Document:

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                                                                    Exhibit 4.6

                               A. M. CASTLE & CO.

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                               SECOND AMENDMENT TO
                                 NOTE AGREEMENT

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                          Dated as of November 22, 2002

              $25,000,000 RESET RATE SENIOR SECURED NOTES DUE 2009

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                                                         As of November 22, 2002

To each of the Current Holders
Named in Annex 1 hereto

Ladies and Gentlemen:

     A. M. CASTLE & CO., a Maryland corporation (together with any successors
and assigns, the "Company"), hereby agrees with each of you as follows:

1.   PRIOR ISSUANCE OF NOTES, ETC.

     The Company issued and sold twenty-five million dollars ($25,000,000) in
aggregate principal amount of its 7.54% Senior Notes due May 30, 2009 (the
"Existing Notes" and, as amended by this Agreement and as may be further
amended, restated or otherwise modified from time to time, the "Notes") pursuant
to a Note Agreement, dated as of May 15, 1997, between the Company and the
purchasers named in Schedule 1 thereto (the "Original Note Agreement"). The
Original Note Agreement was amended by the First Amendment and Waiver to Note
Agreement dated as of December 1, 1998 (the Original Note Agreement, as amended
by the foregoing and as in effect immediately prior to giving effect to the
amendments provided for by this Agreement, is referred to herein as the
"Existing Note Agreement" and, as may be amended pursuant to this Agreement and
as may be further amended, restated or otherwise modified from time to time, the
"Note Agreement"). The register kept by the Company for the registration and
transfer of the Notes indicates that each of the Persons named in Annex 1 hereto
(collectively, the "Current Holders") is currently a holder of the aggregate
principal amount of the Notes indicated in such Annex.

2.   REQUEST FOR CONSENT TO AMENDMENTS

     The Company requests that each of the Current Holders consent to the
amendments (collectively, the "Amendments") to the Existing Note Agreement
provided for by this Agreement.

3.   WARRANTIES AND REPRESENTATIONS

     To induce the Current Holders to enter into this Agreement and to consent
to the Amendments, the Company warrants and represents to each of the Current
Holders as follows (it being agreed, however, that nothing in this Section 3
shall affect any of the warranties and representations previously made by the
Company in or pursuant to the Existing Note Agreement, and that all of such
other warranties and representations, as well as the warranties and
representations in this Section 3, shall survive the effectiveness of the
Amendments):

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     3.1. No Material Adverse Change.

     Except for matters publicly disclosed in the Company's most recent reports
to the Commission under the Exchange Act, since December 31, 2001, there has
been no change in the business operations, profits, financial condition,
properties or business prospects of the Company except changes that, in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

     3.2. Corporate Authority; Authorization.

     The Company is a corporation duly organized and existing in good standing
under the laws of the State of Maryland and has the requisite corporate power
and authority to execute and deliver this Agreement and to perform its
obligations under the Note Agreement. This Agreement has been duly authorized by
all necessary corporate action on the part of the Company, and this Agreement
constitutes a legal, valid and binding obligation of the Company enforceable
against the Company in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, reorganization, arrangement,
insolvency, moratorium or other similar laws affecting the enforceability of
creditors' rights generally, and (b) general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

     3.3. Full Disclosure.

     Neither the financial statements and other certificates previously provided
to each of the Current Holders pursuant to the provisions of the Existing Note
Agreement nor the statements made in this Agreement nor any other written
statements furnished to each of the Current Holders by or on behalf of the
Company in connection with the proposal and negotiation of the transactions
contemplated hereby (other than pro forma financial information or financial or
other projections or any forward-looking statements), or disclosed in the
Company's report on Form 10-Q filed with the Commission on November 14, 2002 or
report on Form 10-K filed with the Commission on March 14, 2002, taken as a
whole, contained any untrue statement of a material fact or omitted a material
fact necessary to make the statements contained therein and herein not
misleading, in each case as of the time such financial statements or
certificates were provided or such statements were made or furnished. There is
no fact known to the Company relating to any event or circumstance that has
occurred or arisen since the Closing Date that the Company has not disclosed to
each of the Current Holders in writing or disclosed in the Company's report on
Form 10-Q filed with the Commission on November 14, 2002 or report on Form 10-K
filed with the Commission on March 14, 2002, that has had or, so far as the
Company can now reasonably foresee, could reasonably be expected to have, a
Material Adverse Effect. All pro forma financial information, financial or other
projections and forward-looking statements delivered to the Current Holders has
been prepared in good faith by the Company based on reasonable assumptions.

                                       2

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     3.4. Ownership of Subsidiaries.

          (a) Annex 2 contains a complete and correct description of the
     Company's Subsidiaries, showing, as to each Subsidiary, the correct name
     thereof, the jurisdiction of its organization and the percentage of shares
     of each class of its capital stock or similar equity interests outstanding
     owned by the Company and each other Subsidiary. The Subsidiary Side Letter
     contains a complete and correct description of the Company's Subsidiaries,
     showing, as to each Subsidiary, the book value of its assets as of
     September 30, 2002 and its contribution to Consolidated EBITDA for the four
     quarter period ended on September 30, 2002.

          (b) Each Subsidiary identified in Annex 2 is a corporation or other
     legal entity duly organized, validly existing and, except as set forth in
     Annex 2, in good standing under the laws of its jurisdiction of
     organization, and is duly qualified as a foreign corporation or other legal
     entity and is in good standing in each jurisdiction in which such
     qualification is required by law, other than those jurisdictions as to
     which the failure to be so qualified or in good standing could not,
     individually or in the aggregate, reasonably be expected to have a Material
     Adverse Effect. Each such Subsidiary has the corporate or other power and
     authority to own or hold under lease the properties it purports to own or
     hold under lease and to transact the business it transacts and proposes to
     transact.

     3.5. Title to Properties.

     The Company and its Subsidiaries have good and sufficient title to or the
legal right to use their respective properties that individually or in the
aggregate are Material, including all such properties reflected in the most
recent audited balance sheet of the Company delivered pursuant to the provisions
of Section 6.6 of the Existing Note Agreement (except as sold or otherwise
disposed of in the ordinary course of business) or purported to have been
acquired by the Company or any Subsidiary after said date (except as sold or
otherwise disposed of in the ordinary course of business), in each case free and
clear from Liens not permitted by the Note Agreement.

     3.6. Solvency.

     The fair value of the business and assets of each of the Company and each
Subsidiary, exceeds, as of the Effective Date, the amount that will be required
to pay the probable liabilities of such Person (including subordinated,
contingent, unmatured and unliquidated liabilities), on existing debts as they
may become absolute and matured. No such Person, after the Effective Date, will
be engaged in any business or transaction, or be about to engage in any business
or transaction, for which such Person has unreasonably small assets or capital,
and no such Person has incurred, or has any intent to, incur debts that would be
beyond such Person's ability to pay as they mature.

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     3.7. Intent.

     Neither the Company nor any Subsidiary is entering into this Agreement with
any intent to hinder, delay, or defraud either current creditors or future
creditors of the Company or any Subsidiary.

     3.8. No Defaults.

     No event has occurred and no condition exists that, upon the execution and
delivery of this Agreement and the effectiveness of the Amendments, would
constitute a Default or an Event of Default.

     3.9. Financial Statements.

     The quarterly and annual financial statements most recently delivered to
each of the Current Holders pursuant to Section 6.6 of the Existing Note
Agreement have been prepared in accordance with GAAP consistently applied and
present fairly, in all material respects, the consolidated financial position of
the Company and its consolidated subsidiaries as of such dates and the results
of their operations and cash flows for the periods specified therein.

     3.10. Litigation; Observance of Agreements.

           (a) Other than as disclosed in the footnotes to the financial
     statements in the Company's most recent report on Form 10-Q and Form 10-K
     filed with the Commission on November 14, 2002 and March 14, 2002, there
     are no actions, suits or proceedings pending or, to the knowledge of the
     Company, threatened against or affecting the Company or any Subsidiary or
     any property of the Company or any Subsidiary in any court or before any
     arbitrator of any kind or before or by any Governmental Authority that,
     individually or in the aggregate, could reasonably be expected to have a
     Material Adverse Effect.

           (b) Neither the Company nor any Subsidiary is in default under any
     term of any order, judgment, decree or ruling of any court, arbitrator or
     Governmental Authority or is in violation of any applicable law, ordinance,
     rule or regulation (including, without limitation, Environmental Laws) of
     any Governmental Authority, which default or violation, individually or in
     the aggregate, could reasonably be expected to have a Material Adverse
     Effect.

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     3.11. Charter Instruments; Other Agreements.

     Neither the Company nor any Subsidiary is in violation in any respect of
any term of any charter instrument or bylaw. Upon the execution and delivery
hereof and the effectiveness of the Amendments as provided herein, neither the
Company nor any Subsidiary is in violation or default in any material respect of
any term in any agreement or other instrument to which it is a party or by which
it or any of its material property may be bound or affected. The execution,
delivery and performance by the Company of this Agreement will not conflict with
or result in the breach of any of the terms, conditions or provisions of any
order, judgment, decree or ruling of any court, arbitrator or Governmental
Authority applicable to the Company or any Subsidiary or violate any provision
of any statute or other rule or regulation of any Government Authority
applicable to the Company or any Subsidiary.

     3.12. Taxes.

     The Company and the Subsidiaries have filed all tax returns that are
required to have been filed in any jurisdiction, and have paid all taxes shown
to be due and payable on such returns and all other taxes and assessments levied
upon them or their properties, assets, income or franchises, to the extent such
taxes and assessments have become due and payable and before they have become
delinquent, except for any taxes and assessments (a) the amount of which is not
individually or in the aggregate Material or (b) the amount, applicability or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which the Company or a Subsidiary, as the case
may be, has established adequate reserves in accordance with GAAP. The Company
knows of no basis for any other tax or assessment that could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Company and the Subsidiaries in respect of federal, state or
other taxes for all fiscal periods are adequate. The federal income tax
liabilities of the Company and the Subsidiaries have been determined by the
Internal Revenue Service and paid for all fiscal years up to and including the
fiscal year ended December 31, 1997.

     3.13. Certain Laws.

     The execution and delivery of this Agreement by the Company:

          (a) is not subject to regulation under the Investment Company Act of
     1940, as amended, the Public Utility Holding Company Act of 1935, as
     amended, the Transportation Acts, as amended, or the Federal Power Act, as
     amended, and

          (b) does not violate any provision of any statute or other rule or
     regulation of any Governmental Authority applicable to the Company or any
     Subsidiary.

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     3.14. Guarantee Representations.

     All of the representations and warranties of the Company and each Guarantor
set forth in the Guarantee Agreement are true and correct.

     3.15. Debt; Liens.

     Annex 3(a) to this Agreement correctly describes all Debt of the Company
and its Subsidiaries as of the date hereof. Annex 3(b) to this Agreement
correctly describes all outstanding Liens securing Debt in an amount greater
than $1,000,000 and all other material Liens on property of the Company or its
Subsidiaries as of the date hereof. Neither the Company nor any Subsidiary is in
default and no waiver of default is currently in effect, in the payment of any
principal or interest on any Debt of the Company or such Subsidiary listed on
Annex 3(a) hereto and no event or condition exists with respect to any Debt of
the Company or any Subsidiary listed on Annex 3(a) that would permit (or that
with notice or the lapse of time, or both, would permit) one or more Persons to
cause such Debt to become due and payable before its stated maturity or before
its regularly scheduled dates of payment.

     3.16. Transaction is Legal and Authorized; Obligations are Enforceable.

           (a) Transaction is Legal and Authorized. Each of the execution and
     delivery of this Agreement and the Guarantee Agreement by the Company and
     each Guarantor and compliance by the Company and each of the Guarantors
     with all of their respective obligations thereunder:

               (i)   is within the corporate powers of the Company and each
           Guarantor, as the case may be;

               (ii)  is legal and, except as set forth on Annex 4, does not
           conflict with, result in any material breach in any of the provisions
           of, constitute a material default under, or result in the creation of
           any Lien upon any material property of the Company or any Guarantor
           under the provisions of, any agreement, charter instrument, bylaw or
           other instrument to which it is a party or by which it or any of its
           property may be bound; and

               (iii) does not give rise to a right or option of any other Person
           under any agreement or other instrument, which right or option could
           reasonably be expected to have a Material Adverse Effect.

           (b) Obligations are Enforceable. Each of this Agreement and the
     Guarantee Agreement have been duly authorized by all necessary action on
     the part of the Company and each of the Guarantors, as the case may be, and
     has been executed and delivered by one or more duly authorized officers of

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     the Company and each of the Guarantors party thereto, and each constitutes
     a legal, valid and binding obligation of the Company and each of the
     Guarantors party thereto, enforceable in accordance with its terms, except
     that such enforceability may be:

               (i) limited by applicable bankruptcy, reorganization,
          arrangement, insolvency, moratorium or other similar laws affecting
          the enforceability of creditors' rights generally; and

               (ii) subject to the availability of equitable remedies.

     3.17. Governmental Consent.

     Neither the nature of the Company or any Guarantor thereof, or of any of
their respective businesses or properties, nor any relationship between the
Company or any such Guarantor and any other Person, nor any circumstance in
connection with the execution and delivery of this Agreement or the Guarantee
Agreement is such as to require a consent, approval or authorization of, or
filing, registration or qualification with, any Governmental Authority on the
part of the Company or any Guarantor as a condition to the execution and
delivery of this Agreement or the Guarantee Agreement.

4.   AMENDMENTS; WAIVERS; ACKNOWLEDGMENTS.

     4.1. Amendments to Existing Note Agreement and Existing Notes.

          (a) Subject to the provisions of Section 4.2, the Existing Note
     Agreement is hereby amended in the manner specified in Exhibit A to this
     Agreement.

          (b) Subject to the provisions of Section 4.2, the Existing Notes are
     hereby amended in the manner specified in Exhibit B1 to this Agreement.

     4.2. Effectiveness of Amendments and Waivers.

     The Amendments contemplated by Section 4.1(a) and 4.1(b) shall become
effective (the date of such effectiveness herein referred to as the "Effective
Date"), if at all, at such time as the Company and each Current Holder shall
have consented in writing to such Amendments by executing and delivering the
applicable counterparts of this Agreement. It is understood that any Current
Holder may withhold its consent for any reason or for no reason, and that,
without limitation of the foregoing, any Current Holder hereby makes the
granting of its consent contingent upon its receipt of each of the following:

     (a) a certificate of the Secretary or Assistant Secretary of the Company
certifying as to resolutions of its Board of Directors and other constitutive
documents which authorize and permit the Company to execute and deliver this
Agreement and to consummate the transactions contemplated hereby;

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     (b) closing opinions from (i) Sidley Austin Brown & Wood LLP, special
counsel to the Company, (ii) Ballard Spahr, special Maryland counsel to the
Company, and (iii) Jerry Aufox, Corporate Counsel of the Company, dated as of
the Effective Date, covering the matters set forth on Exhibit C to this
Agreement. This Section 4.2(b) shall constitute direction by the Company and
each Guarantor to such counsel to deliver such closing opinions to the Current
Holders;

     (c) confirmation from your special counsel that its fees and disbursements
reflected on a statement delivered in connection with the execution and delivery
of this Agreement pursuant to Section 7 have been paid in full;

     (d) if required by applicable regulations, a Private Placement Number
issued by Standard & Poor's CUSIP Service Bureau reflecting the amendment to the
interest rate on the Notes contemplated by this Agreement;

     (e) a Guarantee Agreement, dated as of November 22, 2002 (as may be
amended, restated or otherwise modified from time to time, the "Guarantee
Agreement"), duly executed by each Guarantor in substantially the form of
Exhibit D to this Agreement, and (ii) a certificate of the Secretary or
Assistant Secretary of each such Guarantor certifying as to the resolutions of
their Board of Directors and other constitutive documents which authorize and
permit such Guarantors to execute and deliver the Guarantee Agreement and to
consummate the transactions contemplated hereby;

     (f) the Company shall have received at least $10,000,000 in gross proceeds
from the issuance and sale of its convertible preferred stock (in one or more
transactions) substantially in accordance with the economic terms set forth on
the term sheet dated as of October 24, 2002;

     (g) copies of one or more agreements reasonably satisfactory to such
Current Holder providing for amendments to certain covenants of the Company
contained in agreements of the Company with The Bank of Nova Scotia, Bank of
America, N.A. and The Northern Trust Company; and

     (h) the Subsidiary Side Letter.

     4.3. No Other Amendments; Confirmation.

     Except as expressly provided herein, (a) no terms or provisions of any
agreement are modified or changed by this Agreement, (b) the terms of this
Agreement shall not operate as a waiver by you of, or otherwise prejudice any of
your rights, remedies or powers under, the Existing Note Agreement, the Existing
Notes or any other instrument or agreement executed in connection therewith or

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under any applicable law, and (c) the terms and provisions of the Existing Note
Agreement, the Existing Notes and each other instrument or agreement executed in
connection therewith shall continue in full force and effect.

 5.  COLLATERAL COVENANT

     (a) The Company hereby agrees and covenants that it will, and will cause
each Significant Subsidiary to, on or before December 23, 2002, enter into, or
cause to be delivered, such agreements, documents or instruments of any kind
(including, without limitation, security agreements, mortgages, deeds of trust,
UCC financing statements and opinions of nationally recognized counsel as to the
enforceability, Lien perfection, no conflicts with agreements and other
customary matters), acceptable in all respects to the Required Holders, to grant
Liens in favor of a Collateral Agent on all personal property of the Company and
Significant Subsidiaries whether now held or hereafter acquired by the Company
or any such Significant Subsidiary (other than Excluded Receivables and Excluded
Collateral), in each case to secure the obligations of the Company and each
Guarantor under the Note Agreement, the Notes and the Guarantee Agreement;
provided, that the Company's obligation to grant such Liens on or before
December 23, 2002 shall be conditioned upon the execution by the holders of
Notes and the Other Senior Creditors of an Acceptable Intercreditor Agreement.
The Company further agrees and covenants that it will, and will cause each
Significant Subsidiary to, as soon as reasonably practicable after the Effective
Date and in any event on or before February 15, 2003, enter into, or cause to be
delivered, such agreements, documents or instruments of any kind (including,
without limitation, security agreements, mortgages, deeds of trust, UCC
financing statements and opinions of nationally recognized counsel as to the
enforceability, Lien perfection, no conflicts with agreements and other
customary matters) acceptable in all respects to the Required Holders, to grant
Liens in favor of the Collateral Agent on all real property owned by the Company
or any Significant Subsidiary, whether now held or hereafter acquired by the
Company or any such Significant Subsidiary (other than Excluded Collateral), in
each case to secure the Obligations of the Company and each Guarantor under the
Agreement and the Guarantee Agreement; provided, that the Company's obligation
to grant such Liens by February 15, 2003 shall be conditioned upon the execution
by the holders of the Notes and the Other Senior Creditors of an Acceptable
Intercreditor Agreement. Such collateral may be shared on a pari passu basis
with the Other Senior Creditors pursuant to an Acceptable Intercreditor
Agreement. Notwithstanding anything to the contrary in this Agreement or the
Note Agreement, the failure to comply with this Section 5(a) despite the
exercise by the Company of all commercially reasonable efforts to effect such
compliance shall not constitute a Default or Event of Default under this
Agreement or the Note Agreement and the sole and exclusive remedy for any breach
of this Section 5(a) shall be the adjustments set forth in the definitions of
"Applicable Base," "First Year Ratio" and "Second Year Ratio" as they relate to
Section 7.1 or 7.2 of the Note Agreement, as applicable.

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     (b) Each of the holders of the Notes agrees (i) to use commercially
reasonable efforts to negotiate the terms of, and, contemporaneously with the
grant of such Liens to enter into, an Acceptable Intercreditor Agreement with a
bank or trust company to act as Collateral Agent and each of the Other Senior
Creditors (which Acceptable Intercreditor Agreement will provide that the
Collateral Agent may enter into an intercreditor agreement with the lender(s) or
purchaser(s) under any Receivables Purchase Agreement); and (ii) that at such
time the Company enters into an Acceptable Revolving Credit Facility to replace
the Existing Receivables Purchase Agreement (or any replacement thereof) and the
Company's unsecured debt obligations are Investment Grade, it will promptly take
such action requested by the Company to instruct the Collateral Agent to release
the Liens granted pursuant to the Security Documents as of the time such
Acceptable Revolving Credit Facility is entered into and becomes effective.

6.   DEFINED TERMS

     Capitalized terms used herein and not otherwise defined have the meanings
ascribed to them in the Existing Note Agreement as contemplated to be amended by
the Amendments.

7.   EXPENSES

     Whether or not any of the Amendments becomes effective, the Company will
promptly (and in any event within thirty (30) days of receiving any statement or
invoice therefor) pay all fees, expenses and costs relating to this Agreement,
including, but not limited to, (a) the cost of reproducing this Agreement and
the other documents delivered in connection herewith and (b) the reasonable fees
and disbursements of the Current Holders' special counsel, Bingham McCutchen
LLP, incurred in connection with the preparation, negotiation and delivery of
this Agreement. This Section 7 shall not be construed to limit the Company's
obligations under Section 11.1 of the Note Agreement.

8.   MISCELLANEOUS

     8.1. Part of Note Agreement, Future References, etc.

     The Agreement shall be construed in connection with and as a part of each
of the Existing Note Agreement and the Existing Notes and, except as expressly
amended by this Agreement, all terms, conditions and covenants contained in the
Existing Note Agreement, the Existing Notes and the other documents executed
and/or delivered in connection therewith are hereby ratified and shall be and
remain in full force and effect. Any and all notices, requests, certificates and
other instruments executed and delivered after the execution and delivery of
this Agreement may refer to the Note Agreement without making specific reference
to this Agreement, but nevertheless all such references shall include this
Agreement unless the context otherwise requires.

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     8.2. Governing Law.

     THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE LAW OF THE STATE OF ILLINOIS, UNITED STATES OF AMERICA,
EXCLUDING CHOICE-OF-LAW PRINCIPLES OF THE LAW OF SUCH STATE THAT WOULD REQUIRE
THE APPLICATION OF THE LAWS OF A JURISDICTION OTHER THAN SUCH STATE.

     8.3. Duplicate Originals, Execution in Counterpart.

     Two (2) or more duplicate originals hereof may be signed by the parties,
each of which shall be an original but all of which together shall constitute
one and the same instrument. This Agreement may be executed in one or more
counterparts and shall become effective at the time provided in Section 4.2
hereof, and each set of counterparts that, collectively, show execution by the
Company and each consenting Current Holder shall constitute one duplicate
original.

     8.4. Binding Effect.

     This Agreement shall be binding upon and shall inure to the benefit of the
Company and you and your respective successors and assigns.

   [Remainder of page intentionally left blank. Next page is signature page.]

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     If this Agreement is satisfactory to you, please so indicate by signing the
applicable acceptance on a counterpart hereof and returning such counterpart to
the Company, whereupon this Agreement shall become binding among the Company and
you in accordance with its terms.

                                            Very truly yours,

                                            A. M. CASTLE & CO.

                                            By:  /s/  G. Thomas McKane
                                               --------------------------------
                                            Name:     G. Thomas McKane
                                            Title:    President and
                                                      Chief Executive Officer

             [Signature Page to Second Amendment to Note Agreement]

<PAGE>

Accepted:

MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY

By:  David L. Babson & Company Inc.,
     as Investment Adviser

By:  /s/  Emeka O. Onukwugna
   ------------------------------------
Name:     Emeka O. Onukwugna
Title:    Managing Director

UNITED OF OMAHA LIFE INSURANCE COMPANY

By:  /s/  Edwin H. Garrison, Jr.
   ------------------------------------
Name:     Edwin H. Garrison, Jr.
Title:    First Vice President

The undersigned Guarantors of the company hereby acknowledge and agree to the
terms and provisions contained herein and consent to the Company's execution
hereof:

KEYSTONE TUBE COMPANY, LLC

By:  /s/  Jerry M. Aufox
   ------------------------------------
Name:     Jerry M. Aufox
Title:    Secretary

TOTAL PLASTICS, INC.

By:  /s/  Jerry M. Aufox
   ------------------------------------
Name:     Jerry M. Aufox
Title:    Secretary

             [Signature Page to Second Amendment to Note Agreement]

<PAGE>

PARAMONT MACHINE COMPANY LLC

By:  /s/  Jerry M. Aufox
   ------------------------------------
Name:     Jerry M. Aufox
Title:    Secretary

ADVANCED FABRICATING TECHNOLOGY, LLC

By:  /s/  Jerry M. Aufox
   ------------------------------------
Name:     Jerry M. Aufox
Title:    Secretary

OLIVER STEEL PLATE CO.

By:  /s/  Jerry M. Aufox
   ------------------------------------
Name:     Jerry M. Aufox
Title:    Secretary

METAL MART, LLC

By:  /s/  Jerry M. Aufox
   ------------------------------------
Name:     Jerry M. Aufox
Title:    Secretary

DATAMET, INC.

By:  /s/  Jerry M. Aufox
   ------------------------------------
Name:     Jerry M. Aufox
Title:    Secretary

             [Signature Page to Second Amendment to Note Agreement]

<PAGE>

                                    EXHIBIT A

     1. Section 1.1 of the Existing Note Agreement is hereby amended by deleting
the phrase "rate of 7.54% per annum" and substituting "Reset Rate" in lieu
thereof.

     2. Section 1.1 of the Existing Note Agreement is hereby amended by deleting
the phrase "9.54%" and substituting "the Reset Rate plus two percent (2%) per
annum" in lieu thereof.

     3. The definition of "Net Working Capital" appearing in Section 5.1 of the
Existing Note Agreement is hereby amended and restated in its entirety to read
as follows:

        "Net Working Capital - the sum of (i) the consolidated current
        assets of the Company and its Subsidiaries determined in
        accordance with GAAP and (ii) 75% of the LIFO Reserve, less
        the consolidated current liabilities (excluding Current Debt
        and Current Maturities of Funded Debt) of the Company and its
        Subsidiaries determined in accordance with GAAP."

     4. The definition of "Debt" appearing in Section 5.1 of the Existing Note
Agreement is hereby amended and restated in its entirety to read as follows:

        "Debt - All Indebtedness (excluding obligations with respect
        to bankers' acceptances and trade acceptance financings to the
        extent such obligations, in the aggregate, are less than
        $5,000,000, but including any such obligations, in the
        aggregate, in excess of such amount) of the Company or any
        Subsidiary, but excluding the aggregate outstanding investment
        or claim held by purchasers, assignees or other transferees of
        Receivables of the Company and its Subsidiaries in connection
        with Securitization Transactions."

     5. The definition of "Indebtedness appearing in Section 5.1 of the Existing
Note Agreement is hereby amended and restated in its entirety to read as
follows:

        "Indebtedness - means for any Person, without duplication, all
        (i) obligations for borrowed money or to pay the deferred
        purchase price of property or assets (except trade account
        payables), (ii) obligations secured by any Lien upon property
        or assets owned by such Person, whether or not such Person has

                                  Exhibit A-1

<PAGE>

        assumed or become liable for the payment of such obligations,
        (iii) obligations created or arising under any conditional
        sale or other title retention agreement with respect to
        property acquired, notwithstanding the fact that the rights
        and remedies of the seller, lender or lessor under such
        agreement in the event of default are limited to repossession
        or sale of property, (iv) Capitalized Lease Obligations, and
        (v) Guaranties of obligations of others of the character
        referred to in the foregoing clauses (i) through (iv), but
        excluding from Indebtedness the aggregate outstanding
        investment or claim held by purchasers, assignees or other
        transferees of Receivables of the Company and its Subsidiaries
        in connection with Securitization Transactions."

     6. The definition of "Receivables Purchase Agreement" appearing in Section
5.1 of the Existing Note Agreement is hereby amended and restated in its
entirety to read as follows:

        Receivables Purchase Agreement - means the Existing
        Receivables Purchase Agreement and any other similar agreement
        pursuant to which any one or more of the Company or any
        Subsidiary sells its accounts receivable as a means of
        providing it working capital for its business operations.

     7. The definition of "Consolidated Total Assets" appearing in Section 5.1
of the Existing Note Agreement is hereby amended and restated in its entirety to
read as follows:

        "Consolidated Total Assets - means, at any time, all assets of
        the Company and its Subsidiaries which would be reflected on a
        consolidated balance sheet of such Persons at such time
        prepared in accordance with GAAP."

     8. The following definitions are hereby added to Section 5.1 of the
Existing Note Agreement in their proper alphabetical order:

        "Applicable Base - means (a) prior to February 15, 2003,
        $100,000,000 and (b) on or after February 15, 2003 either (i)
        $100,000,000 if the Notes are Secured or (ii) $115,901,000 if
        the Notes are not Secured.

        "Acceptable Intercreditor Agreement - means an intercreditor
        and collateral agency agreement, in form and substance
        reasonably satisfactory to the Required Holders of the Notes,
        by and among an independent bank or trust company selected by
        the Company and reasonably satisfactory to the Required

                                  Exhibit A-2

<PAGE>

        Holders but not affiliated with any of such holders or the
        Other Senior Creditors, the Institutional Holders which are or
        may become a party to this Agreement, the Other Senior
        Creditors and the Company which shall provide, among other
        things, that any future Indebtedness of the Company owing to
        one or more of the Other Senior Creditors or the Institutional
        Holders party hereto which is incurred in compliance with
        Section 7.2 hereof, may be secured on an equal and ratable
        basis by the Liens which are granted pursuant to the terms of
        the Security Documents.

        Acceptable Revolving Credit Facility - means a loan agreement
        or similar facility pursuant to which a lender or lenders
        provides revolving loans to the Company or any Subsidiary for
        the primary purpose of financing such Person's ongoing
        business operations so long as such agreement or facility (a)
        is not secured by Liens on the property of the Company or any
        Subsidiary and (b) provides for interest rates, fees and other
        pricing terms similar to those generally available to
        borrowers whose unsecured long term debt is rated Investment
        Grade. For the avoidance of doubt, no Receivables Purchase
        Agreement shall constitute a Revolving Loan Facility.

        A. M. Castle Canada - means A. M. Castle & Co. (Canada), Inc.
        and any successor thereto.

        Collateral Agent - means an independent bank or trust company
        selected by the Company and reasonably satisfactory to the
        Required Holders but not affiliated with any of such holders
        or the Other Senior Creditors acting as collateral agent or
        trustee for the benefit of the holders of the Notes and the
        Other Senior Creditors pursuant to the provisions of the
        Security Documents.

        Consolidated EBITDA - means, for any period, the sum of (a)
        Consolidated Net Income for such period; plus (b) to the
        extent, and only to the extent, that such aggregate amount was
        deducted in the computation of such Consolidated Net Income,
        the aggregate amount of (i) income tax expense of the Company
        and its Subsidiaries for such period, plus (ii) charges for
        depreciation, amortization and other non-cash charges of the
        Company and its Subsidiaries for such period, plus (iii)
        Interest Charges for such period.

                                  Exhibit A-3

<PAGE>

        Current Debt - means, at any time and with respect to any
        Person, all Indebtedness of such Person outstanding at such
        time other than Funded Debt of such Person.

        Current Maturities of Funded Debt - means (without
        duplication), at any time and with respect to any item of
        Funded Debt, the portion of such Funded Debt outstanding at
        such time which by the terms of such Funded Debt or the terms
        of any instrument or agreement relating thereto is (a) due on
        demand or within 365 days from such time (whether by sinking
        fund, other required prepayment or final payment at maturity)
        and (b)(i) is not directly or indirectly renewable, extendible
        or refundable at the option of the obligor under an agreement
        or firm commitment in effect at such time to a date 365 days
        or more from such time or (ii) if so renewable, extendible or
        refundable at the option of the obligor, the obligor shall
        have agreed that it will not renew, extend or refund to a date
        365 days or more from such time.

        Effective Date - means the "Effective Date" as defined in the
        Second Amendment.

        Excluded Collateral - means (i) any property (whether
        currently existing or subsequently acquired) subject to a Lien
        permitted under Section 7.4 of this Agreement, to the extent
        the agreement creating such Lien prohibits additional Liens on
        such property; (ii) cash sufficient to secure the Company's
        (or any Subsidiaries') obligations to pay its workmen's
        compensation benefits, including obligations to any Person
        providing surety, insurance, letters of credit or other credit
        support so long as such cash does not secure any other
        obligation for any other purpose; (iii) all property purchased
        with proceeds of the note issued pursuant to the Loan
        Agreement dated as of November 1, 1994 between the Company and
        the City of Hammond, Indiana; (iv) all properties and assets
        of A. M. Castle Canada, and any successor holder of such
        assets; (v) other property with a deminumus fair market value
        that, individually or in the aggregate with all other such
        property, is not material to the continued business operations
        of the Company or any Subsidiary which owns such property; and
        (vi) any leasehold interest in any real property leased by the
        Company or any Subsidiary the termination of which would not
        result in a Material Adverse Effect.

                                   Exhibit A-4

<PAGE>

        Excluded Receivables - means, at any time, outstanding
        Receivables and Related Security arising out of the ordinary
        course of business of the Company or its Subsidiaries which
        shall have been sold to generate funds for working capital
        purposes pursuant to the provisions of a Receivables Purchase
        Agreement which makes funds available to the Company or any
        Subsidiary in an aggregate amount not exceeding $65,000,000 at
        any time and covering Receivables not exceeding, in the
        aggregate, $90,000,000 at any time.

        Existing Receivables Purchase Agreement - means that certain
        Receivables Purchase Agreement dated as of September 27, 2001
        among Castle Funding Corp. as seller, the Company as servicer,
        Market Street Funding Corporation as issuer and PNC Bank,
        National Association as administrator (as in effect on the
        Effective Date).

        Financial Covenant - means any covenant (or substantially
        equivalent default provision) which requires the Company to
        attain or maintain a prescribed level of financial condition,
        financial achievement or results of operations or cash flow or
        prohibits the Company from taking specified actions (such as
        incurring Debt, selling assets, making distributions or making
        investments) unless it will be in compliance with such a
        prescribed level immediately thereafter, including, without
        limitation, covenants of the type contained in Section 7 of
        this Agreement.

        First Year Ratio - means (a) prior to February 15, 2003, .65
        to 1.0; and (b) on or after February 15, 2003 either (i) .65
        to 1.0 if the Notes are Secured or (ii) .55 to 1.0 if the
        Notes are not Secured.

        Funded Debt - means with respect to any Person, all Debt which
        would, in accordance with GAAP, be required to be classified
        as a long term liability on the balance sheet of such Person
        prepared in accordance with GAAP, and without limiting the
        generality of the foregoing shall also include, without
        limitation (i) any Indebtedness which by its terms or by the
        terms of any instrument or agreement relating thereto matures,
        or which is otherwise payable or unpaid, more than 365 days
        from the date of creation thereof, (ii) any Indebtedness
        outstanding under a revolving credit or similar agreement
        providing for borrowings (and renewals and extensions thereof)
        which would, in accordance with GAAP, be required to be

                                  Exhibit A-5

<PAGE>

        classified as a long term liability of such Person, and (iii)
        any Guaranties of such Person with respect to Funded Debt of
        another Person.

        Governmental Authority - means (a) the government of (i) the
        United States of America or any State or other political
        subdivision thereof, or (ii) any jurisdiction in which the
        Company or any Subsidiary conducts all or any part of its
        business, or which asserts jurisdiction over any properties of
        the Company or any Subsidiary, or (b) any entity exercising
        executive, legislative, judicial, regulatory or administrative
        functions of, or pertaining to, any such government.

        Guarantee Agreement - means that certain Guarantee Agreement
        entered into by each of the Guarantors, substantially in the
        form of Exhibit C to the Second Amendment, as amended,
        restated or otherwise modified from time to time.

        Guarantors - means any Subsidiary that is a party to the
        Guarantee Agreement as of the Effective Date and each other
        Person which delivers a Guarantee Agreement or a joinder
        agreement to the Guarantee Agreement pursuant to Section 6.13
        hereof, together with the respective successors and assigns of
        each of the foregoing entities unless and until released in
        accordance with the terms of this Agreement or the Guarantee
        Agreement.

        Interest Charges - means, with respect to any period, the sum
        (without duplication) of the following (in each case,
        eliminating all offsetting debits and credits between the
        Company and its Subsidiaries and all other items required to
        be eliminated in the course of the preparation of consolidated
        financial statements of the Company and its Subsidiaries in
        accordance with GAAP): (a) all interest in respect of Debt of
        the Company and its Subsidiaries (including, without
        limitation, imputed interest on Capitalized Lease Obligations)
        deducted in determining Consolidated Net Income for such
        period, together with all interest capitalized or deferred
        during such period and not deducted in determining
        Consolidated Net Income for such period, and (b) all debt
        discount and expense amortized or required to be amortized in
        the determination of Consolidated Net Income for such period.

        Investment Grade - means in respect of any obligation that
        such obligation (i) has a rating of Baa3 or greater by Moody's
        Investor Service or a rating BBB- or greater by Standard &

                                  Exhibit A-6

<PAGE>

        Poor's; or (ii) has a rating of NAIC 1 or NAIC 2 from the
        National Association of Insurance Commissioners; or (iii) in
        the judgment of the Required Holders and the Other Senior
        Creditors, has a credit quality equal to or better than one
        which would be afforded either of the ratings described in
        clause (i) or clause (ii) of this definition.

        Keystone Guarantee - means that certain Guarantee Agreement,
        dated as of November 22, 2002, by the Company in favor of Bank
        of America, N.A. pursuant to which the Company guarantees (i)
        the payment to Bank of America by the City of LaPorte, Indiana
        (the "Keystone Issuer") of all principal, interest and any
        other amounts payable by the Keystone Issuer in respect of the
        Keystone Issuer's Economic Development Revenue Bonds, Series
        1998 (Keystone Services, Inc. Project), and (ii) the payment
        and performance by Keystone Service, Inc. of all of its
        covenants, agreements, obligations and liabilities under that
        certain Loan Agreement, dated as of April 1, 1998, between the
        Keystone Issuer and Keystone Service, Inc.

        Kreher Steel Letter of Credit Agreement - means the
        Application and Agreement for Standby Letter of Credit, dated
        March 15, 2002, as amended, pursuant to which Bank of America
        issued its Irrevocable Standby Letter of Credit No. 7409195 in
        the stated amount of $5,000,000.

        Material - means material in relation to the business,
        operations, affairs, financial condition, assets, properties
        or prospects of the Company and its Subsidiaries taken as a
        whole.

        Mecklenburg Guaranty - means that certain Guarantee Agreement,
        dated as of November 22, 2002, by the Company in favor of Bank
        of America, N.A. pursuant to which the Company guarantees the
        payment to Bank of America by The Mecklenburg County
        Industrial Facilities and Pollution Control Financing
        Authority (the "Mecklenburg Issuer") of all principal,
        interest and any other amounts payable by the Mecklenburg
        Issuer in respect to the Mecklenburg Issuer's Tax-Exempt
        Industrial Revenue Bonds (A. M. Castle & Co. Project) Series
        1996.

        Other Senior Creditors - means the following parties or their
        permitted successor and/or assigns: (i) Bank of America N.A.,
        (ii) Nationwide Life Insurance Company, (iii) The Northern

                                  Exhibit A-7

<PAGE>

        Trust Company and (iv) any other holders of Debt of the
        Company incurred after the Effective Date in compliance with
        Section 7.2 hereof.

        Other Senior Debt - Debt of the Company and/or its
        Subsidiaries (i) owed to the Bank of America N.A. pursuant to
        the terms of a Reimbursement Agreement, dated as of June 1,
        1994 by the Company in favor of NBD Bank, N.A., as assigned
        and amended pursuant to an Assignment and Amendment of
        Reimbursement Agreement, dated as of June 12, 2001, by and
        among the Company, Bank One, N.A. (successor to NBD Bank,
        N.A.) and Bank of America, N.A., as further amended pursuant
        to the Second Amendment to Reimbursement Agreement dated as of
        November 22, 2002, (ii) owed to Bank of America, N.A. pursuant
        to the terms of a Reimbursement Agreement dated as of November
        1, 1994 by the Company in favor of NBD Bank, N.A., as assigned
        an amended pursuant to the terms of an Assignment and
        Amendment of Reimbursement Agreement, dated as of November 1,
        2001, by and among the Company, Bank One, N.A. and Bank of
        America, N.A. and further amended pursuant to the terms of a
        Second Amendment to Reimbursement Agreement, dated as of
        November 1, 2001 and a Third Amendment to Reimbursement
        Agreement dated as of November 22, 2002, (iii) owed to Bank of
        America, N.A. pursuant to the terms of the Keystone Guarantee,
        (iv) owed to Bank of America, N.A. pursuant to the terms of
        the Mecklenburg Guaranty, (v) owed to Bank of America, N.A. as
        reimbursement for payments under the terms of the Kreher Steel
        Letter of Credit Agreement, as amended, (vi) owed pursuant to
        a Note Agreement dated as of April 1, 1996 between the Company
        and Nationwide Life Insurance Company, as amended by a First
        Amendment and Waiver to Note Agreement, dated as of December
        1, 1998 and a Second Amendment to Note Agreement dated as of
        November 22, 2002, (vii) owed pursuant to a Trade Acceptance
        Purchase Agreement dated as of August 13, 2001 between the
        Company and The Northern Trust Company, in an aggregate amount
        not in excess of $10,000,000, as amended by the First
        Amendment thereto dated as of April 29, 2002, the Second
        Amendment thereto dated as of June 30, 2002, and the Third
        Amendment thereto dated as of November 22, 2002 (viii) owed
        pursuant to a Note Agreement dated as of March 1, 1998 among
        the Company, Massachusetts Mutual Life Insurance Company,
        Mutual of Omaha Life Insurance Company, The Northwestern
        Mutual Life Insurance Company, United of Omaha Life Insurance

                                  Exhibit A-8

<PAGE>

        Company and Allstate Insurance Company, as amended by a First
        Amendment and Waiver to Note Agreement dated as of December 1,
        1998 and a Second Amendment to Note Agreement dated as of
        November 22, 2002, (ix) Debt of the Company incurred after the
        Effective Date in compliance with Section 7.2 hereof.

        Receivable - means a payment owing to a Person (whether
        constituting an account, chattel paper, document, instrument,
        letter-of-credit right, letter of credit, investment property
        or general intangible) arising from the provision of
        merchandise, goods or services by such Person, including the
        right to payment of any interest or finance charges and other
        obligations owing to such Person with respect thereto.

        Related Security - means with respect to any Receivable: (a)
        all supporting obligations, security interests or Liens and
        property subject thereto from time to time securing or
        purporting to secure the payment of such Receivable by the
        Person obligated thereon (b) all guaranties, indemnities and
        warranties, insurance policies, financing statements and other
        agreements or arrangements of whatever character from time to
        time supporting or securing payment of such Receivable, (c)
        all right, title and interest of the Company or any Subsidiary
        in and to any goods (including returned, repossessed or
        foreclosed goods) the sale of which gave rise to such
        Receivable; provided, that Related Security will not include
        returned goods only to the extent that all amounts required to
        be paid pursuant to the transactions involving the transfer of
        such Receivable in respect of such goods have been paid, (d)
        all collections with respect to any of the foregoing, (e) all
        records with respect to any of the foregoing, and (f) all
        proceeds of such Receivable or with respect to any of the
        foregoing.

        Required Holders - means, at any time, the holders of at least
        51% in principal amount of the Notes at the time outstanding
        (exclusive of Notes then owned by the Company, any Subsidiary
        or any Affiliate).

        Reset Rate - means an annual interest rate equal to 9.54%,
        provided, however, that in the event the Company shall have
        replaced the Existing Receivables Purchase Agreement (or any
        replacement thereof) in its entirety with a Revolving Loan
        Facility satisfactory to the Required Holders AND so long as
        neither the Company nor any Subsidiary is a party to any other
        Receivables Purchase Agreement, then upon execution of such

                                  Exhibit A-9

<PAGE>

        Revolving Loan Facility (and so long as neither the Company
        nor any Subsidiary is a party to a Receivables Purchase
        Agreement), the Reset Rate means an annual interest rate equal
        to 8.04%.

        Revolving Loan Facility - means a loan agreement or similar
        facility pursuant to which a lender or lenders provides
        revolving loans to the Company or any Subsidiary for the
        primary purpose of financing such Person's ongoing business
        operations, whether such agreement or facility is secured or
        unsecured. For the avoidance of doubt, no Receivables Purchase
        Agreement shall constitute a Revolving Loan Facility.

        Second Amendment - means the Second Amendment to the Note
        Agreement dated as of November 22, 2002 amending this
        Agreement.

        Second Year Ratio - means on or after December 31, 2003 either
        (i) .60 to 1.0 if the Notes are Secured, or (ii) .55 to 1.0 if
        the Notes are not Secured.

        Secured - means the Notes are secured by Liens on property
        representing (in the aggregate) 95% of the book value
        (measured as of the Effective Date) of all the real and
        personal property of the Company and Significant Subsidiaries
        required to be secured (excluding from such calculation,
        property that the Required Holders or any Other Senior
        Creditor in good faith has determined to be unsuitable as
        collateral for environmental concerns) pursuant to the terms
        and conditions of Section 5 of the Second Amendment including,
        without limitation, any condition that an Acceptable
        Intercreditor Agreement be executed prior to the grant of any
        Liens or security interests.

        Securitization Transactions - means one or more transactions
        involving the transfer by the Company or any of its
        Subsidiaries of Receivables and Related Security including,
        without limitation, the sale or granting of a Lien in such
        Receivables and Related Security, (not including a Revolving
        Loan Facility) to an SPV as a contribution to the capital of
        such SPV or for consideration in the form of cash or advances
        under a subordinated note due from such SPV, provided such
        transactions are entered into in good faith to provide working
        capital to the Company and its Subsidiaries, and provided
        further that the aggregate outstanding amount of the
        obligations incurred under all such transactions by all such
        Persons that would be characterized as principal if such

                                  Exhibit A-10

<PAGE>

        transaction or transactions were structured as a secured
        lending facility rather than as purchase transaction or
        transactions does not exceed $65,000,000 in the aggregate at
        any one time outstanding, and provided, further that the
        aggregate amount of Receivables and Related Security sold,
        pledged or otherwise transferred to the SPV does not exceed
        $90,000,000 in the aggregate at any one time outstanding.

        Security Documents - means each of the security agreements,
        mortgages, deeds of trust, collateral assignments and other
        similar documents granting Liens to secure, directly or
        indirectly, the obligations of the Company under this
        Agreement or the Notes or any of the Guarantors under the
        Guarantee Agreement.

        Senior Financial Officer - means the chief financial officer,
        principal accounting officer, treasurer or comptroller of the
        Company.

        Significant Subsidiary - means all Subsidiaries of the Company
        other than: (i) A. M. Castle Canada, (ii) any SPV and (iii)
        any Subsidiary of the Company which is not required to be a
        Guarantor pursuant to the provisions of the first sentence of
        Section 6.13 of this Agreement so long as such Subsidiary
        described in the foregoing has not guaranteed any Debt of the
        Company or any other Subsidiary (other than the Debt
        outstanding under this Agreement and the Other Senior Debt).

        SPV - means an entity in which the Company or any of its
        Subsidiaries owns an equity interest and a substantial
        economic interest created and maintained for the sole purpose
        of purchasing or otherwise acquiring interests in Receivables
        and Related Security from the Company or any of its
        Subsidiaries.

        Subsidiary Side Letter - means a letter from the Company dated
        as of the Effective Date to the holders of the Notes setting
        forth a description of the Company's Subsidiaries showing, as
        to each Subsidiary, the book value of its assets as of
        September 30, 2002 and its contribution to Consolidated EBITDA
        for the fourth quarter period ended on September 30, 2002.

     9. Section 6.6 of the Existing Note Agreement is hereby amended by adding
the following new paragraph (j) at the end of Section 6.6:

        "(j) To the extent not otherwise provided herein, all
        information required to be delivered by the Company or any of
        its Subsidiaries to the Other Senior Creditors pursuant to the

                                  Exhibit A-11

<PAGE>

         terms of any one or more agreements between or among any one
         or more of them and the Company or any Subsidiary at the same
         time and in the same manner as delivered to such Persons."

     10. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.12 to read as follows:

         "6.12 Maintenance of Most Favored Lender Status. The Company
         hereby acknowledges and agrees that if the Company or any
         Subsidiary shall enter into or be a party to a Revolving Loan
         Facility which contains for the benefit of any lender or
         other Person any Financial Covenants or events of default in
         respect thereof that are more favorable to such lender than
         the Financial Covenants and Events of Default in respect of
         such Financial Covenants contained in this Agreement then,
         and in each and any such event, the Financial Covenants and
         Events of Default in this Agreement shall be and shall be
         deemed to be, notwithstanding Section 9.1 and without any
         further action on the part of the Company or any other Person
         being necessary or required, amended to permanently afford
         (until so amended or waived pursuant to Section 9.1) the
         holders of the Notes the same benefits and rights as so
         afforded to any such lender or Person (such deemed amendment
         may be the addition of one or more new Financial Covenants
         and Events of Default with respect thereto addressing matters
         not addressed by the then existing Financial Covenants and
         Events of Default with respect thereto set forth herein, as
         well as modifications to such Financial Covenants and Events
         of Default with respect thereto that are more favorable to
         such lender or Person). The Company will promptly deliver to
         each holder of Notes a copy of each Revolving Loan Facility
         entered into after the Effective Date. Without limiting the
         effectiveness of the first sentence of this Section 6.12, the
         Company agrees, no later than forty-five (45) days following
         the date the Company or any Subsidiary shall have granted any
         such lender or Person any such benefits or rights, to enter
         into such documentation as the Required Holders may
         reasonably request to evidence the amendments provided for in
         this Section 6.12."

                                  Exhibit A-12

<PAGE>

     11. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.13:

         "6.13 Subsequent Guarantors. The Company covenants that at
         all times the assets of the Company and all Guarantors shall
         constitute at least 95% of Consolidated Total Assets
         (excluding for purposes of this calculation, the assets of A.
         M. Castle Canada and any SPV) and the Company and the
         Guarantors shall have contributed at least 95% of
         Consolidated EBITDA (excluding for purposes of this
         calculation, the EBITDA of A. M. Castle Canada and any SPV)
         for the four quarters then most recently ended. To the extent
         necessary to permit the Company to comply with the foregoing
         the Company will cause one or more Significant Subsidiaries
         to become Guarantors and the Company will cause each such
         Subsidiary to deliver to the holders of the Notes (a) a
         joinder agreement to the Guarantee Agreement, which joinder
         agreement is to be in the form of Exhibit A to the Guarantee
         Agreement; (b) an opinion of counsel for such Person with
         respect to the Guarantee Agreement and such joinder agreement
         which is in form and substance reasonably acceptable to the
         Required Holders; and (c) all applicable Security Documents
         and any other documents as may be necessary or appropriate to
         permit the Company to be in compliance with its obligations
         set forth in Section 6.14. The Guarantors shall be permitted
         to guaranty all Other Senior Debt."

     12. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.14:

         "6.14 Collateral Covenant. At any time on or after the
         Effective Date (as such term is defined in the Second
         Amendment), at the Company's expense:

                  (a) The Company will, and will cause each Guarantor
         to, execute and deliver, within forty-five (45) days after
         any request therefor by the Required Holders, all further
         instruments and documents and take all further action that
         may be necessary, in order to give effect to, and to aid in
         the exercise and enforcement of the Liens, rights and
         remedies of the holders of the Notes and the Collateral Agent
         under, the Note Agreement, the Notes, the Security Documents
         and each other instrument and agreement executed in
         connection with any of the foregoing.

                  (b) The Company will, and will cause each Guarantor
         to, take any and all steps, and execute and deliver one or
         more Security Documents to insure that all property of the
         Company and its Significant Subsidiaries (other than Excluded

                                  Exhibit A-13

<PAGE>

         Receivables and Excluded Collateral) will be subject to Liens
         in favor of the Collateral Agent pursuant to one or more
         Security Documents in form reasonably satisfactory to the
         Required Holders."

     13. Section 6 of the Existing Note Agreement is hereby amended by adding
the following new Section 6.15:

         "6.15 Receivables Purchase Agreement. At such time as any
         Receivables Purchase Agreement is replaced with a Revolving
         Loan Facility satisfactory to the Required Holders, neither
         the Company nor any of its Subsidiaries or SPVs will enter
         into, or be a party to, any Receivables Purchase Agreement."

     14. Section 7.1 of the Existing Note Agreement is hereby amended and
restated in its entirety to read as follows:

         "7.1 Adjusted Consolidated Net Worth. The Company will not
         permit its Adjusted Consolidated Net Worth (calculated on the
         last day of each fiscal quarter) to be less than the
         Applicable Base plus the cumulative sum of 40% of
         Consolidated Net Income (but only if a positive number) for
         (i) each completed fiscal year of the Company ending after
         December 31, 2001, and (ii) the period from the beginning of
         the then current fiscal year through the end of the then most
         recently ended fiscal quarter which shall have been completed
         (if any shall have been completed) in such then current
         fiscal year; provided, that at any time the Company or any
         Subsidiary incurs additional Indebtedness, immediately
         following and after giving effect to the incurrence of such
         additional Indebtedness, the Adjusted Consolidated Net Worth
         shall not be less than the minimum Adjusted Consolidated Net
         Worth that would have been permitted as of the last day of
         the then most recently ended fiscal quarter."

     15. Section 7.2 of the Existing Note Agreement is hereby amended and
restated in its entirety to read as follows:

         "7.2 Consolidated Debt. The Company will not permit the ratio
         (calculated on the last day of each fiscal quarter) of
         Consolidated Debt to Consolidated Total Capitalization to
         exceed the applicable ratio set forth opposite such quarter
         end in the table below; provided, that at any time the
         Company or any Subsidiary incurs additional Indebtedness,
         immediately following and after giving effect to the

                                  Exhibit A-14

<PAGE>

         incurrence of such additional Indebtedness, the ratio of
         Consolidated Debt to Consolidated Total Capitalization shall
         not exceed the applicable ratio as of the then most recently
         ended fiscal quarter:

------------------------------------ ------------------------

Each Fiscal Quarter End              The applicable ratio is:
------------------------------------ ------------------------

Before December 31, 2003             First Year Ratio
------------------------------------ ------------------------

On or after December 31, 2003 and    Second Year Ratio
prior to March 31, 2004
------------------------------------ ------------------------

On or after March 31, 2004           .55 to 1.0"
------------------------------------ ------------------------

     16. Section 7.4 of the Existing Note Agreement is hereby amended by
deleting paragraph (i) and adding new paragraphs (i), (j) and (k) to follow
paragraph (h):

                  "(i) Liens in favor of the Collateral Agent to
         secure the Notes and the Other Senior Debt as provided in the
         Security Documents and an Acceptable Intercreditor Agreement;
         and

                  (j) Liens attaching solely to the property and
         assets of A. M. Castle Canada to secure Debt of A. M. Castle
         Canada and no other Debt; and

                  (k) Liens not otherwise permitted by paragraphs (a)
         through (j) of this Section 7.4 created, assumed or incurred
         subsequent to the Closing Date to secure Indebtedness,
         provided that at the time of creating, assuming or incurring
         such additional Indebtedness and after giving effect thereto
         and to the application of the proceeds therefrom the sum
         (without duplication) of the aggregate principal amount of
         outstanding Consolidated Indebtedness secured by Liens
         permitted by this Section 7.4(k) does not exceed 10% of
         Adjusted Consolidated Net Worth."

     17. section 7.5 of the Existing Note Agreement is hereby amended by (i)
adding the phrase "(other than A. M. Castle Canada)" after the word "Subsidiary"
in the second line and (ii) deleting the "." at the end of clause (b),
substituting a ";" in lieu thereof and adding the following new language:

         "provided, however, that if any Subsidiary merges into any
         other Person in compliance with the terms hereof or conveys
         or transfers all or any part of its assets in compliance with
         the terms hereof and following such conveyance or transfer

                                  Exhibit A-15

<PAGE>

         such Subsidiary no longer constitutes a Significant
         Subsidiary, then the Required Holders, pursuant to the terms
         of the Acceptable Intercreditor Agreement, will promptly take
         all necessary action to cause such Guarantor to be released
         from the Guarantee Agreement as of the time of such sale,
         conveyance or transfer."

     18. Section 7.6 of the Existing Note Agreement is hereby amended by (i)
inserting the phrase "(other than A. M. Castle Canada)" after the word
"Subsidiary" in the first sentence and (ii) adding the following new paragraph
at the end of the section to read as follows:

         "If the Company or any Significant Subsidiary gives notice
         that it intends to sell, lease, transfer or otherwise dispose
         of any assets in compliance with the terms of this Section
         7.6, the holders of the Notes, pursuant to the terms of the
         Acceptable Intercreditor Agreement, will promptly take such
         action reasonably requested by the Company to instruct the
         Collateral Agent to release such assets from the Liens
         granted pursuant to the Security Documents as of the time of
         any sale, lease, transfer or other disposition made in
         compliance with the terms of said Section 7.6."

     19. Section 7.7 of the Existing Note Agreement is hereby amended by (i)
adding the phrase "(other than A. M. Castle Canada)" after the word "Subsidiary"
in the first sentence and (ii) deleting the "." at the end of clause (c),
substituting a ";" in lieu thereof and adding the following new paragraph:

         "provided, however, that if the Company gives notice that it
         intends to sell, transfer or otherwise dispose of the capital
         stock of a Guarantor in compliance with the terms of this
         Section 7.7, the holders of the Notes will promptly take all
         necessary action to cause such Guarantor to be released from
         the Guarantee Agreement and shall instruct the Collateral
         Agent to release the assets of such Guarantor from the Liens
         granted pursuant to the Security Documents, in each case, as
         of the time of any sale, transfer or other disposition made
         in compliance with the terms of said Section 7.7."

     20. Section 7.9 of the Existing Note Agreement is hereby amended by adding
the phrase "and (iii) other than the sale of equity securities to an Affiliate
on November 22, 2002" at the end thereof.

                                  Exhibit A-16

<PAGE>

     21. Section 8.1 of the Existing Note Agreement is hereby amended by
deleting the "." at the end of paragraph (h); subparagraph (vii) thereof and
inserting ";" in lieu thereof and adding new paragraphs (i), (j), (k) and (l),
to follow paragraph (h) (vii):

          "(i) except as otherwise specifically permitted and provided for in
     this Note Agreement, including, without limitation, Section 6.13, Section
     7.6, Section 7.7 and paragraph 5(b) of the Second Amendment to this
     Agreement (i) the obligations of any Guarantor contained in the Guarantee
     Agreement or any of the Security Documents shall cease to be in full force
     and effect or shall be declared by a court or Governmental Authority of
     competent jurisdiction to be void, voidable or unenforceable against any
     such Guarantor; (ii) the Company or any Guarantor shall contest the
     validity or enforceability of the Guarantee Agreement or any of the
     Security Documents against any such Guarantor, or (iii) the Company or any
     Guarantor shall deny that such Guarantor has any further liability or
     obligation under the Guarantee Agreement or any of the Security Documents;

          (j) any representation or warranty made in writing by or on behalf of
     the Company or any Guarantor or by any officer of the Company or any
     Guarantor in any amendment to this Agreement (including, without
     limitation, the Second Amendment), the Guarantee Agreement or any Security
     Document or in any writing furnished in connection therewith or pursuant to
     the terms thereof proves to have been false or incorrect in any material
     respect on the date as of which made;

          (k) except as otherwise specifically permitted and provided for in
     this Note Agreement, including, without limitation, Section 6.13, Section
     7.6, Section 7.7 and paragraph 5(b) of the Second Amendment to this
     Agreement (i) any Security Document shall cease to be in full force and
     effect (other than in accordance with its terms) or shall be declared by
     any court or Governmental Authority of competent jurisdiction to be void,
     voidable or unenforceable against the grantor thereunder; (ii) the validity
     or enforceability of any Security Document against the grantor thereof
     shall be contested by such grantor; or (iii) the Company or any Guarantor
     shall default in the performance or observance of any covenant or
     provisions under the Guarantee Agreement or any Security Document; or

          (l) the Company or any Subsidiary shall enter into a Receivables
     Purchase Agreement after the termination of the Existing Receivables
     Purchase Agreement (or any replacement thereof) and its replacement with a
     Revolving Credit Facility satisfactory to the Required Holders."

                                  Exhibit A-17

<PAGE>

                                   EXHIBIT B1

                          AMENDMENTS TO EXISTING NOTES

     The Existing Notes outstanding on the Effective Date are hereby, without
any further action required on the part of any other Person, deemed to be
automatically amended to conform to and have the terms provided in Attachment I
hereto (except that the principal amount and the payee of each Note shall remain
unchanged). Any Note issued on or after the Effective Date shall be in the form
of Attachment I hereto.

                                  Exhibit B1-1

<PAGE>

                                  ATTACHMENT 1

                               A. M. CASTLE & CO.

                         RESET RATE SENIOR SECURED NOTE
                                Due May 30, 2009

                                 _______________

Registered Note No. R-____                                    __________________
$_________________________

     A. M. CASTLE & CO., a Maryland corporation (the "Company"), for value
received, promises to pay to ______________ or registered assigns, on May 30,
2009, the principal amount of _________________ ($__________) and to pay
interest (computed on the basis of a 360-day year of twelve 30-day months) on
the principal amount from time to time remaining unpaid hereon at the Reset Rate
specified in the Note Agreement referred to below from the date hereof until
maturity, payable in arrears on May 30 and November 30, in each year, commencing
November 30, 1997, and at maturity, and to pay interest on any overdue
principal, on any overdue Make-Whole Amount and (to the extent legally
enforceable) on any overdue installment of interest at a per annum rate equal to
the greater of (a) 11.54% and (b) the sum of the reference rate announced by
Bank of America NT&SA from time to time as its "prime rate" for United States
domestic loans in United States dollars, plus 2%, until paid. Payments of the
principal of, the Make-Whole Amount, if any, and the interest on this Note shall
be made in lawful money of the United States of America in the manner and at the
principal office of the Company.

     This Note is issued under and pursuant to the terms and provisions of the
Note Agreement, dated as of May 15, 1997, entered into by the Company with the
Purchasers named in Schedule I thereto (as may be amended from time to time, the
"Note Agreement"), and this Note and any holder hereof are entitled to all of
the benefits provided for by such Note Agreement or referred to therein.
Reference is made to the Note Agreement for a statement of such benefits and for
the terms governing this Note. Capitalized terms used herein shall have the
meanings ascribed to them in the Note Agreement unless provided otherwise
herein.

     As provided in the Note Agreement, upon surrender of this Note for
registration of transfer, duly endorsed or accompanied by a written instrument
of transfer duly executed by the registered holder hereof or its attorney duly
authorized in writing, a new Note for a like unpaid principal amount will be
issued to, and registered in the name of, the transferee upon the payment of the
taxes or other governmental charges, if any, that may be imposed in connection
therewith. The Company may treat the person in whose name this Note is
registered as the owner hereof for the purpose of receiving payment and for all
other purposes, and the Company shall not be affected by any notice to the
contrary.

     This Note may be declared due prior to its expressed maturity date,
voluntary prepayments may be made hereon and certain prepayments are required to
be made hereon all in the events, on the terms and in the manner as provided in

                                  Exhibit B1-2

<PAGE>

the Note Agreement. Such prepayments include certain required prepayments on May
30 of each year beginning May 30, 2005 through May 30, 2008, inclusive, with the
remaining principal payable May 30, 2009, and certain optional prepayments with
a Make-Whole Amount.

     Should the indebtedness represented by this Note or any part thereof be
collected in any proceeding provided for in the Note Agreement or be placed in
the hands of attorneys for collection, the Company agrees to pay, in addition to
the principal, Make-Whole Amount, if any, and interest due and payable hereon,
all costs of collecting this Note, including attorneys' fees and expenses.

     This Note and the Note Agreement are governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
Illinois.

                                            A. M. CASTLE & CO.

                                            By:________________________________
                                            Title:

                                  Exhibit B1-3

<PAGE>

                                    EXHIBIT D

                               [Form of Guarantee]

     This GUARANTEE AGREEMENT (as the same may hereafter be amended,
supplemented or otherwise modified, this "Guarantee"), dated as of November 22,
2002, is by Datamet, Inc., an Illinois Corporation, Keystone Tube Company, LLC,
a Delaware limited liability company, Total Plastics, Inc., a Michigan
corporation, Paramont Machine Company, LLC, a Delaware limited liability
company, Advanced Fabricating Technology, LLC, a Delaware limited liability
company, Oliver Steel Plate Co., a Delaware corporation and Metal Mart, LLC, a
Delaware limited liability company (each of whom, together with each other
Person which from time to time becomes a Guarantor pursuant to Section 5 hereof,
is referred to herein, individually, as a "Guarantor" and, collectively, as the
"Guarantors"), in favor of Massachusetts Mutual Life Insurance Company and
United of Omaha Life Insurance Company (together with their successors and
assigns including, without limitation, future holders of the Notes (defined
below), herein collectively referred to as the "Noteholders").

                                    RECITALS:

     WHEREAS, each of the Guarantors is a direct or indirect Subsidiary of A. M.
Castle & Co., a Maryland corporation (together with its successors and assigns,
the "Company");

     WHEREAS, the Guarantors' obligations under this Guarantee (and the
Guarantors' obligations under guarantees to the Other Senior Creditors) shall be
secured by Liens granted on certain property of the Guarantors pursuant to the
terms of certain of the security documents to be entered into by the Guarantors
(collectively, the "Security Documents");

     WHEREAS, the Company entered into a Note Agreement, dated as of May 15,
1997 (as amended by that certain First Amendment to Note Purchase Agreement
dated December 1, 1998 and the Second Amendment (as defined below), and as may
be further as amended, modified, restated or replaced from time to time, the
"Note Agreement"), with the purchasers identified on Schedule 1 thereto (the
"Purchasers"), pursuant to which the Company, among other things, issued to the
Purchasers $25,000,000 of its 7.54% Senior Notes due May 30, 2009 (the "Notes").

     WHEREAS, the Noteholders agreed to the amendments to the Note Agreement and
the Notes as set forth in that certain Second Amendment to Note Agreement, dated
of even date herewith (the "Second Amendment") conditioned upon, among other
things, the execution and delivery by the Guarantors of this Guarantee;

     WHEREAS, each Guarantor will receive substantial direct and indirect
economic, financial and other benefits as a result of the amendments set forth
in the Second Amendment.

     NOW THEREFORE, in consideration of the foregoing, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, each Guarantor hereby agrees as follows:

                                  Exhibit D-1

<PAGE>

1.   DEFINITIONS.

     All capitalized terms used herein and not defined herein have the
respective meanings given them in the Note Agreement.

2.   GUARANTEE.

     2.1. Guarantee of Payment and Performance. Each Guarantor hereby
absolutely, unconditionally and irrevocably, on a joint and several basis with
each other Guarantor, guarantees to the Noteholders:

          (a) the full and punctual payment by the Company of the principal of,
     and interest and Make-Whole Amount, if any, on, the Notes at any time
     outstanding and the due and punctual payment of all other amounts payable,
     and all other indebtedness owing, by the Company to the Noteholders under
     the Note Agreement, the Notes, the Security Documents to be entered into by
     the Guarantors and each of the other instruments and agreements executed or
     to be executed in connection with the foregoing (collectively, the
     "Financing Documents") in each case when and as the same shall become due
     and payable, whether at maturity, pursuant to mandatory or optional
     prepayment, by acceleration or otherwise, all in accordance with the terms
     and provisions of this Guarantee, the Note Agreement, the Notes and the
     other Financing Documents, including, without limitation, overdue interest,
     post-petition interest, indemnification payments and all of such
     obligations which would become due but for the operation of the automatic
     stay pursuant to Section 362(a) of the United States Bankruptcy Code and
     the operation of Sections 502(b) and 506(b) of the United States Bankruptcy
     Code; and

          (b) the full and punctual performance by the Company of all duties,
     agreements, covenants and obligations of the Company contained in the Note
     Agreement, the Notes and the other Financing Documents,

and the full and prompt payment, on demand, of all reasonable costs and expenses
incurred by (x) the Noteholders in connection with the negotiation, preparation,
execution and delivery of this Guarantee and (y) any one or more of the
Noteholders or any trustee or agent acting on behalf of the Noteholders in
enforcing any of their respective rights and remedies under this Guarantee, the
Note Agreement, the Notes or any of the other Financing Documents, including,
but not limited to, all reasonable attorney's fees and expenses (whether or not
there is litigation), court costs and all costs in connection with any
proceedings under the United States Bankruptcy Code (collectively, the
"Guarantied Obligations"), provided that the Guarantor shall not be liable for
the reasonable fees and expenses of more than one separate firm of attorneys
representing the Noteholders.

     2.2. Nature of Guarantee. This is a continuing, absolute and unconditional
Guarantee of payment and performance and not merely of collection, and shall
continue in full force and effect until such time as the Guarantied Obligations
have been fully and irrevocably paid.

                                  Exhibit D-2

<PAGE>

     2.3. Binding Nature of Certain Adjudications. Each Guarantor shall be
conclusively bound by the final adjudication in any action or proceeding, legal
or otherwise to which the Company is a party, involving any controversy arising
under, in connection with, or in any way related to, any of the Guarantied
Obligations, and by a final judgment, award or decree entered therein.

     2.4. No Duty to Pursue Others. Upon any default with respect to the
Guarantied Obligations, the Note Agreement or the Notes, and after the
expiration of any notice or cure periods, any one or more of the Noteholders or
any trustee or agent acting on the Noteholders' behalf may proceed to enforce
its rights and remedies directly against any one or more of the Guarantors
without first proceeding against the Company or any other Person liable for the
Guarantied Obligations or any security for the Guarantied Obligations.

     2.5. No Release of Guarantors. Each Guarantor's liability under this
Guarantee shall not be limited, diminished or extinguished by, and each
Guarantor shall not be entitled to raise as a defense, any:

          (a) invalidity, irregularity or unenforceability of the Guarantied
     Obligations or of such Guarantor's obligations hereunder;

          (b) failure of such Guarantor to be given notice of default by the
     Company;

          (c) reorganization, merger or consolidation of the Company or any
     Guarantor into or with any other Person;

          (d) waiver of the Company's defaults or extensions of due dates for
     payments or other accommodations, indulgences or forbearance granted to the
     Company;

          (e) release of or non-perfection with respect to part or all of any
     security for the Guarantied Obligations or the Notes;

          (f) taking or accepting of any other security, collateral or guaranty
     of payment of any or all of the Guarantied Obligations or the Notes;

          (g) release of or settlement or compromise with any one or more
     Persons who constitute guarantors or the release of or settlement or
     compromise with any one or more Persons who are otherwise liable for the
     payment or performance of all or any portion of the Guarantied Obligations
     or the Notes and who are not primary obligors thereon;

                    (h) any loss or impairment of any right of any Guarantor for
               subrogation, reimbursement or contributions;

                    (i) assignment or other transfer by the Noteholders (or any
               trustee or agent acting on the behalf of the Noteholders, as the
               case may be) of any part of the Guarantied Obligations or the
               Notes, or any collateral or security securing any portion of the
               Guarantied Obligations or the Notes;

                                  Exhibit D-3

<PAGE>

                    (j) illegality or impossibility of performance on the part
               of the Company or the Guarantors under the Note Agreement, the
               Notes or this Guarantee; or

                    (k) other acts or omissions of the Noteholders which, in the
               absence of this Section, would operate so as to impair, diminish
               or extinguish any Guarantor's liability under this Guarantee.

     2.6. Certain Waivers.

          (a) Waiver of Notice. Each Guarantor hereby waives notice of (i)
     acceptance of this Guarantee, (ii) any amendment, extension or other
     modification of the Note Agreement, the Notes and/or any of the other
     Financing Documents, (iii) any loans or advances made by any one or more of
     the Noteholders to the Company, (iv) the occurrence of a Default or Event
     of Default under the Note Agreement or the Notes, (v) any transfer or other
     disposition of the Guarantied Obligations or the Notes pursuant to Section
     10 of the Note Agreement, and (vi) any other action at any time taken or
     omitted by the Noteholders or by any trustee or agent acting on behalf of
     any one or more Noteholder, and generally, all demands and notices of every
     kind in connection with this Guarantee, the Note Agreement, the Notes and
     the other Financing Documents, except as provided herein and in the Note
     Agreement.

          (b) Certain Other Waivers. Each Guarantor hereby waives (i) diligence,
     presentment, demand for payment, protest or notice, whether of nonpayment,
     dishonor, protest or otherwise, (ii) all setoffs, counterclaims and claims
     of recoupment against, the Guarantied Obligations or the Notes that may be
     available to the Company or any other guarantor of the Guarantied
     Obligations or the Notes (it being understood that the waivers set forth
     anywhere in this Guarantee shall not preclude any action by such Guarantor,
     after payment in full of its obligations hereunder, to recover for any
     tortious action which resulted in injury to such Guarantor), (iii) any
     defense based upon or in any way related to any claim that any election of
     remedies by any one or more of the Noteholders (or by any trustee or agent
     acting on behalf of the Noteholders) impaired, reduced, released or
     otherwise extinguished any rights such Guarantor might otherwise have had
     against the Company or any security, (iv) any claim based upon or in any
     way related to any of the matters referred to in Section 2.5, and (v) any
     claim that this Guarantee should be strictly construed against the
     Noteholders.

     2.7. Bankruptcy; Other Matters. In the event that, pursuant to any
insolvency, bankruptcy, reorganization, receivership or other debtor relief law,
or any judgment, order or decision thereunder, or for any other reason any
Noteholder must rescind or restore any payment received by such Noteholder in
connection with the Guarantied Obligations, the Note Agreement, the Notes or any
other Financing Documents, or the Company ceases to be liable to any Noteholder
for any of the Notes (other than by the full and irrevocable payment in full
thereof), then any prior release or discharge from this Guarantee shall be
without effect and this Guarantee and the obligations of Guarantor hereunder
shall remain in full force and effect.

                                  Exhibit D-4

<PAGE>

     2.8. Payments by Guarantors. If all or any part of the Guarantied
Obligations or the Notes are not paid when due, whether at maturity, by reason
of acceleration, or otherwise, and remain unpaid until the expiration of any
applicable grace or cure period, or otherwise upon the occurrence and
continuance of any Event of Default, the Guarantors shall, immediately upon
demand by any Noteholder (or any trustee or agent acting on behalf of the
Noteholders), and without presentment, protest, notice of protest, notice of
nonpayment, notice of intention to accelerate or acceleration or any other
notice whatsoever, pay in immediately available funds, the amount due on the
Guarantied Obligations for distribution to such Noteholder. All obligations of
the Guarantors under this Guarantee shall be performable and payable to each
Noteholder at its offices at the addresses set forth in Schedule A of the Note
Agreement.

     2.9. Failure to Pay Guarantied Obligations. If any Guarantor fails to pay
the Guarantied Obligations as required by this Guarantee, then each of the
Guarantors, as the principal obligor and not as a guarantor only, shall jointly
and severally pay, on demand, all out-of-pocket costs and expenses incurred or
expended by any one or more of the Noteholders (and any trustee or agent acting
on behalf of the Noteholders) in connection with the enforcement of, and the
preservation of the Noteholders' rights under and with respect to, this
Guarantee, including, but not limited to, all reasonable attorney's fees and
expenses (whether or not there is litigation), court costs and all costs
incurred in connection with any proceedings under the United States Bankruptcy
Code, provided that the Guarantor shall not be liable for the reasonable fees
and expenses of more than one separate firm of attorneys representing the
Noteholders. Until paid, all such amounts recoverable under this Section 2.9
shall bear interest from the time when such amounts become due until payment in
full thereof at the rate for overdue principal set forth in the Note Agreement.

     2.10. Subordination of Affiliate Obligations. Each of the Guarantors agrees
that all Affiliate Obligations (as defined below), interest thereon, and all
other amounts due with respect thereto, are hereby subordinated as to time of
payment and in all other respects to all the Guarantied Obligations. Each
Guarantor agrees that at all times during the existence of an Event of Default,
such Guarantor shall not be entitled to enforce or receive any payment in
respect thereof until all sums then due and owing to any one or more of the
Noteholders in respect of the Guarantied Obligations shall have been paid in
full. If any payment shall have been made to any Guarantor by the Company or
such indebted Person on any such Affiliate Obligation during any time that an
Event of Default exists and there are Guarantied Obligations outstanding, such
Guarantor shall collect and receive all such payments as trustee for the
Noteholders, to the extent of all amounts owing with respect to this Guarantee,
and such amounts shall be immediately paid over to the Noteholders (or any
trustee or agent acting on behalf of the Noteholders), without affecting in any
manner the liability of the Guarantors under the other provisions of this
Guarantee. For purposes of this Section 2.10, "Affiliate Obligation" means any
indebtedness of any kind of the Company, or any Person obligated in respect of
the Guarantied Obligations to Guarantor.

     2.11. Postponement of Subrogation Rights. No Guarantor will exercise any
Subrogation Rights (as defined below) which it may acquire with respect to this
Guarantee, until the prior and indefeasible payment, in full and in cash, of all
Guarantied Obligations. Any amount paid to a Guarantor by or on behalf of the

                                  Exhibit D-5

<PAGE>

Company or any other guarantor of the Guarantied Obligations on account of any
such Subrogation Rights prior to the payment in full of all Guarantied
Obligations shall immediately be paid over to the Noteholders and credited and
applied against the Guarantied Obligations whether matured or unmatured, in
accordance with the terms of the Note Agreement. In furtherance of the
foregoing, for so long as any Guarantied Obligations remain outstanding, no
Guarantor shall take any action or commence any proceeding against the Company
or any other guarantor of the Guarantied Obligation, (or any of their respective
successors or assigns, whether in connection with a bankruptcy proceeding or
otherwise) to recover any amounts in the respect of payments made under this
Guarantee to the Noteholders and each Guarantor hereby forbears realizing any
benefit of and any right to participate in any security which may be held by the
Noteholders or any agent or trustee acting on their behalf. For purposes of this
Section 2.11, "Subrogation Right" means any right of contribution, subrogation,
reimbursement, indemnity, or repayment, and any other "claim", as that term is
defined in the United States Bankruptcy Code, which any Guarantor might now have
or hereafter acquire against the Company or any other guarantor of the
Guarantied Obligations that arises from the existence or performance of such
Guarantor's obligations under this Guarantee, and any right to participate in
any security for the Guarantied Obligations.

     2.12. Notices in Respect of Payments. If any Guarantor shall pay to any
holder of the Notes from time to time any amount in respect of the Guarantied
Obligations, such Guarantor shall, within five (5) Business Days after making
such payment, provide notice of such payment to each other holder of the Notes
at such time.

     2.13. Limitation on Guarantied Obligations. Notwithstanding anything in
Section 2.1 or elsewhere in this Guarantee or any other Financing Document to
the contrary, the obligations of the Guarantors under this Guarantee shall at
each point in time be limited to an aggregate amount equal to the greatest
amount that would not result in such obligations being subject to avoidance, or
otherwise result in such obligations being unenforceable, at such time under
applicable law (including, without limitation, to the extent, and only to the
extent, applicable to the Guarantors, Section 548 of the United States
Bankruptcy Code and any comparable provisions of the law of any other
jurisdiction, any capital preservation law of any jurisdiction and any other law
of any jurisdiction that at such time limits the enforceability of the
obligations of the Guarantors under this Guarantee). This Section 2.13 is
intended solely to preserve the rights of the Noteholders hereunder to the
maximum extent permitted by applicable law, and neither the Guarantors nor any
other Person shall have any rights under this Section 2.13 that it would not
otherwise have under applicable law.

     2.14. Separate Action; Other Enforcement Rights. Each of the rights and
remedies granted under this Guarantee to any Noteholder in respect of the Notes
held by such Noteholder may be exercised by such Noteholder without notice by
such Noteholder to, or the consent of or any other action by, any other holder
of the Notes from time to time. Any one or more of the Noteholders may proceed
to protect and enforce this Guarantee by suit or suits or proceedings in equity,
at law or in bankruptcy, and whether for the specific performance of any
covenant or agreement contained herein or in execution or aid of any power
herein granted or for the recovery of judgment for the obligations hereby
guaranteed or for the enforcement of any other proper legal or equitable remedy
available under applicable law.

                                  Exhibit D-6

<PAGE>

     2.15. Security. The Guarantied Obligations and the obligations of each
Guarantor set forth herein will be secured pursuant to certain of the Security
Documents to which such Guarantor is a party and each agent or trustee acting on
behalf of the Noteholders, shall be entitled to all of the rights, remedies and
benefits of the Security Documents to which such Guarantor is a party.

3.   REPRESENTATIONS AND WARRANTIES.

     Each Guarantor hereby represents and warrants to the Noteholders that:

     3.1. Organization and Existence. The Guarantor is duly organized and
existing in good standing under the laws of its jurisdiction of organization, is
duly qualified to do business and is in good standing where the nature or extent
of its businesses or properties requires it to be qualified to do business
except where the failure to so qualify will not have a material adverse effect
on the business, operations, profits, financial condition, properties or
business prospects of such Guarantor or on its ability to perform its
obligations hereunder and under the other Financing Documents. The Guarantor has
the power and authority to own its properties and carry on its business as now
being conducted.

     3.2. Authorization. The Guarantor is duly authorized to execute and perform
this Guarantee and this Guarantee has been properly authorized by all requisite
action of such Guarantor. No consent, approval or authorization of, or
declaration or filing with, any Governmental Authority or any other Person, is
required in connection with the execution, delivery or performance of this
Guarantee, except for those already duly obtained.

     3.3. Due Execution. This Guarantee has been executed on behalf of such
Guarantor by a Person duly authorized to do so.

     3.4. Enforceability. This Guarantee constitutes the legal, valid and
binding obligation of the Guarantor, enforceable against such Guarantor in
accordance with its terms, except to the extent that the enforceability thereof
against such Guarantor may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws affecting creditor's rights generally or by equitable
principles of general application (regardless of whether such enforceability is
considered in a proceeding in equity or at law).

                                  Exhibit D-7

<PAGE>

     3.5. Legal Restraints. The execution of this Guarantee by the Guarantor and
the performance by such Guarantor of its obligations under this Guarantee, will
not (i) violate or constitute a default under the certificate or articles of
incorporation, bylaws or other organizational documents of such Guarantor as
applicable, (ii) except as contemplated by the Security Documents and the
granting of Liens to secure Other Senior Debt, result in any Lien being imposed
on any of such Guarantor's property, or (iii) violate or constitute a default
under any agreement to which the Guarantor is a party or any law, ordinance,
governmental rule or regulation to which it is subject, except where such
violation or default could not reasonably be expected to have a material adverse
effect on the business, operations, profits, financial condition, properties or
business prospects of such Guarantor or on its ability to perform its
obligations hereunder and under the other Financing Documents.

     3.6. No Material Proceedings. There are no proceedings, actions or
investigations pending or, to the knowledge of the Guarantor, threatened against
such Guarantor that, in the aggregate for all such proceedings, actions and
investigations, could reasonably be expected to have a material adverse effect
on the business, operations, profits, financial condition, properties or
business prospects of such Guarantor or on its ability to perform its
obligations hereunder and under the other Financing Documents.

     3.7. Compliance with Laws. The Guarantor is in compliance with all laws,
ordinances, governmental rules and regulations to which it is subject, except
for such failures to comply that, in the aggregate for all such failures, could
not reasonably be expected to have a material adverse effect on the business,
operations, profits, financial condition, properties or business prospects of
such Guarantor or on its ability to perform its obligations hereunder and under
the other Financing Documents.

     3.8. Other Names. Except for the trade names set forth in Schedule 3.8, the
Guarantor has not used, and does not use, any name other than the full name
which identifies such Guarantor in this Guarantee.

     3.9. No Defaults. The Guarantor has not breached or violated, or is not in
default under, any agreement to which it is a party, and is not in default with
respect to any of its obligations, except for such breaches, violations and
defaults that, in the aggregate for all such breaches, violations and defaults,
could not reasonably be expected to have a material adverse effect on the
business, operations, profits, financial condition, properties or business
prospects of such Guarantor or on its ability to perform its obligations
hereunder and under the other Financing Documents.

     3.10. Independent Credit Evaluation. The Guarantor has independently, and
without reliance on any information supplied by any one or more of the
Noteholders, taken, and will continue to take, whatever steps such Guarantor
deems necessary to evaluate the financial condition and affairs of the Company,
and the Noteholders shall have no duty to advise the Guarantor of information at
any time known to the Noteholders regarding such financial condition or affairs.

     3.11. No Representation By Agent. None of the Noteholders nor any trustee
or agent acting on their behalf has made any representation, warranty or
statement to the Guarantor to induce such Guarantor to execute this Guarantee.

                                  Exhibit D-8

<PAGE>

     3.12. Survival. All representations and warranties made by the Guarantor
herein shall survive the execution hereof and may be relied upon by the
Noteholders as being true and accurate until the Guarantied Obligations are
fully and irrevocably paid.

4.   COVENANTS.

     4.1  Corporate Existence; Scope of Business; Compliance with Law;
Preservation of Enforceability. Each Guarantor covenants that from the date
hereof and until the Guarantied Obligations and the Notes are fully and
irrevocably paid, such Guarantor shall

          (a) preserve and maintain its existence in good standing and its right
     to transact business in those states in which it is now or hereafter doing
     business and obtain and maintain all licenses, except where the failure to
     obtain and maintain such licenses that, in the aggregate for all such
     failures, could not reasonably be expected to have a material adverse
     effect on the business, operations, profits, financial condition,
     properties or business prospects of such Guarantor or on its ability to
     perform its obligations hereunder and under the other Financing Documents;

          (b) comply, with all applicable laws, ordinances, governmental rules
     and regulations to which it is subject, except where such failure to comply
     could not reasonably be expected to have a material adverse effect on the
     business, operations, profits, financial condition, properties or business
     prospects of such Guarantor; or on its ability to perform its obligations
     hereunder and under the other Financing Documents; and

          (c) take all action and obtain all consents and governmental approvals
     required so that its obligations under this Guarantee will at all times be
     legal, valid and binding and enforceable in accordance with the terms
     hereof.

                                  Exhibit D-9

<PAGE>

5.   ADDITIONAL GUARANTORS.

     In accordance with Section 6.13 of the Note Agreement, additional Persons
may from time to time after the date of this Guarantee become Guarantors under
this Guarantee by executing and delivering to the Noteholders a joinder
agreement (a "Joinder Agreement") to this Guarantee in substantially the form
attached as Exhibit A to this Guarantee. Effective from and after the date of
the execution and delivery by any Person to the Noteholders of a Joinder
Agreement, such Person shall be, and shall be deemed for all purposes to be, a
Guarantor under this Guarantee with the same force and effect, and subject to
the same agreements, representations, guarantees, indemnities, liabilities and
obligations, as if such Person were, effective as of such date, an original
signatory to this Guarantee as a Guarantor. The execution and delivery of a
Joinder Agreement by any Person shall not require the consent of any other
Guarantor and all of the Guarantied Obligations of each Guarantor under this
Guarantee shall remain in force and effect notwithstanding the addition of any
additional Guarantor to this Guarantee.

6.   SUCCESSORS AND ASSIGNS.

     This Guarantee shall bind the successors, assignees, trustees, and
administrators of the Guarantor and shall inure to the benefit of each of the
Noteholders, and each of its successors, transferees, participants and
assignees.

7.   CONTINUANCE OF GUARANTEE.

     Each Guarantor is liable under this Guarantee for the full amount of the
Guarantied Obligations. Any holder of the Notes from time to time may release,
settle with or compromise with any one or more Persons who are otherwise liable
for the payment or performance of all or any portion of the Guarantied
Obligations without impairing, diminishing or releasing the rights of any other
holders of the Notes hereunder against any Guarantor or any other Person liable
for the Guarantied Obligations. This Guarantee shall continue in full force and
effect and shall bind Guarantor notwithstanding the death or release of any
other Person who is otherwise liable for the payment or performance of all or
any portion of the Guarantied Obligations.

8.   AMENDMENTS AND WAIVERS.

     No amendment to, waiver of, or departure from full compliance with any
provision of this Guarantee, or consent to any departure by any Guarantor
herefrom, shall be effective unless it is in writing and signed by authorized
officers of each Guarantor directly affected thereby and the Noteholders;
provided, however, that any such waiver or consent shall be effective only in
the specific instance and for the purpose for which given. No failure by any
Noteholder to exercise, and no delay by any Noteholder in exercising, any right,
remedy, power or privilege hereunder shall operate as a waiver thereof, nor
shall any single or partial exercise by any Noteholder of any right, remedy,
power or privilege hereunder preclude any other exercise thereof, or the
exercise of any other right, remedy, power or privilege.

                                  Exhibit D-10

<PAGE>

9.   RIGHTS CUMULATIVE.

     Each of the rights and remedies of the Noteholders under this Guarantee
shall be in addition to all of their other rights and remedies under applicable
law, and nothing in this Guarantee shall be construed as limiting any such
rights or remedies.

10.  SERVICE OF PROCESS.

     EACH GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON
IT AND CONSENTS THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL
(RETURN RECEIPT REQUESTED) DIRECTED TO IT AT ITS ADDRESS SET FORTH IN ANNEX 1
HERETO. SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED AS OF THE DATE THAT SUCH
GUARANTOR SIGNS THE RETURN RECEIPT. NOTHING IN THIS SECTION SHALL AFFECT THE
RIGHT OF THE NOTEHOLDERS TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.

11.  WAIVER OF JURY TRIAL.

     EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES THE
RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH THIS GUARANTEE.

12.  SEVERABILITY.

     Any provision of this Guarantee which is prohibited, unenforceable or not
authorized in any jurisdiction shall, as to such jurisdiction, be ineffective to
the extent of such prohibition, unenforceability or nonauthorization without
invalidating the remaining provisions hereof or affecting the validity,
enforceability or legality of such provision in any other jurisdiction unless
the ineffectiveness of such provision would result in such a material change as
to cause completion of the transactions contemplated hereby to be unreasonable.

13.  GOVERNING LAW.

     THIS GUARANTEE SHALL BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF ILLINOIS.

14.  SECTION HEADINGS.

     Section headings are for convenience only and shall not affect the
interpretation of this Guarantee.

                                  Exhibit D-11

<PAGE>

15.  LIMITATION OF LIABILITY.

     THE NOTEHOLDERS SHALL NOT HAVE ANY LIABILITY WITH RESPECT TO, AND EACH OF
THE GUARANTORS HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR, (a) ANY LOSS
OR DAMAGE SUSTAINED BY ANY GUARANTOR THAT MAY OCCUR AS A RESULT OF, IN
CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO, ANY ACT OR FAILURE TO ACT
REFERRED TO IN SECTION 2.5 OR (b) ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES
SUFFERED BY ANY GUARANTOR IN CONNECTION WITH ANY CLAIM RELATED TO THIS
GUARANTEE.

16.  ENTIRE AGREEMENT.

     This Guarantee embodies the entire agreement among Guarantors and the
Noteholders relating to the subject matter hereof and supersedes all prior
agreements, representations and understandings, if any, relating to the subject
matter hereof.

17.  COMMUNICATIONS.

All notices and other communications to the Noteholders or Guarantors hereunder
shall be in writing, shall be delivered in the manner and with the effect, as
provided by the Note Agreement, and shall be addressed to the Guarantors as set
forth in Annex 1 hereto and to the Noteholders as set forth in the Note
Agreement.

18.  DUPLICATE ORIGINALS.

     Two or more duplicate counterpart originals hereof may be signed by the
parties, each of which shall be an original but all of which together shall
constitute one and the same instrument. Delivery of any executed signature page
to this Guarantee by any Guarantor by facsimile transmission shall be as
effective as delivery of a manually executed copy of this Guarantee by such
Guarantor.

19.  NOTICES.

     Nothing in this Guarantee shall void or abrogate any obligation of the
Company, any Guarantor or any Noteholder to give any notice specifically
required to be given by such Person in any provision of any Financing Document.

20.  TERMINATION.

     Subject to Section 2.7, this Guarantee shall terminate and have no further
force or effect upon payment in full of the Guarantied Obligations.

   [Remainder of page intentionally left blank. Next page is signature page.]

                                  Exhibit D-12

<PAGE>

     IN WITNESS WHEREOF, each Guarantor has caused this Guarantee to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

                                            KEYSTONE TUBE COMPANY, LLC

                                            By:_____________________________
                                            Name:
                                            Title:

                                            TOTAL PLASTICS, INC.

                                            By:_____________________________
                                            Name:
                                            Title:

                                            PARAMONT MACHINE COMPANY LLC

                                            By:_____________________________
                                            Name:
                                            Title:

                                            ADVANCED FABRICATING TECHNOLOGY, LLC

                                            By:_____________________________
                                            Name:
                                            Title:

                                            OLIVER STEEL PLATE CO.

                                            By:_____________________________
                                            Name:
                                            Title:

                                   Annex 1-1

<PAGE>

                                            METAL MART, LLC

                                            By:_____________________________
                                            Name:
                                            Title:

                                            DATAMET, INC.

                                            By:_____________________________
                                            Name:
                                            Title:

                                   Annex 1-2

<PAGE>

                                                                       EXHIBIT A

                           [FORM OF JOINDER AGREEMENT]

                JOINDER AGREEMENT NO. ___ TO GUARANTEE AGREEMENT

                             Re: A. M. CASTLE & CO.

This Joinder Agreement is made as of ________________, in favor of the
Noteholders (as such terms are defined in the Castle Guaranty, as hereinafter
defined).

A. Reference is made to the Guarantee Agreement made as of November 22, 2002 (as
such Guaranty may be supplemented, amended, restated or consolidated from time
to time, the "Castle Guaranty") by certain Persons in favor of the holders from
time to time of the Notes (as defined in the Castle Guaranty), under which such
Persons have guaranteed to the Noteholders the due payment and performance by A.
M. Castle & Co. ("Castle") of all its present and future indebtedness,
liabilities and obligations to the Noteholders in connection with the Note
Agreement.

B. Capitalized terms used but not otherwise defined in this Joinder Agreement
have the respective meanings given to such terms in the Castle Guaranty,
including the definitions of terms incorporated in the Castle Guaranty by
reference to other agreements.

C. Section 5 of the Castle Guaranty provides that additional Persons may from
time to time after the date of the Castle Guaranty become Guarantors under the
Castle Guaranty by executing and delivering to the Noteholders a supplemental
agreement to the Castle Guaranty in the form of this Joinder Agreement.

For valuable consideration, each of the undersigned (each a "New Guarantor")
severally (and not jointly, or jointly and severally) agrees as follows:

   1. Each of the New Guarantors has received a copy of, and has reviewed, the
Castle Guaranty and the Note Agreement in existence on the date of this Joinder
Agreement and is executing and delivering this Joinder Agreement to the
Noteholders pursuant to Section 5 of the Castle Guaranty.

   2. Effective from and after the date this Joinder Agreement is executed and
delivered to the Noteholders by any one of the New Guarantors (and irrespective
of whether this Joinder Agreement has been executed and delivered by any other
Person), such New Guarantor is, and shall be deemed for all purposes to be, a
Guarantor under the Castle Guaranty with the same force and effect, and subject
to the same agreements, representations, guarantees, indemnities, liabilities
and obligations, as if such New Guarantor was, effective as of the date of this
Joinder Agreement, an original signatory to the Castle Guaranty as a Guarantor.
In furtherance of the foregoing, each of the New Guarantors jointly and
severally guarantees to the Noteholders in accordance with the provisions of the
Castle Guaranty the due and punctual payment and performance in full of each of
the Guarantied Obligations as each such Guarantied Obligation becomes due from

                                  Exhibit A-1

<PAGE>

time to time (whether because of maturity, default, demand, acceleration or
otherwise) and understands, agrees and confirms that the Noteholders may enforce
the Castle Guaranty and this Joinder Agreement against such New Guarantor for
the benefit of the Noteholders up to the full amount of the Guarantied
Obligations without proceeding against any other Guarantor, Castle, any other
Person or any collateral securing the Guarantied Obligations. The terms and
provisions of the Castle Guaranty are incorporated by reference in this Joinder
Agreement.

   3. Upon this Joinder Agreement bearing the signature of any Person claiming
to have authority to bind any New Guarantor coming into the hands of the
Noteholders, and irrespective of whether this Joinder Agreement or the Castle
Guaranty has been executed by any other Person, this Joinder Agreement will be
deemed to be finally and irrevocably executed and delivered by, and be effective
and binding on, and enforceable against, such New Guarantor free from any
promise or condition affecting or limiting the liabilities of such New Guarantor
and such New Guarantor shall be, and shall be deemed for all purposes to be, a
Guarantor under the Castle Guaranty. No statement, representation, agreement or
promise by any officer, employee or agent of any one or more of the Noteholders,
forms any part of this Joinder Agreement or the Castle Guaranty or has induced
the making of this Joinder Agreement or the Castle Guaranty by any of the New
Guarantors or in any way affects any of the obligations or liabilities of any of
the New Guarantors in respect of the Guarantied Obligations.

   4. This Joinder Agreement may be executed in counterparts. Each executed
counterpart shall be deemed to be an original and all counterparts taken
together shall constitute one and the same Joinder Agreement. Delivery of an
executed signature page to this Joinder Agreement by any New Guarantor by
facsimile transmission shall be as effective as delivery of a manually executed
copy of this Joinder Agreement by such New Guarantor.

   5. This Joinder Agreement is a contract made under, and will for all purposes
be governed by and interpreted and enforced according to, the internal laws of
the State of Illinois excluding any conflict of laws rule or principle which
might refer these matters to the laws of another jurisdiction.

   6. This Joinder Agreement and the Castle Guaranty shall be binding upon each
of the New Guarantors and the successors of each of the New Guarantors. None of
the New Guarantors may assign any of its obligations or liabilities in respect
of the Guarantied Obligations.

   IN WITNESS OF WHICH this Joinder Agreement has been duly executed and
delivered by each of the New Guarantors as of the date indicated on the first
page of this Joinder Agreement.

                                            [NEW GUARANTOR]

                                            By: _______________________
                                            Name:
                                            Title:

                                  Exhibit A-2Exhibit 4.7

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

                               A.M. CASTLE & CO.

                                 NOTE AGREEMENT

                           Dated as of March 1, 1998

                                   $15,000,000
                          6.40% Series A Senior Notes
                               Due March 1, 2008

                                  $25,000,000
                          6.53% Series B Senior Notes
                               Due March 1, 2010

                                  $15,000,000
                          6.69% Series C Senior Notes
                               Due March 1, 2012

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
                                                        Series A PPN: 148411 C@8
                                                        Series B PPN: 148411 C#6
                                                        Series C PPN: 148411 D*9

<PAGE>

                                TABLE OF CONTENTS

Section 1. DESCRIPTION OF NOTES AND COMMITMENT COMMITMENT ................1

     1.1. Description of Notes ...........................................1
     1.2. Commitment; Closing Date .......................................2

Section 2. PREPAYMENT OF NOTES ...........................................2

     2.1. Required Prepayments ...........................................2
     2.2. Optional Prepayments ...........................................3
     2.3. Notice of Prepayments ..........................................3
     2.4. Surrender of Notes on Prepayment or Exchange ...................3
     2.5. Direct Payment and Deemed Date of Receipt ......................4
     2.6. Allocation of Payments .........................................4
     2.7. Payments Due on Saturdays, Sundays and Holidays ................4

Section 3. REPRESENTATIONS ...............................................4

     3.1. Representations of the Company .................................4
     3.2. Representations of the Purchaser ..............................11

Section 4. CLOSING CONDITIONS ...........................................11

     4.1. Representations and Warranties ................................12
     4.2. Legal Opinions ................................................12
     4.3. Events of Default .............................................12
     4.4. Payment of Fees and Expenses ..................................13
     4.5. Legality of Investment ........................................13
     4.6. Private Placement Number ..................................... 13
     4.7. Proceedings and Documents .....................................13

Section 4. INTERPRETATION OF AGREEMENT ..................................13

     5.1. Certain Terms Defined .........................................12
     5.2. Accounting Principles .........................................20
     5.3. Valuation Principles ..........................................20
     5.4. Direct or Indirect Actions ....................................21

Section 5. AFFIRMATIVE COVENANTS ........................................21

     6.1. Corporate Existence ...........................................21
     6.2. Insurance .....................................................21
     6.3. Taxes, Claims for Labor and Materials .........................21
     6.4. Maintenance of Properties .....................................21
     6.5. Maintenance of Records ........................................22

                                       i

<PAGE>

     6.6. Financial Information and Reports .............................22
     6.7. Inspection of Properties and Records ..........................24
     6.8. ERISA .........................................................24
     6.9. Compliance with Laws ..........................................25
     6.10. Acquisition of Notes .........................................25
     6.11. Private Placement Number .....................................26

Section 7. NEGATIVE COVENANTS ...........................................26

     7.1. Adjusted Consolidated Net Worth ...............................26
     7.2. Consolidated Debt .............................................26
     7.3. Net Working Capital ...........................................26
     7.4. Liens .........................................................26
     7.5. Merger or Consolidation .......................................27
     7.6. Sale of Assets ................................................27
     7.7. Disposition of Stock of Subsidiaries ..........................28
     7.8. Leases ........................................................28
     7.9. Transactions with Affiliates ..................................28
     7.10. Nature of Business ...........................................28

Section 8. EVENTS OF DEFAULT AND REMEDIES THEREFOR ......................29

     8.1. Nature of Events ..............................................29
     8.2. Remedies on Default ...........................................30
     8.3. Annulment of Acceleration of Notes ............................31
     8.4. Other Remedies ................................................31
     8.5. Conduct No Waiver; Collection Expenses ........................31
     8.6. Remedies Cumulative ...........................................31
     8.7. Notice of Default .............................................32

Section 9. AMENDMENTS, WAIVERS AND CONSENTS .............................32

     9.1. Matters Subject to Modification ...............................32
     9.2. Solicitation 0f Holders of Notes ..............................32
     9.3. Binding Effect ................................................33

Section 10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE
            AND REPLACEMENT .............................................33

     10.1. Form of Notes ................................................33
     10.2. Note Register ................................................33
     10.3. Issuance of New Notes upon Exchange or Transfer ..............33
     10.4. Replacement of Notes .........................................34

                                       ii

<PAGE>

Section 11. MISCELLANEOUS ...............................................34

     11.1. Expenses .....................................................34
     11.2. Notices ......................................................34
     11.3. Reproduction of Documents ....................................35
     11.4. Successors and Assigns .......................................35
     11.5. Law Governing ................................................35
     11.6. Headings .....................................................35
     11.7. Counterparts .................................................35
     11.8. Reliance on and Survival of Provisions .......................35
     11.9. Integration and Severability .................................35

SCHEDULE I ..............................................................37

ANNEXES .................................................................37

     I     Subsidiaries .................................................44
     II    Litigation or Proceedings, Including Environmental Matters ...45
     III   Debt .........................................................46
     1V    Investments ..................................................47
     V     Liens ........................................................48

EXH1BITS ................................................................49

     A     Form of Series A Senior Note .................................49
     B     Form of Series B Senior Note .................................51
     C     Form of Series C Senior Note .................................53
     D     Form of Opinion of Purchasers' Counsel .......................55
     E     Form of Opinion of Company's Counsel .........................56

                                      iii

<PAGE>

                               A. M. CASTLE & CO.

                                 NOTE AGREEMENT

                                                       Dated as of March 1. 1998

To the Purchasers Named in the
Attached Schedule I

Ladies and Gentlemen:

     A. M. CASTLE & CO., a Delaware corporation (the "Company"), agrees with you
as follows:

ss.1. DESCRIPTION OF NOTES AND COMMITMENT

     1.1. Description of Notes. The Company has authorized the issuance and sale
of $55,000,000 aggregate principal amount of its Senior Notes (the "Notes"), to
be dated the date of issuance, to bear interest from such date (computed on the
basis of a 360-day year comprised of twelve 30-day months), payable
semi-annually in arrears on March 1 and September 1 of each year, commencing
September 1, 1998, and at maturity, at the following rates and shall be
expressed to mature as follows: (i) $15,000,000 aggregate principal amount of
the Notes (the "Series A Notes") shall bear interest at the rate of 6.40% per
annum prior to maturity, shall bear interest on any overdue principal (including
any overdue optional or required prepayment), on any overdue Make-Whole Amount
(to the extent legally enforceable) and on any overdue installment of interest
(to the extent legally enforceable) at a rate per annum equal to the greater of
(a) 8.40% and (b) the sum of the reference rate announced by Bank of America
NT&SA from time to time as its "prime rate" for United States domestic loans in
United States dollars plus 2%, and shall be expressed to mature on March 1,
2008; (ii) $25,000,000 aggregate principal amount of the Notes (the "Series B
Notes") shall bear interest at the rate of 6.53% per annum prior to maturity,
shall bear interest on any overdue principal (including any overdue optional or
required prepayment), on any overdue Make-Whole Amount (to the extent legally
enforceable) and on any overdue installment of interest (to the extent legally
enforceable) at a rate per annum equal to the greater of (a) 8.53% and (b) the
sum of the reference rate announced by Bank of America NT&SA from time to time
as its "prime rate" for United States domestic loans in United States dollars
plus 2%, and shall be expressed to mature on March 1, 2010, and (iii)
$15,000,000 aggregate principal amount of the Notes (the "Series C Notes") shall

<PAGE>

bear interest at the rate of 6.69% per annum prior to maturity, shall bear
interest on any overdue principal (including any overdue optional or required
prepayment), on any overdue Make-Whole Amount (to the extent legally
enforceable) and on any overdue installment of interest (to the extent legally
enforceable) at a rate per annum equal to the greater of (a) 8.69% and (b) the
sum of the reference rate announced by Bank of America NT&SA from time to time
as its "prime rate" for United States domestic loans in United States dollars
plus 2%, and shall be expressed to mature on March 1, 2012. The Notes shall be
substantially in the forms attached as Exhibits A, B and C, respectively. The
term "Notes" as used herein shall include each Note delivered pursuant to this
Note Agreement (the "Agreement") and each Note delivered in substitution or
exchange therefor and. where applicable, shall include the singular number as
well as the plural. Any reference to you in this Agreement shall in all
instances be deemed to include any nominee of yours or any separate account or
other person on whose behalf you are purchasing Notes. You and the other
purchasers are sometimes referred to herein individually as a "Purchaser" and
collectively as the "Purchasers."

     1.2. Commitments Closing Date. Subject to the terms and conditions hereof
and on the basis of the representations and warranties hereinafter set forth,
the Company agrees to issue and sell to you, and you agree to purchase from the
Company, Notes of the series and in the aggregate principal amount set forth
opposite your name in the attached Schedule I at a price of 100% of the
principal amount thereof.

     Delivery of and payment for the Notes shall be made at the offices of
Gardner, Carton & Douglas, 321 North Clark Street, Quaker Tower, Chicago,
Illinois 60610, at 9:00 a.m., Chicago time, on March 16, 1998 or at such later
time or on such later date, not later than Noon, Chicago time, on March 16,
1998, as may be mutually agreed upon by the Company and the Purchasers (the
"Closing Date"). The Notes shall be delivered to you in the form of one or more
Notes in fully registered form, issued in your name or in the name of your
nominee. Delivery of the Notes to you on the Closing Date shall be against
payment of the purchase price thereof in Federal funds or other funds in U.S.
dollars immediately available at The Northern Trust, Chicago, Illinois, ABA
#0710 0015 2 for the account of A. M. Castle & Co., Account #82171. If on the
Closing Date the Company shall fail to tender the Notes to you, you shall be
relieved of all remaining obligations under this Agreement. Nothing in the
preceding sentence shall relieve the Company of any liability occasioned by such
failure to deliver the Notes.

ss.2. PREPAYMENT OF NOTES

     2.1. Required Prepayments. In addition to payment of all outstanding
principal of the Notes at maturity and except as provided below in Section 2.2,
regardless of the amount of Notes which may be outstanding from time to time,
the Company shall prepay and there shall become due and payable on March 1 in
each year:

     (a) $1,875,000 of the principal amount of the Series A Notes or such lesser
amount as would constitute payment in full on the Series A Notes, commencing
March 1, 2001 and ending March 1, 2007, inclusive, with the remaining principal
payable on March 1, 2008;

                                       -2-

<PAGE>

     (b) $5,000,000 of the principal amount of the Series B Notes or such lesser
amount as would constitute payment in full on the Series B Notes. commencing
March 1, 2006 and ending March 1, 2009, inclusive, with the remaining principal
payable on March 1, 2010; and

     (c) $3.000.000 of the principal amount of the Series C Notes or such lesser
amount as would constitute payment in full on the Series C Notes, commencing
March 1, 2008 and ending March 1, 2011, inclusive, with the remaining principal
payable on March 1, 2012.

Each such prepayment shall be at a price of 100% of the principal amount
prepaid, together with interest accrued thereon to the date of prepayment,
without a Make-Whole Amount or other premium or penalty.

     2.2. Optional Prepayments.
          --------------------

     (a) Upon notice as provided in Section 2.3(a) and (b), the Company may
prepay the Notes, in whole or in part, on any interest payment date, in an
aggregate principal amount not less than $1,000,000, and in integral multiples
of $100,000 in excess thereof or such lesser amount as shall constitute payment
in full of the Notes. Each such prepayment shall be at a price of 100% of the
principal amount to be prepaid, plus interest accrued thereon to the date of
prepayment, plus the Make-Whole Amount.

     (b) Upon any optional prepayment of less than all of the Notes outstanding
pursuant to Section 2.2(a) and Section 7.6, the principal amount of each
prepayment and payment at maturity required by Section 2.1 on and after the date
of such optional prepayment shall be reduced in the same proportion as the
aggregate unpaid principal amount of the Notes is reduced as a result of such
optional prepayment.

     (c) Except as provided in Section 2.1, Section 7.6 and in this Section 2.2,
the Notes shall not be prepayable in whole or in part.

     2.3. Notice of Prepayments.
          ---------------------

     (a) The Company shall give notice of any optional prepayment of the Notes
pursuant to Section 2.2(a) to each holder of the Notes not less than 30 days nor
more than 60 days before the date fixed for prepayment, specifying (i) such
date, (ii) the principal amount of the holder's Notes to be prepaid on such
date, (iii) the Determination Date for calculating the Make-Whole Amount, (iv) a
calculation of the estimated amount of the Make-Whole Amount, showing in
reasonable detail the method of calculation, and (v) the accrued interest
applicable to the prepayment. Notice of prepayment having been so given, the
aggregate principal amount of the Notes specified in such notice, together with
the actual Make-Whole Amount, if any, and the accrued interest thereon shall
become due and payable on the prepayment date.

     (b) The Company also shall give notice to each holder of the Notes to be
prepaid pursuant to Section 2.2(a) by telecopy, telegram, telex or other
same-day written communication, two Business Days prior to the prepayment date,
of the actual Make-Whole Amount applicable to such prepayment and the details of
the calculations used to determine the amount of such Make-Whole Amount.

                                       -3-

<PAGE>

     2.4. Surrender of Notes on Prepayment or Exchange. Subject to Section 2.5,
upon any partial prepayment of a Note pursuant to this Section 2 or partial
exchange of a Note pursuant to Section 10.3, such Note may, at the option of the
holder thereof, (i) be surrendered to the Company pursuant to Section 10.3 in
exchange for a new Note or Notes equal to the principal amount remaining unpaid
on the surrendered Note, or (ii) be made available to the Company, at the
Company's principal office, for notation thereon of the portion of the principal
so prepaid or exchanged. In case the entire principal amount of any Note is
prepaid, such Note shall be surrendered to the Company, upon its request,
following such prepayment for cancellation and shall not be reissued. No Note
shall be issued in lieu of a Note the entire principal amount of which has been
prepaid.

     2.5. Direct Payment an Deemed Date of Receipt. Notwithstanding any other
provision contained in the Notes or this Agreement, the Company will pay all
sums becoming due on each Note held by you or any subsequent Institutional
Holder by wire transfer of immediately available funds to such account as you
have designated in Schedule I, or as you or such subsequent Institutional Holder
may otherwise designate by notice to the Company, in each case without
presentment and, subject to Section 2.4(ii) above, without notations being made
thereon, except that any such Note so paid or prepaid in full shall be
surrendered to the Company, upon its written request, for cancellation. Any wire
transfer shall identify such payment in the manner set forth in Schedule I and
shall identify the payment as principal, Make-Whole Amount, if any, and/or
interest. Any payment made pursuant to this Section 2.5 shall be deemed received
on the payment date only if received before Noon, Chicago time. Payments
received after Noon, Chicago time, shall be deemed received on the next
succeeding Business Day, with the Make-Whole Amount, if any, and/or interest
payable to such Business Day.

     2.6. Allocation of Payments. In the case of a prepayment pursuant to
Section 2.2(a), if less than the entire principal amount of all of the Notes
outstanding is to be paid, the Company will prorate the aggregate principal
amount to be prepaid among the outstanding Notes in proportion to the unpaid
principal amounts thereof.

     2.7. Payments Due on Saturdays, Sundays and Holidays. If any interest
payment date on the Notes or the date fixed for any other payment of any Note or
exchange of any Note is a day other than a Business Day, then such payment or
exchange need not be made on such date but may be made on the next succeeding
Business Day, with the Make-Whole Amount, if any, and/or interest payable to the
actual date of payment.

ss.3. REPRESENTATIONS

     3.1. Representations of the Company. As an inducement to, and as part of
the consideration for, your purchase of the Notes pursuant to this Agreement,
the Company represents and warrants to you as follows:

                                       -4-

<PAGE>

     (a) Corporate Organization and Authority. The Company is a solvent
corporation duly organized, validly existing and in good standing under the laws
of the State of Delaware, has all requisite corporate power and authority to own
and operate its properties, to carry on its business as now conducted and as
presently proposed to be conducted, to enter into and perform under the
Agreement and to issue and sell the Notes as contemplated in the Agreement.

     (b) Qualification to Do Business. The Company is duly qualified or licensed
and in good standing as a foreign corporation authorized to do business in each
jurisdiction where the nature of the business transacted by it or the character
of its properties owned or leased makes such qualification or licensing
necessary, except for jurisdictions, individually or in the aggregate, where the
failure to be so licensed or qualified would not have a Material Adverse Effect.

     (c) Subsidiaries. The Company has no Subsidiaries except those listed in
the attached Annex 1, which correctly sets forth the jurisdiction of
incorporation or formation and the percentage of the outstanding Voting Stock or
other equity interests of each Subsidiary which is owned, of record or
beneficially, by the Company and/or one or more Subsidiaries. Each Subsidiary
has been duly organized and is validly existing and in good standing under the
laws of its jurisdiction of incorporation or organization and is duly licensed
or qualified and in good standing as a foreign corporation or other organization
in each other jurisdiction where the nature of the business transacted by it or
the character of its properties owned or leased makes such qualification or
licensing necessary, except for jurisdictions, individually or in the aggregate,
where the failure to be so licensed or qualified would not have a Material
Adverse Effect. Each Subsidiary has full corporate or other power and authority
to own and operate its properties and to carry on its business as now conducted
and as presently proposed to be conducted. The Company and each Subsidiary have
good and transferable title to all of the shares of capital stock, or all of the
equity interests, they purport to own of each Subsidiary, free and clear in each
case of any Lien, except as otherwise described in Annex I, and all such shares
or interests have been duly issued and are fully paid and nonassessable.

     (d) Financial Statements. The consolidated balance sheets of the Company
and its Subsidiaries as of December 31, 1996, 1995, 1994, 1993 and 1992, and the
related consolidated statements of income, reinvested earnings and cash flows
for each of the years ended on such dates, accompanied by the reports and
unqualified opinions of Arthur Andersen LLP, independent public accountants,
copies of which have heretofore been delivered to you, were prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as otherwise noted therein) and present fairly the consolidated
financial position of the Company and its Subsidiaries on such dates and the
consolidated results of their operations and their cash flows for the years then
ended. The unaudited consolidated balance sheets of the Company and its
Subsidiaries as of September 30, 1997 and the related unaudited consolidated
statements of income, reinvested earnings and cash flows for the three months
and nine months ended September 30, 1997 and 1996, copies of which have
heretofore been delivered to you, were prepared in accordance with generally
accepted accounting principles and, subject to customary year end audit
adjustments, present fairly the consolidated financial condition of the Company

                                      -5-
<PAGE>

and its Subsidiaries as of such dates and the consolidated results of their
operations and changes in their cash flows for the periods then ended.

     (e) No Contingent Liabilities or Adverse Chance. Neither the Company nor
any of its Subsidiaries has any contingent liabilities that, individually or in
the aggregate, are material to the Company and its Subsidiaries, taken as a
whole, other than as indicated in the most recent audited financial statements
described in Section 3.1(d), and except as indicated as aforesaid, since
December 31, 1996, there have been no changes in the condition, financial or
otherwise, of the Company and its Subsidiaries on a consolidated basis, except
changes occurring in the ordinary course of business, none of which,
individually or in the aggregate, have had a Material Adverse Effect.

     (f) No Pending Litigation or Proceedings. Except as described in Annex II,
there are no actions, suits or proceedings pending or, to the Company's
knowledge, threatened against or affecting the Company or any of its
Subsidiaries, at law or in equity or before or by any Federal. state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign, which would have, individually or in the
aggregate, a Material Adverse Effect.

     (g) Compliance with Law.
         -------------------

          (i) Neither the Company nor any of its Subsidiaries is: (x) in default
     with respect to any order, writ, injunction or decree of any court to which
     it is a named party; or (y) in default under any law, rule, regulation,
     ordinance or order relating to its or their respective businesses, the
     sanctions and penalties resulting from such defaults described in clauses
     (x) and (y) would have, individually or in the aggregate, a Material
     Adverse Effect.

          (ii) None of the Company, any Subsidiary or any Affiliate of the
     Company is an entity defined as a "designated national" within the meaning
     of the Foreign Assets Control Regulations, 31 C.F.R. Chapter V (other than
     Castle de Mexico, S.A. de C.V.), or is in violation of any Federal statute
     or Presidential Executive Order, or any rules or regulations of any
     department, agency or administrative body promulgated under any such
     statute or Order, concerning trade or other relations with any foreign
     country or any citizen or national thereof or the ownership or operation of
     any property, and no restriction of prohibition applicable to the Company
     or any Subsidiary under any such statute, Order, rule or regulation has, or
     would have, individually or in the aggregate, a Material Adverse Effect.

     (h) ERISA.
         -----

          (i) The Company and each ERISA Affiliate have operated and
     administered each Plan in compliance with all applicable laws, except for
     such instances of noncompliance as have not resulted in and would not
     result in a Material Adverse Effect. Neither the Company nor any ERISA
     Affiliate has incurred any liability pursuant to Title I or IV of ERISA
     (other than benefit liabilities pursuant to Plan terms) or the penalty or

                                       -6-

<PAGE>

excise tax provisions of the Code relating to employee benefit plans (as defined
in Section 3 of ERISA), and no event, transaction or condition has occurred or
exists that would result in the incurrence of any such liability by the Company
or any ERISA Affiliate, or in the imposition of any Lien on any of the rights,
properties or assets of the Company or any ERISA Affiliate, in either case
pursuant to Title I or IV of ERISA or to such penalty or excise tax provisions
or to Section 401(a)(29) or 412 of the Code, other than such liabilities or
Liens as would not be individually or in the aggregate material.

          (ii) The present value of the aggregate benefit liabilities under each
     of the Plans subject to Title IV of ERISA (other than multiemployer plans),
     determined as of the end of such Plan's most recently ended plan year on
     the basis of the actuarial assumptions specified for funding purposes in
     such Plan's most recent actuarial valuation report, did not exceed the
     aggregate current value of the assets of such Plan allocable to such
     benefit liabilities. The term "benefit liabilities" has the meaning
     specified in Section 4001 of ERISA and the terms "current value" and
     "present value" have the meanings specified in Section 3 of ERISA.

          (iii) The Company and its ERISA Affiliates have not incurred
     withdrawal liabilities (and are not subject to contingent withdrawal
     liabilities) under Section 4201 or 4204 of ERISA in respect of
     Multiemployer Plans that individually or in the aggregate are material.

          (iv) The expected postretirement benefit obligation (determined as of
     the last day of the Company's most recently ended fiscal year in accordance
     with Financial Accounting Standards Board Statement No. 106, without regard
     to liabilities  attributable to continuation coverage mandated by Section
     4980B of the Code) of the Company and its Subsidiaries, is not material.

          (v) The execution and delivery of this Agreement and the issuance and
     sale of the Notes hereunder will not involve any transaction that is
     subject to the prohibitions of Section 406 of ERISA or in connection with
     which a tax could be imposed pursuant to Section 4975(c)(1)(A)-(D) of the
     Code. The representation by the Company in the first sentence of this
     clause (v) is made in reliance upon and subject to the accuracy of your
     representation in Section 3.2(b) as to the sources of the funds used to pay
     the purchase price of the Notes to be purchased by you.

     (i) Title to Properties. Except as disclosed on the most recent audited
consolidated balance sheet described in the foregoing paragraph (d) of this
Section 3.1, the Company and each Subsidiary have (x) good and marketable title
in fee simple or its equivalent under applicable law to all the real property
owned by them and (y) good and marketable title to all of the other property
reflected in such balance sheet as owned by them or subsequently acquired by the
Company or any Subsidiary (except as sold or otherwise disposed of in the
ordinary course of business), in each case free from all Liens or defects in
title except those permitted by Section 7.4.

                                       -7-

<PAGE>

     (j) Leases. The Company and each Subsidiary enjoy peaceful and undisturbed
possession under all leases under which the Company or such Subsidiary is a
lessee or is operating. except for leases the termination of which. individually
or in the aggregate. would not have a Material Adverse Effect.

     (k) Franchises, Patents, Trademarks and Other Rights. The Company and each
Subsidiary have all franchises, permits, licenses and other authority necessary
to carry on or used in their businesses as now being conducted, except for
franchises. permits, licenses or other authority the lack or loss of which,
individually or in the aggregate, would not have a Material Adverse Effect, and
none are in default under any of such franchises, permits, licenses, or other
authority except for defaults, individually or in the aggregate, which would not
have a Material Adverse Effect. The Company and each Subsidiary own or possess
all patents, trademarks, service marks, trade names, copyrights, and licenses,
or rights with respect to the foregoing, necessary for, or used by them in, the
present conduct of their businesses, without any known conflict with the rights
of others.

     (1) Authorization. This Agreement and the Notes have been duly authorized
on the part of the Company and the Agreement does, and the Notes when issued
will, constitute the legal, valid and binding obligations of the Company,
enforceable in accordance with their terms, except to the extent that
enforcement of this Agreement or the Notes may be limited by applicable
bankruptcy, fraudulent conveyance, insolvency, reorganization, moratorium or
similar laws of general application relating to or affecting the enforcement of
the rights of creditors or by equitable principles, regardless of whether
enforcement is sought in equity or at law. The sale of the Notes, the execution
and delivery of the Agreement and compliance by the Company with all of the
provisions of this Agreement and of the Notes (i) are within the corporate
powers of the Company, (ii) have been duly authorized by proper corporate
action, (iii) are legal and will not violate any provisions of any law or
regulation or order of any court, governmental authority or agency, and (iv)
will not result in any breach of any of the provisions of, constitute a default
under, or result in the creation of any Lien on any property of the Company or
any Subsidiary under the provisions of any charter document, by-law, loan
agreement or other agreement or instrument to which the Company or any
Subsidiary is a party or by which any of them or their property may be bound.

     (m) No Defaults. No event has occurred and no condition exists which, upon
the issuance of the Notes, would constitute a Default or an Event of Default
under this Agreement. Neither the Company nor any Subsidiary is in default under
any charter document, by-law, loan agreement or other material agreement or
material instrument to which it is a party or by which it or its property may be
bound.

     (n) Government Consent. None of the nature of the Company or any of its
Subsidiaries, their respective businesses or properties, any relationship
between the Company or any of its Subsidiaries and any other Person, or any
circumstances relative to the offer, issuance, sale or delivery of the Notes or
execution and delivery of this Agreement is such as to require a consent,
approval or authorization of, withholding of objection on the part of, or
filing, registration or qualification with, any governmental authority on the
part of the Company or any of its Subsidiaries in connection with the execution
and delivery of this Agreement or the offer. issuance, sale or delivery of the
Notes.

                                       -8-

<PAGE>

     (o) Taxes. All tax or information returns required to be filed by the
Company or any Subsidiary in any jurisdiction have been timely filed, and all
taxes. assessments, fees and other governmental charges or levies upon the
Company or any Subsidiary, or upon any of their respective properties, assets,
income or franchises, which are due and payable, have been paid timely or
contested in good faith by appropriate proceedings that stay the collection
thereof by the applicable governmental authority during the period of the
contest and as to which adequate reserves are maintained in accordance with
GAAP. The Company does not know of any proposed additional tax assessment
against it or any Subsidiary for which adequate provision has not been made on
its books in accordance with GAAP. The United States Federal income tax
liability of the Company and its Subsidiaries for all taxable years up to and
including the taxable year ended December 31, 1993, has been finally determined,
and no material controversy in respect of additional taxes due by the Company or
any Subsidiary since such date is pending or, to the Company's knowledge,
threatened. The provisions for taxes on the books of the Company and each
Subsidiary are adequate for all open years and for the current fiscal period.

     (p) Status under Certain Statutes. Neither the Company nor any Subsidiary
is: (i) a "public utility company" or a "holding company," or an "affiliate" or
a "subsidiary company" of a "holding company," or an "affiliate" of such a
"subsidiary company," as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended, (ii) a "public utility" as defined in the
Federal Power Act, as amended, or (iii) an "investment company" or an
"affiliated person" thereof or an "affiliated person" of any such "affiliated
person," as such terms are defined in the Investment Company Act of 1940, as
amended.

     (q) Private Offering. Neither the Company, nor BancAmerica Robertson
Stephens, the only Person authorized or employed by the Company as agent,
broker, dealer or otherwise in connection with the offering of the Notes or any
similar security of the Company, has offered any of the Notes or any similar
security of the Company for sale to, or solicited offers to buy any thereof
from, or otherwise approached or negotiated with respect thereto with, any
prospective purchaser, other than ten (10) institutional investors, including
the Purchasers, each of whom was offered all or a portion of the Notes at
private sale for investment. Neither the Company nor anyone acting on its
authorization will offer the Notes or any part thereof or any similar security
for issuance or sale to, or solicit any offer to acquire any of the same from,
anyone so as to cause the issuance and sale of the Notes to be subject to the
provisions of Section 5 of the Securities Act.

     (r) Effect of Other Instruments. Neither the Company nor any Subsidiary is
bound by any agreement or instrument or subject to any charter or other
corporate restriction which in any way restricts any Subsidiary's ability to pay
dividends or make advances to the Company or which has a Material Adverse
Effect.

     (s) Use of  Proceeds. The Company will use the net proceeds from the sale
of the Notes to repay existing Indebtedness and for general corporate purposes.
None of the transactions contemplated in this Agreement (including, without

                                       -9-

<PAGE>

limitation thereof. the use of the proceeds from the sale of the Notes) will
violate or result in a violation of Section 7 of the Exchange Act, or any
regulations issued pursuant thereto. including. without limitation. Regulations
G, T, U and X of the Board of Governors of the Federal Reserve System (12
C.F.R.. Chapter II). Neither the Company nor any Subsidiary owns nor does the
Company or any Subsidiary intend to carry or purchase any "margin stock" within
the meaning of Regulation G. and none of the proceeds from the sale of the Notes
will be used to purchase or carry or refinance any borrowing the proceeds of
which were used to purchase or carry any "margin stock" or "margin security" in
violation of Regulations G, T, U or X.

     (t) Condition of Property. All of the facilities of the Company and its
Subsidiaries are in good operating condition and repair, except for facilities
being repaired in the ordinary course of business or facilities which,
individually or in the aggregate, are not material to the Company and its
Subsidiaries, on a consolidated basis.

     (u) Books and Records. The Company and each of its Subsidiaries (i)
maintain books, records and accounts in reasonable detail which accurately and
fairly reflect their respective transactions and business affairs, and (ii)
maintain a system of internal accounting controls sufficient to provide
reasonable assurances that transactions are executed in accordance with
management's general or specific authorization and to permit preparation of
financial statements in accordance with GAAP.

     (v) Environmental Compliance. Except as disclosed in the attached Annex II.
the Company and each Subsidiary (including their operations and the conditions
at or in their Facilities) comply with all Environmental Laws except for
violations which. individually or in the aggregate, would not have a Material
Adverse Effect; the Company and each Subsidiary have obtained all permits under
Environmental Laws necessary to their respective operations, all such permits
are in full force and effect, and the Company and each Subsidiary are in
compliance with all material terms and conditions of such permits except for
permits, individually or in the aggregate, the lack of which or noncompliance
with which would not have a Material Adverse Effect; and except as disclosed in
the attached Annex II, neither the Company nor any of its Subsidiaries has any
liability (contingent or otherwise) in connection with any Release of any
Hazardous Material or the existence of any Hazardous Material on, under or about
any Facility that could give rise to an Environmental Claim that would have a
Material Adverse Effect.

     (w) Debt. Annex III sets forth a list of all outstanding Debt of the
Company and its Subsidiaries as of the date of this Agreement, since which date
there has been no material change in the amounts, interest rates, sinking funds,
installment payments or maturities thereof. Neither the Company nor any
Subsidiary is in default, and no waiver of default is currently in effect, in
the payment of any principal or interest on any Debt of the Company or such
Subsidiary and no event or condition exists with respect to any Debt of the
Company or any Subsidiary that would permit (or that with notice or the lapse of
time, or both, would permit) one or more Persons to cause such Debt to become
due and payable before its stated maturity or before its regularly scheduled
dates of payment. Except as disclosed in Annex III, neither the Company nor any
Subsidiary has agreed or consented to cause or permit in the future (upon the

                                      -10-

<PAGE>

happening of a contingency or otherwise) any of its property, whether now owned
or hereafter acquired, to be subject to a Lien not permitted by Section 7..4.

     (x) Full Disclosure. None of the financial statements referred to in
Section 3.1(d). this Agreement, and any other written statement or document
furnished by or on behalf of the Company to you in connection with the
negotiation of the sale of the Notes and the execution and delivery of the
Agreement, taken together, contain any untrue statement of a material fact or
omit a material fact necessary to make the statements contained therein or
herein not misleading in light of the circumstances under which they were made.
There is no fact (exclusive of general economic, political or social conditions
or trends) particular to the Company and known by the Company that the Company
has not disclosed to you in writing and that has a Material Adverse Effect or,
to the Company's best knowledge, will have, individually or in the aggregate, a
Material Adverse Effect.

     3.2. Representations of the Purchasers.
          ---------------------------------

     (a) You represent, and in entering into this Agreement the Company
understands, that you are acquiring the Notes for your own account and not with
a view to any distribution thereof, provided that the disposition of your
property shall at all times be and remain within your control; subject, however,
to compliance with Federal securities laws. You acknowledge that the Notes have
not been registered under the Securities Act and you understand that the Notes
must be held indefinitely unless they are subsequently registered under the
Securities Act or an exemption from such registration is available. You have
been advised that the Company does not contemplate registering, and is not
legally required to register, the Notes under the Securities Act.

     (b) You further represent that, as of the date of this Agreement, at least
one of the following statements is an accurate representation as to each source
of funds (a "Source") to be used by you to pay the purchase price of the Notes
to be purchased by you hereunder:

          (i) if you are an insurance company, the Source does not include
     assets allocated to any separate account maintained by you in which any
     employee benefit plan (or its related trust) has any interest, other than a
     separate account that is maintained solely in connection with your fixed
     contractual obligations under which the amounts payable, or credited, to
     such plan and to any participant or beneficiary of such plan (including any
     annuitant) are not affected in any manner by the investment performance of
     the separate account;

          (ii) the Source is either (x) an insurance company pooled separate
     account, within the meaning of Prohibited Transaction Exemption ("PTE")
     90-1 (issued January 29, 1990), or (y) a bank collective investment fund,
     within the meaning of PTE 91-38 (issued July 12, 1991) and, except as you
     have disclosed to the Company in writing pursuant to this paragraph (b), no
     employee benefit plan or group of plans maintained by the same employer or
     employee organization beneficially owns more than 10% of all assets
     allocated to such pooled separate account or collective investment fund;

                                      -11-

<PAGE>

          (iii) the Source constitutes assets of an "investment fund" (within
     the meaning of Part V of the QPAM Exemption) managed by a "qualified
     professional asset manager" or "QPAM" (within the meaning of Part V of the
     QPAM Exemption), no employee benefit plan's assets that are included in
     such investment fund, when combined with the assets of all other employee
     benefit plans established or maintained by the same employer or by an
     affiliate (within the meaning of Section V(c)(1) of the QPAM Exemption) of
     such employer or by the same employee organization and managed by such
     QPAM, exceed 20% of the total client assets managed by such QPAM, the
     conditions of Part I of the QPAM Exemption are satisfied, neither the QPAM
     nor a person controlling or controlled by the QPAM (applying the definition
     of "control" in Section V(e) of the QPAM Exemption) owns a 5% or more
     interest in the Company and (x) the identity of such QPAM and (y) the names
     of all employee benefit plans whose assets are included in such investment
     fund have been disclosed to the Company in writing pursuant to this clause
     (iii);

          (iv) the Source is a governmental plan;

          (v) the Source is one or more employee benefit plans, or a separate
     account or trust fund comprised of one or more employee benefit plans, each
     of which has been identified to the Company in writing pursuant to this
     paragraph (b)(v);

          (vi) the Source does not include assets of any employee benefit plan,
     other than a plan exempt from the coverage of ERISA; or

          (vii) if you are an insurance company and the Source includes assets
     of your general account, (A) your purchase of Notes is entitled to the
     exemption afforded by PTE 95-60 (issued July 12, 1995), provided the
     Company is not an affiliate (within the meaning of Section v(a) of PTE
     95-60) of you, or (B) there is no Plan with respect to which the assets of
     your general account's reserves (as determined under Section 807(d) of the
     Code) for all contracts held by or on behalf of such Plan and all other
     Plans maintained by the same employer or its affiliates (as so defined) or
     by the same employee organization exceeds 10% of the liabilities of your
     general account.

     As used in this Section 3.2(b), the terms "employee benefit plan,"
"governmental plan," "party in interest" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.

ss.4. CLOSING CONDITIONS

     Your obligation to purchase the Notes on the Closing Date shall be subject
to the performance by the Company of its agreements hereunder, which are to be
performed at or prior to the time of delivery of the Notes, and to the following
conditions to be satisfied on or before the Closing Date:

     4.1. Representations and Warranties. The representations and warranties of
the Company contained in this Agreement, in the certificates delivered pursuant

                                      -12-

<PAGE>

to this Section 4 or otherwise made in connection herewith shall be true and
correct on or as of the Closing Date and the Company shall have delivered to you
a certificate to such effect, dated the Closing Date and executed by the
president, the chief financial officer, the chief accounting officer or the
treasurer of the Company.

     4.2. Legal Opinions. You shall have received from Gardner. Carton &
Douglas. who is acting as your special counsel in this transaction, and from
Jerry M. Aufox, corporate counsel to the Company, their opinions, dated as of
the Closing Date, in form and substance satisfactory to you and covering
substantially the matters set forth or provided in the attached Exhibits D and
E, respectively.

     4.3. Events of Default. No Default or Event of Default shall have occurred
and be continuing on the Closing Date, and the Company shall have delivered to
you a certificate to such effect, dated the Closing Date and executed by the
president, the chief financial officer, the chief accounting officer or the
treasurer of the Company.

     4.4. Payment of Fees and Expenses. The Company shall have paid all of the
fees and expenses of Gardner, Carton & Douglas, your special counsel, through
the Closing Date.

     4.5. Legality of Investment. Your acquisition of the Notes shall constitute
a legal investment as of the Closing Date under the laws and regulations of each
jurisdiction to which you may be subject (without resort to any "basket" or
"leeway" provision which permits the making of an investment without
restrictions as to the character of the particular investment being made), and
such acquisition shall not subject you to any penalty or other onerous condition
in or pursuant to any such law or regulation; and you shall have received such
certificates or other evidence as you may reasonably request to establish
compliance with this condition.

     4.6. Private Placement Number. A private placement number with respect to
each series of Notes shall have been issued by S&P.

     4.7. Proceedings and Documents. All proceedings taken in connection with
the transactions contemplated by this Agreement, and all documents necessary to
the consummation of such transactions shall be satisfactory in form and
substance to you and your special counsel, and you and your special counsel
shall have received copies (executed or certified as may be appropriate) of all
legal documents or proceedings which you and they may reasonably request.

ss.5. INTERPRETATION OF AGREEMENT

     5.1. Certain Terms Defined. The terms hereinafter set forth when used in
this Agreement shall have the following meanings:

     Adjusted Consolidated Net Worth - Consolidated Stockholders' Equity less
all Restricted Investments that exceed, in the aggregate, 10% of Consolidated
Stockholders' Equity.

     Affiliate - Any Person (other than a Subsidiary or an original Purchaser)
(i) who is a director or executive officer of the Company or any Subsidiary,

                                      -13-

<PAGE>

(ii) which directly or indirectly through one or more intermediaries controls,
or is controlled by, or is under common control with, the Company, (iii) which
beneficially owns or holds securities representing 10% or more of the combined
voting power of the Voting Stock of the Company, or (iv) of which securities
representing 10% or more of the combined voting power of its Voting Stock (or in
the case of a Person not a corporation, 10% or more of its equity) is
beneficially owned or held by the Company or any Subsidiary. The term "control"
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of a Person. whether through the
ownership of voting securities, by contract or otherwise.

     Agreement - As defined in Section 1.1.

     Business Day - Any day, other than Saturday, Sunday or a legal holiday or
any other day on which banking institutions in Chicago, Illinois generally are
authorized by law to close.

     Capitalized Lease - Any lease the obligation for Rentals with respect to
which, in accordance with GAAP, would be required to be capitalized on a balance
sheet of the lessee or for which the amount of the asset and liability
thereunder, as if so capitalized, would be required to be disclosed in a note to
such balance sheet.

     Capitalized Lease Obligations - Any amounts required to be capitalized
under any Capitalized Lease.

     Closing Date - As defined in Section 1.2.

     Code -The Internal Revenue Code of 1986, as amended.

     Commission - The Securities and Exchange Commission.

     Consolidated Debt - Debt of the Company and its Subsidiaries consolidated
in accordance with GAAP.

     Consolidated Indebtedness - Indebtedness of the Company and its
Subsidiaries consolidated in accordance with GAAP.

     Consolidated Net Income - For any period, the net income (or deficit) of
the Company and its Subsidiaries for such period, determined on a consolidated
basis in accordance with GAAP.

     Consolidated Stockholders' Equity - The stockholders' equity of the Company
and its Subsidiaries determined on a consolidated basis in accordance with GAAP.

     Consolidated Total Assets - The assets of the Company and its Subsidiaries
determined on a consolidated basis in accordance with GAAP.

     Consolidated Total Capitalization - The sum of (i) Consolidated
Stockholders' Equity, (ii) 50% of the LIFO Reserve, and (iii) Consolidated Debt,
less Restricted Investments in excess of 10% of Consolidated Stockholders'
Equity.

                                      -14-

<PAGE>

     Debt - The sum of (i) all Indebtedness (excluding obligations with respect
to bankers' acceptances and trade acceptance financings to the extent such
obligations, in the aggregate, are less than $5,000,000, but including any such
obligations, in the aggregate, in excess of such amount), and (ii) the Total
Investment.

     Default - Any event which, with the lapse of time or the giving of notice.
or both, would become an Event of Default.

     Determination Date - Two Business Days before the date fixed for a
prepayment pursuant to Section 2.2(a), Section 7.6 or the date of declaration
pursuant to Section 8.2.

     Environmental Claim - Any notice of violation, claim, demand, abatement
order or other order by any Person for any damage, including personal injury
(including sickness, disease or death), tangible or intangible property damage,
contribution, indemnity, indirect or consequential damages, damage to the
environment, nuisance, pollution, contamination or other adverse effects on the
environment, or for fines, penalties or restrictions, resulting from or based
upon (i) the existence of a Release (whether sudden or non-sudden or accidental
or non-accidental) of, or exposure to, any Hazardous Material in, into or onto
the environment at, in, by, from or related to any Facility, (ii) the use,
handling, transportation, storage, treatment or disposal of Hazardous Materials
in connection with the operation of any Facility, or (iii) the violation, or
alleged violation, of any statute, rule, regulation, ordinance, order, permit.
license or authorization of or from any governmental authority, agency or court
relating to environmental matters pertaining to the Facilities.

     Environmental Laws - All laws relating to environmental matters, including
those relating to (i) fines, orders, injunctions, penalties, damages,
contribution, cost recovery compensation, losses or injuries resulting from the
Release or threatened Release of Hazardous Materials and to the generation, use,
storage, transportation, or disposal of Hazardous Materials, in any manner
applicable to the Company or any of its Subsidiaries or any of their respective
properties, including, without limitation, the Comprehensive Environmental
Response, Compensation, and Liability Act (42 U.S.C.ss.9601 et seq.), the
Hazardous Material Transportation Act (49 U.S.C.ss. 1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C.ss. 6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C.ss. 1251 et seq.), the Safe Drinking Water Act
(42 U.S.C.ss.300f et.seq.), the Clean Air Act (42 U.S.C.ss. 7401 et seq.), the
Toxic Substances Control Act (15 U.S.C.ss.2601 et seq.), the Occupational Safety
and Health Act (29 U.S.C.ss.651 et seq.), and the Emergency Planning and
Community Right-to-Know Act (42 U.S.C.ss. 11001 et seq.), and (ii) environmental
protection, including the National Environmental Policy Act (42 U.S.C.ss. 4321
et seq.), and comparable state and foreign laws; each as amended or
supplemented, and any similar or analogous local, state, federal and foreign
statutes and regulations promulgated pursuant thereto, each as in effect as of
the date of determination.

     ERISA - The Employee Retirement Income Act of 1974, as amended from time to
time and any successor statute.

                                     ' -15-

<PAGE>

     ERISA Affiliate - The Company and (i) any corporation that is a member of a
controlled group of corporations within the meaning of Section 414(b) of the
Code of which the Company is a member; (ii) any trade or business (whether or
not incorporated) which is a member of a group of trades or businesses under
common control within the meaning of Section 414(c) of the Code of which the
Company is a member; and (iii) any member of an affiliated service group within
the meaning of Section 414(m) or (o) of the Code of which the Company, any
corporation described in clause (i) above or any trade or business described in
clause (ii) above is a member.

     Event of Default - As defined in Section 8.1.

     Exchange Act - The Securities Exchange Act of 1934, as amended.

     Facilities - Any and all real property (including all buildings, fixtures
or other improvements located thereon) now or heretofore or hereafter owned,
leased, operated or used (under permit or otherwise) by the Company or any of
its Subsidiaries.

     GAAP - Generally accepted accounting principles in effect from time to time
in the United States.

     Guaranties - All obligations (other than endorsements in the ordinary
course of business of negotiable instruments for deposit or collection) of a
Person guaranteeing, or in effect guaranteeing, any Indebtedness, dividend or
other obligation of any other Person in any manner, whether directly or
indirectly, including, without limitation, all obligations incurred through an
agreement, contingent or otherwise, by such Person: (i) to purchase such
Indebtedness or obligation or any property or assets constituting security
therefor; (ii) to advance or supply funds (x) for the purchase or payment of
such Indebtedness or obligation, (y) to maintain working capital or other
balance sheet condition, or (z) otherwise to advance or make available funds for
the purchase or payment of such Indebtedness or obligation; (iii) to lease
property or to purchase securities or other property or services primarily for
the purpose of assuring the owner of such Indebtedness or obligation against
loss in respect thereof; or (iv) otherwise to assure the owner of the
Indebtedness or obligation against loss in respect thereof. For the purposes of
all computations made under this Agreement, Guaranties in respect of any
Indebtedness for borrowed money shall be deemed to be Indebtedness equal to the
principal amount of such Indebtedness for borrowed money which has been
guaranteed, and Guaranties in respect of any other obligation or liability or
any dividend shall be deemed to be Indebtedness equal to the maximum aggregate
amount of such obligation, liability or dividend.

     Hazardous Materials - (i) Any chemical, material or substance defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," or "toxic substances" or "pollutant" or words of similar import under
any Environmental Laws; (ii) any oil, petroleum or petroleum derived substance,
any drilling fluid, produced water or other waste associated with the
exploration, development or production of crude oil, any flammable substance or
explosive, any radioactive material, any hazardous waste or substance, any toxic
waste or substance or any other material or pollutant that (x) poses a hazard to
any property of the Company or any of its Subsidiaries or to Persons on or about
such property, or (y) causes such property to be in violation of any

                                      -16-

<PAGE>

Environmental Law; (iii) any friable asbestos, urea formaldehyde foam
insulation, electrical equipment which contains any oil or dielectric fluid with
levels of polychlorinated biphenyls in excess of fifty parts per million; and
(iv) any other chemical, material or substance. exposure to which is prohibited,
limited or regulated by any governmental authority.

     Indebtedness - For any Person, without duplication, all (i) obligations for
borrowed money or to pay the deferred purchase price of property or assets
(except trade account payables), (ii) obligations secured by any Lien upon
property or assets owned by such Person, whether or not such Person has assumed
or become liable for the payment of such obligations, (iii) obligations created
or arising under any conditional sale or other title retention agreement with
respect to property acquired, notwithstanding the fact that the rights and
remedies of the seller, lender or lessor under such agreement in the event of
default are limited to repossession or sale of property, (iv) Capitalized Lease
Obligations, and (v) Guaranties of obligations of others of the character
referred to in the foregoing clauses (i) through (iv), but excluding from
Indebtedness the Total Investment.

     Institutional Holder - Any bank, trust company, insurance company, pension
fund, mutual fund or other similar financial institution, including, without
limiting the foregoing, any "qualified institutional buyer" within the meaning
of Rule 144A under the Securities Act, which is or becomes a holder of any Note.

     Investments - All investments made, in cash or by delivery of property,
directly or indirectly, in any other Person, whether by acquisition of shares of
capital stock, equity interests, indebtedness or other obligations or securities
or by loan, advance, capital contribution or otherwise; provided, however, that
"Investments" shall not mean or include routine investments in property to be
used or consumed in the ordinary course of business.

     Lien - Any mortgage, pledge, security interest, encumbrance, lien or charge
of any kind; including any agreement to grant any of the foregoing, any
conditional sale or other title retention agreement, any lease in the nature
thereof, including a Capitalized Lease, and the filing of or agreement to file
any financing statement under the Uniform Commercial Code of any jurisdiction in
connection with any of the foregoing.

     LIFO Reserve - The difference between the cost of inventory using the
last-in, first-out ("LIFO") method of valuing inventory under GAAP and the cost
of inventory using the replacement cost method under GAAP, so long as the
Company and its Subsidiaries are reporting the value of their inventory under
the LIFO method for purposes of GAAP.

     Make-Whole Amount. As of any Determination Date, to the extent that the
Reinvestment Yield on such Determination Date is lower than the interest rate
payable on or in respect of the Notes, the excess of (a) the present value of
the principal and interest payments to be foregone by any prepayment (exclusive
of accrued interest on such Notes through the date of prepayment) on such Notes
(taking into account the manner of application of such prepayment required by
Section 2.2(b)), determined by discounting (semi-annually on the basis of a
360-day year composed of twelve 30-day months), such payments at a rate that is
equal to the Reinvestment Yield over (b) the aggregate principal amount of such
Notes then to be prepaid or paid. To the extent that the Reinvestment Yield on
any Determination Date is equal to or higher than the interest rate payable on
or in respect of such Notes, the Make-Whole Amount is zero.

                                      -17-

<PAGE>

     Material Adverse Effect - (i) A material adverse effect on the business.
assets, properties. profits, prospects, operations or condition, financial or
otherwise, of the Company and its Subsidiaries. on a consolidated basis, (ii)
the impairment of the ability of the Company to perform its obligations under
this Agreement or the Notes, or (iii) the impairment of the ability of the
holders of the Notes to enforce the Company's obligations under this Agreement
or the Notes.

     Moody's - Moody's Investor Service, Inc.

     Net Working Capital - The sum of (i) the current assets of the Company and
its Subsidiaries determined in accordance with GAAP and (ii) 75% of the LIFO
Reserve, less the current liabilities of the Company and its Subsidiaries
determined in accordance with GAAP. i Notes - As defined in Section 1.1.

     PBGC - The Pension Benefit Guaranty Corporation or any successor thereto.

     Person - Any individual, corporation, partnership, joint venture, limited
liability company, association, joint-stock company, trust, unincorporated
organization or government or any governmental authority, agency or political
subdivision.

     Plan - Any employee pension benefit plan, as defined in Section 3(2) of
ERISA, that has been established by, or contributed to, or is maintained by the
Company, any Subsidiary or any ERISA Affiliate.

     Purchasers - As defined in Section 1.1.

     Receivables Purchase Agreement - The Receivables Purchase Agreement dated
as of March 1, 1995, among the Company, various financial institutions named
therein, Bank of America Illinois, as administrative agent, and PNC Bank,
National Association, as managing agent and documentation agent.

     Reinvestment Yield - The sum of (i) 0.50% plus (ii) the yield reported, as
of 10:00 A.M. (New York City time) on the Determination Date, on page PX1 of the
Bloomberg Information System (or, if not available, any other nationally
recognized trading screen reporting on-line intraday trading in United States
government securities) for actively traded U.S. Treasury securities having a
maturity equal to the Weighted Average Life to Maturity of the Notes then being
prepaid or paid as of the date of prepayment or payment, rounded to the nearest
month, or if such yields shall not be reported as of such time or the yields
reported as of such time are not ascertainable in accordance with the preceding
clause, then the arithmetic mean of the yields published in the statistical
release designated H.15(519) (or any successor publication) of the Board of
Governors of the Federal Reserve System under the caption "U.S. Government
Securities--Treasury Constant Maturities" (the "statistical release") for the
maturity corresponding to the remaining Weighted Average Life to Maturity of the

                                      -18-

<PAGE>

Notes as of the date of such prepayment or payment rounded to the nearest month.
For purposes of calculating the Reinvestment Yield, the most recent weekly
statistical release published prior to the applicable Determination Date shall
be used. In the event the statistical release is not published, the arithmetic
mean of such reasonably comparable index, as may be designated by the holders of
at least 51 % in aggregate principal amount of the Notes, for the maturity
corresponding to the remaining Weighted Average Life to Maturity of the Notes as
of the date of prepayment or payment, as the case may be, rounded to the nearest
month shall be used. If no maturity exactly corresponding to such rounded
Weighted Average Life to Maturity shall appear therein. yields for the two most
closely corresponding published maturities (one of which occurs prior and the
other subsequent to the Weighted Average Life to Maturity) shall be calculated
pursuant to the foregoing sentence and the Reinvestment Yield shall be
interpolated from such yields on a straight-line basis (rounding, in each of
such relevant periods, to the nearest month).

     Release - Any release, spill, emission, leaking, pumping, pouring,
emptying. dumping. injection, escaping, deposit, disposal, discharge, dispersal,
leaching or migration into the indoor or outdoor environment (including the
abandonment or disposal of any barrel. container or other closed receptacle
containing any Hazardous Material), or into or out of any Facility, including
the movement of any Hazardous Material through the air, soil, surface water,
groundwater or property.

     Rentals - As of the date of any determination thereof, all fixed payments
(including all payments which the lessee is obligated to make to the lessor on
termination of the lease or surrender of the property) payable by the Company or
a Subsidiary, as lessee or sublessee under a lease of real or personal property,
but exclusive of any amounts required to be paid by the Company or a Subsidiary
(whether or not designated as rents or additional rents) on account of
maintenance, repairs, insurance, taxes, assessments, amortization and similar
charges. Fixed rents under any so-called "percentage leases" shall be computed
on the basis of the minimum rents, if any, required to be paid by the lessee,
regardless of sales volume or gross revenues.

     Restricted Investments - Any Investments of the Company and its
Subsidiaries other than:

          (i) Investments in existing and hereafter created or designated
     Subsidiaries and any Person that concurrently with such Investment becomes
     a Subsidiary;

          (ii) Investments in (A) commercial paper of a domestic issuer maturing
     in 270 days or less from the date of issuance which is rated P-2 or better
     by Moody's or A-2 or better by S&P, (B) certificates of deposit or banker's
     acceptances issued by commercial banks or trust companies located in the
     United States of America and organized under its laws or the laws of any
     state thereof each having a combined capital, surplus and undivided profits
     of $100,000,000 or more, (C) obligations of or fully guaranteed by the
     United States of America or an agency thereof maturing within three years
     from the date of acquisition, (D) municipal securities maturing within
     three years from the date of acquisition which are rated in one of the top
     two rating classifications by at least-one national rating agency, or (E)
     money market instrument programs which are classified as current assets in
     accordance with GAAP;

                                      -19-

<PAGE>

          (iii) Extensions of credit in the nature of accounts receivable or
     notes receivable arising from the sale of goods and services m the ordinary
     course of business:

          (iv) Shares of stock, obligations or other securities received in
     settlement of claims arising in the ordinary course of business;

          (v) Participations in notes maturing within 60 days which are rated
     P-2 or better by Moody's or A-2 or better by S&P

          (vi) Advances to officers, employees, subcontractors or suppliers not
     exceeding $5,000,000 in the aggregate; and

          (vii) Investments existing as of the date of this Agreement and
     described in the attached Annex IV.

     S&P - Standard & Poor's Ratings Group, a division of McGraw Hill, Inc.

     Securities Act - The Securities Act of 1933, as amended.

     Subsidiary. Any Person a majority or more of the shares of Voting Stock of
which, or in the case of a Person which is riot a corporation a majority or more
of the equity of which, is owned or controlled, directly or indirectly, by the
Company.

     Total Investment - As defined in the Receivables Purchase Agreement as in
effect on the date of this Agreement.

     Voting Stock - Capital stack of any class of a corporation having power
under ordinary circumstances to vote for the election of members of the board of
directors of such corporation, or persons performing similar functions.

     Weighted Average Life to Maturity - As applied to any prepayment of
principal of the Notes at any date, the number of years obtained by dividing (a)
the then outstanding principal amount of the Notes to be prepaid into (b) the
sum of the products obtained by multiplying (i) the amount of each then
remaining installment, sinking fund, serial maturity, or other required payment,
including payment at final maturity, foregone by virtue of such prepayment of
the Notes, by (ii) the number of years (calculated to the neatest 1112th) which
would have elapsed between such date and the making of such payment.

     Wholly-Owned - When applied to a Subsidiary, any Subsidiary 100% of the
Voting Stock or other equity interests of which is owned by the Company and/or
its Wholly-Owned Subsidiaries, other than directors' qualifying shares or, in
the case of Subsidiaries organized under the laws of a jurisdiction other than
the United States or a state thereof, nominal shares held by foreign nationals
in accordance with local law.

                                      -20-

<PAGE>

     Terms which are not defined in this Section and are defined in other
Sections of this Agreement shall have the meanings specified therein.

     5.2. Accounting Principles. Where the character or amount of any asset or
liability or item of income or expense is required to be determined or any
consolidation or other accounting computation is required to be made for the
purposes of this Agreement, the same shall be done in accordance with GAAP,
except where such principles are inconsistent with the requirements of this
Agreement.

    5.3. Valuation Principles. Except where indicated expressly to the contrary
by the use of terms such as "fair value," "fair market value" or "market value,"
each asset, each liability and each capital item of any Person, and any quantity
derivable by a computation involving any of such assets, liabilities or capital
items, shall be taken at the net book value thereof for all purposes of this
Agreement. "Net book value" with respect to any asset, liability or capital item
of any Person shall mean the amount at which the same is recorded or, in
accordance with GAAP should have been recorded, in the books of account of such
Person, as reduced by any reserves which have been or, in accordance with GAAP
should have been, set aside with respect thereto, but in every case (whether or
not permitted in accordance with GAAP) without giving effect to any write-up,
write-down or write-off (other than any write-down or write-off the entire
amount of which was charged to Consolidated Net Income or to a reserve which was
a charge to Consolidated Net Income) relating thereto which wag made after the
date of this Agreement.

     5.4. Direct or Indirect Actions. Where any provision in this Agreement
refers to action to be taken by any Person, or which such Person is prohibited
from taking, such provision shall be applicable whether the action in question
is taken directly or indirectly by such Person.

ss.6. AFFIRMATIVE COVENANTS

     The Company agrees that, for so long as any amount remains unpaid on any
Note:

     6.1. Corporate Existence. The Company will maintain and preserve, and will
cause each Subsidiary to maintain and preserve, its corporate or partnership
existence and right to carry on its business and maintain, preserve, renew and
extend all of its rights, powers, privileges and franchises necessary to the
proper conduct of its business; provided, however, that the foregoing shall not
prevent any transaction permitted by Section 7.5, Section 7.6 or Section 7.7, or
the termination of the corporate or partnership existence of any Subsidiary or
of any right, power, privilege or franchise of any Subsidiary if, in the
reasonable good faith opinion of the Board of Directors of the Company, such
termination is in the best interests of the Company, is not disadvantageous to
the holders of the Notes, and is not otherwise prohibited by this Agreement.

     6.2. Insurance, The Company will, arid will cause each Subsidiary to,
maintain insurance coverage with financially sound and reputable insurers in
such forms and amounts, with such deductibles and against such risks as are
required by law or sound business practice and are customary for corporations
engaged in the same or similar businesses and owning and operating similar
properties as the Company and its Subsidiaries.

                                      -21-

<PAGE>

     6.3. Taxes, Claims for Labor and Materials. The Company will, and will
cause each Subsidiary to, file timely all tax returns required to be filed in
any jurisdiction and pay and discharge all taxes, assessments, fees and other
governmental charges or levies imposed upon the Company or any Subsidiary or
upon any of their respective properties, including leased properties (but only
to the extent required to do so by the applicable lease), assets, income or
franchises, prior to the date on which penalties attach thereto, and all lawful
claims which, if unpaid. might become a Lien upon any of their respective
properties or assets not permitted by Section 7.4, provided that neither the
Company nor any Subsidiary shall be required to pay any such tax, assessment,
fee, charge, levy or claim, the payment of which is being contested in good
faith and by proper proceedings that will stay the collection thereof or the
forfeiture or sale of any property and with respect to which adequate reserves
are maintained in accordance with GAAP.

     6.4. Maintenance of Properties. The Company will maintain, preserve and
keep, and will cause each Subsidiary to maintain, preserve and keep, its
properties (whether owned in fee or a leasehold interest), other than any
property which is obsolete or, in the good faith judgment of the Company, no
longer necessary for the operation of the business of the Company or any
Subsidiary, in good repair and working order, ordinary wear and tear excepted,
and from time to time will make all necessary repairs, replacements, renewals
and additions thereto so that the business carried on in connection therewith
may be properly conducted.

     6.5. Maintenance of Records. The Company will keep, and will cause each
Subsidiary to keep, at all times proper books of record and account in which
full, true and correct entries will be made of all dealings or transactions of
or in relation to the business and affairs of the Company or such subsidiary in
accordance with GAAP consistently applied throughout the period involved (except
for such changes as are disclosed in such financial statements or in the notes
thereto and concurred in by the Company's independent certified public
accountants), and the Company will, and will cause each Subsidiary to, provide
reasonable protection against loss or damage to such books of record and
account.

     6.6. Financial Information and Reports. The Company will furnish to you and
to any other Institutional Holder (in duplicate if you or such other holder so
request) the following:

     (a) As soon as available and in any event within 45 days after the end of
each of the first three quarterly accounting periods of each fiscal year of the
Company, a consolidated balance sheet of the Company and its Subsidiaries as of
the end of such period and consolidated statements of income and cash flows of
the Company and its Subsidiaries for the periods beginning on the first day of
such fiscal year and the first day of such quarterly accounting period (for the
statements of income) and ending on the date of such balance sheet, setting
forth in comparative form the corresponding consolidated figures for the
corresponding periods of the preceding fiscal year, all in reasonable detail,
prepared in accordance with GAAP consistently applied throughout the period
involved and certified by the chief financial officer or chief accounting
officer of the Company (i) outlining the basis of presentation, and (ii) stating
that the information presented in such financial statements contains all
adjustments (consisting of only normal recurring adjustments) necessary to
present fairly the consolidated financial position of the Company and its

                                      -22-

<PAGE>

Subsidiaries as of such dates and the consolidated results of their operations
and cash flows for the periods then ended, except that such financial statements
condense or omit certain footnotes pursuant to the rules and regulations of the
Commission. Delivery within the time period specified above of copies of the
Company's Quarterly Reports on form 10-Q prepared in compliance with the
requirements therefor and filed with the Commission shall be deemed to satisfy
the requirements of this Section 6.6(a).

     (b) As soon as available and in any event within 90 days after the last day
of each fiscal year, a consolidated balance sheet of the Company and its
Subsidiaries as of the end of such fiscal year and the related consolidated
statements of income, reinvested earnings and cash flows for such fiscal year,
in each case setting forth in comparative form figures for the preceding fiscal
year, all in reasonable detail, prepared in accordance with GAAP consistently
applied throughout the period involved (except for changes disclosed in such
financial statements or in the notes thereto and concurred in by the Company's
independent certified public accountants) and accompanied by a report as to the
consolidated balance sheet and the related consolidated statements of income,
reinvested earnings and cash flows unqualified as to scope of audit and
unqualified as to going concern by Arthur Andersen LLP, or any other firm of
independent public accountants of recognized national standing selected by the
Company, to the effect that such financial statements gave been prepared in
conformity with GAAP and present fairly, in all material respects, the
consolidated financial position and results of operations and cash flows of the
Company and its Subsidiaries and that the examination of such financial
statements by such accounting firm has been made in accordance with generally
accepted auditing standards. Delivery within the time period specified above of
the Company's Annual Report on Form 10-K for such fiscal year (together with the
Company's annual report to shareholders prepared pursuant to Rule 14a-3 under
the Exchange Act) prepared in compliance with the requirements therefor
and filed with the Commission, together with the accountant's certificate
described in Section 6.6(b), shall be deemed to satisfy the requirements of this
Section 6.6(b).

     (c) Together with the consolidated financial statements delivered pursuant
paragraphs (a) and (b) of this Section 6.6, a certificate of the chief financial
officer, accounting officer or treasurer of the Company, (i) to the effect that
such officer has re-examined the terms  and provisions of this Agreement
and that on the date such calculations were made, during the periods covered by
such financial reports and as of the end of such periods the Company is not, or
was not, in default in the fulfillment of any of the terms, covenants,
provisions and conditions of this Agreement and that no Default or Event of
Default is occurring or has occurred as of the date of such certificate, during
the periods covered by such financial statements and as of the end of such
periods, or if such officer is aware of any Default or Event of Default, such
officer shall disclose in such statement the nature thereof, its period of
existence and what action, if any, the Company has taken or proposes to take
with respect thereto, and (ii) stating whether the Company is in compliance with
Sections 7.1 through 7.10 and setting forth, in sufficient detail, the
information and computations required to establish whether or not the Company
was in compliance with the requirements of Sections 7.1 through 7.8 during the
periods covered by the financial statements then being furnished and as of the
end of such periods.

                                      -23-

<PAGE>

     (d) Together with the financial reports delivered pursuant to paragraph (b)
of this Section 6.6, a letter of the Company's independent certified public
accountants stating that they have reviewed this Agreement and stating whether,
in making their audit, they have become aware of any condition or event that
then constitutes a Default or an Event of Default, and, if they are aware that
any such condition or event then exists, specifying the nature and period of the
existence thereof (it being understood that such accountants shall not be
liable, directly or indirectly, for any failure to obtain knowledge of any
Default or Event of Default unless such accountants should have obtained
knowledge thereof in making an audit in accordance with generally accepted
auditing standards or did not make such an audit).

     (e) Concurrently with notice filed with the Commission, notice of (i) the
filing of any suit, action, claim or counterclaim against the Company or any
Subsidiary in which the amount claimed as damages against the Company or any
Subsidiary exceeds $5,000,000 after deducting the amount which the Company
reasonably believes is covered by insurance, and (ii) the entering of any
judgment or decree against the Company or any Subsidiary if the aggregate amount
of all judgments and decrees then outstanding against the Company and all
Subsidiaries exceeds $2,500,000 after deducting the amount the Company or any
Subsidiary (x) is insured therefor and with respect to which the insurer has
assumed responsibility in writing and (y) is otherwise indemnified therefor if
the terms of such indemnification are satisfactory to holders of 55% or more in
aggregate principal amount of the Notes then outstanding.

     (f) As soon as available, copies of each financial statement, notice,
report and proxy statement which the Company furnishes to its shareholders
generally; within 15 days of filing, copies of each registration statement and
periodic report (without exhibits and other than registration statements
relating to employee benefit plans) which the Company files with the Commission,
and any similar or successor agency of the Federal government administering the
Securities Act, and Exchange Act or the Trust Indenture Act of 1939, as amended;
without duplication, within 15 days of filing, copies of each report (other than
reports relating solely to the issuance of, or transactions by others involving,
its securities) relating to the Company or its securities which the Company
files with any securities exchange on which any of the Company's securities may
be registered; copies of any orders applicable to the Company or a Subsidiary in
any material proceedings to which the Company or any Subsidiary is a party,
issued by any governmental agency, Federal or state, having jurisdiction over
the Company or any Subsidiary and, at any time as the Company is not a reporting
company under Section 13 or 15(d) of the Exchange Act or has not complied with
the requirements for the exemption from registration under the Exchange Act set
forth in Rule 12g-3-2(b), such financial or other information as any holder of
the Notes or prospective purchaser of the Notes may reasonably request.

     (g) As soon as available, a copy of each other report submitted to the
Company or any Subsidiary by independent accountants retained by the Company or
any Subsidiary in connection with any special audit made by them of the books of
the Company or any Subsidiary.

     (h) Promptly following any change in the composition of the Company's
Subsidiaries from that set forth in Annex I, as theretofore updated pursuant to
this paragraph, and also at the time of delivery of the financial statements
referred to in Section 6.6(b), an updated list setting forth the information
specified in Annex I.

                                      -24-

<PAGE>

     (i) Such additional information as you or such other Institutional Holder
of the Notes may reasonably request concerning the Company and its Subsidiaries.

     6.7. Inspection of Properties and Records. The Company will allow, and will
cause each Subsidiary to allow, any representative of you or any other
Institutional Holder. so long as you or such other Institutional Holder holds
any Note, to visit and inspect any of its properties, to examine (and, if at the
time thereof any Default or Event of Default has occurred and is continuing,
make copies and extracts of) its books of record and account and to discuss its
affairs, finances and accounts with its officers and its present and former
public accountants (and by this provision the Company authorizes such
accountants to discuss with you or such Institutional Holder the Company's and
any Subsidiary's affairs, finances and accounts), all at such reasonable times
and upon such reasonable notice and as often as you or such Institutional Holder
may reasonably request and, if at the time thereof any Default or Event of
Default has occurred and is continuing, at the Company's expense.

     6.8. ERISA. (a) All assumptions and methods used to determine the actuarial
valuation of employee benefits. both vested and unvested, under any Plan subject
to Title IV of ERISA, and each such Plan, whether now existing or adopted after
the date hereof, will comply in all material respects with ERISA.

     (b) The Company will not at any time permit any Plan to:

          (i) engage in any "prohibited transaction" as such term is defined in
     Section 4975 of the Code or in Section 406 of ERISA;

          (ii) incur any "accumulated funding deficiency" as such term is
     defined in Section 302 of ERISA, whether or not waived; or

          (iii) be terminated under circumstances which are likely to result in
     the imposition of a Lien on the property of the Company or any ERISA
     Affiliate pursuant to Section 4068 of ERISA;

if the event or condition described in clauses (i), (ii) or (iii) above is
likely to subject the Company or an ERISA Affiliate to liabilities which,
individually or in the aggregate, would have a Material Adverse Effect.

     (c) Upon the request of you or any subsequent Institutional Holder, the
Company will furnish a copy of the annual report of each Plan (Form 5500)
required to be filed with the Internal Revenue Service.

     (d) Within 5 days after obtaining knowledge of any event specified in
clauses (i) through (vi) below that would result in a Material Adverse Effect,
the Company will give you and any subsequent Institutional Holder written notice
of (i) a reportable event with respect to any Plan: (ii) the institution of any

                                      -25-

<PAGE>

steps by any of the Company, any ERISA Affiliate or the PBGC to terminate any
Plan; (iii) the institution of any steps by any of the Company or any ERISA
Affiliate to withdraw from any Plan; (iv) a prohibited transaction in connection
with any Plan; (v) any material increase in the contingent liability of the
Company or any Subsidiary with respect to any post-retirement welfare liability;
or (vi) the taking of any action by the Internal Revenue Service. the Department
of Labor or the PBGC with respect to any of the foregoing.

     6.9. Compliance with Laws.
          --------------------

     (a) The Company will comply, and will cause each Subsidiary to comply, with
all laws, rules and regulations, including Environmental Laws, relating to its
or their respectiVe businesses, other than laws, rules and regulations the
failure to comply with which or the sanctions and penalties resulting therefrom,
individually or in the aggregate. would not have a Material Adverse Effect.

     (b) Promptly upon the occurrence thereof, the Company will give you and
each other Institutional Holder notice of the institution of any proceedings
against, or the receipt of written notice of potential liability or
responsibility of, the Company or any Subsidiary for violation, or the alleged
violation, of any Environmental Law which violation would give rise to a
Material Adverse Effect.

     6.10. Acquisition of Notes. Neither the Company nor any Subsidiary nor any
Affiliate of any of them, directly or indirectly, will repurchase, redeem,
prepay or otherwise acquire, directly or indirectly, any Notes except upon
payment or prepayment of the Notes pursuant to Section 2 or Section 7.6. The
Company will forthwith cancel any Notes in any manner or at any time acquired by
the Company or any Subsidiary or Affiliate of any of them, and such Notes shall
not be deemed to be outstanding for any of the purposes of this Agreement or the
Notes.

     6.11. Private Placement Number. The Company consents to the filing by your
special counsel of copies of this Agreement with S&P to obtain a private
placement number.

ss.7. NEGATIVE COVENANTS

     The Company agrees that, for so long as any amount remains unpaid on any
Note:

     7.1. Adjusted Consolidated Net Worth. The Company will not permit its
Adjusted Consolidated Net Worth (calculated on the last day of each fiscal
quarter) to be less than $74,296,000 plus the cumulative sum of 40% of its
Consolidated Net income (but only if a positive number) for (i) each completed
fiscal year of the Company ending after December 31, 1994, and (ii) the period
from the beginning of the fiscal year of which the fiscal quarter being measured
is a part to the last day of such fiscal quarter.

     7.2. Consolidated Debt. The Company will not permit the ratio (calculated
on the last day of each fiscal quarter) of Consolidated Debt to Consolidated
Total Capitalization to exceed the ratio of .55 to 1.0.

                                      -26-

<PAGE>

     7.3. Net Working. Capital. The Company will not permit the ratio
(calculated on the last day of each fiscal quarter) of Net Working Capital to
Consolidated Debt to be less than 1.2 to 1.0.

     7.4. Liens. The Company will not, and will not permit any Subsidiary to,
permit to exist, create, assume or incur, directly or indirectly, any Lien on
its properties or assets. whether now owned or hereafter acquired, except:

     (a) Liens on property created substantially contemporaneously or within 180
days of the acquisition thereof to secure or provide for all or a portion of the
purchase price of such property, provided that (i) such Liens do not extend to
other property of the Company or any Subsidiary, (ii) the aggregate principal
amount of Indebtedness secured by each such Lien does not exceed 80% of the
purchase price at the time of acquisition of the property subject to such Lien,
and (iii) the Indebtedness secured by such Liens is otherwise permitted by
Section 7.2 and Section 7.3 of this Agreement;

     (b) Liens for taxes, assessments or governmental charges not then due and
delinquent or the validity of which is being contested in good faith by
appropriate proceedings and as to which the Company has established adequate
reserves therefor on its books in accordance with GAAP;

     (c) Liens arising in connection with court proceedings, provided the
execution of such Liens is effectively stayed, such Liens are being contested in
good faith by appropriate proceedings and the Company has established adequate
reserves therefor on its books in accordance with GAAP;

     (d) Liens arising in the ordinary course of business and not incurred in
connection with the borrowing of money (including mechanic's and materialmen's
liens and minor survey exceptions on real property) that in the aggregate do not
materially interfere with the conduct of the business of the Company or any
Subsidiary or materially impair the value of the property or assets subject to
such Liens;

     (e) Liens in connection with worker' compensation, unemployment insurance
or other social security laws to secure the public or statutory obligations of
the Company or any Subsidiary;

     (f) Liens securing Indebtedness of a Subsidiary to the Company;

     (g) Liens permitted by and arising under the Receivables Purchase
Agreement;

     (h) Liens existing on property or assets of the Company or any Subsidiary
as of the date of this Agreement that are described in the attached Annex V;

     (i) Liens not otherwise permitted by paragraphs (a) through (h) of this
Section 7.4 created, assumed or incurred subsequent to the Closing Date to
secure Indebtedness, provided that at the time of creating, assuming or
incurring such additional Indebtedness and after giving effect thereto and to

                                      -27-

<PAGE>

the application of the proceeds therefrom the sum (without duplication) of the
aggregate principal amount of outstanding Consolidated Indebtedness secured by
Liens permitted by this Section 7.4(i) does not exceed 10% of Adjusted
Consolidated Net Worth.

     7.5. Merger or Consolidation. The Company will not. and will not permit any
Subsidiary to. merge or consolidate with, or convey, transfer or lease all or
substantially all of its assets in a single transaction or series of
transactions to, any Person. except that:

     (a) The Company may merge into or consolidate with. or sell all or
substantially all of its assets to, any Person or permit any Person to merge
into or consolidate with it, provided that immediately after giving effect
thereto, (i) the Company is the successor corporation or, if the Company is not
the successor corporation, the successor corporation is a solvent corporation
organized under the laws of a state of the United States of America or the
District of Columbia and expressly assumes in writing the Company's obligations
under the Notes and this Agreement; and (ii) there shall exist no Default or
Event of Default.

     (b) Any Subsidiary may (i) merge into the Company or a Wholly-Owned
Subsidiary, (ii) convey, transfer or lease all or any part of its assets to the
Company or a Wholly-Owned Subsidiary, and (iii) merge with any Person which, as
a result of such merger, becomes a Wholly-Owned Subsidiary; provided in each
instance set forth in clauses (i) through (iii) that immediately before and
after giving effect thereto, there shall exist no Default or Event of Default.

     7.6. Sale of Assets. The Company will riot, and will not permit any
Subsidiary to, sell, lease, transfer or otherwise dispose of, including by way
of merger (collectively a "Disposition"), any assets, including capital stock or
equity interests of Subsidiaries, in one or a series of. transactions, other
than in the ordinary course of business, to any Person, except to the Company or
a Wholly-Owned Subsidiary, (i) if, in any fiscal year, after giving effect to
such Disposition, the aggregate net book value of assets subject to Dispositions
during such fiscal year would exceed 15% of Consolidated Total Assets as of the
end of the immediately preceding fiscal year or (ii) if a Default or Event of
Default exists or would exist. Notwithstanding the foregoing, the Company may,
or may permit a Subsidiary to, make a Disposition and the assets subject to such
Disposition shall not be subject to or included in the foregoing limitation and
computation contained in clause (i) of the preceding sentence to the extent that
(x) such assets are leased back by the Company or such Subsidiary, as lessee,
within 180 days following the date of the Disposition, or (y) the net proceeds
from such Disposition are (1) reinvested in productive assets of the Company or
a Subsidiary of at least equivalent value within 180 days of the date of such
Disposition, or (2) applied to the payment or prepayment of outstanding senior
Indebtedness. Any repayment of Notes pursuant to this Section 7.6 shall be in
accordance with Section 2.2(a).

     7.7. Disposition of Stock of Subsidiaries. The Company will not permit any
Subsidiary to issue its capital stock or other equity interests, or any
warrants, rights or options to purchase, or securities convertible into or
exchangeable for, such capital stock or other equity interests, to any Person
other than the Company or a Wholly-Owned Subsidiary. The Company will not, and
will not permit any Subsidiary to, sell, transfer or otherwise dispose of (other

                                      -28-

<PAGE>

than to the Company or a Wholly-Owned Subsidiary) any capital stock or other
equity interests (including any warrants, rights or options to purchase, or
securities convertible into or exchangeable for, capital stock or other equity
interests) or Indebtedness of any Subsidiary. unless:

     (a) simultaneously therewith all Investments in such Subsidiary owned by
the Company and every other Subsidiary are disposed of as an entirety;

     (b) such Subsidiary does not have any continuing Investment in the Company
or any other Subsidiary not being simultaneously disposed of; and

     (c) such sale, transfer or other disposition is permitted by Section 7.6.

     7.8. Leases. The Company will not, and will not permit any Subsidiary to,
enter into or permit to exist any Capitalized Lease which requires the payment
during the remaining term thereof by the Company or any Subsidiary of
Capitalized Lease Obligations which, after giving effect thereto, and to any
other Capitalized Lease Obligations of the Company and its Subsidiaries on a
consolidated basis, exceed in the aggregate 10% of Consolidated Total
Capitalization.

     7.9. Transactions with Affiliates. The Company will not, and will not
permit any Subsidiary to, enter into any transaction (including the furnishing
of goods or services) with an Affiliate, except on terms and conditions no less
favorable to the Company or such Subsidiary than would be obtained in a
comparable arm's-length transaction with a Person not an Affiliate, except for
(i) the transfer pricing between the Company and its joint venture, Castle
Metals de Mexico, S.A. de C.V., and (ii) benefit and compensation plans and
arrangements approved by a majority of the disinterested members of the Board of
Directors of the Company or any Subsidiary.

     7.10. Nature of Business. The Company will not, and will not permit any
Subsidiary to, engage in any business if, as a result thereof, the business then
to be conducted by the Company and its Subsidiaries, taken as a whole, would be
substantially changed from the business conducted on the Closing Date.

ss.8. EVENTS OF DEFAULT AND REMEDIES THEREFOR

     8.1. Nature of Events. An "Event of Default" shall exist if any one or more
of the following occurs:

     (a) Any default in the payment of interest when due on any of the Notes and
continuance of such default for a period of five Business Days;

     (b) Any default in the payment of the principal of any of the Notes or the
Make-Whole Amount thereon, if any, at maturity, upon acceleration of maturity or
at any date fixed for prepayment;

                                      -29-

<PAGE>

     (c) (i) Any default in the payment of the principal of, or interest or
premium on. any other Debt of the Company and its Subsidiaries aggregating in
excess of $3,000,000 as and when due and payable (whether by lapse of time.
declaration. call for redemption or otherwise) and the continuation of such
default beyond the period of grace. if any, allowed with respect thereto, or
(ii) any default (other than a payment default) under any mortgages. agreements
or other instruments of the Company and its Subsidiaries under or pursuant to
which Debt aggregating in excess of $3,000,000 is issued and the continuation of
such default beyond the period of grace, if any, allowed with respect thereto;

     (d) Any default in the observance or performance of Sections 7.1 through
7.10 or in Section 8.7;

     (e) Any default in the observance or performance of any other covenant or
provision of this Agreement which is not remedied within 30 days after the date
on which the Company learns of such default;

     (f) Any representation or warranty made by the Company in this Agreement,
or made by the Company in any written statement or certificate furnished by the
Company in connection with the issuance and sale of the Notes or furnished by
the Company pursuant to this Agreement, proves incorrect in any material respect
as of the date of the making or issuance thereof;

     (g) Any judgment, decree, writ or warrant of attachment or any similar
process in an aggregate amount in excess of $5,000,000 shall be entered or filed
against the Company or any Subsidiary or against any property or assets of
either and remain unpaid, unvacated, unbonded or unstayed (through appeal or
otherwise) for a period of 60 days after the Company or any Subsidiary receives
notice thereof, except for any judgment, decree, writ or warrant of attachment
or any similar process to the extent that the Company or any Subsidiary (i) is
insured therefor and with respect to which the insurer has assumed
responsibility in writing, or (ii) is indemnified therefor, provided the terms
of such indemnification are satisfactory to holders of 55% or more in aggregate
principal amount of the Notes then outstanding;

     (h) The Company or any Subsidiary shall:

          (i) generally not pay its debts as they become due or admit in writing
     its inability to pay its debts generally as they become due;

          (ii) file a petition in bankruptcy or for reorganization or for the
     adoption of an arrangement under the Federal Bankruptcy Code, or any
     similar applicable bankruptcy or insolvency law, as now or in the future
     amended (herein collectively called "Bankruptcy Laws"); file an answer or
     other pleading admitting or failing to deny the material allegations of
     such a petition; fail to obtain the dismissal of such a petition within 60
     days of its filing or be subject to an order for relief or a decree
     approving such a petition; or file an answer or other pleading seeking,
     consenting to or acquiescing in relief provided for under the Bankruptcy
     Laws;

                                      -30-

<PAGE>

          (iii) make an assignment of all or a substantial part of its property
     for the benefit of its creditors;

          (iv) seek or consent to or acquiesce in the appointment of a receiver,
     liquidator, custodian or trustee of it or for all or a substantial part of
     its property;

          (v) be finally adjudicated bankrupt or insolvent;

          (vi) be subject to the entry of a court order which shall not be
     vacated. set aside or stayed within 60 days of the date of entry, (A)
     appointing a receiver. liquidator, custodian or trustee of it or for all or
     a substantial part of its property, (B) for relief pursuant to an
     involuntary case brought under, or effecting an arrangement in, bankruptcy,
     (C) for a reorganization pursuant to the Bankruptcy Laws, or (D) for any
     other judicial modification or alteration of the rights of creditors; or

          (vii) be subject to the assumption of custody or sequestration by a
     court of competent jurisdiction of all or a substantial part of its
     property, which custody or sequestration shall not be suspended or
     terminated within 60 days from its inception.

     8.2. Remedies on Default. When any Event of Default described in paragraphs
(a) through (g) of Section 8.1 has occurred and is continuing, the holders of
33% or more in aggregate principal amount of the Notes then outstanding may, by
notice to the Company, declare the entire principal, together with the
Make-Whole Amount (to the extent permitted by law) and all interest accrued on
all Notes to be, and such Notes shall thereupon become, forthwith due and
payable, without any presentment, demand, protest or other notice of any kind,
all of which are expressly waived. Notwithstanding the foregoing, (i) when any
Event of Default described in paragraph (a) or (b) of Section 8.1 has occurred
and is continuing, any holder may by notice to the Company declare the entire
principal, together with the Make-Whole Amount (to the extent permitted by law)
and all interest accrued on the Notes then held by such holder to be, and such
Notes shall thereupon become, forthwith due and payable, without any
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, and (ii) when any Event of Default described in paragraph (h)
of Section 8.1 has occurred, then the entire principal, together with the
Make-Whole Amount (to the extent permitted by law) and all interest accrued on
all outstanding Notes shall immediately become due and payable without
presentment, demand or notice of any kind. Upon the Notes or any of them
becoming due and payable as aforesaid, the Company will forthwith pay to the
holders of such Notes the entire principal of and interest accrued on such
Notes, plus the Make-Whole Amount (to the extent permitted by law) which shall
be calculated on the Determination Date.

     8.3. Annulment of Acceleration of Notes. The provisions of Section 8.2 are
subject to the condition that if the principal of, the Make-Whole Amount and
accrued interest on the Notes have been declared immediately due and payable by
reason of the occurrence of any Event of Default described in paragraphs (a)
through (g), inclusive, of Section 8.1, the holder or holders of 68% or more in
aggregate principal amount of the Notes then outstanding may, by written
instrument filed with the Company, rescind and annul such declaration and the
consequences thereof, provided that (i) at the time such declaration is annulled
and rescinded no judgment or decree has been entered for the payment of any

                                      -31-

<PAGE>

monies due pursuant to the Notes or this Agreement, (ii) all arrears of interest
upon all the Notes and all other sums payable under the Notes and under this
Agreement (except any principal, Make-Whole Amount or interest on the Notes
which has become due and payable solely by reason of such declaration under
Section 8.2) shall have been duly paid, and (iii) each and every Default or
Event of Default shall have been cured or waived; and provided further, that no
such rescission and annulment shall extend to or affect any subsequent Default
or Event of Default or impair any right consequent thereto.

     8.4. Other Remedies. If any Event of Default shall be continuing, any
holder of Notes may enforce its rights by suit in equity, by action at law, or
by any other appropriate proceedings. whether for the specific performance (to
the extent permitted by law) of any covenant or agreement contained in this
Agreement or in the Notes or in aid of the exercise of any power granted in this
Agreement, and may enforce the payment of any Note held by such holder and any
of its other legal or equitable rights.

     8.5. Conduct No Waiver; Collection Expenses. No course of dealing on the
part of any holder of Notes, nor any delay or failure on the part of any holder
of Notes to exercise any of its rights, shall operate as a waiver of such rights
or otherwise prejudice such holder's rights, powers and remedies. If the Company
fails to pay, when due, the principal of, the Make-Whole Amount, or the interest
on, any Note, or fails to comply with any other provision of this Agreement, the
Company will pay to each holder, to the extent permitted by law, on demand, such
further amounts as shall be sufficient to cover the cost and expenses, including
but not limited to attorneys' fees, incurred by such holders of the Notes in
collecting any sums due on the Notes or in otherwise enforcing any of their
rights.

     8.6. Remedies Cumulative. No right or remedy conferred upon or reserved to
any holder of Notes under this Agreement is intended to be exclusive of any
other right or remedy, and every right and remedy shall be cumulative and in
addition to every other right or remedy given under this Agreement or now or
hereafter existing under any applicable law. Every right and remedy given by
this Agreement or by applicable law to any holder of Notes may be exercised from
tune to time and as often as may be deemed expedient by such holder, as the case
may be.

     8.7. Notice of Default. With respect to Defaults, Events of Default or
claimed defaults, the Company will give the following notices:

     (a) The Company promptly will furnish to each holder of a Note written
notice of the occurrence of a Default or an Event of Default. Such notice shall
specify the nature of such default, the period of existence thereof and what
action the Company has taken or is taking or proposes to take with respect
thereto.

     (b) If the holder of any Note or of any other evidence of Debt of the
Company or any Subsidiary gives any notice or takes any other action with
respect to a claimed default, the Company will forthwith give written notice
thereof to each holder of the then outstanding Notes, describing the notice or
action and the nature of the claimed default.

                                      -32-

<PAGE>

ss.9. AMENDMENTS, WAIVERS AND CONSENTS

     9.1. Matters Subject to Modification. Any term, covenant, agreement or
condition of this Agreement may, with the written consent of the Company, be
amended, or compliance therewith may be waived (either generally or in a
particular instance and either retroactively or prospectively), if the Company
shall have obtained the consent in writing of the holder or holders of 51% or
more in aggregate principal amount of outstanding Notes; provided, however,
that, without the written consent of the holder or holders of all of the Notes
then outstanding, no such amendment, waiver, modification or alteration shall be
effective which will (i) change any of the provisions, including definitions,
relating to payment (including any required prepayment or optional prepayment)
of the principal of, Make-Whole Amount or interest on any Note, (ii) change the
amount of any payment or prepayment of principal or Make-Whole Amount, or change
the rate of interest thereon, or (iii) change any of the provisions of Section
2.1, Section 2.2, Section 8.1, Section 8.2, Section 8.3 or this Section 9..

     For the purpose of determining whether holders of the requisite principal
amount of Notes have made or concurred in any amendment, waiver, consent,
approval, notice or other communication under this Agreement, Notes held in the
name of, or owned beneficially by, the Company, any Subsidiary or any Affiliate
thereof, shall not be deemed outstanding.

     9.2. Solicitation of Holders of Notes. Neither the Company nor any Person
acting on the Company's behalf will solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement or the Notes unless each holder of the Notes (irrespective of the
amount of Notes then owned by it) shall concurrently be informed thereof by the
Company and shall be afforded the opportunity of considering the same and shall
be supplied by the Company with sufficient information to enable it to make an
informed decision with respect thereto. Executed or true and correct copies of
any waiver or consent effected pursuant to the provisions of this Section 9
shall be delivered by the Company to each holder of outstanding Notes forthwith
following the date on which the same shall have been executed and delivered by
the holder or holders of the requisite percentage of outstanding Notes. The
Company will not, directly or indirectly, pay or cause to be paid any
remuneration, whether by way of supplemental or additional interest, fee or
otherwise, to any holder of the Notes, as consideration for or as an inducement
to the consideration of or the entering into by any holder of the Notes of any
waiver or amendment of any of the terms and provisions of this Agreement unless
such remuneration is concurrently paid, on the same terms, ratably to each
holder of the then outstanding Notes. Any consent made by a holder of Notes that
has transferred or has agreed to transfer its Notes to the Company, any
Subsidiary, or any Affiliate thereof and has provided or has agreed to provide
such written consent as a condition to such transfer shall be void and of no
force and effect except solely as to such holder, and any amendments effected or
waivers granted or to be effected or granted that would not have been or would
not be so effected or granted but for such consent (and the consents of all
other holders of Notes that were acquired under the same or similar conditions)
shall be void and of no force and effect retroactive to the date such amendment
or waiver initially took or takes effect, except solely as to such holder..

                                      -33-

<PAGE>

     9.3. lading Effect. Any such amendment, consent or waiver shall apply
equally to all the holders of the Notes and shall be binding upon them, upon
each future holder of any Note and upon the Company whether or not such Note
shall have been marked to indicate such amendment. consent or waiver and whether
or not such holder approved of such amendment. consent or waiver. No such
amendment. consent or waiver shall extend to or affect any obligation not
expressly amended, consented to or waived or impair any right related thereto.

ss.10. FORM OF NOTES, REGISTRATION, TRANSFER, EXCHANGE AND REPLACEMENT

     10.1. Form of Notes. Each Note initially delivered under this Agreement
will be in the form of one fully registered Note in the form attached as Exhibit
A, B or C, as the case may be. The Notes are issuable only in fully registered
form and in denominations of at least $1.000,000 (or the remaining outstanding
balance thereof, if less than $1,000,000).

     10.2. Note Register. The Company shall cause to be kept at its principal
office a register (the "Note Register") for the registration and transfer of the
Notes. The names and addresses of the holders of Notes. the transfer thereof and
the names and addresses of the transferees of the Notes shall be registered in
the Note Register. The Company may deem and treat the person in whose name a
Note is so registered as the holder and owner thereof for all purposes (subject
to the provisions of Section 2.5) and shall not be affected by any notice to the
contrary, until due presentment of such Note for registration of transfer as
provided in this Section 10.

     10.3. Issuance of New Notes upon Exchange or Transfer. Upon surrender for
exchange or registration of transfer of any Note at the office of the Company
designated for notices in accordance with Section 11.2, the Company shall
execute and deliver, at its expense, one or more new Notes of any authorized
denominations of the same series requested by the holder of the surrendered
Note, each dated the date to which interest has been paid on the Notes so
surrendered (or, if no interest has been paid, the date of such surrendered
Note), but in the same aggregate unpaid principal amount as such surrendered
Note, and registered in the name of such person or persons as shall be
designated in writing by such holder. Every Note surrendered for registration of
transfer shall be duly endorsed, or be accompanied by a written instrument of
transfer duly executed, by the holder of such Note or by his attorney duly
authorized in writing.

     10.4. Replacement of Notes. Upon receipt of evidence satisfactory to the
Company of the ownership of and loss, theft, mutilation or destruction of any
Note, and in the case of any such loss, theft or destruction upon delivery of a
bond of indemnity in such form and amount as shall be reasonably satisfactory to
the Company or in the event of such mutilation upon surrender and cancellation
of the Note, the Company, without charge to the holder thereof, will make and
deliver a new Note of like tenor in lieu of such lost, stolen, destroyed or
mutilated Note. If any such lost, stolen or destroyed Note is owned by you or
any other Institutional Holder, then the affidavit of an authorized officer of
such owner setting forth the fact of such loss, theft or destruction and of its
ownership of the Note at the time of such loss, theft or destruction shall be
accepted as satisfactory evidence thereof, and no further indemnity shall be

                                      -34-

<PAGE>

required as a condition to the execution and delivery of a new Note, other than
a written agreement of such owner (in form reasonably satisfactory to the
Company) to indemnify the Company for any losses directly suffered by the
Company relating to the lost, stolen. destroyed or mutilated Note and the
issuance by the Company of a new Note.

ss.11. MISCELLANEOUS

     11.1. Expenses. Whether or not the purchase of Notes herein contemplated
shall be consummated, the Company agrees to pay directly all expenses (including
fees and expenses of counsel) in connection with the preparation, execution and
delivery of this Agreement and the transactions contemplated by this Agreement,
including, but not limited to, out-of-pocket expenses, filing fees of S&P in
connection with obtaining a private placement number, fees. charges and
disbursements of special counsel, photocopying and printing costs and charges
for shipping the Notes, adequately insured, to you at your home office or at
such other address as you may designate, and all similar expenses (including the
fees and expenses of counsel, and the fees and expenses of a financial advisor,
but only in connection with any work-out. renegotiation or restructuring in the
case of a financial advisor) relating to any amendments, waivers or consents in
connection with this Agreement or the Notes (whether or not any such amendments,
waivers or consents become effective), including, but not limited to, any such
amendments, waivers or consents resulting from any Default, Event of Default,
work-out, renegotiation or restructuring relating to the performance by the
Company of its obligations under this Agreement or the Notes. The Company also
agrees that it will pay and save you harmless against any and all liability with
respect to stamp and other documentary taxes, if any, which may be payable. or
which may be determined to be payable in connection with the execution and
delivery of this Agreement or the Notes (but not in connection with a transfer
or replacement of any Notes), whether or not any Notes are then outstanding. The
obligations of the Company under this Section 11.1 shall survive the retirement
of the Notes.

     11.2. Notices. Except as otherwise expressly provided herein, all
communications provided for in this Agreement shall be in writing and delivered
or sent by registered or certified mail, return receipt requested, or by
overnight courier (i) if to you, to the address set forth below your name in
Schedule I, or to such other address as you may in writing designate, (ii) if to
any other holder of the Notes, to such address as the holder may designate in
writing to the Company, and (iii) if to the Company, to A. M. Castle & Co..,
3400 North Wolf Road, Franklin Park, Illinois 60131, Attention: Treasurer, or to
such other address as the Company may in writing designate.

     11.3. Reproduction of Documents. This Agreement and all documents relating
hereto, including, without limitation, (i) consents, waivers and modifications
which may hereafter be executed, (ii) documents received by you at the closing
of the purchase of the Notes (except the Notes themselves), and (iii) financial
statements, certificates and other information previously or hereafter furnished
to you, may be reproduced by you by any photographic, photostatic, microfilm,
micro-card, miniature photographic or other similar process, and you may destroy
any original document so reproduced. The Company agrees and stipulates that any
such reproduction which is legible shall be admissible in evidence as the

                                      -35-

<PAGE>

original itself in any judicial or administrative proceeding (whether or not the
original is in existence and whether or not such reproduction was made by you in
the regular course of business) and that any enlargement, facsimile or further
reproduction of such reproduction shall likewise be admissible in evidence:
provided that nothing herein contained shall preclude the Company from objecting
to the admission of any reproduction on the basis that such reproduction is not
accurate, has been altered or is otherwise incomplete.

     11.4. Successors and Assigns. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and
assigns.

     11.5. Law Govening. This Agreement shall be governed by and construed in
accordance with the internal laws (and not the law of conflicts) of the State of
Illinois.

     11.6. Headings. The headings of the sections and subsections of this
Agreement are inserted for convenience only and do not constitute a part of this
Agreement.

     11.7. Counterparts. This Agreement may be executed simultaneously in one or
more counterparts, each of which shall be deemed an original, but all such
counterparts shall together constitute one and the same instrument, and it shall
not be necessary in making proof of this Agreement to produce or account for
more than one such counterpart or reproduction thereof permitted by Section
11.3.

     11.8. Reliance on and Survival of Provisions. All covenants,
representations and warranties made by the Company herein and in any
certificates delivered pursuant to this Agreement, whether or not in connection
with a closing, (i) shall be presumed to have been relied upon by you,
notwithstanding any investigation heretofore or hereafter made by you or on your
behalf, and (ii) shall survive the delivery of this Agreement and the Notes.

     11.9. Integration and Severability. This Agreement embodies the entire
agreement and understanding between you and the Company and supersedes all prior
agreements and understandings relating to the subject matter hereof. In case any
one or more of the provisions contained in this Agreement or in any Note, or
application thereof, shall be invalid, illegal of unenforceable in any respect,
the validity, legality and enforceability of the remaining provisions contained
in this Agreement and in any Note, and any other application thereof, shall not
in any way be affected or impaired thereby.

                                      -36-

<PAGE>

     IN WITNESS WHEREOF, the Company and the Purchasers have caused this Note
Agreement to be executed and delivered by their respective officer or officers
thereunto duly authorized.

                                             A. M. CASTLE & CO.

                                             By: /s/ James A. Podojil
                                                --------------------------------
                                             Title: Treasurer

                                             ALLSTATE LIFE INSURANCE COMPANY

                                             By: /s/ Patricia W. Wilson
                                                --------------------------------

                                             By: /s/ David A. Chalupnik
                                                --------------------------------
                                             Authorized Signatories

                                             THE NORTHWESTERN MUTUAL LIFE
                                                 INSURANCE COMPANY

                                             By: /s/ J. Thomas Christofferson
                                                --------------------------------
                                             Title: Authorized Representative

                                             MASSACHUSETTS MUTUAL LIFE
                                                 INSURANCE COMPANY

                                             By: /s/ Lawrence O. Stillman
                                                --------------------------------
                                             Title: Managing Director

                                             MUTUAL OF OMAHA INSURANCE COMPANY

                                             By: /s/ Edwin H. Garrison
                                                --------------------------------
                                             Title: First Vice President

                                      -37-

<PAGE>

                                             UNITED OF OMAHA LIFE INSURANCE
                                                 COMPANY

                                             By: /s/ Edwin H. Garrison. Jr.
                                                --------------------------------
                                             Title: First Vice President

                                      -38-

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