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                                                                     Exhibit 1.1

                        [Form of Underwriting Agreement]





                                     Shares

                              STEEL DYNAMICS, INC.

                     Common Stock (par value $.01 per share)




                             UNDERWRITING AGREEMENT




      , 2002
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                                                                          , 2002



Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.
     c/o Morgan Stanley & Co. Incorporated
     1585 Broadway, New York, New York  10036


Dear Sirs:

         Steel Dynamics, Inc., an Indiana corporation (the "COMPANY"), proposes
to issue and sell to the several Underwriters named in Schedule I hereto (the
"UNDERWRITERS"), and certain shareholders of the Company (the "FIRM SELLING
SHAREHOLDERS") named in Schedule II hereto severally propose to sell to the
several Underwriters, an aggregate of    shares of the Common Stock (par value
$.01 per share) of the Company (the "FIRM SHARES") of which shares are to be
issued and sold by the Company (the "COMPANY SHARES") and    shares are to be
sold by the Firm Selling Shareholders, each Firm Selling Shareholder selling the
amount set forth opposite such Firm Selling Shareholder's name in Schedule II
hereto. The Company and the Firm Selling Shareholders are hereinafter
collectively referred to as the "FIRM SELLERS".

         [In addition, [the Company and certain shareholders of the Company
named in Schedule III hereto (the "OPTION SELLING SHAREHOLDERS")] severally
propose to sell to the several Underwriters not more than an additional
aggregate of    shares of Common Stock (par value $.01 per share) of the Company
(the "ADDITIONAL SHARES") if and to the extent that the Representatives shall
have determined to exercise, on behalf of the Underwriters, the right to
purchase such shares of Common Stock granted to the Underwriters in Section 3
hereof. The Firm Shares and the Additional Shares are hereinafter collectively
referred to as the "SHARES". The shares of Common Stock (par value $.01 per
share) of the Company to be outstanding after giving effect to the sales
contemplated hereby are hereinafter referred to as the "COMMON STOCK". The Firm
Selling Shareholders and the Option Selling Shareholders are hereinafter
collectively referred to as the "SELLING SHAREHOLDERS". The Company and the
Selling Shareholders are hereinafter collectively referred to as the "SELLERS".

         The Company has filed with the Securities and Exchange Commission (the
"COMMISSION") a registration statement, including a prospectus, relating to the
Shares. The registration statement as amended at the time it becomes effective,
including information incorporated by reference, the exhibits thereto and the
information (if any) deemed to be part of the registration statement at the time
of effectiveness pursuant to Rule 430A under the Securities Act of 1933, as
amended (the "SECURITIES ACT"), is hereinafter referred to as the "REGISTRATION
STATEMENT"; the prospectus, including information incorporated by reference, in
the form first used to confirm sales of Shares is hereinafter referred to as the
"PROSPECTUS". If the Company has filed an abbreviated registration statement to
register additional shares of Common Stock pursuant to Rule 462(b) under the
Securities Act (the "RULE 462 REGISTRATION STATEMENT"), then


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any reference herein to the term "REGISTRATION STATEMENT" shall be deemed to
include such Rule 462 Registration Statement.

                  1. Representations and Warranties of the Company. The Company
represents and warrants to and agrees with each of the Underwriters and the
Selling Shareholders that:

                  (a) The Registration Statement has become effective; no stop
         order suspending the effectiveness of the Registration Statement is in
         effect, and no proceedings for such purpose are pending before or
         threatened by the Commission.

                  (b) (i) The Registration Statement and the Prospectus comply
         and, as amended or supplemented, if applicable, will comply in all
         material respects with the Securities Act and the applicable rules and
         regulations of the Commission thereunder, (ii) the Registration
         Statement, when it became effective, did not contain, as amended or
         supplemented, if applicable, will not contain any untrue statement of a
         material fact or omit to state a material fact required to be stated
         therein or necessary to make the statements therein not misleading, and
         (iii) the Prospectus does not contain and, as amended or supplemented,
         if applicable, will not contain any untrue statement of a material fact
         or omit to state a material fact necessary to make the statements
         therein, in the light of the circumstances under which they were made,
         not misleading, except that the representations and warranties set
         forth in this paragraph do not apply to statements or omissions in the
         Registration Statement or the Prospectus based upon information
         relating to any Underwriter furnished to the Company in writing by such
         Underwriter through you expressly for use therein.

                  (c) The Company has been duly incorporated, is validly
         existing as a corporation in good standing under the laws of the
         jurisdiction of its incorporation, has the corporate power and
         authority to own its property and to conduct its business as described
         in the Prospectus and is duly qualified to transact business and is in
         good standing in each jurisdiction in which the conduct of its business
         or its ownership or leasing of property requires such qualification,
         except to the extent that the failure to be so qualified or be in good
         standing would not have a material adverse effect on the Company and
         its subsidiaries, taken as a whole.

                  (d) Each subsidiary of the Company has been duly incorporated,
         is validly existing as a corporation in good standing under the laws of
         the jurisdiction of its incorporation, has the corporate power and
         authority to own its property and to conduct its business as described
         in the Prospectus and is duly qualified to transact business and is in
         good standing in each jurisdiction in which the conduct of its business
         or its ownership or leasing of property requires such qualification,
         except to the extent that the failure to be so qualified or be in good
         standing would not have a material adverse effect on the Company and
         its subsidiaries, taken as a whole; all of the issued shares of capital
         stock of each subsidiary of the Company have been duly and validly
         authorized and issued, are fully paid and non-assessable and are owned
         directly by the Company, free and clear of all liens, encumbrances,
         equities or claims.


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                  (e) The authorized capital stock of the Company conforms as to
         legal matters to the description thereof contained in the Prospectus.

                  (f) The shares of Common Stock (including the Shares to be
         sold by the Selling Shareholders) outstanding prior to the issuance of
         the Shares have been duly authorized and are validly issued, fully paid
         and non-assessable.

                  (g) The Company Shares [and the Additional Shares to be sold
         by the Company] have been duly authorized and, when issued and
         delivered in accordance with the terms of this Agreement, will be
         validly issued, fully paid and non-assessable, and the issuance of such
         Shares will not be subject to any preemptive or similar rights.

                  (h) This Agreement and each of the Irrevocable Power of
         Attorney and Custody Agreements (collectively, the "POWER OF ATTORNEY
         AND CUSTODY AGREEMENTS") by each Selling Shareholder and the Company as
         Custodian (the "CUSTODIAN"), appointing certain individuals as the
         Selling Shareholders' attorneys-in-fact to the extent set forth therein
         relating to the transactions contemplated hereby and by the
         Registration Statement have been duly authorized, executed and
         delivered by the Company.

                  (i) The execution and delivery by the Company of, and the
         performance by the Company of its obligations under, this Agreement and
         the Power of Attorney and Custody Agreements, and the issuance and
         delivery of the Company Shares [and the Additional Shares to be sold by
         the Company] will not contravene any provision of applicable law or the
         articles of incorporation or by-laws of the Company or any agreement or
         other instrument binding upon the Company or any of its subsidiaries
         that is material to the Company and its subsidiaries, taken as a whole,
         or any judgment, order or decree of any governmental body, agency or
         court having jurisdiction over the Company or any subsidiary, and no
         consent, approval, authorization or order of or qualification with any
         governmental body or agency is required for the performance by the
         Company of its obligations under this Agreement, except such as may be
         required by the securities or Blue Sky laws of the various states in
         connection with the offer and sale of the Shares.

                  (j) There has not occurred any material adverse change, or any
         development involving a prospective material adverse change, in the
         condition, financial or otherwise, or in the earnings, business or
         operations of the Company and its subsidiaries, taken as a whole, from
         that set forth in the Prospectus (exclusive of any amendments or
         supplements thereto subsequent to the date of this Agreement).

                  (k) There are no legal or governmental proceedings pending or
         threatened to which the Company or any of its subsidiaries is a party
         or to which any of the properties of the Company or any of its
         subsidiaries is subject that are required to be described in the
         Registration Statement or the Prospectus and are not so described or
         any statutes, regulations, contracts or other documents that are
         required to be described in the Registration Statement or the
         Prospectus or to be filed as exhibits to the Registration Statement
         that are not described or filed as required.


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                  (l) Each of the Company and its subsidiaries has all necessary
         consents, authorizations, approvals, orders, certificates and permits
         of and from, and has made all declarations and filings with, all
         federal, state, local and other governmental authorities, all
         self-regulatory organizations and all courts and other tribunals, to
         own, lease, license and use its properties and assets and to conduct
         its business in the manner described in the Prospectus, except to the
         extent that the failure to obtain such consents, authorizations,
         approvals, orders, certificates and permits or make such declarations
         and filings would not have a material adverse effect on the Company and
         its subsidiaries, taken as a whole. Neither the Company nor any of its
         subsidiaries has received any notice of proceedings relating to the
         revocation or modification of any such consent, authorization,
         approval, order, certificate or permit which, singly or in the
         aggregate, if the subject of an unfavorable decision, ruling or
         finding, would result in a material adverse change in the condition,
         financial or otherwise, or in the earnings, business or operations of
         the Company and its subsidiaries, taken as a whole, except as described
         in or contemplated by the Prospectus.

                  (m) Each preliminary prospectus filed as part of the
         registration statement as originally filed or as part of any amendment
         thereto, or filed pursuant to Rule 424 under the Securities Act or
         incorporated by reference into, complied when so filed in all material
         respects with the Securities Act and the rules and regulations of the
         Commission thereunder.

                  (n) The Company is not and, after giving effect to the
         offering and sale of the Shares and the application of the proceeds
         thereof as described in the Prospectus, will not be, required to
         registered as, an "investment company" as such term is defined in the
         Investment Company Act of 1940, as amended.

                  (o) The Company and its subsidiaries (i) are in compliance
         with any and all applicable foreign, federal, state and local laws and
         regulations relating to the protection of human health and safety, the
         environment or hazardous or toxic substances or wastes, pollutants or
         contaminants ("ENVIRONMENTAL LAWS"), (ii) have received all permits,
         licenses or other approvals required of them under applicable
         Environmental Laws to conduct their respective businesses and (iii) are
         in compliance with all terms and conditions of any such permit, license
         or approval, except where such noncompliance with Environmental Laws,
         failure to receive required permits, licenses or other approvals or
         failure to comply with the terms and conditions of such permits,
         licenses or approvals would not, singly or in the aggregate, have a
         material adverse effect on the Company and its subsidiaries, taken as a
         whole.

                  (p) There are no costs or liabilities associated with
         Environmental Laws (including, without limitation, any capital or
         operating expenditures required for clean-up, closure of properties or
         compliance with Environmental Laws or any permit, license or approval,
         any related constraints on operating activities and any potential
         liabilities to third parties) which would, singly or in the aggregate,
         have a material adverse effect on the Company and its subsidiaries,
         taken as a whole.


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                  (q) Subsequent to the respective dates as of which information
         is given in the Registration Statement and the Prospectus, (1) the
         Company and its subsidiaries have not incurred any material liability
         or obligation, direct or contingent, nor entered into any material
         transaction not in the ordinary course of business; (2) the Company has
         not purchased any of its outstanding capital stock, nor declared, paid
         or otherwise made any dividend or distribution of any kind on its
         capital stock; and (3) there has not been any material change in the
         capital stock, short-term debt or long-term debt of the Company and its
         consolidated subsidiaries, except in each case as described in or
         contemplated by the Prospectus.

                  (r) The Company and its subsidiaries have good and marketable
         title in fee simple to all real property and good and marketable title
         to all personal property owned by them which is material to the
         business of the Company and its subsidiaries, in each case free and
         clear of all liens, encumbrances and defects except such as are
         described in the Prospectus or such as do not materially affect the
         value of such property and do not interfere with the use made and
         proposed to be made of such property by the Company and its
         subsidiaries; and any real property and buildings held under lease by
         the Company and its subsidiaries are held by them under valid,
         subsisting and enforceable leases with such exceptions as are not
         material and do not interfere with the use made and proposed to be made
         of such property and buildings by the Company and its subsidiaries, in
         each case except as described in or contemplated by the Prospectus.

                  (s) The Company and its subsidiaries own or possess, or can
         acquire on reasonable terms, all material patents, patent rights,
         licenses, inventions, copyrights, know-how (including trade secrets and
         other unpatented and/or unpatentable proprietary or confidential
         information, systems or procedures), trademarks, service marks and
         trade names currently employed by them in connection with the business
         now operated by them, and neither the Company nor any of its
         subsidiaries has received any notice of infringement of or conflict
         with asserted rights of others with respect to any of the foregoing
         which, singly or in the aggregate, if the subject of an unfavorable
         decision, ruling or finding, would result in any material adverse
         change in the condition, financial or otherwise, or in the earnings,
         business or operations of the Company and its subsidiaries, taken as a
         whole.

                  (t) No material labor dispute with the employees of the
         Company or any of its subsidiaries exists, except as described in or
         contemplated by the Prospectus, or, to the knowledge of the Company, is
         imminent; and the Company is not aware of any existing, threatened or
         imminent labor disturbance by the employees of any of its principal
         suppliers, manufacturers or contractors that could result in any
         material adverse change in the condition, financial or otherwise, or in
         the earnings, business or operations of the Company and its
         subsidiaries, taken as a whole.

                  (u) The Company and each of its subsidiaries are insured by
         insurers of recognized financial responsibility against such losses and
         risks and in such amounts as are prudent and customary in the
         businesses in which they are engaged; neither the Company nor any such
         subsidiary has been refused any insurance coverage sought or applied
         for; and neither the Company nor any such subsidiary has any reason to
         believe


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         that it will not be able to renew its existing insurance coverage as
         and when such coverage expires or to obtain similar coverage from
         similar insurers as may be necessary to continue its business at a cost
         that would not materially and adversely affect the condition, financial
         or otherwise, or the earnings, business or operations of the Company
         and its subsidiaries, taken as a whole, except as described in or
         contemplated by the Prospectus.

                  (v) The Company and each of its subsidiaries maintain a system
         of internal accounting controls sufficient to provide reasonable
         assurance that (1) transactions are executed in accordance with
         management's general or specific authorizations; (2) transactions are
         recorded as necessary to permit preparation of financial statements in
         conformity with generally accepted accounting principles and to
         maintain asset accountability; (3) access to assets is permitted only
         in accordance with management's general or specific authorization; and
         (4) the recorded accountability for assets is compared with the
         existing assets at reasonable intervals and appropriate action is taken
         with respect to any differences.

                  (w) There are no holders of securities (debt or equity) of the
         Company or any of its subsidiaries, or holders of rights, options, or
         warrants to obtain securities of the Company or any of its
         subsidiaries, who have the right, during the 90 day period after the
         date of this Agreement to require the Company to register securities
         held by them under the Securities Act, other than holders who have
         waived such right for the 90 day period after the date of the public
         offering of the Shares and have waived their rights with respect to the
         inclusion of their securities in the Registration Statement.

                  (x) Except for shareholders who properly received notices from
         the Company relating to their registration rights with respect to the
         Registration Statement, no person has the right to require the Company
         to include any Shares or other securities for registration pursuant to
         the Registration Statement.

                  2. Representations and Warranties of the Selling Shareholders.
Each of the Selling Shareholders severally and not jointly represents and
warrants to and agrees with each of the Underwriters that:

                  (a) This Agreement has been duly authorized, executed and
         delivered by or on behalf of such Selling Shareholder.

                  (b) The execution and delivery by such Selling Shareholder of,
         and the performance by such Selling Shareholder of its obligations
         under, this Agreement and its Power of Attorney and Custody Agreement
         will not contravene any provision of applicable law, or the certificate
         of incorporation or by-laws of such Selling Shareholder (if such
         Selling Shareholder is a corporation), or the limited partnership
         agreement (if such Selling Shareholder is a limited partnership) or any
         agreement or other instrument binding upon such Selling Shareholder or
         any judgment, order or decree of any governmental body, agency or court
         having jurisdiction over such Selling Shareholder, and no consent,
         approval, authorization or order of, or qualification with, any
         governmental body or agency is required for the performance by such
         Selling


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         Shareholder of its obligations under this Agreement or the Power of
         Attorney and Custody Agreement of such Selling Shareholder, except such
         as may be required by the securities or Blue Sky laws of the various
         states in connection with the offer and sale of the Shares.

                  (c) Such Selling Shareholder has, and on the Closing Date (as
         defined below), in the case of a Firm Selling Shareholder, or an
         applicable Option Closing Date (as defined below), in the case of an
         Option Selling Shareholder, will have, valid title to the Shares to be
         sold by such Selling Shareholder and the legal right and power, and all
         required authorizations and approvals to enter into this Agreement and
         its Power of Attorney and Custody Agreement and to sell, transfer and
         deliver the Shares to be sold by such Selling Shareholder.

                  (d) The Power of Attorney and Custody Agreement of such
         Selling Shareholder has been duly authorized, executed and delivered by
         such Selling Shareholder and is a valid and binding agreement of such
         Selling Shareholder, enforceable in accordance with its terms, except
         as (i) the enforceability thereof may be limited by bankruptcy,
         insolvency or similar laws affecting creditors' rights generally and
         (ii) the availability of equitable remedies may be limited by equitable
         principles of general applicability.

                  (e) Delivery of the Shares to be sold by such Selling
         Shareholder pursuant to this Agreement will pass valid title to such
         Shares free and clear of any security interests, claims, liens,
         equities and other encumbrances.

                  (f) The information which relates specifically to such Selling
         Shareholder, as set forth under the caption "Principal and Selling
         Stockholders" (including the notes thereto), in the Registration
         Statement and Prospectus is, and on the Closing Date (as defined
         below), in the case of a Firm Selling Shareholder, or an applicable
         Option Closing Date (as defined below), in the case of an Option
         Selling Shareholder, will be, true, correct and complete, and does not,
         and on the Closing Date, in the case of a Firm Selling Shareholder, or
         such applicable Option Closing Date, in the case of an Option Selling
         Shareholder, will not, contain any untrue statement of material fact or
         omit to state any material fact necessary to make such information not
         misleading.

                  3. Agreements to Sell and Purchase. Each Firm Seller,
severally and not jointly, hereby agrees to sell to the several Underwriters,
and each Underwriter, upon the basis of the representations and warranties
herein contained, but subject to the conditions hereinafter stated, agrees,
severally and not jointly, to purchase from such Firm Seller at $    a share
(the "PURCHASE PRICE") the number of Firm Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the number of Firm Shares to be sold by such Firm Seller as the number of
Firm Shares set forth in Schedule I hereto opposite the name of such Underwriter
bears to the total number of Firm Shares.

                  On the basis of the representations and warranties contained
in this Agreement, and subject to its terms and conditions, [the Company and the
Option Selling Shareholders severally agree] to sell to the Underwriters the
Additional Shares, and the Underwriters shall


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have the right to purchase, severally and not jointly, up to    Additional
Shares at the Purchase Price. You may exercise that right on behalf of the
Underwriters in whole or from time to time in part by giving written notice of
each election to exercise the option not later than 30 days after the date of
this Agreement. Any exercise notice shall specify the number of Additional
Shares to be purchased by the Underwriters and the date on which such shares are
to be purchased. Each purchase date must be at least one business day after the
written notice is given and not earlier than the closing date for the Firm
Shares nor later than ten business days after the date of such notice.
Additional Shares may be purchased as provided in Section 5 hereof solely for
the purpose of covering over-allotments made in connection with the offering of
the Firm Shares. On each day, if any, Additional Shares are to be purchased (an
"OPTION CLOSING DATE"), each Underwriter agrees, severally and not jointly, to
purchase the number of Additional Shares (subject to such adjustments to
eliminate fractional shares as you may determine) that bears the same proportion
to the total number of Additional Shares to be purchased on such Option Closing
Date as the number of Firm Shares set forth in Schedule I hereto opposite the
name of such Underwriter bears to the total number of Firm Shares.


                  Each Seller hereby agrees that, without the prior written
consent of Morgan Stanley & Co. Incorporated ("MORGAN STANLEY") and J.P. Morgan
Securities Inc. ("JPMORGAN"), on behalf of the underwriters, it will not, for a
period of 90 days after the date of the Prospectus, (i) offer, pledge, sell,
contract to sell, sell any option or contract to purchase, purchase any option
or contract to sell, grant any option, right or warrant to purchase, lend, or
otherwise transfer or dispose of, directly or indirectly, any shares of Common
Stock or any securities convertible into or exercisable or exchangeable for
Common Stock, or (ii) enter into any swap or other arrangement that transfers to
another, in whole or in part, any of the economic consequences of ownership of
such shares of Common Stock, whether any such transaction described in clause
(i) or (ii) above is to be settled by delivery of Common Stock or such other
securities, in cash or otherwise, other than (a) the sale of the Shares to the
Underwriters pursuant to this Agreement, (b) transactions relating to shares of
Common Stock or other securities acquired in open market transactions after the
completion of the public offering of the Common Stock hereunder or (c) the
issuance by the Company of shares of Common Stock upon the exercise of an option
or warrant or the conversion of a security outstanding on the date hereof of
which the Underwriters have been advised in writing.

                  In addition, each Selling Shareholder agrees that, without the
prior written consent of Morgan Stanley and JPMorgan on behalf of the
Underwriters, it will not, for a period of 90 days after the date of the
Prospectus, make any demand for or exercise any right with respect to, the
registration of any shares of Common Stock or any security convertible into or
exercisable or exchangeable for Common Stock.


                  4. Terms of Public Offering. The Sellers are advised by you
that the Underwriters propose to make a public offering of their respective
portions of the Shares as soon after the Registration Statement and this
Agreement have become effective as in your judgment is advisable. The Sellers
are further advised by you that the Shares are to be offered to the public
initially at $    a share (the "PUBLIC OFFERING PRICE") and to certain dealers
selected by you at a price that represents a concession not in excess of $ a
share under the Public Offering Price, and that any Underwriter may allow,
and such dealers may reallow, a concession, not in excess of $      a share, to
any Underwriter or to certain other dealers.



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                  5. Payment and Delivery. Payment for the Firm Shares to be
sold by each Firm Seller shall be made by wire transfers to the Company's
account and the Custodian's account (for the benefit of the Firm Selling
Shareholders) in federal funds or other funds immediately available in New York
City against delivery of such Firm Shares for the respective accounts of the
several Underwriters at the office of Shearman & Sterling, 599 Lexington Avenue,
New York, New York 10022 at 9:00 a.m., New York City time, on     , 2002, or at
such other time on the same or such other date, not later than     , 2002, as
shall be designated in writing by you. The time and date of such payment are
hereinafter referred to as the "CLOSING DATE".



                  Payment for any Additional Shares shall be made by wire
transfer payable to the [Company's and the Custodian's account (for the benefit
of the Option Selling Shareholders)] in federal funds or other funds immediately
available in New York City against delivery of such Additional Shares for the
respective accounts of the several U.S. Underwriters at the office of Shearman &
Sterling, 599 Lexington Avenue, New York, New York 10022 at 9:00 a.m., New York
City time, on the date specified in the corresponding notice described in
Section 3 or at such other time on the same or on such other date, in any event
not later than     , 2002, as shall be designated in writing by you.


                  The Firm Shares and Additional Shares shall be registered
in such names and in such denominations as you shall request in writing not
later than one full business day prior to the Closing Date or the applicable
Option Closing Date, as the case may be. The Firm Shares and Additional Shares
shall be delivered to you on the Closing Date or an Option Closing Date, as the
case may be, for the respective accounts of the several Underwriters, with any
transfer taxes payable in connection with the transfer of the Shares to the
Underwriters duly paid, against payment of the Purchase Price therefor.


                  6. Conditions to the Underwriters' Obligations. The
obligations of the Sellers to sell the Shares to the Underwriters and the
several obligations of the Underwriters to purchase and pay for the Shares are
subject to the condition that the Registration Statement shall have become
effective not later than     (New City time) on the date hereof.


                  The several obligations of the Underwriters are subject to the
following further conditions:

                  (a) Subsequent to the execution and delivery of this Agreement
         and prior to the Closing Date:

                           (i) there shall not have occurred any downgrading,
                  nor shall any notice have been given of any intended or
                  potential downgrading or of any review for a possible change
                  that does not indicate the direction of the possible change,
                  in the rating accorded any of the Company's securities by any
                  "nationally recognized statistical rating organization" as
                  such term is defined for purposes of Rule 436(g)(2) under the
                  Securities Act, and

                           (ii) there shall not have occurred any change, or any
                  development involving a prospective change, in the condition,
                  financial or otherwise, or in the earnings, business or
                  operations, of the Company and its subsidiaries, taken as a


                                       10
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                  whole, from that set forth in the Prospectus (exclusive of any
                  amendments or supplements thereto subsequent to the date of
                  this Agreement), that, in your judgment, is material and
                  adverse and makes it, in your judgment, impracticable to
                  market the Shares on the terms and in the manner contemplated
                  in the Prospectus.

                  (b) The Underwriters shall have received on the Closing Date a
         certificate, dated the Closing Date and signed by an executive officer
         of the Company, to the effect set forth in clause (a)(i) above and to
         the effect that the representations and warranties of the Company
         contained in this Agreement are true and correct as of the Closing Date
         and that the Company has complied with all of the agreements and
         satisfied all of the conditions on its part to be performed or
         satisfied hereunder on or before the Closing Date.

                  The officer signing and delivering such certificate may rely
         upon the best of his knowledge as to proceedings threatened.

                  (c) No stop order suspending the effectiveness of the
         Registration Statement shall be in effect and no proceedings for such
         purpose shall be pending before or, to the knowledge of the Company or
         the Underwriters, threatened by the Commission.

                  (d) You shall have received on the Closing Date an opinion of
         Barrett & McNagny, counsel for the Company, dated the Closing Date, in
         the form attached hereto as Exhibit A.

                  The opinion of Barrett & McNagny shall be rendered to you at
         the request of the Company and shall so state therein.

                  (e) You shall have received on the Closing Date an opinion of
         each of the counsel for the Selling Shareholders listed on Schedule IV
         hereto, dated the Closing Date, in the form attached hereto as Exhibit
         B.

                  The opinions of such counsel shall be rendered to the
         Underwriters at the request of the Selling Shareholders and shall so
         state therein.

                  (f) You shall have received on the Closing Date an opinion of
         Shearman & Sterling, counsel for the Underwriters, dated the Closing
         Date, with respect to the Registration Statement and the Prospectus and
         such other related matters as you may reasonably request, and such
         counsel shall have received such documents and information as they may
         reasonably request to enable them to pass upon such matters.

                  (g) You shall have received, on each of the date hereof and
         the Closing Date, a letter dated the date hereof and the Closing Date,
         as the case may be, in form and substance satisfactory to you, from
         Ernst & Young LLP, independent public accountants, containing
         statements and information of the type ordinarily included in
         accountants' "comfort letters" to underwriters with respect to the
         financial statements and certain financial information contained in the
         Registration Statement and the Prospectus;


                                       11
<PAGE>
         provided that the letter delivered on the Closing Date shall use a
         "cut-off date" not earlier than the date hereof.

                  (h) The "lock-up" agreements, each substantially in the form
         of Exhibit C hereto between you, certain shareholders, officers and
         directors of the Company relating to sales and certain other
         dispositions of shares of Common Stock or any securities convertible
         into or exercisable or exchangeable for such Common Stock, delivered to
         you on or before the date hereof, shall be in full force and effect on
         the Closing Date.

                  (i) You shall have received on the Closing Date certificates
         dated the Closing Date and signed by the Selling Shareholders or by
         attorneys-in-fact of the Selling Shareholders, to the effect that the
         representations and warranties of each such Selling Shareholder
         contained in this Agreement are true and correct as of the Closing Date
         and that each such Selling Shareholder has complied with all of the
         agreements and satisfied all of the conditions on its part to be
         performed or satisfied hereunder on or before the Closing Date.

                  (j) The Company shall have complied with the provisions of
         Section 7(a) hereof with respect to the furnishing of Prospectuses on
         the business day next succeeding the date of this Agreement, in such
         quantities as you shall have reasonably requested.

                  (k) The Shares shall have been approved for quotation on the
         Nasdaq National Market System by the National Association of Securities
         Dealers, Inc. (the "NASD").

                  (l) You shall have received such other documents and
         certificates as are reasonably requested by you or your counsel.

                  The several obligations of the Underwriters to purchase
Additional Shares hereunder are subject to the delivery to you on the applicable
Option Closing Date of such documents as you may reasonably request with respect
to the good standing of the Company, the due authorization and issuance of the
Additional Shares to be sold on such Option Closing Date and other matters
related to the issuance of such Additional Shares.

                  7. Covenants of the Company. In further consideration of the
agreements of the Underwriters herein contained, the Company covenants with each
Underwriter as follows:

                  (a) To furnish to you, without charge, five signed copies of
         the Registration Statement (including exhibits thereto) and for
         delivery to each other Underwriter a conformed copy of the Registration
         Statement (without exhibits thereto) and, to furnish to you in New York
         City, without charge, prior to 10:00 a.m., New York City time, on the
         business day next succeeding the date of this Agreement during the
         period mentioned in Section 7(c) below, as many copies of the
         Prospectus and any supplements and amendments thereto or to the
         Registration Statement as you may reasonably request.

                  (b) Before amending or supplementing the Registration
         Statement or the Prospectus, to furnish to you a copy of each such
         proposed amendment or supplement and not to file any such proposed
         amendment or supplement to which you reasonably


                                       12
<PAGE>
         object; and to file with the Commission within the applicable period
         specified in Rule 424(b) under the Securities Act any prospectus
         required to be filed pursuant to such Rule.

                  (c) If, during such period after the first date of the public
         offering of the Shares as in the opinion of your counsel the Prospectus
         is required by law to be delivered in connection with sales by an
         Underwriter or dealer, any event shall occur or condition exist as a
         result of which it is necessary to amend or supplement the Prospectus
         in order to make the statements therein, in the light of the
         circumstances when the Prospectus is delivered to a purchaser, not
         misleading, or if, in the opinion of your counsel, it is necessary to
         amend or supplement the Prospectus to comply with applicable law,
         forthwith to prepare, file with the Commission and furnish, at its own
         expense, to the Underwriters and to the dealers (whose names and
         addresses you will furnish to the Company) to which Shares may have
         been sold by you on behalf of the Underwriters and to any other dealers
         upon request, either amendments or supplements to the Prospectus so
         that the statements in the Prospectus as so amended or supplemented
         will not, in the light of the circumstances when the Prospectus is
         delivered to a purchaser, be misleading or so that the Prospectus, as
         amended or supplemented, will comply with law.

                  (d) To endeavor to qualify the Shares for offer and sale under
         the securities or Blue Sky laws of such jurisdictions as you shall
         reasonably request and to pay all expenses (including fees and
         disbursements of counsel) in connection with such qualification and in
         connection with any review of the offering of the Shares by the NASD.

                  (e) If the Company elects to rely on Rule 462(b) under the
         Securities Act, the Company shall file a Rule 462(b) Registration
         Statement with the Commission in compliance with Rule 462(b) under the
         Securities Act no later than the earlier of (i) 10:00 p.m. Eastern time
         on the date hereof and (ii) the time confirmations are sent or given,
         as specified by Rule 462(b)(2) under the Securities Act, and shall pay
         the applicable fees in accordance with Rule 111 under the Securities
         Act.

                  (f) To make generally available to the Company's security
         holders and to you as soon as practicable, an earning statement
         covering such twelve-month period ending September 30, 2003 that
         satisfies the provisions of Section 11(a) of the Securities Act and the
         rules and regulations of the Commission thereunder.

                  (g) To use the net proceeds received by the Company from the
         sale of the Shares hereunder in the manner specified in the Prospectus
         under the caption "Use of Proceeds".

                  (h) Whether or not the transactions contemplated in this
         Agreement are consummated or this Agreement is terminated, to pay or
         cause to be paid all expenses incident to the performance of its and
         the Selling Shareholders (except to the extent set forth in Section
         8(a) below) obligations under this Agreement, including: (i) the fees,
         disbursements and expenses of the Company's counsel and the Company's
         accountants in connection with the registration and delivery of the
         Shares under the Securities Act and all other fees or expenses in
         connection with the preparation and filing of the Registration


                                       13
<PAGE>
         Statement, any preliminary prospectus, the Prospectus and amendments
         and supplements to any of the foregoing, including all printing costs
         associated therewith, and the mailing and delivering of copies thereof
         to the Underwriters and dealers, in the quantities hereinabove
         specified, (ii) all costs and expenses related to the transfer and
         delivery of the Shares to the Underwriters, including any transfer or
         other taxes payable thereon, (iii) the cost of printing or producing
         any preliminary or supplementary Blue Sky or Legal Investment
         memorandum in connection with the offer and sale of the Shares under
         state securities laws and all expenses in connection with the
         qualification of the Shares for offer and sale under state securities
         laws as provided in Section 7(d) hereof, including filing fees and the
         reasonable fees and disbursements of counsel for the Underwriters in
         connection with such qualification and in connection with any
         preliminary or supplementary Blue Sky or Legal Investment memorandum,
         (iv) all filing fees and the reasonable fees and disbursements of
         counsel to the Underwriters incurred in connection with the review and
         qualification of the offering of the Shares by the NASD, (v) all fees
         and expenses in connection with the preparation and filing of the
         registration statement on Form 8-A relating to the Common Stock and all
         costs and expenses incident to quoting the Shares on the Nasdaq
         National Market System, (vi) the cost of printing certificates
         representing the Shares, (vii) the costs and charges of any transfer
         agent, registrar or depositary, (viii) the costs and expenses of the
         Company relating to investor presentations on any "road show"
         undertaken in connection with the marketing of the offering of the
         Shares, including, without limitation, expenses associated with the
         production of road show slides and graphics, fees and expenses of any
         consultants engaged in connection with the road show presentations with
         the prior approval of the Company, travel and lodging expenses of the
         representatives and officers of the Company and any such consultants,
         and the cost of any aircraft chartered in connection with the road
         show, (ix) the document production charges and expenses associated with
         printing this Agreement and (x) all other costs and expenses incident
         to the performance of the obligations of the Company hereunder for
         which provision is not otherwise made in this Section. It is
         understood, however, that except as provided in this Section, Section 9
         entitled "Indemnity and Contribution" and the last paragraph of Section
         11 below, the Underwriters will pay all of their costs and expenses,
         including fees and disbursements of their counsel, stock transfer taxes
         payable on resale of any of the Shares by them, and any advertising
         expenses connected with any offers they may make.

                  8. Covenants of the Selling Shareholders. In further
consideration of the agreements of the Underwriters herein contained, each of
the Selling Shareholders severally and not jointly covenants as follows:

                  (a) Whether or not the transactions contemplated hereby are
         consummated or this Agreement is terminated, to pay or cause to be paid
         (i) all taxes, if any, on the transfer and sale of the Shares being
         sold by such Selling Shareholder and (ii) all expenses incident to the
         delivery of the Shares and the fees and expenses of counsel and
         accountants for such Selling Shareholder; provided that the provisions
         of this Section 8(a) and Section 7(h) shall not in any way affect any
         agreement between the Company and the Selling Shareholders with respect
         to the payment of expenses.


                                       14
<PAGE>
                  (b) Such Selling Shareholder has carefully reviewed the
         Registration Statement and will carefully review, promptly upon
         receipt, each amendment thereto provided to such Selling Shareholder.
         At any time during the period from the date hereof through the Closing
         Date or an Option Closing Date, in the case of an Option Selling
         Shareholder, if there is any change in the information in the
         Registration Statement as set forth under the caption "Principal and
         Selling Shareholders" (including the notes thereto) that specifically
         relate to such Selling Shareholder, such Selling Shareholder will
         immediately notify the Company of such change.

                  (c) Such Selling Shareholder shall cooperate fully with the
         Company in supplying such information relating to such Selling
         Shareholder and the Shares as the Company may reasonably request for
         use in preparation of the Registration Statement and all other
         documents reasonably necessary or desirable in connection with the
         offering of Shares. In addition, such Selling Shareholder shall furnish
         to the Company (or, at the Company's request, to the Underwriters or
         other parties) such further certificates and documents confirming the
         representations and warranties contained herein, or with respect to
         related matters, as the Company may reasonably request.

                  9. Indemnity and Contribution. (a) The Company agrees to
indemnify and hold harmless each Underwriter and each person, if any, who
controls any Underwriter within the meaning of either Section 15 of the
Securities Act or Section 20 of the Securities Exchange Act of 1934, as amended
(the "EXCHANGE ACT"), and each affiliate of any Underwriter within the meaning
of Rule 405 under the Securities Act, from and against any and all losses,
claims, damages and liabilities (including, without limitation, any legal or
other expenses reasonably in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
except insofar as such losses, claims, damages or liabilities are caused by any
such untrue statement or omission or alleged untrue statement or omission based
upon information relating to any Underwriter furnished to the Company in writing
by such Underwriter through you expressly for use therein; provided, however,
that the foregoing indemnity agreement with respect to any preliminary
prospectus shall not inure to the benefit of any Underwriter from whom the
person asserting such losses, claims, damages or liabilities purchased Shares,
or any person controlling such Underwriter, if a copy of the Prospectus (as then
amended or supplemented if the Company shall have furnished any amendments or
supplements thereto) was not sent or given by or on behalf of such Underwriter
to such person, if required by law so to have been delivered, at or prior to the
written confirmation of the sale of the Shares to such person, and if the
Prospectus (as so amended or supplemented) would have cured the defect giving
rise to such losses, claims, damages or liabilities.

                  (b) Each Selling Shareholder agrees, severally and not
jointly, to indemnify and hold harmless the Company, its directors, its officers
who sign the Registration Statement, each Underwriter and each person, if any,
who controls the Company or any Underwriter within the meaning of either Section
15 of the Securities Act or Section 20 of the Exchange Act and


                                       15
<PAGE>
each affiliate of any Underwriter within the meaning of Rule 405 under the
Securities Act, from and against any and all losses, claims, damages and
liabilities (including, without limitation, any legal or other expenses
reasonably incurred in connection with defending or investigating any such
action or claim) caused by any untrue statement or alleged untrue statement of a
material fact contained in the Registration Statement or any amendment thereof,
any preliminary prospectus or the Prospectus (as amended or supplemented if the
Company shall have furnished any amendments or supplements thereto), or caused
by any omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not misleading,
but only with reference to information relating to such Selling Shareholder, as
set forth under the caption "Principal and Selling Stockholders" (including the
notes thereto) in the Prospectus and Registration Statement or any amendment or
supplement thereto; provided, however, that the foregoing indemnity agreement
with respect to any preliminary prospectus shall not inure to the benefit of any
Underwriter from whom the person asserting such losses, claims, damages or
liabilities purchased Shares, or any person controlling such Underwriter, if a
copy of the Prospectus (as then amended or supplemented if the Company shall
have furnished any amendments or supplements thereto) was not sent or given by
or on behalf of such Underwriter to such person, if required by law so to have
been delivered, at or prior to the written confirmation of the sale of the
Shares to such person, and if the Prospectus (as so amended or supplemented)
would have cured the defect giving rise to such losses, claims, damages or
liabilities; provided, further, that with respect to any amount due an
indemnified person under this paragraph (b), each Selling Shareholder shall be
liable only to the extent of the net proceeds received by such Selling
Shareholder from the sale of such Selling Shareholder's Shares.

                  (c) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Company, its directors, its officers who sign
the Registration Statement and each person, if any, who controls the Company
within the meaning of either Section 15 of the Securities Act or Section 20 of
the Exchange Act to the same extent as the foregoing indemnity from the Company
to such Underwriter, but only with reference to information relating to such
Underwriter furnished to the Company in writing by such Underwriter through you
expressly for use in the Registration Statement, any preliminary prospectus, the
Prospectus or any amendments or supplements thereto

                  (d) Each Underwriter agrees, severally and not jointly, to
indemnify and hold harmless the Selling Shareholders and each person, if any,
who controls the Selling Shareholders within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act to the same extent as the
foregoing indemnity from the Selling Shareholders to such Underwriter, but only
with reference to information relating to such Underwriter furnished to the
Company in writing by such Underwriter through you expressly for use in the
Registration Statement, any preliminary prospectus, the Prospectus or any
amendments or supplements thereto.

                  (e) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in respect of which
indemnity may be sought pursuant to subsection (a), (b), (c), or (d) of this
Section 9, such person (the "INDEMNIFIED PARTY") shall promptly notify the
person against whom such indemnity may be sought (the "INDEMNIFYING PARTY") in
writing and the indemnifying party, upon request of the indemnified party, shall
retain counsel reasonably satisfactory to the indemnified party to represent the
indemnified party and


                                       16
<PAGE>
any others the indemnifying party may designate in such proceeding and shall pay
the fees and disbursements of such counsel related to such proceeding. In any
such proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless (i) the indemnifying party and the indemnified
party shall have mutually agreed to the retention of such counsel or (ii) the
named parties to any such proceeding (including any impleaded parties) include
both the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all such indemnified parties and that all such fees
and expenses shall be reimbursed as they are incurred. Such firm shall be
designated in writing by Morgan Stanley, in the case of parties indemnified
pursuant to Section 9(a) or (b), by the Company, in the case of parties
indemnified pursuant to Section 9(c), and by a majority of the Selling
Shareholders, in the case of parties indemnified pursuant to Section 9(d). The
indemnifying party shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such consent or if
there be a final judgment for the plaintiff, the indemnifying party agrees to
indemnify the indemnified party from and against any loss or liability by reason
of such settlement or judgment. Notwithstanding the foregoing sentence, if at
any time an indemnified party shall have requested an indemnifying party to
reimburse the indemnified party for fees and expenses of counsel as contemplated
by the second and third sentences of this paragraph, the indemnifying party
agrees that it shall be liable for any settlement of any proceeding effected
without its written consent if (i) such settlement is entered into more than 30
days after receipt by such indemnifying party of the aforesaid, request and (ii)
such indemnifying party shall not have reimbursed the indemnified party in
accordance with such request prior to the date of such settlement. No
indemnifying party shall, without the prior written consent of the indemnified
party, effect any settlement of any pending or threatened proceeding in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party, unless such settlement
includes an unconditional release of such indemnified party from all liability
on claims that are the subject matter of such proceeding.

                  (f) To the extent the indemnification provided for in
subsection (a), (b), (c) or (d) of this Section 9 is unavailable to an
indemnified party or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party under such
subsection, in lieu of indemnifying such indemnified party thereunder, shall
contribute to the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand from the offering of the Shares or (ii) if the allocation provided by
clause (i) above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in clause (i)
above but also the relative fault of the indemnifying party or parties on the
one hand and of the indemnified party or parties on the other hand in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Sellers on the one hand and the Underwriters
on the other hand in connection with the offering of the Shares shall be deemed
to be in the same respective proportions as the net proceeds from the


                                       17

<PAGE>
offering of the Shares (before deducting expenses) received by each Seller and
the total underwriting discounts and commissions received by the Underwriters,
in each case as set forth in the table on the cover of the Prospectus, bear to
the aggregate Public Offering Price of the Shares. The relative fault of a
Seller and of the Underwriters shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by such Seller or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The Underwriters' respective obligations to contribute
pursuant to this Section 9 are several in proportion to the respective number of
Shares they have purchased hereunder, and not joint. In no event shall the
liability of a Selling Shareholder under this Section 9(f) exceed the amount
that such Selling Shareholder would have been required to pay under Section 9(b)
had such indemnification been held to be available thereunder.

            (g) The Sellers and the Underwriters agree that it would not be just
or equitable if contribution pursuant to this Section 9 were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation that does not take account of the
equitable considerations referred to in subsection (f) of this Section 9. The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages and liabilities referred to in subsection (f) of this Section 9
shall be deemed to include, subject to the limitations set forth above, any
legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Section 9, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the Shares underwritten by it and distributed to the public were
offered to the public exceeds the amount of any damages that such Underwriter
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. The remedies provided for in this Section 9 are
not exclusive and shall not limit any rights or remedies which may otherwise be
available to any indemnified party at law or in equity.

            (h) The indemnity and contribution provisions contained in this
Section 9 and the representations, warranties and other statements of the
Company and the Selling Shareholders contained in this Agreement shall remain
operative and in full force and effect regardless of (i) any termination of this
Agreement, (ii) any investigation made by or on behalf of any Underwriter, any
person controlling any Underwriter or any affiliate of any Underwriter, any
Selling Shareholder or any person controlling any Selling Shareholder, or by or
on behalf of the Company, its officers or directors or any person controlling
the Company and (iii) acceptance of and payment for any of the Shares.

            10. Termination. The Underwriters may terminate this Agreement by
notice given by you to the Company, if after the execution and delivery of this
Agreement and prior to the Closing Date (i) trading generally shall have been
suspended or materially limited on, or by, as the case may be, any of the New
York Stock Exchange, the American Stock Exchange, the Nasdaq National Market,
the Chicago Board of Options Exchange, the Chicago Mercantile Exchange or the
Chicago Board of Trade, (ii) trading of any securities of the Company shall


                                       18
<PAGE>
have been suspended on any exchange or in any over-the-counter market, (iii) a
material disruption in securities settlement, payment or clearance services in
the United States shall have occurred, (iv) any moratorium on commercial banking
activities shall have been declared by Federal or New York State authorities or
(v) there shall have occurred any outbreak or escalation of hostilities, or any
change in financial markets or any calamity or crisis that, in your judgment, is
material and adverse and which, singly or together with any other event
specified in this clause (v), makes it, in your judgment, impracticable or
inadvisable to proceed with the offer, sale or delivery of the Shares on the
terms and in the manner contemplated in the Prospectus.

            11.   Effectiveness; Defaulting Underwriters.  This Agreement
shall become effective upon the execution and delivery hereof by the parties
hereto.

            If, on the Closing Date or an Option Closing Date, as the case may
be, any one or more of the Underwriters shall fail or refuse to purchase Shares
that it has or they have agreed to purchase hereunder on such date, and the
aggregate number of Shares which such defaulting Underwriter or Underwriters
agreed but failed or refused to purchase is not more than one-tenth of the
aggregate number of the Shares to be purchased on such date, the other
Underwriters shall be obligated severally in the proportions that the number of
Firm Shares set forth opposite their respective names in Schedule I bears to the
aggregate number of Firm Shares set forth opposite the names of all such
nondefaulting Underwriters, or in such other proportions as you may specify, to
purchase the Shares which such defaulting Underwriter or Underwriters agreed but
failed or refused to purchase on such date; provided that in no event shall the
number of Shares that any Underwriter has agreed to purchase pursuant to this
Agreement be increased pursuant to this Section 11 by an amount in excess of
one-ninth of such number of Shares without the written consent of such
Underwriter. If, on the Closing Date, any Underwriter or Underwriters shall fail
or refuse to purchase Firm Shares and the aggregate number of Firm Shares with
respect to which such default occurs is more than one-tenth of the aggregate
number of Firm Shares to be purchased, and arrangements satisfactory to you and
the Company for the purchase of such Shares are not made within 36 hours after
such default, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter or the Company. In any such case either you or
the Company shall have the right to postpone the Closing Date, but in no event
for longer than seven days, in order that the required changes, if any, in the
Registration Statement and in the Prospectus or in any other documents or
arrangements may be effected. If, on an Option Closing Date, any Underwriter or
Underwriters shall fail or refuse to purchase Additional Shares and the
aggregate number of Additional Shares with respect to which such default occurs
is more than one-tenth of the aggregate number of Additional Shares to be
purchased on such Option Closing Date, the non-defaulting Underwriters shall
have the option to (i) terminate their obligation hereunder to purchase the
Additional Shares to be sold on such Option Closing Date or (ii) purchase not
less than the number of Additional Shares that such non-defaulting Underwriters
would have been obligated to purchase in the absence of such default. Any action
taken under this paragraph shall not relieve any defaulting Underwriter from
liability in respect of any default of such Underwriter under this Agreement.

            If this Agreement shall be terminated by the Underwriters, or any of
them, because of any failure or refusal on the part of any Seller to comply with
the terms or to fulfill any of the conditions of this Agreement, or if for any
reason any Seller shall be unable to perform its obligations under this
Agreement, the Company will reimburse the Underwriters or


                                       19
<PAGE>
such Underwriters as have so terminated this Agreement with respect to
themselves, severally, for all out-of-pocket expenses (including the fees and
disbursements of their counsel) reasonably incurred by such Underwriters in
connection with this Agreement or the offering contemplated hereunder.

            12.   Counterparts.  This Agreement may be signed in two or more
counterparts, each of which shall be an original, with the same effect as if
the signatures thereto and hereto were upon the same instrument.

            13.   Applicable Law.  This Agreement shall be governed by and
construed in accordance with the internal laws of the State of New York.


                                       20
<PAGE>
            14.   Headings.  The headings of the sections of this Agreement
have been inserted for convenience of reference only and shall not be deemed
a part of this Agreement.


                                      Very truly yours,


                                           STEEL DYNAMICS, INC.

                                           By:
                                                 -------------------------------
                                           Name:
                                           Title:




                                      The Selling Shareholders named in
                                      Schedules II and III hereto, acting
                                      severally


                                           By:
                                                 -------------------------------
                                           Attorney-in-Fact
                                           Name:
                                           Title:


                                       21
<PAGE>
Accepted as of the date hereof


MORGAN STANLEY & CO. INCORPORATED
J.P. MORGAN SECURITIES INC.




Acting severally on behalf of themselves
            and the several Underwriters

            named in Schedule I hereto.

By Morgan Stanley & Co.
            Incorporated

By
   --------------------------------------
    Name:
    Title:


                                       22
<PAGE>
                                   SCHEDULE I

                                  Underwriters


<TABLE>
<CAPTION>
                                                             Number of
                                                            Firm Shares
Underwriter                                               To Be Purchased
- -----------                                               ---------------
<S>                                                       <C>
Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.



                                                           ---------------
Total Firm Shares                                                       --
</TABLE>


                                       23
<PAGE>
                                   SCHEDULE II

                            Firm Selling Shareholders


<TABLE>
<CAPTION>
                                                                Number of
                                                               Firm Shares
Firm Selling Shareholder                                       To Be Sold
- ------------------------                                       ----------
<S>                                                            <C>












Total .................................................              --
</TABLE>


                                       24
<PAGE>
                                  SCHEDULE III

                           Option Selling Shareholders


<TABLE>
<CAPTION>
                                                                 Number of
                                                                 Additional
Option Selling Shareholder                                    Shares To Be Sold
- --------------------------                                    -----------------
<S>                                                            <C>





                                                                   -----------
Total .................................................                     --
</TABLE>


                                  SCHEDULE IV

                       Counsel to the Selling Shareholders

<TABLE>
<CAPTION>
          Selling Shareholder                          Counsel
          -------------------                          -------
<S>                                                    <C>


</TABLE>


                                       25
<PAGE>
                                    EXHIBIT A


            Pursuant to Section 6(d) of the Underwriting Agreement, Barrett &
McNagny, counsel for the Company, shall furnish an opinion to the effect that:

            (i) the Company has been duly incorporated, is validly existing as a
      corporation in good standing under the laws of the jurisdiction of its
      incorporation, has the corporate power and authority to own its property
      and to conduct its business as described in the Prospectus and is duly
      qualified to transact business and is in good standing in each
      jurisdiction in which the conduct of its business or its ownership or
      leasing of property requires such qualification, except to the extent that
      the failure to be so qualified or be in good standing would not have a
      material adverse effect on the Company and its subsidiaries taken as a
      whole;

            (ii) each subsidiary of the Company has been duly incorporated, is
      validly existing as a corporation in good standing under the laws of the
      jurisdiction of its incorporation, has the corporate power and authority
      to own its property and to conduct its business as described in the
      Prospectus and is duly qualified to transact business and is in good
      standing in each jurisdiction in which the conduct of its business or its
      ownership or leasing of property requires such qualification, except to
      the extent that the failure to be so qualified or be in good standing
      would not have a material adverse effect on the Company and its
      subsidiaries taken as a whole;

            (iii) the authorized capital stock of the Company conforms as to
      legal matters to the description thereof contained in the Prospectus;

            (iv) the shares of Common Stock (including the Shares to be sold by
      the Selling Shareholders) outstanding prior to the issuance of the Company
      Shares have been duly authorized and are validly issued, fully paid and
      non-assessable;

            (v) all of the issued shares of capital stock of each subsidiary of
      the Company have been duly and validly authorized and issued, are fully
      paid and non-assessable and are owned directly by the Company, free and
      clear of all liens, encumbrances, equities or claims;

            (vi) the Company Shares [and the Additional Shares to be sold by the
      Company] have been duly authorized and, when issued and delivered in
      accordance with the terms of the Underwriting Agreement, will be validly
      issued, fully paid and non-assessable, and the issuance of such Shares
      will not be subject to any preemptive or similar rights;

            (vii) the Underwriting Agreement and each of the Irrevocable Power
      of Attorney and Custody Agreements (collectively, the "POWER OF ATTORNEY
      AND CUSTODY AGREEMENTS"), each dated the date hereof, by each Selling
      Shareholder and the Company as Custodian, appointing certain individuals
      as the Selling Shareholders' attorneys-in-fact to the extent set forth
      therein relating to the transactions contemplated hereby and by the


                                       26
<PAGE>
      Registration Statement have been duly authorized, executed and delivered
      by the Company;

            (viii) the execution and delivery by the Company of, and the
      performance by the Company of its obligations under, the Underwriting
      Agreement, the Power of Attorney and Custody Agreements, and the issuance
      and delivery of the Company Shares [and the Additional Shares to be sold
      by the Company] will not contravene any provision of applicable law or the
      articles of incorporation or by-laws of the Company or, to the best of
      such counsel's knowledge, any agreement or other instrument binding upon
      the Company or any of its subsidiaries that is material to the Company and
      its subsidiaries, taken as a whole, or, to the best of such counsel's
      knowledge, any judgment, or decree of any governmental body, agency or
      court having jurisdiction over the Company or any subsidiary, and no
      consent, approval, authorization or order of or qualification with any
      governmental body or agency is required for the performance by the Company
      of its obligations under the Underwriting Agreement, except such as may be
      required by the securities or Blue Sky laws of the various states in
      connection with the offer and sale of the Shares;


            (ix) the statements (1) in the Prospectus under the captions "Risk
      Factors -- We face litigation risks in connection with our terminated
      Thailand advisory transaction," "Risk Factors -- Environmental regulation
      imposes substantial costs and limitations on our operations," "Business --
      Environmental Matters," "Business -- Legal Proceedings," "Related Party
      Transactions," "Description of Certain Indebtedness" and "Underwriters",
      (2) in the Annual Report on Form 10-K in Item 1. Business under the
      captions "Risk Factors -- We face litigation risks in connection with our
      terminated Thailand advisory transaction" and " -- Environmental
      regulation imposes substantial costs and limitations on our operations,"
      "Business -- Environmental Matters," in Item 3. Legal Proceedings and in
      Item 13. Certain Relationships and Related Party Transactions", (3) in the
      Quarterly Report on From 10-Q in Item 1. Legal Proceedings, (4) in the
      Current Report on Form 8-K in Item 5. Other Events and (5) in the
      Registration Statement in Items 14 and 15, in each case insofar as such
      statements constitute summaries of the legal matters, documents or
      proceedings referred to therein, fairly present the information called for
      with respect to such legal matters, documents and proceedings and fairly
      summarize the matters referred to therein;



            (x) The statements in the Prospectus under the caption "Certain
      United States Federal Tax Consequences For Non-United States Holders,"
      insofar as such statements constitute a summary of the United States
      federal tax laws referred to therein, are accurate and fairly summarize in
      all material respects the United States federal tax laws referred to
      therein;


            (xi) after due inquiry, such counsel does not know of any legal or
      governmental proceedings pending or threatened to which the Company or any
      of its subsidiaries is a party or to which any of the properties of the
      Company or any of its subsidiaries is subject that are required to be
      described in the Registration Statement or the Prospectus and are not so
      described or of any statutes, regulations, contracts or other


                                       27
<PAGE>
      documents that are required to be described in the Registration Statement
      or the Prospectus or to be filed as exhibits to the Registration Statement
      that are not described or filed as required;

            (xii) After due inquiry, to the best of our knowledge, the Company
      and its subsidiaries (i) are in compliance with any and all applicable
      foreign, federal, state and local laws and regulations relating to the
      protection of human health and safety, the environment or hazardous or
      toxic substances or wastes, pollutants or contaminants ("ENVIRONMENTAL
      LAWS"), (ii) have received all permits, licenses or other approvals
      required of them under applicable Environmental Laws to conduct their
      respective businesses and (iii) are in compliance with all terms and
      conditions of any such permit, license or approval, except where such
      noncompliance with Environmental Laws, failure to receive required
      permits, licenses or other approvals or failure to comply with the terms
      and conditions of such permits, licenses or approvals would not, singly or
      in the aggregate, have a material adverse effect on the Company and its
      subsidiaries, taken as a whole;


            (xiii) the Company is not and, after giving effect to the offering
      and sale of the Shares and the application of the proceeds thereof as
      described in the Prospectus, will not be, required to be registered as an
      "investment company" as such term is defined in the Investment Company Act
      of 1940, as amended;


            (xiv) the Registration Statement and Prospectus (except for
      financial statements and schedules included therein as to which such
      counsel need not express any opinion) comply as to form in all material
      respects with the Securities Act and the rules and regulations of the
      Commission thereunder;

            (xv) nothing has come to the attention of such counsel that causes
      such counsel to believe that (A) the Registration Statement or the
      Prospectus (except for the financial statements and financial schedules
      and other financial and statistical data included therein, as to which
      such counsel need not express any belief) do not comply as to form in all
      material respects with the requirements of the Securities Act and the
      applicable rules and regulations of the Commission thereunder, (B) the
      Registration Statement or the prospectus included therein (except for the
      financial statements and financial schedules and other financial and
      statistical data included therein, as to which such counsel need not
      express any belief) at the time the Registration Statement became
      effective contained an untrue statement of a material fact or omitted to
      state a material fact required to be stated therein or necessary to make
      the statements therein not misleading or (C) the Prospectus (except for
      the financial statements and financial schedules and other financial and
      statistical data included therein, as to which such counsel need not
      express any belief) as of its date or as of the Closing Date contained or
      contains an untrue statement of a material fact or omitted or omits to
      state a material fact necessary in order to make the statements therein,
      in the light of the circumstances under which they were made, not
      misleading; and


                                       28
<PAGE>
            (xvi) each of the Company and its subsidiaries has all necessary
      certificates, orders, permits, licenses, authorizations, consents and
      approvals of and from, and has made all declarations and filings with, all
      federal, state and local governmental authorities, all self-regulatory
      organizations and all courts and tribunals, to own, lease, license and use
      its properties and assets and to conduct its business in the manner
      described in the Prospectus, and neither the Company nor any of its
      subsidiaries has received any notice of proceedings relating to revocation
      or modification of any such certificates, orders, permits, licenses,
      authorizations, consents or approvals, nor is the Company or any of its
      subsidiaries in violation of, or in default under, any federal, state and
      local law, regulation, rule, decree, order or judgment applicable to the
      Company or any of its subsidiaries the effect of which, singly or in the
      aggregate, would have a material adverse effect on the prospects,
      condition, financial or otherwise, or in the earnings, business or
      operations of the Company and its subsidiaries, taken as a whole, except
      as described in the Prospectus.


            (xvii) Except for shareholders who properly received notices from
the Company relating to their registration rights with respect to the
Registration Statement, no person has the right to require the Company to
include any Shares or other securities for registration pursuant to the
Registration Statement.


            With respect to subsection (xv) above, such counsel may state that
their opinion and belief are based upon their participation in the preparation
of the Registration Statement and Prospectus and any amendments or supplements
thereto and review and discussion of the contents thereof, but are without
independent check or verification, except as specified.


                                       29
<PAGE>
                                    EXHIBIT B


            Pursuant to Section 6(e) of the Underwriting Agreement, counsel for
the Selling Shareholders shall furnish an opinion to the effect that:

            (i)   the Underwriting Agreement has been duly authorized,
      executed and delivered by or on behalf of each of the Selling
      Shareholder[s];

            (ii) the execution and delivery by [the] [each] Selling
      Shareholder[s] of, and the performance by such Selling Shareholder of its
      obligations under, the Underwriting Agreement and the Power of Attorney
      and Custody Agreement of such Selling Shareholder will not contravene any
      applicable law, or the certificate of incorporation or by-laws of such
      Selling Shareholder (if such Selling Shareholder is a corporation), or the
      limited partnership agreement (if such Selling Shareholder is a limited
      partnership) or, to the best of such counsel's knowledge, any agreement or
      other instrument binding upon such Selling Shareholder, or to the best of
      such counsel's knowledge, any judgment, order or decree of any
      governmental body, agency or court having jurisdiction over such Selling
      Shareholder, and no consent, approval, authorization or order of or
      qualification with any governmental body or agency is required for the
      performance by such Selling Shareholder of its obligations under this
      Agreement or Power of Attorney and Custody Agreement of such Selling
      Shareholder, except such as may be required by the securities or Blue Sky
      laws of the various states in connection with the offer and sale of the
      Shares;

            (iii) [each of] the Selling Shareholder[s] has legal right and
      power, and all authorization and approval required by law, to enter into
      the Underwriting Agreement and Power of Attorney and Custody Agreement of
      such Selling Shareholder;


            (iv) the Power of Attorney and Custody Agreement of [each of] the
      Selling Shareholder[s] has been duly authorized, executed and delivered by
      the Selling Shareholder[s] and is a valid and binding agreement of [each
      of] of the Selling Shareholder[s], enforceable in accordance with its
      terms, except as (a) the enforceability thereof may be limited by
      bankruptcy, insolvency or similar laws affecting creditors' rights
      generally and (b) the availability of equitable remedies may be limited by
      equitable principles of general applicability;


            (v) [Each/The] Selling Shareholder has full right, power and
      authority to sell, transfer and deliver such Shares pursuant the
      Underwriting Agreement. Upon the payment of the purchase price pursuant to
      the Underwriting Agreement, each Underwriter will be a "protected
      purchaser" of the Shares to be purchased by it (within the meaning of
      Section 8-303 of the Uniform Commercial Code as in effect in the State of
      New York) and will acquire its interest in such Shares (including, without
      limitation, all rights that [such/the] Selling Shareholder had or has the
      power to transfer in such Shares) free of any adverse claim;

            (vi) such counsel has no reason to believe that as to information
      relating to the Selling Shareholder as set forth under the caption
      "Principal and Selling Stockholders"


                                       30
<PAGE>
      (including the notes thereto), the Registration Statement and the
      prospectus included therein at the time the Registration Statement became
      effective contained any untrue statement of a material fact or omitted to
      state a material fact required to be stated therein or necessary to make
      the statements therein not misleading and has no reason to believe that as
      to information relating to the Selling Shareholder as set forth under the
      caption "Principal and Selling Stockholders" (including the notes
      thereto), the Prospectus contains any untrue statement of a material fact
      or omits to state a material fact necessary in order to make the
      statements therein, in the light of the circumstances under which they
      were made, not misleading.

            Such counsel may rely upon an opinion or opinions of counsel for any
Selling Shareholders and, with respect to factual matters and to the extent such
counsel deems appropriate, upon the representations of each Selling Shareholder
contained herein and in the Power of Attorney and Custody Agreement of such
Selling Shareholder and in other documents and instruments; provided that (A)
each such counsel for the Selling Shareholder is satisfactory to counsel for the
Underwriters, (B) a copy of each opinion so relied upon is delivered to you and
is in form and substance satisfactory to counsel for the Underwriters, (C)
copies of such Power of Attorney and Custody Agreement and of any such other
documents and instruments shall be delivered to you and shall be in form and
substance satisfactory to counsel for the Underwriters and (D) such counsel
shall state in their opinion that they are justified in relying on each such
other opinion.


                                       31
<PAGE>
                                    EXHIBIT C

Morgan Stanley & Co. Incorporated
J.P. Morgan Securities Inc.




c/o Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York  10036

Ladies and Gentlemen:


             The undersigned understands that Steel Dynamics, Inc., an Indiana
corporation (the "Company"), and the shareholders (the "Selling Shareholders")
of the Company named in Schedules II and IIII of the Underwriting Agreement (as
defined below) propose to enter into an underwriting agreement (the
"Underwriting Agreement") with (a) Morgan Stanley & Co. Incorporated ("Morgan
Stanley"), J.P. Morgan Securities Inc. ("JPMorgan"),       and       , the
several underwriters (the "Underwriters"), providing for the public offering
(the "Public Offering") of shares of the Company's Common Stock (par value $.01
per share) (the "Common Stock").


            To induce the Underwriters that may participate in the Public
Offering to continue their efforts in connection with the Public Offering, the
undersigned hereby agrees that, without the prior written consent of Morgan
Stanley and JPMorgan, it will not, during the period commencing on the date
hereof and ending 90 days after the date of the final prospectus relating to the
Public Offering (the "Prospectus"), (1) offer, pledge, sell, contract to sell,
sell any option or contract to purchase, purchase any option or contract to
sell, grant any option, right or warrant to purchase, lend, or otherwise
transfer or dispose of, directly or indirectly, any shares of Common Stock or
any securities convertible into or exercisable or exchangeable for Common Stock,
or (2) enter into any swap or other arrangement that transfers to another, in
whole or in part, any of the economic consequences of ownership of such shares
of Common Stock, whether any such transaction described in clause (1) or (2)
above is to be settled by delivery of Common Stock or such other securities, in
cash or otherwise. The foregoing sentence shall not apply to (a) the sale of any
shares of Common Stock to the Underwriters pursuant to the Underwriting
Agreement or (b) transactions relating to shares of Common Stock or other
securities acquired in open market transactions after the completion of the
Public Offering. In addition, the undersigned agrees that, without the prior
written consent of Morgan Stanley and JPMorgan on behalf of the Underwriters, it
will not, during the period commencing on the date hereof and ending 90 days
after the date of the Prospectus, make any demand for or exercise any right with
respect to, the registration of any shares of Common Stock or any security
convertible into or exercisable or exchangeable for Common Stock.

            Whether or not the Public Offering actually occurs depends on a
number of factors, including market conditions. Any Public Offering will only be
made pursuant to an


                                       32
<PAGE>
Underwriting Agreement, the terms of which are subject to agreement between the
Company, the Selling Shareholders and the Underwriters.

                                           Very truly yours,



                                           (Name)



                                           (Print Name)



                                           (Address)



Accepted as of the date first set forth above:

MORGAN STANLEY & CO. INCORPORATED


By:   ________________________


                                       33

