Document:

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                                                                   EXHIBIT 10.4

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                          RELIANCE STEEL & ALUMINUM CO.

                   AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENTS

                            Dated as of July 1, 2003

                                       Re:
              Note Purchase Agreements dated as of October 15, 1998
                                       and
         $23,000,000 6.23% Senior Notes, Series H, due October 15, 2005
         $24,000,000 6.37% Senior Notes, Series I, due October 15, 2006
         $25,000,000 6.52% Senior Notes, Series J, due October 15, 2008
                                       and
         $78,000,000 6.70% Senior Notes, Series K, due October 15, 2010

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                   AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENTS

         Amendment No. 1 to Note Purchase Agreements dated as of July 1, 2003,
between BERKSHIRE LIFE INSURANCE COMPANY OF AMERICA, CONNECTICUT GENERAL LIFE
INSURANCE COMPANY, CENTURY INDEMNITY COMPANY, JOHN HANCOCK LIFE INSURANCE
COMPANY, JOHN HANCOCK VARIABLE LIFE INSURANCE COMPANY, JOHN HANCOCK REASSURANCE
COMPANY LTD., MELLON BANK, N.A., AS TRUSTEE FOR THE BELL ATLANTIC MASTER TRUST,
COMMONWEALTH OF PENNSYLVANIA STATE EMPLOYEES' RETIREMENT SYSTEM, THE
NORTHWESTERN MUTUAL LIFE INSURANCE COMPANY, TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA, AMERICAN UNITED LIFE INSURANCE COMPANY, REASSURE AMERICA
LIFE INSURANCE COMPANY, THE UNION CENTRAL LIFE INSURANCE COMPANY, AMERICAN
INVESTORS LIFE INSURANCE COMPANY and MASSACHUSETTS MUTUAL LIFE INSURANCE COMPANY
(each a "Purchaser" and, collectively, the "Purchasers").

                                    RECITALS

         A.       Under and pursuant to the separate and several Note Purchase
Agreements dated as of October 15, 1998 (the "Note Purchase Agreements"),
between the Company and each of the Purchasers, the Company has issued and sold
to the Purchasers (i) $23,000,000 aggregate principal amount of its 6.23% Senior
Notes, Series H, due October 15, 2005 (the "Series H Notes"), (ii) $24,000,000
aggregate principal amount of its 6.37% Senior Notes, Series I, due October 15,
2006 (the "Series I Notes"), (iii) $25,000,000 aggregate principal amount of its
6.52% Senior Notes, Series J, due October 15, 2008 (the "Series J Notes") and
(iv) $78,000,000 aggregate principal amount of its 6.70% Senior Notes, Series K,
due October 15, 2010 (the "Series K Notes"). The Series H Notes, the Series I
Notes, the Series J Notes and the Series K Notes are herein collectively
referred to as the "Notes."

         B.       Under and pursuant to that certain Credit Agreement by and
among the Company and Bank of America, N.A., a national banking association (the
"Bank"), dated as of October 24, 2001 (as amended, the "Credit Agreement"), the
Bank has extended to the Company a revolving line of credit on the terms and
conditions provided therein. Under the terms of the Third Amendment to Credit
Agreement dated as of July __, 2003, the Bank has required the Company and the
Subsidiary Guarantors to grant the Collateral Agent (as defined in the
Intercreditor Agreement described in Section 1.1 below) a first priority lien in
all right, title and interest of the Company and the Subsidiary Guarantors in
the Collateral (as defined in the Intercreditor Agreement described in Section
1.1 below), whether now owned or hereafter acquired.

         C.       Under and pursuant to Sections 10.5 and 11 of the Note
Purchase Agreements, the grant of a lien by the Company or the Subsidiary
Guarantors on any of their assets or property in favor of the Bank or any other
creditor would be prohibited and would constitute an Event of Default. In
consideration for the Purchasers' consent to the granting of a lien with respect
to the Collateral and the other amendments provided herein, the Company and the
Subsidiary Guarantors have agreed to grant a first priority lien in the
Collateral in favor of the Collateral Agent for the ratable benefit of the Bank
and the other lenders under the Credit Agreement, the

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holders of certain other senior notes of the Company and each of the Purchasers
(the "Pari Passu Lien").

         D.       Under and pursuant to the Subsidiary Guaranty, the Subsidiary
Guarantors have unconditionally guaranteed the obligations of the Company in
connection with the issuance of the Notes. As a condition precedent to amending
the Note Purchase Agreements, the Purchasers have required the Subsidiary
Guarantors to acknowledge and consent to this Amendment No. 1 to the Note
Purchase Agreements and to pledge certain of their assets to the Collateral
Agent to secure the payment of the Notes and the performance by each of the
Subsidiary Guarantors of their obligations under the Subsidiary Guaranty and,
desiring to help secure financing for the Company which will result in direct or
indirect benefits to each of the Subsidiary Guarantors, the Subsidiary
Guarantors have agreed to acknowledge and consent to this Amendment No. 1 to
Note Purchase Agreements and to pledge certain of their assets pursuant to the
Security Agreement (as defined in Section 1.1 hereof).

         E.       The Pari Passu Lien shall be granted pursuant to the Security
Agreement, which is substantially in the form attached hereto as Exhibit A.

         F.       The terms pursuant to which the Purchasers, the Bank and
certain other senior creditors of the Company will share such Pari Passu Lien
shall be set forth in an Intercreditor Agreement substantially in the form
attached hereto as Exhibit B.

         NOW, THEREFORE, in consideration of the mutual agreements herein
contained and other good and valuable consideration, the receipt whereof is
hereby acknowledged, the Company and the Purchasers agree that the Note Purchase
Agreements are hereby amended in the following respects:

SECTION 1.        AMENDMENTS TO NOTE PURCHASE AGREEMENTS.

         Section 1.1.     Section 1 of the Note Purchase Agreements is hereby
amended by adding two new paragraphs at the end thereof reading in their
entirety as set forth below:

                  As an inducement to you entering into Amendment No. 1 to Note
         Purchase Agreements, the Company has executed and delivered or will
         cause to be executed and delivered, or simultaneously with the
         execution and delivery of Amendment No. 1 to Note Purchase Agreements
         will execute and deliver, and the Notes, together with all other
         Obligations (as defined in the Intercreditor Agreement described
         below), will be secured by, the Security Agreement dated as of July 1,
         2003 (the "Security Agreement") from the Company and each Material
         Subsidiary to Bank of America, N.A., as Collateral Agent (the
         "Collateral Agent"), pursuant to which the Company and each Material
         Subsidiary shall grant a security interest (which shall be a pari
         passu, first priority, perfected security interest, subject to Liens
         permitted by Section 10.5) in the collateral defined therein to the
         Collateral Agent for the benefit of the holders of the Notes, certain
         other creditors of the Company and Bank of America, N.A. (the "Bank"),
         which Security Agreement will be

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         substantially in the form attached to Amendment No. 1 to Note Purchase
         Agreements as Exhibit A.

                  In addition, pursuant to that certain Intercreditor Agreement
         dated as of July 1, 2003 (the "Intercreditor Agreement") among the
         Company, the Bank, individually and as Collateral Agent, certain other
         creditors of the Company and the holders of the Notes, which shall be
         substantially in the form attached to Amendment No. 1 to Note Purchase
         Agreements as Exhibit B, the Bank, such other creditors and the holders
         of the Notes have agreed, among other things, to share in the manner
         set forth therein the proceeds arising from the disposition of
         Collateral subject to the Security Agreement.

         Section 1.2.      A new sentence is hereby added to the end of Section
8.2 of the Note Purchase Agreements reading in its entirety as set forth below:

         If amounts are to be applied to the principal of the Notes pursuant to
the terms of the Intercreditor Agreement, such principal amount together with
interest owing thereon to the prepayment date pursuant to the Intercreditor
Agreement and the Make-Whole Amount, if any, with respect to such principal
amount of each Note shall be due and payable on such date.

         Section 1.3.      The definition of "Reinvestment Yield" in Section 8.6
of the Note Purchase Agreements is hereby amended by replacing all references to
"USD" with "PX-1" and all references to "duration" with "maturity".

         Section 1.4.      Section 9.6 of the Note Purchase Agreements is hereby
amended and restated to read in its entirety as set forth below:

                  Section 9.6.     Security.

                  (a)      Security Agreement. The Company will execute and
         deliver to each holder of Notes, in connection with the closing of
         Amendment No. 1 to Note Purchase Agreements dated as of July 1, 2003,
         the Security Agreement. You hereby agree that the Security Agreement
         shall be released upon your receipt of written evidence, in the form
         attached hereto as Exhibit 9.6(a), that no other Debt of the Company
         that was secured by the Security Agreement is supported by any Lien or
         security agreement from the Company or any Material Subsidiary. In the
         event that the Security Agreement is so released and other Debt of the
         Company that was secured by the Security Agreement is thereafter
         supported by any Lien or security agreement from the Company or any
         Material Subsidiary, the Company (i) shall provide each holder of the
         Notes with at least 30 days' prior written notice thereof, which notice
         shall describe in reasonable detail such proposed other Lien or
         security agreement and (ii) concurrent with the effectiveness of such
         other Lien or security agreement, will execute and deliver to each
         holder of Notes, a new security agreement in the form of the Security
         Agreement granting a first priority pari passu Lien on the Collateral
         (as defined in the Security Agreement) to the Agent for the benefit of
         the holders of the Notes.

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                  (b)      Subsidiary Guaranties and Collateral. The Company
         will cause each of its Material Subsidiaries existing as of the date of
         the Closing to execute and deliver to each holder of Notes, at the
         Closing (i) a subsidiary guaranty in the form attached hereto as
         Exhibit 9.6 (the "Subsidiary Guaranty") pursuant to which such Material
         Subsidiary will unconditionally guarantee all obligations of the
         Company under this Agreement, the Other Agreements, the Notes and the
         other Security Documents and (ii) the Security Agreement pursuant to
         which such Material Subsidiary will grant and maintain a first priority
         pari passu security interest (subject to Liens permitted by Section
         10.5) in the Collateral (as defined in the Security Agreement) to the
         Agent for the benefit of the holders of the Notes. The Company will
         cause (a) each of its Restricted Subsidiaries that becomes a Material
         Subsidiary at any time after the Closing and (b) each Material
         Subsidiary that is acquired at any time after the Closing to execute
         and deliver to each holder of Notes, within 10 Business Days after
         becoming a Material Subsidiary (i) a supplement to the Subsidiary
         Guaranty pursuant to which such Material Subsidiary will
         unconditionally guarantee all obligations of the Company under this
         Agreement, the Other Agreements, the Notes and the other Security
         Documents and (ii) a supplement to the Security Agreement pursuant to
         which such Material Subsidiary (y) will grant and maintain a first
         priority pari passu security interest (subject to Liens permitted by
         Section 10.5) in certain of its then owned or thereafter acquired
         personal property to the Agent for the benefit of the holders of the
         Notes and (z) will pledge its ownership of all of its shares of the
         capital stock of any Restricted Subsidiary to the Agent for the benefit
         of the holders of the Notes. The Company hereby agrees that,
         notwithstanding Section 10.11 hereof, at all times when the Subsidiary
         Guaranty or the Security Agreement is in effect (a) total net revenues
         of the Company and its Material Subsidiaries for the period of the
         immediately preceding four fiscal quarters shall be greater than or
         equal to 80% of the consolidated total net revenues of the Company and
         its Subsidiaries for such period and (b) total assets of the Company
         and its Material Subsidiaries, as of the last day of the immediately
         preceding fiscal quarter, shall be greater than or equal to 80% of
         Consolidated Total Assets as of such date, in each case as reflected in
         the most recent annual or quarterly financial statements of the Company
         and its Subsidiaries.

                  Notwithstanding the foregoing, you hereby agree that the
         Security Agreement shall be released upon your receipt of written
         evidence, in the form attached hereto as Exhibit 9.6(a), that no other
         Debt of the Company that was secured by the Security Agreement is
         supported by any Lien or security agreement from the Company or any
         Material Subsidiary. In the event that the Security Agreement is so
         released and other Debt of the Company that was secured by the Security
         Agreement is thereafter supported by any Lien or security agreement
         from any Material Subsidiary, the Company (i) shall provide each holder
         of the Notes with at least 30 days' prior written notice thereof, which
         notice shall describe in reasonable detail such proposed other Lien or
         security agreement and (ii) concurrent with the effectiveness of such
         other Lien or security agreement, will cause each of its Material
         Subsidiaries that executed and delivered a security agreement
         supporting such other Debt to execute and deliver to each holder of
         Notes, a new security agreement in the form of the Security Agreement
         granting a first priority pari passu Lien on the Collateral (as defined
         in the Security Agreement) to the Agent for the benefit of the holders
         of the Notes.

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                  Additionally, you hereby further agree that the Subsidiary
         Guaranty shall be released upon your receipt of written evidence, in
         the form attached hereto as Exhibit 9.6(a), that no other Debt of the
         Company is supported by any Guaranty from any Material Subsidiary. In
         the event that the Subsidiary Guaranty is so released and other Debt of
         the Company is thereafter supported by any Guaranty from any Material
         Subsidiary, the Company (i) shall provide each holder of the Notes with
         at least 30 days' prior written notice thereof, which notice shall
         describe in reasonable detail such proposed other Guaranty and (ii)
         concurrent with the effectiveness of such other Guaranty, will cause
         each of its Material Subsidiaries that executed and delivered a
         Guaranty supporting such other Debt to execute and deliver to each
         holder of Notes, a new Guaranty in the form of the Subsidiary Guaranty.

         Section 1.5.      A new Section 9.7 is hereby added to the Note
Purchase Agreements reading in its entirety as set forth below:

                  Section 9.7.     Further Assurances. At the written request of
         the Collateral Agent or any holder of Notes, the Company will, at no
         expense to the Collateral Agent or any holder of Notes, do, execute,
         acknowledge and deliver all and every further acts, deeds, conveyances,
         transfers and assurances reasonably necessary or proper for (i) the
         perfection and maintenance of the security interests and pledges being
         provided for pursuant to the Security Documents, (ii) carrying out the
         purposes of this Agreement, the Other Agreements, the Notes and each
         Security Document and (iii) better assuring the rights of the holders
         of the Notes under this Agreement, the Other Agreements, the Notes and
         each Security Document.

         Section 1.6.      Section 10.1 of the Note Purchase Agreements is
hereby amended and restated to read in its entirety as set forth below:

                  Section 10.1.    Consolidated Funded Debt. The Company will
         not at any time permit Consolidated Funded Debt to exceed 60% of Total
         Capitalization.

         Section 1.7.      Each reference in the Note Purchase Agreements to
"Section 10.1(c)" is hereby replaced with "Section 10.1".

         Section 1.8.      Section 10.4 of the Note Purchase Agreements is
hereby amended and restated to read in its entirety as set forth below:

                  Section 10.4.    Minimum Consolidated Net Worth. The Company
         will not, at any time, permit Consolidated Net Worth to be less than
         the sum of (a) $500,000,000, plus (b) an aggregate amount equal to 25%
         of its Consolidated Net Income (but, in each case, only if a positive
         number) for each completed fiscal year beginning with the fiscal year
         ended December 31, 2003.

         Section 1.9.      Subparagraph (g) of Section 10.5 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:

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                  (g)      Liens existing on the date of this Agreement and
         securing the Debt of the Company and its Restricted Subsidiaries
         referred to in Schedule 5.15 and Liens granted pursuant to this
         Agreement, the Other Agreements, the Credit Agreement (so long as the
         Intercreditor Agreement shall remain in effect and each Lender under
         the Credit Agreement is a party to the Intercreditor Agreement) or the
         Security Documents;

         Section 1.10.     Subparagraph (b) of Section 10.8 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:

                  (b)      if the Company is not the Successor Corporation, such
         Successor Corporation shall have executed and delivered to each holder
         of Notes its assumption of the due and punctual performance and
         observance of each covenant and condition of this Agreement, the Other
         Agreements, the Security Documents and the Notes (pursuant to such
         agreements and instruments as shall be reasonably satisfactory to the
         Required Holders), and the Company shall have caused to be delivered to
         each holder of Notes an opinion of nationally recognized independent
         counsel, or other independent counsel reasonably satisfactory to the
         Required Holders, to the effect that all agreements or instruments
         effecting such assumption are enforceable in accordance with their
         terms and comply with the terms hereof; and

         Section 1.11.     The last sentence of Section 10.8 of the Note
Purchase Agreements is hereby amended and restated to read in its entirety as
set forth below:

         No such conveyance, transfer or lease of substantially all of the
         assets of the Company shall have the effect of releasing the Company or
         any Successor Corporation from its liability under this Agreement, the
         Other Agreements, the Security Documents or the Notes.

         Section 1.12.     Subparagraph (c) of Section 11 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:

                  (c)      the Company or any Subsidiary Guarantor defaults in
         the performance of or compliance with any term contained in any
         Security Agreement or the Company defaults in the performance of or
         compliance with any term contained in Sections 10.1 through 10.10,
         inclusive, hereof or any term contained in the Intercreditor Agreement;
         or

         Section 1.13.     Subparagraph (e) of Section 11 of the Note Purchase
Agreements is hereby amended and restated to read in its entirety as set forth
below:

                  (e)      any representation or warranty made in writing by or
         on behalf of the Company or any Restricted Subsidiary or by any officer
         of the Company or any Restricted Subsidiary in this Agreement, in any
         Security Document or in any writing furnished in connection with the
         transactions contemplated hereby proves to have been false or incorrect
         in any material respect on the date as of which made; or

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         Section 1.14.     Section 16 of the Note Purchase Agreements is hereby
amended and restated to read in its entirety as set forth below:

         SECTION 16.       SURVIVAL OF REPRESENTATIONS AND WARRANTIES; ENTIRE
                           AGREEMENT.

                  All representations and warranties contained herein, in
         Amendment No. 1 to Note Purchase Agreements dated as of July 1, 2003 or
         in any Security Document shall survive the execution and delivery of
         this Agreement, the Notes and Amendment No. 1 to Note Purchase
         Agreements dated as of July 1, 2003, the purchase or transfer by you of
         any Note or portion thereof or interest therein and the payment of any
         Note, and may be relied upon by any subsequent holder of a Note,
         regardless of any investigation made at any time by or on behalf of you
         or any other holder of a Note. All statements contained in any
         certificate or other instrument delivered by or on behalf of the
         Company or any Subsidiary Guarantor pursuant to this Agreement,
         Amendment No. 1 to Note Purchase Agreements dated as of July 1, 2003 or
         any Security Document shall be deemed representations and warranties of
         the Company or such Subsidiary Guarantor under this Agreement. Subject
         to the preceding sentence, this Agreement (as amended by Amendment No.
         1 to Note Purchase Agreements dated as of July 1, 2003), the Security
         Documents and the Notes embody the entire agreement and understanding
         between you, the Company and the Subsidiary Guarantors supersede all
         prior agreements and understandings relating to the subject matter
         hereof.

         Section 1.15.     Subclause (iv) of clause (8) of the second sentence
of Section 20 of the Note Purchase Agreements is hereby amended and restated to
read in its entirety and a new third sentence is added to Section 20 as set
forth below:

                  (iv)     if an Event of Default has occurred and is
         continuing, to the extent you may reasonably determine such delivery
         and disclosure to be necessary or appropriate in the enforcement or for
         the protection of the rights and remedies under your Notes, this
         Agreement and the Security Documents. Any holder of a Note (and any
         employee, representative or other agent of such holder) may disclose to
         any and all Persons, without limitation of any kind, the tax treatment
         and tax structure of the transaction and all materials of any kind
         (including opinions or other tax analyses) that are provided to the
         taxpayer relating to such tax treatment and tax structure. The
         authorization in the immediately preceding sentence is not intended to
         permit, and does not permit, disclosure of any information not related
         to the tax treatment or tax structure of the transaction, including,
         for example, the identities of participants or potential participants
         and any Confidential Information regarding the operations or finances
         of the Company and its Subsidiaries.

        Section 1.16.      Schedule B to the Note Purchase Agreements is hereby
amended by adding thereto (in alphabetical order) a new definition of
"Consolidated Net Income" reading in its entirety as set forth below:

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                  "Consolidated Net Income" means, with reference to any period,
         the net income (or loss) of the Company and its Restricted Subsidiaries
         for such period (taken as a cumulative whole), as determined in
         accordance with GAAP, after eliminating all offsetting debits and
         credits between the Company and its Restricted Subsidiaries and all
         other items required to be eliminated in the course of the preparation
         of consolidated financial statements of the Company and its Restricted
         Subsidiaries in accordance with GAAP.

         Section 1.17.     Schedule B to the Note Purchase Agreements is hereby
amended by adding thereto (in alphabetical order) a new definition of
"Intercreditor Agreement" reading in its entirety as set forth below:

                  "Intercreditor Agreement" is defined in Section 1.

         Section 1.18.     The definition of "Material Adverse Effect" set forth
in Schedule B to the Note Purchase Agreements is hereby amended and restated to
read in its entirety as set forth below:

                  "Material Adverse Effect" means a material adverse effect on
         (a) the business, operations, affairs, financial condition, assets or
         properties of the Company and its Restricted Subsidiaries, taken as a
         whole, or (b) the ability of the Company to perform its obligations
         under this Agreement, the Other Agreements, any Security Document or
         the Notes, or (c) the validity or enforceability of this Agreement, the
         Other Agreements, any Security Document or the Notes.

         Section 1.19.     The definition of "Material Subsidiary" set forth in
Schedule B to the Note Purchase Agreements is hereby amended and restated to
read in its entirety as set forth below:

                  "Material Subsidiary" means, at any time, those Subsidiaries
         listed on Schedule 5.4 and designated as Restricted Subsidiaries, and
         any other Restricted Subsidiary having at such time either (a) total
         net revenues for the period of the immediately preceding four fiscal
         quarters equal to or greater than 10% of the consolidated total net
         revenues of the Company and its Subsidiaries for such period or (b)
         total assets, as of the last day of the immediately preceding fiscal
         quarter, equal to or greater than 10% of the Consolidated Total Assets
         as of such date, in each case as reflected in the most recent annual or
         quarterly financial statements of the Company and its Subsidiaries, and
         any other Subsidiary that is a guarantor or obligor in respect of the
         Credit Agreement.

        Section 1.20.      Schedule B to the Note Purchase Agreements is hereby
amended by adding thereto (in alphabetical order) a new definition of "Security
Agreement" reading in its entirety as set forth below:

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                  "Security Agreement" is defined in Section 1.

        Section 1.21.      Schedule B to the Note Purchase Agreements is hereby
amended by adding thereto (in alphabetical order) a new definition of "Security
Documents" reading in its entirety as set forth below:

                  "Security Documents" means the Intercreditor Agreement, the
         Subsidiary Guaranty, any supplement to the Subsidiary Guaranty
         contemplated by Section 9.6(b), the Security Agreement, any supplement
         to the Security Agreement contemplated by Section 9.6(b), and any other
         agreement, document or instrument entered into by the Company and/or
         any Restricted Subsidiary providing security for the Notes.

         Section 1.22.     Schedule 5.4 to the Note Purchase Agreements is
hereby amended and restated in its entirety as set forth in Schedule 5.4 hereto.

         Section 1.23.     References in the Note Purchase Agreements to
"Exhibit 9.6" are hereby amended to read "Exhibit 9.6(b)" and a new Exhibit
9.6(a) is hereby added to the Note Purchase Agreements reading in its entirety
as set forth in Exhibit 9.6(a) attached hereto.

SECTION 2.        CONDITIONS TO EFFECTIVENESS.

         This Amendment No. 1 to Note Purchase Agreements shall not be effective
until (i) the Company and the holders of 51% in aggregate principal amount of
the outstanding Notes shall have executed and delivered this Amendment No. 1 to
Note Purchase Agreements and each of the Subsidiary Guarantors has executed and
delivered its Consent hereto, (ii) each Purchaser shall have received from Kay
Rustand, Esq., General Counsel for the Company, her legal opinion with respect
to the Company and the Subsidiary Guarantors, dated the effective date of this
Amendment No. 1 to Note Purchase Agreements, in form and substance reasonably
satisfactory to each Purchaser and special counsel to the Purchasers, covering
the matters set forth in Exhibit C attached hereto, (iii) each Purchaser shall
have received from the Company a certificate dated the effective date of this
Amendment No. 1 to Note Purchase Agreements, signed by the Executive Vice
President and Chief Financial Officer of the Company, to the effect that the
representations and warranties of the Company set forth in Exhibit D attached
hereto are true and correct on and with respect to the effective date of this
Amendment No. 1 to Note Purchase Agreements, (iv) the Company shall have paid to
each Purchaser an amendment fee in an amount equal to 0.15% of the outstanding
principal amount of such Purchaser's Notes, (v) the Company shall have paid all
of the out-of-pocket expenses incurred by the Purchasers in connection with the
consummation of the transactions contemplated by this Amendment No. 1 to Note
Purchase Agreements, including, without limitation, the fees and disbursements
of Chapman and Cutler, special counsel to the Purchasers and (vi) the Company
shall have satisfied each of the following closing conditions:

                  1.       Each of the Intercreditor Agreement (as described in
         Section 1.1 hereof) and the Security Agreement (as described in Section
         1.1 hereof) shall have been duly

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         executed, acknowledged and delivered by the respective parties thereto
         and shall be in full force and effect.

                  2.       The Company and the Bank shall have entered into the
         Third Amendment to the Credit Agreement and each Purchaser shall have
         received a copy of the Credit Agreement, with all amendments thereto,
         certified as true and correct by an authorized officer of the Company.

                  3.       The Collateral Agent and each holder of the Notes
         shall have received reasonably satisfactory evidence that the
         Collateral is insured against fire and other casualties at replacement
         cost, together with standard mortgage clauses naming the Collateral
         Agent (for the benefit of the holders of the Notes) as mortgagee or
         secured party. The Collateral Agent and each holder of the Notes shall
         also have received reasonably satisfactory original certificates of
         general public liability insurance, naming each holder of a Note as an
         additional insured. All premiums on such policies shall be prepaid by
         the Company.

                  4.       All actions shall have been taken at the Company's
         expense as are necessary and appropriate for the holders of the Notes
         and the Bank to maintain a valid and perfected first priority lien and
         security interest in and to the collateral detailed in the Security
         Agreement, including, without limitation, the filing and recording of
         such documents and Uniform Commercial Code financing statements as may
         be necessary and appropriate, subject to Liens permitted by Section
         10.5 of the Note Purchase Agreements.

                  5.       All proceedings taken in connection with the
         transactions contemplated by this Amendment No. 1 to Note Purchase
         Agreements, and all documents necessary to the consummation thereof,
         shall be reasonably satisfactory in form and substance to you and your
         special counsel, and you shall have received a copy (executed or
         certified as may be appropriate) of all legal documents or proceedings
         taken in connection with the consummation of said transactions
         (including, without limitation, approving resolutions duly adopted by
         the respective Board of Directors of the Company and each Subsidiary
         Guarantor and accompanied by a certificate by the Secretary or
         Assistant Secretary of the Company and each Subsidiary Guarantor
         stating that such resolutions are true and correct, have not been
         altered or repealed and are in full force and effect).

                  6.       As of the effective date of this Amendment No. 1 to
         Note Purchase Agreements (after giving effect to the amendments
         contemplated hereby), no Default or Event of Default shall have
         occurred and be continuing.

SECTION 3.        MISCELLANEOUS.

         Section 3.1.      This Amendment No. 1 to Note Purchase Agreements
shall be construed and enforced in accordance with, and the rights of the
parties shall be governed by, the law of the State of New York 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.

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         Section 3.2.      This Amendment No. 1 to Note Purchase Agreements may
be executed in any number of counterparts, each executed counterpart
constituting an original but all together only one agreement.

         Section 3.3.      Except to the extent hereby amended, the Note
Purchase Agreements are in all respects hereby ratified, confirmed and approved.

         Section 3.4.      The capitalized terms used in this Amendment No. 1 to
Note Purchase Agreements shall have the respective meanings specified in the
Note Purchase Agreements unless otherwise herein defined or the context hereof
shall otherwise require.

         Section 3.5.      Any and all notices, requests, certificates and other
instruments, including the Notes, may refer to the "Note Purchase Agreement" or
the "Note Purchase Agreement dated October 15, 1998" without making specific
reference to this Amendment No. 1 to Note Purchase Agreements, but nevertheless
all such references shall be deemed to include this Amendment No. 1 to Note
Purchase Agreements unless the context shall otherwise require.

                                      -11-

<PAGE>

         Section 3.6.      This Amendment No. 1 to Note Purchase Agreements and
all covenants herein contained shall be binding upon and inure to the benefit of
the respective successors and assigns of the parties hereto. All covenants made
by the Company herein shall survive the closing and the delivery of this
Amendment No. 1 to Note Purchase Agreements.

                                       RELIANCE STEEL & ALUMINUM CO.

                                       By
                                          Its

The foregoing is hereby agreed
to as of the date first written above.

                                       BERKSHIRE LIFE INSURANCE COMPANY OF
                                          AMERICA

                                       By
                                          Its

                                       CONNECTICUT GENERAL LIFE INSURANCE
                                          COMPANY

                                       By: CIGNA Investments, Inc.

                                          By
                                             Its

                                      -12-

<PAGE>

                                       CENTURY INDEMNITY COMPANY

                                       By
                                          Its

                                      -13-

<PAGE>

                                       JOHN HANCOCK LIFE INSURANCE COMPANY
                                          (Formerly known as John Hancock Mutual
                                          Life Insurance Company)

                                       By
                                          Its

                                       JOHN HANCOCK VARIABLE LIFE INSURANCE
                                          COMPANY

                                       By
                                          Its

                                       JOHN HANCOCK REASSURANCE COMPANY LTD.

                                       By
                                          Its

                                       MELLON BANK, N.A., solely in its capacity
                                          as Trustee for the Bell Atlantic
                                          Master Trust (as directed by John
                                          Hancock Life Insurance Company), and
                                          not in its individual capacity

                                       By
                                          Its

                                      -14-

<PAGE>

                                       COMMONWEALTH OF PENNSYLVANIA
                                       STATE EMPLOYEES' RETIREMENT SYSTEM

                                       By: John Hancock Life Insurance Company,
                                           as Investment Advisor

                                          By
                                              Its

                                       THE NORTHWESTERN MUTUAL LIFE INSURANCE
                                          COMPANY

                                       By
                                           Name:
                                           Its Authorized Representative

                                       TEACHERS INSURANCE AND ANNUITY
                                          ASSOCIATION OF AMERICA

                                       By
                                          Its

                                       AMERICAN UNITED LIFE INSURANCE COMPANY

                                       By
                                          Its

                                      -15-

<PAGE>

                                       REASSURE AMERICA LIFE INSURANCE COMPANY
                                        (as transferee of CLARICA LIFE INSURANCE
                                        COMPANY-U.S. (formerly known as TMG
                                        Life Insurance Company)

                                       By: Swiss Re Asset Management (Americas)
                                              Inc., as Attorney in Fact

                                              By _______________________________
                                                 Its

                                      -16-

<PAGE>

                                       THE UNION CENTRAL LIFE INSURANCE COMPANY

                                       By
                                          Its

                                      -17-

<PAGE>

                                       AMERICAN INVESTORS LIFE INSURANCE
                                          COMPANY

                                       By: AmerUs Capital Management Group,
                                           Inc., its authorized attorney-in-
                                           fact

                                          By
                                              Its

                                       MASSACHUSETTS MUTUAL LIFE INSURANCE
                                            COMPANY

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

                                          By
                                              Its

                                      -18-

<PAGE>

             CONSENT TO AMENDMENT NO. 1 TO NOTE PURCHASE AGREEMENTS

         The undersigned hereby acknowledges receipt of a counterpart original
of, and consents to, the foregoing Amendment No. 1 to Note Purchase Agreements
dated as of July 1, 2003 and the Security Agreement and the Intercreditor
Agreement described therein.

         The undersigned hereby ratifies and confirms in all respects its
obligations under its Subsidiary Guaranty dated October 15, 1998 in favor of the
holders of the Notes.

         This Consent to Amendment No. 1 to Note Purchase Agreements is
furnished for good and valuable consideration the receipt and sufficiency of
which are hereby acknowledged by the undersigned, and the undersigned
understands and intends that the Purchasers will rely on the foregoing and that
the undersigned will be legally bound by the foregoing. This Consent to
Amendment No. 1 to Note Purchase Agreements shall inure to the benefit of the
Purchasers and their respective successors and assigns.

         IN WITNESS WHEREOF, the undersigned has executed and delivered this
Consent to Amendment No. 1 to Note Purchase Agreements as of July __, 2003,
pursuant to proper authority duly granted.

                                       [SUBSIDIARY GUARANTORS]

                                       By
                                          Its

<PAGE>

                           FORM OF SECURITY AGREEMENT

                                    EXHIBIT A
                (to Amendment No. 1 to Note Purchase Agreements)

<PAGE>

                         FORM OF INTERCREDITOR AGREEMENT

                                    EXHIBIT B
                (to Amendment No. 1 to Note Purchase Agreements)

<PAGE>

                    DESCRIPTION OF OPINION OF COMPANY COUNSEL

         The opinion of Kay Rustand, Esq., General Counsel for the Company, with
respect to the Company and each Subsidiary Guarantor, which is called for by
Section 2 of Amendment No. 1 to Note Purchase Agreements, shall be dated the
effective date of Amendment No. 1 to Note Purchase Agreements and addressed to
the Purchasers, shall be reasonably satisfactory in scope and form to the
Purchasers and shall be to the effect that:

                  (1)      The Company is a corporation, duly incorporated,
         legally existing and in good standing under the laws of the State of
         California, has corporate power and authority and is duly authorized to
         enter into and perform Amendment No. 1 to Note Purchase Agreements, the
         Security Agreement and the Intercreditor Agreement;

                  (2)      Each Subsidiary Guarantor is a corporation, duly
         incorporated, legally existing and in good standing under the laws of
         its jurisdiction of incorporation, has corporate power and authority
         and is duly authorized to enter into and perform its obligations under
         its Consent to Amendment No. 1 to Note Purchase Agreements dated as of
         July 1, 2003 (each a "Consent"), the Subsidiary Guaranty and the
         Security Agreement;

                  (3)      Each of Amendment No. 1 to Note Purchase Agreements,
         the Security Agreement and the Intercreditor Agreement has been duly
         authorized, executed and delivered by the Company and constitutes the
         legal, valid and binding contract and agreement of the Company
         enforceable in accordance with its terms, subject to applicable
         bankruptcy, insolvency or similar laws affecting creditors' rights
         generally, and subject, as to enforceability, to general principles of
         equity (regardless of whether enforcement is sought in a proceeding in
         equity or at law);

                  (4)      Each of the Consents, the Subsidiary Guaranty and the
         Security Agreement has been duly authorized, executed and delivered by
         each Subsidiary Guarantor and constitutes the legal, valid and binding
         contract and agreement of each Subsidiary Guarantor enforceable in
         accordance with its terms, subject to applicable bankruptcy, insolvency
         or similar laws affecting creditors' rights generally, and subject, as
         to enforceability, to general principles of equity (regardless of
         whether enforcement is sought in a proceeding in equity or at law);

                  (5)      No approval, consent or withholding of objection on
         the part of, or filing, registration or qualification with, any
         governmental body, Federal, state or local, is necessary in connection
         with the execution and delivery of Amendment No. 1 to Note Purchase
         Agreements, the Security Agreement, the Intercreditor Agreement, the
         Consents or the Subsidiary Guaranty;

                  (6)      The execution, delivery and performance by the
         Company of Amendment No. 1 to Note Purchase Agreements, the Security
         Agreement and the Intercreditor Agreement does not conflict with or
         result in any breach of any of the provisions of or constitute a
         default under or result in the creation or imposition of any Lien
         (other than the Lien created by the Security Agreement) upon any of the
         property of the Company

                                    EXHIBIT C
                (to Amendment No. 1 to Note Purchase Agreements)

<PAGE>

         pursuant to the provisions of the Articles of Incorporation or By-laws
         of the Company or any agreement or other instrument known to such
         counsel to which the Company is a party or by which the Company may be
         bound;

                  (7)      The execution, delivery and performance by each
         Subsidiary Guarantor of the Subsidiary Guaranty and the Security
         Agreement does not conflict with or result in any breach of any of the
         provisions of or constitute a default under or result in the creation
         or imposition of any Lien (other than the Lien created by the Security
         Agreement) upon any of the property of any Subsidiary Guarantor
         pursuant to the provisions of the [Articles/Certificate] of
         Incorporation or By-laws of any Subsidiary Guarantor or any agreement
         or other instrument known to such counsel to which any Subsidiary
         Guarantor is a party or by which any Subsidiary Guarantor may be bound;
         and

                  (8)      The Security Agreement and/or financing statements or
         similar notices with respect thereto have been filed for record or
         recorded in all public offices wherein such filing or recordation is
         necessary to perfect the Lien in the Collateral (as defined in the
         Intercreditor Agreement) as against creditors of and purchasers from
         the Company, and each Subsidiary Guarantor. The Security Agreement
         creates a perfected Lien in the Collateral in favor of Bank of America,
         N.A., as Collateral Agent, for the benefit of the holders of the Notes,
         subject only to the liens and encumbrances permitted thereby.

         The opinion of Kay Rustand, Esq. shall cover such other matters
relating to Amendment No. 1 to Note Purchase Agreements, the Security Agreement
and the Intercreditor Agreement as the Purchasers may reasonably request,
including, without limitation, that such opinion may be relied upon by
subsequent holders of the Notes. With respect to matters of fact on which such
opinion is based, such counsel shall be entitled to rely on appropriate
certificates of public officials and officers of the Company and each Subsidiary
Guarantor.

                                      C-2

<PAGE>

                         REPRESENTATIONS AND WARRANTIES

         The Company hereby represents and warrants to each holder of any Note
that:

                  1.       The Company is a corporation, duly organized, legally
         existing, and in good standing under the laws of the State of
         California, and is duly qualified as a foreign corporation and in good
         standing in all other states wherein the nature of its business or its
         assets make such qualification necessary.

                  2.       The Company's execution and delivery of the Amendment
         No. 1 to Note Purchase Agreements, the Security Agreement and the
         Intercreditor Agreement and performance of its obligations hereunder
         and thereunder: (a) are and will be within its corporate powers; (b)
         are duly authorized by the Company's board of directors; (c) are not
         and will not be in contravention of any law, statute, rule or
         regulation, the terms of the Company's Articles of Incorporation or
         bylaws, nor of any preferred stock provision, indenture, agreement or
         undertaking to which the Company or any of its properties are bound;
         (d) do not require any consent or approval (including governmental)
         which has not been given; and (e) will not result in the imposition of
         Liens, charges or encumbrances on any of its properties or assets,
         except those in favor of the holders of the Notes and the Bank
         hereunder.

                  3.       The Amendment No. 1 to Note Purchase Agreements, the
         Security Agreement and the Intercreditor Agreement, when duly executed
         and delivered, will constitute the legal, valid and binding obligations
         of the Company, enforceable in accordance with their respective terms.

                  4.       All balance sheets, income statements and other
         financial data which have been furnished to any holder of a Note by the
         Company to induce such holder of a Note to enter into the Amendment No.
         1 to Note Purchase Agreements do fairly represent the Company's
         financial condition as of the dates for which the same are furnished.
         All such financial statements, reports, papers and other data furnished
         to any holder of a Note are accurate and correct in all material
         respects and complete insofar as completeness may be necessary to give
         such holder of a Note a true and accurate knowledge of the subject
         matter. Since the date of such financial statements, no material
         adverse change has occurred in the operations or condition, financial
         or otherwise, of the Company, nor has the Company incurred since
         December 31, 2002, any material liabilities or made any material
         investment or guarantees, direct or contingent, in any single case or
         in the aggregate.

                  5.       The Company is the true and lawful owner of the
         assets pledged pursuant to the terms of the Security Agreement.

                  6.       All of the Company's representations and warranties
         set forth in Section 5 of the Note Purchase Agreements are true and
         correct on and as of the effective date hereof with the same effect as
         though made and repeated by the Company as of the effective date
         hereof.

                                    EXHIBIT D
                (to Amendment No. 1 to Note Purchase Agreements)

<PAGE>

                  7.       (a) Neither the Company nor any of its Subsidiaries
         (i) is a blocked person described in Section 1 of Executive Order 13224
         of the September 23, 2001 Blocking Property and Prohibiting Transaction
         With Persons Who Commit and Threaten to Commit, or Support Terrorism
         (66 Fed. Reg. 49049 (2001)) or (ii) engages in any dealings or
         transactions, or is otherwise associated, with any such blocked person
         and (b) the Company and its Subsidiaries are in compliance, in all
         Material respects, with the USA Patriot Act of 2001 (signed into law
         October 26, 2001).

                                      D-2

<PAGE>

                             NAMES AND OWNERSHIP OF
                           SUBSIDIARIES OF THE COMPANY

<TABLE>
<CAPTION>
                                                                                                           PERCENTAGE
                 NAME OF SUBSIDIARY(1)                                                                    OWNED BY THE
          AND JURISDICTION OF INCORPORATION                   CLASS OF CAPITAL STOCK                       COMPANY(2)
<S>                                                           <C>                                         <C>
(3) Allegheny Steel Distributors, Inc., a Pennsylvania             Common Stock                               100%
    corporation

(3) Aluminum and Stainless, Inc., a Louisiana corporation          Common Stock                               100%

(3) American Metals Corporation, a California corporation          Common Stock                               100%

(3) AMI Metals, Inc., a Tennessee corporation                      Common Stock                               100%

(3) CCC Steel, Inc., a Delaware corporation                        Common Stock                               100%

(3) Central Plains Steel Co., a Kansas corporation                 Common Stock                               100%

(3) Chatham Steel Corporation, a Georgia corporation               Common Stock                               100%

(3) Durrett Sheppard Steel Co., Inc., a California                 Common Stock                               100%
    corporation

(3) Liebovich Bros., Inc., an Illinois corporation                 Common Stock                               100%

(3) Lusk Metals, a California corporation                          Common Stock                               100%

(3) Pacific Metal Company, an Oregon corporation                   Common Stock                               100%

(3) PDM Steel Service Centers, Inc., a California                  Common Stock                               100%
    corporation

(3) Phoenix Corporation, a Georgia corporation                     Common Stock                               100%

(3) RSAC Management Corp., a California corporation                Common Stock                               100%(4)
</TABLE>

-------------------------------
(1) The Company owns certain shell corporations for the purpose of protecting
    the names "Reliance Steel Company" in Nevada; "Reliance Metalcenters" in
    Arizona, and Texas; and "Tube Service Co.," in California and a limited
    liability company in California, Matco Metals West LLC, for purposes of
    purchasing metals.

(2) The shares of all of the subsidiaries listed below (other than RSAC
    Management Corp.) are owned by RSAC Management Corp., which is a
    wholly-owned subsidiary of the Company.

(3) The above designated subsidiaries are Restricted Subsidiaries as defined in
    the Note Purchase Agreement.

                                  SCHEDULE 5.4
                (to Amendment No. 1 to Note Purchase Agreements)

<PAGE>

<TABLE>
<CAPTION>
                                                                                                          PERCENTAGE
                 NAME OF SUBSIDIARY(1)                                                                   OWNED BY THE
          AND JURISDICTION OF INCORPORATION                   CLASS OF CAPITAL STOCK                      COMPANY(2)
<S>                                                          <C>                                         <C>

(3) Service Steel Aerospace Corp., a Delaware corporation          Common Stock                               100%

(3) Siskin Steel & Supply Company, Inc., a Tennessee            Voting Common Stock                           100%
    corporation                                              Non-voting Common Stock                          100%

(3) Toma Metals, Inc., a Pennsylvania corporation                  Common Stock                               100%

(3) Valex Corp., a California corporation                          Common Stock                              97.4%

(3) Viking Materials, Inc., a Minnesota corporation            Voting Common Stock                            100%
                                                             Non-voting Common Stock                          100%
</TABLE>

<TABLE>
<CAPTION>
                                                                                                          PERCENTAGE
                  NAME OF AFFILIATE                                                                      OWNED BY THE
          AND JURISDICTION OF INCORPORATION                      EQUITY INTEREST                          COMPANY(2)
<S>                                                           <C>                                        <C>
American Steel, LLC, an Oregon limited                         Membership Interests                          50.5%
liability company
</TABLE>

RESTRICTIONS

         The Restricted Subsidiaries of the Company are guarantors of the
Company's primary credit facility with Bank of America, National Association, as
Administrative Agent and the Lenders listed therein, and, accordingly, are
subject to certain restrictions, none of which would prohibit any such
Restricted Subsidiary from paying dividends to the Company out of profits or
making any other similar distributions of profits to the Company.

         When the Company merged MetalCenter, Inc. with and into the Company,
the Company became obligated on those Variable Rate Demand Industrial
Development Revenue Bonds, Series 1989 A, issued by MetalCenter, Inc., in favor
of Industrial Development Authority of the City of Santa Fe Springs, a public,
corporate instrumentality of the state of California, due July 1, 2014, with a
principal balance of $2.75 million as of December 31, 2002, which are secured by
a letter of credit issued by Bank of America, National Association, which
contain certain restrictions but do not prohibit the Company from paying
dividends out of profits or making any other similar distributions from profits.

-----------------------------------------------------
(4) RSAC Management Corp. provides certain administrative and financial
    services to the subsidiaries, but is not a metals service center.

                                     5.4-2

<PAGE>

         When the Company acquired Viking Materials, Inc., Viking Materials,
Inc. was obligated on those Variable Rate Demand Industrial Development Revenue
Bonds, Series 1999, issued by Viking Materials, Inc., in favor of the City of
Minneapolis, a public, corporate instrumentality in the state of Minnesota, due
March 1, 2009, with a principal balance of $2.25 million as of December 31,
2002, which are secured by a letter of credit issued by Bank of America,
National Association, which contain certain restrictions but do not prohibit
Viking Materials, Inc. from paying dividends out of profits or making any other
similar distributions from profits to the Company.

         When the Company acquired an additional membership unit of American
Steel, L.L.C. effective May 1, 2002, the Company began consolidating the
financial results of American Steel, L.L.C, including its obligations under that
Credit Agreement dated as of May 1, 2002 in favor of Bank of America, National
Association, due June 30, 2004, with a principal balance of $21.43 million as of
December 31, 2002, which contains certain restrictions including a prohibition
limiting dividends that can be paid out of profits or other similar
distributions from profits to the Company and the minority owner of the
remainder of the joint venture as set forth in the Operating Agreement with
respect to American Steel, L.L.C., as amended.

OFFICERS AND DIRECTORS OF THE COMPANY

OFFICERS

      NAME                                       POSITION

David H. Hannah                   Chief Executive Officer
Gregg J. Mollins                  President and
                                   Chief Operating Officer
Karla R. McDowell                 Executive Vice President and Chief Financial
                                  Officer
James P. MacBeth                  Senior Vice President, Carbon Steel Operations
William K. Sales, Jr.             Senior Vice President, Non-Ferrous Operations
Donna Newton                      Vice President, Human Resources
Kay Rustand                       Vice President and General Counsel
Yvette M. Schiotis                Secretary

                                     5.4-3

<PAGE>

DIRECTORS

Joe D. Crider
Thomas W. Gimbel
Douglas M. Hayes
Robert Henigson
David H. Hannah
Franklin R. Johnson
Gregg J. Mollins
William I. Rumer
Leslie A. Waite

                                      5.4-4

<PAGE>

         FORM OF EVIDENCE WITH RESPECT TO RELEASE OF SECURITY AGREEMENT

                                 EXHIBIT 9.6(a)
                (to Amendment No. 1 to Note Purchase Agreements)<PAGE>

                                                                 EXHIBIT 10.5

                               SECURITY AGREEMENT

                  This SECURITY AGREEMENT (this "AGREEMENT") is dated as of July
1, 2003 and entered into by and among RELIANCE STEEL & ALUMINUM CO., a
California corporation ("RSA" or "COMPANY"), each of THE UNDERSIGNED DIRECT AND
INDIRECT MATERIAL DOMESTIC SUBSIDIARIES of Company (each of such undersigned
Subsidiaries being a "SUBSIDIARY GRANTOR" and collectively "SUBSIDIARY
GRANTORS") and each ADDITIONAL GRANTOR that may become a party hereto after the
date hereof in accordance with Section 21 hereof (each of the Borrowers, each
Subsidiary Grantor, and each Additional Grantor being a "GRANTOR" and
collectively the "GRANTORS"), and Bank of America, N.A. as Collateral Agent for
and representative of (in such capacity herein called "SECURED PARTY") the
Secured Creditors (as hereinafter defined). All capitalized terms used but not
otherwise defined herein shall have the respective meanings ascribed thereto in
the Intercreditor Agreement (as defined below).

                             PRELIMINARY STATEMENTS

                  A.       Pursuant to the Credit Agreement dated as of October
24, 2001, as amended by the First Amendment to Credit Agreement dated as of
April 1, 2002, the Second Amendment to Credit Agreement dated as of February 19,
2003 and the Third Amendment to Credit Agreement dated as of an even date
herewith (said Credit Agreement, as it may hereafter be further amended,
restated, supplemented or otherwise modified from time to time, being the
"CREDIT AGREEMENT"; the terms defined therein and not otherwise defined in
Section 31 or elsewhere herein being used herein as therein defined), by and
among the Company and RSAC Management Corp., a California corporation, a
wholly-owned Subsidiary of Company, as borrowers (the "BORROWERS"), the
financial institutions listed therein as lenders (the "SENIOR LENDERS"), and
Bank of America, N.A., as Administrative Agent, Senior Lenders have made certain
commitments, subject to the terms and conditions set forth in the Credit
Agreement, to extend certain credit facilities to the Borrowers.

                  B.       Certain Subsidiary Grantors (the "EXISTING CREDIT
AGREEMENT SUBSIDIARY GRANTORS") have executed and delivered a subsidiary
guaranty (the "CREDIT AGREEMENT SUBSIDIARY GUARANTY"), in favor of
Administrative Agent for the benefit of Senior Lenders, pursuant to which each
such Subsidiary guarantied the prompt payment and performance when due of all
obligations of Borrowers under the Credit Agreement.

                  C.       The Company has issued to the 1996 Noteholders its
7.08% Senior Notes, Series A, due January 2, 2004 in the aggregate principal
amount of US$22,000,000, of which $22,000,000 is outstanding as of the date
hereof, its 7.21% Senior Notes, Series B, due January 2, 2005 in the aggregate
principal amount of US$23,000,000, of which $23,000,000 is outstanding as of the
date hereof, its 7.31% Senior Notes, Series C, due January 2, 2007 in the
aggregate principal amount of US$20,000,000, of which $20,000,000 is outstanding
as of the date hereof and its 7.37% Senior Notes, Series D, due January 2, 2009
in the aggregate principal amount of US$10,000,000, of which $10,000,000 is
outstanding as of the date hereof (collectively, the "1996 SENIOR NOTES")
pursuant to those certain Note Purchase Agreements

<PAGE>

dated as of November 1, 1996 (as amended from time to time, the "1996 NOTE
PURCHASE AGREEMENTS"), among the Company and the 1996 Noteholders.

                  D.       Certain Subsidiary Grantors (the "1996 SUBSIDIARY
GRANTORS") have executed and delivered a subsidiary guaranty (the "1996
SUBSIDIARY GUARANTY"), in favor of the 1996 Noteholders, pursuant to which each
Subsidiary Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the 1996 Note Purchase Agreements.

                  E.       Company has issued to the 1997 Noteholders their
7.04% Senior Notes, Series F, due January 2, 2006 in the aggregate principal
amount of US$25,000,000, of which $25,000,000 is outstanding as of the date
hereof and their 7.08% Senior Notes, Series G, due January 2, 2008 in the
aggregate principal amount of US$30,000,000, of which $30,000,000 is outstanding
as of the date hereof (collectively, the "1997 SENIOR NOTES") pursuant to those
certain Note Purchase Agreements dated as of September 15, 1997 (as amended from
time to time, the "1997 NOTE PURCHASE AGREEMENTS"), among the Company and the
1997 Noteholders.

                  F.       Certain Subsidiary Grantors (the "1997 SUBSIDIARY
GRANTORS") have executed and delivered a subsidiary guaranty (the "1997
SUBSIDIARY GUARANTY"), in favor of the 1997 Noteholders, pursuant to which each
Subsidiary Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the 1997 Note Purchase Agreements.

                  G.       Company has issued to the 1998 Noteholders its 6.23%
Senior Notes, Series H, due October 15, 2005 in the aggregate principal amount
of US$23,000,000, of which $23,000,000 is outstanding as of the date hereof, its
6.37% Senior Notes, Series I, due October 15, 2006 in the aggregate principal
amount of US$24,000,000, of which $24,000,000 is outstanding as of the date
hereof, its 6.52% Senior Notes, Series J, due October 15, 2008 in the aggregate
principal amount of US$25,000,000, of which $25,000,000 is outstanding as of the
date hereof, its 6.70% Senior Notes, Series K, due October 15, 2010 in the
aggregate principal amount of US$78,000,000, of which $78,000,000 is outstanding
as of the date hereof (collectively, the "1998 SENIOR NOTES") pursuant to those
certain Note Purchase Agreements dated as of October 15, 1998 (as amended from
time to time, the "1998 NOTE PURCHASE AGREEMENTS"), among Company and the 1998
Noteholders.

                  H.       Certain Subsidiary Grantors (the "1998 SUBSIDIARY
GRANTORS") have executed and delivered a subsidiary guaranty (the "1998
SUBSIDIARY GUARANTY"), in favor of the 1998 Noteholders, pursuant to which each
Subsidiary Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the 1998 Note Purchase Agreements.

                  I.       Company has issued to the 2003 Noteholders its 4.87%
Senior Notes, Series L, due July 1, 2011 in the aggregate principal amount of
US$60,000,000, of which $60,000,000 is outstanding as of the date hereof, its
5.35% Senior Notes, Series M, due July 1, 2013 in the aggregate principal amount
of US$75,000,000, of which $75,000,000 is outstanding as of the date hereof
(collectively, the "2003 SENIOR NOTES") pursuant to those certain Note Purchase
Agreements dated as of July 1, 2003 (as amended from time to time, the "2003
NOTE PURCHASE AGREEMENTS," and together with the 1996 Note Purchase Agreements,
the 1997 Note

                                        2

<PAGE>

Purchase Agreements, the 1998 Note Purchase Agreements and any Additional Note
Purchase Agreements (as defined below), the "NOTE PURCHASE AGREEMENTS"), among
Company and the 2003 Noteholders.

                  J.       Certain Subsidiary Grantors (the "2003 SUBSIDIARY
GRANTORS") have executed and delivered a subsidiary guaranty (the "2003
SUBSIDIARY GUARANTY"), in favor of the 2003 Noteholders, pursuant to which each
Subsidiary Grantor has guarantied the prompt payment and performance when due of
all obligations of Company under the 2003 Note Purchase Agreements.

                  K.       It is contemplated that additional senior notes
(hereinafter the "ADDITIONAL SENIOR NOTES") may be issued from time to time to
institutional investors (which may include the 1996 Noteholders, the 1997
Noteholders, the 1998 Noteholders and/or the 2003 Noteholders) pursuant to one
or more note purchase agreements (hereinafter the "ADDITIONAL NOTE PURCHASE
AGREEMENTS") in accordance with the terms and conditions contained in Section
5.06 of the Intercreditor Agreement (as defined below), whereby such Additional
Senior Notes shall be secured equally and ratably with the other Secured
Obligations (as defined herein). The Additional Senior Notes issued from time to
time together with the 1996 Senior Notes, the 1997 Senior Notes, 1998 Senior
Notes and the 2003 Senior Notes are hereinafter referred to collectively as the
"SENIOR NOTES." The purchasers of such Additional Senior Notes which become
parties to the Intercreditor Agreement hereinafter, together with the 1996
Noteholders, the 1997 Noteholders, 1998 Noteholders and the 2003 Noteholders,
are collectively referred to as the "NOTEHOLDERS," and together with the Senior
Lenders, collectively referred to as the "SECURED CREDITORS."

                  L.       It is contemplated that certain Subsidiary Grantors
(the "ADDITIONAL NOTE SUBSIDIARY GRANTORS," and together with the 1996
Subsidiary Grantors, the 1997 Subsidiary Grantors, the 1998 Subsidiary Grantors
and the 2003 Subsidiary Grantors, the "SENIOR NOTE SUBSIDIARY GRANTORS") may
execute and deliver an additional Subsidiary Guaranty (the "ADDITIONAL NOTE
SUBSIDIARY GUARANTY," and together with the 1996 Subsidiary Guaranty, the 1997
Subsidiary Guaranty, the 1998 Subsidiary Guaranty and the 2003 Subsidiary
Guaranty, the "SENIOR NOTE SUBSIDIARY GUARANTIES") in favor of Secured Party for
the benefit of the holders of the Additional Senior Notes, pursuant to which
each Additional Note Subsidiary Grantor will guarantee the prompt payment and
performance when due of all obligations of the Company under the Additional Note
Purchase Agreements.

                  M.       It is contemplated that certain Subsidiary Grantors
(the "ADDITIONAL CREDIT AGREEMENT SUBSIDIARY GRANTORS," and together with the
Existing Credit Agreement Subsidiary Grantors, the "CREDIT AGREEMENT SUBSIDIARY
GRANTORS") may execute and deliver a counterpart to the Credit Agreement
Subsidiary Guaranty, pursuant to which each Additional Credit Agreement
Subsidiary Grantor will guarantee the prompt payment and performance when due of
all obligations of the Borrowers under the Credit Agreement.

                  N.       Company may from time to time enter, or may from time
to time have entered, into one or more Interest Rate Protection Agreements with
one or more Swap Counterparties, and it is desired that the obligations of
Company under the Interest Rate Protection Agreements, including, without
limitation, the obligation of Company to make payments thereunder in the event
of early termination thereof, together with all obligations of

                                       3

<PAGE>

Company under the Credit Agreement, the other Loan Documents and the Note
Purchase Agreements, be secured hereunder.

                  O.       The Noteholders, Senior Lenders and Secured Party
 have entered into, and upon their execution of a Counterpart, Additional
Noteholders will enter into that certain Collateral Agency and Intercreditor
Agreement dated as of July 1, 2003 (as it may hereafter be amended, restated,
supplemented or otherwise modified from time to time, the "INTERCREDITOR
AGREEMENT"), pursuant to which Noteholders and Senior Lenders have appointed,
and upon their execution of such Counterpart, Additional Creditors will appoint
Secured Party, and Secured Party has agreed to act, as agent for the
Noteholders, Senior Lenders and Additional Noteholders hereunder.

                  P.       It is a condition precedent to the amendment by
Senior Lenders of the Credit Agreement and by Noteholders of the Note Purchase
Agreements that Grantors listed on the signature pages hereof shall have granted
the security interests and undertaken the obligations contemplated by this
Agreement.

                  NOW, THEREFORE, in consideration of the premises and in order
to induce Swap Counterparties to enter into Interest Rate Protection Agreements
and for other good and valuable consideration, the receipt and adequacy of which
are hereby acknowledged, each Grantor hereby agrees with Secured Party as
follows:

SECTION 1.        GRANT OF SECURITY.

                  Each Grantor hereby assigns to Secured Party, and hereby
grants to Secured Party a security interest in, all of such Grantor's right,
title and interest in and to all of the personal property of such Grantor listed
below, in each case whether now or hereafter existing, whether tangible or
intangible, whether now owned or hereafter acquired and wherever the same may be
located (the "COLLATERAL"), including the following:

                  (a)      all Accounts;

                  (b)      all Chattel Paper;

                  (c)      all Money and all Deposit Accounts, together with all
amounts on deposit from time to time in such Deposit Accounts;

                  (d)      all Documents;

                  (e)      all General Intangibles (including patents,
trademarks, service marks, copyrights, and other intellectual property), Payment
Intangibles and Software;

                  (f)      all Goods, including Inventory, Equipment, Farm
Products and Fixtures;

                  (g)      all Instruments;

                  (h)      all Investment Property;

                  (i)      all Letter-of-Credit Rights and other Supporting
Obligations;

                                       4

<PAGE>

                  (j)      all Records; and

                  (k)      all Proceeds and Accessions with respect to any of
the foregoing Collateral.

                  Each category of Collateral set forth above shall have the
meaning set forth in the UCC, it being the intention of the Grantors that the
description of the Collateral set forth above be construed to include the
broadest possible range of assets.

SECTION 2.        SECURITY FOR OBLIGATIONS.

                  This Agreement secures, and the Collateral is collateral
security for, the prompt payment or performance in full when due, whether at
stated maturity, by required prepayment, declaration, acceleration, demand or
otherwise, of all Secured Obligations of each Grantor. "SECURED OBLIGATIONS"
means:

                  (a)      with respect to the Borrowers, all obligations and
liabilities of every nature of the Borrowers now or hereafter existing under or
arising out of or in connection with the Credit Agreement and the other Loan
Documents;

                  (b)      with respect to each Credit Agreement Subsidiary
Grantor and Additional Grantor, all obligations and liabilities of every nature
of such Credit Agreement Subsidiary Grantor now or hereafter existing under or
arising out of or in connection with the Credit Agreement Subsidiary Guaranty;

                  (c)      with respect to the Company, all obligations and
liabilities of every nature of Company now or hereafter existing under the Note
Purchase Agreements and the Notes;

                  (d)      with respect to each Senior Note Subsidiary Grantor
and Additional Grantor, all obligations and liabilities of every nature of such
Senior Note Subsidiary Grantor now or hereafter existing under or arising out of
or in connection with the Senior Note Subsidiary Guaranties; and

                  (e)      all obligations of each Grantor to the Swap
Counterparties under Interest Rate Protection Agreements;

in each case together with all extensions or renewals thereof, whether for
principal, interest, reimbursement of amounts drawn under Letters of Credit,
payments for early termination of Interest Rate Protection Agreements, fees,
expenses, indemnities or otherwise, whether voluntary or involuntary, direct or
indirect, absolute or contingent, liquidated or unliquidated, whether or not
jointly owed with others, and whether or not from time to time decreased or
extinguished and later increased, created or incurred, and all or any portion of
such obligations or liabilities that are paid, to the extent all or any part of
such payment is avoided or recovered directly or indirectly from Secured Party
or any Secured Creditor or Swap Counterparty as a preference, fraudulent
transfer or otherwise, and all obligations of every nature of Grantors now or
hereafter existing under this Agreement (including, without limitation, interest
and other amounts that, but for the filing of a petition in bankruptcy with
respect to the Company or any other Grantor,

                                       5

<PAGE>

would accrue on such obligations, whether or not a claim is allowed against the
Company or such Grantor for such amounts in the related bankruptcy proceeding).

SECTION 3.        GRANTORS REMAIN LIABLE.

                  Anything contained herein to the contrary notwithstanding, (a)
each Grantor shall remain liable under any contracts and agreements included in
the Collateral, to the extent set forth therein, to perform all of its duties
and obligations thereunder to the same extent as if this Agreement had not been
executed, (b) the exercise by Secured Party of any of its rights hereunder shall
not release any Grantor from any of its duties or obligations under the
contracts and agreements included in the Collateral, and (c) Secured Party shall
not have any obligation or liability under any contracts, licenses, and
agreements included in the Collateral by reason of this Agreement, nor shall
Secured Party be obligated to perform any of the obligations or duties of any
Grantor thereunder or to take any action to collect or enforce any claim for
payment assigned hereunder.

SECTION 4.        REPRESENTATIONS AND WARRANTIES.

         Each Grantor represents and warrants as follows:

                  (a)      OWNERSHIP OF COLLATERAL. Except as expressly
permitted by the Credit Agreement, such Grantor owns the Collateral and its
interests in the Collateral are owned by such Grantor free and clear of any
Lien. Except as expressly permitted by the Credit Agreement and such as may have
been filed in favor of Secured Party relating to this Agreement, no effective
financing statement or other instrument similar in effect covering all or any
part of the Collateral is on file in any filing or recording office, in the
United States Patent and Trademark Office or in the United States Copyright
Office.

                  (b)      PERFECTION. The security interests in the Collateral
granted to Secured Party for the ratable benefit of the Secured Creditors and
Swap Counterparties hereunder constitute valid security interests in the
Collateral, securing the payment of the Secured Obligations. Upon (i) the filing
of UCC financing statements naming each Grantor as "debtor", naming Secured
Party as "secured party" and describing the Collateral in the filing offices
with respect to such Grantor set forth on Schedule 1 annexed hereto, (ii) in the
case of the Pledged Equity consisting of certificated securities or evidenced by
Instruments, in addition to filing of such UCC financing statements, delivery of
the certificates representing such certificated securities and delivery of such
Instruments to Secured Party, in each case duly endorsed or accompanied by duly
executed instruments of assignment or transfer in blank, (iii) in the case of
Equipment that is covered by a certificate of title, the filing with the
registrar of motor vehicles or other appropriate authority in the applicable
jurisdiction of an application requesting the notation of the security interest
created hereunder on such certificate of title (it being understood and agreed
that such actions need only be taken as provided in Section 5(a)), and (iv), in
the case of any Deposit Account and any Investment Property constituting a
Security Entitlement, Securities Account, Commodity Contract or Commodity
Account, the execution and delivery to Secured Party of an agreement providing
for control by Secured Party thereof (it being understood and agreed that such
actions need only be taken as provided in Section 5(a)), the security interests
in the Collateral (other than copyrights registered in the United States
Copyright Office) granted to Secured Party for the ratable benefit of Senior
Lenders will constitute perfected security interests

                                       6

<PAGE>

therein prior to all other Liens (except for Liens permitted by the Credit
Agreement and the Note Purchase Agreements).

                  (c)      OFFICE LOCATIONS; TYPE AND JURISDICTION OF
ORGANIZATION; LOCATIONS OF EQUIPMENT AND INVENTORY. The chief place of business,
the chief executive office and the office where such Grantor keeps its Records
regarding the Accounts, all originals of all Chattel Paper that evidence
Accounts are, as of the date hereof, and have been for the four month period
preceding the date hereof, or, in the case of an Additional Grantor, the date of
the applicable Counterpart, located at the locations set forth on Schedule 2
annexed hereto; such Grantor's name as it appears in official filings in the
state of its organization; such Grantor's type of organization (i.e.
corporation, limited partnership, etc.), jurisdiction of organization and
organization number provided by the applicable Government Authority of the
jurisdiction of organization are set forth on Schedule 2 annexed hereto. All of
the Equipment and Inventory is, as of the date hereof, or in the case of an
Additional Grantor, the date of the applicable Counterpart, located at the
places set forth on Schedule 3 annexed hereto, except for Inventory which, in
the ordinary course of business, is in transit either (i) from a supplier to a
Grantor, (ii) between the locations set forth on Schedule 3 annexed hereto, or
(ii) to customers of a Grantor.

                  (d)      NAMES. No Grantor (or predecessor by merger or
otherwise of such Grantor) has, within the four month period preceding the date
hereof, or, in the case of an Additional Grantor, the date of the applicable
Counterpart, had a different corporate name from the name of such Grantor listed
on the signature pages hereof, except the corporate names set forth on Schedule
4 annexed hereto.

                  (e)      DELIVERY OF CERTAIN COLLATERAL. All certificates
evidencing, comprising or representing the Pledged Equity have been delivered to
Secured Party duly endorsed or accompanied by duly executed instruments of
transfer or assignment in blank.

                  (f)      PLEDGED EQUITY. All of the Pledged Equity set forth
on Schedule 5 annexed hereto has been duly authorized and validly issued and is
fully paid and non-assessable; there are no outstanding warrants, options or
other rights to purchase, or other agreements outstanding with respect to, or
property that is now or hereafter convertible into, or that requires the
issuance or sale of, any Pledged Equity; and Schedule 5 annexed hereto sets
forth all of the Equity Interests and the Pledged Equity owned by each Grantor,
and the percentage ownership in each issuer thereof, on the date hereof.

                  (g)      TRADEMARKS AND PATENTS. A true and complete list of
all Trademark Registrations and applications for Trademark owned, held (whether
pursuant to a license or otherwise) or used by such Grantor, in whole or in
part, is set forth on Schedule 6 annexed hereto; a true and complete list of all
Patents owned, held (whether pursuant to a license or otherwise) or used by such
Grantor, in whole or in part, is set forth on Schedule 7 annexed hereto.

                  (h)      DEPOSIT ACCOUNTS, SECURITY ACCOUNTS, COMMODITY
ACCOUNTS. Schedule 8 lists all Deposit Accounts, Security Accounts and Commodity
Accounts owned by each Grantor, and indicates the institution or intermediary at
which the account is held and the account number.

                                       7

<PAGE>

SECTION 5.        FURTHER ASSURANCES.

                  (a)      GENERALLY. Each Grantor agrees that from time to
time, at the expense of Grantors, such Grantor will promptly execute and deliver
all further instruments and documents, and take all further action, that may be
necessary or desirable, or that Secured Party may request, in order to perfect
and protect any security interest granted or purported to be granted hereby or
to enable Secured Party to exercise and enforce its rights and remedies
hereunder with respect to any Collateral. Without limiting the generality of the
foregoing, each Grantor will: (i) (A) execute (if necessary) and file such
financing or continuation statements, or amendments thereto, (B) promptly upon
request by Secured Party if an Event of Default has occurred and is continuing
or if the Leverage Ratio Event does not occur on or before June 30, 2005,
execute and deliver, and cause to be executed and delivered, agreements
establishing that Secured Party has control of Deposit Accounts, Investment
Property and Letter-of-Credit Rights of such Grantor and (C) deliver such other
instruments or notices, in each case, as may be necessary or desirable, or as
Secured Party may request, in order to perfect and preserve the security
interests granted or purported to be granted hereby, (ii) furnish to Secured
Party from time to time statements and schedules further identifying and
describing the Collateral and such other reports in connection with the
Collateral as Secured Party may reasonably request, all in reasonable detail,
(iii) promptly upon request by Secured Party if an Event of Default has occurred
and is continuing or if the Leverage Ratio Event does not occur on or before
June 30, 2005, with respect to any item of Equipment that is covered by a
certificate of title under a statute of any jurisdiction under the law of which
indication of a security interest on such certificate is required as a condition
of perfection thereof, execute and file with the registrar of motor vehicles or
other appropriate authority in such jurisdiction an application or other
document requesting the notation or other indication of the security interest
created hereunder on such certificate of title, (iv) at any reasonable time,
upon request by Secured Party, exhibit the Collateral to and allow inspection of
the Collateral by Secured Party, or persons designated by Secured Party, (v) at
Secured Party's request, appear in and defend any action or proceeding that may
affect such Grantor's title to or Secured Party's security interest in all or
any part of the Collateral, and (vi) use commercially reasonable efforts to
obtain any necessary consents of third parties to the creation and perfection of
a security interest in favor of Secured Party with respect to any Collateral.
Each Grantor hereby authorizes Secured Party to file one or more financing or
continuation statements, and amendments thereto, relative to all or any part of
the Collateral (including any financing statement indicating that it covers "all
assets" or "all personal property" of such Grantor) without the signature of any
Grantor.

                  (b)      PLEDGED EQUITY. Without limiting the generality of
the foregoing Section 5(a), each Grantor agrees that all certificates or
instruments representing or evidencing the Pledged Equity shall be delivered to
and held by or on behalf of Secured Party pursuant hereto and shall be in
suitable form for transfer by delivery or, as applicable, shall be accompanied
by such Grantor's endorsement, where necessary, or duly executed instruments of
transfer or assignment in blank, all in form and substance satisfactory to
Secured Party and (ii) it will, upon obtaining any additional Equity Interests
in which a security interest is created hereunder, promptly (and in any event
within five Business Days) deliver to Secured Party a Pledge Supplement, duly
executed by such Grantor, in respect of such additional Pledged Equity. Upon
each such acquisition, the representations and warranties contained in Section
4(f) hereof shall be deemed to have been made by such Grantor as to such Pledged
Equity, whether or not

                                       8

<PAGE>

such Pledge Supplement is delivered. Each Grantor hereby authorizes Secured
Party to attach each Pledge Supplement to this Agreement and agrees that all
Pledged Equity of such Grantor listed on any Pledge Supplement shall for all
purposes hereunder be considered Collateral of such Grantor; provided, that the
failure of any Grantor to execute a Pledge Supplement with respect to any
additional Pledged Equity pledged pursuant to this Agreement shall not impair
the security interest of Secured Party therein or otherwise adversely affect the
rights and remedies of Secured Party hereunder with respect thereto.

SECTION 6.        CERTAIN COVENANTS OF GRANTORS.

         Each Grantor shall:

                  (a)      not use or permit any Collateral to be used
unlawfully or in violation of any provision of this Agreement or any applicable
statute, regulation or ordinance or any policy of insurance covering the
Collateral;

                  (b)      give Secured Party at least 30 days' prior written
notice of any change in such Grantor's name, identity or corporate structure;

                  (c)      give Secured Party at least 30 days' prior written
notice of any reincorporation, reorganization or other action that results in a
change of the jurisdiction of organization of such Grantor;

                  (d)      if Secured Party gives value to enable such Grantor
to acquire rights in or the use of any Collateral, use such value for such
purposes;

                  (e)      except as expressly permitted by the Credit
Agreement, pay promptly when due all property and other taxes, assessments and
governmental charges or levies imposed upon, and all claims (including claims
for labor, services, materials and supplies) against, the Collateral; provided
that such Grantor shall in any event pay such taxes, assessments, charges,
levies or claims not later than five days prior to the date of any proposed sale
under any judgment, writ or warrant of attachment entered or filed against such
Grantor or any of the Collateral as a result of the failure to make such
payment; and

                  (f)      keep correct and accurate Records of Collateral at
its principal place of business; and

                  (g)      permit representatives of Secured Party at any time
during normal business hours to inspect and make abstracts from such Records,
and each Grantor agrees to render to Secured Party, at Grantor's cost and
expense, such clerical and other assistance as may be reasonably requested with
regard thereto.

SECTION 7.        SPECIAL COVENANTS WITH RESPECT TO EQUIPMENT AND INVENTORY.

         Each Grantor shall:

                  (a)      if any Inventory is in possession or control of any
of such Grantor's agents or processors, if the aggregate book value of all such
Inventory exceeds $500,000, and in any event upon the occurrence of an Event of
Default, instruct such agent or processor to hold all

                                       9

<PAGE>

such Inventory for the account of Secured Party and subject to the instructions
of Secured Party; and

                  (b)      if any Inventory is located on premises leased by
such Grantor, if an Event of Default has occurred and is continuing or if the
Leverage Ratio Event does not occur on or before June 30, 2005, promptly upon
request by Secured Party provide to Secured Party a Collateral Access Agreement
with respect to such Inventory.

SECTION 8.        SPECIAL COVENANTS WITH RESPECT TO ACCOUNTS.

                  (a)      Each Grantor shall, for not less than three years
from the date on which each Account of such Grantor arose, maintain (i) complete
Records of such Account, including records of all payments received, credits
granted and merchandise returned, and (ii) all documentation relating thereto.

                  (b)      Except as otherwise provided in this subsection (b),
each Grantor shall continue to collect, at its own expense, all amounts due or
to become due to such Grantor under the Accounts. In connection with such
collections, each Grantor may take (and, upon the occurrence and during the
continuation of an Event of Default at Secured Party's direction, shall take)
such action as such Grantor or Secured Party may deem necessary or advisable to
enforce collection of amounts due or to become due under the Accounts; provided,
however, that Secured Party shall have the right at any time, upon the
occurrence and during the continuation of an Event of Default or a Potential
Event of Default and upon written notice to such Grantor of its intention to do
so, to (i) notify the account debtors or obligors under any Accounts of the
assignment of such Accounts to Secured Party and to direct such account debtors
or obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to Secured Party, (ii) notify each Person maintaining a
lockbox or similar arrangement to which account debtors or obligors under any
Accounts have been directed to make payment to remit all amounts representing
collections on checks and other payment items from time to time sent to or
deposited in such lockbox or other arrangement directly to Secured Party and,
upon such notification and at the expense of Grantors, (iii) enforce collection
of any such Accounts, and (iv) adjust, settle or compromise the amount or
payment thereof, in the same manner and to the same extent as such Grantor might
have done. After receipt by such Grantor of the notice from Secured Party
referred to in the proviso to the preceding sentence, (I) all amounts and
proceeds (including checks and other Instruments) received by such Grantor in
respect of the Accounts shall be received in trust for the benefit of Secured
Party hereunder, shall be segregated from other funds of such Grantor and shall
be forthwith paid over or delivered to Secured Party in the same form as so
received (with any necessary endorsement) to be held as cash Collateral and
applied as provided by Section 17 hereof, and (II) such Grantor shall not
adjust, settle or compromise the amount or payment of any Account, or release
wholly or partly any account debtor or obligor thereof, or allow any credit or
discount thereon.

SECTION 9.        SPECIAL COVENANTS WITH RESPECT TO THE PLEDGED EQUITY.

                  (a)      FORM OF PLEDGED EQUITY. Secured Party shall have the
right at any time to exchange certificates or instruments representing or
evidencing Pledged Equity for certificates or instruments of smaller or larger
denominations. If any Pledged Equity is not a security pursuant to Section 8-103
of the UCC, Grantor shall not take any action that, under such Section,

                                      10

<PAGE>

converts such Pledged Equity into a security without causing the issuer thereof
to issue to it certificates or instruments evidencing such Pledged Equity, which
it shall promptly deliver to Secured Party as provided in this Section 9(a).

                  (b)      COVENANTS. Each Grantor shall (i) not, except as
expressly permitted by the Credit Agreement, permit any issuer of Pledged Equity
to merge or consolidate unless all the outstanding Equity Interests of the
surviving or resulting Person are, upon such merger or consolidation, pledged
hereunder and no cash, securities or other property is distributed in respect of
the outstanding Equity Interests of any other constituent corporation; (ii)
cause each issuer of Pledged Equity not to issue Equity Interests in addition to
or in substitution for the Pledged Equity issued by such issuer, except to such
Grantor; (iii) immediately upon its acquisition (directly or indirectly) of
additional Equity Interests in each issuer of Pledged Equity or Equity Interests
in any Person that, after the date of this Agreement, becomes, as a result of
any occurrence, a direct Subsidiary of such Grantor, comply with Section 5(b);
(iv) promptly deliver to Secured Party all written notices received by it with
respect to the Pledged Equity; and (v) promptly upon request by Secured Party if
an Event of Default has occurred and is continuing or if the Leverage Ratio
Event does not occur on or before June 30, 2005, at the request of Secured
Party, promptly execute and deliver to Secured Party an agreement providing for
control by Secured Party of all Securities Entitlements, Securities Accounts,
Commodity Contracts and Commodity Accounts of such Grantor.

                  (c)      VOTING AND DISTRIBUTIONS. So long as no Event of
Default shall have occurred and be continuing, (i) each Grantor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Equity or any part thereof for any purpose not inconsistent with
the terms of this Agreement or the Credit Agreement; provided, no Grantor shall
exercise or refrain from exercising any such right if Secured Party shall have
notified such Grantor that, in Secured Party's judgment, such action would have
a material adverse effect on the value of the Pledged Equity or any part
thereof; and provided further, such Grantor shall give Secured Party at least
five Business Days' prior written notice of the manner in which it intends to
exercise, or the reasons for refraining from exercising, any such right (it
being understood, however, that neither (A) the voting by such Grantor of any
Pledged Equity for or such Grantor's consent to the election of directors or
other members of a governing body of an issuer of Pledged Equity at a regularly
scheduled annual or other meeting of holders of Equity Interests or with respect
to incidental matters at any such meeting, nor (B) such Grantor's consent to or
approval of any action otherwise permitted under this Agreement and the Credit
Agreement shall be deemed inconsistent with the terms of this Agreement or the
Credit Agreement within the meaning of this Section, and no notice of any such
voting or consent need be given to Secured Party); (ii) each Grantor shall be
entitled to receive and retain, and to utilize free and clear of the lien of
this Agreement, any and all dividends, other distributions and interest paid in
respect of the Pledged Equity; provided, any and all (A) dividends,
distributions and interest paid or payable other than in cash in respect of, and
instruments and other property received, receivable or otherwise distributed in
respect of, or in exchange for, any Pledged Equity, (B) dividends and other
distributions paid or payable in cash in respect of any Pledged Equity in
connection with a partial or total liquidation or dissolution or in connection
with a reduction of capital, capital surplus or paid-in-surplus, and (C) cash
paid, payable or otherwise distributed in respect of principal or in redemption
of or in exchange for any Securities Collateral, shall be, and shall forthwith
be delivered to Secured Party to hold as, Collateral and shall, if received by
such

                                      11

<PAGE>

Grantor, be received in trust for the benefit of Secured Party, be segregated
from the other property or funds of such Grantor and be forthwith delivered to
Secured Party as Collateral in the same form as so received (with all necessary
endorsements); and (iii) Secured Party shall promptly execute and deliver (or
cause to be executed and delivered) to such Grantor all such proxies, dividend
payment orders and other instruments as such Grantor may from time to time
reasonably request for the purpose of enabling such Grantor to exercise the
voting and other consensual rights which it is entitled to exercise pursuant to
clause (i) above and to receive the dividends, distributions, principal or
interest payments which it is authorized to receive and retain pursuant to
clause (ii) above.

                  Upon the occurrence and during the continuation of an Event of
Default, (x) upon written notice from Secured Party to any Grantor, all rights
of such Grantor to exercise the voting and other consensual rights which it
would otherwise be entitled to exercise pursuant hereto shall cease, and all
such rights shall thereupon become vested in Secured Party who shall thereupon
have the sole right to exercise such voting and other consensual rights; (y) all
rights of such Grantor to receive the dividends, other distributions and
interest payments which it would otherwise be authorized to receive and retain
pursuant hereto shall cease, and all such rights shall thereupon become vested
in Secured Party who shall thereupon have the sole right to receive and hold as
Collateral such dividends, other distributions and interest payments; and (z)
all dividends, principal, interest payments and other distributions which are
received by such Grantor contrary to the provisions of clause (ii) of the
immediately preceding paragraph or clause (y) above shall be received in trust
for the benefit of Secured Party, shall be segregated from other funds of such
Grantor and shall forthwith be paid over to Secured Party as Collateral in the
same form as so received (with any necessary endorsements).

                  In order to permit Secured Party to exercise the voting and
other consensual rights which it may be entitled to exercise pursuant hereto and
to receive all dividends and other distributions which it may be entitled to
receive hereunder, (I) each Grantor shall promptly execute and deliver (or cause
to be executed and delivered) to Secured Party all such proxies, dividend
payment orders and other instruments as Secured Party may from time to time
reasonably request, and (II) without limiting the effect of clause (I) above,
each Grantor hereby grants to Secured Party an irrevocable proxy to vote the
Pledged Equity and to exercise all other rights, powers, privileges and remedies
to which a holder of the Pledged Equity would be entitled (including giving or
withholding written consents of shareholders or other holders of equity
interests, calling special meetings of shareholders or other holders of equity
interests and voting at such meetings), which proxy shall be effective,
automatically and without the necessity of any action (including any transfer of
any Pledged Equity on the record books of the issuer thereof) by any other
Person (including the issuer of the Pledged Equity or any officer or agent
thereof), upon the occurrence of an Event of Default and which proxy shall only
terminate upon the payment in full of the Secured Obligations.

SECTION 10.       COLLATERAL ACCOUNT.

                  Secured Party is hereby authorized to establish and maintain
as a blocked account in the name of the Borrowers and under the sole dominion
and control of Secured Party, a restricted Deposit Account designated as
"Reliance Steel & Aluminum Co. Collateral Account". Such Collateral Account
shall be the "Cash Collateral Account" referred to in the Intercreditor
Agreement. All amounts at any time held in the Collateral Account shall be
beneficially owned

                                      12

<PAGE>

by Grantors but shall be held in the name of Secured Party hereunder, for the
benefit of the Secured Creditors, as collateral security for the Secured
Obligations upon the terms and conditions set forth herein and in the
Intercreditor Agreement. Grantors shall have no right to withdraw, transfer or,
except as expressly set forth herein, otherwise receive any funds deposited into
the Collateral Account. Anything contained herein to the contrary
notwithstanding, the Collateral Account shall be subject to such applicable
laws, and such applicable regulations of the Board of Governors of the Federal
Reserve System and of any other appropriate banking or Government Authority, as
may now or hereafter be in effect. All deposits of funds in the Collateral
Account shall be made by wire transfer (or, if applicable, by intra-bank
transfer from another account of a Grantor) of immediately available funds, in
each case addressed in accordance with instructions of Secured Party. Cash held
by Secured Party in the Collateral Account shall not be invested by Secured
Party but instead shall be maintained as a cash deposit in the Collateral
Account pending application thereof as elsewhere provided in this Agreement. To
the extent permitted under Regulation Q of the Board of Governors of the Federal
Reserve System, any cash held in the Collateral Account shall bear interest at
the standard rate paid by Secured Party to its customers for deposits of like
amounts and terms. Subject to Secured Party's rights hereunder, any interest
earned on deposits of cash in the Collateral Account shall be deposited directly
in, and held in the Collateral Account.

SECTION 11.       SECURED PARTY APPOINTED ATTORNEY-IN-FACT.

                  Each Grantor hereby irrevocably appoints Secured Party as such
Grantor's attorney-in-fact, with full authority in the place and stead of such
Grantor and in the name of such Grantor, Secured Party or otherwise, from time
to time in Secured Party's discretion to take any action and to execute any
instrument that Secured Party may deem necessary or advisable to accomplish the
purposes of this Agreement, including, without limitation:

                  (a)      upon the occurrence and during the continuance of an
Event of Default, to obtain (after consultation with such Grantor) and adjust
insurance required to be maintained by such Grantor or paid to Secured Party
pursuant to the Credit Agreement;

                  (b)      upon the occurrence and during the continuance of an
Event of Default, to ask for, demand, collect, sue for, recover, compound,
receive and give acquittance and receipts for moneys due and to become due under
or in respect of any of the Collateral;

                  (c)      upon the occurrence and during the continuance of an
Event of Default, to receive, endorse and collect any drafts or other
Instruments, Documents, Chattel Paper and other documents in connection with
clauses (a) and (b) above;

                  (d)      upon the occurrence and during the continuance of an
Event of Default, to file any claims or take any action or institute any
proceedings that Secured Party may deem necessary or desirable for the
collection of any of the Collateral or otherwise to enforce the rights of
Secured Party with respect to any of the Collateral;

                  (e)      to pay or discharge taxes or Liens (other than Liens
permitted under this Agreement or the Credit Agreement) levied or placed upon or
threatened against the Collateral, the legality or validity thereof and the
amounts necessary to discharge the same to be determined

                                      13

<PAGE>

by Secured Party in its sole discretion, any such payments made by Secured Party
to become obligations of such Grantor to Secured Party, due and payable
immediately without demand;

                  (f)      upon the occurrence and during the continuance of an
Event of Default, to sign and endorse any invoices, freight or express bills,
bills of lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications and notices in connection with Accounts and other
documents relating to the Collateral; and

                  (g)      upon the occurrence and during the continuance of an
Event of Default, at Secured Party's option and Grantors' expense, at any time
or from time to time, all acts and things that Secured Party deems necessary to
protect and preserve the Collateral and Secured Party's security interest
therein, all as fully and effectively as such Grantor might do.

SECTION 12.       SECURED PARTY MAY PERFORM.

                  If any Grantor fails to perform any agreement contained
herein, Secured Party may itself perform, or cause performance of, such
agreement, and the expenses of Secured Party incurred in connection therewith
shall be payable by Grantors under Section 16(b) hereof.

SECTION 13.       STANDARD OF CARE.

                  The powers conferred on Secured Party hereunder are solely to
protect its interest in the Collateral and shall not impose any duty upon it to
exercise any such powers. Except for the exercise of reasonable care in the
custody of any Collateral in its possession and the accounting for moneys
actually received by it hereunder, Secured Party shall have no duty as to any
Collateral or as to the taking of any necessary steps to preserve rights against
prior parties or any other rights pertaining to any Collateral. Secured Party
shall be deemed to have exercised reasonable care in the custody and
preservation of Collateral in its possession if such Collateral is accorded
treatment substantially equal to that which Secured Party accords its own
property.

SECTION 14.       REMEDIES.

                  (a)      GENERALLY. If any Event of Default shall have
occurred and be continuing, Secured Party may, subject to Section 18 hereof,
exercise in respect of the Collateral, in addition to all other rights and
remedies provided for herein or otherwise available to it, all the rights and
remedies of a secured party on default under the UCC (whether or not the UCC
applies to the affected Collateral), and also may (i) require each Grantor to,
and each Grantor hereby agrees that it will at its expense and upon request of
Secured Party forthwith, assemble all or part of the Collateral as directed by
Secured Party and make it available to Secured Party at a place to be designated
by Secured Party that is reasonably convenient to both parties, (ii) enter onto
the property where any Collateral is located and take possession thereof with or
without judicial process, (iii) prior to the disposition of the Collateral,
store, process, repair or recondition the Collateral or otherwise prepare the
Collateral for disposition in any manner to the extent Secured Party deems
appropriate, (iv) take possession of any Grantor's premises or place custodians
in exclusive control thereof, remain on such premises and use the same and any
of such Grantor's equipment for the purpose of completing any work in process,
taking any actions described in the preceding clause (iii) and collecting any
Secured Obligation, (v) without notice except as specified below, sell the
Collateral or any part thereof in one or more parcels at public or private

                                      14

<PAGE>

sale, at any of Secured Party's offices or elsewhere, for cash, on credit or for
future delivery, at such time or times and at such price or prices and upon such
other terms as Secured Party may deem commercially reasonable, (vi) exercise
dominion and control over and refuse to permit further withdrawals from any
Deposit Account maintained with Secured Party or any Secured Creditor and
provide instructions directing the disposition of funds in Deposit Accounts not
maintained with Secured Party or any Secured Creditor and (vii) provide
entitlement orders with respect to Security Entitlements and other Investment
Property constituting a part of the Collateral and, without notice to any
Grantor, transfer to or register in the name of Secured Party or any of its
nominees any or all of the Pledged Equity. Secured Party or any Secured Creditor
may be the purchaser of any or all of the Collateral at any such sale and
Secured Party, as agent for and representative of Secured Creditors (but not any
Secured Creditor in its individual capacity unless Majority Secured Creditors
shall otherwise agree in writing), shall be entitled, for the purpose of bidding
and making settlement or payment of the purchase price for all or any portion of
the Collateral sold at any such public sale, to use and apply any of the Secured
Obligations as a credit on account of the purchase price for any Collateral
payable by Secured Party at such sale. Each purchaser at any such sale shall
hold the property sold absolutely free from any claim or right on the part of
any Grantor, and each Grantor hereby waives (to the extent permitted by
applicable law) all rights of redemption, stay and/or appraisal which it now has
or may at any time in the future have under any rule of law or statute now
existing or hereafter enacted. Each Grantor agrees that, to the extent notice of
sale shall be required by law, at least ten days' notice to such Grantor of the
time and place of any public sale or the time after which any private sale is to
be made shall constitute reasonable notification. Secured Party shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. Secured Party may adjourn any public or private sale from time to
time by announcement at the time and place fixed therefor, and such sale may,
without further notice, be made at the time and place to which it was so
adjourned. Each Grantor hereby waives any claims against Secured Party arising
by reason of the fact that the price at which any Collateral may have been sold
at such a private sale was less than the price which might have been obtained at
a public sale, even if Secured Party accepts the first offer received and does
not offer such Collateral to more than one offeree. If the proceeds of any sale
or other disposition of the Collateral are insufficient to pay all the Secured
Obligations, Grantors shall be jointly and severally liable for the deficiency
and the fees of any attorneys employed by Secured Party to collect such
deficiency. Each Grantor further agrees that a breach of any of the covenants
contained in this Section 15 will cause irreparable injury to Secured Party,
that Secured Party has no adequate remedy at law in respect of such breach and,
as a consequence, that each and every covenant contained in this Section shall
be specifically enforceable against such Grantor, and each Grantor hereby waives
and agrees not to assert any defenses against an action for specific performance
of such covenants except for a defense that no default has occurred giving rise
to the Secured Obligations becoming due and payable prior to their stated
maturities.

                  (b)      PLEDGED EQUITY. Each Grantor recognizes that, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws, Secured Party may be compelled, with respect to any sale
of all or any part of the Pledged Equity conducted without prior registration or
qualification of such Pledged Equity under the Securities Act and/or such state
securities laws, to limit purchasers to those who will agree, among other
things, to acquire the Pledged Equity for their own account, for investment and
not with a view to the distribution or resale thereof. Each Grantor acknowledges
that any such private sales may be at

                                      15

<PAGE>

prices and on terms less favorable than those obtainable through a public sale
without such restrictions (including a public offering made pursuant to a
registration statement under the Securities Act) and, notwithstanding such
circumstances and the registration rights granted to Secured Party by such
Grantor pursuant hereto and notwithstanding the provisions of Section 9-610(c)
of the UCC, which each Grantor hereby waives, each Grantor agrees that any such
private sale shall be deemed to have been made in a commercially reasonable
manner and that Secured Party shall have no obligation to engage in public sales
and no obligation to delay the sale of any Pledged Equity for the period of time
necessary to permit the issuer thereof to register it for a form of public sale
requiring registration under the Securities Act or under applicable state
securities laws, even if such issuer would, or should, agree to so register it.
If Secured Party determines to exercise its right to sell any or all of the
Pledged Equity, upon written request, each Grantor shall and shall cause each
issuer of any Pledged Equity to be sold hereunder from time to time to furnish
to Secured Party all such information as Secured Party may request in order to
determine the number of shares and other instruments included in the Collateral
which may be sold by Secured Party in exempt transactions under the Securities
Act and the rules and regulations of the Securities and Exchange Commission
thereunder, as the same are from time to time in effect.

                  (c)      PATENTS, TRADEMARKS, ETC. In addition to, and not by
way of limitation of, the granting of a security interest in the Collateral
pursuant hereto, each Grantor, effective upon the occurrence and during the
continuation of an Event of Default, hereby assigns, transfers and conveys to
Secured Party the nonexclusive right and license to use all trademarks,
tradenames, copyrights, patents or technical processes owned or used by such
Grantor that relate to the Collateral and any other collateral granted by such
Grantor as security for the Secured Obligations, together with any goodwill
associated therewith, all to the extent necessary to enable Secured Party to
realize on the Collateral in accordance with this Agreement and to enable any
transferee or assignee of the Collateral to enjoy the benefits of the
Collateral. This right shall inure to the benefit of all successors, assigns and
transferees of Secured Party and its successors, assigns and transferees,
whether by voluntary conveyance, operation of law, assignment, transfer,
foreclosure, deed in lieu of foreclosure or otherwise. Such right and license
shall be granted free of charge, without requirement that any monetary payment
whatsoever be made to such Grantor.

SECTION 15.       APPLICATION OF PROCEEDS.

                  Except as expressly provided elsewhere in this Agreement, all
proceeds received by Secured Party in respect of any sale of, collection from,
or other realization upon all or any part of the Collateral shall be applied as
provided in the Intercreditor Agreement.

SECTION 16.       INDEMNITY AND EXPENSES.

                  (a)      Grantors jointly and severally agree to indemnify
Secured Party, each Secured Creditor and each Swap Counterparty from and against
any and all claims, losses and liabilities in any way relating to, growing out
of or resulting from this Agreement and the transactions contemplated hereby
(including, without limitation, enforcement of this Agreement), except to the
extent such claims, losses or liabilities result solely from Secured Party's or
such Secured Creditor's or such Swap Counterparty's gross negligence or willful
misconduct as finally determined by a court of competent jurisdiction.

                                      16

<PAGE>

                  (b)      Grantors jointly and severally agree to pay to
Secured Party the amount of any and all costs and expenses, including the
reasonable fees and expenses of its counsel and of any experts and agents, that
Secured Party may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from, or other realization upon, any of the Collateral, (iii) the
exercise or enforcement of any of the rights of Secured Party hereunder, or (iv)
the failure by any Grantor to perform or observe any of the provisions hereof.

                  (c)      The obligations of Grantors in this Section 16 shall
(i) survive the termination of this Agreement and the discharge of Grantors'
other obligations under this Agreement, the Credit Agreement, the other Loan
Documents, the Note Purchase Agreements and the Interest Rate Protection
Agreements and (ii), as to any Grantor that is a party to either the Credit
Agreement Subsidiary Guaranty, be subject to the provisions of Sections 2(c)
thereof.

SECTION 17.       CONTINUING SECURITY INTEREST; TRANSFER OF LOANS; TERMINATION
                  AND RELEASE.

                  (a)      This Agreement shall create a continuing security
interest in the Collateral and shall (i) remain in full force and effect until
the earliest to occur of either (A) the Leverage Ratio Event or (B) the payment
in full of the Secured Obligations, the cancellation or termination of the
Commitments and the cancellation or expiration of all outstanding Letters of
Credit (or the cash collateralization thereof), (ii) be binding upon Grantors
and their respective successors and assigns, and (iii) inure, together with the
rights and remedies of Secured Party hereunder, to the benefit of Secured Party
and its successors, transferees and assigns. Without limiting the generality of
the foregoing clause (iii), (A) but subject to the provisions of subsection 10.7
of the Credit Agreement, any Lender may assign or otherwise transfer any Loans
held by it to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to Senior Lenders herein
or otherwise, (B) but subject to the provisions of Section 22.1 of the Note
Purchase Agreements, any Noteholder may assign or otherwise transfer any Senior
Notes held by it to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to Noteholders
herein or otherwise and (C) any Swap Counterparty may assign or otherwise
transfer any Interest Rate Protection Agreement to which it is a party to any
other Person in accordance with the terms of such Interest Rate Protection
Agreement, and such other Person shall thereupon become vested with all the
benefits in respect thereof granted to Swap Counterparties herein or otherwise.

                  (b)      Upon either (i) the Leverage Ratio Event or (ii) the
payment in full of all Secured Obligations, the cancellation or termination of
the Commitments and the cancellation or expiration of all outstanding Letters of
Credit (or the cash collateralization thereof), the security interest granted
hereby shall terminate and all rights to the Collateral shall revert to the
applicable Grantors. Upon any such termination Secured Party will, at Grantors'
request and expense, execute and deliver to Grantors such documents as Grantors
shall reasonably request to evidence such termination and shall return all
certificates representing Pledged Equity together with the duly executed
instruments of assignment or transfer in blank that Grantors had previously
delivered. In addition, upon the proposed sale or other disposition of any
Collateral by a Grantor in accordance with the Credit Agreement for which such
Grantor desires to obtain a security interest release from Secured Party, a
security interest release may be obtained pursuant to the provisions of
subsection 10.28 of the Credit Agreement.

                                      17

<PAGE>

SECTION 18.       SECURED PARTY AS AGENT.

                  (a)      Secured Party has been appointed to act as Secured
Party hereunder by the Secured Creditors under the Intercreditor Agreement.
Secured Party shall be obligated, and shall have the right hereunder, to make
demands, to give notices, to exercise or refrain from exercising any rights, and
to take or refrain from taking any action (including, without limitation, the
release or substitution of Collateral), solely in accordance with this Agreement
and the Intercreditor Agreement.

                  (b)      Secured Party shall at all times be the same Person
that is the Collateral Agent under the Intercreditor Agreement. Written notice
of resignation by Administrative Agent pursuant to subsection 4.07 of the
Intercreditor Agreement shall also constitute notice of resignation as Secured
Party under this Agreement; removal of Administrative Agent pursuant to
subsection 4.07 of the Intercreditor Agreement shall also constitute removal as
Secured Party under this Agreement; and appointment of a successor
Administrative Agent pursuant to subsection 4.07 of the Intercreditor Agreement
shall also constitute appointment of a successor Secured Party under this
Agreement. Upon the acceptance of any appointment as Administrative Agent under
subsection 4.07 of the Intercreditor Agreement by a successor Administrative
Agent, that successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring or
removed Secured Party under this Agreement, and the retiring or removed Secured
Party under this Agreement shall promptly (i) transfer to such successor Secured
Party all sums, securities and other items of Collateral held hereunder,
together with all records and other documents necessary or appropriate in
connection with the performance of the duties of the successor Secured Party
under this Agreement, and (ii) execute and deliver to such successor Secured
Party such amendments to financing statements, and take such other actions, as
may be necessary or appropriate in connection with the assignment to such
successor Secured Party of the security interests created hereunder, whereupon
such retiring or removed Secured Party shall be discharged from its duties and
obligations under this Agreement. After any retiring or removed Administrative
Agent's resignation or removal hereunder as Secured Party, the provisions of
this Agreement shall inure to its benefit as to any actions taken or omitted to
be taken by it under this Agreement while it was Secured Party hereunder.

SECTION 19.       ADDITIONAL GRANTORS.

                  The initial Grantors hereunder shall be the Borrowers and such
of their respective Subsidiaries as are signatories hereto on the date hereof.
From time to time subsequent to the date hereof, additional Subsidiaries of the
Borrowers may become Additional Grantors, by executing a Counterpart. Upon
delivery of any such Counterpart to Secured Party, notice of which is hereby
waived by Grantors, each such Additional Grantor shall be a Grantor and shall be
as fully a party hereto as if such Additional Grantor were an original signatory
hereto. Each Grantor expressly agrees that its obligations arising hereunder
shall not be affected or diminished by the addition or release of any other
Grantor hereunder, nor by any election of the Collateral Agent not to cause any
Subsidiary of the Borrowers to become an Additional Grantor hereunder. This
Agreement shall be fully effective as to any Grantor that is or becomes a party
hereto regardless of whether any other Person becomes or fails to become or
ceases to be a Grantor hereunder.

                                      18

<PAGE>

SECTION 20.       AMENDMENTS; ETC.

                  No amendment, modification, termination or waiver of any
provision of this Agreement, and no consent to any departure by any Grantor
therefrom, shall in any event be effective unless the same shall be in writing
and signed by Secured Party and, in the case of any such amendment or
modification, by Grantors; provided this Agreement may be modified by the
execution of a Counterpart by an Additional Grantor in accordance with Section
19 hereof and Grantors hereby waive any requirement of notice of or consent to
any such amendment. Any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given.

SECTION 21.       NOTICES.

                  Any notice or other communication herein required or permitted
to be given shall be in writing and may be personally served or sent by
telefacsimile or United States mail or courier service and shall be deemed to
have been given when delivered in person or by courier service, upon receipt of
telefacsimile, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed; provided that notices to
Secured Party shall not be effective until received. For the purposes hereof,
the address of each party hereto shall be as set forth under such party's name
on the signature pages hereof or such other address as shall be designated by
such party in a written notice delivered to the other parties hereto.

SECTION 22.       FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.

                  No failure or delay on the part of Secured Party in the
exercise of any power, right or privilege hereunder shall impair such power,
right or privilege or be construed to be a waiver of any default or acquiescence
therein, nor shall any single or partial exercise of any such power, right or
privilege preclude any other or further exercise thereof or of any other power,
right or privilege. All rights and remedies existing under this Agreement are
cumulative to, and not exclusive of, any rights or remedies otherwise available.

SECTION 23.       SEVERABILITY.

                  In case any provision in or obligation under this Agreement
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions or obligations, or of
such provision or obligation in any other jurisdiction, shall not in any way be
affected or impaired thereby.

SECTION 24.       HEADINGS.

                  Section and subsection headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of this
Agreement for any other purpose or be given any substantive effect.

SECTION 25.       GOVERNING LAW; RULES OF CONSTRUCTION.

                  THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES
HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE CONSTRUED

                                      19

<PAGE>

AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF CALIFORNIA
(INCLUDING, WITHOUT LIMITATION, SECTION 1646.5 OF THE CIVIL CODE OF THE STATE OF
CALIFORNIA), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES, EXCEPT TO THE
EXTENT THAT THE UCC PROVIDES THAT THE PERFECTION OF THE SECURITY INTEREST
HEREUNDER, OR REMEDIES HEREUNDER, IN RESPECT OF ANY PARTICULAR COLLATERAL ARE
GOVERNED BY THE LAWS OF A JURISDICTION OTHER THAN THE STATE OF CALIFORNIA. The
rules of construction set forth in subsections 1.2 to 1.7 of the Credit
Agreement shall be applicable to this Agreement mutatis mutandis.

SECTION 26.       CONSENT TO JURISDICTION AND SERVICE OF PROCESS.

                  ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST ANY GRANTOR ARISING
OUT OF OR RELATING TO THIS AGREEMENT, OR ANY OBLIGATIONS HEREUNDER, MAY BE
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE OF
CALIFORNIA. BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH GRANTOR, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY (I) ACCEPTS GENERALLY AND
UNCONDITIONALLY THE NONEXCLUSIVE JURISDICTION AND VENUE OF SUCH COURTS; (II)
WAIVES ANY DEFENSE OF FORUM NON CONVENIENS; (III) AGREES THAT SERVICE OF ALL
PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR
CERTIFIED MAIL, RETURN RECEIPT REQUESTED, TO SUCH GRANTOR AT ITS ADDRESS
PROVIDED IN ACCORDANCE WITH SECTION 21 HEREOF; (IV) AGREES THAT SERVICE AS
PROVIDED IN CLAUSE (III) ABOVE IS SUFFICIENT TO CONFER PERSONAL JURISDICTION
OVER SUCH GRANTOR IN ANY SUCH PROCEEDING IN ANY SUCH COURT, AND OTHERWISE
CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY RESPECT; (V) AGREES THAT
SECURED PARTY RETAINS THE RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED
BY LAW OR TO BRING PROCEEDINGS AGAINST SUCH GRANTOR IN THE COURTS OF ANY OTHER
JURISDICTION; AND (VI) AGREES THAT THE PROVISIONS OF THIS SECTION 26 RELATING TO
JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE FULLEST EXTENT
PERMISSIBLE UNDER CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 410.40 OR
OTHERWISE.

SECTION 27.       WAIVER OF JURY TRIAL.

                  GRANTORS AND SECURED PARTY HEREBY AGREE TO WAIVE THEIR
RESPECTIVE RIGHTS TO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF THIS AGREEMENT. THE SCOPE OF THIS WAIVER IS INTENDED TO BE ALL
ENCOMPASSING OF ANY AND ALL DISPUTES THAT MAY BE FILED IN ANY COURT AND THAT
RELATE TO THE SUBJECT MATTER OF THIS TRANSACTION, INCLUDING, WITHOUT LIMITATION,
CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY CLAIMS, AND ALL OTHER COMMON LAW
AND STATUTORY CLAIMS. EACH GRANTOR AND SECURED PARTY ACKNOWLEDGE THAT THIS
WAIVER IS A MATERIAL INDUCEMENT FOR GRANTORS AND SECURED PARTY TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT GRANTORS AND SECURED PARTY HAVE ALREADY RELIED ON
THIS

                                      20

<PAGE>

WAIVER IN ENTERING INTO THIS AGREEMENT AND THAT EACH WILL CONTINUE TO RELY ON
THIS WAIVER IN THEIR RELATED FUTURE DEALINGS. EACH GRANTOR AND SECURED PARTY
FURTHER WARRANT AND REPRESENT THAT EACH HAS REVIEWED THIS WAIVER WITH ITS LEGAL
COUNSEL, AND THAT EACH KNOWINGLY AND VOLUNTARILY WAIVES ITS JURY TRIAL RIGHTS
FOLLOWING CONSULTATION WITH LEGAL COUNSEL. THIS WAIVER IS IRREVOCABLE, MEANING
THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR IN WRITING (OTHER THAN BY A MUTUAL
WRITTEN WAIVER SPECIFICALLY REFERRING TO THIS SECTION 29 AND EXECUTED BY EACH OF
THE PARTIES HERETO), AND THIS WAIVER SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS,
RENEWALS, SUPPLEMENTS OR MODIFICATIONS TO THIS AGREEMENT. In the event of
litigation, this Agreement may be filed as a written consent to a trial by the
court.

SECTION 28.       COUNTERPARTS.

                  This Agreement may be executed in one or more counterparts and
by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document.

SECTION 29.       DEFINITIONS.

                  (a)      Each capitalized term utilized in this Agreement that
is not defined in the Credit Agreement or in this Agreement, but that is defined
in the UCC, including the categories of Collateral listed in Section 1 hereof
shall have the meaning set forth in Division 1, 8 or 9 of the UCC.

                  (b)      In addition, the following terms used in this
Agreement shall have the following meanings:

         "1996 NOTE PURCHASE AGREEMENT" shall have the meaning given to that
term in Recital C of this Agreement.

         "1996 NOTEHOLDERS" shall mean each of the Persons identified as a "1996
Noteholder" on the signature pages of the Intercreditor Agreement, together with
their successors and assigns.

         "1996 SENIOR NOTES" shall have the meaning given to that term in
Recital C of this Agreement.

         "1996 SUBSIDIARY GRANTORS" shall have the meaning given to that term in
Recital D of this Agreement.

         "1996 SUBSIDIARY GUARANTY" shall have the meaning given to that term in
Recital D of this Agreement.

         "1997 NOTE PURCHASE AGREEMENT" shall have the meaning given to that
term in Recital E of this Agreement.

                                      21

<PAGE>

         "1997 NOTEHOLDERS" shall mean each of the Persons identified as a "1997
Noteholder" on the signature pages of the Intercreditor Agreement, together with
their successors and assigns.

         "1997 SENIOR NOTES" shall have the meaning given to that term in
Recital E of this Agreement.

         "1997 SUBSIDIARY GRANTORS" shall have the meaning given to that term in
Recital F of this Agreement.

         "1997 SUBSIDIARY GUARANTY" shall have the meaning given to that term in
Recital F of this Agreement.

         "1998 NOTE PURCHASE AGREEMENT" shall have the meaning given to that
term in Recital G of this Agreement.

         "1998 NOTEHOLDERS" shall mean each of the Persons identified as a "1998
Noteholder" on the signature pages of the Intercreditor Agreement, together with
their successors and assigns.

         "1998 SENIOR NOTES" shall have the meaning given to that term in
Recital G of this Agreement.

         "1998 SUBSIDIARY GRANTORS" shall have the meaning given to that term in
Recital H of this Agreement.

         "1998 SUBSIDIARY GUARANTY" shall have the meaning given to that term in
Recital H of this Agreement.

         "2003 NOTE PURCHASE AGREEMENT" shall have the meaning given to that
term in Recital I of this Agreement.

         "2003 NOTEHOLDERS" shall mean each of the Persons identified as a "2003
Noteholder" on the signature pages of the Intercreditor Agreement, together with
their successors and assigns.

         "2003 SENIOR NOTES" shall have the meaning given to that term in
Recital I of this Agreement.

         "2003 SUBSIDIARY GRANTORS" shall have the meaning given to that term in
Recital J of this Agreement.

         "2003 SUBSIDIARY GUARANTY" shall have the meaning given to that term in
Recital J of this Agreement.

         "ADDITIONAL NOTE PURCHASE AGREEMENTS" shall have the meaning given to
that term in Recital K of this Agreement.

         "ADDITIONAL NOTEHOLDER" means the holders of the Additional Senior
Notes.

         "ADDITIONAL SENIOR NOTES" shall have the meaning given to that term in
Recital K of this Agreement.

                                      22

<PAGE>

         "ADDITIONAL CREDIT AGREEMENT SUBSIDIARY GRANTORS" shall have the
meaning given to that term in Recital M of this Agreement.

         "ADDITIONAL NOTE SUBSIDIARY GRANTORS" shall have the meaning given to
that term in Recital L of this Agreement.

         "ADDITIONAL GRANTOR" means a Subsidiary of Company that becomes a party
hereto after the date hereof as an additional Grantor by executing a
Counterpart.

         "COLLATERAL" has the meaning set forth in Section 1 hereof.

         "COUNTERPART" means a counterpart to this Agreement entered into by a
Subsidiary of Company pursuant to Section 19 hereof.

         "CREDIT AGREEMENT" has the meaning set forth in the Preliminary
Statements of this Agreement.

         "CREDIT AGREEMENT SUBSIDIARY GRANTORS" shall have the meaning given to
that term in Recital M of this Agreement.

         "CREDIT AGREEMENT SUBSIDIARY GUARANTY" shall have the meaning given to
that term in Recital B of this Agreement.

         "DEFAULT" means any Default as defined in the Credit Agreement or the
Note Purchase Agreements.

         "EQUITY INTERESTS" means all shares of stock, partnership interests,
interests in Joint Ventures, limited liability company interests and all other
equity interests in a Person, whether such stock or interests are classified as
Investment Property or General Intangibles under the UCC.

         "EVENT OF DEFAULT" means any Event of Default as defined in the Credit
Agreement or the Note Purchase Agreements.

         "EXISTING CREDIT AGREEMENT SUBSIDIARY GRANTORS" shall have the meaning
given to that term in Recital B of this Agreement.

         "INTERCREDITOR AGREEMENT" shall mean that certain Collateral Agency and
Intercreditor Agreement dated as of July 1, 2003 among the Noteholders, the
Senior Lenders and Bank of America, N.A., as Collateral Agent for the Secured
Creditors.

         "INTEREST RATE PROTECTION AGREEMENT" means any interest rate swap, cap,
floor, collar, forward rate agreement, or other rate protection transaction, or
any combination of such transactions or agreements or any option with respect to
any such transactions or agreements now existing or hereafter entered into
between Swap Counterparties and the Company.

         "LEVERAGE RATIO EVENT" means the occurrence of the "Leverage Ratio
Event" as defined in the Credit Agreement; provided that no Event of Default or
Default then exists.

                                      23

<PAGE>

         "NOTEHOLDERS" shall have the meaning given to such term in Recital K of
this Agreement.

         "NOTE PURCHASE AGREEMENTS" shall have the meaning given to such term in
Recital I of this Agreement.

         "PLEDGED EQUITY" means all Equity Interests now or hereafter owned by a
Grantor in any Subsidiary, including all securities convertible into, and
rights, warrants, options and other rights to purchase or otherwise acquire, any
of the foregoing, including those owned on the date hereof and set forth on
Schedule 5 annexed hereto, and the certificates or other instruments
representing any of the foregoing and any interest of such Grantor in the
entries on the books of any securities intermediary pertaining thereto.

         "PLEDGE SUPPLEMENT" means a Pledge Supplement, in substantially the
form of Exhibit I annexed hereto, in respect of the additional Pledged Equity
pledged pursuant to this Agreement.

         "SECURED CREDITORS" shall have the meaning given to that term in
Recital K of this Agreement.

         "SECURED OBLIGATIONS" has the meaning set forth in Section 2 hereof.

         "SECURITIES COLLATERAL" means, with respect to any Grantor, the Pledged
Equity, and any other Investment Property owned by such Grantor.

         "SENIOR NOTES" shall have the meaning given to such term in Recital K
of this Agreement.

         "SENIOR NOTE SUBSIDIARY GRANTORS" shall have the meaning given to such
term in Recital L of this Agreement.

         "SENIOR NOTE SUBSIDIARY GUARANTIES" shall have the meaning given to
such term in Recital L of this Agreement.

         "SWAP COUNTERPARTY" means a Senior Lender that enters into an Interest
Rate Protection Agreement with Company or a Subsidiary and is a Lender or an
Affiliate of a Lender at the time such agreement is entered into.

         "UCC" means the Uniform Commercial Code, as it exists on the date of
this Agreement or as it may hereafter be amended, in the State of California.

                  [Remainder of page intentionally left blank]

                                      24

<PAGE>

         IN WITNESS WHEREOF, Grantors and Secured Party have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.

                                             RELIANCE STEEL & ALUMINUM CO.,
                                             a California corporation

                                             By:________________________________
                                             Name:  David H. Hannah
                                             Title: Chief Executive Officer

                                             By:________________________________
                                             Name:  Karla McDowell
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

                                             RSAC MANAGEMENT CORP.,
                                             a California corporation

                                             By:________________________________
                                             Name:  David H. Hannah
                                             Title: Chief Executive Officer

                                             By:________________________________
                                             Name:  Karla McDowell
                                             Title: Executive Vice President and
                                                    Chief Financial Officer

                                      S-1

<PAGE>

                                ALLEGHENY STEEL DISTRIBUTORS, INC.
                                ALUMINUM AND STAINLESS, INC.
                                AMI METALS, INC.
                                CCC STEEL, INC.
                                CENTRAL PLAINS STEEL CO.
                                CHATHAM STEEL CORPORATION
                                DURRETT SHEPPARD STEEL CO., INC.
                                PHOENIX CORPORATION
                                PACIFIC METAL COMPANY
                                PDM STEEL SERVICE CENTERS, INC.
                                TOMA METALS, INC.
                                VIKING MATERIALS, INC.

                                By: ____________________________________________
                                Name:  Karla McDowell
                                Title: Vice President and Secretary of each of
                                       the foregoing

                                AMERICAN METALS CORPORATION
                                LIEBOVICH BROS., INC.
                                SISKIN STEEL & SUPPLY COMPANY, INC.

                                By: ____________________________________________
                                Name:  Karla McDowell
                                Title: Vice President and Assistant Secretary of
                                       each of the foregoing

                                LUSK METALS
                                SERVICE STEEL AEROSPACE CORP.
                                VALEX CORP.

                                By: ____________________________________________
                                Name:  Karla McDowell
                                Title: Chief Financial Officer and Secretary of
                                       each of the foregoing

                                      S-2

<PAGE>

                                  BANK OF AMERICA, N.A., as Collateral Agent, as
                                  Secured Party

                                          By:___________________________________
                                             Name:  Ken Puro
                                             Title: Vice President

                                      S-3

<PAGE>

                                   SCHEDULE A

<TABLE>
<CAPTION>
                  Name                           Notice Address for each Grantor
                  ----                           -------------------------------
<S>                                              <C>
                                                       c/o RSAC Management Corp.
                                                       350 South Grand Avenue
                                                       Suite 5100
                                                       Los Angeles, CA 90071
                                                       Attn: General Counsel
Allegheny Steel Distributors, Inc.

Aluminum and Stainless, Inc.

American Metals Corporation

AMI Metals, Inc.

CCC Steel, Inc.

Central Plains Steel Co.

Chatham Steel Corporation

Durrett Sheppard Steel Co., Inc.

Liebovich Bros., Inc.

Lusk Metals

Pacific Metal Company

PDM Steel Service Centers, Inc.

Phoenix Corporation

RSAC Management Corp.

Service Steel Aerospace Corp.

Siskin Steel & Supply Company, Inc.

Toma Metals, Inc.

Valex Corp.

Viking Materials, Inc.
</TABLE>

                                      A-1

<PAGE>

                                   SCHEDULE 1
                                       TO
                               SECURITY AGREEMENT

                                 FILING OFFICES

<TABLE>
<CAPTION>
              Grantor                                            Filing Offices
              -------                                            --------------
<S>                                                        <C>
Allegheny Steel Distributors, Inc.                         Pennsylvania

Aluminum and Stainless, Inc.                               Louisiana

American Metals Corporation                                California Secretary of State

AMI Metals, Inc.                                           Tennessee Secretary of State

CCC Steel, Inc.                                            Delaware Secretary of State

Central Plains Steel Co.                                   Kansas

Chatham Steel Corporation                                  Georgia

Durrett Sheppard Steel Co., Inc.                           California Secretary of State

Liebovich Bros., Inc.                                      Illinois Secretary of State

Lusk Metals                                                California Secretary of State

Pacific Metal Company                                      Oregon

PDM Steel Service Centers, Inc.                            California Secretary of State

Phoenix Corporation                                        Georgia

RSAC Management Corp.                                      California Secretary of State

Service Steel Aerospace Corp.                              Delaware Secretary of State

Siskin Steel & Supply Company, Inc.                        Tennessee

Toma Metals, Inc.                                          Pennsylvania

Valex Corp.                                                California Secretary of State

Viking Materials, Inc.                                     Minnesota
</TABLE>

                                      1-1

<PAGE>

                                   SCHEDULE 2
                                       TO
                               SECURITY AGREEMENT

             OFFICE LOCATIONS, TYPE AND JURISDICTION OF ORGANIZATION

<TABLE>
<CAPTION>
                             TYPE OF                                      JURISDICTION           ORGANIZATION
NAME OF GRANTOR            ORGANIZATION         OFFICE LOCATIONS        OF ORGANIZATION             NUMBER
---------------            ------------         ----------------        ---------------          ------------
<S>                        <C>                  <C>                     <C>                      <C>
</TABLE>

                                      2-1

<PAGE>

                                   SCHEDULE 3
                                       TO
                               SECURITY AGREEMENT

                      LOCATIONS OF EQUIPMENT AND INVENTORY

<TABLE>
<CAPTION>
NAME OF GRANTOR                   LOCATIONS OF EQUIPMENT AND INVENTORY
---------------                   ------------------------------------
<S>                               <C>
</TABLE>

                                      3-1

<PAGE>

                                   SCHEDULE 4
                                       TO
                               SECURITY AGREEMENT

                                   OTHER NAMES

<TABLE>
<CAPTION>
NAME OF GRANTOR               OTHER NAMES
---------------               -----------
<S>                           <C>
</TABLE>

                                      4-1

<PAGE>

                                  SCHEDULE 5 TO
                               SECURITY AGREEMENT

<TABLE>
<CAPTION>
                        CLASS                                                                  PERCENTAGE OF
                          OF               EQUITY                PAR          AMOUNT OF          OUTSTANDING
EQUITY ISSUER           EQUITY         CERTIFICATE NOS.         VALUE      EQUITY INTERESTS    EQUITY PLEDGED
-------------           ------         ----------------         -----      ----------------    --------------
<S>                     <C>            <C>                      <C>        <C>                 <C>
--------------------------------------------------------------------------------------------------------------

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

--------------------------------------------------------------------------------------------------------------
</TABLE>

                                      5-1

<PAGE>

                                  SCHEDULE 6 TO
                               SECURITY AGREEMENT

U.S. TRADEMARKS:

<TABLE>
<CAPTION>
                                    Trademark                    Registration                   Registration
Registered Owner                   Description                      Number                          Date
----------------                   -----------                   ------------                   ------------
<S>                                <C>                           <C>                            <C>
</TABLE>

                                      6-1

<PAGE>

                                  SCHEDULE 7 TO
                               SECURITY AGREEMENT

U.S. PATENTS ISSUED:

<TABLE>
<CAPTION>
Patent No.                 Issue Date            Invention        Inventor
----------                 ----------            ---------        --------
<S>                        <C>                   <C>              <C>
</TABLE>

U.S. PATENTS PENDING:

<TABLE>
<CAPTION>
Applicant's           Date            Application
   Name               Filed              Number               Invention         Inventor
-----------           -----           -----------             ---------         --------
<S>                   <C>             <C>                     <C>               <C>
</TABLE>

                                      7-1

<PAGE>

                                  SCHEDULE 8 TO
                               SECURITY AGREEMENT

             DEPOSIT ACCOUNTS, SECURITY ACCOUNTS, COMMODITY ACCOUNTS

<TABLE>
<CAPTION>
                            Depository Bank or                  Address of Depository Bank
Type of Account           Securities Intermediary               or Securities Intermediary             Account Number
---------------           -----------------------               --------------------------             --------------
<S>                       <C>                                   <C>                                    <C>
</TABLE>

                                      8-1

<PAGE>

                                                                    EXHIBIT I TO
                                                              SECURITY AGREEMENT

                                PLEDGE SUPPLEMENT

                  This Pledge Supplement, dated as of __________________, is
delivered pursuant to the Security Agreement, dated as of July 1, 2003 between
Reliance Steel & Aluminum Co., a California corporation ("RSA") and RSAC
Management Corp., a California corporation ("RSAC Management," and together with
RSA, jointly and severally, the "GRANTORS" and individually, a "GRANTOR"), the
other Grantors named therein, and Bank of America, N.A., as Collateral Agent
(said Security Agreement, as it may heretofore have been and as it may hereafter
be further amended, restated, supplemented or otherwise modified from time to
time, being the "SECURITY AGREEMENT"). Capitalized terms used herein not
otherwise defined herein shall have the meanings ascribed thereto in the
Security Agreement.

                  Grantor hereby agrees that the Pledged Equity set forth on
Schedule A annexed hereto shall be deemed to be part of the Pledged Equity and
shall become part of the Securities Collateral and shall secure all Secured
Obligations.

                  IN WITNESS WHEREOF, Grantor has caused this Amendment to be
duly executed and delivered by its duly authorized officer as of
_______________.

                                              [GRANTOR]

                                              By: ______________________________
                                                       Title:

                                      I-1

<PAGE>

                                  SCHEDULE A TO
                                PLEDGE SUPPLEMENT

                                     I-A-1

<PAGE>

                                                                   EXHIBIT II TO
                                                              SECURITY AGREEMENT

                              [FORM OF COUNTERPART]

         COUNTERPART (this "COUNTERPART"), dated as of _______, is delivered
pursuant to Section 21 of the Security Agreement referred to below. The
undersigned hereby agrees that this Counterpart may be attached to the Security
Agreement, dated as of July 1, 2003 (said Security Agreement, as it may
heretofore have been and as it may hereafter be further amended, restated,
supplemented or otherwise modified from time to time being the "SECURITY
AGREEMENT"; capitalized terms used herein not otherwise defined herein shall
have the meanings ascribed therein), among Reliance Steel & Aluminum Co., RSAC
Management Corp., the other Grantors named therein, and Bank of America, N.A.,
as Secured Party. The undersigned by executing and delivering this Counterpart
hereby becomes a Grantor under the Security Agreement in accordance with Section
19 thereof and agrees to be bound by all of the terms thereof. [Without limiting
the generality of the foregoing, the undersigned hereby:

                  (i)      authorizes the Secured Party to add the information
         set forth on the Schedules to this Agreement to the correlative
         Schedules attached to the Security Agreement(1);

                  (ii)     agrees that all Collateral of the undersigned,
         including the items of property described on the Schedules hereto,
         shall become part of the Collateral and shall secure all Secured
         Obligations; and

                  (iii)    makes the representations and warranties set forth in
         the Security Agreement, as amended hereby, to the extent relating to
         the undersigned.]

                                                    [NAME OF ADDITIONAL GRANTOR]

                                                    By: ________________________
                                                    Name:
                                                    Title:

---------------------
(1) The Schedules to the Counterpart should include copies of all Schedules that
identify collateral to be granted by the Additional Grantor.

                                      II-1

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