Common use of Subsequent Guarantors Clause in Contracts

Subsequent Guarantors. (i) Within 10 days after any Credit Party’s acquisition or formation of a Person that becomes a Major Domestic Subsidiary or within 10 days after any determination that any Domestic Subsidiary has become a Major Domestic Subsidiary, or (ii) concurrently with any Subsidiary’s becoming a guarantor or co-obligor of any of the Secured Obligations (as defined in the Intercreditor Agreement), the Company will cause such Person to (a) become a party to the Multiparty Guaranty, the Indemnity and Contribution Agreement, the Security Agreement (or an additional security agreement substantially similar to the Security Agreement) and the Intercreditor Agreement and (b) execute and deliver to each holder of Notes such opinions of counsel, certificates accompanying authorizing resolutions and corporate or similar documents, and such other financing statements, landlord/mortgagee waivers and other agreements, instruments and other documents as the Required Holders may reasonably request, each of foregoing in form and substance satisfactory to the Required Holders. Notwithstanding the foregoing, within 10 days after any determination by the Required Holders that (1) the book value of the assets of the Company (exclusive of its Subsidiaries), together with the book value of the assets of any then existing parties to the Multiparty Guaranty, in each case as at the end of the most recently ended fiscal quarter, do not collectively constitute at least 90% of the book value of the assets of the Company and its Subsidiaries on a consolidated basis as at the end of the most recently ended fiscal quarter, or (2) the Consolidated EBITDA (determined solely with respect to the Company (exclusive of its Subsidiaries)), together with the Consolidated EBITDA determined solely with respect to any then existing parties to the Multiparty Guaranty, in each case for the most recently ended four consecutive fiscal quarters, does not collectively constitute at least 90% of the Consolidated EBITDA for the most recently ended four consecutive fiscal quarters, then the Company shall cause such Domestic Subsidiaries to execute and deliver to each holder of Notes the documents described in clauses (a) and (b) of the immediately preceding sentence so that (A) the book value of the assets of the Company (exclusive of its Subsidiaries) and the parties to the Multiparty Guaranty constitute at least 90% of the book value of the assets of the Company and its Subsidiaries on a consolidated basis and (B) the Consolidated EBITDA (determined solely with respect to the Company (exclusive of its Subsidiaries)), together with the Consolidated EBITDA determined solely with respect to any then existing parties to the Multiparty Guaranty collectively constitute at least 90% of the Consolidated EBITDA.

Subsequent Guarantors. (i) Within 10 days after any Credit Party’s acquisition or formation of a Person The Company covenants that becomes a Major Domestic Subsidiary or within 10 days after any determination that any Domestic Subsidiary has become a Major Domestic Subsidiary, or (ii) concurrently with any Subsidiary’s becoming a guarantor or co-obligor of any of the Secured Obligations (as defined in the Intercreditor Agreement), the Company will cause such Person to (a) become a party to the Multiparty Guaranty, the Indemnity and Contribution Agreement, the Security Agreement (or an additional security agreement substantially similar to the Security Agreement) and the Intercreditor Agreement and (b) execute and deliver to each holder of Notes such opinions of counsel, certificates accompanying authorizing resolutions and corporate or similar documents, and such other financing statements, landlord/mortgagee waivers and other agreements, instruments and other documents as the Required Holders may reasonably request, each of foregoing in form and substance satisfactory to the Required Holders. Notwithstanding the foregoing, within 10 days after any determination by the Required Holders that (1) the book value of the assets of the Company (exclusive of its Subsidiaries), together with the book value of the assets of any then existing parties to the Multiparty Guaranty, in each case as at the end of the most recently ended fiscal quarter, do not collectively constitute at least 90% of the book value of all times the assets of the Company and its Subsidiaries on a consolidated basis as all Guarantors shall constitute at least 95% of Consolidated A. M. Castle & Co. September 5, 2006 Page 4 Total Assets (excluding, for the end purposes of this calculation, the assets of the most recently ended fiscal quarter, or Foreign Subsidiaries (2except (i) the Consolidated EBITDA (determined solely with respect to the Company Canadian Subsidiary, so long as the assets of the Canadian Subsidiary do not constitute more than 20% of Consolidated Total Assets, (exclusive ii) with respect to the Mexican Subsidiary, so long as the assets of its Subsidiariesthe Mexican Subsidiary do not constitute more than 5% of Consolidated Total Assets)), together with the Consolidated EBITDA determined solely ) and (iii) with respect to any then existing parties 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 Multiparty GuarantyCanadian Subsidiary, in each case for the most recently ended four consecutive fiscal quarters, does not collectively constitute at least 90% of the Consolidated EBITDA for the most recently ended four consecutive fiscal quarters, then the Company shall cause such Domestic Subsidiaries to execute and deliver to each holder of Notes the documents described in clauses (a) and (b) of the immediately preceding sentence so that (A) the book value of long as the assets of the Company Canadian Subsidiary do not constitute more than 20% of Consolidated Total Assets, (exclusive of its Subsidiariesii) and the parties with respect to the Multiparty Guaranty constitute at least 90% of the book value of Mexican Subsidiary, so long as the assets of the Company and its Subsidiaries on a consolidated basis Mexican Subsidiary do not constitute more than 5% of Consolidated Total Assets) and (Biii) 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 EBITDA 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 (determined solely 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 Company (exclusive of its Subsidiaries)), together with the Consolidated EBITDA determined solely with respect to any then existing parties Guaranty Agreement and such joinder agreement which is in form and substance reasonably acceptable to the Multiparty Guaranty collectively constitute at least 90% of Required Holders; and (iii) all applicable Collateral Documents and any other documents as may be necessary or appropriate to permit the Consolidated EBITDACompany 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:

Subsequent Guarantors. (i) Within 10 days after any Credit Party’s acquisition or formation of a Person that becomes a Major Domestic Subsidiary or within 10 days after any determination that any Domestic Subsidiary has become a Major Domestic Subsidiary, or (ii) concurrently with any Subsidiary’s becoming a guarantor or co-obligor of any of the Secured Obligations (as defined in the Intercreditor Agreement), the Company will cause such Person to (a) become a party to the Multiparty Subsidiary Guaranty, the Indemnity and Contribution Agreement, the Security Agreement (or an additional security agreement substantially similar to the Security Agreement) and the Intercreditor Agreement and (b) execute and deliver to each holder of Notes such opinions of counsel, certificates accompanying authorizing resolutions and corporate or similar documents, and such other financing statements, landlord/mortgagee waivers and other agreements, instruments and other documents as the Required Holders may reasonably request, each of foregoing in form and substance satisfactory to the Required Holders. Notwithstanding the foregoing, within 10 days after any determination by the Required Holders that (1) the book value of the assets of the Company (exclusive of its Subsidiaries), together with the book value of the assets of any then existing parties to the Multiparty Subsidiary Guaranty, in each case as at the end of the most recently ended fiscal quarter, do not collectively constitute at least 90% of the book value of the assets of the Company and its Subsidiaries on a consolidated basis as at the end of the most recently ended fiscal quarter, or (2) the Consolidated EBITDA (determined solely with respect to the Company (exclusive of its Subsidiaries)), together with the Consolidated EBITDA determined solely with respect to any then existing parties to the Multiparty Subsidiary Guaranty, in each case for the most recently ended four consecutive fiscal quarters, does not collectively constitute at least 90% of the Consolidated EBITDA for the most recently ended four consecutive fiscal quarters, then the Company shall cause such Domestic Subsidiaries to execute and deliver to each holder of Notes the documents described in clauses (a) and (b) of the immediately preceding sentence so that (A) the book value of the assets of the Company (exclusive of its Subsidiaries) and the parties to the Multiparty Subsidiary Guaranty constitute at least 90% of the book value of the assets of the Company and its Subsidiaries on a consolidated basis and (B) the Consolidated EBITDA (determined solely with respect to the Company (exclusive of its Subsidiaries)), together with the Consolidated EBITDA determined solely with respect to any then existing parties to the Multiparty Subsidiary Guaranty collectively constitute at least 90% of the Consolidated EBITDA.