Document:

exv10w15

 

EXHIBIT 10.15

GUARANTEE AGREEMENT

     This GUARANTEE AGREEMENT (as the same may hereafter be amended, supplemented or otherwise
modified, this “Guarantee”), dated as of September 5, 2006, is by A. M. CASTLE & CO., a Maryland
corporation (“Guarantor”) in favor of Canadian Lenders (as defined in the Credit Agreement referred
to below) and BANK OF AMERICA, N.A., CANADA BRANCH, as Canadian Agent for Canadian Lenders
(together with its successors and assigns, herein referred to as “Canadian Agent”).

RECITALS:

     WHEREAS, A. M. Castle & Co. (Canada), Inc., a corporation organized under the laws of the
Province of Ontario, Canada (“Canadian Borrower”) is a wholly-owned subsidiary of Guarantor;

     WHEREAS, Guarantor, Canadian Borrower, the lenders from time to time party thereto, including
Canadian Lenders, Canadian Agent and Bank of America, N.A., as U.S. Agent, entered into an Amended
and Restated Credit Agreement, dated as of September 5, 2006 (as from time to time modified,
amended, restated or supplemented, the “Credit Agreement”) pursuant to which the lenders party
thereto have agreed to extend certain credit facilities to U.S. Borrower and Canadian Borrower;

     WHEREAS, Guarantor will receive substantial direct and indirect economic, financial and other
benefits as a result of the credit facilities provided to Canadian Borrower pursuant to the Credit
Agreement.

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

1. DEFINITIONS.

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

2. GUARANTEE.

     2.1. Guarantee of Payment and Performance. Guarantor hereby absolutely, unconditionally and
irrevocably guarantees to Canadian Agent and Canadian Lenders:

     (a) the full and punctual payment by Canadian Borrower of the Canadian Obligations, at
any time payable under the Loan Documents in each case when and as the same shall become due
and payable, whether at maturity, pursuant to mandatory or optional prepayment, by
acceleration or otherwise, all in accordance with the terms and provisions of this
Guarantee, the Credit Agreement and the other Loan Documents, including, without limitation,
overdue interest, post-petition interest, indemnification

 

 

payments and all of such obligations which would become due but for the operation of
the automatic stay pursuant to Section 362(a) of the United States Bankruptcy Code and the
operation of Sections 502(b) and 506(b) of the United States Bankruptcy Code; and

     (b) the full and punctual performance by Canadian Borrower of all duties, agreements,
covenants and obligations of Canadian Borrower contained in the Credit Agreement and the
other Loan Documents,

and the full and prompt payment, on demand, of all reasonable costs and expenses incurred by (x)
Canadian Agent in connection with the negotiation, preparation, execution and delivery of this
Guarantee and (y) Canadian Agent, Canadian Lenders or any trustee or agent acting on behalf of
Canadian Agent and/or Canadian Lenders in enforcing any of its rights and remedies under this
Guarantee, the Credit Agreement or any of the other Loan Documents, including, but not limited to,
all reasonable attorneys’ fees and expenses (whether or not there is litigation), court costs and
all costs in connection with any proceedings under any Debtor Relief Laws (collectively, the
“Guarantied Obligations”), provided that Guarantor shall not be liable for the reasonable fees and
expenses of more than one separate firm of attorneys representing Canadian Agent.

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

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

     2.4. No Duty to Pursue Others. Upon the occurrence and during the continuance of an Event of
Default, Canadian Agent or any trustee or agent acting on behalf of Canadian Agent may proceed to
enforce its rights and remedies directly against Guarantor without first proceeding against
Canadian Borrower or any other Person liable for the Guarantied Obligations or any security for the
Guarantied Obligations.

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

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

     (b) failure of Guarantor to be given notice of default by Canadian Borrower;

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

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     (d) waiver of Canadian Borrower’s defaults or extensions of due dates for payments or
other accommodations, indulgences or forbearance granted to Canadian Borrower;

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

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

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

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

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

     (j) illegality or impossibility of performance on the part of Canadian Borrower or
Guarantor under the Credit Agreement or this Guarantee; or

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

     2.6. Certain Waivers.

     (a) Waiver of Notice. Guarantor hereby waives notice of (i) acceptance of this
Guarantee, (ii) any amendment, extension or other modification of the Credit Agreement
and/or any of the other Loan Documents, (iii) any loans or advances made by any Canadian
Lenders to Canadian Borrower, (iv) the occurrence of a Default or Event of Default, (v) any
transfer or other disposition of the Guarantied Obligations pursuant to the Credit
Agreement, and (vi) any other action at any time taken or omitted by Canadian Agent or any
Canadian Lender or by any trustee or agent acting on behalf of Canadian Agent or any
Canadian Lender, and generally, all demands and notices of every kind in connection with
this Guarantee, the Credit Agreement and the other Loan Documents, except as provided herein
and in the Credit Agreement.

     (b) Certain Other Waivers. Guarantor hereby waives (i) diligence, presentment, demand
for payment, protest or notice, whether of nonpayment, dishonor, protest or otherwise, (ii)
all setoffs, counterclaims and claims of recoupment against the Guarantied Obligations that
may be available to Canadian Borrower or any other guarantor of the Guarantied Obligations
(it being understood that the waivers set forth

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anywhere in this Guarantee shall not preclude any action by Guarantor, after payment in
full of its obligations hereunder, to recover for any tortious action or omission by
Canadian Agent or any Canadian Lender which resulted in injury to Guarantor), (iii) any
defense based upon or in any way related to any claim that any election of remedies by
Canadian Agent or any Canadian Lender (or by any trustee or agent acting on behalf of
Canadian Agent or any Canadian Lender) impaired, reduced, released or otherwise extinguished
any rights Guarantor might otherwise have had against Canadian Borrower or any security,
(iv) any claim based upon or in any way related to any of the matters referred to in
Section 2.5, and (v) any claim that this Guarantee should be strictly construed
against Canadian Agent or any Canadian Lender.

     2.7. Bankruptcy; Other Matters. In the event that, pursuant to any insolvency, bankruptcy,
reorganization, receivership or other Debtor Relief Law, or any judgment, order or decision
thereunder, or for any other reason Canadian Agent or any Canadian Lender must rescind or restore
any payment received by Canadian Agent or any Canadian Lender in connection with the Guarantied
Obligations, the Credit Agreement or any other Loan Document, or Canadian Borrower ceases to be
liable to Canadian Agent or any Canadian Lender in respect of the Credit Agreement (other than by
the full and irrevocable payment in full thereof), then any prior release or discharge from this
Guarantee shall be without effect and this Guarantee and the obligations of Guarantor hereunder
shall remain in full force and effect.

     2.8. Payments by Guarantor. If all or any part of the Guarantied Obligations are not paid
when due, whether at maturity, by reason of acceleration, or otherwise, and remain unpaid until the
expiration of any applicable grace or cure period, or otherwise upon the occurrence and continuance
of any Event of Default, Guarantor shall, immediately upon demand by Canadian Agent (or any trustee
or agent acting on behalf of Canadian Agent or any Canadian Lender), and without presentment,
protest, notice of protest, notice of nonpayment, notice of intention to accelerate or acceleration
or any other notice whatsoever, pay in immediately available funds, the amount due on the
Guarantied Obligations to Canadian Agent for distribution to Canadian Lenders. All obligations of
Guarantor under this Guarantee shall be performable and payable to Canadian Agent at its office at
the address for notices provided for in the Credit Agreement.

     2.9. Failure to Pay Guarantied Obligations. If Guarantor fails to pay the Guarantied
Obligations as required by this Guarantee, then Guarantor, as the principal obligor and not as a
guarantor only shall pay, on demand, all reasonable out-of-pocket costs and expenses incurred or
expended by Canadian Agent and Canadian Lenders (and any trustee or agent acting on behalf of
Canadian Agent and/or any Canadian Lender) in connection with the enforcement of, and the
preservation of Canadian Agent’s and Canadian Lenders’ rights under and with respect to, this
Guarantee, including, but not limited to, all reasonable attorneys’ fees and expenses (whether or
not there is litigation), court costs and all costs incurred in connection with any proceedings
under any Debtor Relief Laws, provided that Guarantor shall not be liable for the
reasonable fees and expenses of more than one separate firm of attorneys representing Canadian
Agent. Until paid, all such amounts recoverable under this Section 2.9 shall bear interest
from the time when such amounts become due until payment in full thereof at the Default Rate for
Base Rate Loans.

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

     2.11. Postponement of Subrogation Rights. Guarantor will not exercise any Subrogation Rights
(as defined below) which it may acquire with respect to this Guarantee until the prior and
indefeasible payment, in full and in cash, of all Guarantied Obligations. Any amount paid to
Guarantor by or on behalf of Canadian Borrower or any other guarantor of the Guarantied Obligations
on account of any such Subrogation Rights prior to the payment in full of all Guarantied
Obligations shall immediately be paid over to Canadian Agent for the ratable benefit of Canadian
Lenders and credited and applied against the Guarantied Obligations whether matured or unmatured,
in accordance with the terms of the Credit Agreement. In furtherance of the foregoing, for so long
as any Guarantied Obligations remain outstanding, (i) Guarantor shall not take any action or
commence any proceeding against Canadian Borrower or any other guarantor of the Guarantied
Obligations (or any of their respective successors or assigns, whether in connection with a
bankruptcy proceeding or otherwise), to recover any amounts in the respect of payments made under
this Guarantee to Canadian Agent and/or Canadian Lenders, and (ii) Guarantor hereby forbears
realizing any benefit of and exercising any right to participate in any security which may be held
by Canadian Agent or Canadian Lender or any agent or trustee acting on behalf of Canadian Agent
and/or Canadian Lenders. For purposes of this Section 2.11, “Subrogation Right” means any
right of contribution, subrogation, reimbursement, indemnity, or repayment, and any other “claim”,
as that term is defined in the United States Bankruptcy Code, which Guarantor might now have or
hereafter acquire against Canadian Borrower or any other guarantor of the Guarantied Obligations
that arises from the existence or performance of Guarantor’s obligations under this Guarantee, and
any right to participate in any security for the Guarantied Obligations.

     2.12. Limitation on Guarantied Obligations. Notwithstanding anything in Section 2.1
or elsewhere in this Guarantee or any other Loan Document to the contrary, the obligations of
Guarantor under this Guarantee shall at each point in time be limited to an aggregate amount equal
to the greatest amount that would not result in such obligations being subject to avoidance, or
otherwise result in such obligations being unenforceable, at such time under applicable law
(including, without limitation, to the extent, and only to the extent, applicable to Guarantor,
Section 548 of the United States Bankruptcy Code and any comparable provisions of the law of

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any other jurisdiction, any capital preservation law of any jurisdiction and any other law of
any jurisdiction that at such time limits the enforceability of the obligations of Guarantor under
this Guarantee). This Section 2.12 is intended solely to preserve the rights of Canadian
Agent and Canadian Lenders hereunder to the maximum extent permitted by applicable law, and neither
Guarantor nor any other Person shall have any rights under this Section 2.12 that it would
not otherwise have under applicable law.

     2.13. Other Enforcement Rights. Canadian Agent and Canadian Lenders may proceed to protect
and enforce this Guarantee by suit or proceedings in equity, at law or in bankruptcy, and whether
for the specific performance of any covenant or agreement contained herein or in execution or aid
of any power herein granted or for the recovery of judgment for the obligations hereby guaranteed
or for the enforcement of any other proper legal or equitable remedy available under applicable
law.

3. REPRESENTATIONS AND WARRANTIES.

     Guarantor hereby represents and warrants to Canadian Agent and Canadian Lenders that:

     3.1. Authorization. Guarantor is duly authorized to execute and perform this Guarantee and
this Guarantee has been properly authorized by all requisite action of Guarantor.

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

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

     3.4. Independent Credit Evaluation. Guarantor has independently, and without reliance on any
information supplied by Canadian Agent or any Canadian Lender, taken, and will continue to take,
whatever steps Guarantor deems necessary to evaluate the financial condition and affairs of
Canadian Borrower, and neither Canadian Agent nor any Canadian Lender shall have any duty to advise
Guarantor of information at any time known to Canadian Agent or any Canadian Lender regarding such
financial condition or affairs.

     3.5. No Representation By Agent. Neither Canadian Agent, any Canadian Lender nor any trustee
or agent acting on its behalf has made any representation, warranty or statement to Guarantor to
induce Guarantor to execute this Guarantee.

4. SUCCESSORS AND ASSIGNS.

     This Guarantee shall bind the successors, assignees, trustees, and administrators of Guarantor
and shall inure to the benefit of Canadian Agent, each Canadian Lender, and their respective
successors, transferees, participants and assignees.

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5. CONTINUANCE OF GUARANTEE.

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

6. AMENDMENTS AND WAIVERS.

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

7. RIGHTS CUMULATIVE.

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

8. SERVICE OF PROCESS.

     GUARANTOR HEREBY WAIVES PERSONAL SERVICE OF ANY AND ALL PROCESS UPON IT AND CONSENTS THAT ALL
SUCH SERVICE OF PROCESS MAY BE MADE BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO IT AT
ITS ADDRESS SET FORTH IN SECTION 16. SERVICE SO MADE SHALL BE DEEMED TO BE COMPLETED AS OF
THE DATE THAT GUARANTOR SIGNS THE RETURN RECEIPT. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT
OF CANADIAN AGENT OR ANY CANADIAN LENDER TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW.

9. WAIVER OF JURY TRIAL.

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

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10. SEVERABILITY.

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

11. GOVERNING LAW.

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

12. SECTION HEADINGS.

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

13. LIMITATION OF LIABILITY.

     NEITHER CANADIAN AGENT NOR ANY CANADIAN LENDER SHALL HAVE ANY LIABILITY WITH RESPECT TO, AND
GUARANTOR HEREBY WAIVES, RELEASES AND AGREES NOT TO SUE FOR, (a) ANY LOSS OR DAMAGE SUSTAINED BY
GUARANTOR THAT MAY OCCUR AS A RESULT OF, IN CONNECTION WITH, OR THAT IS IN ANY WAY RELATED TO, ANY
ACT OR FAILURE TO ACT REFERRED TO IN SECTION 2.5 OR (b) ANY SPECIAL, INDIRECT OR
CONSEQUENTIAL DAMAGES SUFFERED BY GUARANTOR IN CONNECTION WITH ANY CLAIM RELATED TO THIS GUARANTEE.

14. ENTIRE AGREEMENT.

     This Guarantee embodies the entire agreement among Guarantor, Canadian Agent and Canadian
Lenders relating to the subject matter hereof and supersedes all prior agreements, representations
and understandings, if any, relating to the subject matter hereof.

15. COMMUNICATIONS.

     All notices and other communications to Canadian Agent and Canadian Lenders or Guarantor
hereunder shall be in writing, shall be delivered in the manner and with the effect, as provided by
the Credit Agreement, and shall be addressed to Guarantor and to Canadian Agent and Canadian
Lenders as set forth in the Credit Agreement.

16. DUPLICATE ORIGINALS.

     Two or more duplicate counterpart originals hereof may be signed by the parties, each of which
shall be an original but all of which together shall constitute one and the same instrument.

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Delivery of any executed signature page to this Guarantee by Guarantor by facsimile
transmission shall be as effective as delivery of a manually executed copy of this Guarantee by
Guarantor.

17. NOTICES.

     Nothing in this Guarantee shall void or abrogate any obligation of Canadian Borrower,
Guarantor or Canadian Agent to give any notice specifically required to be given by such Person in
any provision of any Loan Document.

18. TERMINATION.

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

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

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

	 	 	 	 	 
	 	 	A. M. CASTLE & CO.
	 
	 	 	 	 
	 

	 	By:
	 	/s/ Michael H. Goldberg
	 

	 	 	 	 
	 

	 	Name:
	 	Michael H. Goldberg
	 

	 	Title:
	 	President & CEO

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EXHIBIT 10.16

September 5, 2006

A. M. Castle & Co.

3400 North Wolf Road

Franklin Park, Illinois 60131

     Re: Amendment No. 1 to Note Agreement

Ladies and Gentlemen:

     Reference is made to that certain Note Agreement dated as of November 17, 2005 (the “Note
Agreement”) between A.M. Castle & Co., a Maryland corporation (the “Company”), and The Prudential
Insurance Company of America and Prudential Retirement Insurance and Annuity Company (collectively,
the “Purchasers”). Capitalized terms used herein and not otherwise defined herein shall have the
meanings assigned to such terms in the Note Agreement.

     The Company has requested certain amendments to the Note Agreement as set forth below and the
Purchasers are willing to agree to such amendments on the terms and conditions set for the herein.
Accordingly, and in accordance with the provisions of paragraph 11C of the Note Agreement, the
parties hereto agree as follows:

     SECTION 1. Amendment. From and after the Effective Date (as defined in Section 3
hereof), the Note Agreement is hereby amended as follows:

     1.1. Paragraph 4 of the Note Agreement is amended by adding the words “and 4E” after the words
“paragraph 4A” in the introductory sentence thereof.

     1.2. Paragraph 4A(1) of the Note Agreement is amended by the adding the words “or 4F” after
the words “paragraph 4E” therein.

     1.3. Paragraph 4E of the Note Agreement is renumbered as paragraph 4F and amended and follows
and a new paragraph 4E is added to the Note Agreement as follows:

     “4E. Offer to Prepay Notes in the Event of a Credit Agreement Mandatory Prepayment.

     4E(1). Notice of Credit Agreement Mandatory Prepayment. The Company will, at least 30 days prior
to any Credit Agreement Mandatory Prepayment at a time following the occurrence and during the
continuance of an Event of Default, give written notice of such Credit Agreement Mandatory
Prepayment to each holder of the Notes. Such notice shall contain and constitute an offer to
prepay the Notes as described in paragraph 4E(3) in an amount (the “Offered Amount”) such that the
ratio of the Offered Amount to the outstanding principal amount of the Notes immediately prior to
the payment of such Credit

 

 

A.M. Castle & Co.

September 5, 2006

Page 2

Agreement Mandatory Prepayment is equal to the ratio of the amount of such Credit
Agreement Mandatory Repayment to the outstanding principal amount of the Term A
Loans (as defined in the Credit Agreement) immediately prior to the payment of such
Credit Agreement Mandatory Prepayment, and shall be accompanied by the certificate
described in paragraph 4E(6).

     4E(2). Notice of Acceptance of Offer under Paragraph 4E(1). If the Company
shall at any time receive an acceptance to an offer to prepay Notes under paragraph
4E(1) from some, but not all, of the holders of the Notes, then the Company will,
within two Business Days after the receipt of such acceptance, give written notice
of such acceptance to each other holder of the Notes.

     4E(3). Offer to Prepay Notes. The offer to prepay Notes contemplated by
paragraph 4E(1) shall be an offer to prepay, in accordance with and subject to this
paragraph 4E, the Notes in an aggregate amount equal to the Offered Amount at the
time of the occurrence of the Credit Agreement Mandatory Prepayment.

     4E(4). Rejection; Acceptance. A holder of Notes may accept or reject the offer
to prepay made pursuant to this paragraph 4E by causing a notice of such acceptance
or rejection to be delivered to the Company prior to the prepayment date. A failure
by a holder of Notes to so respond to an offer to prepay made pursuant to this
paragraph 4E shall be deemed to constitute a rejection of such offer by such holder.

     4E(5). Prepayment. Prepayment of the Notes to be prepaid pursuant to this
paragraph 4E shall be at 100% of the principal amount of such Notes to be prepaid,
together with interest accrued thereon to the date of prepayment. The prepayment
shall be made at the time of occurrence of a Credit Agreement Mandatory Prepayment.
If the aggregate principal amount of the Notes held by the holders of the Notes
which have accepted an offer to prepay pursuant to paragraph 4E(4) exceeds the
Offered Amount, the principal amount so prepaid shall be allocated to such Notes pro
rata in proportion to the respective outstanding principal amounts thereof.

     4E(6). Officer’s Certificate. Each offer to prepay the Notes pursuant to this
paragraph 4E shall be accompanied by a certificate, executed by a Responsible
Officer of the Company and dated the date of such offer, specifying (i) the proposed
prepayment date (which shall be the date of such Credit Agreement Mandatory
Prepayment), (ii) that such offer is made pursuant to this paragraph 4E, (iii) the principal amount of each Note offered to be prepaid, (iv)
the interest that would be due on the portion of each Note offered to be prepaid,
accrued to the prepayment date, (v) that the conditions of this paragraph 4E have
been fulfilled, and (vi) in reasonable detail, the nature and anticipated date of
the Credit Agreement Mandatory Prepayment.

 

 

A.M. Castle & Co.

September 5, 2006

Page 3

Paragraph 4E to the contrary, so long as the Intercreditor Agreement is in effect,
any Net Cash Proceeds (as defined in the Credit Agreement) of a Disposition referred
to in Section 2.06(b)(ii) of the Credit Agreement or an Extraordinary Receipt (as
defined in the Credit Agreement) referred to in Section 2.06(b)(v) of the Credit
Agreement shall, to the extent provided in the Intercreditor Agreement, be
distributed as provided therein and shall not require an offer to prepay under this
paragraph 4E; provided, however, if any portion of an “Offered Repayment” (as such
term is defined in the Intercreditor Agreement) relating to a Disposition referred
to in Section 2.06(b)(ii) of the Credit Agreement or an Extraordinary Receipt (as
defined in the Credit Agreement) referred to in Section 2.06(b)(v) of the Credit
Agreement is paid to the Company or any Guarantor as a result of the rejection of
all or a portion of an Offered Repayment by any Other Senior Creditor, the Company
shall make an offer to prepay in accordance with this paragraph 4E in an aggregate
amount determined in accordance with paragraph 4E(1) with respect to the Net Cash
Proceeds (as defined in the Credit Agreement) not applied pursuant to the
Intercreditor Agreement.

     4F. Acquisition of Notes. The Company shall not, and shall not permit any of its
Subsidiaries or Affiliates to, prepay or otherwise retire in whole or in part prior to their
stated final maturity (other than by prepayment pursuant to paragraph 4A or 4B, upon
acceptance of an offer to prepay pursuant to paragraph 4E or upon acceleration of such final
maturity pursuant to paragraph 7A), or purchase or otherwise acquire, directly or
indirectly, Notes held by any holder unless the Company or such Subsidiary or Affiliate
shall have offered to prepay or otherwise retire or purchase or otherwise acquire, as the
case may be, the same proportion of the aggregate principal amount of Notes held by each
other holder of Notes at the time outstanding upon the same terms and conditions. Any Notes
so prepaid or otherwise retired or purchased or otherwise acquired by the Company or any of
its Subsidiaries or Affiliates shall not be deemed to be outstanding for any purpose under
this Agreement.”

     1.4. Paragraph 5A of the Note Agreement is amended by adding the words “, or limited liability
company” after the first appearance of the word “corporate” therein.

     1.5. Clause (b) of paragraph 5F of the Note Agreement is amended by adding the words “or with
respect to the absence of any material misstatement” after the words “unqualified as to scope of
audit” therein.

     1.6. Paragraph 5K of the Note Agreement is amended and restated in its entirety as follows:

     5K. Subsequent Guarantors. The Company covenants that at all times the assets of the
Company and all Guarantors shall constitute at least 95% of Consolidated

 

 

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Total Assets
(excluding, for the purposes of this calculation, the assets of the Foreign Subsidiaries
(except (i) with respect to the Canadian Subsidiary, so long as the assets of the Canadian
Subsidiary do not constitute more than 20% of Consolidated Total Assets, (ii) with respect
to the Mexican Subsidiary, so long as the assets of the Mexican Subsidiary do not constitute
more than 5% of Consolidated Total Assets)) and (iii) with respect to any other Foreign
Subsidiaries, so long as the assets of all such Foreign Subsidiaries do not constitute more
than 30% of Consolidated Total Assets) and the Company and the Guarantors shall have
contributed at least 95% of Consolidated EBITDA (excluding, for the purposes of this
calculation, the EBITDA of the Foreign Subsidiaries (except (i) with respect to the Canadian
Subsidiary, so long as the assets of the Canadian Subsidiary do not constitute more than 20%
of Consolidated Total Assets, (ii) with respect to the Mexican Subsidiary, so long as the
assets of the Mexican Subsidiary do not constitute more than 5% of Consolidated Total
Assets) and (iii) with respect to any other Foreign Subsidiaries, so long as the assets of
all such Foreign Subsidiaries do not constitute more than 30% of Consolidated Total Assets))
for the four quarters then most recently ended. To the extent necessary to permit the
Company to comply with the foregoing the Company will cause one or more Significant
Subsidiaries to become Guarantors and the Company will cause each such Significant
Subsidiary to deliver to the holders of the Notes (i) a joinder agreement to the Guaranty
Agreement, which joinder agreement is to be in the form of Exhibit A to the Guaranty
Agreement; (ii) an opinion of counsel to such Person with respect to the Guaranty Agreement
and such joinder agreement which is in form and substance reasonably acceptable to the
Required Holders; and (iii) all applicable Collateral Documents and any other documents as
may be necessary or appropriate to permit the Company to be in compliance with its
obligations set forth in this paragraph 5K. The Guarantors shall be permitted to guaranty
all Other Senior Debt.

     1.7. The Note Agreement is amended by adding new paragraphs 5O, 5P and 5Q as follows:

     “5O. Notices. The Company covenants that it shall promptly notify you and any
Institutional Holder:

     (a) of the occurrence of any Default;

     (b) of any matter that has resulted or could reasonably be expected to result in a
Material Adverse Effect, including (i) breach or non-performance of, or any default under, a
Contractual Obligation of the Company or any Subsidiary; (ii) any dispute, litigation,
investigation, proceeding or suspension between the Company or any Subsidiary and any
Governmental Authority; or (iii) the commencement of, or any material development in, any
litigation or proceeding affecting the Company or any Subsidiary, including pursuant to any
applicable Environmental Laws;

 

 

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     (c) of any material change in accounting policies or financial reporting practices by
the Company or any Subsidiary; and

     (d) of the occurrence of any Internal Control Event.

     Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer of the Company setting forth details of the occurrence referred to
therein and stating what action the Company has taken and propose to take with respect
thereto. Each notice pursuant to paragraph 5O shall describe with particularity any and all
provisions of this Agreement and any other Transaction Document that have been breached.

     5P. Compliance with Terms of Leaseholds. The Company covenants that it shall, and
shall cause each of its Subsidiaries to, make all payments and otherwise perform all
obligations in respect of all leases of real property to which the Company or such
Subsidiary is a party, keep such leases in full force and effect and not allow such leases
to lapse or be terminated or any rights to renew such leases to be forfeited or cancelled,
notify each Institutional Holder of any default by any party with respect to such leases and
cooperate with the holders of the Notes in all respects to cure any such default, and cause
each of its Subsidiaries to do so, except, in any case, where the failure to do so, either
individually or in the aggregate, could not be reasonably likely to have a Material Adverse
Effect.

     5Q. Material Contracts. The Company covenants that it shall, and shall cause each of
its Subsidiaries to, perform and observe all the terms and provisions of each Material
Contract to be performed or observed by it, maintain each such Material Contract in full
force and effect, enforce each such Material Contract in accordance with its terms, take all
such action to such end as may be from time to time requested by the Required Holder(s) and,
upon request of the Required Holder(s), make to each other party to each such Material
Contract such demands and requests for information and reports or for action as the Company
any of its Subsidiaries is entitled to make under such Material Contract, and cause each of
its Subsidiaries to do so, except, in any case, where the failure to do so, either
individually or in the aggregate, could not reasonably be expected to have a Material
Adverse Effect.”

     1.8 Paragraph 6A of the Note Agreement is amended and restated in its entirety as follows:

     “6A. Adjusted Consolidated Net Worth. The Company will not permit its Adjusted
Consolidated Net Worth (calculated on the last day of each fiscal quarter) to be less than
$149,180,000 plus the cumulative sum of (x) 40% of Consolidated Net Income (but only if a
positive number), plus (y) 75% of Net Cash Proceeds received by the Company from the
issuance of Equity Interests by the Company for (i) each completed fiscal year of the
Company ending after December 31, 2005, and (ii) the period from the

 

 

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beginning of the then
current fiscal year through the end of the then most recently ended fiscal quarter which
shall have been completed (if any shall have been completed) in such then current fiscal
year; provided, that at any time the Company or any Subsidiary incurs additional
Indebtedness, immediately following and after giving effect to the incurrence of such
additional Indebtedness, the Adjusted Consolidated Net Worth shall not be less than the
minimum Adjusted Consolidated Net Worth that would have been permitted as of the last day of
the then most recently ended fiscal quarter.”

     1.9. Paragraph 6D of the Note Agreement is amended and restated in its entirety as follows:

     “6D. Liens. The Company will not, and will not permit any Subsidiary to, permit to
exist, create, assume or incur, directly or indirectly, any Lien on their properties or
assets, whether now owned or hereafter acquired, except:

     (a) Liens on property created substantially contemporaneously or within 180 days of the
acquisition thereof to secure or provide for all or a portion of the purchase price of such
property, provided that (i) such Liens do not extend to other property of the Company or any
Subsidiary, (ii) the aggregate principal amount of Indebtedness secured by each such Lien
does not exceed 80% of the purchase price at the time of acquisition of the property subject
to such Lien, and (iii) the Indebtedness secured by such Liens is otherwise permitted by
paragraph 6B and paragraph 6C;

     (b) Liens on assets existing at the time such assets are acquired by the Company or a
Subsidiary; provided that (i) no such Lien is created in contemplation of or in connection
with such acquisition, (ii) no such Lien shall apply to any other property or assets of the
Company or any Subsidiary other than improvements and accessions to the subject assets and
proceeds thereof and (iii) no such Lien shall secure obligations other than those which it
secures on the date of such acquisition and permitted extensions, renewals and replacements
thereof;

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

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

     (e) Liens arising in the ordinary course of business and not incurred in connection
with the borrowing of money (including mechanic’s and materialmen’s liens and minor survey
exceptions on real property) that in the aggregate do not materially

 

 

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interfere with the
conduct of the business of the Company or any Subsidiary or materially impair the value of
the property or assets subject to such Liens;

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

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

     (h) Liens existing on property or assets of the Company or any Subsidiary as of the
date of this Agreement that are described in the attached Schedule 6D;

     (i) Liens in favor of Collateral Agent to secure the obligations and liabilities of the
Company and the Guarantors under this Agreement and the Other Senior Debt as provided in the
Collateral Documents and the Intercreditor Agreement;

     (j) Liens attaching solely to the property and assets of the Canadian Subsidiary to
secure Debt of the Canadian Subsidiary and no other Debt;

     (k) Liens attaching solely to the property and assets of any Foreign Subsidiary (other
than Guarantors and the Canadian Subsidiary) securing Indebtedness for borrowed money of any
such Foreign Subsidiary of not more than U.S. $15,000,000 in the aggregate at any time
outstanding for all such Foreign Subsidiaries; and

     (l) (i) If the Notes are not Secured, Liens not otherwise permitted by paragraphs (a)
through (k) of this paragraph 6D created, assumed or incurred subsequent to the date of
closing to secure Indebtedness, provided that at the time of creating, assuming or incurring
such additional Indebtedness and after giving effect thereto and to the application of the
proceeds therefrom the sum (without duplication) of the aggregate principal amount of
outstanding Consolidated Indebtedness secured by Liens permitted by this paragraph 6D(l)
does not exceed 10% of Adjusted Consolidated Net Worth and (ii) if the Notes are Secured,
Existing First Priority Liens (as such term is defined in the Intercreditor Agreement) and
Future Acquired Liens (as such term is defined in the Intercreditor Agreement).”

     1.10. Paragraph 6E of the Note Agreement is amended by adding the following parenthetical
after the words “any Person: in the introductory clause thereof:

“(other than Dispositions permitted under paragraph 6F and sales, transfers and
other dispositions permitted under paragraph 6G)”

     1.11. Paragraph 6F of the Note Agreement is amended by replacing the words “15% of
Consolidated Total Assets as of the end of the immediately preceding fiscal year” with
“$5,000,000”.

 

 

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     1.12. Paragraphs 6H, 6I, 6J and 6K of the Note Agreement are renumbered as paragraphs 6I, 6J,
6L and 6M, and new paragraphs 6H, 6K and 6N are added to the Note Agreement as follows:

     “6H. Investments. The Company will not, and will not permit any Subsidiary to make or
hold any Investments, except:

     (a) Investments held by the Company and its Subsidiaries in the form of Cash
Equivalents;

     (b) Short-term Investments of Foreign Subsidiaries acquired by Foreign Subsidiaries in
the ordinary course of business and of a credit quality similar to Cash Equivalents;

     (c) advances to officers, directors and employees of the Company and its Subsidiaries
in an aggregate amount not to exceed $1,000,000 at any time outstanding, for travel,
entertainment, relocation and analogous ordinary business purposes;

     (d) (i) Investments by the Company and its Subsidiaries in their respective
Subsidiaries outstanding on the date hereof, (ii) additional Investments by Company and its
Subsidiaries in the Company, the Canadian Subsidiary and the Guarantors, (iii) additional
Investments by Subsidiaries of the Company that are not Guarantors in other Subsidiaries
that are not Guarantors and (iv) so long as no Default has occurred and is continuing or
would result from such Investment, additional Investments by the Company and the Guarantors
in wholly-owned Subsidiaries that are not Guarantors in an aggregate amount invested from
the date hereof not to exceed $5,000,000;

     (e) Investments consisting of extensions of credit in the nature of accounts receivable
or notes receivable arising from the grant of trade credit in the ordinary course of
business, and Investments received in satisfaction or partial satisfaction thereof from
financially troubled account debtors to the extent reasonably necessary in order to prevent
or limit loss;

     (f) Guarantees by the Company or a Guarantor of the obligations, liabilities or
indebtedness of the Company, the Canadian Subsidiary or another Guarantor;

     (g) the Guaranty Agreement, the Guarantee by the Company of the Canadian Obligations
(as defined in the Credit Agreement) and the Guarantee by the Subsidiaries of the Bank
Credit Agreement Debt (as defined in the Intercreditor Agreement);

     (h) Guarantees by any Foreign Subsidiary (other than the Canadian Subsidiary) of the
obligations, liabilities or indebtedness of any other Foreign Subsidiary (other than the
Canadian Subsidiary);

 

 

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     (i) Guarantees by Company of the obligations, liabilities or indebtedness of any
Subsidiary (other than the Guarantors and the Canadian Subsidiary) not exceeding $7,500,000
in the aggregate at any time outstanding;

     (j) the Transtar Acquisition;

     (k) Investments existing on the date hereof (other than those referred to in paragraph
6H(d)(i));

     (l) the purchase or other acquisition of all of the Equity Interests in, or all or
substantially all of the property of, any Person that, upon the consummation thereof, will
be wholly-owned directly by the Company or one or more of its Wholly-Owned Subsidiaries
(including as a result of a merger or consolidation); provided that, with respect to each
purchase or other acquisition made pursuant to this paragraph 6H(l):

     (i) the Term A Facility (as defined in the Credit Agreement) has been paid in
full;

     (ii) any such newly-created or acquired Subsidiary shall comply with the
requirements of paragraph 5K;

     (iii) the lines of business of the Person to be (or the property of which is to
be) so purchased or otherwise acquired shall be substantially the same lines of
business as one or more of the principal businesses of the Company and its
Subsidiaries in the ordinary course;

     (iv) the prior, effective consent or approval to such purchase shall have been
granted by the Board of Directors or equivalent governing body of the acquiree;

     (v) such purchase or other acquisition shall not include or result in any
contingent liabilities that could reasonably be expected to be material to the
business, financial condition, operations or prospects of the Company and its
Subsidiaries, taken as a whole (as determined in good faith by the board of
directors (or the persons performing similar functions) of the Company or such
Subsidiary if the board of directors is otherwise approving such transaction and, in
each other case, by a Responsible Officer);

     (vi) the total cash and noncash consideration (including the fair market value
of all Equity Interests issued or transferred to the sellers thereof (other than
Equity Interests of the Company), all indemnities, earnouts and other contingent
payment obligations to (with the amount thereof being determined by reference to the
amount reflected on the Company’s or the applicable Subsidiary’s balance sheet as of
the first date after the consummation of the applicable Investment), and the
aggregate amounts paid or to be paid under noncompete, consulting and

 

 

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other
affiliated agreements with, the sellers thereof and all assumptions of debt,
liabilities and other obligations in connection therewith) paid by or on behalf of
the Company and its Subsidiaries for any such purchase or other acquisition, when
aggregated with the total cash and noncash consideration paid by or on behalf of the
Company and its Subsidiaries for all other purchases and other acquisitions made by
the Company and its Subsidiaries pursuant to this paragraph 6H(l) during the
immediately preceding 12 months, shall not exceed $50,000,000;

     (vii) (A) immediately before and immediately after giving pro forma effect to
any such purchase or other acquisition, no Default or Event of Default shall have
occurred and be continuing and (B) immediately after giving effect to such purchase
or other acquisition, the Company and its Subsidiaries shall be in pro forma
compliance with all of the covenants set forth in paragraphs 6A, 6B and 6C, such
compliance to be determined on the basis of the financial information most recently
delivered to the holders of the Notes pursuant to paragraph 5F(a) or (b) as though
such purchase or other acquisition had been consummated as of the first day of the
fiscal period covered thereby; and

     (viii) the Company shall have delivered to each holder of the Notes at least
five Business Days prior to the date on which any such purchase or other acquisition
is to be consummated, a certificate of a Responsible Officer, in form and substance
reasonably satisfactory to the Required Holder(s), certifying that all of the
requirements set forth in this paragraph 6H(l) have been satisfied or will be
satisfied on or prior to the consummation of such purchase or other acquisition;

     (m) Investments in promissory notes issued as all or a portion of the purchase price
paid in connection with any Disposition permitted by paragraph 6F or any sale permitted by
paragraph 6G, not exceeding (i) $10,000,000 in aggregate principal amount at any time
outstanding with respect to Dispositions of the Company’s interests in joint ventures in
existence on September 5, 2006, or (ii) $1,000,000 with respect to any other such
Disposition or sale.

     (n) Investments made after September 5, 2006 in joint ventures not exceeding $7,500,000
in the aggregate at any time outstanding.

     ...

     6K. Off-Balance Sheet Liabilities. The Company will not, and will not permit any
Subsidiary to, incur or suffer to exist any Off-Balance Sheet Liabilities, except for
existing Off-Balance Sheet Liabilities described in the attached Schedule 6K.

     ...

     6N. Accounting Changes. The Company will not, and will not permit any Subsidiary to,
make any change in (a) accounting policies or reporting practices for

 

 

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purposes of this
Agreement or Securities and Exchange Commission reporting requirements, except as required
by generally accepted accounting principles, or (b) fiscal year.”

     1.13. Clause (d) of paragraph 7A of the Note Agreement is amended and restated in its entirety
as follows:

     “(d) any default in the observance or performance of paragraph 4E, paragraphs 6A
through 6N or in paragraph 7E;”

     1.14. Paragraph 10 of the Note Agreement is amended by adding, or amending and restating, the
following definitions as follows:

     “Bank Guarantee Agreement” shall mean that certain Guarantee Agreement, dated
as of September 5, 2006, by the Guarantors in favor of the Bank Agent and the Banks,
and all joinder thereto, as the same may be amended, modified or supplemented from
time to time in accordance with the provisions thereof.

     “Cash Equivalents” means any of the following types of Investments, to the
extent owned by the Company or any of its Subsidiaries free and clear of all Liens
(other than Liens created under the Collateral Documents and other Liens permitted
hereunder):

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

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

     “Collateral Agent” shall mean Bank of America, N.A., in its capacity as
collateral agent under the Intercreditor Agreement, and its successor and assigns in
that capacity.

 

 

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     “Contractual Obligation” shall mean , as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other undertaking
to which such Person is a party or by which it or any of its property is bound.

     “Credit Agreement” shall mean the “Amended and Restated Credit Agreement”,
dated as of September 5, 2006, between the Company, the Canadian Subsidiary, and the
Banks, as amended, restated, supplemented or otherwise modified from time to time.

     “Credit Agreement Mandatory Prepayment” shall mean a prepayment of Term A Loans
(as defined in the Credit Agreement) pursuant to Section 2.06(b) of the Credit
Agreement.

     “Equity Interests” shall mean, with respect to any person, all of the shares of
capital stock of (or other ownership or profit interests in) such Person, all of the
warrants, options or other rights for the purchase or acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, all of the securities convertible into or exchangeable for shares of capital
stock of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or acquisition from such Person of such shares (or such
other interests), and all of the other ownership or profit interests in such person
(including partnership, membership or trust interests therein), whether voting or
nonvoting, and whether or not such shares, warrants, options, rights or other
interests are outstanding on any date of determination.

     “Intercreditor Agreement” shall mean that certain Amended and Restated
Collateral Agency and Intercreditor Agreement, dated as of September 5, 2006, by and
among Collateral Agent, Bank of America N.A., the Noteholders (as defined therein),
Northern Trust, the Company and the Guarantors, as amended, restated, supplemented
or otherwise modified from time to time.

     “Internal Control Event” shall mean a fraud that involves management or other
employees who have a significant role in the Company’s internal controls over
financial reporting.

     “Investment” means, as to any Person, any direct or indirect acquisition or
investment by such Person, whether by means of (a) the purchase or other acquisition
of Equity Interests of another Person, (b) a loan, advance or capital contribution
to, Guarantee or assumption of debt of, or purchase or other acquisition of any
other debt or interest in, another Person, or (c) the purchase or other acquisition
(in one transaction or a series of transactions) of assets of another Person that
constitute a business unit or all or a substantial part of the business of, such
Person. For purposes of covenant compliance, the amount of

 

 

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any Investment shall be
the amount actually invested, without adjustment for subsequent increases or
decreases in the value of such Investment.

     “Material Adverse Effect” shall mean a (i) a material adverse effect on the
business, assets, properties, profits, prospects, operations or condition, financial
or otherwise, of the Company and its Subsidiaries, on a consolidated basis, (ii) the
impairment of the ability of the Company to perform its obligations under this
Agreement, or (iii) the impairment of the ability of any holder of the Notes to
enforce the Company’s and the Guarantor’s obligations under this Agreement, the
Notes or any Transaction Document to which it is a party.

     “Material Contract” means, with respect to any Person, each contract to which
such Person is a party involving aggregate consideration payable to or by such
Person of $20,000,000 or more in any year or otherwise material to the business,
condition (financial or otherwise), operations, performance, properties or prospects
of such Person.

     “Moody’s” shall mean Moody’s Investor Service, Inc.

     “Net Cash Proceeds” shall mean, with respect to the sale or issuance of any
Equity Interest by the Company, the excess of (i) the sum of the cash and Cash
Equivalents received in connection with such transaction over (ii) the underwriting
discounts and commissions, and other reasonable and customary out-of-pocket
expenses, incurred by such Loan Party or such Subsidiary in connection therewith.

     “Off-Balance Sheet Liabilities” means any transaction, agreement or other
contractual arrangement to which an entity unconsolidated with the Company is a
party, under which the Company or any Subsidiary has:

     (a) any obligation under a guarantee contract that has any of the
characteristics identified in paragraph 3 of FASB Interpretation No. 45,
Guarantor’s Accounting and Disclosure Requirements for Guarantees, including
Indirect Guarantees of Indebtedness of Others (November 2002) (“FIN 45”), as may be
modified or supplemented, and that is not excluded from the initial recognition and
measurement provisions of FIN 45 pursuant to paragraphs 6 or 7 of that
Interpretation;

     (b) a retained or contingent interest in assets transferred to an
unconsolidated entity or similar arrangement that serves as credit, liquidity or
market risk support to such entity for such assets;

     (c) any obligation, including a contingent obligation, under a contract that
would be accounted for as a derivative instrument, except that it is both

 

 

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indexed to
the Company’s own stock and classified in stockholders’ equity in the Company’s
statement of financial position, and therefore excluded from the scope of FASB
Statement of Financial Accounting Standards No. 133, Accounting for Derivative
Instruments and Hedging Activities (June 1998), pursuant to paragraph 11(a) of the
Statement, as may be modified or supplemented; or

     (d) any obligation, including a contingent obligation, arising out of a
variable interest (as referenced in FASB Interpretation No. 46, Consolidation of
Variable Interest Entities (January 2003), as may be modified or supplemented) in an
unconsolidated entity that is held by, and material to, the Company or any
Subsidiary, where such entity provides financing, liquidity, market risk or credit
risk support to, or engages in leasing, hedging or research and development services
with, the Company or any Subsidiary.

     “Other Senior Debt” shall mean Debt of the Company and/or its Subsidiaries (i)
owed pursuant to the Credit Agreement, (ii) owed pursuant to the Trade Agreement in
an aggregate principal amount not in excess of $10,000,000, and (iii) Debt of the
Company incurred after the date of closing in compliance with paragraph 6B.

     “Significant Subsidiary” shall mean all Subsidiaries of the Company other than:
(i) Foreign Subsidiaries and (ii) any other Subsidiary of the Company which is not
required to be a Guarantor pursuant to the provisions of the first sentence of
paragraph 5K so long as such Subsidiary described in the foregoing has not
guaranteed any Debt of the Company or any other Guarantor (other than the Debt
outstanding under this Agreement and the Other Senior Debt).

     “Solvent” and “Solvency” mean, with respect to any Person on any date of
determination, that on such date (a) the fair value of the property of such Person
is greater than the total amount of liabilities, including contingent liabilities,
of such Person, (b) the present fair salable value of the assets of such Person is
not less than the amount that will be required to pay the probable liability of such
Person
on its debts as they become absolute and matured, (c) such Person does not
intend to, and does not believe that it will, incur debts or liabilities beyond such
Person’s ability to pay such debts and liabilities as they mature, (d) such Person
is not engaged in business or a transaction, and is not about to engage in business
or a transaction, for which such Person’s property would constitute an unreasonably
small capital, and (e) such Person is able to pay its debts and liabilities,
contingent obligations and other commitments as they mature in the ordinary course
of business. The amount of contingent liabilities at any time shall be computed as
the amount that, in the light of all the facts and circumstances existing at such
time, represents the amount that can reasonably be expected to become an actual or
matured liability.

 

 

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     “S&P” shall mean Standard & Poor’s Ratings Services, Inc., a division of the
McGraw-Hill Companies, and any successor thereto.

     “Trade Agreement” shall mean the Amended and Restated Trade Acceptance Purchase
Agreement, dated as of September 5, 2006, between the Company and Northern Trust, as
amended, restated, supplemented or otherwise modified from time to time.

     “Transtar Acquisition” means the purchase by the Company of 100% of the
outstanding Equity Interests of Transtar Intermediate Holdings #2, Inc., pursuant to
the Transtar Stock Purchase Agreement.

     “Transtar Entities” shall mean Transtar Intermediate Holdings #2, Inc., a
Delaware corporation, Transtar Metals Holdings, Inc., a Delaware corporation,
Transtar Inventory Corp., a Delaware corporation, Transtar Metals Corp., a Delaware
corporation and Transtar Marine Corp., a Delaware corporation.

     “Transtar Stock Purchase Agreement” means that certain Stock Purchase
Agreement, dated as of August 12, 2006, among Transtar Holdings #2, LLC, as seller,
and the Company, as buyer.

     1.15. Paragraph 10C is amended by adding the following sentence to the end thereof:

“In the event that compliance with the provisions of the Pension Protection Act of
2006 by the Company and its Subsidiaries results in non-cash charges which are
reflected on the Company’s balance sheets or income statements, such charges shall
be disregarded for purposes of calculating Adjusted Consolidated Net Worth, the
ratio of Consolidated Debt to Consolidated Total Capitalization and the ratio of Net
Working Capital to Consolidated Debt hereunder.”

     1.16. Schedule 2 to Exhibit F (Compliance Certificate) to the Note Agreement is hereby amended
and restated in its entirety as set forth on Schedule 2 hereto.

     1.17. The Note Agreement is amended (i) by adding new Schedules 6D and 6K thereto in the form
of Schedules 6D and 6K hereto and (ii) by amending and restating Schedule 8A(1) thereto in the
form of Schedule 8A(1) attached hereto.

     1.18. Section 5 of the Guaranty Agreement is hereby amended by replacing the reference to
“paragraph 5K(a)” therein with “paragraph 5K”.

     SECTION 2. Representations and Warranties. The Company and each Guarantor represents
and warrants that (a) each representation and warranty set forth in paragraph 8 of the Note
Agreement and the other Transaction Documents to which it is a party, is true and correct as of the
date of execution and delivery of this letter by the Company or such Guarantor with the same effect
as if made on such date (except to the extent such representations and warranties

 

 

A.M. Castle & Co.

September 5, 2006

Page 16

expressly refer
to an earlier date, in which case they were true and correct as of such earlier date and except
that the representations and warranties contained in paragraph 8B of the Note Agreement shall be
deemed to refer to the most recent statements furnished pursuant to clauses (a) and (b),
respectively, of paragraph 5F of the Note Agreement); (b) both before and after giving effect to
the amendments set forth in Section 1 hereof, no Event of Default or Default exists or has occurred
and is continuing on the date hereof; and (c) both before and after giving effect to the amendments
set forth in Section 1 hereof and the consummation of the transactions contemplated by the Credit
Agreement, Trade Agreement and Transtar Stock Purchase Agreement, the Company, individually and
together with its Subsidiaries on a consolidated basis, is Solvent.

     SECTION 3. Conditions Precedent. This amendments in Section 1 of this letter shall
become effective on the date (the “Effective Date”) when each Purchaser shall have received
original counterparts or, if satisfactory to such Purchaser, certified or other copies of all of
the following, each duly executed and delivered by the party or parties thereto, in form and
substance satisfactory to such Purchaser, dated the date hereof unless otherwise indicated, and on
the Effective Date in full force and effect:

     (i) counterparts to this letter executed by the Company and each Guarantor;

     (ii) counterparts to the Intercreditor Agreement executed by the Collateral Agent, Bank
of America, N.A., Northern Trust, the Company and the Guarantors;

     (iii) a copy of the amendments to certain Collateral Documents set forth on Exhibit C
to the Intercreditor Agreement (the “Collateral Document Amendments”);

     (iv) a Joinder to the Guaranty Agreement, in the form of Exhibit A hereto, executed by
each Transtar Entity;

     (v) a Secretary’s Certificate signed by the Secretary or an Assistant Secretary and one
other officer of each Transtar Entity certifying, among other things, (a) as to the names,
titles and true signatures of the officers of such Transtar Entity authorized to sign
the Transaction Documents to which such Transtar Entity is a party, (b) that attached
thereto is a true, accurate and complete copy of the certificate of incorporation of such
Transtar Entity, certified by the Secretary of State of the state of organization of such
Transtar Entity, as of a recent date, (c) that attached thereto is a true, accurate and
complete copy of the by-laws of such Transtar Entity, which were duly adopted and are in
effect as of the Date and have been in effect immediately prior to and at all times since
the adoption of the resolutions referred to in clause (d), below, (d) that attached thereto
is a true, accurate and complete copy of the resolutions of the board of directors or other
managing body of the such Transtar Entity, duly adopted at a meeting or by unanimous written
consent of such board of directors or other managing body, authorizing the execution,
delivery and performance of the Transaction Documents to which such Transtar Entity is a
party, and that such resolutions have not been amended, modified,

 

 

A.M. Castle & Co.

September 5, 2006

Page 17

revoked or rescinded, are
in full force and effect and are the only resolutions of the shareholders of such Transtar
Entity, or of such board of directors or other managing body or any committee thereof
relating to the subject matter thereof, (e) that the Transaction Documents executed and
delivered to such Purchaser by such Transtar Entity, are in the form approved by its board
of directors or other managing body in the resolutions referred to in clause (d), above, and
(f) that no dissolution or liquidation proceedings as to such Transtar Entity have been
commenced or are contemplated;

     (vi) a certificate of corporate or other type of entity and tax good standing for each
Transtar Entity from the Secretary of State of the state of organization of such Transtar
Entity and of each state in which such Transtar Entity is required to be qualified to
transact business as a foreign organization, in each case dated as of a recent date;

     (vii) Certified copies of Requests for Information or Copies (Form UCC-11) or
equivalent reports listing all effective financing statements which name any Transtar Entity
(under its present name and previous names) as debtor and which are filed in the office of
the Secretary of State in any state in which any Transtar Entity is located (as determined
under the UCC), and lien and judgment search reports from the county recorder of any county
in which any Transtar Entity maintains an office or in which any assets of any Transtar
Entity are located;

     (viii) a favorable opinion of McDermott Will & Emery, special counsel to the Transtar
Entities, and each Transtar Entity, by its execution hereof, hereby requests and authorizes
such special counsel to render such opinion and to allow each holder of the Notes to rely on
such opinion, and understands and agrees that each Purchaser receiving such an opinion will
be relying, and is hereby authorized to rely, on such opinion;

     (ix) a copy of the Credit Agreement and all instruments, documents and agreements
delivered at the closing of and making of the term loan and the initial revolving loan
thereunder, certified by an Officer’s Certificate, dated the Effective Date, as correct and
complete;

     (x) a copy of the Trade Agreement and all instruments, documents and agreements
delivered at the closing thereof, certified by an Officer’s Certificate, dated the Effective
Date, as correct and complete;

     (xi) an Officer’s Certificate confirming that all conditions precedent to the Transtar
Acquisition have been satisfied or waived by the applicable Persons;

     (xii) evidence that all commitments under the Financing Agreement, dated as of December
14, 2004 among Transtar Inventory Corp., Transtar Metals Corp., U.S. Bank National
Association, as Agent, and the other lenders party thereto (the “Existing Credit Facilities
Agreement”) have been or concurrently with the Effective Date are being terminated, and all
outstanding amounts thereunder paid in full and all Liens

 

 

A.M. Castle & Co.

September 5, 2006

Page 18

securing obligations under the
Existing Credit Facilities Agreement have been or concurrently with the Effective Date are
being released;

     (xiii) evidence that after giving effect to the U.S. Revolving Credit Loans (as defined
in the Credit Agreement) on the Effective Date, Undrawn Availability (as defined in the
Credit Agreement) is not less than $15,000,000;

     (xiv) evidence that (i) the Consolidated EBITDA of the Company and its Subsidiaries
(with Subsidiaries being determined after giving effect to the consummation of the Transtar
Acquisition) for the 12 months ended June 30, 2006 was not less than $105,000,000, and (ii)
the ratio of Consolidated Debt to Consolidated EBITDA of the Company and its Subsidiaries
(with Subsidiaries being determined after giving effect to the consummation of the Transtar
Acquisition and with EBITDA being calculated for the 12 months ended June 30, 2006) as of
the Effective Date is not greater than 2.75 to 1.0; and

     (xi) such other certificates, documents and agreements as such Purchaser may reasonably
request.

     SECTION 4. Reference to and Effect on Note Agreement. Upon the effectiveness of the
amendments to the Note Agreement made in this letter, each reference to the Note Agreement in any
other document, instrument or agreement shall mean and be a reference to the Note Agreement as
modified by this letter. Except as specifically set forth in Section 1 hereof, the Note Agreement
shall remain in full force and effect and is hereby ratified and confirmed in all respects. The
Company and each Guarantor hereby represents and warrants that all necessary or required consents
to this letter have been obtained and are in full force and effect. Except as specifically stated
in this letter, the execution, delivery and effectiveness of this letter shall not (a) amend the
Note Agreement, any Note or any of the other Transaction Documents, (b) operate as a waiver of any
right, power or remedy of the holder of any Note, (c) constitute a waiver of, or consent to any
departure from, any provision of the Note Agreement, any Note or any of the other Transaction
Documents at any time or (d) be construed as a course of dealing or other implication that any
holder of any Note has agreed to or is prepared to grant any consents or
agree to any amendments to the Note Agreement, any Note or any of the other Transaction
Documents in the future, whether or not under similar circumstances.

     SECTION 5. Expenses. The Company hereby confirms its obligations under the Note
Agreement, whether or not the transactions hereby contemplated are consummated, to pay, promptly
after request by the holders of the Notes, all reasonable out-of-pocket costs and expenses,
including attorneys’ fees and expenses, incurred by any holder of the Notes in connection with this
letter or the transactions contemplated hereby, in enforcing any rights under this letter, or in
responding to any subpoena or other legal process or informal investigative demand issued in
connection with this letter or the transactions contemplated hereby. The obligations of the
Company under this Section 5 shall survive transfer by any holder of a Note of any Note and payment
of any Note.

 

 

A.M. Castle & Co.

September 5, 2006

Page 19

     SECTION 6. Reaffirmation. Each Guarantor hereby ratifies and reaffirms all of its
payment and performance obligations, contingent or otherwise, under the Guaranty Agreement to which
it is a party and each of the other Transaction Documents to which it is a party. Each Guarantor
hereby consents to the terms and conditions of this letter and reaffirms its obligations and
liabilities under or with respect to the Note Agreement as amended by this letter.

     SECTION 7. Collateral Documents. The Company and the Guarantors have heretofore
executed and delivered certain Collateral Documents and concurrently herewith are executing the
Collateral Document Amendments. The Company and the Guarantors hereby acknowledge and agree that
the Liens created and provided for by the Collateral Documents, as amended by the Collateral
Document Amendments, continue to secure, among other things, the obligations arising under the Note
Agreement as amended hereby; and the Collateral Documents, as amended by the Collateral Document
Amendments, and the rights and remedies of the holders of the Notes and Collateral Agent
thereunder, the obligations of the Company and the Guarantors thereunder, and the Liens created and
provided for thereunder remain in full force and effect and shall not be affected, impaired or
discharged hereby. Nothing herein contained shall in any manner affect or impair the priority of
the liens and security interests created and provided for by the Collateral Documents, as amended
by the Collateral Document Amendments, as to the indebtedness which would be secured thereby prior
to giving effect to this letter agreement.

     SECTION 8. Governing Law. THIS LETTER SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE INTERNAL LAWS OF THE STATE OF ILLINOIS, WITHOUT REGARD TO PRINCIPLES OF CONFLICT OF LAWS
OF SUCH STATE WHICH WOULD OTHERWISE CAUSE THIS LETTER TO BE CONSTRUED OR ENFORCED OTHER THAN IN
ACCORDANCE WITH THE LAWS OF THE STATE OF ILLINOIS.

     SECTION 9. Counterparts; Section Titles. This letter may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which taken together shall
constitute but one and the same instrument. Delivery of an executed counterpart of a signature
page to this letter by facsimile shall be effective as delivery of a manually executed counterpart
of this letter. The section titles contained in this letter are and shall be without substance,
meaning or content of any kind whatsoever and are not a part of the agreement between the parties
hereto.

[signature page follows]

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	Very truly yours,	 	 
	 
	 	 	 	 	 	 
	 	 	THE PRUDENTIAL INSURANCE COMPANY OF AMERICA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ G. Anthony Coletta	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	PRUDENTIAL RETIREMENT INSURANCE	 	 
	 	 	   AND ANNUITY COMPANY	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	Prudential Investment Management, Inc.,
as investment manager	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ G. Anthony Coletta	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Vice President	 	 

	 	 	 	 	 
	 

	 	 	 	 
	Agreed and Accepted:	 	 
	 
	 	 	 	 
	A. M. CASTLE & CO.	 	 
	 
	 	 	 	 
	By:

	 	/s/ Lawrence A. Boik	 	 
	 

	 	 	 	 
	Name:

	 	Lawrence A. Boik	 	 
	Title:

	 	Vice President	 	 

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	GUARANTORS:	 	 
	 
	 	 	 	 	 	 
	 	 	DATAMET, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jerry M. Aufox	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Jerry M. Aufox	 	 
	 	 	Title:    Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	KEYSTONE TUBE COMPANY, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jerry M. Aufox	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Jerry M. Aufox	 	 
	 	 	Title:    Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	TOTAL PLASTICS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence A. Boik	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Lawrence A. Boik	 	 
	 	 	Title:    Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	PARAMONT MACHINE COMPANY, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jerry M. Aufox	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Jerry M. Aufox	 	 
	 	 	Title:    Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	ADVANCED FABRICATING	 	 
	 	 	  TECHNOLOGY, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Jerry M. Aufox	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Jerry M. Aufox	 	 
	 	 	Title:    Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	OLIVER STEEL PLATE CO.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jerry M. Aufox	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Jerry M. Aufox	 	 
	 	 	Title:    Secretary	 	 
	 
	 	 	 	 	 	 
	 	 	METAL MART, LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	     /s/ Jerry M. Aufox	 	 
	 

	 	 	 	 	 	 
	 	 	Name:  Jerry M. Aufox	 	 
	 	 	Title:    Vice President	 	 

 

 

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TRANSTAR INTERMEDIATE HOLDINGS #2, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence A. Boik	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Lawrence A. Boik	 	 
	 	 	Title:   Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR METALS HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence A. Boik	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Lawrence A. Boik	 	 
	 	 	Title:   Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR INVENTORY CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence A. Boik	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Lawrence A. Boik	 	 
	 	 	Title:   Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR METALS CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence A. Boik	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Lawrence A. Boik	 	 
	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR MARINE CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Lawrence A. Boik	 	 
	 

	 	 	 	 	 	 
	 	 	Name: Lawrence A. Boik	 	 
	 	 	Title:   Vice President	 	 

 

 

A.M. Castle & Co.

September 5, 2006

Page 23

EXHIBIT A

JOINDER AGREEMENT NO. 1 TO GUARANTY AGREEMENT

Re: A. M. CASTLE & CO.

     This Joinder Agreement is made as of September 5, 2006, in favor of the Holders (as such terms
are defined in the Castle Guaranty, as hereinafter defined).

A. Reference is made to the Guaranty Agreement made as of November 17, 2005 (as such Guarantee may
be supplemented, amended, restated or consolidated from time to time, the “Castle Guaranty”) by
certain Persons in favor of the Holders (as defined in the Castle Guaranty), under which such
Persons have guaranteed to the Holders the due payment and performance by A. M. Castle & Co.
(“Castle”) of the Guarantied Obligations (as defined in the Castle Guaranty).

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

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

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

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

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

 

 

A.M. Castle & Co.

September 5, 2006

Page 24

understands, agrees and confirms that the
Holders may enforce the Castle Guaranty and
this Joinder Agreement against such New Guarantor for the benefit of the Holders up to the
full amount of the Guarantied Obligations without proceeding against any other Guarantor, Castle,
any other Person or any collateral securing the Guarantied Obligations. The terms and provisions
of the Castle Guaranty are incorporated by reference in this Joinder Agreement.

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

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

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

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

[signature page follows]

 

 

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

	 	 	 	 	 	 	 
	 

	 	 	 	 	 	 
	 	 	TRANSTAR INTERMEDIATE HOLDINGS #2, INC.,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR METALS HOLDINGS, INC., a Delaware
corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR INVENTORY CORP.,
a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR METALS CORP., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	TRANSTAR MARINE CORP., a Delaware corporation	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Name:	 	 	 	 
	 

	 	 	 	 	 	 
	 

	 	Title:	 	 	 	 
	 

	 	 	 	 	 	 

 

 

SCHEDULE 2

For the Quarter/Year ended                                         (“Statement Date”)

SCHEDULE 2

to the Compliance Certificate

($ in 000’s)

	 	 	 	 	 	 	 	 	 	 	 
	I.	 	Paragraph 5K — Subsequent Guarantors	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Assets of the Canadian Subsidiary as a percentage of Consolidated Total Assets	 	 	                    	%
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Assets of the Mexican Subsidiary as a percentage of Consolidated Total Assets	 	 	                    	%
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	C.	 	Assets of the Foreign Subsidiaries (other than the Canadian Subsidiary and the Mexican Subsidiary) as a percentage of Consolidated Total Assets	 	 	                    	%
	 
	 	 	 	 	 	 	 	 	 	 
	II.	 	Paragraph 6A — Adjusted Consolidated Net Worth.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Adjusted Consolidated Net Worth at Statement Date:	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	1.	 	Consolidated Stockholders Equity:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	2.	 	Restricted Investments in excess of 10% of Consolidated Stockholders Equity:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	3.	 	Adjusted Consolidated Net Worth (Line I.A.1 less Line I.A.2):	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Minimum Required Adjusted Consolidated Net Worth:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	1.	 	$                    :	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	2.	 	plus the sum of 40% of Consolidated Net Income (but only if a positive number) earned in each completed fiscal year ending after December 31, 2005:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	3.	 	plus 40% of Consolidated Net Income (but only if a positive number) for the portion of the fiscal year to date:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	4.	 	plus 75% of Net Cash Proceeds received by the Company from the issuance of Equity Interests by the Company:	 	$	                    	 

F-1

 

	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	5.	 	Minimum Required Adjusted Consolidated Net Worth (I.B.1 plus I.B.2 plus I.B.3. plus I.B.4.):	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	D.	 	Excess (deficient) for covenant compliance (Line I.A.3 less I.B.4):	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	III.	 	Paragraph 6B – Consolidated Debt to Consolidated Total Capitalization.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Consolidated Debt:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Consolidated Total Capitalization:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	C.	 	Consolidated Debt to Consolidated Total Capitalization (Line II.A. ) Line II.B.):	 	                     to 1.0
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Minimum required:	 	 	0.55 to 1.0	 
	 
	 	 	 	 	 	 	 	 	 	 
	IV.	 	Paragraph 6C – Net Working Capital to Consolidated Debt.	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	A.	 	Net Working Capital:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	B.	 	Consolidated Debt:	 	$	                    	 
	 
	 	 	 	 	 	 	 	 	 	 
	 
	 	C.	 	Net Working Capital to Consolidated Debt: (Line III.A. ) Line III.B.)	 	                     to 1.0
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	Minimum required:	 	 	1.0 to 1.0	 

F-2

 

SCHEDULE 6D

EXISTING LIENS

	1.	 	Specific equipment of Transtar Metals Corp. is subject to Liens pursuant to that certain
Interim Financing Agreement, dated as of June 20, 2006, between Transtar Metals Corp. and
General Electric Capital Corporation and that certain Master Lease Agreement, dated as of
April 28, 2006, between Transtar Metals Corp. and General Electric Capital Corporation.

Liens represented by the following financing statements:

	2.	 	UCC Financing Statement Number 31773194, filed with the Delaware Secretary of State on July
14, 2003. against Transtar Metals Corp. by NMHG Financial Services, Inc. covering specific
equipment.

	3.	 	UCC Financing Statement Number 31100182, filed with the Delaware Secretary of State on
November 20, 2003, as amended April 15, 2003 and May 3, 2004, against Transtar Metals Corp. by
Fleet Capital Corporation covering specific equipment.

	4.	 	UCC Financing Statement Number 41795048, filed with the Delaware Secretary of State on June
28, 2004, as amended September 10, 2004, against Transtar Metals Corp. by De Lage Landen
Financial Services covering specific equipment.

	5.	 	UCC Financing Statement Number 51067249, filed with the Delaware Secretary of State on April
7, 2004, as amended June 22, 2005, against Transtar Metals Corp. and Transtar Metals Holdings,
Inc. by California First Leasing Corporation covering specific equipment.

	6.	 	UCC Financing Statement Number 42457531, filed with the Delaware Secretary of State on August
31, 2004, as amended October 25, 2004, against Transtar Metals Corp. and Transtar Metals
Holdings, Inc. by California First Leasing Corporation covering specific equipment.

	7.	 	UCC Financing Statement Number 42089540, filed with the Delaware Secretary of State on July
26, 2004, against Transtar Metals Corp. by Greater Bay Bank N.A. covering specific equipment.

	8.	 	UCC Financing Statement Number 20047004746305, filed with the California Secretary of State
on November 19, 2004, against Transtar Metals Corp. by Greater Bay Bank N.A. covering specific
equipment.

	9.	 	UCC Financing Statement Number 52553213, filed with the Delaware Secretary of State on August
11, 2005, against Transtar Metals Holdings, Inc. by Raymond Leasing Corporation covering
specific equipment.

	10.	 	UCC Financing Statement Number 50248865, filed with the Delaware Secretary of State on
January 24, 2005, against Transtar Metals Holdings, Inc. by Raymond Leasing Corporation
covering specific equipment.

	11.	 	UCC Financing Statement Number 20047001453660, filed with the California Secretary of State
on October 25, 2005, against Transtar Metals Corp. by Raymond Leasing Corporation covering
specific equipment.

 

 

	12.	 	UCC Financing Statement Number 20047001500380, filed with the California Secretary of State
on October 26, 2005, against Transtar Metals Corp. by Raymond Leasing Corporation covering
specific equipment.

	13.	 	UCC Financing Statement Number 200420860173, filed with the California Secretary of State on
July 19, 2004, against Transtar Metals Corp. by Wells Fargo Financial Leasing, Inc. covering
specific equipment.

	14.	 	UCC Financing Statement Number 20067065119570, filed with the California Secretary of State
on April 3, 2006, against Transtar Metals Corp. by Accurate Air Engineering, Inc. covering
specific equipment.

	15.	 	UCC Financing Statement Number 42425322, filed with the Delaware Secretary of State on August
27, 2004, against Transtar Metals Corp. by American Express Business Finance covering specific
equipment.

	16.	 	UCC Financing Statement Number 31148413, filed with the Delaware Secretary of State on May 5,
2003, against Transtar Intermediate Holdings #2, Inc. by CIT Communications Finance
Corporation covering specific equipment. [Note — This financing statement should have been
filed against Transtar Intermediate Holdings, Inc. (the former name of Transtar Metals
Holdings, Inc.), but was mistakenly filed against Transtar Intermediate Holdings #2, Inc.

	17.	 	UCC Financing Statement Number 62152338, filed with the Delaware Secretary of State on June
22, 2006, against Transtar Metals Corp. by General Electric Capital Corporation covering
specific equipment.

	18.	 	UCC Financing Statement Number 31100141, filed with the Delaware Secretary of State on April
25, 2003, against Transtar Marine Corp. Fleet Capital Corporation covering specific equipment.

	19.	 	A portion of the property at 26826 68th Avenue South, Kent, WA 98032 has been subleased to
Meridian Transportation Resources, L.L.C., pursuant to a Sublease, dated March 18, 2003.

F-5

 

SCHEDULE 6K

EXISTING OFF-BALANCE SHEET LIABILITIES

None.

 

 

SCHEDULE 8A(1)

SUBSIDIARIES

AND OTHER EQUITY INVESTMENTS

			
	Part (a)	 	Subsidiaries.

	 	 	 
	Subsidiary	 	Jurisdiction of Organization
	A. M. Castle & Co. (Canada) Inc.
	 	Ontario, Canada
	Castle Metals de Mexico, S.A. de C.V.
	 	Mexico
	Castle Foundation, Inc.
	 	Illinois
	Castle IND MGR, Inc. (dissolution in process)
	 	Delaware
	Castle SPFD, LLC (dissolution in process)
	 	Delaware
	Datamet, Inc.
	 	Illinois
	Hy-Alloy Steels Company
	 	Delaware
	KSI, LLC
	 	Delaware
	Keystone Services Inc.
	 	Indiana
	Keystone Tube Company LLC
	 	Delaware
	Metal Mart, LLC
	 	Delaware
	Oliver Steel Plate Co.
	 	Delaware
	Pacific Metals Company
	 	California
	Total Plastics, Inc.
	 	Michigan
	Advanced Fabricating Technology, LLC
	 	Delaware
	Paramont Machine Company, LLC
	 	Delaware
	Transtar Intermediate Holdings #2, Inc.
	 	Delaware
	Transtar Metals Holdings, Inc.
	 	Delaware
	Transtar Inventory Corp.
	 	Delaware
	Transtar Metals Corp.
	 	Delaware
	Transtar Marine Corp.
	 	Delaware
	Transtar Metals Limited
	 	United Kingdom
	Transtar Metals France
	 	France

			
	Part (b)	 	Other Equity Investments.

	 	 	 	 	 
	Entity	 	Equity Holder	 	Ownership
	Interest
	 	 	 	 
	 
	 	 	 	 
	Depot Metal, LLC
	 	A. M. Castle & Co.	 	50.0%
	(holder of 100% of equity interests
of Kreher Steel Company, LLC)

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