performance of, the same

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immediately. An Event of Default under this Indenture or the Notes shall constitute an event of default under this Guarantee, and shall entitle the Holders of Notes and the Trustee to accelerate the obligations of the Guarantors hereunder in the same manner and to the same extent as the obligations of the Company.

        Each of the Guarantors hereby agrees (to the maximum extent permitted by law) that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes, the Registration Rights Agreement, the Security Documents, the Intercreditor Agreement or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, any release of any other Guarantor or any Collateral, the recovery of any judgment against the Company, any action to enforce the same, whether or not a Guarantee is affixed to any particular Note, or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each of the Guarantors hereby waives (to the maximum extent permitted by law) the benefit of diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants (to the maximum extent permitted by law) that its Guarantee shall not be discharged except by complete performance of the obligations contained in the Notes, this Indenture, the Registration Rights Agreement, the Security Documents, the Intercreditor Agreement and this Guarantee. This Guarantee is a guarantee of payment and not of collection.

        If any Holder or the Trustee is required by any court or otherwise to return to the Company or to any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or such Guarantor, any amount paid by the Company or such Guarantor to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect.

        Each Guarantor further agrees (to the fullest extent permitted by law) that, as between it, on the one hand, and the Holders of Notes and the Trustee, on the other hand, (a) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article Six hereof for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations guaranteed hereby, and (b) in the event of any acceleration of such obligations as provided in Article Six hereof, such obligations (whether or not due and payable) shall forthwith become due and payable by the Guarantors for the purpose of this Guarantee.

        This Guarantee shall remain in full force and effect and continue to be effective should any petition be filed by or against the Company for liquidation or reorganization, should the Company become insolvent or make an assignment for the benefit of creditors or should a receiver or trustee be appointed for all or any significant part of the Company's assets, and shall, to the fullest extent permitted by law, continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Notes are, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee on the Notes, whether as a "voidable preference", "fraudulent transfer" or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Notes shall, to the fullest extent permitted by law, be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

        10.02    Execution and Delivery of Guarantee.

        To further evidence the Guarantee set forth in Section 10.01 hereof, each Guarantor hereby agrees that a notation of such Guarantee, substantially in the form included in Exhibit E hereto, shall be executed on behalf of such Guarantor by one of its Officers (by manual or facsimile signature) under its corporate seal (which may be a facsimile of its genuine seal and provided that, if any Guarantor is a partnership, the corporate seal shall be that of its direct or indirect corporate general partner executing

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the Guarantee or, if such partnership has no direct or indirect corporate general partner, the seal shall be that of its general partner executing the Guarantee or, if such general partner has no seal, the seal may be omitted) attested by the manual of facsimile signature of another of its Officers and shall be endorsed on each Note authenticated and delivered by the Trustee. Typographical and other minor defects in any reproduction of any such signature or seal shall not affect the validity or enforceability of any Guarantee. In addition, the validity and enforceability of any Guarantee shall not be affected by the fact that a notation of such Guarantee is not affixed to any particular Note. The Company shall cause all future Guarantors to execute a supplemental indenture and otherwise comply with Sections 4.17 and 4.22 hereof.

        Each of the Guarantors hereby agrees that its Guarantee set forth in Section 10.01 hereof shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee.

        If an Officer of a Guarantor whose signature on a Guarantee no longer holds that office at the time the Trustee authenticates such Note or at any time thereafter, such Guarantor's Guarantee of such Note shall be valid nevertheless.

        The delivery of any Note by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of any Guarantee set forth in this Indenture on behalf of each Guarantor.

        To provide an "original evidence of debt" as required by Section 38-38-101 and 38-39-102 of the Colorado Revised Statutes (or any successor statutes thereto), CF&I has, on the Issue Date, executed and delivered the CF&I Note to the Trustee, which CF&I Note further evidences the Guarantee set forth in Section 10.01 hereof. The parties hereto agree that the Guarantee of CF&I set forth in this Article Ten and the notation of such Guarantee endorsed on each Note shall in no way be limited by the CF&I Note. The CF&I Note shall be executed and attested as provided above in this Section 10.02, but notwithstanding the foregoing provisions of this Section 10.02, a notation of the CF&I Note shall not be endorsed on the Notes. Anything herein to the contrary notwithstanding, CF&I's covenants and agreements and the other provisions and limitations set forth in this Article Ten applicable to CF&I's Guarantee shall, unless the context otherwise requires, apply equally to the CF&I Note and, as a result, the CF&I Note will be entitled to the benefits of such covenants and agreements and shall be subject to such other provisions and limitations (including, without limitation, Sections 10.01, 10.05, 10.06 and 10.07 hereof). The Trustee shall hold the CF&I Note for the benefit of the Holders. Upon receipt of a Company Order in connection with any release or partial release of property subject to any Mortgage executed by CF&I, the Trustee shall present the Global Note to the relevant public trustee in the State of Colorado in order to obtain such release or partial release (but the Trustee shall thereafter retain possession of the Global Notes).

        10.03    Merger or Consolidation of a Guarantor.

        Except for a transaction in which a Guarantor is released from its Guarantee in accordance with Section 10.04 hereof, no Guarantor shall, (a) directly or indirectly, in any transaction or series of transactions, merge, consolidate or amalgamate with or into, or sell, assign, convey, transfer, lease or otherwise dispose of all or substantially all of its properties and assets to, any person or persons, or (b) permit any of its Subsidiaries that are Guarantors (each, a "Subsidiary Guarantor") to enter into any such transaction or series of transactions if such transaction or series of transactions, in the aggregate, would result in a sale, assignment, conveyance, transfer, lease or other disposition of all or substantially all of the properties and assets of such Guarantor or of such Guarantor and its Subsidiary Guarantors, taken as a whole, to any other person or persons, unless at the time of and after giving effect thereto:

        (a)  either:

          (i)  such Guarantor shall be the surviving person, or

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        (ii)  the person formed by or surviving such consolidation, merger or amalgamation (if other than such Guarantor) or into which such Guarantor or such Subsidiary Guarantors, as the case may be, is merged or to which the properties and assets of such Guarantor or such Subsidiary Guarantor, as the case may be, are transferred (any such surviving person or transferee being the "Surviving Person"),

        (A)  shall be the Company or another Guarantor (with the percentage of outstanding Capital Stock owned by the Company to be at least equal to the percentage of outstanding Capital Stock of such Guarantor owned by the Company immediately prior to such merger, consolidation, amalgamation or transfer) and shall be a corporation (or if such Guarantor is CF&I, a corporation or a limited partnership) organized and existing under the laws of the United States of America, any state thereof or the District of Columbia, and

        (B)  shall expressly assume (except in the case of a merger into or the transfer of properties and assets to the Company), by a supplemental indenture, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of such Guarantor under its Guarantee and this Indenture (and such supplemental indenture shall also be executed by the Company and each other Guarantor and shall further provide that the Company confirms that its obligations under this Notes and this Indenture and each other Guarantor confirms that its obligations under this Indenture and its Guarantee, remain in full force and effect), and

        (C)  shall expressly assume, by amendment, supplement or other appropriate instrument, executed and delivered to the Trustee, in form reasonably satisfactory to the Trustee, all of the obligations of such Guarantor under the Intercreditor Agreement, the Registration Rights Agreement and its Security Documents (and such amendment, supplement or other instrument shall also be executed by the Company and each other Guarantor and shall further provide that the Company and each Guarantor confirms that its obligations under the Registration Rights Agreement, the Intercreditor Agreement and its Security Documents remain in full force and effect), and

        (D)  shall cause such amendments, supplements or other instruments to be filed and recorded in such jurisdictions as may be required by applicable law to preserve and protect the Lien of the Security Documents on the Collateral owned by such Guarantor and, if applicable, such Subsidiary Guarantor (in the case of a merger, amalgamation or consolidation) or on the Collateral transferred to the Surviving Person (in the case of a transfer of assets), together with such financing statements as may be required to perfect any security interests in such Collateral which may be perfected by the filing of a financing statement under the Uniform Commercial Code of the relevant states);

        (b)  the Collateral owned by such Guarantor and, if applicable, such Subsidiary Guarantor (in the case of a merger, amalgamation, or consolidation) or the Collateral transferred to the Surviving Person (in the case of a transfer of assets) (1) shall continue to constitute Collateral under this Indenture and the Security Documents, (2) shall be subject to the Lien in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the holders of the Notes and (3) shall not be subject to any Lien other than Permitted Liens;

        (c)  the property and assets of the person which is merged or consolidated with or into such Guarantor or such Subsidiary Guarantor or to which the properties and assets of such Guarantor or Subsidiary Guarantor, are transferred, to the extent that such property and assets are of types that would constitute "Trust Property" (as defined in the form of Mortgage attached as Exhibit G to this Indenture) (assuming, in the case of real property or a leasehold interest in real property,

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that an appropriate description of such property or leasehold interest were included as a schedule to such form of Mortgage and assuming, in the case of fixtures, improvements and other types of Trust Property, that a description of the related real property or leasehold interest in real property, as the case may be, were included as a schedule to such form of Mortgage) or "Collateral" (as defined in the form of Security Agreement attached as Exhibit F to this Indenture) shall be treated as After-Acquired Property and such Guarantor and its Subsidiary Guarantors or the Surviving Person, as the case may be, shall take such actions as may be necessary to cause such property and assets to be made subject to the Lien of the Security Documents in the manner and to the extent required by this Indenture (including, without limitation, as specified in Section 11.01 hereof (including delivery of such documents, Officers' Certificates and Opinions of Counsel as may be required by Section 11.01 hereof)) and the Security Documents;

        (d)  except in the case of a merger into or the transfer of properties and assets to the Company, (1) immediately before and immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), no Default or Event of Default shall have occurred and be continuing and (2) the Company, after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), could incur $1.00 of additional Indebtedness pursuant to the first paragraph of Section 4.08 hereof (assuming a market rate of interest with respect to such additional Indebtedness);

        (e)  except in the case of a merger into or the transfer of properties and assets to the Company, immediately after giving effect to such transaction or series of transactions on a Pro Forma basis (including, without limitation, any Indebtedness incurred or anticipated to be incurred in connection with or in respect of such transaction or series of transactions), the Consolidated Net Worth of such Guarantor or the Surviving Person, as the case may be, is at least equal to the Consolidated Net Worth of such Guarantor immediately before such transaction or series of transactions; and

        (f)    if, as a result of any such transaction or series of transactions, any property or assets of such Guarantor or any of its Subsidiary Guarantors would become subject to a Lien, such Lien is permitted by Section 4.11 hereof.

        In connection with any such transaction or series of transactions, the Company shall deliver, or cause to be delivered, to the Trustee an Officers' Certificate and an Opinion of Counsel, each in form reasonably satisfactory to the Trustee, each stating that such transaction or series of transactions and any supplemental indenture, amendments, supplements or other instruments or agreements required by clause (a) or (c) above or by this sentence comply with the requirements of this Indenture and that all conditions precedent herein provided for relating to such transaction or series of transactions have been complied with (except that such Opinion of Counsel need express no opinion as to the matters referred to in clauses (b)(3), (d)(2) or (e) above), and the Company and each other Guarantor shall have confirmed, by supplemental indenture executed and delivered to the Trustee in form reasonably satisfactory to the Trustee, that its obligations under this Indenture, the Intercreditor Agreement, its Guarantee (including, if applicable, the CF&I Note), the Registration Rights Agreement and the Security Documents remain in full force and effect.

        Upon any consolidation, merger, amalgamation or sale, assignment, conveyance, transfer, lease or disposition of all or substantially all of the assets of a Guarantor in accordance with the foregoing in which such Guarantor is not the Surviving Person, the Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of, such Guarantor under this Indenture, the Registration Rights Agreement, the Intercreditor Agreement, its Guarantee and the relevant Security

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Documents with the same force and effect as if such Surviving Person had been named as a Guarantor therein. Thereafter, except in the case of a lease, the predecessor Guarantor shall be released from its obligations hereunder and thereunder, except with respect to any obligations that arise from, or are related to, such transaction; provided, however, that solely for purposes of computing amounts described in subclause (C) of the first paragraph of Section 4.09 hereof, any such Surviving Person shall only be deemed to have succeeded to and be substituted for such Guarantor with respect to periods subsequent to the effective time of such transaction or series of transactions.

        10.04    Release of a Guarantor.

        (a)  In the event of a sale, transfer or other disposition of all of the Capital Stock of any Guarantor (or its parent) owned by the Company and its Subsidiaries, by way of merger, consolidation or otherwise, in each case to a person which is not the Company or a Subsidiary or an Affiliate of the Company and which is otherwise made in compliance with this Indenture, such Guarantor will be released from all of its obligations under its Guarantee, this Indenture, the Security Documents and the Intercreditor Agreement; provided that:

          (i)  such transaction complies with the other provisions of this Indenture, including without limitation the provisions set forth in Section 4.13 hereof (including the use of Net Cash Proceeds of such Asset Sale in accordance therewith); and

        (ii)  any such release shall occur only if (A) all Indebtedness owing by such Guarantor to the Company or any Subsidiaries of the Company shall have been paid in full, and (B) all obligations of such Guarantor under all of its guarantees of, and under all of its pledges of assets or Capital Stock or other Liens which secure, Indebtedness of the Company or any Subsidiaries of the Company also shall terminate.

        Prior to any transaction which will result in the release of a Guarantor from its Guarantee as described above, the Company will deliver an Officers' Certificate to the Trustee stating that such transaction will be effected in accordance with the provisions of this Section 10.04 in order to obtain the release of such Guarantor.

        (b)  The Trustee shall deliver an appropriate instrument evidencing the release of a Guarantor upon receipt of a request of the Company accompanied by an Officers' Certificate certifying as to the compliance with this Section 10.04. Any Guarantor not so released will remain liable under its Guarantee as provided in this Article Ten.

        Except as set forth in Articles Four and Five and Section 10.03 hereof and this Section 10.04, nothing contained in this Indenture or in any of the Notes shall prevent any consolidation or merger of a Guarantor with or into the Company or another Guarantor.

        10.05    Waiver of Subrogation.

        Until the date that is 123 days after the later of (x) the date on which the principal of, premium, if any, and interest and Liquidated Damages, if any, on all of the outstanding Notes shall have been indefeasibly paid to the Holders thereof and (y) the date on which any and all other amounts owing by the Company or any of the Guarantors under this Indenture, the Notes, the Guarantees, the CF&I Note, the Registration Rights Agreement, the Security Documents or the Intercreditor Agreement shall have been indefeasibly paid to the persons entitled thereto, each Guarantor hereby irrevocably waives any claim or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of such Guarantor's obligations under its Guarantee, the Security Documents, the Registration Rights Agreement, the Intercreditor Agreement and this Indenture, including, without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any right to participate in any claim or remedy of any Holder of Notes against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or

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common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Notes shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Holders of the Notes, and shall forthwith be paid to the Trustee for the benefit of such Holders to be credited and applied upon the Notes, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 10.05 is knowingly made in contemplation of such benefits.

        10.06    Limitation of Guarantor's Liability.

        Each Guarantor, and by its acceptance hereof, each Holder hereby confirms that it is the intention of all such parties that the guarantee by such Guarantor pursuant to its Guarantee (including, in the case of CF&I, the CF&I Note) not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any other federal or state law. To effectuate the foregoing intention, the Holders and each Guarantor hereby irrevocably agree that the obligations of such Guarantor under its Guarantee (including, in the case of CF&I, the CF&I Note) and this Article Ten shall be limited to the maximum amount as will, under applicable law and (to the extent permitted by applicable law) after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from, rights to receive contribution from or payments made by or on behalf of any other Guarantor in respect of the obligations of such other Guarantor under its Guarantee (including, in the case of CF&I, the CF&I Note) or pursuant to Section 10.07 hereof, result in the obligations of such Guarantor under its Guarantee (including, in the case of CF&I, the CF&I Note) not constituting such fraudulent transfer or conveyance under applicable law.

        10.07    Contribution.

        In order to provide for just and equitable contribution among the Guarantors, the Guarantors agree, inter se, that in the event any payment or distribution is made by any Guarantor (a "Funding Guarantor") under its Guarantee (including, in the case of CF&I, the CF&I Note), such Funding Guarantor shall be entitled to a contribution from all other Guarantors in a pro rata amount based on the Adjusted Net Assets of each Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Company's obligations with respect to the Notes, this Indenture, the Registration Rights Agreement, the Intercreditor Agreement or any Security Document or any other Guarantor's obligations with respect to its Guarantee (including, in the case of CF&I, the CF&I Note). "Adjusted Net Assets" of any Guarantor at any date shall mean the lesser of the amount by which (x) the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, the probable liability of such Guarantor with respect to contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date), but excluding liabilities under its Guarantee (including, in the case of CF&I, the CF&I Note), of such Guarantor at such date and (y) the present fair salable value of the assets of such Guarantor at such date exceeds the amount that will be required to pay the probable liability of such Guarantor on its debts (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Subsidiary under the Guarantee), excluding debt in respect of the Guarantee (including, in the case of CF&I, the CF&I Note), as they become absolute and matured.

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ARTICLE ELEVEN

COLLATERAL AND SECURITY

        11.01    Collateral and Security Documents; Additional Collateral.

        (a)  In order to secure the due and punctual payment of the principal of and interest and Liquidated Damages, if any, on the Notes when and as the same shall be due and payable, whether on an Interest Payment Date, at maturity, on any Asset Sale Purchase Date or Change of Control Purchase Date, or by acceleration, redemption or otherwise, and interest on the overdue principal of and (to the extent permitted by law) interest and Liquidated Damages, if any, on the Notes and the performance of all other obligations of the Company and the Guarantors to the Holders or the Trustee under this Indenture, the Notes, the Guarantees, the Intercreditor Agreement, the Registration Rights Agreement, the Security Documents and any other documents contemplated hereby, as the case may be, the Company, the Guarantors and the Trustee have simultaneously with the execution of this Indenture entered into the Security Documents. The Trustee, the Company and the Guarantors each hereby agrees that the Trustee holds its interest in the Collateral in trust for the benefit of the Holders pursuant to the terms of the Security Documents.

        (b)  Promptly upon (i) the acquisition or receipt by the Company or any of the Guarantors of property or assets (whether real, personal or mixed, tangible or intangible, and including, without limitation, property and assets acquired or received pursuant to a merger or consolidation of any person or persons with or into the Company or a Guarantor, pursuant to an Asset Sale, pursuant to a transaction as a result of which a Guarantor is released as provided in Section 10.04 hereof, pursuant to a transaction as a result of which a person becomes a Guarantor as provided in Section 4.17 or 4.22 hereof, or pursuant to Section 12.02 or 12.04 hereof) of the type that constitutes or would constitute "Trust Property" as defined in the form of Mortgage attached as Exhibit G hereto (assuming, in the case of real property or a leasehold interest in real property, that an appropriate description of such property or leasehold interest were included as a schedule to such form of Mortgage and assuming, in the case of fixtures, improvements and other types of Trust Property, that a description of the related real property or leasehold interest in real property, as the case may be, were included as a schedule to such form of Mortgage), or "Collateral" as defined in the form of Security Agreement attached hereto as Exhibit F (each such item of property and each such asset so acquired or received being referred to herein as "After-Acquired Property"),

          (i)  the Company or the applicable Guarantor, as the case may be, and the Trustee shall enter into such amendments or supplements to the Security Documents or additional Mortgages (in each case in registerable or recordable form), Security Agreements and other Security Documents, and the Company or the applicable Guarantor, as the case may be, shall cause such amendments, supplements, Mortgages, Security Agreements and other Security Documents to be filed and recorded in all such governmental offices, as shall be necessary in order to grant and create a valid first priority Lien on and security interest in such After-Acquired Property in favor of the Trustee (or, in the case of property or assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) (subject to no prior Liens except as expressly permitted by this Indenture and the Security Documents), shall cause appropriate financing statements to be filed in such governmental offices as shall be necessary in order to perfect any security interest in such After-Acquired Property as to which a security interest may, under the Uniform Commercial Code of the applicable jurisdiction, be perfected by the filing of a financing statement and, if any such After-Acquired Property consists of stock certificates, promissory notes or other property as to which, under the relevant Uniform Commercial Code, a security interest may be perfected by possession, deliver such certificates,

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promissory notes and other property, together with stock powers or assignments duly endorsed in blank, to the Trustee; and

        (ii)  the Company or the applicable Guarantor, as the case may be, shall also deliver to the Trustee the following:

        (w)  to the extent such After-Acquired Property consists of real property or a leasehold interest in real property, a title insurance policy or an endorsement to an existing title insurance policy, in the American Land Title Insurance Loan Policy Extended Coverage form, or its equivalent, and in an amount at least equal to the purchase price thereof (or, if such property was not purchased or such purchase price cannot be determined by the Company, the Fair Market Value thereof as determined by the Board of Directors of the Company and set forth in an Officers' Certificate delivered to the Trustee), in favor of the Trustee insuring that the Lien of the Security Documents or any additional Security Documents constitutes a valid and perfected first priority Lien, subject only to such Liens as are permitted by this Indenture and the applicable Security Document, on such real property or leasehold interest in an aggregate amount equal to the purchase price or the Fair Market Value, as applicable, of the real property or leasehold interest and containing such endorsements and other assurances of the type included in the title insurance policy delivered to the Trustee on the Issue Date with respect to the real property Collateral, together with an Officers' Certificate stating that any Liens or such real property or leasehold interest are Liens expressly permitted by this Indenture and the applicable Security Document;

        (x)  to the extent such After-Acquired Property consists of real property or a leasehold interest in real property, a current as-built survey (each, a "Survey") prepared by a surveyor licensed in the state where the real property is located in form reasonably satisfactory to Trustee and the title company issuing the title insurance policy, made in accordance with ALTA / ACSM minimum technical standards and the laws of the state where the real property is located, certified to the Trustee, the title company, and any other persons or entities as the Trustee may reasonably request, showing the entire real property, all adjoining streets and roads (including, without limitation, the points of ingress and egress thereto), the exact location by metes and bounds and the exact dimensions of the real property, a legal description of the real property, the exact location of any improvements, structures and buildings, set back lines, protrusions, encroachments, parking spaces and easements on and upon the real property, together with all rights-of-way and other matters relating to the real property;

        (y)  any Opinions of Counsel required pursuant to Section 11.02(b) hereof; and

        (z)  evidence of payment of all filing fees, recording and registration charges, transfer taxes and other costs and expenses, including reasonable legal fees and disbursements of counsel for the Trustee (and any local counsel), that may be incurred to validly and effectively subject the After-Acquired Property to the Lien of any applicable Security Document and perfect such Lien; and

        (iii)  The Company shall deliver to the Trustee an Opinion of Counsel and an Officers' Certificate to the effect that the documents that have been or are therewith delivered to the Trustee pursuant to this Section 11.01(b) (including any amendments, supplements, Mortgages, Security Agreements or other Security Documents referred to in paragraph (i) of this Section 11.01(b)) conform to the requirements of this Indenture.

        (c)  Each Holder, by accepting a Note, agrees to all the terms and provisions of the Security Documents and the Intercreditor Agreement, including the additional Security Documents

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described in Section 11.01(b), as the same may be amended or supplemented from time to time pursuant to the provisions of the Security Documents (including such additional Security Documents) and the Intercreditor Agreement and this Indenture.

        11.02    Recording, Registration and Opinions.

        (a)  The Company and the Guarantors shall take or cause to be taken all action required to perfect, maintain, preserve and protect the Lien on and security interest in the Collateral granted by the Security Documents (subject only to Permitted Liens), including without limitation, the filing of financing statements, continuation statements and any instruments of further assurance, in such manner and in such places as may be required by law fully to preserve and protect the rights of the Holders and the Trustee under this Indenture and the Security Documents to all property comprising the Collateral. The Company and the Guarantors shall from time to time promptly pay all financing and continuation statement recording, registration and/or filing fees, charges and taxes relating to this Indenture and the Security Documents, any amendments thereto and any other instruments of further assurance required pursuant to the Security Documents. The Trustee shall not be responsible for any failure to so register, file or record.

        (b)  The Company shall furnish to the Trustee, promptly after the execution and delivery of this Indenture, Opinion(s) of Counsel either (i) substantially to the effect that, in the opinion of such counsel, this Indenture and the grant of the Liens on and security interests in the Collateral intended to be made by the Security Documents and all other instruments of further assurance, including, without limitation, financing statements, have been properly recorded and filed to the extent necessary to record or register (as the case may be), and if applicable, to perfect the Liens on and security interests in the Collateral created by the Security Documents, to the extent that, in the case of perfection of security interests, a security interest may be perfected by filing under the Uniform Commercial Code of the applicable jurisdiction, and reciting the details of such action, and stating that as to the Liens and security interests created pursuant to the Security Documents, such recordings, registrations and filings are the only recordings, registrations and filings necessary to give notice thereof and that no re-recordings, re-registrations or refilings are necessary to maintain such notice (other than as stated in such opinion), or (ii) to the effect that, in the opinion of such counsel, no such action is necessary to record or register such Liens or to perfect such security interests. The Company or the applicable Guarantor shall furnish to the Trustee, at the time of execution and delivery of any additional Security Document(s) or any amendments or supplements to existing Security Documents, Opinion(s) of Counsel either substantially to the effect set forth in clause (i) of the immediately preceding sentence (but relating only to such additional Security Documents or any amendments or supplements to existing Security Documents and the related After-Acquired Property) or to the effect set forth in clause (ii) thereof, and to the further effect that such additional Security Documents or amendments or supplements to existing Security Documents, as the case may be, have been duly authorized, executed and delivered by, and constitute the valid, binding and enforceable obligations of the Company or the relevant Guarantor, as the case may be, subject to customary exceptions. In addition, promptly after execution and delivery of this Indenture, the Company shall deliver the opinion(s) required by TIA § 314(b).

        (c)  The Company or the applicable Guarantor shall furnish to the Trustee, at the time of execution and delivery of this Indenture, with respect to each Mortgage, (i) a policy of title insurance (or a commitment to issue such policy) (each, a "Title Policy"), insuring (or committing to insure) the Lien of such Mortgage as a valid first mortgage Lien on the real property and fixtures described therein which policy (or commitment) shall (A) be issued by a reputable title company, (B) include such reinsurance arrangements, if any (with provisions for direct access), as shall be customary in the same general area and for transactions of this type and size, (C) have been supplemented by such endorsements as are customary in the same general area and for

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transactions of this type and size or, where such endorsements are not available at commercially reasonable premium costs, opinion letters of reputable architects or other reputable professionals (including, without limitation, endorsements or opinion letters on matters relating to usury, first loss, last dollar, zoning, non-imputation, public road access, contiguity (where appropriate), tie-in, survey, variable rate and so-called comprehensive coverage over covenants and restrictions, if available) and (D) contain only such exceptions to title as shall be Permitted Liens, (ii) the aggregate amount of all such Title Policies shall be not less than the principal amount of the Notes and (iii) an Officers' Certificate stating that such Title Policies comply with the requirements of this Section 11.02(c).

        (d)  The Company shall furnish to the Trustee on June 1st of each year, beginning with June 1, 2003, Opinion(s) of Counsel, dated as of such date, either (i)(x) stating that, in the opinion of such counsel, action has been taken with respect to the recording, registration, filing, re-recording, re-registration and refiling of all supplemental indentures, financing statements, continuation statements and other documents as is necessary to maintain the Lien of the Security Documents and reciting with respect to the Liens on and security interests in the Collateral the details of such action or referring to prior Opinions of Counsel in which such details are given, and (y) stating that, based on relevant laws as in effect on the date of such Opinion of Counsel, all financing statements, continuation statements and other documents have been executed and filed that are necessary as of such date and during the succeeding 24 months fully to maintain the Liens and security interests of the Holders and the Trustee hereunder and under the Security Documents with respect to the Collateral, provided that if there is a required filing of a continuation statement within such 24 month period and such continuation statement is not effective if filed at the time of the opinion, such opinion may so state and in that case the Company shall cause a continuation statement to be timely filed so as to maintain such Liens and security interests and shall provide a further Opinion of Counsel to the effect of this clause (i) upon the filing of the relevant continuation statement; or (ii) stating that, in the opinion of such counsel, no such action is necessary to maintain such Liens or security interests.

        11.03    Release of Collateral.

        (a)  The Trustee shall not at any time release Collateral from the Liens created by this Indenture and the Security Documents unless such release is in accordance with the provisions of this Indenture and the Security Documents.

        (b)  Anything herein to the contrary notwithstanding, at any time when an Event of Default shall have occurred and be continuing, no release of Collateral pursuant to the provisions of this Indenture or the Security Documents shall be effective as against the holders.

        (c)  The release of any Collateral from the Lien of the Security Documents shall not be deemed to impair the security under this Indenture in contravention of the provisions hereof if and to the extent the Collateral is released pursuant to this Indenture and the Security Documents. To the extent applicable, the Company shall cause TIA § 314(d), relating to the release of property from the Lien of the Security Documents and relating to the substitution therefor of any property to be subjected to the Lien of the Security Documents, to be complied with. Any certificate or opinion required by TIA § 314(d) may be made by an Officer of the Company, except in cases where TIA § 314(d) requires that such certificate or opinion be made by an independent person, which person shall be an independent engineer, appraiser or other expert selected or approved by the Trustee in the exercise of reasonable care.

        11.04    Possession and Use of Collateral.

        Subject to and in accordance with the provisions of this Indenture and the Security Documents, and so long as no Event of Default shall have occurred and be continuing, the Company and the

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Guarantors shall have the right to remain in possession and retain exclusive control of and to exercise all rights with respect to the Collateral (other than Trust Moneys held by the Trustee, other than monies or U.S. Government Obligations deposited pursuant to Article Eight, and as otherwise set forth in the Security Documents and this Indenture), to operate, manage, develop, lease, use, consume and enjoy the Collateral (other than Trust Moneys held by the Trustee, other than moneys and U.S. Government Obligations deposited pursuant to Article Eight and as otherwise set forth in the Security Documents and this Indenture), to alter or repair any Collateral consisting of machinery or equipment so long as such alterations and repairs do not diminish the value thereof or impair the Lien of the Security Documents thereon and to collect, receive, use, invest and dispose of the reversions, remainders, interest, rents, lease payments, issues, profits, revenues, proceeds and other income thereof.

        11.05    Specified Releases of Collateral.

        The Company and the Guarantors, as the case may be, shall be entitled to obtain a release of, and the Trustee shall release, items of Collateral in the following circumstances:

        (1)  Collateral that is sold, transferred or otherwise disposed of in accordance with the Indenture, subject to the conditions precedent set forth in Section 11.05(b) hereof, in the case of an Asset Sale (other than an Event of Loss), and Section 11.05(c) hereof, in the case of an Event of Loss;

        (2)  Collateral that is released with the requisite consent of the Holders of Notes as provided under Section 11.05(e) hereof;

        (3)  all Collateral (except the trust funds deposited with the Trustee pursuant to Section 8.01(a)(2)(ii) and Section 8.02(d)(i), as applicable, and except as otherwise provided in Sections 8.01 and 8.02) upon discharge of the Indenture in accordance with Section 8.01 hereof and upon Legal Defeasance or Covenant Defeasance pursuant to Section 8.02 hereof, in each case subject to the conditions precedent set forth in Section 11.05(a) hereof;

        (4)  all Collateral upon payment in full of all obligations of the Company and the Guarantors with respect to the Notes, subject to the conditions precedent set forth in Section 11.05(a) hereof; and

        (5)  Collateral of a Guarantor whose Guarantee is released in accordance with the Indenture and the Security Documents, subject to the conditions precedent set forth in Section 11.05(d) below;

provided, that the Trustee shall not release any Lien on any Collateral unless and until it shall have received an Officers' Certificate certifying that all conditions precedent hereunder have been met and such other documents required by Section 10.05 hereof. Upon compliance with the above provisions, the Trustee shall execute, deliver or acknowledge any necessary or proper instruments of termination, satisfaction or release to evidence the release of any Collateral permitted to be released pursuant to this Indenture or the Security Documents.

        (a)    Satisfaction and Discharge; Defeasance.    The Company and the Guarantors shall be entitled to obtain a full release of all of the Collateral from the Liens of this Indenture and of the Security Documents upon compliance with the conditions precedent set forth in Section 8.01 hereof for satisfaction and discharge of this Indenture or for Legal Defeasance or Covenant Defeasance pursuant to Section 8.02 hereof. Upon delivery by the Company to the Trustee of an Officers' Certificate and an Opinion of Counsel, each to the effect that such conditions precedent have been complied with (and which may be the same Officers' Certificate and Opinion of Counsel required by Article Eight hereof), together with such documentation, if any, as may be required by the TIA (including, without limitation, TIA § 314(d)) prior to the release of such Collateral, the Trustee shall forthwith take all necessary action (at the request of and the expense of the

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Company) to release and reconvey without recourse to the Company and the applicable Guarantors all of the Collateral, and shall deliver such Collateral in its possession to the Company and the applicable Guarantors including, without limitation, the execution and delivery of releases and satisfactions wherever required.

        (b)    Dispositions of Collateral Permitted by Section 4.13.    The Company and the Guarantors, as the case may be, shall be entitled to obtain a release of, and the Trustee shall release, items of Collateral (as used in this Section 11.05(b), the "Released Interests") subject to an Asset Sale (other than an Event of Loss, which shall be required to comply with paragraph (c) below) upon compliance with the conditions precedent that the Company shall have delivered to the Trustee each of the following:

        (i)    Company Order.    A Company Order requesting release of the Released Interests, accompanied by the Officers' Certificate described in paragraph (ii) below.

        (ii)    Officers' Certificate.    An Officers' Certificate of the Company:

        (A)  specifically describing the proposed Released Interests,

        (B)  specifying the provisions of the Indenture and the Security Documents which authorize such release,

        (C)  specifying the Fair Market Value of such Released Interests on the date that the Fair Market Value of the Released Interests sold was determined for purposes of determining whether Section 4.13 was complied with, which date shall be within 60 days of such Company Order (the "Valuation Date"),

        (D)  stating that the consideration to be received is at least equal to the Fair Market Value of the Released Interests,

        (E)  certifying that the release of such Collateral will not impair the value of the remaining Collateral or interfere with the Trustee's ability to realize such value and will not impair the maintenance and operation of the remaining Collateral,

        (F)  confirming the sale of, or an agreement to sell, the Released Interests in a bona fide sale to a person that is not an Affiliate of the Company or, in the event that such sale is to a person that is an Affiliate, confirming that such sale is made in compliance with Section 4.14 hereof,

        (G)  certifying that such sale covers only the Released Interests (or other property which is not Collateral),

        (H)  certifying that such sale complies with the terms and conditions of the Indenture with respect thereto, including, without limitation, the provisions (and the use of Net Cash Proceeds) under Section 4.13 hereof,

        (I)  in the event there is to be a substitution of property for the Collateral subject to the sale, specifying the property intended to be substituted for the Collateral to be disposed of, in which case the property to be substituted must comply with the provisions of Sections 11.01 and 11.02 hereof,

        (J)  certifying that all Collateral Proceeds (including amounts deemed to be Collateral Proceeds) from the sale of any of the Released Interests will be deposited in the Note Collateral Account, and that all Net Cash Proceeds from the sale of any of the Released Interests (and any other property which is not Collateral) will be applied pursuant to the provisions of the Indenture in respect of Asset Sales,

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        (K)  certifying that there is no Default or Event of Default in effect or continuing on the Valuation Date or on the date that the Asset Sale was consummated,

        (L)  certifying that there is no Default or Event of Default in effect or continuing on the date of such release and that the release of the Collateral will not result in a Default or Event of Default under the Indenture, and

        (M) certifying that any other conditions precedent in the Indenture relating to the release in question have been complied with.

        (iii)    Opinion of Counsel.    An Opinion of Counsel stating that:

        (A)  all documentation required by the TIA, if any, prior to the release of Collateral by the Trustee and, in the event that there is to be a substitution of property for the Collateral subject to the Asset Sale, all documentation necessary to effect the substitution of such new Collateral and to subject such new Collateral to the Lien of the relevant Security Documents, has been executed, acknowledged, delivered and filed, as the case may be,

        (B)  the documents that have been or are therewith delivered to the Trustee in connection with such Released Interests conform to the requirements of this Indenture, and

        (C)  all conditions precedent herein provided for relating to such Released Interests have been complied with.

        (iv)    Title Policy and Survey.    To the extent that any Asset Sale only relates to a portion of real property subject to a Mortgage, (A) an endorsement to the existing Title Policy in favor of the Trustee insuring that the Lien of the Security Documents for the remaining real property continues to constitute a valid and perfected first priority Lien and (B) a revised Survey of such remaining real property.

        (v)    Compliance with TIA and Sections 11.01 and 11.02 hereof.    All documentation required by the TIA (including, without limitation, TIA § 314(d)), if any, prior to the release of Collateral by the Trustee, and, in the event there is to be a substitution of property for the Collateral subject to the Asset Sale, all documentation required by the TIA to effect the substitution of such new Collateral and to subject such new Collateral to the Lien of the relevant Security Documents, and all documents required by Sections 11.01 and 11.02 hereof.

        Upon compliance by the Company with the conditions precedent set forth above, the Trustee shall cause to be released and reconveyed without recourse to the Company or the applicable Guarantor the Released Interests by executing a release in the form provided by the Company or the applicable Guarantor.

        (c)    Event of Loss.    The Company and the Guarantors, as the case may be, shall be entitled to obtain a release of, and the Trustee shall release, items of Collateral (the "Lost Interests") subject to an Event of Loss upon compliance with the conditions precedent that the Company shall have delivered to the Trustee each of the following:

        (i)    Company Order.    A Company Order requesting release of the Lost Interests, accompanied by the Officers' Certificate described in paragraph (ii) below.

        (ii)    Officers' Certificate.    An Officers' Certificate of the Company:

        (A)  specifically describing the Lost Interests,

        (B)  specifying the provisions of the Indenture and the Security Documents which authorize such release,

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        (C)  certifying that such Collateral has been subject to an Event of Loss and describing such Event of Loss and the amount of the proceeds thereof,

        (D)  certifying that the Company has complied with the terms and conditions of the Indenture with respect to an Event of Loss, including, without limitation, the provisions (and the use of Net Cash Proceeds) under Section 4.13 hereof,

        (E)  in the event there is to be a substitution of property for the Collateral subject to the loss, specifying the property intended to be substituted for the lost Collateral, in which case the property to be substituted must comply with the provisions of Sections 11.01 and 11.02 hereof,

        (F)  certifying that all proceeds from the Event of Loss attributable to the Released Interests will be deposited in the Note Collateral Account, and that all Net Cash Proceeds from the Event of Loss will be applied pursuant to the provisions of the Indenture in respect of Asset Sales,

        (G)  certifying that any other conditions precedent in the Indenture relating to the release in question have been complied with.

        (iii)    Opinion of Counsel.    An Opinion of Counsel to the effect that:

        (A)  in the case of any taking by eminent domain, (1) such property has been lawfully taken by exercise of the right of eminent domain, or (2) has been sold pursuant to the exercise of a right vested in the United States of America or a State, municipality, province or other governmental authority to purchase, or to designate a purchaser or order a sale of, such property,

        (B)  in the case of any taking by eminent domain, the award for such property has become final or an appeal therefrom is not advisable in the interests of the Company or the Holders,

        (C)  all documentation required by the TIA, if any, prior to the release of Collateral by the Trustee and, in the event that there is to be a substitution of property for the Collateral subject to the Event of Loss, all documentation necessary to effect the substitution of such new Collateral and to subject such new Collateral to the Lien of the relevant Security Documents, has been executed, acknowledged, delivered and filed, as the case may be,

        (D)  the documents that have been or are therewith delivered to the Trustee in connection with such release conform to the requirements of this Indenture, and

        (E)  all conditions precedent herein provided relating to such release have been complied with;

        (iv)    Deposit of Net Cash Proceeds.    Cash equal to the amount of Net Cash Proceeds of such Event of Loss, shall be deposited with the Trustee in the Note Collateral Account and held as Trust Moneys subject to the disposition thereof pursuant to Section 4.13 and Article Twelve hereof; and

        (v)    Title Policy and Survey.    To the extent that any Event of Loss only relates to a portion of real property subject to a Mortgage, (A) an endorsement to the existing Title Policy in favor of the Trustee insuring that the Lien of the Security Documents for the remaining real property continues to constitute a valid and perfected first priority Lien and (B) a revised Survey of such remaining real property.

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        (vi)    Compliance with TIA.    All documentation required by the TIA (including, without limitation, TIA § 314(d)), if any, prior to the release of Collateral by the Trustee and, in the event there is to be a substitution of property for the Collateral subject to the Event of Loss, all documentation required by the TIA to effect the substitution of such new Collateral and to subject such new Collateral to the Lien of the relevant Security Documents, and all documents required by Sections 11.01 and 11.02 hereof.

        Upon compliance by the Company with the conditions precedent set forth above, the Trustee shall cause to be released and reconveyed to the Company or the applicable Guarantor without recourse the aforementioned items of Collateral by executing a release in the form provided by the Company or the applicable Guarantor.

        (d)    Release of Guarantor.    In the event that pursuant to Section 10.04 hereof, any Guarantor shall be released from its obligations under its Guarantee, this Indenture and the applicable Security Documents such Guarantor shall be entitled to obtain a release of, and the Trustee shall release, all Collateral owned by such Guarantor (provided that, if any such Collateral is jointly owned with another Guarantor or with the Company, such release shall not affect the Lien on such Collateral granted by such other Guarantor or by the Company pursuant to the relevant Security Documents and such Collateral granted by such other Guarantor or by the Company shall not be released (as used in this Section 11.05(d), the "Released Interests")), upon compliance with the conditions precedent that the Company shall have delivered to the Trustee each of the following:

        (i)    Company Order.    A Company Order requesting the release of the Collateral owned by such Guarantor, accompanied by the Officers' Certificate described in paragraph (ii) below.

        (ii)    Officers' Certificate.    An Officers' Certificate of the Company:

        (A)  specifically describing the proposed Released Interests,

        (B)  specifying the provisions of the Indenture and the Security Documents which authorize such release,

        (C)  certifying that such Guarantor has been released from its obligations under its Guarantee, this Indenture and the applicable Security Documents in compliance with Section 10.04 hereof,

        (D)  certifying that there is no Default or Event of Default in effect or continuing on the date of such release and that the release of the Collateral will not result in a Default or Event of Default under the Indenture, and

        (E)  certifying that any other conditions precedent in the Indenture relating to the release in question have been complied with.

        (iii)    Opinion of Counsel.    An Opinion of Counsel stating that:

        (A)  all documentation required by the TIA, if any, prior to the release of Collateral by the Trustee has been executed, acknowledged, delivered and filed, as the case may be,

        (B)  the documents that have been or are therewith delivered to the Trustee in connection with such release conform to the requirements of this Indenture and

        (C)  all conditions precedent herein provided for relating to such release have been complied with.

        (iv)    Compliance with TIA.    All documentation if any, required by the TIA (including, without limitation, TIA § 314(d)) prior to the release of such Collateral by the Trustee.

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        Upon compliance by the Company with the conditions precedent set forth above, the Trustee shall cause to be released and reconveyed without recourse, to the applicable Guarantor, the Collateral pledged by such Guarantor by executing a release in the form provided by the Company (provided that, as set forth in the first clause of this paragraph, such release shall not affect the Lien on any such Collateral which may have been granted by any other Grantor or by the Company and such Collateral granted by such other Guarantor or by the Company shall not be released).

        (e)    Consent of Holders.    The Company and the Guarantors, as the case may be, shall be entitled to obtain a release of, and the Trustee shall release, any items of Collateral for which the Holders have consented to the release in accordance with Section 9.02 hereof.

        11.06    Disposition of Collateral Without Release.

        Notwithstanding the provisions of Section 11.05 hereof, so long as no Default or Event of Default shall have occurred and be continuing or would result therefrom, the Company and the Guarantors may, without any prior release or consent by the Trustee, conduct the following activities, in the ordinary course of business and consistent with past practice, with respect to the Collateral (such activities, the "Permitted Dispositions"):

        (a)  selling or otherwise disposing of, in any transaction or series of related transactions, any property subject to the Lien of the Security Documents which has become worn out or obsolete and which either (i) has an aggregate Fair Market Value of $100,000 or less, or (ii) is replaced by property of substantially equivalent or greater value which becomes subject to the Lien of the Security Documents as After-Acquired Property;

        (b)  altering, repairing, replacing, changing the location or position of and adding to its structures, machinery, systems, equipment, fixtures and appurtenances;

        (c)  demolishing, dismantling, tearing down, scrapping or abandoning any Collateral if, in the good faith opinion of the Board of Directors of the Company, such demolition, dismantling, tearing down, scrapping or abandonment is in the best interest of the Company;

        (d)  abandoning intellectual property which has become obsolete and not used in the business; and

        (e)  abandoning, terminating, cancelling, releasing or making alterations in or substitutions of any real property leases subject to the Lien of the Security Documents provided that such abandonment, termination, cancellation, release, alteration in or substitution is permitted by the Security Documents.

        11.07    Form and Sufficiency of Release.

        In the event that the Company or any Guarantor has sold, exchanged, or otherwise disposed of or proposes to sell, exchange or otherwise dispose of any portion of the Collateral that under the provisions of Section 11.05 or 11.06 hereof may be sold, exchanged or otherwise disposed of by the Company or any Guarantor, and the Company or such Guarantor requests the Trustee to furnish a written disclaimer, release or quitclaim of any interest in such property under this Indenture, the applicable Guarantee and the applicable Security Documents, upon being satisfied that the Company or such Guarantor is selling, exchanging or otherwise disposing of the Collateral in accordance with the provisions of Section 11.05 or 11.06 hereof, the Trustee shall execute, acknowledge and deliver to the Company or such Guarantor such an instrument in the form provided by the Company, and providing for release without recourse, promptly after satisfaction of the conditions set forth herein for delivery of any such release and shall take such other action as the Company or such Guarantor may reasonably request and is necessary to effect such release. Notwithstanding the preceding sentence, all purchasers and grantees of any property or rights purporting to be released herefrom shall be entitled to rely upon any release executed by the Trustee hereunder as sufficient for the purpose of this Indenture and as

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constituting a good and valid release of the property therein described from the Lien of this Indenture and of the Security Documents.

        11.08    Purchaser Protected.

        No purchaser or grantee of any property or rights purporting to be released herefrom shall be bound to ascertain the authority of the Trustee to execute the release or to inquire as to the existence of any conditions herein prescribed for the exercise of such authority.

        11.09    Authorization of Actions To Be Taken by the Trustee Under the Security Documents.

        Subject to the provisions of the Security Documents and the Intercreditor Agreement, (a) the Trustee may, in its sole discretion and without the consent of the Holders, take all actions it deems necessary or appropriate in order to (i) enforce any of the terms of the Security Documents or the Intercreditor Agreement and (ii) collect and receive any and all amounts payable in respect of the obligations of the Company and the Guarantors or the Revolver Agent hereunder or thereunder and (b) the Trustee shall have power to institute and to maintain such suits and proceedings as it may deem expedient to prevent any impairment of the Collateral by any act that may be unlawful or in violation of the Security Documents, the Intercreditor Agreement, the Guarantees, or this Indenture, and such suits and proceedings as the Trustee may deem expedient to preserve or protect its interests and the interests of the Holders in the Collateral (including the power to institute and maintain suits or proceedings to restrain the enforcement of or compliance with any legislative or other governmental enactment, rule or order that may be unconstitutional or otherwise invalid if the enforcement of, or compliance with, such enactment, rule or order would impair the security interest thereunder or be prejudicial to the interests of the Holders or of the Trustee). The Trustee is hereby expressly authorized to execute, deliver and perform its obligations under the Security Documents and the Intercreditor Agreement. Except during the continuance of an Event of Default, the Trustee shall not be required to take any action under the Security Documents or the Intercreditor Agreement that involves the exercise by it of discretion. The Trustee may, however, take any such action upon the basis of, at the election of the Trustee, either an Officers' Certificate or an Opinion of Counsel, or both, of the Company stating the nature of the proposed action and that any such action (i) is appropriate, necessary or advisable under the circumstances, (ii) complies with this Indenture, the Intercreditor Agreement and the Security Documents, and (iii) does not adversely affect the interests of the Holders; provided that the foregoing shall not limit the ability of the Trustee to take action at its discretion in the absence of such an Officers' Certificate or Opinion of Counsel. Except during the continuance of an Event of Default, the Trustee may refrain from taking any such action pending receipt of such Officers' Certificate and/or Opinion of Counsel, if so requested by it, and shall incur no liability to any person for failure to take any such action pending receipt thereof. The Trustee shall be fully protected in acting on the basis of any such Officers' Certificate and/or Opinion of Counsel and shall incur no liability to any person arising out of any action taken on the basis thereof.

        11.10    Authorization of Receipt of Funds by the Trustee Under the Security Documents.

        The Trustee is authorized to receive any funds for the benefit of Holders distributed under the Security Documents, to apply such funds as provided in this Indenture, the Intercreditor Agreement and the Security Documents, and to make further distributions of such funds to the Holders in accordance with the provisions of Article Twelve hereof and the other provisions of this Indenture.

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ARTICLE TWELVE

APPLICATION OF TRUST MONEYS

        12.01    Note Collateral Account.

        On the Issue Date there shall be established and, at all times hereafter until this Indenture shall have terminated, there shall be maintained with the Trustee an account which shall be entitled the "Note Collateral Account" (the "Note Collateral Account"). The Note Collateral Account shall be established and maintained by the Trustee at its Corporate Trust Office. All Trust Moneys which are received by the Trustee (including, without limitation, all Collateral Proceeds, Net Proceeds (as defined below) and Net Awards required to be deposited with the Trustee) shall be deposited in the Note Collateral Account and thereafter shall be held by the Trustee for the benefit of the Holders as a part of the Collateral and, upon any entry upon or sale or other disposition of the Collateral or any part thereof pursuant to any of the Security Documents, said Trust Moneys shall be applied in accordance with Section 6.10 hereof and may also be applied by the Trustee to cure any Event of Default; but prior to any such entry, sale or other disposition, all or any part of the Trust Moneys may be withdrawn, and shall be released, paid or applied by the Trustee in accordance with the terms of this Article.

        12.02    Withdrawal of Insurance Proceeds and Condemnation Awards.

        To the extent that any Trust Moneys consist of either (a) Net Cash Proceeds from an Event of Loss (as used herein, "Net Proceeds") or (b) Net Awards, such Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee upon a Company Order delivered to the Trustee to reimburse the Company or the applicable Guarantor for expenditures made, or to pay costs incurred, by the Company or such Guarantor in connection with the repair, rebuilding or replacement of the Collateral destroyed, damaged or taken, upon receipt by the Trustee of each of the following:

        (a)  An Officers' Certificate of the Company, dated not more then 30 days prior to the date of the application for the withdrawal and payment of such Trust Moneys setting forth:

          (i)  that expenditures have been made, or costs incurred by the Company or such Guarantor, as the case may be, in a specified amount in connection with certain repairs, rebuildings and replacements of the Collateral, which shall be briefly described, and stating the Fair Market Value thereof to the Company or such Guarantor at the date of the acquisition thereof by the Company or such Guarantor;

        (ii)  that no part of such expenditures or costs has been or is being made the basis for the withdrawal of any Trust Moneys in any previous or then pending application pursuant to this Section 12.02;

        (iii)  that no part of such expenditures or costs has been paid out of either the proceeds of insurance upon any part of the Collateral not required to be paid to the Trustee under the Security Documents or any award for or the proceeds from any of the Collateral being taken not required to be paid to the Trustee under Section 11.05(c) hereof, as the case may be;

        (iv)  that there is no outstanding Indebtedness, other than costs for which payment is being requested, known to the Company, after due inquiry, for the purchase price or construction of such repairs, rebuildings or replacements, or for labor, wages, materials or supplies in connection with the making thereof, which, if unpaid, might become the subject of a vendor's, mechanics', laborers', materialmen's, statutory or other similar Lien upon any such repairs, rebuildings or replacement, which Lien might, in the opinion of the signers of such Officers' Certificate, materially impair the security afforded by such repairs, rebuildings or replacements;

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        (v)  that the property to be repaired, rebuilt or replaced is necessary or desirable in the conduct of the Company's or such Guarantor's business;

        (vi)  whether any part of such repairs, rebuildings or replacements within six months before the date of acquisition thereof by the Company has been used or operated by others than the Company in a business similar to that in which such property has been or is to be used or operated by the Company, and whether the fair value to the Company, at the date of such acquisition of such part of such repairs, rebuildings or replacement is at least $25,000;

      (vii)  )that the Company or such Guarantor has title to such repairs, rebuildings and replacements that is substantially similar to its title to the property destroyed, damaged or taken and that any Liens upon such repairs, rebuildings and replacements are expressly permitted by this Indenture and the applicable Security Documents;

      (viii)  that no Default or Event of Default shall have occurred and be continuing; and

        (ix)  that all conditions precedent herein provided for relating to such withdrawal and payment have been complied with;

        (b)  All documentation required under the TIA (including, without limitation, TIA § 314(d));

        (c)  All documentation necessary to subject such repairs, rebuildings or replacements to a valid first priority Lien and security interest in favor of the Trustee (or, in the case of property subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the Holders pursuant to the Security Documents, including, without limitation, all instruments, agreements, certificates, Opinions of Counsel and documents required by Section 11.01 hereof; and

        (d)  An Opinion of Counsel substantially stating:

          (i)  that the instruments that have been or are therewith delivered to the Trustee conform to the requirements of this Indenture and the other Security Documents, and that, upon the basis of such Company Order and the accompanying documents specified in this Section 12.02, all conditions precedent herein provided for relating to such withdrawal and payment have been complied with, and the Trust Moneys whose withdrawal is then requested may be paid over under this Section 12.02;

        (ii)  that the relevant Security Documents create a valid, binding and enforceable Lien on and security interest in such repairs, rebuildings and replacements in favor of the Trustee (or, in the case of property subject to a Mortgage, the Trustee or another trustee under such Mortgage) in favor of the Holders and, to the extent that a security interest in any such property may be perfected under the relevant Uniform Commercial Code, a perfected security interest in such property; and

        (iii)  that all the Company's or such Guarantor's right, title and interest in and to said repairs, rebuilding or replacements, or combination thereof are then subject to the Lien of this Indenture and the relevant Security Documents.

        Upon compliance with the foregoing provisions of this Section 12.02 and Section 11.01 hereof, the Trustee shall, upon Company Order, pay an amount of Trust Moneys of the character aforesaid equal to the amount of the expenditures or costs stated in the Officers' Certificate required by clause (i) of paragraph (a) of this Section 12.02, or the Fair Market Value to the Company or the applicable Guarantor of such repairs, rebuildings and replacements stated in such Officers' Certificate (or in an Independent Appraiser's or Independent Financial Advisor's certificate, if required by the TIA), whichever is less; provided, however, that notwithstanding the above, so long as no Default or Event of Default shall have occurred and be continuing, in the event that any Net Proceeds or Net Awards for such property or proceeds of such sale do not exceed $25,000 and, in the good faith estimate of the

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Company, such destruction or damage resulting in such Net Proceeds or such taking or sale resulting in such Net Awards does not detrimentally affect the value or use of the applicable Collateral in any material respect, upon delivery to the Trustee of an Officers' Certificate of the Company to such effect and compliance with Section 11.01 hereof, the Trustee shall release to the Company or the applicable Guarantor such Net Proceeds or Net Awards for such property or proceeds of such sale, free of the Lien hereof and of the Security Documents.

        12.03    Withdrawal of Net Cash Proceeds to Fund an Asset Sale Offer.

        To the extent that any Trust Moneys consist of Collateral Proceeds (or amounts deemed pursuant to this Indenture to be Collateral Proceeds) received by the Trustee pursuant to the provisions of Section 4.13 hereof and an Asset Sale Offer has been made in accordance therewith, such Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee to the Paying Agent for application in accordance with Section 4.13 hereof upon a Company Order to the Trustee and upon receipt by the Trustee of each of the following:

        (a)  An Officers' Certificate, of the Company dated not more than five days prior to the Asset Sale Purchase Date stating:

          (i)  that no Default or Event of Default shall have occurred and be continuing;

        (ii)  (x) that such Trust Moneys constitute Collateral Proceeds or are deemed, pursuant to Section 4.13 hereof, to constitute Collateral Proceeds, (y) that pursuant to and in accordance with Section 4.13 hereof, the Company has made an Asset Sale Offer and (z) the amount of Excess Proceeds (to the extent then determinable) to be applied to the repurchase of the Notes pursuant to the Asset Sale Offer;

        (iii)  the Asset Sale Purchase Date; and

        (iv)  that all conditions precedent and covenants herein provided for relating to such application of Trust Moneys have been complied with;

        (b)  All documentation, if any, required under TIA § 314(d); and

        (c)  An Opinion of Counsel stating that the documents that have been or are therewith delivered to the Trustee in connection with the Asset Sale Offer pursuant to this Section 12.03 conform to the requirements of this Indenture and that all conditions precedent herein provided for relating to such application of Trust Moneys have been complied with.

        Upon compliance with the foregoing provisions of this Section 12.03, the Trustee shall apply the Trust Moneys as directed and specified by such Company Order, subject to Section 4.13 hereof.

        12.04    Withdrawal of Trust Moneys for Investment in Replacement Assets.

        In the event the Company (or a Guarantor of the Company if such Guarantor has engaged in the Asset Sale) intends to reinvest Collateral Proceeds (or amounts which, pursuant to Section 4.13 hereof, are deemed to constitute Collateral Proceeds) of an Asset Sale in Replacement Assets (the "Released Trust Moneys"), such Collateral Proceeds constituting Trust Moneys may be withdrawn by the Company and shall be paid by the Trustee to the Company (or as otherwise directed by the Company) for application in accordance with Section 4.13 hereof upon a Company Order to the Trustee and upon receipt by the Trustee of each of the following:

        (a)  a notice signed by the Company (each, a "Trust Moneys Release Notice"), which shall (i) refer to this Section 12.04, (ii) contain all documents referred to below, (iii) describe with particularity the Released Trust Moneys, (iv) describe with particularity the Replacement Assets to be invested in with respect to the Released Trust Moneys and (v) be accompanied by a counterpart

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of the instruments proposed to give effect to the release fully executed and acknowledged (if applicable) by all parties thereto other than the Trustee;

        (b)  An Officers' Certificate of the Company certifying that (i) such Trust Moneys constitute Net Cash Proceeds, (ii) the release of the Released Trust Moneys complies with the terms and conditions of Section 4.13 hereof, (iii) there is no Default or Event of Default in effect or continuing on the date thereof, (iv) the release of the Released Trust Moneys will not result in a Default or Event of Default hereunder and (v) all conditions precedent to such release have been complied with;

        (c)  All documentation required under the TIA (including, without limitation, TIA § 314(d));

        (d)  All documentation necessary to subject such Replacement Assets to a valid first priority Lien and security interest (subject only to Liens expressly permitted by this Indenture or the relevant Security Documents) in favor of the Trustee (or, in the case of property subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the Holders pursuant to the Security Documents, including, without limitation, all instruments, agreements, Opinions of Counsel, certificates and other documents required by Section 11.01 hereof; and

        (e)  An Opinion of Counsel stating:

          (i)  that the documents that have been or are therewith delivered to the Trustee in connection with an investment in Replacement Assets conform to the requirements of this Indenture and that all conditions precedent herein provided for relating to such application of Trust Moneys have been complied with; and

        (ii)  to the extent that such Replacement Assets were acquired with Collateral Proceeds (or amounts deemed to constitute Collateral Proceeds), the relevant Security Documents create a valid, binding and enforceable Lien on and security interest in such Replacement Assets in favor of the Trustee (or, in the case of Replacement Assets subject to a Mortgage, the Trustee or another trustee under such Mortgage) for the benefit of the Holders and, to the extent that a security interest in any such Replacement Assets may be perfected under the relevant Uniform Commercial Code, a perfected security interest in such property.

        Upon compliance with the foregoing provisions of this Indenture, the Trustee shall apply the Released Trust Moneys as directed and specified by the Company, subject to Section 4.13 hereof.

        12.05    Withdrawal of Trust Moneys on Basis of Retirement of Notes.

        Trust Moneys (other than Collateral Proceeds from an Asset Sale) may be withdrawn by the Company to be applied to pay the principal of and interest (and Liquidated Damages, if any) on the Notes on any Stated Maturity, upon redemption or retirement, or upon the purchase thereof (including purchase in the open market, upon tender or otherwise and including, without limitations, pursuant to an offer to purchase pursuant to Section 4.12 hereof but excluding an offer to purchase pursuant to Section 4.13 hereof, which is governed by Section 12.03 hereof) and shall be paid by the Trustee to the Company (or as otherwise directed by the Company) for application to such purposes upon a Company Order to the Trustee and upon receipt by the Trustee of the following:

        (a)  a Board Resolution requesting the withdrawal and payment of a specified amount of Trust Moneys;

        (b)  an Officers' Certificate of the Company, dated not more than 5 days prior to date of the application for the withdrawal and payment of such Trust Moneys, certifying that (i) there is no Default or Event of Default in effect or continuing on the date thereof and (ii) all conditions precedent herein provided relating to such withdrawal and application have been complied with;

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        (c)  an Opinion of Counsel stating that the documents that have been or are therewith delivered to the Trustee in connection with such withdrawal conform to the requirements of this Indenture and that all conditions precedent herein provided relating to such withdrawal have been complied with; and

        (d)  all documentation, if any, required by the TIA (including, without limitation, TIA § 314(d)).

        Upon compliance with the foregoing provisions of this Indenture, the Trustee shall apply the Trust Moneys as directed and specified by such Company Order in accordance with this Section 12.05.

        12.06    Investment of Trust Moneys.

        The Trustee shall be entitled to apply any Trust Moneys to cure any Event of Default. So long as no Default or Event of Default shall have occurred and is continuing, all or any part of any Trust Moneys held by the Trustee shall from time to time be invested or reinvested by the Trustee in any Cash Equivalents pursuant to a Company Order, which shall specify the Cash Equivalents in which such Trust Moneys shall be invested and shall certify that such investments constitute Cash Equivalents and the Trustee shall sell any such Cash Equivalent only upon receipt of a Company Order specifying the particular Cash Equivalent to be sold. So long as no Default or Event of Default occurs and is continuing, any interest or dividends accrued, earned or paid on such Cash Equivalents (in excess of any accrued interest or dividends paid at the time of purchase) that may be received by the Trustee shall be forthwith paid to the Company. Such Cash Equivalents shall be held by the Trustee as a part of the Collateral, subject to the same provisions hereof as the cash used by it to purchase such Cash Equivalents.

        The Trustee shall not be liable or responsible for any loss resulting from such investments or sales except only for its own negligent action, its own negligent failure to act or its own willful misconduct in complying with this Section 12.06.

ARTICLE THIRTEEN

MISCELLANEOUS

        13.01    Trust Indenture Act of 1939.

        This Indenture is subject to the provisions of the TIA that are required to be a part of this Indenture, and shall, to the extent applicable, be governed by such provisions.

        If any provision of this Indenture modifies or excludes any provision of the TIA that may be so modified or excluded, the latter provision shall be deemed to apply to this Indenture as so modified or excluded, as the case may be.

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        13.02    Notices.

        Any notice or communication by the Company, any Guarantor or the Trustee to any of the others shall be duly given if in writing and delivered in person or by overnight courier guaranteeing next day delivery or sent by telecopier, addressed as follows:

If to the Company or any Guarantor to:

Oregon Steel Mills, Inc.
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205
Facsimile: (503) 240-5800
Attention: Chief Financial Officer

With a copy to:

Stoel Rives LLP
900 S.W. 5th Avenue, Suite 2600
Portland, Oregon 97204
Facsimile: (503) 220-2400
Attention: Mr. Robert J. Moorman

If to the Trustee to:

U.S. Bank National Association
180 East 5th Street
St. Paul, MN 55101
Facsimile: (651) 244-0711
Attention: Corporate Trust Department

        The parties hereto by notice to the other parties may designate additional or different addresses or facsimile numbers for subsequent notices or communications.

        All notices and communications (other than those sent to Holders) shall be deemed to have been duly given: at the time delivered by hand, if personally delivered; when receipt acknowledged, if telecopied; and the next Business Day after timely delivery to the courier, if sent by overnight air courier guaranteeing next day delivery.

        Any notice or communication to a Holder, including any notice delivered in connection with TIA § 310(b), TIA § 313(c), TIA § 314(a) and TIA § 315(b), shall be mailed by overnight courier guaranteeing next day delivery (or, if such delivery can not be made to such Holder by overnight courier, then by first class mail) to such Holder at the address of such Holder as it appears on the Notes register maintained by the Registrar and shall be sufficiently given to such Holder if so mailed within the time prescribed. Copies of any such communication or notice to a holder shall also be mailed to the Trustee and each Agent.

        Failure to mail a notice or communication to a Holder or any defect in it shall not affect its sufficiency with respect to other Holders. Except for a notice to the Trustee, which is deemed given only when received, if a notice or communication is mailed in the manner provided above, it is duly given, whether or not the addressee receives it.

        13.03    Communication by Holders with Other Holders.

        Holders may communicate pursuant to TIA § 312(b) with other Holders with respect to their rights under this Indenture, the Security Documents, the Guarantees or the Notes. The Company, the Guarantors, the Trustee, the Registrar and any other person shall have the protection of TIA § 312(c).

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        13.04    Certificate and Opinion as to Conditions Precedent.

        Upon any request or application by the Company or any Guarantor to the Trustee to take any action under this Indenture, such obligor shall furnish to the Trustee:

        (a)  an Officers' Certificate, in form and substance reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof), stating that, in the opinion of the signers, all conditions precedent and covenants, if any, provided for in this Indenture relating to the proposed action have been complied with; and

        (b)  an Opinion of Counsel, in form reasonably satisfactory to the Trustee (which shall include the statements set forth in Section 13.05 hereof), stating that, in the opinion of such counsel, all such conditions precedent and covenants have been complied with.

        13.05    Statements Required in Certificate or Opinion.

        Each certificate or opinion with respect to compliance with a condition or covenant provided for in this Indenture (other than a certificate pursuant to TIA § 314(a)(4)) shall comply with the provisions of TIA § 314(e) and shall include:

        (a)  a statement that the person making such certificate or opinion has read such covenant or condition;

        (b)  a brief statement as to the nature and scope of the examination or investigation upon which the statement or opinions contained in such certificate or opinion are based;

        (c)  a statement that, in the opinion of such person, he or she has made such examination or investigation as is necessary to enable him or her to express an informed opinion as to whether or not such covenant or condition has been complied with; and

        (d)  a statement as to whether or not, in the opinion of such person, such condition or covenant has been complied with; provided, however, that with respect to matters of fact an Opinion of Counsel may rely on an Officers' Certificate or certificates of public officials or other appropriate certificates.

        13.06    Rules by Trustee, Paying Agent, Registrar.

        The Trustee may make reasonable rules for action by or at a meeting of Holders. The Paying Agent or Registrar may make reasonable rules for its functions.

        13.07    Legal Holidays.

        In any case where any Interest Payment Date, Stated Maturity, Maturity Date, Redemption Date, Change of Control Purchase Date or Asset Sale Purchase Date of any Note shall not be a Business Day at a Place of Payment, then (notwithstanding any other provision of this Indenture or any Note), payment of interest, Liquidated Damages, if any, or principal need not be made at such Place of Payment on such date, but may be made on the next succeeding Business Day at such Place of Payment with the same force and effect as if made on such Interest Payment Date, Stated Maturity, Maturity Date, Redemption Date, Change of Control Purchase Date or Asset Sale Purchase Date, as the case may be, and no interest shall accrue on the amount so payable for the period from and after such Interest Payment Date, Stated Maturity, Maturity Date, Redemption Date, Change of Control Purchase Date or Asset Sale Purchase Date, as the case may be, to such next succeeding Business Day.

        13.08    Governing Law.

        THIS INDENTURE, THE GUARANTEES AND THE NOTES SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW

118

YORK, INCLUDING, WITHOUT LIMITATION, SECTION 5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW, EXCEPT TO THE EXTENT THAT VALIDLY OR PERFECTION OF SECURITY INTERESTS IN RESPECT OF CERTAIN ITEMS OF COLLATERAL, INCLUDING, WITHOUT LIMITATION, REAL PROPERTY, IS GOVERNED BY THE LAWS OF THE JURISDICTION WHERE SUCH COLLATERAL IS LOCATED.

        THE TRUSTEE, THE COMPANY, EACH GUARANTOR AND THE HOLDERS AGREE (TO THE FULLEST EXTENT PERMITTED BY LAW) TO SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS INDENTURE, THE GUARANTEES OR THE NOTES.

        13.09    No Interpretation of Other Agreements.

        This Indenture may not be used to interpret another indenture, loan or debt agreement of the Company or any Guarantor. Any such indenture, loan or debt agreement may not be used to interpret this Indenture.

        13.10    No Recourse Against Others.

        No director, officer, employee, stockholder or limited partner (other than the Company and the Guarantors) of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or the Guarantors under the Notes, this Indenture, the Guarantees, the Registration Rights Agreement, the Security Documents or the Intercreditor Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation by reason of his, her or its status as such director, officer, employee, stockholder or limited partner. Each Holder by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. The waiver may not be effective to waive liability under federal securities laws.

        13.11    Successors.

        All agreements of the Company and the Guarantors in this Indenture, the Notes, the Security Documents, the Registration Rights Agreement, the Intercreditor Agreement and the Guarantees shall bind their respective successors. All agreements of the Trustee in this Indenture shall bind its successors.

        13.12    Duplicate Originals.

        The parties may sign any number of copies of this Indenture. Each signed copy shall be an original, but all such executed copies together represent the same agreement.

        13.13    Separability.

        In case any provision in this Indenture, any Guarantee or the Notes shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not (to the maximum extent permitted by law) in any way be affected or impaired thereby, and a Holder shall have no claim therefor against any party hereto.

        13.14    Table of Contents, Headings, etc..

        The Table of Contents, Cross-Reference Table and headings of the Articles and Sections of this Indenture have been inserted for convenience of reference only, are not to be considered a part hereof, and shall in no way modify or restrict any of the terms or provisions hereof.

        13.15    True Copy.

        The Company shall, within three Business Days of receipt of a written request by the Trustee, furnish the Trustee with a true copy of this Indenture.

119

        13.16    Benefits of Indenture.

        Except as provided in this Article Thirteen, nothing in this Indenture, the Guarantees or in the Notes, express or implied, shall give to any person, other than the parties hereto and their successors hereunder, and the Holders, any benefit or any legal or equitable right, remedy or claim under this Indenture.

        13.17    Intercreditor Agreement.    The rights and obligations of the parties hereto are subject to the Intercreditor Agreement.

[signature page follows]

120

        IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be duly executed as of the day and year first above written.

[Seal]		OREGON STEEL MILLS, INC.
Attest:		By:
	Name:		Name:
	Title:		Title:
		U.S. BANK NATIONAL ASSOCIATION, as Trustee
		By:
			Name:
			Title:
[Seal]		NEW CF&I, INC., as a Guarantor
Attest:		By:
	Name:		Name:
	Title:		Title:
		CF&I STEEL, L.P., as a Guarantor
[Seal]		By:    NEW CF&I, INC., its General Partner
Attest:		By:
	Name:		Name:
	Title:		Title:

121

EXHIBIT A-1
(Face of Note)

CUSIP:                         

10% First Mortgage Notes due 2009

No.: $

Oregon Steel Mills, Inc.

promises to pay to                                                                                                                                                                    

or registered assigns,

the principal sum of                                                                                                                                                                    

Dollars on July 15, 2009.

Interest Payment Dates: January 15th and July 15th, commencing January 15, 2003.

Record Dates: January 1st and July 1st.

Dated: July 15, 2002
OREGON STEEL MILLS, INC.
By:
	Name: Title:

This is one of the
Notes referred to in the
within-mentioned Indenture:

U.S. Bank National Association,
as Trustee

By:
	Authorized Signatory

A-1-1

(Back of Note)

10% First Mortgage Notes due 2009

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

        1.    Principal and Interest.    Oregon Steel Mills, Inc., a corporation incorporated under the laws of the State of Delaware (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to the person named on the face hereof or such person's registered assigns, the principal sum set forth on the face hereof on July 15, 2009, at the office or agency of the Company referred to below, and to pay interest thereon at 10% per annum from July 15, 2002 until maturity. The Company shall pay interest semi-annually on January 15th and July 15th of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be January 15, 2003. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand to the extent lawful at the interest rate applicable to the Notes; the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

        2.    Method of Payment.    The interest (and Liquidated Damages, if any) so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be January 1st or July 1st (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each a "Regular Record Date"). Any such interest (and Liquidated Damages, if any) not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and, together with interest, to the extent lawful, on such defaulted interest at the rate borne by the Notes, shall be paid to the person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Company, notice of which shall be given to holders of Notes not less than 15 days prior to such special record date, or shall be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture.

        Payment of the principal of, premium, if any, interest and Liquidated Damages, if any, on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan in the City of New York, or at such other office or agency of the Company as may be maintained for such purpose, or, at the option of the Company, payment of interest may be made by check mailed to the address of the person entitled thereto as such address shall appear on the Notes register maintained by the Registrar provided that all payments of principal, premium, interest and Liquidated Damages, if any, with respect to Notes the Holders of which have given wire transfer instructions to the Company prior to the Record Date will be required to be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof. Until otherwise designated by the Company, the Company's office or agency in New York will be the office of the

A-1-2

Trustee maintained for such purpose. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

        3.    Paying Agent and Registrar.    Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

        4.    Indenture.    This Note is one of a duly authorized issue of Notes of the Company designated as its 10% First Mortgage Notes due 2009, limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $305,000,000, issued under an indenture (which Indenture, together with all indentures supplemental thereto, are hereinafter called the "Indenture") dated as of July 15, 2002, among the Company, U.S. Bank National Association, as trustee (herein called the "Trustee", which term includes any successor Trustee under the Indenture), New CF&I, Inc., a Delaware corporation, and CF&I Steel, L.P., a Delaware limited partnership, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee, the Guarantors and the Holders of the Notes, and of the terms upon which the Notes are, and are to be, authenticated and delivered.

        The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. All terms used in this Note that are not otherwise defined shall have the meaning assigned to them in the Indenture.

        The rights and obligations of the parties to this Indenture are subject to the Intercreditor Agreement.

        No reference herein to the Indenture and no provisions of this Note, the Guarantee or of the Indenture shall alter or impair the obligation of the Company or any Guarantor, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

        5.    Guarantees; Collateral.    This Note is entitled to certain Guarantees made for the benefit of the Holders, as set forth in this Note and in the Indenture. This Note and such Guarantees are also entitled to the benefits of certain Collateral pledged as security therefor as provided in the Indenture and the Security Documents.

        6.    Optional Redemption.    Except as set forth in the following paragraph, the Notes will not be redeemable at the Company's option prior to July 15, 2006. On or after July 15, 2006, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 30 days' nor more than 60 days' notice, at the Redemption Prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, if any, and Liquidated Damages, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15th of the years indicated below:

Year	Percentage
2006	105.000	%
2007	102.500	%
2008 and thereafter	100.000	%

A-1-3

        Notwithstanding the foregoing, at any time on or prior to July 15, 2005, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes at a Redemption Price equal to 110.000% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, and Liquidated Damages, if any, to the redemption date, with the net cash proceeds of Qualified Equity Offerings by the Company; provided that (i) at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and (ii) such redemption shall occur within 60 days of the date of the closing of such Qualified Equity Offering.

        Notice of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part (in integral multiples of $1,000). If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. In the case of any redemption of Notes, interest installments whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Notes, or one or more Predecessor Notes, of record at the close of business on the relevant record date referred to on the face hereof.

        7.    Mandatory Redemption.    For the avoidance of doubt, an offer to purchase pursuant to paragraph 8 shall not be deemed a redemption. The Company shall not be required to make mandatory redemption payments with respect to the Notes.

        8.    Repurchase at Option of Holder.    If a Change of Control occurs, each Holder of Notes will have the right to require the Company to make an offer to all Holders to repurchase Notes on the terms, in accordance with the procedures and subject to the limitations set forth in the Indenture. If the Company or a Guarantor consummates any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $10,000,000, the Company will be required to make an offer to all Holders of Notes to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds on the terms, in accordance with the procedures and subject to the limitations set forth in the Indenture.

        9.    Defaults and Remedies.    If an Event of Default shall occur and be continuing, the principal of, premium, if any, and interest on all of the outstanding Notes may be declared due and payable in the manner and with the effect provided in the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes generally may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency as set forth in the Indenture, with respect to the Company or any Guarantor, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, or the premium on, the Notes.

A-1-4

        10.    Defeasance.    The Indenture contains provisions (which provisions apply to this Note) for defeasance at any time of the entire indebtedness of the Company and the Guarantors under this Note and certain restrictive covenants, in each case upon compliance by the Company with certain conditions set forth therein, and for the termination of the Company's and the Guarantors' obligations (subject to certain exceptions) under the Indenture.

        11.    Amendments and Waivers.    The Indenture permits, with certain exceptions as therein provided, the amendment and the modification of the rights and obligations of the Company and the Guarantors and the rights of the Holders under the Indenture, the Notes, the Guarantees, the Intercreditor Agreement, and the Security Documents at any time by the Company, the Guarantors and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding. The Indenture also contains provisions permitting the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, on behalf of the Holders of all the Notes, to waive compliance by the Company and the Guarantors with certain provisions of, and to waive certain past defaults under, the Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Security Documents and their consequences. Any such consent or waiver by or on behalf of the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. Without the consent of any Holder of Notes, the Company and the Trustee may amend or supplement the Indenture or the Notes to cure any ambiguity, defect or inconsistency, to evidence the succession of another person to the Company in accordance with Article Five of the Indenture or the succession of another person to a Guarantor in accordance with Section 10.03 of the Indenture, and the assumption by any such successor of the obligations of the Company or such Guarantor, as the case may be, in accordance with the Indenture and the Security Documents, to qualify, or maintain the qualification of, the Indenture under the TIA, to give effect to the release of any Released Interests or any other release of Collateral, in each case permitted to be released in accordance with the terms of the Indenture or the relevant Security Documents, to evidence or effect the pledge of additional or substitute assets or property as Collateral in accordance with the Indenture and the Security Documents, to evidence the release of any Guarantor in accordance with Section 10.04 of the Indenture or the addition of any new Guarantor in accordance with Sections 4.17 and 4.22 of the Indenture, to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee with respect to the Notes and to make such additions or changes as shall be necessary or appropriate to provide for or facilitate the administration of the trusts hereunder by more than one trustee pursuant to the requirements of Section 7.12 of the Indenture, to comply with the requirements of the Trustee and the Depository (including their respective nominees) with respect to transfers of beneficial interests in the Notes or to provide for issuance of the Exchange Notes, and to make any other change that would provide any additional rights or benefits to the Holders of the Notes, or that does not adversely affect the rights of any Holder of Notes under this Indenture, the Notes, the Guarantees, the Registration Rights Agreement or the Security Documents or, in the case of any other change to the Intercreditor Agreement, that does not adversely affect the rights of any Holder of Notes in any material respect.

        12.    Denominations, Transfer and Exchange.    The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.

        The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company or the Registrar is not required to transfer or exchange any Note selected for redemption. Also, the Company or the Registrar is not

A-1-5

required to transfer or exchange any Notes for a period of 15 days before a selection of Notes to be redeemed.

        No service charge shall be made for any registration of transfer or exchange or redemption or repurchase of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

        13.    Persons Deemed Owners.    Prior to and at the time of due presentment of this Note for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors, or the Trustee may treat the person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note shall be overdue, and neither the Company, the Guarantors, the Trustee nor any agent shall be affected by notice to the contrary.

        14.    Trustee Dealings with the Company.    The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or the Company's Affiliates, and may otherwise deal with the Company or the Company's Affiliates, as if it were not the Trustee; subject, however, to TIA § 310(b).

        15.    No Recourse Against Others.    No director, officer, employee, incorporator, limited partner or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Indenture, the Guarantees, the Registration Rights Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. This waiver may not be effective to waive liability under federal securities law.

        16.    Authentication.    This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

        17.    Abbreviations.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

        18.    Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.    In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Exchange and Registration Rights Agreement dated as of the date of the Indenture, among the Company, the Guarantors and the parties named on the signature pages thereof (the "Registration Rights Agreement").

        19.    CUSIP Numbers.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon, and any such redemption shall not be affected by any defect in or omission of such numbers.

        20.    Governing Law.    This Note, the Indenture and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.

        The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Oregon Steel Mills, Inc., 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205, Attention: Chief Financial Officer.

A-1-6

ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to

                                                                                                                                                                                                        
(Insert assignee's soc. sec. or tax I.D. no.)

                                                                                                                                                                                                        
(Print or type assignee's name, address and zip code)

and irrevocably appoint                                                                                                                                                                
to transfer this Note on the books of the Company. The agent may substitute another to act for him or her.

Date:                                                              

Your Signature:                                                                                  
(Sign exactly as your name appears on the Note)        

SIGNATURE GUARANTEE

                                                                                 
Participant in a Recognized Signature
Guarantee Medallion Program

A-1-7

OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Note purchased by the Company pursuant to Section 4.12 or 4.13 of the Indenture, check the appropriate box below:

o Section 4.12                        o Section 4.13

        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.12 or Section 4.13 of the Indenture, state the amount you elect to have purchased:

$                                                                                 

Date:                                                                          

Your Signature:                                                                                  
(Sign exactly as your name appears on the Note)        

Tax Identification No.                                                                        

SIGNATURE GUARANTEE

                                                                                 
Participant in a Recognized Signature
Guarantee Medallion Program

A-1-8

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)

        The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of
decrease in
Principal Amount of
this Global Note Amount of increase in
Principal Amount of
this Global Note Principal Amount of
this Global Note
following such decrease
(or increase) Signature of authorized
signatory of Trustee or
Custodian

(1)

This should be included only if the Note is issued in global form.

A-1-9

EXHIBIT A-2
(Face of Regulation S Temporary Global Note)

CUSIP:                         

10% First Mortgage Notes due 2009

No.: $

Oregon Steel Mills, Inc.

promises to pay to                                                                                                                                                                    

or registered assigns,

the principal sum of                                                                                                                                                                    

Dollars on July 15, 2009.

Interest Payment Dates: January 15th and July 15th, commencing January 15, 2003.

Record Dates: January 1st and July 1st.

Dated: July 15, 2002
OREGON STEEL MILLS, INC.
By:
	Name: Title:

This is one of the
Notes referred to in the
within-mentioned Indenture:

U.S. Bank National Association,
as Trustee

By:
	Authorized Signatory

A-2-1

(Back of Regulation S Temporary Global Note)

10% First Mortgage Notes due 2009

        THE RIGHTS ATTACHING TO THIS REGULATION S TEMPORARY GLOBAL NOTE, AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR CERTIFICATED NOTES, ARE AS SPECIFIED IN THE INDENTURE (AS DEFINED HEREIN).

        THIS GLOBAL NOTE IS HELD BY THE DEPOSITORY (AS DEFINED IN THE INDENTURE GOVERNING THIS NOTE) OR ITS NOMINEE IN CUSTODY FOR THE BENEFIT OF THE BENEFICIAL OWNERS HEREOF, AND IS NOT TRANSFERABLE TO ANY PERSON UNDER ANY CIRCUMSTANCES EXCEPT THAT (I) THE TRUSTEE MAY MAKE SUCH NOTATIONS HEREON AS MAY BE REQUIRED PURSUANT TO THE INDENTURE, (II) THIS GLOBAL NOTE MAY BE EXCHANGED IN WHOLE BUT NOT IN PART PURSUANT TO SECTION 2.06(a) OF THE INDENTURE, (III) THIS GLOBAL NOTE MAY BE DELIVERED TO THE TRUSTEE FOR CANCELLATION PURSUANT TO SECTION 2.11 OF THE INDENTURE AND (IV) THIS GLOBAL NOTE MAY BE TRANSFERRED TO A SUCCESSOR DEPOSITORY WITH THE PRIOR WRITTEN CONSENT OF ITS ISSUER.

        UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED

        REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO. HAS AN INTEREST HEREIN.

        THE NOTES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (A) (1) TO A PERSON WHO THE SELLER REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER THE SECURITIES ACT PURCHASING FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (2) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 OR RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (3) TO AN INSTITUTIONAL ACCREDITED INVESTOR AS DEFINED IN RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D IN A TRANSACTION EXEMPT FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT, (4) PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF AVAILABLE), (5) PURSUANT TO ANOTHER EXEMPTION FROM REGISTRATION AVAILABLE UNDER THE SECURITIES ACT OR (6) PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT AND (B) IN EACH CASE, IN ACCORDANCE WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES.

        1.    Principal and Interest.    Oregon Steel Mills, Inc., a corporation incorporated under the laws of the State of Delaware (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to the person named on the face hereof or such person's registered assigns, the principal sum set forth on the face

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hereof on July 15, 2009, at the office or agency of the Company referred to below, and to pay interest thereon at 10% per annum from July 15, 2002 until maturity. The Company shall pay interest semi-annually on January 15th and July 15th of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be January 15, 2003. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand to the extent lawful at the interest rate applicable to the Notes; the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

        Until this Regulation S Temporary Global Note is exchange for one or more Regulation S Permanent Global Notes, the Holder hereof shall not be entitled to receive payments of interest hereon; until so exchanged in full, this Regulation S Temporary Global Note shall in all other respects be entitled to the same benefits as other Notes under the Indenture.

        2.    Method of Payment.    The interest (and Liquidated Damages, if any) so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be January 1st or July 1st (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each a "Regular Record Date"). Any such interest (and Liquidated Damages, if any) not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and, together with interest, to the extent lawful, on such defaulted interest at the rate borne by the Notes, shall be paid to the person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Company, notice of which shall be given to holders of Notes not less than 15 days prior to such special record date, or shall be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture.

        Payment of the principal of, premium, if any, interest and Liquidated Damages, if any, on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan in the City of New York, or at such other office or agency of the Company as may be maintained for such purpose, or, at the option of the Company, payment of interest may be made by check mailed to the address of the person entitled thereto as such address shall appear on the Notes register maintained by the Registrar provided that all payments of principal, premium, interest and Liquidated Damages, if any, with respect to Notes the Holders of which have given wire transfer instructions to the Company prior to the Record Date will be required to be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof. Until otherwise designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

        3.    Paying Agent and Registrar.    Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

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        4.    Indenture.    This Note is one of a duly authorized issue of Notes of the Company designated as its 10% First Mortgage Notes due 2009, limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $305,000,000, issued under an indenture (which Indenture, together with all indentures supplemental thereto, are hereinafter called the "Indenture") dated as of July 15, 2002, among the Company, U.S. Bank National Association, as trustee (herein called the "Trustee", which term includes any successor Trustee under the Indenture), New CF&I, Inc., a Delaware corporation, and CF&I Steel, L.P., a Delaware limited partnership, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee, the Guarantors and the Holders of the Notes, and of the terms upon which the Notes are, and are to be, authenticated and delivered.

        The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. All terms used in this Note that are not otherwise defined shall have the meaning assigned to them in the Indenture.

        The rights and obligations of the parties to this Indenture are subject to the Intercreditor Agreement.

        No reference herein to the Indenture and no provisions of this Note, the Guarantee or of the Indenture shall alter or impair the obligation of the Company or any Guarantor, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

        5.    Guarantees; Collateral.    This Note is entitled to certain Guarantees made for the benefit of the Holders, as set forth in this Note and in the Indenture. This Note and such Guarantees are also entitled to the benefits of certain Collateral pledged as security therefor as provided in the Indenture and the Security Documents.

        6.    Optional Redemption.    Except as set forth in the following paragraph, the Notes will not be redeemable at the Company's option prior to July 15, 2006. On or after July 15, 2006, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 30 days' nor more than 60 days' notice, at the Redemption Prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, if any, and Liquidated Damages, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15th of the years indicated below:

Year	Percentage
2006	105.000	%
2007	102.500	%
2008 and thereafter	100.000	%

        Notwithstanding the foregoing, at any time on or prior to July 15, 2005, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes at a Redemption Price equal to 110.000% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, and Liquidated Damages, if any, to the redemption date, with the net cash proceeds of Qualified Equity Offerings by the Company; provided that (i) at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and (ii) such redemption occurs 60 days of the date of the closing of such Qualified Equity Offering.

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        Notice of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part (in integral multiples of $1,000). If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. In the case of any redemption of Notes, interest installments whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Notes, or one or more Predecessor Notes, of record at the close of business on the relevant record date referred to on the face hereof.

        7.    Mandatory Redemption.    For the avoidance of doubt, an offer to purchase pursuant to paragraph 8 shall not be deemed a redemption. The Company shall not be required to make mandatory redemption payments with respect to the Notes.

        8.    Repurchase at Option of Holder.    If a Change of Control occurs, each Holder of Notes will have the right to require the Company to make an offer to all Holders to repurchase Notes on the terms, in accordance with the procedures and subject to the limitations set forth in the Indenture. If the Company or a Guarantor consummates any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $10,000,000, the Company will be required to make an offer to all Holders of Notes to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds on the terms, in accordance with the procedures and subject to the limitations set forth in the Indenture.

        9.    Defaults and Remedies.    If an Event of Default shall occur and be continuing, the principal of, premium, if any, and interest on all of the outstanding Notes may be declared due and payable in the manner and with the effect provided in the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes generally may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency as set forth in the Indenture, with respect to the Company or any Guarantor, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, or the premium on, the Notes.

        10.    Defeasance.    The Indenture contains provisions (which provisions apply to this Note) for defeasance at any time of the entire indebtedness of the Company and the Guarantors under this Note and certain restrictive covenants, in each case upon compliance by the Company with certain conditions set forth therein, and for the termination of the Company's and the Guarantors' obligations (subject to certain exceptions) under the Indenture.

        11.    Amendments and Waivers.    The Indenture permits, with certain exceptions as therein provided, the amendment and the modification of the rights and obligations of the Company and the Guarantors and the rights of the Holders under the Indenture, the Notes, the Guarantees, the Intercreditor Agreement, and the Security Documents at any time by the Company, the Guarantors

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and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding. The Indenture also contains provisions permitting the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, on behalf of the Holders of all the Notes, to waive compliance by the Company and the Guarantors with certain provisions of, and to waive certain past defaults under, the Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Security Documents and their consequences. Any such consent or waiver by or on behalf of the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. Without the consent of any Holder of Notes, the Company and the Trustee may amend or supplement the Indenture or the Notes to cure any ambiguity, defect or inconsistency, to evidence the succession of another person to the Company in accordance with Article Five of the Indenture or the succession of another person to a Guarantor in accordance with Section 10.03 of the Indenture, and the assumption by any such successor of the obligations of the Company or such Guarantor, as the case may be, in accordance with the Indenture and the Security Documents, to qualify, or maintain the qualification of, the Indenture under the TIA, to give effect to the release of any Released Interests or any other release of Collateral, in each case permitted to be released in accordance with the terms of the Indenture or the relevant Security Documents, to evidence or effect the pledge of additional or substitute assets or property as Collateral in accordance with the Indenture and the Security Documents, to evidence the release of any Guarantor in accordance with Section 10.04 of the Indenture or the addition of any new Guarantor in accordance with Sections 4.17 and 4.22 of the Indenture, to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee with respect to the Notes and to make such additions or changes as shall be necessary or appropriate to provide for or facilitate the administration of the trusts hereunder by more than one trustee pursuant to the requirements of Section 7.12 of the Indenture, to comply with the requirements of the Trustee and the Depository (including their respective nominees) with respect to transfers of beneficial interests in the Notes or to provide for issuance of the Exchange Notes, and to make any other change that would provide any additional rights or benefits to the Holders of the Notes, or that does not adversely affect the rights of any Holder of Notes under this Indenture, the Notes, the Guarantees, the Registration Rights Agreement or the Security Documents or, in the case of any other change to the Intercreditor Agreement, that does not adversely affect the rights of any Holder of Notes in any material respect.

        12.    Denominations, Transfer and Exchange.    The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.

        The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company or the Registrar is not required to transfer or exchange any Note selected for redemption. Also, the Company or the Registrar is not required to transfer or exchange any Notes for a period of 15 days before a selection of Notes to be redeemed.

        No service charge shall be made for any registration of transfer or exchange or redemption or repurchase of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

        This Regulation S Temporary Global Note is exchangeable in whole or in part for one or more Global Notes only (i) on or after the termination of the 40-day distribution compliance period (as defined in Regulation S) and (ii) upon presentation of certificates (accompanied by an Opinion of Counsel, if applicable) required by Article 2 of the Indenture. Upon exchange of this Regulation S

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Temporary Global Note for one or more Global Notes, the Trustee shall cancel this Regulation S Temporary Global Note.

        13.    Persons Deemed Owners.    Prior to and at the time of due presentment of this Note for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors, or the Trustee may treat the person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note shall be overdue, and neither the Company, the Guarantors, the Trustee nor any agent shall be affected by notice to the contrary.

        14.    Trustee Dealings with the Company.    The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or the Company's Affiliates, and may otherwise deal with the Company or the Company's Affiliates, as if it were not the Trustee; subject, however, to TIA § 310(b).

        15.    No Recourse Against Others.    No director, officer, employee, incorporator, limited partner or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Indenture, the Guarantees, the Registration Rights Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. This waiver may not be effective to waive liability under federal securities law.

        16.    Authentication.    This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

        17.    Abbreviations.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

        18.    Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.    In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Exchange and Registration Rights Agreement dated as of the date of the Indenture, among the Company, the Guarantors and the parties named on the signature pages thereof (the "Registration Rights Agreement").

        19.    CUSIP Numbers.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon, and any such redemption shall not be affected by any defect in or omission of such number.

        20.    Governing Law.    This Note, the Indenture and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.

        The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Oregon Steel Mills, Inc., 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205, Attention: Chief Financial Officer.

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ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to

                                                                                                                                                                                                        
(Insert assignee's soc. sec. or tax I.D. no.)

                                                                                                                                                                                                        
(Print or type assignee's name, address and zip code)

and irrevocably appoint                                                                                                                                                                
to transfer this Note on the books of the Company. The agent may substitute another to act for him or her.

Date:                                                              

Your Signature:                                                                                  
(Sign exactly as your name appears on the Note)        

SIGNATURE GUARANTEE

                                                                                 
Participant in a Recognized Signature
Guarantee Medallion Program

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OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Note purchased by the Company pursuant to Section 4.12 or 4.13 of the Indenture, check the appropriate box below:

o Section 4.12                        o Section 4.13

        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.12 or Section 4.13 of the Indenture, state the amount you elect to have purchased:

$                                                                                 

Date:                                                                          

Your Signature:                                                                                  
(Sign exactly as your name appears on the Note)        

Tax Identification No.                                                                        

SIGNATURE GUARANTEE

                                                                                 
Participant in a Recognized Signature
Guarantee Medallion Program

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SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(2)

        The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of
decrease in
Principal Amount of
this Global Note Amount of increase in
Principal Amount of
this Global Note Principal Amount of
this Global Note
following such decrease
(or increase) Signature of authorized
signatory of Trustee or
Custodian

(2)

This should be included only if the Note is issued in global form.

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EXHIBIT B
FORM OF CERTIFICATE OF TRANSFER

Oregon Steel Mills, Inc.
1000 S.W. Broadway
Suite 2200
Portland, Oregon 97205

[Registrar address block]

Re:10% First Mortgage Notes due 2009

(CUSIP                        )

        Reference is hereby made to the Indenture, dated as of July 15, 2002 (the "Indenture"), by and among Oregon Mills, Inc., as issuer (the "Company"), the Guarantors and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                                (the "Transferor") owns and proposes to transfer the Note[s] or interest in such Note[s] specified in Annex A hereto, in the principal amount of $                        in such Note[s] or interests (the "Transfer"), to                        (the "Transferee"), as further specified in Annex A hereto. In connection with the Transfer, the Transferor hereby certifies that:

[CHECK ALL THAT APPLY]

        1.    o Check if Transferee will take delivery of a beneficial interest in a 144A Global Note or a Definitive Note pursuant to Rule 144A. The Transfer is being effected pursuant to and in accordance with Rule 144A under the United States Securities Act of 1933, as amended (the "Securities Act"), and, accordingly, the Transferor hereby further certifies that the beneficial interest or Definitive Note is being transferred to a person that the Transferor reasonably believed and believes is purchasing the beneficial interest or Definitive Note for its own account, or for one or more accounts with respect to which such person exercises sole investment discretion, and such Person and each such account is a "qualified institutional buyer" within the meaning of Rule 144A in a transaction meeting the requirements of Rule 144A and such Transfer is in compliance with any applicable securities laws of any state of the United States. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the 144A Global Note and/or the Definitive Note and in the Indenture and the Securities Act.

        2.    o Check if Transferee will take delivery of a beneficial interest in a Regulation S Global Note or a Definitive Note pursuant to Regulation S. The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and, accordingly, the Transferor hereby further certifies that (i) the Transfer is not being made to a person in the United States and (x) at the time the buy order was originated, the Transferee was outside the United States or such Transferor and any person acting on its behalf reasonably believed and believes that the Transferee was outside the United States or (y) the transaction was executed in, on or through the facilities of a designated offshore securities market and neither such Transferor nor any person acting on its behalf knows that the transaction was prearranged with a buyer in the United States, (ii) no directed selling efforts have been made in contravention of the requirements of Rule 903(b) or Rule 904(b) of Regulation S under the Securities Act, (iii) the transaction is not part of a plan or scheme to evade the registration requirements of the Securities Act and (iv) if the proposed transfer is being made prior to the expiration of the Restricted Period, the transfer is not being made to a U.S. person or for the account or benefit of a U.S. person (other than an initial purchaser). Upon consummation of the proposed

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transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on Transfer enumerated in the Private Placement Legend printed on the Regulation S Global Note and/or the Definitive Note and in the Indenture and the Securities Act.

        3.    o Check and complete if Transferee will take delivery of a beneficial interest in the Global Note or a Definitive Note pursuant to any provision of the Securities Act other than Rule 144A or Regulation S. The Transfer is being effected in compliance with the transfer restrictions applicable to beneficial interests in Restricted Global Notes and Restricted Definitive Notes and pursuant to and in accordance with the Securities Act and any applicable securities laws of any state of the United States, and accordingly the Transferor hereby further certifies that (check one):

        (a)  o such Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act;

or

        (b)  o such Transfer is being effected to the Company or a Subsidiary thereof;

or

        (c)  o such Transfer is being effected pursuant to an effective registration statement under the Securities Act and in compliance with the prospectus delivery requirements of the Securities Act;

or

        (d)  o such Transfer is being effected to an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and pursuant to an exemption from the registration requirements of the Securities Act other than Rule 144A, Rule 144 or Rule 904, and the Transferor hereby further certifies that it has not engaged in any general solicitation within the meaning of Regulation D under the Securities Act and the Transfer complies with the transfer restrictions applicable to beneficial interests in a Restricted Global Note or Restricted Definitive Notes and the requirements of the exemption claimed, which certification is supported by (1) a certificate executed by the Transferee in the form of Exhibit D to the Indenture and (2) if such Transfer is in respect of a principal amount of Notes at the time of transfer of less than $250,000, an Opinion of Counsel provided by the Transferor or the Transferee (a copy of which the Transferor has attached to this certification), to the effect that such Transfer is in compliance with the Securities Act. Upon consummation of the proposed transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Global Note and/or the Definitive Notes and in the Indenture and the Securities Act.

        4.    o Check if Transferee will take delivery of a beneficial interest in an Unrestricted Global Note or an Unrestricted Definitive Note.

        (a)  o Check if Transfer is pursuant to Rule 144. (i) The Transfer is being effected pursuant to and in accordance with Rule 144 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

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        (b)  o Check if Transfer is pursuant to Regulation S. (i) The Transfer is being effected pursuant to and in accordance with Rule 903 or Rule 904 under the Securities Act and in compliance with the transfer restrictions contained in the Indenture and any applicable securities laws of any state of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will no longer be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes, on Restricted Definitive Notes and in the Indenture.

        (c)  o Check if Transfer is pursuant to Other Exemption. (i) The Transfer is being effected pursuant to and in compliance with an exemption from the registration requirements of the Securities Act other than Rule 144, Rule 903 or Rule 904 and in compliance with the transfer restrictions contained in the Indenture and any applicable securities laws of any State of the United States and (ii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act. Upon consummation of the proposed Transfer in accordance with the terms of the Indenture, the transferred beneficial interest or Definitive Note will not be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the Restricted Global Notes or Restricted Definitive Notes and in the Indenture.

[signature page follows]

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        This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

	[Insert Name of Transferor]
	By:
		Name: Title:
Dated:

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ANNEX A TO CERTIFICATE OF TRANSFER

1.	The Transferor owns and proposes to transfer the following:
[CHECK ONE]
	(a)	o a beneficial interest in the:
		(i)	o	144A Global Note (CUSIP)                        , or
		(ii)	o	Regulation S Global Note (CUSIP)                        , or
	(b)	o a Restricted Definitive Note.
2.	After the Transfer the Transferee will hold:
[CHECK ONE]
	(a)	o a beneficial interest in the:
		(i)	o	144A Global Note (CUSIP)                        , or
		(ii)	o	Regulation S Global Note (CUSIP)                        , or
		(iii)	o	Unrestricted Global Note (CUSIP)                        ; or
	(b)	o a Restricted Definitive Note; or
	(c)	o an Unrestricted Definitive Note, in accordance with the terms of the Indenture.

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EXHIBIT C

FORM OF CERTIFICATE OF EXCHANGE

Oregon Steel Mills, Inc.
1000 S.W. Broadway
Suite 2200
Portland, OR 97205

[Registrar address block]

Re:10% First Mortgage Notes due 2009

(CUSIP                        )

        Reference is hereby made to the Indenture, dated as of July 15, 2002 (the "Indenture"), by and among Oregon Steel Mills, Inc., as issuer (the "Company"), the Guarantors and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

                                (the "Owner") owns and proposes to exchange the Note[s] or interest in such Note[s] specified herein, in the principal amount of $                        in such Note[s] or interests (the "Exchange"). In connection with the Exchange, the Owner hereby certifies that:

1.    Exchange of Restricted Definitive Notes or Beneficial Interests in a Restricted Global Note for Unrestricted Definitive Notes or Beneficial Interests in an Unrestricted Global Note

        (a)  o    Check if Exchange is from beneficial interest in a Restricted Global Note to beneficial interest in an Unrestricted Global Note. In connection with the Exchange of the Owner's beneficial interest in a Restricted Global Note for a beneficial interest in an Unrestricted Global Note in an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Global Notes and pursuant to and in accordance with the United States Securities Act of 1933, as amended (the "Securities Act"), (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest in an Unrestricted Global Note is being acquired in compliance with any applicable securities laws of any state of the United States.

        (b)  o    Check if Exchange is from Restricted Definitive Note to beneficial interest in an Unrestricted Global Note. In connection with the Owner's Ex-change of a Restricted Definitive Note for a beneficial interest in an Unrestricted Global Note, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the beneficial interest is being acquired in compliance with any applicable securities laws of any state of the United States.

        (c)  o    Check if Exchange is from Restricted Definitive Note to Un-restricted Definitive Note. In connection with the Owner's Exchange of a Restricted Definitive Note for an Unrestricted Definitive Note, the Owner hereby certifies (i) the Unrestricted Definitive Note is being acquired for the Owner's own account without transfer, (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to Restricted Definitive Notes and pursuant to and in accordance with the Securities Act, (iii) the restrictions on transfer contained in the Indenture and the Private Placement Legend are not required in order to maintain compliance with the Securities Act and (iv) the

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Unrestricted Definitive Note is being acquired in compliance with any applicable securities laws of any state of the United States.

2.    Exchange of Restricted Definitive Notes for Restricted Definitive Notes or Beneficial Interests in Restricted Global Notes

        (a)  o    Check if Exchange is from Restricted Definitive Note to beneficial interest in a Restricted Global Note. In connection with the Exchange of the Owner's Restricted Definitive Note for a beneficial interest in the [CHECK ONE]     144A Global Note,    Regulation S Global Note with an equal principal amount, the Owner hereby certifies (i) the beneficial interest is being acquired for the Owner's own account without transfer and (ii) such Exchange has been effected in compliance with the transfer restrictions applicable to the Restricted Global Notes and pursuant to and in accordance with the Securities Act, and in compliance with any applicable securities laws of any state of the United States. Upon consummation of the proposed Exchange in accordance with the terms of the Indenture, the beneficial interest issued will be subject to the restrictions on transfer enumerated in the Private Placement Legend printed on the relevant Restricted Global Note and in the Indenture and the Securities Act.

[signature page follows]

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        This certificate and the statements contained herein are made for your benefit and the benefit of the Company.

	[Insert Name of Owner]
	By:
		Name:
		Title:
Dated:

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EXHIBIT D

FORM OF CERTIFICATE FROM
ACQUIRING INSTITUTIONAL ACCREDITED INVESTOR

Oregon Steel Mills, Inc.
1000 S.W. Broadway
Suite 2200
Portland, OR 97205

[Registrar address block]

Re:10% First Mortgage Notes due 2009

(CUSIP                        )

        Reference is hereby made to the Indenture, dated as of July 15, 2002 (the "Indenture"), by and among Oregon Steel Mills, Inc., as issuer (the "Company"), the Guarantors and U.S. Bank National Association, as trustee. Capitalized terms used but not defined herein shall have the meanings given to them in the Indenture.

        In connection with our proposed purchase of $                        aggregate principal amount of:

        (a)  o    a beneficial interest in a Global Note, or

        (b)  o    a Definitive Note,

        we confirm that:

        1.    We understand that any subsequent transfer of the Notes or any interest therein is subject to certain restrictions and conditions set forth in the Indenture and the undersigned agrees to be bound by, and not to resell, pledge or otherwise transfer the Notes or any interest therein except in compliance with, such restrictions and conditions and the United States Securities Act of 1933, as amended (the "Securities Act").

        2.    We understand that the offer and sale of the Notes have not been registered under the Securities Act, and that the Notes and any interest therein may not be offered or sold except as permitted in the following sentence. We agree, on our own behalf and on behalf of any accounts for which we are acting as hereinafter stated, that if we should sell the Notes or any interest therein, we will do so only (A) to the Company or any subsidiary thereof, (B) in accordance with Rule 144A under the Securities Act to a "qualified institutional buyer" (as defined therein), (c) to an institutional "accredited investor" (as defined below) that, prior to such transfer, furnishes (or has furnished on its behalf by a U.S. broker-dealer) to you and to the Company a signed letter substantially in the form of this letter and, if such transfer is in respect of a principal amount of Notes, at the time of transfer, of less than $250,000, an Opinion of Counsel in form reasonably acceptable to the Company to the effect that such transfer is in compliance with the Securities Act, (D) outside the United States in accordance with Rule 904 of Regulation S under the Securities Act, (E) pursuant to the provisions of Rule 144(k) under the Securities Act, (F) pursuant to another applicable exemption from the Securities Act or (G) pursuant to an effective registration statement under the Securities Act, and we further agree to provide to any person purchasing the Definitive Note or beneficial interest in a Global Note from us in a transaction meeting the requirements of clauses (A) through (F) of this paragraph a notice advising such purchaser that resales thereof are restricted as stated herein.

        3.    We understand that, on any proposed resale of the Notes or beneficial interest therein, we will be required to furnish to you and the Company such certifications, legal opinions and other information as you and the Company may reasonably require to confirm that the proposed sale

D-1

complies with the foregoing restrictions. We further understand that the Notes purchased by us will bear a legend to the foregoing effect.

        4.    We are an institutional "accredited investor" (as defined in Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act) and have such knowledge and experience in financial and business matters as to be capable of evaluating the merits and risks of our investment in the Notes, and we and any accounts for which we are acting are each able to bear the economic risk of our or its investment.

        5.    We are acquiring the Notes or beneficial interest therein purchased by us for our own account or for one or more accounts (each of which is an institutional "accredited investor") as to each of which we exercise sole investment discretion.

[signature page follows]

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        You and the Company are entitled to rely upon this letter and are irrevocably authorized to produce this letter or a copy hereof to any interested party in any administrative or legal proceedings or official inquiry with respect to the matters covered hereby.

	[Insert Name of Accredited Owner]
	By:
		Name:
		Title:
Dated:

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EXHIBIT E

FORM OF GUARANTEE

        For value received, the undersigned (including any successor person under the Indenture) has, jointly and severally, unconditionally guaranteed, and to the extent set forth in the Indenture and subject to the provisions of the Indenture dated as of July 15, 2002 (the "Indenture") by and among Oregon Steel Mills, Inc. (the "Company"), the Guarantors listed on the signature page thereto and U.S. Bank National Association, as trustee (the "Trustee"), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders and the Trustee under, and in accordance with, the Indenture, the Security Documents, the Registration Rights Agreement, the Intercreditor Agreement and the Notes and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Note.

        The obligations of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture and reference is hereby made to the Indenture for the precise terms of this Guarantee and all of the other provisions of the Indenture to which this Guarantee relates. All terms used herein which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

        The rights and obligations of the parties under the Indenture are subject to the Intercreditor Agreement.

        Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions.

        The terms of the Indenture, including, without limitation, Article Ten of the Indenture, are incorporated herein by reference. Capitalized terms used herein shall have the meanings assigned to them in the Indenture unless otherwise indicated.

        No director, officer, employee, stockholder or limited partner, as such (other than the Company and the Guarantors), of the undersigned shall have any liability for any obligations of the undersigned under this Guarantee, the Notes, the Indenture, the Security Documents, the Registration Rights Agreement or the Intercreditor Agreement or for any claim based on, in respect of or by reason of, such obligations or their creation by reason of his, her or its status as such director, officer, employee, stockholder or limited partner.

[signature page follows]

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        This Guarantee shall be governed by and construed according to the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.

        This Guarantee is subject to release upon the terms set forth in the Indenture.

[Seal]		[NAME OF GUARANTOR]
Attest:		By:
	Name:		Name:
	Title:		Title:

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EXHIBIT F

F-1

EXHIBIT G

G-1

EXHIBIT H

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EXHIBIT I

PROMISSORY NOTE

$305,000,000 Dated: July 15, 2002

        FOR VALUE RECEIVED, CF&I Steel, L.P., a Delaware limited partnership (herein called the "Maker", which term includes any successor under the Indenture referred to below), hereby promises to pay to U.S. Bank National Association, a national banking association organized and existing under the laws of the United States, or to such other person or entity which at the time shall be trustee under the Indenture referred to below ("Payee", which term includes any such successor trustee under the Indenture referred to below), as trustee under that certain Indenture dated as of July 15, 2002 among Oregon Steel Mills, Inc., a Delaware corporation (herein called the "Company", which term includes any successor under the Indenture), Payee, Maker and New CF&I, Inc. (which indenture, together with all indentures supplemental thereto, is hereinafter called the "Indenture"), or registered assigns, for the ratable benefit of the Holders (as defined in the Indenture), on or before July 15, 2009, the sum of THREE HUNDRED FIVE MILLION DOLLARS ($305,000,000) plus any and all other amounts becoming due and payable by Maker under the Indenture and its Guarantee (as defined in the Indenture), or such lesser amount as shall become due and payable by Maker under the Indenture and its Guarantee. All amounts becoming due and payable by Maker under the Indenture and its Guarantee shall constitute indebtedness evidenced by this Note and shall be due and payable hereunder as and when due and payable under its Guarantee and the Indenture. Without limitation to any other provisions of this Note, an Event of Default (as defined in the Indenture) under the Indenture shall constitute an event of default under this Note, and shall entitle Payee or the Holders (as defined in the Indenture) of the Securities (as defined in the Indenture) to accelerate the obligations of Maker hereunder in the same manner and to the same extent as the obligations of the Company under the Securities. Maker further agrees (to the fullest extent permitted by law) that, as between it, on the one hand, and Payee, on the other hand, (a) the maturity of the obligations of the Company under the Securities may be accelerated as provided in Article Six of the Indenture for the purposes of this Note, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the obligations of the Company under the Securities, and (b) in the event of any acceleration of such obligations as provided in Article Six of the Indenture, such obligations (whether or not due and payable) shall forthwith become due and payable by Maker for the purpose of this Note.

        All payments hereunder shall be made in lawful money of the United States of America in immediately available funds at Payee's offices in the Borough of Manhattan, The City of New York, or at such other place as Payee shall have designated to Maker in writing.

        This Note is secured by, and is entitled to the benefits of, a Deed of Trust, Assignment of Rents and Leases and Security Agreement, dated as of July 15, 2002 from Maker to the Public Trustee of Pueblo County for the benefit of Payee and a Deed of Trust, Assignment of Rents and Leases and Security Agreement, dated as of July 15, 2002 from Maker to the Public Trustee of Fremont County for the benefit of Payee (as the same may be amended or supplemented from time to time, collectively, the "Deeds of Trust"). Reference is made to the Deeds of Trust for a more detailed description of the property covered thereby and the rights, remedies and obligations of Payee in respect thereto.

        The rights and obligations of the parties under the Deeds of Trust and under the Indenture are subject to the Intercreditor Agreement.

        Maker waives presentment, notice of dishonor, notice of acceleration and protest, and all other notices in connection with the delivery, acceptance, performance, default or enforcement of the

I-1

payment of this Note and assents to any extension of time with respect to any payment due under this Note, to any substitution or release of collateral and to the addition or release of any party.

        It is not intended hereby to charge interest at a rate in excess of the maximum rate of interest permitted to be charged to Maker under applicable law, but if, notwithstanding such intention, interest in excess of the maximum rate shall be paid hereunder, the excess shall be retained by Payee as additional cash collateral for the payment of this Note, unless such retention is not permitted by law, in which case the interest rate on this Note shall be adjusted to the maximum rate permitted under applicable law during the period or periods that the interest rate otherwise provided herein would exceed such rate.

        Maker covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, or plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law which would prohibit or forgive Maker from paying all or any portion of the principal of, premium, if any, or interest on or other amounts due under this Note as contemplated herein, whenever enacted, now or at any time hereafter in force, or which may affect the performance of this Note; and (to the extent that it may lawfully do so) Maker hereby expressly waives all benefit or advantage of any such law and covenants that it will not hinder, delay or impede the execution of any power herein granted to Payee, but will suffer and permit the execution of every such power as though no such law had been enacted.

        The provisions of this Note shall be binding obligations against Maker, its successors and assigns.

        A director, officer, employee or limited partner, as such, of Maker shall not have any liability for any obligations of Maker under this Note, its Guarantee or the Indenture or for any claim based on, in respect of or by reason of, such obligations or their creation by reason of his, her or its status as such director, officer, employee or limited partner.

        Payee shall not be deemed to have waived or amended any of its rights hereunder unless such waiver or amendment is in writing and signed by Payee and otherwise complies with the Indenture. No delay or omission on the part of Payee in exercising any right hereunder shall operate as a waiver of any such right or any other right. A waiver on any one occasion shall not be construed as a bar to, or waiver of, the exercise of any right or remedy on any future occasion.

        This Note is the "CF&I Note" referred to in the Indenture and is subject to, and entitled to the benefits of, the terms of the Indenture applicable to the CF&I Note, and, anything in this Note to the contrary notwithstanding, the aggregate amount payable by Maker under this Note shall in no event exceed the amount specified in Section 10.06 of the Indenture (giving effect to the provisions of Sections 10.07 of the Indenture).

        Maker hereby acknowledges and agrees that this Note shall constitute the "original issuance of debt" required by Section 38-38-101 and Section 38-39-102 of the Colorado Revised Statutes, or any successor statutes thereto, to be filed with the public trustee in connection with a foreclosure or release of the Deed of Trust.

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        This Note shall be governed by and construed according to the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.

		CF&I STEEL, L.P., a Delaware limited partnership
		By: NEW CF&I, Inc., as General Partner
		[SEAL]
		By:
		Name:
		Title:
Attest:
	Name:
	Title:

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Exhibit 4.2

Oregon Steel Mills, Inc.

10% First Mortgage Notes due 2009

unconditionally guaranteed as to the
payment of principal, premium,
if any, and interest by

New CF&I, Inc.
CF&I Steel, L.P.

Exchange and Registration Rights Agreement

July 15, 2002

Goldman, Sachs & Co.
2121 Avenue of the Stars
The Fox Plaza Building
Suite 2600
Los Angeles, California 90067

Ladies and Gentlemen:

        Oregon Steel Mills, Inc., a Delaware corporation (the "Company"), proposes to issue and sell to the Purchaser (as defined herein) upon the terms set forth in the Purchase Agreement (as defined herein) its 10% First Mortgage Notes due 2009, which are unconditionally guaranteed as to the payment of principal, premium, if any, interest and Liquidated Damages (as defined herein), if any, by New CF&I, Inc., a Delaware corporation ("New CF&I"), CF&I Steel, L.P., a Delaware limited partnership ("CF&I"), and any future Guarantors party to the Indenture. As an inducement to the Purchaser to enter into the Purchase Agreement and in satisfaction of a condition to the obligations of the Purchaser thereunder, the Company agrees with the Purchaser for the benefit of holders (as defined herein) from time to time of the Registrable Securities (as defined herein) as follows:

        1.    Certain Definitions.    For purposes of this Exchange and Registration Rights Agreement, the following terms shall have the following respective meanings:

"Base Interest" shall mean the interest that would otherwise accrue on the Securities under the terms thereof and the Indenture, without giving effect to the provisions of this Agreement.

        The term "broker-dealer" shall mean any broker or dealer registered with the Commission under the Exchange Act.

"Closing Date" shall mean the date on which the Securities are initially issued.

"Commission" shall mean the United States Securities and Exchange Commission, or any other federal agency at the time administering the Exchange Act or the Securities Act, whichever is the relevant statute for the particular purpose.

"DTC" shall mean The Depository Trust Company.

"Effective Time," in the case of (i) an Exchange Registration, shall mean the time and date as of which the Commission declares the Exchange Registration Statement effective or as of which the Exchange Registration Statement otherwise becomes effective and (ii) a Shelf Registration, shall mean the time and date as of which the Commission declares the Shelf

1

Registration Statement effective or as of which the Shelf Registration Statement otherwise becomes effective.

        "Electing Holder" shall mean any holder of Registrable Securities that has returned a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(ii) or 3(d)(iii) hereof.

"Electing Holder Counsel" shall mean one counsel for all of the Electing Holders (designated in writing by the Electing Holders to the Company) retained in connection with a Shelf Registration, as selected by the Electing Holders of at least a majority in aggregate principal amount of the Registrable Securities held by Electing Holders (which counsel shall be reasonably satisfactory to the Company).

"Exchange Act" shall mean the Securities Exchange Act of 1934, or any successor thereto, as the same shall be amended from time to time.

"Exchange Offer" shall have the meaning assigned thereto in Section 2(a) hereof.

"Exchange Registration" shall have the meaning assigned thereto in Section 3(c) hereof.

"Exchange Registration Statement" shall have the meaning assigned thereto in Section 2(a) hereof.

"Exchange Securities" shall have the meaning assigned thereto in Section 2(a) hereof.

"Guarantor" shall have the meaning assigned thereto in the Indenture.

        The term "holder" shall mean the Purchaser and other persons who acquire Registrable Securities from time to time (including any successors or assigns), in each case for so long as such person owns any Registrable Securities.

"Indenture" shall mean the Indenture, dated as of July 15, 2002, among the Company, the Guarantors and U.S. Bank National Association, as Trustee, as the same shall be amended from time to time.

"Liquidated Damages" shall have the meaning assigned thereto in Section 2(c) hereof.

        "Notice and Questionnaire" means a Notice of Registration Statement and Selling Securityholder Questionnaire substantially in the form of Exhibit A hereto.

        The term "person" shall mean a corporation, limited liability company, association, partnership, organization, business, individual, government or political subdivision thereof or governmental agency or any other entity.

"Purchase Agreement" shall mean the Purchase Agreement, dated as of July 10, 2002, among the Purchaser, the Guarantors and the Company relating to the Securities.

"Purchaser" shall mean Goldman, Sachs & Co.

"Registrable Securities" shall mean the Securities; provided, however, that a Security shall cease to be a Registrable Security when (i) in the circumstances contemplated by Section 2(a) hereof, the Security has been exchanged for an Exchange Security in an Exchange Offer as contemplated in Section 2(a) hereof (provided that any Exchange Security that, pursuant to the last two sentences of Section 2(a), is included in a prospectus for use in connection with resales by broker-dealers shall be deemed to be a Registrable Security with respect to Sections 5, 6 and 9 until resale of such Registrable Security has been effected within the 180-day period referred to in Section 2(a)(4)); (ii) in the circumstances contemplated by Section 2(b) hereof, a Shelf Registration Statement registering such Security under the Securities Act has been declared or becomes effective and such Security has been sold or otherwise transferred by the holder thereof pursuant to and in a manner contemplated by such effective Shelf Registration

2

Statement; (iii) such Security is sold pursuant to Rule 144 under circumstances in which any legend borne by such Security relating to restrictions on transferability thereof, under the Securities Act or otherwise, is removed by the Company or pursuant to the Indenture; (iv) such Security is eligible to be sold pursuant to paragraph (k) of Rule 144; or (v) such Security shall cease to be outstanding.

"Registration Default" shall have the meaning assigned thereto in Section 2(c) hereof.

"Registration Expenses" shall have the meaning assigned thereto in Section 4 hereof.

"Resale Period" shall have the meaning assigned thereto in Section 2(a) hereof.

"Restricted Holder" shall mean (i) a holder that is an affiliate of the Company within the meaning of Rule 405, (ii) a holder who acquires Exchange Securities outside the ordinary course of such holder's business, (iii) a holder who has arrangements or understandings with any person to participate in the Exchange Offer for the purpose of distributing Exchange Securities and (iv) a holder that is a broker-dealer, but only with respect to Exchange Securities received by such broker-dealer pursuant to an Exchange Offer in exchange for Registrable Securities acquired by the broker-dealer directly from the Company.

"Rule 144," "Rule 405" and "Rule 415" shall mean, in each case, such rule promulgated under the Securities Act (or any successor provision), as the same shall be amended from time to time.

"Securities" shall mean, collectively, the 10% First Mortgage Notes due 2009 of the Company to be issued and sold to the Purchaser, and securities issued in exchange therefor or in lieu thereof pursuant to the Indenture. Each Security is entitled to the benefit of the guarantees provided for in the Indenture (the "Guarantees") and, unless the context otherwise requires, any reference herein to a "Security," an "Exchange Security" or a "Registrable Security" shall include a reference to the related Guarantees.

"Securities Act" shall mean the Securities Act of 1933, or any successor thereto, as the same shall be amended from time to time.

"Shelf Registration" shall have the meaning assigned thereto in Section 2(b) hereof.

"Shelf Registration Statement" shall have the meaning assigned thereto in Section 2(b) hereof.

"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, or any successor thereto, and the rules, regulations and forms promulgated thereunder, all as the same shall be amended from time to time.

        Unless the context otherwise requires, any reference herein to a "Section" or "clause" refers to a Section or clause, as the case may be, of this Exchange and Registration Rights Agreement, and the words "herein," "hereof" and "hereunder" and other words of similar import refer to this Exchange and Registration Rights Agreement as a whole and not to any particular Section or other subdivision.

        2.    Registration Under the Securities Act.

        (a)  Except as set forth in Section 2(b) below, the Company agrees to file under the Securities Act, as soon as practicable, but no later than 60 days after the Closing Date, a registration statement relating to an offer to exchange (such registration statement, the "Exchange Registration Statement", and such offer, the "Exchange Offer") any and all of the Securities for a like aggregate principal amount of debt securities issued by the Company and guaranteed by the Guarantors, which debt securities and guarantees are substantially identical to the Securities and the related Guarantees, respectively (and are entitled to the benefits of a

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trust indenture which is substantially identical to the Indenture or is the Indenture and which has been qualified under the Trust Indenture Act), except that they have been registered pursuant to an effective registration statement under the Securities Act and do not contain provisions for the Liquidated Damages contemplated in Section 2(c) below (such new debt securities hereinafter called "Exchange Securities"). The Company agrees to use its reasonable best efforts to cause the Exchange Registration Statement to become effective under the Securities Act as soon as practicable, but no later than 180 days after the Closing Date. The Exchange Offer will be registered under the Securities Act on the appropriate form and will comply with all applicable tender offer rules and regulations under the Exchange Act. The Company further agrees to use its reasonable best efforts to commence the Exchange Offer and to complete the Exchange Offer promptly, but no later than 45 days after such registration statement has become effective, and hold the Exchange Offer open for at least 30 days. As soon as practicable after the close of the Exchange Offer, the Company shall (i) accept for exchange all Securities tendered and not validly withdrawn pursuant to the Exchange Offer; (ii) deliver to the Trustee for cancellation all Securities so accepted for exchange; and (iii) cause the Trustee to promptly authenticate and deliver to each holder, Exchange Securities equal in principal amount to the Securities of such holder so accepted for exchange. The Exchange Offer will be deemed to have been "completed" upon the delivery by the Company to the Trustee of Exchange Securities equal in principal amount to the aggregate principal amount of Registrable Securities that were tendered in the Exchange Offer, which shall be on a date that is at least 30 days following commencement of the Exchange Offer. The Exchange Offer will be deemed to have been "completed" only if the Exchange Securities received (through DTC book entry form or otherwise) by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are, upon receipt, transferable by each such holder without restriction under the Securities Act and the Exchange Act and without material restrictions under the blue sky or securities laws of a substantial majority of the states of the United States of America. The Company agrees (x) to include in the Exchange Registration Statement a prospectus for use in any resales by any holder of Exchange Securities that is a broker-dealer and (y) to keep such Exchange Registration Statement effective for a period (the "Resale Period") beginning when Exchange Securities are first issued in the Exchange Offer and ending upon the earlier of the expiration of the 180th day after the Exchange Offer has been completed (subject to extension pursuant to Section 3(c)(iv) below) or such time as such broker-dealers no longer own any Registrable Securities. With respect to such Exchange Registration Statement, such holders shall have the benefit of the rights of indemnification and contribution set forth in Sections 6(a), (c), (d) and (e) hereof.

        (b)  If (i) on or prior to the time the Exchange Offer is completed existing Commission interpretations are changed such that the debt securities or the related guarantees received by holders other than Restricted Holders in the Exchange Offer for Registrable Securities are not or would not be, upon receipt, transferable by each such holder without restriction under the Securities Act, (ii) the Exchange Offer has not been completed within 225 days following the Closing Date or (iii) the Exchange Offer is not available to any holder of the Securities, the Company shall, in lieu of (or, in the case of clause (iii), in addition to) conducting the Exchange Offer contemplated by Section 2(a), file under the Securities Act as soon as practicable, but no later than the later of 30 days after the time such obligation to file arises, a "shelf" registration statement providing for the registration of, and the sale on a continuous or delayed basis by the holders of, all of the Registrable Securities, pursuant to Rule 415 or any similar rule that may be adopted by the Commission (such filing, the "Shelf Registration" and such registration statement, the "Shelf Registration Statement"). The Company agrees to use its reasonable best efforts (x) to cause the Shelf Registration Statement to become or be

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declared effective no later than 120 days after such Shelf Registration Statement is filed and to keep such Shelf Registration Statement continuously effective for a period (the "Effective Period") ending on the earlier of the second anniversary of the Effective Time (subject to extension pursuant to Section 3(e) below) or such time as there are no longer any Registrable Securities outstanding, provided, however, that no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement or to use the prospectus forming a part thereof for resales of Registrable Securities unless such holder is an Electing Holder, and (y) after the Effective Time of the Shelf Registration Statement, promptly upon the request of any holder of Registrable Securities that is not then an Electing Holder, to take any action reasonably necessary to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities, including, without limitation, any action necessary to identify such holder as a selling securityholder in the Shelf Registration Statement, provided, however, that nothing in this clause (y) shall relieve any such holder of the obligation to return a completed and signed Notice and Questionnaire to the Company in accordance with Section 3(d)(iii) hereof. The Company further agrees to supplement or make amendments to the Shelf Registration Statement, as and when required by the rules, regulations or instructions applicable to the registration form used by the Company for such Shelf Registration Statement or by the Securities Act or rules and regulations thereunder for shelf registration, and the Company agrees to furnish to each Electing Holder copies of any such supplement or amendment prior to its being used or promptly following its filing with the Commission.

        (c)  In the event that (i) the Company has not filed the Exchange Registration Statement or Shelf Registration Statement on or before the date on which such registration statement is required to be filed pursuant to Section 2(a) or 2(b), respectively, or (ii) such Exchange Registration Statement or Shelf Registration Statement has not become effective or been declared effective by the Commission on or before the date on which such registration statement is required to become or be declared effective pursuant to Section 2(a) or 2(b), respectively, or (iii) the Exchange Offer has not been completed within 45 days after the initial effective date of the Exchange Registration Statement relating to the Exchange Offer (if the Exchange Offer is then required to be made) or (iv) any Exchange Registration Statement or Shelf Registration Statement required by Section 2(a) or 2(b) hereof is filed and declared effective but shall thereafter either be withdrawn by the Company or shall become subject to an effective stop order issued pursuant to Section 8(d) of the Securities Act suspending the effectiveness of such registration statement (except as specifically permitted herein) without being succeeded immediately by an additional registration statement filed and declared effective (each such event referred to in clauses (i) through (iv), a "Registration Default" and each period during which a Registration Default has occurred and is continuing, a "Registration Default Period"), then, subject to the provisions of Section 9(b), liquidated damages ("Liquidated Damages"), in addition to the Base Interest, shall accrue at a per annum rate of 0.25% for the first 90 days of the Registration Default Period, at a per annum rate of 0.50% for the second 90 days of the Registration Default Period, at a per annum rate of 0.75% for the third 90 days of the Registration Default Period and at a per annum rate of 1.0% thereafter for the remaining portion of the Registration Default Period.

        (d)  The Company shall take, and shall cause the Guarantors to take, all actions necessary or advisable to be taken by it to ensure that the transactions contemplated herein are effected as so contemplated, including all actions necessary or desirable to register the Guarantees under the registration statement contemplated in Section 2(a) or 2(b) hereof, as applicable.

        (e)  Any reference herein to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of

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such time and any reference herein to any post-effective amendment to a registration statement as of any time shall be deemed to include any document incorporated, or deemed to be incorporated, therein by reference as of such time.

        3.    Registration Procedures.

        If the Company files a registration statement pursuant to Section 2(a) or Section 2(b), the following provisions shall apply:

        (a)  At or before the Effective Time of the Exchange Offer or the Shelf Registration, as the case may be, the Company shall qualify the Indenture under the Trust Indenture Act.

        (b)  In the event that such qualification would require the appointment of a new trustee under the Indenture, the Company shall appoint a new trustee thereunder pursuant to the applicable provisions of the Indenture.

        (c)  In connection with the Company's obligations with respect to the registration of Exchange Securities as contemplated by Section 2(a) (the "Exchange Registration"), if applicable, the Company shall, as soon as practicable (or as otherwise specified):

          (i)  prepare and file with the Commission, as soon as practicable but no later than 60 days after the Closing Date, an Exchange Registration Statement on any form which may be utilized by the Company and which shall permit the Exchange Offer and resales of Exchange Securities by broker-dealers during the Resale Period to be effected as contemplated by Section 2(a), and use its reasonable best efforts to cause such Exchange Registration Statement to become effective as soon as practicable thereafter, but no later than 180 days after the Closing Date;

        (ii)  as soon as practicable prepare and file with the Commission such amendments and supplements to such Exchange Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Exchange Registration Statement for the periods and purposes contemplated in Section 2(a) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Exchange Registration Statement, and promptly provide each broker-dealer holding Exchange Securities with such number of copies of the prospectus included therein (as then amended or supplemented), in conformity in all material respects with the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, as such broker-dealer reasonably may request prior to the expiration of the Resale Period, for use in connection with resales of Exchange Securities;

        (iii)  promptly notify each broker-dealer that has requested or received copies of the prospectus included in such registration statement and, if requested by such persons, confirm such advice in writing, (A) when such Exchange Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Exchange Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Exchange Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Exchange Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time when a prospectus is required to be delivered under the Securities Act or a registration statement is being kept, or is required to be kept, effective under the Securities Act the representations and warranties of the

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Company contemplated by Section 5 cease to be true and correct in all material respects, (E) of the receipt by the Company of any notification with respect to the suspension of the qualification of the Exchange Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (F) at any time during the Resale Period when a prospectus is required to be delivered under the Securities Act, that such Exchange Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

        (iv)  in the event that the Company would be required, pursuant to Section 3(e)(iii)(F) above, to notify any broker-dealers holding Exchange Securities, without delay prepare and furnish to each such holder a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to a purchaser of such Exchange Securities during the Resale Period, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading; if the Company shall give any such notice, the Resale Period shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each such holder shall have received the copies of such amended or supplemented prospectus;

        (v)  use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such Exchange Registration Statement or any post-effective amendment thereto at the earliest practicable date;

        (vi)  use its reasonable best efforts to (A) register or qualify the Exchange Securities under the securities laws or blue sky laws of such jurisdictions as are contemplated by Section 2(a) no later than the commencement of the Exchange Offer, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions until the expiration of the Resale Period and (C) take any and all other actions as may be reasonably necessary or advisable to enable each broker-dealer holding Exchange Securities to consummate the disposition thereof in such jurisdictions; provided, however, that neither the Company nor any Guarantor shall be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(c)(vi), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its certificate of incorporation, by-laws, certificate of limited partnership, limited partnership agreement or any agreement between it and its stockholders;

      (vii)  use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Exchange Registration, the Exchange Offer and the offering and sale of Exchange Securities by broker-dealers during the Resale Period;

      (viii)  provide a CUSIP number for all Exchange Securities, not later than the applicable Effective Time;

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        (ix)  comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable but no later than eighteen months after the effective date of such Exchange Registration Statement, an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder).

        (d)  In connection with the Company's obligations with respect to the Shelf Registration, if applicable, the Company shall, as soon as practicable (or as otherwise specified):

          (i)  prepare and file with the Commission, as soon as practicable but in any case within the time periods specified in Section 2(b), a Shelf Registration Statement on any form which may be utilized by the Company and which shall register all of the Registrable Securities for resale by the holders thereof in accordance with such method or methods of disposition as may be specified by such of the holders as, from time to time, may be Electing Holders and use its reasonable best efforts to cause such Shelf Registration Statement to become effective as soon as practicable but in any case within the time periods specified in Section 2(b);

        (ii)  not less than 30 calendar days prior to the Effective Time of the Shelf Registration Statement, mail the Notice and Questionnaire to the holders of Registrable Securities; no holder shall be entitled to be named as a selling securityholder in the Shelf Registration Statement as of the Effective Time, and no holder shall be entitled to use the prospectus forming a part thereof for resales of Registrable Securities at any time, unless such holder has returned a completed and signed Notice and Questionnaire to the Company by the deadline for response set forth therein; provided, however, holders of Registrable Securities shall have at least 28 calendar days from the date on which the Notice and Questionnaire is first mailed to such holders to return a completed and signed Notice and Questionnaire to the Company;

        (iii)  after the Effective Time of the Shelf Registration Statement, upon the request of any holder of Registrable Securities that is not then an Electing Holder, promptly send a Notice and Questionnaire to such holder; provided that the Company shall not be required to take any action to name such holder as a selling securityholder in the Shelf Registration Statement or to enable such holder to use the prospectus forming a part thereof for resales of Registrable Securities until such holder has returned a completed and signed Notice and Questionnaire to the Company;

        (iv)  prepare and file with the Commission such amendments and supplements to such Shelf Registration Statement and the prospectus included therein as may be necessary to effect and maintain the effectiveness of such Shelf Registration Statement for the period specified in Section 2(b) hereof and as may be required by the applicable rules and regulations of the Commission and the instructions applicable to the form of such Shelf Registration Statement, and furnish to the Electing Holders copies of any such supplement or amendment simultaneously with or prior to its being used or filed with the Commission;

        (v)  comply with the provisions of the Securities Act with respect to the disposition of all of the Registrable Securities covered by such Shelf Registration Statement in accordance with the intended methods of disposition by the Electing Holders provided for in such Shelf Registration Statement;

        (vi)  provide (A) the Electing Holders, (B) the underwriters (which term, for purposes of this Exchange and Registration Rights Agreement, shall include a person deemed to be an underwriter within the meaning of Section 2(a)(11) of the Securities Act), if any, thereof, (C) any sales or placement agent therefor, (D) counsel for any such

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underwriter or agent and (E) Electing Holders Counsel, if any, the opportunity to participate in the preparation of such Shelf Registration Statement, each prospectus included therein or filed with the Commission and each amendment or supplement thereto;

      (vii)  for a reasonable period prior to the filing of such Shelf Registration Statement, and throughout the period specified in Section 2(b), make available at reasonable times at the Company's principal place of business or such other reasonable place for inspection by the persons referred to in Section 3(d)(vi) who shall certify to the Company that they have a current intention to sell the Registrable Securities pursuant to the Shelf Registration such financial and other information and books and records of the Company, and cause the officers, employees, counsel and independent certified public accountants of the Company to respond to such inquiries, as shall be reasonably necessary, in the judgment of the respective counsel referred to in such Section, to conduct a reasonable investigation within the meaning of Section 11 of the Securities Act; provided, however, that each such party shall be required to maintain in confidence and not to disclose to any other person any information or records reasonably designated by the Company as being confidential, until such time as (A) such information becomes a matter of public record (whether by virtue of its inclusion in such registration statement or for any reason other than the disclosure of such information by such party in violation hereof), or (B) such person shall be required so to disclose such information pursuant to a subpoena or order of any court or other governmental agency or body having jurisdiction over the matter (subject to the requirements of such order, and only after such person shall have given the Company prompt prior written notice of such requirement and cooperated with the Company in any effort it may make to obtain a protective order or other appropriate remedy), or (C) such information is required to be set forth in such Shelf Registration Statement or the prospectus included therein or in an amendment to such Shelf Registration Statement or an amendment or supplement to such prospectus in order that such Shelf Registration Statement, prospectus, amendment or supplement, as the case may be, complies with applicable requirements of the federal securities laws and the rules and regulations of the Commission and does not contain an untrue statement of a material fact or omit to state therein a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

      (viii)  promptly notify each of the Electing Holders, any sales or placement agent therefor and any underwriter thereof (which notification may be made through any managing underwriter that is a representative of such underwriter for such purpose) and, if requested by such persons, confirm such advice in writing, (A) when such Shelf Registration Statement or the prospectus included therein or any prospectus amendment or supplement or post-effective amendment has been filed, and, with respect to such Shelf Registration Statement or any post-effective amendment, when the same has become effective, (B) of any comments by the Commission and by the blue sky or securities commissioner or regulator of any state with respect thereto or any request by the Commission for amendments or supplements to such Shelf Registration Statement or prospectus or for additional information, (C) of the issuance by the Commission of any stop order suspending the effectiveness of such Shelf Registration Statement or the initiation or threatening of any proceedings for that purpose, (D) if at any time when a prospectus is required to be delivered under the Securities Act or a registration statement is being kept, or is required to be kept, effective pursuant to this Agreement the representations and warranties of the Company contemplated by Section 3(d)(xvii)(A) or Section 5 cease to be true and correct in all material respects, (E) of the receipt by the

9

Company of any notification with respect to the suspension of the qualification of the Registrable Securities for sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose, or (F) if at any time when a prospectus is required to be delivered under the Securities Act, that such Shelf Registration Statement, prospectus, prospectus amendment or supplement or post-effective amendment does not conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder or contains an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading;

        (ix)  use its reasonable best efforts to obtain the withdrawal of any order suspending the effectiveness of such registration statement or any post-effective amendment thereto at the earliest practicable date;

        (x)  if requested by any managing underwriter or underwriters, any placement or sales agent or any Electing Holder, promptly incorporate in a prospectus supplement or post-effective amendment such information as is required by the applicable rules and regulations of the Commission and as such managing underwriter or underwriters, such agent or such Electing Holder specifies should be included therein relating to the terms of the sale of such Registrable Securities, including information with respect to the principal amount of Registrable Securities being sold by such Electing Holder or agent or to any underwriters, the name and description of such Electing Holder, agent or underwriter, the offering price of such Registrable Securities and any discount, commission or other compensation payable in respect thereof, the purchase price being paid therefor by such underwriters and with respect to any other terms of the offering of the Registrable Securities to be sold by such Electing Holder or agent or to such underwriters; and make all required filings of such prospectus supplement or post-effective amendment promptly after notification of the matters to be incorporated in such prospectus supplement or post-effective amendment;

        (xi)  furnish to each Electing Holder, each placement or sales agent, if any, therefor, each underwriter, if any, thereof and the respective counsel referred to in Section 3(d)(vi) an executed copy (or, in the case of an Electing Holder, a conformed copy) of such Shelf Registration Statement, each such amendment and supplement thereto (in each case including all exhibits thereto (in the case of an Electing Holder of Registrable Securities, upon request)) and such number of copies of such Shelf Registration Statement (excluding exhibits thereto and documents incorporated by reference therein unless specifically so requested by such Electing Holder, agent or underwriter, as the case may be) and of the prospectus included in such Shelf Registration Statement (including each preliminary prospectus and any summary prospectus), in conformity in all material respects with the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder, and such other documents, as such Electing Holder, agent, if any, and underwriter, if any, may reasonably request in order to facilitate the offering and disposition of the Registrable Securities owned by such Electing Holder, offered or sold by such agent or underwritten by such underwriter and to permit such Electing Holder, agent and underwriter to satisfy the prospectus delivery requirements of the Securities Act; and the Company hereby consents to the use of such prospectus (including such preliminary and summary prospectus) and any amendment or supplement thereto by each such Electing Holder and by any such agent and underwriter, in each case in the form most recently provided to such person by the Company, in connection with the offering

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and sale of the Registrable Securities covered by the prospectus (including such preliminary and summary prospectus) or any supplement or amendment thereto;

      (xii)  use its reasonable best efforts to (A) register or qualify the Registrable Securities to be included in such Shelf Registration Statement under such securities laws or blue sky laws of such jurisdictions as any Electing Holder and each placement or sales agent, if any, therefor and underwriter, if any, thereof shall reasonably request, (B) keep such registrations or qualifications in effect and comply with such laws so as to permit the continuance of offers, sales and dealings therein in such jurisdictions during the period the Shelf Registration is required to remain effective under Section 2(b) above and for so long as may be necessary to enable any such Electing Holder, agent or underwriter to complete its distribution of Securities pursuant to such Shelf Registration Statement and (C) take any and all other actions as may be reasonably necessary or advisable to enable each such Electing Holder, agent, if any, and underwriter, if any, to consummate the disposition in such jurisdictions of such Registrable Securities; provided, however, that neither the Company nor any Guarantor shall be required for any such purpose to (1) qualify as a foreign corporation in any jurisdiction wherein it would not otherwise be required to qualify but for the requirements of this Section 3(d)(xii), (2) consent to general service of process in any such jurisdiction or (3) make any changes to its certificate of incorporation, certificate of limited partnership, by-laws or limited partnership agreement or any agreement between it and its stockholders, as applicable;

      (xiii)  use its reasonable best efforts to obtain the consent or approval of each governmental agency or authority, whether federal, state or local, which may be required to effect the Shelf Registration or the offering or sale in connection therewith or to enable the selling holder or holders to offer, or to consummate the disposition of, their Registrable Securities;

      (xiv)  unless any Registrable Securities shall be in book-entry only form, cooperate with the Electing Holders and the managing underwriters, if any, to facilitate the timely preparation and delivery of certificates representing Registrable Securities to be sold, which certificates, if so required by any securities exchange upon which any Registrable Securities are listed, shall be penned, lithographed or engraved, or produced by any combination of such methods, on steel engraved borders, and which certificates shall not bear any restrictive legends; and, in the case of an underwritten offering, enable such Registrable Securities to be in such denominations and registered in such names as the managing underwriters may request at least two business days prior to any sale of the Registrable Securities;

      (xv)  provide a CUSIP number for all Registrable Securities, not later than the applicable Effective Time;

      (xvi)  enter into one or more underwriting agreements, engagement letters, agency agreements, "best efforts" underwriting agreements or similar agreements, as appropriate, including customary provisions relating to indemnification and contribution, and take such other actions in connection therewith as any Electing Holders aggregating at least 35% in aggregate principal amount of the Registrable Securities at the time outstanding shall request in order to expedite or facilitate the disposition of such Registrable Securities;

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    (xvii)  whether or not an agreement of the type referred to in Section 3(d)(xvi) hereof is entered into and whether or not any portion of the offering contemplated by the Shelf Registration is an underwritten offering or is made through a placement or sales agent or any other entity, (A) make such representations and warranties to the Electing Holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof in form, substance and scope as are customarily made in connection with an offering of debt securities pursuant to any appropriate agreement or to a registration statement filed on the form applicable to the Shelf Registration; (B) obtain an opinion of counsel to the Company in customary form and covering such matters, of the type customarily covered by such an opinion, as the managing underwriters, if any, or as any Electing Holders of at least 35% in aggregate principal amount of the Registrable Securities at the time outstanding may reasonably request, addressed to such Electing Holder or Electing Holders and the placement or sales agent, if any, therefor and the underwriters, if any, thereof and dated the effective date of such Shelf Registration Statement (and if such Shelf Registration Statement contemplates an underwritten offering of a part or all of the Registrable Securities, dated the date of the closing under the underwriting agreement relating thereto); (C) obtain a "cold comfort" letter or letters from the independent certified public accountants of the Company in customary form and covering such matters of the type customarily covered by letters of such type, as the managing underwriters, if any, or as any Electing Holders of at least 35% in aggregate principal amount of the Registrable Securities at the time outstanding may reasonably request, addressed to such Electing Holder or Electing Holders (to the extent that the internal policies of such independent certified public accountants allow such accountants to address such a letter to such persons), the placement or sales agent, if any, therefor or the underwriters, if any, thereof, dated (i) the effective date of such Shelf Registration Statement and (ii) the effective date of any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus (and, if such Shelf Registration Statement contemplates an underwritten offering pursuant to any prospectus supplement to the prospectus included in such Shelf Registration Statement or post-effective amendment to such Shelf Registration Statement which includes unaudited or audited financial statements as of a date or for a period subsequent to that of the latest such statements included in such prospectus, dated the date of the closing under the underwriting agreement relating thereto); (D) deliver such documents and certificates, including officers' certificates, as may be reasonably requested by any Electing Holders of at least 35% in aggregate principal amount of the Registrable Securities at the time outstanding or the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof to evidence the accuracy of the representations and warranties made pursuant to clause (A) above or those contained in Section 5(a) hereof and the compliance with or satisfaction of any agreements or conditions contained in the underwriting agreement or other agreement entered into by the Company or any Guarantor; and (E) undertake such obligations relating to expense reimbursement, indemnification and contribution as are provided in Section 6 hereof;

    (xviii)  notify in writing each holder of Registrable Securities of any proposal by the Company to amend or waive any provision of this Exchange and Registration Rights Agreement pursuant to Section 9(h) hereof and of any amendment or waiver effected pursuant thereto, each of which notices shall contain the text of the amendment or waiver proposed or effected, as the case may be;

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      (xix)  in the event that any broker-dealer registered under the Exchange Act shall underwrite any Registrable Securities or participate as a member of an underwriting syndicate or selling group or "assist in the distribution" (within the meaning of the Conduct Rules (the "Conduct Rules") of the National Association of Securities Dealers, Inc. ("NASD") or any successor thereto, as amended from time to time) thereof, whether as a holder of such Registrable Securities or as an underwriter, a placement or sales agent or a broker or dealer in respect thereof, or otherwise, assist such broker-dealer in complying with the requirements of such Conduct Rules, including by (A) if such Conduct Rules shall so require, engaging a "qualified independent underwriter" (as defined in such Conduct Rules) to participate in the preparation of the Shelf Registration Statement relating to such Registrable Securities, to exercise usual standards of due diligence in respect thereto and, if any portion of the offering contemplated by such Shelf Registration Statement is an underwritten offering or is made through a placement or sales agent, to recommend the yield of such Registrable Securities, (B) indemnifying any such qualified independent underwriter to the extent of the indemnification of underwriters provided in Section 6 hereof (or to such other customary extent as may be reasonably requested by such underwriter), and (C) providing such information to such broker-dealer as may be required in order for such broker-dealer to comply with the requirements of the Conduct Rules; and

      (xx)  comply with all applicable rules and regulations of the Commission, and make generally available to its securityholders as soon as practicable but in any event not later than eighteen months after the effective date of such Shelf Registration Statement, an earning statement of the Company and its subsidiaries complying with Section 11(a) of the Securities Act (including, at the option of the Company, Rule 158 thereunder).

        (e)  In the event that the Company would be required, pursuant to Section 3(d)(viii)(F) above, to notify the Electing Holders, the placement or sales agent, if any, therefor and the managing underwriters, if any, thereof, the Company shall without delay prepare and furnish to each of the Electing Holders, to each placement or sales agent, if any, and to each such underwriter, if any, a reasonable number of copies of a prospectus supplemented or amended so that, as thereafter delivered to purchasers of Registrable Securities, such prospectus shall conform in all material respects to the applicable requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and shall not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. Each Electing Holder agrees that upon receipt of any notice from the Company pursuant to Section 3(d)(viii)(F) hereof, such Electing Holder shall forthwith discontinue the disposition of Registrable Securities pursuant to the Shelf Registration Statement applicable to such Registrable Securities until such Electing Holder shall have received copies of such amended or supplemented prospectus, and if so directed by the Company, such Electing Holder shall deliver to the Company (at the Company's expense) all copies, other than permanent file copies, then in such Electing Holder's possession of the prospectus covering such Registrable Securities at the time of receipt of such notice. If the Company shall give any such notice, the Effective Period shall be extended by the number of days during such period from and including the date of the giving of such notice to and including the date when each such holder shall have received the copies of such amended or supplemented prospectus.

        (f)    In the event of a Shelf Registration, in addition to the information required to be provided by each Electing Holder in its Notice Questionnaire, the Company may require such Electing Holder to furnish to the Company such additional information regarding such

13

Electing Holder and such Electing Holder's intended method of distribution of Registrable Securities as may be required in order to comply with the Securities Act. Each such Electing Holder agrees to notify the Company as promptly as practicable of any inaccuracy or change in information previously furnished by such Electing Holder to the Company or of the occurrence of any event in either case as a result of which any prospectus relating to such Shelf Registration contains or would contain an untrue statement of a material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities or omits to state any material fact regarding such Electing Holder or such Electing Holder's intended method of disposition of such Registrable Securities required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, and promptly to furnish to the Company any additional information required to correct and update any previously furnished information or required so that such prospectus shall not contain, with respect to such Electing Holder or the disposition of such Registrable Securities, an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

        (g)  Until the expiration of two years after the Closing Date, the Company will not, and will not permit any of its "affiliates" (as defined in Rule 144) to, resell any of the Securities that have been reacquired by any of them except pursuant to an effective registration statement under the Securities Act.

        4.    Registration Expenses.

        The Company agrees to bear and to pay or cause to be paid promptly all expenses incident to the Company's performance of or compliance with this Exchange and Registration Rights Agreement, including (a) all Commission and any NASD registration, filing and review fees and expenses including fees and disbursements of counsel for the placement or sales agent or underwriters in connection with such registration, filing and review, (b) all fees and expenses in connection with the qualification of the Securities for offering and sale under the State securities and blue sky laws referred to in Section 3(d)(xii) hereof and determination of their eligibility for investment under the laws of such jurisdictions as any managing underwriters or the Electing Holders may designate, including any reasonable fees and disbursements (not to exceed $5,000) of the Electing Holders Counsel, if any, or counsel for the underwriters in connection with such qualification and determination, (c) all expenses relating to the preparation, printing, production, distribution and reproduction of each registration statement required to be filed hereunder, each prospectus included therein or prepared for distribution pursuant hereto, each amendment or supplement to the foregoing, the expenses of preparing the Securities for delivery and the expenses of printing or producing any underwriting agreements, agreements among underwriters, selling agreements and blue sky or legal investment memoranda and all other documents in connection with the offering, sale or delivery of Securities to be disposed of (including certificates representing the Securities), (d) messenger, telephone and delivery expenses relating to the offering, sale or delivery of Securities and the preparation of documents referred in clause (c) above, (e) fees and expenses of the Trustee under the Indenture, any agent of the Trustee and any counsel for the Trustee and of any collateral agent or custodian or DTC, (f) internal expenses (including all salaries and expenses of the Company's officers and employees performing legal or accounting duties), (g) fees, disbursements and expenses of counsel and independent certified public accountants of the Company (including the expenses of any opinions or "cold comfort" letters required by or incident to such performance and compliance), (h) fees, disbursements and expenses of any "qualified independent underwriter" engaged by the Company as an underwriter pursuant to Section 3(d)(xix) hereof, (i) reasonable fees, disbursements and expenses of the Electing Holders Counsel, if any, (j) any fees charged by securities rating services for rating the

14

Securities, and (k) fees, expenses and disbursements of any other persons, including special experts, retained by the Company in connection with such registration (collectively, the "Registration Expenses"). To the extent that any Registration Expenses are incurred, assumed or paid by any holder of Registrable Securities or any placement or sales agent therefor or underwriter thereof, the Company shall reimburse such person for the full amount of the Registration Expenses so incurred, assumed or paid promptly after receipt of an invoice containing reasonable detail with respect to such Registration Expenses. It is understood, however, that except as provided in clauses (a), (b) and (h) of this Section, Registration Expenses do not include the fees and expenses of counsel to any placement or sales agent or underwriter, unless otherwise agreed to in writing by the Company. Notwithstanding the foregoing, the holders of the Registrable Securities being registered shall pay all agency fees and commissions and underwriting discounts and commissions attributable to the sale of such Registrable Securities and the fees and disbursements of any counsel or other advisors or experts retained by such holders (severally or jointly), other than the counsel and experts specifically referred to above.

        5.    Representations and Warranties.

        The Company represents and warrants to, and agrees with, each Purchaser and each of the holders from time to time of Registrable Securities that:

        (a)  Each registration statement covering Registrable Securities and each prospectus (including any preliminary or summary prospectus) contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof and any further amendments or supplements to any such registration statement or prospectus, when it becomes effective or is filed with the Commission, as the case may be, and, in the case of an underwritten offering of Registrable Securities, at the time of the closing under the underwriting agreement relating thereto, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading; and at all times subsequent to the Effective Time when a prospectus would be required to be delivered under the Securities Act or a registration statement is being kept, or is required to be kept, effective, other than from (i) such time as a notice has been given to holders of Registrable Securities pursuant to Section 3(d)(viii)(F) or Section 3(c)(iii)(F) hereof until (ii) such time as the Company furnishes an amended or supplemented prospectus pursuant to Section 3(e) or Section 3(c)(iv) hereof, each such registration statement, and each prospectus (including any summary prospectus) contained therein or furnished pursuant to Section 3(d) or Section 3(c) hereof, as then amended or supplemented, will conform in all material respects to the requirements of the Securities Act and the Trust Indenture Act and the rules and regulations of the Commission thereunder and will not contain an untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided, however, that this representation and warranty shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein.

        (b)  Any documents incorporated by reference in any prospectus referred to in Section 5(a) hereof, when they become or became effective or are or were filed with the Commission, as the case may be, will conform or conformed in all material respects to the requirements of the Securities Act or the Exchange Act, as applicable, and none of such documents will contain or contained an untrue statement of a material fact or will omit or omitted to state a material fact required to be stated therein or necessary to make the statements therein not misleading; provided, however, that this representation and warranty

15

shall not apply to any statements or omissions made in reliance upon and in conformity with information furnished in writing to the Company by a holder of Registrable Securities expressly for use therein.

        (c)  The compliance by the Company with all of the provisions of this Exchange and Registration Rights Agreement and the consummation of the transactions herein contemplated will not conflict with or result in a breach of any of the terms or provisions of, or constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any subsidiary of the Company is a party or by which the Company or any subsidiary of the Company is bound or to which any of the property or assets of the Company or any subsidiary of the Company is subject (except such conflicts, breaches or defaults as would not individually or in the aggregate have a material adverse effect on (A) the current or future financial position, stockholders' or partners' equity, results of operations or business prospects of the Company and the Guarantors, taken as a whole, or (B) the ability of the holders of Registrable Securities to dispose of their Registrable Securities as contemplated by this Agreement, or to consummate any other transaction contemplated by this Agreement), nor will such action result in any violation of the provisions of the certificate of incorporation, certificate of partnership, by-laws or similar organizational documents of the Company or any Guarantor or any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Company or any subsidiary of the Company or any of their properties; and no consent, approval, authorization, order, registration or qualification of or with any such court or governmental agency or body is required for the consummation by the Company and the Guarantors of the transactions contemplated by this Exchange and Registration Rights Agreement, except the registration under the Securities Act of the Securities, qualification of the Indenture under the Trust Indenture Act and such consents, approvals, authorizations, registrations or qualifications as may be required under state securities or blue sky laws in connection with the offering and distribution of the Securities.

        (d)  This Exchange and Registration Rights Agreement has been duly authorized, executed and delivered by the Company.

        6.    Indemnification.

        (a)    Indemnification by the Company and the Guarantors.    The Company and the Guarantors, jointly and severally, will indemnify and hold harmless each of the holders of Registrable Securities included in an Exchange Registration Statement, each of the Electing Holders of Registrable Securities included in a Shelf Registration Statement and each person who participates as a placement or sales agent or as an underwriter in any offering or sale of such Registrable Securities against any losses, claims, damages or liabilities, joint or several, to which such holder, agent or underwriter may become subject under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in any Exchange Registration Statement or Shelf Registration Statement, as the case may be, under which such Registrable Securities were registered under the Securities Act, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such holder, Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, and will reimburse such holder, such Electing Holder, such agent and such underwriter for any legal or other expenses reasonably incurred by them in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that neither the Company nor any Guarantor shall be liable to any such

16

person in any such case to the extent that any such loss, claim, damage or liability arises out of or is based upon an untrue statement or alleged untrue statement or omission or alleged omission made in such registration statement, or preliminary, final or summary prospectus, or amendment or supplement thereto, in reliance upon and in conformity with written information furnished to the Company by such person expressly for use therein.

        (b)    Indemnification by the Holders and any Agents and Underwriters.    With respect to a registration statement filed pursuant to Section 2(b) hereof or an underwriting agreement with respect thereto, the Electing Holders of such Registrable Securities and each underwriter named in any such underwriting agreement will, severally and not jointly, (i) indemnify and hold harmless the Company, the Guarantors, and all other holders of Registrable Securities, against any losses, claims, damages or liabilities to which the Company, the Guarantor or such other holders of Registrable Securities may become subject, under the Securities Act or otherwise, insofar as such losses, claims, damages or liabilities (or actions in respect thereof) arise out of or are based upon an untrue statement or alleged untrue statement of a material fact contained in such registration statement, or any preliminary, final or summary prospectus contained therein or furnished by the Company to any such Electing Holder, agent or underwriter, or any amendment or supplement thereto, or arise out of or are based upon the omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading, in each case to the extent, but only to the extent, that such untrue statement or alleged untrue statement or omission or alleged omission was made in reliance upon and in conformity with written information furnished to the Company by such Electing Holder or underwriter expressly for use therein, and (ii) reimburse the Company and the Guarantors for any legal or other expenses reasonably incurred by the Company and the Guarantors in connection with investigating or defending any such action or claim as such expenses are incurred; provided, however, that no such Electing Holder shall be required to undertake liability to any person under this Section 6(b) for any amounts in excess of the dollar amount of the proceeds to be received by such Electing Holder from the sale of such Electing Holder's Registrable Securities pursuant to such registration.

        (c)    Notices of Claims, Etc.    Promptly after receipt by an indemnified party under subsection (a) or (b) above of written notice of the commencement of any action, such indemnified party shall, if a claim in respect thereof is to be made against an indemnifying party pursuant to the indemnification provisions of or contemplated by this Section 6, notify such indemnifying party in writing of the commencement of such action; but the omission so to notify the indemnifying party shall not relieve it from any liability which it may have to any indemnified party otherwise than under the indemnification provisions of or contemplated by Section 6(a) or 6(b) hereof. In case any such action shall be brought against any indemnified party and it shall notify an indemnifying party of the commencement thereof, such indemnifying party shall be entitled to participate therein and, to the extent that it shall wish, jointly with any other indemnifying party similarly notified, to assume the defense thereof, with counsel reasonably satisfactory to such indemnified party (who shall not, except with the consent of the indemnified party, be counsel to the indemnifying party), and, after notice from the indemnifying party to such indemnified party of its election so to assume the defense thereof, such indemnifying party shall not be liable to such indemnified party for any legal expenses of other counsel or any other expenses, in each case subsequently incurred by such indemnified party, in connection with the defense thereof other than reasonable costs of investigation. No indemnifying party shall, without the written consent of the indemnified party, effect the settlement or compromise of, or consent to the entry of any judgment with respect to, any pending or threatened action or claim in respect of which indemnification or contribution may be sought hereunder (whether or not the indemnified party is an actual or

17

potential party to such action or claim) unless such settlement, compromise or judgment (i) includes an unconditional release of the indemnified party from all liability arising out of such action or claim and (ii) does not include a statement as to or an admission of fault, culpability or a failure to act by or on behalf of any indemnified party.

        (d)    Contribution.    If for any reason the indemnification provisions contemplated by Section 6(a) or Section 6(b) are unavailable to or insufficient to hold harmless an indemnified party in respect of any losses, claims, damages or liabilities (or actions in respect thereof) referred to therein, then each indemnifying party shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages or liabilities (or actions in respect thereof) in such proportion as is appropriate to reflect the relative fault of the indemnifying party and the indemnified party in connection with the statements or omissions which resulted in such losses, claims, damages or liabilities (or actions in respect thereof), as well as any other relevant equitable considerations. The relative fault of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact relates to information supplied by such indemnifying party or by such indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission. The parties hereto agree that it would not be just and equitable if contributions pursuant to this Section 6(d) were determined by pro rata allocation (even if the holders or any agents or underwriters or all of them were treated as one entity for such purpose) or by any other method of allocation which does not take account of the equitable considerations referred to in this Section 6(d). The amount paid or payable by an indemnified party as a result of the losses, claims, damages, or liabilities (or actions in respect thereof) referred to above shall be deemed to include any legal or other fees or expenses reasonably incurred by such indemnified party in connection with investigating or defending any such action or claim. Notwithstanding the provisions of this Section 6(d), no holder shall be required to contribute any amount in excess of the amount by which the dollar amount of the proceeds received by such holder from the sale of any Registrable Securities (after deducting any fees, discounts and commissions applicable thereto) exceeds the amount of any damages which such holder has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission, and no underwriter shall be required to contribute any amount in excess of the amount by which the total price at which the Registrable Securities underwritten by it and distributed to the public were offered to the public exceeds the amount of any damages which such underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation. The holders' and any underwriters' obligations in this Section 6(d) to contribute shall be several in proportion to the principal amount of Registrable Securities registered or underwritten, as the case may be, by them and not joint.

        (e)  The obligations of the Company and the Guarantors under this Section 6 shall be in addition to any liability which the Company or the Guarantors may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of each holder, agent and underwriter and each person, if any, who controls any holder, agent or underwriter within the meaning of the Securities Act; and the obligations of the holders and any agents or underwriters contemplated by this Section 6 shall be in addition to any liability which the respective holder, agent or underwriter may otherwise have and shall extend, upon the same terms and conditions, to each officer, director and partner of the Company or the Guarantors (including any person who, with his consent, is named in any registration

18

statement as about to become a director of the Company or any Guarantor) and to each person, if any, who controls the Company within the meaning of the Securities Act.

        7.    Underwritten Offerings.

        (a)    Selection of Underwriters.    If any of the Registrable Securities covered by the Shelf Registration are to be sold pursuant to an underwritten offering, the managing underwriter or underwriters thereof shall be designated by Electing Holders holding at least a majority in aggregate principal amount of the Registrable Securities to be included in such offering, provided that such designated managing underwriter or underwriters is or are reasonably acceptable to the Company.

        (b)    Participation by Holders.    Each holder of Registrable Securities hereby agrees with each other such holder that no such holder may participate in any underwritten offering hereunder unless such holder (i) agrees to sell such holder's Registrable Securities on the basis provided in any underwriting arrangements approved by the persons entitled hereunder to approve such arrangements and (ii) completes and executes all questionnaires, powers of attorney, indemnities, underwriting agreements and other documents reasonably required under the terms of such underwriting arrangements.

        8.    Rule 144.

        The Company covenants to the holders of Registrable Securities that to the extent it shall be required to do so under the Exchange Act, the Company shall timely file the reports required to be filed by it under the Exchange Act and the reports required to be filed by it under the Securities Act (including the reports under Section 13 and 15(d) of the Exchange Act referred to in subparagraph (c)(1) of Rule 144 adopted by the Commission under the Securities Act) and the rules and regulations adopted by the Commission thereunder, and shall take such further action as any holder of Registrable Securities may reasonably request, all to the extent required from time to time to enable such holder to sell Registrable Securities without registration under the Securities Act within the limitations of the exemption provided by Rule 144 under the Securities Act, as such Rule may be amended from time to time, or any similar or successor rule or regulation hereafter adopted by the Commission. Upon the request of any holder of Registrable Securities in connection with that holder's sale pursuant to Rule 144, the Company shall deliver to such holder a written statement as to whether it has complied with such requirements.

        9.    Miscellaneous.

        (a)    No Inconsistent Agreements.    The Company represents, warrants, covenants and agrees that it has not granted, and shall not grant, registration rights with respect to Registrable Securities or any other securities which would be inconsistent with the terms contained in this Exchange and Registration Rights Agreement.

        (b)    Specific Performance.    The parties hereto acknowledge that there would be no adequate remedy at law if the Company fails to perform any of its obligations hereunder and that the Purchaser and the holders from time to time of the Registrable Securities may be irreparably harmed by any such failure, and accordingly agree that the Purchaser and such holders, in addition to any other remedy to which they may be entitled at law or in equity, shall be entitled to compel specific performance of the obligations of the Company under this Exchange and Registration Rights Agreement in accordance with the terms and conditions of this Exchange and Registration Rights Agreement, in any court of the United States or any state thereof having jurisdiction.

        (c)    Notices.    All notices, requests, claims, demands, waivers and other communications hereunder shall be in writing and shall be deemed to have been duly given when delivered by

19

hand, if delivered personally or by courier, or three days after being deposited in the mail (registered or certified mail, postage prepaid, return receipt requested) as follows: If to the Company, to it at 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205, and if to a holder, to the address of such holder set forth in the security register or other records of the Company, or to such other address as the Company or any such holder may have furnished to the other in writing in accordance herewith, except that notices of change of address shall be effective only upon receipt.

        (d)    Parties in Interest.    All the terms and provisions of this Exchange and Registration Rights Agreement shall be binding upon, shall inure to the benefit of and shall be enforceable by the parties hereto and the holders from time to time of the Registrable Securities and the respective successors and assigns of the parties hereto and such holders. In the event that any transferee of any holder of Registrable Securities shall acquire Registrable Securities, in any manner, whether by gift, bequest, purchase, operation of law or otherwise, such transferee shall, without any further writing or action of any kind, be deemed a beneficiary hereof for all purposes and such Registrable Securities shall be held subject to all of the terms of this Exchange and Registration Rights Agreement, and by taking and holding such Registrable Securities such transferee shall be entitled to receive the benefits of, and be conclusively deemed to have agreed to be bound by all of the applicable terms and provisions of this Exchange and Registration Rights Agreement. If the Company shall so request, any such successor, assign or transferee shall agree in writing to acquire and hold the Registrable Securities subject to all of the applicable terms hereof.

        (e)    Survival.    The respective indemnities, agreements, representations, warranties and each other provision set forth in this Exchange and Registration Rights Agreement or made pursuant hereto shall remain in full force and effect regardless of any investigation (or statement as to the results thereof) made by or on behalf of any holder of Registrable Securities, any director, officer or partner of such holder, any agent or underwriter or any director, officer or partner thereof, or any controlling person of any of the foregoing, and shall survive delivery of and payment for the Registrable Securities pursuant to the Purchase Agreement and the transfer and registration of Registrable Securities by such holder and the consummation of an Exchange Offer.

        (f)GOVERNING LAW.THIS EXCHANGE AND REGISTRATION RIGHTS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK.

        (g)    Headings.    The descriptive headings of the several Sections and paragraphs of this Exchange and Registration Rights Agreement are inserted for convenience only, do not constitute a part of this Exchange and Registration Rights Agreement and shall not affect in any way the meaning or interpretation of this Exchange and Registration Rights Agreement.

        (h)    Entire Agreement; Amendments.    This Exchange and Registration Rights Agreement and the other writings referred to herein (including the Indenture and the form of Securities) or delivered pursuant hereto which form a part hereof contain the entire understanding of the parties with respect to its subject matter. This Exchange and Registration Rights Agreement supersedes all prior agreements and understandings between the parties with respect to its subject matter. This Exchange and Registration Rights Agreement may be amended and the observance of any term of this Exchange and Registration Rights Agreement may be waived (either generally or in a particular instance and either retroactively or prospectively) only by a written instrument duly executed by the Company and the holders of at least a majority in aggregate principal amount of the Registrable Securities at the time outstanding. Each holder

20

of any Registrable Securities at the time or thereafter outstanding shall be bound by any amendment or waiver effected pursuant to this Section 9(h), whether or not any notice, writing or marking indicating such amendment or waiver appears on such Registrable Securities or is delivered to such holder.

        (i)    Inspection.    For so long as this Exchange and Registration Rights Agreement shall be in effect, this Exchange and Registration Rights Agreement and a complete list of the names and addresses of all the holders of Registrable Securities shall be made available for inspection and copying within five business days of a written request therefor by any holder of Registrable Securities for proper purposes only (which shall include any purpose related to the rights of the holders of Registrable Securities under the Securities, the Indenture and this Agreement) at the offices of the Company at the address thereof set forth in Section 9(c) above and at the office of the Trustee under the Indenture.

        (j)    Counterparts.    This agreement may be executed by the parties in counterparts, each of which shall be deemed to be an original, but all such respective counterparts shall together constitute one and the same instrument.

[signature page follows]

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        If the foregoing is in accordance with your understanding, please sign and return to us six (6) counterparts hereof, and upon the acceptance hereof by you, this letter and such acceptance hereof shall constitute a binding agreement among the Purchaser, the Guarantors and the Company.

Very truly yours,
Oregon Steel Mills, Inc.
By:
	Name: Title:
New CF&I, Inc.
By:
	Name: Title:
CF&I Steel, L.P.
By:	New CF&I, Inc.
Its:	General Partner
By:
	Name: Title:

Accepted as of the date hereof:
Goldman, Sachs & Co
By:
	Name: Title:

22

Exhibit A

OREGON STEEL MILLS, INC.

INSTRUCTION TO DTC PARTICIPANTS

                        , 200            

URGENT—IMMEDIATE ATTENTION REQUESTED

DEADLINE FOR RESPONSE:  [DATE]^*

        The Depository Trust Company ("DTC") has identified you as a DTC Participant through which beneficial interests in the Oregon Steel Mills, Inc. (the "Company") 10% First Mortgage Notes due 2009 (the "Securities") are held.

        The Company is in the process of registering the Securities under the Securities Act of 1933 for resale by the beneficial owners thereof. In order to have their Securities included in the registration statement, beneficial owners must complete and return the enclosed Notice of Registration Statement and Selling Securityholder Questionnaire.

It is important that beneficial owners of the Securities receive a copy of the enclosed materials as soon as possible as their rights to have the Securities included in the registration statement depend upon their returning the Notice and Questionnaire by [Deadline For Response]. Please forward a copy of the enclosed documents to each beneficial owner that holds interests in the Securities through you. If you require more copies of the enclosed materials or have any questions pertaining to this matter, please contact Oregon Steel Mills, Inc., 1000 SW Broadway, Portland, Oregon 97205, telephone number (503) 223-9228, attn:                          .

*Not less than 28 calendar days from date of mailing.

A-1

OREGON STEEL MILLS, INC.

Notice of Registration Statement
and
Selling Securityholder Questionnaire

                        , 200  

        Reference is hereby made to the Exchange and Registration Rights Agreement (the "Exchange and Registration Rights Agreement") between Oregon Steel Mills, Inc. (the "Company") and the Purchaser named therein. Pursuant to the Exchange and Registration Rights Agreement, the Company has filed with the United States Securities and Exchange Commission (the "Commission") a registration statement on Form       (the "Shelf Registration Statement") for the registration and resale under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"), of the Company's 10% First Mortgage Securities due 2009 (the "Securities"). A copy of the Exchange and Registration Rights Agreement is attached hereto. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Exchange and Registration Rights Agreement.

        Each beneficial owner of Registrable Securities (as defined below) is entitled to have the Registrable Securities beneficially owned by it included in the Shelf Registration Statement. In order to have Registrable Securities included in the Shelf Registration Statement, this Notice of Registration Statement and Selling Securityholder Questionnaire ("Notice and Questionnaire") must be completed, executed and delivered to the Company's counsel at the address set forth herein for receipt ON OR BEFORE [Deadline for Response]. Beneficial owners of Registrable Securities who do not complete, execute and return this Notice and Questionnaire by such date (i) will not be named as selling securityholders in the Shelf Registration Statement and (ii) may not use the Prospectus forming a part thereof for resales of Registrable Securities.

        Certain legal consequences arise from being named as a selling securityholder in the Shelf Registration Statement and related Prospectus. Accordingly, holders and beneficial owners of Registrable Securities are advised to consult their own securities law counsel regarding the consequences of being named or not being named as a selling securityholder in the Shelf Registration Statement and related Prospectus.

        The term "Registrable Securities" is defined in the Exchange and Registration Rights Agreement.

A-2

ELECTION

        The undersigned holder (the "Selling Securityholder") of Registrable Securities hereby elects to include in the Shelf Registration Statement the Registrable Securities beneficially owned by it and listed below in Item (3). The undersigned, by signing and returning this Notice and Questionnaire, agrees to be bound with respect to such Registrable Securities by the terms and conditions of this Notice and Questionnaire and the Exchange and Registration Rights Agreement, including, without limitation, Section 6 of the Exchange and Registration Rights Agreement, as if the undersigned Selling Securityholder were an original party thereto.

        Upon any sale of Registrable Securities pursuant to the Shelf Registration Statement, the Selling Securityholder will be required to deliver to the Company and Trustee the Notice of Transfer set forth in Appendix A to the Prospectus and as Exhibit B to the Exchange and Registration Rights Agreement.

A-3

        The Selling Securityholder hereby provides the following information to the Company and represents and warrants that such information is accurate and complete:

QUESTIONNAIRE

(1)	(a)	Full Legal Name of Selling Securityholder:
	(b)	Full Legal Name of Registered Holder (if not the same as in (a) above) of Registrable Securities Listed in Item (3) below:
	(c)	Full Legal Name of DTC Participant (if applicable and if not the same as (b) above) Through Which Registrable Securities Listed in Item (3) below are Held:
(2)		Address for Notices to Selling Securityholder:
		Telephone:
		Fax:
		Contact Person:
(3)		Beneficial Ownership of Securities:
		Except as set forth below in this Item (3), the undersigned does not beneficially own any Securities.
	(a)	Principal amount of Registrable Securities beneficially owned:
		CUSIP No(s). of such Registrable Securities:
	(b)	Principal amount of Securities other than Registrable Securities beneficially owned:
		CUSIP No(s). of such other Securities:
	(c)	Principal amount of Registrable Securities which the undersigned wishes to be included in the Shelf Registration
		Statement:
		CUSIP No(s). of such Registrable Securities to be included in the Shelf Registration Statement:
(4)		Beneficial Ownership of Other Securities of the Company:
		Except as set forth below in this Item (4), the undersigned Selling Securityholder is not the beneficial or registered owner of any other securities of the Company, other than the Securities listed above in Item (3).
		State any exceptions here:
(5)		Relationships with the Company:
		Except as set forth below, neither the Selling Securityholder nor any of its affiliates, officers, directors or principal equity holders (5% or more) has held any position or office or has had any other material relationship with the Company (or its predecessors or affiliates) during the past three years.
		State any exceptions here:

A-4

(6)	Plan of Distribution:
	Except as set forth below, the undersigned Selling Securityholder intends to distribute the Registrable Securities listed above in Item (3) only as follows (if at all): Such Registrable Securities may be sold from time to time directly by the undersigned Selling Securityholder or, alternatively, through underwriters, broker-dealers or agents. Such Registrable Securities may be sold in one or more transactions at fixed prices, at prevailing market prices at the time of sale, at varying prices determined at the time of sale, or at negotiated prices. Such sales may be effected in transactions (which may involve crosses or block transactions) (i) on any national securities exchange or quotation service on which the Registered Securities may be listed or quoted at the time of sale, (ii) in the over-the-counter market, (iii) in transactions otherwise than on such exchanges or services or in the over-the-counter market, or (iv) through the writing of options. In connection with sales of the Registrable Securities or otherwise, the Selling Securityholder may enter into hedging transactions with broker-dealers, which may in turn engage in short sales of the Registrable Securities in the course of hedging the positions they assume. The Selling Securityholder may also sell Registrable Securities short and deliver Registrable Securities to close out such short positions, or loan or pledge Registrable Securities to broker-dealers that in turn may sell such securities.
	State any exceptions here:

        By signing below, the Selling Securityholder acknowledges that it understands its obligation to comply, and agrees that it will comply, with the provisions of the Exchange Act and the rules and regulations thereunder, particularly Regulation M.

        In the event that the Selling Securityholder transfers all or any portion of the Registrable Securities listed in Item (3) above after the date on which such information is provided to the Company, the Selling Securityholder agrees to notify the transferee(s) at the time of the transfer of its rights and obligations under this Notice and Questionnaire and the Exchange and Registration Rights Agreement.

        By signing below, the Selling Securityholder consents to the disclosure of the information contained herein in its answers to Items (1) through (6) above and the inclusion of such information in the Shelf Registration Statement and related Prospectus. The Selling Securityholder understands that such information will be relied upon by the Company in connection with the preparation of the Shelf Registration Statement and related Prospectus.

        In accordance with the Selling Securityholder's obligation under Section 3(d) of the Exchange and Registration Rights Agreement to provide such information as may be required by law for inclusion in the Shelf Registration Statement, the Selling Securityholder agrees to promptly notify the Company of any inaccuracies or changes in the information provided herein which may occur subsequent to the date hereof at any time while the Shelf Registration Statement remains in effect. All notices hereunder and pursuant to the Exchange and Registration Rights Agreement shall be made in writing, by hand-delivery, first-class mail, or air courier guaranteeing overnight delivery as follows:

          (i)  To the Company:

Oregon Steel Mills, Inc.
1000 SW Broadway
Suite 2200
Portland, OR 97205
Attn:

A-5

        (ii)  With a copy to:

Stoel Rives LLP
900 SW Fifth Avenue
Suite 2600
Portland, OR 97204
Attn:  Steven H. Hull

        Once this Notice and Questionnaire is executed by the Selling Securityholder and received by the Company's counsel, the terms of this Notice and Questionnaire, and the representations and warranties contained herein, shall be binding on, shall inure to the benefit of and shall be enforceable by the respective successors, heirs, personal representatives, and assigns of the Company and the Selling Securityholder (with respect to the Registrable Securities beneficially owned by such Selling Securityholder and listed in Item (3) above. This Agreement shall be governed in all respects by the laws of the State of New York.

A-6

        IN WITNESS WHEREOF, the undersigned, by authority duly given, has caused this Notice and Questionnaire to be executed and delivered either in person or by its duly authorized agent.

Dated:

Selling Securityholder
(Print/type full legal name of beneficial owner of Registrable Securities)
  

By:

Name:
Title:

        PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND QUESTIONNAIRE FOR RECEIPT ON OR BEFORE [DEADLINE FOR RESPONSE] TO THE COMPANY'S COUNSEL AT:

Stoel Rives LLP
900 SW Fifth Avenue
Suite 2600
Portland, OR 97204
Attn:  Steven H. Hull

A-7

Exhibit B

NOTICE OF TRANSFER PURSUANT TO REGISTRATION STATEMENT

[Name of Trustee]
Oregon Steel Mills, Inc,
c/o [Name of Trustee]
[Address of Trustee]

Attention:	Trust Officer
Re:	Oregon Steel Mills, Inc. (the "Company") 10% First Mortgage Notes due 2009

Dear Sirs:

        Please be advised that                                                 has transferred $                        aggregate principal amount of the above-referenced Notes pursuant to an effective Registration Statement on Form       (File No. 333-          ) filed by the Company.

        We hereby certify that the prospectus delivery requirements, if any, of the Securities Act of 1933, as amended, have been satisfied and that the above-named beneficial owner of the Notes is named as a "Selling Holder" in the Prospectus dated            , 200    or in supplements thereto, and that the aggregate principal amount of the Notes transferred are the Notes listed in such Prospectus opposite such owner's name.

Dated:

Very truly yours,
	(Name)
By:
	(Authorized Signature

B-1

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EX-4.3

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Exhibit 4.3

Execution Copy

SECURITY AGREEMENT

dated as of July 15, 2002

By

OREGON STEEL MILLS, INC.

as Grantor

and

U.S. BANK NATIONAL ASSOCIATION

as Trustee

OSM Security Agreement

Table of Contents

Description		Page No(s)
RECITALS:
ARTICLE I DEFINITIONS
1.1	Defined Terms	1
1.2	Interpretation	7
ARTICLE II GRANT OF SECURITY INTERESTS
2.1	Security Grant	7
ARTICLE III OBLIGATIONS
3.1	Obligations	8
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.1	Validity, Perfection and Priority	8
4.2	No Liens	9
4.3	Chief Executive Office	9
4.4	Jurisdiction of Organization	9
4.5	[INTENTIONALLY OMITTED]	9
4.6	Organization; Qualification	9
4.7	Corporate Power, Binding Obligation	9
4.8	No Violation	10
4.9	No Litigation	10
4.10	Prior Name	10
4.11	Other Security Agreement	10
4.12	No Consents	10
4.13	Farm Products	10
4.14	All Information Accurate	10
4.15	Representations Regarding Contracts Constituting Collateral	10
4.16	Copyrights, Patents and Trademarks	11
ARTICLE V COVENANTS
5.1	Further Assurances	11
5.2	Change of Name, Identity, Corporate Structure or Location	12
5.3	Change of Jurisdiction of Organization	12
5.4	Maintain Records	12
5.5	Payment of Obligations	13
5.6	Negative Pledge	13
5.7	Compliance with Laws	13
5.8	No Impairment; Defense of Collateral	13
5.9	No Transfer of Collateral	13
5.10	Delivery of Instruments and Chattel Paper	13
5.11	Inspections	13
5.12	Insurance	13
5.13	Notices	14
5.14	Fair Labor Standards Act	14
ARTICLE VI OBLIGATIONS OF GRANTOR RELATING TO INTELLECTUAL PROPERTY
6.1	Intellectual Property	15

ARTICLE VII POWER OF ATTORNEY
7.1	Power of Attorney	17
7.2	Irrevocable Grant	19
ARTICLE VIII REMEDIES; RIGHTS UPON DEFAULT
8.1	Rights and Remedies Generally	19
8.2	Notice to Obligors and Contract Parties	19
8.3	Proceeds to be Turned Over to Trustee	19
8.4	Obtaining Possession of the Collateral	20
8.5	Disposition of Collateral	20
8.6	Additional Non-UCC Remedies	20
8.7	Certain Sales of Collateral	21
8.8	Certain Remedies in Respect of Intellectual Property	21
8.9	Specific Performance	21
8.10	Recourse	21
8.11	Application of Proceeds	21
8.12	Expenses; Attorneys Fees	22
8.13	Limitation on Duties Regarding Preservation of Collateral	22
ARTICLE IX MISCELLANEOUS
9.1	Indemnity	23
9.2	Governing Law	23
9.3	Consent to Jurisdiction and Service Process	23
9.4	Notices	24
9.5	Grantor Remains Liable	24
9.6	Appointment as Trustee	24
9.7	Trustee May Perform	25
9.8	Authority of Trustee	25
9.9	Successors and Assigns	25
9.10	Amendments in Writing: No Waiver; Cumulative Remedies	25
9.11	Termination	26
9.12	Release of Collateral	26
9.13	Headings Descriptive	26
9.14	Severability	26
9.15	Other Security	26
9.16	Execution in Counterparts	26
9.17	Obligations Absolute	26
9.18	Limitation on Interest Payable	27
9.19	Indenture Controls	27
9.20	Trust Indenture Act Controls	27
9.21	Notice under ORS 746.201	27
9.22	Intercreditor Agreement. The rights and obligations of the parties hereto are subject to the Intercreditor Agreement.	28

ii

Schedule 2.1(f)	Excluded Equipment
Schedule 4.1	Necessary Filings
Schedule 4.3	Chief Executive Office, Locations of Books and Records and Trade Names
Schedule 4.16(a)	Copyrights and Copyright Licenses
Schedule 4.16(b)	Patents and Patent Licenses
Schedule 4.16(c)	Trademarks and Trademark Licenses
Exhibit A	Form of Security Supplement

iii

SECURITY AGREEMENT

        THIS SECURITY AGREEMENT, dated as of July 15, 2002 (as the same may from time to time be amended, restated, supplemented or otherwise modified, this "Security Agreement"), is made by Oregon Steel Mills, Inc., a Delaware corporation, having an office at 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205 ("Grantor," which term includes its successors pursuant to the Indenture referred to below), in favor of U.S. Bank National Association, as trustee for its own benefit and the ratable benefit of the Holders (as hereinafter defined) (in such capacity and together with any successors in such capacity, "Trustee.")

RECITALS:

        WHEREAS, Grantor and Trustee are, contemporaneously with the execution and delivery of this Security Agreement, entering into an indenture dated as of July 15, 2002 among Grantor, New CF&I, Inc., a Delaware corporation ("New CF&I"), CF&I Steel, L.P., a Delaware limited partnership ("CF&I") and Trustee (as the same may from time to time be amended, restated, supplemented or otherwise modified, the "Indenture") pursuant to which Grantor is issuing its 10% First Mortgage Notes due 2009 (the "Securities") in the aggregate principal amount of $305,000,000;

        WHEREAS, Grantor is the owner of the Collateral (as hereinafter defined);

        WHEREAS, it is a condition precedent to the purchase of the Securities that Grantor shall have executed and delivered this Security Agreement to Trustee for the ratable benefit of the registered holders from time to time of the Securities (the "Holders"); and

        WHEREAS, this Security Agreement is given by Grantor in favor of Trustee for its benefit and the ratable benefit of the Holders to secure the payment and performance of the Obligations (as hereinafter defined).

        NOW, THEREFORE, in consideration of the foregoing premises and in order to induce Trustee to enter into the Indenture and to induce the Holders to purchase the Securities and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor and Trustee hereby agree for the ratable benefit of the Holders as follows:

ARTICLE I
DEFINITIONS

        1.1    Defined Terms.    All section references herein to the UCC (as hereinafter defined) shall include all successor sections under any subsequent version or amendment to any Article of the UCC. Capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the Indenture.

        "Accession" shall mean "accession" as such term is defined in Article 9 of the UCC.

        "Account Debtor" shall mean "account debtor" as such term is defined in Article 9 of the UCC

        "Account" shall mean "account" as such term is defined in Article 9 of the UCC.

        "Business Day" shall mean any day, other than a Saturday, a Sunday, or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

        "Cash Proceeds" shall have the meaning ascribed thereto in Section 8.3.

1

        "Chattel Paper" shall mean "chattel paper" as defined in Article 9 of the UCC, including, without limitation, "electronic chattel paper" and "tangible chattel paper," as each term is defined in Article 9 of the UCC.

        "CF&I" shall have the meaning ascribed thereto in the recitals hereof.

        "Collateral" shall have the meaning ascribed thereto in Article II.

        "Collateral Records" shall mean books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

        "Collateral Support" shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

        "Contracts" shall mean any and all contracts and agreements, as such may be amended, restated, supplemented, or otherwise modified from time to time, including without limitation, (a) all rights to receive moneys due and to become due to Grantor thereunder or in connection therewith, (b) all rights to damages arising out of or for breach or default in respect thereof and (c) all rights to perform and exercise all remedies thereunder.

        "Copyrights" shall mean (a) all copyrights in all works, whether published or unpublished, registered or unregistered relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, the copyrights in the works listed on Schedule 4.16(a) (as such schedule may be amended or supplemented from time to time), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office or in any other country, (b) all renewals thereof; and (c) the right to sue for past, present and future infringements of any of the foregoing, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Copyright License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right to reproduce, copy, publish or otherwise use any Copyright relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including without limitation, any of the agreements referred to on Schedule 4.16(a) (as such schedule may be amended or supplemented from time to time).

        "Default Rate" shall have the meaning ascribed to it in Section 5.12.

        "Documents" shall mean "documents" as such term is defined in Article 9 of the UCC.

        "Equipment" shall mean all "equipment" as defined in Article 9 of the UCC, including, without limitation, all machinery, apparatus, equipment, office machinery, furniture, electric arc furnaces, heat treating machinery, rolling mills, pipe mills, rod mills, bar mills, rail mills, pipe coating machinery, furnaces, conveyors, tools, manufacturing equipment, Fixtures and all other equipment of any kind or nature, wherever located, and all modifications, alterations, repairs, substitutions, additions and Accessions thereto and all replacements and all parts therefor, other than Motor Vehicles and Mobile Equipment.

        "Excluded Collateral" shall mean (i) the approximately 67 acres of real property in Camrose, Alberta, on which the Camrose Pipe Mill is located, together with all buildings, improvements and fixtures thereon, and all related leases, rents and other rights, (ii) the real property in Pueblo County, Colorado and Fremont County, Colorado commonly known as the Pueblo Outside the Fence Property,

2

and any contracts of sale or lease for any of the Pueblo Outside the Fence Property, (iii) Motor Vehicles and Mobile Equipment, (iv) the two trailers located on the Pueblo Inside the Fence Property, (v) the condominiums located at 170 S. Del Monte Place, Pueblo, CO 81007-3644 and 769 Cottage Drive, Napa, CA 94558-1247, (vi) the Excluded Assets, (vii) the Excluded Securities, (viii) Intercompany Indebtedness and (ix) any Proceeds or products of any of the foregoing, except to the extent that such Proceeds or products are invested in real property or improvements thereon, machinery and Equipment or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k).

        "Fixtures" shall mean all "fixtures" as defined in Article 9 of the UCC.

        "General Intangibles" shall mean all "general intangibles" as defined in Article 9 of the UCC, including, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles (as defined in Article 9 of the UCC), programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise, and all interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations and all Intellectual Property (in each case, regardless of whether characterized as general intangibles under Article 9 of the UCC).

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

        "Grantor" shall have the meaning ascribed thereto in the preamble hereof.

        "Indemnitees" shall have the meaning ascribed thereto in Section 9.1

        "Indenture" shall have the meaning ascribed thereto in the recitals hereof.

        "Insurance" shall mean (regardless of whether Trustee is the loss payee thereof): (i) all insurance polices covering any or all property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k), and (ii) any key man life insurance policies.

        "Instruments" shall mean "instruments" as such term is defined in Article 9 of the UCC.

        "Intellectual Property" shall mean, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets and the Trade Secret Licenses of Grantor, including without limitation, any Intellectual Property listed on the schedules hereto.

        "Inventory" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Licenses" shall mean Copyright Licenses, Patent Licenses, Trademark Licenses and Trade Secret Licenses, collectively.

        "Lien" means any mortgage, charge, pledge, lien (statutory or other), security interest, hypothecation, assignment for security, claim, preference, priority or other encumbrance of any kind, regardless of whether filed, recorded or otherwise perfected under applicable laws, including any conditional sale, capital lease or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

3

        "Material Adverse Effect" shall mean a material adverse effect on any of (a) the business, operations, property, condition (financial or otherwise) or prospects of Grantor and the Guarantors taken as a whole; (b) the validity or enforceability of (i) this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees (ii) the rights or remedies of Trustee (or any other trustee) or the Holders hereunder or thereunder, or (c) the value of the Collateral taken as a whole.

        "Mobile Equipment" shall mean mobile cranes, loaders, forklifts, trailers, backhoes, towmotors, graders and all other categories of equipment as listed on Schedule 2.1(f).

        "Motor Vehicles" shall mean all cars, trucks, trailers, construction and earth moving equipment and other vehicles and Mobile Equipment covered by a certificate of title law of any state and all tires, Accessions, additions and other appurtenances to, substitutions for and replacements of any of the foregoing; provided that any such substitutions or replacements constitute Motor Vehicles as defined in this sentence.

        "New CF&I" shall have the meaning ascribed thereto in the recitals hereof.

        "Obligations" shall have the meaning ascribed to it in Section 3.1.

        "Patents" shall mean (a) all letters patent of the United States or any other country and all reissues, continuations, continuations-in-part, divisions and extensions, renewals and reexaminations thereof relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time), (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time), and (c) all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit and the right to sue for past, present and future infringements of any of the foregoing.

        "Patent License" shall mean any and all agreements, whether written or oral providing for the grant by or to Grantor of any right to manufacture, use or sell any invention covered by a Patent relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time).

        "Person" shall mean and include natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

        "Proceeds" shall mean: (i) all "proceeds" as defined in Article 9 of the UCC, and (ii) whatever is receivable or received when Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.

        "Receivables" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Record" shall have the meaning specified in Article 9 of the UCC.

        "Related Contracts" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Revolver Collateral" shall mean all rights, title and interest to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of Grantor, CF&I, New CF&I or CWR (each, for purposes of this definition, a "grantor") (including under any trade names,

4

styles or derivations thereof), and whether owned or consigned by or to, or leased from or to, such grantor, and regardless of where located:

        (i)    all inventory (as defined in the Article 9 of the UCC) of such grantor, wherever located, including all such inventory sold by such grantor which is returned to or repossessed by such grantor, and all Accessions thereto and Documents therefor (any and all such inventory, Accessions and Documents being the "Inventory");

        (ii)  all (A) Accounts of such grantor arising from the sale of Inventory or services rendered by such grantor, (B) Chattel Paper and Instruments evidencing any right to payment for Inventory sold or services rendered by such grantor, and (C) rights of such grantor now or hereafter existing in and to all security agreements and guaranties entered into by or on behalf of the Account Debtors and securing or guaranteeing any such Accounts, Chattel Paper and Instruments (any and all such Accounts, Chattel Paper and Instruments being the "Receivables", and any and all such security agreements and guaranties being the "Related Contracts");

        (iii)  all books, records, writings, databases and other information (A) evidencing, embodying or listing any Inventory, Receivables or Related Contracts or (B) used in connection with the sale of Inventory or the collection of amounts due under Receivables and Related Contracts;

        (iv)  all General Intangibles, such as, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles, programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise (but excluding any Intellectual Property or other General Intangibles relating to production, property, plant and equipment, the operation thereof or the production and manufacturing processes);

        (v)  all investment property (as defined in Article 9 of the UCC), including, without limitation, all stock or other equity interests (whether constituting investment property or not) in material subsidiaries (other than Camrose, Camrose Pipe, Canadian National Steel, Oregon Feralloy and LSI Plate), all securities, whether certificated or uncertificated, security entitlements, securities accounts, bank accounts, deposit accounts, cash collateral accounts, commodity contracts and commodity accounts, excluding the Note Collateral Account (as defined in the Indenture);

        (vi)  all Supporting Obligations relating to the property described in clauses (i) through (v) above, including without limitation, letters of credit and guaranties issued in support of Accounts, and all Instruments evidencing Intercompany Indebtedness;

        (vii) all other personal property related to any of foregoing Revolver Collateral (except to the extent that such personal property constitutes real property or improvements thereon, machinery and Equipment or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (l)); and

        (viii) all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Revolver Collateral (including Proceeds which constitute property of the types described in (and not excluded from) clauses (i) through (vii) of this definition), Proceeds deposited from time to time in any lock box or blocked account, and, to the extent not otherwise included, all payments under insurance with respect to any of the foregoing Revolver Collateral (collectively, the "Revolver Collateral Proceeds") (except to the extent that such Revolver Collateral Proceeds are invested in real property or improvements thereon, machinery and Equipment constituting personal property or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k)), or any indemnity, warranty or guarantee,

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payable by reason of loss or damage to, or otherwise with respect to, any of the foregoing Revolver Collateral.

        "Securities" shall have the meaning ascribed thereto in the recitals hereof.

        "Security Agreement" shall have the meaning ascribed thereto in the preamble.

        "Supporting Obligations" shall mean all "supporting obligations" as defined in Article 9 of the UCC.

        "TIA" shall mean the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of this Security Agreement.

        "Trademarks" shall mean (a) all registered and unregistered trademarks, trade names, corporate names, business names, fictitious business names, internet domain names, trade styles, service marks, logos, slogans, certification marks, collective marks and other source or business identifiers, designs and general intangibles of a like nature and the goodwill associated therewith, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(c) (as such schedule may be amended or supplemented from time to time), (b) all renewals or extensions thereof, and (c) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Trademark License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right to use any Trademark relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(c) (as such schedule may be amended or supplemented from time to time).

        "Trade Secret" shall mean (a) all trade secrets and all other confidential or proprietary information and know-how now or hereafter owned or used in, or contemplated at any time for use in the business of Grantor relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, and any proprietary technology, process or system which is within the possession of Grantor, including, without limitation, manufacturing processes or methods, all formulae, processes, procedures, compounds, drawings, designs, blue prints, surveys, reports, manuals, and operating standards relating to or used in the operation of Grantor's business, in each case, whether or not reduced to writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to any of the foregoing and (b) the right to sue for past, present and future infringement of any of the foregoing and all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Trade Secret License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right in or to any Trade Secret relating to production, property, plant and equipment, the operation thereof or the manufacturing processes.

        "Trustee" shall have the meaning ascribed thereto in the preamble.

        "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.

        "Work" shall mean any work which is or may be subject to copyright protection pursuant to Title 17 of the U.S. Code.

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        1.2    Interpretation.    References to "Articles," "Sections," "Schedules" and "Exhibits" shall be to Articles, Sections, Schedules and Exhibits to this Security Agreement unless otherwise specifically provided herein. References to the words "herein," "hereof," "hereto" and "hereunder" and other words of similar import refer to this Security Agreement as a whole and not to any particular Article, Section or other subdivision. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word "include" or "including," when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

ARTICLE II
GRANT OF SECURITY INTERESTS

        2.1    Security Grant.    As security for the prompt and complete payment and performance in full when due (whether at Stated Maturity, upon redemption or required repurchase, by acceleration or otherwise) of all the Obligations, Grantor hereby grants, pledges, assigns and transfers to Trustee, for its individual benefit and the ratable benefit of the Holders, a continuing security interest in and continuing lien on all of the right, title and interest of Grantor in, to and under the following property, in each case, whether now owned or existing or hereafter acquired or arising, and wherever located (all of which being hereinafter collectively called the "Collateral"):

        (a)  all Chattel Paper;

        (b)  the Note Collateral Account and all Trust Moneys, other moneys, securities, certificates, items and other property on deposit therein;

        (c)  all Contracts;

        (d)  all Intellectual Property;

        (e)  all Documents;

        (f)    all Equipment;

        (g)  all Fixtures;

        (h)  all General Intangibles;

        (i)    all Instruments;

        (j)    all Insurance;

        (k)  (i) all other rights to the payment of money, including rents and other sums payable to Grantor under leases, rental agreements and other Chattel Paper and insurance proceeds; (ii) all Collateral Records; (iii) all Collateral Support; (iv) all Supporting Obligations; and (v) all Accessions and additions to, parts and appurtenances of, substitutions for and replacements of any of the foregoing (provided, however, that for the avoidance of doubt, the foregoing clauses (a) through (k) shall not include (A) any property or assets described in (and not excluded from) clauses (i) through (vi) of the definition of "Revolver Collateral" or (B) any Excluded Collateral); and

        (l)    to the extent not otherwise included in the foregoing, all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Collateral

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(including Proceeds which constitute property of the type described in (and not excluded from) clauses (a) through (k) above and all collateral security and guarantees given by any Person with respect to any of the foregoing, and in any event, including, without limitation, any and all (i) proceeds of any insurance (including, without limitation, all Net Proceeds), indemnity, warranty or guarantee payable to Trustee or to Grantor from time to time with respect to any of the foregoing Collateral, (ii) payments (in any form whatsoever and including, without limitation, all Net Awards) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the foregoing Collateral by any Governmental Authority (or any Person acting under color of a Governmental Authority), (iii) products of the foregoing Collateral, and (iv) other amounts from time to time paid or payable under or in connection with any of the foregoing Collateral.

ARTICLE III
OBLIGATIONS

        3.1    Obligations.    This Security Agreement secures, and the Collateral is collateral and security for, the payment and performance in full when due (whether at Stated Maturity, upon redemption or required repurchase, by acceleration or otherwise) of the principal of, premium, if any, and interest on, and any and all other amounts which may at any time be or become payable by Grantor under the Securities and any and all other obligations and liabilities of Grantor to Trustee, any other trustee under any Mortgage, and the Holders (including, without limitation, any and all amounts which may at any time be or become due and payable and any and all interest and Liquidated Damages, if any, accruing after the maturity of the Securities and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to Grantor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and interest, to the extent permitted by law, on the unpaid interest), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, premium, interest, Liquidated Damages (if any), fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to Trustee or to the Holders that are required to be paid by Grantor, Trustee, the trustee under any Mortgage or by any Secured Party pursuant to the terms of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other document entered into by Grantor in connection with any of the foregoing) (collectively, the "Obligations").

ARTICLE IV
REPRESENTATIONS AND WARRANTIES

        Grantor hereby represents and warrants to Trustee (for the benefit of Trustee and the ratable benefit of the Holders), which representations and warranties shall survive execution and delivery of this Security Agreement, as follows:

        4.1    Validity, Perfection and Priority.

        (a)  The security interests in the Collateral granted to Trustee (for the benefit of Trustee and the ratable benefit of the Holders) hereunder constitute valid and continuing first priority security interests in the Collateral (except with respect to Permitted Liens);

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        (b)  The filings, registrations and recordings described on Schedule 4.1 constitute the only filings, registrations and recordings necessary to perfect the security interests granted by Grantor to Trustee pursuant to this Security Agreement in respect of the Collateral (other than any non-U.S. Patents and other than non-U.S. patents with respect to which Grantor has no present or future, direct or indirect obligation to perfect or assist in the perfection of a security interest therein) to the extent such security interests may be perfected by filing, registration or recording. All such filings, registrations and recordings have been accomplished as of the date hereof (other than filings with the United States Patent and Trademark Office and the United States Copyright Office, each of which shall be made as soon as possible after the execution hereof but in any event within thirty (30) days after the date hereof); and

        (c)  Grantor shall not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) relating to the Collateral, except financing statements filed or to be filed (i) under the Indenture or this Security Agreement and (ii) in respect of Permitted Liens.

        4.2    No Liens.

        (a)  Grantor owns and, as to all Collateral whether now existing or hereafter acquired, will continue to own, each item of the Collateral (or in the case of Collateral held by Grantor as lessee under a lease, Grantor has and will have a valid and subsisting leasehold interest in such Collateral) free and clear of any and all Liens, claims or other right, title or interest of all Persons except for Permitted Liens; and

        (b)  No financing statement or other evidence of Lien covering or purporting to cover any of the Collateral is on file in any public office other than (i) financing statements filed in connection with Permitted Liens and (ii) financing statements which have been filed in favor of Trustee pursuant to this Security Agreement.

        4.3    Chief Executive Office.    The chief executive office of Grantor is located as set forth on Schedule 4.3 and Grantor represents and warrants that it (i) has no place of business, (ii) has no offices where Grantor's books of account and records are kept, and (iii) currently uses no business or trade names, except as set forth on Schedule 4.3.

        4.4    Jurisdiction of Organization.    Grantor is a corporation organized under the laws of the State of Delaware. Grantor's organizational identification number is 0782834, and Grantor's legal name is "Oregon Steel Mills, Inc."

        4.5[INTENTIONALLY OMITTED].    

        4.6    Organization; Qualification.    Grantor (i) is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware, (ii) has the corporate power and corporate authority to own its property and assets and to transact the business in which it is engaged or presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing as a foreign corporation in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where any such failure to so qualify would not have, individually or in the aggregate, a Material Adverse Effect.

        4.7    Corporate Power, Binding Obligation.    Grantor has the corporate power and corporate authority to execute, deliver and carry out the terms and provisions of this Security Agreement including, without limitation, the right to grant a security interest in all the Collateral and has taken all necessary corporate action to authorize the execution, delivery and performance by it of this Security Agreement. Grantor has duly executed and delivered this Security Agreement, and this Security Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer or

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conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally or by general equitable principles (whether considered in a proceeding in equity or at law).

        4.8    No Violation.    Neither the execution, delivery or performance by Grantor of this Security Agreement nor compliance by it with the terms and provisions hereof (i) will violate in any material respects any applicable provisions of any law, statute, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority applicable to Grantor, (ii) will conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien or encumbrance (except pursuant to this Security Agreement) upon any of the property or assets of Grantor pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which Grantor is a party or by which it or any of its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the certificate of incorporation or by-laws of Grantor.

        4.9    No Litigation.    There are no actions, suits, arbitrations or other proceedings pending or, to the knowledge of Grantor, threatened with respect to this Security Agreement or the transactions contemplated hereby.

        4.10    Prior Name.    Grantor has not conducted business under any other name other than as indicated on Schedule 4.3 during the last five (5) years.

        4.11    Other Security Agreement.    Grantor has not within the last five (5) years become bound (whether as a result of merger or otherwise) as debtor under a security agreement entered into by another Person, which has not heretofore been terminated, other than security agreements to the extent such security agreements create no Liens other than Permitted Liens.

        4.12    No Consents.    Except for the filings, registrations and recordings contemplated in Section 4.1(b) and as may be required, in connection with the disposition of any investment property (as defined in Article 9 of the UCC), by laws generally affecting the offering and sale of securities, no consent of any Person (including, without limitation, any stockholders or creditors of Grantor) and no consent, authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body or other Person is required either (a) for the grant by Grantor of a security interest in the Collateral pursuant to this Security Agreement, for the perfection of such security interest or for the authorization, execution, delivery or performance of this Security Agreement by Grantor or (b) except as may be provided in the Intercreditor Agreement and any amendment or supplement thereto, for the exercise by Trustee of the rights and remedies provided for in this Security Agreement (whether specifically granted or created hereunder or created or provided for by applicable law) in respect of the Collateral.

        4.13    Farm Products.    None of the Collateral constitutes or will constitute Farm Products (as defined in Article 9 of the UCC), or is or will be the Proceeds of Farm Products.

        4.14    All Information Accurate.    All information supplied by Grantor with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) including, without limitation, the information set forth in the Schedules hereto, is accurate and complete in all material respects.

        4.15    Representations Regarding Contracts Constituting Collateral.

        (a)  Each Contract constituting Collateral is in full force and effect and constitutes a valid and legally enforceable obligation of Grantor and, to the best of Grantor's knowledge, the other parties thereto, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally or by general equitable principles (whether considered in a proceeding in

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equity or at law) and except where unenforceability of any such Contract constituting Collateral would not have, individually or in the aggregate, a Material Adverse Effect.

        (b)  Neither Grantor nor, to the best of Grantor's knowledge, any other party to any Contract constituting Collateral is in default in the performance or observance of any of the terms thereof.

        (c)  Grantor has fully performed all of its material obligations under each Contract constituting Collateral.

        (d)  The right, title and interest of Grantor in, to and under each Contract constituting Collateral are not, to the best of Grantor's knowledge, subject to any defense, offset, counterclaim or claim which would materially adversely affect the value of such Contract as Collateral, nor have any of the foregoing been asserted or alleged against Grantor as to any Contract constituting Collateral.

        (e)  No amount payable to Grantor under or in connection with any Contract constituting Collateral is evidenced by any Instrument or Chattel Paper which has not been delivered to Trustee.

        4.16    Copyrights, Patents and Trademarks.

        (a)  Schedule 4.16(a) includes all registrations and pending applications for Copyrights and Copyright Licenses owned by Grantor in its own name on the date hereof;

        (b)  Schedule 4.16(b) includes all issued Patents and pending Patent applications and Patent Licenses owned by Grantor in its own name on the date hereof;

        (c)  Schedule 4.16(c) includes all registrations and pending applications for Trademarks, Trademark Licenses and registered domain names owned by Grantor in its own name on the date hereof;

        (d)  to the best of Grantor's knowledge, each Copyright, Patent and Trademark is on the date hereof valid, subsisting, unexpired, enforceable and has not been abandoned;

        (e)  except as set forth in any of Schedule 4.16(a), Schedule 4.16(b) or Schedule 4.16(c), none of such Copyrights, Patents and Trademarks is on the date hereof the subject of any licensing or franchise agreement;

        (f)    no holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any Copyright, Patent or Trademark in any respect that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and

        (g)  no action or proceeding is pending or, to Grantor's knowledge, threatened on the date hereof (i) seeking to limit, cancel or question the validity of any Copyright, Patent or Trademark, or (ii) which, if adversely determined, would have, individually or in the aggregate, a Material Adverse Effect or a material adverse effect on the value of any Copyright, Patent or Trademark.

ARTICLE V
COVENANTS

        Grantor covenants and agrees that from and after the date of this Security Agreement until this Security Agreement is terminated:

        5.1    Further Assurances.    Grantor shall from time to time at the expense of Grantor, promptly execute, deliver, file or record all further instruments, endorsements and other documents, and take such further action, as Trustee may deem reasonably desirable in obtaining the full benefits of this

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Security Agreement and of the rights, remedies and powers herein granted, including, without limitation, the following:

        (a)  The filing of any financing statements, in form acceptable to Trustee under the UCC in effect in any jurisdiction, and the filing of a copy of this Security Agreement or a short-form filing with the United States Patent and Trademark Office and/or the United States Copyright Office, with respect to the Liens and security interests granted hereby, except that Grantor shall not be obligated, now or in the future, to directly or indirectly file or assist in the filing of any filings with respect to security interests in non-U.S. patents; and furnish to Trustee from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Trustee may request, all in reasonable detail and in form reasonably satisfactory to Trustee. Without limiting the generality of the foregoing, Grantor hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdiction and with any filing offices as Trustee may determine, in its sole discretion, are necessary or advisable to perfect the security interest granted to Trustee in connection herewith. Such financing statements may describe the Collateral in the same manner as described in this Security Agreement or may contain an indication or description of Collateral that describes such property in any other manner as Trustee may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to Trustee in connection herewith, including, without limitation, describing such property as "all assets" or "all personal property," whether now owned or hereafter acquired. A photocopy or other reproduction of this Security Agreement shall be sufficient as a financing statement and may be filed in lieu of the original to the extent permitted by applicable law. Grantor shall pay or reimburse Trustee for all filing fees and related expenses.

        (b)  If Grantor shall obtain any additional Collateral, Grantor shall furnish to Trustee a Security Supplement substantially in the form attached hereto as Exhibit A describing such Collateral.

        5.2    Change of Name, Identity, Corporate Structure or Location.    Grantor shall not change its name, identity, corporate structure or the location of its chief executive office from the addresses set forth on Schedule 4.3, without (i) giving Trustee at least thirty (30) days' prior written notice clearly describing such new name, identity, corporate structure or new location and providing such other information in connection therewith as Trustee may reasonably request, (ii) taking all action satisfactory to Trustee as Trustee may reasonably request to maintain the security interest of Trustee in the Collateral intended to be granted hereby at all times as a fully perfected first priority security interest (subject to Permitted Liens), and (iii) delivering to Trustee an Officers' Certificate as to compliance with this Section 5.2.

        5.3    Change of Jurisdiction of Organization.    Grantor shall not change its jurisdiction of organization until (i) it shall have given to Trustee not less than thirty (30) days' prior written notice of its intention to do so, identifying such new proposed jurisdiction of organization and providing such other information in connection therewith as Trustee may reasonably request, (ii) with respect to such change of jurisdiction of organization, it shall have taken all action as requested by Trustee that Trustee may find necessary or advisable to maintain the continuous validity, perfection and first priority status (subject to Permitted Liens), of the security interest of Trustee in the Collateral intended to be granted and agreed to hereby, and (iii) it shall have delivered to Trustee an Officers' Certificate as to compliance with this Section 5.3.

        5.4    Maintain Records.    Grantor shall keep and maintain at its own cost and expense satisfactory and complete records of the Collateral at the locations for books and records indicated on Schedule 4.3 and shall stamp or otherwise mark such books and records in a manner as may be necessary or as

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Trustee may reasonably require in order to reflect the security interests granted by this Security Agreement.

        5.5    Payment of Obligations.    Grantor shall pay before delinquency all taxes, assessments and governmental charges or levies imposed upon the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials, supplies and services) against or with respect to the Collateral, except that no such tax, assessment, levy, charge or claim need be paid if (i) the validity thereof is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve, in the sole opinion of Trustee, any material danger for the sale, forfeiture or loss of any of the Collateral or any interest therein, (iii) such charge is adequately reserved against on Grantor's books in accordance with generally accepted accounting principles, and (iv) the failure to pay any such charge does not result in the imposition of a Lien against the Collateral other than Permitted Liens.

        5.6    Negative Pledge.    Without the consent of Trustee, Grantor (a) shall not create, incur or permit to exist, (b) shall defend the Collateral against, and (c) shall take such other action as is necessary to remove, in each case, any Lien or claim on or to the Collateral, other than the Permitted Liens.

        5.7    Compliance with Laws.    Grantor shall comply in all material respects with all requirements of law applicable to the Collateral or any part thereof or to the operation of Grantor's business.

        5.8    No Impairment; Defense of Collateral.    Grantor (a) shall not take or permit to be taken any action which could reasonably be expected to impair Trustee's rights hereunder or in the Collateral, including the creation or existence of any Lien upon or with respect to any of the Collateral, except Permitted Liens and (b) shall defend the Collateral against all Persons at any time claiming any interest therein, except the holders of Permitted Liens with respect to such Permitted Liens.

        5.9    No Transfer of Collateral.    Grantor shall not sell, transfer or assign (by operation of law or otherwise) any Collateral without the consent of the Trustee other than as permitted by the Indenture.

        5.10    Delivery of Instruments and Chattel Paper.    If any amount in excess of $150,000 payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be promptly delivered to Trustee, duly endorsed in a manner satisfactory to Trustee, to be held as Collateral pursuant to this Security Agreement; provided that if within any twelve month period Grantor shall receive Instruments or Chattel Paper representing amounts payable, in the aggregate, greater than $250,000, under or in connection with any of the Collateral, then all Instruments or Chattel Paper evidencing any amounts payable under or in connection with any of the Collateral in the possession of Grantor shall be promptly delivered to Trustee, duly endorsed in a manner satisfactory to Trustee, to be held as Collateral pursuant to this Security Agreement.

        5.11    Inspections.    Grantor shall permit representatives of Trustee, upon reasonable notice and at any time during normal business hours, to inspect and make abstracts from its books and records pertaining to the Collateral, and shall permit representatives of Trustee to be present at Grantor's place of business to receive copies of all communications and remittances relating to the Collateral, all in such manner as Trustee may reasonably require.

        5.12    Insurance.    Grantor shall maintain at all times and at its sole expense, with financially sound and reputable insurance companies, insurance policies (i) insuring the Equipment against loss by fire, explosion, theft and such other casualties as from time to time would be insured against by a prudent operator of similar property and (ii) insuring Trustee and the Holders against liability for personal injury and property damage relating to such Equipment, such policies to be in such form and amounts and having such coverage as from time to time would be maintained by a prudent operator of similar property. Each policy or certificate with respect to such insurance shall be endorsed for the benefit of Trustee (including, without limitation, by naming Trustee as an additional named insured or loss payee

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as its interest may appear) and such policy or certificate shall be retained by Grantor and a copy or copies of such policy or certificate shall be delivered to Trustee annually together with the Officers' Certificate required to be delivered to Trustee within 90 days after the end of each fiscal year of Grantor pursuant to Section 4.06(a) of the Indenture. Each such policy or a certificate issued to Trustee in respect thereof shall state that such policy cannot be cancelled without thirty (30) days' prior written notice to Trustee. At least thirty (30) days prior to the expiration of any such policy of insurance, Grantor shall provide documentation to Trustee that Grantor is negotiating an extension or renewal of such policy and shall at least five (5) Business Days prior to expiration of any such policy of insurance obtain an extension or renewal policy and an insurance certificate evidencing such renewal or extension and shall give Trustee written notice thereof. If Grantor shall fail to insure such Collateral in accordance with the provisions hereof or if Grantor shall fail to so endorse or to extend or renew, any such insurance policies or certificates with respect thereto, Trustee shall have the right (but shall be under no obligation), to advance funds to procure, renew or extend such insurance (after providing Grantor with at least five (5) Business Days' notice of its intent to advance such funds) and Grantor agrees to reimburse Trustee for any and all costs and expenses thereof, with interest on all such funds from the date advanced at the rate per annum (the "Default Rate") equal to the rate then payable under the Securities. Within five (5) Business Days after making any such advance, Trustee shall give Grantor written notice of the amount and purpose of such advance; provided, however, that failure to give such notice will not relieve Grantor of its obligations to make such reimbursement to Trustee. Unless an Event of Default under the Indenture shall have occurred and shall be continuing, Grantor may determine whether to file a claim for repair or replacement costs or a claim for actual cash value under the relevant insurance policy. Any proceeds of insurance in respect of the Collateral are hereby assigned to Trustee. In case of any loss or damage to any of the Collateral, all proceeds of insurance maintained by Grantor in respect of the Collateral shall be paid to Trustee as Trust Moneys pursuant to the Indenture and shall be subject to retention and disbursement by Trustee in accordance with the terms of the Indenture. The provisions of this Section 5.12 shall not be deemed to limit Grantor's obligations to maintain insurance (or any related obligations) pursuant to any Mortgage or other Security Document.

        5.13    Notices.    Grantor shall advise Trustee promptly, in reasonable detail, of:

        (a)  any Lien (other than security interests created hereby or Permitted Liens) on any of the Collateral; and

        (b)  the occurrence of any other event which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

        5.14    Fair Labor Standards Act.    Any goods now or hereafter produced by Grantor or any of its subsidiaries included in the Collateral have been and will be produced in compliance with the requirements of the Fair Labor Standards Act, as amended.

        5.15    Covenants Regarding Contracts Constituting Collateral.

        (a)  So long as it is commercially reasonable to do so, Grantor shall perform and comply in all material respects with all of its obligations under the Contracts constituting Collateral, provided, however, that any such non-performance or non-compliance shall not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

        (b)  Grantor shall not amend, modify, terminate or waive any provision of any Contract in any manner which could reasonably be expected to materially adversely affect the value of the Collateral taken as a whole; provided that the Company may replace a Contract (the "Initial Contract") so long as (i) the contract entered into to replace the Initial Contract (the "Replacement Contract") is subject to the security interest created by this Security Agreement and (ii) the

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Replacement Contract is on no materially less favorable terms to the Company than the Initial Contract.

        (c)  Grantor shall, in its prudent business judgment, exercise promptly and diligently each and every material right which it may have under each Contract; provided Grantor may amend, modify, terminate or waive rights subject to Section 5.15(b) above.

        (d)  Grantor shall deliver to Trustee a copy of each material demand, notice or document received by it relating in any way to any Contract.

        (e)  In any suit, proceeding or action brought by Trustee or any Holder under any Contract, Grantor shall save, indemnify and keep Trustee and such Holder harmless from and against any and all expenses, losses, claims, liabilities and damages, as incurred, suffered by reason of any defense, setoff, counterclaim, recoupment or reduction or liability whatsoever of the obligor thereunder, arising out of a breach by Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such obligor or its successors from Grantor.

ARTICLE VI
OBLIGATIONS OF GRANTOR RELATING TO INTELLECTUAL PROPERTY

        6.1    Intellectual Property.

        (a)  If Grantor, either by itself or through any agent, employee, licensee or designee shall file any applications or registrations with respect to any Intellectual Property with the United States Patent and Trademark Office and/or the United States Copyright Office, or any similar office or agency in any other country or any political subdivision thereof, Grantor shall notify Trustee thereof within thirty (30) days of filing such application or registration. Grantor shall execute and deliver to Trustee any document required or reasonably requested by Trustee to acknowledge, confirm, register, record, or perfect Trustee's security interest in any part of the Intellectual Property, whether now owned or hereafter acquired, and Grantor shall deliver an Officers' Certificate as to compliance with this Section 6.1(a); provided that Grantor shall not be obligated to make any present or future, direct or indirect filings of any kind to perfect such security interest in non-U.S. patents.

        (b)  Grantor shall not do any act or omit to do any act whereby any of the Intellectual Property which is material to the business of Grantor may lapse, or become abandoned, dedicated to the public, or unenforceable, or which would adversely affect the validity, grant, or enforceability of the security interest granted herein.

        (c)  With respect to any Trademarks which are material to its business, Grantor (i) shall maintain such Trademarks in full force free from any claim of abandonment or invalidity for non-use, (ii) shall not fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent with the quality of such products and services as of the date hereof, (iii) shall not fail to employ each material Trademark with the appropriate notice of registration, or (iv) shall not fail to do any act or knowingly omit to do any act (or permit a licensee or sublicensee to act or knowingly omit to act) whereby such Trademark may become invalidated. Grantor shall take all steps necessary to insure that licensees and sublicenses of such Trademarks use such consistent standards of quality.

        (d)  Grantor shall notify Trustee promptly if it knows (i) that any application or registration relating to any Intellectual Property which is material to the business of Grantor may become abandoned, dedicated or injected into the public domain, (ii) of any materially adverse determination or development (including, without limitation, the institution of, or any such

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determination or development in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in any country) regarding Grantor's ownership of any Patent or Trademark material to the business of Grantor or its right to register the same or to keep and maintain the same, and (iii) of any action Grantor is taking in respect of such event.

        (e)  Grantor shall take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the Patents and Trademarks material to the business of Grantor, including, without limitation, the filing of applications for renewal, affidavits of use and affidavits of incontestability and, as to Patents, the payment of maintenance fees, except where the failure to take any such action would not have, individually or in the aggregate, a Material Adverse Effect.

        (f)    Grantor (either itself or through licensees) (i) shall employ the appropriate notice of copyright for each published Work subject to copyright protection to the extent necessary to protect the Copyright relating to such Work and (ii) shall not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material Copyright may become invalidated, except where the failure to take such action would not have, individually or in the aggregate, a Material Adverse Effect.

        (g)  Grantor shall take all reasonable and necessary steps, as it shall deem appropriate under the circumstances, in accordance with its reasonable business judgment, to maintain and pursue each application (and to obtain the relevant registration) and to maintain to the extent permitted by law each registration of each material Copyright owned by Grantor including, without limitation, filing of applications for renewal, where necessary.

        (h)  If Grantor shall obtain any rights to any new invention (whether or not patentable), Trade Secret, Trademark, Trademark License, Copyright, Copyright License, Patent or Patent License, then, to the extent that any item enumerated in this sentence would constitute Collateral, the provisions of this Security Agreement shall automatically apply thereto and any such item shall automatically constitute Collateral and shall be subject to the assignment, Lien and security interest created hereby without further action by any party. Grantor promptly shall (x) give to Trustee written notice of its acquisition of or entitlement to any of the rights set forth in the immediately preceding sentence and (y) confirm the attachment of the Lien and security interest created hereby to any of such rights by execution of an appropriate instrument delivered to Trustee, including an amendment to Schedules 4.16(a), 4.16(b) and/or 4.16(c) to include any such rights, and shall, if applicable, make such filings, registrations and recordings as are necessary or appropriate to perfect such security interests; provided that Grantor shall not be obligated to make any present or future, direct or indirect filings of any kind to perfect such security interests in any non-U.S. Intellectual Property.

        (i)    In the event that any Intellectual Property owned by or exclusively licensed to Grantor is infringed upon, misappropriated, or diluted by a third party, Grantor shall promptly take all actions as Grantor shall reasonably deem appropriate under the circumstances to protect its rights in such Intellectual Property including, but not limited to, the initiation of a suit for injunctive relief and to recover damages. If such Intellectual Property is of material economic value, Grantor shall promptly notify Trustee after it learns thereof and sue for infringement, misappropriation or dilution, seek injunctive relief where appropriate and seek and recover any and all damages for such infringement, misappropriation or dilution.

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        (j)    Anything contained herein to the contrary notwithstanding, Trustee shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the name of Grantor, Trustee or otherwise, in Trustee's reasonable discretion, to enforce any Intellectual Property, in which event Grantor shall, at the request of Trustee, do any and all lawful acts and execute any and all documents required by Trustee in aid of such enforcement and Grantor shall promptly, upon demand, reimburse and indemnify Trustee as provided in Section 9.1 hereof in connection with the exercise of its rights under this Section 6.1, and, to the extent that Trustee shall elect not to bring suit to enforce any Intellectual Property as provided in this Section 6.1, Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property by others and for that purpose agrees to diligently maintain any action, suit or proceeding against any Person so infringing as shall be necessary to prevent such infringement.

        (k)  Grantor hereby grants to Trustee a transferable and sublicensable non-exclusive worldwide license (exercisable without payment of royalty or other compensation by Trustee) to use, operate under, and make, have made, use, import and sell products or services embodying or made in accordance with any Intellectual Property now or hereafter owned, licensed to, or otherwise acquired by Grantor ("Grantor Intellectual Property"), and/or to reproduce, perform, display, distribute, and modify Grantor Intellectual Property effective upon the occurrence of an Event of Default. The foregoing license shall be irrevocable and perpetual. If the Obligations are repaid by Grantor in the ordinary course and in any event prior to a bankruptcy or insolvency proceeding involving Grantor and other than through the exercise by Grantor of any of its rights and remedies hereunder, then such license shall terminate and have no further force and effect.

        (l)    Grantor and Trustee may modify this Security Agreement, without the consent of Holders, by amending Schedules 4.16(a), 4.16(b) and/or 4.16(c) to include any future Intellectual Property of Grantor in accordance with Section 6.1(h) or to reflect any disposition of Intellectual Property made in compliance with the provisions of this Security Agreement and the Indenture.

        (m)  Except in the ordinary course of business consistent with prudent business practice, and as may otherwise be permitted by the Indenture, Grantor shall not, without the prior written consent of Trustee, abandon any registration of any Intellectual Property or any right to file an application with respect to Intellectual Property or any pending application with respect to Intellectual Property.

        (n)  Grantor shall not, without the consent of Trustee, license the Intellectual Property or any portion thereof, or amend or permit the amendment of any of the Licenses, in either case, in a manner that adversely affects the right to receive any material amount of payments thereunder, or, except as otherwise permitted under the Indenture, in any manner materially adverse to the interests of Trustee in the Intellectual Property.

        (o)  Subject to Section 6.1(n) but notwithstanding any other provision herein to the contrary, so long as no Event of Default shall have occurred and be continuing, Grantor shall be permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of the business of Grantor.

ARTICLE VII
POWER OF ATTORNEY

        7.1    Power of Attorney.    Grantor hereby irrevocably constitutes and appoints Trustee and any officer of Trustee, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Grantor and in the name of Grantor or in its own name, from time to time after the occurrence and during the continuation of an Event of Default,

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for the purpose of carrying out the terms of this Security Agreement, to take any and all appropriate action by any technologically available means, which may include, without limitation, any form of electronic data transmission, and to execute in any appropriate manner, which may include, without limitation, using any symbol that Trustee may adopt to signify Grantor's intent to authenticate, any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Security Agreement. Without limiting the generality of the foregoing, Grantor hereby authorizes Trustee:

        (a)  to file a Record or Records, including, without limitation, financing or continuation statements, and amendments thereto, in all jurisdictions and with all filing offices as Trustee may determine, in its reasonable discretion, are necessary or advisable to perfect the security interest granted to Trustee for its benefit and the ratable benefit of the Holders herein; such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as Trustee may determine, in its reasonable discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to Trustee herein; Grantor shall furnish to Trustee from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Trustee may reasonably request, all in reasonable detail;

        (b)  in the name of Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Contract or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Trustee for the purpose of collecting any and all such moneys due under any Contract or with respect to any other Collateral whenever payable;

        (c)  in the case of any Copyright, Patent or Trademark, execute and deliver any and all agreements, instruments, documents and papers as Trustee may request to evidence Trustee's and the Holders' security interest in such Copyright, Patent or Trademark and the goodwill and General Intangibles of Grantor relating thereto or represented thereby;

        (d)  execute, in connection with any sale provided for in Article VIII, any other sale of Collateral pursuant to this Security Agreement or any license or sublicense granted pursuant to Article VIII, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

        (e)  (i) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to Trustee or as Trustee shall direct; (ii) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (iii) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (iv) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (v) defend any suit, action or proceeding brought against Grantor with respect to any Collateral; (vi) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, to give such discharges or releases as Trustee may deem appropriate; (vii) assign, license or sublicense any Intellectual Property (along with the goodwill of the business to which any such Intellectual Property pertains), throughout the world for such term or terms, on such conditions, and in such manner, as Trustee shall determine; (viii) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though

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Trustee were the absolute owner thereof for all purposes; and (ix) at Trustee's option and Grantor's expense, at any time, or from time to time, do all acts and things which Trustee deems necessary to protect, preserve or realize upon the Collateral and Trustee's and the Holders' security interests therein and to effect the intent of this Security Agreement, all as fully and effectively as Grantor might do; and

        (f)    notwithstanding the foregoing, at any time prior to or after the occurrence of an Event of Default, pay or discharge taxes and Liens (which do not constitute Permitted Liens) levied or placed on or threatened against the Collateral or effect any repairs on the Collateral.

        7.2    Irrevocable Grant.    The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable until this Security Agreement is terminated and the security interests created hereby are released. Grantor hereby ratifies all that such attorneys may lawfully do or cause to be done by virtue and in accordance with the terms hereof.

ARTICLE VIII
REMEDIES; RIGHTS UPON DEFAULT

        8.1    Rights and Remedies Generally.    If an Event of Default shall occur and be continuing, then and in every such case, Trustee shall have all the rights of a secured party under the UCC (including, without limitation, the right to sell all or any portion of the Collateral in one or more parcels at public or private sale, for cash or credit, or for future delivery and upon such terms as Trustee may determine), shall have all rights now or hereafter existing under all other applicable laws, and, subject to any mandatory requirements of applicable law then in effect, shall have all the rights set forth in this Security Agreement.

        8.2    Notice to Obligors and Contract Parties.    Upon the request of Trustee at any time after the occurrence and during the continuance of an Event of Default, Grantor shall notify parties to the Contracts constituting Collateral and Account Debtors in respect of any General Intangibles, Instruments and Chattel Paper constituting Collateral that such Collateral has been assigned to Trustee for the ratable benefit of the Holders and that payments in respect thereof shall be made directly to Trustee.

        8.3    Proceeds to be Turned Over to Trustee.    All proceeds of any Collateral received by Grantor consisting of cash, checks and other near-cash items (collectively, "Cash Proceeds") shall be held by Grantor in trust for Trustee, segregated from other funds of Grantor, and shall, forthwith upon receipt by Grantor be turned over to Trustee in the exact form received by Grantor (duly endorsed by Grantor to Trustee, if required) and held by Trustee in the Note Collateral Account, which shall be maintained under the sole dominion and control of Trustee. Any Cash Proceeds received by Trustee (whether from Grantor or otherwise): (i) if no Event of Default shall have occurred and be continuing, shall be held by Trustee as collateral security for the Obligations (whether matured or unmatured) unless and until delivered to Grantor as provided in the Indenture, and (ii) if an Event of Default shall occur and be continuing, may, in the sole discretion of Trustee, (A) be held by Trustee as collateral security for the Obligations (whether matured or unmatured) and/or (B) then or at any time thereafter may be applied by Trustee, in accordance with the Indenture, for the payment of any expenses incurred by Trustee in enforcing its rights under this Security Agreement. Notwithstanding the foregoing, this Section 8.3 shall not apply to Cash Proceeds received by Grantor in the ordinary course of business prior to the occurrence and continuance of an Event of Default or to proceeds of any Revolver Collateral. All Proceeds while held by Trustee in the Note Collateral Account (or by Grantor in trust for Trustee and the Holders) shall continue to be held as collateral security for the Obligations and shall not constitute payment thereof until applied as provided in Section 8.11.

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        8.4    Obtaining Possession of the Collateral.    If an Event of Default shall occur and be continuing, then and in every such case, Trustee may, but shall not be obligated to, in addition to any other action permitted by law (and not limited in any manner to the remedies contained in the Notes and the Indenture) take one or more of the following actions:

          (i)  personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from Grantor or any other Person who then has possession of any part thereof with or without notice of process of law, and for that purpose may enter upon Grantor's premises where any of the Collateral is located and remove such Collateral and, in connection with such removal, use any and all services, supplies, aids and other facilities of Grantor;

        (ii)  sell, assign or otherwise liquidate, or direct Grantor to sell, assign or otherwise liquidate, any or all investments made in whole or in part with the Collateral or any part thereof, and take possession of the proceeds of any such sale, assignment or liquidation; and

        (iii)  take possession of the Collateral or any part thereof, by directing Grantor in writing to deliver the same to Trustee at any commercially reasonable place or places which Trustee shall reasonably select, in which event Grantor shall at its own expense: (A) forthwith cause the same to be moved to the place or places so designated by Trustee and there delivered to Trustee; (B) store and keep any Collateral so delivered to Trustee at such place or places pending further action by Trustee; and (C) while the Collateral shall be so stored and kept, provide such guards and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain them in good condition.

Grantor's obligation to deliver the Collateral is of the essence in this Security Agreement. Upon application to a court of equity having jurisdiction, Trustee shall, to the extent permitted by law, be entitled to a decree requiring specific performance by Grantor of such obligation.

        8.5    Disposition of Collateral.    Trustee will give Grantor reasonable notice of the time and place of any public sale of the Collateral or any part thereof or of the time after which any private sale or any other intended disposition thereof is to be made. Grantor agrees that the requirements of reasonable notice to it shall be met if such notice is delivered (personally, by facsimile transmission or by overnight delivery service) to its address specified in Section 9.4 (or such other address that Grantor may provide to Trustee in writing) at least ten (10) Business Days before the time of any public sale or after which any private sale may be made.

        8.6    Additional Non-UCC Remedies.    Upon the occurrence and during the continuance of an Event of Default, Trustee, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except as provided in Section 9.5 and except for any notice required by law referred to below) to or upon Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are, to the extent permitted by law, hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of Trustee or elsewhere upon such terms and conditions as Trustee may deem advisable and at such prices as Trustee may elect, for cash or on credit or for future delivery without assumption of any credit risk. Trustee or any Holder shall have the right, to the extent permitted by law, upon any such public sale or sales or upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Grantor (including any rights of stay and/or appraisal), which right or equity is, to the extent permitted by law, hereby waived or released. Grantor hereby waives any claims against Trustee arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a

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public sale, even if Trustee accepts the first offer received and does not offer such Collateral to more than one offeree. Grantor further agrees, at Trustee's request, to assemble the Collateral and make it available to Trustee at places which Trustee shall reasonably select, whether at Grantor's premises or elsewhere. Trustee shall apply the net proceeds of any action taken by it pursuant to this Section 8.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Trustee and the Holders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, as provided in Section 8.11, and only after such application and after the payment by Trustee of any other amount required by any provision of law, need Trustee account for the surplus, if any, to Grantor. Grantor further agrees that a breach of any of the covenants contained in this Article VIII will cause irreparable injury to Trustee, that Trustee has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Article VIII shall be specifically enforceable against Grantor, and Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Obligations becoming due and payable prior to their stated maturities. Nothing in this Article VIII shall in any way alter the rights of Trustee under this Security Agreement.

        8.7    Certain Sales of Collateral.    Grantor recognizes that, by reason of certain prohibitions contained in law, rules, regulations or orders of any Governmental Authority, Trustee may be compelled, with respect to any sale of all or any part of the Collateral, to limit purchasers to those who meet the requirements of such Governmental Authority. Grantor acknowledges that any such sales may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any such restricted sale shall not be deemed, solely by virtue thereof, not to have been made in a commercially reasonable manner.

        8.8    Certain Remedies in Respect of Intellectual Property.    If an Event of Default shall occur and shall be continuing, in addition to the other rights and remedies provided for herein or otherwise available to it, Trustee may license or sublicense (whether general, special or otherwise, and whether on an exclusive or non-exclusive basis) all or any portions of the Intellectual Property throughout the world for such term or terms, on such conditions and in such manner as Trustee shall determine. Upon request by Trustee, Grantor shall execute and deliver to Trustee any powers of attorney, in form and substance satisfactory to Trustee, for the implementation of any assignment, license, sublicense, grant of option, sale or other disposition of any Intellectual Property. In the event of any sale, assignment, or other disposition of any of the Intellectual Property, the goodwill connected with and symbolized by the Intellectual Property subject to such disposition shall be included in such sale, assignment or other disposition.

        8.9    Specific Performance.    In addition to any of the other rights and remedies hereunder, Trustee shall have the right to institute a proceeding seeking specific performance in connection with any of the agreements or obligations hereunder.

        8.10    Recourse.    Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to satisfy the Obligations. Grantor shall also be liable for all expenses of Trustee or any Holder incurred in connection with collecting such deficiency, including, without limitation, the fees and disbursements of any attorneys employed by Trustee to collect such deficiency.

        8.11    Application of Proceeds.    The net proceeds received by Trustee in respect of any sale of, collection from or other realization upon all or any part of the Collateral pursuant to the exercise by Trustee of its remedies provided in this Article VIII shall be applied (after deduction of amounts permitted or required pursuant to this Article VIII), together with any other sums then held by Trustee pursuant to this Security Agreement, promptly by Trustee in the manner set forth in the Indenture.

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        8.12    Expenses; Attorneys Fees.    Grantor shall upon demand pay to Trustee the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and the reasonable fees and expenses of any experts and agents which Trustee may incur in connection with (i) the collection of the Obligations, (ii) the enforcement and administration of this Security Agreement and any consent, amendment, waiver or other modification to this Security Agreement, (iii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iv) the exercise, protection or enforcement of any of the rights of Trustee or any other secured party hereunder, (v) the failure by Grantor to perform or observe any of the provisions hereof, (vi) the creation and perfection of Liens in favor of the Trustee for the benefit of the Holders, including, without limitation, the filing or recording of financing statements and other documents (including all taxes in connection therewith) in public offices, search fees and the reasonable fees, expenses and disbursements of any counsel providing any opinions in respect of the Collateral or the Liens created pursuant to the Security Documents, (vii) the payment or discharge of any taxes, insurance premiums or encumbrances, (viii) defending or prosecuting any actions or proceedings arising out of or related to the transactions to which this Security Agreement relates, (ix) otherwise protecting, maintaining or preserving the Collateral, or the enforcing, foreclosing, retaking, holding, storing, processing, selling or otherwise realizing upon the Collateral and Trustee's security interest therein, whether through judicial proceedings or otherwise, (x) any refinancing or restructuring of the credit arrangements pursuant to the Indenture, including a "work-out," or pursuant to any insolvency or bankruptcy cases or proceedings, and (xi) the failure by Grantor to perform or observe any of the provisions of this Security Agreement. All amounts payable by Grantor under this Section 8.12 shall be due upon demand and shall be part of the Obligations. Grantor's obligations under this Section 8.12 shall survive the termination of this Security Agreement and the discharge of Grantor's other obligations hereunder.

        8.13    Limitation on Duties Regarding Preservation of Collateral.    Trustee's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as Trustee (in its commercial and not in its trust capacity) deals with similar property for its own account.

        (a)  Trustee shall have no obligation to take any steps to preserve rights against prior parties to any Collateral.

        (b)  Neither Trustee nor any Holder, nor any of their respective directors, officers or employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Grantor or otherwise.

        (c)  Trustee shall have no obligation to marshal any of the Collateral.

        (d)  The powers conferred on Trustee and the Holders hereunder are solely to protect Trustee's and the Holders' interests in the Collateral and shall not impose any duty upon Trustee or any Holder to exercise any such powers.

        (e)  Trustee and the Holders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their offices, directors, employees or agents shall be responsible to Grantor for any act or failure to act hereunder, except for their own negligence or willful misconduct.

        (f)    Beyond the duties set forth in this Section 8.13 and the exercise of reasonable care in custody thereof, Trustee shall have no duty as to the collection of any Collateral in its possession or control or in the possession or control of any agent or nominee of Trustee, or any income thereon.

        (g)  Trustee shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially

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equivalent to that which Trustee, in its individual capacity, accords its own property, it being understood that Trustee shall not have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Collateral, whether or not Trustee or any other Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any Person with respect to any Collateral.

ARTICLE IX
MISCELLANEOUS

        9.1    Indemnity.    Grantor agrees to indemnify, reimburse and hold Trustee, the Holders and their respective officers, directors, partners, members, employees and representatives ("Indemnitees") harmless from any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs or expenses or disbursements (including attorneys' fees and expenses) for whatsoever kind or nature which may be imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Security Agreement, any other Security Agreement, the Indenture, the Notes, the Guarantees, the Intercreditor Agreement, the Registration Rights Agreement or any of the transactions contemplated hereby or thereby. The obligations of Grantor under this Section 9.1 shall be secured hereby and shall survive payment and performance or discharge of the Obligations and the termination of this Security Agreement for the two years following such payment and performance or discharge; provided that, if during such two year period any Indemnitee gives notice to Grantor of any potential claim under this Section 9.1, then this Section 9.1 shall survive indefinitely until any such potential claim is resolved in a manner satisfactory to Trustee.

        9.2    Governing Law.    THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

        9.3    Consent to Jurisdiction and Service Process.    ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR WITH RESPECT TO THIS SECURITY AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS SECURITY AGREEMENT GRANTOR, TO THE EXTENT PERMITTED BY LAW, ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS SECURITY AGREEMENT. GRANTOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, WITH AN ADDRESS AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY GRANTOR IRREVOCABLY AGREEING IN WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF IN NEW YORK, NEW YORK, SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY GRANTOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED OR CERTIFIED MAIL TO GRANTOR AT ITS ADDRESS PROVIDED FOR IN SECTION 9.4 EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY

23

AGENT APPOINTED BY GRANTOR REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, GRANTOR HEREBY AGREES THAT SERVICE UPON IT BY DELIVERY SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF TRUSTEE OR ANY HOLDER TO BRING PROCEEDINGS AGAINST GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

        9.4    Notices.    Except as otherwise expressly provided herein, all notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and shall be deemed to have been duly given or made when delivered by hand, or in the case of telecopy notice, when sent by transmittal on a Business Day, or in the case of a nationally recognized overnight courier service, one business day after delivery to such courier service, addressed, in the case of each party hereto, at its address specified below, or to such other address as may be designated by any party in a written notice to the other party hereto.

        If to Grantor:

Oregon Steel Mills, Inc.
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205
Attention: Chief Financial Officer
Telecopy: (503) 240-5800

        If to the Secured Party:

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Telecopy: (651) 244-0711

        9.5    Grantor Remains Liable.    Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under the Contracts and agreements included in the Collateral to the extent set forth therein to perform all of the duties and obligations thereunder to the same extent as if this Security Agreement had not been executed, (ii) the exercise by Trustee or any holder of any of the rights hereunder shall not release Grantor from any of its duties or obligations under the Contracts and agreements included in the Collateral, and (iii) Trustee shall not have any obligation or liability under the Contracts and agreements included in the Collateral by reason of this Security Agreement, nor shall Trustee be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

        9.6    Appointment as Trustee.    The actions of Trustee hereunder are subject to the provisions of the Indenture. Trustee shall have the right hereunder to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking action (including, without limitation, the release or substitution of Collateral), in accordance with this Security Agreement and the Indenture. Trustee may resign and a successor Trustee may be appointed in the manner provided in the Indenture. Upon the acceptance of any appointment as Trustee by a successor Trustee, that successor Trustee shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Trustee under this Security Agreement, and the retiring Trustee shall thereupon be discharged from its duties and obligations under this Security Agreement. After any retiring Trustee's resignation, the provisions of this Security Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it under this Security Agreement while it was Trustee.

24

        9.7    Trustee May Perform.    If Grantor shall fail to do any act or thing that it has covenanted to do hereunder or if any warranty on the part of Grantor contained herein shall be breached, Trustee or any Holder may (but shall not be obligated to), after providing Grantor with at least five (5) Business Days' notice, do the same or cause it to be done or remedy any such breach, and may expend funds for such purpose. Any and all amounts so expended by Trustee or such Holder shall be paid by Grantor promptly upon demand therefor, with interest at the Default Rate during the period from and including the date on which such funds were so expended to the date of repayment. Grantor's obligations under this Section 9.7 shall survive the termination of this Security Agreement and the discharge of Grantor's other obligations under this Security Agreement.

        9.8    Authority of Trustee.    Grantor acknowledges that the rights and responsibilities of Grantor under this Security Agreement with respect to any action taken by Trustee or the exercise or non-exercise by Trustee of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Security Agreement shall, as between Trustee and the Holders, be governed by the Indenture and by such other agreements with respect thereto as may exist from time to time among them, but, as between Trustee and Grantor, Trustee shall be conclusively presumed to be acting as agent for the Holders with full and valid authority so to act or refrain from acting, and Grantor shall be under no obligation, or entitlement, to make any inquiry respecting such authority.

        9.9    Successors and Assigns.    This Security Agreement shall create a continuing security interest in the Collateral and shall be binding upon and inure to the benefit of Grantor, Trustee, the Holders, all future holders of the Obligations and their respective successors and permitted assigns, except that Grantor may not assign or transfer any of its rights or obligations under this Security Agreement without the prior written consent of Trustee. Trustee may assign its rights under this Security Agreement to one or more permitted assignees. Upon any such assignment, the assignee shall succeed to all of Trustee's rights and powers hereunder. No other persons (including, without limitation, any other creditors of Grantor) other than a permitted assignee of Trustee shall have any interest herein or any right or benefit with respect hereto.

        9.10    Amendments in Writing: No Waiver; Cumulative Remedies.

        (a)  Subject to the provisions of Article Nine of the Indenture, none of the terms or provisions of this Security Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Grantor and Trustee, provided that any provision of this Security Agreement imposing obligations on Grantor may be waived by Trustee in a written instrument executed solely by Trustee.

        (b)  In the event Trustee shall have instituted any proceeding to enforce any right, power or remedy under this Security Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to Trustee, then and in every such case, Grantor, Trustee and each Holder, except as may be otherwise determined in such proceeding, shall be restored to their respective former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Trustee and the Holders, except as may be otherwise determined in such proceeding, shall continue as if no such proceeding had been instituted.

        (c)  No failure or delay on the part of Trustee in exercising any right, power or privilege hereunder and no course of dealing between Grantor and Trustee shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Trustee of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Trustee would otherwise have on any future occasion. The rights and remedies herein expressly provided are cumulative and may be exercised singly or concurrently and as often and in such order as Trustee deems expedient and are not exclusive of

25

any rights or remedies which Trustee would otherwise have whether by agreement or now or hereafter existing under applicable law. No notice to or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Trustee to any other or future action in any circumstances without notice or demand.

        9.11    Termination.    When the Obligations (other than any obligations arising under the proviso to Section 9.1) have been indefeasibly paid and performed in full, this Security Agreement shall terminate, and Trustee, at the request and sole expense of Grantor, shall execute and deliver to Grantor the proper instruments (including UCC termination statements) acknowledging the termination of this Security Agreement, and shall duly assign, transfer and deliver to Grantor, without recourse, representation or warranty of any kind whatsoever, such of the Collateral as may be in possession of Trustee and has not theretofore been disposed of, applied or released, including the release and cancellation of all licenses and rights referred to in Section 6.1(l); provided, however, that any licenses of sublicenses granted by Trustee pursuant to Section 8.8 shall continue to be in full force and effect in accordance with their terms.

        9.12    Release of Collateral.    Reference is hereby made to Article Eleven of the Indenture for provisions which discuss the release of the Collateral from the Liens created by this Security Agreement.

        9.13    Headings Descriptive.    The headings of the several Articles, Sections and subsections of this Security Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Security Agreement.

        9.14    Severability.    In case any provision in or obligation under this Security Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions hereof, or of such provision in any other jurisdiction, shall not in any way be affected or impaired thereby.

        9.15    Other Security.    To the extent that the Obligations are now or hereafter secured by property other than the Collateral or are now or hereafter secured by the guarantee, endorsement or property of any other Person, then Trustee shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of Trustee's or any Holder's rights and remedies hereunder.

        9.16    Execution in Counterparts.    This Security Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute one and the same agreement.

        9.17    Obligations Absolute.    All obligations of Grantor hereunder shall be absolute and unconditional irrespective of:

        (a)  any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of Grantor;

        (b)  any lack of validity or enforceability of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing;

        (c)  any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or

26

instrument relating to any of the foregoing (except to the extent specified in such change, amendment or waiver);

        (d)  any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to any departure from any guarantee, for all or any of the Obligations; or

        (e)  any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing, except as specifically set forth in a waiver granted pursuant to the provisions of the Indenture.

        9.18    Limitation on Interest Payable.    It is the intention of the parties to conform strictly to the usury laws, whether state or federal, that are applicable to the transaction of which this Security Agreement is a part. All agreements between Grantor and Trustee, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid by Grantor for the use, forbearance or detention of the money to be loaned or advanced under this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing, or for the payment or performance of any covenant or obligation contained herein or therein, exceed the maximum amount permissible under applicable federal or state usury laws. If under any circumstances whatsoever fulfillment of any such provision, at the time performance of such provision shall be due, shall involve exceeding the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity. If under any circumstances Grantor shall have paid an amount deemed interest by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the principal amount owing in respect of the Obligations and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and any other amounts due hereunder, the excess shall be refunded to Grantor. All sums paid or agreed to be paid for the use, forbearance or detention of the principal under any extension of credit or advancement of funds by Trustee or any Holder, shall, to the extent permitted by applicable law, and to the extent necessary to preclude exceeding the limit of validity prescribed by law, be amortized, prorated, allocated and spread from the date of this Security Agreement until payment in full of the Obligations so that the actual rate of interest on account of such principal amounts is uniform throughout the term hereof.

        9.19    Indenture Controls.    All terms, covenants, conditions, provisions and requirements of the Indenture are incorporated by reference in this Security Agreement. In the event of any conflict or inconsistency between the provisions of this Security Agreement and those of the Indenture, including any conflicts or inconsistencies in any definitions herein or therein, except to the extent that new definitions are set forth herein for such terms, the provisions or definitions of the Indenture shall govern.

        9.20    Trust Indenture Act Controls.    If any provision of this Security Agreement limits, qualifies or conflicts with the duties imposed by the TIA, the duties imposed by the TIA shall control.

        9.21    Notice under ORS 746.201.    In compliance with ORS 746.201, this Security Agreement contains the following warning, which Grantor acknowledges:

WARNING

UNLESS YOU (OREGON STEEL MILLS, INC.) PROVIDE US (BENEFICIARY) WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR

27

LOAN AGREEMENT, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE OBTAINED PROPERTY COVERAGE ELSEWHERE.

YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF THIS INSURANCE MAY BE ADDED TO YOUR CONTRACT OR LOAN BALANCE. IF THE COST IS ADDED TO YOUR CONTRACT OR LOAN BALANCE, THE INTEREST RATE ON THE UNDERLYING CONTRACT OR LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE YOUR PRIOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE.

THE COVERAGE WE PROVIDE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.

        9.22    Intercreditor Agreement.    The rights and obligations of the parties hereto are subject to the Intercreditor Agreement.

[signature page follows]

28

        IN WITNESS WHEREOF, Grantor and Trustee have caused this Security Agreement to be duly executed and delivered as of the date first above written.

OREGON STEEL MILLS, INC. As Grantor
By:
	Name: Title:
U.S. BANK NATIONAL ASSOCIATION As Trustee
By:
	Name: Title:

29

SCHEDULE 2.1(f)
EXCLUDED EQUIPMENT

Passenger trucks
Cars
Sport utility vehicles
Forklifts
Pickup trucks
Dump trucks
Railroad trackmobile
Mobile grader
Front end loaders
Semi trucks
Maintenance trucks
Manlifts
Field tractors
Trailers for semi trucks
Electric 300 hp railroad switch engine
Scrap gondola railcars
Backhoes
Gradalls
Crawler cranes
Bobcat loaders
Pipe handlers
New coil rod loaders
Pettibone carry-lifts
Pettibone loader carriages
Forklift trucks
Coil handlers
Cranes
Loaders
Scrap loaders
Crawler loaders
Power sweepers
Mobile floor sweepers
Crane mobile trucks
Lowboy trailers
Truck mounted cranes
Fuel trucks
Portable air compressors
Bucket trucks
Flatbed trucks
Fire trucks
Floor machine tennant industrial
Lugger trucks
Water trucks
Rear dump trucks
Rock trucks
Hydraulic platform transporters
Straddle carriers
Graders
Draglines
Tractors
All terrain vehicles
Vans
Van ambulance

SCHEDULE 4.1
NECESSARY FILINGS

        1.    UCC Financing Statement listing Oregon Steel Mills, Inc. as debtor and U.S. Bank National Association, as Trustee as secured party to be filed with the Delaware Secretary of State.

        2.    A fully executed original of this Security Agreement to be filed with the U.S. Patent and Trademark Office.

SCHEDULE 4.3
CHIEF EXECUTIVE OFFICE, LOCATIONS OF BOOKS AND RECORDS AND TRADE NAMES

1.	Chief Executive Office
	1000 S.W. Broadway, Suite 2200 Portland, Oregon 97205
2.	Other Places Of Business And Locations Where Books Of Accounts And Records Are Kept
	Napa Pipe Corporation 1025 Kaiser Road Napa, California 94559
	Portland Steel Works 14400 N. Rivergate Blvd. Portland, Oregon 97203
3.	Trade Names

Owner	Trade Name
Oregon Steel Mills, Inc.	Napa Pipe Corporation
Oregon Steel Mills, Inc.	Portland Steel Works

SCHEDULE 4.16(a)
COPYRIGHTS AND COPYRIGHT LICENSES

        None.

SCHEDULE 4.16(b)
PATENTS AND PATENT LICENSES

1.

Patents

Owner	Patent	Country	Registration No.	Date
Oregon Steel Mills, Inc.	Apparatus and Method For Destructive Testing of Coupons formed from Metal	U.S.	5,487,299	1/30/96

2.

Patents Licenses

Owner	Patent License	Date
Oregon Steel Mills, Inc. (via Napa Pipe Corp.)	Patent License Agreement between Kaiser Steel Corporation and Napa Pipe Corporation	10/15/87
Oregon Steel Mills, Inc. (via Napa Pipe Corp.)	Know-How License Agreement between Kaiser Steel Corporation and Napa Pipe Corporation	10/15/87

SCHEDULE 4.16(c)
TRADEMARKS AND TRADEMARK LICENSES

Domain Names

Owner	Domain Name
Oregon Steel Mills, Inc.	osm.com
Oregon Steel Mills, Inc.	oregonsteel.com
Oregon Steel Mills, Inc.	oregonsteel.biz
Oregon Steel Mills, Inc.	napapipe.biz
Oregon Steel Mills, Inc.	rmsm.biz
Oregon Steel Mills, Inc.	campipe.biz

EXHIBIT A
FORM OF SECURITY SUPPLEMENT

        This SECURITY SUPPLEMENT, dated [            ] , is delivered pursuant to the Security Agreement, dated as of July [            ], 2002 (as the same may be from time to time amended, restated, supplemented or otherwise modified, the "Security Agreement"), among Oregon Steel Mills, Inc., as Grantor, and U.S. Bank National Association, as Trustee. Capitalized terms used herein not otherwise defined herein shall have the meanings ascribed thereto in the Security Agreement.

        Grantor hereby confirms the grant to Trustee set forth in the Security Agreement of, and does hereby grant to Trustee, a security interest in all of Grantor's right, title and interest in and to all Collateral to secure the Obligations, in each case whether now or hereafter existing or in which Grantor now has or hereafter acquires an interest and wherever the same may be located. Grantor represents and warrants that the attached Supplements to Schedules accurately and completely set forth all additional information required pursuant to the Security Agreement and hereby agrees that such Supplements to Schedules shall constitute part of the Schedules to the Security Agreement.

IN WITNESS WHEREOF, Grantor has caused this Security Supplement to be duly executed and delivered by its duly authorized officer as of [            ].

OREGON STEEL MILLS, INC.
By:
	Name: Title:

[Attach Supplements to Schedules]

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EXHIBIT 4.4

Execution Copy

  
SECURITY AGREEMENT

  
dated as of July 15, 2002

   
   
By

   
   
CF&I STEEL, L.P.

as Grantor

  
and

  
U.S. BANK NATIONAL ASSOCIATION

as Trustee

Table of Contents

Description		Page No(s)
RECITALS:
ARTICLE I DEFINITIONS
1.1	Defined Terms	1
1.2	Interpretation	6
ARTICLE II GRANT OF SECURITY INTERESTS
2.1	Security Grant	7
ARTICLE III OBLIGATIONS
3.1	Obligations	8
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.1	Validity, Perfection and Priority	8
4.2	No Liens	9
4.3	Chief Executive Office	9
4.4	Jurisdiction of Organization	9
4.5	[INTENTIONALLY OMITTED]	9
4.6	Organization; Qualification	9
4.7	Partnership Power, Binding Obligation	9
4.8	No Violation	9
4.9	No Litigation	10
4.10	Prior Name	10
4.11	Other Security Agreement	10
4.12	No Consents	10
4.13	Farm Products	10
4.14	All Information Accurate	10
4.15	Representations Regarding Contracts Constituting Collateral	10
4.16	Copyrights, Patents and Trademarks	11
ARTICLE V COVENANTS
5.1	Further Assurances	11
5.2	Change of Name, Identity, Partnership Structure or Location	12
5.3	Change of Jurisdiction of Organization	12
5.4	Maintain Records	12
5.5	Payment of Obligations	12
5.6	Negative Pledge	13
5.7	Compliance with Laws	13
5.8	No Impairment; Defense of Collateral	13
5.9	No Transfer of Collateral	13
5.10	Delivery of Instruments and Chattel Paper	13
5.11	Inspections	13
5.12	Insurance	13
5.13	Notices	14
5.14	Fair Labor Standards Act	14
5.15	Covenants Regarding Contracts Constituting Collateral	14
ARTICLE VI OBLIGATIONS OF GRANTOR RELATING TO INTELLECTUAL PROPERTY
6.1	Intellectual Property	15

i

ARTICLE VII POWER OF ATTORNEY
7.1	Power of Attorney	17
7.2	Irrevocable Grant	18
ARTICLE VIII REMEDIES; RIGHTS UPON DEFAULT
8.1	Rights and Remedies Generally	19
8.2	Notice to Obligors and Contract Parties	19
8.3	Proceeds to be Turned Over to Trustee	19
8.4	Obtaining Possession of the Collateral	19
8.5	Disposition of Collateral	20
8.6	Additional Non-UCC Remedies	20
8.7	Certain Sales of Collateral	21
8.8	Certain Remedies in Respect of Intellectual Property	21
8.9	Specific Performance	21
8.10	Recourse	21
8.11	Application of Proceeds	21
8.12	Expenses; Attorneys Fees	21
8.13	Limitation on Duties Regarding Preservation of Collateral	22
ARTICLE IX MISCELLANEOUS
9.1	Indemnity	22
9.2	Governing Law	23
9.3	Consent to Jurisdiction and Service Process	23
9.4	Notices	23
9.5	Grantor Remains Liable	24
9.6	Appointment as Trustee	24
9.7	Trustee May Perform	24
9.8	Authority of Trustee	24
9.9	Successors and Assigns	25
9.10	Amendments in Writing: No Waiver; Cumulative Remedies.	25
9.11	Termination	25
9.12	Release of Collateral	26
9.13	Headings Descriptive	26
9.14	Severability	26
9.15	Other Security	26
9.16	Execution in Counterparts	26
9.17	Obligations Absolute	26
9.18	Limitation on Interest Payable	26
9.19	Indenture Controls	27
9.20	Trust Indenture Act Controls	27
9.21	Notice under ORS 746.201	27
9.22	Intercreditor Agreement. The rights and obligations of the parties hereto are subject to the Intercreditor Agreement.	28

Schedule 2.1(f)	Excluded Equipment
Schedule 4.1	Necessary Filings
Schedule 4.3	Chief Executive Office, Locations of Books and Records and Trade Names
Schedule 4.16(a)	Copyrights and Copyright Licenses
Schedule 4.16(b)	Patents and Patent Licenses
Schedule 4.16(c)	Trademarks and Trademark Licenses
Exhibit A	Form of Security Supplement

ii

SECURITY AGREEMENT

        THIS SECURITY AGREEMENT, dated as of July 15, 2002 (as the same may from time to time be amended, restated, supplemented or otherwise modified, this "Security Agreement"), is made by CF&I Steel, L.P., a Delaware limited partnership, having an office at 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205 ("Grantor," which term includes its successors pursuant to the Indenture referred to below), in favor of U.S. Bank National Association, as trustee for its own benefit and the ratable benefit of the Holders (as hereinafter defined) (in such capacity and together with any successors in such capacity, "Trustee.")

RECITALS:

        WHEREAS, Grantor and Trustee are, contemporaneously with the execution and delivery of this Security Agreement, entering into an indenture dated as of July 15, 2002 among Oregon Steel Mills, Inc., a Delaware corporation ("OSM"), New CF&I, Inc., a Delaware corporation ("New CF&I"), Grantor and Trustee (as the same may from time to time be amended, restated, supplemented or otherwise modified, the "Indenture") pursuant to which OSM is issuing its 10% First Mortgage Notes due 2009 (the "Securities") in the aggregate principal amount of $305,000,000;

        WHEREAS, Grantor is the owner of the Collateral (as hereinafter defined);

        WHEREAS, it is a condition precedent to the purchase of the Securities that Grantor shall have executed and delivered this Security Agreement to Trustee for the ratable benefit of the registered holders from time to time of the Securities (the "Holders"); and

        WHEREAS, this Security Agreement is given by Grantor in favor of Trustee for its benefit and the ratable benefit of the Holders to secure the payment and performance of the Obligations (as hereinafter defined).

        NOW, THEREFORE, in consideration of the foregoing premises and in order to induce Trustee to enter into the Indenture and to induce the Holders to purchase the Securities and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor and Trustee hereby agree for the ratable benefit of the Holders as follows:

ARTICLE I

DEFINITIONS

        1.1    Defined Terms.    All section references herein to the UCC (as hereinafter defined) shall include all successor sections under any subsequent version or amendment to any Article of the UCC. Capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the Indenture.

        "Accession" shall mean "accession" as such term is defined in Article 9 of the UCC.

        "Account Debtor" shall mean "account debtor" as such term is defined in Article 9 of the UCC

        "Account" shall mean "account" as such term is defined in Article 9 of the UCC.

        "Business Day" shall mean any day, other than a Saturday, a Sunday, or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

        "Cash Proceeds" shall have the meaning ascribed thereto in Section 8.3.

        "Chattel Paper" shall mean "chattel paper" as defined in Article 9 of the UCC, including, without limitation, "electronic chattel paper" and "tangible chattel paper," as each term is defined in Article 9 of the UCC.

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        "Collateral" shall have the meaning ascribed thereto in Article II.

        "Collateral Records" shall mean books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

        "Collateral Support" shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

        "Contracts" shall mean any and all contracts and agreements, as such may be amended, restated, supplemented, or otherwise modified from time to time, including without limitation, (a) all rights to receive moneys due and to become due to Grantor thereunder or in connection therewith, (b) all rights to damages arising out of or for breach or default in respect thereof and (c) all rights to perform and exercise all remedies thereunder.

        "Copyrights" shall mean (a) all copyrights in all works, whether published or unpublished, registered or unregistered relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, the copyrights in the works listed on Schedule 4.16(a) (as such schedule may be amended or supplemented from time to time), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office or in any other country, (b) all renewals thereof; and (c) the right to sue for past, present and future infringements of any of the foregoing, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Copyright License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right to reproduce, copy, publish or otherwise use any Copyright relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including without limitation, any of the agreements referred to on Schedule 4.16(a) (as such schedule may be amended or supplemented from time to time).

        "Default Rate" shall have the meaning ascribed to it in Section 5.12.

        "Documents" shall mean "documents" as such term is defined in Article 9 of the UCC.

        "Equipment" shall mean all "equipment" as defined in Article 9 of the UCC, including, without limitation, all machinery, apparatus, equipment, office machinery, furniture, electric arc furnaces, heat treating machinery, rolling mills, pipe mills, rod mills, bar mills, rail mills, pipe coating machinery, furnaces, conveyors, tools, manufacturing equipment, Fixtures and all other equipment of any kind or nature, wherever located, and all modifications, alterations, repairs, substitutions, additions and Accessions thereto and all replacements and all parts therefor, other than Motor Vehicles and Mobile Equipment.

        "Excluded Collateral" shall mean (i) the approximately 67 acres of real property in Camrose, Alberta, on which the Camrose Pipe Mill is located, together with all buildings, improvements and fixtures thereon, and all related leases, rents and other rights, (ii) the real property in Pueblo County, Colorado and Fremont County, Colorado commonly known as the Pueblo Outside the Fence Property, and any contracts of sale or lease for any of the Pueblo Outside the Fence Property, (iii) Motor Vehicles and Mobile Equipment, (iv) the two trailers located on the Pueblo Inside the Fence Property, (v) the condominiums located at 170 S. Del Monte Place, Pueblo, CO 81007-3644 and 769 Cottage Drive, Napa, CA 94558-1247, (vi) the Excluded Assets, (vii) the Excluded Securities, (viii) Intercompany Indebtedness and (ix) any Proceeds or products of any of the foregoing, except to the

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extent that such Proceeds or products are invested in real property or improvements thereon, machinery and Equipment or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k).

        "Fixtures" shall mean all "fixtures" as defined in Article 9 of the UCC.

        "General Intangibles" shall mean all "general intangibles" as defined in Article 9 of the UCC, including, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles (as defined in Article 9 of the UCC), programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise, and all interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations and all Intellectual Property (in each case, regardless of whether characterized as general intangibles under Article 9 of the UCC).

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

        "Grantor" shall have the meaning ascribed thereto in the preamble hereof.

        "Indemnitees" shall have the meaning ascribed thereto in Section 9.1

        "Indenture" shall have the meaning ascribed thereto in the recitals hereof.

        "Insurance" shall mean (regardless of whether Trustee is the loss payee thereof): (i) all insurance polices covering any or all property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k), and (ii) any key man life insurance policies.

        "Instruments" shall mean "instruments" as such term is defined in Article 9 of the UCC.

        "Intellectual Property" shall mean, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets and the Trade Secret Licenses of Grantor, including without limitation, any Intellectual Property listed on the schedules hereto.

        "Inventory" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Licenses" shall mean Copyright Licenses, Patent Licenses, Trademark Licenses and Trade Secret Licenses, collectively.

        "Lien" means any mortgage, charge, pledge, lien (statutory or other), security interest, hypothecation, assignment for security, claim, preference, priority or other encumbrance of any kind, regardless of whether filed, recorded or otherwise perfected under applicable laws, including any conditional sale, capital lease or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

        "Material Adverse Effect" shall mean a material adverse effect on any of (a) the business, operations, property, condition (financial or otherwise) or prospects of OSM and the Guarantors taken as a whole; (b) the validity or enforceability of (i) this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees (ii) the rights or remedies of Trustee (or any other trustee) or the Holders hereunder or thereunder, or (c) the value of the Collateral taken as a whole.

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        "Mobile Equipment" shall mean mobile cranes, loaders, forklifts, trailers, backhoes, towmotors, graders and all other categories of equipment as listed on Schedule 2.1(f).

        "Motor Vehicles" shall mean all cars, trucks, trailers, construction and earth moving equipment and other vehicles and Mobile Equipment covered by a certificate of title law of any state and all tires, Accessions, additions and other appurtenances to, substitutions for and replacements of any of the foregoing; provided that any such substitutions or replacements constitute Motor Vehicles as defined in this sentence.

        "New CF&I" shall have the meaning ascribed thereto in the recitals hereof.

        "Obligations" shall have the meaning ascribed to it in Section 3.1.

        "OSM" shall have the meaning ascribed thereto in the recitals hereof.

        "Patents" shall mean (a) all letters patent of the United States or any other country and all reissues, continuations, continuations-in-part, divisions and extensions, renewals and reexaminations thereof relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time), (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time), and (c) all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit and the right to sue for past, present and future infringements of any of the foregoing.

        "Patent License" shall mean any and all agreements, whether written or oral providing for the grant by or to Grantor of any right to manufacture, use or sell any invention covered by a Patent relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time).

        "Person" shall mean and include natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

        "Proceeds" shall mean: (i) all "proceeds" as defined in Article 9 of the UCC, and (ii) whatever is receivable or received when Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.

        "Receivables" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Record" shall have the meaning specified in Article 9 of the UCC.

        "Related Contracts" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Revolver Collateral" shall mean all rights, title and interest to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of OSM, New CF&I, Grantor or CWR (each, for purposes of this definition, a "grantor") (including under any trade names, styles or derivations thereof), and whether owned or consigned by or to, or leased from or to, such grantor, and regardless of where located:

          (i)  all inventory (as defined in the Article 9 of the UCC) of such grantor, wherever located, including all such inventory sold by such grantor which is returned to or repossessed by such

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grantor, and all Accessions thereto and Documents therefor (any and all such inventory, Accessions and Documents being the "Inventory");

        (ii)  all (A) Accounts of such grantor arising from the sale of Inventory or services rendered by such grantor, (B) Chattel Paper and Instruments evidencing any right to payment for Inventory sold or services rendered by such grantor, and (C) rights of such grantor now or hereafter existing in and to all security agreements and guaranties entered into by or on behalf of the Account Debtors and securing or guaranteeing any such Accounts, Chattel Paper and Instruments (any and all such Accounts, Chattel Paper and Instruments being the "Receivables", and any and all such security agreements and guaranties being the "Related Contracts");

        (iii)  all books, records, writings, databases and other information (A) evidencing, embodying or listing any Inventory, Receivables or Related Contracts or (B) used in connection with the sale of Inventory or the collection of amounts due under Receivables and Related Contracts;

        (iv)  all General Intangibles, such as, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles, programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise (but excluding any Intellectual Property or other General Intangibles relating to production, property, plant and equipment, the operation thereof or the production and manufacturing processes);

        (v)  all investment property (as defined in Article 9 of the UCC), including, without limitation, all stock or other equity interests (whether constituting investment property or not) in material subsidiaries (other than Camrose, Camrose Pipe, Canadian National Steel, Oregon Feralloy and LSI Plate), all securities, whether certificated or uncertificated, security entitlements, securities accounts, bank accounts, deposit accounts, cash collateral accounts, commodity contracts and commodity accounts, excluding the Note Collateral Account (as defined in the Indenture);

        (vi)  all Supporting Obligations relating to the property described in clauses (i) through (v) above, including without limitation, letters of credit and guaranties issued in support of Accounts, and all Instruments evidencing Intercompany Indebtedness;

      (vii)  all other personal property related to any of foregoing Revolver Collateral (except to the extent that such personal property constitutes real property or improvements thereon, machinery and Equipment or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (l)); and

      (viii)  all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Revolver Collateral (including Proceeds which constitute property of the types described in (and not excluded from) clauses (i) through (vii) of this definition), Proceeds deposited from time to time in any lock box or blocked account, and, to the extent not otherwise included, all payments under insurance with respect to any of the foregoing Revolver Collateral (collectively, the "Revolver Collateral Proceeds") (except to the extent that such Revolver Collateral Proceeds are invested in real property or improvements thereon, machinery and Equipment constituting personal property or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k)), or any indemnity, warranty or guarantee, payable by reason of loss or damage to, or otherwise with respect to, any of the foregoing Revolver Collateral.

        "Securities" shall have the meaning ascribed thereto in the recitals hereof.

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        "Security Agreement" shall have the meaning ascribed thereto in the preamble.

        "Supporting Obligations" shall mean all "supporting obligations" as defined in Article 9 of the UCC.

        "TIA" shall mean the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of this Security Agreement.

        "Trademarks" shall mean (a) all registered and unregistered trademarks, trade names, corporate names, business names, fictitious business names, internet domain names, trade styles, service marks, logos, slogans, certification marks, collective marks and other source or business identifiers, designs and general intangibles of a like nature and the goodwill associated therewith, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(c) (as such schedule may be amended or supplemented from time to time), (b) all renewals or extensions thereof, and (c) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Trademark License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right to use any Trademark relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(c) (as such schedule may be amended or supplemented from time to time).

        "Trade Secret" shall mean (a) all trade secrets and all other confidential or proprietary information and know-how now or hereafter owned or used in, or contemplated at any time for use in the business of Grantor relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, and any proprietary technology, process or system which is within the possession of Grantor, including, without limitation, manufacturing processes or methods, all formulae, processes, procedures, compounds, drawings, designs, blue prints, surveys, reports, manuals, and operating standards relating to or used in the operation of Grantor's business, in each case, whether or not reduced to writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to any of the foregoing and (b) the right to sue for past, present and future infringement of any of the foregoing and all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Trade Secret License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right in or to any Trade Secret relating to production, property, plant and equipment, the operation thereof or the manufacturing processes.

        "Trustee" shall have the meaning ascribed thereto in the preamble.

        "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.

        "Work" shall mean any work which is or may be subject to copyright protection pursuant to Title 17 of the U.S. Code.

        1.2    Interpretation.    References to "Articles," "Sections," "Schedules" and "Exhibits" shall be to Articles, Sections, Schedules and Exhibits to this Security Agreement unless otherwise specifically provided herein. References to the words "herein," "hereof," "hereto" and "hereunder" and other words of similar import refer to this Security Agreement as a whole and not to any particular Article,

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Section or other subdivision. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word "include" or "including," when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

ARTICLE II

GRANT OF SECURITY INTERESTS

        2.1    Security Grant.    As security for the prompt and complete payment and performance in full when due (whether at Stated Maturity, upon redemption or required repurchase, by acceleration or otherwise) of all the Obligations, Grantor hereby grants, pledges, assigns and transfers to Trustee, for its individual benefit and the ratable benefit of the Holders, a continuing security interest in and continuing lien on all of the right, title and interest of Grantor in, to and under the following property, in each case, whether now owned or existing or hereafter acquired or arising, and wherever located (all of which being hereinafter collectively called the "Collateral"):

        (a)  all Chattel Paper;

        (b)  the Note Collateral Account and all Trust Moneys, other moneys, securities, certificates, items and other property on deposit therein;

        (c)  all Contracts;

        (d)  all Intellectual Property;

        (e)  all Documents;

        (f)    all Equipment;

        (g)  all Fixtures;

        (h)  all General Intangibles;

        (i)    all Instruments;

        (j)    all Insurance;

        (k)  (i) all other rights to the payment of money, including rents and other sums payable to Grantor under leases, rental agreements and other Chattel Paper and insurance proceeds; (ii) all Collateral Records; (iii) all Collateral Support; (iv) all Supporting Obligations; and (v) all Accessions and additions to, parts and appurtenances of, substitutions for and replacements of any of the foregoing (provided, however, that for the avoidance of doubt, the foregoing clauses (a) through (k) shall not include (A) any property or assets described in (and not excluded from) clauses (i) through (vi) of the definition of "Revolver Collateral" or (B) any Excluded Collateral); and

        (l)    to the extent not otherwise included in the foregoing, all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Collateral (including Proceeds which constitute property of the type described in (and not excluded from) clauses (a) through (k) above and all collateral security and guarantees given by any Person with respect to any of the foregoing, and in any event, including, without limitation, any and all (i) proceeds of any insurance (including, without limitation, all Net Proceeds), indemnity, warranty or guarantee payable to Trustee or to Grantor from time to time with respect to any of the foregoing

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Collateral, (ii) payments (in any form whatsoever and including, without limitation, all Net Awards) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the foregoing Collateral by any Governmental Authority (or any Person acting under color of a Governmental Authority), (iii) products of the foregoing Collateral, and (iv) other amounts from time to time paid or payable under or in connection with any of the foregoing Collateral.

ARTICLE III

OBLIGATIONS

        3.1    Obligations.    This Security Agreement secures, and the Collateral is collateral and security for, the payment and performance in full when due (whether at Stated Maturity, upon redemption or required repurchase, by acceleration or otherwise) of the principal of, premium, if any, and interest on, and any and all other amounts which may at any time be or become payable by Grantor under the Guarantees and any and all other obligations and liabilities of Grantor to Trustee, any other trustee under any Mortgage, and the Holders (including, without limitation, any and all amounts which may at any time be or become due and payable and any and all interest and Liquidated Damages, if any, accruing after the maturity of the Securities and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to Grantor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and interest, to the extent permitted by law, on the unpaid interest), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, premium, interest, Liquidated Damages (if any), fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to Trustee or to the Holders that are required to be paid by Grantor, Trustee, the trustee under any Mortgage or by any Secured Party pursuant to the terms of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other document entered into by Grantor in connection with any of the foregoing) (collectively, the "Obligations").

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

        Grantor hereby represents and warrants to Trustee (for the benefit of Trustee and the ratable benefit of the Holders), which representations and warranties shall survive execution and delivery of this Security Agreement, as follows:

        4.1    Validity, Perfection and Priority.

        (a)  The security interests in the Collateral granted to Trustee (for the benefit of Trustee and the ratable benefit of the Holders) hereunder constitute valid and continuing first priority security interests in the Collateral (except with respect to Permitted Liens);

        (b)  The filings, registrations and recordings described on Schedule 4.1 constitute the only filings, registrations and recordings necessary to perfect the security interests granted by Grantor to Trustee pursuant to this Security Agreement in respect of the Collateral (other than any non-U.S. Patents and other than non-U.S. patents with respect to which Grantor has no present or future, direct or indirect obligation to perfect or assist in the perfection of a security interest therein) to the extent such security interests may be perfected by filing, registration or recording. All such filings, registrations and recordings have been accomplished as of the date hereof (other than

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filings with the United States Patent and Trademark Office and the United States Copyright Office, each of which shall be made as soon as possible after the execution hereof but in any event within thirty (30) days after the date hereof); and

        (c)  Grantor shall not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) relating to the Collateral, except financing statements filed or to be filed (i) under the Indenture or this Security Agreement and (ii) in respect of Permitted Liens.

        4.2    No Liens.

        (a)  Grantor owns and, as to all Collateral whether now existing or hereafter acquired, will continue to own, each item of the Collateral (or in the case of Collateral held by Grantor as lessee under a lease, Grantor has and will have a valid and subsisting leasehold interest in such Collateral) free and clear of any and all Liens, claims or other right, title or interest of all Persons except for Permitted Liens; and

        (b)  No financing statement or other evidence of Lien covering or purporting to cover any of the Collateral is on file in any public office other than (i) financing statements filed in connection with Permitted Liens and (ii) financing statements which have been filed in favor of Trustee pursuant to this Security Agreement.

        4.3    Chief Executive Office.    The chief executive office of Grantor is located as set forth on Schedule 4.3 and Grantor represents and warrants that it (i) has no place of business, (ii) has no offices where Grantor's books of account and records are kept, and (iii) currently uses no business or trade names, except as set forth on Schedule 4.3.

        4.4    Jurisdiction of Organization.    Grantor is a limited partnership organized under the laws of the State of Delaware. Grantor's organizational identification number is 2324228, and Grantor's legal name is "CF&I Steel, L.P."

        4.5[INTENTIONALLY OMITTED].    

        4.6    Organization; Qualification.    Grantor (i) is a duly organized and validly existing limited partnership in good standing under the laws of the State of Delaware, (ii) has the power and authority to own its property and assets and to transact the business in which it is engaged or presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing as a foreign limited partnership in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where any such failure to so qualify would not have, individually or in the aggregate, a Material Adverse Effect.

        4.7    Partnership Power, Binding Obligation.    Grantor has the partnership power and authority to execute, deliver and carry out the terms and provisions of this Security Agreement including, without limitation, the right to grant a security interest in all the Collateral and has taken all necessary action to authorize the execution, delivery and performance by it of this Security Agreement. Grantor has duly executed and delivered this Security Agreement, and this Security Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally or by general equitable principles (whether considered in a proceeding in equity or at law).

        4.8    No Violation.    Neither the execution, delivery or performance by Grantor of this Security Agreement nor compliance by it with the terms and provisions hereof (i) will violate in any material respects any applicable provisions of any law, statute, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority applicable to Grantor, (ii) will conflict or be inconsistent with or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a

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default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien or encumbrance (except pursuant to this Security Agreement) upon any of the property or assets of Grantor pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which Grantor is a party or by which it or any of its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the certificate of limited partnership or limited partnership agreement of Grantor.

        4.9    No Litigation.    There are no actions, suits, arbitrations or other proceedings pending or, to the knowledge of Grantor, threatened with respect to this Security Agreement or the transactions contemplated hereby.

        4.10    Prior Name.    Grantor has not conducted business under any other name other than as indicated on Schedule 4.3 during the last five (5) years.

        4.11    Other Security Agreement.    Grantor has not within the last five (5) years become bound (whether as a result of merger or otherwise) as debtor under a security agreement entered into by another Person, which has not heretofore been terminated, other than security agreements to the extent such security agreements create no Liens other than Permitted Liens.

        4.12    No Consents.    Except for the filings, registrations and recordings contemplated in Section 4.1(b) and as may be required, in connection with the disposition of any investment property (as defined in Article 9 of the UCC), by laws generally affecting the offering and sale of securities, no consent of any Person (including, without limitation, any stockholders or creditors of Grantor) and no consent, authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body or other Person is required either (a) for the grant by Grantor of a security interest in the Collateral pursuant to this Security Agreement, for the perfection of such security interest or for the authorization, execution, delivery or performance of this Security Agreement by Grantor or (b) except as may be provided in the Intercreditor Agreement and any amendment or supplement thereto, for the exercise by Trustee of the rights and remedies provided for in this Security Agreement (whether specifically granted or created hereunder or created or provided for by applicable law) in respect of the Collateral.

        4.13    Farm Products.    None of the Collateral constitutes or will constitute Farm Products (as defined in Article 9 of the UCC), or is or will be the Proceeds of Farm Products.

        4.14    All Information Accurate.    All information supplied by Grantor with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) including, without limitation, the information set forth in the Schedules hereto, is accurate and complete in all material respects.

        4.15    Representations Regarding Contracts Constituting Collateral.

        (a)  Each Contract constituting Collateral is in full force and effect and constitutes a valid and legally enforceable obligation of Grantor and, to the best of Grantor's knowledge, the other parties thereto, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally or by general equitable principles (whether considered in a proceeding in equity or at law) and except where unenforceability of any such Contract constituting Collateral would not have, individually or in the aggregate, a Material Adverse Effect.

        (b)  Neither Grantor nor, to the best of Grantor's knowledge, any other party to any Contract constituting Collateral is in default in the performance or observance of any of the terms thereof.

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        (c)  Grantor has fully performed all of its material obligations under each Contract constituting Collateral.

        (d)  The right, title and interest of Grantor in, to and under each Contract constituting Collateral are not, to the best of Grantor's knowledge, subject to any defense, offset, counterclaim or claim which would materially adversely affect the value of such Contract as Collateral, nor have any of the foregoing been asserted or alleged against Grantor as to any Contract constituting Collateral.

        (e)  No amount payable to Grantor under or in connection with any Contract constituting Collateral is evidenced by any Instrument or Chattel Paper which has not been delivered to Trustee.

        4.16    Copyrights, Patents and Trademarks.

        (a)  Schedule 4.16(a) includes all registrations and pending applications for Copyrights and Copyright Licenses owned by Grantor in its own name on the date hereof;

        (b)  Schedule 4.16(b) includes all issued Patents and pending Patent applications and Patent Licenses owned by Grantor in its own name on the date hereof;

        (c)  Schedule 4.16(c) includes all registrations and pending applications for Trademarks, Trademark Licenses and registered domain names owned by Grantor in its own name on the date hereof;

        (d)  to the best of Grantor's knowledge, each Copyright, Patent and Trademark is on the date hereof valid, subsisting, unexpired, enforceable and has not been abandoned;

        (e)  except as set forth in any of Schedule 4.16(a), Schedule 4.16(b) or Schedule 4.16(c), none of such Copyrights, Patents and Trademarks is on the date hereof the subject of any licensing or franchise agreement;

        (f)    no holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any Copyright, Patent or Trademark in any respect that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and

        (g)  no action or proceeding is pending or, to Grantor's knowledge, threatened on the date hereof (i) seeking to limit, cancel or question the validity of any Copyright, Patent or Trademark, or (ii) which, if adversely determined, would have, individually or in the aggregate, a Material Adverse Effect or a material adverse effect on the value of any Copyright, Patent or Trademark.

ARTICLE V

COVENANTS

        Grantor covenants and agrees that from and after the date of this Security Agreement until this Security Agreement is terminated:

        5.1    Further Assurances.    Grantor shall from time to time at the expense of Grantor, promptly execute, deliver, file or record all further instruments, endorsements and other documents, and take such further action, as Trustee may deem reasonably desirable in obtaining the full benefits of this Security Agreement and of the rights, remedies and powers herein granted, including, without limitation, the following:

        (a)  The filing of any financing statements, in form acceptable to Trustee under the UCC in effect in any jurisdiction, and the filing of a copy of this Security Agreement or a short-form filing with the United States Patent and Trademark Office and/or the United States Copyright Office, with respect to the Liens and security interests granted hereby, except that Grantor shall not be

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obligated, now or in the future, to directly or indirectly file or assist in the filing of any filings with respect to security interests in non-U.S. patents; and furnish to Trustee from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Trustee may request, all in reasonable detail and in form reasonably satisfactory to Trustee. Without limiting the generality of the foregoing, Grantor hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdiction and with any filing offices as Trustee may determine, in its sole discretion, are necessary or advisable to perfect the security interest granted to Trustee in connection herewith. Such financing statements may describe the Collateral in the same manner as described in this Security Agreement or may contain an indication or description of Collateral that describes such property in any other manner as Trustee may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to Trustee in connection herewith, including, without limitation, describing such property as "all assets" or "all personal property," whether now owned or hereafter acquired. A photocopy or other reproduction of this Security Agreement shall be sufficient as a financing statement and may be filed in lieu of the original to the extent permitted by applicable law. Grantor shall pay or reimburse Trustee for all filing fees and related expenses.

        (b)  If Grantor shall obtain any additional Collateral, Grantor shall furnish to Trustee a Security Supplement substantially in the form attached hereto as Exhibit A describing such Collateral.

        5.2    Change of Name, Identity, Partnership Structure or Location.    Grantor shall not change its name, identity, partnership structure or the location of its chief executive office from the addresses set forth on Schedule 4.3, without (i) giving Trustee at least thirty (30) days' prior written notice clearly describing such new name, identity, partnership structure or new location and providing such other information in connection therewith as Trustee may reasonably request, (ii) taking all action satisfactory to Trustee as Trustee may reasonably request to maintain the security interest of Trustee in the Collateral intended to be granted hereby at all times as a fully perfected first priority security interest (subject to Permitted Liens), and (iii) delivering to Trustee an Officers' Certificate as to compliance with this Section 5.2.

        5.3    Change of Jurisdiction of Organization.    Grantor shall not change its jurisdiction of organization until (i) it shall have given to Trustee not less than thirty (30) days' prior written notice of its intention to do so, identifying such new proposed jurisdiction of organization and providing such other information in connection therewith as Trustee may reasonably request, (ii) with respect to such change of jurisdiction of organization, it shall have taken all action as requested by Trustee that Trustee may find necessary or advisable to maintain the continuous validity, perfection and first priority status (subject to Permitted Liens), of the security interest of Trustee in the Collateral intended to be granted and agreed to hereby, and (iii) it shall have delivered to Trustee an Officers' Certificate as to compliance with this Section 5.3.

        5.4    Maintain Records.    Grantor shall keep and maintain at its own cost and expense satisfactory and complete records of the Collateral at the locations for books and records indicated on Schedule 4.3 and shall stamp or otherwise mark such books and records in a manner as may be necessary or as Trustee may reasonably require in order to reflect the security interests granted by this Security Agreement.

        5.5    Payment of Obligations.    Grantor shall pay before delinquency all taxes, assessments and governmental charges or levies imposed upon the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials, supplies and services) against or with respect to the Collateral, except that no such tax, assessment, levy, charge or claim need be paid if (i) the validity thereof is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve, in the sole opinion of Trustee, any material danger for the sale, forfeiture or loss of any of

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the Collateral or any interest therein, (iii) such charge is adequately reserved against on Grantor's books in accordance with generally accepted accounting principles, and (iv) the failure to pay any such charge does not result in the imposition of a Lien against the Collateral other than Permitted Liens.

        5.6    Negative Pledge.    Without the consent of Trustee, Grantor (a) shall not create, incur or permit to exist, (b) shall defend the Collateral against, and (c) shall take such other action as is necessary to remove, in each case, any Lien or claim on or to the Collateral, other than the Permitted Liens.

        5.7    Compliance with Laws.    Grantor shall comply in all material respects with all requirements of law applicable to the Collateral or any part thereof or to the operation of Grantor's business.

        5.8    No Impairment; Defense of Collateral.    Grantor (a) shall not take or permit to be taken any action which could reasonably be expected to impair Trustee's rights hereunder or in the Collateral, including the creation or existence of any Lien upon or with respect to any of the Collateral, except Permitted Liens and (b) shall defend the Collateral against all Persons at any time claiming any interest therein, except the holders of Permitted Liens with respect to such Permitted Liens.

        5.9    No Transfer of Collateral.    Grantor shall not sell, transfer or assign (by operation of law or otherwise) any Collateral without the consent of the Trustee other than as permitted by the Indenture.

        5.10    Delivery of Instruments and Chattel Paper.    If any amount in excess of $150,000 payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be promptly delivered to Trustee, duly endorsed in a manner satisfactory to Trustee, to be held as Collateral pursuant to this Security Agreement; provided that if within any twelve month period Grantor shall receive Instruments or Chattel Paper representing amounts payable, in the aggregate, greater than $250,000, under or in connection with any of the Collateral, then all Instruments or Chattel Paper evidencing any amounts payable under or in connection with any of the Collateral in the possession of Grantor shall be promptly delivered to Trustee, duly endorsed in a manner satisfactory to Trustee, to be held as Collateral pursuant to this Security Agreement.

        5.11    Inspections.    Grantor shall permit representatives of Trustee, upon reasonable notice and at any time during normal business hours, to inspect and make abstracts from its books and records pertaining to the Collateral, and shall permit representatives of Trustee to be present at Grantor's place of business to receive copies of all communications and remittances relating to the Collateral, all in such manner as Trustee may reasonably require.

        5.12    Insurance.    Grantor shall maintain at all times and at its sole expense, with financially sound and reputable insurance companies, insurance policies (i) insuring the Equipment against loss by fire, explosion, theft and such other casualties as from time to time would be insured against by a prudent operator of similar property and (ii) insuring Trustee and the Holders against liability for personal injury and property damage relating to such Equipment, such policies to be in such form and amounts and having such coverage as from time to time would be maintained by a prudent operator of similar property. Each policy or certificate with respect to such insurance shall be endorsed for the benefit of Trustee (including, without limitation, by naming Trustee as an additional named insured or loss payee as its interest may appear) and such policy or certificate shall be retained by Grantor and a copy or copies of such policy or certificate shall be delivered to Trustee annually together with the Officers' Certificate required to be delivered to Trustee within 90 days after the end of each fiscal year of Grantor pursuant to Section 4.06(a) of the Indenture. Each such policy or a certificate issued to Trustee in respect thereof shall state that such policy cannot be cancelled without thirty (30) days' prior written notice to Trustee. At least thirty (30) days prior to the expiration of any such policy of insurance, Grantor shall provide documentation to Trustee that Grantor is negotiating an extension or renewal of such policy and shall at least five (5) Business Days prior to expiration of any such policy of insurance obtain an extension or renewal policy and an insurance certificate evidencing such renewal or

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extension and shall give Trustee written notice thereof. If Grantor shall fail to insure such Collateral in accordance with the provisions hereof or if Grantor shall fail to so endorse or to extend or renew, any such insurance policies or certificates with respect thereto, Trustee shall have the right (but shall be under no obligation), to advance funds to procure, renew or extend such insurance (after providing Grantor with at least five (5) Business Days' notice of its intent to advance such funds) and Grantor agrees to reimburse Trustee for any and all costs and expenses thereof, with interest on all such funds from the date advanced at the rate per annum (the "Default Rate") equal to the rate then payable under the Securities. Within five (5) Business Days after making any such advance, Trustee shall give Grantor written notice of the amount and purpose of such advance; provided, however, that failure to give such notice will not relieve Grantor of its obligations to make such reimbursement to Trustee. Unless an Event of Default under the Indenture shall have occurred and shall be continuing, Grantor may determine whether to file a claim for repair or replacement costs or a claim for actual cash value under the relevant insurance policy. Any proceeds of insurance in respect of the Collateral are hereby assigned to Trustee. In case of any loss or damage to any of the Collateral, all proceeds of insurance maintained by Grantor in respect of the Collateral shall be paid to Trustee as Trust Moneys pursuant to the Indenture and shall be subject to retention and disbursement by Trustee in accordance with the terms of the Indenture. The provisions of this Section 5.12 shall not be deemed to limit Grantor's obligations to maintain insurance (or any related obligations) pursuant to any Mortgage or other Security Document.

        5.13    Notices.    Grantor shall advise Trustee promptly, in reasonable detail, of:

        (a)  any Lien (other than security interests created hereby or Permitted Liens) on any of the Collateral; and

        (b)  the occurrence of any other event which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

        5.14    Fair Labor Standards Act.    Any goods now or hereafter produced by Grantor or any of its subsidiaries included in the Collateral have been and will be produced in compliance with the requirements of the Fair Labor Standards Act, as amended.

        5.15    Covenants Regarding Contracts Constituting Collateral.

        (a)  So long as it is commercially reasonable to do so, Grantor shall perform and comply in all material respects with all of its obligations under the Contracts constituting Collateral, provided, however, that any such non-performance or non-compliance shall not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

        (b)  Grantor shall not amend, modify, terminate or waive any provision of any Contract in any manner which could reasonably be expected to materially adversely affect the value of the Collateral taken as a whole; provided that the Company may replace a Contract (the "Initial Contract") so long as (i) the contract entered into to replace the Initial Contract (the "Replacement Contract") is subject to the security interest created by this Security Agreement and (ii) the Replacement Contract is on no materially less favorable terms to the Company than the Initial Contract.

        (c)  Grantor shall, in its prudent business judgment, exercise promptly and diligently each and every material right which it may have under each Contract; provided Grantor may amend, modify, terminate or waive rights subject to Section 5.15(b) above.

        (d)  Grantor shall deliver to Trustee a copy of each material demand, notice or document received by it relating in any way to any Contract.

        (e)  In any suit, proceeding or action brought by Trustee or any Holder under any Contract, Grantor shall save, indemnify and keep Trustee and such Holder harmless from and against any and all expenses, losses, claims, liabilities and damages, as incurred, suffered by reason of any

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defense, setoff, counterclaim, recoupment or reduction or liability whatsoever of the obligor thereunder, arising out of a breach by Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such obligor or its successors from Grantor.

ARTICLE VI

OBLIGATIONS OF GRANTOR RELATING TO INTELLECTUAL PROPERTY

        6.1    Intellectual Property.

        (a)  If Grantor, either by itself or through any agent, employee, licensee or designee shall file any applications or registrations with respect to any Intellectual Property with the United States Patent and Trademark Office and/or the United States Copyright Office, or any similar office or agency in any other country or any political subdivision thereof, Grantor shall notify Trustee thereof within thirty (30) days of filing such application or registration. Grantor shall execute and deliver to Trustee any document required or reasonably requested by Trustee to acknowledge, confirm, register, record, or perfect Trustee's security interest in any part of the Intellectual Property, whether now owned or hereafter acquired, and Grantor shall deliver an Officers' Certificate as to compliance with this Section 6.1(a); provided that Grantor shall not be obligated to make any present or future, direct or indirect filings of any kind to perfect such security interest in non-U.S. patents.

        (b)  Grantor shall not do any act or omit to do any act whereby any of the Intellectual Property which is material to the business of Grantor may lapse, or become abandoned, dedicated to the public, or unenforceable, or which would adversely affect the validity, grant, or enforceability of the security interest granted herein.

        (c)  With respect to any Trademarks which are material to its business, Grantor (i) shall maintain such Trademarks in full force free from any claim of abandonment or invalidity for non-use, (ii) shall not fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent with the quality of such products and services as of the date hereof, (iii) shall not fail to employ each material Trademark with the appropriate notice of registration, or (iv) shall not fail to do any act or knowingly omit to do any act (or permit a licensee or sublicensee to act or knowingly omit to act) whereby such Trademark may become invalidated. Grantor shall take all steps necessary to insure that licensees and sublicenses of such Trademarks use such consistent standards of quality.

        (d)  Grantor shall notify Trustee promptly if it knows (i) that any application or registration relating to any Intellectual Property which is material to the business of Grantor may become abandoned, dedicated or injected into the public domain, (ii) of any materially adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in any country) regarding Grantor's ownership of any Patent or Trademark material to the business of Grantor or its right to register the same or to keep and maintain the same, and (iii) of any action Grantor is taking in respect of such event.

        (e)  Grantor shall take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the Patents and Trademarks material to the business of Grantor, including, without limitation, the filing of applications for renewal, affidavits of use and affidavits of incontestability and, as to Patents, the payment of maintenance fees, except where the failure to take any such action would not have, individually or in the aggregate, a Material Adverse Effect.

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        (f)    Grantor (either itself or through licensees) (i) shall employ the appropriate notice of copyright for each published Work subject to copyright protection to the extent necessary to protect the Copyright relating to such Work and (ii) shall not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material Copyright may become invalidated, except where the failure to take such action would not have, individually or in the aggregate, a Material Adverse Effect.

        (g)  Grantor shall take all reasonable and necessary steps, as it shall deem appropriate under the circumstances, in accordance with its reasonable business judgment, to maintain and pursue each application (and to obtain the relevant registration) and to maintain to the extent permitted by law each registration of each material Copyright owned by Grantor including, without limitation, filing of applications for renewal, where necessary.

        (h)  If Grantor shall obtain any rights to any new invention (whether or not patentable), Trade Secret, Trademark, Trademark License, Copyright, Copyright License, Patent or Patent License, then, to the extent that any item enumerated in this sentence would constitute Collateral, the provisions of this Security Agreement shall automatically apply thereto and any such item shall automatically constitute Collateral and shall be subject to the assignment, Lien and security interest created hereby without further action by any party. Grantor promptly shall (x) give to Trustee written notice of its acquisition of or entitlement to any of the rights set forth in the immediately preceding sentence and (y) confirm the attachment of the Lien and security interest created hereby to any of such rights by execution of an appropriate instrument delivered to Trustee, including an amendment to Schedules 4.16(a), 4.16(b) and/or 4.16(c) to include any such rights, and shall, if applicable, make such filings, registrations and recordings as are necessary or appropriate to perfect such security interests; provided that Grantor shall not be obligated to make any present or future, direct or indirect filings of any kind to perfect such security interests in any non-U.S. Intellectual Property.

        (i)    In the event that any Intellectual Property owned by or exclusively licensed to Grantor is infringed upon, misappropriated, or diluted by a third party, Grantor shall promptly take all actions as Grantor shall reasonably deem appropriate under the circumstances to protect its rights in such Intellectual Property including, but not limited to, the initiation of a suit for injunctive relief and to recover damages. If such Intellectual Property is of material economic value, Grantor shall promptly notify Trustee after it learns thereof and sue for infringement, misappropriation or dilution, seek injunctive relief where appropriate and seek and recover any and all damages for such infringement, misappropriation or dilution.

        (j)    Anything contained herein to the contrary notwithstanding, Trustee shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the name of Grantor, Trustee or otherwise, in Trustee's reasonable discretion, to enforce any Intellectual Property, in which event Grantor shall, at the request of Trustee, do any and all lawful acts and execute any and all documents required by Trustee in aid of such enforcement and Grantor shall promptly, upon demand, reimburse and indemnify Trustee as provided in Section 9.1 hereof in connection with the exercise of its rights under this Section 6.1, and, to the extent that Trustee shall elect not to bring suit to enforce any Intellectual Property as provided in this Section 6.1, Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property by others and for that purpose agrees to diligently maintain any action, suit or proceeding against any Person so infringing as shall be necessary to prevent such infringement.

        (k)  Grantor hereby grants to Trustee a transferable and sublicensable non-exclusive worldwide license (exercisable without payment of royalty or other compensation by Trustee) to use, operate under, and make, have made, use, import and sell products or services embodying or made in accordance with any Intellectual Property now or hereafter owned, licensed to, or otherwise

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acquired by Grantor ("Grantor Intellectual Property"), and/or to reproduce, perform, display, distribute, and modify Grantor Intellectual Property effective upon the occurrence of an Event of Default. The foregoing license shall be irrevocable and perpetual. If the Obligations are repaid by Grantor in the ordinary course and in any event prior to a bankruptcy or insolvency proceeding involving Grantor and other than through the exercise by Grantor of any of its rights and remedies hereunder, then such license shall terminate and have no further force and effect.

        (l)    Grantor and Trustee may modify this Security Agreement, without the consent of Holders, by amending Schedules 4.16(a), 4.16(b) and/or 4.16(c) to include any future Intellectual Property of Grantor in accordance with Section 6.1(h) or to reflect any disposition of Intellectual Property made in compliance with the provisions of this Security Agreement and the Indenture.

        (m)  Except in the ordinary course of business consistent with prudent business practice, and as may otherwise be permitted by the Indenture, Grantor shall not, without the prior written consent of Trustee, abandon any registration of any Intellectual Property or any right to file an application with respect to Intellectual Property or any pending application with respect to Intellectual Property.

        (n)  Grantor shall not, without the consent of Trustee, license the Intellectual Property or any portion thereof, or amend or permit the amendment of any of the Licenses, in either case, in a manner that adversely affects the right to receive any material amount of payments thereunder, or, except as otherwise permitted under the Indenture, in any manner materially adverse to the interests of Trustee in the Intellectual Property.

        (o)  Subject to Section 6.1(n) but notwithstanding any other provision herein to the contrary, so long as no Event of Default shall have occurred and be continuing, Grantor shall be permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of the business of Grantor.

ARTICLE VII

POWER OF ATTORNEY

        7.1    Power of Attorney.    Grantor hereby irrevocably constitutes and appoints Trustee and any officer of Trustee, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Grantor and in the name of Grantor or in its own name, from time to time after the occurrence and during the continuation of an Event of Default, for the purpose of carrying out the terms of this Security Agreement, to take any and all appropriate action by any technologically available means, which may include, without limitation, any form of electronic data transmission, and to execute in any appropriate manner, which may include, without limitation, using any symbol that Trustee may adopt to signify Grantor's intent to authenticate, any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Security Agreement. Without limiting the generality of the foregoing, Grantor hereby authorizes Trustee:

        (a)  to file a Record or Records, including, without limitation, financing or continuation statements, and amendments thereto, in all jurisdictions and with all filing offices as Trustee may determine, in its reasonable discretion, are necessary or advisable to perfect the security interest granted to Trustee for its benefit and the ratable benefit of the Holders herein; such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as Trustee may determine, in its reasonable discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to Trustee herein; Grantor shall furnish to Trustee from time to time statements and schedules further identifying and describing the

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Collateral and such other reports in connection with the Collateral as Trustee may reasonably request, all in reasonable detail;

        (b)  in the name of Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Contract or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Trustee for the purpose of collecting any and all such moneys due under any Contract or with respect to any other Collateral whenever payable;

        (c)  in the case of any Copyright, Patent or Trademark, execute and deliver any and all agreements, instruments, documents and papers as Trustee may request to evidence Trustee's and the Holders' security interest in such Copyright, Patent or Trademark and the goodwill and General Intangibles of Grantor relating thereto or represented thereby;

        (d)  execute, in connection with any sale provided for in Article VIII, any other sale of Collateral pursuant to this Security Agreement or any license or sublicense granted pursuant to Article VIII, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

        (e)  (i) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to Trustee or as Trustee shall direct; (ii) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (iii) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (iv) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (v) defend any suit, action or proceeding brought against Grantor with respect to any Collateral; (vi) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, to give such discharges or releases as Trustee may deem appropriate; (vii) assign, license or sublicense any Intellectual Property (along with the goodwill of the business to which any such Intellectual Property pertains), throughout the world for such term or terms, on such conditions, and in such manner, as Trustee shall determine; (viii) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Trustee were the absolute owner thereof for all purposes; and (ix) at Trustee's option and Grantor's expense, at any time, or from time to time, do all acts and things which Trustee deems necessary to protect, preserve or realize upon the Collateral and Trustee's and the Holders' security interests therein and to effect the intent of this Security Agreement, all as fully and effectively as Grantor might do; and

        (f)    notwithstanding the foregoing, at any time prior to or after the occurrence of an Event of Default, pay or discharge taxes and Liens (which do not constitute Permitted Liens) levied or placed on or threatened against the Collateral or effect any repairs on the Collateral.

        7.2    Irrevocable Grant.    The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable until this Security Agreement is terminated and the security interests created hereby are released. Grantor hereby ratifies all that such attorneys may lawfully do or cause to be done by virtue and in accordance with the terms hereof.

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ARTICLE VIII

REMEDIES; RIGHTS UPON DEFAULT

        8.1    Rights and Remedies Generally.    If an Event of Default shall occur and be continuing, then and in every such case, Trustee shall have all the rights of a secured party under the UCC (including, without limitation, the right to sell all or any portion of the Collateral in one or more parcels at public or private sale, for cash or credit, or for future delivery and upon such terms as Trustee may determine), shall have all rights now or hereafter existing under all other applicable laws, and, subject to any mandatory requirements of applicable law then in effect, shall have all the rights set forth in this Security Agreement.

        8.2    Notice to Obligors and Contract Parties.    Upon the request of Trustee at any time after the occurrence and during the continuance of an Event of Default, Grantor shall notify parties to the Contracts constituting Collateral and Account Debtors in respect of any General Intangibles, Instruments and Chattel Paper constituting Collateral that such Collateral has been assigned to Trustee for the ratable benefit of the Holders and that payments in respect thereof shall be made directly to Trustee.

        8.3    Proceeds to be Turned Over to Trustee.    All proceeds of any Collateral received by Grantor consisting of cash, checks and other near-cash items (collectively, "Cash Proceeds") shall be held by Grantor in trust for Trustee, segregated from other funds of Grantor, and shall, forthwith upon receipt by Grantor be turned over to Trustee in the exact form received by Grantor (duly endorsed by Grantor to Trustee, if required) and held by Trustee in the Note Collateral Account, which shall be maintained under the sole dominion and control of Trustee. Any Cash Proceeds received by Trustee (whether from Grantor or otherwise): (i) if no Event of Default shall have occurred and be continuing, shall be held by Trustee as collateral security for the Obligations (whether matured or unmatured) unless and until delivered to Grantor as provided in the Indenture, and (ii) if an Event of Default shall occur and be continuing, may, in the sole discretion of Trustee, (A) be held by Trustee as collateral security for the Obligations (whether matured or unmatured) and/or (B) then or at any time thereafter may be applied by Trustee, in accordance with the Indenture, for the payment of any expenses incurred by Trustee in enforcing its rights under this Security Agreement. Notwithstanding the foregoing, this Section 8.3 shall not apply to Cash Proceeds received by Grantor in the ordinary course of business prior to the occurrence and continuance of an Event of Default or to proceeds of any Revolver Collateral. All Proceeds while held by Trustee in the Note Collateral Account (or by Grantor in trust for Trustee and the Holders) shall continue to be held as collateral security for the Obligations and shall not constitute payment thereof until applied as provided in Section 8.11.

        8.4    Obtaining Possession of the Collateral.    If an Event of Default shall occur and be continuing, then and in every such case, Trustee may, but shall not be obligated to, in addition to any other action permitted by law (and not limited in any manner to the remedies contained in the Notes and the Indenture) take one or more of the following actions:

          (i)  personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from Grantor or any other Person who then has possession of any part thereof with or without notice of process of law, and for that purpose may enter upon Grantor's premises where any of the Collateral is located and remove such Collateral and, in connection with such removal, use any and all services, supplies, aids and other facilities of Grantor;

        (ii)  sell, assign or otherwise liquidate, or direct Grantor to sell, assign or otherwise liquidate, any or all investments made in whole or in part with the Collateral or any part thereof, and take possession of the proceeds of any such sale, assignment or liquidation; and

        (iii)  take possession of the Collateral or any part thereof, by directing Grantor in writing to deliver the same to Trustee at any commercially reasonable place or places which Trustee shall reasonably select, in which event Grantor shall at its own expense: (A) forthwith cause the same to

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be moved to the place or places so designated by Trustee and there delivered to Trustee; (B) store and keep any Collateral so delivered to Trustee at such place or places pending further action by Trustee; and (C) while the Collateral shall be so stored and kept, provide such guards and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain them in good condition.

Grantor's obligation to deliver the Collateral is of the essence in this Security Agreement. Upon application to a court of equity having jurisdiction, Trustee shall, to the extent permitted by law, be entitled to a decree requiring specific performance by Grantor of such obligation.

        8.5    Disposition of Collateral.    Trustee will give Grantor reasonable notice of the time and place of any public sale of the Collateral or any part thereof or of the time after which any private sale or any other intended disposition thereof is to be made. Grantor agrees that the requirements of reasonable notice to it shall be met if such notice is delivered (personally, by facsimile transmission or by overnight delivery service) to its address specified in Section 9.4 (or such other address that Grantor may provide to Trustee in writing) at least ten (10) Business Days before the time of any public sale or after which any private sale may be made.

        8.6    Additional Non-UCC Remedies.    Upon the occurrence and during the continuance of an Event of Default, Trustee, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except as provided in Section 9.5 and except for any notice required by law referred to below) to or upon Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are, to the extent permitted by law, hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of Trustee or elsewhere upon such terms and conditions as Trustee may deem advisable and at such prices as Trustee may elect, for cash or on credit or for future delivery without assumption of any credit risk. Trustee or any Holder shall have the right, to the extent permitted by law, upon any such public sale or sales or upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Grantor (including any rights of stay and/or appraisal), which right or equity is, to the extent permitted by law, hereby waived or released. Grantor hereby waives any claims against Trustee arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if Trustee accepts the first offer received and does not offer such Collateral to more than one offeree. Grantor further agrees, at Trustee's request, to assemble the Collateral and make it available to Trustee at places which Trustee shall reasonably select, whether at Grantor's premises or elsewhere. Trustee shall apply the net proceeds of any action taken by it pursuant to this Section 8.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Trustee and the Holders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, as provided in Section 8.11, and only after such application and after the payment by Trustee of any other amount required by any provision of law, need Trustee account for the surplus, if any, to Grantor. Grantor further agrees that a breach of any of the covenants contained in this Article VIII will cause irreparable injury to Trustee, that Trustee has no adequate remedy at law in respect of such breach and, as a consequence, that each and every covenant contained in this Article VIII shall be specifically enforceable against Grantor, and Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Obligations becoming due and payable prior to their stated maturities. Nothing in this Article VIII shall in any way alter the rights of Trustee under this Security Agreement.

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        8.7    Certain Sales of Collateral.    Grantor recognizes that, by reason of certain prohibitions contained in law, rules, regulations or orders of any Governmental Authority, Trustee may be compelled, with respect to any sale of all or any part of the Collateral, to limit purchasers to those who meet the requirements of such Governmental Authority. Grantor acknowledges that any such sales may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any such restricted sale shall not be deemed, solely by virtue thereof, not to have been made in a commercially reasonable manner.

        8.8    Certain Remedies in Respect of Intellectual Property.    If an Event of Default shall occur and shall be continuing, in addition to the other rights and remedies provided for herein or otherwise available to it, Trustee may license or sublicense (whether general, special or otherwise, and whether on an exclusive or non-exclusive basis) all or any portions of the Intellectual Property throughout the world for such term or terms, on such conditions and in such manner as Trustee shall determine. Upon request by Trustee, Grantor shall execute and deliver to Trustee any powers of attorney, in form and substance satisfactory to Trustee, for the implementation of any assignment, license, sublicense, grant of option, sale or other disposition of any Intellectual Property. In the event of any sale, assignment, or other disposition of any of the Intellectual Property, the goodwill connected with and symbolized by the Intellectual Property subject to such disposition shall be included in such sale, assignment or other disposition.

        8.9    Specific Performance.    In addition to any of the other rights and remedies hereunder, Trustee shall have the right to institute a proceeding seeking specific performance in connection with any of the agreements or obligations hereunder.

        8.10    Recourse.    Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to satisfy the Obligations. Grantor shall also be liable for all expenses of Trustee or any Holder incurred in connection with collecting such deficiency, including, without limitation, the fees and disbursements of any attorneys employed by Trustee to collect such deficiency.

        8.11    Application of Proceeds.    The net proceeds received by Trustee in respect of any sale of, collection from or other realization upon all or any part of the Collateral pursuant to the exercise by Trustee of its remedies provided in this Article VIII shall be applied (after deduction of amounts permitted or required pursuant to this Article VIII), together with any other sums then held by Trustee pursuant to this Security Agreement, promptly by Trustee in the manner set forth in the Indenture.

        8.12    Expenses; Attorneys Fees.    Grantor shall upon demand pay to Trustee the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and the reasonable fees and expenses of any experts and agents which Trustee may incur in connection with (i) the collection of the Obligations, (ii) the enforcement and administration of this Security Agreement and any consent, amendment, waiver or other modification to this Security Agreement, (iii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iv) the exercise, protection or enforcement of any of the rights of Trustee or any other secured party hereunder, (v) the failure by Grantor to perform or observe any of the provisions hereof, (vi) the creation and perfection of Liens in favor of the Trustee for the benefit of the Holders, including, without limitation, the filing or recording of financing statements and other documents (including all taxes in connection therewith) in public offices, search fees and the reasonable fees, expenses and disbursements of any counsel providing any opinions in respect of the Collateral or the Liens created pursuant to the Security Documents, (vii) the payment or discharge of any taxes, insurance premiums or encumbrances, (viii) defending or prosecuting any actions or proceedings arising out of or related to the transactions to which this Security Agreement relates, (ix) otherwise protecting, maintaining or preserving the Collateral, or the enforcing, foreclosing, retaking, holding, storing, processing, selling or otherwise realizing upon the Collateral and Trustee's security interest therein, whether through judicial

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proceedings or otherwise, (x) any refinancing or restructuring of the credit arrangements pursuant to the Indenture, including a "work-out," or pursuant to any insolvency or bankruptcy cases or proceedings, and (xi) the failure by Grantor to perform or observe any of the provisions of this Security Agreement. All amounts payable by Grantor under this Section 8.12 shall be due upon demand and shall be part of the Obligations. Grantor's obligations under this Section 8.12 shall survive the termination of this Security Agreement and the discharge of Grantor's other obligations hereunder.

        8.13    Limitation on Duties Regarding Preservation of Collateral.    Trustee's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as Trustee (in its commercial and not in its trust capacity) deals with similar property for its own account.

        (a)  Trustee shall have no obligation to take any steps to preserve rights against prior parties to any Collateral.

        (b)  Neither Trustee nor any Holder, nor any of their respective directors, officers or employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Grantor or otherwise.

        (c)  Trustee shall have no obligation to marshal any of the Collateral.

        (d)  The powers conferred on Trustee and the Holders hereunder are solely to protect Trustee's and the Holders' interests in the Collateral and shall not impose any duty upon Trustee or any Holder to exercise any such powers.

        (e)  Trustee and the Holders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their offices, directors, employees or agents shall be responsible to Grantor for any act or failure to act hereunder, except for their own negligence or willful misconduct.

        (f)    Beyond the duties set forth in this Section 8.13 and the exercise of reasonable care in custody thereof, Trustee shall have no duty as to the collection of any Collateral in its possession or control or in the possession or control of any agent or nominee of Trustee, or any income thereon.

        (g)  Trustee shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially equivalent to that which Trustee, in its individual capacity, accords its own property, it being understood that Trustee shall not have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Collateral, whether or not Trustee or any other Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any Person with respect to any Collateral.

ARTICLE IX

MISCELLANEOUS

        9.1    Indemnity.    Grantor agrees to indemnify, reimburse and hold Trustee, the Holders and their respective officers, directors, partners, members, employees and representatives ("Indemnitees") harmless from any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs or expenses or disbursements (including attorneys' fees and expenses) for whatsoever kind or nature which may be imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Security Agreement, any other Security Agreement, the Indenture, the Notes, the Guarantees, the Intercreditor Agreement, the Registration Rights Agreement or any of the

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transactions contemplated hereby or thereby. The obligations of Grantor under this Section 9.1 shall be secured hereby and shall survive payment and performance or discharge of the Obligations and the termination of this Security Agreement for the two years following such payment and performance or discharge; provided that, if during such two year period any Indemnitee gives notice to Grantor of any potential claim under this Section 9.1, then this Section 9.1 shall survive indefinitely until any such potential claim is resolved in a manner satisfactory to Trustee.

        9.2    Governing Law.    THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

        9.3    Consent to Jurisdiction and Service Process.    ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR WITH RESPECT TO THIS SECURITY AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS SECURITY AGREEMENT GRANTOR, TO THE EXTENT PERMITTED BY LAW, ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS SECURITY AGREEMENT. GRANTOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, WITH AN ADDRESS AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY GRANTOR IRREVOCABLY AGREEING IN WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF IN NEW YORK, NEW YORK, SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY GRANTOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED OR CERTIFIED MAIL TO GRANTOR AT ITS ADDRESS PROVIDED FOR IN SECTION 9.4 EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY GRANTOR REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, GRANTOR HEREBY AGREES THAT SERVICE UPON IT BY DELIVERY SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF TRUSTEE OR ANY HOLDER TO BRING PROCEEDINGS AGAINST GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

        9.4    Notices.    Except as otherwise expressly provided herein, all notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and shall be deemed to have been duly given or made when delivered by hand, or in the case of telecopy notice, when sent by transmittal on a Business Day, or in the case of a nationally recognized overnight courier service, one business day after delivery to such courier service, addressed, in the case of each party hereto, at its address specified below, or to such other address as may be designated by any party in a written notice to the other party hereto.

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        If to Grantor:

CF&I Steel, L.P.
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205
Attention: Chief Financial Officer
Telecopy: (503) 240-5800

        If to the Secured Party:

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Telecopy: (651) 244-0711

        9.5    Grantor Remains Liable.    Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under the Contracts and agreements included in the Collateral to the extent set forth therein to perform all of the duties and obligations thereunder to the same extent as if this Security Agreement had not been executed, (ii) the exercise by Trustee or any holder of any of the rights hereunder shall not release Grantor from any of its duties or obligations under the Contracts and agreements included in the Collateral, and (iii) Trustee shall not have any obligation or liability under the Contracts and agreements included in the Collateral by reason of this Security Agreement, nor shall Trustee be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

        9.6    Appointment as Trustee.    The actions of Trustee hereunder are subject to the provisions of the Indenture. Trustee shall have the right hereunder to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking action (including, without limitation, the release or substitution of Collateral), in accordance with this Security Agreement and the Indenture. Trustee may resign and a successor Trustee may be appointed in the manner provided in the Indenture. Upon the acceptance of any appointment as Trustee by a successor Trustee, that successor Trustee shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Trustee under this Security Agreement, and the retiring Trustee shall thereupon be discharged from its duties and obligations under this Security Agreement. After any retiring Trustee's resignation, the provisions of this Security Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it under this Security Agreement while it was Trustee.

        9.7    Trustee May Perform.    If Grantor shall fail to do any act or thing that it has covenanted to do hereunder or if any warranty on the part of Grantor contained herein shall be breached, Trustee or any Holder may (but shall not be obligated to), after providing Grantor with at least five (5) Business Days' notice, do the same or cause it to be done or remedy any such breach, and may expend funds for such purpose. Any and all amounts so expended by Trustee or such Holder shall be paid by Grantor promptly upon demand therefor, with interest at the Default Rate during the period from and including the date on which such funds were so expended to the date of repayment. Grantor's obligations under this Section 9.7 shall survive the termination of this Security Agreement and the discharge of Grantor's other obligations under this Security Agreement.

        9.8    Authority of Trustee.    Grantor acknowledges that the rights and responsibilities of Grantor under this Security Agreement with respect to any action taken by Trustee or the exercise or non-exercise by Trustee of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Security Agreement shall, as between Trustee and the Holders, be governed by the Indenture and by such other agreements with respect thereto as may exist from time to time among them, but, as between Trustee and Grantor, Trustee shall be conclusively presumed

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to be acting as agent for the Holders with full and valid authority so to act or refrain from acting, and Grantor shall be under no obligation, or entitlement, to make any inquiry respecting such authority.

        9.9    Successors and Assigns.    This Security Agreement shall create a continuing security interest in the Collateral and shall be binding upon and inure to the benefit of Grantor, Trustee, the Holders, all future holders of the Obligations and their respective successors and permitted assigns, except that Grantor may not assign or transfer any of its rights or obligations under this Security Agreement without the prior written consent of Trustee. Trustee may assign its rights under this Security Agreement to one or more permitted assignees. Upon any such assignment, the assignee shall succeed to all of Trustee's rights and powers hereunder. No other persons (including, without limitation, any other creditors of Grantor) other than a permitted assignee of Trustee shall have any interest herein or any right or benefit with respect hereto.

        9.10    Amendments in Writing: No Waiver; Cumulative Remedies.

        (a)  Subject to the provisions of Article Nine of the Indenture, none of the terms or provisions of this Security Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Grantor and Trustee, provided that any provision of this Security Agreement imposing obligations on Grantor may be waived by Trustee in a written instrument executed solely by Trustee.

        (b)  In the event Trustee shall have instituted any proceeding to enforce any right, power or remedy under this Security Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to Trustee, then and in every such case, Grantor, Trustee and each Holder, except as may be otherwise determined in such proceeding, shall be restored to their respective former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Trustee and the Holders, except as may be otherwise determined in such proceeding, shall continue as if no such proceeding had been instituted.

        (c)  No failure or delay on the part of Trustee in exercising any right, power or privilege hereunder and no course of dealing between Grantor and Trustee shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Trustee of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Trustee would otherwise have on any future occasion. The rights and remedies herein expressly provided are cumulative and may be exercised singly or concurrently and as often and in such order as Trustee deems expedient and are not exclusive of any rights or remedies which Trustee would otherwise have whether by agreement or now or hereafter existing under applicable law. No notice to or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Trustee to any other or future action in any circumstances without notice or demand.

        9.11    Termination.    When the Obligations (other than any obligations arising under the proviso to Section 9.1) have been indefeasibly paid and performed in full, this Security Agreement shall terminate, and Trustee, at the request and sole expense of Grantor, shall execute and deliver to Grantor the proper instruments (including UCC termination statements) acknowledging the termination of this Security Agreement, and shall duly assign, transfer and deliver to Grantor, without recourse, representation or warranty of any kind whatsoever, such of the Collateral as may be in possession of Trustee and has not theretofore been disposed of, applied or released, including the release and cancellation of all licenses and rights referred to in Section 6.1(l); provided, however, that any licenses of sublicenses granted by Trustee pursuant to Section 8.8 shall continue to be in full force and effect in accordance with their terms.

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        9.12    Release of Collateral.    Reference is hereby made to Article Eleven of the Indenture for provisions which discuss the release of the Collateral from the Liens created by this Security Agreement.

        9.13    Headings Descriptive.    The headings of the several Articles, Sections and subsections of this Security Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Security Agreement.

        9.14    Severability.    In case any provision in or obligation under this Security Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions hereof, or of such provision in any other jurisdiction, shall not in any way be affected or impaired thereby.

        9.15    Other Security.    To the extent that the Obligations are now or hereafter secured by property other than the Collateral or are now or hereafter secured by the guarantee, endorsement or property of any other Person, then Trustee shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of Trustee's or any Holder's rights and remedies hereunder.

        9.16    Execution in Counterparts.    This Security Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute one and the same agreement.

        9.17    Obligations Absolute.    All obligations of Grantor hereunder shall be absolute and unconditional irrespective of:

        (a)  any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of Grantor;

        (b)  any lack of validity or enforceability of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing;

        (c)  any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing (except to the extent specified in such change, amendment or waiver);

        (d)  any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to any departure from any guarantee, for all or any of the Obligations;

        (e)  any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing, except as specifically set forth in a waiver granted pursuant to the provisions of the Indenture; or

        (f)    any other circumstance which might otherwise constitute a defense available to, or a discharge of, a guarantor or a surety other than irrevocable payment in full of the Obligations.

        9.18    Limitation on Interest Payable.    It is the intention of the parties to conform strictly to the usury laws, whether state or federal, that are applicable to the transaction of which this Security

26

Agreement is a part. All agreements between Grantor and Trustee, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid by Grantor for the use, forbearance or detention of the money to be loaned or advanced under this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing, or for the payment or performance of any covenant or obligation contained herein or therein, exceed the maximum amount permissible under applicable federal or state usury laws. If under any circumstances whatsoever fulfillment of any such provision, at the time performance of such provision shall be due, shall involve exceeding the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity. If under any circumstances Grantor shall have paid an amount deemed interest by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the principal amount owing in respect of the Obligations and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and any other amounts due hereunder, the excess shall be refunded to Grantor. All sums paid or agreed to be paid for the use, forbearance or detention of the principal under any extension of credit or advancement of funds by Trustee or any Holder, shall, to the extent permitted by applicable law, and to the extent necessary to preclude exceeding the limit of validity prescribed by law, be amortized, prorated, allocated and spread from the date of this Security Agreement until payment in full of the Obligations so that the actual rate of interest on account of such principal amounts is uniform throughout the term hereof.

        9.19    Indenture Controls.    All terms, covenants, conditions, provisions and requirements of the Indenture are incorporated by reference in this Security Agreement. In the event of any conflict or inconsistency between the provisions of this Security Agreement and those of the Indenture, including any conflicts or inconsistencies in any definitions herein or therein, except to the extent that new definitions are set forth herein for such terms, the provisions or definitions of the Indenture shall govern.

        9.20    Trust Indenture Act Controls.    If any provision of this Security Agreement limits, qualifies or conflicts with the duties imposed by the TIA, the duties imposed by the TIA shall control.

        9.21    Notice under ORS 746.201.    In compliance with ORS 746.201, this Security Agreement contains the following warning, which Grantor acknowledges:

WARNING

UNLESS YOU (CF&I STEEL, L.P.) PROVIDE US (BENEFICIARY) WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR LOAN AGREEMENT, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE OBTAINED PROPERTY COVERAGE ELSEWHERE.

YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF THIS INSURANCE MAY BE ADDED TO YOUR CONTRACT OR LOAN BALANCE. IF THE COST IS ADDED TO YOUR CONTRACT OR LOAN BALANCE, THE INTEREST RATE ON THE UNDERLYING CONTRACT OR LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE YOUR PRIOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE.

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THE COVERAGE WE PROVIDE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.

        9.22    Intercreditor Agreement.    The rights and obligations of the parties hereto are subject to the Intercreditor Agreement.

[signature page follows]

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        IN WITNESS WHEREOF, Grantor and Trustee have caused this Security Agreement to be duly executed and delivered as of the date first above written.

CF&I STEEL, L.P. As Grantor
By:	Its General Partner
	NEW CF&I, INC.
	By:	Name: Title:
U.S. BANK NATIONAL ASSOCIATION As Trustee
By:	Name: Title:

SCHEDULE 2.1(f)

EXCLUDED EQUIPMENT

Passenger trucks
Cars
Sport utility vehicles
Forklifts
Pickup trucks
Dump trucks
Railroad trackmobile
Mobile grader
Front end loaders
Semi trucks
Maintenance trucks
Manlifts
Field tractors
Trailers for semi trucks
Electric 300 hp railroad switch engine
Scrap gondola railcars
Backhoes
Gradalls
Crawler cranes
Bobcat loaders
Pipe handlers
New coil rod loaders
Pettibone carry-lifts
Pettibone loader carriages
Forklift trucks
Coil handlers
Cranes
Loaders
Scrap loaders
Crawler loaders
Power sweepers
Mobile floor sweepers
Crane mobile trucks
Lowboy trailers
Truck mounted cranes
Fuel trucks
Portable air compressors
Bucket trucks
Flatbed trucks
Fire trucks
Floor machine tennant industrial
Lugger trucks
Water trucks
Rear dump trucks
Rock trucks
Hydraulic platform transporters
Straddle carriers
Graders
Draglines
Tractors
All terrain vehicles
Vans
Van ambulance

SCHEDULE 4.1

NECESSARY FILINGS

        1.    UCC Financing Statement listing CF&I Steel, L.P. as debtor and U.S. Bank National Association, as Trustee as secured party to be filed with the Delaware Secretary of State.

        2.    A fully executed original of this Security Agreement to be filed with the U.S. Patent and Trademark Office.

SCHEDULE 4.3

CHIEF EXECUTIVE OFFICE, LOCATIONS OF BOOKS AND RECORDS AND TRADE NAMES

1.

Chief Executive Office

1612 E. Abriendo
Pueblo, Colorado 81004

2.

Other Places Of Business And Locations Where Books Of Accounts And Records Are Kept

1000 SW Broadway, Suite 2200
Portland, OR 97205

3.

Business or Trade Names

RMSM
Rocky Mountain Steel Mills
Rocky Mountain Steel Mills Division

SCHEDULE 4.16(a)

COPYRIGHTS AND COPYRIGHT LICENSES

None.

SCHEDULE 4.16(b)

PATENTS AND PATENT LICENSES

Owner	File	Patent	Country	Registration No.	Date
CF&I Steel, L.P.	LP E-0011	Long Rail, Free of Weld Seams	U.S.	5,018,666 Appl No. 444,789	5/28/91
CF&I Steel, L.P.	LP E-0012	Continuous Rail Production	U.S.	5,195,573 Appl. No. 568,552	3/23/93
CF&I Steel, L.P.	LP E-0063	Continuous Rail Production	Mexico	167667 (term to 7/3/2010)	7/3/90
CF&I Steel, L.P.	LP E-0136	RR Rail & Method and System of Rolling the Same by Conventional or Continuous Rolling Process	U.S.	5,472,041 Appl. No. 08/080,431	12/5/95
CF&I Steel, L.P.	LP E-0137	Continuous Rail Production	U.S.	5,419,387 Appl. No. 07/568,491	5/30/95
CF&I Steel, L.P.	LP E-0138	Continuous Rail Production	Poland	164678 (term to 11/28/10)	11/28/90
CF&I Steel, L.P.	LP E-0146	Continuous Rail Production from "Rounds"	U.S.	5,507,081	4/16/96
CF&I Steel, L.P.		Wheel-type Transmit/Receive Ultrasonic Inspection Device with Constant Length Internal Soundpath	U.S.	Appl. No. 09/661,599	9/14/00
CF&I Steel, L.P.		High Impact and Wear Resistant Steel	U.S.	No receipt	4/10/02

SCHEDULE 4.16(c)

TRADEMARKS AND TRADEMARK LICENSES

Owner	Mark	Registration	Registration (R)/Filing(F) Date
CF&I Steel, L.P.	CF&I (design)	578,615	8/11/53 (R	)
CF&I Steel, L.P.	Silvertip	1,649,263	7/2/91 (R	)
CF&I Steel, L.P.	RMSM	2,327,962	3/14/00 (R	)
CF&I Steel, L.P.	Rocky Mountain Steel Mills	2,304,960	12/28/99 (R	)

Domain Names

Owner	Domain Name
CF&I Steel, L.P.	rmsm.com

EXHIBIT A

FORM OF SECURITY SUPPLEMENT

        This SECURITY SUPPLEMENT, dated [            ] , is delivered pursuant to the Security Agreement, dated as of July [            ], 2002 (as the same may be from time to time amended, restated, supplemented or otherwise modified, the "Security Agreement"), among CF&I Steel, L.P., as Grantor, and U.S. Bank National Association, as Trustee. Capitalized terms used herein not otherwise defined herein shall have the meanings ascribed thereto in the Security Agreement.

        Grantor hereby confirms the grant to Trustee set forth in the Security Agreement of, and does hereby grant to Trustee, a security interest in all of Grantor's right, title and interest in and to all Collateral to secure the Obligations, in each case whether now or hereafter existing or in which Grantor now has or hereafter acquires an interest and wherever the same may be located. Grantor represents and warrants that the attached Supplements to Schedules accurately and completely set forth all additional information required pursuant to the Security Agreement and hereby agrees that such Supplements to Schedules shall constitute part of the Schedules to the Security Agreement.

IN WITNESS WHEREOF, Grantor has caused this Security Supplement to be duly executed and delivered by its duly authorized officer as of [            ].

CF&I STEEL L.P.
By:	Name: Title:

[Attach Supplements to Schedules]

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EXHIBIT 4.4

EX-4.5

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Exhibit 4.5

Execution Copy

SECURITY AGREEMENT

dated as of July 15, 2002

By

NEW CF&I, INC.

as Grantor

and

U.S. BANK NATIONAL ASSOCIATION

as Trustee

New CF&I Securitiy Agreement

Table of Contents

Description		Page No(s)
RECITALS:
ARTICLE I DEFINITIONS
1.1	Defined Terms	1
1.2	Interpretation	6
ARTICLE II GRANT OF SECURITY INTERESTS
2.1	Security Grant	7
ARTICLE III OBLIGATIONS
3.1	Obligations	8
ARTICLE IV REPRESENTATIONS AND WARRANTIES
4.1	Validity, Perfection and Priority	8
4.2	No Liens	9
4.3	Chief Executive Office	9
4.4	Jurisdiction of Organization	9
4.5	[INTENTIONALLY OMITTED]	9
4.6	Organization; Qualification	9
4.7	Corporate Power, Binding Obligation	9
4.8	No Violation	9
4.9	No Litigation	10
4.10	Prior Name	10
4.11	Other Security Agreement	10
4.12	No Consents	10
4.13	Farm Products	10
4.14	All Information Accurate	10
4.15	Representations Regarding Contracts Constituting Collateral	10
4.16	Copyrights, Patents and Trademarks	11
ARTICLE V COVENANTS
5.1	Further Assurances	11
5.2	Change of Name, Identity, Corporate Structure or Location	12
5.3	Change of Jurisdiction of Organization	12
5.4	Maintain Records	12
5.5	Payment of Obligations	12
5.6	Negative Pledge	13
5.7	Compliance with Laws	13
5.8	No Impairment; Defense of Collateral	13
5.9	No Transfer of Collateral	13
5.10	Delivery of Instruments and Chattel Paper	13
5.11	Inspections	13
5.12	Insurance	13
5.13	Notices	14
5.14	Fair Labor Standards Act	14
5.15	Covenants Regarding Contracts Constituting Collateral	14

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ARTICLE VI OBLIGATIONS OF GRANTOR RELATING TO INTELLECTUAL PROPERTY
6.1	Intellectual Property	15
ARTICLE VII POWER OF ATTORNEY
7.1	Power of Attorney	17
7.2	Irrevocable Grant	18
ARTICLE VIII REMEDIES; RIGHTS UPON DEFAULT
8.1	Rights and Remedies Generally	19
8.2	Notice to Obligors and Contract Parties	19
8.3	Proceeds to be Turned Over to Trustee	19
8.4	Obtaining Possession of the Collateral	19
8.5	Disposition of Collateral	20
8.6	Additional Non-UCC Remedies	20
8.7	Certain Sales of Collateral	21
8.8	Certain Remedies in Respect of Intellectual Property	21
8.9	Specific Performance	21
8.10	Recourse	21
8.11	Application of Proceeds	21
8.12	Expenses; Attorneys Fees	21
8.13	Limitation on Duties Regarding Preservation of Collateral	22
ARTICLE IX MISCELLANEOUS
9.1	Indemnity	23
9.2	Governing Law	23
9.3	Consent to Jurisdiction and Service Process	23
9.4	Notices	24
9.5	Grantor Remains Liable	24
9.6	Appointment as Trustee	24
9.7	Trustee May Perform	24
9.8	Authority of Trustee	25
9.9	Successors and Assigns	25
9.10	Amendments in Writing: No Waiver; Cumulative Remedies	25
9.11	Termination	26
9.12	Release of Collateral	26
9.13	Headings Descriptive	26
9.14	Severability	26
9.15	Other Security	26
9.16	Execution in Counterparts	26
9.17	Obligations Absolute	26
9.18	Limitation on Interest Payable	27
9.19	Indenture Controls	27
9.20	Trust Indenture Act Controls	27
9.21	Notice under ORS 746.201	27
9.22	Intercreditor Agreement. The rights and obligations of the parties hereto are subject to the Intercreditor Agreement.	28

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Schedule 2.1(f)	Excluded Equipment
Schedule 4.1	Necessary Filings
Schedule 4.3	Chief Executive Office, Locations of Books and Records and Trade Names
Schedule 4.16(a)	Copyrights and Copyright Licenses
Schedule 4.16(b)	Patents and Patent Licenses
Schedule 4.16(c)	Trademarks and Trademark Licenses
Exhibit A	Form of Security Supplement

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SECURITY AGREEMENT

        THIS SECURITY AGREEMENT, dated as of July 15, 2002 (as the same may from time to time be amended, restated, supplemented or otherwise modified, this "Security Agreement"), is made by New CF&I, Inc., a Delaware corporation, having an office at 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205 ("Grantor," which term includes its successors pursuant to the Indenture referred to below), in favor of U.S. Bank National Association, as trustee for its own benefit and the ratable benefit of the Holders (as hereinafter defined) (in such capacity and together with any successors in such capacity, "Trustee.")

RECITALS:

        WHEREAS, Grantor and Trustee are, contemporaneously with the execution and delivery of this Security Agreement, entering into an indenture dated as of July 15, 2002 among Oregon Steel Mills, Inc., a Delaware corporation ("OSM"), Grantor, CF&I Steel, L.P., a Delaware limited partnership ("CF&I") and Trustee (as the same may from time to time be amended, restated, supplemented or otherwise modified, the "Indenture") pursuant to which OSM is issuing its 10% First Mortgage Notes due 2009 (the "Securities") in the aggregate principal amount of $305,000,000;

        WHEREAS, Grantor is the owner of the Collateral (as hereinafter defined);

        WHEREAS, it is a condition precedent to the purchase of the Securities that Grantor shall have executed and delivered this Security Agreement to Trustee for the ratable benefit of the registered holders from time to time of the Securities (the "Holders"); and

        WHEREAS, this Security Agreement is given by Grantor in favor of Trustee for its benefit and the ratable benefit of the Holders to secure the payment and performance of the Obligations (as hereinafter defined).

        NOW, THEREFORE, in consideration of the foregoing premises and in order to induce Trustee to enter into the Indenture and to induce the Holders to purchase the Securities and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor and Trustee hereby agree for the ratable benefit of the Holders as follows:

ARTICLE I

DEFINITIONS

        1.1    Defined Terms.    All section references herein to the UCC (as hereinafter defined) shall include all successor sections under any subsequent version or amendment to any Article of the UCC. Capitalized terms used herein but not otherwise defined shall have the meanings assigned to such terms in the Indenture.

        "Accession" shall mean "accession" as such term is defined in Article 9 of the UCC.

        "Account Debtor" shall mean "account debtor" as such term is defined in Article 9 of the UCC

        "Account" shall mean "account" as such term is defined in Article 9 of the UCC.

        "Business Day" shall mean any day, other than a Saturday, a Sunday, or a day on which banking institutions in the City of New York or at a place of payment are authorized by law, regulation or executive order to remain closed.

        "Cash Proceeds" shall have the meaning ascribed thereto in Section 8.3.

        "Chattel Paper" shall mean "chattel paper" as defined in Article 9 of the UCC, including, without limitation, "electronic chattel paper" and "tangible chattel paper," as each term is defined in Article 9 of the UCC.

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        "CF&I" shall have the meaning ascribed thereto in the recitals hereof.

        "Collateral" shall have the meaning ascribed thereto in Article II.

        "Collateral Records" shall mean books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or contain information relating to any of the Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon.

        "Collateral Support" shall mean all property (real or personal) assigned, hypothecated or otherwise securing any Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property.

        "Contracts" shall mean any and all contracts and agreements, as such may be amended, restated, supplemented, or otherwise modified from time to time, including without limitation, (a) all rights to receive moneys due and to become due to Grantor thereunder or in connection therewith, (b) all rights to damages arising out of or for breach or default in respect thereof and (c) all rights to perform and exercise all remedies thereunder.

        "Copyrights" shall mean (a) all copyrights in all works, whether published or unpublished, registered or unregistered relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, the copyrights in the works listed on Schedule 4.16(a) (as such schedule may be amended or supplemented from time to time), all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office or in any other country, (b) all renewals thereof; and (c) the right to sue for past, present and future infringements of any of the foregoing, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Copyright License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right to reproduce, copy, publish or otherwise use any Copyright relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including without limitation, any of the agreements referred to on Schedule 4.16(a) (as such schedule may be amended or supplemented from time to time).

        "Default Rate" shall have the meaning ascribed to it in Section 5.12.

        "Documents" shall mean "documents" as such term is defined in Article 9 of the UCC.

        "Equipment" shall mean all "equipment" as defined in Article 9 of the UCC, including, without limitation, all machinery, apparatus, equipment, office machinery, furniture, electric arc furnaces, heat treating machinery, rolling mills, pipe mills, rod mills, bar mills, rail mills, pipe coating machinery, furnaces, conveyors, tools, manufacturing equipment, Fixtures and all other equipment of any kind or nature, wherever located, and all modifications, alterations, repairs, substitutions, additions and Accessions thereto and all replacements and all parts therefor, other than Motor Vehicles and Mobile Equipment.

        "Excluded Collateral" shall mean (i) the approximately 67 acres of real property in Camrose, Alberta, on which the Camrose Pipe Mill is located, together with all buildings, improvements and fixtures thereon, and all related leases, rents and other rights, (ii) the real property in Pueblo County, Colorado and Fremont County, Colorado commonly known as the Pueblo Outside the Fence Property, and any contracts of sale or lease for any of the Pueblo Outside the Fence Property, (iii) Motor Vehicles and Mobile Equipment, (iv) the two trailers located on the Pueblo Inside the Fence Property, (v) the condominiums located at 170 S. Del Monte Place, Pueblo, CO 81007-3644 and 769 Cottage Drive, Napa, CA 94558-1247, (vi) the Excluded Assets, (vii) the Excluded Securities,

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(viii) Intercompany Indebtedness and (ix) any Proceeds or products of any of the foregoing, except to the extent that such Proceeds or products are invested in real property or improvements thereon, machinery and Equipment or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k).

        "Fixtures" shall mean all "fixtures" as defined in Article 9 of the UCC.

        "General Intangibles" shall mean all "general intangibles" as defined in Article 9 of the UCC, including, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles (as defined in Article 9 of the UCC), programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise, and all interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations and all Intellectual Property (in each case, regardless of whether characterized as general intangibles under Article 9 of the UCC).

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

        "Grantor" shall have the meaning ascribed thereto in the preamble hereof.

        "Indemnitees" shall have the meaning ascribed thereto in Section 9.1

        "Indenture" shall have the meaning ascribed thereto in the recitals hereof.

        "Insurance" shall mean (regardless of whether Trustee is the loss payee thereof): (i) all insurance polices covering any or all property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k), and (ii) any key man life insurance policies.

        "Instruments" shall mean "instruments" as such term is defined in Article 9 of the UCC.

        "Intellectual Property" shall mean, collectively, the Copyrights, the Copyright Licenses, the Patents, the Patent Licenses, the Trademarks, the Trademark Licenses, the Trade Secrets and the Trade Secret Licenses of Grantor, including without limitation, any Intellectual Property listed on the schedules hereto.

        "Inventory" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Licenses" shall mean Copyright Licenses, Patent Licenses, Trademark Licenses and Trade Secret Licenses, collectively.

        "Lien" means any mortgage, charge, pledge, lien (statutory or other), security interest, hypothecation, assignment for security, claim, preference, priority or other encumbrance of any kind, regardless of whether filed, recorded or otherwise perfected under applicable laws, including any conditional sale, capital lease or other title retention agreement, any lease in the nature thereof, any option or other agreement to sell or give a security interest in and any filing of or agreement to give any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction.

        "Material Adverse Effect" shall mean a material adverse effect on any of (a) the business, operations, property, condition (financial or otherwise) or prospects of OSM and the Guarantors taken as a whole; (b) the validity or enforceability of (i) this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement

3

or the Guarantees (ii) the rights or remedies of Trustee (or any other trustee) or the Holders hereunder or thereunder, or (c) the value of the Collateral taken as a whole.

        "Mobile Equipment" shall mean mobile cranes, loaders, forklifts, trailers, backhoes, towmotors, graders and all other categories of equipment as listed on Schedule 2.1(f).

        "Motor Vehicles" shall mean all cars, trucks, trailers, construction and earth moving equipment and other vehicles and Mobile Equipment covered by a certificate of title law of any state and all tires, Accessions, additions and other appurtenances to, substitutions for and replacements of any of the foregoing; provided that any such substitutions or replacements constitute Motor Vehicles as defined in this sentence.

        "Obligations" shall have the meaning ascribed to it in Section 3.1.

        "OSM" shall have the meaning ascribed thereto in the recitals hereof.

        "Patents" shall mean (a) all letters patent of the United States or any other country and all reissues, continuations, continuations-in-part, divisions and extensions, renewals and reexaminations thereof relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time), (b) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time), and (c) all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit and the right to sue for past, present and future infringements of any of the foregoing.

        "Patent License" shall mean any and all agreements, whether written or oral providing for the grant by or to Grantor of any right to manufacture, use or sell any invention covered by a Patent relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(b) (as such schedule may be amended or supplemented from time to time).

        "Person" shall mean and include natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, joint ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Governmental Authorities.

        "Proceeds" shall mean: (i) all "proceeds" as defined in Article 9 of the UCC, and (ii) whatever is receivable or received when Collateral or proceeds are sold, exchanged, collected or otherwise disposed of, whether such disposition is voluntary or involuntary.

        "Receivables" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Record" shall have the meaning specified in Article 9 of the UCC.

        "Related Contracts" shall have the meaning ascribed thereto in the definition of "Revolver Collateral."

        "Revolver Collateral" shall mean all rights, title and interest to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of OSM, CF&I, Grantor or CWR (each, for purposes of this definition, a "grantor") (including under any trade names, styles or derivations thereof), and whether owned or consigned by or to, or leased from or to, such grantor, and regardless of where located:

          (i)  all inventory (as defined in the Article 9 of the UCC) of such grantor, wherever located, including all such inventory sold by such grantor which is returned to or repossessed by such

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grantor, and all Accessions thereto and Documents therefor (any and all such inventory, Accessions and Documents being the "Inventory");

        (ii)  all (A) Accounts of such grantor arising from the sale of Inventory or services rendered by such grantor, (B) Chattel Paper and Instruments evidencing any right to payment for Inventory sold or services rendered by such grantor, and (C) rights of such grantor now or hereafter existing in and to all security agreements and guaranties entered into by or on behalf of the Account Debtors and securing or guaranteeing any such Accounts, Chattel Paper and Instruments (any and all such Accounts, Chattel Paper and Instruments being the "Receivables", and any and all such security agreements and guaranties being the "Related Contracts");

        (iii)  all books, records, writings, databases and other information (A) evidencing, embodying or listing any Inventory, Receivables or Related Contracts or (B) used in connection with the sale of Inventory or the collection of amounts due under Receivables and Related Contracts;

        (iv)  all General Intangibles, such as, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles, programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise (but excluding any Intellectual Property or other General Intangibles relating to production, property, plant and equipment, the operation thereof or the production and manufacturing processes);

        (v)  all investment property (as defined in Article 9 of the UCC), including, without limitation, all stock or other equity interests (whether constituting investment property or not) in material subsidiaries (other than Camrose, Camrose Pipe, Canadian National Steel, Oregon Feralloy and LSI Plate), all securities, whether certificated or uncertificated, security entitlements, securities accounts, bank accounts, deposit accounts, cash collateral accounts, commodity contracts and commodity accounts, excluding the Note Collateral Account (as defined in the Indenture);

        (vi)  all Supporting Obligations relating to the property described in clauses (i) through (v) above, including without limitation, letters of credit and guaranties issued in support of Accounts, and all Instruments evidencing Intercompany Indebtedness;

      (vii)  all other personal property related to any of foregoing Revolver Collateral (except to the extent that such personal property constitutes real property or improvements thereon, machinery and Equipment or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (l)); and

      (viii)  all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Revolver Collateral (including Proceeds which constitute property of the types described in (and not excluded from) clauses (i) through (vii) of this definition), Proceeds deposited from time to time in any lock box or blocked account, and, to the extent not otherwise included, all payments under insurance with respect to any of the foregoing Revolver Collateral (collectively, the "Revolver Collateral Proceeds") (except to the extent that such Revolver Collateral Proceeds are invested in real property or improvements thereon, machinery and Equipment constituting personal property or other property and assets of the types described in (and not excluded from) Sections 2.1(a) through (k)), or any indemnity, warranty or guarantee, payable by reason of loss or damage to, or otherwise with respect to, any of the foregoing Revolver Collateral.

        "Securities" shall have the meaning ascribed thereto in the recitals hereof.

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        "Security Agreement" shall have the meaning ascribed thereto in the preamble.

        "Supporting Obligations" shall mean all "supporting obligations" as defined in Article 9 of the UCC.

        "TIA" shall mean the Trust Indenture Act of 1939 (15 U.S. Code §§ 77aaa-77bbbb) as in effect on the date of this Security Agreement.

        "Trademarks" shall mean (a) all registered and unregistered trademarks, trade names, corporate names, business names, fictitious business names, internet domain names, trade styles, service marks, logos, slogans, certification marks, collective marks and other source or business identifiers, designs and general intangibles of a like nature and the goodwill associated therewith, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(c) (as such schedule may be amended or supplemented from time to time), (b) all renewals or extensions thereof, and (c) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Trademark License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right to use any Trademark relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, any thereof referred to on Schedule 4.16(c) (as such schedule may be amended or supplemented from time to time).

        "Trade Secret" shall mean (a) all trade secrets and all other confidential or proprietary information and know-how now or hereafter owned or used in, or contemplated at any time for use in the business of Grantor relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, and any proprietary technology, process or system which is within the possession of Grantor, including, without limitation, manufacturing processes or methods, all formulae, processes, procedures, compounds, drawings, designs, blue prints, surveys, reports, manuals, and operating standards relating to or used in the operation of Grantor's business, in each case, whether or not reduced to writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to any of the foregoing and (b) the right to sue for past, present and future infringement of any of the foregoing and all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit.

        "Trade Secret License" shall mean any and all agreements, written or oral, providing for the grant by or to Grantor of any right in or to any Trade Secret relating to production, property, plant and equipment, the operation thereof or the manufacturing processes.

        "Trustee" shall have the meaning ascribed thereto in the preamble.

        "UCC" shall mean the Uniform Commercial Code as in effect from time to time in the State of New York or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.

        "Work" shall mean any work which is or may be subject to copyright protection pursuant to Title 17 of the U.S. Code.

        1.2    Interpretation.    References to "Articles," "Sections," "Schedules" and "Exhibits" shall be to Articles, Sections, Schedules and Exhibits to this Security Agreement unless otherwise specifically provided herein. References to the words "herein," "hereof," "hereto" and "hereunder" and other words of similar import refer to this Security Agreement as a whole and not to any particular Article,

6

Section or other subdivision. Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference. The use herein of the word "include" or "including," when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as "without limitation" or "but not limited to" or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

ARTICLE II

GRANT OF SECURITY INTERESTS

        2.1    Security Grant.    As security for the prompt and complete payment and performance in full when due (whether at Stated Maturity, upon redemption or required repurchase, by acceleration or otherwise) of all the Obligations, Grantor hereby grants, pledges, assigns and transfers to Trustee, for its individual benefit and the ratable benefit of the Holders, a continuing security interest in and continuing lien on all of the right, title and interest of Grantor in, to and under the following property, in each case, whether now owned or existing or hereafter acquired or arising, and wherever located (all of which being hereinafter collectively called the "Collateral"):

        (a)  all Chattel Paper;

        (b)  the Note Collateral Account and all Trust Moneys, other moneys, securities, certificates, items and other property on deposit therein;

        (c)  all Contracts;

        (d)  all Intellectual Property;

        (e)  all Documents;

        (f)    all Equipment;

        (g)  all Fixtures;

        (h)  all General Intangibles;

        (i)    all Instruments;

        (j)    all Insurance;

        (k)  (i) all other rights to the payment of money, including rents and other sums payable to Grantor under leases, rental agreements and other Chattel Paper and insurance proceeds; (ii) all Collateral Records; (iii) all Collateral Support; (iv) all Supporting Obligations; and (v) all Accessions and additions to, parts and appurtenances of, substitutions for and replacements of any of the foregoing (provided, however, that for the avoidance of doubt, the foregoing clauses (a) through (k) shall not include (A) any property or assets described in (and not excluded from) clauses (i) through (vi) of the definition of "Revolver Collateral" or (B) any Excluded Collateral); and

        (l)    to the extent not otherwise included in the foregoing, all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Collateral (including Proceeds which constitute property of the type described in (and not excluded from) clauses (a) through (k) above and all collateral security and guarantees given by any Person with respect to any of the foregoing, and in any event, including, without limitation, any and all (i) proceeds of any insurance (including, without limitation, all Net Proceeds), indemnity, warranty or guarantee payable to Trustee or to Grantor from time to time with respect to any of the foregoing

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Collateral, (ii) payments (in any form whatsoever and including, without limitation, all Net Awards) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the foregoing Collateral by any Governmental Authority (or any Person acting under color of a Governmental Authority), (iii) products of the foregoing Collateral, and (iv) other amounts from time to time paid or payable under or in connection with any of the foregoing Collateral.

ARTICLE III

OBLIGATIONS

        3.1    Obligations.    This Security Agreement secures, and the Collateral is collateral and security for, the payment and performance in full when due (whether at Stated Maturity, upon redemption or required repurchase, by acceleration or otherwise) of the principal of, premium, if any, and interest on, and any and all other amounts which may at any time be or become payable by Grantor under the Guarantees and any and all other obligations and liabilities of Grantor to Trustee, any other trustee under any Mortgage, and the Holders (including, without limitation, any and all amounts which may at any time be or become due and payable and any and all interest and Liquidated Damages, if any, accruing after the maturity of the Securities and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to Grantor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and interest, to the extent permitted by law, on the unpaid interest), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other document made, delivered or given in connection with any of the foregoing, in each case whether on account of principal, premium, interest, Liquidated Damages (if any), fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to Trustee or to the Holders that are required to be paid by Grantor, Trustee, the trustee under any Mortgage or by any Secured Party pursuant to the terms of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other document entered into by Grantor in connection with any of the foregoing) (collectively, the "Obligations").

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

        Grantor hereby represents and warrants to Trustee (for the benefit of Trustee and the ratable benefit of the Holders), which representations and warranties shall survive execution and delivery of this Security Agreement, as follows:

        4.1    Validity, Perfection and Priority.

        (a)  The security interests in the Collateral granted to Trustee (for the benefit of Trustee and the ratable benefit of the Holders) hereunder constitute valid and continuing first priority security interests in the Collateral (except with respect to Permitted Liens);

        (b)  The filings, registrations and recordings described on Schedule 4.1 constitute the only filings, registrations and recordings necessary to perfect the security interests granted by Grantor to Trustee pursuant to this Security Agreement in respect of the Collateral (other than any non-U.S. Patents and other than non-U.S. patents with respect to which Grantor has no present or future, direct or indirect obligation to perfect or assist in the perfection of a security interest therein) to the extent such security interests may be perfected by filing, registration or recording. All such

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filings, registrations and recordings have been accomplished as of the date hereof (other than filings with the United States Patent and Trademark Office and the United States Copyright Office, each of which shall be made as soon as possible after the execution hereof but in any event within thirty (30) days after the date hereof); and

        (c)  Grantor shall not execute or authorize to be filed in any public office any financing statement (or similar statement or instrument of registration under the law of any jurisdiction) relating to the Collateral, except financing statements filed or to be filed (i) under the Indenture or this Security Agreement and (ii) in respect of Permitted Liens.

        4.2    No Liens.

        (a)  Grantor owns and, as to all Collateral whether now existing or hereafter acquired, will continue to own, each item of the Collateral (or in the case of Collateral held by Grantor as lessee under a lease, Grantor has and will have a valid and subsisting leasehold interest in such Collateral) free and clear of any and all Liens, claims or other right, title or interest of all Persons except for Permitted Liens; and

        (b)  No financing statement or other evidence of Lien covering or purporting to cover any of the Collateral is on file in any public office other than (i) financing statements filed in connection with Permitted Liens and (ii) financing statements which have been filed in favor of Trustee pursuant to this Security Agreement.

        4.3    Chief Executive Office.    The chief executive office of Grantor is located as set forth on Schedule 4.3 and Grantor represents and warrants that it (i) has no place of business, (ii) has no offices where Grantor's books of account and records are kept, and (iii) currently uses no business or trade names, except as set forth on Schedule 4.3.

        4.4    Jurisdiction of Organization.    Grantor is a corporation organized under the laws of the State of Delaware. Grantor's organizational identification number is 2299031, and Grantor's legal name is "New CF&I, Inc."

        4.5[INTENTIONALLY OMITTED].    

        4.6    Organization; Qualification.    Grantor (i) is a duly organized and validly existing corporation in good standing under the laws of the State of Delaware, (ii) has the corporate power and corporate authority to own its property and assets and to transact the business in which it is engaged or presently proposes to engage and (iii) is duly qualified and is authorized to do business and is in good standing as a foreign corporation in every jurisdiction in which it owns or leases real property or in which the nature of its business requires it to be so qualified, except where any such failure to so qualify would not have, individually or in the aggregate, a Material Adverse Effect.

        4.7    Corporate Power, Binding Obligation.    Grantor has the corporate power and corporate authority to execute, deliver and carry out the terms and provisions of this Security Agreement including, without limitation, the right to grant a security interest in all the Collateral and has taken all necessary corporate action to authorize the execution, delivery and performance by it of this Security Agreement. Grantor has duly executed and delivered this Security Agreement, and this Security Agreement constitutes its legal, valid and binding obligation, enforceable in accordance with its terms, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally or by general equitable principles (whether considered in a proceeding in equity or at law).

        4.8    No Violation.    Neither the execution, delivery or performance by Grantor of this Security Agreement nor compliance by it with the terms and provisions hereof (i) will violate in any material respects any applicable provisions of any law, statute, rule, regulation, order, writ, injunction or decree of any court or Governmental Authority applicable to Grantor, (ii) will conflict or be inconsistent with

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or result in any breach of, any of the terms, covenants, conditions or provisions of, or constitute a default under, or result in the creation or imposition of (or the obligation to create or impose) any Lien or encumbrance (except pursuant to this Security Agreement) upon any of the property or assets of Grantor pursuant to the terms of any indenture, mortgage, deed of trust, agreement or other instrument to which Grantor is a party or by which it or any of its property or assets is bound or to which it may be subject, or (iii) will violate any provision of the certificate of incorporation or by-laws of Grantor.

        4.9    No Litigation.    There are no actions, suits, arbitrations or other proceedings pending or, to the knowledge of Grantor, threatened with respect to this Security Agreement or the transactions contemplated hereby.

        4.10    Prior Name.    Grantor has not conducted business under any other name other than as indicated on Schedule 4.3 during the last five (5) years.

        4.11    Other Security Agreement.    Grantor has not within the last five (5) years become bound (whether as a result of merger or otherwise) as debtor under a security agreement entered into by another Person, which has not heretofore been terminated, other than security agreements to the extent such security agreements create no Liens other than Permitted Liens.

        4.12    No Consents.    Except for the filings, registrations and recordings contemplated in Section 4.1(b) and as may be required, in connection with the disposition of any investment property (as defined in Article 9 of the UCC), by laws generally affecting the offering and sale of securities, no consent of any Person (including, without limitation, any stockholders or creditors of Grantor) and no consent, authorization, approval or other action by, and no notice to or filing with, any Governmental Authority or regulatory body or other Person is required either (a) for the grant by Grantor of a security interest in the Collateral pursuant to this Security Agreement, for the perfection of such security interest or for the authorization, execution, delivery or performance of this Security Agreement by Grantor or (b) except as may be provided in the Intercreditor Agreement and any amendment or supplement thereto, for the exercise by Trustee of the rights and remedies provided for in this Security Agreement (whether specifically granted or created hereunder or created or provided for by applicable law) in respect of the Collateral.

        4.13    Farm Products.    None of the Collateral constitutes or will constitute Farm Products (as defined in Article 9 of the UCC), or is or will be the Proceeds of Farm Products.

        4.14    All Information Accurate.    All information supplied by Grantor with respect to any of the Collateral (in each case taken as a whole with respect to any particular Collateral) including, without limitation, the information set forth in the Schedules hereto, is accurate and complete in all material respects.

        4.15    Representations Regarding Contracts Constituting Collateral.

        (a)  Each Contract constituting Collateral is in full force and effect and constitutes a valid and legally enforceable obligation of Grantor and, to the best of Grantor's knowledge, the other parties thereto, except as the enforceability thereof may be limited by bankruptcy, insolvency, fraudulent transfer or conveyance, reorganization, moratorium and other similar laws relating to or affecting creditors' rights generally or by general equitable principles (whether considered in a proceeding in equity or at law) and except where unenforceability of any such Contract constituting Collateral would not have, individually or in the aggregate, a Material Adverse Effect.

        (b)  Neither Grantor nor, to the best of Grantor's knowledge, any other party to any Contract constituting Collateral is in default in the performance or observance of any of the terms thereof.

        (c)  Grantor has fully performed all of its material obligations under each Contract constituting Collateral.

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        (d)  The right, title and interest of Grantor in, to and under each Contract constituting Collateral are not, to the best of Grantor's knowledge, subject to any defense, offset, counterclaim or claim which would materially adversely affect the value of such Contract as Collateral, nor have any of the foregoing been asserted or alleged against Grantor as to any Contract constituting Collateral.

        (e)  No amount payable to Grantor under or in connection with any Contract constituting Collateral is evidenced by any Instrument or Chattel Paper which has not been delivered to Trustee.

        4.16    Copyrights, Patents and Trademarks.

        (a)  Schedule 4.16(a) includes all registrations and pending applications for Copyrights and Copyright Licenses owned by Grantor in its own name on the date hereof;

        (b)  Schedule 4.16(b) includes all issued Patents and pending Patent applications and Patent Licenses owned by Grantor in its own name on the date hereof;

        (c)  Schedule 4.16(c) includes all registrations and pending applications for Trademarks, Trademark Licenses and registered domain names owned by Grantor in its own name on the date hereof;

        (d)  to the best of Grantor's knowledge, each Copyright, Patent and Trademark is on the date hereof valid, subsisting, unexpired, enforceable and has not been abandoned;

        (e)  except as set forth in any of Schedule 4.16(a), Schedule 4.16(b) or Schedule 4.16(c), none of such Copyrights, Patents and Trademarks is on the date hereof the subject of any licensing or franchise agreement;

        (f)    no holding, decision or judgment has been rendered by any Governmental Authority which would limit, cancel or question the validity of any Copyright, Patent or Trademark in any respect that could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect; and

        (g)  no action or proceeding is pending or, to Grantor's knowledge, threatened on the date hereof (i) seeking to limit, cancel or question the validity of any Copyright, Patent or Trademark, or (ii) which, if adversely determined, would have, individually or in the aggregate, a Material Adverse Effect or a material adverse effect on the value of any Copyright, Patent or Trademark.

ARTICLE V

COVENANTS

        Grantor covenants and agrees that from and after the date of this Security Agreement until this Security Agreement is terminated:

        5.1    Further Assurances.    Grantor shall from time to time at the expense of Grantor, promptly execute, deliver, file or record all further instruments, endorsements and other documents, and take such further action, as Trustee may deem reasonably desirable in obtaining the full benefits of this Security Agreement and of the rights, remedies and powers herein granted, including, without limitation, the following:

        (a)  The filing of any financing statements, in form acceptable to Trustee under the UCC in effect in any jurisdiction, and the filing of a copy of this Security Agreement or a short-form filing with the United States Patent and Trademark Office and/or the United States Copyright Office, with respect to the Liens and security interests granted hereby, except that Grantor shall not be obligated, now or in the future, to directly or indirectly file or assist in the filing of any filings with

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respect to security interests in non-U.S. patents; and furnish to Trustee from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Trustee may request, all in reasonable detail and in form reasonably satisfactory to Trustee. Without limiting the generality of the foregoing, Grantor hereby authorizes the filing of any financing statements or continuation statements, and amendments to financing statements, in any jurisdiction and with any filing offices as Trustee may determine, in its sole discretion, are necessary or advisable to perfect the security interest granted to Trustee in connection herewith. Such financing statements may describe the Collateral in the same manner as described in this Security Agreement or may contain an indication or description of Collateral that describes such property in any other manner as Trustee may determine, in its sole discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to Trustee in connection herewith, including, without limitation, describing such property as "all assets" or "all personal property," whether now owned or hereafter acquired. A photocopy or other reproduction of this Security Agreement shall be sufficient as a financing statement and may be filed in lieu of the original to the extent permitted by applicable law. Grantor shall pay or reimburse Trustee for all filing fees and related expenses.

        (b)  If Grantor shall obtain any additional Collateral, Grantor shall furnish to Trustee a Security Supplement substantially in the form attached hereto as Exhibit A describing such Collateral.

        5.2    Change of Name, Identity, Corporate Structure or Location.    Grantor shall not change its name, identity, corporate structure or the location of its chief executive office from the addresses set forth on Schedule 4.3, without (i) giving Trustee at least thirty (30) days' prior written notice clearly describing such new name, identity, corporate structure or new location and providing such other information in connection therewith as Trustee may reasonably request, (ii) taking all action satisfactory to Trustee as Trustee may reasonably request to maintain the security interest of Trustee in the Collateral intended to be granted hereby at all times as a fully perfected first priority security interest (subject to Permitted Liens), and (iii) delivering to Trustee an Officers' Certificate as to compliance with this Section 5.2.

        5.3    Change of Jurisdiction of Organization.    Grantor shall not change its jurisdiction of organization until (i) it shall have given to Trustee not less than thirty (30) days' prior written notice of its intention to do so, identifying such new proposed jurisdiction of organization and providing such other information in connection therewith as Trustee may reasonably request, (ii) with respect to such change of jurisdiction of organization, it shall have taken all action as requested by Trustee that Trustee may find necessary or advisable to maintain the continuous validity, perfection and first priority status (subject to Permitted Liens), of the security interest of Trustee in the Collateral intended to be granted and agreed to hereby, and (iii) it shall have delivered to Trustee an Officers' Certificate as to compliance with this Section 5.3.

        5.4    Maintain Records.    Grantor shall keep and maintain at its own cost and expense satisfactory and complete records of the Collateral at the locations for books and records indicated on Schedule 4.3 and shall stamp or otherwise mark such books and records in a manner as may be necessary or as Trustee may reasonably require in order to reflect the security interests granted by this Security Agreement.

        5.5    Payment of Obligations.    Grantor shall pay before delinquency all taxes, assessments and governmental charges or levies imposed upon the Collateral, as well as all claims of any kind (including, without limitation, claims for labor, materials, supplies and services) against or with respect to the Collateral, except that no such tax, assessment, levy, charge or claim need be paid if (i) the validity thereof is being contested in good faith by appropriate proceedings, (ii) such proceedings do not involve, in the sole opinion of Trustee, any material danger for the sale, forfeiture or loss of any of

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the Collateral or any interest therein, (iii) such charge is adequately reserved against on Grantor's books in accordance with generally accepted accounting principles, and (iv) the failure to pay any such charge does not result in the imposition of a Lien against the Collateral other than Permitted Liens.

        5.6    Negative Pledge.    Without the consent of Trustee, Grantor (a) shall not create, incur or permit to exist, (b) shall defend the Collateral against, and (c) shall take such other action as is necessary to remove, in each case, any Lien or claim on or to the Collateral, other than the Permitted Liens.

        5.7    Compliance with Laws.    Grantor shall comply in all material respects with all requirements of law applicable to the Collateral or any part thereof or to the operation of Grantor's business.

        5.8    No Impairment; Defense of Collateral.    Grantor (a) shall not take or permit to be taken any action which could reasonably be expected to impair Trustee's rights hereunder or in the Collateral, including the creation or existence of any Lien upon or with respect to any of the Collateral, except Permitted Liens and (b) shall defend the Collateral against all Persons at any time claiming any interest therein, except the holders of Permitted Liens with respect to such Permitted Liens.

        5.9    No Transfer of Collateral.    Grantor shall not sell, transfer or assign (by operation of law or otherwise) any Collateral without the consent of the Trustee other than as permitted by the Indenture.

        5.10    Delivery of Instruments and Chattel Paper.    If any amount in excess of $150,000 payable under or in connection with any of the Collateral shall be or become evidenced by any Instrument or Chattel Paper, such Instrument or Chattel Paper shall be promptly delivered to Trustee, duly endorsed in a manner satisfactory to Trustee, to be held as Collateral pursuant to this Security Agreement; provided that if within any twelve month period Grantor shall receive Instruments or Chattel Paper representing amounts payable, in the aggregate, greater than $250,000, under or in connection with any of the Collateral, then all Instruments or Chattel Paper evidencing any amounts payable under or in connection with any of the Collateral in the possession of Grantor shall be promptly delivered to Trustee, duly endorsed in a manner satisfactory to Trustee, to be held as Collateral pursuant to this Security Agreement.

        5.11    Inspections.    Grantor shall permit representatives of Trustee, upon reasonable notice and at any time during normal business hours, to inspect and make abstracts from its books and records pertaining to the Collateral, and shall permit representatives of Trustee to be present at Grantor's place of business to receive copies of all communications and remittances relating to the Collateral, all in such manner as Trustee may reasonably require.

        5.12    Insurance.    Grantor shall maintain at all times and at its sole expense, with financially sound and reputable insurance companies, insurance policies (i) insuring the Equipment against loss by fire, explosion, theft and such other casualties as from time to time would be insured against by a prudent operator of similar property and (ii) insuring Trustee and the Holders against liability for personal injury and property damage relating to such Equipment, such policies to be in such form and amounts and having such coverage as from time to time would be maintained by a prudent operator of similar property. Each policy or certificate with respect to such insurance shall be endorsed for the benefit of Trustee (including, without limitation, by naming Trustee as an additional named insured or loss payee as its interest may appear) and such policy or certificate shall be retained by Grantor and a copy or copies of such policy or certificate shall be delivered to Trustee annually together with the Officers' Certificate required to be delivered to Trustee within 90 days after the end of each fiscal year of Grantor pursuant to Section 4.06(a) of the Indenture. Each such policy or a certificate issued to Trustee in respect thereof shall state that such policy cannot be cancelled without thirty (30) days' prior written notice to Trustee. At least thirty (30) days prior to the expiration of any such policy of insurance, Grantor shall provide documentation to Trustee that Grantor is negotiating an extension or renewal of such policy and shall at least five (5) Business Days prior to expiration of any such policy of

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insurance obtain an extension or renewal policy and an insurance certificate evidencing such renewal or extension and shall give Trustee written notice thereof. If Grantor shall fail to insure such Collateral in accordance with the provisions hereof or if Grantor shall fail to so endorse or to extend or renew, any such insurance policies or certificates with respect thereto, Trustee shall have the right (but shall be under no obligation), to advance funds to procure, renew or extend such insurance (after providing Grantor with at least five (5) Business Days' notice of its intent to advance such funds) and Grantor agrees to reimburse Trustee for any and all costs and expenses thereof, with interest on all such funds from the date advanced at the rate per annum (the "Default Rate") equal to the rate then payable under the Securities. Within five (5) Business Days after making any such advance, Trustee shall give Grantor written notice of the amount and purpose of such advance; provided, however, that failure to give such notice will not relieve Grantor of its obligations to make such reimbursement to Trustee. Unless an Event of Default under the Indenture shall have occurred and shall be continuing, Grantor may determine whether to file a claim for repair or replacement costs or a claim for actual cash value under the relevant insurance policy. Any proceeds of insurance in respect of the Collateral are hereby assigned to Trustee. In case of any loss or damage to any of the Collateral, all proceeds of insurance maintained by Grantor in respect of the Collateral shall be paid to Trustee as Trust Moneys pursuant to the Indenture and shall be subject to retention and disbursement by Trustee in accordance with the terms of the Indenture. The provisions of this Section 5.12 shall not be deemed to limit Grantor's obligations to maintain insurance (or any related obligations) pursuant to any Mortgage or other Security Document.

        5.13    Notices.    Grantor shall advise Trustee promptly, in reasonable detail, of:

        (a)  any Lien (other than security interests created hereby or Permitted Liens) on any of the Collateral; and

        (b)  the occurrence of any other event which could reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

        5.14    Fair Labor Standards Act.    Any goods now or hereafter produced by Grantor or any of its subsidiaries included in the Collateral have been and will be produced in compliance with the requirements of the Fair Labor Standards Act, as amended.

        5.15    Covenants Regarding Contracts Constituting Collateral.

        (a)  So long as it is commercially reasonable to do so, Grantor shall perform and comply in all material respects with all of its obligations under the Contracts constituting Collateral, provided, however, that any such non-performance or non-compliance shall not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

        (b)  Grantor shall not amend, modify, terminate or waive any provision of any Contract in any manner which could reasonably be expected to materially adversely affect the value of the Collateral taken as a whole; provided that the Company may replace a Contract (the "Initial Contract") so long as (i) the contract entered into to replace the Initial Contract (the "Replacement Contract") is subject to the security interest created by this Security Agreement and (ii) the Replacement Contract is on no materially less favorable terms to the Company than the Initial Contract.

        (c)  Grantor shall, in its prudent business judgment, exercise promptly and diligently each and every material right which it may have under each Contract; provided Grantor may amend, modify, terminate or waive rights subject to Section 5.15(b) above.

        (d)  Grantor shall deliver to Trustee a copy of each material demand, notice or document received by it relating in any way to any Contract.

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        (e)  In any suit, proceeding or action brought by Trustee or any Holder under any Contract, Grantor shall save, indemnify and keep Trustee and such Holder harmless from and against any and all expenses, losses, claims, liabilities and damages, as incurred, suffered by reason of any defense, setoff, counterclaim, recoupment or reduction or liability whatsoever of the obligor thereunder, arising out of a breach by Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to or in favor of such obligor or its successors from Grantor.

ARTICLE VI

OBLIGATIONS OF GRANTOR RELATING TO INTELLECTUAL PROPERTY

        6.1    Intellectual Property.

        (a)  If Grantor, either by itself or through any agent, employee, licensee or designee shall file any applications or registrations with respect to any Intellectual Property with the United States Patent and Trademark Office and/or the United States Copyright Office, or any similar office or agency in any other country or any political subdivision thereof, Grantor shall notify Trustee thereof within thirty (30) days of filing such application or registration. Grantor shall execute and deliver to Trustee any document required or reasonably requested by Trustee to acknowledge, confirm, register, record, or perfect Trustee's security interest in any part of the Intellectual Property, whether now owned or hereafter acquired, and Grantor shall deliver an Officers' Certificate as to compliance with this Section 6.1(a); provided that Grantor shall not be obligated to make any present or future, direct or indirect filings of any kind to perfect such security interest in non-U.S. patents.

        (b)  Grantor shall not do any act or omit to do any act whereby any of the Intellectual Property which is material to the business of Grantor may lapse, or become abandoned, dedicated to the public, or unenforceable, or which would adversely affect the validity, grant, or enforceability of the security interest granted herein.

        (c)  With respect to any Trademarks which are material to its business, Grantor (i) shall maintain such Trademarks in full force free from any claim of abandonment or invalidity for non-use, (ii) shall not fail to maintain the level of the quality of products sold and services rendered under any of such Trademarks at a level at least substantially consistent with the quality of such products and services as of the date hereof, (iii) shall not fail to employ each material Trademark with the appropriate notice of registration, or (iv) shall not fail to do any act or knowingly omit to do any act (or permit a licensee or sublicensee to act or knowingly omit to act) whereby such Trademark may become invalidated. Grantor shall take all steps necessary to insure that licensees and sublicenses of such Trademarks use such consistent standards of quality.

        (d)  Grantor shall notify Trustee promptly if it knows (i) that any application or registration relating to any Intellectual Property which is material to the business of Grantor may become abandoned, dedicated or injected into the public domain, (ii) of any materially adverse determination or development (including, without limitation, the institution of, or any such determination or development in, any proceeding in the United States Patent and Trademark Office or any court or tribunal in any country) regarding Grantor's ownership of any Patent or Trademark material to the business of Grantor or its right to register the same or to keep and maintain the same, and (iii) of any action Grantor is taking in respect of such event.

        (e)  Grantor shall take all reasonable and necessary steps, including, without limitation, in any proceeding before the United States Patent and Trademark Office, or any similar office or agency in any other country or any political subdivision thereof, to maintain and pursue each application (and to obtain the relevant registration) and to maintain each registration of the Patents and

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Trademarks material to the business of Grantor, including, without limitation, the filing of applications for renewal, affidavits of use and affidavits of incontestability and, as to Patents, the payment of maintenance fees, except where the failure to take any such action would not have, individually or in the aggregate, a Material Adverse Effect.

        (f)    Grantor (either itself or through licensees) (i) shall employ the appropriate notice of copyright for each published Work subject to copyright protection to the extent necessary to protect the Copyright relating to such Work and (ii) shall not (and not permit any licensee or sublicensee thereof to) do any act or knowingly omit to do any act whereby any material Copyright may become invalidated, except where the failure to take such action would not have, individually or in the aggregate, a Material Adverse Effect.

        (g)  Grantor shall take all reasonable and necessary steps, as it shall deem appropriate under the circumstances, in accordance with its reasonable business judgment, to maintain and pursue each application (and to obtain the relevant registration) and to maintain to the extent permitted by law each registration of each material Copyright owned by Grantor including, without limitation, filing of applications for renewal, where necessary.

        (h)  If Grantor shall obtain any rights to any new invention (whether or not patentable), Trade Secret, Trademark, Trademark License, Copyright, Copyright License, Patent or Patent License, then, to the extent that any item enumerated in this sentence would constitute Collateral, the provisions of this Security Agreement shall automatically apply thereto and any such item shall automatically constitute Collateral and shall be subject to the assignment, Lien and security interest created hereby without further action by any party. Grantor promptly shall (x) give to Trustee written notice of its acquisition of or entitlement to any of the rights set forth in the immediately preceding sentence and (y) confirm the attachment of the Lien and security interest created hereby to any of such rights by execution of an appropriate instrument delivered to Trustee, including an amendment to Schedules 4.16(a), 4.16(b) and/or 4.16(c) to include any such rights, and shall, if applicable, make such filings, registrations and recordings as are necessary or appropriate to perfect such security interests; provided that Grantor shall not be obligated to make any present or future, direct or indirect filings of any kind to perfect such security interests in any non-U.S. Intellectual Property.

        (i)    In the event that any Intellectual Property owned by or exclusively licensed to Grantor is infringed upon, misappropriated, or diluted by a third party, Grantor shall promptly take all actions as Grantor shall reasonably deem appropriate under the circumstances to protect its rights in such Intellectual Property including, but not limited to, the initiation of a suit for injunctive relief and to recover damages. If such Intellectual Property is of material economic value, Grantor shall promptly notify Trustee after it learns thereof and sue for infringement, misappropriation or dilution, seek injunctive relief where appropriate and seek and recover any and all damages for such infringement, misappropriation or dilution.

        (j)    Anything contained herein to the contrary notwithstanding, Trustee shall have the right (but not the obligation) to bring suit or otherwise commence any action or proceeding in the name of Grantor, Trustee or otherwise, in Trustee's reasonable discretion, to enforce any Intellectual Property, in which event Grantor shall, at the request of Trustee, do any and all lawful acts and execute any and all documents required by Trustee in aid of such enforcement and Grantor shall promptly, upon demand, reimburse and indemnify Trustee as provided in Section 9.1 hereof in connection with the exercise of its rights under this Section 6.1, and, to the extent that Trustee shall elect not to bring suit to enforce any Intellectual Property as provided in this Section 6.1, Grantor agrees to use all reasonable measures, whether by action, suit, proceeding or otherwise, to prevent the infringement of any of the Intellectual Property by others and for that purpose agrees

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to diligently maintain any action, suit or proceeding against any Person so infringing as shall be necessary to prevent such infringement.

        (k)  Grantor hereby grants to Trustee a transferable and sublicensable non-exclusive worldwide license (exercisable without payment of royalty or other compensation by Trustee) to use, operate under, and make, have made, use, import and sell products or services embodying or made in accordance with any Intellectual Property now or hereafter owned, licensed to, or otherwise acquired by Grantor ("Grantor Intellectual Property"), and/or to reproduce, perform, display, distribute, and modify Grantor Intellectual Property effective upon the occurrence of an Event of Default. The foregoing license shall be irrevocable and perpetual. If the Obligations are repaid by Grantor in the ordinary course and in any event prior to a bankruptcy or insolvency proceeding involving Grantor and other than through the exercise by Grantor of any of its rights and remedies hereunder, then such license shall terminate and have no further force and effect.

        (l)    Grantor and Trustee may modify this Security Agreement, without the consent of Holders, by amending Schedules 4.16(a), 4.16(b) and/or 4.16(c) to include any future Intellectual Property of Grantor in accordance with Section 6.1(h) or to reflect any disposition of Intellectual Property made in compliance with the provisions of this Security Agreement and the Indenture.

        (m)  Except in the ordinary course of business consistent with prudent business practice, and as may otherwise be permitted by the Indenture, Grantor shall not, without the prior written consent of Trustee, abandon any registration of any Intellectual Property or any right to file an application with respect to Intellectual Property or any pending application with respect to Intellectual Property.

        (n)  Grantor shall not, without the consent of Trustee, license the Intellectual Property or any portion thereof, or amend or permit the amendment of any of the Licenses, in either case, in a manner that adversely affects the right to receive any material amount of payments thereunder, or, except as otherwise permitted under the Indenture, in any manner materially adverse to the interests of Trustee in the Intellectual Property.

        (o)  Subject to Section 6.1(n) but notwithstanding any other provision herein to the contrary, so long as no Event of Default shall have occurred and be continuing, Grantor shall be permitted to exploit, use, enjoy, protect, license, sublicense, assign, sell, dispose of or take other actions with respect to the Intellectual Property in the ordinary course of the business of Grantor.

ARTICLE VII

POWER OF ATTORNEY

        7.1    Power of Attorney.    Grantor hereby irrevocably constitutes and appoints Trustee and any officer of Trustee, with full power of substitution, as its true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Grantor and in the name of Grantor or in its own name, from time to time after the occurrence and during the continuation of an Event of Default, for the purpose of carrying out the terms of this Security Agreement, to take any and all appropriate action by any technologically available means, which may include, without limitation, any form of electronic data transmission, and to execute in any appropriate manner, which may include, without limitation, using any symbol that Trustee may adopt to signify Grantor's intent to authenticate, any and all documents and instruments which may be necessary or desirable to accomplish the purposes of this Security Agreement. Without limiting the generality of the foregoing, Grantor hereby authorizes Trustee:

        (a)  to file a Record or Records, including, without limitation, financing or continuation statements, and amendments thereto, in all jurisdictions and with all filing offices as Trustee may determine, in its reasonable discretion, are necessary or advisable to perfect the security interest

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granted to Trustee for its benefit and the ratable benefit of the Holders herein; such financing statements may describe the Collateral in the same manner as described herein or may contain an indication or description of collateral that describes such property in any other manner as Trustee may determine, in its reasonable discretion, is necessary, advisable or prudent to ensure the perfection of the security interest in the Collateral granted to Trustee herein; Grantor shall furnish to Trustee from time to time statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Trustee may reasonably request, all in reasonable detail;

        (b)  in the name of Grantor or its own name, or otherwise, take possession of and endorse and collect any checks, drafts, notes, acceptances or other instruments for the payment of moneys due under any Contract or with respect to any other Collateral and file any claim or take any other action or proceeding in any court of law or equity or otherwise deemed appropriate by Trustee for the purpose of collecting any and all such moneys due under any Contract or with respect to any other Collateral whenever payable;

        (c)  in the case of any Copyright, Patent or Trademark, execute and deliver any and all agreements, instruments, documents and papers as Trustee may request to evidence Trustee's and the Holders' security interest in such Copyright, Patent or Trademark and the goodwill and General Intangibles of Grantor relating thereto or represented thereby;

        (d)  execute, in connection with any sale provided for in Article VIII, any other sale of Collateral pursuant to this Security Agreement or any license or sublicense granted pursuant to Article VIII, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral; and

        (e)  (i) direct any party liable for any payment under any of the Collateral to make payment of any and all moneys due or to become due thereunder directly to Trustee or as Trustee shall direct; (ii) ask or demand for, collect, receive payment of and receipt for, any and all moneys, claims and other amounts due or to become due at any time in respect of or arising out of any Collateral; (iii) sign and endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, notices and other documents in connection with any of the Collateral; (iv) commence and prosecute any suits, actions or proceedings at law or in equity in any court of competent jurisdiction to collect the Collateral or any portion thereof and to enforce any other right in respect of any Collateral; (v) defend any suit, action or proceeding brought against Grantor with respect to any Collateral; (vi) settle, compromise or adjust any such suit, action or proceeding and, in connection therewith, to give such discharges or releases as Trustee may deem appropriate; (vii) assign, license or sublicense any Intellectual Property (along with the goodwill of the business to which any such Intellectual Property pertains), throughout the world for such term or terms, on such conditions, and in such manner, as Trustee shall determine; (viii) generally, sell, transfer, pledge and make any agreement with respect to or otherwise deal with any of the Collateral as fully and completely as though Trustee were the absolute owner thereof for all purposes; and (ix) at Trustee's option and Grantor's expense, at any time, or from time to time, do all acts and things which Trustee deems necessary to protect, preserve or realize upon the Collateral and Trustee's and the Holders' security interests therein and to effect the intent of this Security Agreement, all as fully and effectively as Grantor might do; and

        (f)    notwithstanding the foregoing, at any time prior to or after the occurrence of an Event of Default, pay or discharge taxes and Liens (which do not constitute Permitted Liens) levied or placed on or threatened against the Collateral or effect any repairs on the Collateral.

        7.2    Irrevocable Grant.    The foregoing grant of authority is a power of attorney coupled with an interest and such appointment shall be irrevocable until this Security Agreement is terminated and the

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security interests created hereby are released. Grantor hereby ratifies all that such attorneys may lawfully do or cause to be done by virtue and in accordance with the terms hereof.

ARTICLE VIII

REMEDIES; RIGHTS UPON DEFAULT

        8.1    Rights and Remedies Generally.    If an Event of Default shall occur and be continuing, then and in every such case, Trustee shall have all the rights of a secured party under the UCC (including, without limitation, the right to sell all or any portion of the Collateral in one or more parcels at public or private sale, for cash or credit, or for future delivery and upon such terms as Trustee may determine), shall have all rights now or hereafter existing under all other applicable laws, and, subject to any mandatory requirements of applicable law then in effect, shall have all the rights set forth in this Security Agreement.

        8.2    Notice to Obligors and Contract Parties.    Upon the request of Trustee at any time after the occurrence and during the continuance of an Event of Default, Grantor shall notify parties to the Contracts constituting Collateral and Account Debtors in respect of any General Intangibles, Instruments and Chattel Paper constituting Collateral that such Collateral has been assigned to Trustee for the ratable benefit of the Holders and that payments in respect thereof shall be made directly to Trustee.

        8.3    Proceeds to be Turned Over to Trustee.    All proceeds of any Collateral received by Grantor consisting of cash, checks and other near-cash items (collectively, "Cash Proceeds") shall be held by Grantor in trust for Trustee, segregated from other funds of Grantor, and shall, forthwith upon receipt by Grantor be turned over to Trustee in the exact form received by Grantor (duly endorsed by Grantor to Trustee, if required) and held by Trustee in the Note Collateral Account, which shall be maintained under the sole dominion and control of Trustee. Any Cash Proceeds received by Trustee (whether from Grantor or otherwise): (i) if no Event of Default shall have occurred and be continuing, shall be held by Trustee as collateral security for the Obligations (whether matured or unmatured) unless and until delivered to Grantor as provided in the Indenture, and (ii) if an Event of Default shall occur and be continuing, may, in the sole discretion of Trustee, (A) be held by Trustee as collateral security for the Obligations (whether matured or unmatured) and/or (B) then or at any time thereafter may be applied by Trustee, in accordance with the Indenture, for the payment of any expenses incurred by Trustee in enforcing its rights under this Security Agreement. Notwithstanding the foregoing, this Section 8.3 shall not apply to Cash Proceeds received by Grantor in the ordinary course of business prior to the occurrence and continuance of an Event of Default or to proceeds of any Revolver Collateral. All Proceeds while held by Trustee in the Note Collateral Account (or by Grantor in trust for Trustee and the Holders) shall continue to be held as collateral security for the Obligations and shall not constitute payment thereof until applied as provided in Section 8.11.

        8.4    Obtaining Possession of the Collateral.    If an Event of Default shall occur and be continuing, then and in every such case, Trustee may, but shall not be obligated to, in addition to any other action permitted by law (and not limited in any manner to the remedies contained in the Notes and the Indenture) take one or more of the following actions:

        (i)    personally, or by agents or attorneys, immediately take possession of the Collateral or any part thereof, from Grantor or any other Person who then has possession of any part thereof with or without notice of process of law, and for that purpose may enter upon Grantor's premises where any of the Collateral is located and remove such Collateral and, in connection with such removal, use any and all services, supplies, aids and other facilities of Grantor;

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        (ii)  sell, assign or otherwise liquidate, or direct Grantor to sell, assign or otherwise liquidate, any or all investments made in whole or in part with the Collateral or any part thereof, and take possession of the proceeds of any such sale, assignment or liquidation; and

        (iii)  take possession of the Collateral or any part thereof, by directing Grantor in writing to deliver the same to Trustee at any commercially reasonable place or places which Trustee shall reasonably select, in which event Grantor shall at its own expense: (A) forthwith cause the same to be moved to the place or places so designated by Trustee and there delivered to Trustee; (B) store and keep any Collateral so delivered to Trustee at such place or places pending further action by Trustee; and (C) while the Collateral shall be so stored and kept, provide such guards and maintenance services as shall be reasonably necessary to protect the same and to preserve and maintain them in good condition.

Grantor's obligation to deliver the Collateral is of the essence in this Security Agreement. Upon application to a court of equity having jurisdiction, Trustee shall, to the extent permitted by law, be entitled to a decree requiring specific performance by Grantor of such obligation.

        8.5    Disposition of Collateral.    Trustee will give Grantor reasonable notice of the time and place of any public sale of the Collateral or any part thereof or of the time after which any private sale or any other intended disposition thereof is to be made. Grantor agrees that the requirements of reasonable notice to it shall be met if such notice is delivered (personally, by facsimile transmission or by overnight delivery service) to its address specified in Section 9.4 (or such other address that Grantor may provide to Trustee in writing) at least ten (10) Business Days before the time of any public sale or after which any private sale may be made.

        8.6    Additional Non-UCC Remedies.    Upon the occurrence and during the continuance of an Event of Default, Trustee, without demand of performance or other demand, presentment, protest, advertisement or notice of any kind (except as provided in Section 9.5 and except for any notice required by law referred to below) to or upon Grantor or any other Person (all and each of which demands, defenses, advertisements and notices are, to the extent permitted by law, hereby waived), may in such circumstances forthwith collect, receive, appropriate and realize upon the Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give option or options to purchase, or otherwise dispose of and deliver the Collateral or any part thereof (or contract to do any of the foregoing), in one or more parcels at public or private sale or sales, at any exchange, broker's board or office of Trustee or elsewhere upon such terms and conditions as Trustee may deem advisable and at such prices as Trustee may elect, for cash or on credit or for future delivery without assumption of any credit risk. Trustee or any Holder shall have the right, to the extent permitted by law, upon any such public sale or sales or upon any such private sale or sales, to purchase the whole or any part of the Collateral so sold, free of any right or equity of redemption in Grantor (including any rights of stay and/or appraisal), which right or equity is, to the extent permitted by law, hereby waived or released. Grantor hereby waives any claims against Trustee arising by reason of the fact that the price at which any Collateral may have been sold at such a private sale was less than the price which might have been obtained at a public sale, even if Trustee accepts the first offer received and does not offer such Collateral to more than one offeree. Grantor further agrees, at Trustee's request, to assemble the Collateral and make it available to Trustee at places which Trustee shall reasonably select, whether at Grantor's premises or elsewhere. Trustee shall apply the net proceeds of any action taken by it pursuant to this Section 8.6, after deducting all reasonable costs and expenses of every kind incurred in connection therewith or incidental to the care or safekeeping of any of the Collateral or in any way relating to the Collateral or the rights of Trustee and the Holders hereunder, including, without limitation, reasonable attorneys' fees and disbursements, as provided in Section 8.11, and only after such application and after the payment by Trustee of any other amount required by any provision of law, need Trustee account for the surplus, if any, to Grantor. Grantor further agrees that a breach of any of the covenants contained in this Article VIII will cause irreparable injury to Trustee, that Trustee has no adequate remedy at law in

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respect of such breach and, as a consequence, that each and every covenant contained in this Article VIII shall be specifically enforceable against Grantor, and Grantor hereby waives and agrees not to assert any defenses against an action for specific performance of such covenants except for a defense that no default has occurred giving rise to the Obligations becoming due and payable prior to their stated maturities. Nothing in this Article VIII shall in any way alter the rights of Trustee under this Security Agreement.

        8.7    Certain Sales of Collateral.    Grantor recognizes that, by reason of certain prohibitions contained in law, rules, regulations or orders of any Governmental Authority, Trustee may be compelled, with respect to any sale of all or any part of the Collateral, to limit purchasers to those who meet the requirements of such Governmental Authority. Grantor acknowledges that any such sales may be at prices and on terms less favorable than those obtainable through a public sale without such restrictions, and, notwithstanding such circumstances, agrees that any such restricted sale shall not be deemed, solely by virtue thereof, not to have been made in a commercially reasonable manner.

        8.8    Certain Remedies in Respect of Intellectual Property.    If an Event of Default shall occur and shall be continuing, in addition to the other rights and remedies provided for herein or otherwise available to it, Trustee may license or sublicense (whether general, special or otherwise, and whether on an exclusive or non-exclusive basis) all or any portions of the Intellectual Property throughout the world for such term or terms, on such conditions and in such manner as Trustee shall determine. Upon request by Trustee, Grantor shall execute and deliver to Trustee any powers of attorney, in form and substance satisfactory to Trustee, for the implementation of any assignment, license, sublicense, grant of option, sale or other disposition of any Intellectual Property. In the event of any sale, assignment, or other disposition of any of the Intellectual Property, the goodwill connected with and symbolized by the Intellectual Property subject to such disposition shall be included in such sale, assignment or other disposition.

        8.9    Specific Performance.    In addition to any of the other rights and remedies hereunder, Trustee shall have the right to institute a proceeding seeking specific performance in connection with any of the agreements or obligations hereunder.

        8.10    Recourse.    Grantor shall remain liable for any deficiency if the proceeds of any sale or other disposition of the Collateral are insufficient to satisfy the Obligations. Grantor shall also be liable for all expenses of Trustee or any Holder incurred in connection with collecting such deficiency, including, without limitation, the fees and disbursements of any attorneys employed by Trustee to collect such deficiency.

        8.11    Application of Proceeds.    The net proceeds received by Trustee in respect of any sale of, collection from or other realization upon all or any part of the Collateral pursuant to the exercise by Trustee of its remedies provided in this Article VIII shall be applied (after deduction of amounts permitted or required pursuant to this Article VIII), together with any other sums then held by Trustee pursuant to this Security Agreement, promptly by Trustee in the manner set forth in the Indenture.

        8.12    Expenses; Attorneys Fees.    Grantor shall upon demand pay to Trustee the amount of any and all reasonable expenses, including the reasonable fees and expenses of its counsel and the reasonable fees and expenses of any experts and agents which Trustee may incur in connection with (i) the collection of the Obligations, (ii) the enforcement and administration of this Security Agreement and any consent, amendment, waiver or other modification to this Security Agreement, (iii) the custody or preservation of, or the sale of, collection from, or other realization upon, any of the Collateral, (iv) the exercise, protection or enforcement of any of the rights of Trustee or any other secured party hereunder, (v) the failure by Grantor to perform or observe any of the provisions hereof, (vi) the creation and perfection of Liens in favor of the Trustee for the benefit of the Holders, including, without limitation, the filing or recording of financing statements and other documents (including all taxes in connection therewith) in public offices, search fees and the reasonable fees, expenses and

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disbursements of any counsel providing any opinions in respect of the Collateral or the Liens created pursuant to the Security Documents, (vii) the payment or discharge of any taxes, insurance premiums or encumbrances, (viii) defending or prosecuting any actions or proceedings arising out of or related to the transactions to which this Security Agreement relates, (ix) otherwise protecting, maintaining or preserving the Collateral, or the enforcing, foreclosing, retaking, holding, storing, processing, selling or otherwise realizing upon the Collateral and Trustee's security interest therein, whether through judicial proceedings or otherwise, (x) any refinancing or restructuring of the credit arrangements pursuant to the Indenture, including a "work-out," or pursuant to any insolvency or bankruptcy cases or proceedings, and (xi) the failure by Grantor to perform or observe any of the provisions of this Security Agreement. All amounts payable by Grantor under this Section 8.12 shall be due upon demand and shall be part of the Obligations. Grantor's obligations under this Section 8.12 shall survive the termination of this Security Agreement and the discharge of Grantor's other obligations hereunder.

        8.13    Limitation on Duties Regarding Preservation of Collateral.    Trustee's sole duty with respect to the custody, safekeeping and physical preservation of the Collateral in its possession, under Section 9-207 of the UCC or otherwise, shall be to deal with it in the same manner as Trustee (in its commercial and not in its trust capacity) deals with similar property for its own account.

        (a)  Trustee shall have no obligation to take any steps to preserve rights against prior parties to any Collateral.

        (b)  Neither Trustee nor any Holder, nor any of their respective directors, officers or employees or agents shall be liable for failure to demand, collect or realize upon all or any part of the Collateral or for any delay in doing so or shall be under any obligation to sell or otherwise dispose of any Collateral upon the request of Grantor or otherwise.

        (c)  Trustee shall have no obligation to marshal any of the Collateral.

        (d)  The powers conferred on Trustee and the Holders hereunder are solely to protect Trustee's and the Holders' interests in the Collateral and shall not impose any duty upon Trustee or any Holder to exercise any such powers.

        (e)  Trustee and the Holders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers, and neither they nor any of their offices, directors, employees or agents shall be responsible to Grantor for any act or failure to act hereunder, except for their own negligence or willful misconduct.

        (f)    Beyond the duties set forth in this Section 8.13 and the exercise of reasonable care in custody thereof, Trustee shall have no duty as to the collection of any Collateral in its possession or control or in the possession or control of any agent or nominee of Trustee, or any income thereon.

        (g)  Trustee shall be deemed to have exercised reasonable care in the custody and preservation of the Collateral in its possession if such Collateral is accorded treatment substantially equivalent to that which Trustee, in its individual capacity, accords its own property, it being understood that Trustee shall not have responsibility for (i) ascertaining or taking action with respect to calls, conversions, exchanges, maturities, tenders or other matters relating to any Collateral, whether or not Trustee or any other Secured Party has or is deemed to have knowledge of such matters, or (ii) taking any necessary steps to preserve rights against any Person with respect to any Collateral.

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ARTICLE IX

MISCELLANEOUS

        9.1    Indemnity.    Grantor agrees to indemnify, reimburse and hold Trustee, the Holders and their respective officers, directors, partners, members, employees and representatives ("Indemnitees") harmless from any and all liabilities, obligations, losses, damages, penalties, claims, actions, judgments, suits, costs or expenses or disbursements (including attorneys' fees and expenses) for whatsoever kind or nature which may be imposed on, asserted against or incurred by any of the Indemnitees in any way relating to or arising out of this Security Agreement, any other Security Agreement, the Indenture, the Notes, the Guarantees, the Intercreditor Agreement, the Registration Rights Agreement or any of the transactions contemplated hereby or thereby. The obligations of Grantor under this Section 9.1 shall be secured hereby and shall survive payment and performance or discharge of the Obligations and the termination of this Security Agreement for the two years following such payment and performance or discharge; provided that, if during such two year period any Indemnitee gives notice to Grantor of any potential claim under this Section 9.1, then this Section 9.1 shall survive indefinitely until any such potential claim is resolved in a manner satisfactory to Trustee.

        9.2    Governing Law.    THIS SECURITY AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAWS OF THE STATE OF NEW YORK EXCEPT TO THE EXTENT THAT THE VALIDITY OR PERFECTION OF THE SECURITY INTEREST HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR PROPERTY ARE GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF NEW YORK.

        9.3    Consent to Jurisdiction and Service Process.    ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST GRANTOR WITH RESPECT TO THIS SECURITY AGREEMENT MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF NEW YORK AND BY EXECUTION AND DELIVERY OF THIS SECURITY AGREEMENT GRANTOR, TO THE EXTENT PERMITTED BY LAW, ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE NONEXCLUSIVE JURISDICTION OF THE AFORESAID COURTS AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN CONNECTION WITH THIS SECURITY AGREEMENT. GRANTOR DESIGNATES AND APPOINTS CT CORPORATION SYSTEM, WITH AN ADDRESS AT 1633 BROADWAY, NEW YORK, NEW YORK 10019 AND SUCH OTHER PERSONS AS MAY HEREAFTER BE SELECTED BY GRANTOR IRREVOCABLY AGREEING IN WRITING TO SO SERVE, AS ITS AGENT TO RECEIVE ON ITS BEHALF IN NEW YORK, NEW YORK, SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY GRANTOR TO BE EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT. A COPY OF SUCH PROCESS SO SERVED SHALL BE MAILED BY REGISTERED OR CERTIFIED MAIL TO GRANTOR AT ITS ADDRESS PROVIDED FOR IN SECTION 9.4 EXCEPT THAT UNLESS OTHERWISE PROVIDED BY APPLICABLE LAW, ANY FAILURE TO MAIL SUCH COPY SHALL NOT AFFECT THE VALIDITY OF SERVICE OF PROCESS. IF ANY AGENT APPOINTED BY GRANTOR REFUSES TO RECEIVE AND FORWARD SUCH SERVICE, GRANTOR HEREBY AGREES THAT SERVICE UPON IT BY DELIVERY SHALL CONSTITUTE SUFFICIENT NOTICE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF TRUSTEE OR ANY HOLDER TO BRING PROCEEDINGS AGAINST GRANTOR IN THE COURTS OF ANY OTHER JURISDICTION.

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        9.4    Notices.    Except as otherwise expressly provided herein, all notices, requests and demands to or upon the respective parties hereto to be effective shall be in writing (including by telecopy), and shall be deemed to have been duly given or made when delivered by hand, or in the case of telecopy notice, when sent by transmittal on a Business Day, or in the case of a nationally recognized overnight courier service, one business day after delivery to such courier service, addressed, in the case of each party hereto, at its address specified below, or to such other address as may be designated by any party in a written notice to the other party hereto.

        If to Grantor:

New CF&I, Inc.
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205
Attention: Chief Financial Officer
Telecopy: (503) 240-5800

        If to the Secured Party:

U.S. Bank National Association
180 East Fifth Street
St. Paul, Minnesota 55101
Attention: Corporate Trust Department
Telecopy: (651) 244-0711

        9.5    Grantor Remains Liable.    Anything herein to the contrary notwithstanding, (i) Grantor shall remain liable under the Contracts and agreements included in the Collateral to the extent set forth therein to perform all of the duties and obligations thereunder to the same extent as if this Security Agreement had not been executed, (ii) the exercise by Trustee or any holder of any of the rights hereunder shall not release Grantor from any of its duties or obligations under the Contracts and agreements included in the Collateral, and (iii) Trustee shall not have any obligation or liability under the Contracts and agreements included in the Collateral by reason of this Security Agreement, nor shall Trustee be obligated to perform any of the obligations or duties of Grantor thereunder or to take any action to collect or enforce any claim for payment assigned hereunder.

        9.6    Appointment as Trustee.    The actions of Trustee hereunder are subject to the provisions of the Indenture. Trustee shall have the right hereunder to make demands, to give notices, to exercise or refrain from exercising any rights, and to take or refrain from taking action (including, without limitation, the release or substitution of Collateral), in accordance with this Security Agreement and the Indenture. Trustee may resign and a successor Trustee may be appointed in the manner provided in the Indenture. Upon the acceptance of any appointment as Trustee by a successor Trustee, that successor Trustee shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Trustee under this Security Agreement, and the retiring Trustee shall thereupon be discharged from its duties and obligations under this Security Agreement. After any retiring Trustee's resignation, the provisions of this Security Agreement shall inure to its benefit as to any actions taken or omitted to be taken by it under this Security Agreement while it was Trustee.

        9.7    Trustee May Perform.    If Grantor shall fail to do any act or thing that it has covenanted to do hereunder or if any warranty on the part of Grantor contained herein shall be breached, Trustee or any Holder may (but shall not be obligated to), after providing Grantor with at least five (5) Business Days' notice, do the same or cause it to be done or remedy any such breach, and may expend funds for such purpose. Any and all amounts so expended by Trustee or such Holder shall be paid by Grantor promptly upon demand therefor, with interest at the Default Rate during the period from and including the date on which such funds were so expended to the date of repayment. Grantor's

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obligations under this Section 9.7 shall survive the termination of this Security Agreement and the discharge of Grantor's other obligations under this Security Agreement.

        9.8    Authority of Trustee.    Grantor acknowledges that the rights and responsibilities of Grantor under this Security Agreement with respect to any action taken by Trustee or the exercise or non-exercise by Trustee of any option, voting right, request, judgment or other right or remedy provided for herein or resulting or arising out of this Security Agreement shall, as between Trustee and the Holders, be governed by the Indenture and by such other agreements with respect thereto as may exist from time to time among them, but, as between Trustee and Grantor, Trustee shall be conclusively presumed to be acting as agent for the Holders with full and valid authority so to act or refrain from acting, and Grantor shall be under no obligation, or entitlement, to make any inquiry respecting such authority.

        9.9    Successors and Assigns.    This Security Agreement shall create a continuing security interest in the Collateral and shall be binding upon and inure to the benefit of Grantor, Trustee, the Holders, all future holders of the Obligations and their respective successors and permitted assigns, except that Grantor may not assign or transfer any of its rights or obligations under this Security Agreement without the prior written consent of Trustee. Trustee may assign its rights under this Security Agreement to one or more permitted assignees. Upon any such assignment, the assignee shall succeed to all of Trustee's rights and powers hereunder. No other persons (including, without limitation, any other creditors of Grantor) other than a permitted assignee of Trustee shall have any interest herein or any right or benefit with respect hereto.

        9.10    Amendments in Writing: No Waiver; Cumulative Remedies.

        (a)  Subject to the provisions of Article Nine of the Indenture, none of the terms or provisions of this Security Agreement may be waived, amended, supplemented or otherwise modified except by a written instrument executed by Grantor and Trustee, provided that any provision of this Security Agreement imposing obligations on Grantor may be waived by Trustee in a written instrument executed solely by Trustee.

        (b)  In the event Trustee shall have instituted any proceeding to enforce any right, power or remedy under this Security Agreement by foreclosure, sale, entry or otherwise, and such proceeding shall have been discontinued or abandoned for any reason or shall have been determined adversely to Trustee, then and in every such case, Grantor, Trustee and each Holder, except as may be otherwise determined in such proceeding, shall be restored to their respective former positions and rights hereunder with respect to the Collateral, and all rights, remedies and powers of Trustee and the Holders, except as may be otherwise determined in such proceeding, shall continue as if no such proceeding had been instituted.

        (c)  No failure or delay on the part of Trustee in exercising any right, power or privilege hereunder and no course of dealing between Grantor and Trustee shall operate as a waiver thereof; nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or further exercise thereof or the exercise of any other right, power or privilege. A waiver by Trustee of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Trustee would otherwise have on any future occasion. The rights and remedies herein expressly provided are cumulative and may be exercised singly or concurrently and as often and in such order as Trustee deems expedient and are not exclusive of any rights or remedies which Trustee would otherwise have whether by agreement or now or hereafter existing under applicable law. No notice to or demand on Grantor in any case shall entitle Grantor to any other or further notice or demand in similar or other circumstances or constitute a waiver of the rights of Trustee to any other or future action in any circumstances without notice or demand.

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        9.11    Termination.    When the Obligations (other than any obligations arising under the proviso to Section 9.1) have been indefeasibly paid and performed in full, this Security Agreement shall terminate, and Trustee, at the request and sole expense of Grantor, shall execute and deliver to Grantor the proper instruments (including UCC termination statements) acknowledging the termination of this Security Agreement, and shall duly assign, transfer and deliver to Grantor, without recourse, representation or warranty of any kind whatsoever, such of the Collateral as may be in possession of Trustee and has not theretofore been disposed of, applied or released, including the release and cancellation of all licenses and rights referred to in Section 6.1(l); provided, however, that any licenses of sublicenses granted by Trustee pursuant to Section 8.8 shall continue to be in full force and effect in accordance with their terms.

        9.12    Release of Collateral.    Reference is hereby made to Article Eleven of the Indenture for provisions which discuss the release of the Collateral from the Liens created by this Security Agreement.

        9.13    Headings Descriptive.    The headings of the several Articles, Sections and subsections of this Security Agreement are inserted for convenience only and shall not in any way affect the meaning or construction of any provision of this Security Agreement.

        9.14    Severability.    In case any provision in or obligation under this Security Agreement shall be invalid, illegal or unenforceable in any jurisdiction, the validity, legality and enforceability of the remaining provisions hereof, or of such provision in any other jurisdiction, shall not in any way be affected or impaired thereby.

        9.15    Other Security.    To the extent that the Obligations are now or hereafter secured by property other than the Collateral or are now or hereafter secured by the guarantee, endorsement or property of any other Person, then Trustee shall have the right in its sole discretion to pursue, relinquish, subordinate, modify or take any other action with respect thereto, without in any way modifying or affecting any of Trustee's or any Holder's rights and remedies hereunder.

        9.16    Execution in Counterparts.    This Security Agreement and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed and delivered shall be deemed to be an original, but all such counterparts together shall constitute one and the same agreement.

        9.17    Obligations Absolute.    All obligations of Grantor hereunder shall be absolute and unconditional irrespective of:

        (a)  any bankruptcy, insolvency, reorganization, arrangement, readjustment, composition, liquidation or the like of Grantor;

        (b)  any lack of validity or enforceability of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing;

        (c)  any change in the time, manner or place of payment of, or in any other term of, all or any of the Obligations, or any other amendment or waiver of or any consent to any departure from this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing (except to the extent specified in such change, amendment or waiver);

        (d)  any exchange, release or non-perfection of any other collateral, or any release or amendment or waiver of or consent to any departure from any guarantee, for all or any of the Obligations;

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        (e)  any exercise or non-exercise, or any waiver of, any right, remedy, power or privilege under or in respect of this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing, except as specifically set forth in a waiver granted pursuant to the provisions of the Indenture; or

        (f)    any other circumstances which might otherwise constitute a defense available to, or a discharge of, a guarantor or a surety other than irrevocable payment in full of the Obligations.

        9.18    Limitation on Interest Payable.    It is the intention of the parties to conform strictly to the usury laws, whether state or federal, that are applicable to the transaction of which this Security Agreement is a part. All agreements between Grantor and Trustee, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid by Grantor for the use, forbearance or detention of the money to be loaned or advanced under this Security Agreement, any other Security Document, the Notes, the Indenture, the Registration Rights Agreement, the Intercreditor Agreement or the Guarantees or any other agreement or instrument relating to any of the foregoing, or for the payment or performance of any covenant or obligation contained herein or therein, exceed the maximum amount permissible under applicable federal or state usury laws. If under any circumstances whatsoever fulfillment of any such provision, at the time performance of such provision shall be due, shall involve exceeding the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity. If under any circumstances Grantor shall have paid an amount deemed interest by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the principal amount owing in respect of the Obligations and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and any other amounts due hereunder, the excess shall be refunded to Grantor. All sums paid or agreed to be paid for the use, forbearance or detention of the principal under any extension of credit or advancement of funds by Trustee or any Holder, shall, to the extent permitted by applicable law, and to the extent necessary to preclude exceeding the limit of validity prescribed by law, be amortized, prorated, allocated and spread from the date of this Security Agreement until payment in full of the Obligations so that the actual rate of interest on account of such principal amounts is uniform throughout the term hereof.

        9.19    Indenture Controls.    All terms, covenants, conditions, provisions and requirements of the Indenture are incorporated by reference in this Security Agreement. In the event of any conflict or inconsistency between the provisions of this Security Agreement and those of the Indenture, including any conflicts or inconsistencies in any definitions herein or therein, except to the extent that new definitions are set forth herein for such terms, the provisions or definitions of the Indenture shall govern.

        9.20    Trust Indenture Act Controls.    If any provision of this Security Agreement limits, qualifies or conflicts with the duties imposed by the TIA, the duties imposed by the TIA shall control.

        9.21    Notice under ORS 746.201.    In compliance with ORS 746.201, this Security Agreement contains the following warning, which Grantor acknowledges:

WARNING

UNLESS YOU (NEW CF&I, INC.) PROVIDE US (BENEFICIARY) WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR LOAN AGREEMENT, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL

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THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE OBTAINED PROPERTY COVERAGE ELSEWHERE.

YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF THIS INSURANCE MAY BE ADDED TO YOUR CONTRACT OR LOAN BALANCE. IF THE COST IS ADDED TO YOUR CONTRACT OR LOAN BALANCE, THE INTEREST RATE ON THE UNDERLYING CONTRACT OR LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE YOUR PRIOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE.

THE COVERAGE WE PROVIDE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.

        9.22    Intercreditor Agreement.    The rights and obligations of the parties hereto are subject to the Intercreditor Agreement.

[signature page follows]

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        IN WITNESS WHEREOF, Grantor and Trustee have caused this Security Agreement to be duly executed and delivered as of the date first above written.

NEW CF&I, INC. As Grantor
By:
	Name: Title:
U.S. BANK NATIONAL ASSOCIATION As Trustee
By:
	Name: Title:

SCHEDULE 2.1(f)

EXCLUDED EQUIPMENT

Passenger trucks
Cars
Sport utility vehicles
Forklifts
Pickup trucks
Dump trucks
Railroad trackmobile
Mobile grader
Front end loaders
Semi trucks
Maintenance trucks
Manlifts
Field tractors
Trailers for semi trucks
Electric 300 hp railroad switch engine
Scrap gondola railcars
Backhoes
Gradalls
Crawler cranes
Bobcat loaders
Pipe handlers
New coil rod loaders
Pettibone carry-lifts
Pettibone loader carriages
Forklift trucks
Coil handlers
Cranes
Loaders
Scrap loaders
Crawler loaders
Power sweepers
Mobile floor sweepers
Crane mobile trucks
Lowboy trailers
Truck mounted cranes
Fuel trucks
Portable air compressors
Bucket trucks
Flatbed trucks
Fire trucks
Floor machine tennant industrial
Lugger trucks
Water trucks
Rear dump trucks
Rock trucks
Hydraulic platform transporters
Straddle carriers
Graders
Draglines
Tractors
All terrain vehicles

Vans
Van ambulance

SCHEDULE 4.1

NECESSARY FILINGS

        1.    UCC Financing Statement listing New CF&I, Inc. as debtor and U.S. Bank National Association, as Trustee as secured party to be filed with the Delaware Secretary of State.

SCHEDULE 4.3

CHIEF EXECUTIVE OFFICE, LOCATIONS OF BOOKS AND RECORDS AND TRADE NAMES

1.	Chief Executive Office
	1000 S.W. Broadway, Suite 2200 Portland, Oregon 97205
2.	Other Places Of Business And Locations Where Books Of Accounts And Records Are Kept
	1612 E. Abriendo Pueblo, CO 81004
3.	Trade Names
	None.

SCHEDULE 4.16(a)

COPYRIGHTS AND COPYRIGHT LICENSES

None.

SCHEDULE 4.16(b)

PATENTS AND PATENT LICENSES

None.

SCHEDULE 4.16(c)

TRADEMARKS AND TRADEMARK LICENSES

None.

EXHIBIT A

FORM OF SECURITY SUPPLEMENT

        This SECURITY SUPPLEMENT, dated [            ] , is delivered pursuant to the Security Agreement, dated as of July [            ], 2002 (as the same may be from time to time amended, restated, supplemented or otherwise modified, the "Security Agreement"), among New CF&I, Inc., as Grantor, and U.S. Bank National Association, as Trustee. Capitalized terms used herein not otherwise defined herein shall have the meanings ascribed thereto in the Security Agreement.

        Grantor hereby confirms the grant to Trustee set forth in the Security Agreement of, and does hereby grant to Trustee, a security interest in all of Grantor's right, title and interest in and to all Collateral to secure the Obligations, in each case whether now or hereafter existing or in which Grantor now has or hereafter acquires an interest and wherever the same may be located. Grantor represents and warrants that the attached Supplements to Schedules accurately and completely set forth all additional information required pursuant to the Security Agreement and hereby agrees that such Supplements to Schedules shall constitute part of the Schedules to the Security Agreement.

IN WITNESS WHEREOF, Grantor has caused this Security Supplement to be duly executed and delivered by its duly authorized officer as of [            ].

NEW CF&I, INC.
By:
	Name:
	Title:

[Attach Supplements to Schedules]

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Exhibit 4.5

EX-4.6

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Exhibit 4.6

INTERCREDITOR AGREEMENT

        THIS INTERCREDITOR AGREEMENT (this "Agreement"), dated as of the 15^th day of July, 2002, by and among Oregon Steel Mills, Inc., a Delaware corporation (the "Company"), U.S. Bank National Association, in its capacity as trustee, for itself and on behalf of the "Noteholders" from time to time party to the "Indenture" as those terms are defined below (together with any successor thereto under the Indenture (provided that such successor shall be bound by the terms hereof), the "Trustee"), and Textron Financial Corporation, a Delaware corporation ("Textron"), in its capacity as agent for itself and any other "Revolver Lender" from time to time party to the "Revolver Credit Agreement" as those terms are defined below.

R E C I T A L S

        A.    The Company, the Note Guarantors (as defined below) and the Trustee are entering into that certain Indenture (as defined below), pursuant to which the Company shall issue to the Noteholders the aggregate principal amount of $305,000,000 10% First Mortgage Notes due 2009 (the "Notes");

        B.    The Company has entered into the Revolver Credit Agreement (as defined below), pursuant to which the Revolver Lenders have made available to the Company a revolving credit facility in the aggregate amount up to $75,000,000;

        C.    The obligations of the Company and the Note Guarantors under the Indenture are secured by mortgages, liens and security interests in substantially all of the Company's and the Note Guarantors' real property, plant and equipment and certain other assets, all as more specifically set forth in the Indenture and the other Note Documents (as defined below);

        D.    The obligations of the Company under the Revolver Credit Agreement are secured by inventory, receivables and all assets relating thereto, as more specifically set forth in the Revolver Credit Agreement and the other Revolver Credit Documents (as defined below); and

        E.    The Company, CF&I, New CF&I, CWR, the Revolver Agent (as defined below) and the Trustee wish to enter into this Agreement setting forth certain agreements among them in respect of their respective rights and the respective rights of the Revolver Lenders and Revolver Agent, and the Noteholders and the Trustee, with respect to the Revolver Collateral and the Note Collateral.

A G R E E M E N T

        In consideration of the premises and the mutual covenants and conditions herein contained, the Trustee, for itself and on behalf of the Noteholders, and the Revolver Agent, for itself and on behalf of the Revolver Lenders, intending to be legally bound, agree as follows:

        1.    Definitions.    In addition to those terms elsewhere expressly defined in this Agreement, as used herein, the following terms shall be defined as set forth below:

        "Business Day" means any day that is not a Saturday, a Sunday, a day on which banks are required or authorized to be closed in the State of New York or a day on which the Revolver Agent or the Trustee is closed for business.

        "Camrose Parties" means Camrose Pipe Corporation, a Delaware corporation, Canadian National Steel Company, an Alberta, Canada corporation, and Camrose Pipe Company, a Canadian general partnership.

        "CF&I" means CF&I Steel, L.P., a Delaware limited partnership.

        "CF&I Security Agreements" means (i) the Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of July 15, 2002, from CF&I, as grantor, to The Public Trustee of Pueblo County, as trustee, for the benefit of the Trustee, as beneficiary, (ii) the Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of July 15,

2002, from CF&I, as grantor, to The Public Trustee of Fremont County, as trustee, for the benefit of the Trustee, as beneficiary, (iii) Assignment of Rents and Leases, dated as of July 15, 2002, by CF&I for the benefit of the Trustee, (iv) the Security Agreement, dated as of July 15, 2002, by CF&I, as grantor, in favor of the Trustee and (v) in each case, any and all fixture filings and other filings related thereto.

        "Collateral" means, collectively, the Revolver Collateral and the Note Collateral.

        "Company" has the meaning set forth in the Recitals.

        "CWR" means Colorado and Wyoming Railway Company, a Delaware corporation.

        "Disposition" means the sale, assignment, transfer, lease, conveyance or other disposition by the Company or any of its Domestic Subsidiaries of any OSM Property, including, without limitation, an involuntary disposition as a result of a casualty or condemnation.

        "Domestic Subsidiaries" means any Subsidiary organized or formed in any state of the United States or in the District of Columbia, excluding Camrose, LSI and Oregon Feralloy.

        "General Intangibles" means any "general intangibles," as such term is defined in the UCC.

        "Governmental Agency" means (a) any international, foreign, federal, state, county or municipal government, or political subdivision thereof, (b) any governmental agency, authority, board, bureau, commission, department or instrumentality, (c) any court or administrative tribunal, (d) any non- governmental agency or entity that is vested by a governmental agency with applicable jurisdiction over a Person, or (e) any arbitration tribunal or other non-governmental authority to whose jurisdiction a Person has given its general consent.

        "Indenture" means (a) the Indenture, dated as of July 15, 2002, among the Company, the Note Guarantors and the Trustee, as such agreement may be amended, amended and restated, renewed, extended, restructured, supplemented, or otherwise modified from time to time; and (b) any credit agreement, loan agreement, note purchase agreement, indenture or other agreement, document or instrument refinancing, refunding or otherwise replacing the Indenture, or any other agreement deemed an Indenture under clause (a) or (b) hereof, whether or not with the same agent, trustee, representative lenders or holders and, subject to the provisions of the next succeeding sentence, irrespective of any change in the terms and conditions thereof; provided, that any such agreement, document or instrument effecting any such refunding or replacement expressly provides that it is deemed to be the "Indenture" hereunder and that the noteholders thereunder and their trustee(s), if any, shall be bound by the terms hereof. Without limiting the generality of the foregoing, the term "Indenture" shall include any amendment, amendment and restatement, renewal, extension, restructuring, supplement or modification to any issuance of Notes and all refundings and replacements of any issuance of notes including any agreement (i) extending the maturity of any Note Obligations; (ii) adding or deleting issuers, borrowers or guarantors thereunder; (iii) increasing the amount of Note Obligations incurred thereunder or available to be issued thereunder; or (iv) otherwise altering the terms and conditions thereof; provided, that any such agreement, document or instrument effecting any such refunding or replacement expressly provides that it is deemed to be the "Indenture" hereunder.

        "Law" means, when used in connection with any Person, collectively, all international, foreign, federal, state and local statutes, treaties, rules, regulations, standards, guidelines, ordinances, codes, orders and judgments (or any official interpretation of any of the foregoing) issued by any Governmental Agency applicable to that Person.

        "Lien" means any mortgage, deed of trust, deed to secure debt, pledge, hypothecation, assignment for security, security interest, encumbrance, lien or charge of any kind, whether voluntarily incurred or arising by operation of Law, by statute, by contract, or otherwise, affecting any Property, including any agreement to grant any of the foregoing, any conditional sale or other title retention agreement, any

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lease in the nature of a security interest, and/or the filing of or agreement to give any financing statement (other than a precautionary financing statement with respect to a lease that is not in the nature of a security interest) under the UCC or comparable Law of any jurisdiction as in effect on the date hereof with respect to any Property.

        "LSI" means LSI Plate, a California general partnership.

        "New CF&I" means New CF&I, Inc., a Delaware corporation.

        "New CF&I Security Agreement" means (i) the Security Agreements dated as of July 15, 2002, by New CF&I, as grantor, in favor of the Trustee and (ii) any and all filings related thereto.

        "Note Collateral" has the meaning set forth in Section 2.1(b).

        "Note Documents" means the Indenture, the Note Security Documents and all guarantees, documents, agreements, instruments and certificates now or hereafter executed and delivered in connection with the Indenture and the Note Security Documents, except as released pursuant to or in accordance with the Indenture.

        "Note Guarantors" means CF&I and New CF&I.

        "Note Obligations" means, collectively, at any time all debts, liabilities and obligations of the Company and the Note Guarantors, whether now or hereafter existing, arising pursuant to the terms of the Note Documents at such time.

        "Note Security Agreements" means the security agreements executed pursuant to and in connection with the Indenture, including the OSM Security Agreements, the New CF&I Security Agreement and the CF&I Security Agreements.

        "Note Security Documents" means, collectively, any and all documents executed in connection with the Indenture or in furtherance thereof, pursuant to which the Company, and the Note Guarantors or their Domestic Subsidiaries grant to the Noteholders (whether through the Trustee or otherwise) a Lien on the Note Collateral, including, without limitation, the Note Security Agreements as the same may be amended, modified or supplemented from time to time to the extent, and only to the extent, that such amendment, modification or supplement is permitted by the Indenture.

        "Noteholders" means the holders from time to time of the Notes and each of their respective successors, transferees or assigns.

        "Noteholders' Lien" means a Lien now or hereafter granted to, or obtained by, the Noteholders or the Trustee for the benefit of the Noteholders on any Note Collateral, as security for the payment of any Note Obligations.

        "Notes" has the meaning set forth in the Recitals.

        "Oregon Feralloy" means Oregon Feralloy Partners, an Oregon general partnership.

        "OSM Property" means any and all Property of the Company and each of its Domestic Subsidiaries, or rights, title or interests of the Company or such Domestic Subsidiary in Property, howsoever arising, acquired or obtained, whether now or hereafter existing, whether tangible or intangible, whether real or personal, and wherever located.

        "OSM Real Property" means (i) all freehold real and immovable property now owned or hereafter acquired by the Company and each of its Domestic Subsidiaries that is a party to a mortgage or a deed of trust delivered pursuant to the Indenture, together with all buildings, erections, improvements and fixtures now or hereafter constructed or placed thereon or used in connection therewith, and (ii) all leasehold real property now or hereafter leased by the Company or such Domestic Subsidiary, together

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with all buildings, erections, improvements and fixtures now or hereafter constructed or placed thereon or used in connection therewith that is subject to the Noteholders' Lien.

        "OSM Security Agreements" means (i) the Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of July 15, 2002, by and among the Company, as grantor, to Commonwealth Land Title Insurance Company, as trustee, for the benefit of the Trustee, as beneficiary, (ii) the Deed of Trust, Assignment of Rents and Leases, Security Agreement and Fixture Filing, dated as of July 15, 2002, by and among the Company, as grantor, to Transnation Title Insurance Company, as trustee, for the benefit of the Trustee, as beneficiary, (iii) the Security Agreement, dated as of July 15, 2002, by and among the Company, as grantor, in favor of the Trustee, and (iv) in each case, any and all fixture filings and other filings related thereto.

        "Patent" or "Patents" means one or all of the following now owned or hereafter acquired by the Company or its Domestic Subsidiaries or in which the Company or its Domestic Subsidiaries now has or hereafter acquires any rights, including, without limitation, pursuant to any Patent License, and wherever located: (a) all letters patent of the United States or any other country and all applications for letters patent of the United States or any other country, (b) all reissues, renewals, reexaminations, continuations, continuations-in-part, divisions, and extensions of any of the foregoing, (c) all inventions claimed and disclosed in the Patents and any and all trade secrets and know-how related thereto, and (d) all proceeds of the foregoing, including licenses, royalties, income, payment claims, damages and proceeds of suit and the right to sue for any past, present or future infringements of any of the foregoing.

        "Patent License" means any agreement (whether written or verbal) granting any right to make, use, sell and/or practice any invention or discovery that is the subject matter of a Patent now owned or hereafter acquired by the Company or its Domestic Subsidiaries or in which the Company or its Domestic Subsidiaries now has or hereafter acquires any rights.

        "Person" means any entity, whether an individual, trustee, corporation, general partnership, limited partnership, joint stock company, trust, estate, unincorporated organization, business association, tribe, firm, joint venture, Governmental Agency, or otherwise.

        "Proceeds" means "Proceeds," as such term is defined in the UCC and, in any event, shall include, without limitation, (a) any and all Proceeds of any insurance, indemnity, warranty or guaranty payable to either the Trustee or the Revolver Agent or the Company or any of its Domestic Subsidiaries that is a party to a Security Document from time to time with respect to any of the Collateral, (b) any and all payments (in any form whatsoever) made or due and payable to the Company or such Domestic Subsidiary from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the Collateral by any Governmental Agency (or any Person acting under color of governmental authority) and (c) any and all other amounts from time to time paid or payable under or in connection with any of the Collateral.

        "Property" means any interest in any kind of property or asset, whether real, personal or mixed, tangible or intangible.

        "Remedial Action" means any claim, proceeding or action to foreclose upon, take possession or control of, sell, lease or otherwise dispose of or in any other manner realize, take steps to realize or seek to realize upon, the whole or any part of any OSM Property, whether pursuant to the UCC, by foreclosure, by setoff, by self-help repossession, by notification to account debtors, by deed in lieu of foreclosure, by exercise of power of sale, by judicial action or otherwise, or the exercise of any other remedies with respect to any OSM Property available under any of the Security Documents, or under applicable Law.

        "Revolver Agent" means Textron in its capacity as agent for the Revolver Lenders under the Revolver Credit Agreement and not in its individual capacity, any successor agent to Textron under the

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Revolver Credit Agreement and any other agent, trustee or representative of the Revolver Lenders serving in such capacity from time to time and, if there is no such agent, trustee or representative, "Revolver Agent" means, collectively, the Revolver Lenders.

        "Revolver Collateral" has the meaning set forth in Section 2.1(a).

        "Revolver Credit Agreement" means (a) the Credit Agreement, dated as of July 12, 2002, among the Company, New CF&I, CF&I, CWR, GMAC Business Credit LLC, as Co-Managing Agent, and Textron, as Agent, as such agreement may be amended, amended and restated, renewed, extended, restructured, supplemented, or otherwise modified from time to time; and (b) any credit agreement, loan agreement, note purchase agreement, indenture or other agreement, document or instrument refinancing, refunding or otherwise replacing the Revolver Credit Agreement, or any other agreement deemed a Revolver Credit Agreement under clause (a) or (b) hereof, whether or not with the same agent, trustee, representative lenders or holders and, subject to the provisions of the next succeeding sentence, irrespective of any change in the terms and conditions thereof; provided, that, any such agreement, document or instrument effecting any such refunding, refinancing or replacement expressly provides that it is deemed to be a "Revolver Credit Agreement" hereunder and that the lenders thereunder and their agent(s), if any, shall be bound by the terms hereof. Without limiting the generality of the foregoing, the term "Revolver Credit Agreement" shall include any amendment, amendment and restatement, renewal, extension, restructuring, supplement or modification to any Revolver Credit Agreement and all refundings, refinancings and replacements of any Revolver Credit Agreement including any agreement (i) extending the maturity of any Revolver Obligations; (ii) adding or deleting issuers, borrowers or guarantors thereunder; (iii) increasing the amount of Revolver Obligations incurred thereunder or available to be borrowed thereunder; or (iv) otherwise altering the terms and conditions thereof; provided, that any such agreement, document or instrument effecting any such refunding, refinancing or replacement expressly provides that it is deemed to be a "Revolver Credit Agreement" hereunder and that the lenders thereunder and their agent(s), if any, shall be bound by the terms hereof.

        "Revolver Credit Documents" means the Revolver Credit Agreement, the Revolver Security Documents, and all guarantees, documents, agreements, instruments and certificates now or hereafter executed and delivered in connection with the Revolver Credit Agreement, except as released pursuant to or in accordance with the Revolver Credit Agreement.

        "Revolver Lenders" means, collectively, the holders from time to time of the Revolver Obligations.

        "Revolver Lenders' Lien" means a Lien now or hereafter granted to, or obtained by, the Revolver Lenders or the Revolver Agent for the benefit of the Revolver Lenders on any Revolver Collateral as security for the payment and performance of any Revolver Obligations.

        "Revolver Obligations" means, collectively, at any time, all debts, liabilities and obligations of the Company or its Domestic Subsidiaries, whether now or hereafter existing, incurred in connection with the Revolver Credit Documents at such time.

        "Revolver Security Documents" means, collectively, any and all documents executed in connection with the Revolver Credit Agreement or in furtherance thereof, pursuant to which the Company or its Domestic Subsidiaries grants to the Revolver Lenders (whether through the Revolver Agent or otherwise) a Lien on the Revolver Collateral, as the same may be amended, modified, supplemented or acknowledged from time to time to the extent, and only to the extent, that such amendment, modification, supplement or acknowledgment is permitted by the Revolver Credit Agreement.

        "Security Documents" means, collectively, the Revolver Security Documents and the Note Security Documents.

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        "Subsidiary" means any Person of which at least a majority of the capital stock or other ownership interest having ordinary voting power for the election of directors or other governing body of said Person is owned by OSM, directly or through one or more other Subsidiaries.

        "Trustee" has the meaning set forth in the introductory paragraph.

        "Trademark" or "Trademarks" means, as used by the Company or its Domestic Subsidiaries, (a) all registered and unregistered trademarks, trade names, corporate names, business names, fictitious business names, internet domain names, trade styles, service marks, logos, slogans, certification marks, collective marks and other source or business identifiers, designs and general intangibles of a like nature and the goodwill associated therewith, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise, (b) all renewals or extensions thereof, and (c) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims damages and proceeds of suit.

        "Trademark License" means any agreement (whether written or verbal) granting any right to use any Trademark or Trademark registration now owned or hereafter acquired by the Company or its Domestic Subsidiaries or in which the Company or its Domestic Subsidiaries now has or hereafter acquires any rights.

        "UCC" means the Uniform Commercial Code as in effect from time to time in the State of New York, or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction.

        2.    Priority of Liens; Remedial Actions; Other Agreements.

        2.1    Priority of Liens.    The Revolver Lenders' Liens and the Noteholders' Liens shall, as between the Revolver Lenders and the Noteholders, have the following priorities:

        (a)  The Revolver Lenders' Liens in all that OSM Property set forth and described on Schedule A hereto (the "Revolver Collateral") shall be first priority Liens in such Property, and the Trustee and Noteholders shall have no security interest therein or Lien thereon.

        (b)  The Noteholders' Liens in all that OSM Property set forth and described on Schedule B hereto (the "Note Collateral") shall be first priority Liens in such Property, and the Revolver Agent shall have no security interest therein or Lien thereon.

The foregoing provisions shall be effective at all times during the term of this Agreement, notwithstanding: (i) the initiation of any bankruptcy, moratorium, reorganization or other solvency proceeding with respect to the Company or its Domestic Subsidiaries or the grantor or pledgor of any Collateral; (ii) the priorities which would otherwise result from the order of creation, attachment or perfection of any such Lien; (iii) the taking of possession of any of the OSM Property by the Revolver Agent, the Trustee, any Revolver Lender or any Noteholder; (iv) the filing of any financing statement or the recording of any mortgage or other instrument in any recording office; (v) the order in which any of the Revolver Obligations or the Note Obligations are created; (vi) whether any such Lien is now perfected, hereafter ceases to be perfected, is avoidable by any bankruptcy trustee or otherwise is set aside invalidated or lapses; or (vii) any other matter whatsoever; and shall continue in full force and effect unless and until this Agreement shall have terminated in accordance with Section 4 hereof.

        2.2    Remedial Actions.    Unless and until this Agreement shall have been terminated in accordance with Section 4 hereof, the Revolver Agent and the Trustee shall have the right, as

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between themselves, to take or fail to take Remedial Actions with respect to any Collateral as follows:

        (a)  The Revolver Agent shall have the sole and exclusive right to take or fail to take any Remedial Action with respect to the Revolver Collateral as provided in the Revolver Security Documents or under applicable Law in any manner deemed appropriate by the Revolver Agent or the Revolver Lenders in its or their sole discretion, and neither the Trustee nor any Noteholder shall take any Remedial Action with respect to the Revolver Collateral without the prior written consent of the Revolver Agent;

        (b)  The Trustee shall have the sole and exclusive right to take or fail to take any Remedial Action with respect to the Note Collateral as provided in the Note Security Documents or under applicable Law in any manner deemed appropriate by the Trustee or the Noteholders in its or their sole discretion, and neither the Revolver Agent nor any Revolver Lender shall take any Remedial Action with respect to the Note Collateral without the prior written consent of the Trustee;

        (c)  The Revolver Agent shall have the sole and exclusive right to adjust settlement of, and collect the Proceeds of, any and all insurance insuring the Revolver Collateral; any such Proceeds received shall be promptly distributed in accordance with Section 2.3 hereof; and

        (d)  The Trustee shall have the sole and exclusive right to adjust settlement of, and collect the Proceeds of, any and all insurance insuring the Note Collateral; any such Proceeds received shall be promptly distributed in accordance with Section 2.3 hereof.

Notwithstanding the foregoing, nothing contained in this Section 2.2 shall prohibit the Revolver Agent, the Revolver Lenders, the Trustee or the Noteholders from filing a proof of claim in any case involving the Company or any of its Domestic Subsidiaries, as debtor, under Title 11 of the United States Code, as amended, nor from intervening or participating in any other judicial proceeding to the extent necessary to establish or preserve its interests, subject in each case to the provisions of this Agreement.

        2.3    Priority on Distribution of Proceeds of Collateral.    In the event of:

        (a)  any distribution of any OSM Property upon the bankruptcy, arrangement, receivership, assignment for the benefit of creditors or any other action or proceeding involving the readjustment of the obligations and indebtedness of the Company or any of its Domestic Subsidiaries that is a party to a Security Document, or the application of any OSM Property to the payment thereof;

        (b)  any distribution of the OSM Property upon the liquidation or dissolution of the Company or any Domestic Subsidiary of the Company that is a party to a Security Document, or the winding up of the assets or business of the Company or any such Subsidiary of the Company;

        (c)  any realization by any of the Revolver Agent, the Trustee, the Revolver Lenders or the Noteholders with respect to the Revolver Lenders' Liens or the Noteholders' Liens, respectively, whether through a Remedial Action or otherwise; or

        (d)  any Disposition of any OSM Property, to the extent that any part of the proceeds of such Disposition are required to be applied to any of the Revolver Obligations or the Note Obligations or held by the Revolver Agent or the Trustee in accordance with the provisions of the Revolver Credit Documents, the Note Documents, or the provisions of this Agreement;

then, in any such event, as between the Revolver Lenders and the Noteholders (i) all of the Revolver Collateral and any Proceeds thereof so distributed, applied or realized upon shall be

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distributed or paid to (or retained by) the Revolver Agent for application to the Revolver Obligations to the extent of the Revolver Lenders' Liens therein and (ii) all of the Note Collateral and any Proceeds thereof distributed, applied or realized upon shall be distributed or paid to (or retained by) the Trustee for application to the Note Obligations to the extent of the Noteholders' Liens therein. Any amounts paid to the Revolver Agent and the Trustee shall be allocated to the Revolver Lenders and the Noteholders, respectively, in accordance with the terms of the Revolver Credit Documents and the Note Documents, respectively.

        2.4    Parties to Hold Proceeds in Trust.    In the event that:

        (a)  the Revolver Agent or any Revolver Lender obtains possession of any of the Note Collateral or receives any Proceeds from any Remedial Action with respect to Note Collateral or any Disposition of Note Collateral described in Section 2.3 hereof at any time prior to payment in full of all Note Obligations; or

        (b)  the Trustee or any Noteholder obtains possession of any of the Revolver Collateral or receives any Proceeds from any Remedial Action with respect to Revolver Collateral or Disposition of Revolver Collateral described in Section 2.3 at any time prior to payment in full of all Revolver Obligations;

then, in any such event, the party receiving such Proceeds shall (unless otherwise provided by Law) hold the same in trust for the party entitled to receive the same and as soon as reasonably practicable after it shall have obtained actual knowledge thereof notify and pay over the same to the Revolver Agent for application to the Revolver Obligations (in the case of clause (b)) and to the Trustee for application to the Note Obligations (in the case of clause (a)).

        2.5    Payment Invalidated.    In the event that any of the Revolver Obligations or Note Obligations shall be paid in full in cash and subsequently, for whatever reason (including but not limited to, an order or judgment for disgorgement of a preference under Title 11 of the United States Code, or any similar Law, or the settlement of any claim in respect thereof), such formerly paid or satisfied Revolver Obligations or Note Obligations become unpaid or unsatisfied, the terms and conditions of this Agreement shall be reinstated, notwithstanding any prior termination of this Agreement pursuant to Section 4, and all provisions of this Agreement shall again be operative until either the Revolver Obligations or the Note Obligations are paid in full in cash and this Agreement is then terminated pursuant to Section 4.

        2.6    Notice of Acceleration; Notice of Remedial Action.

        (a)  The Revolver Agent agrees to deliver to the Trustee (i) prompt written notice of the acceleration of the Revolver Obligations pursuant to the Revolver Credit Documents (such notice to be provided in the same manner and substantially contemporaneously with any notice provided to the Company) and (ii) written notice as soon as practicable after the Revolver Agent shall have first commenced Remedial Action with respect to Revolver Collateral; and

        (b)  The Trustee agrees to deliver to the Revolver Agent (i) prompt written notice of the acceleration of the Note Obligations pursuant to the Note Documents (such notice to be provided in the same manner and substantially contemporaneously with any notice provided to the Company) and (ii) written notice as soon as practicable after the Trustee shall have first commenced Remedial Action with respect to Note Collateral.

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        2.7    Contesting Liens.    The Revolver Agent, for itself and on behalf of the Revolver Lenders, agrees that it shall not contest the validity, perfection, priority or enforceability of any Noteholders' Lien in Note Collateral so long as such Lien is purported to be effective under the Security Document pursuant to which such Lien was purported to have been created or granted. The Trustee on behalf of itself and on behalf of the Noteholders agrees that it shall not contest the validity, perfection, priority or enforceability of any Revolver Lenders' Lien in Revolver Collateral so long as such Lien is purported to be effective under the Security Document pursuant to which such Lien was purported to have been created or granted.

        2.8    Further Assurances.    From time to time during the term hereof, each of the Revolver Agent and the Trustee, at the reasonable request of the other and solely at the Company's expense, shall execute and deliver such other documents and instruments and take such other actions, as shall reasonably be necessary to carry out the intentions or to facilitate the performance of this Agreement including, without limitation, in connection with any Remedial Action of which such Person has received notice in accordance with the terms hereof.

        2.9    Access to Collateral.    (a) Each of the Revolver Agent and the Trustee agrees to allow the other and its respective agents and employees reasonable access, subject to the conditions set forth in Sections 2.9(b)-(f), to any OSM Property in its possession or under its control, including, without limitation, any OSM Real Property and any customer lists, software, data bases, business records data and other books and records of the Company, New CF&I, CF&I and CWR pertaining to any of the Collateral, for the purposes of any Remedial Action then permitted by both this Agreement and the relevant Security Documents; the Company, on its behalf and on behalf of any of its Domestic Subsidiaries which is a party to any Security Documents, by acknowledging receipt of this Agreement consents to such access.

        (b)  In the event that any action has been taken to enforce the rights of the Noteholders or the Trustee with respect to the Note Collateral and the Trustee has obtained possession and control of any or all of the Note Collateral pursuant to the Note Security Documents, upon reasonable notice to the Trustee by the Revolver Agent, the Trustee shall, to the extent permitted by applicable Law, permit the Revolver Agent, its employees, agents, advisers and representatives, at the Revolver Agent's sole cost, expense, liability and risk, to enter upon the Note Collateral for purposes of (i) assembling the Revolver Collateral located on such Note Collateral, (ii) selling any or all of the Revolver Collateral located on such Note Collateral, whether in bulk, in lots or to retail customers in the ordinary course of business or otherwise, (iii) removing any or all of the Revolver Collateral located on such Note Collateral, and/or (iv) taking reasonable actions to protect, secure, and otherwise enforce the rights of the Revolver Agent in and to the Revolver Collateral.

        If the Revolver Agent elects to enter upon the Note Collateral as aforesaid, all actions taken by the Revolver Agent or its employees, agents, advisors and representatives pursuant to this Section 2.9(b) shall be taken in an efficient and workmanlike manner and in accordance with applicable Law. The Revolver Agent shall compensate the Trustee in cash (which may be paid by wire transfer) for any damage to the Note Collateral caused by such assembling, selling, removing, protecting and/or securing of such Revolver Collateral, and shall pay the Trustee in cash (which may be paid by check or wire transfer), within 15 days after demand, for all the direct costs and incremental costs of the Trustee related to the provision and supervision of such access to the Note Collateral and the assembling, selling, removing, protecting and/or securing the Revolver Collateral. Upon not less than 35 days' prior written notice from the Trustee requesting that the Revolver Collateral be removed from the Note Collateral, the Revolver Agent shall at its sole cost, expense, liability and risk either remove the Revolver Collateral from the Note Collateral by the later of (i) the last day of the 120 day period referred to in Section 2.9(f) below and (ii) the 35^th day after Revolver Agent's receipt of such written notice, or pay, for any periods after such later

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day, the Trustee reasonable storage costs as provided in such notice. It is hereby understood that the payment of storage costs to the Trustee hereunder is intended to compensate the Trustee for their actual out-of-pocket costs, and the term "reasonable storage costs" shall include only the actual out-of-pocket costs incurred by the Trustee in connection with the storage of the Revolver Collateral on the site of the Note Collateral.

        (c)  Nothing in this Section 2.9 shall prevent the Trustee from entering into a contract of sale, transfer or other disposition of, or otherwise foreclosing on, any of the Note Collateral so long as such contract provides, or such foreclosure is subject to providing the Revolver Agent with the same access to such Collateral (including the execution and delivery of any agreements between third parties and the Revolver Agent to preserve the Revolver Agent's or any Revolver Lender's access to the Revolver Collateral during the period described in clause (f) below) as provided by this Section 2.9. Nothing in this Section 2.9 shall prevent the Revolver Agent from entering into a contract of sale, transfer or other disposition of, or otherwise foreclosing on, any of the Revolver Collateral so long as such contract provides, or such foreclosure is subject to providing the Trustee with the same access to such Collateral (including the execution and delivery of any agreements between third parties and the Trustee) to preserve the Trustee's access to the Note Collateral during the period provided by this Section 2.9.

        (d)  The Trustee agrees that it shall not take any action, legal, contractual or otherwise to, or commence any legal proceeding to, prevent the Revolver Agent's access to the Note Collateral as provided in this Section 2.9 or the Revolver Agent's non-exclusive use of any Patents, Patent Licenses or General Intangibles necessary or desirable to dispose of Revolver Collateral, to the extent that the Company and the Note Guarantors have granted the Revolver Agent the right to use any such property for such purpose.

        (e)  The Revolver Agent agrees that it shall not take any action, legal, contractual or otherwise to, or commence any legal proceeding to, prevent the Trustee's access to the Revolver Collateral as provided in this Section 2.9 or the Trustee's non-exclusive use of any Patents, Patent Licenses or General Intangibles necessary or desirable to dispose of Note Collateral, to the extent that the Company and the Note Guarantors have granted the Trustee the right to do so.

        (f)    Notwithstanding anything to the contrary in this Agreement, (i) the access to the Note Collateral by the Revolver Agent shall be permitted for a period not to exceed (x) 120 days from the date the Revolver Agent takes any Remedial Action or receives notice from the Trustee that the Trustee has taken or intends to take any Remedial Action or (y) such shorter period as is necessary for the Revolver Agent to sell or remove such Revolver Collateral from the OSM Real Property in which the Trustee is purported to have a Lien and complete the Revolver Agent's exercise of remedies in respect thereof.

        2.10    Trademark Licenses.    (a) The Trustee consents to the granting by the Company to the Revolver Agent of a nonexclusive license to use each Trademark of the Company solely for the purpose of permitting the Revolver Agent and the Company to sell the Revolver Collateral in accordance with Section 2.9. Such license and such right shall be world-wide and royalty free.

        (b)  The Revolver Agent consents to the granting by the Company to the Trustee of a nonexclusive license to use each Trademark of the Company to enable the Trustee to remove and realize on the Note Collateral. Such license and such right shall be world-wide and royalty free.

        (c)  The Trustee and the Revolver Agent each agree to cooperate with each other as reasonably requested to facilitate the realization upon Revolver Collateral by the Revolver Agent and the realization upon the Note Collateral by the Trustee, including without limitation by granting each other licenses in intellectual property constituting Revolver Collateral or Note Collateral, as the case may be.

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        3.    Reliance, Waivers, Etc.

        3.1    Creation of Future Obligations.    (a) Subject to Section 6.2, all of the Revolver Obligations shall be deemed to have been funded by the Revolver Lenders and incurred by the Company, New CF&I, CF&I and CWR in reliance upon this Agreement, and the Trustee and each Noteholder expressly waive notice to the Trustee or any Noteholder of the acceptance of the agreements set forth herein, notice of reliance on such agreements and notice of the creation of any of the Revolver Obligations after the date hereof, and agree that the Revolver Lenders shall be entitled to rely upon the agreements set forth herein at all times in creating the Revolver Obligations.

        (b)  Subject to Section 6.2, all of the Note Obligations shall be deemed to have been funded by the Noteholders and incurred by the Company and the Note Guarantors in reliance upon this Agreement, and the Revolver Agent and each Revolver Lender expressly waive notice to the Revolver Agent or any Revolver Lender of the acceptance of the agreements set forth herein, notice of reliance on such agreements and notice of the creation of any of the Note Obligations after the date hereof and agree that the Noteholders shall be entitled to rely upon the agreements set forth herein at all times in creating the Note Obligations.

        3.2    Responsibility for Credit Decisions; No Duty to Inform Other Parties.    (a) The Trustee has, independently and without reliance on the Revolver Agent, any Revolver Lender or the directors, officers, agents, employees or attorneys of any thereof, and instead in reliance upon information supplied to it on behalf of the Company and upon such other information as it has deemed appropriate (including, without limitation, all such information as it deemed advisable with respect to the Company's compliance or non-compliance with any environmental Laws), made its own independent decision to enter into the Note Documents and to serve as Trustee thereunder, and the Trustee shall, for itself and on behalf of the Noteholders, independently and without reliance upon the Revolver Agent, any Revolver Lender or the directors, officers, agents, employees or attorneys of any thereof, continue to make its own independent analysis and decisions in acting or not acting under the Note Documents.

        (b)  The Revolver Agent has, independently and without reliance on the Trustee, any Noteholder or the directors, officers, agents, employees or attorneys of any thereof, and instead in reliance upon information supplied to it on behalf of the Company and upon such other information as it has deemed appropriate (including, without limitation, all such information as it deemed advisable with respect to the Company's compliance or non-compliance with any environmental Laws), made its own independent decision to enter into the Revolver Credit Documents and to serve as the Revolver Agent thereunder, and the Revolver Agent shall, for itself and on behalf of the Revolver Lenders, independently and without reliance upon the Trustee, any Noteholder or the directors, officers, agents, employees or attorneys of any thereof, continue to make its own independent analysis and decisions in acting or not acting under the Revolver Credit Documents.

        (c)  Neither the Revolver Agent nor any Revolver Lender shall have any present or future duty or responsibility to the Trustee or any Noteholder to advise the Trustee or any Noteholder of information known to the Revolver Agent or any Revolver Lender regarding the financial condition of the Company or of any circumstances bearing upon the risk of nonpayment of the Revolver Obligations or the Note Obligations and the Trustee, and each Noteholder acknowledges that neither the Revolver Agent nor any Revolver Lender has made any representations or warranties to the Trustee or any Noteholder with respect to the due execution, delivery, validity or enforceability of the Revolver Credit Documents, the validity or perfection of the Revolver Lenders' Liens, the validity or enforceability of the Revolver Obligations, the existence, condition or value of any of the Revolver Collateral or as to any other matter whatsoever. If, notwithstanding the foregoing, any such information is conveyed by the Revolver Agent or any

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Revolver Lender to the Trustee or any Noteholder, neither the Revolver Agent nor any Revolver Lender shall have any responsibility to the Trustee or any Noteholder for the accuracy or completeness of any such information, nor any continuing duty or responsibility to advise the Trustee or any Noteholder of any inaccuracy in such information that is subsequently discovered, or of any updated or subsequent information, whether or not of like kind.

        (d)  Neither the Trustee nor any Noteholder shall have any present or future duty or responsibility to the Revolver Agent or any Revolver Lender to advise the Revolver Agent or any Revolver Lender of information known to the Trustee or any Noteholder regarding the financial condition of the Company or of any circumstances bearing upon the risk of nonpayment of the Note Obligations or the Revolver Obligations and the Revolver Agent on behalf of itself and each Revolver Lender acknowledges that neither the Trustee nor any Noteholder has made any representations or warranties to the Revolver Agent or any Revolver Lender with respect to the due execution, delivery, validity or enforceability of the Note Documents, the validity or perfection of the Noteholders' Liens, the validity or enforceability of the Note Obligations, the existence, condition or value of any of the Note Collateral or as to any other matter whatsoever. If, notwithstanding the foregoing, any such information is conveyed by the Trustee or any Noteholder to the Revolver Agent or any Revolver Lender, neither the Trustee nor any Noteholder shall have any responsibility to the Revolver Agent or any Revolver Lender for the accuracy or completeness of any such information, nor any continuing duty or responsibility to advise the Revolver Agent or any Revolver Lender of any inaccuracy in such information that is subsequently discovered, or of any updated or subsequent information, whether or not of like kind.

        3.3    Order of Enforcement of Remedial Actions.    Subject to all of the terms and conditions of this Agreement, including, without limitation, Section 2.3 hereof:

        (a)  The Revolver Agent and the Revolver Lenders shall have the right at any and all times to determine the order in which (i) any Remedial Action or other recourse is sought against the Company or any other obligor with respect to the Revolver Obligations, and (ii) any or all of the Revolver Lenders' Liens shall be enforced; and the Trustee, on behalf of itself and each Noteholder, hereby waives any and all rights to require that the Revolver Agent pursue or exhaust any rights or remedies with respect to the Company or any OSM Property prior to exercising its rights and remedies with respect to the Revolver Collateral or in any other manner to require the marshaling of assets or security in connection with the exercise by the Revolver Agent or any Revolver Lender of any Remedial Action with respect to the Revolver Obligations and the Revolver Collateral.

        (b)  The Trustee and the Noteholders shall have the right at any and all times to determine the order in which (i) any Remedial Action or other recourse is sought against the Company or any other obligor with respect to the Note Obligations, and (ii) any or all of the Noteholders' Liens shall be enforced; and the Revolver Agent, on behalf of itself and the Revolver Lenders, hereby waives any and all rights to require that the Trustee pursue or exhaust any rights or remedies with respect to the Company or any OSM Property prior to exercising its rights and remedies with respect to Note Collateral or in any other manner to require the marshaling of assets or security in connection with the exercise by the Trustee or any Noteholder of any Remedial Action with respect to the Note Obligations and the Note Collateral.

        3.4    Waiver of Liability for Actions Taken with Respect to Obligations and Collateral.    (a) Except as provided in Section 2.9, neither the Revolver Agent nor any Revolver Lender shall have any liability to the Trustee or any Noteholder for, and the Trustee, on behalf of itself and each Noteholder, hereby waives to the extent permitted by applicable Law any claim, right, action or cause of action which it may now or hereafter have against the Revolver Agent or any Revolver

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Lender (including, without limitation, any and all claims, rights, actions or causes of action that the Trustee or any Noteholder may otherwise have against the Agent or any Revolver Lender) arising out of, any and all actions which any Revolver Lender or the Revolver Agent, in good faith, takes or omits to take with respect to the Revolver Obligations, any obligor with respect to the Revolver Obligations or any Revolver Collateral, including, without limitation, actions with respect to: the creation, perfection or continuation of Liens with respect to any Revolver Collateral; any Remedial Action or Disposition of any Revolver Collateral; the release of any Revolver Collateral; the custody, valuation, protection, preservation, use or depreciation of any Revolver Collateral; the realizing upon or failure to realize upon any Revolver Collateral; or the collection of the Revolver Obligations. To the extent that any of the foregoing waivers is not permitted by applicable Law, the Trustee agrees that the applicable standard by which any non-waivable rights, duties or claims are to be measured shall be that neither the Revolver Agent nor any Revolver Lender shall have any liability or responsibility to the Trustee or to any Noteholders for any actions or omissions other than actions or omissions constituting gross negligence or willful misconduct.

        (b)  Neither the Trustee nor any Noteholder shall have any liability to the Revolver Agent or the Revolver Lenders for, and the Revolver Agent, on behalf of itself and each Revolver Lender, hereby waives any claim, right, action or cause of action which it may now or hereafter have against the Trustee or any Noteholder (including, without limitation, any and all claims, rights, actions or causes of action that the Revolver Agent or any Revolver Lender may otherwise have against the Trustee or any Noteholder) arising out of, any and all actions which the Trustee or any Noteholder, in good faith, takes or omits to take with respect to the Note Obligations, any obligor with respect to the Note Obligations or any Note Collateral, including, without limitation, actions with respect to: the creation, perfection or continuation of Liens with respect to any Note Collateral; any Remedial Action or Disposition of any Note Collateral; the release of any Note Collateral; the custody, valuation, protection, preservation, use or depreciation of any Note Collateral; the realizing upon or failure to realize upon any Note Collateral; or the collection of the Note Obligations. To the extent that any of the foregoing waivers is not permitted by applicable Law, the Revolver Agent agrees that the applicable standard by which any non-waivable rights, duties or claims are to be measured shall be that neither the Trustee nor any Noteholder shall have any liability or responsibility to the Revolver Agent or to any Revolver Lender for any actions or omissions other than actions or omissions constituting gross negligence or willful misconduct.

        4.    Term.    This Agreement shall be irrevocable and shall remain in full force and effect until (i) all of the letters of credit issued pursuant to the Revolver Credit Agreement have been terminated or cash collateralized and the loans, notes and unpaid letter of credit drawings, together with interest, fees and all other Revolver Obligations incurred thereunder are paid in full in cash and, all obligations to extend further advances pursuant to the Revolver Credit Agreement have been terminated, subject to Section 2.5 hereof or (ii) the Notes, together with interest, fees and all other Note Obligations incurred under the Indenture are paid in full in cash and all obligations pursuant to the Indenture have been terminated, subject to Section 2.5 hereof; provided, however, that as set forth in Sections 2.9, 2.10(a) and 2.10(b), the rights of the Revolver Agent pursuant to Sections 2.9 and 2.10 and the rights of the Trustee pursuant to Section 2.9 and Section 2.10 shall continue to apply in accordance with the terms thereof notwithstanding any sale of the Revolver Collateral or the Note Collateral, as applicable. At the time of such termination, (a) if such termination occurs pursuant to clause (i) of the preceding sentence, the Revolver Agent, solely at the expense of the Company, shall (x) deliver to the Trustee any Collateral then in its possession unless the Trustee declines or advises the Revolver Agent that possession of such Collateral by the Trustee is not required pursuant to the Note Security Documents and (y) terminate or assign to the Trustee any landlords' agreements, warehouse operators' agreements and similar agreements in favor of the Revolver Agent pertaining to the Collateral; and (b) if such termination occurs pursuant to clause (ii) of the preceding sentence, the Trustee, solely at the expense

13

of the Company, shall (x) deliver to the Revolver Agent any Collateral then in its possession unless the Revolver Agent declines or advises the Trustee that possession of such Collateral by the Revolver Agent is not required pursuant to the Revolver Security Documents and (y) terminate or assign to the Revolver Agent any landlords' agreements, warehouse operators' agreements and similar agreements in favor of the Trustee pertaining to the Collateral; and (c) if such termination occurs pursuant to clauses (i) and (ii) concurrently, then each of the Revolver Agent and the Trustee, solely at the expense of the Company, shall (x) deliver to the Company any Collateral then in the possession of the Revolver Agent and the Trustee, respectively, and (y) terminate any landlords' agreements, warehouse operators' agreements and similar agreements in favor of the Revolver Agent and the Trustee, respectively, pertaining to the Collateral.

        5.    Representations and Warranties.    (a) Each of the Revolver Agent and the Trustee represents and warrants to the other that (i) it has all requisite power and authority to execute, deliver and perform under this Agreement and (ii) the execution, delivery and performance by it of this Agreement have been duly authorized by all requisite corporate or other action;

        (b)  The Revolver Agent represents and warrants that it is a duly organized and validly existing corporation under the laws of the State of Delaware;

        (c)  The Trustee represents and warrants that it is a duly organized and validly existing national banking association; and

        (d)  By its acknowledgment hereof, the Company hereby agrees to pay the reasonable costs and expenses incurred by the Revolver Agent and the Trustee in connection with this Agreement, including, but not limited to the termination or assignment of the Revolver Collateral by the Revolver Agent and the Note Collateral by the Trustee, respectively.

        6.    Miscellaneous.

        6.1    Notices.    Whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon either of the parties by the other, or whenever either of the parties desires to give or serve upon the other any such communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and either shall be delivered in person with receipt acknowledged, delivered by reputable overnight courier or telecopied and confirmed immediately in writing by a copy mailed by registered or certified mail, return receipt requested, postage prepaid, or mailed by registered or certified mail, return receipt requested, postage prepaid, addressed as follows:

if to the Revolver Agent at:

Textron Financial Corporation
Commercial Lending Advisors
4550 North Point Parkway
Suite 400
Alpharetta, GA 30022
Attention: Eric Hubbard
Telecopier: (770) 360-1407

if to the Trustee at:

U.S. Bank National Association
101 East Fifth Street
St. Paul, MN 55101
Attention: Frank Leslie
Telecopier: (651) 244-0711

14

or at such other address or telecopy number as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Every notice, demand, request, consent, approval, declaration or other communication hereunder shall be deemed to have been duly given or served on the date on which personally delivered, with receipt acknowledged, on the date of delivery by reputable overnight courier service, on the date of telecopier transmission (so long as electronic confirmation of receipt thereof is received). Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to the persons designated above to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication.

        6.2    Entire Agreement; Amendment.    This Agreement constitutes the entire agreement between the Revolver Agent and the Trustee with respect to the subject matter hereof and supersedes all prior negotiations, understandings and agreements between the Revolver Agent and the Trustee in respect of such subject matter, whether written or oral. This Agreement may be amended, modified or supplemented only by a written instrument executed by the Revolver Agent and the Trustee.

        6.3    WAIVER OF JURY TRIAL; CONSENT TO JURISDICTION.    (a) EACH OF THE PARTIES HERETO WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS AGREEMENT.

        (b)  EACH OF THE PARTIES HERETO SUBMITS FOR ITSELF AND ITS PROPERTY IN ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR FOR RECOGNITION AND ENFORCEMENT OF ANY JUDGMENT IN RESPECT HEREOF, TO THE NON-EXCLUSIVE GENERAL JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND THE COURTS OF THE UNITED STATES OF AMERICA FOR THE SOUTHERN DISTRICT OF NEW YORK LOCATED IN NEW YORK COUNTY OF THE STATE OF NEW YORK, AND APPELLATE COURTS FROM ANY THEREOF.

        6.4    Severability.    Wherever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement.

        6.5    Survival.    The representations and warranties of the parties in this Agreement shall survive the execution, delivery and acceptance hereof by the parties hereto until the termination of this Agreement pursuant to Section 4 hereof but subject to Section 2.5 hereof.

        6.6    Counterparts.    This Agreement may be executed in any number of counterparts, all of which, taken together, shall constitute one and the same instrument, and either of the parties hereto may execute this Agreement by signing any such counterpart.

        6.7    GOVERNING LAW.    THIS AGREEMENT SHALL BE INTERPRETED, AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HERETO DETERMINED, IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THE STATE OF NEW YORK.

        6.8    Parties.    This Agreement shall be binding upon, and shall inure to the benefit of, the parties hereto, the Revolver Lenders which from time to time are parties to the Revolver Credit Agreement, the Noteholders and their respective successors and assigns.

15

        6.9    No Third Party Beneficiaries.    Nothing contained in this Agreement shall be deemed to indicate that this Agreement has been entered into for the benefit of the Company or any other Person except for the parties hereto, the Revolver Lenders, the Noteholders and their respective successors and assigns.

        6.10    Legend.    Each of the Revolver Credit Documents and the Note Documents shall be made specifically subject to the terms and conditions of this Agreement.

        6.11    Section Titles.    The Section titles contained in this Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

        6.12    Trustee or Revolver Agent not Liable.    (a) In no event shall the Trustee or (except for damages for which the Revolver Agent is required to compensate the Trustee pursuant to Section 2.9(b)), the Revolver Agent be liable for special, punitive, indirect or consequential loss or damage of any kind whatsoever (including but not limited to lost profit), even if the Trustee or the Revolver Agent has been advised of the likelihood of such loss or damage and regardless of the form of action.

        (b)  Neither the Trustee nor the Revolver Agent shall be responsible or liable for any failure or delay in the performance of its obligations under this Agreement arising out of or caused, directly or indirectly, by circumstances beyond its reasonable control, including without limitation, acts of God; earthquakes; fires; floods; wars; civil or military disturbances; sabotage; epidemics; riots; terrorist acts; interruptions, loss or malfunctions of utilities, computer (hardware or software) or communications service; accidents; labor disputes; and acts of civil or military authority or governmental actions.

[Signature Pages Follow]

16

IN WITNESS WHEREOF, this Agreement has been executed by the undersigned duly authorized signatories of the parties hereto as of the date and year first above written.

	U.S. BANK NATIONAL ASSOCIATION as Trustee
	By:
	Name: Title:
	TEXTRON FINANCIAL CORPORATION, as Revolver Agent
	By:
	Name: Title:
	OREGON STEEL MILLS, INC.
	By:
	Name: Title:
Acknowledged and Agreed:
NEW CF&I, INC.
By:
Name: Title:
CF&I STEEL, L.P.
By New CF&I, Inc., as General Partner
By:
Name: Title:
COLORADO AND WYOMING RAILWAY COMPANY
By:
Name: Title:

SCHEDULE A

REVOLVER COLLATERAL

        All right, title and interest of the Company, CF&I, New CF&I and CWR (each a "Borrower") in, to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Borrower (including under any trade names, styles or deviations thereof), and whether owned or consigned by or to, or leased from or to, such Borrower, and regardless of where located:

        (a)  all inventory (as defined in the NY UCC) of such Borrower, wherever located, including all Inventory sold by such Borrower which is returned to or repossessed by such Borrower, and all Accessions thereto and Documents therefor (any and all such Inventory, Accessions and Documents being the "Inventory");

        (b)  all (A) Accounts of such Borrower arising from the sale of Inventory or services rendered by such Borrower, (B) Chattel Paper and Instruments evidencing any right to payment for Inventory sold or services rendered by such Borrower, and (C) rights of such Borrower now or hereafter existing in and to all security agreements and guaranties entered into by or on behalf of the Account Debtors and securing or guaranteeing any such Accounts, Chattel Paper and Instruments (any and all such Accounts, Chattel Paper and Instruments being the "Receivables", and any and all such security agreements and guaranties being the "Related Contracts");

        (c)  all books, records, writings, databases and other information (A) evidencing, embodying or listing any Inventory, Receivables or Related Contracts or (B) used in connection with the sale of Inventory or the collection of amounts due under Receivables and Related Contracts;

        (d)  all General Intangibles such as, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles, programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise (but excluding any intellectual property or other General Intangibles relating to production, property, plant and equipment, the operation thereof or the production and manufacturing processes) (collectively, the "Intangibles");

        (e)  all investment property (as defined in the NY UCC), including, without limitation, all stock or other equity interests (whether constituting investment property or not) in material subsidiaries (excluding the Camrose Parties, LSI and Feralloy), all securities, whether certificated or uncertificated, security entitlements, securities accounts, bank accounts, Deposit Accounts, cash collateral accounts, commodity contracts and commodity accounts, excluding the Note Collateral Account as defined in the Indenture in which products and Proceeds of Note Collateral may be deposited (collectively, the "Investment Property");

        (f)    all supporting obligations (as defined in the NY UCC) related to the property described above, including without limitation, letters of credit and guaranties issued in support of Accounts (collectively, the "Supporting Obligations"), and all Instruments evidencing intercompany indebtedness; and

        (g)  all other related personal property and products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Revolver Collateral (including Proceeds which constitute property of the types described in (but not excluded from) clauses (a) through (f) above), Proceeds deposited from time to time in any lock box or blocked account, and, to the extent not otherwise included, all payments under insurance with respect to any of the foregoing Revolver Collateral (whether or not the Revolver Agent is the loss payee thereof) (collectively the "Proceeds") (except to the extent such Proceeds are invested in real property and any improvements thereon and machinery and equipment constituting personal property, or other

property and assets owned by the Company, CF&I and New CF&I which constitute Note Collateral), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Revolver Collateral.

        The terms "Account," "Account Debtor", "Accession", "Chattel Paper", "Deposit Accounts", "General Intangibles", "Instruments", "Documents" and "Proceeds" shall have the respective meanings assigned to them in the Uniform Commercial Code in effect in the State of New York on the date hereof and as amended from time to time ("NY UCC") (such terms being defined therein in the lower case).

2

SCHEDULE B

NOTE COLLATERAL

        All of the right, title and interest of the Company, New CF&I and CF&I in, to and under the following property, in each case, whether now owned or existing or hereafter acquired or arising, and wherever located (all of which being hereinafter collectively called the "Note Collateral") (capitalized terms used in this Schedule B shall have the respective meanings set forth in the Note Security Agreements, unless indicated otherwise in this Schedule B):

        (a)    all Chattel Paper;

        (b)    the Note Collateral Account and all Trust Moneys (as such terms are defined in the Indenture), other moneys, securities, certificates, items and other property on deposit therein;

        (c)    all Contracts;

        (d)    all Intellectual Property;

        (e)    all Documents;

        (f)    all Equipment;

        (g)    all Fixtures;

        (h)    all General Intangibles;

        (i)    all Instruments;

        (j)    all Insurance;

        (k)  (i) all other rights to the payment of money, including rents and other sums payable to Grantor under leases, rental agreements and other Chattel Paper and insurance proceeds; (ii) all Collateral Records; (iii) all Collateral Support; (iv) all Supporting Obligations; and (v) all Accessions and additions to, parts and appurtenances of, substitutions for and replacements of any of the foregoing (provided, however, that for the avoidance of doubt, the foregoing clauses (a) through (k) shall not include (A) any property or assets described in (and not excluded from) clauses (i) through (vi) of the definition of "Revolver Collateral" or (B) any Excluded Collateral); and

        (l)    to the extent not otherwise included in the foregoing, all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Note Collateral (including Proceeds which constitute property of the type described in (and not excluded from) clauses (a) through (k) above and all collateral security and guarantees given by any Person with respect to any of the foregoing, and in any event, including, without limitation, any and all (i) proceeds of any insurance (including, without limitation, all Net Proceeds (as defined in the Indenture)), indemnity, warranty or guarantee payable to Trustee or to Grantor from time to time with respect to any of the foregoing Note Collateral, (ii) payments (in any form whatsoever and including, without limitation, all Net Awards (as defined in the Indenture)) made or due and payable to Grantor from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the foregoing Note Collateral by any Governmental Authority (or any Person acting under color of a Governmental Authority), (iii) products of the foregoing Note Collateral, and (iv) other amounts from time to time paid or payable under or in connection with any of the foregoing Note Collateral.

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Exhibit 4.6

EX-4.7

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Exhibit 4.7

[FORM OF DEED OF TRUST]

[COLORADO COVER PAGE]

DEED OF TRUST, ASSIGNMENT OF RENTS
AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING

from

CF&I Steel, L.P., Grantor

to

The Public Trustee of [PUEBLO] [FREMONT] County, Trustee

for the benefit of

U.S. Bank National Association, a national banking association organized
under the laws of the United States, as Trustee, Beneficiary

Dated as of July    , 2002

Prepared By, and After Recording Return To:

Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Mona Y. Oh, Esq.

[CALIFORNIA COVER PAGE]

Recording Requested by,
And When Recorded Return to:
Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Mona Y. Oh, Esq.

DEED OF TRUST, ASSIGNMENT OF RENTS
AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING

from

Oregon Steel Mills, Inc., Grantor

to

Transnation Title Insurance Company, Trustee

for the benefit of

U.S. Bank National Association, a national banking association organized
under the laws of the United States, as Trustee, Beneficiary

DATED AS OF JULY    , 2002

ATTENTION: COUNTY RECORDER—THIS INSTRUMENT COVERS GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN AND IS INTENDED TO CONSTITUTE A FIXTURE FILING UNDER SECTION 9502 OF THE CALIFORNIA COMMERCIAL CODE. THIS INSTRUMENT IS TO BE FILED FOR RECORD IN THE RECORDS WHERE DEEDS OF TRUST ON REAL ESTATE ARE RECORDED AND SHOULD BE APPROPRIATELY INDEXED, NOT ONLY AS A DEED OF TRUST, BUT ALSO AS A FINANCING STATEMENT COVERING GOODS THAT ARE OR ARE TO BECOME FIXTURES ON THE REAL PROPERTY DESCRIBED HEREIN. THE MAILING ADDRESSES OF THE GRANTOR (DEBTOR) AND BENEFICIARY (SECURED PARTY) ARE SET FORTH IN THIS INSTRUMENT.

[OREGON COVER PAGE]

After Recording Return To:

Skadden, Arps, Slate, Meagher & Flom LLP
300 South Grand Avenue, Suite 3400
Los Angeles, California 90071
Attention: Mona Y. Oh, Esq.

DEED OF TRUST, ASSIGNMENT OF RENTS
AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING

from

Oregon Steel Mills, Inc., Grantor

to

Transnation Title Insurance Company, Trustee

for the benefit of

U.S. Bank National Association, a national banking association organized
under the laws of the United States, as Trustee, Beneficiary

DATED AS OF JULY    , 2002

THIS DEED OF TRUST COVERS REAL PROPERTY IN THE CITY OF PORTLAND, COUNTY OF MULTNOMAH AND STATE OF OREGON WITH THE FOLLOWING TAX ACCOUNT NUMBERS: R239681, R239682, R239683 (alternates: R649774290, R649774291, R649774292) and R323745 (alternate: R961011240).

TABLE OF CONTENTS

Background		1
Granting Clauses		2
Terms and Conditions		5
1.	Warranty of Title	5
2.	Payment and Performance of Obligations	5
3.	Requirements	6
4.	Payment of Taxes and Other Impositions	6
5.	Insurance	7
6.	Restrictions on Liens, Encumbrances, Sales and Transfers	10
7.	Relationship of Beneficiary, Trustee and Grantor; Grantor Remains Liable Under Contracts and Leases	10
8.	Maintenance; No Alteration; Inspection; Utilities	11
9.	Condemnation/Eminent Domain	11
10.	Leases	12
11.	Further Assurances/Estoppel Certificates	13
12.	Trustee's and Beneficiary's Right to Perform	13
13.	Environmental Matters	13
14.	Environmental Covenants	14
15.	Environmental Notices	15
16.	Limitation on Environmental Obligations of Trustee and Beneficiary	15
17.	Environmental Indemnity	15
18.	Asbestos	16
19.	Events of Default	16
20.	Remedies	16
21.	Right of Beneficiary to Credit Sale	19
22.	Appointment of Receiver	19
23.	Extension, Release, etc.	19
24.	Security Agreement under Uniform Commercial Code	20
25.	Assignment of Rents	21
26.	Trust Funds	21
27.	Additional Rights	21
28.	Changes in Method of Taxation	22
29.	Notices	22
30.	No Oral Modification	22
31.	Partial Invalidity; Limitation on Interest	22
32.	Waiver of Right of Redemption and Other Rights	22
33.	Remedies Not Exclusive	23
34.	Multiple Security	23
35.	Expenses; Indemnification	24
36.	Successors and Assigns	25
37.	No Waivers, etc.	26
38.	Governing Law, etc.	26
39.	Waiver of Trial by Jury	26
40.	Certain Definitions	26
41.	Release Upon Payment and Discharge of Grantor's Obligations	26
42.	Concerning the Trustee	26
43.	The Indenture Controls	28

i

44.	[STRIKE AND INSERT "INTENTIONALLY DELETED" IN THE OREGON AND COLORADO FORMS] Certain Matters Relating to Trust Property Located in the State of California	28
45.	[STRIKE AND INSERT "INTENTIONALLY DELETED" IN THE OREGON AND CALIFORNIA FORMS] Certain Matters Relating to Trust Property Located in the State of Colorado	30
46.	[STRIKE AND INSERT "INTENTIONALLY DELETED" IN THE COLORADO AND CALIFORNIA FORMS] Certain Matters Relating to Trust Property Located in the State of Oregon	32
47.	LEASEHOLD DEED OF TRUST	33

ii

DEED OF TRUST, ASSIGNMENT OF
RENTS AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING

        THIS DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING, dated as of July    , 2002 is made by                        , a                         ("Grantor"), whose address is                        , to Transnation Title Insurance Company [FOR COLORADO, REPLACE WITH "THE PUBLIC TRUSTEE OF PUEBLO/FREMONT COUNTY], as trustee (in such capacity, "Trustee") under this Deed Of Trust whose address is                        , for the benefit of U.S. Bank National Association, as trustee under the Indenture defined herein ("Beneficiary"), whose address is 101 East 5th Street, St. Paul, Minnesota 55101-1860. References to this "Deed Of Trust" shall mean this instrument and any and all renewals, modifications, amendments, supplements, extensions, consolidations, substitutions, spreaders and replacements of this instrument.

Background

        [A.] Grantor is the owner of the parcel(s) of real property described on Schedule A attached together with all of Grantor's buildings, improvements, structures and fixtures now or subsequently located thereon [FOR OREGON, ADD "AND GRANTOR IS THE TENANT OF AND OWNER OF A LEASEHOLD ESTATE AND LEASEHOLD INTEREST ARISING UNDER THE LEASE DESCRIBED ON SCHEDULE B IN ALL OR A PORTION OF THE PARCEL(S) OF REAL PROPERTY AND THE BUILDINGS, IMPROVEMENTS, STRUCTURES AND FIXTURES NOW OR SUBSEQUENTLY LOCATED THEREON DESCRIBED ON SCHEDULE B PURSUANT TO THE LEASE DESCRIBED ON SCHEDULE B"].

        [B.]  Grantor and Beneficiary are parties to the Indenture dated as of July    , 2002 between Oregon Steel Mills, Inc., New CF & I, Inc., CF & I Steel, L.P., and U.S. Bank National Association, as trustee (as the same may be amended, modified or otherwise supplemented from time to time, the "Indenture"; capitalized terms not defined herein shall have the meanings ascribed thereto in the Indenture and in addition, the terms "guarantee" and "person" shall have the meanings ascribed thereto in the Indenture [NOTE: FOR COLORADO, ADD "A TRUE COPY OF WHICH IS ATTACHED AS SCHEDULE B"]) for the benefit of Holders of            %                        Notes due 2009 (the "Securities") in the aggregate principal amount of [$300,000,000] issued by Oregon Steel Mills, Inc. and guaranteed by New CF & I, Inc. and CF & I Steel, L.P. pursuant to the Subsidiary Guarantees.

        [NOTE: FOR COLORADO ADD:

        [C.] PURSUANT TO THE INDENTURE, GRANTOR HAS EXECUTED A PROMISSORY NOTE OF EVEN DATE HEREWITH PAYABLE TO BENEFICIARY IN THE FACE AMOUNT OF [$300,000,000] PLUS ANY OTHER AMOUNTS BECOMING DUE AND PAYABLE BY GRANTOR UNDER THE INDENTURE AND/OR BY ANY SUBSIDIARY UNDER ITS SUBSIDIARY GUARANTEES, OR SUCH LESSER AMOUNT AS SHALL BECOME DUE AND PAYABLE BY GRANTOR UNDER THE INDENTURE AND/OR BY ANY SUBSIDIARY UNDER ITS SUBSIDIARY GUARANTEES AND MATURING ON                        , 2009 (AS THE SAME MAY BE AMENDED RENEWED, EXTENDED, RESTATED OR OTHERWISE MODIFIED FROM TIME TO TIME, THE "CF&I NOTE")."]

        [C.][D.]    It is a condition precedent to the purchase of the Securities that Grantor shall have executed and delivered this Deed Of Trust to Beneficiary for the ratable benefit of the Holders [FOR COLORADO, ADD ", TO SECURE, AMONG OTHER THINGS, THE CF&I NOTE"].

        NOW, THEREFORE, in consideration of the premises and to induce Beneficiary to enter into the Indenture and to induce the Holders to purchase the Securities, Grantor hereby agrees with Beneficiary, for the ratable benefit of the Holders, as follows:

Granting Clauses

        For good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Grantor agrees that to secure repayment of the unpaid principal of, premium, if any, and interest on the Securities and the Subsidiary Guarantees and all other obligations and liabilities of Grantor to Beneficiary and the Holders (including, without limitation, interest accruing after the maturity of the Securities and interest accruing after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to Grantor, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding and interest, to the extent permitted by law, on the unpaid interest), whether direct or indirect, absolute or contingent, due or to become due, or now existing or hereafter incurred, which may arise under, out of, or in connection with, the Indenture, the Securities, the Subsidiary Guarantees, this Deed Of Trust, the other Security Documents, the Intercreditor Agreement, or any other document made, delivered or given in connection therewith, in each case whether on account of principal, premium, interest, fees, indemnities, costs, expenses or otherwise (including, without limitation, all fees and disbursements of counsel to Beneficiary and Trustee that are required to be paid by Trustee or Beneficiary pursuant to the terms of the Indenture, the Intercreditor Agreement, this Deed Of Trust or any other Security Document) (all such indebtedness, obligations and liabilities collectively, the "Obligations"); [NOTE: FOR COLORADO, DELETE THE PRECEDING SENTENCE AND INSERT "FOR GOOD AND VALUABLE CONSIDERATION, THE RECEIPT AND SUFFICIENCY OF WHICH ARE HEREBY ACKNOWLEDGED, TO SECURE THE PRINCIPAL OF, PREMIUM IF ANY, AND INTEREST ON, AND ALL OTHER INDEBTEDNESS NOW OR HEREAFTER EVIDENCED BY, THE CF&I NOTE AND ALL OTHER OBLIGATIONS AND LIABILITIES WHICH CONSTITUTE INDEBTEDNESS OF, OR OTHER AMOUNTS OWING BY, GRANTOR TO BENEFICIARY OR ANY OF THE HOLDERS, WHETHER DIRECT OR INDIRECT, ABSOLUTE OR CONTINGENT, DUE OR TO BECOME DUE, OR NOW EXISTING OR HEREAFTER INCURRED, WHICH MAY ARISE UNDER, OUT OF, OR IN CONNECTION WITH, THE CF&I NOTE, THIS DEED OF TRUST, THE INDENTURE, THE INTERCREDITOR AGREEMENT, ANY OTHER SECURITY DOCUMENT OR ANY SUBSIDIARY GUARANTEE (ALL SUCH INDEBTEDNESS, OBLIGATIONS AND LIABILITIES COLLECTIVELY, THE "OBLIGATIONS");"]

        Grantor bargains, sells, mortgages, warrants, conveys, grants, assigns, transfers and sets over with power of sale and by these presents does hereby bargain, sell, mortgage, warrant, convey, grant, assign, transfer and set over with power of sale unto Trustee for the benefit of Beneficiary for the ratable benefit of the Holders and hereby grants to Beneficiary for the ratable benefit of the Holders a continuing security interest in and to all the estate, right, title, claim or demand whatsoever of Grantor, in possession or expectancy, whether now owned or hereafter acquired, in or to all of the following:

        (1)  the plot(s), pieces(s) or parcel(s) of real property described on Schedule A attached hereto and made a part hereof together with all buildings, foundations, structures, fixtures, additions, enlargements, extensions, modifications, repairs, replacements and improvements of every kind or nature now or hereafter located on such real property (collectively referred to as the "[FOR OREGON, ADD "FEE"] Improvements"; the [FOR OREGON, ADD "FEE"] Improvements and such real property are collectively referred to as the "[FOR OREGON, ADD "FEE"] Real Estate"); [FOR OREGON, ADD "AND THE LEASEHOLD ESTATE AND LEASEHOLD INTEREST ARISING UNDER THE LEASE DESCRIBED ON SCHEDULE B ATTACHED HERETO AND MADE A PART HEREOF (THE "MORTGAGED LEASE") IN THE PLOT(S), PIECES(S) OR PARCEL(S) OF REAL PROPERTY DESCRIBED ON SCHEDULE B ATTACHED HERETO AND MADE A PART HEREOF TOGETHER WITH

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ALL BUILDINGS, STRUCTURES, FIXTURES, AND IMPROVEMENTS OF EVERY KIND OR NATURE NOW OR HEREAFTER LOCATED ON SUCH REAL PROPERTY (COLLECTIVELY REFERRED TO AS THE "LEASED IMPROVEMENTS"; THE LEASED IMPROVEMENTS AND SUCH REAL PROPERTY ARE COLLECTIVELY REFERRED TO AS THE "LEASED REAL ESTATE") PURSUANT TO THE MORTGAGED LEASE; (THE FEE IMPROVEMENTS AND THE LEASED IMPROVEMENTS ARE COLLECTIVELY REFERRED TO AS THE "IMPROVEMENTS" AND THE FEE REAL ESTATE AND LEASED REAL ESTATE ARE COLLECTIVELY REFERRED TO AS THE "REAL ESTATE");]

        (2)  the Real Estate or any part thereof;

        (3)  all easements [FOR COLORADO ADD: "(INCLUDING WITHOUT LIMITATION, THOSE EASEMENT RIGHTS DESCRIBED ON ATTACHED SCHEDULE C) AND THOSE EASEMENTS CREATED PURSUANT TO THAT CERTAIN DECLARATION OF EASEMENTS, DATED MAY            , 2002, EXECUTED BY GRANTOR AND RECORDED ON JUNE 18, 2002 IN THE OFFICIAL RECORDS OF PUEBLO COUNTY, COLORADO AS RECEPTION NO. 1445005 AND RECORDED ON JUNE 18, 2002 IN THE OFFICIAL RECORDS OF FREMONT COUNTY, COLORADO AS RECEPTION NO. 750790], rights of way, gores of land, streets, ways, alleys, passages, sewer rights, waters, water courses, water and riparian rights, development rights, air rights, mineral rights and all estates, rights, titles, interests, privileges, licenses, tenements, hereditaments and appurtenances to the extent belonging, relating or appertaining to the Real Estate (or any portion thereof), whether existing or hereafter acquired, and any reversions, remainders, rents, issues, profits and revenues thereof and all land lying in the bed of any street, road or avenue, in front of or adjoining the Real Estate to the center line thereof, whether existing or hereafter acquired or hereafter arising; including, without limitation, all water and water rights, ditches and ditch rights, reservoirs and storage rights, wells and well rights, springs and spring rights, groundwater rights (whether tributary, nontributary or not-nontributary), water contracts, water allotments, water taps, shares in ditch or reservoir companies, and all other rights of any kind or nature in or to the use of water, [FOR COLORADO, ADD: "INCLUDING BUT NOT LIMITED TO, THE RIGHTS AND INTERESTS DESCRIBED ON SCHEDULE D ATTACHED HERETO,"] to the extent such belong, relate or appertain to the Real Estate together with any and all easements, rights of way, fixtures, personal property, contract rights, stock certificates, permits or decrees associated with or used in connection with any such rights to the extent such belong, relate or appertain to the Real Estate. (FOR COLORADO, ADD: "THE LISTING OF SPECIFIC WATER RIGHTS ON SCHEDULE C IS NOT INTENDED TO LIMIT THE GENERALITY OF THE FOREGOING GRANT OR EXCLUDE ANY OTHER WATER RIGHTS WHICH ARE NOT SO SPECIFICALLY LISTED TO THE EXTENT SUCH BELONG, RELATE OR APPERTAIN TO THE REAL ESTATE;"]

        (4)  all of the fixtures, chattels, business machines, machinery, apparatus, equipment, furnishings, fittings and articles of personal property of every kind and nature whatsoever and all appurtenances and additions thereto and substitutions or replacements thereof (together with, in each case, attachments, components, parts and accessories) and now or subsequently attached to, or contained in or used or usable in any way in connection with any operation or letting of, the Real Estate, including but without limiting the generality of the foregoing, all screens, awnings, shades, blinds, curtains, draperies, artwork, carpets, rugs, storm doors and windows, furniture and furnishings, heating, electrical, and mechanical equipment, lighting, switchboards, plumbing, ventilating, air conditioning and air-cooling apparatus, refrigerating and incinerating equipment, escalators, elevators, loading and unloading equipment and systems, stoves, ranges, laundry equipment, cleaning systems (including window cleaning apparatus), telephones, communication systems (including satellite dishes and antennae), televisions, computers, sprinkler systems and

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other fire prevention and extinguishing apparatus and materials, security systems, motors, engines, machinery, pipes, pumps, tanks, conduits, appliances, fittings and fixtures of every kind and description (all of the foregoing in this paragraph (4) being referred to as the "Equipment");

        (5)  all substitutes and replacements of, and all additions and improvements to, the Real Estate and the Equipment, subsequently acquired by or released to Grantor or constructed, assembled or placed by Grantor on the Real Estate, immediately upon such acquisition, release, construction, assembling or placement, including, without limitation, any and all building materials whether stored at the Real Estate or offsite, and, in each such case, without any further mortgage, conveyance, assignment or other act by Grantor;

        (6)  all right, title and interest (but not the obligations) of Grantor in, to and under all leases, subleases, underlettings, concession agreements, management agreements, licenses and other agreements relating to the use or occupancy of the Real Estate or the Equipment or any part thereof, now existing or subsequently entered into by Grantor and whether written or oral and all guarantees of any of the foregoing (collectively, as any of the foregoing may be amended, restated, extended, renewed or modified from time to time, the "Leases"), and all rights of Grantor now existing or hereafter arising in respect of cash and securities deposited thereunder and the right to receive and collect the revenues, income, rents, issues and profits thereof, together with all other rents, royalties, issues, profits, revenue, income and other benefits arising from the use and enjoyment of the Trust Property (as defined below) (collectively, the "Rents");

        (7)  all trade names, trademarks, logos, copyrights, goodwill and books and records relating to or used in connection with the operation of the Real Estate or the Equipment or any part thereof; and all general intangibles related to the operation of the Improvements now existing or hereafter arising;

        (8)  all unearned premiums under insurance policies now existing or subsequently obtained by Grantor relating to the Trust Property (or any portion thereof) and Grantor's interest in and to all proceeds of any such insurance policies (including title insurance policies) to the extent relating to all or any portion of the Trust Property or any of Grantor's operations or business, including without limitation, the right to collect and receive such proceeds, subject to the provisions relating to insurance generally set forth below; and all awards and other compensation, including the interest payable thereon and the right to collect and receive the same, made to the present or any subsequent owner of the Trust Property (or any portion thereof) for the taking by eminent domain, condemnation or otherwise, of all or any part of the Real Estate or any easement or other right therein;

        (9)  all right, title and interest (but not the obligations) of Grantor now existing or hereafter arising in and to (i) all contracts from time to time executed by Grantor or any officer, director, manager or agent on its behalf relating to the ownership, construction, maintenance, repair, operation, occupancy, sale or financing of the Trust Property (or any portion thereof) and all agreements relating to the purchase or lease of any portion of the Trust Property, together with the right to exercise any options relating to the Trust Property, or any such property, (ii) all leases of Equipment, (iii) all consents, licenses, building permits, certificates of occupancy and other governmental approvals relating to construction, completion, occupancy, use or operation of the Trust Property or any part thereof and (iv) all drawings, plans, specifications and similar or related items relating to the Trust Property (collectively, as the foregoing may be amended, restated, extended, renewed or modified from time to time, the "Contracts");

        (10) any and all monies now or subsequently on deposit for the payment of real estate taxes or special assessments against the Trust Property (or any portion thereof) or for the payment of premiums on insurance policies covering the Trust Property (as defined below) or otherwise on deposit with or held by Trustee as provided in this Deed Of Trust; all capital, operating, reserve or

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similar accounts held by or on behalf of Grantor and related to the operation of the Trust Property, whether now existing or hereafter arising, and all monies held in any of the foregoing accounts and any certificates or instruments related to or evidencing such accounts;

        (11) (i) all accounts and revenues now existing or hereafter arising for rental of space in the Improvements or any other facility on the Trust Property whether or not yet earned by performance and (ii) all rights to payment from any consumer credit-charge card organization or entity, including those now existing or hereafter created, substitutions therefore, proceeds thereof (whether cash or non-cash, movable or immovable, tangible or intangible) received upon the sale, exchange, transfer, collection or other disposition or substitution thereof and any and all of the foregoing and proceeds therefrom; and

        (12) all proceeds, both cash and noncash, of the foregoing.

        All of the foregoing property and rights and interests now owned or held or subsequently acquired by Grantor and described in the foregoing paragraphs numbered (1) through (5) are collectively referred to as the "Premises", and those described in the foregoing paragraphs numbered (1) through (12) are collectively referred to as the "Trust Property". Notwithstanding the foregoing, the Trust Property shall not include any Excluded Assets and any Excluded Collateral.

        All of the Trust Property hereinabove described, real, personal and mixed, whether affixed or annexed to the Real Estate or not and all rights hereby conveyed and mortgaged are intended so to be as a unit and are hereby understood, agreed and declared, to the maximum extent permitted by law, to form a part and parcel of the Real Estate and to be appropriated to the use of the Real Estate, and shall be for the purposes of this Deed Of Trust deemed to be real estate and conveyed and mortgaged hereby; provided, however, as to any of the property aforesaid which does not so form a part and parcel of the Real Estate or does not constitute a "fixture" (as defined in the Uniform Commercial Code as in effect from time to time in the State of New York or, when the context implies, the Uniform Commercial Code as in effect from time to time in any other applicable jurisdiction (the "Code")), this Deed Of Trust is hereby deemed to also be a Security Agreement under the Code for purposes of granting a security interest in such property, which Grantor hereby grants to Beneficiary, as Secured Party (as defined in the Code), as more particularly provided below in this Deed Of Trust.

        TO HAVE AND TO HOLD the Trust Property and the rights and privileges hereby mortgaged and conveyed, together with the right to retain possession of the Trust Property after an Event of Default (as defined below), unto Trustee, its successors and assigns for the uses and purposes set forth, until the Obligations are fully paid and performed.

Terms and Conditions

        Grantor further represents and warrants to, and covenants and agrees with, Trustee and Beneficiary as follows:

        1.    Warranty of Title.    Grantor warrants that Grantor has good title to the Real Estate in fee simple and good title to the rest of the Trust Property, subject only to the Permitted Liens. (FOR OREGON, ADD "GRANTOR ALSO WARRANTS THAT GRANTOR HAS GOOD TITLE TO THE LEASEHOLD ESTATE AND THE LEASEHOLD INTEREST OF GRANTOR IN THE LEASED REAL ESTATE UNDER AND FOR THE TERM OF YEARS SET FORTH IN THE MORTGAGED LEASE, SUBJECT ONLY TO THE PERMITTED LIENS.] Grantor shall warrant, defend and preserve such title and the Lien of this Deed Of Trust thereon against all claims of all persons and entities. Grantor further warrants that it has the right to mortgage and convey the Trust Property.

        2.    Payment and Performance of Obligations.    Grantor shall pay the Obligations at the times and places and in the manner specified in [NOTE: FOR COLORADO, ADD "THE CF & I NOTE

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AND"] the Indenture and shall perform all the Obligations [NOTE: FOR COLORADO, ADD "AS SPECIFIED IN THE CF & I NOTE AND THE INDENTURE"].

        3.    Requirements.    Grantor shall promptly comply with, or cause to be complied with, and conform to all present and future laws, statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and requirements, of each of the United States of America, any state and any municipality, local government or other political subdivision thereof and any agency, department, bureau, board, commission or other instrumentality of any of them, now existing or subsequently created (collectively, "Governmental Authority") which has jurisdiction over the Trust Property and all covenants, restrictions and conditions now or later of record which may be applicable to any of the Trust Property, or to the use, manner of use, occupancy, possession, operation, maintenance, alteration, repair or reconstruction of any of the Trust Property. All present and future laws, statutes, codes, ordinances, orders, judgments, decrees, rules, regulations and requirements of every Governmental Authority applicable to Grantor or to any of the Trust Property and all covenants, restrictions, and conditions which now or later may be applicable to any of the Trust Property are collectively referred to as the "Legal Requirements".

        (a)  From and after the date of this Deed Of Trust, Grantor shall not by act or omission permit any building or other improvement on any premises not subject to the Lien of this Deed Of Trust to rely on the Premises or any part thereof or any interest therein to fulfill any Legal Requirement, and Grantor hereby assigns to Trustee any and all rights to give consent for all or any portion of the Premises or any interest therein to be so used. Grantor shall not by act or omission impair the integrity of any of the Real Estate as one or more legal zoning lots separate and apart from all other premises not owned by Grantor. Grantor represents that each parcel of the Real Estate constitutes a legally subdivided lot, in compliance with all subdivision laws and similar Legal Requirements. Any act or omission by Grantor which would result in a violation of any of the provisions of this subsection shall be void.

        (b)  Grantor shall have the right to contest by appropriate legal proceedings diligently conducted in good faith, without cost or expense to Beneficiary, the validity or application of any Legal Requirement and to suspend compliance therewith if permitted under the applicable Legal Requirement, provided (i) failure to comply therewith shall not subject Beneficiary to any civil or criminal liability, (ii) such contest shall not (A) subject the Trust Property to any Lien the enforcement of which is not suspended during the prosecution of such contest, (B) affect the priority of the Lien of this Deed Of Trust, (C) affect the ownership, use or occupancy of the Trust Property, or (D) subject the Trust Property or any part thereof or any interest therein to any danger of being sold, forfeited or lost by reason of such contest by Grantor, (iii) Grantor shall furnish a good and sufficient bond or surety or otherwise make provision for payment thereof in the amount necessary to comply with such Legal Requirement, plus any interest, penalty, loss or injury by reason of such contest or non-compliance with such Legal Requirement, and (iv) upon a final determination of such proceeding, Grantor shall take all steps necessary to comply with any requirements arising therefrom.

        4.    Payment of Taxes and Other Impositions.    (a) Promptly when due, Grantor shall pay and discharge, or shall cause to be paid and discharged, all taxes of every kind and nature (including, without limitation, all real and personal property, income, franchise, withholding, transfer, gains, profits and gross receipts taxes), all charges for any easement or agreement maintained for the benefit of any of the Trust Property, all general and special assessments, levies, permits, inspection and license fees, all water and sewer rents and charges and all other public charges even if unforeseen or extraordinary, imposed upon or assessed against or which may become a lien on any of the Trust Property, or arising in respect of the occupancy, use or possession thereof, together with any penalties or interest on any of the foregoing (all of the foregoing are collectively referred to as the "Impositions"). Upon request by Beneficiary, Grantor shall deliver to Beneficiary (i) original or copies of receipted bills and cancelled checks evidencing payment of such Imposition if it is a real estate tax or other public charge and

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(ii) evidence acceptable to Beneficiary showing the payment of any other such Imposition. If by law any Imposition, at Grantor's option, may be paid in installments (whether or not interest shall accrue on the unpaid balance of such Imposition), Grantor may elect to pay such Imposition in such installments and shall be responsible for the payment of such installments with interest, if any.

        (b)  Nothing herein shall affect any right of Beneficiary under this Deed Of Trust or otherwise, without notice or demand to Grantor, to pay any Imposition after the date such Imposition shall have become due unless Grantor shall contest such Imposition in accordance with Section 4(d) below and Grantor shall have given prior written notice of such contest as required thereby, and to add to the Obligations the amount so paid, together with interest (to the maximum extent permitted by law) from the time of payment at the rate then borne by the Securities. Any sums paid by Beneficiary in discharge of any Impositions shall be (1) a Lien on the Premises secured hereby prior to any right or title to, interest in, or claim upon the Premises subordinate to the Lien of this Deed Of Trust, and (ii) payable on demand by Grantor to Beneficiary together with interest (to the maximum extent permitted by law) at the rate then borne by the Securities.

        (c)  Grantor shall not claim, demand or be entitled to receive any credit or credits toward the satisfaction of this Deed Of Trust or on any interest payable thereon for any taxes assessed against the Trust Property or any part thereof, and shall not claim any deduction from the taxable value of the Trust Property by reason of this Deed Of Trust.

        (d)  Grantor shall have the right before any delinquency occurs to contest or object to the amount or validity of any Imposition by appropriate legal proceedings diligently conducted in good faith, without cost or expense to Beneficiary, but such right shall not be deemed or construed in any way as relieving, modifying, or extending Grantor's covenant to pay any such Imposition at the time and in the manner provided in this Section unless (i) Grantor has given prior written notice to Beneficiary of Grantor's intent so to contest or object to an Imposition, (ii) the legal proceedings shall operate conclusively to prevent the sale of the Trust Property, or any part thereof, to satisfy such Imposition prior to final determination of such proceedings, (iii) Grantor shall furnish a good and sufficient bond or surety or otherwise make adequate provision for the payment thereof in the amount of the Impositions which are being contested plus any interest and penalty which may be imposed thereon and which could become a Lien against the Real Estate or any part of the Trust Property, and (iv) any such Lien shall be a Permitted Lien.

        (e)  Upon written notice to Grantor after an Event of Default, Beneficiary shall be entitled to require Grantor to pay monthly in advance to Beneficiary the equivalent of 1/12th of the estimated annual Impositions. Beneficiary may commingle such funds with its own funds and Grantor shall not be entitled to interest thereon.

        5.    Insurance.

        (a)  Grantor shall maintain or cause to be maintained on all of the Premises:

        (i)    property insurance against loss or damage by fire, lightning, windstorm, tornado, water damage, flood, earthquake (except with respect to real property in the state of California) and by such other further risks and hazards as now are or subsequently may be covered by an "all risks" policy or a fire policy covering "special" causes of loss; provided, however, that in the event earthquake or flood peril insurance is not available at commercially reasonable rates to insure at 100 percent of values at risk, Grantor shall maintain such coverage as would be maintained by a prudent owner and operator of property similar in use and configuration as the Premises;

        (ii)  comprehensive commercial general liability insurance under a policy covering all tort claims for personal injury, bodily injury or death, or property damage covered by such type of policy occurring on, in or about the Premises with respect to injury and property damage in

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such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises;

        (iii)  insurance against rent loss, extra expense or business interruption (and/or soft costs, in the case of new construction), if applicable, in such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises, but not less than one year's gross rent or gross income;

        (iv)  during the course of any construction, alteration or repair of Improvements:

        (A)  comprehensive commercial general liability insurance. The policy shall include coverage for independent contractors and completed operations. The completed operations coverage shall stay in effect for two years after construction of any Improvements has been completed. The policy shall provide coverage on an occurrence basis against claims for personal injury, including, without limitation, bodily injury, death or property damage occurring on, in or about the Premises and the adjoining streets, sidewalks and passageways, such insurance to afford protection with respect to personal injury, bodily injury or death to any one or more persons or damage to property in such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises;

        (B)  workers' compensation insurance (including employer's liability insurance) for all employees of Grantor engaged on or with respect to the Premises in such amounts as required by law; including self-insured coverage to the extent allowed by applicable law, or a combination thereof, provided such self-insurance is consistent with coverage that would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises;

        (C)  builder's risk completed value form insurance against "all risks of physical loss," including collapse, water damage, flood and earthquake (except with respect to real property in the state of California), provided, however, that in the event earthquake or flood peril insurance is not available at commercially reasonable rates to insure at 100 percent of values at risk, Grantor shall maintain such coverage as would be maintained by a prudent owner and operator of property similar in use and configuration as the Premises and transit coverage, during construction or repairs of the Improvements, in nonreporting form, covering the total value of work performed and equipment, supplies and materials furnished (with an appropriate limit for soft costs in the case of construction), with deductibles in such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises;

        (v)  boiler and machinery property insurance covering pressure vessels, air tanks, boilers, machinery, pressure piping, heating, air conditioning and elevator equipment and escalator equipment, provided the Improvements contain equipment of such nature, and insurance against rent, extra expense, business interruption and soft costs, if applicable, arising from any such breakdown, all such insurance to be in such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises;

        (vi)  if any portion of the Premises are located in an area identified as a special flood hazard area by the Federal Emergency Management Agency or other applicable agency, flood insurance in such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises, but in no event less than the maximum limit of coverage available under the National Flood Insurance Act of 1968, as amended; and

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        (vii) such other insurance in such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises.

Each insurance policy (other than flood insurance written under the National Flood Insurance Act of 1968, as amended, in which case to the extent available) shall (i) provide that it shall not be cancelled, non-renewed or materially amended without 30 days' prior written notice to Beneficiary, and (ii) with respect to all property insurance, provide for deductibles in such amounts as would be maintained by a prudent owner and operator of property similar in use and configuration to the Premises, contain a "Replacement Cost Endorsement" without any deduction made for depreciation and with no co-insurance penalty (or attaching an agreed amount endorsement), with loss payable solely to Beneficiary (modified, if necessary, to provide that proceeds in the amount of replacement cost (or if replacement cost is unavailable, actual cash value) may be retained by Beneficiary without the obligation to rebuild) as its interest may appear, without contribution, under a "standard" or "New York" mortgagee clause and be written by financially sound and reputable insurance companies. Liability insurance policies shall name Trustee and Beneficiary as additional insureds and contain a waiver of subrogation against Trustee and Beneficiary; all such policies shall indemnify and hold Trustee and Beneficiary harmless from all liability claims occurring on, in or about the Premises and the adjoining streets, sidewalks and passageways to the extent of the risks covered by such policies. Notwithstanding the foregoing provision, Grantor shall have no obligation to indemnify Beneficiary or Trustee for liabilities, claims or damages which result directly from Beneficiary's or Trustee's or their respective agents' or employees' willful misconduct or gross negligence or which arise from acts, omissions or occurrences first occurring after title to the Trust Property is conveyed to Beneficiary through foreclosure or delivery of a deed in lieu thereof. Each policy shall expressly provide that any proceeds which are payable to Beneficiary shall be paid by check payable to the order of Beneficiary only and requiring the endorsement of Beneficiary only. If any required insurance shall expire, be withdrawn, become void by breach of any condition thereof by Grantor or by any lessee of any part of the Trust Property or become void or unsafe by reason of the failure or impairment of the capital of any insurer, Grantor shall immediately obtain new or additional insurance complying with the terms of this Deed Of Trust and provide copies thereof to Beneficiary. Grantor shall not take out any separate or additional insurance which is contributing in the event of loss unless it is properly endorsed to Beneficiary and it complies with the terms of this Deed Of Trust.

        (b)  Grantor shall deliver to Trustee and Beneficiary a copy of each insurance policy required to be maintained, or a copy of a certificate of such insurance, together with a copy of the declaration page for each such policy. Grantor shall (i) pay as they become due all premiums for such insurance, (ii) not later than 30 days prior to the expiration of each policy, obtain and deliver a renewed policy or policies, or duplicate original or originals thereof, marked "premium paid," or accompanied by other evidence of payment with standard non-contributory mortgagee clauses in favor of Beneficiary. Within 30 days of the end of each calendar year, Grantor shall cause its insurance underwriter or broker to certify to Trustee and Beneficiary in writing that all the requirements of this Deed Of Trust governing insurance have been satisfied.

        (c)  If Grantor is in default of its obligations to insure or deliver any such prepaid policy or policies, then Beneficiary, at its option and without notice, may effect such insurance from year to year, and pay the premium or premiums therefor, and Grantor shall pay to Beneficiary on demand such premium or premiums so paid by Beneficiary with interest (to the fullest extent permitted by law) from the time of payment at the rate then borne by the Securities and the same shall be deemed to be secured by this Deed Of Trust and shall be collectible in the same manner as the Obligations secured by this Deed Of Trust.

        (d)  Grantor promptly shall comply with and conform to (i) all provisions of each such insurance policy, and (ii) all requirements of the insurers applicable to Grantor or to any of the Trust Property or to the use, manner of use, occupancy, possession, operation, maintenance,

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alteration or repair of any of the Trust Property. Grantor shall not use or permit the use of the Trust Property in any manner which would permit any insurer to cancel any insurance policy or void coverage required to be maintained by this Deed Of Trust.

        (e)  If the Trust Property, or any part thereof, shall be destroyed or damaged by fire or any other casualty, whether insured or uninsured, or in the event any claim is made against Grantor for any personal injury, bodily injury or property damage incurred on or about the Premises and the amount of loss or claim is in excess of One Million Dollars ($1,000,000), Grantor shall give immediate notice thereof to Trustee and Beneficiary. If the Trust Property is damaged by fire or other casualty, Grantor authorizes and empowers Beneficiary, at Beneficiary's option and in its sole discretion (but without any obligation to do so), as attorney-in-fact for Grantor, to make proof of loss, to adjust and compromise any claim under any insurance policy, to appear in and prosecute any action arising from any policy, to collect and receive insurance proceeds and to deduct therefrom expenses incurred in the collection process. Each insurance company concerned is hereby authorized and directed by Grantor to make payment for such loss directly to Beneficiary. Beneficiary shall have the right (but not the obligation) to require Grantor to repair or restore the Trust Property, and Grantor hereby designates Beneficiary as its attorney-in-fact for the purpose of making any election (which election Beneficiary shall not be obligated to make) required or permitted under any insurance policy relating to repair or restoration. The insurance proceeds or any part thereof received by Beneficiary shall be applied in accordance with the Indenture.

        (f)    In the event of foreclosure or exercise of the power of sale of this Deed Of Trust or other transfer of title to the Trust Property, all right, title and interest of Grantor in and to any insurance policies then in force shall pass to the purchaser or grantee (subject to the insurer's approval as maybe required by any such insurance policies or applicable law) and Grantor hereby appoints Beneficiary its attorney-in-fact, in Grantor's name, to assign and transfer all such policies and proceeds to such purchaser or grantee.

        (g)  Upon written notice to Grantor after an Event of Default, Beneficiary shall be entitled to require Grantor to pay monthly in advance to Beneficiary the equivalent of 1/12^th of the estimated annual premiums due on such insurance. Beneficiary may commingle such funds with its own funds and Grantor shall not be entitled to interest thereon.

        (h)  Grantor may maintain insurance required under this Deed Of Trust by means of one or more blanket insurance policies maintained by Grantor; provided, however, that (i) any such policy shall specify the maximum amount of the total insurance afforded by such blanket policy that is allocated to the Premises and the other Trust Property and any sublimits in such blanket policy applicable to the Premises and the other Trust Property, (ii) each such blanket policy shall include an endorsement providing that, in the event of a loss resulting from an insured peril, insurance proceeds shall be allocated to the Trust Property in an amount equal to the coverages required to be maintained by Grantor as provided above and (iii) the protection afforded under any such blanket policy shall be no less than that which would have been afforded under a separate policy or policies relating only to the Trust Property.

        6.    Restrictions on Liens, Encumbrances, Sales and Transfers.    Except for the Lien of this Deed Of Trust and other Permitted Liens, Grantor shall not create or suffer to exist any Lien on the Trust Property, or any part thereof, whether superior or subordinate to the Lien of this Deed Of Trust and whether recourse or non-recourse. Furthermore, except as may be permitted by the Indenture, Grantor shall not sell, transfer, convey or assign all or any portion of, or any interest in, the Trust Property.

        7.    Relationship of Beneficiary, Trustee and Grantor; Grantor Remains Liable Under Contracts and Leases.     (a) Neither Beneficiary nor Trustee shall in any event be construed as a partner, joint venturer, agent or associate of Grantor or of any beneficiary, tenant, subtenant, operator,

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concessionaire or licensee of Grantor in the conduct of their respective businesses. Without limiting the foregoing, neither Beneficiary nor Trustee shall be deemed to be such partner, joint venturer, agent or associate on account of Trustee or Beneficiary becoming a mortgagee in possession or exercising any rights pursuant to the Indenture, this Deed Of Trust, any of the other Security Documents, the Intercreditor Agreement, any other document or instrument, applicable law, or otherwise.

        (b)  Notwithstanding anything to the contrary herein, Grantor shall remain liable under each of the Contracts and Leases to observe and perform all the conditions and obligations to be observed and performed by Grantor thereunder, all in accordance with the terms and provisions of each Contract and Lease. Nothing set forth herein shall relieve Grantor from the performance of any term, covenant, condition or agreement on Grantor's part to be performed or observed under or in respect of any Contract or Lease or from any liability to any person under or in respect of any Contract or Lease. Neither Beneficiary nor Trustee nor any Holder shall have any obligation or liability under any Contract or Lease by reason of or arising out of this Deed Of Trust or the receipt by Beneficiary or any such Holder of any payment relating to such Contract or Lease pursuant hereto. Neither Beneficiary nor Trustee nor any Holder shall be obligated in any manner to perform any of the obligations of Grantor under or pursuant to any Contract or Lease, to make any payment, to make any inquiry as to the nature or the sufficiency of any payment received by it or as to the sufficiency of any performance by any party under any Contract or Lease, to present or file any claim, to take any action to enforce any performance or to collect the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

        8.    Maintenance; No Alteration; Inspection; Utilities.    (a) Grantor shall maintain or cause to be maintained all the Improvements in good condition and repair and shall not commit or suffer any waste of the Improvements. Grantor shall repair, restore, replace or rebuild promptly any part of the Premises which may be damaged or destroyed by any casualty whatsoever. The Improvements shall not be demolished or materially altered, except as permitted by the Indenture.

        (b)  Trustee and Beneficiary and any persons authorized by either of them shall have the right to enter and inspect the Premises and the right to inspect all work done, labor performed and materials furnished in and about the Improvements and the right to inspect and make copies of all books, contracts and records of Grantor relating to the Trust Property.

        (c)  Grantor shall pay or cause to be paid when due all utility charges which are incurred for gas, electricity, water or sewer services furnished to the Premises and all other assessments or charges of a similar nature, whether public or private, affecting the Premises or any portion thereof, whether or not such assessments or charges are liens thereon.

        9.    Condemnation/Eminent Domain.    Immediately upon obtaining knowledge of the institution of any proceedings for the condemnation or taking of the Trust Property, or any portion thereof, Grantor will notify Trustee and Beneficiary of the pendency of such proceedings. Grantor authorizes and empowers Beneficiary, at Beneficiary's option and in Beneficiary's sole discretion (but without any obligation to do so), as attorney-in-fact for Grantor, to commence, appear in and prosecute, in Beneficiary's or Grantor's name, any action or proceeding relating to any condemnation or taking of the Trust Property, or any portion thereof, to settle or compromise any claim in connection with such condemnation or taking, and to collect and receive the award therefrom and to deduct therefrom the expenses incurred in the collection process. If Beneficiary elects not to participate in such condemnation or taking proceeding, then Grantor shall, at its expense, diligently prosecute any such proceeding. All awards and proceeds of condemnation or taking shall be and hereby are assigned to Beneficiary as provided above, and Grantor agrees to execute any such assignments of all such awards as Beneficiary may request. The awards and proceeds of condemnation or taking or any part thereof received by Beneficiary shall constitute Trust Moneys which shall be deposited into the Collateral Account and applied in accordance with the Indenture.

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        10.    Leases.    (a) Grantor shall not (i) execute an assignment or pledge of any Lease relating to all or any portion of the Trust Property other than in favor of Trustee and Beneficiary, or (ii) with respect to any Lease, accept any payment of rent more than 30 days in advance of its due date.

        (b)  Grantor shall not enter into any Lease of any of the Trust Property or other agreement or arrangement subsequent to the date hereof with any person which would (i) involve property that is necessary for Grantor's steel making operations, plate rolling operations, rail, rod, wire and bar making operations or any other finishing or related operations of Grantor, or otherwise interfere in any material respect with the ordinary conduct of the business of Grantor or (ii) have a material adverse effect on the value or utility of the property subject thereto. Grantor shall not amend, modify, renew, extend, terminate, cancel, or accept the surrender of a Lease unless the foregoing action is (i) in the ordinary conduct of the business of Grantor, (ii) for a reasonable business purpose of Grantor and (iii) would not have an adverse effect on the value or utility of the Trust Property or the Lien of this Deed Of Trust thereon.

        (c)  As to any Lease, Grantor shall:

        (i)    perform all of the material provisions of the Lease on the part of the lessor thereunder to be performed;

        (ii)  not engage in any conduct in respect of any Lease which would materially impair the value of the Trust Property or impair the Lien of this Deed Of Trust thereon;

        (iii)  exercise, within five days after a request by Beneficiary, any right to request from the lessee a certificate with respect to the status thereof;

        (iv)  promptly deliver to Beneficiary copies of any notices of default which Grantor may at any time forward to or receive from the lessee; and

        (v)  promptly deliver to Beneficiary, upon its request, a fully executed counterpart of the Lease.

        (d)  Grantor shall deliver to Beneficiary, within ten days after a request by Beneficiary, an Officers' Certificate containing the names of all lessees and other occupants of the Trust Property, the terms of all Leases and the spaces occupied and rentals payable thereunder, and a list of all Leases which are then in default, including the nature and magnitude of the default; such statement shall be accompanied by credit information with respect to the lessees and such other information as Beneficiary may reasonably request.

        (e)  All Leases entered into by Grantor after the date hereof, if any, and all rights of any lessees thereunder shall be subject and subordinate in all respects to the Lien and provisions of this Deed Of Trust.

        (f)    In the event of the enforcement by Trustee or Beneficiary of any remedy under this Deed Of Trust, the lessee under each Lease shall, if requested by Beneficiary or any other person succeeding to the interest of Grantor as a result of such enforcement, attorn to such person and shall recognize such successor in interest as lessor under the Lease without change in the provisions thereof; provided, however, that such successor in interest shall not be: (i) bound by any payment of an installment of rent or additional rent which may have been made more than 30 days before the due date of such installment; (ii) liable for any previous act or omission of Grantor (or its predecessors in interest); (iii) responsible for any monies owing by Grantor to the credit of such lessee or subject to any credits, offsets, claims, counterclaims, demands or defenses which the lessee may have against Grantor (or its predecessors in interest); (iv) bound by any covenant to undertake or complete any construction of the Premises or any portion thereof; or (v) obligated to make any payment to such lessee other than any security deposit actually delivered to such successor in interest. Each lessee or other occupant, upon request by Beneficiary or such successor in interest, shall execute and deliver an instrument or

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instruments confirming such attornment. In addition, Grantor agrees that each Lease entered into after the date of this Deed Of Trust shall include language to the effect of subsections (e) and (f) of this Section 10; provided that (to the fullest extent permitted by law) the provisions of such subsections shall be self-operative and any failure of any Lease to include such language shall not impair the binding effect of such provisions on any lessee under such Lease.

        11.    Further Assurances/Estoppel Certificates.    To further assure Trustee's and Beneficiary's rights under this Deed Of Trust, Grantor agrees upon demand of Trustee or Beneficiary to do any act or execute any additional documents (including, but not limited to, security agreements on any personalty included or to be included in the Trust Property and a separate assignment of each Lease in recordable form) as may be required by Trustee or Beneficiary to confirm the Lien of this Deed Of Trust and all other rights or benefits conferred on Trustee and Beneficiary. Grantor, within five business days after request, shall deliver, in form and substance satisfactory to Beneficiary, a written statement, duly acknowledged, setting forth the amount of the obligations, and whether any offsets, claims, counterclaims or defenses exist against the Obligations and certifying as to such other matters as Beneficiary shall reasonably request.

        12.    Trustee's and Beneficiary's Right to Perform.    If Grantor fails to perform any of the covenants or agreements of Grantor herein, then Trustee or Beneficiary, without waiving or releasing Grantor from any obligation or default under this Deed Of Trust, may, at any time (but shall be under no obligation to) pay or perform the same, and the amount or cost thereof, with interest (to the fullest extent permitted by law) at the rate then borne by the Securities, shall immediately be due from Grantor to Trustee or Beneficiary and the same shall be secured by this Deed Of Trust and shall be a Lien on the Trust Property prior to any right, title to, interest in or claim upon the Trust Property attaching subsequent to the Lien of this Deed Of Trust. No payment or advance of money by Trustee or Beneficiary under this Section 12 shall be deemed or construed to cure Grantor's default or waive any right or remedy of Trustee or Beneficiary.

        13.    Environmental Matters.    Except as disclosed in the Security Documents, (a) to the best of Grantor's knowledge, Grantor is in material compliance with all federal, state and local laws and regulations relating to pollution or protection of human health or the environment, including, without limitation, ambient air, surface water, ground water, land surface or subsurface strata, and natural resources (together "Environmental Laws" and including, without limitation, laws and regulations relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, wastes, toxic or hazardous substances or wastes, petroleum and petroleum products, asbestos or asbestos-containing materials, polychlorinated biphenyls, lead or lead-based paints or materials, radon or mold, fungi or other substances that may have an adverse effect on human health ("Materials of Environmental Concern")), or otherwise relating to the manufacture, generation, processing, distribution, use, treatment, storage, disposal, transport or handling of Materials of Environmental Concern, or the preservation of the environmental or mitigation of adverse effects thereon, and each law and regulation with regard to record keeping, notification, disclosure, and reporting requirements respecting Materials of Environmental Concern, except as would not reasonably be expected to result in sanctions or other loss or expenditures of $100,000 or more. Such compliance includes, but is not limited to, the possession by Grantor of all permits and other governmental authorizations required under all applicable Environmental Laws, and compliance with the terms and conditions thereof.

        (b)  Grantor has not received any communication (written or, to the best of Grantor's knowledge, oral), whether from a governmental authority, citizens group, employee or otherwise, that alleges that Grantor is not in compliance with any Environmental Laws, and, to the best of Grantor's knowledge, there are no circumstances that may prevent or interfere with such compliance in the future.

        (c)  There is no claim, action, cause of action, investigation or notice (written or, to the best of Grantor's knowledge, oral) (collectively, "Environmental Claim") by any person or entity alleging

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potential liability (including, without limitation, potential liability for investigatory costs, cleanup costs, governmental response costs, natural resources damages, property damages, personal injuries, or penalties) arising out of, based on or resulting from (a) the presence, or release into the environment, of any Material of Environmental Concern at any location, whether or not owned or operated by Grantor or (b) circumstances forming the basis of any violation, or alleged violation, of any Environmental Law, that in either case is pending or threatened against Grantor or, to Grantor's best knowledge, against any person or entity whose liability for any Environmental Claim Grantor has retained or assumed either contractually or by operation of law.

        (d)  To Grantor's best knowledge, there are no past or present actions, activities, circumstances, conditions, events or incidents, including, without limitation, the release, emission, discharge, presence or disposal of any Material of Environmental Concern, that could form the basis of any Environmental Claim against Grantor or' against any person or entity whose liability for any Environmental Claim Grantor has retained or assumed either contractually or by operation of law.

        14.    Environmental Covenants.

        (a)  Grantor agrees to comply in all respects with any applicable requirements under any Environmental Law and all civil, criminal or administrative orders relating to the manufacture, generation, handling, storage, release, discharge, removal and disposal of any Material of Environmental Concern on, under or from the Trust Property; the foregoing compliance shall include but shall not be limited to Grantor paying the costs of remediation of any Material of Environmental Concern present at, on, or under, or originating from, the Trust Property as required pursuant to applicable Environmental Law, and Grantor keeping the Trust Property free of any Lien imposed pursuant to any Environmental Law. In the event Grantor fails to comply with the foregoing covenants, after written notice to Grantor and the expiration of the cure period permitted under the applicable Environmental Law, Beneficiary may (but shall not be obligated to) pay or perform the covenant or remove any Material of Environmental Concern from the Trust Property or any property adjacent thereto and the amount or cost thereof with interest (to the fullest extent permitted by law) at the rate then borne by the Securities shall immediately be due from Grantor to Beneficiary and the same shall be added to the Obligations and be secured by this Deed Of Trust. After written notice to Grantor, if Beneficiary in good faith believes that Grantor may not be in compliance with the foregoing covenants, or after the occurrence and during the continuance of an Event of Default, Beneficiary shall have the right to conduct an environmental audit of the Trust Property at Grantor's expense, at such times and under such conditions as Beneficiary shall reasonably determine in the circumstances, and Grantor shall cooperate in the conduct of such environmental audit. Grantor shall give Beneficiary and its agents and employees access to Grantor's books and records (except for any attorney-client privileged documents; provided that in the event such documents are withheld, Grantor shall provide Trustee and Beneficiary with adequate information concerning the issues of concern) and to the Trust Property to remove Material of Environmental Concern which is present at, on or under the Trust Property in violation of any Environmental Law or to permit Beneficiary to comply with all Environmental Laws.

        (b)  Grantor shall have the right to contest by appropriate action or legal proceedings diligently conducted in good faith, without cost or expense to Beneficiary, the validity or application of any Environmental Law, or orders or demands to investigate or remove any Material of Environmental Concern from the Trust Property of any Governmental Authority or private person, or the necessity, scope, or procedures of such investigation or removal, and to suspend compliance therewith if permitted under the applicable Environmental Law, provided (i) Grantor shall give written notice to Beneficiary of Grantor's intent to so contest an Environmental Law, (ii) failure to comply therewith shall not subject Beneficiary or Trustee to any civil or criminal liability, (iii) Grantor shall deliver to Beneficiary an Officers' Certificate and, as to

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the matters set forth in clauses (A), (B) and (C) below, an Opinion of Counsel to the effect that such contest shall not (A) subject the Trust Property to any Lien on the Trust Property the enforcement of which is not suspended during the prosecution of such contest, (B) affect the priority of the lien of this Deed Of Trust or (C) affect the ownership, use or occupancy of the Trust Property, (iv) Grantor shall furnish a bond or surety, or set aside on its books reserves if and to the extent required by GAAP, in the amount necessary to comply with the Environmental Law, plus any interest, penalty, loss or injury by reason of such contest or non-compliance with such Environmental Law, (v) upon a final determination of such proceeding, Grantor shall take all reasonable steps necessary to comply with any requirements arising therefrom, and (vi) Grantor shall defend, indemnify, and hold harmless Trustee and Beneficiary from and against any and all liability, losses, costs, damage and expenses, including, without limitation, attorneys' fees and costs and consequential damages) that Trustee or Beneficiary may sustain by reason of any such contest.

        15.    Environmental Notices.    If Grantor shall become aware of or receive notice or other communication concerning any actual, alleged, suspected or threatened violation of any Environmental Law, or Environmental Claim in connection with the Trust Property or past or present activities of any Person thereon, including, but not limited to, notice or other communication concerning any actual or threatened investigation, inquiry, lawsuit, claim, citation, directive, summons, proceedings, complaint, notice, order, writ or injunction, relating to same, then Grantor shall deliver to Beneficiary, promptly, and in any event, within seven (7) days of the receipt of such notice or communication by Grantor, a written description of said violation, liability, or actual or threatened event or condition, together with copies of any documents evidencing same. Receipt of such notice shall not be deemed to create any obligation on the part of Beneficiary to defend or otherwise respond to any such notification.

        16.    Limitation on Environmental Obligations of Trustee and Beneficiary.    Nothing in this Deed Of Trust shall be construed to confer any obligation on Trustee or Beneficiary to take any action or incur any liability under any Environmental Law with respect to the Trust Property.

        17.    Environmental Indemnity.    Grantor agrees to defend, indemnify and hold Trustee and Beneficiary free and harmless from and against any and all loss, costs, damage and expense (including attorneys' fees and costs and consequential damages) Trustee or Beneficiary may sustain by reason of (i) the imposition or recording of a Lien on the Trust Property by any Governmental Authority pursuant to any Environmental Law; (ii) claims of any person asserted against Trustee or Beneficiary regarding Grantor's violation or alleged violations of applicable Environmental Laws at, on or related to the Trust Property or any proceedings in which Grantor is contesting such violation pursuant to Section 14(b); (iii) costs and expenses (including, without limitation, attorneys' fees and fees incidental to the securing of repayment of such costs and expenses) incurred by Trustee or Beneficiary in connection with the removal of any such Lien or in connection with Trustee's or Beneficiary's or Grantor's compliance with any Environmental Law at the Trust Property; and (iv) the assertion against Trustee or Beneficiary by any person of any claim in connection with any Material of Environmental Concern at, on, under or originating from the Trust Property. Notwithstanding the foregoing provision, Grantor shall have no obligation to indemnify Beneficiary or Trustee for liabilities, claims or damages to the extent resulting directly from Beneficiary's or Trustee's or their respective agents' or employees' willful misconduct or gross negligence or arising from acts, omissions or occurrences first and solely occurring after title to the Trust Property is conveyed to Beneficiary through foreclosure or delivery of a deed in lieu thereof and unrelated to Grantor's operations at the Trust Property. The foregoing indemnification shall be a recourse obligation of Grantor and shall survive repayment of the Obligations, notwithstanding any limitations on recourse which may be contained herein or in any Security Documents or the delivery of any satisfaction, release or release deed, discharge or deed of reconveyance, or the assignment of this Deed Of Trust by Trustee or Beneficiary.

        18.    Asbestos.    Grantor shall not install or permit to be installed in the Trust Property friable asbestos ("Asbestos") or any substance containing asbestos and defined as hazardous, dangerous or

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toxic by any Environmental Law ("ACM"). If any Asbestos is currently present in the Trust Property Grantor shall promptly, at Grantor's discretion and expense, remove, contain or maintain it in accordance with applicable Environmental Law. Grantor shall comply with all Environmental Laws applicable to removal or maintenance of any ACM. If Grantor shall fail to comply with the foregoing covenants of this Section 18 within the period allowed under this Deed Of Trust, Beneficiary may (but shall not be obligated to) do whatever is reasonably necessary to remove, contain or maintain the Asbestos or ACM, following written notice to Grantor and expiration of 30 days after such written notice, and the costs thereof, with interest (to the fullest extent permitted by law) at the rate then borne by the Securities, shall be immediately due from Grantor to Trustee or Beneficiary and the same shall be added to the Obligations and be secured by this Deed Of Trust. Grantor shall, upon receipt of written notice, give Beneficiary and its agents and employees access to the books and records of Grantor (except attorney-client privileged documents; provided that in the event such documents are withheld, Grantor shall provide Trustee and Beneficiary with adequate information concerning the issues of concern) and to the Trust Property to remove, contain or maintain the Asbestos or ACM or to permit Beneficiary to comply with all Environmental Laws. Grantor shall defend, indemnify, and save Trustee and Beneficiary harmless from all loss, costs, damages and expense (including attorneys' fees and costs and consequential damages) asserted or proven against Trustee or Beneficiary by any party, as a result of the presence or removal of Asbestos or ACM or compliance with any Environmental Law. Notwithstanding the foregoing provision, Grantor shall have no obligation to indemnify Beneficiary or Trustee for liabilities, claims or damages to the extent resulting directly from Beneficiary's or Trustee's or their respective agents' or employees' willful misconduct or gross negligence or arising from acts, omissions or occurrences first and solely occurring after title to the Trust Property is conveyed to Beneficiary through foreclosure or delivery of a deed in lieu thereof and unrelated to Grantor's operations at the Trust Property. The foregoing indemnification shall be a recourse obligation of Grantor and shall survive repayment of the Obligations, notwithstanding any limitation on recourse which may be contained herein or in any of the Security Documents or the delivery of any satisfaction, release or release deed, discharge or deed of reconveyance, or the assignment of this Deed Of Trust by Trustee or Beneficiary.

        19.    Events of Default.    The term "Event of Default" means the occurrence of any "Event of Default" as defined in the Indenture.

        20.    Remedies.    (a) If any Event of Default shall have occurred and be continuing, in addition to any other rights and remedies Beneficiary may have pursuant to the Indenture, the other Security Documents, or as provided by law, Beneficiary may also declare the Obligations to be immediately due and payable. In addition, if any Event of Default shall have occurred and be continuing, Trustee or Beneficiary may immediately take such lawful action, without notice or demand, as it deems advisable to protect and enforce its rights against Grantor and in and to the Trust Property, including, but not limited to, the following actions, each of which may be pursued concurrently or otherwise, at such time and in such manner as Trustee or Beneficiary may determine, in its sole discretion, without impairing or otherwise affecting the other rights and remedies of Trustee or Beneficiary:

        (i)    (A) institute and maintain an action of mortgage foreclosure against all or any part of the Trust Property, (B) institute and maintain an action on the Obligations, (C) sell all or part of the Trust Property (Grantor expressly granting to Trustee the power of sale), or (D) take such other action at law or in equity for the enforcement of this Deed Of Trust or any of the Security Documents as applicable law may allow. Trustee or Beneficiary may proceed in any such action to final judgment and execution thereon for all sums due hereunder, together with interest thereon (to the fullest extent permitted by law) at the rate then borne by the Securities and all costs of suit, including, without limitation, reasonable attorneys' fees and disbursements. Interest at the rate then borne by the Securities shall be due (to the fullest extent permitted by law) on any judgment obtained by Trustee or

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Beneficiary from the date of judgment until actual payment is made of the full amount of the judgment.

        (ii)  Trustee or Beneficiary may each personally, or by its agents, attorneys and employees and without regard to the adequacy or inadequacy of the Trust Property or any other collateral serving as security for the Obligations, enter into and upon the Trust Property and each and every part thereof and exclude Grantor and its agents and employees therefrom without liability for trespass, damage or otherwise (Grantor hereby agreeing to surrender possession of the Trust Property to Trustee or Beneficiary, as the case may be, upon demand of either of them at any such time) and use, operate, manage, maintain and control the Trust Property and every part thereof. Following such entry and taking of possession, Trustee or Beneficiary shall be entitled, without limitation, (x) to lease all or any part or parts of the Trust Property for such periods of time and upon such conditions as Trustee or Beneficiary may, in its sole discretion, deem proper, (y) to exercise Grantor's rights as lessor to enforce, cancel or modify any Lease and (z) generally to execute, do and perform any other act, deed, matter or thing concerning the Trust Property as Trustee or Beneficiary shall deem appropriate as fully as Grantor might do.

        (iii)  Trustee and Beneficiary shall have the right to institute partial foreclosure proceedings with respect to the portion of the Obligations in default, as if under a full foreclosure, and without declaring the entire secured Obligations due (such proceeding being hereinafter referred to as a "partial foreclosure"), and provided that if a partial foreclosure sale is consummated as provided herein, such sale may be made subject to the continuing Lien of this Deed Of Trust for the unmatured portion of the secured Obligations, but as to such unmatured part, this Deed Of Trust, and the Lien hereof, shall remain in full force and effect just as though no partial foreclosure sale had been made under the provisions of this Section 20(a). Notwithstanding the filing of any partial foreclosure or entry of a decree of sale therein, Trustee and Beneficiary may elect at any time prior to a partial foreclosure sale pursuant to such decree, to discontinue such partial foreclosure and to accelerate the Obligations secured hereby by reason of any Event of Default upon which such partial foreclosure was predicated or by reason of any other Events of Default, and proceed with full foreclosure proceedings. It is further agreed that one or more foreclosure sales may be made pursuant to partial foreclosures without exhausting the right of full or partial foreclosure sale for any unmatured part of the secured Obligations, it being the purpose to provide for a partial foreclosure sale of the Obligations secured hereby without exhausting the power to foreclose for any other part of the Obligations whether matured at the time or subsequently maturing, and without exhausting any right of acceleration and full foreclosure.

        (iv)  Trustee, at the request of Beneficiary, shall have the power to sell the Trust Property or any part thereof at public auction, in such manner, at such time and place, upon such terms and conditions, and upon such public notice as Beneficiary may deem best for the interest of Beneficiary, and as may be required or permitted by applicable law, consisting of advertisement in a newspaper of general circulation in the jurisdiction and for such period as applicable law may require and at such other times and by such other methods, if any, as may be required by applicable law to convey the Trust Property in fee simple by trustee's deed as provided by applicable law to and at the cost of the purchaser, who shall not be liable to see to the application of the purchase money. The proceeds or avails of any sale made under or by virtue of this Section 20, together with any other sums which then may be held by Beneficiary under this Deed Of Trust, whether under the provisions of this Section 20 or otherwise, shall be applied as follows subject to applicable law:

First: To the payment of the third-party costs and expenses reasonably incurred in connection with any such sale and to advances, fees and expenses, including, without

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limitation, reasonable fees and expenses of Beneficiary's and Trustee's legal counsel as applicable, and of any judicial proceedings wherein the same may be made, and of all expenses, liabilities and advances reasonably made or incurred by Beneficiary or Trustee under this Deed Of Trust, together with interest (to the fullest extent permitted by law) as provided herein on all such advances made by Beneficiary, and all Impositions, except any Impositions or other charges subject to which the Trust Property shall have been sold;

Second: To the payment of the Obligations in accordance with the Indenture; and

Third: The surplus, if any, to Grantor or to any person entitled thereto.

Beneficiary and any receiver or custodian of the Trust Property or any part thereof shall be liable to account for only those rents, issues, proceeds and profits actually received by it. Beneficiary and Trustee, as applicable, may adjourn from time to time any sale by it to be made under or by virtue of this Deed Of Trust by announcement at the time and place appointed for such sale or for such adjourned sale or sales and, except as otherwise provided by any applicable law, Beneficiary or Trustee, without further notice or publication, may make such sale at the time and place to which the same shall be so adjourned. Upon the completion of any sale or sales ordered by Beneficiary and made by Trustee under or by virtue of this Section, Beneficiary or Trustee, or any officer of any court empowered to do so, shall execute and deliver to the accepted purchaser or purchasers a good and sufficient instrument, or good and sufficient instruments, granting, conveying, assigning and transferring all estate, right, title and interest in and to the property and rights sold. Trustee is hereby irrevocably appointed the true and lawful attorney-in-fact of Grantor (coupled with an interest), in its name and stead, to make all necessary conveyances, assignments, transfers and deliveries of the property and rights so sold and for that purpose Trustee may execute all necessary instruments of conveyance, assignment, transfer and delivery, and may substitute one or more persons with like power, Grantor hereby ratifying and confirming all that its said attorney-in-fact or such substitute or substitutes shall lawfully do by virtue hereof. Nevertheless, Grantor, if so requested by Trustee or Beneficiary, shall ratify and confirm any such sale or sales by executing and delivering to Beneficiary, or to such purchaser or purchasers, all such instruments as may be advisable, in the sole judgment of Beneficiary, for such purpose, and as may be designated in such request. Any such sale or sales made under or by virtue of this Section, whether made under the power of sale herein granted or under or by virtue of judicial proceedings or a judgment or decree of foreclosure and sale, shall operate to divest all the estate, right, title, interest, claim and demand whatsoever, whether at law or in equity of Grantor in and to the property and rights so sold, and shall, to the fullest extent permitted under law, be a perpetual bar both at law and in equity against Grantor and against any and all persons claiming or who may claim the same, or any part thereof, from, through or under Grantor.

        (b)  In case of a foreclosure sale or exercise of the power of sale, the Real Estate may be sold, at Beneficiary's election, in one parcel or in more than one parcel. Beneficiary is specifically empowered (without being required to do so, and in its sole and absolute discretion) to cause successive sales of portions of the Trust Property to be held by Trustee.

        (c)  In the event of any breach of any of the covenants, agreements, terms or conditions contained in this Deed Of Trust, Beneficiary shall be entitled to enjoin such breach and obtain specific performance of any covenant, agreement, term or condition and Beneficiary shall have the

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right to invoke any equitable right or remedy as though other remedies were not provided for in this Deed Of Trust.

        (d)  Nothing herein shall in any way limit the provisions of Sections 6.2 and 6.3 of the Indenture, including the power of Beneficiary or the Holders to declare the principal of, premium, if any, and interest on the Securities to be due and payable.

        21.    Right of Beneficiary to Credit Sale.    Upon the occurrence of any sale made under this Deed Of Trust, whether made under the power of sale or by virtue of judicial proceedings or of a judgment or decree of foreclosure and sale, Beneficiary may bid for and acquire the Trust Property or any part thereof. In lieu of paying cash therefor, Beneficiary may make settlement for the purchase price by crediting upon the Obligations or other sums secured by this Deed Of Trust the net sales price after deducting therefrom the expenses of sale and the cost of the action and any other sums which Trustee is authorized to deduct under this Deed Of Trust. In such event, this Deed Of Trust, and documents evidencing expenditures secured hereby may be presented to the person or persons conducting the sale in order that the amount so used or applied may be credited upon the Obligations as having been paid.

        22.    Appointment of Receiver.    If an Event of Default occurs and is continuing, Trustee or Beneficiary as a matter of right and without notice to Grantor, unless otherwise required by applicable law, and without regard to the adequacy or inadequacy of the Trust Property or any other collateral as security for the Obligations or the interest of Grantor therein, shall have the right to apply to any court having jurisdiction to appoint a receiver or receivers or other manager of the Trust Property, and Grantor hereby irrevocably consents to such appointment and waives notice of any application therefor (except as may be required by law). Any such receiver or receivers shall have all the usual powers and duties of receivers in like or similar cases and all the powers and duties of Trustee in case of entry as provided in this Deed Of Trust, including, without limitation and to the extent permitted by law, the right to enter into Leases of all or any part of the Trust Property, and shall continue as such and exercise all such powers until the date of confirmation of sale of the Trust Property unless such receivership is sooner terminated.

        23.    Extension, Release, etc.    (a) Without affecting the Lien of this Deed Of Trust upon any portion of the Trust Property not then or theretofore released as security for the full amount of the Obligations, Beneficiary may, from time to time and without notice, agree to (i) release any person liable for the obligations, (ii) extend the maturity or alter any of the terms of the Obligations or any guarantee thereof, including, without limitation, any Subsidiary Guarantee, (iii) grant other indulgences, (iv) release or reconvey, or cause to be released or reconveyed, at any time at Beneficiary's option any parcel, portion or all of the Trust Property, (v) take or release any other or additional security for any obligation, or (vi) make compositions or other arrangements with debtors in relation thereto. If at any time this Deed Of Trust shall secure less than all of the principal amount of the Obligations, it is expressly agreed that any repayments of the principal amount of the Obligations shall not reduce the amount of the Lien of this Deed Of Trust until the lien amount shall equal the principal amount of the Obligations outstanding.

        (b)  No recovery of any judgment by Beneficiary and no levy of an execution under any judgment upon the Trust Property or upon any other property of Grantor shall affect the Lien of this Deed Of Trust or any liens, rights, powers or remedies of Beneficiary hereunder, and such liens, rights, powers and remedies shall continue unimpaired.

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        (c)  If Trustee or Beneficiary shall have the right to foreclose this Deed Of Trust, Grantor authorizes Trustee or Beneficiary at its option to foreclose the Lien of this Deed Of Trust subject to the rights of any tenants of the Trust Property. The failure to make any such tenants parties to any such foreclosure proceeding and to foreclose their rights will not (to the fullest extent permitted by law) be asserted by Grantor as a defense to any proceeding instituted by Trustee to collect the Obligations or to foreclose the Lien of this Deed Of Trust.

        (d)  Unless expressly provided otherwise, in the event that ownership of this Deed Of Trust and title to the Trust Property or any estate therein shall become vested in the same person or entity, this Deed Of Trust shall not merge in such title but shall continue as a valid Lien on the Trust Property for the amount secured hereby.

        24.    Security Agreement under Uniform Commercial Code.    (a) It is the intention of the parties hereto that this Deed Of Trust shall constitute a Security Agreement within the meaning of the Code. If an Event of Default shall occur and shall be continuing, then in addition to having any other right or remedy available at law or in equity, Beneficiary shall have the option of either (i) proceeding under the Code and exercising such rights and remedies as may be provided to a secured party by the Code with respect to all or any portion of the Trust Property which is personal property (including, without limitation, taking possession of and selling such property) or (ii) treating such property as real property and proceeding with respect to both the real and personal property constituting the Trust Property in accordance with Beneficiary's rights, powers and remedies with respect to the real property (in which event the default provisions of the Code shall not apply). If Beneficiary shall elect to proceed under the Code, then ten days' notice of sale of the personal property shall be deemed reasonable notice and the reasonable expenses of retaking, holding, preparing for sale, selling and the like incurred by Trustee or Beneficiary shall include, but not be limited to, attorneys' fees and legal expenses. At Trustee's or Beneficiary's request, Grantor shall assemble the personal property and make it available to Trustee and Beneficiary at a place designated by Trustee or Beneficiary which is reasonably convenient to all parties.

        (b)  Grantor and Beneficiary agree, to the extent permitted by law, that: (i) all of the goods described within the definition of the word "Equipment" are or are to become fixtures on the Real Estate; (ii) this Deed Of Trust upon recording or registration in the real estate records of the proper office shall constitute a financing statement filed as a "fixture filing" within the meaning of Sections 9-334 and 9-502 of the Code; (iii) Grantor is the record owner of the Real Estate; and (iv) the addresses of Grantor and Beneficiary are as set forth on the first page of this Deed Of Trust.

        (c)  Grantor, upon request by Trustee or Beneficiary from time to time, shall execute, acknowledge and deliver to Trustee and Beneficiary one or more separate security agreements, in form satisfactory to Trustee and Beneficiary, covering all or any part of the Trust Property and Grantor will further execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, any financing statement, affidavit, continuation statement or certificate or other document in order to perfect, preserve, maintain, continue the perfection of or extend the security interest under and the priority of this Deed Of Trust and such security instrument. Grantor further agrees to pay to Trustee or Beneficiary on demand all costs and expenses incurred by Trustee or Beneficiary in connection with the preparation, execution, recording, filing and re-filing of any such document and all reasonable costs and expenses of any record searches for financing or continuation statements Trustee or Beneficiary shall reasonably require. Grantor shall from time to time, on request of Trustee or Beneficiary, deliver to Trustee and Beneficiary an inventory in reasonable detail of any of the Trust Property which constitutes personal property. If Grantor shall fail to furnish any financing or continuation statement within 10 days after request, then pursuant to the provisions of the Code, Grantor hereby authorizes Trustee or Beneficiary, without the signature of Grantor, to execute and file any such financing and continuation statements. The filing of any financing or continuation statements in the records relating to personal property or chattels shall not be construed as in any way impairing the right of Trustee or

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Beneficiary to proceed against any personal property encumbered by this Deed Of Trust as real property, as set forth above.

        (d)  For purposes of the foregoing fixture filing, Grantor's Tax Identification Number is [FOR OSM: 94-0506370, FOR CF&I: 93-1103440], Grantor's Organizational Filing Number for the State of [Oregon is                        ][Colorado is                        ], and Borrower's State of California Foreign Limited Liability Company Filing is                        . The owner of record of the real property burdened in part by the Mortgaged Lease is 1000 Broadway Building Limited Partnership, an Oregon limited partnership.

        25.    Assignment of Rents.    Grantor hereby assigns to Beneficiary the Rents as further security for the payment of the Obligations and performance of the Obligations. Grantor grants to Beneficiary the right to enter the Trust Property for the purpose of collecting the same and to let the Trust Property or any part thereof, and to apply the Rents on account of the Obligations. The foregoing assignment and grant is present and absolute and shall continue in effect until the Obligations are paid in full; provided, however, Trustee and Beneficiary hereby waive the right to enter the Trust Property for the purpose of collecting the Rents, and Grantor shall be entitled to collect, receive, use and retain the Rents until the occurrence and during the continuance of an Event of Default. The right of Grantor to collect, receive, use and retain the Rents may be revoked by Beneficiary upon the occurrence and during the continuance of an Event of Default by giving written notice of such revocation to Grantor. In the event such notice is given, Grantor shall pay over to Beneficiary, or to any receiver appointed to collect the Rents, any Lease security deposits, and shall pay monthly in advance to Beneficiary, or to any such receiver, the fair and reasonable rental value as determined by Beneficiary for the use and occupancy of the Trust Property or of such part thereof as may be in the possession of Grantor or any affiliate of Grantor, and upon default in any such payment Grantor and any such affiliate will vacate and surrender the possession of the Trust Property to Trustee or Beneficiary or to such receiver, and in default thereof may be evicted by summary proceedings or otherwise. Grantor shall not accept prepayments of installments of Rent to become due for a period of more than 30 days in advance (except for security deposits and estimated payments of percentage rent, if any).

        26.    Trust Funds.    All Lease security deposits of the Real Estate shall be treated as trust funds not to be commingled with any other funds of Grantor. Within 10 days after request by Beneficiary, Grantor shall furnish Beneficiary satisfactory evidence of compliance with this subsection, together with a statement of all Lease security deposits by lessees and copies of all Leases not previously delivered to Beneficiary, which statement shall be certified by an Officers' Certificate of Grantor.

        27.    Additional Rights.    Subordinate Liens on the Trust Property shall only be permitted to the extent permitted by the Indenture and this Deed Of Trust. The holder of any subordinate Lien on the Trust Property shall have no right to terminate any Lease whether or not such Lease is subordinate to this Deed Of Trust nor shall any holder of any subordinate Lien join any tenant under any Lease in any action to foreclose the lien or modify, interfere with, disturb or terminate the rights of any tenant under any Lease. By recordation of this Deed Of Trust all holders of a subordinate Lien are subject to and notified of this provision, and any action taken by any holder of such Lien contrary to this provision shall be null and void. Upon the occurrence of any Event of Default, Beneficiary may, in its sole discretion and without regard to the adequacy of its security under this Deed Of Trust, apply all or any part of any amounts on deposit with Trustee or Beneficiary under this Deed Of Trust against all or any part of the Obligations. Any such application shall not be construed to cure or waive any Event of Default or invalidate any act taken by Trustee or Beneficiary on account of such Event of Default. This Section 27 shall not be deemed to be consent by Trustee or Beneficiary to any subordinated Lien.

        28.    Changes in Method of Taxation.    In the event of the passage after the date hereof of any law of any Governmental Authority deducting from the value of the Premises for the purposes of taxation any lien thereon, or changing in any way the laws for the taxation of mortgages or deeds of trust or

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debts secured thereby for federal, state or local purposes, or the manner of collection of any such taxes, and imposing a tax, either directly or indirectly, on mortgages or deeds of trust or debts secured thereby, Grantor shall assume as an Obligation hereunder the payment of any tax so imposed and pay such tax in full.

        29.    Notices.    All notices, requests, demands and other communications hereunder shall be given in the manner provided in the Indenture, and if sent to Trustee, to the address set forth on the first page of this Deed Of Trust.

        30.    No Oral Modification.    This Deed Of Trust may not be changed or terminated orally. Any agreement made by Grantor and Beneficiary after the date of this Deed Of Trust relating to this Deed Of Trust shall be superior to the rights of the holder of any intervening or subordinate lien or encumbrance.

        31.    Partial Invalidity; Limitation on Interest.

        (a)  In the event any one or more of the provisions contained in this Deed Of Trust shall for any reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provision hereof, but each shall be construed as if such invalid, illegal or unenforceable provision had never been included.

        (b)  It is the intention of the parties to conform strictly to the usury laws, whether state or federal, that are applicable to the transaction of which this Deed Of Trust is a part. All agreements between Grantor and Beneficiary, whether now existing or hereafter arising and whether oral or written, are hereby expressly limited so that in no contingency or event whatsoever shall the amount paid or agreed to be paid by Grantor for the use, forbearance or detention of the money to be loaned or advanced under [NOTE: FOR COLORADO, ADD "THE CF&I NOTE,"] the Indenture, the Securities, the Subsidiary Guarantees, this Deed Of Trust, any other Security Document, the Intercreditor Agreement or any other agreement or instrument relating thereto, or for the payment or performance of any covenant or obligation contained herein or therein, exceed the maximum amount permissible under applicable federal or state usury laws. If under any circumstances whatsoever fulfillment of any such provision, at the time performance of such provision shall be due, shall involve exceeding the limit of validity prescribed by law, then the obligation to be fulfilled shall be reduced to the limit of such validity. If under any circumstances Grantor shall have paid an amount deemed interest by applicable law, which would exceed the highest lawful rate, such amount that would be excessive interest under applicable usury laws shall be applied to the reduction of the principal amount owing in respect of the Obligations and not to the payment of interest, or if such excessive interest exceeds the unpaid balance of principal and any other amounts due thereunder, the excess shall be refunded to Grantor. All sums paid or agreed to be paid for the use, forbearance or detention of the principal under any extension of credit or advancement of funds by Beneficiary or any Holder shall, to the extent permitted by applicable law, and to the extent necessary to preclude exceeding the limit of validity prescribed by law, be amortized, prorated, allocated and spread from the date of this Deed Of Trust until payment in full of the Obligations so that the actual rate of interest on account of such principal amounts is uniform throughout the term hereof.

        32.    Waiver of Right of Redemption and Other Rights.

        (a)  Grantor hereby voluntarily and knowingly releases and waives any and all rights to retain possession of the Trust Property after the occurrence of an Event of Default and any and all rights of redemption from sale under any order or decree of foreclosure (whether full or partial), pursuant to any statutory or common law or right, on its own behalf, on behalf of all persons claiming or having an interest (direct or indirectly) by, through or under Grantor and on behalf of each and every person acquiring any interest in the Trust Property subsequent to the date hereof,

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it being the intent hereof that any and all such rights of redemption of Grantor and all such other persons are and shall be deemed to be hereby waived to the fullest extent permitted by applicable law. Grantor shall not invoke or utilize any such law or laws or otherwise hinder, delay, or impede the execution of any right, power, or remedy herein or otherwise granted or delegated to Beneficiary or Trustee, but shall permit the execution of every such right, power, and remedy as though no such law or laws had been made or enacted.

        (b)  To the fullest extent permitted by law, Grantor waives the benefit of all laws now existing or that may subsequently be enacted providing for (i) any appraisement before sale of any portion of the Trust Property, (ii) any extension of the time for the enforcement of the collection of the Obligations or the creation or extension of a period of redemption from any sale made in collecting the Obligations and (iii) exemption of the Trust Property from attachment, levy or sale under execution or exemption from civil process. To the fullest extent Grantor may lawfully do so, Grantor agrees that Grantor will not at any time insist upon, plead, claim or take the benefit or advantage of any law now or hereafter in force providing for any appraisement, valuation, stay, exemption, extension or redemption, or requiring foreclosure of this Deed Of Trust before exercising any other remedy granted hereunder and Grantor, for Grantor and its successors and assigns, and for any and all persons ever claiming any interest in the Trust Property, to the extent permitted by law, hereby waives and releases all rights of redemption, valuation, appraisement, stay of execution, notice of election to mature or declare due the Obligations and marshalling in the event of foreclosure of the liens hereby created.

        33.    Remedies Not Exclusive.    Trustee and Beneficiary shall be entitled to enforce payment of the Obligations and performance of the Obligations and to exercise all rights and powers under the Indenture or this Deed of Trust or under any of the other Security Documents or other agreement or any laws now or hereafter in force, notwithstanding some or all of the Obligations may now or hereafter be otherwise secured, whether by mortgage, security agreement, pledge, lien, assignment or otherwise. Neither the acceptance of this Deed Of Trust nor its enforcement shall prejudice or in any manner affect Trustee's and Beneficiary's right to realize upon or enforce any other security now or hereafter held by Trustee or Beneficiary. Trustee and Beneficiary shall be entitled to enforce this Deed Of Trust and any other security now or hereafter held by Trustee or Beneficiary in such order and manner as Trustee or Beneficiary may determine in its absolute discretion. To the extent permitted by law, no remedy herein conferred upon or reserved is intended to be exclusive of any other remedy herein, in the Indenture or in any other Security Document or by law provided or permitted, but each shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute. To the extent permitted by law, every power or remedy given by this Deed Of Trust, the Indenture or any of the other Security Documents to Trustee or Beneficiary or to which it may otherwise be entitled, may be exercised, concurrently or independently, from time to time and as often as may be deemed expedient by Trustee or Beneficiary. In no event shall Trustee or Beneficiary, in the exercise of the remedies provided in this Deed Of Trust (including, without limitation, in connection with the assignment of Rents, or the appointment of a receiver and the entry of such receiver onto all or any part of the Trust Property), be deemed a "mortgagee in possession," and Trustee and Beneficiary shall not in any way be made liable for any act, either of commission or omission, in connection with the exercise of such remedies.

        34.    Multiple Security.    If (a) the Premises shall consist of one or more parcels, whether or not contiguous and whether or not located in the same county, or (b) in addition to this Deed Of Trust, Trustee or Beneficiary shall now or hereafter hold one or more additional mortgages, liens, deeds of trust or other security (directly or indirectly) for the Obligations upon other property in the state in which the Premises are located (whether or not such property is owned by Grantor or by others) or (c) both the circumstances described in clauses (a) and (b) shall be true, then to the fullest extent permitted by law, Trustee or Beneficiary may, at its election, commence or consolidate in a single

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foreclosure action all foreclosure proceedings against all such collateral securing the Obligations (including the Trust Property), which action may be brought or consolidated in the courts of any county in which any of such collateral is located. Grantor acknowledges that the right to maintain a consolidated foreclosure action is a specific inducement to Beneficiary, and Grantor expressly and irrevocably waives any objections to the commencement or consolidation of the foreclosure proceedings in a single action and any objections to the laying of venue or based on the grounds of forum non conveniens which it may now or hereafter have. Grantor further agrees that if Trustee or Beneficiary shall be prosecuting one or more foreclosure or other proceedings against a portion of the Trust Property or against any Collateral other than the Trust Property, which Collateral directly or indirectly secures the Obligations, the Securities or the Subsidiary Guarantees, or if Trustee or Beneficiary shall have obtained a judgment of foreclosure and sale or similar judgment against such other Collateral, then, whether or not such proceedings are being maintained or judgments were obtained in or outside the state in which the Premises are located, Trustee or Beneficiary may commence or continue foreclosure proceedings and exercise the power of sale or its other remedies granted in this Deed Of Trust against all or any part of the Trust Property and Grantor waives any objections to the commencement or continuation of a foreclosure of this Deed Of Trust or exercise of the power of sale or any other remedies hereunder based on such other proceedings or judgments, and waives any right to seek to dismiss, stay, remove, transfer or consolidate either any action under this Deed Of Trust or such other proceedings on such basis. Neither the commencement nor continuation of proceedings to foreclose this Deed Of Trust nor the exercise of the power of sale or any other rights hereunder nor the recovery of any judgment by Beneficiary or Trustee in any such proceedings shall prejudice, limit or preclude Beneficiary's or Trustee's right to commence or continue one or more foreclosure proceedings or exercise of the power of sale or other proceedings or obtain a judgment against any other Collateral (either in or outside the state in which the Premises are located) which directly or indirectly secures the Obligations, the Securities or the Subsidiary Guarantees, and Grantor expressly waives any objections to the commencement of, continuation of, or entry of a judgment in such other proceedings or exercise of the power of sale or any remedies in such proceedings based upon any action or judgment connected to this Deed Of Trust, and Grantor also waives any right to seek to dismiss, stay, remove, transfer or consolidate either such other proceedings or any action under this Deed Of Trust on such basis. It is expressly understood and agreed that to the fullest extent permitted by law, Trustee or Beneficiary may, at its election, cause the sale of all Collateral which is the subject of a single foreclosure action at either a single sale or at multiple sales conducted simultaneously and take such other measures as are appropriate in order to effect the agreement of the parties to dispose of and administer all Collateral securing the Obligations, the Securities or the Subsidiary Guarantees (directly or indirectly) in the most economical and least time-consuming manner.

        35.    Expenses; Indemnification.

        (a)  Grantor shall pay or reimburse Trustee and Beneficiary for all expenses incurred by Trustee or Beneficiary before and after the date of this Deed Of Trust with respect to any and all transactions contemplated by this Deed Of Trust including without limitation, the preparation of any document reasonably required hereunder or any amendment, modification, restatement or supplement to this Deed Of Trust, the delivery of any consent, non-disturbance agreement or similar document in connection with this Deed Of Trust or the enforcement of any of Trustee's or Beneficiary's rights hereunder. Such expenses shall include, without limitation, all title and conveyancing charges, recording and filing fees and taxes, mortgage taxes, intangible personal property taxes, escrow fees, revenue and tax stamp expenses, insurance premiums (including title insurance premiums), title search and title rundown charges, brokerage commissions, finders' fees, placement fees, court costs, surveyors', photographers', appraisers', architects', engineers', consulting professionals', accountants' and attorneys' fees and disbursements. All such expenses and other amounts together with interest (to the fullest extent permitted by law) at the rate then borne by the Securities shall be a Lien on the Trust Property, prior to any right or title to, interest

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in or claim upon the Trust Property attaching or accruing subsequent to the Lien of this Deed Of Trust, and shall be deemed to be secured by this Deed Of Trust. Grantor acknowledges that from time to time Grantor may receive statements for such expenses and interest, including without limitation attorneys' fees and disbursements. Grantor shall pay such statements promptly upon receipt.

        (b)  If (i) any action or proceeding shall be commenced by Trustee or Beneficiary (including but not limited to any action to foreclose this Deed Of Trust or exercise the power of sale or to collect the Obligations), or any action or proceeding is commenced to which Trustee or Beneficiary is made a party, or in which it becomes necessary to defend or uphold the Lien of this Deed Of Trust (including, without limitation, any proceeding or other action relating to the bankruptcy, insolvency or reorganization of Grantor), or in which Trustee or Beneficiary is served with any legal process, discovery notice or subpoena and (ii) in each of the foregoing instances such action or proceeding in any manner relates to or arises out of this Deed Of Trust or any of the Obligations or any of the transactions contemplated by this Deed Of Trust, then Grantor will immediately reimburse or pay to Trustee or Beneficiary all of the expenses which have been or may be incurred by Trustee or Beneficiary with respect to the foregoing (including counsel fees and disbursements), together with interest (to the fullest extent permitted by law) at the rate then borne by the Securities, and any such sum and the interest thereon shall be a Lien on the Trust Property, prior to any right or title to, interest in or claim upon the Trust Property attaching or accruing subsequent to the Lien of this Deed Of Trust, and shall be deemed to be secured by this Deed Of Trust. In any action or proceeding to foreclose this Deed Of Trust or exercise the power of sale, or to recover or collect the Obligations, the provisions of law respecting the recovering of costs, disbursements and allowances shall prevail unaffected by this covenant.

        (c)  Grantor shall indemnify and hold harmless Beneficiary and Trustee, and their respective directors, officers, agents and employees and affiliates from and against any and all claims, damages, losses and liabilities and expenses (including, without limitation, attorneys' fees and expenses) arising out of or based upon any matter related to this Deed Of Trust, the Trust Property or the occupancy, ownership, maintenance or management of the Trust Property by Grantor, including, without limitation, any claims based on the alleged acts or omissions of any employee or agent of Grantor. The amounts of such claims, damages, losses, liabilities and expenses (including, without limitation attorneys' fees and expenses) together with interest (to the fullest extent permitted by law) at the rate then borne by the Securities shall be a Lien on the Trust Property, prior to any right or title to, interest in or claim upon the Trust Property attaching or accruing subsequent to the Lien of this Deed Of Trust, and shall be deemed to be secured by this Deed Of Trust. This indemnification shall be in addition to any other liability which Grantor may otherwise have to Beneficiary and Trustee. Notwithstanding the foregoing provision, Grantor shall have no obligation to indemnify Beneficiary or Trustee for liabilities, claims or damages to the extent resulting directly from Beneficiary's or Trustee's or their respective agents' or employees' willful misconduct or gross negligence or arising from acts, omissions or occurrences first occurring after title to the Trust Property is conveyed to Beneficiary through foreclosure or delivery of a deed in lieu thereof.

        36.    Successors and Assigns.    All covenants of Grantor contained in this Deed Of Trust are imposed solely and exclusively for the benefit of Beneficiary and Trustee and their respective successors and assigns, and for the benefit of the Holders from time to time of the Securities, and no other person or entity shall have standing to require compliance with such covenants or be deemed, under any circumstances, to be a beneficiary of such covenants, any or all of which may be freely waived in whole or in part by Beneficiary at any time if in its sole discretion it deems such waiver advisable and such waiver is permitted by the Indenture. All such covenants of Grantor shall run with the land and bind Grantor, the successors and assigns of Grantor (and each of them) and all subsequent owners,

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encumbrancers and tenants of the Trust Property, and shall inure to the benefit of Beneficiary and Trustee, their respective successors and assigns, and the Holders from time to time of the Securities. The word "Grantor" shall be construed as if it read "Grantors" whenever the sense of this Deed Of Trust so requires and if there shall be more than one Grantor, the obligations of the Grantors shall be joint and several.

        37.    No Waivers, etc.    Any failure by Beneficiary to insist upon the strict performance by Grantor of any of the terms and provisions of this Deed Of Trust shall not be deemed to be a waiver of any of the terms and provisions hereof, and Beneficiary, notwithstanding any such failure, shall have the right thereafter to insist upon the strict performance by Grantor of any and all of the terms and provisions of this Deed Of Trust to be performed by Grantor.

        38.    Governing Law, etc.    This Deed Of Trust shall be governed by and construed in accordance with the laws of the state in which the Premises are located, except that Grantor expressly acknowledges that by their terms the Indenture, the Securities and the Subsidiary Guarantees shall be governed and construed in accordance with the laws of the State of New York, without regard to principles of conflict of law.

        39.    Waiver of Trial by Jury.    Grantor, Beneficiary and Trustee each hereby irrevocably and unconditionally waive, to the fullest extent permitted by law, trial by jury in any action, claim, suit or proceeding relating to this Deed Of Trust and for any counterclaim (other than compulsory counterclaims) brought therein. Grantor hereby waives, to the fullest extent permitted by law, all rights to interpose any counterclaim (other than compulsory counterclaims) in any suit brought by Trustee or Beneficiary hereunder and all rights to have any such suit consolidated with any separate suit, action or proceeding.

        40.    Certain Definitions.    Unless the context clearly indicates a contrary intent or unless otherwise specifically provided herein, words used in this Deed Of Trust shall be used interchangeably in singular or plural form and the word "Grantor" shall mean "each Grantor or any subsequent owner or owners of the Trust Property or any part thereof or interest therein," the word "Trustee" shall mean "Trustee or any successor to the Trustee under this Deed Of Trust or pursuant to law," the word "Beneficiary" shall mean "Beneficiary or any trustee under the Indenture as successor to Beneficiary," and the words "Trust Property" shall include any portion of the Trust Property or interest therein. Whenever the context may require, any pronouns used herein shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural and vice versa. The table of contents and captions in this Deed Of Trust are for convenience of reference only and in no way limit or amplify the provisions hereof.

        41.    Release Upon Payment and Discharge of Grantor's Obligations.    Trustee and Beneficiary shall release this Deed Of Trust and the Lien hereof by proper instrument upon payment and discharge of all Obligations secured hereby (including payment of reasonable expenses incurred by Trustee or Beneficiary in connection with the execution of such release) and upon full and complete performance of all of the Obligations.

        42.    Concerning the Trustee.

        (a)    Certain Rights.    Trustee shall be under no duty to take any action hereunder except as expressly required hereunder or by law, or to perform any act which would involve Trustee in any expense or liability or to institute or defend any suit in respect hereof, unless properly indemnified to Trustee's reasonable satisfaction. Trustee, by acceptance of this Deed of Trust, covenants to perform and fulfill the trusts herein created. With the approval of Beneficiary, Trustee shall have the right to take any and all of the following actions: (i) to select, employ, and consult with counsel (who may be, but need not be, counsel for Beneficiary) upon any matters arising hereunder, including the preparation, execution, and interpretation of this Deed Of Trust, and shall

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be fully protected in relying as to legal matters on the advice of counsel, (ii) to execute any of the trusts and powers hereof and to perform any duty hereunder either directly or through its agents or attorneys, (iii) to select and employ, in and about the execution of its duties hereunder, suitable accountants, engineers and other experts, agents and attorneys-in-fact, either corporate or individual, not regularly in the employ of Trustee (and Trustee shall not be answerable for any act, default, negligence, or misconduct of any such accountant, engineer or other expert, agent or attorney-in-fact, if selected with reasonable care, or for any error of judgment or act done by Trustee in good faith, or be otherwise responsible or accountable under any circumstances whatsoever, except for Trustee's negligence or bad faith), and (iv) any and all other lawful action that Beneficiary may instruct Trustee to take to protect or enforce Beneficiary's rights hereunder. Trustee shall not be personally liable in case of entry by Trustee, or anyone entering by virtue of the powers herein granted to Trustee, upon the Trust Property for debts contracted for or liability or damages incurred in the management or operation of the Trust Property. Trustee shall have the right to rely on any instrument, document, or signature authorizing or supporting any action taken or proposed to be taken by Trustee hereunder, believed by Trustee in good faith to be genuine. Trustee shall be entitled to reimbursement for expenses incurred by Trustee in the performance of Trustee's duties hereunder and to reasonable compensation for such of Trustee's services hereunder as shall be rendered. Grantor will, from time to time, pay the compensation due to Trustee hereunder and reimburse Trustee for, and save Trustee harmless against, any and all liability and expenses which may be incurred by Trustee in the performance of Trustee's duties. Beneficiary shall have no responsibility for compensating Trustee, reimbursing its expenses or providing it with indemnification.

        (b)    Retention of Money.    All moneys received by Trustee shall, until used or applied as herein provided, be held in trust for the purposes for which they were received, and shall be segregated from any other moneys of Trustee.

        (c)    Successor Trustees.    Trustee may resign by the giving of notice of such resignation in writing to Beneficiary. If Trustee shall die, resign, or become disqualified from acting in the execution of this trust, or if, for any reason, Beneficiary, in Beneficiary's sole discretion and with or without cause, shall prefer to appoint a substitute trustee or multiple substitute trustees, or successive substitute trustees or successive multiple substitute trustees, to act instead of the forenamed Trustee, Beneficiary shall have full power to appoint a substitute trustee (or, if preferred, multiple substitute trustees) in succession who shall succeed (and if multiple substitute trustees are appointed, each of such multiple substitute trustees shall succeed) to all the estates, rights, powers, and duties of the forenamed Trustee. Such appointment may be executed by any authorized agent of Beneficiary, and if such Beneficiary be a corporation and such appointment be executed on its behalf by any officer of such corporation, such appointment shall be conclusively presumed to be executed with authority and shall be valid and sufficient without proof of any action by the board of directors or any superior officer of the corporation. Grantor hereby ratifies and confirms any and all acts which the forenamed Trustee, or its successor or successors in this trust, shall do lawfully by virtue hereof. If multiple substitute trustees are appointed, each of such multiple substitute trustees shall be empowered and authorized to act alone without the necessity of the joinder of the other multiple substitute trustees, whenever any action or undertaking of such substitute trustees is requested or required under or pursuant to this Deed Of Trust or applicable law. Any prior election to act jointly or severally shall not prevent either or both of such multiple substitute trustees from subsequently executing, jointly or severally, any or all of the provisions hereof.

        (d)    Perfection of Appointment.    Should any deed, conveyance, or instrument of any nature be required from Grantor by any Trustee or substitute Trustee to more fully and certainly vest in and confirm to the Trustee or substitute Trustee such estates, rights, powers, and duties, then, upon

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request by the Trustee or substitute Trustee, any and all such deeds, conveyances and instruments shall be made, executed, acknowledged, and delivered and shall be caused to be recorded and/or filed by Grantor.

        (e)    Succession Instruments.    Any substitute Trustee appointed pursuant to any of the provisions hereof and applicable law shall, without any further act, deed, or conveyance, become vested with all the estates, properties, rights, powers, and trusts of its or his predecessor in the rights hereunder with like effect as if originally named as Trustee herein; but nevertheless, upon the written request of Beneficiary or of the substitute Trustee, the Trustee ceasing to act shall execute and deliver any instrument transferring to such substitute Trustee, upon the trusts herein expressed, all the estates, properties, rights, powers, and trusts of the Trustee so ceasing to act, and shall duly assign, transfer and deliver any of the property and moneys held by such Trustee to the substitute Trustee so appointed in the Trustee's place.

        (f)    No Representation by Trustee or Beneficiary.    By accepting or approving anything required to be observed, performed, or fulfilled or to be given to Trustee or Beneficiary pursuant to this Deed Of Trust, neither Trustee nor Beneficiary shall be deemed to have warranted, consented to, or affirmed the sufficiency, legality, effectiveness, or legal effect of the same, or of any term, provision, or condition thereof, and such acceptance or approval thereof shall not be or constitute any warranty or affirmation with respect thereto by Trustee or Beneficiary.

        43.    The Indenture Controls.    This Deed Of Trust is made pursuant to the Indenture and is subject to the terms of the Indenture. In the event of a conflict between the terms of the Indenture and the terms of this Deed Of Trust, the terms of the Indenture shall control [FOR OREGON, ADD: "EXCEPT AS PROVIDED IN SUBSECTION 47(c) OF THIS DEED OF TRUST"].

        44.    [STRIKE AND INSERT "INTENTIONALLY DELETED" IN THE OREGON AND COLORADO FORMS]Certain Matters Relating to Trust Property Located in the State of California.    With respect to the Trust Property which is located in the State of California, notwithstanding anything contained herein to the contrary:

        (a)    Fixtures.    Portions of the Trust Property are goods that are or are to become fixtures relating to the Trust Property, and Grantor covenants and agrees that the filing of this Deed Of Trust in the real estate records of the county where the Trust Property is located shall also operate from the time of filing as a fixture filing in accordance with Sections 9-334 and 9-502 of the California Uniform Commercial Code.

        (b)    Not Residential Property.    No portion of the proceeds of the Obligations shall be used by Grantor to purchase real property containing four (4) or fewer residential units or on which four (4) or fewer residential units are to be constructed.

        (c)    Not A Dwelling.    No portion of the Trust Property is or will be a "dwelling" within the meaning of Section 10240.1 or Section 10240.2 of the California Business and Professions Code.

        (d)    Default.    At any time after the occurrence and during the continuance of an Event of Default, Beneficiary may deliver to Trustee a written declaration of default and demand for sale and a written notice of default and election to cause Grantor's interest in the Trust Property or any portion thereof to be sold, which notice Trustee or Beneficiary shall cause to be duly filed for record in the official records of the county in which the Trust Property is located.

        (e)    Power of Sale.

        (i)    Should Beneficiary elect to foreclose by exercise of the power of sale herein contained, Beneficiary shall notify Trustee and shall deposit with Trustee this Deed Of Trust and such other documents relating to the Obligations secured hereby as Trustee may require

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and such receipts and evidence of expenditures made and secured hereby as Trustee may require.

        (ii)  Upon receipt of such notice from Beneficiary, Trustee shall cause to be recorded, published and delivered to Grantor such Notice of Default and Election to Sell as may then be required by law and by this Deed Of Trust. Trustee shall, without demand on Grantor, after lapse of such time as may then be required by law and after recordation of such Notice of Default and after Notice of Sale having been given as required by law, sell the Trust Property at the time and place of sale fixed by it in said Notice of Sale, either as a whole, or in separate lots or parcels or items as Trustee shall deem expedient, and in such order as it may determine, at public auction to the highest bidder for cash in lawful money of the United States payable at the time of sale. Trustee shall deliver to such purchaser or purchasers thereof its good and sufficient deed or deeds conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in such deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including, without limitation, Trustee or Beneficiary, may purchase at such sale and Grantor hereby covenants to warrant and defend the title of such purchaser or purchasers.

        (iii)  After deducting all costs, fees and expenses of Trustee and Beneficiary and of this Deed Of Trust, including costs of evidence of title and attorneys' fees of Trustee or Beneficiary in connection with the sale, Trustee shall apply the proceeds of sale to payment of all sums expended under the terms hereof not then repaid, with accrued interest (to the fullest extent permitted by law) at the rate in effect under the Securities, all other sums then secured hereby and the remainder, if any, to the person or persons legally entitled thereto.

        (iv)  Trustee may postpone the sale of all or any portion of the Trust Property by public announcement at the time and place of such sale, and from time to time thereafter may postpone such sale by public announcement at the time fixed by the preceding postponement or subsequently noticed sale, and without further notice make such sale at the time fixed by the last postponement, or may, in its discretion, give a new notice of sale.

        (v)  Grantor hereby expressly waives any right which it may have to direct the order in which any of the Trust Property shall be sold in the event of any sale or sales pursuant hereto.

        (f)    Rescission of Notice of Default.    Beneficiary, from time to time before any Trustee's sale as provided above, may rescind any Notice of Default and Election to Sell or Notice of Sale by executing and delivering to Trustee a written notice of such rescission, which notice, when recorded, shall also constitute a cancellation of any prior declaration of default and demand for sale. The exercise by Beneficiary of such right of rescission shall not constitute a waiver of any Event of Default then existing or subsequently occurring, or impair the right of Beneficiary to execute and deliver to Trustee, other declarations or notices of default or demand for sale of the Trust Property to satisfy the obligations secured hereby, and shall not otherwise affect any provision, covenant or condition of this Deed Of Trust or any of the rights, obligations or remedies of Trustee or Beneficiary hereunder.

        (g)    Copies of Notice of Default and Notice of Sale.    Grantor hereby requests that copies of any Notice of Default and Election to Sell and any Notice of Sale be sent to Grantor by first class mail, postage prepaid, or as otherwise provided by law, to the following address:                        .

        45.    [STRIKE AND INSERT "INTENTIONALLY DELETED" IN THE OREGON AND CALIFORNIA FORMS]Certain Matters Relating to Trust Property Located in the State of Colorado.

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With respect to the Trust Property which is located in the State of Colorado, notwithstanding anything contained herein to the contrary:

        (a)    Public Trustee.    Trustee named herein is the Public Trustee of [PUEBLO] [FREMONT] County, Colorado, who is a public official of such county created pursuant to C.R.S. Section 38-37-101. Therefore, certain provisions of this Deed Of Trust, including those relating to the removal and substitution of Trustee, the fees to be charged by Trustee, the powers and rights of Trustee, and procedural requirements to be followed by Trustee are each subject to applicable provisions of Colorado law.

        (b)    Power of Sale.    Upon the occurrence and during the continuance of an Event of Default, Beneficiary may take such action, without notice or demand, as it deems advisable to protect and enforce its rights against Grantor and in and to the Trust Property or any part thereof or interest therein, including, but not limited to, the following actions, at such time and in such order as Beneficiary may determine without impairing or otherwise affecting the other rights and remedies of Beneficiary:

        (i)    Declare an Event of Default hereunder and elect to advertise the Trust Property for sale and demand such sale. Then upon Beneficiary's filing notice of such election and demand for sale with Trustee (who shall upon receipt of such notice of election and demand for sale cause a copy of the same to be recorded in the office of the Clerk and Recorder of the County of [PUEBLO] [FREMONT], Colorado), it shall and may be lawful for said Trustee to sell and dispose of the Trust Property (en masse or in separate parcels, as Beneficiary may designate) and all the right, title, and interest of Grantor, its successors and assigns therein, at public auction at the main entrance to the County Building in and for said County of [PUEBLO] [FREMONT], Colorado, or on the Trust Property, or any part thereof, or such other place as may be authorized or permitted by law, all as may be specified in the notice of such sale, for the highest and best price the same will bring in cash, four weeks public notice having been previously given of the time and place of such sale, by advertisement weekly in some newspaper of general circulation at that time published in the County of [PUEBLO] [FREMONT], Colorado. A copy of such notice of sale shall be given to Grantor at its address given herein, and to such person or persons appearing to have acquired a subsequent record interest in the Trust Property at the address given in the recorded instrument evidencing such interest, any such notice to be given in accordance with applicable law. Trustee shall then make and give to the purchaser or purchasers of such Trust Property at such sale a certificate or certificates in writing describing such Trust Property purchased, and the sum or sums paid therefor, and the time when the purchaser or purchasers (or other persons entitled thereto) shall be entitled to a deed or deeds therefor, unless the same shall be redeemed as provided by law, and said Trustee shall, upon demand by the person or persons holding the said certificate or certificates of purchase, when said demand is made, or upon demand by the person entitled to a deed to and for the Trust Property purchased, at the time such demand is made (the time for redemption having expired) make and execute to such person or persons a deed or deeds to the said Trust Property purchased, which said deed or deeds shall be in the ordinary form of a conveyance, and shall be signed, acknowledged, and delivered by Trustee, as grantor, and shall convey and quitclaim to such person or persons entitled to such deed, as grantee, the said Trust Property purchased as aforesaid, and all the right, title, interest, benefit, and equity of redemption of Grantor, its successors and assigns therein, and shall refer to the power of sale herein contained, and to the sale or sales made by virtue thereof.

        In case of an assignment of such certificate or certificates of purchase or in the case of redemption of such Trust Property by a subsequent encumbrance, such assignment or redemption shall also be referred to in such deed or deeds, but the notice of sale need not be set out in such deed or deeds. Trustee shall, out of the proceeds or avails of such sale, after

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first paying and retaining all fees, charges, and costs of making said sale, apply the remaining proceeds of the sale first to Beneficiary for the payment of all moneys advanced by Beneficiary for insurance, repairs, appraisals, maintenance, inspection and testing fees, receivers' and management fees, leasing and sales commissions, advertising costs and expenses, taxes and assessments, environmental audits, environmental studies and reports, environmental tests and remediation costs, surveys, engineering studies and reports, engineering fees and expenses, soils tests, space planning costs and expenses, contractors' fees, expert witness fees and expenses, copying charges, costs for title searches and-examinations, title insurance premiums and expenses, filing and recording fees, all costs, fees and expenses incurred by Beneficiary to maintain, preserve and protect the Trust Property, legal fees, and any other costs or fees authorized in the Indenture, this Deed Of Trust or by statute, with interest thereon (to the fullest extent permitted by law) from the date incurred until paid, and then to Beneficiary for the payment of the Obligations in such manner and order of priority as the Indenture shall provide, rendering the surplus, if any, unto Grantor or its successor or assigns or to any person entitled thereto. Such sale or sales and said deed or deeds so made shall be a perpetual bar, both in law and equity, against Grantor and its successors and assigns, and all other persons claiming the said Trust Property, or any part thereof, by, through, from, or under Grantor. The holder of this Deed Of Trust may purchase the Trust Property or any part thereof. It shall not be obligatory upon the purchaser or purchasers at any such sale to see to the application of the purchase money.

        (ii)  Pay any sums in any form or manner deemed expedient by Beneficiary to protect the security of this Deed of Trust or to cure any Event of Default; make any payment herein authorized to be made according to any bill, statement, or estimate furnished or procured from the appropriate public officer or other party claiming payment without inquiry into the accuracy or validity thereof, and the receipt of any such public officer or party in the hands of Beneficiary shall be conclusive proof of the right of Beneficiary to make such payment (whether or not the validity or amount thereof be ultimately determined as false or incorrect), and Beneficiary shall have no liability for payments so made. All amounts so paid, with interest thereon (to the fullest extent permitted by law) from the date incurred until paid shall be added to and become a part of the Obligations and be immediately due and payable to Beneficiary.

        (iii)  Declare the Obligations, including all monies advanced by Beneficiary under the terms hereof, to be due and payable.

        (c)    Colorado Law Controls.    Nothing herein dealing with foreclosure procedures or specifying particular actions to be taken by Beneficiary or by Trustee shall be deemed to contradict or add to the requirements and procedures (now or hereafter existing) of Colorado law applicable to this Deed Of Trust at the time of foreclosure, and any such conflict or inconsistency shall be resolved in favor of Colorado law.

        (d)    Remedies Not Exclusive.    The recitation of the foregoing power of sale by the Public Trustee shall not be deemed to be a waiver of, and shall not preclude or impair Beneficiary from exercising, any other rights and remedies available under this Deed Of Trust, the Indenture, the Securities, the Subsidiary Guarantees, the Intercreditor Agreement, the other Security Documents, any other agreement or instrument or applicable law. All such rights and remedies are cumulative to the extent permitted by applicable law.

        (e)    Colorado Statutes Sections 38-38-101 and 38-39-102.    Grantor hereby acknowledges and agrees that the CF & I Note shall constitute the "original evidence of debt" required by Section 38-38-101 and Section 38-39-102 of the Colorado Statutes, or any successor statutes

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thereto, to be filed with the Public Trustee in connection with a foreclosure or release of this Deed Of Trust.

        46.    [STRIKE AND INSERT "INTENTIONALLY DELETED" IN THE COLORADO AND CALIFORNIA FORMS]Certain Matters Relating to Trust Property Located in the State of Oregon.    With respect to the Trust Property which is located in the State of Oregon, notwithstanding anything contained herein to the contrary:

        (a)    Advertisement and Sale; Foreclosure.    Following recording of a notice of default and at least 120 days before the date of the Trustee's sale, notice either by personal service pursuant to ORCP 7D(2), (3), or by both first class and certified mail, return receipt requested, shall be given to Grantor, any successor in interest having a recorded interest or known interest in the Trust Property, any person with a lien or interest of record subsequent to this Deed Of Trust, any person with an interest in the Trust Property known to Beneficiary, and persons having a recorded request for notice. At least 120 days before such sale, occupants shall be personally served with notice pursuant to ORCP 7D(2), (3). Notice shall also be published for four successive weeks ending more than 20 days prior to sale. On or before the date of sale, affidavits of mailing, service and publication of notice shall be recorded. The contents of the notice shall be in accordance with applicable law and procedure. Trustee may postpone the sale to a date or dates not more than 180 days after the initial sale date under ORS 86.755(2).

        (b)    Effect of Sale.    Sale pursuant to advertisement and sale shall terminate the interest of all persons given notice or claiming through those given notice. Grantor waives the right of redemption on Grantor's behalf and Grantor's successors and assigns to the fullest extent permitted by law.

        (c)    Not Residential Property.    The Trust Property is not residential property improved by four or fewer residential units, one of which is occupied as a principal residence of Grantor, Grantor's spouse or Grantor's minor children.

        (d)    Notice under ORS 746.201.    In compliance with ORS 746.201, this Deed Of Trust contains the following warning, which Grantor acknowledges:

WARNING

        UNLESS YOU (OREGON STEEL MILLS, INC.) PROVIDE US (BENEFICIARY) WITH EVIDENCE OF THE INSURANCE COVERAGE AS REQUIRED BY OUR CONTRACT OR LOAN AGREEMENT, WE MAY PURCHASE INSURANCE AT YOUR EXPENSE TO PROTECT OUR INTEREST. THIS INSURANCE MAY, BUT NEED NOT, ALSO PROTECT YOUR INTEREST. IF THE COLLATERAL BECOMES DAMAGED, THE COVERAGE WE PURCHASE MAY NOT PAY ANY CLAIM YOU MAKE OR ANY CLAIM MADE AGAINST YOU. YOU MAY LATER CANCEL THIS COVERAGE BY PROVIDING EVIDENCE THAT YOU HAVE OBTAINED PROPERTY COVERAGE ELSEWHERE.

        YOU ARE RESPONSIBLE FOR THE COST OF ANY INSURANCE PURCHASED BY US. THE COST OF THIS INSURANCE MAY BE ADDED TO YOUR CONTRACT OR LOAN BALANCE. IF THE COST IS ADDED TO YOUR CONTRACT OR LOAN BALANCE, THE INTEREST RATE ON THE UNDERLYING CONTRACT OR LOAN WILL APPLY TO THIS ADDED AMOUNT. THE EFFECTIVE DATE OF COVERAGE MAY BE THE DATE YOUR PRIOR COVERAGE LAPSED OR THE DATE YOU FAILED TO PROVIDE PROOF OF COVERAGE.

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        THE COVERAGE WE PROVIDE MAY BE CONSIDERABLY MORE EXPENSIVE THAN INSURANCE YOU CAN OBTAIN ON YOUR OWN AND MAY NOT SATISFY ANY NEED FOR PROPERTY DAMAGE COVERAGE OR ANY MANDATORY LIABILITY INSURANCE REQUIREMENTS IMPOSED BY APPLICABLE LAW.

        (e)    Successor Trustees.    Subsection 42(c) of this Deed Of Trust shall be modified by the following provisions:

        The appointment of a successor trustee shall be in writing and shall be recorded pursuant to ORS 86.790(3). When the appointment of the successor trustee is recorded in the mortgage records of the county or counties in which the Deed Of Trust is recorded, the successor trustee shall be vested with all the powers of the original Trustee.

        (f)    Attorneys' Fees.    Whenever this Deed Of Trust, the Indenture, the Securities, the Subsidiary Guarantees, the Intercreditor Agreement or the other Security Documents provide that Grantor shall pay Beneficiary's or Trustee's attorneys' fees and expenses or that Beneficiary or Trustee shall be paid, reimbursed for or collect attorneys' fees and expenses, such provisions shall be deemed to mean that Grantor agrees to pay and Beneficiary and Trustee shall be paid, reimbursed for, and collect all of Beneficiary's and Trustee's reasonable attorneys' fees and expenses relating to the interpretation or enforcement of this Deed Of Trust, the Indenture, the Securities, the Subsidiary Guarantees, the Intercreditor Agreement or the other Security Documents even though no suit or action is instituted, including, but not limited by, those fees and expenses permitted or defined by statutory law, and including without limitation all fees and expenses incurred during or in preparation for litigation, at trial, on appeal, on petition for review, and in any other proceeding, including any arbitration or bankruptcy case or proceeding, and with respect to issues peculiar to bankruptcy.

        (g)    Notice Under ORS 93.040.    In compliance with ORS 93.040, this Deed Of Trust contains the following notice:

        THIS INSTRUMENT WILL NOT ALLOW USE OF THE PROPERTY DESCRIBED IN THIS INSTRUMENT IN VIOLATION OF APPLICABLE LAND USE LAWS AND REGULATIONS. BEFORE SIGNING OR ACCEPTING THIS INSTRUMENT, THE PERSON ACQUIRING FEE TITLE TO THE PROPERTY SHOULD CHECK WITH THE APPROPRIATE CITY OR COUNTY PLANNING DEPARTMENT TO VERIFY APPROVED USES AND TO DETERMINE ANY LIMITS ON LAWSUITS AGAINST FARMING OR FOREST PRACTICES AS DEFINED IN ORS 30.930.

        [FOR OREGON, ADD:

        47.    LEASEHOLD DEED OF TRUST.

        (a)  THIS DEED OF TRUST CONSTITUTES AN ENCUMBRANCE ON THE MORTGAGED LEASE AND THE INTEREST AND LEASEHOLD ESTATE OF GRANTOR IN THE LEASED REAL ESTATE PURSUANT TO THE MORTGAGED LEASE.

        (b)  GRANTOR HEREBY REPRESENTS, COVENANTS AND WARRANTS THAT:

        (i)    THE MORTGAGED LEASE IS IN FULL FORCE AND EFFECT AND UNMODIFIED, EXCEPT AS SET FORTH ON SCHEDULE B HERETO.

        (ii)  ALL RENTS (INCLUDING ADDITIONAL RENTS AND OTHER AMOUNTS AND CHARGES) SPECIFIED IN THE MORTGAGED LEASE AND ALL SERVICES OR OTHER CONSIDERATION TO BE PROVIDED OR PAID UNDER THE MORTGAGED LEASE HAVE BEEN PAID OR PROVIDED TO THE EXTENT THEY WERE PAYABLE OR REQUIRED PRIOR TO THE DATE HEREOF.

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        (iii)  THERE ARE NO EXISTING DEFAULTS UNDER THE PROVISIONS OF THE MORTGAGED LEASE OR IN THE PERFORMANCE OF ANY OF THE TERMS, COVENANTS OR CONDITIONS THEREOF ON THE PART OF GRANTOR TO BE OBSERVED AND PERFORMED BEYOND ANY APPLICABLE GRACE PERIOD.

        (iv)  GRANTOR HAS NOT ASSIGNED OR SUBLET THE MORTGAGED LEASE OR THE LEASED REAL ESTATE OR ANY PART THEREOF.

        (c)  GRANTOR SHALL KEEP AND PERFORM, OR CAUSE TO BE KEPT AND PERFORMED, ALL THE MATERIAL TERMS, COVENANTS AND CONDITIONS CONTAINED IN THE MORTGAGED LEASE BY GRANTOR THEREIN TO BE KEPT AND PERFORMED. NOTWITHSTANDING THE PROVISIONS OF THIS SECTION 47 TO THE CONTRARY, ANY BREACH OF THE MORTGAGED LEASE BY GRANTOR OR THE OCCURRENCE OF A DEFAULT UNDER THE MORTGAGED LEASE, OR FORFEITURE OF THE MORTGAGED LEASE DUE TO DEFAULT BY GRANTOR THEREUNDER, OR OTHER TERMINATION OR AMENDMENT OF THE MORTGAGED LEASE, OR ANY BREACH OF ANY OF THE TERMS OF SUBSECTION 47(c) OR 47(d) OF THE DEED OF TRUST SHALL NOT BE AN EVENT OF DEFAULT UNDER THIS DEED OF TRUST OR UNDER THE INDENTURE.

        (d)  GRANTOR SHALL GIVE BENEFICIARY PROMPT NOTICE OF ANY ALTERATION OR MODIFICATION OF ANY MATERIAL TERMS OF THE MORTGAGED LEASE OR OF ANY CANCELLATION, SURRENDER OR TERMINATION OF THE MORTGAGED LEASE. GRANTOR SHALL GIVE BENEFICIARY PROMPT NOTICE OF ANY RECEIPT BY GRANTOR OF ANY NOTICE OF DEFAULT FROM THE LESSOR UNDER THE MORTGAGED LEASE. GRANTOR SHALL FURNISH TO BENEFICIARY ANY AND ALL INFORMATION WHICH IT MAY REASONABLY REQUEST CONCERNING THE PERFORMANCE BY GRANTOR OF THE TERMS, COVENANTS AND CONDITIONS OF THE MORTGAGED LEASE, AND GRANTOR SHALL PERMIT BENEFICIARY OR ITS REPRESENTATIVE AT ALL REASONABLE TIMES TO INVESTIGATE OR EXAMINE SUCH PERFORMANCE. GRANTOR WILL PROMPTLY DEPOSIT WITH BENEFICIARY AN ORIGINAL EXECUTED COPY OF THE MORTGAGED LEASE OR A COPY CERTIFIED BY GRANTOR AS TRUE, COMPLETE AND CORRECT AND ANY AND ALL DOCUMENTARY EVIDENCE RECEIVED BY IT SHOWING COMPLIANCE BY GRANTOR WITH THE TERMS, COVENANTS AND CONDITIONS OF THE MORTGAGED LEASE. GRANTOR WILL ALSO PROMPTLY DELIVER TO BENEFICIARY AN EXACT COPY OF ANY NOTICE, COMMUNICATION, PLAN, SPECIFICATION OR OTHER INSTRUMENT OR DOCUMENT RECEIVED OR GIVEN BY IT AFFECTING THE MORTGAGED LEASE OR THE LEASED REAL ESTATE OR AFFECTING THE ESTATE OF THE LESSOR OR GRANTOR IN OR UNDER THE MORTGAGED LEASE OR THE LEASED REAL ESTATE.

        (e)  UNLESS BENEFICIARY SHALL OTHERWISE IN WRITING CONSENT, THE LEASEHOLD ESTATE IN THE LEASED REAL ESTATE, HEREINBEFORE DESCRIBED, SHALL NOT MERGE INTO THE FEE ESTATE BUT SHALL ALWAYS BE KEPT SEPARATE AND DISTINCT, NOTWITHSTANDING THE UNION OF SAID ESTATES EITHER IN THE LESSOR OR IN GRANTOR OR IN ANY SUBLESSEE OR IN A THIRD PARTY, BY PURCHASE OR OTHERWISE AND GRANTOR FURTHER COVENANTS AND AGREES THAT, IN CASE IT SHALL ACQUIRE THE FEE ESTATE OR ANY OTHER ESTATE, TITLE OR INTEREST IN THE LEASED REAL ESTATE COVERED BY THE MORTGAGED LEASE INCLUDING, WITHOUT LIMITATION, PURSUANT TO THE PURCHASE OPTION OR RIGHT OF FIRST REFUSAL, IF ANY, SET FORTH IN THE MORTGAGED LEASE, THIS DEED OF TRUST SHALL ATTACH TO AND BE A LIEN UPON SUCH OTHER

34

ESTATE SO ACQUIRED, AND SUCH OTHER ESTATE SO ACQUIRED BY GRANTOR SHALL BE CONSIDERED AS MORTGAGED, ASSIGNED OR CONVEYED TO BENEFICIARY AND THE LIEN HEREOF SPREAD TO COVER AND ENCUMBER SUCH ESTATE WITH THE SAME FORCE AND EFFECT AS THOUGH SPECIFICALLY HEREIN MORTGAGED, ASSIGNED OR CONVEYED, AND SPREAD.

        (f)    IF AT ANY TIME GRANTOR, ANYONE CLAIMING BY, THROUGH OR UNDER GRANTOR OR A TRUSTEE IN BANKRUPTCY SHALL HAVE THE RIGHT TO REJECT THE MORTGAGED LEASE PURSUANT TO SECTION 365 OF THE BANKRUPTCY CODE OF THE UNITED STATES, OR A SUCCESSOR OR OTHER APPLICABLE STATUTE, THEN BENEFICIARY SHALL HAVE THE EXCLUSIVE RIGHT TO EXERCISE SAID RIGHT AND GRANTOR HEREBY ASSIGNS SAID RIGHT TO BENEFICIARY. IF AT ANY TIME THE LESSOR UNDER THE MORTGAGED LEASE, ANYONE HOLDING BY, THROUGH OR UNDER THE LESSOR UNDER THE MORTGAGED LEASE OR A TRUSTEE IN BANKRUPTCY SHALL ELECT TO REJECT THE MORTGAGED LEASE PURSUANT TO SUCH SECTION 365, OR A SUCCESSOR OR OTHER APPLICABLE STATUTE, THEREBY GIVING TO GRANTOR THE RIGHT TO ELECT TO TREAT THE MORTGAGED LEASE AS TERMINATED PURSUANT TO SUCH SECTION 365, OR A SUCCESSOR OR OTHER APPLICABLE STATUTE, THEN BENEFICIARY SHALL HAVE THE EXCLUSIVE RIGHT TO EXERCISE SAID RIGHT AND GRANTOR HEREBY ASSIGNS SAID RIGHT TO BENEFICIARY. GRANTOR HEREBY ASSIGNS, TRANSFERS AND SETS OVER TO BENEFICIARY ALL OF GRANTOR'S CLAIMS AND RIGHTS TO THE PAYMENT OF DAMAGES ARISING FROM ANY REJECTION BY THE LESSOR OF THE MORTGAGED LEASE UNDER THE BANKRUPTCY CODE. BENEFICIARY IS HEREBY IRREVOCABLY APPOINTED AS GRANTOR'S ATTORNEY-IN-FACT, COUPLED WITH AN INTEREST, WITH EXCLUSIVE POWER TO FILE AND PROSECUTE, TO THE EXCLUSION OF GRANTOR, ANY PROOFS OF CLAIM, COMPLAINTS, MOTIONS, APPLICATIONS, NOTICES AND OTHER DOCUMENTS, IN ANY CASE IN RESPECT OF THE MORTGAGED LEASE OR THE LESSOR OF THE MORTGAGED LEASE UNDER THE BANKRUPTCY CODE. GRANTOR MAY MAKE ANY COMPROMISE OR SETTLEMENT IN CONNECTION WITH SUCH PROCEEDINGS (SUBJECT TO BENEFICIARY'S REASONABLE APPROVAL); PROVIDED, HOWEVER, THAT BENEFICIARY SHALL BE AUTHORIZED AND ENTITLED TO COMPROMISE OR SETTLE ANY SUCH PROCEEDING IF SUCH COMPROMISE OR SETTLEMENT IS MADE AFTER THE OCCURRENCE AND DURING THE CONTINUANCE OF ANY EVENT DEFAULT. GRANTOR SHALL PROMPTLY EXECUTE AND DELIVER TO BENEFICIARY ANY AND ALL INSTRUMENTS REASONABLY REQUIRED IN CONNECTION WITH ANY SUCH PROCEEDING AFTER REQUEST THEREFOR BY BENEFICIARY.

        [SIGNATURE PAGE FOLLOWS]

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        This Deed Of Trust has been duly executed by Grantor on the date first above written.

ATTEST:		[OREGON STEEL MILLS, INC., a Delaware corporation
By:		By:
	Name:		Name:
	Title:		Title:
		CF&I STEEL, L.P., a Delaware limited partnership
		By:	New CF&I, Inc., a Delaware corporation
			By:
				Name:
				Title:          ]

36

(Colorado Acknowledgment]

STATE OF	)
	)    ss.
COUNTY OF	)

        The foregoing instrument was acknowledged before me this    day of                        2002, by                        as                         of New CF&I, Inc., a Delaware corporation, as general partner of CF&I Steel, L.P., a Delaware limited partnership.

        Witness my hand and official seal.

(Notary Seal)

Notary Public

My commission expires:

(California Acknowledgment]

STATE OF	)
	)    ss.
COUNTY OF	)

        On the            day of            , 2002, before me,            , Notary Public, personally appeared            ,

        o personally known to me to be

        OR

        o proved to me on the basis of satisfactory evidence

to be the person(s) whose name(s) is/are subscribed to the within instrument, and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

WITNESS my hand and official seal.

Signature:
		(Seal)
	Notary Public

My commission expires:

CAPACITY CLAIMED BY SIGNER:	THIS CERTIFICATE MUST BE ATTACHED TO THE DOCUMENT DESCRIBED BELOW:
IX] Corporate Officer—
	Title or Type of Document: DEED OF TRUST, ASSIGNMENT OF RENTS AND LEASES, SECURITY AGREEMENT AND FIXTURE FILING

(Oregon Acknowledgment]

STATE OF	)
	)    ss.
COUNTY OF	)

        This instrument was acknowledged before me on            , 2002, by            , as            of Oregon Steel Mills, Inc., a Delaware corporation.

	[SEAL]
Notary Public for
My commission expires:

Schedule A

Description of the Real Estate

[Attach Legal Description of all Parcels]

[For Fremont Deed of Turst, Legal Description

Should Be the Pueblo ITF Property]

[FOR COLORADO, ADD

SCHEDULE B

THE INDENTURE]

[FOR OREGON, ADD

SCHEDULE B

THE LEASED REAL ESTATE AND

THE MORTGAGED LEASE]

SCHEDULE C

EASEMENTS

SCHEDULE D

WATER RIGHTS]

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Exhibit 4.7

EX-4.8

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Exhibit 4.8

(Face of Note)

CUSIP:                         

10% First Mortgage Notes due 2009

No.: $

Oregon Steel Mills, Inc.

promises to pay to                                                                                                                                                                    

or registered assigns,

the principal sum of                                                                                                                                                                    

Dollars on July 15, 2009.

Interest Payment Dates: January 15th and July 15th, commencing January 15, 2003.

Record Dates: January 1st and July 1st.

Dated: July 15, 2002
OREGON STEEL MILLS, INC.
By:
	Name: Title:

This is one of the
Notes referred to in the
within-mentioned Indenture:

U.S. Bank National Association,
as Trustee

By:
	Authorized Signatory

1

(Back of Note)

10% First Mortgage Notes due 2009

[Insert the Global Note Legend, if applicable pursuant to the provisions of the Indenture]

[Insert the Private Placement Legend, if applicable pursuant to the provisions of the Indenture]

        1.    Principal and Interest.    Oregon Steel Mills, Inc., a corporation incorporated under the laws of the State of Delaware (herein called the "Company", which term includes any successor corporation under the Indenture hereinafter referred to), for value received, hereby promises to pay to the person named on the face hereof or such person's registered assigns, the principal sum set forth on the face hereof on July 15, 2009, at the office or agency of the Company referred to below, and to pay interest thereon at 10% per annum from July 15, 2002 until maturity. The Company shall pay interest semi-annually on January 15th and July 15th of each year, or if any such day is not a Business Day, on the next succeeding Business Day (each an "Interest Payment Date"). Interest on the Notes will accrue from the most recent date to which interest has been paid or, if no interest has been paid, from the date of original issuance; provided that if there is no existing Default in the payment of interest, and if this Note is authenticated between a Record Date referred to on the face hereof and the next succeeding Interest Payment Date, interest shall accrue from such next succeeding Interest Payment Date; provided, further, that the first Interest Payment Date shall be January 15, 2003. The Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue principal and premium, if any, from time to time on demand to the extent lawful at the interest rate applicable to the Notes; the Company shall pay interest (including post-petition interest in any proceeding under any Bankruptcy Law) on overdue installments of interest (without regard to any applicable grace periods) from time to time on demand at the same rate to the extent lawful. Interest will be computed on the basis of a 360-day year of twelve 30-day months.

        2.    Method of Payment.    The interest (and Liquidated Damages, if any) so payable, and punctually paid or duly provided for, on any Interest Payment Date will be paid to the person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on the Regular Record Date for such interest, which shall be January 1st or July 1st (whether or not a Business Day), as the case may be, next preceding such Interest Payment Date (each a "Regular Record Date"). Any such interest (and Liquidated Damages, if any) not so punctually paid or duly provided for shall forthwith cease to be payable to the Holder on such Regular Record Date, and, together with interest, to the extent lawful, on such defaulted interest at the rate borne by the Notes, shall be paid to the person in whose name this Note (or one or more Predecessor Notes) is registered at the close of business on a special record date for the payment of such defaulted interest to be fixed by the Company, notice of which shall be given to holders of Notes not less than 15 days prior to such special record date, or shall be paid at any time in any other lawful manner not inconsistent with the requirements of any securities exchange on which the Notes may be listed, and upon such notice as may be required by such exchange, all as more fully provided in such Indenture.

        Payment of the principal of, premium, if any, interest and Liquidated Damages, if any, on this Note will be made at the office or agency of the Company maintained for that purpose in the Borough of Manhattan in the City of New York, or at such other office or agency of the Company as may be maintained for such purpose, or, at the option of the Company, payment of interest may be made by check mailed to the address of the person entitled thereto as such address shall appear on the Notes register maintained by the Registrar provided that all payments of principal, premium, interest and Liquidated Damages, if any, with respect to Notes the Holders of which have given wire transfer instructions to the Company prior to the Record Date will be required to be made by wire transfer of immediately available funds to the accounts specified by the Holders thereof. Until otherwise designated by the Company, the Company's office or agency in New York will be the office of the Trustee maintained for such purpose. Such payment shall be in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.

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        3.    Paying Agent and Registrar.    Initially, U.S. Bank National Association, the Trustee under the Indenture, will act as Paying Agent and Registrar. The Company may change any Paying Agent or Registrar without notice to any Holder. The Company or any of its Subsidiaries may act in any such capacity.

        4.    Indenture.    This Note is one of a duly authorized issue of Notes of the Company designated as its 10% First Mortgage Notes due 2009, limited (except as otherwise provided in the Indenture referred to below) in aggregate principal amount to $305,000,000, issued under an indenture (which Indenture, together with all indentures supplemental thereto, are hereinafter called the "Indenture") dated as of July 15, 2002, among the Company, U.S. Bank National Association, as trustee (herein called the "Trustee", which term includes any successor Trustee under the Indenture), New CF&I, Inc., a Delaware corporation, and CF&I Steel, L.P., a Delaware limited partnership, to which Indenture and all indentures supplemental thereto reference is hereby made for a statement of the respective rights, limitations of rights, duties, obligations and immunities thereunder of the Company, the Trustee, the Guarantors and the Holders of the Notes, and of the terms upon which the Notes are, and are to be, authenticated and delivered.

        The terms of the Notes include those stated in the Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939, as amended (15 U.S. Code §§ 77aaa-77bbbb) (the "TIA"). The Notes are subject to all such terms, and Holders are referred to the Indenture and the TIA for a statement of such terms. To the extent any provision of this Note conflicts with the express provisions of the Indenture, the provisions of the Indenture shall govern and be controlling. All terms used in this Note that are not otherwise defined shall have the meaning assigned to them in the Indenture.

        The rights and obligations of the parties to this Indenture are subject to the Intercreditor Agreement.

        No reference herein to the Indenture and no provisions of this Note, the Guarantee or of the Indenture shall alter or impair the obligation of the Company or any Guarantor, which is absolute and unconditional, to pay the principal of, premium, if any, and interest on this Note at the times, place and rate, and in the coin or currency, herein prescribed.

        5.    Guarantees; Collateral.    This Note is entitled to certain Guarantees made for the benefit of the Holders, as set forth in this Note and in the Indenture. This Note and such Guarantees are also entitled to the benefits of certain Collateral pledged as security therefor as provided in the Indenture and the Security Documents.

        6.    Optional Redemption.    Except as set forth in the following paragraph, the Notes will not be redeemable at the Company's option prior to July 15, 2006. On or after July 15, 2006, the Notes will be subject to redemption at any time at the option of the Company, in whole or in part, upon not less than 30 days' nor more than 60 days' notice, at the Redemption Prices (expressed as percentages of principal amount) set forth below plus accrued and unpaid interest thereon, if any, and Liquidated Damages, if any, to the applicable redemption date, if redeemed during the twelve-month period beginning on July 15th of the years indicated below:

Year	Percentage
2006	105.000	%
2007	102.500	%
2008 and thereafter	100.000	%

        Notwithstanding the foregoing, at any time on or prior to July 15, 2005, the Company may on any one or more occasions redeem up to 35% of the aggregate principal amount of Notes at a Redemption Price equal to 110.000% of the principal amount thereof, plus accrued and unpaid interest thereon, if any, and Liquidated Damages, if any, to the redemption date, with the net cash proceeds of Qualified

3

Equity Offerings by the Company; provided that (i) at least 65% of the aggregate principal amount of Notes issued under the Indenture remains outstanding immediately after the occurrence of such redemption (excluding Notes held by the Company and its Subsidiaries) and (ii) such redemption shall occur within 60 days of the date of the closing of such Qualified Equity Offering.

        Notice of redemption will be mailed by first class mail at least 30 days but not more than 60 days before the redemption date to each Holder of Notes to be redeemed at its registered address. Notes in denominations larger than $1,000 may be redeemed in part (in integral multiples of $1,000). If any Note is to be redeemed in part only, the notice of redemption that relates to such Note shall state the portion of the principal amount thereof to be redeemed. A new Note in principal amount equal to the unredeemed portion thereof will be issued in the name of the Holder thereof upon cancellation of the original Note. On and after the redemption date interest ceases to accrue on Notes or portions thereof called for redemption. In the case of any redemption of Notes, interest installments whose Stated Maturity is on or prior to the Redemption Date will be payable to the Holders of such Notes, or one or more Predecessor Notes, of record at the close of business on the relevant record date referred to on the face hereof.

        7.    Mandatory Redemption.    For the avoidance of doubt, an offer to purchase pursuant to paragraph 8 shall not be deemed a redemption. The Company shall not be required to make mandatory redemption payments with respect to the Notes.

        8.    Repurchase at Option of Holder.    If a Change of Control occurs, each Holder of Notes will have the right to require the Company to make an offer to all Holders to repurchase Notes on the terms, in accordance with the procedures and subject to the limitations set forth in the Indenture. If the Company or a Guarantor consummates any Asset Sales, when the aggregate amount of Excess Proceeds exceeds $10,000,000, the Company will be required to make an offer to all Holders of Notes to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds on the terms, in accordance with the procedures and subject to the limitations set forth in the Indenture.

        9.    Defaults and Remedies.    If an Event of Default shall occur and be continuing, the principal of, premium, if any, and interest on all of the outstanding Notes may be declared due and payable in the manner and with the effect provided in the Indenture. If any Event of Default occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes generally may declare all the Notes to be due and payable immediately. Notwithstanding the foregoing, in the case of an Event of Default arising from certain events of bankruptcy or insolvency as set forth in the Indenture, with respect to the Company or any Guarantor, all outstanding Notes will become due and payable without further action or notice. Holders of the Notes may not enforce the Indenture or the Notes except as provided in the Indenture. Subject to certain limitations, Holders of a majority in principal amount of the then outstanding Notes may direct the Trustee in its exercise of any trust or power. The Trustee may withhold from Holders of the Notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal or interest) if it determines that withholding notice is in their interest. The Holders of a majority in aggregate principal amount of the Notes then outstanding by notice to the Trustee may on behalf of the Holders of all of the Notes waive any existing Default or Event of Default and its consequences under the Indenture except a continuing Default or Event of Default in the payment of interest on, or the principal of, or the premium on, the Notes.

        10.    Defeasance.    The Indenture contains provisions (which provisions apply to this Note) for defeasance at any time of the entire indebtedness of the Company and the Guarantors under this Note and certain restrictive covenants, in each case upon compliance by the Company with certain conditions set forth therein, and for the termination of the Company's and the Guarantors' obligations (subject to certain exceptions) under the Indenture.

4

        11.    Amendments and Waivers.    The Indenture permits, with certain exceptions as therein provided, the amendment and the modification of the rights and obligations of the Company and the Guarantors and the rights of the Holders under the Indenture, the Notes, the Guarantees, the Intercreditor Agreement, and the Security Documents at any time by the Company, the Guarantors and the Trustee with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding. The Indenture also contains provisions permitting the Holders of not less than a majority in aggregate principal amount of the Notes at the time outstanding, on behalf of the Holders of all the Notes, to waive compliance by the Company and the Guarantors with certain provisions of, and to waive certain past defaults under, the Indenture, the Notes, the Guarantees, the Intercreditor Agreement and the Security Documents and their consequences. Any such consent or waiver by or on behalf of the Holder of this Note shall be conclusive and binding upon such Holder and upon all future Holders of this Note and of any Note issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof whether or not notation of such consent or waiver is made upon this Note. Without the consent of any Holder of Notes, the Company and the Trustee may amend or supplement the Indenture or the Notes to cure any ambiguity, defect or inconsistency, to evidence the succession of another person to the Company in accordance with Article Five of the Indenture or the succession of another person to a Guarantor in accordance with Section 10.03 of the Indenture, and the assumption by any such successor of the obligations of the Company or such Guarantor, as the case may be, in accordance with the Indenture and the Security Documents, to qualify, or maintain the qualification of, the Indenture under the TIA, to give effect to the release of any Released Interests or any other release of Collateral, in each case permitted to be released in accordance with the terms of the Indenture or the relevant Security Documents, to evidence or effect the pledge of additional or substitute assets or property as Collateral in accordance with the Indenture and the Security Documents, to evidence the release of any Guarantor in accordance with Section 10.04 of the Indenture or the addition of any new Guarantor in accordance with Sections 4.17 and 4.22 of the Indenture, to evidence and provide for the acceptance of appointment hereunder by a separate or successor Trustee with respect to the Notes and to make such additions or changes as shall be necessary or appropriate to provide for or facilitate the administration of the trusts hereunder by more than one trustee pursuant to the requirements of Section 7.12 of the Indenture, to comply with the requirements of the Trustee and the Depository (including their respective nominees) with respect to transfers of beneficial interests in the Notes or to provide for issuance of the Exchange Notes, and to make any other change that would provide any additional rights or benefits to the Holders of the Notes, or that does not adversely affect the rights of any Holder of Notes under this Indenture, the Notes, the Guarantees, the Registration Rights Agreement or the Security Documents or, in the case of any other change to the Intercreditor Agreement, that does not adversely affect the rights of any Holder of Notes in any material respect.

        12.    Denominations, Transfer and Exchange.    The Notes are issuable only in registered form without coupons in denominations of $1,000 and integral multiples thereof. The transfer of Notes may be registered and Notes may be exchanged as provided in the Indenture.

        The Registrar and the Trustee may require a Holder, among other things, to furnish appropriate endorsements and transfer documents and the Company may require a Holder to pay any taxes and fees required by law or permitted by the Indenture. The Company or the Registrar is not required to transfer or exchange any Note selected for redemption. Also, the Company or the Registrar is not required to transfer or exchange any Notes for a period of 15 days before a selection of Notes to be redeemed.

        No service charge shall be made for any registration of transfer or exchange or redemption or repurchase of Notes, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

5

        13.    Persons Deemed Owners.    Prior to and at the time of due presentment of this Note for registration of transfer, the Company, the Guarantors, the Trustee and any agent of the Company, the Guarantors, or the Trustee may treat the person in whose name this Note is registered as the owner hereof for all purposes, whether or not this Note shall be overdue, and neither the Company, the Guarantors, the Trustee nor any agent shall be affected by notice to the contrary.

        14.    Trustee Dealings with the Company.    The Trustee, in its individual or any other capacity, may make loans to, accept deposits from, and perform services for the Company or the Company's Affiliates, and may otherwise deal with the Company or the Company's Affiliates, as if it were not the Trustee; subject, however, to TIA § 310(b) .

        15.    No Recourse Against Others.    No director, officer, employee, incorporator, limited partner or stockholder of the Company or any Guarantor, as such, shall have any liability for any obligations of the Company or any Guarantor under the Notes, the Indenture, the Guarantees, the Registration Rights Agreement or for any claim based on, in respect of, or by reason of, such obligations or their creation. Each Holder of Notes by accepting a Note waives and releases all such liability. The waiver and release are part of the consideration for issuance of the Notes. This waiver may not be effective to waive liability under federal securities law.

        16.    Authentication.    This Note shall not be valid until authenticated by the manual signature of the Trustee or an authenticating agent.

        17.    Abbreviations.    Customary abbreviations may be used in the name of a Holder or an assignee, such as: TEN COM (= tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint tenants with right of survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

        18.    Additional Rights of Holders of Restricted Global Notes and Restricted Definitive Notes.    In addition to the rights provided to Holders of Notes under the Indenture, Holders of Restricted Global Notes and Restricted Definitive Notes shall have all the rights set forth in the Exchange and Registration Rights Agreement dated as of the date of the Indenture, among the Company, the Guarantors and the parties named on the signature pages thereof (the "Registration Rights Agreement").

        19.    CUSIP Numbers.    Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification Procedures, the Company has caused CUSIP numbers to be printed on the Notes and the Trustee may use CUSIP numbers in notices of redemption as a convenience to Holders. No representation is made as to the accuracy of such numbers either as printed on the Notes or as contained in any notice of redemption and reliance may be placed only on the other identification numbers placed thereon, and any such redemption shall not be affected by any defect in or omission of such numbers.

        20.    Governing Law.    This Note, the Indenture and the Guarantees shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.

        The Company will furnish to any Holder upon written request and without charge a copy of the Indenture and/or the Registration Rights Agreement. Requests may be made to: Oregon Steel Mills, Inc., 1000 S.W. Broadway, Suite 2200, Portland, Oregon 97205, Attention: Chief Financial Officer.

6

ASSIGNMENT FORM

To assign this Note, fill in the form below: (I) or (we) assign and transfer this Note to

                                                                                                                                                                                                        
(Insert assignee's soc. sec. or tax I.D. no.)

                                                                                                                                                                                                        
(Print or type assignee's name, address and zip code)

and irrevocably appoint                                                                                                                                                                
to transfer this Note on the books of the Company. The agent may substitute another to act for him or her.

Date:                                                              

Your Signature:                                                                                  
(Sign exactly as your name appears on the Note)        

SIGNATURE GUARANTEE

                                                                                 
Participant in a Recognized Signature
Guarantee Medallion Program

7

OPTION OF HOLDER TO ELECT PURCHASE

        If you want to elect to have this Note purchased by the Company pursuant to Section 4.12 or 4.13 of the Indenture, check the appropriate box below:

o Section 4.12                        o Section 4.13

        If you want to elect to have only part of this Note purchased by the Company pursuant to Section 4.12 or Section 4.13 of the Indenture, state the amount you elect to have purchased:

$                                                                                 

Date:                                                                          

Your Signature:                                                                                  
(Sign exactly as your name appears on the Note)        

Tax Identification No.                                                                        

SIGNATURE GUARANTEE

                                                                                 
Participant in a Recognized Signature
Guarantee Medallion Program

8

SCHEDULE OF EXCHANGES OF INTERESTS IN THE GLOBAL NOTE(1)

        The following exchanges of a part of this Global Note for an interest in another Global Note or for a Definitive Note, or exchanges of a part of another Global Note or Definitive Note for an interest in this Global Note, have been made:

Date of Exchange Amount of
decrease in
Principal Amount of
this Global Note Amount of increase in
Principal Amount of
this Global Note Principal Amount of
this Global Note
following such decrease
(or increase) Signature of authorized
signatory of Trustee or
Custodian

(1)

This should be included only if the Note is issued in global form.

9

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Exhibit 4.8

EX-4.9

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EXHIBIT 4.9

GUARANTEE

        For value received, the undersigned (including any successor person under the Indenture) has, jointly and severally, unconditionally guaranteed, and to the extent set forth in the Indenture and subject to the provisions of the Indenture dated as of July 15, 2002 (the "Indenture") by and among Oregon Steel Mills, Inc. (the "Company"), the Guarantors listed on the signature page thereto and U.S. Bank National Association, as trustee (the "Trustee"), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders and the Trustee under, and in accordance with, the Indenture, the Security Documents, the Registration Rights Agreement, the Intercreditor Agreement and the Notes and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Note.

        The obligations of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture and reference is hereby made to the Indenture for the precise terms of this Guarantee and all of the other provisions of the Indenture to which this Guarantee relates. All terms used herein which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

        The rights and obligations of the parties under the Indenture are subject to the Intercreditor Agreement.

        Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions.

        The terms of the Indenture, including, without limitation, Article Ten of the Indenture, are incorporated herein by reference. Capitalized terms used herein shall have the meanings assigned to them in the Indenture unless otherwise indicated.

        No director, officer, employee, stockholder or limited partner, as such (other than the Company and the Guarantors), of the undersigned shall have any liability for any obligations of the undersigned under this Guarantee, the Notes, the Indenture, the Security Documents, the Registration Rights Agreement or the Intercreditor Agreement or for any claim based on, in respect of or by reason of, such obligations or their creation by reason of his, her or its status as such director, officer, employee, stockholder or limited partner.

        This Guarantee shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.

        This Guarantee is subject to release upon the terms set forth in the Indenture.

[signature page follows]

[Seal]		CF&I STEEL, L.P.
		By:	NEW CF&I, INC., its General Partner
Attest:		By:
	Name: Title:		Name: Title:

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EXHIBIT 4.9

EX-4.10

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EXHIBIT 4.10

GUARANTEE

        For value received, the undersigned (including any successor person under the Indenture) has, jointly and severally, unconditionally guaranteed, and to the extent set forth in the Indenture and subject to the provisions of the Indenture dated as of July 15, 2002 (the "Indenture") by and among Oregon Steel Mills, Inc. (the "Company"), the Guarantors listed on the signature page thereto and U.S. Bank National Association, as trustee (the "Trustee"), (a) the due and punctual payment of the principal of, premium, if any, and interest on the Notes (as defined in the Indenture), whether at maturity, by acceleration, redemption or otherwise, the due and punctual payment of interest on overdue principal and premium, and, to the extent permitted by law, interest, and the due and punctual performance of all other obligations of the Company to the Holders and the Trustee under, and in accordance with, the Indenture, the Security Documents, the Registration Rights Agreement, the Intercreditor Agreement and the Notes and (b) in case of any extension of time of payment or renewal of any Notes or any of such other obligations, that the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, whether at stated maturity, by acceleration or otherwise. The validity and enforceability of any Guarantee shall not be affected by the fact that it is not affixed to any particular Note.

        The obligations of the undersigned to the Holders of Notes and to the Trustee pursuant to this Guarantee and the Indenture are expressly set forth in Article Ten of the Indenture and reference is hereby made to the Indenture for the precise terms of this Guarantee and all of the other provisions of the Indenture to which this Guarantee relates. All terms used herein which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

        The rights and obligations of the parties under the Indenture are subject to the Intercreditor Agreement.

        Each Holder of a Note, by accepting the same, agrees to and shall be bound by such provisions.

        The terms of the Indenture, including, without limitation, Article Ten of the Indenture, are incorporated herein by reference. Capitalized terms used herein shall have the meanings assigned to them in the Indenture unless otherwise indicated.

        No director, officer, employee, stockholder or limited partner, as such (other than the Company and the Guarantors), of the undersigned shall have any liability for any obligations of the undersigned under this Guarantee, the Notes, the Indenture, the Security Documents, the Registration Rights Agreement or the Intercreditor Agreement or for any claim based on, in respect of or by reason of, such obligations or their creation by reason of his, her or its status as such director, officer, employee, stockholder or limited partner.

        This Guarantee shall be governed by and construed in accordance with the laws of the State of New York applicable to contracts made and to be performed in the State of New York, including, without limitation, Section 5-1401 of the New York General Obligations Law.

        This Guarantee is subject to release upon the terms set forth in the Indenture.

[signature page follows]

[Seal]		NEW CF&I, INC.
Attest:		By:
	Name: Title:		Name: Title:

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EXHIBIT 4.10

EX-5.1

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Exhibit 5.1

[Letterhead of Stoel Rives LLP]

August 15, 2002

Board of Directors
Oregon Steel Mills, Inc.
1000 SW Broadway, Suite 2200
Portland, OR 97205

Board of Directors
New CF&I, Inc.
1000 S.W. Broadway, Suite 2200
Portland, OR 97205

General Partner
CF&I Steel, L.P.
1000 S.W. Broadway, Suite 2200
Portland, OR 97205

        We have acted as counsel for Oregon Steel Mills, Inc. (the "Company") and for New CF&I, Inc. ("New CF&I") and CF&I Steel, L.P. ("CF&I" and together with New CF&I, the "Guarantors") in connection with the preparation and filing of a Registration Statement on Form S-4 (the "Registration Statement") under the Securities Act of 1933 covering $305,000,000 aggregate principal amount of the Company's 10% First Mortgage Notes due 2009 (the "Exchange Notes") being offered for exchange by the Company and the issuance by the Guarantors of the guarantees with respect to the Exchange Notes (the "Exchange Guarantees"). We have reviewed the corporate action of the Company and the Guarantors in connection with this matter and have examined the documents, corporate records and other instruments we deemed necessary for the purpose of this opinion, including, but not limited to, the Indenture, dated as of July 15, 2002, among the Company, US Bank National Association, and the Guarantors (the "Indenture").

        Based on the foregoing, it is our opinion that:

(i)

Each of the Company and New CF&I is a corporation validly existing and in good standing under the laws of the State of Delaware;



(ii)

CF&I Steel is a limited partnership validly existing and in good standing under the laws of the State of Delaware; and



(iii)

The Notes and the Guarantees have been duly authorized and legally issued and the Notes are fully paid and non-assessable.

        We consent to the use of our name in the Registration Statement and in the prospectus filed as a part thereof and to the filing of this opinion as an exhibit to the Registration Statement.

Very truly yours,

STOEL RIVES LLP

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Exhibit 5.1

EX-5.2

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Exhibit 5.2

August 15, 2002

Oregon Steel Mills, Inc.
1000 S.W. Broadway
Suite 2200
Portland, Oregon 97205

New CF&I, Inc.
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205

CF&I Steel, L.P.
1000 S.W. Broadway, Suite 2200
Portland, Oregon 97205

Re:	Oregon Steel Mills, Inc.
	(Our Reference No. 05394-00190)

Ladies and Gentlemen:

        In connection with the registration under the Securities Act of 1933 (the "Act") of $305,000,000 aggregate principal amount of 10% First Mortgage Notes due 2009 (the "Notes") made by Oregon Steel Mills, Inc., a Delaware corporation (the "Company") and the related guarantees (the "Guarantees") of each of New CF&I, Inc., a Delaware corporation "New CF&I"), and CF&I Steel, L.P., a Delaware limited partnership ("CF&I," and together with New CF&I, the "Guarantors"), which are to be delivered pursuant to Indenture, dated as of July 15, 2002 (the "Indenture"), among the Company, as Issuer, U.S. Bank National Association, as trustee, and the Guarantors, we have acted as special local counsel to the Company and the Guarantors with respect to the laws of the State of New York.

        As to all factual matters material to the opinions expressed herein, we have (with your permission and without any investigation or independent verification) relied upon, and assumed the accuracy and completeness of the representations, warranties and covenants contained in the Notes, the Guarantees and the Indenture. We have also assumed that the parties to the Notes, the Guarantees and the Indenture will act in accordance with, and will refrain from taking any action that is forbidden by, the terms and conditions of the Notes, the Guarantees and the Indenture.

        In connection with this opinion, we have, with your consent and without investigation or independent verification, assumed the following with respect to the Notes and the Guarantees and the other documents and instruments examined by us: (a) such documents and instruments have been or will be duly authorized, authenticated, executed, delivered and, as appropriate, acknowledged by the parties thereto in the forms examined by us (in particular that the Notes and the Guarantees conform to the forms of Notes and the Guarantees, respectively, under the Indenture, as examined by us) and, except as we opine below with respect to the Company and the Guarantors, constitute or will constitute the legal, valid and binding obligation of such parties, enforceable against such parties in accordance with the terms thereof; (b) all signatures are genuine, all documents and instruments submitted to us as originals are authentic and all documents and instruments submitted to us as photocopies, telecopies or facsimiles or in electronic form conform to the original documents and instruments; (c) the parties to such documents and instruments are and will be duly formed entities and are and will be duly qualified to transact business in all states where such formation and qualification are necessary, and such parties have all necessary power and authority to enter into and perform such documents and instruments; (d) the parties to such documents and instruments are not and will not be subject to any special laws, regulations or other restrictions that are not generally applicable to parties participating in transactions of the type provided for by such documents and instruments and that would affect the validity, binding effect or enforceability of such documents and instruments or the performance by such parties of their

obligations thereunder; (e) neither the execution, the delivery nor the performance of such documents and instruments by any party thereto will result in any violation of or be in conflict with or constitute a default under the charter, bylaws or other governing documents of such party, or any other document or instrument to which such party is a party, the consequence of which would affect the validity, binding effect or enforceability of such documents and instruments or the performance by such party of its obligations thereunder; (f) no party to such documents and instruments is or will be in violation of any order, judgment or decree of any court, arbiter or arbitration panel or governmental authority, the consequences of which would affect the validity, binding effect or enforceability of such documents and instruments or the performance by such party of its obligations thereunder; (g) to the extent such documents and instruments are governed by laws other than the State of New York, they are legal, valid and binding and are enforceable in accordance with their terms; and (h) no party to such documents and instruments is a "utility" or subject to regulation under any federal, state or local utility laws, rules, regulations or orders.

        Based solely upon the foregoing and subject to the comments, qualifications and other matters set forth herein, we are of the opinion that when the Registration Statement to be filed by the Company with the Securities and Exchange Commission ("SEC") under the Act (the "Registration Statement") has become effective under the Act, and the Notes, together with the Guarantees, have been issued and sold as provided for in the Registration Statement (i) the Notes will constitute legal, valid and binding obligations of the Company enforceable against the Company in accordance with their terms, and (ii) the Guarantees will constitute legal, valid and binding obligations of the Guarantors enforceable against the Guarantors in accordance with their terms.

        The opinions expressed herein are limited by, subject to and based upon the following:

        A.    Bankruptcy, etc.    The Notes, the Guarantees and the Indenture may be limited, affected or rendered unenforceable by bankruptcy, insolvency, reorganization, fraudulent transfer, moratorium or other statutes or rules of law affecting creditors' rights generally, including, without limitation, statutes or rules of law that (i) limit the effect of waivers of rights by a debtor, (ii) affect obligations undertaken by a subsidiary entity for the benefit of a parent or other related entity, and (iii) relate to deficiency judgments.

        B.    Equitable Principles and Remedies.    The Notes, the Guarantees and the Indenture are subject to general principles of equity (whether considered in a proceeding in equity or at law), including without limitation, concepts of materiality, reasonableness, good faith and fair dealing and to the discretion of the court before which any proceeding therefor may be brought, and public policy considerations. Certain remedies, waivers and other provisions of the Notes, the Guarantees and the Indenture may be limited, affected or rendered unenforceable by applicable law and judicial decisions; however, such law and decisions should not render the Notes or the Guarantees invalid as a whole or preclude the judicial enforcement of the obligation of the Company and the Guarantors to repay the principal, together with interest thereon, as provided in the Notes and the Guarantees, respectively (to the extent not deemed a penalty). Without limiting the generality of the foregoing, no opinion is expressed herein with respect to (a) provisions in the Notes and the Guarantees that provide for arbitration, provide for penalties or liquidated damages or appoint one party as attorney-in-fact for an adverse party, or (b) any indemnification provision that relieves or would purport to relieve any party from its obligation to mitigate damages or indemnifies or purports to indemnify a party from its own negligence, willful or intentional misconduct, intentional torts or criminal or other unlawful acts, or with respect to criminal penalties or exemplary or punitive damages.

        C.    Statutes of Limitation.    Under applicable law, enforcement of obligations and liabilities may be barred by statutes of limitation at some time after the due date of those obligations and liabilities.

        D.    Tax, Anti-Trust, Local and Securities Laws.    In rendering this opinion we have made no examination of and express no opinion with respect to the characterization of the transactions provided

2

for by the Notes, the Guarantees and the Indenture under federal, state or local tax laws and regulations and the tax liabilities of the parties with respect thereto, as to matters of federal or state anti-trust laws, local laws or as to matters of federal or state securities laws and, for purposes of this opinion, we have assumed that the parties to the Notes, the Guarantees and the Indenture are in compliance with such laws.

        E.    Non-Participation in Negotiations.    We have not participated in negotiation of the Notes, the Guarantees or the Indenture. Our undertaking has been limited to a review of the form and content of the Notes, the Guarantees and the Indenture to the extent we deem appropriate to render the opinion expressed herein. We have not reviewed any other agreement or been informed of any other understanding and we offer no opinion as to the effect of any such other agreement or understanding on the opinions expressed herein.

        F.    Additional Documents and Instruments.    The Notes, the Guarantees and the Indenture make reference to documents and instruments not examined by us in connection with this opinion. The opinion expressed herein is subject to the matters that would be revealed by examination of such documents and instruments.

        G.    Choice of Law and Forum.    We express no opinion as to the enforceability of any choice-of-law or choice of forum or venue provision or consent to jurisdiction contained in the Notes, the Guarantees or the Indenture. For purposes of this opinion, we have assumed that the substantive laws of New York will be applicable to the Notes, the Guarantees and the Indenture and the enforceability thereof, and will govern the other provisions of the Notes, the Guarantees and the Indenture.

        H.    Law Limitation.    The opinions expressed herein are limited to the laws of the State of New York.

        The opinions expressed herein are rendered as of the date hereof. We do not undertake to advise you of matters that may come to our attention subsequent to the date hereof and that may affect the opinions expressed herein, including, without limitation, future changes in applicable law. This letter is our opinion as to certain legal conclusions as specifically set forth herein and is not and should not be deemed to be a representation or opinion as to any factual matters. We hereby consent to the filing of this opinion as Exhibit 5 to the Registration Statement and to the reference to us under the caption "Legal Matters" in the prospectus forming a part of the Registration Statement. In giving such consent, we do not admit that we are within the category of persons whose consent is required by Section 7 of such Act, or the rules and regulations promulgated by the SEC thereunder.

Very truly yours,

/s/ Holme Roberts & Owen LLP

3

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Exhibit 5.2

EX-10.1

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Exhibit 10.1

CREDIT AGREEMENT

dated as of July 12, 2002,

among

OREGON STEEL MILLS, INC.,

NEW CF&I, INC.

CF&I STEEL, L.P. (dba ROCKY MOUNTAIN STEEL MILLS),

and

COLORADO AND WYOMING RAILWAY COMPANY

as Borrowers,

and

VARIOUS FINANCIAL INSTITUTIONS,

as Lenders,

and

GMAC BUSINESS CREDIT LLC,

as Co-Managing Agent for the Lenders,

and

TEXTRON FINANCIAL CORPORATION,

as Agent for the Lenders

TABLE OF CONTENTS

				Page
SECTION 1.			DEFINITIONS	1
	1.1		Definitions	1
	1.2		Other Interpretive Provisions	16
SECTION 2.			COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES	17
	2.1		Commitments	17
		2.1.1	Loan Commitment	17
		2.1.2	L/C Commitment	17
		2.1.3	Swing Loans	17
	2.2		Loan Procedures	18
		2.2.1	Borrowing Procedures	18
		2.2.2	Conversion and Continuation Procedures	18
	2.3		Letter of Credit Procedures	19
		2.3.1	L/C Applications	19
		2.3.2	Participation in Letters of Credit	19
		2.3.3	Reimbursement Obligations	19
		2.3.4	Limitation on Obligations of the Agent	20
		2.3.5	Funding by Lenders to the Agent	20
		2.3.6	Return of Letters of Credit; Supporting Letters of Credit	20
	2.4		Commitments Several	20
	2.5		Certain Conditions	20
	2.6		Availability of Lender's Percentage	20
	2.7		Non-Funding Lenders	21
	2.8		Borrowing Agent Provisions	21
	2.9		Waiver of Subrogation	22
SECTION 3.			NOTES EVIDENCING LOANS	22
	3.1		Notes	22
	3.2		Recordkeeping	22
SECTION 4.			INTEREST	22
	4.1		Interest Rates	23
		4.1.1	Loans	23
		4.1.2	Default Rate	23
	4.2		Interest Payment Dates	23
	4.3		Setting and Notice of LIBO Rates	23
	4.4		Computation of Interest	23
SECTION 5.			FEES	23
	5.1		Unused Line Fee	23
	5.2		Letter of Credit Fees	24
	5.3		Early Termination Fee	24
	5.4		Audit Fees	24
	5.5		Additional Fees	24
	5.6		Fees Nonrefundable	24

i

SECTION 6.		PREPAYMENTS	24
	6.1	Voluntary Prepayments	24
	6.2	Mandatory Prepayments	25
	6.3	All Prepayments	25
SECTION 7.		MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES	25
	7.1	Making of Payments	25
	7.2	Application of Payments	25
	7.3	Due Date Extension	26
	7.4	Setoff	26
	7.5	Proration of Payments	26
	7.6	Taxes	26
	7.7	Settlement Among Lenders	27
SECTION 8.		INCREASED COSTS; SPECIAL PROVISIONS FOR LIBO RATE LOANS	27
	8.1	Increased Costs	27
	8.2	Basis for Determining Interest Rate Inadequate or Unfair	28
	8.3	Changes in Law Rendering LIBO Rate Loans Unlawful	28
	8.4	Funding Losses	29
	8.5	Notices by Lenders	29
	8.6	Discretion of Lenders as to Manner of Funding	29
	8.7	Mitigation of Circumstances; Replacement of Lenders	29
	8.8	Conclusiveness of Statements; Survival of Provisions	29
SECTION 9.		REPRESENTATIONS AND WARRANTIES	30
	9.1	Organization	30
	9.2	Authorization; No Conflict	30
	9.3	Validity and Binding Nature	30
	9.4	Financial Condition	30
	9.5	No Material Adverse Change	30
	9.6	Litigation and Contingent Liabilities	30
	9.7	Ownership of Properties; Liens	31
	9.8	Subsidiaries	31
	9.9	Pension and Welfare Plans	31
	9.10	Investment Company Act	31
	9.11	Public Utility Holding Company Act	31
	9.12	Regulation U	31
	9.13	Taxes	32
	9.14	Solvency, etc.	32
	9.15	Environmental Matters	32
	9.16	Insurance	33
	9.17	Information	33
	9.18	Intellectual Property	33
	9.19	Burdensome Obligations	33
	9.20	Labor Matters	33
	9.21	No Default	34
	9.22	Material Licenses	34
	9.23	No Violations	34
	9.24	Locations	34
	9.25	Names	34

ii

	9.26		First Priority Perfected Liens	34
	9.27		Accounts and Inventory Warranties and Representations	34
	9.28		Bank Accounts	34
	9.29		Business Activities	34
	9.30		Securities Laws Filings	35
SECTION 10.			COVENANTS	35
	10.1		Reports, Certificates and Other Information	35
		10.1.1	Financial Information	35
		10.1.2	Notice of Default, Litigation and ERISA Matters	36
		10.1.3	Borrowing Base Certificates	37
		10.1.4	Tax Returns	37
		10.1.5	Other Information	37
	10.2		Books, Records and Inspections	37
	10.3		Maintenance of Property; Insurance	38
	10.4		Compliance with Laws; Payment of Taxes and Liabilities	38
	10.5		Maintenance of Existence, etc.	39
	10.6		Financial Covenants	39
	10.7		Limitations on Debt	40
	10.8		Liens	40
	10.9		Operating Leases	40
	10.10		Restricted Payments	41
	10.11		Mergers, Consolidations, Sales	41
	10.12		Use of Proceeds	41
	10.13		Further Assurances	41
	10.14		Collections	41
	10.15		Transactions with Affiliates	43
	10.16		Employee Benefit Plans	43
	10.17		Environmental Matters	43
	10.18		Inconsistent Agreements	44
	10.19		Business Activities	44
	10.20		Advances and Other Investments	44
	10.21		Restriction of Amendments to Certain Documents	44
	10.22		Fiscal Year	44
	10.23		Cancellation of Debt	44
	10.24		No New Locations	44
	10.25		Press Releases	45
	10.26		Customs, Duty and Freight	45
	10.27		Minimum Borrowing Availability	45
SECTION 11.			EFFECTIVENESS; CONDITIONS OF LENDING, ETC.	45
	11.1		Initial Credit Extension	45
		11.1.1	Notes	45
		11.1.2	Resolutions	45
		11.1.3	Consents, etc.	46
		11.1.4	Incumbency and Signature Certificates	46
		11.1.5	Security Agreements	46
		11.1.6	Intercreditor Agreement	46
		11.1.7	Opinions of Counsel	46
		11.1.8	Insurance	46
		11.1.9	Copies of Documents	46

iii

		11.1.10	Payment of Fees	46
		11.1.11	Solvency Certificate	46
		11.1.12	Disclosure Schedule	46
		11.1.13	Search Results; Lien Terminations	46
		11.1.14	Filings, Registrations and Recordings	47
		11.1.15	Closing Certificate	47
		11.1.16	Borrowing Base Certificate	47
		11.1.17	Independent Accountant Letter	47
		11.1.18	Governing Documents	47
		11.1.19	Good Standing Certificates	47
		11.1.20	Blocked Account/Lockbox Agreements	47
		11.1.21	Collateral Access Agreement	47
		11.1.22	Security Agreement Documents	47
		11.1.23	Payoff Letter	47
		11.1.24	Customs Agents Agreements	47
		11.1.25	Fee Letter	47
		11.1.26	Subsidiary Guarantees	47
		11.1.27	Other	48
	11.2		Conditions	48
		11.2.1	Compliance with Warranties, No Default, etc.	48
		11.2.2	Confirmatory Certificate	48
		11.2.3	Minimum Borrowing Availability	48
SECTION 12.			EVENTS OF DEFAULT AND THEIR EFFECT	48
	12.1		Events of Default	48
		12.1.1	Nonpayment of Loans, etc.	48
		12.1.2	Nonpayment of Other Debt	48
		12.1.3	Other Material Obligations	48
		12.1.4	Bankruptcy, Insolvency, etc.	49
		12.1.5	Noncompliance with Loan Documents	49
		12.1.6	Representations and Warranties	49
		12.1.7	Pension Plans	49
		12.1.8	Judgments	49
		12.1.9	Invalidity of Loan Documents, etc.	49
		12.1.10	Breach of Certain Agreements	49
		12.1.11	Change in Control	49
		12.1.12	Auditor's Report	49
		12.1.13	Damage to Collateral	49
		12.1.14	Attachment, etc.	50
		12.1.15	Lien, Levy or Assessment	50
		12.1.16	Material Adverse Effect	50
		12.1.17	Environmental Expenditures	50
	12.2		Effect of Event of Default	50
SECTION 13.			THE AGENT	51
	13.1		Appointment and Authorization	51
	13.2		Delegation of Duties	51
	13.3		Liability of the Agent	51
	13.4		Reliance by the Agent	51
	13.5		Notice of Default	52
	13.6		Credit Decision	52

iv

	13.7		Indemnification	52
	13.8		Agent and Lenders in their Individual Capacity	53
	13.9		Successor Agent; Assignment of Agency	53
	13.10		Collateral Matters	53
	13.11		Co-Managing Agent	53
SECTION 14.			GENERAL	53
	14.1		Waiver; Amendments	53
	14.2		Notices	54
	14.3		Computations	54
	14.4		Regulation U	54
	14.5		Costs, Expenses and Taxes	54
	14.6		Captions	55
	14.7		Assignments; Participations	55
		14.7.1	Assignments	55
		14.7.2	Participations	56
		14.7.3	Company Assistance	57
		14.7.4	Prohibition of Certain Assignments and Participations	57
	14.8		Governing Law	57
	14.9		Counterparts	57
	14.10		Successors and Assigns	57
	14.11		Indemnification by the Borrowers	57
	14.12		Forum Selection and Consent to Jurisdiction	58
	14.13		Waiver of Jury Trial	58
	14.14		Interest	58
	14.15		Confidentiality	60
	14.16		Termination	60
	14.17		The Agent and Lenders	61
	14.18		Intercreditor Agreement	61
	14.19		Concerning Joint and Several Liability of the Borrowers	61

EXHIBITS

EXHIBIT A-1		Form of Revolving Note
	(Section 3.1)
EXHIBIT A-2		Form of Swing Loan Note
	(Section 3.1)
EXHIBIT B		Form of Borrowing Base Certificate
	(Section 10.1.3)
EXHIBIT C		Form of Solvency Certificate
	(Section 11.1.11)
EXHIBIT D		Form of Assignment Agreement
	(Section 14.9.1)

v

CREDIT AGREEMENT

        This CREDIT AGREEMENT, dated as of July 12, 2002 (this "Agreement"), is entered into by and among OREGON STEEL MILLS, INC., a Delaware corporation ("OSM"), NEW CF&I, INC., a Delaware corporation ("New CF&I"), CF&I STEEL, L.P. (dba Rocky Mountain Steel Mills), a Delaware limited partnership ("RMSM") and COLORADO AND WYOMING RAILWAY COMPANY, a Delaware corporation ("CWR"; each of OSM, New CF&I, RMSM, and CWR a "Borrower" and collectively, "Borrowers"), the financial institutions that are or may from time to time become parties hereto, as Lenders, GMAC BUSINESS CREDIT LLC, as Co-Managing Agent (in such capacity, the "Co-Managing Agent"), and TEXTRON FINANCIAL CORPORATION, a Delaware corporation ("Textron"), as Agent for the Lenders.

        WHEREAS, the Lenders have agreed to make available to the Borrowers a revolving credit facility (which includes the provision of letters of credit) upon the terms and conditions set forth herein;

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

        SECTION 1. DEFINITIONS.

        1.1    Definitions.    When used herein the following terms have the following indicated meanings:

Accounts has the meaning set forth in the UCC.

Account Debtor shall have the meaning assigned to the term "account debtor" in the UCC in effect in the State of New York as amended from time to time.

Additional Charges—see Section 14.14.

Adjusted LIBO Rate shall mean, with respect to each Interest Period for any LIBO Rate Loan, the rate per annum (rounded upwards, if necessary, to the next one-sixteenth (¹/16) of one (1%) percent) determined by dividing (a) the LIBO Rate for such Interest Period by (b) a percentage equal to: (i) one (1) minus (ii) the Reserve Percentage. For purposes hereof, "Reserve Percentage" shall mean the reserve percentage, expressed as a decimal, prescribed by any United States or foreign banking authority for determining the reserve requirement which is or would be applicable to deposits of United States dollars in a non-United States or an international banking office of Reference Bank used to fund a LIBO Rate Loan or any LIBO Rate Loan made with the proceeds of such deposit, whether or not the Reference Bank actually holds or has made any such deposits or loans. The Adjusted LIBO Rate shall be adjusted on and as of the effective day of any change in the Reserve Percentage.

Affected Loan—see Section 8.3.

Affiliate of any Person means (i) any other Person which, directly or indirectly, controls or is controlled by or is under common control with such Person and (ii) any officer or director (or comparable manager) of such Person. A Person shall be deemed to be "controlled by" any other Person if such Person possesses, directly or indirectly, (i) power to vote 10% or more of the equity interests (on a fully diluted basis) having ordinary voting power for the election of directors (or managers) of the governing body of a Person, (ii) 10% or more of the partnership or other ownership interests of a Person or (iii) power to direct or cause the direction of the management and policies of such Person whether by contract or otherwise.

Agent means Textron Financial Corporation, a Delaware corporation, in its capacity as agent for the Lenders hereunder and any successor thereto in such capacity.

Agreement—see the Preamble.

Applicable Base Rate Margin and Applicable LIBO Rate Margin mean, for any day with respect to any Base Rate Loan or any LIBO Rate Loan, respectively, the applicable rate per annum set forth below under the caption "Base Rate Spread" or "LIBO Rate Spread," respectively, based upon the Senior Debt Ratio as of the most recent determination date, provided that during the six-month period

immediately following the Closing Date the Applicable Base Rate Margin and Applicable LIBO Rate Margin shall be the applicable rate per annum set forth below in Level II:

Senior Debt Ratio:	LIBO Rate Spread	Base Rate Spread	Unused Fee
Level I Greater than or equal to 4.00 to 1.00	3.25%	1.00%	0.50%
Level II Greater than or equal to 3.25 to 1.00 but less than 4.00 to 1.00	3.00%	0.75%	0.50%
Level III Greater than or equal to 2.50 to 1.00 but less than 3.25 to 1.00	2.75%	0.50%	0.25%
Level IV Less than 2.50 to 1.00	2.50%	0.25%	0.25%

        For purposes of the foregoing, (a) the Senior Debt Ratio shall be determined as of the last day of each fiscal quarter in OSM's fiscal year based upon its consolidated financial statements delivered pursuant to Section 10.1.1 and (b) each change in the Applicable Base Rate Margin or Applicable LIBO Rate Margin resulting from a change in the Senior Debt Ratio shall be effective during the period commencing on and including the third Business Day after the date of delivery to the Agent of such consolidated financial statements indicating such change and ending on the date immediately preceding the effective date of the next such change, provided that the Senior Debt Ratio shall be deemed to be in Level I if OSM fails to deliver the consolidated financial statements and the compliance certificate required to be delivered by it pursuant to Section 10.1.1, during the period from the expiration of the time for delivery thereof until such consolidated financial statements and compliance certificate are delivered.

Assignee—see Section 14.7.1.

Assignment Agreement—see Section 14.7.1.

Availability Reserves means, as of any date of determination, such amounts as the Agent may from time to time establish (and increase or decrease) in good faith and in its reasonable commercial judgment reducing the Borrowing Base that would otherwise be available under the lending formula(s) provided for herein: (a) to reflect events, conditions, contingencies or risks that, as determined reasonably by the Agent in good faith, do or may materially affect either (i) the Collateral or any other property which is security for the Obligations or the value of the foregoing taken as a whole, (ii) the assets, business or prospects of the Borrowers taken as a whole or (iii) the Liens and other rights of the Agent in the Collateral (including the enforceability, perfection and priority thereof), (b) to reflect the Agent's good faith belief that any Borrowing Base Certificate, collateral report or financial information furnished by or on behalf of the Borrowers to the Agent is or may have been incomplete, inaccurate or misleading in any material respect, or (c) in respect of any state of facts that the Agent determines in good faith constitutes an Event of Default.

Base Rate means the highest prime or equivalent rate of interest (expressed as an annual rate) publicly announced by JPMorganChase Bank from time to time as its "prime rate" or "reference note", each change in such a rate to take effect on the date of effective change of such prime rate or reference rate (with the understanding that any such rate may not necessarily represent the lowest rate of interest charged to any customer by any such bank).

Base Rate Loan means any Loan that bears interest at a rate determined by reference to the Base Rate.

Blocked Accounts—see Section 10.14(a).

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Borrowers—see the Preamble.

Borrowing Availability means, as of any date of determination, an amount equal to (a) the lesser of (i) the Maximum Amount minus the Letter of Credit Reserve and (ii) the Borrowing Base minus the Letter of Credit Reserve, minus (b) the aggregate amount of all outstanding Loans minus (c) the aggregate amount of all outstanding accounts payable of all the Borrowers that are past due more than thirty (30) days from the date such accounts were due under the terms of the original purchase order, in each case as of such date.

Borrowing Agent means OSM.

Borrowing Base shall mean, as of any date of determination by the Agent, an amount equal to the sum of:

        (a)  up to 85% of the net amount of the Borrowers' Eligible Accounts plus;

        (b)  the lesser of (i) $50,000,000, (ii) up to 65% of the aggregate value of the Borrowers' Eligible Inventory and (iii) up to 85% of Orderly Liquidation Value (provided, however, that the amount added to the Borrowing Base at any time under this clause (b) may never exceed the amount added to the Borrowing Base at such time under the foregoing clause (a)); minus

        (c)  any Availability Reserves in effect,

        in each case as of such date.

Borrowing Base Certificate means a certificate substantially in the form of Exhibit B.

Business Day means (a) for the Base Rate Loans, any day other than a Saturday, Sunday, or such other day as banks are authorized or required to close under the laws of the State of New York, and (b) for all LIBO Rate Loans, any such day as described in (a) above in this definition of Business Day, excluding any day on which banks are closed for dealings in dollar deposits in the London interbank market.

Camrose Parties means Camrose Pipe Corporation, a Delaware corporation, Canadian National Steel Company, an Alberta, Canada corporation, and Camrose Pipe Company, a Canadian general partnership.

Capex Carry Over Amount—See Section 10.6(e).

Capital Expenditures means, with respect to OSM and its Subsidiaries (excluding the Camrose Parties, Feralloy and LSI) on a consolidated basis, all expenditures (whether paid in cash, in kind or accrued as liabilities) and Capital Lease obligations incurred during such period that are required by GAAP to be included or reflected in the property, plant, equipment or similar fixed asset accounts (or intangible accounts subject to amortization) on a balance sheet.

Capital Lease means, with respect to any Person, any lease of (or other agreement conveying the right to use) any real or personal property by such Person that, in conformity with GAAP, is or should be accounted for as a capital lease on the balance sheet of such Person.

Capital Lease Obligations means, with respect to any Person, all obligations of such Person with respect to Capital Leases.

Cash Equivalent Investment means, at any time:

        (a)  any obligation, maturing not more than one year after such time, issued or guaranteed by the United States Government;

        (b)  municipal notes or note funds rated at the time of purchase, SP-1/A-1 or SP-A-2 by Standard & Poor's Ratings Group or VM1G1 or VM1G2 by Moody's Investors Service, Inc.;

3

municipal bonds or bond funds rated at the time of purchase, AAA or AA by Standard & Poor's Ratings Group or Aaa or Aa by Moody's Investors Service, Inc.; or money market preferred stock rated at the time of purchase, AAA or AA by Standard & Poor's Ratings Group or aaa or aa by Moody's Investors Service, Inc.;

        (c)  commercial paper, maturing not more than nine months from the date of issue, which is issued by (i) a corporation (other than an Affiliate of any Borrower) organized under the laws of any state of the United States or of the District of Columbia and rated at least A-2 by Standard & Poor's Ratings Group or at least P-2 Moody's Investors Service, Inc., or (ii) any Lender (or its holding company); or

        (d)  any certificate of deposit or bankers acceptance, maturing not more than one year after such time, which is issued by either (i) a commercial banking institution that is a member of the Federal Reserve System and has a combined capital and surplus and undivided profits of not less than $500,000,000, or (ii) any Lender.

CERCLA means the Comprehensive Environmental Response, Compensation and Liability Act, as amended.

CF&I Acquisition Debt means that long term Debt arising under the Asset Purchase Agreement dated March 3, 2003 relating to the purchase of the assets of CF&I Steel Corporation and its subsidiary by CF&I Steel, L.P.

Change in Control means (a)(i) OSM ceases to directly own and control at least the same ownership percentage of each other Borrower as owned and controlled by OSM as of the Closing Date, or (ii) New CF&I ceases to directly own and control at least the same ownership percentage of RMSM and CWR as owned and controlled by New CF&I on the Closing Date, in each case as set forth in Item 9.8 of the Disclosure Schedule, (b) the acquisition by any Person (other than the ESOP), or two or more Persons acting in concert, of beneficial ownership (within the meaning of Rule 13d-3 of the Securities and Exchange Commission under the Securities Exchange Act of 1934) of 20% or more of the outstanding shares of voting stock of OSM, (c) the occurrence of any event or condition that would require OSM to repurchase or redeem (or to make an offer to repurchase or redeem) any 2002 Bonds as a result of any "change in control," "change of control" or similar circumstance under the 2002 Bond Indenture or (d) the accounts of OSM are at any time consolidated with those of any Person (other than OSM and OSM's Subsidiaries) in such Person's consolidated financial statements.

Chattel Paper shall have the meaning assigned to the term "chattel paper" in the UCC in effect in the State of New York as amended from time to time.

Closing Date—see Section 11.1.

Code means the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder.

Collateral means, collectively, (i) all property wherever located and whether now existing or hereafter acquired, in which any Credit Party now has or may hereafter acquire any interest and in which a Lien is granted to the Agent for the benefit of the Lenders (including, without limitation, the "Collateral" as defined in the Security Agreement), and (ii) all other property and interests in property, now owned or leased or hereafter acquired, pledged or assigned as collateral security for payment of any of the Obligations.

Collateral Access Agreement means, with respect to such Persons other than the 2002 Trustee, an agreement in form and substance satisfactory to the Agent pursuant to which a mortgagee or lessor of real property on which Collateral is stored or otherwise located, or a warehouseman, processor, or other bailee of Inventory owned by any Borrower acknowledges the Liens of the Agent and waives or, if agreed to in writing by the Agent, subordinates any Liens held by such Person on such property, and,

4

in the case of any such agreement with a mortgagee or lessor (unless otherwise agreed to in writing by the Agent), permits the Agent access to and use of such real property for a reasonable amount of time following the occurrence and during the continuance of an Event of Default to assemble, complete and sell any Collateral stored or otherwise located thereon.

Commitment means, as to any Lender, the amount specified opposite such Lender's name on the signature page to this Agreement, as adjusted by subsequent assignments pursuant to Section 14.7.1.

        Consolidated EBITDA shall mean for OSM and its Subsidiaries on a consolidated basis, with respect to any period, net income after taxes for such period plus, to the extent deducted in determining such net income (or net loss), the sum of (a) interest expense, (b) income tax expense, (c) depreciation, (d) amortization, including non-cash goodwill impairment charge, for such period, and (e) plus or minus (without duplication) any other non cash charges or gains which have been subtracted or added in calculating net income after taxes for such period (including without limitation the non cash portion of OSM's contribution to the ESOP during such period all as determined in accordance with GAAP).

Consolidated Fixed Charges means for any period, the sum (without duplication) of (a) Consolidated Interest Expense of OSM and its Subsidiaries for such period, (b) provision for cash income taxes made by OSM or any of its Subsidiaries on a consolidated basis in respect of such period and (c) scheduled payments made during such period on account of principal of Debt of OSM or any of its Subsidiaries (provided that any CF&I Acquisition Debt otherwise required to be included pursuant to this clause (c) may be excluded if and only if OSM's consolidated balance sheet as of the last day of such fiscal quarter reflects cash of not less than $9,500,000).

Consolidated Interest Expense means of any Person for any period, total cash interest expense (including that attributable to Capital Lease Obligations) of such Person and its Subsidiaries for such period with respect to all outstanding Debt of such Person and its Subsidiaries (including, without limitation, all commissions, discounts and other fees and charges owed by such Person with respect to letters of credit and bankers' acceptance financing).

Consolidated Tangible Net Worth means the amount, computed in accordance with GAAP, equal to the excess of OSM's Consolidated Total Assets minus intangibles as defined and computed in accordance with GAAP less its Consolidated Total Liabilities.

Consolidated Total Assets means the amount, computed in accordance with GAAP, of the total assets of OSM and its consolidated Subsidiaries, excluding all (i) prepaid expenses in an aggregate amount exceeding $5,000,000, (ii) amounts owing from Affiliates, (iii) transactions with Affiliates not permitted in this Agreement and (iv) minority interests in Subsidiaries.

Consolidated Total Liabilities means the amount, computed in accordance with GAAP, of the total liabilities (including all Debt) of OSM and its consolidated Subsidiaries, and all reserves and deferred credits.

Controlled Group means all members of a controlled group of Persons and all members of a controlled group of trades or businesses under common control that, together with OSM, are treated as a single employer under Section 414 of the Code or Section 4001 of ERISA.

Credit Parties means, collectively, Borrowers and their respective Subsidiaries (excluding the Camrose Parties, LSI and Feralloy) that are parties to the Loan Documents.

Debt of any Person means, without duplication, (a) all indebtedness of such Person for borrowed money, whether or not evidenced by bonds, debentures, notes or similar instruments, (b) all obligations of such Person as lessee under Capital Leases that have been or should be recorded as liabilities on a balance sheet of such Person in accordance with GAAP, (c) all obligations of such Person to pay the deferred purchase price of property or services (excluding trade accounts payable in the ordinary course

5

of business), (d) all obligations, contingent or otherwise, with respect to the face amount of all letters of credit (whether or not drawn) and banker's acceptances issued for the account of such Person (including the Letters of Credit), (e) net liabilities of such Person under all Hedging Obligations, (f) all Suretyship Liabilities of such Person, (g) all indebtedness created or arising under any conditional sale or other title retention agreement with respect to property acquired by such Person (even though the rights and remedies of the seller or lender under such agreement in the event of default are limited to repossession or sale of such property), (h) all obligations of such Person, and contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any capital stock of such Person required to be treated as a liability in accordance with GAAP, and (i) all obligations of the kind referred to in clauses (a) through (h) above secured by (or for which the holder of such obligation has an existing right, contingent or otherwise, to be secured by) any Lien on property (including, without limitation, accounts and contract rights) owned by such Person, whether or not such Person has assumed or become liable for the payment of such obligation.

Disclosure Schedule means the Information Certificate dated the Closing Date delivered by OSM to the Agent on the Closing Date as a condition precedent to the obligation of the Lenders to make the initial Loans and the obligation of the Agent to arrange for any initial Letters of Credit.

Disposal—see the definition of "Release".

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

Early Termination Fee—see Section 5.3.

Eligible Account means, subject to the following sentence, a bona fide outstanding Account of any of the Borrowers, as applicable, which arose in the ordinary course of business from the sale of goods or services, less all unearned finance charges, late fees, and other fees which are unearned, as to which the Agent for the benefit of Lenders has a first priority perfected security interest under the UCC, and (x) if for the sale of goods, as to which all goods have been shipped or delivered to an Account Debtor against a receipt therefor pursuant to a purchase order or otherwise on an absolute sale basis and as to which no rejections or returns have been made or offered, and (y) if for the sale of services, as to which all applicable services have been duly performed and acknowledged and accepted by the Account Debtor. Eligible Accounts shall not include any Account:

        (i)    which has remained unpaid for more than ninety (90) days after the original invoice date or more than sixty (60) days past the original due date;

        (ii)  owed by an Account Debtor which collectively has more than twenty-five percent (25%) of the aggregate amount of its Accounts unpaid for more than sixty (60) days past the original invoice date or more than thirty (30) days past the original due date;

        (iii)  where the aggregate amount of all Accounts owed by an Account Debtor, together with all Accounts owed by its Affiliates, exceeds ten percent (10%) of the aggregate amount of all Eligible Accounts at such time, but only to the extent of such excess (or as set forth as Item 1.1 of the Disclosure Schedule); provided, that the Agent, in its sole discretion, may deem an Account which otherwise satisfies the criteria for Eligible Accounts set forth hereunder to be an Eligible Account if the Agent approves of the terms of the underlying contract under which such Account is derived and/or the credit and/or bond rating of such Account Debtor;

        (iv)  as to which any representation, warranty or covenant contained in this Agreement and the other Loan Documents with respect to such Account has been breached;

        (v)  with respect to which a check, promissory note, draft, trade acceptance or other instrument for the payment of money has been received, presented for payment and returned uncollected for any reason;

6

        (vi)  which relates to a sale which is subject to any repurchase obligation or return right, such as a consignment sale, bill-and-hold sale, guaranteed sale, sale on approval or sale or return arrangement; provided, that the Agent, in its reasonable credit judgment, may deem an Account of the Borrowers which arises from a bill-and-hold sale in the ordinary course of business and which otherwise satisfies the criteria for Eligible Accounts set forth hereunder to be an Eligible Account if (v) such sale is unconditional and not subject to any repurchase obligation or return right, (w) the Account Debtor has inspected and approved the goods which are the subject of such sale and agreed in writing that title to such goods has passed to such Account Debtor, (x) such goods are not subject to any Lien of any creditor of any such Borrower, (y) such goods are segregated from such Borrower's Inventory and identified as goods of such Account Debtor, and (z) the aggregate net amount of Accounts arising from such sales and not paid in full within 30 days following the date of invoice which are included as Eligible Accounts shall not exceed $5,000,000;

        (vii) which is evidenced by a promissory note or other instrument or by chattel paper or is not payable in Dollars;

        (viii)as to which any Borrower has extended the time for payment without the consent of the Agent or which is for goods sold or services rendered under a contract or agreement pursuant to which the Account Debtor's obligation to pay such invoice is conditioned upon any such Borrower's completion of any further performance under the contract or agreement or which is subject to the equitable lien of a surety bond issuer;

        (ix)  owed by an Account Debtor as to which an Insolvency Proceeding has commenced or, in the case of an individual, as to whom death or a judicial declaration of incompetency has occurred;

        (x)  owed by an Account Debtor which: (w) is an employee or Affiliate of any Borrower; (x) does not maintain its chief executive office in the United States or Canada (excluding the provinces of Quebec, Newfoundland, Nova Scotia, Prince Edwards Island, the Northwest Territories and the Territory of Nunavit); (y) is not organized under the laws of the United States, any state thereof, Canada or any province thereof (excluding the provinces of Quebec, Newfoundland, Nova Scotia, Prince Edwards Island, the Northwest Territories and the Territory of Nunavit); or (z) is the government of any foreign country or sovereign state, or of any state, province, municipality, or other political subdivision thereof, or of any department, agency, public corporation, or other instrumentality thereof; except to the extent that such Account is secured or payable by a letter of credit or acceptance, or insured under foreign credit insurance, on terms and conditions satisfactory to the Agent in its discretion;

        (xi)  as to which either the perfection, enforceability, or validity of the Agent's Lien in such Account, or the Agent's right or ability to obtain direct payment to the Agent of the proceeds of such Account, is governed by any federal, state, or local statutory requirements other than those of the UCC;

        (xii) is not a valid, legally enforceable and unconditional obligation of the Account Debtor or, unless waived by such Account Debtor in a manner satisfactory to the Agent, is subject to any setoff right (including without limitation any setoff right in respect of any Borrower's performance obligations under any contract with or purchase order from such Account Debtor), counterclaim, credit, allowance or adjustment by the Account Debtor (but only to the extent of the potential setoff, counterclaim, credit, allowance or adjustment), or to any claim by such Account Debtor denying liability thereunder in whole or in part;

        (xiii)which is owed by the government of the United States of America, or any department, agency, public corporation, or other instrumentality thereof, unless the applicable Borrower to which such account is owed has assigned its right to payment of such Account to the Agent in full compliance with the Federal Assignment of Claims Act of 1940, as amended;

7

        (xiv) which is owed by any state, municipality, or other political subdivision of the United States of America, or any department, agency, public corporation, or other instrumentality thereof and as to which the Agent determines that its Lien therein is not or cannot be perfected;

        (xv) which is owed by an Account Debtor located in a state which requires the applicable Borrower to which such account is owed in order to commence or maintain an action in the courts of that state, to either have qualified to do business and be in good standing in such state or file a notice of business activities report or similar report with such state's taxing authority, unless the applicable Borrower to which such account is owed has either complied with such requirement or is exempt from any such requirement;

        (xvi) which (i) arises out of a contract or order which fails in any material respect to comply with any requirement of applicable law or (ii) is not fully enforceable by the applicable Borrower to which such account is owed in the courts of the jurisdiction of the Account Debtor's residence or (iii) is subject to any Lien other than the Agent's Lien;

        (xvii)which arises out of an agreement or purchase order between any Borrower and an Account Debtor providing for multiple purchases of goods or services unless (w) all goods to be delivered and/or services to be performed under such agreement or purchase order have been accepted by such Account Debtor, (x) the Agent has reviewed and approved of such agreement or purchase order or (y) such Account Debtor has waived all offset rights in respect of such Account in a manner satisfactory to the Agent in its sole discretion; or

        (xviii)which is a contra account, poor credit, chargeback, debit entry/memo, cooperative advertising, or other account otherwise unacceptable to the Agent, in its reasonable credit judgment, as collateral for lending purposes.

Eligible Inventory means, at the time of determination, Inventory owned by any Borrower, as applicable, that is located at any premises listed in Item 9.24 of the Disclosure Schedule in which the Agent has a first priority perfected security interest under the UCC which meets all of the following criteria:

        (i)    consists of Raw Materials, Semi-Finished Goods or Finished Goods in good condition, free from defects and not, in the Agent's reasonable credit judgment, obsolete, slow moving or unmerchantable;

        (ii)  meets all applicable standards (if any) imposed by any governmental or other regulatory authority over such Inventory;

        (iii)  is salable in the ordinary course of such Borrower's business and, in the case of Finished Goods, is being held for sale;

        (iv)  is situated at locations, if not owned by such Borrower, with respect to which the Agent has received a Collateral Access Agreement;

        (v)  does not fail in any material respect to comply with any requirement of applicable law and is not otherwise subject to any assignment, bailment, consignment (unless consented to in writing by the Agent in its sole discretion), claim, Lien charge, encumbrance, third party dispute, offset or counterclaim;

        (vi)  as to which all applicable representations, warranties or covenants of such Borrower as to such Inventory are true and correct or have been performed and complied with;

        (vii) the completion of manufacture or sale of which does not require the consent of, or royalty payments to, any third party; and

8

        (viii)is otherwise acceptable to the Agent, in its reasonable credit judgment, as collateral for lending purposes.

        Eligible Inventory shall not include (i) any Inventory that is located outside the United States, (ii) any Inventory that consists of work-in-process (other than Semi Finished Goods), packaging, machinery parts or stores Inventory, or (iii) reject Inventory. Other items of Inventory which do not constitute collateral acceptable to the Agent, in its reasonable credit judgment, as collateral for lending purposes shall also be excluded from Eligible Inventory. Eligible Inventory may, at the Agent's sole discretion, include consigned Inventory and excess prime Inventory. For purposes of this Agreement, Eligible Inventory shall be valued in accordance with GAAP at the lower of cost, calculated on an average cost basis, or market, adjusted on a monthly basis.

Environmental Claims means all claims, however asserted, by any governmental, regulatory or judicial authority or other Person alleging potential liability or responsibility for violation of any Environmental Law, or for release or injury to the environment.

Environmental Expenditure Carry Over Amount—See Section 12.1.17.

Environmental Expenditures means, with respect to OSM and its Subsidiaries (excluding the Camrose Parties, Feralloy and LSI) on a consolidated basis, all expenditures in excess of approved Capital Expenditures (whether paid in cash, in kind or accrued as liabilities) incurred during such period in connection with any Environmental Matters or Environmental Claims.

Environmental Laws means all present or future federal, state or local laws, statutes, common law duties, rules, regulations, ordinances and codes, together with all administrative orders, directed duties, requests, licenses, authorizations and permits of, and agreements with, any governmental authority, in each case relating to Environmental Matters. Environmental Laws shall include, without limitation, the Clean Air Act, Clean Water Act, Comprehensive Environmental Response, Compensation and Liability Act, Emergency Planning and Community Right-to-Know Act, Federal Water Pollution Control Act, Federal Insecticide, Fungicide and Rodenticide Act, Hazardous Materials Transportation Act, Occupational Safety and Health Act, Resource Conservation and Recovery Act, Safe Drinking Water Act, Toxic Substances Control Act, and all analogous or related federal, state or local laws, each as amended.

Environmental Matters means any matter arising out of or relating to health and safety, or pollution or protection of the environment or workplace, including, without limitation, any of the foregoing relating to the presence, use, production, generation, handling, transport, treatment, storage, disposal, distribution, discharge, release, control or cleanup of any Hazardous Substance.

ERISA means the Employee Retirement Income Security Act of 1974, as amended from time to time and any regulations promulgated thereunder.

ESOP means the employee stock ownership plan for the employees of OSM and certain of its Subsidiaries as in effect on the Closing Date and as amended from time to time to the extent permitted under this Agreement.

Event of Default means any of the events described in Section 12.1.

Feralloy means Oregon Feralloy Partners, an Oregon general partnership.

Finished Goods means the portion of the Borrowers' Inventory consisting of plate, specialty plate, seamless tube, welded tube, steel rod and rebar and steel coil and rail, in each case that are held for sale in the ordinary course of such Borrower's business, which portion, for purposes of calculating Eligible Inventory, shall not exceed 65% of the Borrowers' Inventory.

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Fiscal Quarter means a fiscal quarter of a Fiscal Year.

Fiscal Year means the fiscal year of OSM which period shall be the 12-month period ending on December 31 of each year. References to a Fiscal Year with a number corresponding to any calendar year (e.g., "Fiscal Year 2000") refer to the Fiscal Year ending on December 31 of such calendar year.

Fixed Charge Coverage Ratio means with respect to any period, the ratio of (a) Consolidated EBITDA for such period minus Capital Expenditures for such period to (b) Consolidated Fixed Charges for such period.

GAAP means generally accepted accounting principles and practices as in effect from time to time in the United States, consistently applied during each interval and from interval to interval.

Governing Documents means, with respect to any Person, the certificate or articles of incorporation, by-laws, certificate of limited partnership, partnership agreement, certificate of formation, limited liability company agreement, or any other organizational documents of such Person.

Guarantors means Oregon Steel Mills Processing, Inc., OSM Glassification, Inc., OSM Distribution, Inc. and Oregon Steel de Guyana, Inc.

Hazardous Substance(s) means any pollutant, contaminant, chemical, waste and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable or flammable chemical or chemical compound or hazardous substance, material or waste, whether solid, liquid or gas, including, without limitation, asbestos containing materials containing greater than 1% of asbestos by weight, urea formaldehyde, polychlorinated biphenyls, radon gas, crude oil or any fraction thereof, petroleum products or by-products or derivatives, radioactive substance or material, pesticide waste waters, sludges, and any other substance, material or waste that is subject to regulation, control or remediation under any Environmental Laws.

Hedging Obligations means, with respect to any Person, all liabilities of such Person under interest rate, currency and commodity swap agreements, cap agreements and collar agreements, and all other agreements or arrangements designed to protect such Person against fluctuations in interest rates, currency exchange rates or commodity prices.

Highest Lawful Rate means, with respect to any indebtedness owed to any Lender hereunder or under any Note, the maximum nonusurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received by such Lender with respect to such indebtedness under applicable law.

Impermissible Qualification means, relative to the opinion or certification of any independent public accountant as to any financial statement of any Borrower, any qualification or exception to such opinion or certificate

        (a)  which is of a "going concern" or similar nature;

        (b)  which relates to the limited scope of examination of matters relevant to such financial statement; or

        (c)  which relates to the treatment or classification of any item in such financial statement and which, as a condition to its removal, would require an adjustment to such item the effect of which would be to cause any of the Borrowers to be in default of any of their obligations under Section 10.6.

Indemnified Liabilities—see Section 14.11.

Insolvency Proceeding means, with respect to the Person in question, the commencement or filing by or against it of a request or petition for liquidation, reorganization, arrangement, adjustment of debts, adjudication as a bankrupt, winding-up, or other similar relief under the bankruptcy, insolvency,

10

or similar laws of the United States, any state or territory thereof, or any foreign jurisdiction, now or hereafter in effect; the making of any general assignment for the benefit of creditors; the appointment of a receiver, trustee or custodian for it or for any of its assets; the institution by or against it of any of the foregoing or of any formal or informal proceeding for the dissolution or liquidation of, settlement of claims against, or winding up of its affairs; the sale, assignment, or transfer of all or any material part of its assets; the nonpayment generally of its debts as they become due; or the cessation of its business as a going concern.

Instruments shall have the meaning assigned to the term "instruments" in the UCC in effect in the State of New York as amended from time to time.

Intercreditor Agreement means that certain Intercreditor Agreement to be dated as of July 15, 2002 among the Agent, the 2002 Trustee and certain Credit Parties, as amended from time to time.

Interest Period means, as to any LIBO Rate Loan, the period commencing on the date such Loan is borrowed or continued as, or converted into, a LIBO Rate Loan and ending on the date one, two or three months thereafter as selected by the Borrowers pursuant to Section 2.2.2; provided that:

(i)

if any Interest Period would otherwise end on a day that is not a Business Day, such Interest Period shall be extended to the following Business Day unless the result of such extension would be to carry such Interest Period into another calendar month, in which event such Interest Period shall end on the preceding Business Day;



(ii)

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



(iii)

the Borrowers may not select any Interest Period that would extend beyond the end of the Term.

Inventory has the meaning set forth in the Security Agreement.

Investment means, relative to any Person, any investment in another Person, whether by acquisition of any debt or equity security, by making any loan or advance or by becoming obligated with respect to a Suretyship Liability in respect of obligations of such other Person (other than travel and similar advances to employees in the ordinary course of business).

Issuer means a bank, other financial institution or other legally authorized Person selected by or acceptable to the Agent and reasonably acceptable to the Borrowers to issue Letters of Credit for Borrowers' account under an agreement between such Person and the Agent whereby the Agent incurs a reimbursement obligation to such Person with respect to such Letters of Credit.

L/C Application means, with respect to any request for the issuance of a Letter of Credit, a letter of credit application in the form being used by the Issuer at the time of such request for the type of letter of credit requested.

Lender Party—see Section 14.11.

Lenders—see the Preamble.

Letter of Credit means a standby or documentary sight letter of credit issued by the Issuer in each case containing such terms and conditions as are permitted by the Agent and are reasonably satisfactory to the Agent and the Issuer, including, without limitation, the condition that: (i) such letter of credit may be presented, drawn or transferred by the beneficiary only by the presentment of sight drafts and required accompanying documents through a bank acceptable to the Agent; (ii) such letter of credit shall not be payable unless and until the draft and all required accompanying documents are received in good order at an office of the bank to whom it is presented in the United States; (iii) any

11

deviation from the terms of such letter of credit have been approved by the Agent; (iv) the form of such letter of credit has been approved by the Agent prior to its issuance; and (v) the maturity date of the Letter Credit occurs at least forty-five (45) days prior to the end of the Original Term. "Letters of Credit" may include documentary sight letters of credit with a discount for a 90-120 day interest component.

Letter of Credit Reserve means, as of any date of determination, an amount equal to the Stated Amount of all Letters of Credit.

LIBO Rate Loan means any Loan or portion thereof that bears interest at a rate determined by reference to the Adjusted LIBO Rate.

LIBO Rate means with respect to the Interest Period for a LIBO Rate Loan, the interest rate per annum equal to the arithmetic average of the rates of interest per annum (rounded upwards, if necessary, to the next one-sixteenth (¹/16) of one (1%) percent) at which Reference Bank is offered deposits of United States dollars in the London interbank market on or about 9:00 a.m. (Atlanta time) two (2) Business Days prior to the commencement of such Interest Period in amounts substantially equal to the principal amount of the LIBO Rate Loans requested by Borrowers and available to the Borrowers in accordance with this Agreement, with a maturity of comparable duration to the Interest Period selected by Borrowers.

Lien means any lien, security interest or other charge or encumbrance of any kind, or any other type of preferential arrangement, including, without limitation, the lien or retained security title of a conditional vendor.

Loan Documents means this Agreement, the Notes, the Intercreditor Agreement and all agreements, instruments and documents including, without limitation, guaranties, mortgages, trust deeds, pledges, powers of attorney, consents, assignments, contracts, notices, security agreements, leases, financing statements, fee letters and all other writings heretofore, now or from time to time hereafter executed by or on behalf of any Credit Party or any other Person and delivered to the Agent, Lender or to any parent, affiliate or subsidiary of the Agent or any Lender in connection with the Obligations or the transactions contemplated hereby.

Loan or Loans means Revolving Loans.

LSI means LSI Plate, a California general partnership.

Margin Stock means any "margin stock" as defined in Regulation U of the Board of Governors of the Federal Reserve System.

Material Adverse Effect means (a) a material adverse change in, or a material adverse effect upon, the financial condition, operations, assets, business, properties or prospects (financial or otherwise) of OSM individually, the other Borrowers taken as a whole, or of the Credit Parties taken as a whole, (b) a material impairment on the ability of OSM individually or the other Borrowers taken as a whole to perform its obligations under any Loan Document, (c) a material adverse effect upon any material portion of the Collateral or (d) a material adverse effect upon the legality, validity, binding effect or enforceability against any Borrower or the 2002 Trustee of any Loan Document.

Maximum Amount shall mean, at any particular time, an amount equal to the Commitments of all Lenders.

Multiemployer Pension Plan means a multiemployer plan, as such term is defined in Section 4001(a)(3) of ERISA, and to which any Credit Party or any member of the Controlled Group may have any liability.

Net Income means, with respect to any fiscal period of OSM, the net income of OSM and its consolidated Subsidiaries with respect to such fiscal period, as determined in accordance with GAAP.

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Non-Funding Lender—see Section 2.6.

Note or Notes means a Revolving Note and/or the Swing Loan Note, as the context requires.

Obligations means and includes the aggregate of all Loans and all accrued interest thereon, the Stated Amount of all Letters of Credit, and all other loans, indebtedness, debts, liabilities, obligations, interest, fees, premiums, guarantees, covenants and duties owing by any Borrower to the Agent or any Lender, of every kind and description (whether or not evidenced by any note or other instrument and whether or not for the payment of money), direct or indirect, absolute or contingent, due or to become due, now existing or hereafter arising, in each case arising under or in connection with the Loan Documents. "Obligations" includes: (i) any debt, liability or obligation owing from any Borrower to others which the Agent or any Lender may obtain by assignment or otherwise; (ii) all interest, fees, charges or other costs and payments that any Borrower is required to pay to the Agent or any Lender under or as a result of the Loan Documents or by law; (iii) all fees, costs and expenses described in Section 14.5 or otherwise required to be paid by any Borrower to the Agent or any Lender pursuant to any Loan Document.

Operating Lease means any lease of (or other agreement conveying the right to use) any real or personal property by any Credit Party, as lessee, other than any Capital Lease.

Orderly Liquidation Value means the net value, as determined by an independent appraiser acceptable to the Agent, of Borrowers' Inventory if such Inventory were liquidated in an orderly fashion.

Original Term—see Section 14.16.

Participant—see Section 14.7.2.

Payment Account—see Section 10.14(a).

PBGC means the Pension Benefit Guaranty Corporation and any entity succeeding to any or all of its functions under ERISA.

Pension Plan means a "pension plan", as such term is defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA (other than a Multiemployer Pension Plan), and to which the Borrowers or any member of the Controlled Group may have any liability, including any liability by reason of having been a substantial employer within the meaning of Section 4063 of ERISA at any time during the preceding five years, or by reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.

Percentage means, as to each Lender at any time, the percentage obtained by dividing (i) the amount of the Commitments of such Lender in effect at such time (or, if the Commitments have been terminated, the sum of the outstanding principal amount of the Loans owed to such Lender at such time plus such Lender's ratable share of the Stated Amount of Letters of Credit existing at such time (after giving effect to Section 7.7)) by (ii) the aggregate amount of the Commitments in effect at such time (or, if the Commitments have been terminated, the amount of all outstanding Loans and the Stated Amount of all Letters of Credit immediately prior to such termination after giving effect to Section 7.7).

Permitted Intercompany Loans means (i) unsecured intercompany loans between the Borrowers, (ii) existing unsecured intercompany loans from OSM to the other Credit Parties outstanding as of the Closing Date and (iii) unsecured intercompany loans from any of OSM's Subsidiaries to OSM to the extent such loans are subordinated to the Obligations on terms satisfactory to the Required Lenders. All Permitted Intercompany Loans made by any Borrower shall be evidenced by promissory notes pledged to the Agent pursuant to the Loan Documents. All Permitted Intercompany Loans outstanding as of the Closing Date are set forth in Item 1.1 of the Disclosure Schedule.

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Permitted Liens means (i) Liens for taxes, assessments or other governmental charges not at the time delinquent or thereafter payable without penalty or being contested in good faith and by appropriate proceedings diligently pursued, provided that the reserve or other appropriate provision, if any, as shall be required by GAAP shall have been made therefor; (ii) deposits or pledges of money to secure the payment of workmen's compensation, unemployment insurance, old age pensions or other social security benefits or obligations; (iii) deposits or pledges of money to secure the performance of bids, tenders, contracts, leases, public or statutory obligations, surety or appeal bonds, or other deposits or pledges of money for purposes of a like general nature made or given in the ordinary course of business and not in connection with the borrowing of money; (iv) Liens in favor of the Agent under the Loan Documents; (v) Liens of carriers, warehousemen, mechanics, materialmen and landlords incurred in the ordinary course of business for sums not overdue or being contested in good faith by appropriate proceedings and for which adequate reserves, as required by GAAP, shall have been made therefor; (vi) judgment Liens securing judgments not constituting Events of Default under Section 12.1.8 and with respect to which execution has been stayed; (vii) such utility, access and other easements, rights of way, restrictions, exceptions, minor defects or irregularities in or clouds on title or encumbrances not arising out of the borrowing of money or the securing of advances or credit, and which will not interfere with or impair in any respect the utility, operation or value of any properties of any Credit Party; (viii) Liens described in detail in Item 10.8 of the Disclosure Schedule; (ix) Liens granted to the 1996 Trustee under the 1996 Bond Indenture (but only until the closing of the 2002 Bond offering) and to the 2002 Trustee under the 2002 Bond Indenture against property of any Borrower to secure the 1996 Bonds and the 2002 Bonds, respectively; provided that such Liens do not attach to or otherwise encumber any Collateral (except for shared collateral under the 1996 Bonds); and (x) Liens on fixed assets subject to the limitations set forth in clause (v)(B) of Section 10.7(a); provided that any such Lien attaches to such property within ten (10) days of the acquisition thereof and such Lien attaches solely to the property so acquired.

Person means any natural person, corporation, partnership, trust, limited liability company, association, governmental authority or unit, or any other entity, whether acting in an individual, fiduciary or other capacity.

Quarterly Board Report shall mean the quarterly operating, marketing and financial reports submitted to OSM's board of directors.

Raw Materials means the portion of a Borrower's Inventory consisting of high grade scrap metal and alternative metallics used in the melt process.

RCRA means the Resource Conservation and Recovery Act, as amended.

Reference Bank shall mean the Agent's Treasury Department, or such other bank as the Agent may from time to time designate.

Release has the meaning specified in CERCLA and the term "Disposal" (or "Disposed") has the meaning specified in RCRA; provided that if either CERCLA or RCRA is amended so as to broaden the meaning of any term defined thereby, such broader meaning shall apply as of the effective date of such amendment; and provided, further, that to the extent that the laws of a state wherein any affected property lies establish a meaning for "Release" or "Disposal" that is broader than is specified in either CERCLA or RCRA, such broader meaning shall apply.

Renewal Term—see Section 14.16.

Replacement Lender—see Section 8.7.

Required Lenders means Lenders having Percentages aggregating more than 50%.

Revolving Loans—see Section 2.1.1.

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Revolving Note—see Section 3.1.

Security Agreement means the Security Agreement dated as of the date hereof among the Borrowers and the Agent, as the same may be amended, supplemented or otherwise modified from time to time.

Semi-Finished Goods means the portion of a Borrower's Inventory consisting of semi-finished billets, blooms, and slabs, which are, in the Agent's judgment, saleable in their current state or used to produce Finished Goods.

Senior Debt means, with respect to any Person, all Debt of such Person that is not Subordinated Debt.

Senior Debt Ratio means, as of any day, the ratio of (a) all Senior Debt of the Borrowers outstanding on such day (including, without limitation, all Debt in respect of the 2002 Bonds and the Loans and the aggregate Letter of Credit Reserve), minus cash on hand of the Borrowers to (b) EBITDA for the 12-month period most recently ended.

Settlement Date—see Section 7.7.

Stated Amount means, with respect to any Letter of Credit at any date of determination, the maximum aggregate amount available for drawing thereunder at any time during the then ensuing term of such Letter of Credit under any and all circumstances, plus the aggregate amount of all unreimbursed payments and disbursements under such Letter of Credit.

Subordinated Debt means, with respect to any Person, Debt of such Person that is subordinated to the Obligations on terms and conditions satisfactory to the Agent and Required Lenders.

Subsidiary means, with respect to any Person, a corporation, partnership, limited liability company or other entity of which such Person and/or its other Subsidiaries own, directly or indirectly, such number of outstanding shares or other ownership interests having at least 50% of the ordinary voting power for the election of directors or other managers of such corporation, partnership, limited liability company or other entity.

Substitute Lender—see Section 2.7.

Suretyship Liability means any agreement, undertaking or arrangement by which any Person guarantees, endorses or otherwise becomes or is contingently liable upon (by direct or indirect agreement, contingent or otherwise, to provide funds for payment, to supply funds to or otherwise to invest in a debtor, or otherwise to assure a creditor against loss) any indebtedness, obligation or other liability of any other Person (other than by endorsements of instruments in the course of collection), or guarantees the payment of dividends or other distributions upon the shares of any other Person. The amount of any Person's obligation in respect of any Suretyship Liability shall (subject to any limitation set forth therein) be deemed to be the principal amount of the debt, obligation or other liability supported thereby.

Swing Loan—see Section 2.1.3(a).

Swing Loan Available Credit means $5,000,000.

Swing Loan Lender means Textron or any other Lender hereafter appointed by the Agent as Swing Loan Lender in replacement thereof.

Swing Loan Note—see Section 3.1.

Swing Loan Settlement Date—see Section 2.1.3(c).

Term—see Section 14.16.

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Termination Date means the earlier to occur of (a) the end of the Term and (b) such other date on which the Commitments shall terminate pursuant to Section 12 or otherwise.

UCC means the Uniform Commercial Code (or any successor statute) of the State of New York.

Unmatured Event of Default means any event that, if it continues uncured, will, with lapse of time or notice or both, constitute an Event of Default.

Welfare Plan means a "welfare plan", as such term is defined in Section 3(1) of ERISA, to which any Credit Party may have any liability.

1996 Bonds means those certain 11% first mortgage notes of OSM due 2003 issued under the 1996 Bond Indenture (including securities entitlements to the 1996 Bonds).

1996 Bond Indenture means, collectively, (i) that certain Indenture dated as of June 1996 among OSM, certain Credit Parties named therein, and the 1996 Trustee and (ii) all "Security Documents" (as such term is defined therein).

1996 Trustee means JPMorgan Chase Bank (fka Chemical Bank), as trustee under the 1996 Bond Indenture, and its successors.

2000 Credit Facility means, collectively, (i) the Credit Agreement dated as of December 1, 2000 (as amended or otherwise modified from time to time) among OSM, PPM Finance, Inc. and the lenders named therein, and (ii) all other "Loan Documents" (as such term is defined therein).

2002 Bonds means those certain first mortgage notes of the Borrowers due 2009 issued under the 2002 Bond Indenture (including securities entitlements to the 2002 Bonds).

2002 Bond Indenture means, collectively, (i) that certain Indenture to be dated as of July 15, 2002 among OSM, certain Credit Parties named therein, and the 2002 Trustee and (ii) all "Security Documents" (as such term is defined therein).

2002 Trustee means U.S. Bank National Association, as trustee under the 2002 Bond Indenture, and its successors.

        1.2    Other Interpretive Provisions.

        (a)  The meanings of defined terms are equally applicable to the singular and plural forms of the defined terms.

        (b)  Section, Disclosure Schedule and Exhibit references are to this Agreement unless otherwise specified.

        (c)  (i) The term "including" is not limiting and means "including without limitation."

        (ii)  In the computation of periods of time from a specified date to a later specified date, the word "from" means "from and including"; the words "to" and "until" each mean "to but excluding", and the word "through" means "to and including."

        (d)  Unless otherwise expressly provided herein, (i) references to Loan Documents or other agreements (including this Agreement) and other contractual instruments shall be deemed to include all subsequent amendments and other modifications thereto, but only to the extent such amendments and other modifications are not prohibited by the terms of any Loan Document, and (ii) references to any statute or regulation are to be construed as including all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such statute or regulation.

        (e)  Any accounting terms used in this Agreement which are not specifically defined in this Agreement have the meanings customarily given them in accordance with GAAP.

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        (f)    All other terms contained in this Agreement (and which are not otherwise specifically defined in the Agreement) have the meanings provided by the UCC to the extent the same are used or defined in the UCC.

        (g)  All calculations of Dollar amounts pursuant to this Agreement shall be rounded to the nearest cent.

        SECTION 2. COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES.

        2.1    Commitments.    On and subject to the terms and conditions of this Agreement, each of the Lenders, severally and for itself alone, agrees to make loans to, and to participate in the reimbursement obligation with respect to the issuance of Letters of Credit for the account of, the Borrowers as follows:

        2.1.1    Loan Commitment.    Each Lender agrees to make available from time to time until the Termination Date its Percentage of revolving loans (each, a "Revolving Loan" and collectively, the "Revolving Loans") as the Borrowing Agent shall request under Section 2.2, the aggregate outstanding amount of which shall not at any time exceed such Lender's Commitment. The aggregate amount of Revolving Loans outstanding shall not exceed at any time the lesser of (i) the Maximum Amount minus the sum of the Letter of Credit Reserve and the aggregate amount of Swing Loans outstanding and (ii) the Borrowing Base minus the sum of the Letter of Credit Reserve and the aggregate amount of Swing Loans outstanding.

        2.1.2    L/C Commitment.

        Agent will arrange for, and will cause, the issuance of Letters of Credit by the Issuer, as are permitted by this Agreement and are reasonably satisfactory to the Agent and the Issuer, at the request of the Borrowing Agent and for the account of the Borrowers from time to time and as more fully set forth in Section 2.3.2, each Lender shall be deemed to have purchased a ratable (in accordance with its Percentage) participation in the Stated Amount of each such Letter of Credit. The aggregate Stated Amount of all Letters of Credit shall not at any time exceed the lesser of (i) $15,000,000 and (ii) the Maximum Amount minus the aggregate outstanding amount of all Loans at such time.

        2.1.3    Swing Loans.

        (a)  The Swing Loan Lender, in its sole discretion, on the terms and subject to the conditions contained in this Agreement, may make advances (each a "Swing Loan") to the Borrowers from time to time on any Business Day during the period from the Closing Date until the Termination Date in an aggregate amount not to exceed at any time outstanding the lesser of (i) the Swing Loan Available Credit and (ii) the lesser of (A) the Maximum Amount minus the sum of the Letter of Credit Reserve and the aggregate amount of Revolving Loans outstanding and (B) the Borrowing Base minus the sum of the Letter of Credit Reserve and the aggregate amount of Revolving Loans outstanding. The Swing Loan Lender shall be entitled to rely on the most recent Borrowing Base Certificate delivered to the Agent. Within the limits set forth above, Swing Loans repaid may be reborrowed under this Section 2.1.3. All Swing Loans shall be made as Base Rate Loans.

        (b)  Each Swing Loan shall be made upon such notice as the Swing Loan Lender and the Borrowing Agent shall agree. Upon fulfillment of the applicable conditions set forth in Section 11, the Swing Loan Lender will make each Swing Loan available to the Borrowers.

        (c)  The Agent shall notify each Lender, at such dates as the Agent shall determine in its sole discretion, of the amount of the Swing Loans outstanding as of 1:00 P.M., Atlanta time as of such date (each such date of notification being referred to herein as the "Swing Line

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Settlement Date") and each Lender's Percentage thereof. Notwithstanding whether the applicable conditions set forth in Section 11 are presently met or were met at the time of the Swing Loan, each Lender shall before 2:00 P.M., Atlanta time, on the Swing Line Settlement Date make available to the Agent, in immediately available funds, the amount of its Percentage of the principal amount of all such Swing Loans. Upon such payment by a Lender, such Lender shall be deemed to have made a Revolving Loan to the Borrower in the amount of such payment. The Agent shall use such funds to repay the Swing Loan to the Swing Loan Lender. The Agent's books and records shall be conclusive and binding, absent manifest error, for all purposes of determining the Swing Loans outstanding at any time.

        2.2    Loan Procedures.

        2.2.1    Borrowing Procedures.    Other than as contemplated under Section 2.1.3 as to Swing Loans, the Borrowing Agent shall give written notice or telephonic notice (followed immediately by written confirmation thereof) to the Agent of each proposed borrowing not later than (a) in the case of a Base Rate borrowing, 12:00 P.M., Atlanta time, on the Business Day of such borrowing, and (b) in the case of a LIBO Rate borrowing, 12:00 P.M., Atlanta time, at least three Business Days prior to the proposed date of such borrowing. Each such notice shall be effective upon receipt by the Agent, shall be irrevocable, shall specify the date, amount and type of borrowing and, in the case of a LIBO Rate borrowing, the initial Interest Period therefor. Promptly upon receipt of such notice, the Agent shall advise each Lender thereof. Not later than 1:00 P.M., Atlanta time, on the date of a proposed borrowing, each Lender shall provide the Agent at the office specified by the Agent with immediately available funds covering such Lender's Percentage of such borrowing and, so long as the Agent believes in good faith that the conditions precedent set forth in Section 11 with respect to such borrowing have been satisfied, the Agent shall fund the borrowing request by paying over the funds so received by the Agent to the Borrowing Agent on the applicable borrowing date. Base Rate Loans and LIBO Rate Loans may be outstanding at the same time, provided that (i) not more than eight LIBO Rate Loans shall be outstanding at any one time, and (ii) the aggregate principal amount of each LIBO Rate Loan shall at all times be at least $5,000,000 and an integral multiple of $1,000,000 each thereafter.

        2.2.2    Conversion and Continuation Procedures.

        (a)  Subject to the notice and request procedures of Section 2.2.1, the Borrowing Agent may, from time to time, upon irrevocable written notice to the Agent in accordance with clause (b) below:

        (i)    elect, as of any Business Day, to convert any Loans (or any part thereof in an aggregate amount not less than $5,000,000 or a higher integral multiple of $1,000,000) into Loans of the other type; or

        (ii)  elect, as of the last day of the applicable Interest Period, to continue any LIBO Rate Loan having an Interest Period expiring on such day (or any part thereof in an aggregate amount not less than $5,000,000 or a higher integral multiple of $1,000,000) for a new Interest Period.

        (b)  The Borrowing Agent shall give written or telephonic (followed immediately by written confirmation thereof) notice to the Agent of each proposed conversion or continuation not later than (i) in the case of conversion into a Base Rate Loan, 12:00 P.M., Atlanta time, at least three Business Days prior to the proposed date of such conversion and (ii) in the case of conversion into or continuation of a LIBO Rate Loan, 12:00 P.M., Atlanta time, at least three Business Days prior to the proposed date of such conversion or continuation, specifying in each case:

        (i)    the proposed date of conversion or continuation;

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        (ii)  the aggregate amount of the Loan to be converted or continued;

        (iii)  the type of Loan resulting from the proposed conversion or continuation; and

        (iv)  in the case of conversion into, or continuation of, LIBO Rate Loans, the duration of the requested Interest Period therefor.

        (c)  If upon the expiration of any Interest Period applicable to a LIBO Rate Loan, the Borrowing Agent has failed to select timely a new Interest Period to be applicable to such LIBO Rate Loan, the Borrowing Agent shall be deemed to have elected to convert such LIBO Rate Loan into a Base Rate Loan effective on the last day of such Interest Period.

        (d)  The Agent will promptly notify each Lender of its receipt of a notice of conversion or continuation pursuant to this Section 2.2.2 or, if no timely notice is provided by the Borrowing Agent, of the details of any automatic conversion.

        (e)  Any conversion of a LIBO Rate Loan on a day other than the last day of an Interest Period therefor shall be subject to Section 8.4.

        2.3    Letter of Credit Procedures.

        2.3.1    L/C Applications.    The Borrowing Agent shall give notice to the Agent of the proposed issuance of each Letter of Credit on a Business Day that is at least three Business Days (or such lesser number of days as the Agent shall agree in any particular instance) prior to the proposed date of issuance of such Letter of Credit. Each such notice shall be accompanied by an L/C Application, duly executed by the Borrowing Agent and in all respects satisfactory to the Agent, together with such other documentation as the Agent may request in support thereof, it being understood that each L/C Application shall specify, among other things, the Letter of Credit amount (there being no minimum or integral amounts for Letters of Credit and such amount not being deemed to violate Section 2.2.1), the date on which the proposed Letter of Credit is to be issued, the expiration date of such Letter of Credit (which shall not be later than the earlier to occur of (i) one year after the date of issuance thereof and (ii) forty-five (45) days prior to the end of the scheduled Term) and whether such Letter of Credit is to be transferable in whole or in part. In the event of any inconsistency between the terms of any L/C Application and the terms of this Agreement, the terms of this Agreement shall control.

        2.3.2    Participation in Letters of Credit.    Concurrently with the issuance of each Letter of Credit, the Agent shall be deemed to have sold and transferred to each Lender, and each Lender shall be deemed irrevocably and unconditionally to have purchased and received from the Agent, without recourse or warranty, an undivided interest and participation, to the extent of such Lender's Percentage, in the Agent's reimbursement obligation to the Issuer for such Letter of Credit. The Agent hereby agrees, upon request of any Lender, to deliver to such Lender a list of all outstanding Letters of Credit arranged by the Agent, together with such information related thereto as such Lender may reasonably request.

        2.3.3    Reimbursement Obligations.    The Borrowers hereby unconditionally and irrevocably agree to reimburse the Agent for each payment made by the Agent with respect to the reimbursement obligations to the Issuer for payments and disbursements of the Issuer under any Letter of Credit honoring any demand for payment made by the beneficiary thereunder, in each case on the date that such payment or disbursement is made. In the event that the Borrowers do not provide the Agent with immediately available funds (either by amounts received by the Agent from or on account of the Borrowers for distribution to the Agent or the other Lenders under this Agreement or otherwise) sufficient to reimburse the Agent as described above by 12:00 P.M., Atlanta time, on the date such obligation arises, the Swing Loan Lender will be deemed to have automatically made a Swing Loan in the amount of such reimbursement obligation, with any excess

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deemed to automatically constitute a Revolving Loan to the Borrowers, notwithstanding any failure to satisfy the conditions precedent set forth in Section 11.2. The Agent shall notify the Borrowing Agent whenever any demand for payment is made under any Letter of Credit by the beneficiary thereunder; provided, however, that the failure of the Agent to so notify the Borrowing Agent shall not affect the rights of the Agent or the Lenders in any manner whatsoever.

        2.3.4    Limitation on Obligations of the Agent.    Any action taken or omitted to be taken by the Agent under or in connection with any Letter of Credit, if taken or omitted in the absence of gross negligence and willful misconduct, shall not impose upon the Agent any liability to the Borrowers or any Lender and shall not reduce or impair the Borrowers' reimbursement obligations set forth in Section 2.3.3 or otherwise or the obligations of the Lenders pursuant to Section 2.3.5 or otherwise.

        2.3.5    Funding by Lenders to the Agent.    Promptly upon receipt of notice from the Issuer that payment will be made upon a Letter of Credit, the Agent shall advise each Lender thereof. Not later than 1:00 P.M., Atlanta time, on the date of such proposed payment, each Lender shall be obligated to pay to the Agent, in full or partial payment of the purchase price of its participation in such reimbursement obligation, its pro rata share (according to its Percentage) of such payment (but no such payment shall diminish the obligations of the Borrowers under Section 2.3.3), and the Agent shall promptly notify each other Lender thereof. Each Lender irrevocably and unconditionally agrees to so pay to the Agent in immediately available funds the amount of such Lender's Percentage of such payment.

        2.3.6    Return of Letters of Credit; Supporting Letters of Credit.    If any Letter of Credit, whether or not then due and payable, shall for any reason be outstanding on the Termination Date or any other date upon which the Commitments are terminated, or if otherwise requested by the Agent at any time that an Event of Default has occurred and is continuing, the Borrowing Agent shall either (i) cause all such Letters of Credit to be canceled and returned or (ii) deliver a standby letter (or letters) of credit in guarantee of such Letter of Credit, which standby letter (or letters) of credit shall be of like tenor and duration as, and in an amount equal to 105% of the Stated Amount of, the Letters of Credit to which it relates and shall be issued by a Person, and shall be subject to such terms and conditions, as are satisfactory to the Agent in its sole discretion, which standby letter (or letters) of credit shall be held by the Agent as security for, and to provide for the payment of, such outstanding Letters of Credit and the Agent's and Lenders' reimbursement obligations in respect thereof.

        2.4    Commitments Several.    The failure of any Lender to make a requested Loan on any date shall not relieve any other Lender of its obligation (if any) to make a Loan on such date, but no Lender shall be responsible for the failure of any other Lender to make any Loan to be made by such other Lender; provided, that the Agent may, in its sole discretion, offer to the other Lenders an opportunity to fund a Non-Funding Lender's portion of any Loan not made by such Non-Funding Lender and any such Lenders who elect to so fund such Non-Funding Lender's portion will have the rights set forth in Section 2.7.

        2.5    Certain Conditions.    Notwithstanding any provision of this Agreement other than Section 2.1.3(c) and Section 2.3.3, if an Event of Default or Unmatured Event of Default exists, no Lender shall have an obligation to make any Loan, or to permit the continuation of or any conversion into any LIBO Rate Loan, and the Agent shall not have any obligation to arrange for the issuance of any Letter of Credit.

        2.6    Availability of Lender's Percentage.    The Agent may assume that each Lender will make its Percentage of each Loan available to the Agent on each funding date. If such Percentage is not, in fact, paid to the Agent by such Lender when due, the Agent will be entitled to recover such amount on demand from such Lender without setoff, counterclaim or deduction of any kind. The failure of any

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Lender to make any Loan or to purchase any participation in any Letter of Credit on the date specified therefor (such Lender, a "Non-Funding Lender") shall not relieve any other Lender of its obligations to make such Loans or purchase such participations on such date, but in accordance with Section 2.4 hereof, only those other Lenders (if any) who elect to fund such Non-Funding Lender's obligations under Section 2.4 and no other Lender nor the Agent shall be responsible for the failure of any Non-Funding Lender to make a Loan or purchase a participation by any Non-Funding Lender.

        2.7    Non-Funding Lenders.

        (a)  Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender shall not have any voting or consent rights under or with respect to any Loan Document or constitute a "Lender" (or be included in the calculation of "Required Lenders") under this Agreement for any voting or consent rights under or with respect to any Loan Document; provided, however, that if any Lender making the election under Section 2.4 advances funds to the Borrowing Agent on behalf of any Non-Funding Lender in accordance with Section 2.4, such Lenders shall be permitted to exercise the voting or consent rights of the Non-Funding Lender under the Agreement ratably in accordance with the amount of such funds provided by such Lenders. If any Lender is a Non-Funding Lender and any Lender making the election under Section 2.4 advances funds to the Borrowers on behalf of a Non-Funding Lender, then such Non-Funding Lender shall owe such Lenders the amount of such advance plus interest accrued on such advance at the Base Rate plus 2.00% (a "Defaulted Advance Amount") ratably in accordance with the amount of such funds provided by such Lenders. So long as a Non-Funding Lender owes a Defaulted Advance Amount, if the Agent receives a payment or proceeds to be paid to such Non-Funding Lender under this Agreement but for this Section 2.7, then the Agent shall make such payment to any Lender making the election under Section 2.4 in an amount not to exceed the Defaulted Advance Amount and any remaining amount shall otherwise be applied pursuant to Section 7.2. The rights and remedies under this Section 2.7 are in addition to other rights and remedies that the Lenders, the Agent or any other party may have against such Non-Funding Lender with respect to any Defaulted Advance Amount.

        (b)  The Agent may, at its option, notify any Non-Funding Lender of its intention to replace such Non-Funding Lender with a substitute Lender (a "Substitute Lender") for such Non-Funding Lender. If the Agent obtains a Substitute Lender within 120 days following notice of its intention to do so, the applicable Non-Funding Lender must sell and assign its Loans and participations in Letters of Credit to such Substitute Lender for an amount equal to the principal balance of all Loans and Letters of Credit held by such Non-Funding Lender and all accrued interest and fees with respect thereto through the date of such sale.

        2.8    Borrowing Agent Provisions.

        (a)  Each Borrower hereby irrevocably designates the Borrowing Agent to be its attorney and agent and in such capacity to borrow, sign and endorse notes, and execute and deliver all instruments, documents, writings and further assurances now or hereafter required hereunder, on behalf of such Borrower or Borrowers, and hereby authorizes the Agent to pay over or credit all loan proceeds hereunder in accordance with the request of the Borrowing Agent.

        (b)  The handling of this credit facility as a co-borrowing facility with a borrowing agent in the manner set forth in this Agreement is solely as an accommodation to the Borrowers and at their request. Neither the Agent nor any Lender shall incur liability to any Borrower as a result thereof. To induce the Agent and Lenders to do so and in consideration thereof, each Borrower hereby indemnifies the Agent and each Lender and holds the Agent and each Lender harmless from and against any and all liabilities, expenses, losses, damages and claims of damage or injury asserted against the Agent or any Lender by any Person arising from or incurred by reason of the handling of the financing arrangements of the Borrowers as provided herein, reliance by the Agent or any

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Lender on any request or instruction from the Borrowing Agent or any other action taken by the Agent or any Lender with respect to this Section 2.8, except due to willful misconduct or gross (not mere) negligence by the indemnified party.

        (c)  All Obligations shall be joint and several, and each Borrower shall make payment upon the maturity of the Obligations by acceleration or otherwise, and such obligation and liability on the part of each Borrower shall in no way be affected by any extensions, renewals and forbearance granted by the Agent or any Lender to any Borrower, failure of the Agent or any Lender to give any Borrower notice of borrowing or any other notice, any failure of the Agent or any Lender to pursue or preserve its rights against any Borrower, the release by the Agent or any Lender of any Collateral now or hereafter acquired from any Borrower, and such agreement by each Borrower to pay upon any notice issued pursuant thereto is unconditional and unaffected by prior recourse by the Agent or any Lender to the other Borrowers or any Collateral for such Borrower's Obligations or the lack thereof.

        2.9    Waiver of Subrogation.    Each Borrower expressly waives any and all rights of subrogation, reimbursement, indemnity, exoneration, contribution or any other claim which such Borrower may now or hereafter have against the other Borrowers or other person directly or contingently liable for the Obligations hereunder, or against or with respect to the other Borrowers' property (including, without limitation, any property which is Collateral for the Obligations), arising from the existence or performance of this Agreement, until termination of this Agreement and repayment in full of the Obligations.

        SECTION 3. NOTES EVIDENCING LOANS.

        3.1    Notes.    The Revolving Loans of each Lender shall be evidenced by a promissory note (each, a "Revolving Note") substantially in the form set forth in Exhibit A-1, with appropriate insertions, payable to the order of such Lender in a face principal amount equal to the sum of such Lender's Percentage of the Commitment. Each Revolving Note shall be payable in full on the Termination Date to the order of the applicable Lender in an amount equal to the aggregate unpaid principal amount of all of such Lender's Revolving Loans. The Swing Loans of Swing Loan Lender shall be evidenced by a promissory note (a "Swing Loan Note") substantially in the form set forth in Exhibit A-2, with appropriate insertions, payable to the order of Swing Loan Lender in a face principal amount equal to the Swing Loan Available Credit. The Swing Loan Note shall be payable in full on the Termination Date to the order of the Swing Loan Lender in an amount equal to the aggregate unpaid principal amount of all Swing Loans.

        3.2    Recordkeeping.    Each Lender shall record in its records, or at its option on the schedule attached to its Note, the date and amount of each Loan made by such Lender, each repayment or conversion thereof and, in the case of each LIBO Rate Loan, the dates on which each Interest Period for such Loan shall begin and end. The aggregate unpaid principal amount so recorded shall be rebuttable presumptive evidence of the principal amount owing and unpaid on such Note. The failure to so record any such amount or any error in so recording any such amount shall not, however, limit or otherwise affect the obligations of the Borrowers hereunder or under any Note to repay the principal amount of the Loans evidenced by such Note together with all interest accruing thereon.

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        SECTION 4. INTEREST.

        4.1    Interest Rates.    The Borrowers promise to pay interest on the unpaid principal amount of the Loans for the period commencing on the date of such Loans until such Loans are paid in full as follows:

        4.1.1    Loans.

        (a)  at all times while any Loan is a Base Rate Loan, at a rate per annum equal to the sum of the Base Rate plus the Applicable Base Rate Margin in effect; and

        (b)  at all times while any Loan is a LIBO Rate Loan, at a rate per annum equal to the sum of the Adjusted LIBO Rate plus the Applicable LIBO Rate Margin applicable to each Interest Period for such Loan.

        4.1.2    Default Rate.    If an Event of Default occurs and continues for fifteen (15) days, the interest rate applicable to each Loan shall be the rate set forth in Section 4.1.1 plus 2%. Such rate shall apply to each Loan from the date the Event of Default occurred until such Event of Default is cured.

        4.2    Interest Payment Dates.    Accrued interest on each Base Rate Loan shall be payable monthly in arrears on the last Business Day of each month and at maturity. Accrued interest on each LIBO Rate Loan shall be payable on the last day of each Interest Period relating to such Loan and at maturity. After maturity and during the existence of an Event of Default, accrued interest on all Loans shall be payable on demand.

        4.3    Setting and Notice of LIBO Rates.    The applicable Adjusted LIBO Rate for each Interest Period shall be determined by the Agent, and notice thereof shall be given by the Agent promptly to the Borrowing Agent and each Lender. Each determination of the applicable Adjusted LIBO Rate by the Agent shall be conclusive and binding upon the parties hereto, in the absence of demonstrable error. The Agent shall, upon written request of the Borrowing Agent or any Lender, deliver to the Borrowing Agent or such Lender a statement showing the computations used by the Agent in determining any applicable Adjusted LIBO Rate hereunder.

        4.4    Computation of Interest.    All computations of interest shall be computed for the actual number of days elapsed on the basis of a year of 360 days. The applicable interest rate for each Base Rate Loan shall change simultaneously with each change in the Base Rate.

        SECTION 5. FEES.

        5.1    Unused Line Fee.    The Borrowers agree to pay to the Agent for the account of each Lender an unused line fee, for the period from the Closing Date to the Termination Date at a rate per annum of either (i) 0.50%, if the Applicable Base Rate Margin and Applicable LIBO Rate Margin is Level I or Level II or (ii) 0.25%, if the Applicable Base Rate Margin and Applicable LIBO Rate Margin is Level III or Level IV, of the difference between (a) the Maximum Amount and (b) the average for the period of the daily closing balances of the aggregate Loans and undrawn face amount of the Letters of Credit. In addition to the unused line fee described in the preceding sentence, in the event the average for any period of the daily closing balances of the aggregate Loans and Letter of Credit Reserve are less than 33% of the Maximum Amount, the Borrowers agree to pay to the Agent for the account of each Lender an additional fee at a rate per annum of 0.25% of the difference between (a) the Maximum Amount and (b) the average for such period of the daily closing balances of the aggregate Loans and undrawn face amount of the Letters of Credit. Such unused line fee shall be payable monthly in arrears on the first Business Day of each month following the month for which such fee is calculated and on the Termination Date for any period then ending for which such unused line fee shall not have theretofore been paid. The unused line fee shall be computed for the actual number of days elapsed on the basis of a year of 360 days.

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        5.2    Letter of Credit Fees.

        (a)  The Borrowers agree to pay to the Agent for the account of the Lenders a letter of credit fee for each Letter of Credit in an amount equal to the Applicable LIBO Rate Margin per annum on the daily outstanding balance of the undrawn amount of such Letter of Credit (computed for the actual number of days elapsed on the basis of a year of 360 days). Such letter of credit fee shall be payable in arrears on the last Business Day of each month and on the Termination Date for the period from the date of the issuance of each Letter of Credit to the date such payment is due or, if earlier, the date on which such Letter of Credit expired or was terminated.

        (b)  In addition, with respect to each Letter of Credit, the Borrowers agree to pay to the Agent such fees and expenses as the Agent incurs or is responsible for in connection with the issuance, negotiation, processing and/or administration of such Letters of Credit.

        5.3    Early Termination Fee.    If for any reason this Agreement is terminated by Borrowers prior to the end of the Original Term of this Agreement or by Lenders on account of any Event of Default as provided in Section 12.2, in view of the impracticality and extreme difficulty of ascertaining actual damages and by mutual agreement of the parties as to a reasonable calculation of lost profits of Lenders as a result thereof, the Borrowers agree to pay to the Agent for the account of the Lenders, upon the effective date of such termination, an Early Termination Fee in an amount equal to the following percentage of the Maximum Amount corresponding to the period in which the termination date occurs:

Percentage of Maximum Amount	Period
2%	From Closing to and including July 12, 2003
1%	After July 12, 2003 to and including July 12, 2004
0%	After July 12, 2004

        The Early Termination Fee shall be presumed to be the amount of damages sustained by Lenders as a result of such early termination, and the Borrowers agree that it is reasonable under the circumstances currently existing. The Early Termination Fee shall be deemed included in the Obligations.

        5.4    Audit Fees.    With respect to any examination or audit of any Credit Party, the Borrowers agree to pay to the Agent audit fees of $850 per person per day (subject to any increases in the audit fee as the Agent may implement in its discretion) for field examiners plus reasonable travel, hotel and other out- of-pocket expenses.

        5.5    Additional Fees.    The Borrowers agree to pay to the Agent such additional fees as are set forth in the fee letter dated as of the Closing Date between the Agent and the Borrowers and such other fees as agreed upon by the Borrowers, the Agent and/or the Lenders from time to time.

        5.6    Fees Nonrefundable.    All fees paid pursuant to this Section 5 (including the fee letter referenced in Section 5.5) are fully earned and nonrefundable upon payment.

        SECTION 6. PREPAYMENTS.

        6.1    Voluntary Prepayments.    In addition to applications under Section 7.1, the Borrowers may from time to time prepay the Loans in whole or in part; provided that any such prepayment is applied pursuant to the priorities set forth in Section 7.2. The Borrowing Agent shall give the Agent (which shall promptly advise each Lender) notice thereof not later than 12:00 P.M., Atlanta time, on the day of such prepayment (which shall be a Business Day), specifying the Loans to be prepaid and the date and amount of prepayment.

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        6.2    Mandatory Prepayments.    If at any time and for any reason, (w) the sum of the aggregate amount of outstanding Loans plus the Letter of Credit Reserve exceeds the Maximum Amount minus $5,000,000, (x) the sum of the aggregate amount of outstanding Loans plus the Letter of Credit Reserve exceeds the Borrowing Base minus $15,000,000, or (z) any component of the Loans or Letters of Credit exceed such other limits designated under the lending formulas, eligibility criteria, or other limits set forth in this Agreement, the Borrowers shall immediately prepay the Loans or return and/or collateralize the outstanding Letters of Credit (in accordance with Section 2.3.6) or do a combination of the foregoing as the Agent shall designate in amounts sufficient to eliminate such excess.

        6.3    All Prepayments.    Any prepayment of a LIBO Rate Loan on a day other than the last day of an Interest Period therefor shall include interest on the principal amount being repaid and shall be subject to Section 8.4.

        SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.

        7.1    Making of Payments.    All payments under this Agreement (including collections received in the Payment Account) shall be made by the Borrowing Agent to the Agent in immediately available funds and in Dollars to the Payment Account (as provided in Section 10.14(a)) or such other place as the Agent may designate from time to time, not later than 12:00 P.M., Atlanta time, on the date due; and funds received after that hour shall be deemed to have been received by the Agent on the next following Business Day. The Agent shall remit to each Lender or other holder of a Note its share of all such payments received in collected funds by the Agent for the account of such Lender or holder as described in Section 7.7.

        The Agent shall be entitled to charge the Borrowers for one (1) Business Day "clearance' or "float' at the rate then applicable to Base Rate Loans on all collections received under Section 10.14 in the Payment Account. The parties agree that such charges shall be for the exclusive benefit of the Agent.

        7.2    Application of Payments.    So long as no Event of Default has occurred and is continuing, all amounts received by the Agent or the Lenders from or on account of the Borrowers for distribution to the Agent or the Lenders under this Agreement will be distributed and applied as described in Section 7.7 in the following order: first, to the Swing Loan Lender for all amounts owing under the Swing Loans; second, to any fees and reimbursable expenses of the Agent then due and payable pursuant to any of the Loan Documents; third, to the ratable payment of any fees and reimbursable expenses due and payable to the Lenders under any of the Loan Documents; fourth, to interest then due and payable on the Revolving Loans; fifth, to the principal balance of the Revolving Loans; and sixth, at the Agent's election, to any Letter of Credit of any Borrower to provide cash collateral therefor until all Letters of Credit have been fully cash collateralized. The Commitments shall not be permanently reduced by the amount of any such prepayments. Subject to the priorities set forth in this Section 7.2, application on account of principal due on the Loans will be made by the Agent (i) first to all Base Rate Loans and (ii) only when no Base Rate Loans are outstanding, to LIBO Rate Loans; provided, that prior to the expiration of the Interest Period applicable to such LIBO Rate Loans, the Agent shall (unless the Borrowing Agent requests otherwise and pays any resulting costs under Section 8.4 or unless the Agent waives payment of such costs) retain such balances as cash collateral for the applicable Borrowers' obligations and liabilities under this Agreement until applied to such LIBO Rate Loans at the expiration of such Interest Period (it being agreed that neither the Agent nor the Lenders will be obligated to the Borrowers for any interest accrued on such balances and that, so long as no Event of Default or Unmatured Event of Default has occurred and is continuing, such balances will be available to the Borrowers for use under this Agreement). Notwithstanding anything in this Agreement to the contrary, during the continuance of an Event of Default each of the Borrowers irrevocably waives the right to direct the application of any and all payments at any time or times after the Closing Date received by the Agent for the account of itself or the Lenders from the Borrowers or with respect to

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any of the Collateral and irrevocably agrees that the Agent shall have the continuing exclusive right to apply and reapply any and all such payments against the Obligations as the Agent may deem advisable.

        7.3    Due Date Extension.    If any payment of principal or interest with respect to any of the Notes or of unused line fees or Letter of Credit fees falls due on a day that is not a Business Day, then such due date shall be extended to the immediately following Business Day (unless, in the case of a LIBO Rate Loan, such immediately following Business Day is the first Business Day of a calendar month, in which case such date shall be the immediately preceding Business Day) and, in the case of principal, additional interest shall accrue and be payable for the period of any such extension.

        7.4    Setoff.    Each Borrower agrees that the Agent and each Lender have all rights of set-off and bankers' lien provided by applicable law, and in addition thereto, each Borrower agrees that at any time any Event of Default exists (irrespective of any bankruptcy or insolvency of any Borrower), the Agent and each Lender may apply to the payment of any obligations of the Borrowers hereunder, whether or not then due, any and all balances, credits, deposits, accounts or moneys of any Borrower then or thereafter with the Agent or such Lender.

        7.5    Proration of Payments.    If any Lender shall obtain any payment or other recovery (whether voluntary, involuntary, by application of offset or otherwise, but excluding any payment pursuant to Section 8.7 or 14.7) on account of principal of or interest on any Loan (or on account of its participation in the reimbursement obligation for any Letter of Credit) in excess of its pro rata share of payments and other recoveries obtained by all Lenders on account of principal of and interest on such Loans (or such participation) then held by them calculated in accordance with the priorities set forth in Section 7.2, such Lender shall purchase from the other Lenders such participations in the Loans (or sub- participations in Letters of Credit) held by them as shall be necessary to cause such purchasing Lender to share the excess payment or other recovery ratably with each of them, or, at the request of the Agent, deliver the excess payment for distribution to the Lenders in accordance with this Agreement; provided, however, that if all or any portion of the excess payment or other recovery is thereafter recovered from such purchasing Lender, the purchase shall be rescinded and the purchase price restored to the extent of such recovery.

        7.6    Taxes.    All payments of principal of, and interest on, the Loans and all other amounts payable hereunder shall be made free and clear of and without deduction for any present or future income, excise, stamp or franchise taxes and other taxes, fees, duties, withholdings or other charges of any nature whatsoever imposed by any taxing authority, but excluding franchise taxes and taxes imposed on or measured by any Lender's net income or receipts (all nonexcluded items being called "Taxes"). If any withholding or deduction from any payment to be made by the Borrowers hereunder is required in respect of any Taxes pursuant to any applicable law, rule or regulation, then the Borrowing Agent will:

        (a)  pay directly to the relevant authority the full amount required to be so withheld or deducted;

        (b)  promptly forward to the Agent an official receipt or other documentation satisfactory to the Agent evidencing such payment to such authority; and

        (c)  pay to the Agent for the account of the Lenders such additional amount or amounts as is necessary to ensure that the net amount actually received by each Lender will equal the full amount such Lender would have received had no such withholding or deduction been required.

Moreover, if any Taxes are directly asserted against the Agent or any Lender with respect to any payment received by the Agent or such Lender hereunder, the Agent or such Lender may pay such Taxes and the Borrowing Agent will promptly pay such additional amounts (including any penalty, interest and expense) as is necessary so that the net amount received by such Person after the payment of such Taxes (including any Taxes on such additional amount) shall equal the amount such Person would have received had such Taxes not been asserted.

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        If the Borrowing Agent fails to pay any Taxes when due to the appropriate taxing authority or fails to remit to the Agent, for the account of the respective Lenders, the required receipts or other required documentary evidence, the Borrowers shall indemnify the Lenders for any incremental Taxes, interest or penalties that may become payable by any Lender as a result of any such failure.

        The obligations of the Borrowers under this Section 7.6 are subject to the limitation set out in Section 14.7.1.

        7.7    Settlement Among Lenders.    On the second Business Day of each calendar week or more frequently as determined by the Agent (each, a "Settlement Date"), the Agent will advise each Lender by telephone or telecopy of the amount of such Lender's Percentage of principal, interest and fees paid to the Agent for the benefit of the Lenders under this Agreement. Subject to Section 2.7, the Agent will pay to each Lender such Lender's Percentage of principal, interest and fees paid by the Borrowers since the previous Settlement Date for the benefit of such Lender. Such payments will be made by wire transfer to such Lender's account (as set forth under such Lender's name on the signature page to this Agreement or as specified in the applicable Assignment Agreement) not later than 1:00 P.M., Atlanta time, on each Settlement Date.

        SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR LIBO RATE LOANS.

        8.1    Increased Costs.

        (a)  If, after the date hereof, the adoption of any applicable law, rule or regulation of the United States, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency of the United States charged with the interpretation or administration thereof, or compliance by any Lender with any request or directive (whether or not having the force of law) of any such authority, central bank or comparable agency

        (i)    shall subject any Lender to any tax, duty or other charge with respect to its LIBO Rate Loans, its Note or its obligation to make LIBO Rate Loans, or shall change the basis of taxation of payments to any Lender of the principal of or interest on its LIBO Rate Loans or any other amounts due under this Agreement in respect of its LIBO Rate Loans or its obligation to make LIBO Rate Loans (except for changes in the rate of tax on the overall net income of such Lender imposed by the jurisdiction in which such Lender's principal executive office is located);

        (ii)  shall impose, modify or deem applicable any reserve (including any reserve imposed by the Board of Governors of the Federal Reserve System, but excluding any reserve included in the determination of interest rates pursuant to Section 4), special deposit or similar requirement against assets of, deposits with or for the account of, or credit extended by any Lender; or

        (iii)  shall impose on any Lender any other condition affecting its LIBO Rate Loans, its Note or its obligation to make LIBO Rate Loans;

and the result of any of the foregoing is to increase the cost to (or to impose a cost on) such Lender of making or maintaining any LIBO Rate Loan, or to reduce the amount of any sum received or receivable by such Lender under this Agreement or under its Note with respect thereto, then upon demand by such Lender to the Agent and by the Agent to the Borrowers (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), the Borrowers shall pay to the Agent for the benefit of such Lender such additional amount as will compensate such Lender for such increased cost or such reduction.

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        (b)  If any Lender shall determine that the adoption or phase-in of any applicable law, rule or regulation of the United States regarding capital adequacy, or any change therein, or any change in the interpretation or administration thereof by any governmental authority, central bank or comparable agency of the United States charged with the interpretation or administration thereof, or compliance by any Lender or any Person controlling such Lender with any request or directive regarding capital adequacy (whether or not having the force of law) of any such authority, central bank or comparable agency, has or would have the effect of reducing the rate of return on such Lender's or such controlling Person's capital as a consequence of such Lender's obligations hereunder or under any Letter of Credit to a level below that which such Lender or such controlling Person could have achieved but for such adoption, change or compliance (taking into consideration such Lender's or such controlling Person's policies with respect to capital adequacy) by an amount deemed by such Lender or such controlling Person to be material, then from time to time, upon demand by such Lender to the Agent and by the Agent to the Borrowers (which demand shall be accompanied by a statement setting forth the basis for such demand and a calculation of the amount thereof in reasonable detail), the Borrowers shall pay to the Agent for the benefit of such Lender such additional amount or amounts as will compensate such Lender or such controlling Person for such reduction.

        8.2    Basis for Determining Interest Rate Inadequate or Unfair.    If with respect to any Interest Period:

        (a)  deposits in Dollars (in the applicable amounts) are not being offered to the Reference Bank in the London interbank market for such Interest Period, or the Agent otherwise determines (which determination, if made in good faith, shall be binding and conclusive on the Borrowers) that by reason of circumstances affecting the London interbank market adequate and reasonable means do not exist for ascertaining the applicable LIBO Rate; or

        (b)  Lenders having an aggregate Percentage of 55% or more advise the Agent in writing that the Adjusted LIBO Rate as determined by the Agent will not adequately and fairly reflect the cost to such Lenders of maintaining or funding such LIBO Rate Loans for such Interest Period (taking into account any amount to which such Lenders may be entitled under Section 8.1) or that the making or funding of LIBO Rate Loans has become impracticable as a result of an event occurring after the date of this Agreement;

then the Agent shall promptly notify the other parties thereof and, so long as such circumstances shall continue, (i) no Lender shall be under any obligation to make or convert into LIBO Rate Loans and (ii) on the last day of the current Interest Period for each LIBO Rate Loan, such Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan.

        8.3    Changes in Law Rendering LIBO Rate Loans Unlawful.    If any change in (including the adoption of any new) applicable law or regulation of the United States, or any change in the interpretation of applicable law or regulation of the United States by any governmental or other regulatory body charged with the administration thereof, should make it (or in the good faith judgment of any Lender cause a substantial question as to whether it is) unlawful for any Lender to make, maintain or fund LIBO Rate Loans, then such Lender shall promptly notify each of the other parties hereto and, so long as such circumstances shall continue, (a) such Lender shall have no obligation to make or convert into LIBO Rate Loans (but shall make Base Rate Loans concurrently with the making of or conversion into LIBO Rate Loans by the Lenders which are not so affected, in each case in an amount equal to such Lender's pro rata share of all LIBO Rate Loans which would be made or converted into at such time in the absence of such circumstances) and (b) on the last day of the current Interest Period for each LIBO Rate Loan of such Lender (or, in any event, on such earlier date as may be required by the relevant law, regulation or interpretation), such LIBO Rate Loan shall, unless then repaid in full, automatically convert to a Base Rate Loan. Each Base Rate Loan made by a

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Lender which, but for the circumstances described in the foregoing sentence, would be a LIBO Rate Loan (an "Affected Loan") shall remain outstanding for the same period as the LIBO Rate Loans of which such Affected Loan would be a part absent such circumstances.

        8.4    Funding Losses.    The Borrowers hereby agree that upon demand by any Lender to the Agent and by the Agent to the Borrowing Agent (which demand shall be accompanied by a statement setting forth the basis for the amount being claimed), the Borrowers will indemnify such Lender against any net loss or expense which such Lender may sustain or incur (including any net loss or expense incurred by reason of the liquidation or reemployment of deposits or other funds acquired by such Lender to fund or maintain any LIBO Rate Loan) as a result of (a) any payment, prepayment or conversion of any LIBO Rate Loan of such Lender on a date other than the last day of an Interest Period for such Loan (including any conversion pursuant to Section 8.3) or (b) any failure of Borrowing Agent to borrow or convert any Loan on a date specified therefor in a notice of borrowing or conversion pursuant to this Agreement. Any indemnification obligation of the Borrowers under this Section 8.4 will be paid to the Agent for the benefit of the applicable Lenders. For this purpose, all notices to the Agent pursuant to this Agreement shall be deemed to be irrevocable.

        8.5    Notices by Lenders.    Each Lender will promptly notify the Borrowing Agent and the Agent of any event of which it has knowledge, occurring after the date hereof, which will entitle such Lender to compensation pursuant to Section 8.1, 8.2, 8.3 or 8.4. If any Lender fails to give such notice within forty-five days after it obtains knowledge of such an event, such Lender shall, with respect to compensation payable pursuant to the applicable Section hereof, only be entitled to payment under such Section for costs incurred from and after the date forty-five days prior to the date that such Lender does give such notice.

        8.6    Discretion of Lenders as to Manner of Funding.    Notwithstanding any provision of this Agreement to the contrary, each Lender shall be entitled to fund and maintain its funding of all or any part of its Loans in any manner it sees fit, it being understood, however, that for the purposes of this Agreement all determinations hereunder shall be made as if such Lender had actually funded and maintained each LIBO Rate Loan during each Interest Period for such Loan through the purchase of deposits having a maturity corresponding to such Interest Period and bearing an interest rate equal to the LIBO Rate for such Interest Period.

        8.7    Mitigation of Circumstances; Replacement of Lenders.    In the event the Borrowers become obligated to pay additional amounts to any Lender pursuant to Section 8.1, the Borrowing Agent or the Agent may designate another lender which is acceptable to the Agent in its reasonable discretion (such other lender being herein called a "Replacement Lender") to purchase the Loans of such Lender and such Lender's rights hereunder, without recourse to or warranty by, or expense to, such Lender for a purchase price equal to the outstanding principal amount of the Loans payable to such Lender plus any accrued but unpaid interest on such Loans and accrued but unpaid fees in respect of such Lender's Commitments and any other amounts payable to such Lender under this Agreement, and to assume all the obligations of such Lender hereunder, and, upon such purchase, such Lender shall no longer be a party hereto or have any rights hereunder (other than indemnities and other similar rights applicable to such Lender prior to the date of such assignment and assumption) and shall be relieved from all obligations to the Borrowers hereunder, and the Replacement Lender shall succeed to the rights and obligations of such Lender hereunder.

        8.8    Conclusiveness of Statements; Survival of Provisions.    Determinations and statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be conclusive absent manifest error. Lenders may use reasonable averaging and attribution methods in determining compensation under Sections 8.1 and 8.4, and the provisions of such Sections shall survive repayment of the Loans, cancellation of the Notes, cancellation or expiration of the Letters of Credit and any termination of this Agreement.

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        SECTION 9. REPRESENTATIONS AND WARRANTIES.

        To induce the Agent and the Lenders to enter into this Agreement and to induce the Lenders to make Loans and arrange for and purchase participations in Letters of Credit hereunder, the Credit Parties executing this Agreement, jointly and severally, make the following representations and warranties to the Agent and each Lender with respect to all Credit Parties, each and all of which shall survive the execution and delivery of this Agreement:

        9.1    Organization.    Each Credit Party is duly organized, validly existing and in good standing under the laws of its jurisdiction of organization. Each Credit Party is in good standing and is duly qualified to do business in each jurisdiction where, because of the nature of its respective activities or properties, such qualification is required, except for such jurisdictions where the failure to so qualify would not have a Material Adverse Effect.

        9.2    Authorization; No Conflict.    Each Credit Party is duly authorized to execute and deliver the Loan Documents to which it is a party, is duly authorized to borrow monies hereunder and is and will continue to be duly authorized to perform its obligations under the Loan Documents. The execution, delivery and performance by each Credit Party of this Agreement and the other Loan Documents to which it is a party, and the borrowings by the Borrowers hereunder, do not and will not (a) require any consent or approval of any governmental agency or authority that has not been obtained, (b) conflict with (i) any provision of applicable law, (ii) the Governing Documents of any Borrower, (iii) any material agreement binding upon any Borrower, or its properties or assets or (iv) any court or administrative order or decree applicable to any Borrower or (c) require, or result in, the creation or imposition of any Lien on any asset of any Borrower (other than Liens in favor of the Agent created pursuant to the Loan Documents).

        9.3    Validity and Binding Nature.    Each of this Agreement and the other Loan Documents to which any Credit Party is a party is the legal, valid and binding obligation of such Credit Party, enforceable against such Credit Party in accordance with its terms, as such enforceability shall be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and general principles of equity.

        9.4    Financial Condition.    The audited consolidated financial statements of OSM and its Subsidiaries for the year ended December 31, 2001 and the unaudited consolidated financial statements of OSM and its Subsidiaries for the portion of 2002 to and including May 31, 2002, copies of which have been furnished prior to the Closing Date to the Agent (and, after the delivery of any financial statements required to be delivered hereunder, such financial statements), were prepared in accordance with GAAP (subject, in the case of any such unaudited financial statements, to normal year-end adjustments and the absence of footnotes) and fairly present the financial position and results of operations of OSM and its consolidated Subsidiaries for the periods covered thereby. No Credit Party has any liability or unusual or long-term commitment (other than pursuant to the transactions contemplated hereby to occur on the Closing Date) that could reasonably be expected to have a Material Adverse Effect and that is not reflected in the financial statements referred to above or in the footnotes to the May 31, 2002 consolidated financial statements of OSM and its Subsidiaries previously delivered to the Agent.

        9.5    No Material Adverse Change.    Since December 31, 2001, there has been no Material Adverse Effect.

        9.6    Litigation and Contingent Liabilities.    No injunction or temporary restraining order prohibits the making of the Loans or the issuance of the Letters of Credit and no litigation (including derivative actions), arbitration proceeding, governmental investigation or other proceeding is pending or, to any Credit Party's knowledge, is threatened in writing against any Credit Party that could reasonably be expected to have a Material Adverse Effect. Item 9.6 of the Disclosure Schedule sets forth all material

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pending and, to the knowledge of the Credit Parties, threatened in writing, litigation, investigations and proceedings against any Credit Party.

        9.7    Ownership of Properties; Liens.    The Credit Parties own good title to all of their respective properties and assets, free and clear of all Liens, charges and claims except as permitted pursuant to Section 10.8.

        9.8    Subsidiaries.    Set forth in Item 9.8 of the Disclosure Schedule is a complete and accurate list of each Credit Party and each direct and indirect Subsidiary of each Credit Party, and a complete and accurate designation of the owners of each Credit Party (other than OSM) and each direct and indirect Subsidiary of each Credit Party, and the percentage ownership of each such owner as of the Closing Date. Other than as set forth in Item 9.8 of the Disclosure Schedule, there are no subscriptions, options, warrants or calls relating to any equity or other ownership interests relating to any Credit Party, including without limitation, any right of conversion or exchange. Except as set forth in Item 9.8 of the Disclosure Schedule, no Credit Party is subject to any obligation (contingent or otherwise) to repurchase or otherwise acquire or retire any equity or other ownership interests of such Credit Party.

        9.9    Pension and Welfare Plans.

        (a)  No steps have been taken to terminate any Pension Plan which could give rise to any liability on the part of any Borrower or any other member of the Controlled Group as of the Closing Date or the date of the making of any Loan or the issuance of any Letter of Credit; no contribution failure has occurred with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; and no condition exists or event or transaction has occurred with respect to any Pension Plan that could result in the incurrence by any Borrower or any other member of the Controlled Group of any material liability, excise tax, fine or penalty. No Borrower nor any other members of the Controlled Group has contingent liability with respect to any post-retirement benefit under a Welfare Plan, other than liability for continuation coverage described in Part 6 of Subtitle B of Title I of ERISA.

        (b)  All contributions (if any) have been made to any Multiemployer Pension Plan that are required to be made by any Borrower or any other member of the Controlled Group under the terms of the plan or of any collective bargaining agreement or by applicable law; no Borrower nor any member of the Controlled Group has withdrawn or partially withdrawn from any Multiemployer Pension Plan, incurred any withdrawal liability with respect to any such plan, received notice of any claim or demand for withdrawal liability or partial withdrawal liability from any such plan, and no condition has occurred that, if continued, might result in a withdrawal or partial withdrawal from any such plan; and no Borrower nor any member of the Controlled Group has received any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of any excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent.

        9.10    Investment Company Act.    No Credit Party is an "investment company" or a company "controlled" by an "investment company", within the meaning of the Investment Company Act of 1940.

        9.11    Public Utility Holding Company Act.    No Credit Party is a "holding company", or a "subsidiary company" of a "holding company", or an "affiliate" of a "holding company" or of a "subsidiary company" of a "holding company", within the meaning of the Public Utility Holding Company Act of 1935.

        9.12    Regulation U.    No Credit Party is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying Margin Stock.

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        9.13    Taxes.    Each Credit Party has timely filed all tax returns and reports required by law to have been filed by it and has paid all taxes and governmental charges thereby shown to be owing, except any such taxes or charges that are being diligently contested in good faith by appropriate proceedings and for which adequate reserves in accordance with GAAP shall have been set aside on its books and any taxes which are accrued and not yet payable. No Credit Party is aware of any proposed material tax assessments against any Credit Party.

        9.14    Solvency, etc.

        On the Closing Date, and immediately prior to and after giving effect to the issuance of each Letter of Credit and each borrowing hereunder and the use of the proceeds thereof, each Borrower will be solvent, will be able to pay its debts as they mature, will own property with a value both at fair valuation and at present fair saleable value materially greater than the amount required to pay its debts and will have capital sufficient to carry on its business as then constituted.

        9.15    Environmental Matters.

        (a)  No Violations. Except as set forth in Item 9.15 of the Disclosure Schedule, no Credit Party nor any operator of any Credit Party's properties is in violation, or alleged violation, of any judgment, decree, order, law, permit, license, rule or regulation pertaining to Environmental Matters or any Environmental Law, that in any single case, requires expenditures in any three-year period of $1,000,000 or more by such Credit Party in penalties and/or for investigative, removal or remedial actions.

        (b)  Notices. Except as set forth in Item 9.15 of the Disclosure Schedule, no Credit Party has received notice from any third party, including any federal, state or local governmental authority: (a) that such Credit Party has been identified by the U.S. Environmental Protection Agency as a potentially responsible party under CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R. Part 300 Appendix B; (b) that any Hazardous Substance, that such Credit Party has generated, transported or disposed of has been found at any site at which a federal, state or local agency or other third party has conducted a remedial investigation, removal or other response action pursuant to any Environmental Law that, in any single case, requires expenditures in any three-year period of $1,000,000 or more by such Credit Party in penalties and/or for investigative, removal or remedial actions; (c) that such Credit Party must conduct a remedial investigation, removal, response action or other activity pursuant to any Environmental Law that, in any single case, requires expenditures in any three-year period of $1,000,000 or more by such Credit Party in penalties and/or for investigative, removal or remedial actions; or (d) of any Environmental Claim that, in any single case, requires expenditures in any three-year period of $1,000,000 or more by such Credit Party in penalties and/or for investigative, removal or remedial actions.

        (c)  Handling of Hazardous Substances. Except as set forth in Item 9.15 of the Disclosure Schedule, (i) no portion of the real property or other assets of any Credit Party has been used for the handling, processing, storage or disposal of Hazardous Substances except in accordance in all material respects with applicable Environmental Laws; and no underground tank or other underground storage receptacle for Hazardous Substances is located on such properties that requires expenditures by the Credit Parties in any three-year period of $1,000,000 or more in any single case or $5,000,000 in the aggregate in penalties and/or for investigative, removal or remedial actions; (ii) in the course of any activities conducted by any Credit Party, or the operators of any real property of any Credit Party, no Hazardous Substances have been generated or are being used on such properties except in accordance in all material respects with applicable Environmental Laws; (iii) there have been no Releases or threatened Releases of Hazardous Substances on, upon, into or from any real property or other assets of any Credit Party, which Releases singly or in the aggregate might reasonably be expected to have a material adverse effect on the value of such real property or assets; (iv) there have been no Releases on, upon, from or into any real property in

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the vicinity of the real property or other assets of any Credit Party that, through soil or groundwater contamination, may have come to be located on, and that might reasonably be expected to have a material adverse effect on the value of, the real property or other assets of such Credit Party; and (v) any Hazardous Substances generated by any Credit Party have been transported offsite only by properly licensed carriers and delivered only to treatment or disposal facilities maintaining valid permits as required under applicable Environmental Laws, which transporters and facilities to the knowledge of the Credit Parties have been and are operating in compliance in all material respects with such permits and applicable Environmental Laws.

        (d)  Investigations. Except as set forth in Item 9.15 of the Disclosure Schedule, each Credit Party has taken all steps required by Environmental Laws to investigate the past and present condition and usage of the real property of such Credit Party and the operations conducted by such Credit Party and the operations conducted by such Credit Party with regard to environmental matters.

        (e)  The matters identified in Item 9.15 of the Disclosure Schedule, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

        9.16    Insurance.    Set forth in Item 9.16 of the Disclosure Schedule is a complete and accurate summary of the property and casualty insurance program of each Credit Party as of the Closing Date (including the names of all insurers, policy numbers, expiration dates, amounts and types of coverage, annual premiums, exclusions, deductibles, self-insured retention, and a description in reasonable detail of any self-insurance program, retrospective rating plan, fronting arrangement or other risk assumption arrangement involving such Credit Party).

        9.17    Information.    All information heretofore or contemporaneously herewith furnished in writing by any Borrower to the Agent or any Lender for purposes of or in connection with this Agreement (including without limitation information furnished with respect to any other Credit Party) and the transactions contemplated hereby is, and all written information hereafter furnished by or on behalf of any Borrower to the Agent or any Lender pursuant hereto or in connection herewith (including without limitation information furnished with respect to any other Credit Party) will be, true and accurate in every material respect on the date as of which such information is dated or certified, and none of such information is or will be incomplete by omitting to state any material fact necessary to make such information not misleading in light of the circumstances under which made (it being recognized by the Agent and the Lenders that any projections and forecasts provided by any Borrower are based on good faith estimates and assumptions believed by such Borrower to be reasonable as of the date of the applicable projections or assumptions and that actual results during the period or periods covered by any such projections and forecasts may differ from projected or forecasted results).

        9.18    Intellectual Property.    Each Credit Party owns and possesses or has a license or other right to use all such patents, patent rights, trademarks, trademark rights, trade names, trade name rights, service marks, service mark rights and copyrights as are necessary for the conduct of the business of such Credit Party, without any infringement upon rights of others that could reasonably be expected to have a Material Adverse Effect.

        9.19    Burdensome Obligations.    No Credit Party is party to any agreement or contract or subject to any corporate or organization restriction that could reasonably be expected to have a Material Adverse Effect.

        9.20    Labor Matters.    Except as set forth in Item 9.20 of the Disclosure Schedule, no Credit Party is subject to any labor or collective bargaining agreement and there are no existing or threatened strikes, lockouts or other labor disputes involving any Credit Party that singly or in the aggregate could reasonably be expected to have a Material Adverse Effect. Item 9.20 of the Disclosure Schedule sets forth all existing or threatened strikes or other material labor disputes involving any Credit Party. Hours worked by and payment made to employees of each Credit Party are not in violation in any

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material respect of the Fair Labor Standards Act or any other applicable law, rule or regulation dealing with such matters.

        9.21    No Default.    No Event of Default or Unmatured Event of Default exists or would result from the incurring by any Borrower of any Debt hereunder or under any other Loan Document. No Credit Party is in default with respect to any indenture, loan agreement, lease, deed, contract or other agreement to which such Credit Party is a party, that individually or in the aggregate could reasonably be expected to have a Material Adverse Effect.

        9.22    Material Licenses.    Except as disclosed in Item 9.22 of the Disclosure Schedule, each material license is in full force and effect and no event has occurred or failed to occur which with the giving of notice or passage of time or both would constitute a default under any such license and each Credit Party has, and is current and in good standing with respect to, all governmental approvals, permits, certificates, inspections, consents and franchises necessary to continue to conduct its business as heretofore conducted, and to own or lease and operate the properties now owned or leased by it.

        9.23    No Violations.    Except as disclosed in items 9.15 and 9.20 of the Disclosure Schedule, no Credit Party is in violation of any applicable statute, regulation or ordinance of any governmental entity, or of any agency thereof, which could reasonably be expected to have a Material Adverse Effect.

        9.24    Locations.    The offices or locations where each Borrower keeps the Collateral and books and records concerning the Collateral, including, without limitation, computer programs, printouts and other computer materials, are at the locations set forth in Item 9.24 of the Disclosure Schedule (as such Items are amended from time to time to include additional locations permitted under Section 10.24), and the addresses specified on such schedule include and designate each Borrower's chief executive office, chief place of business and other offices and places of business and are the Borrowers' sole offices and places of business. Item 9.24 of the Disclosure Schedule separately identifies all of such offices or locations which are not owned by any Borrower and sets forth the respective owners thereof.

        9.25    Names.    No Borrower has, during the preceding five years, been known as or used any other corporate, trade or fictitious name, except as disclosed in Item 9.25 of the Disclosure Schedule.

        9.26    First Priority Perfected Liens.    The Liens granted to the Agent pursuant to the Loan Documents are fully perfected first priority Liens in and to the Collateral, subject only to the Liens permitted by Section 10.8.

        9.27    Accounts and Inventory Warranties and Representations.    With respect to its Accounts and Inventory, each of the Borrowers represents and warrants to the Agent that the Agent may rely, in determining which items of Accounts and Inventory listed on any schedule of Accounts and Inventory are Eligible Accounts and Eligible Inventory, on all statements or representations made by the Borrowing Agent or with respect to any such schedule and, unless otherwise indicated in writing by the Borrowing Agent that such Accounts and Inventory meet all of the required criteria of Eligible Accounts and Eligible Inventory.

        9.28    Bank Accounts.Item 9.28 of the Disclosure Schedule sets forth the account numbers and locations of all bank accounts of the Borrowers.

        9.29    Business Activities.    As of the Closing Date, (i) each of the Credit Parties (other than Oregon Steel de Guayana, Inc., OSM Glassification, Inc., Glassification International Ltd., New CF&I, OSM Distribution, Inc., Oregon Steel Mills Processing, Inc., The Union Ditch and Water Company) is engaged in the business of producing, processing, selling and distributing custom plate and hot rolled coil for welded pipe and tubing, (ii) each of Oregon Steel de Guayana, Inc., OSM Glassification, Inc. and Glassification International Ltd. is not engaged in any business activity and does not maintain any material assets or liabilities, and (iii) each of New CF&I, OSM Distribution, Inc. and Oregon Steel Mills Processing, Inc. is engaged solely in the business of acting as the general partner and/or holding

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company, as applicable, of those entities identified in Item 9.8 of the Disclosure Schedule as Subsidiaries of such Person.

        9.30    Securities Laws Filings.    OSM has timely made all filings required to be made by it under all applicable state and federal securities laws, rules and regulations; all information contained in such filings is true and correct in all material respects and does not omit any statement necessary so that such information is not materially misleading, in each case, as of the date of the applicable filing.

        SECTION 10. COVENANTS.

        Until the expiration or termination of the Commitments and thereafter until all Obligations are paid in full and all Letters of Credit have been terminated, each Borrower jointly and severally agrees that, unless at any time the Required Lenders shall otherwise expressly consent in writing:

        10.1    Reports, Certificates and Other Information.

        10.1.1    Financial Information.    OSM will furnish to the Agent and all Lenders:

          (i)  as soon as available, but not later than ninety days after the close of each Fiscal Year of OSM hereafter, audited consolidated and unaudited consolidating financial statements of OSM and its consolidated Subsidiaries as at the end of such year certified without exception or qualification by a firm of independent certified public accountants of recognized standing, acceptable to the Agent and selected by OSM, together with any management letter and any other letters or certificates supplied by OSM to such accountants;

        (ii)  concurrently with the delivery of the financial statements described in subsection (i) above, (a) a certificate of the Borrowing Agent demonstrating in reasonable detail showing the calculations used in determining the financial covenants and certifying as to compliance therewith, and (b) a certificate of such certified public accountants to the effect that, based upon their examination of the affairs of OSM and its Subsidiaries performed in connection with the preparation of said financial statements, they are not aware of the existence of any condition or event which constitutes or would, upon notice or lapse of time or both, constitute an Event of Default or, if they are aware of such condition or event, the nature thereof;

        (iii)  (a) as soon as available, but not later than twenty-five (25) days after the end of each month, unaudited interim internal consolidated and consolidating income statements, unaudited internal consolidated and consolidating balance sheets and unaudited internal consolidated and consolidating statements of cash flows, and a statement by OSM's principal financial officer showing in reasonable detail the calculations used in determining the financial covenants set forth in Sections 10.6 and certifying as to compliance therewith and declaring that all such financial statements were prepared in accordance with GAAP (subject to normal year-end adjustments and the absence of footnotes) and fairly present the financial position and results of operations of OSM and its consolidated Subsidiaries for such period;

        (b)  as soon as available, but not later than thirty days after the end of each Fiscal Quarter, unaudited consolidated and consolidating income statements, unaudited consolidated and consolidating balance sheets and internal consolidated and consolidating statements of cash flows, and (i) the Quarterly Board Report and (ii) a statement by OSM's principal financial officer showing in reasonable detail the calculations used in determining the financial covenants set forth in Sections 10.6 and certifying as to compliance therewith and declaring that all such financial statements were prepared in accordance with GAAP (subject to normal year-end adjustments and the absence of footnotes) and fairly present the financial position and results of operations of OSM and its consolidated Subsidiaries for such period and a narrative report from management

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discussing results for such period in comparison to the operating plan previously delivered to the Lenders for such period;

        (iv)  as soon as possible, but not later than thirty (30) days following the beginning of each Fiscal Year, a copy of OSM's operating plan for such Fiscal Year, as approved by the Board of Directors of OSM, which shall include on a consolidated basis for OSM and its Subsidiaries quarterly cash flow projections, quarterly balance sheet projections and projected monthly income statements, a Capital Expenditure budget, Environmental Expenditures budget and projected collateral availability as of each month end, all in reasonable detail, and accompanied by a certificate of OSM's principal financial officer to the effect that (i) such projections, plan and budget were prepared by OSM in good faith, (ii) OSM has a reasonable basis for the assumptions contained in such projections plan and budget, and (iii) such projections plan and budget have been prepared in accordance with such assumptions;

        (v)  as soon as possible, but not later than the twenty-fifth day after the end of each calendar month or at such other times as may be requested by the Agent from time to time hereafter, (a) an accounts receivable and accounts payable aging report for such month for each Borrower, (b) a calculation of ineligible Accounts and Inventory for such month for each Borrower, and (c) inventory reports for such month by category; and

        (vi)  as soon as possible, but not later than the tenth day after filing by OSM, (a) 10-Q quarterly reports, Form 10-K annual reports and Form 8-K current reports, (b) any other filings made by any Credit Party with the SEC and (c) any other information that is provided by OSM to its shareholders generally.

        10.1.2    Notice of Default, Litigation and ERISA Matters.    Promptly upon any Borrower becoming aware of any of the following, the Borrowing Agent will furnish to the Agent and each Lender written notice describing the same and summarizing the steps being taken by the applicable Credit Party affected thereby with respect thereto:

        (a)  the occurrence of an Event of Default or an Unmatured Event of Default;

        (b)  any litigation, arbitration or governmental investigation or proceeding not previously disclosed by any Credit Party to the Lenders which has been instituted or, to the knowledge of such Credit Party, is threatened in writing against such Credit Party or to which any of the properties of any thereof is subject that could reasonably be expected to have a Material Adverse Effect;

        (c)  the institution of any steps by any member of the Controlled Group or any other Person to terminate any Pension Plan, or the failure of any member of the Controlled Group to make a required contribution to any Pension Plan (if such failure is sufficient to give rise to a Lien under Section 302(f) of ERISA) or to any Multiemployer Pension Plan, or the taking of any action with respect to a Pension Plan that could result in the requirement that any Borrower or any other member of the Controlled Group furnish a bond or other security to the PBGC or such Pension Plan, or the occurrence of any event with respect to any Pension Plan or Multiemployer Pension Plan that could result in the incurrence by any member of the Controlled Group of any material liability, excise tax fine or penalty (including any claim or demand for withdrawal liability or partial withdrawal from any Multiemployer Pension Plan), or any material increase in the contingent liability of any Borrower or any other member of the Controlled Group with respect to any post-retirement Welfare Plan benefit, or any notice that any Multiemployer Pension Plan is in reorganization, that increased contributions may be required to avoid a reduction in plan benefits or the imposition of an excise tax, that any such plan is or has been funded at a rate less than that required under Section 412 of the Code, that any such plan is or may be terminated, or that any such plan is or may become insolvent;

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        (d)  any cancellation or material change in any provisions or terms of any insurance maintained by any Credit Party, in either case which is not remedied to the Agent's satisfaction within 30 days;

        (e)  any event (including (i) any violation of any Environmental Law or the assertion of any Environmental Claim or (ii) the enactment or effectiveness of any law, rule or regulation) that could reasonably be expected to have a Material Adverse Effect; or

        (f)    any Lien (other than Liens permitted by Section 10.8) to which any of the Collateral is subject, and any material setoff, claims, withholdings or other defenses to which any of the Collateral or the Agent's or any Lenders' rights with respect to the Collateral, are subject.

        10.1.3    Borrowing Base Certificates.    On Thursday of each calendar week, and at such other times as may be requested by the Agent from time to time hereafter, the Borrowing Agent on behalf of the Borrowers shall deliver to the Agent and each Lender a Borrowing Base Certificate for the 7-day period from Thursday of the prior week through Wednesday of such week, together with (i) a schedule reflecting all sales made, credits issued, inventory activity, ineligibles calculations, summary receivables agings, summary payables agings, summary inventory ledgers and collections received during such 7-day period and (ii) a schedule, updated not later than the twentieth day after each month, reflecting detailed accounts receivable agings, detailed accounts payables agings and reflecting perpetual inventory by category, in each case as of the last day of such month, in each case with such supporting detail as the Agent shall request; provided, however, that at any time that the average aggregate Loans plus the Letter of Credit Reserve is less than 10% of the Maximum Amount for any monthly period, Borrowers shall only be required to deliver such Borrowing Base Certificates on a monthly basis (by the 10th Business Day of each calendar month). At such times as may be requested by the Agent from time to time hereafter, each Credit Party shall deliver to the Agent (i) such additional schedules, certificates, reports and information with respect to the Collateral as the Agent may from time to time require and (ii) a collateral assignment of any or all items of Collateral to the Agent.

        10.1.4    Tax Returns.    As soon as available with respect to each Fiscal Year, the Borrowing Agent shall deliver to the Agent true and correct copies of the Borrowers' respective federal and state income tax returns as filed and all schedules thereto.

        10.1.5    Other Information.    From time to time the Borrowing Agent shall deliver to the Agent such other information concerning any Credit Party as any Lender or the Agent may reasonably request.

        10.2    Books, Records and Inspections.    Each Borrower shall, and shall cause each other Credit Party consolidated with OSM for financial reporting purposes to, keep its books and records in accordance with sound business practices sufficient to allow the preparation of financial statements in accordance with GAAP, permit the Agent or any representative thereof to inspect the properties and operations of any Credit Party and permit at any reasonable time and with reasonable notice (or at any time without notice if an Event of Default exists), the Agent or any representative thereof to visit any or all of its offices, to discuss its financial matters with such Credit Party's officers and its independent auditors (and the Borrowers hereby authorize such independent auditors to discuss such financial matters with the Agent or any representative thereof), and to examine (and, at the expense of the Borrowers, photocopy extracts from) any of its books or other records; and permit the Agent and its agents and employees to inspect the Inventory and other tangible assets of such Credit Party; and to inspect, audit, check and make copies of and extracts from the books, records, computer data and records, computer programs, journals, orders, receipts, correspondence and other data relating to Accounts and Inventory or any other Collateral; provided, that so long as no Event of Default has occurred and is continuing, the Agent will conduct no more than four inspections under this Section 10.2 in any calendar year. All such inspections or audits by the Agent shall be at the Borrowers'

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expense as described in Section 5.4. Any Lender shall have the right to accompany Agent or any representative thereof on any inspection or audit of the properties and operations of any Credit Party, including any discussions with independent auditors; provided that the cost thereof shall be paid by the Borrower only during the existence of an Event of Default.

        10.3    Maintenance of Property; Insurance.    Each Borrower shall, and shall cause each other Credit Party to:

        (a)  Keep all property useful and necessary in its business in good working order and condition, ordinary wear and tear excepted, and make necessary and proper repairs, renewals and replacements so that its business carried on in connection therewith may be properly conducted at all times unless such Credit Party determines in good faith that the continued maintenance of any such properties is no longer economically desirable and except for properties that may be the subject of sales and other dispositions permitted under Section 10.11.

        (b)  Maintain with responsible insurance companies, such insurance as may be required by any law or governmental regulation or court decree or order applicable to it and such other insurance, to such extent and against such hazards and liabilities, as is customarily maintained by companies similarly situated, including, without limitation, business interruption insurance; and, upon request of the Agent, furnish to the Agent a certificate setting forth in reasonable detail the nature and extent of all insurance maintained by such Credit Party. In addition to, and without limiting the foregoing, each Credit Party will maintain customary insurance commercially reasonable in the industry on Inventory in international transit. Each Borrower shall cause each issuer of an insurance policy to provide the Agent with an endorsement (i) showing loss payable to the Agent with respect to each policy of property or casualty insurance covering Collateral and naming the Agent for the benefit of the Lenders as an additional insured with respect to each policy of insurance for liability for personal injury and property damage, in each case, covering Collateral, (ii) providing that 30 days' notice will be given to the Agent prior to any cancellation of, material reduction or change in coverage provided by or other material modification to such policy and (iii) reasonably acceptable in all other respects to the Agent.

        (c)  UNLESS THE BORROWERS PROVIDE THE AGENT WITH EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE AGENT MAY PURCHASE INSURANCE AT THE BORROWERS' EXPENSE TO PROTECT THE AGENT'S AND THE LENDERS' INTERESTS IN THE COLLATERAL. THIS INSURANCE MAY, BUT NEED NOT, PROTECT ANY BORROWER'S INTERESTS. THE COVERAGE THAT THE AGENT PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST ANY CREDIT PARTY IN CONNECTION WITH THE COLLATERAL. THE BORROWING AGENT MAY LATER CANCEL ANY INSURANCE PURCHASED BY THE AGENT, BUT ONLY AFTER PROVIDING THE AGENT WITH EVIDENCE THAT EACH BORROWER HAS OBTAINED INSURANCE AS REQUIRED BY THIS AGREEMENT. IF THE AGENT PURCHASES INSURANCE FOR THE COLLATERAL, THE BORROWERS WILL BE RESPONSIBLE FOR THE COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY BE IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE INSURANCE MAY BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING HEREUNDER. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF THE INSURANCE THE BORROWERS MAY BE ABLE TO OBTAIN ON THEIR OWN.

        10.4    Compliance with Laws; Payment of Taxes and Liabilities.    Each Borrower shall, and shall cause each other Credit Party to: (i) comply in all material respects with all applicable laws (including Environmental Laws), rules, regulations, decrees, orders, judgments, licenses and permits; and (ii) pay prior to delinquency, all taxes and other governmental charges against it or any of its property, as well

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as claims of any kind that, if unpaid, might become a Lien on any of its property; provided, however, that the foregoing shall not require any Credit Party to pay any such tax or charge so long as it shall contest the validity thereof in good faith by appropriate proceedings and shall set aside on its books adequate reserves with respect thereto in accordance with GAAP.

        10.5    Maintenance of Existence, etc.

        Each Borrower shall, and shall cause each other Credit Party to: maintain and preserve (a) its existence and good standing in the jurisdiction of its organization and (b) its qualification and good standing as a foreign entity in each jurisdiction where the nature of its business makes such qualification necessary (except in those instances in which the failure to be qualified or in good standing could not have a Material Adverse Effect).

        10.6    Financial Covenants.    The Borrowers shall:

        (a)    Minimum Consolidated EBITDA.    Not permit Consolidated EBITDA for the twelve-month period ending on the last day of each Fiscal Quarter set forth below to be less than the amount set forth below next to such Fiscal Quarter:

Fiscal Quarter ending:	Consolidated EBITDA:
June 30, 2002	$	70,000,000
September 30, 2002	$	70,000,000
December 31, 2002	$	80,000,000
Each Fiscal Quarter ending thereafter	$	80,000,000

        (b)  Minimum Fixed Charge Coverage Ratio. Not permit the Fixed Charge Coverage Ratio for the 12-month period ending on the last day of each Fiscal Quarter set forth below to be less than the ratio set forth next to such Fiscal Quarter:

Fiscal Quarter ending:	Fixed Charge Coverage Ratio:
June 30, 2002	1.60:1.00
September 30, 2002	1.60:1.00
December 31, 2002	1.75:1.00
March 31, 2003	1.75:1.00
June 30, 2003	1.75:1.00
Each Fiscal Quarter ending thereafter	1.60:1.00

        (c)  Maximum Senior Debt Ratio. Not permit the Senior Debt Ratio to exceed at any time 4.00:1.00.

        (d)  Minimum Consolidated Tangible Net Worth. Not permit Consolidated Tangible Net Worth at any time during any Fiscal Quarter ending after June 30, 2002 to be less than the Benchmark (defined below). For purposes of this Section 10.6(d), the term "Benchmark" shall mean (i) with respect to the Fiscal Quarter ending March 31, 2002, $280,000,000 and (ii) with respect to any subsequent Fiscal Quarter in any Fiscal Year, the Benchmark as of December 31 of the immediately preceding Fiscal Year plus an amount equal to the product of (A) 80% and (B) the positive Net Income (if any) for the period beginning January 1 of such Fiscal Year through and including the end of such Fiscal Quarter.

        (e)  Capital Expenditures. Not make Capital Expenditures through the end of any Fiscal Year in excess of $20,000,000 for all Credit Parties on a combined basis with respect to such Fiscal Year; provided, that the amount of permitted Capital Expenditures will be increased in any Fiscal Year by the positive amount (if any) equal to the lesser of (i) the difference obtained by subtracting the actual amount of Capital Expenditures expended during the prior Fiscal Year from $20,000,000 and (ii) $10,000,000 (such lesser amount being the "Capex Carry Over Amount"), and for purposes

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of measuring compliance herewith, the Capex Carry Over Amount shall be deemed to be the last amount spent on Capital Expenditures in that succeeding Fiscal Year.

        10.7    Limitations on Debt.    (a) No Borrower shall nor shall any Borrower cause or permit any other Credit Party to, create, incur, assume or have outstanding any Debt, except: (i) Debt arising under the Loan Documents (including Letters of Credit); (ii) Debt existing on the date hereof and set forth in Item 10.7 of the Disclosure Schedule, including renewals, refinancings and extensions of such Debt on reasonably similar terms and conditions; (iii) Debt in respect of any Borrower's obligations under the 2002 Bond Indenture; (iv) Debt constituting Permitted Intercompany Loans; (v) other Debt for borrowed money in an aggregate outstanding amount for all Credit Parties not exceeding $10,000,000 at any time and which Debt is either (A) unsecured or (B) incurred to finance the acquisition of fixed assets by any Credit Party (including for purposes hereof Capital Leases) and secured solely by Liens on the fixed assets acquired with the proceeds of such Debt, including any renewals, refinancings and extensions thereof on terms and conditions no less favorable to the applicable Credit Party and the Agent and Lenders; (vi) Debt for borrowed money incurred by the Camrose Parties, Feralloy and LSI so long as no other Credit Party has any Suretyship Liability (or any other liability, whether contingent or absolute) in respect of such Debt; and (vii) exposure not exceeding at any time $500,000 in respect of Hedging Obligations entered into in the ordinary course of business and not for speculative purposes. Except as otherwise permitted by this Agreement, no Credit Party shall pay any obligation or indebtedness (other than Debt constituting Permitted Intercompany Loans) before the same is due in the ordinary course (without acceleration).

        (b)  No Borrower shall, nor shall any Borrower permit any other Credit Party to, directly or indirectly, voluntarily repurchase, redeem, defease or prepay any of the 2002 Bonds except in accordance with this Agreement.

        (c)  1996 Bond Repayment. Concurrently with the funding of the 2002 Bonds, the Borrowers will be discharged of their obligations under the 1996 Bond Indenture, except for certain surviving obligations specified in the 1996 Bond Indenture (as to which no claims have been made). Within thirty-five (35) days after the Closing Date, the 1996 Bonds will no longer be "outstanding" as defined in the 1996 Bond Indenture and Borrowers' obligations under the 1996 Bond Indenture will be terminated (subject to surviving obligations for indemnification and reinstatement as to which no claim has been made).

        (d)  Subordination of Intercompany Loans. Each Borrower hereby agrees that any and all present and future indebtedness of any other Borrower owing to such Borrower is postponed in favor of and subordinated to payment, in full, in cash, of the Obligations hereunder. In this regard, if any Event of Default has occurred and is continuing, no payment of any kind whatsoever shall be made with respect to such indebtedness until the Obligations hereunder have been indefeasibly paid in full.

        10.8    Liens.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, create or permit to exist any Lien on any of its properties, assets or rights of whatsoever nature (whether now owned or hereafter acquired), except Permitted Liens. RMSM shall at all times own, directly or indirectly, free and clear of all Liens, not less than the greater of (i) 15,000 shares of The Union Ditch and Water Company ("UDWC") and (ii) the number of outstanding shares of common stock of UDWC that constitutes at least 51% thereof.

        10.9    Operating Leases.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, permit the aggregate amount of all rental payments consisting of base rent and percentage rent under Operating Leases scheduled to be made by the Credit Parties during the term of such Operating Leases to exceed $5,000,000 in the aggregate for all Credit Parties at any time.

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        10.10    Restricted Payments.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, (a) declare or make any dividend or distribution to any of its shareholders or partners, (b) prepay, purchase, redeem, retire or otherwise acquire, directly or indirectly, any Debt, partnership or other equity interests of any Credit Party or any warrants, options or other rights in respect of such equity interests or (c) set aside funds for any of the foregoing, except (i) that OSM may from time to time repurchase 2002 Bonds and shares of its capital stock so long as: (1) OSM has provided the Agent with prior written notice of any such repurchase, which notice sets forth the price to be paid to repurchase such capital stock or 2002 Bonds, (2) no Unmatured Event of Default or Event of Default then exists or would result after giving effect to such repurchase, (3) immediately before and after giving effect to such repurchase, Borrowing Availability is at least $20,000,000, (4) after giving effect to such repurchase, the Borrowers are in compliance with all of the covenants set forth in Section 10.6 on a pro forma basis for the most recent measurement period, (5) before and after giving effect to such repurchase, the Swing Loan and Revolving Loan balance is zero and (6) no proceeds of any Loans are used, directly or indirectly for the purpose of purchasing or carrying such shares or 2002 Bonds (within the meaning of Regulation U); and (ii) as set forth in Item 10.10 of the Disclosure Schedule.

        10.11    Mergers, Consolidations, Sales.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, be a party to any merger or consolidation, or purchase or otherwise acquire all or substantially all of the assets or any equity interests of, or any corporate or joint venture interest in, any other Person, or sell, transfer, convey or lease any of its properties, assets and rights (including the Collateral) other than (i) sales in the ordinary course of business of Inventory, (ii) sales, transfers and conveyances described in Item 10.11 of the Disclosure Schedule and (iii) Investments permitted under Section 10.20.

        10.12    Use of Proceeds.    Use the proceeds of the Loans and Letters of Credit solely (a) to refinance the 2000 Credit Facility, (b) for the financing of Capital and Environmental Expenditures permitted hereunder and (c) the Borrowers' ordinary course working capital and general corporate needs. No Credit Party shall use or permit any proceeds of any Loan or Letter of Credit to be used, either directly or indirectly, for the purpose, whether immediate, incidental or ultimate, of "purchasing or carrying" any Margin Stock.

        10.13    Further Assurances.    Each Borrower shall take such actions as are necessary, or as the Agent (on its own or at the request of the Required Lenders) may reasonably request, from time to time (including the execution and delivery of security agreements, financing statements and other documents, the filing or recording of any of the foregoing, and other collateral with respect to which perfection is obtained by possession) to ensure that the Obligations are secured by the Collateral.

        10.14    Collections.

        (a)  Each of the Borrowers shall direct all of their Account Debtors to make all payments on the Accounts directly to post office boxes ("Lock Boxes") with financial institutions acceptable to the Agent, and in the name and under exclusive control of, the Agent. The Borrowers shall establish accounts ("Blocked Accounts") in the Agent's name for the benefit of the Borrowers with financial institutions acceptable to the Agent, into which all payments received in the Lock Boxes shall be deposited, and into which the Borrowers will immediately deposit all payments made for Inventory or services sold or rendered by the Borrowers (including without limitation all proceeds of Accounts) and received in the identical form in which such payments were made, whether by cash or check. If the Borrowers, any Affiliate or Subsidiary of the Borrowers or any equityholder, officer, director, employee or agent of the Borrowers or any Affiliate or Subsidiary, or any other Person acting for or in concert with the Borrowers shall receive any monies, checks, notes, drafts or other payments relating to or as proceeds of Collateral, the Borrowers and each such Person shall receive all such items in trust for, and as the sole and exclusive property of, the Agent and, immediately upon receipt thereof, shall remit the same (or cause the same to be remitted) in kind

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to a Blocked Account. Each financial institution with which a Lock Box and Blocked Account are established shall acknowledge and agree, in a manner satisfactory to the Agent, that the amounts on deposit in such Lock Box and Blocked Account are the sole and exclusive property of the Agent, that such financial institution has no right to setoff against such Lock Box or Blocked Account or against any other account maintained by such financial institution into which the contents of such Blocked Account are transferred, and that such financial institution shall wire, or otherwise transfer in immediately available funds in a manner satisfactory to the Agent, funds deposited in such Blocked Account on a daily basis as such funds are collected to a bank account of the Agent as the Agent may designate from time to time for such purpose (the "Payment Account"). Each of the Borrowers agree that all payments made to any Blocked Account established by such Person or otherwise received by the Agent, whether in respect of the Accounts of such Person or as proceeds of other Collateral of such Person, will be applied on account of the Obligations one day after receipt by the Agent of good funds with respect to such payments. The Borrowers may use such payments for the purpose of calculating Borrowing Availability immediately upon receipt by the Agent of good funds with respect to such payments. Each of the Borrowers agrees to pay all fees, costs and expenses which such Person incurs in connection with opening and maintaining its Lock Box and Blocked Account. All of such fees, costs and expenses which remain unpaid pursuant to any Lock Box or Blocked Account Agreement with the Borrowers to the extent same shall have been paid by the Agent hereunder, shall constitute Loans hereunder, shall be payable to the Agent by the Borrowers upon demand, and, until paid, shall bear interest at the highest rate then applicable to such Loans hereunder. All checks, drafts, instruments and other items of payment or proceeds of Collateral delivered to the Agent in kind shall be endorsed by the Borrowers to the Agent, and, if that endorsement of any such item shall not be made for any reason, the Agent is hereby irrevocably authorized to endorse the same on such Person's behalf. For the purpose of this paragraph, each of the Borrowers irrevocably hereby makes, constitutes and appoints the Agent (and all Persons designated by the Agent for that purpose) as such Person's true and lawful attorney and agent-in-fact (i) to endorse such Person's name upon said items of payment and/or proceeds of Collateral of such Person and upon any Chattel Paper, document, instrument, invoice or similar document or agreement relating to any Account of such Person or Inventory pertaining thereto; (ii) to take control in any manner of any item of payment or proceeds thereof; (iii) to have access to any Lock Box or (following the occurrence of an Event of Default) other postal box into which any of such Person's mail is deposited; and (iv) to open and process all mail addressed to such Person and deposited therein; provided, however, that the Agent shall not exercise any such powers described in subparagraphs (i) and (ii) of this Section 10.14(a) (except for routine Lock Box payments/proceeds) unless and until an Event of Default has occurred and is continuing.

        (b)  The Agent may, at any time and from time to time after the occurrence and during the continuance of an Event of Default, whether before or after notification to any Account Debtor and whether before or after the maturity of any of the Obligations, (i) enforce collection of any Borrower's Accounts or contract rights by suit or otherwise; (ii) exercise all of any Borrower's rights and remedies with respect to proceedings brought to collect any Accounts; (iii) surrender, release or exchange all or any part of any Accounts of any Borrower, or compromise or extend or renew for any period (whether or not longer than the original period) any indebtedness thereunder; (iv) sell or assign any Account of any Borrower upon such terms, for such amount and at such time or times as the Agent deems advisable; (v) prepare, file and sign the requisite Borrower's name on any proof of claim in bankruptcy or other similar document against any Account Debtor indebted on an Account of such Borrower; and (vi) do all other acts and things which are necessary, in the Agent's sole discretion, to fulfill any Obligations under this Agreement and to allow the Agent to collect the Accounts. In addition to any other provision hereof, the Agent may at any time on or after the occurrence of an Event of Default, at the Borrowers' sole

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expense, notify any parties obligated on any of the Accounts to make payment directly to the Agent of any amounts due or to become due thereunder.

        (c)  Immediately upon any Borrower's receipt of any portion of the Collateral evidenced by an agreement, instrument or document including, without limitation, any Chattel Paper, such Borrower shall deliver the original thereof to the Agent together with an appropriate endorsement or other specific evidence of assignment thereof to the Agent (in form and substance acceptable to the Agent). If an endorsement or assignment of any such items shall not be made for any reason, the Agent is hereby irrevocably authorized, as such Borrower's attorney and agent-in-fact, to endorse or assign the same on such Borrower's behalf.

        (d)  None of the Borrowers shall open any bank account, or close any Blocked Account or Lock Box or terminate any Blocked Account or Lock Box Agreement, without the Agent's prior written consent. None of the Borrowers shall deposit, or cause to be deposited, in any Blocked Account or Lock Box any items or remittances other than payments relating to or constituting proceeds of Collateral.

        10.15    Transactions with Affiliates.    None of the Borrowers shall, nor shall any Borrower cause or permit any other Credit Party to, enter into, or cause, suffer or permit to exist any transaction, arrangement or contract with any of its Affiliates (excluding the Credit Parties) that is on terms that are less favorable than are obtainable from any Person that is not one of its Affiliates.

        10.16    Employee Benefit Plans.    Each Borrower and each other member of the Controlled Group shall maintain each Pension Plan in substantial compliance with ERISA, the Code and all applicable requirements of law and regulations. None of the Borrowers shall or permit any other member of the Controlled Group to:

        (a)  engage in any prohibited transaction described in Sections 406 of ERISA or 4975 of the Code for which a statutory or class exemption is not available or a private exemption has not been previously obtained from the Department of Labor, which could reasonably result in a material liability to any Borrower or any other member of the Controlled Group;

        (b)  take any action which may result in a "reportable event" under Section 4043 of ERISA for which notice to the PBGC is required;

        (c)  amend any Pension Plan so that security is required to be provided under Section 401(a)(29) of the Code; or

        (d)  allow any Pension Plan to experience an accumulated funding deficiency under Section 412(b) of the Code or apply for a minimum funding waiver under Section 412 of the Code.

        10.17    Environmental Matters.

        (a)  If any Release or Disposal of Hazardous Substances shall occur or shall have occurred on any real property or any other assets of any Credit Party, such Credit Party shall, to the extent required under Environmental Laws, cause the prompt containment and removal of such Hazardous Substances and the remediation of such real property or other assets as necessary to comply with all Environmental Laws and to preserve the value of such real property or other assets. Without limiting the generality of the foregoing, each Credit Party shall comply with any valid federal or state judicial or administrative order requiring the performance at any real property of such Credit Party of activities in response to the Release or threatened Release of a Hazardous Substance.

        (b)  To the extent that the transportation of "hazardous waste" as defined by RCRA is permitted by this Agreement, each Credit Party shall dispose of such hazardous waste only at licensed disposal facilities operating in compliance with Environmental Laws.

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        10.18    Inconsistent Agreements.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, enter into any agreement containing any provision that would (a) be violated or breached by any borrowing hereunder or by the performance by any Borrower of any of its obligations hereunder or under any other Loan Document or (b) prohibit any Borrower from granting to the Agent, for the benefit of the Lenders, a Lien on any of its Collateral.

        10.19    Business Activities.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, engage in any lines of business other than those engaged in by such Person as of the Closing Date and will not permit Oregon Steel de Guayana, Inc., OSM Glassification Inc. and Glassification International Ltd. to engage in any type of business or maintain any material assets or liabilities. Upon request of the Agent, the Credit Parties will cause Oregon Steel de Guayana, Inc., OSM Glassification Inc. and Glassification International Ltd. to be dissolved in a manner satisfactory to the Agent.

        10.20    Advances and Other Investments.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, make, incur, assume or suffer to exist any Investment in any other Person, except (without duplication) (a) Cash Equivalent Investments, (b) bank deposits in the ordinary course of business, (c) Permitted Intercompany Loans, (d) with respect to each Credit Party, its existing Investments in its Subsidiaries as of the Closing Date, (e) deposits with vendors of goods in the ordinary course of business, (f) Investments existing on the Closing Date and set forth in Item 10.20 of the Disclosure Schedule, (g) Canadian National Steel Corporation may purchase the partnership interests of Camrose Pipe Company not held by Canadian National Steel Corporation in accordance with the provisions of the partnership agreement of Camrose Pipe Company, (h) Borrowers may make equity investments in and/or intercompany loans to the other Credit Parties after the Closing Date in an aggregate amount not exceeding $7,500,000, so long as such equity investments and/or loans (which loans shall be deemed Permitted Intercompany Loans) are pledged to the Agent, on behalf of the Lenders, as additional collateral security for the Obligations, and (i) Camrose Pipe Company may make other Investments following the Closing Date in an amount not exceeding $10,000,000 in the aggregate for all such Investments, subject in the case of any such Investment to the prior written approval of the Agent, which will not be unreasonably withheld so long as (1) the Agent shall have been provided with reasonable prior notice of such Investment and with all information relating to such Investment as the Agent shall have reasonably requested, (2) no Event of Default shall have occurred and be continuing or would result therefrom and (3) such Investment could not reasonably be expected to subject any other Credit Party to any material liability (fixed or contingent), as determined by the Agent in its reasonable credit judgment. No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, form a new Subsidiary.

        10.21    Restriction of Amendments to Certain Documents.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, amend or otherwise modify the promissory notes evidencing the Permitted Intercompany Loans or amend or otherwise modify, or waive any rights under, (i) any Credit Party's Governing Documents, (ii) the 2002 Bond Indenture, or (iii) the documents governing the ESOP, in the case of any of the foregoing clauses (i), (ii) and (iii), in a manner adverse to any Credit Party, the Agent or any Lender.

        10.22    Fiscal Year.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, change its Fiscal Year.

        10.23    Cancellation of Debt.    No Borrower shall, nor shall any Borrower cause or permit any other Credit Party to, cancel any claim or debt owing to it, except for reasonable consideration or in the ordinary course of business.

        10.24    No New Locations.    No Borrower shall have any offices or locations where any Borrower keeps any Collateral or any books and records concerning the Collateral (including without limitation, computer programs, printouts and other computer materials) other than those offices and locations set

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forth in Item 9.24 of the Disclosure Schedule; provided, that any Borrower may amend Item 9.24 of the Disclosure Schedule to include other offices and locations if such Borrower (i) gives the Agent twenty Business Days' prior written notice of such other offices or locations; (ii) such Borrower provides the Agent with an executed Collateral Access Agreement for such other offices or locations, if necessary, (iii) and all financing statements have been filed and all other necessary or reasonable steps have been taken to insure that the Agent has a first-priority, perfected Lien (subject only to any Permitted Liens) on the Collateral to be located at such other offices or locations and (iv) such Borrower has provided the Agent with an amended Item 9.24 of the Disclosure Schedule showing such other offices and locations.

        10.25    Press Releases.    Not issue any press release relating to this Agreement or the other Loan Documents unless the Agent has received and approved such press release (which approval will not be unreasonably withheld). The Agent will approve or disapprove such press release as soon as practicable, but in any event no later than one full Business Day after the Agent's receipt of such press release. Each Credit Party further agrees that any press release relating to this Agreement or the other Loan Documents may refer to the Agent, but will not refer to any of the Lenders.

        10.26    Customs, Duty and Freight.

        Promptly (i) pay all applicable freight costs and duties, tariffs, taxes and any other governmental assessments applicable to the importation and/or sale of all Eligible Inventory and (ii) satisfy all other requirements necessary for permitting all Eligible Inventory to gain entry into the United States through the United States Custom Service in compliance with any applicable import quotas for immediate sale and/or distribution in the United States.

        10.27    Minimum Borrowing Availability.    No Borrower shall permit (a) Borrowing Availability to be less than $5,000,000 or (b) the Borrowing Base to exceed the aggregate amount of outstanding Loans plus the Letter of Credit Reserve by less than $15,000,000.

        SECTION 11. EFFECTIVENESS; CONDITIONS OF LENDING, ETC.

        The obligation of each Lender to make its Loans and of the Agent to arrange for Letters of Credit is subject to the following conditions precedent (except as expressly provided in Section 2.3.3):

        11.1    Initial Credit Extension.    The obligation of the Lenders to make the initial Loans and the obligation of the Agent to arrange for any initial Letter of Credit (whichever first occurs) is, in addition to the conditions precedent specified in Section 11.2, subject to the conditions precedent that (A) after giving effect to the initial Loans and Letters of Credit, Borrowing Availability, after accommodation for payment of accounts payable over thirty (30) days past due, bank overdrafts and any transaction related fees, will be at least $7,500,000 and (B) the Agent shall have confirmed to its satisfaction that the Fixed Charge Coverage Ratio for the 12-month period ending June 30, 2002 was at least 1.6:1 and (E) OSM shall have discharged the 1996 Bonds in accordance with the 1996 Bond Indenture and shall have received net proceeds of the 2002 Bonds of not less than approximately $301,254,600. The Agent shall have received this Agreement and all of the following, each duly executed (where appropriate) by all parties thereto and dated the Closing Date (or such earlier date as shall be satisfactory to the Agent), in form and substance satisfactory to the Agent (and the date on which all such conditions precedent have been satisfied or waived in writing by the Agent is called the "Closing Date"):

        11.1.1    Notes.    The Notes.

        11.1.2    Resolutions.    Certified copies of resolutions of the board of directors or general partner of each Credit Party (other than The Union Ditch and Water Company and Glassification International Ltd.) authorizing the execution, delivery and performance by such Credit Party of the Loan Documents to which it is a party.

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        11.1.3    Consents, etc.    Certified copies of all documents evidencing any necessary corporate or partnership action, consents and governmental approvals (if any) required for the execution, delivery and performance by each Borrower of the documents referred to in this Section 11. Without limiting the foregoing, the Agent shall have received a consent from all minority equityholders of RMSM to the transactions contemplated by the Loan Documents in form and substance satisfactory to the Agent.

        11.1.4    Incumbency and Signature Certificates.    A certificate of the Secretary or an Assistant Secretary of each Credit Party (other than The Union Ditch and Water Company and Glassification International Ltd.) as of the Closing Date certifying the names of the officer or officers of each Credit Party (other than The Union Ditch and Water Company and Glassification International Ltd.) authorized to sign the Loan Documents to which such entity is a party, together with a sample of the true signature of each such officer (it being understood that the Agent and each Lender may conclusively rely on each such certificate until formally advised by a like certificate of any changes therein).

        11.1.5    Security Agreements.    One or more security agreements, pledge agreements or assignment agreements executed by each Borrower, together with (i) evidence, satisfactory to the Agent, that all filings necessary to perfect the Agent's Lien on the Collateral have been duly made and are in full force and effect, (ii) instructions to deliver to the Agent all certificated securities, promissory notes, transfer powers, control letters and instruments as the Agent shall require to perfect the Agent's Lien on the equity interests of all the Credit Parties (excluding The Union Ditch and Water Company) held by the Borrowers and all Permitted Intercompany Loans made by the Borrowers (other than to the Camrose Parties) and (iii) delivery to the Agent of a negative pledge in favor of the Agent and Lenders with respect to certain of the shares of The Union Ditch and Water Company held by RMSM, and evidence that such negative pledge will be recorded on the certificate(s) representing such shares.

        11.1.6    Intercreditor Agreement.    An Intercreditor Agreement executed by the 2002 Trustee and each other party thereto and in form and substance acceptable to the Agent.

        11.1.7    Opinions of Counsel.    Opinions of legal counsel to the Borrowers acceptable to the Agent.

        11.1.8    Insurance.    Evidence satisfactory to the Agent of the existence of insurance required to be maintained pursuant to Section 10.3(b), together with evidence that the Agent has been named as a lender's loss payee and an additional insured on all related insurance policies.

        11.1.9    Copies of Documents.    Copies, certified by the Secretary of OSM, of the 2002 Bond Indenture and related security agreements.

        11.1.10    Payment of Fees.    Evidence of payment by the Borrowers of all accrued and unpaid fees, costs and expenses to the extent then due and payable on the Closing Date, together with all fees and expenses of counsel to the Agent.

        11.1.11    Solvency Certificate.    A Solvency Certificate, substantially in the form of Exhibit C, executed by the principal financial officer of OSM on behalf of each of the Borrowers.

        11.1.12    Disclosure Schedule.    The Disclosure Schedule shall be in form and substance satisfactory to the Agent.

        11.1.13    Search Results; Lien Terminations.    Certified copies of Uniform Commercial Code search reports dated a date reasonably near to the Closing Date, listing all effective financing statements that name each Credit Party (requested by the Agent under its present name and any previous names) as debtor, together with (i) copies of such financing statements, (ii) executed copies of proper Uniform Commercial Code Form UCC-3 termination statements necessary to

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release all Liens and other rights of any Person in any collateral described in the 2000 Credit Facility and the 1996 Bonds and (iii) such other Uniform Commercial Code Form UCC-3 termination statements as the Agent may request.

        11.1.14    Filings, Registrations and Recordings.    The Agent shall have received each document (including Uniform Commercial Code financing statements) required by the Loan Documents or under law or requested by the Agent to be filed, registered or recorded to create in favor of the Agent, for the benefit of the Lenders, a perfected Lien on the Collateral described therein, prior and superior to any other Person (subject to Permitted Liens), in proper form for filing, registration or recording.

        11.1.15    Closing Certificate.    A certificate signed by the president or chief financial officer of OSM on behalf of each of the Borrowers dated as of the Closing Date, affirming the matters set forth in Section 11.2.1 as of the Closing Date.

        11.1.16    Borrowing Base Certificate.    A Borrowing Base Certificate dated as of July 12, 2002.

        11.1.17    Independent Accountant Letter.    A letter from OSM to its independent certified public accountant advising that OSM intends the Agent to rely on the opinions and reports of such accountants described in Section 10.1.1.

        11.1.18    Governing Documents.    Certified copies of each Borrower's Governing Documents and copies of each other Credit Party's Governing Documents.

        11.1.19    Good Standing Certificates.    Certificates of good standing for all states in which each Borrower and each other Credit Party whose equity interests are being pledged to the Agent is qualified to do business.

        11.1.20    Blocked Account/Lockbox Agreements.    All agreements establishing or relating to Blocked Accounts and Lock Boxes.

        11.1.21    Collateral Access Agreement.    Such Collateral Access Agreements as the Agent shall reasonably require.

        11.1.22    Security Agreement Documents.    All documents required by any security agreement, pledge agreement or assignment agreement between any Borrower and the Agent.

        11.1.23    Payoff Letter.    A payoff letter executed by the agent and lenders under the 2000 Credit Facility and agreeing to release all liens thereunder.

        11.1.24    Customs Agents Agreements.    Agreements in favor of the Agent from the Borrowers' custom agents as the Agent may require.

        11.1.25    Fee Letter.    The fee letter referred to in Section 5.5 executed by the Borrowers.

        11.1.26    Subsidiary Guarantees.    A Subsidiary Guarantee executed by each Guarantor in form and substance reasonably acceptable to the Agent.

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        11.1.27    Other.    Such other documents as the Agent or any Lender may reasonably request.

        11.2    Conditions.    The obligation (a) of each Lender to make each Loan (except as expressly set forth in Section 2.1.3(c) and Section 2.3.3) and (b) of the Agent to arrange for each Letter of Credit is subject to the following further conditions precedent that:

        11.2.1    Compliance with Warranties, No Default, etc.    Both before and after giving effect to any borrowing and the issuance of any Letter of Credit the following statements shall be true and correct:

        (a)  the representations and warranties of each Borrower set forth in this Agreement and the other Loan Documents shall be true and correct in all material respects with the same effect as if then made (except to the extent stated to relate to a specific earlier date, in which case such representations and warranties shall be true and correct as of such earlier date); and

        (b)  no Event of Default or Unmatured Event of Default shall have then occurred and be continuing.

        11.2.2    Confirmatory Certificate.    If requested by the Agent or any Lender, the Agent shall have received (in sufficient counterparts to provide one to each Lender) a certificate dated the date of a requested Loan or Letter of Credit and signed by a duly authorized representative of the Borrowers as to the matters set out in Section 11.2.1 (it being understood that each request by the Borrowers for the making of a Loan or the issuance of a Letter of Credit shall be deemed to constitute a representation and warranty by each Borrower that the conditions precedent set forth in Section 11.2.1 will be satisfied at the time of the making of such Loan or the issuance of such Letter of Credit), together with such other documents as the Agent or any Lender may reasonably request in support thereof.

        11.2.3    Minimum Borrowing Availability.    After giving effect to the requested Loan or Letter of Credit, (a) the Borrowing Availability shall be no less than $5,000,000 and (b) the Borrowing Base shall exceed the aggregate amount of outstanding Loans plus the Letter of Credit Reserve by at least $15,000,000.

        SECTION 12. EVENTS OF DEFAULT AND THEIR EFFECT.

        12.1    Events of Default.    Each of the following shall constitute an Event of Default under this Agreement:

        12.1.1    Nonpayment of Loans, etc.    (i) Default in the payment when due of the principal of any Loan or of any reimbursement obligation with respect to any Letter of Credit or (ii) default in the payment when due of any interest, fee or other Obligations (other than Obligations referred to in clause (i) above) which default continues for three Business Days.

        12.1.2    Nonpayment of Other Debt.    Any default (after giving effect to any applicable cure periods) shall occur under the terms applicable to any Debt of any Credit Party in an outstanding principal aggregate amount (for all such Debt so affected) exceeding $5,000,000 and such default shall (a) consist of the failure to pay such Debt when due, whether by acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit the holder or holders thereof, or any trustee or agent for such holder or holders, to cause such Debt to become due and payable prior to its expressed maturity.

        12.1.3    Other Material Obligations.    Default in the payment when due, or in the performance or observance of, any material obligation of, or condition agreed to by, any Credit Party with respect to any material purchase or lease of goods or services where such default, singly or in the aggregate with other such defaults, could reasonably be expected to have a Material Adverse Effect.

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        12.1.4    Bankruptcy, Insolvency, etc.    Any Borrower becomes insolvent or generally fails to pay, or admits in writing its inability or refusal to pay, debts as they become due; or such entity applies for, consents to, or acquiesces in the appointment of a trustee, receiver or other custodian for such entity or any property thereof, or makes a general assignment for the benefit of creditors; or, in the absence of such application, consent or acquiescence, a trustee, receiver or other custodian is appointed for such entity or for a substantial part of the property of any thereof and is not discharged within 60 days; or any bankruptcy, reorganization, debt arrangement, or other case or proceeding under any bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is commenced in respect of such entity, and if such case or proceeding is not commenced by such entity, it is consented to or acquiesced in by such entity, or remains for 60 days undismissed or such entity takes any action to authorize, or in furtherance of, any of the foregoing.

        12.1.5    Noncompliance with Loan Documents.    Failure by any Credit Party to comply with or to perform any covenant or agreement set forth in this Agreement or any other Loan Document.

        12.1.6    Representations and Warranties.    Any representations and warranty made by any Borrower, herein or in any other Loan Document, is breached or is false or misleading in any material respect, or any schedule, certificate, financial statement, report, notice or other writing furnished by any Credit Party to the Agent or any Lender in connection herewith is false or misleading in any material respect on the date as of which the facts therein set forth are stated or certified.

        12.1.7    Pension Plans.    (i) Institution of any steps by any Credit Party or any other Person to terminate a Pension Plan if as a result of such termination such Credit Party could be required to make a contribution to such Pension Plan, or could incur a liability or obligation to such Pension Plan, in excess of $5,000,000; (ii) a contribution failure occurs with respect to any Pension Plan sufficient to give rise to a Lien under Section 302(f) of ERISA or Section 412 of the Code; or (iii) there shall occur any withdrawal or partial withdrawal from a Multiemployer Pension Plan and the withdrawal liability (without unaccrued interest) to Multiemployer Pension Plans as a result of such withdrawal (including any outstanding withdrawal liability that any Credit Party and the Controlled Group have incurred on the date of such withdrawal) exceeds $5,000,000.

        12.1.8    Judgments.    Final judgments that exceed an aggregate of $5,000,000 shall be rendered against any or all of the Credit Parties, and shall not have been paid, discharged or vacated or had execution thereof stayed pending appeal or otherwise within 30 days after entry or filing of such judgments.

        12.1.9    Invalidity of Loan Documents, etc.    Any Loan Document shall cease to be in full force and effect with respect to any Borrower; or any Credit Party (or any Person by, through or on behalf of any Credit Party) shall contest in any manner the validity, binding nature or enforceability of any Loan Document.

        12.1.10    Breach of Certain Agreements.    Any "Event of Default" (as defined in the 2002 Bond Indenture) (after giving effect to any applicable cure periods) occurs under the 2002 Bond Indenture.

        12.1.11    Change in Control.    A Change in Control shall occur.

        12.1.12    Auditor's Report.    The auditor's report delivered in connection with the annual financial statements (to be delivered pursuant to Section 10.1.1) shall contain an Impermissible Qualification.

        12.1.13    Damage to Collateral.    There shall occur any material uninsured damage to, or loss, theft or destruction of, any of the Collateral having an aggregate value in excess of $3,000,000.

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        12.1.14    Attachment, etc.    The Collateral or any other assets of any Credit Party having an aggregate value in excess of $2,000,000 are attached, seized, levied upon or subjected to a writ or distress warrant, or come within the possession of any receiver, trustee, custodian or assignee for the benefit of creditors and the same is not cured within 45 days thereafter or an application is made by any Person, other than any Credit Party, for the appointment of a receiver, trustee, or custodian for any assets having an aggregate value in excess of $2,000,000 of such Credit Party and the same is not dismissed within 45 days after the application therefor.

        12.1.15    Lien, Levy or Assessment.    A notice of lien, levy or assessment is filed of record with respect to all or any assets of any Credit Party by the United States, or any department, agency or instrumentality thereof, or by any state, county, municipal or other governmental agency, including, without limitation, the PBGC, or if any taxes or debts owing at any time or times hereafter to any one of these becomes a lien or encumbrance upon any assets of any Credit Party and the same is not released within 30 days after the same becomes a lien or encumbrance; provided, that such Credit Party shall have the right to contest in good faith and by appropriate proceedings any such lien, levy or assessment if such Credit Party provides the Agent with a bond or indemnity satisfactory to the Agent assuring the payment of such lien, levy or assessment.

        12.1.16    Material Adverse Effect.    The occurrence of any event having a Material Adverse Effect.

        12.1.17    Environmental Expenditures.    Borrowers shall have made, through the end of any Fiscal Year, Environmental Expenditures in excess of $10,000,000 for all Credit Parties on a combined basis with respect to such Fiscal Year; provided that such $10,000,000 limit with respect to any Fiscal Year shall be increased by the positive amount (if any) equal to the difference obtained by subtracting the actual amount of Environmental Expenditures expended during the prior Fiscal Year from $10,000,000 (the "Environmental Expenditure Carry Over") and for purposes of measuring compliance herewith, the Environmental Expenditure Carry Over Amount shall be deemed to be the last amount spent on Environmental Expenditures in that succeeding Fiscal Year.

        12.2    Effect of Event of Default.    If any Event of Default described in Section 12.1.4 with respect to any Borrower shall occur, the Commitments (if they have not theretofore terminated) shall immediately terminate and the Notes and all other Obligations hereunder shall become immediately due and payable and the Borrowers shall become immediately obligated to return and/or collateralize all Letters of Credit in accordance with Section 2.3.6, all without presentment, demand, protest or notice of any kind and the Agent may (and at the written request of the Required Lenders shall) exercise any rights and remedies provided to the Agent under the Loan Documents and/or at law or equity. If any other Event of Default shall occur and be continuing, the Agent may (and at the written request of the Required Lenders shall) declare the Commitments (if they have not theretofore terminated) to be terminated and/or declare all Notes and all other Obligations to be immediately due and payable and/or demand that the Borrowers immediately return and/or collateralize all Letters of Credit in accordance with Section 2.3.6, whereupon the Commitments (if they have not theretofore terminated) shall immediately terminate and/or all Notes and all other Obligations shall become immediately due and payable and/or the Borrowers shall immediately become obligated to return and/or collateralize all Letters of Credit in accordance with Section 2.3.6, all without presentment, demand, protest or notice of any kind, and exercise any rights and remedies provided to the Agent under the Loan Documents, and/or at law or equity and the Agent may (and at the written request of the Required Lenders shall) exercise any rights and remedies provided to the Agent under the Loan Documents and/or at law or equity. The Agent shall promptly advise the Borrowers of any such declaration, but failure to do so shall not impair the effect of such declaration. Notwithstanding the foregoing, the effect of an Event of Default of any event described in Section 12.1.1 or Section 12.1.4 may be waived by the written concurrence of all of the Lenders, and the effect of an Event of Default

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of any other event described in this Section 12 may be waived by the written concurrence of the Required Lenders. Any cash collateral delivered hereunder shall be held by the Agent (without liability for interest thereon) and applied to Obligations arising in connection with any drawing under a Letter of Credit. After the expiration or termination of all Letters of Credit, such cash collateral shall be applied by the Agent to any remaining Obligations and any excess shall be delivered to the Borrowers or as a court of competent jurisdiction may elect. The Agent and Lenders shall be under no obligation to marshal any assets in favor of any Borrower or any other Person or against or in payment of any or all of the Obligations.

        SECTION 13. THE AGENT.

        13.1    Appointment and Authorization.    Each Lender hereby irrevocably (subject to Section 13.9) appoints, designates and authorizes the Agent to take such action on its behalf under the provisions of this Agreement and each other Loan Document and to exercise such powers and perform such duties as are expressly delegated to it by the terms of this Agreement or any other Loan Document, together with such powers as are reasonably incidental thereto. Notwithstanding any provision to the contrary contained elsewhere in this Agreement or in any other Loan Document, the Agent shall not have any duties or responsibilities except those expressly set forth herein, nor shall the Agent have or be deemed to have any fiduciary relationship with any Lender, and no implied covenants, functions, responsibilities, duties, obligations or liabilities shall be read into this Agreement or any other Loan Document or otherwise exist against the Agent.

        13.2    Delegation of Duties.    The Agent may execute any of its duties under this Agreement or any other Loan Document by or through agents, employees or attorneys-in-fact and shall be entitled to advice of counsel concerning all matters pertaining to such duties. The Agent shall not be responsible for the negligence or misconduct of any agent or attorney-in-fact that it selects with reasonable care.

        13.3    Liability of the Agent.    None of the Agent nor any of its directors, officers, employees or agents shall (i) be liable to any of the Lenders for any action taken or omitted to be taken by any of them under or in connection with this Agreement or any other Loan Document or the transactions contemplated hereby (except for its own gross negligence or willful misconduct), or (ii) be responsible in any manner to any of the Lenders for any recital, statement, representation or warranty made by any Borrower or any Subsidiary or Affiliate of any Borrower, or any officer thereof, contained in this Agreement or in any other Loan Document, or in any certificate, report, statement or other document referred to or provided for in, or received by the Agent under or in connection with, this Agreement or any other Loan Document, or the validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement or any other Loan Document, or for any failure of any Borrower or any other party to any Loan Document to perform its obligations hereunder or thereunder. The Agent shall not be under any obligation to any Lender to ascertain or to inquire as to the observance or performance of any of the agreements contained in, or conditions of, this Agreement or any other Loan Document, or to inspect the properties, books or records of any Credit Party or any of any Credit Party's Subsidiaries or Affiliates.

        13.4    Reliance by the Agent.    The Agent shall be entitled to rely, and shall be fully protected in relying, upon any writing, resolution, notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or telephone message, statement or other document or conversation believed by it to be genuine and correct and to have been signed, sent or made by the proper Person or Persons, and upon advice and statements of legal counsel (including counsel to the Borrowers), independent accountants and other experts selected by the Agent. The Agent shall be fully justified in failing or refusing to take any action under this Agreement or any other Loan Document unless it shall first receive such advice or concurrence of the Required Lenders as it deems appropriate and, if it so requests, confirmation from the Lenders of their obligation to indemnify the Agent against any and all liability and expense which may be incurred by it by reason of taking or continuing to take any such action. The Agent shall in all

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cases be fully protected in acting, or in refraining from acting, under this Agreement or any other Loan Document in accordance with a request or consent of the Required Lenders and such request and any action taken or failure to act pursuant thereto shall be binding upon all of the Lenders.

        13.5    Notice of Default.    The Agent shall not be deemed to have knowledge or notice of the occurrence of any Event of Default or Unmatured Event of Default except with respect to defaults in the payment of principal, interest and fees required to be paid to the Agent for the account of the Lenders, unless the Agent shall have received written notice from a Lender or any Borrower referring to this Agreement, describing such Event of Default or Unmatured Event of Default and stating that such notice is a "notice of default". The Agent will promptly notify the Lenders in writing of its receipt of any such notice, together with a copy thereof. The Agent shall take such action with respect to such Event of Default or Unmatured Event of Default as may be requested by the Required Lenders in accordance with Section 12; provided, however, that unless and until the Agent has received any such request, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Event of Default or Unmatured Event of Default as it shall deem advisable or in the best interest of the Lenders.

        13.6    Credit Decision.    Each Lender acknowledges that the Agent has not made any representation or warranty to it, and that no act by the Agent hereafter taken, including any review of the affairs of any Credit Party, shall be deemed to constitute any representation or warranty by the Agent to any Lender. Each Lender represents to the Agent that it has, independently and without reliance upon the Agent and based on such documents and information as it has deemed appropriate, made its own appraisal of and investigation into the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers and the other Credit Parties, and made its own decision to enter into this Agreement and to extend credit to the Borrowers hereunder. Each Lender also represents that it will, independently and without reliance upon the Agent and based on such documents and information as it shall deem appropriate at the time, continue to make its own credit analysis, appraisals and decisions in taking or not taking action under this Agreement and the other Loan Documents, and to make such investigations as it deems necessary to inform itself as to the business, prospects, operations, property, financial and other condition and creditworthiness of the Borrowers and the other Credit Parties. Except for notices, reports and other documents expressly herein required to be furnished to the Lenders by the Agent, the Agent shall not have any duty or responsibility to provide any Lender with any credit or other information concerning the business, prospects, operations, property, financial or other condition or creditworthiness of the Borrowers or the other Credit Parties which may come into the possession of the Agent.

        13.7    Indemnification.    Whether or not the transactions contemplated hereby are consummated, the Lenders shall indemnify upon demand the Agent and its directors, officers, employees and agents (to the extent not reimbursed by or on behalf of the Borrowers and without limiting the obligation of the Borrowers to do so), pro rata, from and against any and all Indemnified Liabilities; provided, however, that no Lender shall be liable for any payment to the Agent of any portion of the Indemnified Liabilities resulting solely from such Person's gross negligence or willful misconduct. Without limitation of the foregoing, each Lender shall reimburse the Agent upon demand for its ratable share of any costs or out-of-pocket expenses (including reasonable fees of attorneys for the Agent (including the allocable costs of internal legal services and all disbursements of internal counsel)) incurred by the Agent in connection with the preparation, execution, delivery, administration, modification, amendment or enforcement (whether through negotiations, legal proceedings or otherwise) of, or legal advice in respect of rights or responsibilities under, this Agreement, any other Loan Document, or any document contemplated by or referred to herein, to the extent that the Agent is not reimbursed for such expenses by or on behalf of the Borrowers. The undertaking in this Section shall survive repayment of the Loans, cancellation of the Notes, any foreclosure under, or any

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modification, release or discharge of, any or all of the Loan Documents, any termination of this Agreement and the resignation or replacement of the Agent.

        13.8    Agent and Lenders in their Individual Capacity.    The Agent and its Affiliates and any Lender and its Affiliates may make loans to, issue letters of credit for the account of, accept deposits from, acquire equity interests in and generally engage in any kind of banking, trust, financial advisory, underwriting or other business with any Credit Party and its Subsidiaries and Affiliates as though the Agent or such Lender was not the Agent or a Lender, as the case may be, hereunder and without notice to or consent of the other Lenders. The Lenders acknowledge that, pursuant to such activities, the Agent and its Affiliates and any Lender and its Affiliates may receive information regarding any Credit Party or its Affiliates (including information that may be subject to confidentiality obligations in favor of any Credit Party) and acknowledge that the Agent and its Affiliates and any such Lender and its Affiliates shall be under no obligation to provide such information to any other Lender. With respect to its Loans, the Agent shall have the same rights and powers under this Agreement as any other Lender and may exercise the same in its individual capacity.

        13.9    Successor Agent; Assignment of Agency.    The Agent may resign as the Agent upon 30 days' prior notice to the Lenders. If the Agent resigns under this Agreement, the Required Lenders shall appoint from among the Lenders a successor agent for the Lenders. If no successor agent is appointed prior to the effective date of the resignation of the Agent, the Agent may appoint, after consulting with the Lenders, a successor agent from among the Lenders. Upon the acceptance of its appointment as successor agent hereunder, such successor agent shall succeed to all the rights, powers and duties of the retiring Agent and the term "Agent" shall mean such successor agent, and the retiring Agent's appointment, powers and duties as the Agent shall be terminated. After any retiring Agent's resignation hereunder as the Agent, the provisions of this Section 13 and Sections 14.5 and 14.11 shall inure to its benefit as to any actions taken or omitted to be taken by it while it was the Agent under this Agreement. If no successor agent has accepted appointment as the Agent by the date which is 30 days following a retiring Agent's notice of resignation, the retiring Agent's resignation shall nevertheless thereupon become effective and the Lenders shall perform all of the duties of the Agent hereunder until such time, if any, as the Required Lenders appoint a successor agent as provided for above.

        13.10    Collateral Matters.    The Lenders irrevocably authorize the Agent, at its option and in its discretion, to release any Lien granted to or held by the Agent under any Loan Document (i) upon termination of the Commitments and payment in full of all Loans and all other Obligations of the Credit Parties hereunder and the expiration or termination of all Letters of Credit; (ii) constituting property sold or to be sold or disposed of as part of or in connection with any disposition permitted hereunder; or (iii) subject to Section 14.1, if approved, authorized or ratified in writing by the Required Lenders. Upon request by the Agent at any time, the Lenders will confirm in writing the Agent's authority to release particular types or items of Collateral pursuant to this Section 13.10.

        13.11    Co-Managing Agent.    The Co-Managing Agent, in its capacity as such, shall have no duties or responsibilities hereunder and shall not have any liability under this Agreement to any Person other than in its capacity as a Lender hereunder. Notwithstanding the foregoing, in the event any Person shall make any claim against the Co-Managing Agent in its capacity as such or the Co-Managing Agent, in its capacity as such, shall otherwise be subject to any liability hereunder, the Co-Managing Agent shall be entitled to the same indemnification rights under this Agreement as the Agent.

        SECTION 14. GENERAL.

        14.1    Waiver; Amendments.    No delay on the part of the Agent, any Lender or any other holder of a Note in the exercise of any right, power or remedy shall operate as a waiver thereof, nor shall any single or partial exercise by any of them of any right, power or remedy preclude other or further exercise thereof, or the exercise of any other right, power or remedy. No amendment, modification or waiver of, or consent with respect to, any provision of this Agreement or the Notes shall in any event

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be effective unless the same shall be in writing and signed and delivered by Lenders having an aggregate Percentage of not less than the aggregate Percentage expressly designated herein with respect thereto or, in the absence of such designation as to any provision of this Agreement or the Notes, by the Required Lenders, and then any such amendment, modification, waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. No amendment, modification, waiver or consent shall change the Percentage of any Lender without the consent of such Lender. No amendment, modification, waiver or consent shall (i) extend or increase the amount of the Commitments or any Commitment of a Lender, (ii) extend the date for payment of any principal of or interest on the Loans or any fees payable hereunder, (iii) reduce the principal amount of any Loan, the rate of interest thereon or any fees payable hereunder, (iv) reduce the aggregate Percentage required to effect an amendment, modification, waiver or consent, (v) amend or modify this Section 14.1, (vi) reduce the minimum Borrowing Availability required under Section 11.2.3 or increase the advance rate percentages of the Borrowing Base or make less restrictive the criteria for Eligible Inventory or Eligible Accounts in a manner that would increase the percentage rate of advance, or (vii) release any material portion of the Collateral, except as expressly provided in this Agreement, or release any of the Guarantors without, in each case, the consent of all Lenders. No provisions of Section 13 or other provision of this Agreement affecting the Agent in its capacity as such shall be amended, modified or waived without the consent of the Agent.

        14.2    Notices.    Except as otherwise provided in Sections 2.2, 2.4 and 4.3, all notices hereunder shall be in writing (including facsimile transmission) and shall be sent to the applicable party at its address shown under such party's name on the signature page to this Agreement or at such other address as such party may, by written notice received by the other parties, have designated as its address for such purpose. Notices sent by facsimile transmission shall be deemed to have been given when sent; notices sent by mail shall be deemed to have been given three Business Days after the date when sent by registered or certified mail, postage prepaid; and notices sent by hand delivery or overnight courier service shall be deemed to have been given when received. For purposes of Sections 2.2, 2.4 and 4.3, the Agent shall be entitled to rely on telephonic instructions from any person that the Agent in good faith believes is an authorized officer or employee of the Borrowers and the Borrowers shall hold the Agent and each other Lender harmless from any loss, cost or expense resulting from any such reliance.

        14.3    Computations.    Where the character or amount of any asset or liability or item of income or expense is required to be determined, or any consolidation or other accounting computation is required to be made, for the purpose of this Agreement, such determination or calculation shall, to the extent applicable and except as otherwise specified in this Agreement, be made in accordance with GAAP, consistently applied.

        14.4    Regulation U.    Each Lender represents that it in good faith is not relying, either directly or indirectly, upon any Margin Stock as collateral security for the extension or maintenance by it of any credit provided for in this Agreement.

        14.5    Costs, Expenses and Taxes.    The Borrowers agree to pay on demand all reasonable out-of-pocket costs and expenses of the Agent (including the reasonable fees and charges of counsel for the Agent and Co-Managing Agent and of local counsel, if any, who may be retained by said counsel) in connection with the preparation, execution, delivery and administration of this Agreement, the other Loan Documents and all other documents provided for herein or delivered or to be delivered hereunder or in connection herewith (including any amendments, supplements or waivers to any Loan Documents and any assignment of Loans), and all reasonable out-of-pocket costs and expenses (including reasonable attorneys' fees, court costs and other legal expenses and allocated costs of staff counsel) incurred by the Agent and Lenders in connection with the enforcement of this Agreement, the other Loan Documents or any such other documents. Each Lender agrees to reimburse the Agent for such Lender's pro rata share (based on its respective Percentage) of any such costs and expenses of the

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Agent not paid by the Borrowers. In addition, the Borrowers agree to pay, and to save the Agent and the Lenders harmless from all liability for, (a) any stamp or other taxes (excluding income taxes and franchise taxes based on net income) that are payable in connection with the execution and delivery of this Agreement, the borrowings hereunder, the issuance of the Notes or the execution and delivery of any other Loan Document or any other document provided for herein or delivered or to be delivered hereunder or in connection herewith and (b) any fees of the auditors in connection with any exercise by the Agent of its rights pursuant to Section 10.2. All obligations provided for in this Section 14.5 shall survive repayment of the Loans, cancellation of the Notes and any termination of this Agreement.

        14.6    Captions.    Section captions used in this Agreement are for convenience only and shall not affect the construction of this Agreement.

        14.7    Assignments; Participations.

        14.7.1    Assignments.    Any Lender may at any time assign and delegate to an Affiliate or another Lender, and any Lender may, with the prior written consent of the Agent, at any time assign and delegate to one or more other financial institutions or, with Borrowers' consent (which consent shall not be unreasonably delayed or withheld and shall not be required if an Event of Default shall have occurred and be continuing), other Persons; provided, that if such a Person is a foreign Person, such Person shall execute and deliver to the Agent one or more (as the Agent may reasonably request) United States Internal Revenue Service Forms W-8BEN or such other forms or documents, appropriately completed, as may be applicable to establish that such Person is exempt from withholding or deduction Taxes (any Person to whom such an assignment and delegation is to be made being herein called an "Assignee"), all or any fraction of such Lender's Loans and Commitment (which assignment and delegation shall be of a constant, and not a varying, percentage of all the assigning Lender's Loans and Commitment) in a minimum aggregate amount equal to the lesser of (i) the Lender's Commitment and (ii) $5,000,000; provided, however, that (a) no assignment and delegation may be made to any Person if, at the time of such assignment and delegation, the Borrowers would be obligated to pay any greater amount under Section 7.6 or Section 8 to the Assignee than the Borrowers are then obligated to pay to the assigning Lender under such Sections (and if any assignment is made in violation of the foregoing, the Borrowers will not be required to pay the incremental amounts) and (b) the Borrowing Agent and the Agent shall be entitled to continue to deal solely and directly with such Lender in connection with the interests so assigned and delegated to an Assignee until the date when all of the following conditions shall have been met:

        (i)    five Business Days (or such lesser period of time as the Agent and the assigning Lender shall agree) shall have passed after written notice of such assignment and delegation, together with payment instructions, addresses and related information with respect to such Assignee, shall have been given to the Borrowing Agent and the Agent by such assigning Lender and the Assignee,

        (ii)  the assigning Lender and the Assignee shall have executed and delivered to the Borrowing Agent and the Agent an assignment agreement substantially in the form of Exhibit D (an "Assignment Agreement"), together with any documents required to be delivered thereunder, which Assignment Agreement shall have been accepted by the Agent, and

        (iii)  the assigning Lender or the Assignee shall have paid the Agent a processing fee of $5,000.

From and after the date on which the conditions described above have been met, (x) such Assignee shall be deemed automatically to have become a party hereto and, to the extent that rights and obligations hereunder have been assigned and delegated to such Assignee pursuant to such Assignment Agreement, shall have the rights and obligations of a Lender hereunder and (y) the assigning Lender,

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to the extent that rights and obligations hereunder have been assigned and delegated by it pursuant to such Assignment Agreement, shall be released from its obligations hereunder from and after such date. Within five Business Days after effectiveness of any assignment and delegation, the Borrowers shall execute and deliver to the Agent (for delivery to the Assignee and the Assignor, as applicable) a new Note in the principal amount of the Assignee's Percentage of the Commitment and, if the assigning Lender has retained a Commitment hereunder, a replacement Note in the principal amount of the Percentage of the Commitment retained by the assigning Lender (such Note to be in exchange for, but not in payment of, the predecessor Note held by such assigning Lender). Each such Note shall be dated the effective date of such assignment. The assigning Lender shall mark the predecessor Note "exchanged" and deliver it to the Borrowers. Accrued interest on that part of the predecessor Note being assigned shall be paid as provided in the Assignment Agreement. Accrued interest and fees on that part of the predecessor Note not being assigned shall be paid to the assigning Lender. Accrued interest and accrued fees shall be paid at the same time or times provided in the predecessor Note and in this Agreement. Any attempted assignment and delegation not made in accordance with this Section 14.7.1 shall be null and void.

        Notwithstanding the foregoing provisions of this Section 14.7.1 or any other provision of this Agreement, any Lender may at any time assign all or any portion of its Loans and its Note to a federal reserve lender (but no such assignment shall release any Lender from any of its obligations hereunder).

        14.7.2    Participations.    The Agent shall have the right to permit any Lender to at any time sell to one or more financial institutions or, with Borrowers' consent (which consent shall not be unreasonably delayed or withheld and shall not be required if an Event of Default shall have occurred and be continuing), other Persons participating interests in any Loan owing to such Lender, the Note held by such Lender, the Commitment of such Lender, the direct or participation interest of such Lender in any Letter of Credit or any other interest of such Lender hereunder (any Person purchasing any such participating interest being herein called a "Participant"); provided that any Lender selling any such participating interest shall give notice thereof to the Borrowers. In the event of a sale by a Lender of a participating interest to a Participant, (x) such Lender shall remain the holder of its Note for all purposes of this Agreement, (y) the Borrowers and the Agent shall continue to deal solely and directly with such Lender in connection with such Lender's rights and obligations hereunder and (z) all amounts payable by the Borrowers shall be determined as if such Lender had not sold such participation and shall be paid directly to such Lender. No Participant shall have any direct or indirect voting rights hereunder except with respect to any of the events (excluding the events described in clause (i)) described in the fourth sentence of Section 14.1 and for increases in the Commitment of the participating Lender if the Participant's commitment would be thereby increased. Each Lender agrees to incorporate the requirements of the preceding sentence and any noncompete provisions required by the Agent into each participation agreement that such Lender enters into with any Participant. The Borrowers agree that if amounts outstanding under this Agreement and the Notes are due and payable (as a result of acceleration or otherwise), each Participant shall be deemed to have the right of setoff in respect of its participating interest in amounts owing under this Agreement, any Note and with respect to any Letter of Credit to the same extent as if the amount of its participating interest were owing directly to it as a Lender under this Agreement or such Note; provided that such right of setoff shall be subject to the obligation of each Participant to share with the Lenders, and the Lenders agree to share with each Participant, as provided in Section 7.5. The Borrowers also agree that each Participant shall be entitled to the benefits of Section 7.6 and Section 8 as if it were a Lender (provided that no Participant shall receive any greater compensation pursuant to Section 7.6 or Section 8 than would have been paid to the participating Lender if no participation had been sold).

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        14.7.3    Company Assistance.    The Borrowers shall assist the Agent in its efforts to sell and/or participate the Loans by providing the Agent with all information reasonably requested by the Agent in connection with its syndication efforts and, if requested by the Agent, the Borrowers shall assist in the preparation of information materials, projections and an informational memorandum for, and senior management of the Borrowers shall participate in meetings and other communications with, potential assignees or participants, at such times and places as the Agent may reasonably request. If requested by Agent, the Borrowers shall assist the Agent in verifying the completeness and accuracy of any information provided to the Agent for distribution to potential assignees.

        14.7.4    Prohibition of Certain Assignments and Participations.    Notwithstanding anything herein to the contrary, no Lender shall grant assignments or sell participations in any portion of the Commitments to a Participant or Assignee which is either directly, or through one or more Affiliates, substantially engaged in the same line of business as Borrowers.

        14.8    Governing Law.    This Agreement and each Note shall be a contract made under and governed by the internal laws (as opposed to the conflicts of law provisions) of the State of New York. Whenever possible each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. All obligations of any Borrower and rights of the Agent, the Lenders and any other holder of a Note expressed herein or in any other Loan Document shall be in addition to and not in limitation of those provided by applicable law.

        14.9    Counterparts.    This Agreement may be executed in any number of counterparts and by the different parties hereto on separate counterparts and each such counterpart shall be deemed to be an original, but all such counterparts shall together constitute but one and the same Agreement.

        14.10    Successors and Assigns.    This Agreement shall be binding upon the Borrowers, the Lenders and the Agent and their respective successors and assigns, and shall inure to the benefit of the Borrowers, the Lenders and the Agent and the successors and assigns of the Lenders and the Agent. No Borrower may assign or otherwise transfer its rights or obligations under this Agreement without the prior written consent of the Agent and Lenders.

        14.11    Indemnification by the Borrowers.

        (a)  In consideration of the execution and delivery of this Agreement by the Agent and the Lenders and the agreement to extend the Commitments provided hereunder, the Borrowers hereby agree to, jointly and severally, indemnify, exonerate and hold (x) the Agent, each Lender and each of their respective officers, directors, employees, Affiliates, agents and attorneys (each a "Lender Party") free and harmless from and against any and all actions, causes of action, suits, losses, liabilities, damages and expenses, including reasonable attorneys' fees and charges and allocated costs of staff counsel (collectively, the "Indemnified Liabilities"), incurred by any Lender Party in connection with the execution, delivery, performance, administration or enforcement of this Agreement or any other Loan Document by any of the Lender Parties and (y) each Lender Party free and harmless from and against any Indemnified Liabilities incurred by the Lender Parties or any of them as a result of, or arising out of, or relating to (i) the use, handling, release, emission, discharge, transportation, storage, treatment or disposal of any hazardous substance at any property owned or leased by any Credit Party, (ii) any violation of any Environmental Laws with respect to conditions at any property owned or leased by any Credit Party or the operations conducted thereon, or (iii) the investigation, cleanup or remediation of offsite locations at which any Credit Party or its predecessors are alleged to have directly or indirectly disposed of hazardous substances, except for any such Indemnified Liabilities arising on account of any such Lender

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Party's gross negligence or willful misconduct. If and to the extent that the foregoing undertaking may be unenforceable for any reason, the Borrowers hereby agree to make the maximum contribution to the payment and satisfaction of each of the Indemnified Liabilities which is permissible under applicable law.

        (b)  All obligations provided for in this Section 14.11 shall survive repayment of the Loans, cancellation of the Notes, any foreclosure under, or any modification, release or discharge of any or all of the Loan Documents and any termination of this Agreement.

        14.12Forum Selection and Consent to Jurisdiction.ANY LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS OF THE STATE OF NEW YORK OR IN THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT THE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE OF NEW YORK AND OF THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE BORROWERS FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK. THE BORROWERS HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION THAT THEY MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT ANY BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, SUCH BORROWER HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.

        14.13Waiver of Jury Trial.EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14.13.

        14.14    Interest.

        (a)  It is the intention of the parties hereto that each Lender shall conform strictly to usury laws applicable to it. Accordingly, the parties hereto stipulate and agree that none of the terms and provisions contained in this Agreement or any Note shall ever be construed to create a contract to pay any Lender for the use, forbearance or detention of money a rate in excess of the Highest Lawful Rate applicable to such Lender, and that for purposes hereof, "interest" shall

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include the aggregate of all charges or other consideration which constitute interest under applicable laws and are contracted for, taken, reserved, charged or received under this Agreement, the applicable Note or otherwise in connection with the transactions contemplated by this Agreement. Further, if the transactions contemplated hereby would be usurious as to any Lender under the laws applicable to it, then notwithstanding anything to the contrary in this Agreement or the applicable Note, or any agreement or document entered into in connection herewith or therewith, it is agreed as follows: the aggregate of all consideration which constitutes interest under the laws applicable to such Lender that is contracted for, taken, reserved, charged or received by such Lender under this Agreement or the applicable Note, or otherwise in connection herewith or therewith, shall under no circumstances exceed the maximum amount allowed by the laws applicable to such Lender, and any excess shall be credited by such Lender on the principal amount of the indebtedness of the Borrowers owed to such Lender (or, if the principal amount of all such indebtedness shall have been paid in full, to the extent such interest has been received by such Lender it shall be refunded by such Lender to the Borrowers). The provisions of this Section 14.14(a) shall control over all other provisions of this Agreement, the Notes and any other agreement or document which may be in apparent conflict herewith. The parties further stipulate and agree that, without limitation of the foregoing, all calculations of the rate or amount of interest contracted for, taken, reserved, charged or received under this Agreement, each Note and any other applicable agreement or document which are made for the purpose of determining whether such rate or amount exceeds the Highest Lawful Rate shall be made, to the extent permitted by applicable law, by amortizing, prorating, allocating and spreading during the period of the full stated term of the indebtedness of the Borrowers to the applicable Lender, and if longer and if permitted by applicable law, until payment in full, all interest at any time so contracted for, taken, reserved, charged or received.

        (b)  If at any time the effective rate of interest which would otherwise apply to any indebtedness evidenced by any Note issued to any Lender would exceed the Highest Lawful Rate applicable to such Lender (taking into account the interest rate applicable to such indebtedness pursuant to the other provisions of this Agreement, plus all additional charges and consideration which have been contracted for, taken, reserved, charged or received under this Agreement or such Note (the "Additional Charges") which constitute interest with respect to such indebtedness), the effective interest rate to apply to such indebtedness shall be limited to the Highest Lawful Rate, but any subsequent reductions in the interest rate applicable to such indebtedness shall not reduce the effective interest rate to apply to such indebtedness below the Highest Lawful Rate applicable to such Lender until the total amount of interest accrued on such indebtedness equals the amount of interest which would have accrued if the interest rate from time to time applicable to such indebtedness had at all times been in effect with respect to such indebtedness pursuant to the other provisions of this Agreement and if such Lender had collected all Additional Charges called for under this Agreement and its Note. If at maturity or final payment of any Note issued to any Lender, the total amount of interest accrued on such Note (including amounts designated as "interest" plus any Additional Charges which constitute interest, and taking into account the limitations of the first sentence of this Section 14.14(b)) is less than the total amount of interest which would have accrued if the interest rate or interest rates applicable to the indebtedness from time to time outstanding under such Note had at all times been in effect pursuant to the other provisions of this Agreement, then the Borrowers agree, to the fullest extent permitted by the laws applicable to such Lender, to pay to such Lender an amount equal to the difference between (i) the lesser of (1) the amount of interest which would have accrued on such Note if the Highest Lawful Rate had at all times been in effect (but excluding, for purposes of calculating such amount of interest, any Additional Charges which constitute interest with respect to such Note), or (2) the amount of interest which would have accrued on such Note if the interest rate or interest rates applicable to the indebtedness from time to time outstanding under such Note had at all times

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been in effect pursuant to the other provisions of this Agreement (including amounts designated as "interest" plus any Additional Charges which constitute interest with respect to such Note) less (ii) the amount of interest actually accrued on such Note (including amounts designated as "interest" plus any Additional Charges which constitute interest with respect to such Note).

        14.15    Confidentiality.    Each of the Agent, the Lenders and each Borrower shall hold all non-public information (which has been identified as such by the Agent, any Lender or any of the Borrowers, as the case may be) obtained pursuant to the requirements of this Agreement in accordance with its customary procedures for handling confidential information of this nature and in accordance with safe and sound banking and regular corporate practices, shall take such steps in a prompt and timely manner as the other parties may reasonably request to assure such confidential treatment, and in any event may make disclosure to any of their respective employees, examiners, Affiliates, outside auditors, counsel and other professional advisors in connection with this Agreement or as reasonably required by any bona fide transferee, participant or assignee or as required or requested by any governmental agency or representative thereof or pursuant to legal process; provided, however, that

        (a)  unless prohibited by applicable law or court order, each party shall notify the others of any request by any governmental agency or representative thereof (other than any such request in connection with an examination of the financial condition of the Agent or any Lender by such governmental agency) for disclosure of any such non-public information prior to disclosure of such information;

        (b)  prior to any such disclosure pursuant to this Section 14.15, the Agent, any Lender, or any Borrower, as the case may be, shall require any such bona fide transferee, participant and assignee receiving a disclosure of non-public information to agree in writing

        (i)    to be bound by this Section 14.15; and

        (ii)  to require such Person to require any other Person to whom such Person discloses such non-public information to be similarly bound by this Section 14.15; and

        (c)  except as may be required by an order of a court of competent jurisdiction and to the extent set forth therein, neither the Agent nor any Lender shall be obligated or required to return any materials furnished by any Borrower or any other Credit Party.

        14.16    Termination.    This Agreement shall be in effect from the date hereof until June 30, 2005 (the "Original Term") and, at the election of all the Lenders, shall renew itself from year to year thereafter (each such one year renewal being referred to herein as a "Renewal Term", and the Original Term and all Renewal Terms collectively are referred to herein as the "Term") unless (i) the due date of the Obligations is accelerated pursuant to Section 12 hereof; or (ii) Borrowers elect or one or more Lenders elect to terminate this Agreement at the end of the Original Term or at the end of any Renewal Term by giving the other parties written notice of such election at least ninety (90) days prior to the end of the Original Term or the then current Renewal Term, in which case Borrowers shall pay all of the Obligations in full on the last day of such Term and shall collateralize all Letters of Credit in accordance with Section 2.3.6. If one or more of the events specified in clauses (i) or (ii) above occurs, this Agreement shall terminate on the date thereafter that the Obligations are paid in full; provided, however, that the security interests and liens created under the Loan Documents shall survive such termination until the date upon which payment and satisfaction in full of the Obligations shall have occurred. At such time as Borrowers have repaid all of the Obligations and this Agreement has terminated, (i) the Credit Parties shall deliver to the Agent a release, in form and substance reasonably satisfactory to the Agent, of all obligations and liabilities of the Agent, Lenders and their respective officers, directors, employees, agents, parents, subsidiaries and affiliates to any Credit Party, and if Borrowers are obtaining new financing from another lender, Borrowers shall deliver Borrowers' indemnification of the Agent and Lender, in form and substance satisfactory to the Agent, for checks

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which the Agent has credited to Borrowers' account, but which subsequently are dishonored for any reason and (ii) upon Borrowers' request, the Agent shall deliver to Borrowers a payoff in form and substance reasonably satisfactory to Borrowers and the Agent. If any Lender elects not to renew this Agreement, the other Lenders may purchase such Lender's Commitment or the Agent may find a new lender to purchase such Lender's Commitment, in each case pursuant to Section 14.7.1.

        14.17    The Agent and Lenders.    The Agent and each Lender represents and warrants to the Borrowers that it is a financial institution having combined capital and surplus of at least $300,000,000.

        14.18    Intercreditor Agreement.    Certain rights and obligations of the parties hereto are subject to the Intercreditor Agreement.

        14.19    Concerning Joint and Several Liability of the Borrowers.

        (a)  Each of the Borrowers is accepting joint and several liability hereunder in consideration of the financial accommodation to be provided by the Lenders under this Agreement, for the mutual benefit, directly and indirectly, of each of the Borrowers and in consideration of the undertakings of each of the Borrowers to accept joint and several liability for the obligations of each of them.

        (b)  Each of the Borrowers jointly and severally hereby irrevocably and unconditionally accepts, not merely as a surety but also as a co-debtors, joint and several liability with the other Borrowers with respect to the payment and performance of all of the Obligations, it being the intention of the parties hereto that all such Obligations shall be the joint and several obligations of each of the Borrowers without preferences or distinction among them.

        (c)  If and to the extent that any of the Borrowers shall fail to make any payment with respect to any of the Obligations as and when due or to perform any of such Obligations in accordance with the terms thereof, then in each such event, the other Borrowers will make such payment with respect to, or perform, such Obligations.

        (d)  The obligations of each Borrower under the provisions of this Section 14.19 constitute full recourse obligations of such Borrower, enforceable against it to the full extent of its properties and assets, irrespective of the validity, regularity or enforceability of this Agreement or any other Loan Document or any other circumstances whatsoever.

        (e)  Except as otherwise expressly provided in the Loan Documents or required by applicable law, each Borrower hereby waives notice of acceptance of its joint and several liability, notice of any other Borrower's request for any Loan under this Agreement, notice of any Loan made under this Agreement, notice of occurrence of any Event of Default, or of any demand for any payment under this Agreement or any other Loan Document, notice of any action at any time taken or omitted by any Lender or the Lender under or in respect of any of the Obligations, any requirement of diligence and, generally, all demands, notices and other formalities of every kind in connection with this Agreement or any other Loan Document. Each Borrower hereby assents to, and waives notice of, any extension or postponement of the time for the payment of any of the Obligations, the acceptance of any partial payment thereon, any waiver, consent or other action or acquiescence by any Lender at any time or times in respect of any default by any Borrower in the performance or satisfaction of any term, covenant, condition or provision of this Agreement or any other Loan Document, any and all other indulgences whatsoever by any Lender in respect of any of the Obligations, and the taking, addition, substitution or release, in whole or in part, at any time or times, of any security for any of the Obligations or the addition, substitution or release, in whole or in part, of any Borrower. Without limiting the generality of the foregoing, each Borrower assents to any other action or delay in acting or failure to act on the part of any Lender, including, without limitation, any failure strictly or diligently to assert any right or to pursue any remedy which might, but for the provisions of this Section 14.19, afford grounds for terminating,

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discharging or relieving such Borrower, in whole or in part, from any of its obligations under this Section 14.19, it being the intention of each Borrower that, so long as any of the Obligations remain unsatisfied, the obligations of such Borrower under this Section 14.19 shall not be discharged except by performance and then only to the extent of such performance. The obligations of each Borrower under this Section 14.19 shall not be diminished or rendered unenforceable by any winding up, reorganization, arrangement, liquidation, reconstruction or similar proceeding with respect to any Borrower or any Lender. The joint and several liability of the Borrowers hereunder shall continue in full force and effect notwithstanding any absorption, merger, amalgamation or any other change whatsoever in the name, membership, constitution or place of formation of any Borrower or any Lender.

        (f)    The provisions of this Section 14.19 are made for the benefit of the Lenders and their respective successors and assigns, and may be enforced by any such Person from time to time against any of the Borrowers as often as occasion therefor may arise and without requirement on the part of any Lender first to marshal any of its claims or to exercise any of its rights against any other Borrower or to exhaust any remedies available to it against any other Borrower or to resort to any other source or means of obtaining payment of any of the Obligations or to elect any other remedy. The provisions of this Section 14.19 shall remain in effect until all the Obligations shall have been paid in full or otherwise fully satisfied. If at any time, any payment, or any part thereof, made in respect of any of the Obligations is rescinded or must otherwise be restored or returned by any Lender upon the insolvency, bankruptcy or reorganization of any of the Borrowers, or otherwise, the provisions of this Section 14.19 will forthwith be reinstated in effect, as though such payment had not been made.

        (g)  Notwithstanding any provision to the contrary contained herein or in any other of the Loan Documents, to the extent the joint obligations of a Borrower shall be adjudicated to be invalid or unenforceable for any reason (including, without limitation, because of any applicable state or federal law relating to fraudulent conveyances or transfers) then the obligations of each Borrower hereunder shall be limited to the maximum amount that is permissible under applicable law (whether federal or state and including, without limitation, the federal Bankruptcy Code).

        (h)  The Borrowers hereby agree, as among themselves, that if any Borrower shall become an Excess Funding Borrower (as defined below), each other Borrower shall, on demand of such Excess Funding Borrower (but subject to the next sentence hereof and to subsection (B) below), pay to such Excess Funding Borrower an amount equal to such Borrower's Pro Rata Share (as defined below and determined, for this purpose, without reference to the properties, assets, liabilities and Indebtedness of such Excess Funding Borrower) of such Excess Payment (as defined below). The payment obligation of the other Borrowers to any Excess Funding Borrower under this Section 14.19(h) shall be subordinate and subject in right of payment to the proper payment in full of the obligations of such Borrower under the other provisions of this Agreement and the other Loan Documents, and such Excess Funding Borrower shall not exercise any right or remedy with respect to such excess until payment and satisfaction in full of all such obligations. For purposes hereof, (i) "Excess Funding Borrower" shall mean, in respect of any Obligations (hereafter, the "Joint Obligations"), any Borrower that has paid an amount in excess of its Pro Rata Share of the Joint Obligations; (ii) "Excess Payment" shall mean, in respect of any Joint Obligations, the amount paid by an Excess Funding Borrower in excess of its pro Rata Share of such Joint Obligations; and (iii) "Pro Rata Share", for the purposes of this Section 14.19(h), shall mean, for any Borrower, the ratio (expressed as a percentage) of (A) the amount by which the aggregate present fair saleable value of all of its assets and properties exceeds the amount of all Indebtedness and liabilities of such Borrower (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Borrower hereunder) to (B) the amount by which the aggregate present fair saleable value of all assets and other properties of

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such Borrower and the other Borrowers exceeds the amount of all of the Indebtedness and liabilities (including contingent, subordinated, unmatured, and unliquidated liabilities, but excluding the obligations of such Borrower and the other Borrowers hereunder) of such Borrower and the other Borrower, all as of the Closing Date.

[Signature Pages Follow]

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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year specified at the beginning hereof.

BORROWERS:
OREGON STEEL MILLS, INC.
By:	Title:
Notice Address:		1000 Broadway Bldg. Suite 2200 1000 S.W. Broadway Portland, Oregon 97205 Facsimile: (503) 240-5232 Attn: Jeff S. Stewart
NEW CF&I, INC.
By:	Title:
Notice Address:		c/o Oregon Steel Mills, Inc. 1000 Broadway Bldg. Suite 2200 1000 S.W. Broadway Portland, Oregon 97205 Facsimile: (503) 240-5232 Attn: Jeff S. Stewart
CF&I STEEL, L.P. (dba Rocky Mountain Steel Mills)
By:	New CF&I, Inc., General Partner
By:	Title:
Notice Address:		c/o Oregon Steel Mills, Inc. 1000 Broadway Bldg. Suite 2200 1000 S.W. Broadway Portland, Oregon 97205 Facsimile: (503) 240-5232 Attn: Jeff S. Stewart

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	COLORADO AND WYOMING RAILWAY COMPANY
	By:	Title:
	Notice Address:		c/o Oregon Steel Mills, Inc. 1000 Broadway Bldg. Suite 2200 1000 S.W. Broadway Portland, Oregon 97205 Facsimile: (503) 240-5232 Attn: Jeff S. Stewart
	TEXTRON FINANCIAL CORPORATION,     as Agent and as a Lender
Commitment: $35,000,000 (as a Lender)	By:	Title:
	Notice Address:		Textron Financial Corporation Commercial Lending Advisors 4550 North Point Parkway Suite 400 Alpharetta, Georgia 30022 Facsimile: (770) 360-1407 Attn: Eric Hubbard
	GMAC BUSINESS CREDIT LLC, as Co-Managing Agent and as a Lender
Commitment: $25,000,000 (as a Lender)	By:	Title:
	Notice Address:		GMAC Business Credit LLC 3000 Town Center Suite 280 Southfield, MI 48075 Attn: Gwen Julin Facsimile: (248) 356-8978
	with copies to:
	Kristi Loucks Vice President GMAC Business Credit LLC 2059 Northlake Parkway Third Floor North Tucker, GA 30084 Facsimile: (678) 937-4182

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	ORIX FINANCIAL SERVICES, INC., as a Lender
Commitment: $15,000,000 (as a Lender)	By:	Title:
	Notice Address:		ORIX Financial Services, Inc. One South Wacker Drive Suite 2750 Chicago, Illinois 60606-4633 Facsimile: (      ) - Attn: Mark Tauber—Managing Director
2059 Northlake Parkway

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EX-10.2

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EXHIBIT 10.2

SECURITY AGREEMENT

        THIS SECURITY AGREEMENT (this "Security Agreement"), dated as of July 12, 2002, is among OREGON STEEL MILLS, INC., a Delaware corporation ("OSM"), NEW CF&I, INC., a Delaware corporation ("New CF&I"), CF&I STEEL, L.P., a Delaware limited partnership doing business as Rocky Mountain Steel Mills ("RMSM"), and COLORADO AND WYOMING RAILWAY COMPANY, a Delaware corporation ("CWR") (OSM, New CF&I, RMSM and CWR, collectively, "Grantors" and each, individually, a "Grantor"), and TEXTRON FINANCIAL CORPORATION, a Delaware corporation, in its capacity as Agent for Lenders from time to time party thereto.

W I T N E S S T H:

        WHEREAS, pursuant to that certain Credit Agreement dated as of the date hereof by and among Grantors, Agent and Lenders (including all exhibits and schedules thereto, as from time to time amended, restated, supplemented or otherwise modified, the "Credit Agreement"), Lenders have agreed to make Loans and other financial accommodations to Grantors;

        WHEREAS, in order to induce Agent and Lenders to enter into the Credit Agreement and other Loan Documents and to induce Lenders to make the Loans and other financial accommodations as provided for in the Credit Agreement, Grantors have agreed to grant a continuing Lien on the Collateral (as hereinafter defined) to secure the Obligations;

        NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

        1.    DEFINED TERMS.    All capitalized terms used but not otherwise defined herein have the meanings given to them in the Credit Agreement. The terms "Account," "Account Debtor", "Accession", "Chattel Paper", "Deposit Accounts", "General Intangibles", "Instruments", "Documents" and "Proceeds" shall have the respective meanings assigned to them in the Uniform Commercial Code in effect in the State of New York on the date hereof and as amended from time to time ("NY UCC") (such terms being defined therein in the lower case). The term "Bond Offering Collateral" as used herein shall mean the collateral described on Exhibit A that is collateral under that certain Indenture, to be dated as of July 15, 2002 (the "Indenture") by and among OSM, certain Credit Parties named therein, and U.S. Bank National Association, as trustee.

        2.    GRANT OF LIEN.

        (a)  To secure the prompt and complete payment, performance and observance of all of the Obligations, each Grantor hereby grants, assigns, conveys, mortgages, pledges, hypothecates and transfers to Agent, for itself and the benefit of Lenders, a Lien upon all of its right, title and interest in, to and under the following property, whether now owned by or owing to, or hereafter acquired by or arising in favor of such Grantor (including under any trade names, styles or derivations thereof), and whether owned or consigned by or to, or leased from or to, such Grantor, and regardless of where located (all of which being hereinafter collectively referred to as the "Collateral"):

        (i)    all inventory (as defined in the NY UCC) of such Grantor, wherever located, including all Inventory sold by such Grantor which is returned to or repossessed by such Grantor, and all Accessions thereto and Documents therefor (any and all such Inventory, Accessions and Documents being the "Inventory");

        (ii)  all (A) Accounts of such Grantor arising from the sale of Inventory or services rendered by such Grantor, (B) Chattel Paper and Instruments evidencing any right to payment for Inventory sold or services rendered by such Grantor, and (C) rights of such Grantor now or hereafter existing in and to all security agreements and guaranties

entered into by or on behalf of the Account Debtors and securing or guaranteeing any such Accounts, Chattel Paper and Instruments (any and all such Accounts, Chattel Paper and Instruments being the "Receivables", and any and all such security agreements and guaranties being the "Related Contracts");

        (iii)  all books, records, writings, databases and other information (A) evidencing, embodying or listing any Inventory, Receivables or Related Contracts or (B) used in connection with the sale of Inventory or the collection of amounts due under Receivables and Related Contracts;

        (iv)  all General Intangibles such as, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles, programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise (but excluding any intellectual property or other General Intangibles relating to production, property, plant and equipment, the operation thereof or the production and manufacturing processes) (collectively, the "Intangibles");

        (v)  all investment property (as defined in the NY UCC), including, without limitation, all stock or other equity interests (whether constituting investment property or not) in material subsidiaries (excluding the Camrose Parties, LSI and Feralloy), all securities, whether certificated or uncertificated, security entitlements, securities accounts, bank accounts, Deposit Accounts, cash collateral accounts, commodity contracts and commodity accounts, excluding the Note Collateral Account as defined in the 2002 Indenture in which products and Proceeds of Bond Offering Collateral may be deposited (collectively, the "Investment Property");

        (vi)  all supporting obligations (as defined in the NY UCC) related to the property described above, including without limitation, letters of credit and guaranties issued in support of Accounts (collectively, the "Supporting Obligations"), and all Instruments evidencing intercompany indebtedness; and

        (vii) all other related personal property and products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Collateral (including Proceeds which constitute property of the types described in (but not excluded from) clauses (i) through (vi) above), Proceeds deposited from time to time in any lock box or blocked account, and, to the extent not otherwise included, all payments under insurance with respect to any of the foregoing Collateral (whether or not the Agent is the loss payee thereof) (collectively the "Proceeds") (except to the extent such Proceeds are invested in real property and any improvements thereon and machinery and equipment constituting personal property, or other property and assets owned by OSM, New CF&I, and RMSM, which constitute Bond Offering Collateral), or any indemnity, warranty or guaranty, payable by reason of loss or damage to or otherwise with respect to any of the foregoing Collateral.

        (b)  In addition, to secure the prompt and complete payment, performance and observance of the Obligations and in order to induce Agent and Lenders as aforesaid, each Grantor hereby grants to Agent, for itself and the benefit of Lenders, a right of setoff against the property of such Grantor held by Agent or any Lender, consisting of property constituting Collateral now or hereafter in the possession or custody of or in transit to Agent or any

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Lender, for any purpose, including safekeeping, collection or pledge, for the account of such Grantor, or as to which such Grantor may have any right or power.

        3.    AGENT'S AND LENDERS' RIGHTS: LIMITATIONS ON AGENT'S AND LENDERS' OBLIGATIONS.

        (a)  It is expressly agreed by Grantors that, anything herein to the contrary notwithstanding, each Grantor shall remain liable under each of its Related Contracts to observe and perform all the conditions and obligations to be observed and performed by it thereunder. Neither Agent nor any Lender shall have any obligation or liability under any Related Contract by reason of or arising out of this Security Agreement or the granting herein of a Lien thereon or the receipt by Agent or any Lender of any payment relating to any Related Contract pursuant hereto. Neither Agent nor any Lender shall be required or obligated in any manner to perform or fulfill any of the obligations of any Grantor under or pursuant to any Related Contract, or to make any payment, or to make any inquiry as to the nature or the sufficiency of any payment received by it or the sufficiency of any performance by any party under any Related Contract, or to present or file any claims, or to take any action to collect or enforce any performance or the payment of any amounts which may have been assigned to it or to which it may be entitled at any time or times.

        (b)  Agent may, at any time after an Event of Default shall have occurred and be continuing, without prior notice to any Grantor, notify Account Debtors, parties to the Related Contracts and any other obligors in respect of the Receivables, that the Receivables and the right, title and interest of any Grantor in and under such Related Contracts have been assigned to Agent, and that payments shall be made directly to Agent. Upon the request of Agent, each Grantor shall so notify Account Debtors, parties to Related Contracts and other obligors in respect of the Receivables.

        (c)  Agent may at any time in Agent's own name, in the name of a nominee of Agent or in the name of any Grantor communicate (by mail, telephone, facsimile or otherwise) with Account Debtors and other parties to Receivables and Related Contracts to verify with such Persons, to Agent's satisfaction, the existence, amount terms of, and any other matter relating to, any such Receivables or Related Contracts. If an Event of Default shall have occurred and be continuing, each Grantor, at its own expense, shall cause the independent certified public accountants then engaged by such Grantor to prepare and deliver to Agent and each Lender at any time and from time to time promptly upon Agent's request the following reports with respect to each Grantor: (i) a reconciliation of all Receivables; (ii) an aging of all Receivables; (iii) trial balances; and (iv) a test verification of such Receivables as Agent may request. Each Grantor, at its own expense, shall deliver to Agent the results of each physical verification, if any, which such Grantor may in its discretion have made, or caused any other Person to have made on its behalf, of all or any portion of its Inventory.

        4.    REPRESENTATIONS AND WARRANTIES.    Each Grantor represents and warrants that:

        (a)  Each Grantor is the sole owner of each item of the Collateral upon which it purports to grant a Lien hereunder, free and clear of any and all Liens other than Permitted Liens.

        (b)  No effective security agreement, financing statement, equivalent security or Lien instrument or continuation statement covering all or any part of the Collateral is on file or of record in any public office, except such as may have been filed (i) by any Grantor in favor of Agent pursuant to this Security Agreement or the other Loan Documents, and (ii) in connection with any other Permitted Liens.

        (c)  This Security Agreement is effective to create a valid and continuing Lien on and, upon the filing of the appropriate financing statements listed on Schedule I hereto, a perfected

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Lien in favor of Agent, for itself and the benefit of Lenders, on the Collateral with respect to which a Lien may be perfected by filing pursuant to the UCC. Such Lien is prior to all other Liens, except Permitted Liens that would be prior to Liens in favor of Agent for the benefit of Agent and Lenders as a matter of law, and is enforceable as such as against any and all creditors of and purchasers from any Grantor (other than purchasers of Inventory in the ordinary course of business) as such enforceability may be subject to applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect relating to creditors' rights generally and general principles of equity. All action by any Grantor necessary or desirable to protect and perfect such Lien on each item of the Collateral has been duly taken.

        (d)  Schedule II hereto lists all Instruments (other than intercompany debt) and Chattel Paper of each Grantor which constitute Collateral. All action by any Grantor necessary or desirable to protect and perfect the Lien of Agent on each item set forth on Schedule II (including the delivery of all originals thereof to Agent and the legending of all Chattel Paper as required by Section 5(b) hereof) has been duly taken. The Lien of Agent, for the benefit of Agent and Lenders, on the Collateral listed on Schedule II hereto is prior to all other Liens, except Permitted Liens that would be prior to the Liens in favor of Agent as a matter of law, and is enforceable as such against any and all creditors of and purchasers from any Grantor.

        (e)  Each Grantor's state of organization or incorporation, chief executive office, principal place of business, offices, all warehouses and premises where Collateral is stored or located, and the locations of all of its books and records concerning the Collateral are set forth on Schedule IIIA, Schedule IIIB, Schedule IIIC, and Schedule IIID, respectively, hereto.

        (f)    Each Grantor's legal name, and the place of formation of each Grantor, is as set forth in the preamble to this Agreement.

        (g)  Each Grantor's state organizational identification number, if any, is as set forth on Schedule IV hereto.

        5.    COVENANTS.    Each Grantor covenants and agrees with Agent, for the benefit of Agent and Lenders, that from and after the date of this Security Agreement and until the Termination Date:

        (a)  Further Assurances: Pledge of Instruments; Chattel Paper.

        (i)    At any time and from time to time, upon the written request of Agent and at the sole expense of Grantors, each Grantor shall promptly and duly execute and deliver any and all such further instruments and documents and take such further actions as Agent may deem desirable to obtain the full benefits of this Security Agreement and of the rights and powers herein granted, including (A) using its reasonable efforts to secure all consents and approvals necessary or appropriate for the assignment to or for the benefit of Agent of any Receivables or Related Contracts held by such Grantor or in which such Grantor has any rights not heretofore assigned, (B) filing any financing or continuation statements under the UCC with respect to the Liens granted hereunder or under any other Loan Document, (C) transferring Collateral to Agent's possession (for the benefit of Agent and Lenders) if such Collateral consists of Chattel Paper or Instruments or if a Lien on such Collateral can be perfected only by possession, or if requested by Agent, and (D) obtaining, or using its reasonable best efforts to obtain, waivers of Liens, if any exist, from landlords and mortgagees in accordance with the Credit Agreement. Each Grantor hereby authorizes the Agent to authenticate any record regarding all or any portion of the Collateral, including, without limitation, one or more financing or continuation statements and amendments thereto (all without the signature

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or authentication of any Grantor). At any time and from time to time, the Agent shall be entitled to file and/or record any or all such financing statements, instruments and documents held by it, and any or all such further financing statements, documents and instruments, relative to the Collateral or any part thereof in each instance, and to take all such other actions as the Agent may deem appropriate to perfect and to maintain perfected the security interests granted herein. A carbon, photographic or other reproduction of this Agreement or any financing statement covering the Collateral or any part thereof shall be sufficient as a financing statement where permitted by law. If any amount payable under or in connection with any of the Collateral is or shall become evidenced by any Instrument, such Instrument, other than checks and notes received in the ordinary course of business, shall be duly endorsed in a manner satisfactory to Agent immediately upon such Grantor's receipt thereof.

        (ii)  Each Grantor shall deliver to Agent the original of all letters of credit issued to it as a beneficiary along with a collateral assignment thereof evidencing the consent to such assignment by the issuer of the letter of credit and each correspondent or confirming bank, all in form and substance reasonably satisfactory to Agent.

        (iii)  Each Grantor shall take all steps necessary to grant the Agent control of all electronic Chattel Paper that constitutes Collateral in accordance with the UCC as revised effective July 1, 2001.

        (b)  Maintenance of Records.    Grantors shall keep and maintain, at their own cost and expense, satisfactory and complete records of the Collateral, including a record of any and all payments received and any and all credits granted with respect to the Collateral and all other dealings with the Collateral. Grantors shall mark their books and records pertaining to the Collateral to evidence this Security Agreement and the Liens granted hereby. All Chattel Paper that constitutes Collateral shall be marked with the following legend: "This writing and the obligations evidenced or secured hereby are subject to the security interest of Textron Financial Corporation, as Agent, for the benefit of Agent and certain Lenders."

        (c)  Indemnification.    In any suit, proceeding or action brought by Agent or any Lender relating to any Receivables or Related Contracts, each Grantor will save, indemnify and keep Agent and Lenders harmless from and against all expense (including reasonable attorneys' fees and expenses), loss or damage suffered by reason of any defense, setoff, counterclaim, recoupment or reduction of liability whatsoever of the obligor thereunder, arising out of a breach by any Grantor of any obligation thereunder or arising out of any other agreement, indebtedness or liability at any time owing to, or in favor of, such obligor or its successors from such Grantor, except in the case of Agent or any Lender, to the extent such expense, loss, or damage is attributable to the gross negligence or willful misconduct of Agent or such Lender as finally determined by a court of competent jurisdiction. All such obligations of Grantors shall be and remain enforceable against and only against Grantors and shall not be enforceable against Agent or any Lender.

        (d)  Compliance with Terms of Accounts, etc.    In all material respects, each Grantor will perform and comply with all obligations in respect of its Receivables and Related Contracts and all other agreements to which it is a party or by which it is bound relating to the Collateral.

        (e)  Limitation on Liens on Collateral.    No Grantor will create, permit or suffer to exist, and each Grantor will defend the Collateral against, and take such other action as is necessary to remove, any Lien on the Collateral except Permitted Liens, and will defend the right, title and interest of Agent and Lenders in and to any of such Grantor's rights under the Collateral against the claims and demands of all Persons whomsoever.

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        (f)    Limitations on Disposition.    No Grantor will sell, lease, transfer or otherwise dispose of any of the Collateral, or attempt or contract to do so except as permitted by the Credit Agreement and the other Loan Documents.

        (g)  Further Identification of Collateral.    Grantors will, if so requested by Agent, furnish to Agent, statements and schedules further identifying and describing the Collateral and such other reports in connection with the Collateral as Agent may reasonably request, all in such detail as Agent may reasonably specify.

        (h)  Notices.    Grantors will advise Agent promptly, in reasonable detail, (i) of any Lien (other than Permitted Liens) or claim made or asserted against any material portion of the Collateral, and (ii) of the occurrence of any other event which would have a material adverse effect on the aggregate value of the Collateral or on the Liens created hereunder or under any other Loan Document.

        (i)    Name and Organization.    Grantors will not change their legal name, their place of incorporation, formation or organization (as applicable) or their state organizational identification number, from those specified in the preamble to this Agreement and Schedule IV.

        6.    AGENT'S APPOINTMENT AS ATTORNEY-IN-FACT.    On the Closing Date each Grantor shall execute and deliver to Agent a power of attorney (the "Power of Attorney") substantially in the form attached hereto as Exhibit B. The power of attorney granted pursuant to the Power of Attorney is a power coupled with an interest and shall be irrevocable until the Loans are paid in full in cash. The powers conferred on Agent, for the benefit of Agent and Lenders, under the Power of Attorney are solely to protect Agent's interests (for the benefit of Agent and Lenders) in the Collateral and shall not impose any duty upon Agent or any Lender to exercise any such powers. Agent agrees that (a) it shall not exercise any power or authority granted under the Power of Attorney unless an Event of Default has occurred and is continuing, and (b) Agent shall account for any moneys received by Agent in respect of any foreclosure on or disposition of Collateral pursuant to the Power of Attorney provided that none of Agent or any Lender shall have any duty as to any Collateral, and Agent and Lenders shall be accountable only for amounts that they actually receive as a result of the exercise of such powers. NONE OF AGENT, LENDERS OR THEIR RESPECTIVE AFFILIATES, OFFICERS, DIRECTORS, EMPLOYEES, AGENTS OR REPRESENTATIVES SHALL BE RESPONSIBLE TO ANY GRANTOR FOR ANY ACT OR FAILURE TO ACT UNDER ANY POWER OF ATTORNEY OR OTHERWISE, EXCEPT IN RESPECT OF DAMAGES ATTRIBUTABLE TO THEIR OWN GROSS NEGLIGENCE OR WILLFUL MISCONDUCT AS FINALLY DETERMINED BY A COURT OF COMPETENT JURISDICTION, NOR FOR ANY PUNITIVE, EXEMPLARY, INDIRECT OR CONSEQUENTIAL DAMAGES.

        7.    REMEDIES: RIGHTS UPON DEFAULT.    Subject to the Intercreditor Agreement referenced in Section 23 hereof and, to the extent applicable, the Pledge Agreement and Partnership Pledge Agreement of even date herewith:

        (a)  In addition to all other rights and remedies granted to it under this Security Agreement, the Credit Agreement, the other Loan Documents and under any other instrument or agreement securing, evidencing or relating to any of the Obligations, if any Event of Default shall have occurred and be continuing, Agent may exercise all rights and remedies of a secured party under the UCC. Without limiting the generality of the foregoing, each Grantor expressly agrees that in any such event Agent, without demand of performance or other demand, advertisement or notice of any kind (except the notice specified below of time and place of public or private sale) to or upon such Grantor or any other Person (all and each of which demands, advertisements and notices are hereby expressly waived to the

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maximum extent permitted by the UCC and other applicable law), may forthwith enter upon the premises of such Grantor where any Collateral is located through self-help, without judicial process, without first obtaining a final judgment or giving such Grantor or any other Person notice and opportunity for a hearing on Agent's claim or action and may collect, receive, assemble, process, appropriate and realize upon the Collateral, or any part thereof, and may sell, lease, assign, give an option or options to purchase, or sell or otherwise dispose of and deliver said Collateral (or contract to do so), or any part thereof, in one or more parcels at a public or private sale or sales, at any exchange at such prices as it may deem acceptable, for cash or on credit or for future delivery without assumption of any credit risk. Agent or any Lender shall have the right upon any such public sale or sales and, to the extent permitted by law, upon any such private sale or sales, to purchase for the benefit of Agent and Lenders, the whole or any part of said Collateral so sold, free of any right or equity of redemption, which equity of redemption each Grantor hereby releases. Such sales may be adjourned and continued from time to time with or without notice. Agent shall have the right to conduct such sales on any Grantor's premises or elsewhere and shall have the right to use any Grantor's premises without charge for such time or times as Agent deems necessary or advisable.

        Each Grantor further agrees, at Agent's request, to assemble the Collateral and make it available to Agent at places which Agent shall select, whether at such Grantor's premises or elsewhere. Until Agent is able to effect a sale, lease, or other disposition of Collateral, Agent shall have the right to hold or use Collateral, or any part thereof, to the extent that it deems appropriate for the purpose of preserving Collateral or its value or for any other purpose deemed appropriate by Agent. Agent shall have no obligation to any Grantor to maintain or preserve the rights of such Grantor as against third parties with respect to Collateral while Collateral is in the possession of Agent. Agent may, if it so elects, seek the appointment of a receiver or keeper to take possession of Collateral and to enforce any of Agent's remedies (for the benefit of Agent and Lenders), with respect to such appointment without prior notice or hearing as to such appointment. Agent shall apply the net proceeds of any such collection, recovery, receipt, appropriation, realization or sale to the Obligations as provided in the Credit Agreement, and only after so paying over such net proceeds, and after the payment by Agent of any other amount required by any provision of law, need Agent account for the surplus, if any, to any Grantor. To the maximum extent permitted by applicable law, each Grantor waives all claims, damages, and demands against Agent or any Lender arising out of the repossession, retention or sale of the Collateral except such as arise out of the gross negligence or willful misconduct of Agent or such Lender as finally determined by a court of competent jurisdiction. Each Grantor agrees that ten (10) days prior notice by Agent of the time and place of any public sale or of the time after which a private sale may take place is reasonable notification of such matters. Grantors shall remain liable for any deficiency if the proceeds of any sale or disposition of the Collateral are insufficient to pay all Obligations, including any attorneys' fees and other expenses incurred by Agent or any Lender to collect such deficiency.

        (b)  Except as otherwise specifically provided herein or in the other Loan Documents, each Grantor hereby waives presentment, demand, protest or any notice (to the maximum extent permitted by applicable law) of any kind in connection with this Security Agreement or any Collateral.

        8.    LIMITATION ON AGENT'S AND LENDERS' DUTY IN RESPECT OF COLLATERAL.    Agent and each Lender shall use reasonable care with respect to the Collateral in its possession or under its control. Neither Agent nor any Lender shall have any other duty as to any Collateral in its possession or control or in the possession or control of any agent or nominee of Agent or such

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Lender, or any income thereon or as to the preservation of rights against prior parties or any other rights pertaining thereto.

        9.    REINSTATEMENT.    This Security Agreement shall remain in full force and effect and continue to be effective should any petition be filed by or against any Grantor for liquidation or reorganization, should any Grantor become insolvent or make an assignment for the benefit of any creditor or creditors or should a receiver or trustee be appointed for all or any significant part of any Grantor's assets, and shall continue to be effective or be reinstated, as the case may be, if at any time payment and performance of the Obligations, or any part thereof, is, pursuant to applicable law, rescinded or reduced in amount, or must otherwise be restored or returned by any obligee of the Obligations, whether as a "voidable preference," "fraudulent conveyance," or otherwise, all as though such payment or performance had not been made. In the event that any payment, or any part thereof, is rescinded, reduced, restored or returned, the Obligations shall be reinstated and deemed reduced only by such amount paid and not so rescinded, reduced, restored or returned.

        10.    NOTICES.    Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other party, or whenever any of the parties desires to give and serve upon any other party any communication with respect to this Security Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be given in the manner, and deemed received, as provided for in the Credit Agreement.

        11.    SEVERABILITY.    Whenever possible, each provision of this Security Agreement shall be interpreted in a manner as to be effective and valid under applicable law, but if any provision of this Security Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Security Agreement. This Security Agreement is to be read, construed and applied together with the Credit Agreement and the other Loan Documents which, taken together, set forth the complete understanding and agreement of Agent, Lenders and Grantors with respect to the matters referred to herein and therein.

        12.    NO WAIVER; CUMULATIVE REMEDIES.    Neither Agent nor any Lender shall by any act, delay, omission or otherwise be deemed to have waived any of its rights or remedies hereunder, and no waiver shall be valid unless in writing, signed by Agent and then only to the extent therein set forth. A waiver by Agent of any right or remedy hereunder on any one occasion shall not be construed as a bar to any right or remedy which Agent would otherwise have had on any future occasion. No failure to exercise nor any delay in exercising on the part of Agent or any Lender, any right, power or privilege hereunder, shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege hereunder preclude any other or future exercise thereof or the exercise of any other right, power or privilege. The rights and remedies hereunder provided are cumulative and may be exercised singly or concurrently, and are not exclusive of any rights and remedies provided by law. None of the terms or provisions of this Security Agreement may be waived, altered, modified or amended except by an instrument in writing, duly executed by Agent and Grantors.

        13.    LIMITATION BY LAW.    All rights, remedies and powers provided in this Security Agreement may be exercised only to the extent that the exercise thereof does not violate any applicable provision of law, and all the provisions of this Security Agreement are intended to be subject to all applicable mandatory provisions of law that may be controlling and to be limited to the extent necessary so that they shall not render this Security Agreement invalid, unenforceable,

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in whole or in part, or not entitled to be recorded, registered or filed under the provisions of any applicable law.

        14.    TERMINATION OF THIS SECURITY AGREEMENT.    Subject to Section 9 hereof, this Security Agreement shall continue in effect until (i) the Credit Agreement has terminated pursuant to its express terms and (ii) all of the Obligations have been paid and satisfied in full.

        15.    SUCCESSORS AND ASSIGNS.    This Security Agreement and all obligations of Grantors hereunder shall be binding upon the successors and assigns of each Grantor (including any debtor-in-possession on behalf of such Grantor) and shall, together with the rights and remedies of Agent, for the benefit of Agent and Lenders, hereunder, inure to the benefit of Agent and Lenders, all future holders of any instrument evidencing any of the Obligations and their respective successors and assigns. No sales of participations, other sales, assignments, transfers or other dispositions of any agreement governing or instrument evidencing the Obligations or any portion thereof or interest therein shall in any manner affect the Lien granted to Agent, for the benefit of Agent and Lenders, hereunder. No Grantor may assign, sell, hypothecate or otherwise transfer any interest in or obligation under this Security Agreement.

        16.    COUNTERPARTS.    This Security Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement.

        17.    GOVERNING LAW.    EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS, IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, THIS SECURITY AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE, AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA. EACH GRANTOR HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE SOUTHERN DISTRICT OF NEW YORK, SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN GRANTORS, AGENT AND LENDERS PERTAINING TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS SECURITY AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, PROVIDED, THAT AGENT, LENDERS AND GRANTORS ACKNOWLEDGE THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE SOUTHERN DISTRICT OF NEW YORK AND, PROVIDED, FURTHER, NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT. EACH GRANTOR EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH GRANTOR HEREBY WAIVES ANY OBJECTION WHICH IT MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH GRANTOR HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH GRANTOR IN ACCORDANCE WITH SECTION 14.2 OF THE CREDIT AGREEMENT AND THAT SERVICE SO MADE SHALL BE DEEMED

9

COMPLETED UPON THE EARLIER OF ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE U.S. MAILS, PROPER POSTAGE PREPAID.

        18.    WAIVER OF JURY TRIAL.    EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER LOAN DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 18.

        19.    SECTION TITLES.    The Section titles contained in this Security Agreement are and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

        20.    NO STRICT CONSTRUCTION.    The parties hereto have participated jointly in the negotiation and drafting of this Security Agreement. In the event an ambiguity or question of intent or interpretation arises, this Security Agreement shall be construed as if drafted jointly by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provisions of this Security Agreement.

        21.    ADVICE OF COUNSEL.    Each of the parties represents to each other party hereto that it has discussed this Security Agreement and, specifically, the provisions of Section 17 and Section 18, with its counsel.

        22.    BENEFIT OF LENDERS.    All Liens granted or contemplated hereby shall be for the benefit of Agent and Lenders, and all proceeds or payments realized from Collateral in accordance herewith shall be applied to the Obligations in accordance with the terms of the Credit Agreement.

        23.    INTERCREDITOR AGREEMENT.    The rights and obligations of the parties hereto are subject to the Intercreditor Agreement, to be dated as of July 15, 2002 (as amended from time to time), by and among OSM, Agent, U.S. Bank National Association, as trustee, and the other parties named therein.

[Signature Page Follows]

10

        IN WITNESS WHEREOF, each of the parties hereto has caused this Security Agreement to be executed and delivered by its duly authorized officer as of the date first set forth above.

AGENT:

TEXTRON FINANCIAL CORPORATION,
a Delaware corporation, as Agent

By:

Name:

Title:

[Signature Page To Security Agreement]

GRANTORS:

OREGON STEEL MILLS, INC.,
a Delaware corporation,

By:

Name:

Title:

NEW CF&I, INC.,
a Delaware corporation,

By:

Name:

Title:

CF&I STEEL, L.P., a Delaware limited partnership
	By:	New CF&I, Inc., a Delaware corporation, its General Partner

By:

Name:

Title:

COLORADO AND WYOMING RAILWAY COMPANY,
a Delaware corporation,

By:

Name:

Title:

[Signature Page To Security Agreement]

SCHEDULE I
to
SECURITY AGREEMENT

FILING JURISDICTIONS FOR EACH GRANTOR

Name of Debtor	Type of Filing	Jurisdiction
Oregon Steel Mills, Inc.	UCC-1 Financing Statement	Delaware SOS
New CF&I, Inc.	UCC-1 Financing Statement	Delaware SOS
CF&I Steel, L.P.	UCC-1 Financing Statement	Delaware SOS
Colorado and Wyoming Railway Company	UCC-1 Financing Statement	Delaware SOS

SCHEDULE II
to
SECURITY AGREEMENT

INSTRUMENTS
AND
CHATTEL PAPER FOR EACH GRANTOR

None.

SCHEDULE IIIA
to
SECURITY AGREEMENT

SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING BORROWER'S COLLATERAL

I.

State of Organization or Incorporation:

Delaware

II.

Chief Executive Office and Principal Place of Business:

Oregon Steel Mills, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

III.

Corporate Offices:

Oregon Steel Mills, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

IV.

Warehouses and Other Premises at which Collateral is Stored or Located:

Oregon Steel Mills, Inc.

Oregon Steel Mills, Inc.—Chief Executive Office/Chief Place of Business (Leased) 1000 SW Broadway, Suite 2200 Portland, OR 97205	Oregon Steel Mills, Inc.—Heat Treat (Owned) 10400 N. Swiftcourt Portland, OR 97203
Oregon Steel Mills, Inc. (Owned) 14400 N. Rivergate Blvd. Portland, OR 97203	Oregon Steel Mills, Inc.—Napa (Owned) 1025 Kaiser Road Napa, CA 94559
Oregon Steel Mills, Inc.—Port of Portland—Terminal 6 (T-6) (Leased) 7201 N. Marine Portland, OR 97203	American Steel, LLC (Processor Facility) 4033 NW Yeon Ave. Portland, OR 97210-1413
JIT Steel Inc (Processor Facility) 2000 South "O" Street Tualare, CA 93274-6852	Copperweld Corp (dba LTV Copperweld) (Processor Facility) 8735 N. Harborgate Portland, OR 97203
ALTA Metal Processing (Division of Alta/Steelco LLC) (Processor Facility) 1880 7 South 700 West Salt Lake City, UT 84104	LAMPROS Steel Inc (Warehouse) 8524 N Crawford Portland, OR 97203
Lampros Steel Plate Distribution, LLC/ LSI Plate (Warehouse) 13600 Napa Street Fontana, CA 92335	Oregon Metal Slitters, Inc. (Processor Facility) 7227 N. Leadbetter Road Portland, OR 97203-6490
Trans Load Services, LLC (Warehouse) 135 S. LaSalle Street Chicago, IL 60674-1879	Feralloy Processing (Processor Facility) Oregon Feralloy Partners 14400 N. Rivergate Blvd. Portland, OR 97203
Feralloy Processing (Processor Facility) 600 George Nelson Drive Portage, IN 46368	Lamprose Steel—leased space from Pacific Equipment Rental Co. 8614 N. Crawford Portland, OR 97203

V.

Locations of Records Concerning Collateral:

Oregon Steel Mills, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

SCHEDULE IIIB
to
SECURITY AGREEMENT

SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING RMSM'S COLLATERAL

I.

State of Organization or Incorporation:

Delaware

II.

Chief Executive Office and Principal Place of Business:

CF&I Steel, L.P.
1612 E. Abriendo
Pueblo, Colorado 81004

III.

Corporate Offices:

CF&I Steel, L.P.
1612 E. Abriendo
Pueblo, Colorado 81004

IV.

Warehouses and Other Premises at which Collateral is Stored or Located:

Rocky Mountain Steel Mills

New CF&I, Inc. (Owned) 1612 E. Abriendo Pueblo, CO 81004	CF&I Steel, L.P.—Chief Executive Office/Chief Place of Business (Owned) 1612 E. Abriendo Pueblo, CO 81004
CF&I Steel, L.P.—Port of Beaumont (Loading Dock) 1225 Main Street PO Drawer 2297 Beaumont, TX 77704	Norfolk Southern Corp. (Processor Facility) 1680 Marietta Road, NW Gate 8 N & W Tracks Rule 11 Atlanta, GA 30318
Grey-Mak Pipe, Inc. (Processor Facility) Hwy 25 North PO Box 697 Casper, WY 82602	Frank's Tubular International, Inc. (Processor Facility) 9518 E. Mt. Houston Rd. Houston, TX 77050
Tuboscope Vetco (Processor Facility) 10222 Sheldon Road Houston, TX 77049
Progress Rail (Processor Facility) 1600 Progress Dr. Albertville, AL 35950	A & A Tubular Services, Inc. (Processor Facility) 16937 Neonard Rd. Houston, TX 77049
American Pipe Inspection (Processor Facility) C/O 5 Star Yard 7418 Miller Road #3 Houston, TX 77049	A-Z Terminal (Processor Facility) 1919 Crosby-Dayton Rd. Crosby, TX 77532
A & H Industries (Processor Facility) 8216 Miller Road #3 Houston, TX 77049	Arctic Pipe Inspection (Processor Facility) PO Box 1258 (9500 Sheldon Road) Houston, TX 77049

Castronics (Processor Facility) East HiWay 30 Kimball, NE 69145-0037	Dick Sparks International (Processor Facility) 1523 Elwyn Street Midland, TX 79701
Grant Pride Co. (Processor Facility) 10222 N. Sheldon Rd., Bldg C-4 Houston, TX 77049	ICO (Processor Facility) 9015 Sheldon Rd. Channelview, TX 77530
Lone Star Tubular Service (Processor Facility) T&N Warehouse Highway 250 Lone Star, Texas 75668	Oiltube, Inc. (Processor Facility) 7735 Miller Rd. #3 Houston, TX 77049
Patterson Tubular (Processor Facility) 539 S. Sheldon Toad Channelview, TX 77530	Tech. Svcs/Tech. Industries (Processor Facility) PO Box 1848 (10519 Sheldon Rd.) Houston, TX 77049
Total Premier Services (Processor Facility) 9015 Sheldon Rd. Houston, TX 77049	Tubular Processors USA (Processor Facility) PO Box 1329 (400 Sheldon Rd.) Channelview, TX 77530
Tubular Services, Inc. (Processor Facility) 1010 McMarty Drive Houston, TX 77029	United Casing (Processor Facility) 10901 Sheldon Rd. Houston, TX 77044

V.

Locations of Records Concerning Collateral:

CF&I Steel, L.P.
1612 E. Abriendo
Pueblo, Colorado 81004

and

Oregon Steel Mills, Inc. and New CF&I, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

SCHEDULE IIIC
to
SECURITY AGREEMENT

SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING NEW CF&I'S COLLATERAL

I.

State of Organization or Incorporation:

Delaware

III.

Chief Executive Office and Principal Place of Business:

New CF&I, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

III.

Corporate Offices:

New CF&I, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

IV.

Warehouses and Other Premises at which Collateral is Stored or Located:

New CF&I, Inc.

New CF&I, Inc. (Owned) 1612 E. Abriendo Pueblo, CO 81004	CF&I Steel, L.P.—Chief Executive Office/Chief Place of Business (Owned) 1612 E. Abriendo Pueblo, CO 81004
CF&I Steel, L.P.—Port of Beaumont (Loading Dock) 1225 Main Street PO Drawer 2297 Beaumont, TX 77704	Norfolk Southern Corp. (Processor Facility) 1680 Marietta Road, NW Gate 8 N & W Tracks Rule 11 Atlanta, GA 30318
Grey-Mak Pipe, Inc. (Processor Facility) Hwy 25 North PO Box 697 Casper, WY 82602	Frank's Tubular International, Inc. (Processor Facility) 9518 E. Mt. Houston Rd. Houston, TX 77050
Tuboscope Vetco (Processor Facility) 10222 Sheldon Road Houston, TX 77049
Progress Rail (Processor Facility) 1600 Progress Dr. Albertville, AL 35950	A & A Tubular Services, Inc. (Processor Facility) 16937 Neonard Rd. Houston, TX 77049
American Pipe Inspection (Processor Facility) C/O 5 Star Yard 7418 Miller Road #3 Houston, TX 77049	A-Z Terminal (Processor Facility) 1919 Crosby-Dayton Rd. Crosby, TX 77532
A & H Industries (Processor Facility) 8216 Miller Road #3 Houston, TX 77049	Arctic Pipe Inspection (Processor Facility) PO Box 1258 (9500 Sheldon Road) Houston, TX 77049

Castronics (Processor Facility) East HiWay 30 Kimball, NE 69145-0037	Dick Sparks International (Processor Facility) 1523 Elwyn Street Midland, TX 79701
Grant Pride Co. (Processor Facility) 10222 N. Sheldon Rd., Bldg C-4 Houston, TX 77049	ICO (Processor Facility) 9015 Sheldon Rd. Channelview, TX 77530
Lone Star Tubular Service (Processor Facility) T&N Warehouse Highway 250 Lone Star, Texas 75668	Oiltube, Inc. (Processor Facility) 7735 Miller Rd. #3 Houston, TX 77049
Patterson Tubular (Processor Facility) 539 S. Sheldon Toad Channelview, TX 77530	Tech. Svcs/Tech. Industries (Processor Facility) PO Box 1848 (10519 Sheldon Rd.) Houston, TX 77049
Total Premier Services (Processor Facility) 9015 Sheldon Rd. Houston, TX 77049	Tubular Processors USA (Processor Facility) PO Box 1329 (400 Sheldon Rd.) Channelview, TX 77530
Tubular Services, Inc. (Processor Facility) 1010 McMarty Drive Houston, TX 77029	United Casing (Processor Facility) 10901 Sheldon Rd. Houston, TX 77044

V.

Locations of Records Concerning Collateral:

New CF&I, Inc. and Oregon Steel Mills, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

and

CF&I Steel, L.P.
1612 E. Abriendo
Pueblo, Colorado 81004

SCHEDULE IIID
to
SECURITY AGREEMENT

SCHEDULE OF OFFICES, LOCATIONS OF COLLATERAL
AND RECORDS CONCERNING CWR'S COLLATERAL

I.

State of Organization or Incorporation:

Delaware

V.

Chief Executive Office and Principal Place of Business:

Colorado and Wyoming Railway Company
2100 S Freeway
Pueblo, CO 81004-3406

III.

Corporate Offices:

Colorado and Wyoming Railway Company
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

VI.

Warehouses and Other Premises at which Collateral is Stored or Located:

        (a) Colorado and Wyoming Railway Company

Colorado & Wyoming Railway Company (Owned)
2100 S Freeway
Pueblo, CO 81004-3406

V.

Locations of Records Concerning Collateral:

New CF&I, Inc. and Oregon Steel Mills, Inc.
1000 SW Broadway, Suite 2200
Portland, Oregon 97205

and

CF&I Steel, L.P.
1612 E. Abriendo
Pueblo, Colorado 81004

and

Colorado and Wyoming Railway Company
2100 S Freeway
Pueblo, CO 81004-3406

SCHEDULE IV
to
SECURITY AGREEMENT

GRANTORS' ORGANIZATIONAL IDENTIFICATION NUMBERS

Grantor	Delaware Organizational Identification Number
Oregon Steel Mills, Inc.	0782834
New CF&I, Inc.	2299031
CF&I Steel, L.P.	2324228
Colorado and Wyoming Railway Company	2323851

EXHIBIT A

BOND OFFERING COLLATERAL

        As used in this Agreement, "Bond Offering Collateral" shall mean, collectively, all of the right, title and interest of OSM, New CF&I and RMSM (collectively, for purposes of this definition, the "grantors") in, to and under the following property, in each case, whether now owned or existing or hereafter acquired or arising, and wherever located:

        (a)  all Chattel Paper;

        (b)  the Note Collateral Account and all Trust Moneys (each, as defined in the Indenture), other moneys, securities, certificates, items and other property on deposit therein;

        (c)  any and all contracts and agreements, as such may be amended, restated, supplemented or otherwise modified from time to time, including without limitation, (i) all rights to receive moneys due and to become due to the grantors thereunder or in connection therewith, (ii) all rights to damages arising out of or for breach or default in respect thereof and (iii) all rights to perform and exercise all remedies thereunder;

        (d)  all Intellectual Property (as defined under "Certain Definitions" below);

        (e)  all Documents;

        (f)    all Equipment (as defined under "Certain Definitions" below);

        (g)  all "fixtures" (as defined in Article 9 of the NY UCC);

        (h)  all "General Intangibles" (including, without limitation, all goodwill, trademarks, trade names, service marks, patents, copyrights, industrial designs, other industrial or intellectual property or rights therein, whether under license or otherwise, payment intangibles (as defined in the NY UCC), programs, software, software codes, computer systems, customer lists, programming material, books, catalogs and other printed materials, publications, indexes, lists, data and other documents and papers relating thereto, blueprints, designs, charts, and research and development, whether on paper, recorded electronically or otherwise, and all interest rate or currency protection or hedging arrangements, all tax refunds, all licenses, permits, concessions and authorizations and all intellectual property (in each case, regardless of whether characterized as general intangibles under Article 9 of the NY UCC)), in each case relating to;

        (i)    all Instruments;

        (j)    (i) all insurance polices covering any or all property and assets of the types described in (and not excluded from) the foregoing clauses (a) through (i) of this definition of "Bond Offering Collateral" or the following clause (k) of this definition of "Bond Offering Collateral," and (ii) any key man life insurance policies, in each case, regardless of whether the Bond Trustee is the loss payee thereof;

        (k)  (i) all other rights to the payment of money, including rents and other sums payable to the grantors under leases, rental agreements and other Chattel Paper and insurance proceeds; (ii) all books, records, ledger cards, files, correspondence, customer lists, blueprints, technical specifications, manuals, computer software, computer printouts, tapes, disks and related data processing software and similar items that at any time evidence or contain information relating to any of the Bond Offering Collateral or are otherwise necessary or helpful in the collection thereof or realization thereupon; (iii) all property (real or personal) assigned, hypothecated or otherwise securing any Bond Offering Collateral and shall include any security agreement or other agreement granting a lien or security interest in such real or personal property; (iv) all "supporting obligations" (as defined in Article 9 of the NY UCC); and (v) all Accessions and additions to, parts and appurtenances of, substitutions for and replacements of any of the foregoing

(provided, however, that for the avoidance of doubt, the foregoing clauses (a) through (k) of this definition of "Bond Offering Collateral" shall not include (A) any property or assets described in

(and not excluded from) clauses (i) through (vi) of the definition of "Collateral" in the Security Agreement of which this Exhibit A forms a part or (B) any Excluded Collateral (as defined under "Certain Definitions" below); and

        (l)    to the extent not otherwise included in the foregoing, all products, offspring, rents, issues, profits, returns, income and Proceeds of and from any and all of the foregoing Bond Offering Collateral (including Proceeds which constitute property of the type described in (and not excluded from) the foregoing clauses (a) through (k) of this definition of "Bond Offering Collateral" and all collateral security and guarantees given by any Person with respect to any of the foregoing, and in any event, including, without limitation, any and all (i) proceeds of any insurance (including, without limitation, all Net Proceeds (as defined in the Indenture)), indemnity, warranty or guarantee payable to Trustee or to the grantors from time to time with respect to any of the foregoing Bond Offering Collateral, (ii) payments (in any form whatsoever and including, without limitation, all Net Awards (as defined in the Indenture)) made or due and payable to the grantors from time to time in connection with any requisition, confiscation, condemnation, seizure or forfeiture of all or any part of the foregoing Bond Offering Collateral by any Governmental Authority (or any Person acting under color of a Governmental Authority), (iii) products of the foregoing Bond Offering Collateral, and (iv) other amounts from time to time paid or payable under or in connection with any of the foregoing Bond Offering Collateral.

Certain Definitions

        The following terms used in this Exhibit A shall have the following meanings. Capitalized terms used but not defined in this Exhibit A shall have the respective meanings set forth in the Security Agreement of which this Exhibit A forms a part.

        "Bond Offering Security Agreements" shall mean, collectively, (a) the Security Agreement, dated as of July 15, 2002, by RMSM, as grantor, in favor of the Bond Trustee, (b) the Security Agreement, dated as of July 15, 2002, by New CF&I, as grantor, in favor of the Bond Trustee, and (c) the Security Agreement, dated as of July 15, 2002, by OSM, as grantor, in favor of the Bond Trustee including, in each case, any amendment, amendment and restatement, renewal, extension, restructuring, supplement or modification thereof.

        "Bond Trustee" shall mean the Person designated as "Trustee" under the Indenture.

        "Equipment" shall mean all "equipment" as defined in Article 9 of the NY UCC, including, without limitation, all machinery, apparatus, equipment, office machinery, furniture, electric arc furnaces, heat treating machinery, rolling mills, pipe mills, rod mills, bar mills, rail mills, pipe coating machinery, furnaces, conveyors, tools, manufacturing equipment, "fixtures" as defined in the NY UCC and all other equipment of any kind or nature, wherever located, and all modifications, alterations, repairs, substitutions, additions and Accessions thereto and all replacements and all parts therefor, other than Motor Vehicles (as defined below) and Mobile Equipment (as defined below).

        "Excluded Collateral" shall mean (i) the approximately 67 acres of real property in Camrose, Alberta, on which the Camrose Pipe Mill is located, together with all buildings, improvements and fixtures thereon, and all related leases, rents and other rights, (ii) the real property in Pueblo County, Colorado and Fremont County, Colorado commonly known as the Pueblo Outside the Fence Property (as defined in the Indenture), and any contracts of sale or lease for any of the Pueblo Outside the Fence Property (as defined in the Indenture), (iii) Motor Vehicles and Mobile Equipment, (iv) the two trailers located on the Pueblo Inside the Fence Property (as defined in the Indenture), (v) the condominiums located at 170 S. Del Monte Place, Pueblo, CO 81007-3644 and 769 Cottage Drive, Napa, CA 94558-1247, (vi) the Excluded Assets (as defined in the Indenture), (vii) the Excluded Securities (as defined in the Indenture), (viii) Intercompany Indebtedness (as defined in the Indenture) and (ix) any Proceeds or products of any of the foregoing, except to the extent that such Proceeds or products are invested in real property or improvements thereon,

machinery and Equipment or other property and assets of the types described in (and not excluded from) clauses (a) through (k) under the definition of "Bond Offering Collateral" above.

        "Intellectual Property" shall mean, collectively, the following:

        (a)  (i) all copyrights in all works, whether published or unpublished, registered or unregistered relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, including, without limitation, the copyrights in the works listed on Schedule 4.16(a) to each of the Bond Offering Security Agreements (as such schedules may be amended or supplemented from time to time) all registrations and recordings thereof, and all applications in connection therewith, including, without limitation, registrations, recordings and applications in the United States Copyright Office or in any other country, (ii) all renewals thereof and (iii) the right to sue for past, present and future infringements of any of the foregoing, and all proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit (collectively, the "Copyrights");

        (b)  any and all agreements, written or oral, providing for the grant by or to the grantors of any right to reproduce, copy, publish or otherwise use any Copyright relating to production, property, plant and equipment, the operation thereof or the manufacturing processes including, without limitation, any of the agreements referred to on Schedule 4.16(a) to each of the Bond Offering Security Agreements (as such schedules may be amended or supplemented from time to time) (collectively, the "Copyright Licenses");

        (c)  (i) all letters patent of the United States or any other country and all reissues, continuations, continuations-in-part, divisions and extensions, renewals and reexaminations thereof relating to production, property, plant and equipment, the operation thereof or the manufacturing processes including, without limitation, any thereof referred to on Schedule 4.16(b) to each of the Bond Offering Security Agreements (as such schedules may be amended or supplemented from time to time), (ii) all applications for letters patent of the United States or any other country and all divisions, continuations and continuations-in-part thereof including, without limitation, any thereof referred to on Schedule 4.16(b) to each of the Bond Offering Security Agreements (as such schedules may be amended or supplemented from time to time), and (iii) all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit and the right to sue for past, present and future infringements of any of the foregoing (collectively, the "Patents");

        (d)  any and all agreements, whether written or oral providing for the grant by or to the grantors of any right to manufacture, use or sell any invention covered by a Patent relating to production, property, plant and equipment, the operation thereof or the manufacturing processes including, without limitation, any thereof referred to on Schedule 4.16(b) to each of the Bond Offering Security Agreements (as such schedules may be amended or supplemented from time to time), (collectively, the "Patent Licenses");

        (e)  (i) all registered and unregistered trademarks, trade names, corporate names, business names, fictitious business names, internet domain names, trade styles, service marks, logos, slogans, certification marks, collective marks and other source or business identifiers, designs and general intangibles of a like nature and the goodwill associated therewith, all registrations and recordings thereof, and all applications in connection therewith, whether in the United States Patent and Trademark Office or in any similar office or agency of the United States, any State thereof or any other country or any political subdivision thereof, or otherwise relating to production, property, plant and equipment, the operation thereof or the manufacturing processes including, without limitation, any thereof referred to on Schedule 4.16(c) to each of the Bond Offering Security Agreements (as such schedules may be amended or supplemented from time to time), (ii) all renewals or extensions thereof and (iii) the right to sue for past, present and future infringement or dilution of any of the foregoing or for any injury to goodwill, and all proceeds of the foregoing, including licenses,

royalties, income, payments, claims, damages and proceeds of suit (collectively, the "Trademarks");

        (f)    any and all agreements, written or oral, providing for the grant by or to the grantors of any right to use any Trademark relating to production, property, plant and equipment, the operation thereof or the manufacturing processes including, without limitation, any thereof referred to on Schedule 4.16(c) to each of the Bond Offering Security Agreements (as such schedules may be amended or supplemented from time to time), (collectively, the "Trademark Licenses");

        (g)  (i) all trade secrets and all other confidential or proprietary information and know-how now or hereafter owned or used in, or contemplated at any time for use in the business of the grantors relating to production, property, plant and equipment, the operation thereof or the manufacturing processes, and any proprietary technology, process or system which is within the possession of the grantors, including, without limitation, manufacturing processes or methods, all formulae, processes, procedures, compounds, drawings, designs, blue prints, surveys, reports, manuals, and operating standards relating to or used in the operation of the grantors' businesses, in each case, whether or not reduced to writing or other tangible form, including all documents and things embodying, incorporating, or referring in any way to any of the foregoing and (ii) the right to sue for past, present and future infringement of any of the foregoing and all Proceeds of the foregoing, including licenses, royalties, income, payments, claims, damages and proceeds of suit (collectively, the "Trade Secrets"); and

        (h)  any and all agreements, written or oral, providing for the grant by or to the grantors of any right in or to any Trade Secret relating to production, property, plant and equipment, the operation thereof or the manufacturing processes (collectively, the "Trade Secret Licenses").

        "Mobile Equipment" shall mean mobile cranes, loaders, forklifts, trailers, backhoes, towmotors, graders and all other categories of equipment as listed on Schedule 2.1(f) to the Bond Offering Security Agreements.

        "Motor Vehicles" shall mean all cars, trucks, trailers, construction and earth moving equipment and other vehicles and Mobile Equipment covered by a certificate of title law of any state and all tires, Accessions, additions and other appurtenances to, substitutions for and replacements of any of the foregoing; provided that any such substitutions or replacements constitute Motor Vehicles as defined in this sentence.

EXHIBIT B

FORM OF
POWER OF ATTORNEY

        This Power of Attorney is executed and delivered by [GRANTOR], a Delaware                        ("Grantor") to TEXTRON FINANCIAL CORPORATION, a Delaware corporation (hereinafter referred to as "Attorney"), as Agent for the benefit of Agent and Lenders, under a Credit Agreement (the "Credit Agreement") and a Security Agreement (the "Security Agreement"), both dated as of July     , 2002, and other related documents (together with the Credit Agreement and the Security Agreement, the "Loan Documents"). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to them in the Security Agreement. No person to whom this Power of Attorney is presented, as authority for Attorney to take any action or actions contemplated hereby, shall be required to inquire into or seek confirmation from Grantor as to the authority of Attorney to take any action described below, or as to the existence of or fulfillment of any condition to this Power of Attorney, which is intended to grant to Attorney unconditionally the authority to take and perform the actions contemplated herein, and Grantor irrevocable waives any right to commence any suit or action, in law or equity, against any person or entity if such suit or action results from such person's actions in reliance upon the authority granted under this Power of Attorney. The power of attorney granted hereby is coupled with an interest, and may not be revoked or canceled by Grantor without Attorney' s written consent.

        Grantor hereby irrevocably constitutes and appoints Attorney (and all officers, employees or agents designated by Attorney), with full power of substitution, as Grantor's true and lawful attorney-in-fact with full irrevocable power and authority in the place and stead of Grantor and in the name of Grantor or in its own name, from time to time in Attorney's reasonable discretion, to take any and all appropriate action and to execute and deliver any and all documents and instruments which may be necessary or desirable to accomplish the purposes of the Loan Documents and, without limiting the generality of the foregoing, Grantor hereby grants to Attorney the power and right, on behalf of Grantor, without notice to or assent by Grantor, and at any time, to do the following during the existence of an "Event of Default" (as defined in the Credit Agreement): (a) change the mailing address of Grantor, open a post office box on behalf of Grantor, open mail for Grantor, and ask, demand, collect, give acquittances and receipts for, take possession of, endorse any invoices, freight or express bills, bills of lading, storage or warehouse receipts, drafts against debtors, assignments, verifications, and notices in connection with any Collateral of Grantor; (b) effect any repairs to any asset of Grantor, or continue or obtain any insurance and pay all or any part of the premiums therefor and costs thereof, and make, settle and adjust all claims under such policies of insurance, and make all determinations and decisions with respect to such policies; (c) pay or discharge any taxes, liens, security interests, or other encumbrances levied or placed on or threatened against Grantor or its property; (d) defend any suit, action or proceeding brought against Grantor if Grantor does not defend such suit, action or proceeding or if Attorney believes that Grantor is not pursuing such defense in a manner that will maximize the recovery to Attorney, and settle, compromise or adjust any suit, action, or proceeding described above and, in connection therewith, give such discharges or releases as Attorney may deem appropriate; (e) file or prosecute any claim, litigation, suit or proceeding in any court of competent jurisdiction or before any arbitrator, or take any other action otherwise deemed appropriate by Attorney for the purpose of collecting any and all such moneys due to Grantor whenever payable and to enforce any other right in respect of the Collateral; (f) cause the certified public accountants then engaged by Grantor to prepare and deliver to Attorney at any time and from time to time, promptly upon Attorney's request, the following reports: (1) a reconciliation of all Accounts, (2) an aging of all Accounts, (3) trial balances, (4) test verifications of such Accounts as Attorney may request, and (5) the results of each physical verification of Inventory; (g) communicate in its own name with any party to any Receivables or Related Contracts with regard to the assignment of the right, title and interest of such Grantor in and under the Receivables or Related Contracts and other matters relating thereto; and (h) execute, in connection with any sale provided for in any Loan Document, any endorsements, assignments or other instruments of conveyance or transfer with respect to the Collateral

and to otherwise direct such sale or resale, all as though Attorney were the absolute owner of the property of Grantor for all purposes, and to do, at Attorney's option and Grantor's expense, at any time or from time to time, all acts and other things that Attorney reasonably deems necessary to perfect, preserve, or realize upon the Collateral and Attorney's Liens thereon, all as fully and effectively as Grantor might do. Grantor hereby ratifies, to the extent permitted by law, all that said Attorney shall lawfully do or cause to be done by virtue hereof.

        IN WITNESS WHEREOF, this Power of Attorney is executed by Grantor pursuant to the authority of its [board of directors] [partners] this             day of            2002.

[GRANTOR]

Name:

Title:

NOTARY PUBLIC CERTIFICATE

        On this            day of            , 2002,                         who is personally known to me appeared before me in his/her capacity as the                         of [                        ] ("Grantor") and executed on behalf of Grantor the Power of Attorney in favor of Textron Financial Corporation to which this Certificate is attached.

Notary Public

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EXHIBIT 10.2

EX-12.1

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EXHIBIT 12.1

OREGON STEEL MILLS, INC.

STATEMENT RE: COMPUTATION OF RATIOS

(dollars in thousands)

			Years Ended December 31,														Six Months Ended June 30, 2002
			1997		1998			1999			2000			2001
Earnings (loss) as defined:
	Income (loss) from operations before taxes		$	18,617	$	20,316		$	32,970		$	(29,481	)	$	(8,087	)	$	9,259
	Plus: Fixed charges (net of capitalized interest)			10,216		38,485			35,027			34,936			35,595			16,940
		Minority interest		5,898		4,213			1,475			7			339			364
	Earnings (loss)		$	34,731	$	63,014		$	69,472		$	5,462		$	27,847		$	26,563
Fixed Charges as defined:
	Interest expense, adding back capitalized interest and amortization of debt issue costs			38,032		39,699			35,968			35,730			36,279			17,322
	Fixed Charges		$	38,032	$	39,699		$	35,968		$	35,730		$	36,279		$	17,322
Ratio of Earnings to Fixed Charges(1)				—		1.6	x		1.9	x		—			—			1.5	x

(1)

For the purpose of determining the ratio of earnings to fixed charges, earnings consist of consolidated income (loss) before income taxes plus fixed charges (net of capitalized interest) and minority interest in income of majority-owned subsidiaries. Fixed charges consist of consolidated interest on indebtedness, adding back capitalized interest and amortization of debt issue costs. Fixed charges exceeded earnings by $3,301,000, $30,268,000 and $8,432,000 in the years ended December 31, 1997, 2000, 2001, respectively.

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EXHIBIT 12.1

EX-23.1

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EXHIBIT 23.1

Consent of Independent Accountants

We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Oregon Steel Mills, Inc. of our report dated March 22, 2002 relating to the financial statements and financial statement schedule, which appear in Oregon Steel Mills, Inc.'s Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

PRICEWATERHOUSECOOPERS LLP
Portland, Oregon
August 15, 2002

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EXHIBIT 23.1

EX-23.2

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EXHIBIT 23.2

Consent of Independent Accountants

We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Oregon Steel Mills, Inc. of our report dated March 22, 2002 relating to the financial statements and financial statement schedule of CF&I Steel, L.P., which appears in New CF&I Inc. and CF&I Steel, L.P.'s Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

PRICEWATERHOUSECOOPERS LLP
Portland, Oregon
August 15, 2002

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EXHIBIT 23.2

EX-23.3

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EXHIBIT 23.3

Consent of Independent Accountants

We hereby consent to the incorporation by reference in this Registration Statement on Form S-4 of Oregon Steel Mills, Inc. of our report dated March 22, 2002 relating to the financial statements and financial statement schedule of New CF&I Inc., which appears in New CF&I Inc. and CF&I Steel L.P.'s Annual Report on Form 10-K for the year ended December 31, 2001. We also consent to the reference to us under the heading "Experts" in such Registration Statement.

PRICEWATERHOUSECOOPERS LLP
Portland, Oregon
August 15, 2002

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EXHIBIT 23.3

EX-25.1

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM T-1

STATEMENT OF ELIGIBILITY UNDER
THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
Check if an Application to Determine Eligibility of
a Trustee Pursuant to Section 305(b)(2)

U.S. BANK NATIONAL ASSOCIATION
(Exact name of Trustee as specified in its charter)

31-0841368
I.R.S. Employer Identification No.

180 East Fifth Street
St. Paul, Minnesota(Address of principal executive offices) 55101(Zip Code)

Richard Prokosch
U.S. Bank National Association
180 East Fifth Street
St. Paul, MN 55101
(651) 244-0721
(Name, address and telephone number of agent for service)

OREGON STEEL MILLS, INC.
(Issuer with respect to the Securities)

Delaware(State or other jurisdiction of incorporation or organization)	94-0506370(I.R.S. Employer Identification No.)
1000 S.W. Broadway, Suite 2200 Portland, Oregon(Address of Principal Executive Offices)	97205(Zip Code)

10% First Mortgage Notes Due 2009
Guarantees of 10% First Mortgage Notes Due 2009
(Title of the Indenture Securities)

TABLE OF ADDITIONAL REGISTRANTS

Name	State/Country of Incorporation	I.R.S Employer Identification No.
New CF& I, Inc.	Delaware	93-1086900
CF& I Steel L.P.	Delaware	93-1103440

        The address of each of the additional registrants is 1000 S.W. Broadway, Suite 2200 Portland, Oregon 97205 and the primary standard industrial classification code number of each of the additional registrants is 3310.

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FORM T-1

        Item 1.    GENERAL INFORMATION.    Furnish the following information as to the Trustee.

a)

Name and address of each examining or supervising authority to which it is subject.

Comptroller of the Currency
Washington, D.C.

b)

Whether it is authorized to exercise corporate trust powers.

Yes

        Item 2.    AFFILIATIONS WITH OBLIGOR.If the obligor is an affiliate of the Trustee, describe each such affiliation.

        None

        Items 3-15Items 3-15 are not applicable because to the best of the Trustee's knowledge, the obligor is not in default under any Indenture for which the Trustee acts as Trustee.

        Item 16.    LIST OF EXHIBITS:List below all exhibits filed as a part of this statement of eligibility and qualification.

1.

A copy of the Articles of Association of the Trustee.*



2.

A copy of the certificate of authority of the Trustee to commence business.*



3.

A copy of the certificate of authority of the Trustee to exercise corporate trust powers.*



4.

A copy of the existing bylaws of the Trustee.*



5.

A copy of each Indenture referred to in Item 4. Not applicable.



6.

The consent of the Trustee required by Section 321(b) of the Trust Indenture Act of 1939, attached as Exhibit 6.



7.

Report of Condition of the Trustee as of December 31, 2001, published pursuant to law or the requirements of its supervising or examining authority, attached as Exhibit 7.

* Incorporated by reference to Registration Number 333-67188.

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NOTE

        The answers to this statement insofar as such answers relate to what persons have been underwriters for any securities of the obligors within three years prior to the date of filing this statement, or what persons are owners of 10% or more of the voting securities of the obligors, or affiliates, are based upon information furnished to the Trustee by the obligors. While the Trustee has no reason to doubt the accuracy of any such information, it cannot accept any responsibility therefor.

SIGNATURE

        Pursuant to the requirements of the Trust Indenture Act of 1939, as amended, the Trustee, U.S. BANK NATIONAL ASSOCIATION, a national banking association organized and existing under the laws of the United States of America, has duly caused this statement of eligibility and qualification to be signed on its behalf by the undersigned, thereunto duly authorized, all in the City of St. Paul, State of Minnesota on the 7th day of August, 2002.

		U.S. BANK NATIONAL ASSOCIATION
		By:	/s/ RICHARD PROKOSCH Richard Prokosch Vice President
By:	/s/ JULIE EDDINGTON Julie Eddington Assistant Vice President

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Exhibit 6

CONSENT

        In accordance with Section 321(b) of the Trust Indenture Act of 1939, the undersigned, U.S. BANK NATIONAL ASSOCIATION hereby consents that reports of examination of the undersigned by Federal, State, Territorial or District authorities may be furnished by such authorities to the Securities and Exchange Commission upon its request therefor.

Dated: August 7, 2002

		U.S. BANK NATIONAL ASSOCIATION
		By:	/s/ RICHARD PROKOSCH Richard Prokosch Vice President
By:	/s/ JULIE EDDINGTON Julie Eddington Assistant Vice President

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Exhibit 7
U.S. Bank National Association
Statement of Financial Condition
As of 3/31/2002

($000's)

			3/31/2002
Assets
	Cash and Due From Depository Institutions		$	6,610,097
	Federal Reserve Stock			0
	Securities			24,432,814
	Federal Funds			1,509,430
	Loans & Lease Financing Receivables			112,081,360
	Fixed Assets			1,414,464
	Intangible Assets			8,269,267
	Other Assets			6,637,699
		Total Assets	$	160,955,131
Liabilities
	Deposits		$	107,406,480
	Fed Funds			6,981,749
	Treasury Demand Notes			0
	Trading Liabilities			120,375
	Other Borrowed Money			18,019,329
	Acceptances			185,399
	Subordinated Notes and Debentures			5,104,491
	Other Liabilities			3,878,626
	Total Liabilities		$	141,696,449
Equity
	Minority Interest in Subsidiaries		$	985,901
	Common and Preferred Stock			18,200
	Surplus			11,278,504
	Undivided Profits			6,976,077
		Total Equity Capital	$	19,258,682
Total Liabilities and Equity Capital			$	160,955,131

To the best of the undersigned's determination, as of the date hereof, the above financial information is true and correct.

U.S. Bank National Association
By:	/s/ RICHARD PROKOSCH Vice President
Date:	August 7, 2002

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EX-99.1

FORM OF
LETTER OF TRANSMITTAL

OREGON STEEL MILLS, INC.

Offer to Exchange its
10% First Mortgage Notes due 2009
that have been registered under the Securities Act
for any and all of its outstanding
10% First Mortgage Notes due 2009
that were issued and sold in a transaction
exempt from registration under the Securities
Act of 1933, as amended

Pursuant to the Prospectus dated                            , 2002

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON                        , 2002, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

The Exchange Agent for the Exchange Offer is:
U.S. Bank National Association

By Mail: U.S. Bank National Association 180 E. 5th Street St. Paul, MN 55101	By Overnight Carrier: U.S. Bank National Association 180 E. 5th Street St. Paul, MN 55101	By Hand: U.S. Bank National Association 180 E. 5th Street St. Paul, MN 55101
Attn: Specialized Finance Group - 4th Floor	Attn: Specialized Finance Group - 4th Floor	Attn: Specialized Finance Group - 4th Floor - Bond Drop Window
By Facsimile Transmission: (For Eligible Institutions Only) (651) 244-1537
Confirm by Telephone (800) 934-6802

DELIVERY OF THIS LETTER OF TRANSMITTAL OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THE INSTRUCTIONS CONTAINED HEREIN SHOULD BE READ CAREFULLY BEFORE THIS LETTER OF TRANSMITTAL IS COMPLETED.

        Capitalized terms used but not defined herein shall have the same meaning given them in the Prospectus (as defined below).

        This Letter of Transmittal is to be completed either if (a) certificates are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth under "The Exchange Offer—Procedures for Tendering Original Notes" in the Prospectus and an Agent's Message (as defined below) is not delivered. Certificates, or book-entry confirmation of a book-entry transfer of such Original Notes into the Exchange Agent's account at The Depository Trust Company ("DTC"), as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter

of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date. Tenders by book-entry transfer also may be made by delivering an Agent's Message in lieu of this Letter of Transmittal. The term "book-entry confirmation" means a confirmation of a book-entry transfer of Original Notes into the Exchange Agent's account at DTC. The term "Agent's Message" means a message, transmitted by DTC to and received by the Exchange Agent and forming a part of a book-entry confirmation, which states that DTC has received an express acknowledgment from the tendering participant, which acknowledgment states that such participant has received and agrees to be bound by this Letter of Transmittal and that Oregon Steel Mills, Inc. (the "Company") may enforce this Letter of Transmittal against such participant.

        Holders (as defined below) of Original Notes whose certificates (the "Certificates") for such Original Notes are not immediately available or who cannot deliver their Certificates and all other required documents to the Exchange Agent on or prior to the Expiration Date (as defined in the Prospectus) or who cannot complete the procedures for book-entry transfer on a timely basis, must tender their Original Notes according to the guaranteed delivery procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures" in the Prospectus.

DELIVERY OF DOCUMENTS TO THE BOOK-ENTRY TRANSFER FACILITY DOES NOT CONSTITUTE DELIVERY TO THE EXCHANGE AGENT.

NOTE: SIGNATURES MUST BE PROVIDED BELOW
PLEASE READ THE ACCOMPANYING INSTRUCTIONS CAREFULLY

ALL TENDERING HOLDERS COMPLETE THIS BOX:

DESCRIPTION OF ORIGINAL NOTES
	Original Notes (Attach additional list if necessary)
If blank, please print name and address of registered holder(s)	Certificate Number(s)*	Aggregate Principal Amount of Original Notes	Principal Amount of Original Notes Tendered (if less than all)**
	Total:

*

Need not be completed by book-entry holders.

**

Original Notes may be tendered in whole or in part in multiples of $1,000. All Original Notes held shall be deemed tendered unless a lesser number is specified in this column. See Instruction 4.

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(BOXES BELOW TO BE CHECKED BY ELIGIBLE INSTITUTIONS ONLY)

o

CHECK HERE IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED BY BOOK-ENTRY TRANSFER MADE TO THE ACCOUNT MAINTAINED BY THE EXCHANGE AGENT WITH DTC AND COMPLETE THE FOLLOWING:

Name of Tendering Institution

DTC Account Number

Transaction Code Number

o

CHECK HERE AND ENCLOSE A PHOTOCOPY OF THE NOTICE OF GUARANTEED DELIVERY IF TENDERED ORIGINAL NOTES ARE BEING DELIVERED PURSUANT TO A NOTICE OF GUARANTEED DELIVERY PREVIOUSLY SENT TO THE EXCHANGE AGENT AND COMPLETE THE FOLLOWING (SEE INSTRUCTION 1):

Name(s) of registered Holder(s)

Window Ticket Number (if any)

Date of Execution of Notice of Guaranteed Delivery

Name of Institution which Guaranteed Delivery

If Guaranteed Delivery is to be made by Book-Entry Transfer:

Name of Tendering Institution

DTC Account Number

Transaction Code Number

o

CHECK HERE IF TENDERED BY BOOK-ENTRY TRANSFER AND NON-EXCHANGED ORIGINAL NOTES ARE TO BE RETURNED BY CREDITING THE DTC ACCOUNT NUMBER SET FORTH ABOVE.

o

CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

Name:

Address:

3

Ladies and Gentlemen:

        The undersigned hereby tenders to Oregon Steel Mills, Inc. (the "Company"), the above described principal amount of the Company's 10% First Mortgage Notes due 2009 (the "Original Notes") in exchange for an equivalent amount of the Company's 10% First Mortgage Notes due 2009 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), upon the terms and subject to the conditions set forth in the Prospectus dated                            , 2002 (as the same may be amended or supplemented from time to time, the "Prospectus"), receipt of which is hereby acknowledged, and in this Letter of Transmittal (which, together with the Prospectus, constitute the "Exchange Offer").

        Subject to and effective upon the acceptance for exchange of all or any portion of the Original Notes tendered herewith in accordance with the terms and conditions of the Exchange Offer (including, if the Exchange Offer is extended or amended, the terms and conditions of any such extension or amendment), the undersigned hereby sells, assigns and transfers to or upon the order of the Company all right, title and interest in and to such Original Notes as is being tendered herewith. The undersigned hereby irrevocably constitutes and appoints the Exchange Agent as its agent and attorney-in-fact (with full knowledge that the Exchange Agent is also acting as agent of the Company in connection with the Exchange Offer) with respect to the tendered Original Notes, with full power of substitution (such power of attorney being deemed to be an irrevocable power coupled with an interest) subject only to the right of withdrawal described in the Prospectus, to (i) deliver Certificates for Original Notes to the Company together with all accompanying evidences of transfer and authenticity to, or upon the order of, the Company, upon receipt by the Exchange Agent, as the undersigned's agent, of the Exchange Notes to be issued in exchange for such Original Notes, (ii) present Certificates for such Original Notes for transfer, and to transfer the Original Notes on the books of the Company, and (iii) receive for the account of the Company all benefits and otherwise exercise all rights of beneficial ownership of such Original Notes, all in accordance with the terms and conditions of the Exchange Offer.

        The undersigned hereby represents and warrants that the undersigned has full power and authority to tender, exchange, sell, assign and transfer the Original Notes tendered hereby and that when the same is accepted for exchange, the Company will acquire good, marketable and unencumbered title thereto, free and clear of all liens, restrictions, charges and encumbrances, and that the Original Notes tendered hereby are not subject to any adverse claims or proxies. The undersigned will, upon request, execute and deliver any additional documents deemed by the Company or the Exchange Agent to be necessary or desirable to complete the exchange, assignment and transfer of the Original Notes tendered hereby, and the undersigned will comply with its obligations under the Registration Rights Agreement. The undersigned has read and agrees to all of the terms of the Exchange Offer.

        The name(s) and address(es) of the registered holder(s) of the Original Notes tendered hereby should be printed above, if they are not already set forth above, as they appear on the Certificates representing such Original Notes. The Certificate number(s) and the Original Notes that the undersigned wishes to tender should be indicated in the appropriate boxes above.

        If any tendered Original Notes are not exchanged pursuant to the Exchange Offer for any reason, or if Certificates are submitted for more Original Notes than are tendered or accepted for exchange, Certificates for such nonexchanged or nontendered Original Notes will be returned (or, in the case of Original Notes tendered by book-entry transfer, such Original Notes will be credited to an account maintained at DTC), without expense to the tendering Holder, promptly following the expiration or termination of the Exchange Offer.

        The undersigned understands that tenders of Original Notes pursuant to any one of the procedures described in "The Exchange Offer—Procedures for Tendering Original Notes" in the Prospectus and in the instructions attached hereto will, upon the Company's acceptance for exchange of such tendered

4

Original Notes, constitute a binding agreement between the undersigned and the Company upon the terms and subject to the conditions of the Exchange Offer. The undersigned recognizes that, under certain circumstances set forth in the Prospectus, the Company may not be required to accept for exchange any of the Original Notes tendered hereby.

        Unless otherwise indicated herein in the box entitled "Special Issuance Instructions" below, the undersigned hereby directs that the Exchange Notes be issued in the name(s) of the undersigned or, in the case of a book-entry transfer of Original Notes, that such Exchange Notes be credited to the account indicated above maintained at DTC. If applicable, substitute Certificates representing Original Notes not exchanged or not accepted for exchange will be issued to the undersigned or, in the case of a book-entry transfer of Original Notes, will be credited to the account indicated above maintained at DTC. Similarly, unless otherwise indicated under "Special Delivery Instructions," Exchange Notes will be delivered to the undersigned at the address shown below the undersigned's signature.

        By tendering Original Notes and executing this Letter of Transmittal or effecting delivery of an Agent's Message in lieu thereof, the undersigned hereby represents and agrees that (i) the undersigned is not an "affiliate" of the Company, (ii) any Exchange Notes to be received by the undersigned is being acquired in the ordinary course of its business, (iii) the undersigned has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of Exchange Notes to be received in the Exchange Offer, and (iv) if the undersigned is not a broker-dealer, the undersigned is not engaged in, and does not intend to engage in, a distribution (within the meaning of the Securities Act) of such Exchange Notes. The Company may require the undersigned, as a condition to the undersigned's eligibility to participate in the Exchange Offer, to furnish to the Company (or an agent thereof) in writing information as to the number of "beneficial owners" within the meaning of Rule 13d-3 under the Exchange Act on behalf of whom the undersigned holds the Original Notes to be exchanged in the Exchange Offer. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes, it represents that the Original Notes to be exchanged for Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a Prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a Prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

        The Company has agreed that, subject to the provisions of the Registration Rights Agreement, the Prospectus, as it may be amended or supplemented from time to time, may be used by a Participating Broker-Dealer (as defined below) in connection with resales of Exchange Notes received in exchange for Original Notes, where such Original Notes were acquired by such Participating Broker-Dealer for its own account as a result of market-making activities or other trading activities, for a period ending on the earlier of 180 days after the Exchange Offer has been consummated and such time as the Participating Broker-Dealers no longer own any Exchange Notes received in exchange for Original Notes. In that regard, each broker-dealer who acquired Original Notes for its own account as a result of market-making or other trading activities (a "Participating Broker-Dealer"), by tendering such Original Notes and executing this Letter of Transmittal or effecting delivery of an Agent's Message in lieu thereof, agrees that, upon receipt of notice from the Company of the occurrence of any event or the discovery of any fact which makes any statement contained or incorporated by reference in the Prospectus untrue in any material respect or which causes the Prospectus to omit to state a material fact necessary in order to make the statements contained or incorporated by reference therein, in light of the circumstances under which they were made, not misleading or of the occurrence of certain other events specified in the Registration Rights Agreement, such Participating Broker-Dealer will suspend the sale of Exchange Notes pursuant to the Prospectus until the Company has amended or supplemented the Prospectus to correct such misstatement or omission and has furnished copies of the amended or supplemented Prospectus to the Participating Broker-Dealer or the Company has given

5

notice that the sale of the Exchange Notes may be resumed, as the case may be. If the Company gives such notice to suspend the sale of the Exchange Notes, it shall extend the 180-day period referred to above during which Participating Broker-Dealers are entitled to use the Prospectus in connection with the resale of Exchange Notes by the number of days during the period from and including the date of the giving of such notice to and including the date when Participating Broker-Dealers shall have received copies of the supplemented or amended Prospectus necessary to permit resales of the Exchange Notes or to and including the date on which the Company has given notice that the sale of Exchange Notes may be resumed, as the case may be.

        As a result, a Participating Broker-Dealer who intends to use the Prospectus in connection with resales of Exchange Notes received in exchange for Original Notes pursuant to the Exchange Offer must notify the Company, or cause the Company to be notified, on or prior to the Expiration Date, that it is a Participating Broker-Dealer. Such notice may be given in the space provided above or may be delivered to the Exchange Agent at the address set forth in the Prospectus under "The Exchange Offer—Exchange Agent."

        The undersigned will, upon request, execute and deliver any additional documents deemed by the Company to be necessary or desirable to complete the sale, assignment and transfer of the Original Notes tendered hereby. All authority herein conferred or agreed to be conferred in this Letter of Transmittal shall survive the death or incapacity of the undersigned and any obligation of the undersigned hereunder shall be binding upon the heirs, executors, administrators, personal representatives, trustees in bankruptcy, legal representatives, successors and assigns of the undersigned. Except as stated in the Prospectus, this tender is irrevocable.

        The undersigned, by completing the box entitled "Description of Original Notes" above and signing this letter, will be deemed to have tendered the Original Notes as set forth in such box.

6

IMPORTANT
HOLDERS: SIGN HERE
(Please Complete Substitute Form W-9 herein)

Signature(s) of Holder(s)

Date:

        (Must be signed by the registered holder(s) exactly as name(s) appear(s) on Certificate(s) for the Original Notes hereby tendered or on a security position listing or by person(s) authorized to become registered holder(s) by certificates and documents transmitted herewith. If signature is by trustee, executor, administrator, guardian, attorney-in-fact, officer of corporation or other person acting in a fiduciary or representative capacity, please provide the following information and see Instruction 2 below.)

Name(s):

(Please Print)

Capacity (full title):

Address:

(Include Zip Code)

Area Code and Telephone No.: (See Substitute Form W-9 herein)

GUARANTEE OF SIGNATURE(S)
(See Instruction 2 below)

Authorized Signature:

Name:

(Please Type or Print)

Title:

Name of Firm:

Address:

(Include Zip Code)

Area Code and Telephone No.:

Date:

7

SPECIAL ISSUANCE INSTRUCTIONS
(SIGNATURE GUARANTEE REQUIRED—SEE INSTRUCTION 2)

TO BE COMPLETED ONLY if Exchange Notes or Original Notes not tendered are to be issued in the name of someone other than the registered holder of the Original Notes whose name(s) appear(s) above.

o Original Notes not tendered to:

o Exchange Notes to:

Name

(Please Print)

Address

(Include Zip Code)

(TAX IDENTIFICATION
OR SOCIAL SECURITY NUMBER)

SPECIAL DELIVERY INSTRUCTIONS
(SIGNATURE GUARANTEE REQUIRED—SEE INSTRUCTION 2)

TO BE COMPLETED ONLY if Exchange Notes or Original Notes not tendered are to be sent to someone other than the registered holder of the Original Notes whose name(s) appear(s) above, or such registered holder at an address other than that shown above.

o Original Notes not tendered to:

o Exchange Notes to:

Name

(Please Print)

Address

(Include Zip Code)

8

INSTRUCTIONS
Forming Part of the Terms and Conditions of the Exchange Offer

        1.    DELIVERY OF LETTER OF TRANSMITTAL AND CERTIFICATES; GUARANTEED DELIVERY PROCEDURES. This Letter of Transmittal is to be completed either if (a) Certificates are to be forwarded herewith or (b) tenders are to be made pursuant to the procedures for tender by book-entry transfer set forth in "The Exchange Offer—Procedures for Tendering Original Notes" in the Prospectus and an Agent's Message is not delivered. Certificates, or timely confirmation of a book-entry transfer of such Original Notes into the Exchange Agent's account at DTC, as well as this Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees, and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent at its address set forth herein on or prior to the Expiration Date. Tenders by book-entry transfer may also be made by delivering an Agent's Message in lieu thereof. Original Notes may be tendered in whole or in part in integral multiples of $1,000.

        Holders who wish to tender their Original Notes and (i) whose Original Notes are not immediately available or (ii) who cannot deliver their Original Notes, this Letter of Transmittal and all other required documents to the Exchange Agent on or prior to the Expiration Date or (iii) who cannot complete the procedures for delivery by book-entry transfer on a timely basis, may tender their Original Notes by properly completing and duly executing a Notice of Guaranteed Delivery pursuant to the guaranteed delivery procedures set forth in "The Exchange Offer—Guaranteed Delivery Procedures" in the Prospectus. Pursuant to such procedures: (i) such tender must be made by or through an Eligible Institution (as defined below); (ii) a properly completed and duly executed Notice of Guaranteed Delivery, substantially in the form made available by the Company, must be received by the Exchange Agent on or prior to the Expiration Date; and (iii) the Certificates (or a book-entry confirmation) representing all tendered Original Notes, in proper form for transfer, together with a Letter of Transmittal (or facsimile thereof), properly completed and duly executed, with any required signature guarantees and any other documents required by this Letter of Transmittal, must be received by the Exchange Agent within three New York Stock Exchange trading days after the date of execution of such Notice of Guaranteed Delivery, all as provided in "The Exchange Offer—Guaranteed Delivery Procedures" in the Prospectus.

        The Notice of Guaranteed Delivery may be delivered by hand or transmitted by facsimile or mail to the Exchange Agent, and must include a guarantee by an Eligible Institution in the form set forth in such Notice of Guaranteed Delivery. For Original Notes to be properly tendered pursuant to the guaranteed delivery procedure, the Exchange Agent must receive a Notice of Guaranteed Delivery on or prior to the Expiration Date. As used herein and in the Prospectus, "Eligible Institution" means a firm or other entity identified in Rule 17Ad-15 under the Exchange Act as "an eligible guarantor institution," including (as such terms are defined therein) (i) a bank; (ii) a broker, dealer, municipal securities broker or dealer or government securities broker or dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association.

        THE METHOD OF DELIVERY OF CERTIFICATES, THIS LETTER OF TRANSMITTAL AND ALL OTHER REQUIRED DOCUMENTS IS AT THE OPTION AND SOLE RISK OF THE TENDERING HOLDER, AND THE DELIVERY WILL BE DEEMED MADE ONLY WHEN ACTUALLY RECEIVED BY THE EXCHANGE AGENT. IF DELIVERY IS BY MAIL, THEN REGISTERED MAIL WITH RETURN RECEIPT REQUESTED, PROPERLY INSURED, OR OVERNIGHT DELIVERY SERVICE IS RECOMMENDED. IN ALL CASES, SUFFICIENT TIME SHOULD BE ALLOWED TO ENSURE TIMELY DELIVERY.

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        The Company will not accept any alternative, conditional or contingent tenders. Each tendering Holder, by execution of a Letter of Transmittal (or facsimile thereof), waives any right to receive any notice of the acceptance of such tender.

        2.    GUARANTEE OF SIGNATURES. No signature guarantee on this Letter of Transmittal is required if:

(i)

this Letter of Transmittal is signed by the registered holder (which term, for purposes of this document, shall include any participant in DTC whose name appears on a security position listing as the owner of the Original Notes (the "Holder")) of Original Notes tendered herewith, unless such Holder(s) has completed either the box entitled "Special Issuance Instructions" or the box entitled "Special Delivery Instructions" above, or



(ii)

such Original Notes are tendered for the account of a firm that is an Eligible Institution.

        In all other cases, an Eligible Institution must guarantee the signature(s) on this Letter of Transmittal. See Instruction 5.

        3.    INADEQUATE SPACE. If the space provided in the box captioned "Description of Original Notes" is inadequate, the Certificate number(s) and/or the principal amount of Original Notes and any other required information should be listed on a separate signed schedule that is attached to this Letter of Transmittal.

        4.    PARTIAL TENDERS AND WITHDRAWAL RIGHTS. Tenders of Original Notes will be accepted only in integral multiples of $1,000. If less than all the Original Notes evidenced by any Certificates submitted is to be tendered, fill in the principal amount of Original Notes that is to be tendered in the box entitled "Principal Amount of Original Notes Tendered." In such case, new Certificate(s) for the remainder of the Original Notes that was evidenced by your old Certificate(s) will only be sent to the Holder of the Original Notes, promptly after the Expiration Date. All Original Notes represented by Certificates delivered to the Exchange Agent will be deemed to have been tendered unless otherwise indicated.

        Except as otherwise provided herein, tenders of Original Notes may be withdrawn at any time on or prior to the Expiration Date. In order for a withdrawal to be effective on or prior to that time, a written or facsimile transmission of such notice of withdrawal must be timely received by the Exchange Agent at one of its addresses set forth above or in the Prospectus on or prior to the Expiration Date. Any such notice of withdrawal must specify the name of the person who tendered the Original Notes to be withdrawn, the aggregate principal amount of Original Notes to be withdrawn, and (if Certificates for Original Notes have been tendered) the name of the registered Holder of the Original Notes as set forth on the Certificate for the Original Notes, if different from that of the person who tendered such Original Notes.

        If Certificates for the Original Notes have been delivered or otherwise identified to the Exchange Agent, then prior to the physical release of such Certificates for the Original Notes, the tendering Holder must submit the serial numbers shown on the particular Certificates for the Original Notes to be withdrawn and the signature on the notice of withdrawal must be guaranteed by an Eligible Institution, except in the case of Original Notes tendered for the account of an Eligible Institution. If Original Notes have been tendered pursuant to the procedures for book-entry transfer set forth in the Prospectus under "The Exchange Offer—Procedures for Tendering Original Notes," the notice of withdrawal must specify the name and number of the account at DTC to be credited with the withdrawal of Original Notes, in which case a notice of withdrawal will be effective if delivered to the Exchange Agent by written, telegraphic, telex or facsimile transmission. Withdrawals of tenders of Original Notes may not be rescinded. Original Notes properly withdrawn will not be deemed validly tendered for purposes of the Exchange Offer, but may be retendered at any subsequent time on or

10

prior to the Expiration Date by following any of the procedures described in the Prospectus under "The Exchange Offer—Procedures for Tendering Original Notes."

        All questions as to the validity, form and eligibility (including time of receipt) of such withdrawal notices will be determined by the Company, in its sole discretion, whose determination shall be final and binding on all parties. The Company, any affiliates or assigns of the Company, the Exchange Agent or any other person shall not be under any duty to give any notification of any irregularities in any notice of withdrawal or incur any liability for failure to give any such notification. Any Original Notes which have been tendered but which are withdrawn will be returned to the Holder thereof without cost to such Holder promptly after withdrawal.

        5.    SIGNATURES ON LETTER OF TRANSMITTAL, ASSIGNMENTS AND ENDORSEMENTS. If this Letter of Transmittal is signed by the registered Holder(s) of the Original Notes tendered hereby, the signature(s) must correspond exactly with the name(s) as written on the face of the Certificate(s) without alteration, enlargement or any change whatsoever.

        If any Original Notes tendered hereby are owned of record by two or more joint owners, all such owners must sign this Letter of Transmittal.

        If any tendered Original Notes are registered in different name(s) on several Certificates, it will be necessary to complete, sign and submit as many separate Letters of Transmittal (or facsimiles thereof) as there are different registrations of Certificates.

        If this Letter of Transmittal or any Certificates or bond powers are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, such persons should so indicate when signing and, unless waived by the Company, must submit proper evidence satisfactory to the Company, in its sole discretion, of each such person's authority to so act.

        When this Letter of Transmittal is signed by the registered owner(s) of the Original Notes listed and transmitted hereby, no endorsement(s) of Certificate(s) or separate bond power(s) is required unless Exchange Notes are to be issued in the name of a person other than the registered Holder(s). Signatures on such Certificate(s) or bond power(s) must be guaranteed by an Eligible Institution.

        If this Letter of Transmittal is signed by a person other than the registered owner(s) of the Original Notes listed, the Certificates must be endorsed or accompanied by appropriate bond powers, signed exactly as the name or names of the registered owner(s) appear(s) on the Certificates, and also must be accompanied by such opinions of counsel, certifications and other information as the Company or the Trustee for the Original Notes may require in accordance with the restrictions on transfer applicable to the Original Notes. Signatures on such Certificates or bond powers must be guaranteed by an Eligible Institution.

        6.    SPECIAL ISSUANCE AND DELIVERY INSTRUCTIONS. If Exchange Notes are to be issued in the name of a person other than the signer of this Letter of Transmittal, or if Exchange Notes are to be sent to someone other than the signer of this Letter of Transmittal or to an address other than that shown above, the appropriate boxes on this Letter of Transmittal should be completed. Certificates for Original Notes not exchanged will be returned by mail or, if tendered by book-entry transfer, by crediting the account indicated above maintained at DTC. See Instruction 4.

        7.    IRREGULARITIES. The Company will determine, in its sole discretion, all questions as to the form of documents, validity, eligibility (including time of receipt) and acceptance for exchange of any tender of Original Notes, which determination shall be final and binding on all parties. The Company reserves the absolute right to reject any and all tenders determined by it not to be in proper form or the acceptance of which, or exchange for which, may, in the view of counsel to the Company, be unlawful. The Company also reserves the absolute right, subject to applicable law, to waive any of

11

the conditions of the Exchange Offer set forth in the Prospectus under "The Exchange Offer—Conditions to the Exchange Offer" or any conditions or irregularities in any tender of Original Notes of any particular Holder whether or not similar conditions or irregularities are waived in the case of other holders. The Company's interpretation of the terms and conditions of the Exchange Offer (including this Letter of Transmittal and the instructions hereto) will be final and binding. No tender of Original Notes will be deemed to have been validly made until all irregularities with respect to such tender have been cured or waived. Neither the Company, any affiliates or assigns of the Company, the Exchange Agent, nor any other person shall be under any duty to give notification of any irregularities in tenders or incur any liability for failure to give such notification.

        8.    QUESTIONS, REQUESTS FOR ASSISTANCE AND ADDITIONAL COPIES. Questions and requests for assistance may be directed to the Exchange Agent at its address and telephone number set forth on the front of this Letter of Transmittal. Additional copies of the Prospectus, the Notice of Guaranteed Delivery and the Letter of Transmittal may be obtained from the Exchange Agent or from your broker, dealer, commercial bank, trust company or other nominee.

        9.    30% BACKUP WITHHOLDING; SUBSTITUTE FORM W-9. Under the U.S. Federal income tax law, a Holder whose tendered Original Notes are accepted for exchange is required to provide the Exchange Agent with such Holder's correct taxpayer identification number ("TIN") on Substitute Form W-9 below. If the Exchange Agent is not provided with the correct TIN, the Internal Revenue Service (the "IRS") may subject the Holder or other payee to a $50 penalty. In addition, payments to such holders or other payees with respect to Original Notes exchanged pursuant to the Exchange Offer may be subject to 30% backup withholding.

        The box in Part 2 of the Substitute Form W-9 may be checked if the tendering Holder has not been issued a TIN and has applied for a TIN or intends to apply for a TIN in the near future. If the box in Part 2 is checked, the Holder or other payee must also complete the Certificate of Awaiting Taxpayer Identification Number below in order to avoid backup withholding. Notwithstanding that the box in Part 2 is checked and the Certificate of Awaiting Taxpayer Identification Number is completed, the Exchange Agent will withhold 30% of all payments made prior to the time a properly certified TIN is provided to the Exchange Agent. The Exchange Agent will retain such amounts withheld during the 60-day period following the date of the Substitute Form W-9. If the Holder furnishes the Exchange Agent with its TIN within 60 days after the date of the Substitute Form W-9, the amounts retained during the 60-day period will be remitted to the Holder and no further amounts shall be retained or withheld from payments made to the Holder thereafter. If, however, the Holder has not provided the Exchange Agent with its TIN within such 60-day period, amounts withheld will be remitted to the IRS as backup withholding. In addition, 30% of all payments made thereafter will be withheld and remitted to the IRS until a correct TIN is provided.

        The Holder is required to give the Exchange Agent the TIN (e.g., social security number or employer identification number) of the registered owner of the Original Notes or of the last transferee appearing on the transfers attached to, or endorsed on, the Original Notes. If the Original Notes are registered in more than one name or are not in the name of the actual owner, consult the enclosed "Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which number to report.

        Certain holders (including, among others, corporations, financial institutions and certain foreign persons) may not be subject to the backup withholding and reporting requirements. Such holders should nevertheless complete the attached Substitute Form W-9 below, and write "exempt" on the face thereof, to avoid possible erroneous backup withholding. A foreign person may qualify as an exempt recipient by submitting a properly completed IRS Form W-8, signed under penalties of perjury, attesting to that Holder's exempt status. Please consult the enclosed "Guidelines for Certification of

12

Taxpayer Identification Number on Substitute Form W-9" for additional guidance on which holders are exempt from backup withholding.

        Backup withholding is not an additional U.S. Federal income tax. Rather, the U.S. Federal income tax liability of a person subject to backup withholding will be reduced by the amount of tax withheld. If withholding results in an overpayment of taxes, a refund may be obtained.

        10.  WAIVER OF CONDITIONS. The Company reserves the absolute right to waive satisfaction of any or all conditions enumerated in the Prospectus.

        11.  NO CONDITIONAL TENDERS. No alternative, conditional or contingent tenders will be accepted. All tendering holders of Original Notes, by execution of this Letter of Transmittal, shall waive any right to receive notice of the acceptance of Original Notes for exchange.

        Neither the Company, the Exchange Agent nor any other person is obligated to give notice of any defect or irregularity with respect to any tender of Original Notes nor shall any of them incur any liability for failure to give any such notice.

        12.  LOST, DESTROYED OR STOLEN CERTIFICATES. If any Certificate(s) representing Original Notes have been lost, destroyed or stolen, the Holder should promptly notify the Exchange Agent. The Holder will then be instructed as to the steps that must be taken in order to replace the Certificate(s). This Letter of Transmittal and related documents cannot be processed until the procedures for replacing lost, destroyed or stolen Certificate(s) have been followed.

        13.  SECURITY TRANSFER TAXES. Holders who tender their Original Notes for exchange will not be obligated to pay any transfer taxes in connection therewith. If, however, Exchange Notes are to be delivered to, or are to be issued in the name of, any person other than the registered Holder of the Original Notes tendered, or if a transfer tax is imposed for any reason other than the exchange of Original Notes in connection with the Exchange Offer, then the amount of any such transfer tax (whether imposed on the registered Holder or any other persons) will be payable by the tendering Holder. If satisfactory evidence of payment of such taxes or exemption therefrom is not submitted with the Letter of Transmittal, the amount of such transfer taxes will be billed directly to such tendering Holder.

13

PAYER'S NAME: U.S. BANK NATIONAL ASSOCIATION
SUBSTITUTE FORM W-9 DEPARTMENT OF THE TREASURY INTERNAL REVENUE SERVICE	PART 1—PLEASE PROVIDE YOUR TIN IN THE BOX AT RIGHT AND CERTIFY BY SIGNING AND DATING BELOW.	TIN:   Social Security Number or Employer Identification Number
Payer's Request for Taxpayer Identification Number ("TIN")	PART 2—TIN Applied For o
CERTIFICATION: Under penalties of perjury, I certify that:

(1)	The number shown on this form is my correct Taxpayer Identification Number (or I am waiting for a number to be issued to me); and
(2)	I am not subject to backup withholding either because: (a) I have not been notified by the Internal Revenue Service (the "IRS") that I am subject to backup withholding as a result of a failure to report all interest or dividends, or (b) the IRS has notified me that I am no longer subject to backup withholding; and
(3)	I am a U.S. person (including a U.S. resident alien).
Certification Instructions—You must cross out item (2) above if you have been notified by the IRS that you are subject to backup withholding because of underreporting interest or dividends on your tax return. However, if after being notified by the IRS that you were subject to backup withholding, you received another notification from the IRS that you were no longer subject to backup withholding, do not cross out item (2).

Signature	Date
NOTE: FAILURE TO COMPLETE AND RETURN THIS FORM MAY RESULT IN BACKUP WITHHOLDING OF 30% OF ANY PAYMENTS MADE TO YOU IN CONNECTION WITH THE EXCHANGE OFFER. PLEASE REVIEW THE ENCLOSED GUIDELINES FOR CERTIFICATION OF TAXPAYER IDENTIFICATION NUMBER ON SUBSTITUTE FORM W-9 FOR ADDITIONAL DETAILS.
YOU MUST COMPLETE THE FOLLOWING CERTIFICATE IF YOU ARE AWAITING (OR WILL SOON APPLY FOR) A TAXPAYER IDENTIFICATION NUMBER.
CERTIFICATE OF AWAITING TAXPAYER IDENTIFICATION NUMBER
I certify under penalties of perjury that a taxpayer identification number has not been issued to me, and either (a) I have mailed or delivered an application to receive a taxpayer identification number to the appropriate Internal Revenue Service Center or Social Security Administration Office or (b) I intend to mail or deliver an application in the near future. I understand that if I do not provide a taxpayer identification number by the time of the exchange, thirty percent (30%) of all reportable payments made to me thereafter will be withheld until I provide a number.

Signature
Date

14

EX-99.2

FORM OF
NOTICE OF GUARANTEED DELIVERY

OREGON STEEL MILLS, INC.

Offer to Exchange its
10% First Mortgage Notes due 2009
that have been registered under the Securities Act
for any and all of its outstanding
10% First Mortgage Notes due 2009
that were issued and sold in a transaction
exempt from registration under the
Securities Act of 1933, as amended

Pursuant to the Prospectus dated                        , 2002

        This Notice of Guaranteed Delivery, or one substantially equivalent to this form, must be used to accept the Exchange Offer (as defined below) if (i) certificates for the Company's 10% First Mortgage Notes due 2009 (the "Original Notes") are not immediately available, (ii) Original Notes, the Letter of Transmittal and all other required documents cannot be delivered to U.S. Bank National Association (the "Exchange Agent") on or prior to the Expiration Date or (iii) the procedures for delivery by book-entry transfer cannot be completed on a timely basis. This Notice of Guaranteed Delivery may be delivered by hand, overnight courier or mail, or transmitted by facsimile transmission, to the Exchange Agent. See "The Exchange Offer—Procedures for Tendering Original Notes" in the Prospectus. In addition, in order to utilize the guaranteed delivery procedure to tender Original Notes pursuant to the Exchange Offer, a completed, signed and dated Letter of Transmittal relating to the Original Notes (or facsimile thereof) must also be received by the Exchange Agent on or prior to the Expiration Date. Capitalized terms not defined herein have the meanings assigned to them in the Prospectus.

The Exchange Agent for the Exchange Offer is:
U.S. Bank National Association

By Mail U.S. Bank National Association 180 E. 5th Street St. Paul, MN 55101	By Overnight Carrier U.S. Bank National Association 180 E. 5th Street St. Paul, MN 55101	By Hand U.S. Bank National Association 180 E. 5th Street St. Paul, MN 55101
Attn: Specialized Finance Group - 4th Floor	Attn: Specialized Finance Group - 4th Floor	Attn: Specialized Finance Group - 4th Floor - Bond Drop Window
By Facsimile Transmission: (For Eligible Institutions Only) (651) 244-1537
To confirm by Telephone (800) 934-6802

DELIVERY OF THIS NOTICE OF GUARANTEED DELIVERY OTHER THAN AS SET FORTH ABOVE WILL NOT CONSTITUTE A VALID DELIVERY. THIS NOTICE OF GUARANTEED DELIVERY IS NOT TO BE USED TO GUARANTEE SIGNATURES. IF A SIGNATURE ON A LETTER OF TRANSMITTAL IS REQUIRED TO BE GUARANTEED BY AN "ELIGIBLE INSTITUTION" UNDER THE INSTRUCTIONS THERETO, SUCH SIGNATURE GUARANTEE MUST APPEAR IN THE APPLICABLE SPACE PROVIDED IN THE SIGNATURE BOX ON THE LETTER OF TRANSMITTAL.

Ladies and Gentlemen:

        The undersigned hereby tenders to Oregon Steel Mills, Inc., a Delaware corporation (the "Company"), upon the terms and subject to the conditions set forth in the Prospectus dated                             , 2002 (as the same may be amended or supplemented from time to time, the "Prospectus"), and the related Letter of Transmittal (which together constitute the "Exchange Offer"), receipt of which is hereby acknowledged, the aggregate principal amount of Original Notes set forth below pursuant to the guaranteed delivery procedures set forth in the Prospectus under the caption "The Exchange Offer—Guaranteed Delivery Procedures."

Aggregate Principal Amount: $ Name(s) of Registered Holder(s):

Amount Tendered: $                 *

Certificate No(s) (if available):

$	(Total Principal Amount Represented by Original Notes Certificate(s))
If Original Notes will be tendered by book-entry transfer, provide the following information:

DTC Account Number:

Date:

* Must be in integral multiples of $1,000.

        All authority herein conferred or agreed to be conferred shall survive the death or incapacity of the undersigned and every obligation of the undersigned hereunder shall be binding upon the heirs, personal representatives, successors and assigns of the undersigned.

PLEASE SIGN HERE

X
X
	Signature(s) of Owner(s) or Authorized Signatory	Date

Area Code and Telephone Number:

        Must be signed by the holder(s) of the Original Notes as their name(s) appear(s) on certificates for Original Notes or on a security position listing, or by person(s) authorized to become registered holder(s) by endorsement and documents transmitted with this Notice of Guaranteed Delivery. If signature is by a trustee, executor, administrator, guardian, attorney-in-fact, officer or other person acting in a fiduciary or representative capacity, such person must set forth his or her full title below and, unless waived by the Company, provide proper evidence satisfactory to the Company of such person's authority to so act.

2

Please print name(s) and address(es)

Name(s):

Capacity:

Address(es):

GUARANTEE OF DELIVERY

(Not to be used for signature guarantee)

        The undersigned, a firm or other entity identified in Rule 17Ad-15 under the Securities Exchange Act of 1934, as amended, as an "eligible guarantor institution," including (as such terms are defined therein): (i) a bank; (ii) a broker, dealer, municipal securities broker, government securities broker or government securities dealer; (iii) a credit union; (iv) a national securities exchange, registered securities association or clearing agency; or (v) a savings association that is a participant in a Securities Transfer Association (each of the foregoing being referred to as an "Eligible Institution"), hereby guarantees to deliver to the Exchange Agent, at one of its addresses set forth above, either the Original Notes tendered hereby in proper form for transfer, or confirmation of the book-entry transfer of such Original Notes to the Exchange Agent's account at The Depository Trust Company ("DTC"), pursuant to the procedures for book-entry transfer set forth in the Prospectus, in either case together with one or more properly completed and duly executed Letter(s) of Transmittal (or facsimile thereof) and any other required documents within three New York Stock Exchange trading days after the date of execution of this Notice of Guaranteed Delivery.

        The undersigned acknowledges that it must deliver the Letter(s) of Transmittal (or facsimile thereof) and the Original Notes tendered hereby to the Exchange Agent within the time period set forth above and that failure to do so could result in a financial loss to the undersigned.

Name of Firm	Authorized Signature
Address	Title
Zip Code	(Please Type or Print)

Area Code and Telephone Number:
Date:

NOTE: DO NOT SEND CERTIFICATES FOR OUTSTANDING DEBT WITH THIS FORM. CERTIFICATES FOR OUTSTANDING DEBT SHOULD BE SENT ONLY WITH YOUR LETTER OF TRANSMITTAL.

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EX-99.3

FORM OF
INSTRUCTION TO REGISTERED HOLDER AND/OR DEPOSITORY
TRUST COMPANY PARTICIPANT FROM BENEFICIAL OWNER

For
Oregon Steel Mills, Inc.
Offer to Exchange its
10% First Mortgage Notes due 2009
that have been registered under the Securities Act
for any and all of its outstanding
10% First Mortgage Notes due 2009
that were issued and sold in a transaction
exempt from registration under the
Securities Act of 1933, as amended

THE EXCHANGE OFFER AND WITHDRAWAL RIGHTS WILL EXPIRE AT 5:00 P.M., NEW YORK CITY TIME, ON            , 2002, UNLESS THE OFFER IS EXTENDED. TENDERS MAY BE WITHDRAWN PRIOR TO 5:00 P.M., NEW YORK CITY TIME, ON THE EXPIRATION DATE.

To Registered Holder and/or Depository Trust Company Participant:

        The undersigned hereby acknowledges receipt of the Prospectus dated                        , 2002 (the "Prospectus") of Oregon Steel Mills, Inc., a Delaware corporation (the "Company"), and the accompanying Letter of Transmittal (the "Letter of Transmittal"), that together constitute the Company's offer (the "Exchange Offer") to exchange its 10% First Mortgage Notes due 2009 (the "Exchange Notes"), which have been registered under the Securities Act of 1933, as amended (the "Securities Act"), for all of its outstanding 10% First Mortgage Notes due 2009 (the "Original Notes"). Capitalized terms used but not defined herein have the meanings ascribed to them in the Prospectus.

        This will instruct you, the registered holder and/or Depository Trust Company Participant, as to the action to be taken by you relating to the Exchange Offer with respect to the Original Notes held by you for the account of the undersigned.

        The aggregate face amount of the Original Notes held by you for the account of the undersigned is (FILL IN AMOUNT):

        $                        of the 10% First Mortgage Notes due 2009.

        With respect to the Exchange Offer, the undersigned hereby instructs you (CHECK APPROPRIATE BOX):

o

To TENDER the following Original Notes held by you for the account of the undersigned (INSERT PRINCIPAL AMOUNT OF OUTSTANDING DEBT TO BE TENDERED (IF LESS THAN ALL)): $                  



o

NOT to TENDER any Original Notes held by you for the account of the undersigned.

        If the undersigned instructs you to tender the Original Notes held by you for the account of the undersigned, it is understood that you are authorized to make, on behalf of the undersigned (and the undersigned, by its signature below, hereby makes to you), the representations and warranties contained in the Letter of Transmittal that are to be made with respect to the undersigned as a beneficial owner, including but not limited to the representations, that (i) the undersigned is not an "affiliate" of the Company, (ii) any Exchange Notes to be received by the undersigned are being acquired in the ordinary course of its business, (iii) the undersigned has no arrangement or understanding with any person to participate in a distribution (within the meaning of the Securities Act) of Exchange Notes to be received in the Exchange Offer, and (iv) if the undersigned is not a

broker-dealer, the undersigned is not engaged in, and does not intend to engage in, a distribution (within the meaning of the Securities Act) of such Exchange Notes. The Company may require the undersigned, as a condition to the undersigned's eligibility to participate in the Exchange Offer, to furnish to the Company (or an agent thereof) in writing information as to the number of "beneficial owners" within the meaning of Rule 13d-3 under the Exchange Act on behalf of whom the undersigned holds the Original Notes to be exchanged in the Exchange Offer. If the undersigned is a broker-dealer that will receive Exchange Notes for its own account in exchange for Original Notes, it represents that the Original Notes to be exchanged for Exchange Notes were acquired by it as a result of market-making activities or other trading activities and acknowledges that it will deliver a prospectus in connection with any resale of such Exchange Notes; however, by so acknowledging and by delivering a prospectus, the undersigned will not be deemed to admit that it is an "underwriter" within the meaning of the Securities Act.

SIGN HERE

Name of beneficial owner(s)

Signature

Name(s) (please print)

(Address)

(Telephone Number)

(Taxpayer Identification or Social Security Number)

Date

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