MATERIAL SCIENCES CORP
TOLLING AGREEMENT, DATED AS OF MAY 6, 2003
<DOCUMENT>
<TYPE>EX-10.BB
<SEQUENCE>5
<FILENAME>dex10bb.txt
<DESCRIPTION>TOLLING AGREEMENT, DATED AS OF MAY 6, 2003
<TEXT>
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                                                                  Exhibit 10(bb)

                                TOLLING AGREEMENT

          TOLLING AGREEMENT (the "Agreement") dated as of May 6, 2003 among
INTERNATIONAL STEEL GROUP INC. ("ISG"), a Delaware corporation, MSC WALBRIDGE
COATINGS, INC., a Delaware corporation ("MSCWC"), and MATERIAL SCIENCES
CORPORATION, a Delaware corporation ("MSC").

                              W I T N E S S E T H :

          WHEREAS, MSCWC is now the sole owner and operator of an
electrogalvanizing and coil coating facility for cold rolled steel ("Substrate")
located at 30610 East Broadway, Walbridge, Ohio 43465 (the "Facility"), formerly
operated by MSCWC on behalf of Walbridge Coatings, An Illinois Partnership (the
"Partnership"), the previous owner of the Facility; and

          WHEREAS, MSCWC utilizes an electrogalvanization process to place a
free zinc coating on Substrate (the "Zinc Process") or to place a free zinc and
nickel coating on Substrate (the "Zinc-Nickel Process") and a roll application
process to place other coatings on Substrate (the "Roll Process" and,
collectively with the Zinc Process and the Zinc-Nickel Process, the "Processes")
at the Facility;

          WHEREAS, ISG and MSCWC desire that upon request by ISG, MSCWC will, at
the facility, coat ISG Substrate (as hereinafter defined) utilizing one of the
Processes in the same manner as conducted by MSCWC on behalf of the Partnership
prior to the date hereof (the "Core Services") and perform slitting, inspection
and other services ("Ancillary Services" and, collectively with the Core
Services, "Coating Services") on such coated ISG Substrate in exchange for the
payment of tolls, all on the terms and conditions as set forth herein; and

          NOW, THEREFORE, in consideration of the representations, warranties,
covenants and agreements herein set forth and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:

                                   ARTICLE I

                                   Definitions

          SECTION 1.01. Definitions. As used herein, the following terms shall
have the following meanings:

          "Affiliate" means, with respect to any Person at any time, any other
Person directly or indirectly Controlling, Controlled by or under common Control
with such specified Person.

          "Bankruptcy" means, as to any Person, the Person's taking or
acquiescing to the taking of any action seeking relief under, or advantage of,
any applicable debtor relief,

<PAGE>

liquidation, receivership, conservatorship, bankruptcy, moratorium,
rearrangement, insolvency, reorganization or similar law affecting the rights or
remedies of creditors generally, as in effect from time to time. For purposes of
this definition, the term "acquiescing" shall include, without limitation, the
failure to file, within thirty (30) days after its entry, a petition, answer or
motion to vacate or to discharge any order, judgment or decree providing for any
relief under such law.

          "Business Day" shall mean any day that the Facility is open for
business.

          "Coated ISG Substrate" means ISG Substrate that has been coated
pursuant to one of the Processes at the Facility.

          "Coating Weight" means the amount of free zinc required to be applied
by the Zinc Process to ISG Substrate, expressed in grams per square meter of
coated substrate surface area.

          "Control" means, with respect to any Person, the power to, directly or
indirectly, direct the management and policies of such Person, whether through
ownership of voting securities (or pledge of voting securities if the pledgee
thereof may on the date of determination exercise or control the exercise of the
voting rights of the owner of such voting securities), by contract or otherwise;
and the terms "Control" (when used as a verb), "Controlling" and "Controlled"
have meanings correlating to the foregoing.

          "EDI" means electronic data interchange.

          "Finished Substrate" means ISG Substrate or Coated ISC Substrate on
which Ancillary Services have been performed.

          "Firm Order" has the meaning set forth in Section 6.03.

          "Floor Space" means the square footage of the Facility as of April 30,
2003.

          "Hot-Dip Galvanizing" means a process by which molten zinc is applied
to Substrate other than through electrogalvanizing.

          "ISG Inventory" means ISG Substrate, Coated ISG Substrate and Finished
Substrate.

          "ISG Line Time" means production time on the Line necessary to fulfill
the current Firm Order.

          "ISG Substrate" means Substrate owned by ISG or its Affiliates.

          "Line" means the production line of the Facility commonly referred to
as Line 6.

          "Line Time" has the meaning set forth in Section 3.02.

          "LME" means London Metal Exchange.

<PAGE>

          "Person" means any natural person, firm, trust, partnership, joint
venture, unincorporated association, corporation, limited liability company,
government or governmental agency or other entity.

          "Prior Agreement" means the Amended and Restated Coating Agreement
dated as of July 23, 1999, between Bethlehem Steel Corporation and the
Partnership.

          "Prime Rate" means the rate of interest published in The Wall Street
Journal as the "prime rate" on the most recent Business Day.

          "Purchase Order" shall have the meaning set forth in Section 6.04.

          "Reference Strip" means (a) a 60-inch wide, 0.030-inch minimum
thickness steel coil to which a minimum Coating Weight of 100 grams of free zinc
per square meter has been applied on one side only by the Zinc Process or (b) a
49-inch wide, 0.030-inch minimum thickness steel coil to which a minimum coating
weight of 30 grams of zinc-nickel alloy per square meter has been applied on
both sides by the zinc-nickel process.

          "Scheduled Line Time" means all time on the Line available to perform
Core Services.

          "Term" shall have the meaning set forth in Section 3.01.

          "Trip Title" means title passes to the customer at the Facility prior
to shipment from the Facility.

          "Yield Loss means ISG Substrate scrap losses and rejections of Coated
ISG Substrate or Finished Substrate caused by quality failures in the operation
of the Zinc Process or the Zinc-Nickel Process at the Facility and shall be
calculated based upon the difference between the weight of the Substrate
delivered to the Facility and the weight of the Coated ISG Substrate or Finished
Substrate shipped from the Facility; provided, however, that all losses and
rejections due to any reason beyond the control of MSCWC, including; without
limitation, defects in ISG Substrate, requests by ISG to trim coils and requests
by ISG to process overweight coils, shall not be included in Yield Loss.
Responsibility for rejected Coated ISG Substrate and Finished Substrate shall be
determined in good faith by the technical representatives of ISG and MSCWC
designated by each to determine such matters.

                                   ARTICLE II

                                Scrap Attachment

          SECTION 2.01. Attachment I. In addition to the schedules attached
hereto, Attachment I hereto entitled "Scrap Policy" shall be a part of this
Agreement and the parties hereto shall comply with the requirements of such
attachment in carrying out their respective obligations hereunder.

<PAGE>

                                  ARTICLE III

                   Term; Purchase and Sale of Coating Services

          SECTION 3.01. Term. Subject to Article IX hereof, the term of this
Agreement shall be from May 7, 2003 through December 31, 2004 (the "Term").

          SECTION 3.02. Core Services. Subject to the terms and conditions of
this Agreement, MSCWC shall provide ISG, as requested by ISG in accordance with
this Agreement, with a maximum 163 hours of scheduled production time (but not
more than 25% of the available hours of scheduled production time) during each
month of the Term (the "Line Time") for MSCWC's performance of Core Services on
ISG Substrate; provided, however, that for the month of May, 2003, production
time through May 6, 2003 for BSC and its Affiliates under the Prior Agreement
shall reduce the maximum hours available to ISG hereunder for that month.

          SECTION 3.03. Sole Provider. Subject to the availability of time on
the Line, ISG agrees that MSCWC shall be the sole provider of Core Services
(excluding Hot-Dip Galvanizing) on all Substrate produced or processed in, or
shipped from, ISG's Burns Harbor facilities, provided that the provision of the
Core Services at the Facility continue to meet the current acceptable level of
quality, capability and service thereat. Any new quality, capability and service
requirements will be negotiated in good faith.

          SECTION 3.04. Ancillary Services. During the Term, ISG may request
and, following such request, MSCWC shall provide Ancillary Services on ISG
Substrate or Coated ISG Substrate. MSCWC shall perform Slitting Services in
accordance with Schedule 4.02 hereto.

          SECTION 3.05. Yield Loss. MSCWC will periodically report to ISG the
amount of Yield Loss on all ISG Substrate coated using the Zinc Process and the
Zinc-Nickel Process. If the total Yield Loss on such ISG Substrate during any
fiscal quarter (March through May, June through August, September through
November and December through February) shall exceed 4% of the total tons of ISG
Substrate coated using the Zinc Process or the Zinc-Nickel Process during such
quarter, MSCWC shall promptly reimburse ISG for its cost to manufacture the
Yield Loss tons during such quarter in excess of 4% of such total, plus an
allowance for freight on such excess tons to the Facility and minus the scrap
value (as defined in Section 6.08) of such excess tons.

                                   ARTICLE IV

                            Toll for Coating Services

          SECTION 4.01. Toll for Core Services. During the Term, ISG shall pay
MSCWC the tolls for requested Core Services set forth on Schedule 4.01, subject
to adjustment pursuant to Section 4.03. Invoicing shall be rendered on "coated"
weight and shall include the weight of coatings applied on each individual coil
but shall not include the weights of protective wrappings and shipping
materials. Tolls for Core Services other than Reference Strip shall be
proportionately adjusted in accordance with the past practices of the
Partnership, as illustrated

<PAGE>

for four products in Exhibits I through IV of Schedule 4.01. Except as otherwise
expressly stated in this Agreement, the prices specified in Schedule 4.01
include all of MSCWC's charges for electrogalvanizing materials and processing
costs.

          SECTION 4.02. Toll for Ancillary Services. ISG shall pay fees to MSCWC
for Ancillary Services as set forth on Schedule 4.02 hereto. Schedule 4.02 also
sets forth the fees that MSCWC may charge ISG for the idle Line Time required to
(a) switch from the Zinc Process to the Zinc-Nickel Process (a "Mode Change") or
(b) interrupt at ISG's request the existing schedule of production to run an
urgent order from ISG (a "Schedule Break").

          SECTION 4.03. Adjustment to Toll for Coating Services. If during the
Term ISG makes a request of MSCWC for Core Services different from those
previously provided by the Partnership under the Prior Agreement, the parties
shall negotiate in good faith the terms under which MSCWC would perform such
Core Services under this Agreement.

          SECTION 4.04. Electricity, Taxes and Insurance Costs. MSCWC has
informed ISG that the price provisions applicable during the Term hereof exclude
certain fixed electricity, taxes and insurance costs and that any pricing
subsequent to the Term will include such costs.

          SECTION 4.05. Utility Curtailment. Whenever during the Term MSCWC is
notified by a utility provider of a utility curtailment that will affect the
Facility, MSCWC shall promptly notify ISG of such utility curtailment, whereupon
ISG shall have the option to require MSCWC to continue to produce in accordance
with Firm Orders previously received. If ISG elects to exercise such option, the
higher utility rates related to such utility curtailment shall be borne by ISG.
If ISG elects not to exercise such option, 25% of all idle Line Time related to
such utility curtailment shall be deducted from the maximum amount of time on
the Line set forth in Section 3.02 hereof for the month in which the utility
curtailment occurs and to the extent necessary to treat all customers fairly, an
appropriate adjustment shall be made in any applicable Firm Order previously
received by MSCWC pursuant to Section 6.03 hereof.

                                   ARTICLE V

                      Substrate Quantity; Substrate Quality

          SECTION 5.01. Substrate Quantity. With respect to each Firm Order, ISG
shall provide MSCWC with the amount of ISG Substrate sufficient to utilize the
ISG Line Time. If the Line becomes idle as a result of ISG's failure to deliver
ISG Substrate sufficient to utilize the ISG Line Time and a corresponding
Purchase Order to MSCWC, ISG shall pay MSCWC $2,200 per such unused hour of ISG
Line Time (which shall be MSCWC's exclusive remedy).

          SECTION 5.02. Substrate Quality. MSCWC shall promptly advise ISG if
all or part of any shipment of ISG Substrate is obviously damaged or defective.
MSCWC shall have no obligation to perform Coating Services on any damaged or
defective ISG Substrate.

<PAGE>

                                   ARTICLE VI

                                   Operations

          SECTION 6.01. Operation of the Facility. MSCWC currently maintains and
shall maintain the capability of the Facility to receive ISG Substrate and to
ship Coated ISG Substrate and Finished Substrate via rail and/or truck as
requested by ISG.

          SECTION 6.02. Communication of ISG Inventory Information. MSCWC will
electronically communicate inventory information regarding ISG Inventory using
the same EDI systems as used under the Prior Agreement. If ISG determines to
change to a different system or different procedures under the same system, any
additional costs will be passed on to ISG.

          SECTION 6.03. Firm Orders. Ninety (90) days prior to the beginning of
each calendar month during the Term, ISG shall deliver to MSCWC a firm order
(each, a "Firm Order") for the amount of time on the Line to be used during such
month to provide Core Services for ISG (with the amount of time on the Line
required for Core Services utilizing each of the Zinc Process, the Zinc-Nickel
Process or the Roll Process set forth separately therein); provided, that
without the written consent of MSCWC, the ISG Line Time with respect to each
such Firm Order shall not exceed the maximum amount of time on the Line set
forth in Section 3.02 hereof for the respective month; and provided, further,
that for the month of May and June, 2003, the "firm orders" that MSCWC has
received from Bethlehem Steel Corporation under the Prior Agreement shall be
deemed to be the Firm Orders of ISG hereunder and for the month of July, 2003,
ISG need not deliver its Firm Order to MSCWC until May 31, 2003.

          SECTION 6.04. Purchase Orders. At least thirty (30) days prior to the
performance by MSCWC of any Core Services, ISG shall deliver to MSCWC a purchase
order (each, a "Purchase Order") for the performance of such Core Services. Each
Purchase Order shall set forth the specifications for Core Services (which
specifications shall be within the reasonable capabilities of the Line) and the
delivery points and scheduled delivery dates for Coated ISG Substrate. In the
event that ISG requests MSCWC to perform Ancillary Services on all or part of
such Coated ISG Substrate, the delivery points and dates set forth in the
Purchase Order shall, absent written notification by ISG to MSCWC, also apply to
the delivery of Finished Substrate. In the event of any inconsistency between
the terms of a Purchase Order and this Agreement, this Agreement shall govern.
ISG shall order Core Services in a reasonably level manner so that excessive
productivity demands will not be placed on the MSCWC's operation of the Facility
during any unit of time. ISG acknowledges that such scheduled delivery dates
will necessarily be approximate, and MSCWC may make such adjustments from time
to time as are reasonably necessary or advisable to achieve economic and
efficient order sizes, to make efficient use of available Substrate and raw
materials and otherwise to maximize efficiency and levels of production.

          SECTION 6.05. Priority of Firm Orders; Modification of Purchase Orders

               (a) ISG may at any time notify MSCWC of any priority within any
Firm Order or Purchase Order and MSCWC shall, to the extent reasonably
practicable, utilize the

<PAGE>

Processes requested by ISG to process ISG Substrate in accordance with the
priority set forth in any such notification and shall allocate production time
on the Line in an equitable manner between Core Services and the coating of
other Substrate.

               (b) ISG may, at any time prior to the commencement of coating ISG
Substrate, notify MSCWC of changes in the specifications for all or part of a
Purchase Order, which specifications shall be within the reasonable capabilities
of the Line and otherwise in accordance herewith, and MSCWC shall, to the extent
reasonably possible, utilize the Processes requested by ISG to coat such ISG
Substrate in accordance with such changed specifications.

               (c) In utilizing the Processes requested by ISG to coat ISG
Substrate, MSCWC will comply, to the extent reasonably possible, with any
reasonable request (including, without limitation, changes to delivery points
and scheduled delivery dates) made by ISG provided that MSCWC shall not be
required: (i) to comply with any request that would result in unfair or
inequitable treatment of others who have ordered time on the Line or (ii) to
follow any practices which are not commercially reasonable or consistent with
the effective utilization of the Line.

          SECTION 6.06. Shipment, Handling of ISG Substrate.

               (a) ISG shall be responsible for arranging and paying for the
shipment of ISG Substrate to the Facility and for any risk of loss associated
with such shipments.

               (b) MSCWC shall be responsible for unloading (after removal of
bracing materials and covers, if any) all ISG Substrate delivered by or on
behalf of ISG to the Facility and so shall unload ISG Substrate in accordance
with customary industry practices. MSCWC shall load and unload carriers
expeditiously to avoid delays and shall be liable for the detention of ISG
trucks caused by MSCWC; provided that carriers comply with their scheduled
appointment times. MSCWC shall be liable for all rail demurrage charges which
result from delays caused by MSCWC that extend beyond its free time. The parties
shall work together to avoid delivery or shipping schedules that will over-tax
the normal capacity and operation of the Facility. If any request is made by ISG
for MSCWC to depart from the customary industry practices referred to in this
Section 6.06(b), the parties shall negotiate in good faith toward fulfilling
such request.

          SECTION 6.07. Shipment, Handling of Coated and Finished ISG Substrate.

               (a) MSCWC shall be responsible for arranging, and ISG shall be
responsible for paying for, all shipments of Coated ISG Substrate and/or
Finished Substrate from the Facility pursuant to the following procedures:

               (1) ISG shall furnish MSCWC with written carrier routing
                   instructions for delivery of Coated ISG Substrate and
                   Furnished Substrate, which instructions shall list the
                   routings numerically in order of dispatch priority along with
                   the carrier's phone number. Unless modified by such
                   instructions, MSCWC shall ship Coated ISG Substrate and/or
                   Finished Substrate to the address stated on the relevant
                   Purchase Order. If ISC changes such instructions, ISG

<PAGE>

                         shall reimburse MSCWC for any demurrage charges for
                         rail cars ordered by MSCWC in accordance with the
                         original instructions.

                    (2)  Unless ISG instructs MSCWC otherwise, all Coated ISG
                         Substrate and Finished Substrate shall be shipped on a
                         per coil basis, oldest coils first. In the event that
                         MSCWC does not so ship Coated ISG Substrate or Finished
                         Substrate, MSCWC shall be liable to ISG for losses
                         caused by deterioration of aged Coated ISG Substrate
                         and/or Finished Substrate.

                    (3)  In the event that all approved carriers refuse ISG's
                         freight of Coated ISG Substrate and/or Finished
                         Substrate, MSCWC shall contact ISG's external
                         transportation department and such department shall
                         give MSCWC alternative carriers to call. If MSCWC is
                         unable to reach such department to obtain alternative
                         carriers, then MSCWC may use such other carriers as
                         necessary to meet ISG's delivery requirements.

                    (4)  MSCWC shall invoice ISG on a timely basis.

                    (5)  MSCWC shall allocate sufficient storage at the Facility
                         to accommodate ISG Inventory, which storage space shall
                         be approximately equal to the product of (i) the
                         percentage of all Scheduled Line Time subject to Firm
                         Orders from ISG for the following quarter and (ii) the
                         Floor Space available for the storage of Substrate.
                         MSCWC shall store, and provide protection for, such ISG
                         Inventory stored at the Facility in accordance with
                         customary industry practice; provided, however, that
                         when the ISG Inventory stored at the Facility equals
                         the storage space allocated to ISG Inventory pursuant
                         to the immediately preceding sentence, MSCWC shall
                         immediately provide written notice to ISG and,
                         forty-eight hours after delivery of such notice, shall
                         have the right to refuse receipt of additional ISG
                         Substrate for so long as the ISG Inventory stored at
                         the Facility equals the storage space allocated to ISG
                         Inventory pursuant to the immediately preceding
                         sentence.

                    (6)  Coated ISG Substrate and/or Finished Substrate not
                         shipped after 90 days will be subject to the storage
                         fees at the rate of $10 per ton per month.

                    (b)  MSCWC shall execute Trip Title of Coated ISG Substrate
and/or Finished Substrate, subject to any mechanic's, serviceman's, bailee's or
similar liens to which MSCWC is entitled, within twenty-four hours of the date
such information is provided by ISG to MSCWC.

                SECTION 6.08. Scrap. Scrap allowance will be credited at the
beginning of each month for line scrap generated the previous month using the
price for #1 dealer bundles as

<PAGE>

quoted by American Metal Market for the month the scrap was generated as the
average of Detroit, Chicago and Pittsburgh, less a $40.00 per ton handling fee.
In the event American Metal Market no longer publishes such information, the
parties shall mutually agree on an appropriate source for such scrap price.
MSCWC shall maintain records of scrap sales and shall, upon ISG's reasonable
request, grant ISG access to all such records.

          SECTION 6.09. Claim Policy. In the event that: (a) due to a breach by
MSCWC of the warranty set forth in Section 7.02, ISG or a customer of ISG
rejects, in whole or in part, any Coated ISG Substrate or Finished Substrate;
(b) MSCWC damages, destroys or loses ISG Inventory (other than normal scrap);
(c) improper processing, storage, clerical or other error on the part of MSCWC
causes ISG Inventory (other than normal scrap) to lose value; or (d) MSCWC fails
to correct or report to ISG any defects in or affecting ISG Inventory that are
reasonably discoverable by MSCWC in the course of its operations, whether such
defects are caused by ISG, MSCWC or another party; then MSCWC shall reimburse
ISG for all fees for Coating Services associated with such Coated ISG Substrate,
Finished Substrate or ISG Inventory ("Claim Product"). The parties shall, with
due diligence, work amicably together to resolve disputes over the underlying
cause of such Claim Product defects. MSCWC's obligation as set forth herein
shall not terminate until a buyer has accepted such Claim Product or has waived
such acceptance as a condition for payment for such Claim Product by such buyer.
ISG's rights under this Section 6.09 shall be its exclusive remedy for Claim
Product and in no event shall MSCWC be liable for any consequential damages or
lost profits.

          SECTION 6.10. Insurance. MSCWC shall maintain in force at its sole
cost and expense general comprehensive liability insurance in an amount not less
than $2,000,000 in the aggregate, $1,000,000 per occurrence and excess liability
coverage in the form of a $4,000,000 umbrella policy (per occurrence and in the
aggregate). If requested by ISG, MSCWC shall provide ISG with a certificate of
insurance covering MSCWC's insurance obligations. Such certificate shall name
ISG as an additional insured and shall contain a statement that ISG will be
notified by the insurer in writing at least thirty (30) days before any material
policy change or cancellation or non-renewal is effected.

          SECTION 6.11. ISG Inventory. For the Term and for a period of six (6)
months thereafter, MSCWC shall provide ISG reasonable access to its records
relating to ISG Inventory. MSCWC shall perform a physical inventory of ISG
Inventory at least once every calendar year. In addition, MSCWC shall, upon
request of ISG during the Term (made not more than once in any calendar year),
permit ISG (or its designees) to conduct a physical inventory of all ISG
Inventory then held by MSCWC. In the event that ISG and MSCWC disagree as to the
amount of ISG Inventory, then the general manager of purchasing of ISG and the
Plant Manager of MSCWC shall meet and in good faith attempt to equitably
determine the amount of ISG Inventory.

          SECTION 6.12. Inspection. MSCWC shall employ customary inspection
techniques on ISG Substrate, Coated ISG Substrate and Finished Substrate during
the performance of the Coating Services, unless directed by ISG in a Purchase
Order or other written instruction; provided that in any event, MSCWC shall not
be responsible for failure to detect any defect in any Coated ISG Substrate or
Finished Substrate which could not have been reasonably discovered during
inspection of such Substrate using its practices under the Prior Agreement.

<PAGE>

          SECTION 6.13. Customer Service. ISG shall be responsible for rendering
advice and providing other assistance to ISG customers relating to Coated ISG
Substrate and/or Finished Substrate. At the reasonable request of ISG, MSCWC
shall make qualified personnel available at any location reasonably specified by
ISG or any ISG customer to assist ISG or such customer with respect to the
provision of advice and assistance relating to Coated ISG Substrate or Finished
Substrate. To the extent that ISG or an ISG customer reasonably specifies the
number and/or qualifications of such personnel, MSCWC shall use its reasonable
efforts to provide such personnel to ISG or such ISG customer. Services to be
provided by such personnel may include the investigation of claims or complaints
relating to the coating and/or the slitting of Finished Substrate.

          SECTION 6.14. Compliance with Laws. MSCWC warrants that: (i) no
infringement of any patents shall arise from MSCWC's use of the Processes and
the performance of Core or Ancillary Services; and (ii) subject to Section 7.03
hereof, as of the date of shipment all Coated ISG Substrate or Finished
Substrate supplied to ISG or to an ISG customer will have been processed and
loaded for shipment in accordance with all applicable laws, ordinances, rules
and regulations relating thereto. Without limiting the generality of the
foregoing, MSCWC warrants that any Coated ISG Substrate and Finished Substrate
processed and loaded for shipment by it will be processed and loaded for
shipment in accordance with the Fair Labor Standards Act of 1938, as amended.

          SECTION 6.15. Indemnification.

               (a) MSCWC shall indemnify ISG and its Affiliates against, and
hold them harmless from, any losses, damages, liabilities, costs or expenses,
including, without limitation, the reasonable fees and out-of-pocket expenses of
attorneys retained by MSCWC to defend ISG, arising out of or relating to: (i) a
breach by MSCWC of any of its representations or warranties in this Agreement;
or (ii) any breach by MSCWC of this Agreement; provided that ISG may also be
represented in any action, at its own expense, by attorneys of its own choice.

               (b) ISG shall indemnify MSCWC, MSC and their Affiliates against,
and hold them harmless from, any losses, damages, liabilities, costs or
expenses, including, without limitation, the reasonable fees and out-of-pocket
expenses of attorneys retained by ISG to defend MSCWC, arising out of or
relating to: (i) any breach by ISG of any of its representations and warranties
in this Agreement; or (ii) any breach by ISG of this Agreement; provided that
MSCWC may also be represented in any action, at its own expense, by attorneys of
its own choice.

                                  ARTICLE VII

                          General Terms and Conditions

          SECTION 7.01. Force Majeure. Neither party shall be liable or
responsible to the other party for any delay in or failure of performance of its
obligations under this Agreement to the extent such delay or failure is
attributable to any cause beyond its control, including, without limitation, any
act of God, fire, accident, strike or other labor difficulties, war,

<PAGE>

embargo or other governmental act, riot or economic conditions that make
continued operation of the Facility commercially unreasonable; provided,
however, that the party affected thereby gives the other party prompt written
notice of the occurrence of any event which is likely to cause any delay or
failure and sets forth its best estimate of the length of any delay and any
possibility that it shall be unable to resume performance; and provided,
further, that said affected party shall use reasonable commercial efforts to
expeditiously overcome the effects of that event and resume performance.

          SECTION 7.02. Warranty. MSCWC warrants to ISG that all Coated ISG
Substrate and Finished Substrate shipped by MSCWC pursuant to this Agreement
shall be in conformity with the specifications set forth by ISG in the related
Purchase Order (as such Purchase Order may be modified from time to time
pursuant to Section 6.05 hereof) which sp ecifications shall be within the
reasonable capabilities of the Line; provided, however, that ISG's payment for
services provided hereunder shall not be deemed to waive any such warranty.
MSCWC further warrants that, subject to Section 7.05 hereof, all Coated ISG
Substrate and Finished Substrate shipped by MSCWC pursuant to this Agreement
shall be delivered free from any security interest, lien or other encumbrance
created by MSCWC, other than any liens of the carrier to whom MSCWC delivers
such ISG Substrate for shipment. EXCEPT AS EXPRESSLY PROVIDED IN THIS SECTION
7.02, MSCWC MAKES NO WARRANTIES, EXPRESS OR IMPLIED, INCLUDING ANY IMPLIED
WARRANTY OF MERCHANTABILITY, OF FITNESS FOR A PARTICULAR PURPOSE OR ARISING FROM
USAGE OF TRADE. In no event will MSCWC be liable for damage to Coated ISG
Substrate or Finished Substrate caused by customer storage practices.

          SECTION 7.03. Trademarks, etc. All ISG Substrate coated by MSCWC
pursuant to this Agreement shall bear the trademark or brand name requested by
ISG. ISG represents and warrants to MSCWC that the application of each such
trademark or brand name by MSCWC has been duly authorized and will not violate
the trademark or other rights of any other Person.

          SECTION 7.04. Title to Substrate and Products. Subject to Section
6.07(b), Section 6.08 and Section 6.09 hereof, ISG shall at all times retain
title to all ISG Inventory (other than normal line scrap). MSCWC agrees that
under no circumstances shall it hold itself out as being the owner of any ISG
Inventory on its premises, including, without limitation, on MSCWC's books and
records. Risk of loss shall pass to ISG upon delivery of the Coated or Finished
Substrate to the carrier.

          SECTION 7.05. UCC Filings. Notwithstanding Section 7.04 hereof, the
parties hereto intend to create in MSCWC the relationship of bailee and
processor with respect to any ISG Inventory in the possession of MSCWC and agree
that upon the request of ISG, an informational or precautionary filing shall be
made pursuant to the Uniform Commercial Code in effect in each jurisdiction
where any ISG Inventory is being held by MSCWC. Following any such request, ISG
and MSCWC shall execute and file such instruments, including financing
statements and related amendments or continuation statements, and take such
other actions as may be deemed by either of them to be necessary or desirable in
order to fully protect the rights of ISG in and to the ISG Inventory. Nothing in
this Section 7.05 or in any instrument executed, delivered or filed pursuant
hereto, and no action or omission on the part of any party hereto, shall

<PAGE>

change the fact than the ISG Inventory is legally and equitably owned by ISG and
is held by MSCWC as a bailee and processor only. MSCWC shall inform ISG, in
writing and within thirty (30) days of becoming so aware, of any financing
statement filed by a creditor of MSCWC against the ISG Inventory held by MSCWC
at the Facility.

          SECTION 7.06. Liens. The parties understand and agree that MSCWC shall
have a processor's and bailee's lien on all ISG Substrate that is located at the
Facility and has been processed under this Agreement to secure the payment of
any and all amounts due from ISG or any of its Affiliates hereunder; provided,
however, that MSCWC hereby waives any lien rights it may have with respect to
ISG Substrate located at the Facility until such time as it is processed under
this Agreement.

                                  ARTICLE VIII

                             Procedures for Payment

          SECTION 8.01. Method of Payment. All amounts payable hereunder shall
be paid at such place or to such account as the party entitled to such payment
shall reasonably specify in writing. Each payment shall be made in immediately
available funds prior to 12:00 noon local time at the place of payment, on the
scheduled date when such payment shall be due, unless such scheduled date shall
not be a Business Day, in which case such payment shall be made on the next
succeeding Business Day.

          SECTION 8.02. Late Payment. If any amount payable hereunder is not
paid when due, the paying party shall pay interest (to the extent permitted by
law) on such overdue amount from and including the due date thereof to but
excluding the date of payment thereof (unless such payment shall be made after
12:00 noon local time at the place of payment, on such date of payment, in which
case such date shall be included) at a rate per annum equal to the Prime Rate
plus 3 percent per annum. If any amount payable hereunder is paid on the date
when due, but after 12:00 noon local time at the place of payment, interest
shall be payable as aforesaid for one day.

          SECTION 8.03. Timing of Payments. ISG shall pay MSCWC for Coating
Services provided hereunder net thirty (30) days from the date the Coated ISG
Substrate and/or Finished Substrate has been produced, subject to the following:
All shipments and delivery of Coated ISG Substrate and/or Finished Substrate are
at all times subject to credit approval by MSCWC. Whenever MSCWC for any reason
shall be in doubt as to the responsibility of ISG, MSCWC may decline to make
shipments except on receipt of cash in advance or upon conditions and security
satisfactory to MSCWC. Invoices not paid within terms specified herein shall be
cause to withhold current shipments or defer processing of open orders.

                                   ARTICLE IX

                                   Termination

          SECTION 9.01. Termination Due to Bankruptcy. Notwithstanding Section
7.01 hereof, either party may immediately terminate this Agreement upon the
Bankruptcy of the

<PAGE>

other party by written notice to the other party; provided that in the event of
the Bankruptcy of MSCWC, ISG may enter the Facility and take possession of all
ISG Inventory and, without limiting any rights granted hereunder, take such
actions as are permitted by law to protect ISG's interest and to enforce MSCWC's
obligations hereunder.

          SECTION 9.02. Termination Due to Material Breach. If either party
materially defaults in the performance of any of its obligations under this
Agreement, which default is not substantially cured within fifteen (15) days
after notice is given to the defaulting party specifying the default and
referencing this Section 9.02, then the party not in default may, by giving
notice to the defaulting party, terminate this Agreement as of a date specified
in such notice of termination. Notwithstanding the foregoing, with respect to
material defaults that cannot reasonably be cured within fifteen (15) days, it
will not be a default under this Section 9.02 if the defaulting party in good
faith submits a corrective action plan to cure such default, reasonably
acceptable to the other party, within fifteen (15) days of receipt of the notice
of default, and thereafter proceeds with due diligence to carry out such plan to
conclusion; provided that the Term shall not be suspended or extended by any
such cure period.

                                   ARTICLE X

                                     Audits

          SECTION 10.01. Audits. ISG has the right to hire a firm of independent
certified accountants of recognized standing to monitor, investigate and verify
the proper performance of the MSCWC's obligations hereunder. MSCWC shall permit
such accountants to inspect records relating to such obligations during normal
business hours and shall make available in a reasonably timely manner all
current data reasonably deemed necessary by the auditors to perform their task.

                                   ARTICLE XI

                                  MSC Guarantee

          SECTION 11.01. Guarantee. MSC unconditionally guarantees the
performance by MSCWC of all of MSCWC's obligations under this Tolling Agreement
(subject to the conditions thereto set forth herein).

<PAGE>

                                  ARTICLE XII

                                  Miscellaneous

          SECTION 12.01. Independent Contractor. MSCWC is an independent
contractor and this Agreement will not create a principal-agent,
employee-employee, partnership or joint venture relationship between MSCWC and
ISG. Each party shall be solely responsible for all of its acts and the acts of
their respective agents, employees and subcontractors. Without limiting the
generality of the foregoing, ISG shall be solely responsible for any personal
injuries or property damage caused or incurred by ISG's employees at the
Facility.

          SECTION 12.02. Confidentiality. Each party and its Affiliates shall
treat the existence of this Agreement, the schedules and attachments hereto and
all data and information furnished by a party or an Affiliate to the other party
hereto or its Affiliates which is marked "Confidential", or contains a similar
proprietary notice clause, as confidential and shall take or cause to be taken
such reasonable precautions as such party takes to safeguard its own
confidential information to prevent disclosure of the existence of this
Agreement and all such data and information to others for a period of three
years from the termination of this Agreement; provided, however, that this
obligation shall not be applicable:

                 (a)  to disclosure to public authorities to the extent required
by applicable law, including, without limitation, any applicable securities laws
or stock exchange rules; provided, however, that the party required to disclose
the existence of this Agreement or any confidential data or information shall
have given the other party prompt written notice thereof so that the other party
may seek a protective order or other appropriate remedy;

                 (b)  to the extent the existence of this Agreement or such data
or information was part of the public domain at the time of its disclosure to
such party;

                 (c)  to the extent the existence of this Agreement or such data
or information became generally available to the public or otherwise part of the
public domain after its disclosure other than through any act or omission of a
party or its Affiliate in breach of this Agreement;

                 (d)  to the extent the existence of this Agreement or such data
or information was subsequently disclosed to such party by a third party on a
non-confidential basis who had no obligation to either party (whether directly
or indirectly) not to disclose the existence of this Agreement or such data or
information; or

                 (e)  to the extent that a party can demonstrate that such data
or information was in such party's possession at the time of disclosure and was
not acquired, directly or indirectly, from the other party or an Affiliate on a
confidential basis.

          SECTION 12.03. Notices. All notices hereunder shall be in writing and
shall be personally delivered or sent via reputable overnight courier or
facsimile. Such notices shall be addressed respectively: All notices hereunder
shall be in writing and shall be personally delivered or sent via reputable
overnight courier or facsimile. Such notices shall be addressed respectively:

<PAGE>

           if to MSC or MSCWC, to:

                 Material Sciences Corporation
                 2200 Pratt Boulevard
                 Elk Grove Village, IL 60007

                 Attention of Chief Financial Officer
                 Telecopier:  847-718-8643

           with a copy to:

                 Sidley Austin Brown & Wood
                 10 South Dearborn Street
                 Bank One Plaza
                 Chicago, IL 60603

                 Attention of Jon M. Gregg
                 Telecopier: 312-853-7036

           if to ISG or ISG Sub, to:

                 International Steel Group Inc.
                 3250 Interstate Drive, 2/nd/ Floor
                 Richmond, Ohio 44286-9000

                 Attention of Mr. Gordon Spelich
                 Telecopier: 330-659-9132

           with a copy to:

                 Jones, Day, Reavis & Pogue
                 North Point, 901 Lakeside Avenue
                 Cleveland, Ohio 44114-1190

                 Attention of David Watson
                 Telecopier:  216-579-0212

or to such other address or telecopier number as such party may hereafter
specify for the purpose of providing notice to the other parties. Each such
notice, request or other communication shall be effective (i) if given by
facsimile, when such facsimile is transmitted to the telecopier number specified
in this Section 12.03 and the transmission of the appropriate number of pages is
confirmed or (ii) if given by any other means, when delivered at the address
specified in this Section 12.03.

          SECTION 12.04. Third Parties. Nothing in this Agreement, whether
express or implied, is intended to confer any rights or remedies under or by
reason of this Agreement on any persons other than the parties hereto and their
respective successors and permitted assigns.

<PAGE>

          SECTION 12.05. Successors and Assigns. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their successors and
permitted assigns; provided that except in the case of an assignment of this
Agreement by MSCWC to a Person who is the purchaser of the Facility, no party
hereto shall be permitted to assign any of its obligations under this Agreement
to any other Person without the written consent of each of the other parties
hereto.

          SECTION 12.06. Headings. Headings are for ease of reference only and
shall not form a part of this Agreement.

          SECTION 12.07. Survival. Articles I, II and XIII and Sections 6.09,
7.02, 12.02, 12.07, 12.09 and 12.11 shall survive the termination of this
Agreement.

          SECTION 12.08. Extension of Time for Performance. If this Agreement
calls for any action to be taken on or by a date which is not a Business Day,
such action shall be deemed to be required to be taken on or by the next
succeeding Business Day.

          SECTION 12.09. Governing Law; Entire Agreement.

                 (a)   This Agreement shall be construed in accordance with and
governed by the law of the State of Illinois without giving effect to the
principles of conflicts of laws thereof which might cause the laws of any other
jurisdiction to govern this Agreement.

                 (b)   This Agreement, the schedules and attachments hereto and
the documents referred to herein to be executed contemporaneously herewith
embody the entire agreement of the parties hereto with respect to the subject
matter hereof and supersede all prior agreements with respect thereto.

          SECTION 12.10. Incorporation of Schedules. The schedules identified in
this Agreement are incorporated herein by reference and made a part hereof.

          SECTION 12.11. Amendments and Waivers.

                 (a)   Any provision of this Agreement may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed, in the
case of an amendment, by each party to this Agreement, or in the case of a
waiver, by the party against whom the waiver is to be effective.

                 (b)   No failure or delay by any party in exercising any right,
power or privilege hereunder shall operate as a waiver thereof nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein provided shall be cumulative and not exclusive of any rights or
remedies provided by law.

          SECTION 12.12. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed an original and all of which
taken together shall constitute a single agreement. This Agreement shall become
a binding agreement when

<PAGE>

each party hereto shall have received a counterpart hereof signed by each of the
other parties hereto.

          IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the day and year first above written.

                                  INTERNATIONAL STEEL GROUP INC.


                                  By:  /s/ Gordon Spelich
                                       ------------------
                                       Name:  Gordon Spelich
                                       Title: Vice President



                                  MSC WALBRIDGE COATINGS INC.


                                  By:  /s/ James J. Waclawik, Sr.
                                       --------------------------
                                       Name:  James J. Waclawik, Sr.
                                       Title: Vice President, Chief
                                              Financial Officer and Secretary


                                  MATERIAL SCIENCES CORPORATION


                                  By:  /s/ James J. Waclawik, Sr.
                                       --------------------------
                                       Name:  James J. Waclawik, Sr.
                                       Title: Vice President, Chief
                                              Financial Officer and Secretary

<PAGE>


                                 Exhibit Index

Attachment I          Scrap Policy

Schedule 4.01         Tolls for Core Services

Schedule 4.02         Tolls for Ancillary Services

</TEXT>
</DOCUMENT>
