Master Equipment Lease

Attached to and by reference made a part of the Master Equipment Lease dated September 29, 2000 and all Equipment Schedule A's dated September 29, 2000 executed by Fifth Third Bank, Ohio Valley as Lessor, and Kentucky Electric Steel, Inc. (the Lessee) as Lessee. This Amended and Restated Addendum amends and restates that certain Addendum A to the Master Lease dated September 29, 2000. In consideration of Fifth Third Bank, Ohio Valley extending a 1ease in the total amount of $8,536,082 to Lessee and various other prior and existing extensions of credit and any additional extensions of credit or renewals (the "lease", "notes", "loan", or "loans") Lessee agrees as follows: Representations and Warranties To induce Lessor to make the lease, Lessee makes the following representations and warranties, which shall survive the execution and delivery of the lease: 1. Affirmative Covenants. The Lessee covenants, and agrees with the Lessor that, until (a) all Obligations have been paid in full, and (b) there exists no commitment by the Lessor which could give rise to any Obligations, the Lessee will comply with such of the following covenants: (a) The financial information furnished to Lessor in connection with its application for the lease and in the financial statements submitted to Lessor is complete and accurate in all material respects and Lessee has no undisclosed direct or contingent liabilities which are material in amount. (b) Lessee is a corporation duly organized, existing and in good standing under the laws of the State of Delaware, has corporate power to carry on the business in which it is engaged, and the obtaining and performance of the lease have been duly authorized by all necessary action of the board of directors and shareholders of the corporation under the applicable law, and do not and will not (i) violate any provisions of law or any of its organizational or other organic documents, or (ii) result in a breach of, constitute a default under, require any consent under, or result in the creation, of any lien, charge, or encumbrance upon any property of Lessee pursuant to any instrument order, or other agreement to which Lessee is a party or by which Lessee, any of its officers as such, or any of its property is bound. (c) There are no judgments, liens, encumbrances, or other security interests outstanding against Lessee or any of its property other than those disclosed to Lessor in connection with its request for the lease. (d) Lessee has not incurred any debts, liabilities, or obligations, which are material in amount and has not committed itself to incur any debts, liabilities, or other obligations other than those disclosed to Lessor in connection with the request for the lease or shown on the financial statements submitted to Lessor. (e) Proceeds of the lease will be used exclusively to repay debt and other general corporate purposes. (f) Reserve and keep in force all licenses, permits, and franchises necessary for the proper conduct of its business and duly pay and discharge all taxes, assessments, and governmental charges upon Lessee or against Lessee's property which are material in amount before the date on which penalties attach thereto, unless and to the extent only that the same shall be contested in good faith and by appropriate proceedings. (g) Periodic Financial Statements. Furnish to the Lessor in writing as soon as available, but in no event more than 120 days after the end of each Annual accounting period of the Lessee, statements of operations, changes in shareholders' equity, and cash flows for such period and for the period from the beginning of the current fiscal year of the Lessee to the end of such period, and a balance sheet as at the end of such period, all in detail and scope reasonably satisfactory to the Lessor. (h) Interim Statements. Within 60 days after the close of each Quarter, Lessee will provide Lessor a balance sheet and statement of operations on Lessee certified by Lessee to be correct and accurate; and such other information respecting the financial condition and operation of Lessee as Lessor may from time to time reasonably request. (i) At any time an annual or quarterly report is due and the Lessee cannot comply with the provisions of this Agreement, an executive officer of the Lessee shall provide to the Lessor a certificate stating the respect in which it has failed to do so. (j) Record Audit. Upon reasonable prior notice and during business hours, permit any representative or agent of Lessor to examine and audit any or all Lessee's books, assets, and records requested by Lessor. (k) Adverse Change. Inform Lessor immediately of any material adverse change in the financial condition of Lessee Lessee will also promptly inform Lessor of any litigation or threatened litigation, which might substantially affect L ...