OPERATING AGREEMENT OF SPARTAN STEEL COATING, L.L.C.

1
EXHIBIT 10.18

OPERATING AGREEMENT

SPARTAN STEEL COATING, L.L.C.

A Michigan Limited Liability Company

Dated as of November 14, 1996

OPERATING AGREEMENT
OF
SPARTAN STEEL COATING, L.L.C.

TABLE OF CONTENTS

PAGE

ARTICLE I

DEFINITIONS

1.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

ARTICLE II

FORMATION AND NAME, OFFICE, STATUTORY AGENT,

PURPOSE, PARTNERSHIP STATUS, POWERS AND TERM

2.1 Formation and Name . . . . . . . . . . . . . . . . . . . . . . . . 6
2.2 Office . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.3 Registered Office and Resident Agent . . . . . . . . . . . . . . . 6
2.4 Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.5 Partnership Status. . . . . . . . . . . . . . . . . . . . . . . . . 6
2.6 Powers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.7 Term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.8 Initial Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.9 Equipping the Facility . . . . . . . . . . . . . . . . . . . . . . 7
2.10 Toll Processing . . . . . . . . . . . . . . . . . . . . . . . . . 7
2.11 Quarterly Fee . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.12 Supply Agreement . . . . . . . . . . . . . . . . . . . . . . . . 8
2.13 Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9

ARTICLE III

MEMBERS AND CAPITAL

3.1 Capital Contributions; Additional Members . . . . . . . . . . . . . 9
3.2 Additional Funds . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.3 Loans by Members . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.4 No Priority Among Members . . . . . . . . . . . . . . . . . . . . . 10
3.5 No Interest on Capital Contributions; No Withdrawal of Capital. . . 10
3.6 Capital Accounts . . . . . . . . . . . . . . . . . . . . . . . . . 10
3.7 Actions of Members; Meetings of Members . . . . . . . . . . . . . . 11

3
3.8 No Requirement to Restore Deficit in Capital Account . . . . . . . . 11
3.9 Limited Liability of Members . . . . . . . . . . . . . . . . . . . . 11
3.10 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . 11
3.11 Competition Matters . . . . . . . . . . . . . . . . . . . . . . . . 12
3.12 Investment Representations . . . . . . . . . . . . . . . . . . . . . 13

ARTICLE IV

ALLOCATIONS AND DISTRIBUTIONS

4.1 Allocation of Profits and Losses . . . . . . . . . . . . . . . . . . 13
4.2 Special Allocations and Other Provisions
Relating to Allocations . . . . . . . . . . . . . . . . . . . . . . 14
4.3 Cash Distributions . . . . . . . . . . . . . . . . . . . . . . . . . 15
4.4 Distributions of Liquidation Proceeds Upon Liquidation . . . . . . . 15
4.5 Distributions in Kind on Liquidation . . . . . . . . . . . . . . . . 15
4.6 Certain Provisions of the Act Superseded . . . . . . . . . . . . . . 16

ARTICLE V

POWER, AUTHORITY, RIGHTS, DUTIES AND OBLIGATIONS OF

THE BOARD OF GOVERNORS

5.1 Management and Control of Company's Business
and Affairs by Governors . . . . . . . . . . . . . . . . . . . . . 16
5.2 Power and Authority of Governors . . . . . . . . . . . . . . . . . 16
5.3 Prohibited Actions . . . . . . . . . . . . . . . . . . . . . . . . 16
5.4 Management and Services Agreement . . . . . . . . . . . . . . . . 17
5.5 Management Personnel . . . . . . . . . . . . . . . . . . . . . . . 17
5.6 Compensation and Expenses . . . . . . . . . . . . . . . . . . . . . 18
5.7 Budgets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.8 Corporate Allocation . . . . . . . . . . . . . . . . . . . . . . . 19
5.9 Meetings of Governors . . . . . . . . . . . . . . . . . . . . . . . 19
5.10 Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.11 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . 19
5.12 Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.13 Bank Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
5.14 Tax Matters Member . . . . . . . . . . . . . . . . . . . . . . . . 20
5.15 Certain Provisions of the Act Superseded . . . . . . . . . . . . . 21

ARTICLE VI

TRANSFERS OF INTERESTS BY MEMBERS; SUBSTITUTION OF MEMBERS

6.1 Transfer of Interests by Members . . . . . . . . . . . . . . . . . . 22
6.2 Additional Restrictions on Transfers . . . . . . . . . . . . . . . . 22
6.3 Requirements for Substitution . . . . . . . . . . . . . . . . . . . . 22
6.4 Obligations and Rights of Transferees . . . . . . . . . . . . . . . . 23

6.5 Distributions and Allocations in Respect
of Transferred Interests . . . . . . . . . . . . . . . . . . . . . . 23
6.6 Continuation Upon Transfer . . . . . . . . . . . . . . . . . . . . . 24
6.7 Restrictions Reasonable . . . . . . . . . . . . . . . . . . . . . . . 24
6.8 Certain Provisions of the Act Superseded . . . . . . . . . . . . . . 24
7.1 Liquidation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
7.2 Operations During Liquidation . . . . . . . . . . . . . . . . . . . . 24
7.3 Time for Liquidation . . . . . . . . . . . . . . . . . . . . . . . . 24
7.4 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25

ARTICLE VIII

BOOKS AND RECORDS, BANK ACCOUNTS

8.1 Maintenance of Books and Accounting Method . . . . . . . . . . . . . 25
8.2 Fiscal Year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.3 Reports to the Members . . . . . . . . . . . . . . . . . . . . . . . 25
8.4 Tax Elections; Special Basis Adjustments . . . . . . . . . . . . . . 26

ARTICLE IX

AMENDMENTS AND MAJOR DECISIONS

9.1 Amendments Requiring Unanimous Consent of Members Holding
Seventy-Five Percent of the Percentage Interests . . . . . . . . . 26
9.2 Major Decisions . . . . . . . . . . . . . . . . . . . . . . . . . . 26

ARTICLE X

DISSOLUTION

10.1 Events of Dissolution - General . . . . . . . . . . . . . . . . . . 27
10.2 Events of Dissolution - Elective . . . . . . . . . . . . . . . . . 27
10.3 Events of Dissolution - Default . . . . . . . . . . . . . . . . . . 27
10.4 Notice of Dissolution . . . . . . . . . . . . . . . . . . . . . . . 28
10.5 Winding Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
10.6 Buy-Out Procedures. . . . . . . . . . . . . . . . . . . . . . . . . 28
10.7 Necessary Approvals . . . . . . . . . . . . . . . . . . . . . . . . 29

iii

ARTICLE XI

GENERAL PROVISIONS

11.1 Non-Waiver . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.2 Additional Documents and Instruments . . . . . . . . . . . . . . . . 30
11.3 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.5 Provisions Binding . . . . . . . . . . . . . . . . . . . . . . . . . 30
11.6 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.7 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.8 Word Meanings . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.9 Applicable Law . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
11.10 Dispute Resolution . . . . . . . . . . . . . . . . . . . . . . . . 31

Exhibit 1 -- Description of Facility
Exhibit 2 -- Members and Percentage Interests
Exhibit 3 -- Major Decisions
Exhibit 4 -- Processing Agreement
Exhibit 5 -- Management and Services Agreement
Exhibit 6 -- Supply Agreement
Exhibit 7 -- Leased Employees Agreement

OPERATING AGREEMENT OF SPARTAN STEEL COATING, L.L.C.

THIS OPERATING AGREEMENT OF SPARTAN STEEL COATING, L.L.C. (this
"Agreement"), entered into as of this 14th day of November, 1996 by and between
QS Steel Inc., a Michigan corporation, ("QS Steel"), and Worthington Steel of
Michigan, Inc., a Michigan corporation ("WSMI");

W I T N E S S E T H:

WHEREAS, the Members desire to enter into this Agreement and to cause
articles of organization to be filed with the Administrator of the Michigan
Department of Consumer and Industry Services, Corporations, Securities and Land
Development Bureau, thereby forming a limited liability company under the laws
of the State of Michigan, which limited liability company shall be a party to
this Agreement and a signatory hereto; and

WHEREAS, this Agreement shall constitute the "Operating Agreement" of
Spartan Steel Coating, L.L.C., within the meaning of that term as used in the
Act;

NOW, THEREFORE, it is mutually agreed as follows:

ARTICLE I
DEFINITIONS

1.1 DEFINITIONS. As used in this Agreement, the following terms shall
have the meanings ascribed to them as follows:

Act means the Michigan Limited Liability Company Act, Mich. Corp. ▇▇▇▇
▇▇▇. Section 450.4101 et seq., Mich. Stat. ▇▇▇. Section 21.198 et seq.,
governing, among other matters, certain aspects of the formation, operation and
dissolution of limited liability companies in Michigan, as the same may be
amended from time to time.

Adjusted Capital Account Deficit means the deficit balance, if any, in a
Member's Capital Account at the time in question, after (i) reducing the amount
of such deficit by the amount, if any, of such Member's Restoration Obligation
and (ii) increasing the amount of such deficit by the amount, if any, of the
items described in paragraphs (4), (5) and (6) of Section 1.704-1(b)(2)(ii)(d)
of the Allocation Regulations. The determination of a Member's Adjusted
Capital Account Deficit is made for purposes of Section 1.704-1(b)(2)(ii)(d) of
the Allocation Regulations and shall be made consistently therewith.

Affiliate of a Person means an Entity which, directly or indirectly
through one or more intermediaries, controls, or is controlled by, or is under
common control with, such Entity.

Agreement means this Operating Agreement, as the same may be modified,
amended, supplemented and/or restated from time to time in accordance with its
terms and applicable law.

Allocation Regulations means the Income Tax Regulations promulgated under
Code Section 704(b) (regarding partners' distributive shares of partnership tax
items), as currently in effect, and as modified and clarified by amendment,
successor regulation, ruling, court decision or other Income Tax Regulation
relating to partners' distributive shares.

Articles of Organization means the Articles of Organization of the Company
filed with the Department upon execution of this Agreement as required by the
Act, as amended and/or restated from time to time in accordance with the terms
of this Agreement and applicable law.

Bankruptcy, in reference to a Member, means that event and date when (i)
the Member makes an assignment for the benefit of creditors; (ii) the Member
files a voluntary petition in bankruptcy; (iii) the Member is adjudicated a
bankrupt or insolvent; (iv) the Member files a petition or answer seeking for
itself any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any statute, law, or regulation; (v) the
Member files an answer or other pleading admitting or failing to contest the
material allegations of a petition filed against it in any proceeding of the
type referred to in clause (iv); (vi) the Member seeks, consents to, or
acquiesces in the appointment of a trustee, receiver, or liquidator of such
Member or of all or any substantial part of its property; (vii) ninety (90)
days or more have elapsed after the commencement of any proceeding against the
Member seeking reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under any statute, law, or
regulation, if the proceeding has not been dismissed prior thereto; (viii)
ninety (90) days or more have elapsed after the appointment without its consent
or acquiescence of a trustee, receiver, or liquidator of the Member or of all
or any substantial part of its property, if such appointment has not been
vacated or stayed prior thereto; or (ix) ninety (90) days have elapsed after
the expiration of any such stay, if such appointment has not been vacated.

Capital Account has the meaning specified in Section 3.6.

Capital Contribution means the total amount of cash and/or property
contributed to the Company by each Member as shown in Schedule OA-2, as such
Schedule OA-2 may be modified, supplemented or amended from time to time in
accordance with this Agreement and applicable law, plus any other contributions
to the capital of the Company made by a Member, in such Member's capacity as a
Member, pursuant to the terms of this Agreement, in respect of the Interest of
such Member in the Company. Any reference in this Agreement to the Capital
Contribution of a Member shall include a Capital Contribution previously made
by any predecessor Member with respect to the Interest owned by the Member.

Code means the Internal Revenue Code of 1986, as amended, or the
corresponding provisions of any subsequent federal income tax law.

Company means Spartan Steel Coating, L.L.C., a Michigan limited liability
company.

Company Minimum Gain means "partnership minimum gain" as set forth in
Sections 1.704-2(b)(2) and 1.704-2(d) of the Allocation Regulations.

Confidential Information means all records and accounts of the Company,
and any technical data or other know-how or information which, prior to or
subsequent to the date of this Agreement, has been or may be disclosed by a
Member or any of its Affiliates, directly or indirectly, to any other Member or
an Affiliate of any other Member (a) in writing and identified in writing as
being confidential at the time of or prior to such disclosure or (b) orally and
identified at the time of disclosure as confidential and promptly thereafter
identified and described in writing as confidential or (c) is so obviously
confidential that no such identification is necessary.

Consent of a Member or a Governor means the consent of such Member or
Governor, which shall be deemed to have been given if: (a) such consent is
given in a vote (either in person or by proxy) at a duly called meeting of the
Member or Governors, as the case may be, called and held in accordance with the
provisions of this Agreement, or (b) such consent is delivered in writing to
each other Member, in the case of a Member, or to each other Governor, in the
case of a Governor. Such consent may be withheld by any Member or Governor, in
such Member's or Governor's sole and absolute discretion, for any reason or for
no reason at all.

Department means the Administrator of the Michigan Department of Commerce,
Consumer and Industry Services, Corporation Securities and Land Development
Bureau.

Entity means any limited liability company, general partnership, limited
partnership, corporation, joint venture, trust, real estate investment trust,
business trust, estate or association.

Facility means the facility of the Company as defined in Section 2.4.

General Manager means the General Manager appointed and serving from time
to time in accordance with Section 5.5, if any.

Governor means an individual appointed and serving as a Governor in
accordance with Section 5.1 of this Agreement. The Board of Governors shall be
deemed to be the "Managers" in respect of the Company, within the meaning of
that term as used in the Act.

Income Tax Regulations means those regulations promulgated under the Code.
Whenever reference is made to any Income Tax Regulation, unless otherwise
specified, such reference shall include any amendments or successor regulations
thereto.

Initial Capital Contribution shall mean, for purposes of Section 2.11, the
amount of WSMI's Capital Contribution determined as of six months after
production start-up for the Facility. Any capitalized pre-production costs
shall be excluded.

Interests means the interests in the Company of the Members, including
such Members' respective shares of, and rights to receive distributions and
allocations of, the business, property, assets, capital, profits and losses of
the Company, subject to and as provided in this Agreement and the Act. The
holder of an Interest shall have no right to participate in the management of
the business and affairs of the Company under the terms of this Agreement
unless such holder is also a Member.

Losses means the net losses of the Company for federal income tax purposes
(or as may be otherwise required to comply with the Allocation Regulations) as
determined as of the close of the Company's fiscal year and, when the context
requires, related items of deduction or loss, tax preference, credits and
depreciation, provided that "Losses" shall include items described in Code
Section 705(a)(2)(B) or required by the Income Tax Regulations to be treated as
so described.

Major Decisions means any of the decisions, actions or inactions referred
to in Section 3.7 and described in Exhibit 3 hereto.

Member means each Entity identified as a member on Exhibit 2, as such
Exhibit 2 may be modified, supplemented or amended from time to time in
accordance with this Agreement and applicable law, and any Entity which may be
admitted as an additional or Substitute Member as provided herein. Unless the
context otherwise requires, the term "Member" refers to any one of the Members
and to all the Members.

Member Loan shall mean a loan made by a Member to the Company in
accordance with the provisions of this Agreement.

Member Nonrecourse Debt shall mean "partner nonrecourse debt" as set forth
in Section 1.704-2(b)(4) of the Allocation Regulations.

Member Nonrecourse Debt Minimum Gain shall mean "partner nonrecourse debt
minimum gain" as set forth in Section 1.704-2(i) of the Allocation Regulations.

Member Nonrecourse Deductions shall mean "partner nonrecourse deductions"
as set forth in Sections 1.704-2(i)(1) and 1.704-2(i)(2) of the Allocation
Regulations.

Nonrecourse Deductions has the meaning set forth in Sections 1.704-2(b)(1)
and 1.704-2(c) of the Allocation Regulations.

Nonrecourse Liability has the meaning set forth in Section 1.704-2(b)(3)
of the Allocation Regulations and Section 1.752-1(a)(2) of the Income Tax
Regulations.

Owning Party has the meaning specified in Section 3.10(a).

Percentage Interests means the percentage interests of the Members in the
Company as set forth on Exhibit 2, as amended from time to time.

Person means any natural person or Entity.

Profits means the net profits of the Company for federal income tax
purposes (or as may otherwise be required to comply with the Allocation
Regulations) as determined as of the close of the Company's fiscal year, and,
when the context requires, related items of income or gain, provided that
Profits shall include income exempt from tax.

Quarter means a fiscal quarter of the Company.

Related Agreements means the Management and Services Agreement, the
Processing Agreement, the Supply Agreement and the Leased Employees Agreement
to be executed in connection with this Agreement.

Restoration Obligation means, with respect to any Member, the sum of (i)
the amount of any express, unconditional obligation of such Member pursuant to
this Agreement to restore to the Company the amount of any deficit in such
Member's Capital Account, which meets the timing requirements of the Allocation
Regulations, and (ii) the amount of any deficit balance in such Member's
Capital Account which such Member is treated as obligated to restore pursuant
to (A) Section 1.704-1(b)(2)(ii)(c) of the Allocation Regulations and (B) the
penultimate sentences of Sections 1.704-2(g)(1) and 1.704-2(i)(5) of the
Allocation Regulations. Computation of the amount of a Member's Restoration
Obligation, and any determinations related thereto, shall be made in accordance
with the Allocation Regulations.

Retirement means, with respect to any Member, (i) the Bankruptcy of such
Member; (ii) the Member's retirement, resignation, expulsion or other
withdrawal from the Company; (iii) the Transfer by the Member of all of the
Member's Interest in compliance with this Agreement (other than (A) an
assignment merely of its right to receive distributions or (B) a pledge,
hypothecation or other collateral assignment of its rights before the time such
pledge, hypothecation or other collateral assignment becomes absolute); (iv) if
such Member is a corporation, the filing of a certificate of dissolution, or
its equivalent, for said corporation, or the revocation of its charter; or (v)
if such Member is a separate limited liability company or partnership, the
dissolution and termination of such separate limited liability company or
partnership. If this Operating Agreement is amended to permit individuals to
be Members, the death or incapacity of such individual shall also be a
Retirement.

Schedules means the Schedules for the Operating Agreement, the Management
and Services Agreement, the Processing Agreement and the Supply Agreement,
which shall be included in a separate "Schedule Packet."

Site means the land on which the Facility, and all fixtures and
improvements from time to time added to the Facility is built, including a
permanent easement of ingress and egress at all times over roads and
transmission facilities providing access to the Facility.

Substitute Member means any Entity which acquires an Interest from a
Member and is admitted to the Company as a Member.

Tax Matters Member means the Entity at the time designated as such
pursuant to Section 5.14 of this Agreement.

Transfer means a sale, assignment, transfer, conveyance, pledge,
encumbrance, grant, gift or other disposition, whether direct or indirect,
voluntary, involuntary or by operation of law, or with or without
consideration.

Worthington means Worthington Industries, Inc. and its subsidiaries.

ARTICLE II

FORMATION AND NAME, OFFICE, REGISTERED OFFICE AND RESIDENT AGENT,
PURPOSE, PARTNERSHIP STATUS, POWERS AND TERM

2.1 FORMATION AND NAME. The Company shall be and is formed upon the
filing of the original Articles of Organization with the Department in
accordance with the provisions of the Act, under the name of SPARTAN STEEL
COATING, L.L.C., as a limited liability company under the Act.

2.2 OFFICE. The principal offices of the Company at which its books and
records shall be kept shall be maintained at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇, or at such other location as the Governors may from time to
time determine. The Governors shall notify the Members of any change in the
principal offices of the Company.

2.3 REGISTERED OFFICE AND RESIDENT AGENT. The Registered Office of the
Company shall be maintained at ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇. The Resident Agent of the Company shall be ▇▇▇ ▇▇▇▇▇▇▇▇, an individual
resident of Michigan whose business address is ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ ▇▇▇▇▇. The Governors have the right, power and authority to change
the location of the Registered Office and to revoke the appointment of the
Resident Agent of the Company from time to time, and to appoint a substitute or
replacement Resident Agent, in accordance with applicable law. The Governors
shall notify the Members of any change in the Registered Office of Resident
Agent of the Company.

2.4 PURPOSE. The purpose of the Company is to construct, equip, own and
operate a steel galvanizing facility, as more particularly described in Exhibit
1 hereto (the "Facility) on the Site in Frenchtown Charter Township, Michigan,
which Facility shall generally be constructed and equipped as described in
Schedule OA-1, and to engage in any and all acts or activities incidental
thereto for which limited liability companies legally may be formed in the
State of Michigan.

2.5 PARTNERSHIP STATUS. It is intended that the Company be treated as a
partnership for federal income tax purposes (but not for liability purposes).
Accordingly, this Agreement shall be construed in a manner that ensures the
Company's classification as a partnership for federal income tax purposes at
all times, and any provision of this Agreement that would have the effect of
preventing the Company from being classified as a partnership for federal
income tax purposes shall be null and void. The Members shall take all
actions, and execute, acknowledge and deliver all documents, including without
limitation any tax election forms, which in the judgment of the Governors, or
in the opinion of counsel satisfactory to the Governors, are necessary or
desirable to obtain and/or maintain the Company's classification as a
partnership for such tax purposes at all times.

2.6 POWERS. In furtherance of the Company's purposes, the Company shall
have all of the powers granted or permitted to a limited liability company
under the laws of the State of Michigan, including, without limitation, the
powers specifically enumerated in the Act.

2.7 TERM. The term of the Company commenced with the filing of Articles
of Organization with the Department. The Company shall continue until
dissolved upon the occurrence of the earliest of (a) December 31, 2045, (b) the
passage of ninety (90) days from the sale or other disposition of all or
substantially all of the assets of the Company unless the Governors elect to
continue the Company for the sole purpose of collecting the proceeds of such
sale or other disposition, (c) the Retirement of any Member, unless the Company
is continued as provided in Section 6.6 or a Substitute Member is admitted and
all Members consent to a continuation of the Company; (d) the voluntary or
elective dissolution of the Company; (e) at any time when there are less than
two Members of the Company, unless the sole remaining Member admits a
Substitute Member to the Company; or (f) the entry of a judicial decree of
dissolution; and shall terminate as soon as the winding up of its affairs upon
such dissolution has been completed. The provisions of this Section 2.7 are
intended to and shall, to the fullest extent permitted by law, supersede the
provisions of the Act regarding the dissolution of limited liability companies.

2.8 INITIAL COSTS. The anticipated initial capital, funding and other
costs and cash needs for the Company are as set forth on Schedule OA-1. The
parties shall amend Schedule OA-1 from time to time prior to start-up of the
facility to reflect any changes in such costs or cash needs. Schedule OA-1
shall also be amended after actual costs of the Company assets have been
determined and periodically amended throughout the term of construction and
installation. The Members shall each bear their own management time and
attorneys fees incurred in connection with the preparation of this Agreement
and the related documents.

It is the intent of the Company to develop and maintain a working cash
flow analysis and required cash contributions on the first working day of each
month based on the cash flow analysis. Adjustments to the cash flow analysis
will be communicated to each Member based on the estimated cash shortages or
cash surplus. If additional cash is required, the Company will give a notice
of five working days to each Member before the cash is required.

2.9 EQUIPPING THE FACILITY. Members have agreed upon the design and
equipping of the Facility as set forth in Schedule OA-1. Any changes to or
improvement of the Facility shall require approval of the Board of Governors.

2.10 TOLL PROCESSING.

(a) The Members intend that the Company will not sell finished coils from
its galvanizing line, but will instead act solely as a toll processor for the
Members. QS Steel, WSMI and the Company shall enter into a Processing
Agreement substantially in the form set forth in Exhibit 4 hereto whereby the
Company shall provide such toll processing services for the Members. Such
agreement shall cover among other things, line times available to the Members,
a method for determining toll processing charges, billing and steel supply.

(b) Unless otherwise provided in the Processing Agreement: (i) toll
coating for non-Member companies shall require the mutual consent by the
Members, which consent shall not be unreasonably withheld; and (ii) all such
non-Member coating shall be

booked through a Member and, regardless of the end customer, the Company shall
▇▇▇▇ only through a Member for such toll coating.

(c) A toll coating pricing schedule shall be established by the Company
based on processing costs, market prices for various cold rolled galvanized
steel products, return on investment considerations and other relevant factors
all of which shall be set forth in the Processing Agreement.

(d) It is intended that QS Steel shall take approximately 80% of the line
time and WSMI shall take 20% of the line time, unless otherwise provided in the
Processing Agreement.

2.11 QUARTERLY FEE . WSMI shall be paid a Quarterly Fee by the Company
determined as follows:

TONNAGE PROCESSED QUARTERLY
FOR THE QUARTER FEE
-------------------------------------------------------------
50,000 tons or less $1,000,000
50,001 - 100,000 tons $ 750,000

greater than 100,000 tons $ 375,000

Such Quarterly Fee shall be paid by the Company to WSMI within 30 days after
the end of the applicable Quarter, commencing with the production of salable
product.

Once WSMI has received total cash from the Company from a combination of
Quarterly Fees and cash distribution pursuant to Section 4.3 hereof (both net
of taxes) in an amount equal to its Initial Capital Contribution to the
Company, then the Quarterly Fee shall be fixed at $375,000 per Quarter, and the
above table shall no longer apply.

2.12 SUPPLY AGREEMENT. The Members or their Affiliates shall enter into a
Supply Agreement, substantially in the form of Exhibit 6, whereby Rouge Steel
Company will agree to sell to WSMI and its Affiliates full hard steel substrate
in amount sufficient to supply WSMI substrate for its 20% of the Company's line
time. Prices for such steel shall be those agreed upon based on the March 1996
proforma market conditions, adjusted as provided in the Supply Agreement.

2.13 EMPLOYEES. Most of the employees will be employed by the Company
directly. However, either Member may supply certain employees to the Company
on a lease type basis from time to time and the cost (including benefits) will
be charged to the Company and paid to the appropriate Member. The Company and
QS Steel and Rouge Steel Company shall enter into a Leased Employees Agreement
in the form of Exhibit 7 to cover employees leased from those

entities. Employees leased from WSMI will be covered under the Management and
Services Agreement referred to in Section 5.4.

ARTICLE III

MEMBERS AND CAPITAL

3.1 CAPITAL CONTRIBUTIONS; ADDITIONAL MEMBERS.

(a) Capital Contributions. The total initial Capital Contribution to the
Company to be made by the Members shall be to fund the Venture's cash needs as
set forth in Schedule OA-1, with each Member paying its prorata share thereof,
in accordance with its Percentage Interest. Accordingly, WSMI's total initial
contribution shall be 52% and QS Steel's total initial capital contributions
shall be 48% of the Company's initial cash needs as set forth in Schedule OA-1.
The initial capital contributions shall be made by the Members either in lump
sums or in periodic payments as determined by the Board of Governors. Payments
of the Capital Contributions shall be made by the Members within ten business
days after the request of the Board of Governors.

(b) Failure to Contribute. Should either Member fail to pay all or a
portion of its Capital Contribution on time, the other Member may, but need
not, loan such funds to the Company. If a Member fails to make its capital
contribution, it shall be obligated to pay to the Company interest compounded
monthly at the prime interest rate in effect on date the payment was due,
quoted by Bank One Columbus, as publicly announced, plus 3%, or the maximum
amount as may be permitted by applicable law, whichever is less. Such interest
shall accrue on the date the contribution was due and shall cease to accrue on
the date the contribution is finally made to the Company by the
non-contributing Member. Upon receipt by the Company of such funds from the
previously non-contributing Member, the Member who covered for the
non-contributing Member shall be repaid by the Company for the amount covered,
plus interest as set forth above. In addition, during such period of
non-contribution, the covering Member shall have a lien on the Capital Account
of the non-contributing Member for the amount of its cover.

In addition to the foregoing, at any time a non-contributing Member has
not paid its appropriate Capital Contribution, it shall be considered in
default of its obligations under the Operating Agreement. Accordingly, the
non-defaulting Member shall be entitled, by written notice to the
non-contributing Member, to call the non-contributing Member in default and if
payment is not made within 15 business days after such notice, then the
provisions of Section 10.3 may be invoked by the non-defaulting Member and once
such provisions have been invoked, the non-contributing Member shall no longer
be able to cure its failure to make its contribution.

3.2 ADDITIONAL FUNDS . Any funds required by the Company in excess of the
Capital Contributions by the Members shall be obtained from borrowings by the
Members which shall be presented and approved by the Board of Governors.

Pre-production costs (Schedule OA-1) shall be funded by the Members based
on their respective Percentage Interests (Exhibit 2).

3.3 LOANS BY MEMBERS. Any Member may, but is not obligated to, loan to
the Company such sums as the Governors determine to be appropriate for the
conduct of the Company's business. Any such Member loans shall be made on such
terms and for such maturities as are approved by the Consent of the Governors.

3.4 NO PRIORITY AMONG MEMBERS. No Member shall have priority over any
other Member either as to the return of its original capital contribution or as
to distributions by the Company, except as specifically provided in this
Agreement.

3.5 NO INTEREST ON CAPITAL CONTRIBUTIONS; NO WITHDRAWAL OF CAPITAL. No
interest shall be paid by the Company to any Member with respect to any Capital
Contribution. Except as otherwise specifically set forth in this Agreement, no
Member shall have the right to (a) demand to receive property other than cash
in return for its Capital Contribution or as distributions of income, (b)
withdraw any part of its Capital Contribution (regardless of whether or not
such Member has withdrawn from the Company), or (c) demand to receive any funds
or property of the Company.

3.6 CAPITAL ACCOUNTS. A single Capital Account shall be established,
determined and maintained for each Member on the books and records of the
Company in accordance with the provisions of the Allocation Regulations. The
property of the Company shall be revalued on the books of the Company in any
case in which such revaluation is required by the Allocation Regulations and
may be revalued in any case where such revaluation is permitted by the
Allocation Regulations and such revaluation is determined to be appropriate by
the Members. Any such revaluation shall be carried out in accordance with the
principles and methodology agreed to by the Members. In the event any Company
property is revalued on the books of the Company in accordance with the
Allocation Regulations, the Members' Capital Accounts shall be adjusted in
accordance with the Allocation Regulations to reflect such revaluations and for
allocations to them of Profits and Losses, and items thereof, as computed for
book purposes, with respect to such property. In the event the property of the
Company is revalued on the books of the Company, all Company property shall be
valued for such purpose at its fair market value, as determined by the Members.

3.7 ACTIONS OF MEMBERS; MEETINGS OF MEMBERS. Any Major Decision shall
require the prior Consent of all Members. Any other action or inaction by
Consent of Members holding greater than 50% of the Percentage Interests shall
constitute an action of the Members. In the event of a deadlock by the
Members, then the subject of such deadlock may be addressed under the Dispute
Resolution Procedures referred to in Section 11.10. Except as otherwise
provided, no Member, acting alone, shall have the power or authority to bind
the Members, the Governors or the Company. Any Member may from time to time by
written notice to each other Member call a meeting of the Members. Upon
receipt of a written request for such a meeting, the Members shall promptly,
and in any event not later than ten (10) days after receipt of such request,
fix a place and time for such meeting. To the extent possible, such meeting
shall be held

at a place convenient to all the Members. Such meeting shall be held not less
than fifteen (15) nor more than sixty (60) days after receipt of a request for
a meeting unless the Members otherwise agree. In the absence of agreement of
Members, such meeting shall be held at 10:00 a.m. local time on the first
business day falling on or after the fifteenth (15th) day after receipt of a
request for a meeting at the principal place of business of the Company.
Meetings of the Members may be held through any communications equipment if all
those participating can hear each other and participation in any such meeting
shall constitute presence thereat.

3.8 NO REQUIREMENT TO RESTORE DEFICIT IN CAPITAL ACCOUNT. Nothing
contained in this Agreement shall be construed to require any Member to restore
any deficit in its Capital Account.

3.9 LIMITED LIABILITY OF MEMBERS. Subject to the provisions of the Act,
the liability of a Member for the debts and obligations of the Company shall be
limited to the amount of such Member's Capital Contribution, and no Member
shall be obligated to contribute money to the Company or to otherwise answer
for an obligation of the Company beyond such Member's obligation to pay such
Member's Capital Contribution, except to the extent required by law.

3.10 CONFIDENTIALITY.

(a) Restrictions on Disclosure. Each Member, on behalf of itself and its
Affiliates, agrees with respect to the Confidential Information of the Company
or the other Member (the "Owning Party"), to:

(i) treat in strict confidence such Confidential Information and
use reasonable efforts to ensure that its employees and others subject
directly or indirectly to its control shall not reproduce, disclose or
make available to any third party any of such Confidential Information;

(ii) limit access to such Confidential Information to such of its
employees and representatives, including without limitation members of
each Member's outside law and accounting firms, as may be reasonably
required in connection with the activities of the Company as contemplated
by this Agreement; and

(iii) not use such Confidential Information for any purpose other
than the activities of the Company as contemplated by this Agreement;

unless the Owning Party otherwise consents thereto in writing. Without
limiting the generality of the foregoing, each Member and its Affiliates
specifically agrees not to directly or indirectly use or disclose Confidential
Information in any judicial or administrative proceeding, unless (i) served
with compulsory process or otherwise required by law, or (ii) consented to by
the other Member.

(b) Exceptions. The obligations of each Member and its Affiliates set
forth in Section 3.10(a) shall not apply to Confidential Information which:

(i) is or becomes generally available to the public other than as a
result of disclosure by the Member or its Affiliates in whom the
Confidential Information is confided;

(ii) becomes available to the confidant Member on a
non-confidential basis from a source other than the Owning Party, or its
Affiliates, and provided that such source has represented to the
confidant Member (and which confidant Member has no reason to disbelieve
after due inquiry) that it is entitled to disclose the Confidential
Information; or

(iii) was known to the confidant Member on a non-confidential basis
prior to the disclosure thereof to the confidant Member by the Owning
Party or its Affiliates.

(c) Return of Confidential Information. All Confidential Information
furnished by any Member to the other Member shall be returned by such other
Member to the Owning Party immediately upon the request of the Owning Member.
The confidentiality obligations and restrictions on use contained in this
Section 3.10 shall survive this Agreement.

3.11 COMPETITION MATTERS.

(a) Acknowledgment of Competitive Situation. Each Member acknowledges
that it and its Affiliates now are and/or hereinafter may be engaged in
businesses which may compete with, relate to or are similar to the businesses
of each other. Each Member acknowledges that it may compete with or
potentially may compete with the other Member in the manufacture or sale or
galvanizing steel products and services. Because the Members may compete with
each other in various areas, no Member shall be obligated to render any
information to any other Member, on demand or otherwise, if the Member
reasonably believes it to be inappropriate to disclose such information to a
competitor.

(b) Dealing with Company. Nothing in this Agreement shall be construed to
prevent a Member, or its Affiliates, or entity in which a Member, or its
Affiliates, shall have an interest, from dealing with the Company in good faith
as vendor, customer or otherwise in a manner not specifically covered by this
Agreement, provided the Member or entity shall have given notice of such
interest to the Governors, and the Governors designated by the unaffiliated
Member shall have approved or ratified such dealing.

3.12 INVESTMENT REPRESENTATIONS .

(a) Each Member represents and warrants to the other Member and the
Company as follows: (i) such Member is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization; (ii) such
Member has full power and authority to execute, deliver and perform such
Member's obligations under this Agreement and the Related Agreements; (iii)
such Member has duly authorized, executed and delivered this Agreement and has
duly authorized the performance of such Member's obligations under this
Agreement and the Related Agreements; and (iv) such Member's authorization,
execution, delivery and performance under this Agreement and the Related
Agreements do not and will not conflict with any

organizational document, agreement or law applicable to such Member or by which
such Member is bound.

(b) Each Member further represents and warrants to the Company that such
Member is acquiring such Member's Interest for such Member's own account and
not with a view toward the distribution or resale thereof, and each Member
agrees that such Member will not sell or offer to sell all or any portion of
its Interest, or negotiate in respect thereof with any Person or Persons
whomsoever, so as thereby to bring the transaction in which such Member
acquired such Member's Interest or any other offering of interests in the
Company within the provisions of Section 5 of the Securities Act of 1933, as
amended, or the registration requirement of any other federal or state
securities statute.

(c) Each Member further represents and warrants to the other Member and
the Company that (i) such Member has been given access to all information
concerning the Company and the terms and conditions of the Interest such Member
is purchasing hereby; (ii) such Member understands and acknowledges that the
Interest such Member is purchasing hereby is a speculative investment and
involves a high degree of risk and that no federal or state agency has made any
finding or determination as to the fairness for public or private investment
in, nor any recommendations or endorsement of, such Interest as an investment;
(iii) such Member has such knowledge and experience in business and financial
matters that such Member is capable of evaluating the merits and risks of an
investment in such Interest; and (iv) such Member's financial situation is such
that such Member can afford the risks of an investment in such Interest.

ARTICLE IV

ALLOCATIONS AND DISTRIBUTIONS

4.1 ALLOCATION OF PROFITS AND LOSSES. Except as provided in Section 4.2,
Profits and Losses shall be allocated among the Members in proportion to their
respective Percentage Interests.

4.2 SPECIAL ALLOCATIONS AND OTHER PROVISIONS RELATING TO ALLOCATIONS.

(a) Allocation of Nonrecourse Deductions. Any Member Nonrecourse
Deductions for any fiscal year shall be specially allocated to the Members who
bear the economic risk of loss with respect to the Member Nonrecourse Debt to
which such Member Nonrecourse Deductions are attributable in accordance with
the Allocation Regulations. Such Members shall be specially allocated items of
Company income and gain as are required by the "chargeback of partner
nonrecourse debt minimum gain" requirements of the Allocation Regulations.

(b) Manner of Allocation. Nonrecourse Deductions for any fiscal year
shall be specially allocated to the Members (with the Members intending to
satisfy the reasonable consistency requirement contained in the Allocation
Regulations as a result of this allocation) in

proportion to their respective Percentage Interests. Such Members shall be
specially allocated items of Company income and gain as are required by the
"minimum gain chargeback" requirements of the Allocation Regulations.

(c) Disallowed Deduction. If the deduction of all or any part of any fee
paid by the Company to a Member is disallowed by recharacterizing such fee as a
distribution to such Member, such Member shall be, to the extent permitted by
the Code, allocated items of Company income and gain for the taxable year in
which such disallowed deduction was claimed by the Company in the amount of
such disallowed deduction.

(d) Qualified Income Offset. In the event any Member's unexpected receipt
of any adjustments, allocations or distributions described in Sections
1.704-1(b)(2)(ii)(d)(4), 1.704-1(b)(2)(ii)(d)(5) or 1.704-1(b)(2)(ii)(d)(6) of
the Allocation Regulations causes such Member to have (or increases) an
Adjusted Capital Account Deficit, items of Company income and gain shall be
specially allocated to each such Member in an amount and manner sufficient to
eliminate, to the extent required by the Allocation Regulations, the Adjusted
Capital Account Deficit of such Member as quickly as possible, provided that an
allocation pursuant to this Section 4.2(d) shall be made only if and to the
extent that such Member would have an Adjusted Capital Account Deficit after
all other allocations provided for in this Article IV have been tentatively
made as if this Section 4.2(d) were not in the Agreement.

(e) Curative Allocations. The allocations set forth in paragraphs (a),
(b) and (d) of this Section 4.2 (the "Regulatory Allocations") are intended to
comply with certain requirements of the Allocation Regulations. It is the
intent of the Members that, to the extent possible, all Regulatory Allocations
will be offset either with other Regulatory Allocations or with special
allocations of other items of Company income, gain, loss or deduction pursuant
to this Section 4.2(e). Therefore, notwithstanding any other provision of this
Article IV (other than the Regulatory Allocations), the Members shall make such
offsetting special allocations in whatever manner the Members determine
appropriate so that, after such offsetting allocations are made, each Member's
Capital Account balance is, to the extent possible, equal to the Capital
Account balance such Member would have had if the Regulatory Allocations were
not part of this Agreement and all Company items were allocated pursuant to
Section 4.1. In exercising its discretion under this Section 4.2(e), the
Members may take into account future Regulatory Allocations under the last
sentence of each of Sections 4.2(a) and 4.2(b) that, although not yet made, are
likely to offset other Regulatory Allocations previously made under the first
sentence of each of Sections 4.2(a) and 4.2(b), respectively.

4.3 CASH DISTRIBUTIONS. Cash shall be distributed to the Members from the
Company in such amounts and at such times as the Governors may determine,
consistent with the Act. Each distribution of cash shall be made to the
Members in proportion to their respective Percentage Interests in the Company
at the time of such distribution. The Company shall distribute to the Members
any cash in excess of the Company's current and reasonably anticipated future
cash needs. It is the intent of the Company, to the extent cash is available,
to make sufficient cash distributions to the Members to fund federal income tax
payments which may become owing by the Members on the Company's Profits.

4.4 DISTRIBUTIONS OF LIQUIDATION PROCEEDS UPON LIQUIDATION. Upon the
liquidation of the Company, the Governors shall attempt to liquidate the assets
of the Company and the proceeds of such liquidation shall be applied and
distributed in the following order of priority:

(a) First, to creditors, including Members who are creditors, to the
extent permitted by law, in satisfaction of liabilities of the Company (other
than liabilities to Members for distributions of cash to which they may be
entitled), and to the expenses of liquidation;

(b) Second, to the setting up of reserves that the Governors determine are
necessary to pay all contingent, conditional or unmatured claims and
obligations that are known to the Company and all claims and obligations that
are known to the Company but with respect to which the claimant or obligee is
unknown; such reserves may be paid over by the Governors to any attorney at law
or other party selected by the Governors, as escrow agent to be held for
disbursement in payment of any of the aforementioned liabilities or
obligations, or at the expiration of such period as shall be deemed advisable
by the Governors, for distribution in accordance with clause (c) of this
Section 4.4;

(c) Thereafter, to the Members in accordance with their respective
positive Capital Account balances, determined after all allocations pursuant to
Sections 4.1 through 4.2 (including, without limitation, allocations to reflect
the gain or loss recognized upon the sale of the Company's assets) and all
distributions pursuant to Section 4.3 have been made, but before any
distributions pursuant to this Section 4.4(c) are made.

4.5 DISTRIBUTIONS IN KIND ON LIQUIDATION. Upon the liquidation of the
Company, to the extent the Company's assets are not sold or otherwise disposed
of, such assets (if any) may be distributed in kind to the Members as follows:
the value of such assets shall be appraised (by an appraiser selected by the
Governors) to determine the Profits and Losses that would have resulted if such
assets had been sold; the Capital Account of each Member shall be credited or
debited with such Member's respective share of the hypothetical gains or losses
resulting from such assumed sales in the same manner as such Capital Account
would have been credited or debited on the actual disposition of such assets;
and such assets shall be distributed in accordance with the Members' Capital
Account balances as thus adjusted, each Member taking an undivided interest in
such assets subject to a pro rata share of the Company's liabilities.

4.6 CERTAIN PROVISIONS OF THE ACT SUPERSEDED. The provisions of this
Agreement regarding allocations and distributions among the Members are
intended to and should, to the fullest extent permitted by law, supersede the
provisions of the Act regarding allocations and distributions.

ARTICLE V

POWER, AUTHORITY, RIGHTS, DUTIES AND OBLIGATIONS OF THE BOARD OF GOVERNORS

5.1 MANAGEMENT AND CONTROL OF COMPANY'S BUSINESS AND AFFAIRS BY GOVERNORS.
Subject to the restrictions hereinafter set forth, the Governors shall have
full and exclusive right,

power and authority to conduct the business and manage the affairs of the
Company in accordance with the terms and conditions of this Agreement. Any
action or inaction by Consent of Governors designated by Members holding
greater than 50% of the Percentage Interests, other than for a Major Decision,
shall constitute the action of the Governors and shall bind all of the
Governors and the Company. A Major Decision shall require the Consent of all
the Members. In the event of a deadlock by the Governors, then the subject of
such deadlock may be addressed under the Dispute Resolution Procedures referred
to in Section 11.10. No Governor, acting alone, shall have the power or
authority to bind the Governors or the Company. The Governors may delegate
such power and authority by Consent of Governors designated by Members holding
a majority of the Percentage Interests. WSMI shall be entitled to designate
three Governors and QS Steel shall be entitled to designate three Governors.
Each Governor shall serve at the pleasure of the Member entitled to designate
such Governor. All designations and removals of Governors shall be made by
written notice by the designating or removing Member, as the case may be, to
the other Members.

5.2 POWER AND AUTHORITY OF GOVERNORS. The Governors shall have all power
and authority necessary to carry out the purposes, business and objectives of
the Company.

5.3 PROHIBITED ACTIONS .The Company may not:

(i) change the nature of the business of the Company or enter into
any business other than or in addition to that contemplated by this
Agreement:

(ii) sell, exchange, transfer, convey, assign, mortgage, lease or
otherwise dispose of all or substantially all of the assets of the
Company except to secure loans of the Company;

(iii) enter into any merger of or consolidation involving the
Company, whether or not the Company shall be the survivor thereof;

(iv) authorize or undertake a major capital expansion of the
Company's facilities beyond that originally contemplated; and

(v) add new Members, except as permitted under Article VI hereof.

5.4 MANAGEMENT AND SERVICES AGREEMENT . QS Steel and WSMI agree that the
Company shall enter into a Management and Services Agreement with WSMI
substantially in the form set forth in Exhibit 5 hereto, pursuant to which WSMI
will provide certain management and other services to the Company.

5.5 MANAGEMENT PERSONNEL .

(a) The Governors shall have the authority to employ and dismiss from
employment any and all Company management personnel, subject to Major Decisions
made by the Members. Company management personnel shall serve at the pleasure
of the Governors and

may be removed at any time by the Governors, subject to Major Decisions made by
the Members and guidelines and policies established by the Governors from time
to time.

(b) WSMI may nominate the Company's management personnel and shall
consider candidates proposed by QS Steel. Such nominations shall be subject to
the approval of the Governors. WSMI agrees to withdraw the nomination of any
individual as to whom QS Steel objects for legitimate business reasons.

(c) The Company's management personnel shall provide general management
and supervision for the Company and have such power and duties as the Governors
may assign. Initially, the Company's General Manager or other designated
management personnel shall have the powers and duties set forth as follows,
subject to the Governors authority to amend such powers and duties;

(i) oversee the operations of the business of the Company;

(ii) execute and implement the plans and policies of the Governors;

(iii) authorize the making of unbudgeted capital expenditures in
amounts not exceeding the dollar limitations as set by the Governors;

(iv) authorize the execution, delivery and performance of any contract
or agreement to be entered into by the Company in the ordinary course of
business, involving an aggregate amount of not more than the dollar
limitations set by the Governors, or consistent with approved budgets;

(v) execute and deliver on behalf of the Company any and all
contracts and agreements as shall have been approved by the Governors if
required under this Agreement or as provided in clause (iv);

(vi) approve all expenditures and the payment of all obligations of
the Company in accordance with the authority provided by or consistent with
approved budgets and the plans and policies of the Governors;

(vii) employ and dismiss from employment any and all Company
personnel, other than management personnel designated from time to time
by the Governors;

(viii) prepare or arrange for the preparation of financial
statements concerning the Company;

(ix) propose and prepare annual budgets and operational plans of the
Company;

(x) make recommendations to the Governors concerning appropriate
policies, procedures, facilities and equipment;

(xi) arrange for the obtaining of insurance by the Company;

(xii) authorize the opening of bank accounts and the establishment of
other depository relationships on behalf of the Company with such
signatories and on such terms as the Governors shall deem appropriate;

(xiii) oversee the preparation of financial statements and tax
information concerning the Company and its business, and the preparation
and filing of all Company tax returns, subject to the authority of the Tax
Matters Member;

(xiv) supervise the procurement, construction, erection and
installation of facilities and improvements to the facilities of the
Company, consistent with approved budgets; and

(xv) authorize the employment and dismissal from employment of any
and all Company agents, independent contractors, consultants, attorneys and
accountants for amounts not in excess of the dollar limitations as set by
the Governors.

5.6 COMPENSATION AND EXPENSES. The philosophy and guidelines with respect
to the salary, benefits and other terms and conditions of employment of the
Company's management shall be established and reviewed from time to time by the
Governors, subject to Major Decisions of the Members.

5.7 BUDGETS. The Governors shall consider and approve from time to time
budgets for the Company, subject to the right of Members to approve Major
Decisions. Upon approval of a budget by the Governors, the management
personnel of the Company, shall have the right without further consent or
approval by the Governors, to incur and pay on behalf of the Company the
expenses set forth in such approved budget.

5.8 CORPORATE ALLOCATION . WSMI shall be entitled to receive an amount
for a corporate allocation to be charged to the Company in an amount agreed
between the parties, based on cost as are detailed in Schedule OA-3 and
reviewed, amended and approved by the Board of Governors periodically.

5.9 MEETINGS OF GOVERNORS . Any Governor may by written notice to each
other Governor call a meeting of all the Governors. Upon receipt of a written
request for such a meeting, the Governors shall promptly, and in any event not
later than ten (10) days after receipt of such request, fix a place and time
for such meeting. To the extent possible, such meeting shall be held at a
place convenient to all the Governors. Such meeting shall be held not less
than fifteen (15) nor more than sixty (60) business days after receipt of a
request for a meeting. In the absence of agreement by a majority of the
Governors, such meeting shall be held at 10:00 a.m. local time on the fifteenth
(15th) business day after receipt of a request for a meeting at the principal
place of business of the Company. Meetings of the Governors may be held
through any communications equipment if all those participating can hear each
other and participation in any such meeting shall constitute presence thereat.

5.10 LIABILITY. When acting with respect to the Company, the Governors
shall not be liable to the Company or to any Member for any mistake or error in
judgment or for any act or omission believed in good faith to be within the
scope of the authority conferred by this Agreement. When acting with respect
to the Company, the Governors shall be liable only for willful misconduct or
failure to act in good faith.

5.11 INDEMNIFICATION. The Company shall, to the fullest extent permitted
under the Act and other applicable law, indemnify any Person who is a party, or
is threatened to be made a party, to any threatened, pending or completed
civil, criminal, administrative or investigative action, suit or proceeding
because such Person is or was a Member, Affiliate of a Member, Governor,
General Manager, officer, employee or agent of the foregoing or is or was
serving at the request of the Company as a member, manager, director, trustee,
partner, officer, employee or agent of another limited liability company,
corporation, partnership, joint venture, trust or other enterprise, against
costs, claims, damages, losses, judgments, fines and expenses (including
without limitation, reasonable attorneys' fees, filing fees, court reporters'
fees and transcript costs) actually and reasonably incurred by such Person in
connection with such action, suit or proceeding if such Person's act or
omission giving rise to any claim for indemnification under this Section 5.11
was not occasioned by such Person's fraud, willful misconduct, gross negligence
or intent to cause injury to the Company or by such Person's reckless disregard
for the best interests of the Company, and in respect of any criminal action or
proceeding, such Person had no reasonable basis to believe such Person's
conduct was unlawful.

5.12 INSURANCE . The Company shall, with the assistance of WSMI arrange
for the necessary and desirable insurance coverages with respect to Company and
its business, the type of policies and the amounts of coverage to be determined
by the Board of Governors. Such policies may be separate policies of the
Company, or if approved by the Board of Governors, may be maintained under
blanket insurance policies maintained by WSMI or its Affiliates. The premiums
and deductibles for such insurance shall be paid by the Company. If insurance
is obtained under blanket policies, premiums shall be pro rated according to
Worthington's standard practices and reimbursed to WSMI (or its Affiliates),
and any deductibles, copayment or other self-insured amounts applicable to
claims of or against the Company shall be the responsibility of the Company.

5.13 BANK ACCOUNTS .

(a) ESTABLISHMENT. All funds received in connection with the
operation of the Company shall be deposited in such bank account or
accounts as approved by the Board of Governors. The Company shall also
create and designate one or more disbursing accounts from which the
obligation owing by the Company shall be paid. Such account may be the
same as or separate from the collection account. The operating expenses
of the Company shall be paid out of such disbursing account.

(b) WORKING CAPITAL. No monies received from the Company are to be
commingled with Member funds unless approved by all Members of the
Company. The Members may agree to advance funds to the Company in order
to make disbursements or for other purposes. A revolving line of credit
shall be established with

each Member and the Member shall be entitled to a reasonable interest
expense allocation, as agreed upon by the parties for such funds. Any
advances obtained by the Company from the Members shall be repaid with
interest before any cash dividend will be distributed.

(c) SIGNATORIES. The Board of Governors shall designate the persons
permitted access to the bank accounts of the Company.

5.14 TAX MATTERS MEMBER. The Tax Matters Member (referred to as the "tax
matters partner" in Section 6231(a)(7) of the Code) initially shall be WSMI.
The Tax Matters Member may at any time resign as the Tax Matters Member, and
the Tax Matters Member may be removed as the Tax Matters Member by Consent of
Members. In the event that the Tax Matters Member resigns or is removed, a new
Tax Matters Member shall be appointed with the Consent of Members. The Tax
Matters Member shall represent the Company and the Members, at Company expense,
in any administrative or judicial proceeding with the Internal Revenue Service.
Any other Member may, at such Member's own expense, participate in such
proceeding to the extent permitted by the Code. If an administrative
proceeding results in the issuance of a "final partnership administrative
adjustment" ("FPAA"), as that term is used in Sections 6223 et seq. of the
Code, the Tax Matters Member shall determine whether the Company shall seek
judicial review of such FPAA. If the Tax Matters Member determines that the
Company shall not seek judicial review, such Member shall promptly notify each
Member of this determination and each Member shall be entitled, at such
Member's own expense, to pursue whatever rights such Member may have under the
Code. Any amounts paid by the Tax Matters Member on behalf of the Company in
connection with any administrative or judicial proceeding shall be considered a
loan to the Company, and not a contribution to capital. The Tax Matters Member
shall not be liable to the Company or the other Members for any action such
Member takes or fails to take in connection with any such judicial or
administrative proceeding, including, without limitation, the agreement to or
failure to agree to a settlement or the extension of, or failure to extend the
relevant statutes of limitations, unless such action or failure constitutes
willful misconduct or failure to act in good faith.

5.15 CERTAIN PROVISIONS OF THE ACT SUPERSEDED. The provisions of this
Agreement regarding the management of the Company and the power, authority,
rights, duties and obligations of the Members are intended to and shall, to the
fullest extent permitted by law, supersede the provisions of the Act regarding
the management of a limited liability company and the power, authority, rights,
duties and obligations of limited liability company members set forth in the
Act.

ARTICLE VI

TRANSFERS OF INTERESTS BY MEMBERS; SUBSTITUTION OF MEMBERS

6.1 TRANSFER OF INTERESTS BY MEMBERS .

General. No Member may Transfer its Interest to any Person without the
Consent of the other Member, provided, however, that the other Member shall not
unreasonably withhold consent to a transfer to a wholly-owned subsidiary of
Worthington Industries, Inc. or Rouge Steel Company. Any transfer permitted by
this Section 6.1 shall be subject to the further limitations set forth in
Section 6.2 and the admission of a Substitute Member shall be subject to
Section 6.3.

6.2 ADDITIONAL RESTRICTIONS ON TRANSFERS. Notwithstanding anything in
this Article VI to the contrary, the following additional restrictions apply to
the Interests:

(a) Unless the other Member consents, no Member shall make any assignment
or transfer of any Interest if the transfer would, when considered with all
other assignments and transfers during the same applicable twelve-month period,
cause a termination of the Company for federal income tax purposes.

(b) No Member shall make an assignment or transfer to a tax-exempt Entity
under Section 168(h) of the Code.

(c) No Member shall make any assignment or transfer of any Interest unless
such Member gives a copy of this Agreement to the assignee or transferee before
such assignment or transfer is effected.

6.3 REQUIREMENTS FOR SUBSTITUTION. Notwithstanding anything in this
Article VI to the contrary, upon the assignment or transfer of any Interest, no
assignee or transferee shall have the right to become a Substitute Member in
place of its assignor or transferor unless the conditions of Sections 6.1 and
6.2 have been satisfied and:

(a) the assignor or transferor has evidenced in a written instrument of
assignment or transfer its intention that the assignee or transferee be
admitted as a Substitute Member pursuant to the provisions hereof;

(b) Consent shall have been given by the remaining Member which consent
may be withheld by such remaining Member in its sole and absolute discretion,
for any reason or for no reason at all, except in the case of a transfer to an
Affiliate, in which case consent may not be unreasonably withheld;

(c) the assignee or transferee has adopted and agreed in writing to be
bound by all of the provisions hereof, as the same may have been amended; and

(d) all documents reasonably required by the Governors to effect the
substitution of the assignee or transferee as a Member shall have been
executed.

When and if all of the provisions of this Section 6.3 have been complied with,
the assignee or transferee shall thereupon become a Member of the Company.

6.4 OBLIGATIONS AND RIGHTS OF TRANSFEREES. Whether or not an Entity which
acquires an interest in the Company has accepted in writing the terms and
provisions of this Agreement and assumed in writing the obligations hereunder
of its predecessor in interest, such Entity shall be deemed, by such
acquisition of such interest, to have agreed to be subject to and bound by all
the obligations of this Agreement with the same effect as any predecessor in
interest of such Entity. An Entity acquiring an interest in the Company shall
have only such rights and shall be subject to all the obligations as provided
in this Agreement, and, without limiting the foregoing, such Entity shall not
have the right to have the value of its interest ascertained or receive the
value of such interest or, in lieu thereof, profits attributable to any right
in the Company, except as set forth in this Agreement.

6.5 DISTRIBUTIONS AND ALLOCATIONS IN RESPECT OF TRANSFERRED INTERESTS. If
any Interest is sold, assigned or transferred during any accounting period in
compliance with the provisions of this Article VI, Profits, Losses, each item
thereof and all other items attributable to such Interest for such period shall
be divided and allocated between the transferor and the transferee by taking
into account their varying interests during the period in accordance with Code
Section 706(d), using any conventions permitted by law and selected by the
Governors. Unless otherwise determined by Governors, all distributions made on
or before the date thirty (30) days following the date on which the Company
receives written notice of such transfer (accompanied by the transfer
documents) shall be made to the transferor, and all distributions made
thereafter shall be made to the transferee. Solely for purposes of making such
allocations and distributions, the Company shall recognize such transfer not
later than the end of the calendar month during which it is given notice of
such transfer, provided that if the Company does not receive a notice stating
the date such Interest was transferred and such other information as the
Governors may reasonably require within thirty (30) days after the end of the
accounting period during which the transfer occurs, then, at the Governors'
option, all of such items shall be allocated, and all distributions shall be
made, to the Entity which, according to the books and records of the Company,
on the last day of the accounting period during which the transfer occurs, was
the owner of the Interest. Neither the Company nor the Governors shall incur
any liability for making allocations and distributions in accordance with the
provisions of this Section 6.5, whether or not the Governors or the Company
have knowledge of any transfer of ownership of any Interest.

6.6 CONTINUATION UPON TRANSFER. The Company shall be dissolved upon the
Transfer of the Interest of a Member in compliance with the Agreement (other
than (i) an assignment merely of its right to receive distributions or (ii) a
pledge, hypothecation or other collateral assignment of its rights before the
time such pledge, hypothecation or other collateral assignment becomes
absolute); provided, however, that the Company and its business shall be
continued after such Transfer if the transferee becomes a Substitute Member in
accordance with the

provisions of this Agreement including the Consent of all remaining Members.
In the event the Company's business has been validly continued as provided in
the preceding sentence, such business shall be continued in the form of a
successor limited liability company, which shall be deemed constituted and
continued on the terms and conditions in this Agreement except as may be
modified by the Agreement of the Members as provided in Article IX hereof; and
the assets of the Company shall not be liquidated. Each Member hereby agrees
to execute and deliver all documents necessary to effectuate the purposes of
this Section.

6.7 RESTRICTIONS REASONABLE. Each Member acknowledges and agrees that the
restrictions or the transfer of Interests imposed by this Agreement are imposed
to accomplish legitimate purposes of the Company, and that such restrictions
are not more restrictive than necessary to accomplish those purposes.

6.8 CERTAIN PROVISIONS OF THE ACT SUPERSEDED. The provisions of this
Agreement regarding the Transfer of a Member's Interest are intended to and
shall, to the fullest extent permitted by law, supersede the provisions of the
Act regarding the withdrawal of a member set forth in the Act.

ARTICLE VII

PROCEDURE ON DISSOLUTION

7.1 LIQUIDATION. Upon the dissolution of the Company, unless the Company
is continued or reformed as provided in this Agreement, the Members shall
proceed to liquidate the Company and to apply and distribute the proceeds of
liquidation as set forth in Sections 4.4 and 4.5 and as is consistent with the
Act.

7.2 OPERATIONS DURING LIQUIDATION. Upon the determination that the
Company is to be dissolved and liquidated, the business of the Company during
the period of liquidation shall be carried on by the Governors, or by a
designee of the Governors, who shall possess all the powers of the Governors to
the extent necessary to wind up the business and affairs of the Company.

7.3 TIME FOR LIQUIDATION. In the event the Company is "liquidated" within
the meaning of the Allocation Regulations, distributions shall be made pursuant
to Section 4.4 in compliance with the timing requirements of the Allocation
Regulations; provided, however, that if, in the opinion of counsel satisfactory
to the Governors, failure to comply with the Allocation Regulations would not
cause the allocations of Profits and Losses (or any item thereof) to the
respective Members to lack substantial economic effect within the meaning of
Section 704(b) of the Code, then distributions need not be made in compliance
with the timing requirements of the Allocation Regulations.

7.4 TERMINATION. Upon compliance with the foregoing distribution plan
(including payment over to an escrow agent or trustee, if deemed appropriate by
the Governors and if there be sufficient funds therefor), the Company shall
cease to be such, and the Governors and/or the

Members shall execute, acknowledge and cause to be filed a certificate of
dissolution of the Company with the Department, including the name of the
Company and the effective date of its dissolution subject to and in accordance
with applicable law.

ARTICLE VIII

BOOKS AND RECORDS, BANK ACCOUNTS

8.1 MAINTENANCE OF BOOKS AND ACCOUNTING METHOD. The Governors shall keep
or cause to be kept the following: (i) a current list of the name and last
known business or residence addresses of all Members and Governors; (ii) a copy
of the Articles of Organization, including any amendments thereof and any
written powers of attorney relating to the execution thereof; (iii) a copy of
this Agreement, including any amendments thereof and any written powers of
attorney relating to the execution thereof; (iv) copies of federal, state and
local income tax returns and reports of the Company for the three (3) most
recent years; (v) copies of any financial statements of the Company for the
three (3) most recent years; and (vi) copies of any records that would enable a
Member to determine the Member's relative share of the Company's distributions
and the Member's relative voting rights. Such books and records shall be
maintained at the Registered Office of the Company or at such other place as
the Governors may designate and shall be available upon reasonable notice, at
reasonable times, for inspection and examination by the Members or their duly
authorized agents or representatives. Such books and records shall be
consistent with the rules referred to in Section 3.7 of this Agreement. The
books and records of the Company shall be kept in accordance with accounting
policies and methods unless other policies or methods are selected by the
Governors.

8.2 FISCAL YEAR. The fiscal year of the Company shall end on May 31.

8.3 REPORTS TO THE MEMBERS.

(a) On a quarterly basis (or on a monthly basis if the Governors so
determine), the Governors shall cause to be prepared and shall send to each
Member: (i)(A) a statement of operations of the Company and (B) a statement of
cash flows of the Company for the preceding period (and year-to-date through
and including such period); and (ii) a balance sheet of the Company as of the
close of such period. The annual financial statements of the Company will be
audited by the outside auditing firm of the Tax Matters Member, or such other
independent accounting firm as may be selected by the Governors, unless all
Members agree that no audit is necessary.

(b) The Governors shall cause to be prepared and distributed to each
Member, in a timely manner copies of all Single Business Tax and other state
and local tax returns prior to filing the same with the respective tax
authorities, as well as the Member's Schedule K-1 (Form 1065) and all other
information reasonably necessary for the preparation of such Member's federal,
state and local tax returns.

(c) No cause of action shall accrue to any Member under this Section 8.3
if the Governors shall have acted in good faith in attempting to meet its
obligations under this Section yet failed to deliver any required statements,
reports, returns or information within the specified time period.

(d) In the event of any dispute among the Members relating to the
financial statements or accounting for the Company, the dispute shall be
submitted, at the request of any Member involved, to the public accounting firm
which has been engaged to audit the books of the Company, or if no accounting
firm has been so engaged, then to a public accounting firm to be selected as
provided in Section 8.3(a). In the case of any such disputes, the
determination of the accounting firm shall be final and binding on the Members.

8.4 TAX ELECTIONS; SPECIAL BASIS ADJUSTMENTS. The Tax Matters Member
shall make all tax elections on behalf of the Company. In the event of a
transfer of all or any part of the Interest of any Member for an amount in
excess of the adjusted basis for such interest for federal income tax purposes,
the Governors may elect, pursuant to Section 754 of the Code (or corresponding
provisions of succeeding law), to enable an adjustment to be made to the basis
of the Company's property. Any costs incurred by the Company in connection
with such Section 754 election shall be borne by the Member seeking a transfer
of its Interest. Any adjustments made pursuant to an election under Section
754 shall affect only the successor in Interest to the transferring Member.
Each Member will furnish the Company with all information necessary to give
effect to such election.

ARTICLE IX

AMENDMENTS AND MAJOR DECISIONS

9.1 AMENDMENTS REQUIRING UNANIMOUS CONSENT OF MEMBERS . The Members may
amend this Agreement or the Articles of Organization only with the Consent of
all Members.

9.2 MAJOR DECISIONS. Major decisions shall require the Consent of all
Members, subject to the provisions of Section 11.10.

ARTICLE X

DISSOLUTION

10.1 EVENTS OF DISSOLUTION - GENERAL. The Company will be terminated upon
the mutual written agreement of the Members that the Company be dissolved and
the term of the Agreement ended.

10.2 EVENTS OF DISSOLUTION - ELECTIVE. The Company may be dissolved, at
the election of a Member as follows:

(a) Any Member may elect to dissolve the Company upon the occurrence of
any event or the existence of any condition beyond the reasonable control of
the Members which prevents the Company from producing commercially acceptable
products consistent with the purpose of the Company or the Company is otherwise
unable to carry out its purpose, and such event or condition cannot be
corrected within a reasonable time, at a reasonable expense.

(b) (i) WSMI may elect to dissolve the Company if there is a change
of control of QS Steel so that QS Steel is no longer a member of the same
"controlled group of corporations" (as that term is defined in Section
1563(a) of the Code) as Rouge Steel Company. An election to dissolve due
to a change in control of QS Steel must be made by written notice from
WSMI to QS Steel within 90 days after WSMI is notified by QS Steel that a
change of control has occurred or will occur.

(ii) QS Steel may elect to dissolve the Company if there is a change
of control of WSMI so that WSMI is no longer a member of the same
"controlled group of corporations" (as that term is defined in Section
1563(a) of the Code) as Worthington. An election to dissolve due to a
change in control of WSMI must be made by the written notice from QS
Steel to WSMI within 90 days after QS Steel is notified by WSMI that a
change of control has occurred or will occur.

(c) Either Member may elect to dissolve the Company as of December 31,
2005 or as of the end of any year thereafter. Such election to dissolve must
be made at least 24 months before the end of such year.

(d) QS Steel may elect to dissolve the Company if WSMI invokes its right
to break a deadlock under Section 11.10(c). Such election may be made by
written notice from QS Steel to WSMI within 90 days after WSMI invokes such
right.

10.3 EVENTS OF DISSOLUTION - DEFAULT. The non-defaulting Member may elect
to terminate and dissolve the Company in the event of a default, as specified
below, by the other Member. The occurrence of any of the following events
shall constitute a default by a Member:

(a) A Member shall have defaulted in its obligation to make any capital
contribution or to provide financial support as required in Section 3.1 hereof
and such default shall continue to exist for a period of fifteen (15) business
days after the other Member gives such defaulting Member notice of such
default.

(b) A Member or its Affiliate shall materially default in the observance
or performance of any material agreement, covenant, or condition contained in
this Agreement or in any material agreement with or relating to the Company and
such default shall continue to exist for a period of 30 days after the other
Member or the Company gives such defaulting Member or its Affiliate written
notice of such Default;

(c) A representation or warranty made by the Member herein (or in any
certificate or financial or other statement furnished by such Member to the
other pursuant to the

terms hereof) or by the Member's Affiliate in connection herewith shall prove
to be false or misleading in any material respect when made;

(d) The Bankruptcy of such Member.

10.4 NOTICE OF DISSOLUTION. If a Member is entitled to dissolve the
Company, it may do so by giving notice to the other Member, in writing, that it
is electing to dissolve the Company.

10.5 WINDING UP. If the Company is to be dissolved, then the Members
shall proceed jointly to wind up the affairs of the Company; provided, however,
that if the dissolution is occurring pursuant to Section 10.3, then the
non-defaulting Member may unilaterally wind up the affairs of the Company if it
so chooses.

10.6 BUY-OUT PROCEDURES.

(a) If an election is made by WSMI to dissolve the Company pursuant to
Section 10.3 above (i.e. for Default), WSMI may also elect, by written notice
given within ninety (90) days of the date of the election to dissolve, to
either (i) purchase Rouge's Interest in the Company for an amount equal to
ninety (90) percent of the fair market value of Rouge's interest, or (ii)
require Rouge to purchase WSMI's Interest in the Joint Venture for an amount
equal to 110% of the fair market value of Rouge's Interest.

(b) If an election is made by QS Steel to dissolve the Company pursuant to
Section 10.3 above (i.e. for Default) QS Steel may also elect by written notice
given within 90 days of the election to dissolve, to either (i) purchase WSMI's
Interest in the Company for an amount equal to ninety percent (90%) of the fair
market value of WSMI's Interest, or (ii) require WSMI to purchase QS Steel's
Interest in the Company for an amount equal to 110% of the fair market value of
QS Steel's Interest.

(c) If an election is made by a Member (the "Terminating Member") to
dissolve the Company pursuant to Section 10.2(a) or (c), the other Member may
elect, by written notice given within 90 days of the date of the election to
dissolve, to continue the business of the Company by acquiring the Terminating
Member's interest in the Company for an amount equal to one hundred percent
(100%) of the fair market value of the Terminating Member's Interest.

(d) If the Company's "income before tax" return on assets falls below 15%
for two or more consecutive fiscal years after the first three years of
operation, WSMI may elect to require Rouge to purchase WSMI's Interest in the
Company for an amount equal to 100% of the fair market value of WSMI's
Interest. (Any capitalized pre-production costs; see Schedule OA1, and any
depreciation thereof, shall be excluded in these calculations.) Such election
must be made by written notice to Rouge within 90 days after the Board of
Governors confirms that the Company has not met such performance level.

(e) If an election is made by a Member (the "Terminating Member") to
dissolve the Company pursuant to Section 10.2 (b) (i.e. due to a change in
control), the

Terminating Member may elect, by written notice given within 90 days of the
date of the election to dissolve, to either (i) continue the business of the
Company by acquiring the other Member's interest in the Company for an amount
equal to one hundred percent (100%) of the fair market value of the other
Member's Interest; or (ii) require the other Member to purchase the Terminating
Member's Interest in the Company for an amount equal to 100% of the fair market
value of the Terminating Member's Interest.

(f) If an election is made by QS Steel to dissolve the Company pursuant to
Section 10.2(d), QS Steel may also elect in its notice of dissolution to
require WSMI to purchase QS Steel's Interest in the Company for an amount equal
to 100% of the fair market value of QS Steel's Interest.

(g) If the Company is dissolved pursuant to Section 10.1 above, either
Member may elect, by written notice given within ninety (90) days of the date
of dissolution, to continue conducting the business of the Company. Unless the
Members otherwise agree, the acquiring Member shall purchase the Terminating
Member's interest in the Company for an amount equal to one hundred percent
(100%) of the fair market value of the Terminating Member's interest.

(h) In case of any election under this Agreement requiring the
determination of fair market value of the Company, the Members shall use their
best efforts to agree as to the fair market value of the Company. If the
Members fail to agree on such fair market value within sixty (60) days
following the election which requires such a determination, then the Members
shall attempt to agree upon a single appraiser to determine fair market value.
If the parties fail to agree on a single appraiser within 15 days, each Member
shall appoint a reputable appraiser, and the two appraisers shall appoint a
third appraiser. The appraiser or appraisers shall then determine in good
faith such fair market value(s), with such determination to be due within 60
days. In the event three appraisers are appointed and the appraisers cannot
agree upon a fair value, each of the three appraisers shall set forth, in good
faith, their own valuation, and the highest and lowest valuations shall be
discarded and the middle of the three valuations shall be deemed to be the fair
value.

10.7 NECESSARY APPROVALS The provisions as to liquidation of the Company
and the purchase of the business of the Company and the purchase of the
business of the Company shall be subject to any necessary governmental
approvals, and the Members shall agree upon such reasonable extensions of time
with respect to such provisions as may be reasonably necessary in order to
obtain any such approvals.

ARTICLE XI

GENERAL PROVISIONS

11.1 NON-WAIVER. No provision of this Agreement shall be deemed to have
been waived unless such waiver is contained in a written notice given by the
party granting such waiver to the party claiming such waiver and no such waiver
shall be deemed to be a waiver of

any other or further obligation or liability of the party or parties in whose
favor the waiver was given or a waiver by any party not executing such waiver
of any of its rights.

11.2 ADDITIONAL DOCUMENTS AND INSTRUMENTS. The Members shall execute and
deliver to each other such other and further documents and instruments as may
be necessary to carry out the purposes of this Agreement and which are required
by the Governor, or any federal, state or local governmental agency having
jurisdiction over the Company.

11.3 SEVERABILITY. If any provision or provisions of this Agreement (or
any part thereof) or the application thereof to any particular facts or
circumstances shall be illegal and unenforceable by reason of any statute or
rule of law, or shall be deemed null and void pursuant to Section 2.5 of this
Agreement, the remaining provisions (or parts thereof) of this Agreement or the
application of the particular provision or provisions (or parts thereof) to
other facts or circumstances shall not be affected thereby and shall remain in
full force and effect. It is the intention of the provisions of this Section
to make clear that the agreement of the parties to this Agreement is that this
Agreement shall be enforced insofar as it may be enforced consistent with
applicable statutes and rules of law.

11.4 ENTIRE AGREEMENT. This Agreement and any schedules and exhibits
annexed hereto, each of which is made a part hereof by this reference,
constitute the entire operating agreement of the Company within the meaning of
the Act and contain the entire understanding and agreement between the parties
upon the subject matter of this Agreement and may only be amended or changed in
a writing executed by Members holding the requisite Percentage Interests as
specified in Article IX. Any prior understandings and agreements between the
parties are merged herein, except only as herein otherwise expressly stated.

11.5 PROVISIONS BINDING. This Agreement shall inure to the benefit of and
be binding upon the parties and their respective heirs, executors,
administrators, successors and assigns and any additional or Substitute Members
(except as may otherwise be specifically provided herein).

11.6 CAPTIONS. The table of contents and captions set forth herein are
for convenience and reference only and are not intended to modify, limit,
describe or affect in any way the contents, scope or intent of this Agreement.

11.7 COUNTERPARTS. This Agreement may be executed in several counterparts
and all so executed shall constitute one and the same agreement binding on all
parties hereto, notwithstanding that all parties have not signed the same
counterpart or that any such counterpart does not have attached copies of all
signature pages attached hereto that constitute part of this Agreement.

11.8 WORD MEANINGS. The words such as "herein," "hereinafter," "hereof"
and "hereunder" refer to this Agreement as a whole and not merely to a
subdivision in which such words appear unless the context otherwise requires.
The singular shall include the plural, and the masculine gender shall include
the feminine and neuter, and vice versa, unless the context otherwise requires.

11.9 APPLICABLE LAW. This Agreement and the rights of the parties hereto
shall be construed under and enforced in accordance with the laws of the State
of Michigan (exclusive of its choice of law principles).

11.10 DISPUTE RESOLUTION.

(a) Initial Procedure. Any claim, dispute, difference or controversy
arising out of or relative to this Agreement or the operation of the Company
and any deadlock in voting relative to the operation of the Company which
cannot be settled by mutual understanding between the Members or their
Governors, will first be submitted to the chief executive officers of the
Members, who will meet and attempt to resolve such dispute.

(b) Formal Dispute Resolution. Should said claim, dispute, difference or
controversy or the deadlock not be resolved as above provided within sixty (60)
days after submission to the named persons, then at the written request of the
Company or any Member involved, the said claim, dispute, difference or
controversy or the deadlock shall be submitted to Alternative Dispute
Resolution in Michigan in accordance with a procedure to be agreed upon by the
Members.

(c) Breaking a Deadlock. If there is a deadlock between the Members
concerning the operation of the Company, which is not resolved despite attempts
to do so under the provisions of Section 11.10(a) or (b), then WSMI may, but is
not required, by 30 days written notice to QS Steel, elect to break the
deadlock, in which case WSMI's position shall prevail. If WSMI invokes its
right to break a deadlock, then the provisions of Sections 10.2(e) and 10.6(e)
will apply.

This Section (c) shall apply only to breaking deadlocks in operating the
Company and not to resolving claims, disputes, differences or controversies
between (i) the Members or the Members and the Company or (ii) relating to a
party's rights under this Agreement or other agreements relating to the
Company.

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36

IN WITNESS WHEREOF, the undersigned have duly executed this Operating
Agreement of Spartan Steel Coating, L.L.C.

QS STEEL INC., a Michigan corporation WORTHINGTON STEEL OF
MICHIGAN, INC., a Michigan corporation

By:____________________________ By:_______________________________

Printed Name:__________________ Printed Named:____________________

Title: ________________________ Title:____________________________

SPARTAN STEEL COATING, L.L.C.,
a Michigan limited liability company

By:_____________________________

Printed Name:___________________

Title:__________________________

OPERATING AGREEMENT OF SPARTAN STEEL COATING, L.L.C.

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