<PAGE>

               FIRST AMENDMENT TO AMENDED AND RESTATED CREDIT AGREEMENT

     This First Amendment to Amended and Restated Credit Agreement (the 
"AMENDMENT") dated as of October 7, 1998 among Atchison Casting Corporation 
(the "BORROWER"), the Banks, and Harris Trust and Savings Bank, as Agent;

                                W I T N E S S E T H:

     WHEREAS, the Borrower, Guarantors, Banks and Harris Trust and Savings 
Bank, as Agent, have heretofore executed and delivered an Amended and 
Restated Credit Agreement dated as of April 3, 1998 (the "CREDIT AGREEMENT"); 
and

     WHEREAS, the parties hereto desire to amend the Credit Agreement as
provided herein;

     NOW, THEREFORE, for good and valuable consideration the receipt and 
sufficiency of which is hereby acknowledged, the parties hereto agree that 
the Credit Agreement shall be and hereby is amended as follows:

     1.   The definition of "EUROCURRENCY MARGIN" appearing in Section 1.3(b) 
of the Credit Agreement is hereby amended by deleting the phrase "1.00% PER 
ANNUM" appearing in clause (A) thereof and inserting in its place the phrase 
"1.125% PER ANNUM."

     2.   A new Section 1.14 to the Credit Agreement is hereby amended as
follows:

          SECTION 1.14.  INCREASE IN COMMITMENTS.  Prior to the Termination
          Date, the Borrower shall have the right to increase the
          Commitments up to an additional $30,000,000 (in a minimum amount
          of $5,000,000 and integral multiples of $1,000,000 in excess
          thereof) on a PRO RATA basis for each of the Banks in accordance
          with the amount of their Commitment upon one Business Day's prior
          written notice to the Agent PROVIDED THAT:  (i) the Borrower may
          exercise its right to increase the Commitments pursuant to this
          Section 1.14 only one time, (ii) no Default or Event of Default
          shall have occurred and be continuing on the date of such
          increase or would result from such increase, (iii) on the date of
          such increase the Borrower shall have repaid in full the
          outstanding Term Loans from the proceeds of the issuance of
          Subordinated Debt, and (iv) the increase in Commitments to become
          effective on such date shall be in an amount no greater than the
          aggregate principal amount of the Term Loans repaid on such date. 
          Upon the satisfaction of the foregoing provisions, the Commitment
          of each Bank shall, without any further action on the part of the
          Borrower or any Bank, be deemed amended to reflect the increase
          as provided in this Section 1.14. 

     3.   Section 2.1(a) of the Credit Agreement is hereby amended by 
deleting clause (i) thereof in its entirety and inserting in its place the 
following: "(i) PRIOR TO THE ISSUANCE OF SUBORDINATED DEBT BY THE BORROWER, 
0.250% PER ANNUM FOR EACH DAY LEVEL I STATUS EXISTS AND


<PAGE>

FROM AND AFTER THE DATE ON WHICH THE BORROWER ISSUES ANY SUBORDINATED DEBT 
0.375% PER ANNUM FOR EACH DAY LEVEL I STATUS EXISTS."

     4.   The definition of "RESTRICTED PAYMENT" contained in Section 4 of 
the Credit Agreement is hereby amended in its entirety and as so amended 
shall read as follows:

          "RESTRICTED PAYMENT" means any payment or distribution or the
          incurrence of any liability to make any payment or distribution,
          in cash, property or other assets (other than shares of common
          stock of the Borrower) upon or in respect of any share of any
          class of capital stock of the Borrower or any warrants, rights or
          options evidencing a right to purchase or acquire any securities
          of the Borrower, including, without limiting the generality of
          the foregoing, (i) payments or distributions as dividends and
          (ii) Stock Repurchases.

     5.   Section 4 of the Credit Agreement is hereby further amended by 
inserting in proper alphabetical order the new defined term "STOCK 
REPURCHASES" as follows:

          "STOCK REPURCHASES" means payments or distributions for the
          purpose of purchasing, acquiring, retiring or redeeming any such
          shares of stock (or any warrants, rights or options to purchase
          or acquire any such securities) or the making of any other
          distribution in respect of any such shares of stock (or any
          warrants, rights or options evidencing a right to purchase or
          acquire any such securities).

     6.   Section 7.19 of the Credit Agreement is hereby amended in its 
entirety and as so amended shall read as follows:

          SECTION 7.19.  RESTRICTED PAYMENTS; RESTRICTED INVESTMENTS.  The
          Borrower will not, directly or indirectly (through a Subsidiary or
          otherwise), declare, order, pay, distribute, make, or set apart any
          sum or property for any Restricted Payment, and the Borrower will not
          and will not permit any of its Subsidiaries to make or become
          obligated to make any Restricted Investment unless, both at the time
          of and immediately after effect has been given to such proposed
          action:

               (a)   no Default or Event of Default shall have
          occurred and be continuing; and

               (b)   the aggregate amount of

               (i)   all sums and property included in all Restricted
          Payments directly or indirectly declared, ordered, paid,
          made or set apart by the Borrower or any Subsidiary during
          the period from and including March 31, 1994 to and
          including the date of such proposed action (the "COMPUTATION
          PERIOD"), plus


                                     -2-

<PAGE>

               (ii)  the aggregate amount of all Restricted
          Investments (at original cost) made during the Computation
          Period (less any net return of capital through sale or other
          liquidation thereof or other return of capital thereon) and
          all commitments for Restricted Investments made by the
          Borrower or any of its Subsidiaries outstanding on such date

          shall not exceed the sum of (x) $8,000,000, PLUS (y) 50% of
          Consolidated Net Income for the Computation Period (or minus
          100% of Consolidated Net Income in the case of a deficit)
          PLUS (z) the net cash proceeds received by the Borrower from
          the issuance or sale during the Computation Period of shares
          of its capital stock (other than any mandatorily redeemable
          preferred stock); and, in any event, the aggregate amount of
          Restricted Payments made during any fiscal year shall not
          exceed 25% of Consolidated Net Income for the immediately
          preceding fiscal year.

          Notwithstanding anything in this Section 7.19 to the
          contrary, Restricted Payments under this Section 7.19 shall
          not include up to $24,000,000 in aggregate principal amount
          of Stock Repurchases by the Borrower PROVIDED THAT (i) no
          Default or Event of Default shall have occurred and be
          continuing or would result from such Stock Repurchase; and
          (ii) Stock Repurchases in excess of $10,000,000 in the
          aggregate in any one fiscal year may occur only if after
          giving effect to such Stock Repurchase the Borrower shall,
          and shall demonstrate in writing to the Agent that it shall,
          (i) maintain a level of performance at no less than 110% of
          that required by Sections 7.15(a) and 7.15(e) and
          (ii) maintain a level of performance at no greater than 90%
          of that required by Sections 7.15(c), 7.15(d) and 7.15(f). 

          For all purposes of this Section 7.19, the amount involved
          in any Restricted Payment directly or indirectly declared,
          ordered, paid, distributed, made or set apart in property,
          and the amount of any Restricted Investment made through the
          transfer of property, shall be deemed to be the greater of
          (1) the fair value of such property (as determined in good
          faith by the Board of Directors) and (2) the net book value
          thereof on the books of the Borrower or any of its
          Subsidiaries (as determined in accordance with GAAP), in
          each case as determined on the date such Restricted Payment
          is declared, ordered, paid, distributed, made or set apart
          or the date such Restricted Investment is made or committed
          to be made, as the case may be.


                                     -3-

<PAGE>

          The Borrower will not pay any dividend which it has not
          declared nor will it declare any dividend (other than
          dividends payable solely in shares of its common stock) on
          any shares of any class of its capital stock which is
          payable more than 60 days after the date of declaration
          thereof.

     7.   The Borrower represents and warrants to each Bank and the Agent 
that (a) each of the representations and warranties set forth in Section 5 of 
the Credit Agreement is true and correct on and as of the date of this 
Amendment as if made on and as of the date hereof and as if each reference 
therein to the Credit Agreement referred to the Credit Agreement as amended 
hereby; (b) no Default and no Event of Default has occurred and is 
continuing; and (c) without limiting the effect of the foregoing, the 
Borrower's execution, delivery and performance of this Amendment have been 
duly authorized, and this Amendment has been executed and delivered by  duly 
authorized officers of the Borrower.

     8.   This Amendment shall become effective upon satisfaction of the 
following conditions precedent:

          (i)  the Borrower, the Banks, and the Agent shall have executed and
     delivered this Amendment and the Guarantors shall have executed the consent
     attached hereto; and

          (ii) receipt by the Agent of the favorable written opinion of
     Blackwell Sanders Peper Martin LLP, legal counsel to the Borrower, in form
     and substance satisfactory to the Agent.

     This Amendment may be executed in any number of counterparts and by 
different parties hereto on separate counterpart signature pages, each of 
which when so executed shall be an original but all of which shall constitute 
one and the same instrument.  Except as specifically amended and modified 
hereby, all of the terms and conditions of the Credit Agreement and the other 
Credit Documents shall remain unchanged and in full force and effect.  All 
references to the Credit Agreement in any document shall be deemed to be 
references to the Credit Agreement as amended hereby.  All capitalized terms 
used herein without definition shall have the same meaning herein as they 
have in the Credit Agreement.  This Amendment shall be construed and governed 
by and in accordance with the internal laws of the State of Illinois.


                                     -4-

<PAGE>

     Dated as of the date first above written.

                                   ATCHISON CASTING CORPORATION

                                   By:   /s/ Kevin T. McDermed
                                   Title:  V.P. & Treasurer
                                   

                                   HARRIS TRUST AND SAVINGS BANK, in its
                                        individual capacity as a Bank and as
                                        Agent

                                   By: /s/ Len E. Meyer
                                   Title: Vice President

                                   COMMERCE BANK, N.A.

                                   By:  /s/ Jeffrey R. Gray
                                   Title:  Vice President

                                   MERCANTILE BANK

                                   By: /s/ Susan D. Cott
                                   Title:
                                   

                                   KEY BANK NATIONAL ASSOCIATION

                                   By: /s/ Sharon F. Weinstein
                                   Title: Vice President


                                     -5-

<PAGE>

                                   COMERICA BANK

                                   By:  /s/ Jeffrey E. Peck
                                   Title:  Vice President
                                   

                                   HIBERNIA NATIONAL BANK

                                   By:  Troy J. Villafarro
                                   Title:  Senior Vice President
                                   

                                   NATIONAL WESTMINSTER BANK PLC

                                   Nassau Branch

                                   By:  /s/ J. Brett
                                   Title:  Senior Manager

                                   New York Branch

                                   By:  /s/ J. Brett
                                   Title:  Senior Manager
                                   

                                   NORWEST BANK MINNESOTA, N.A.

                                   By: /s/ R. Duncan Sinclair
                                   Title:  Vice President

                                     -6-