Exhibit 10.3

FORM OF EXCHANGE AGREEMENT

[                    ] (each, an “Undersigned”), for itself and on behalf of the
beneficial owners (if any) listed on Exhibit A hereto (“Accounts”) for whom the
Undersigned holds contractual and investment authority (each Account, as well as
the Undersigned if it is exchanging Existing Securities (as defined below)
hereunder, a “Holder”), enters into this Exchange Agreement (the “Agreement”)
with A.M Castle & Co., a Maryland corporation (the “Company”), on May [    ],
2016 whereby the Holders will exchange (the “Exchange”) the Company’s 7.00%
Convertible Senior Notes due 2017 (the “Existing Securities”) for new 5.25%
Convertible Senior Secured Notes due 2019 (the “New Securities”) to be issued
pursuant to that certain Indenture (the “New Indenture”) dated as of May     ,
2016, by and among the Company, the guarantors named therein (the “Guarantors”)
and U.S. Bank National Association, as trustee and collateral agent (the “New
Trustee and Collateral Agent”).

On and subject to the terms and conditions set forth in this Agreement, the
parties hereto agree as follows:

Article I: Exchange of the Existing Securities for New Securities

At the Closing (as defined herein), the Holders shall exchange and deliver to
the Company the following Existing Securities, and in exchange therefor the
Company shall issue to the Holders the aggregate principal amount of New
Securities described below, plus accrued but unpaid interest to, but excluding,
the Closing Date (as defined herein) on such Existing Securities (the “Accrued
Interest Amount”):

 

Principal Amount of Existing Securities to be Exchanged:    $[        ] (the
“Exchanged Securities”). Principal Amount of New Securities to be Issued in the
Exchange:    $700 principal amount of New Securities per $1,000 principal amount
of Exchanged Securities calculated as provided in Exhibit A hereto (the
“Holders’ Securities”).

The New Securities will be issued only in denominations of $1,000 and multiples
of $1,000. If the exchange of the Exchanged Securities for the Holders’
Securities would result in the Holder being entitled to receive a fractional
interest in the New Securities, the principal amount the Holder will receive
will be rounded down to the next lower integral multiple of $1,000, and the
Holder will receive cash (the “Cash Payment”) in lieu of a fractional New
Security for the balance. The cash paid in lieu of a fractional New Security
shall be delivered on the Closing Date by the Company to the Holder by wire
transfer of immediately available funds pursuant to the wire instructions
provided by the Holder as set forth on Exhibit A.

The closing of the Exchange (the “Closing”) shall occur on May [    ], 2016 (the
“Closing Date”). At the Closing, each Holder shall assign and transfer all
right, title and interest in and to its Exchanged Securities (and no other
consideration) to the Company, and deliver or cause to be delivered the
Exchanged Securities to U.S. Bank, National Association, as Trustee for the
Existing Securities, by book-entry transfer through the facilities of The
Depositary Trust Company from the account(s) of the Holders specified on
Exhibit A hereto, free and clear of any mortgage, lien, pledge, charge, security
interest, encumbrance, title retention agreement, option, equity or other
adverse claim thereto (collectively, “Liens”) together with any documents of
conveyance or transfer that the Company may deem necessary or desirable to
transfer to and confirm in the Company all right, title and interest in and to
the Exchanged Securities. At the Closing, the Company shall pay the Accrued
Interest Amount in cash, by wire transfer of immediately available funds to the
account specified on Exhibit A hereto.

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Notwithstanding the foregoing, if the Holder fails to satisfy its obligations
under this Agreement by the Closing Date, such Holder agrees to satisfy its
obligations hereunder as soon as practicable thereafter (the “Subsequent
Date”). As promptly as practicable after the Subsequent Date, but in no event
more than three (3) business days following the Subsequent Date (the “Late
Settlement Date”), the Company shall issue the New Securities in exchange for
the Existing Securities, effective as of the Closing Date. The New Securities
issued on the Late Settlement Date shall accrue interest from the Closing
Date. The Holder shall be required to pay the Company, in cash, on the Late
Settlement Date, all accrued and unpaid interest due on the exchanged Existing
Securities from the Closing Date to, but not including, the Late Settlement
Date. For the avoidance of doubt, the Exchange shall not occur until such funds
have been received by the Company.

Each Holder and the Company acknowledge and agree that upon the Closing, in
accordance with the terms of this Agreement, the Company’s obligations to
effectuate the “Convertible Note Exchanges” pursuant to the Amended and Restated
Transaction Support Agreement between each such Holder and the Company, dated as
of March 16, 2016 and amended as of May [    ], 2016 (each, a “TSA”), shall be
deemed satisfied with respect to the Exchanged Securities in its entirety.

Article II: Covenants, Representations and Warranties of the Holders

Each Holder (and, where specified below, the Undersigned) hereby covenants
(solely as to itself, severally and not jointly) as follows and makes the
following representations and warranties (solely as to itself, severally and not
jointly), each of which is and shall be true and correct on the date hereof and
at the Closing, to the Company, and all such covenants, representations and
warranties shall survive the Closing.

Section 2.1 Power and Authorization. The Holder is duly organized, validly
existing and in good standing, and has the power, authority and capacity to
execute and deliver this Agreement, to perform its obligations hereunder, and to
consummate the Exchange contemplated hereby. If the Undersigned is executing
this Agreement on behalf of Accounts, the Undersigned has all requisite
discretionary and contractual authority to enter into this Agreement on behalf
of, and bind, each Account. The information presented on Exhibit A with respect
to each Holder is true, correct and complete in all material respects.

Section 2.2 Valid and Enforceable Agreement; No Violations. This Agreement has
been duly executed and delivered by the Undersigned and the Holder and
constitutes a legal, valid and binding obligation of the Undersigned and the
Holder, enforceable against the Undersigned and the Holder in accordance with
its terms, except that such enforcement may be subject to (a) bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium or other similar
laws affecting or relating to enforcement of creditors’ rights generally, and
(b) general principles of equity, whether such enforceability is considered in a
proceeding at law or in equity (the “Enforceability Exceptions”). This Agreement
and consummation of the Exchange will not violate, conflict with or result in a
breach of or default under (i) the Undersigned’s or the Holder’s organizational
documents, (ii) any material agreement or instrument to which the Undersigned or
the Holder is a party or by which the Undersigned or the Holder or any of their
respective assets are bound, or (iii) any laws, regulations or governmental or
judicial decrees, injunctions or orders applicable to the Undersigned or the
Holder.

Section 2.3 Title to the Exchanged Securities. The Holder is, and on the Closing
Date will be, the sole legal and beneficial owner of the Exchanged Securities
set forth opposite its name on Exhibit A hereto (or, if there are no Accounts,
the Undersigned is the sole legal and beneficial owner of all of the Exchanged
Securities). The Holder has good, valid and marketable title to its Exchanged
Securities, free and clear of any Liens (other than pledges or security
interests that the Holder may have created in favor of a prime broker under and
in accordance with its prime brokerage agreement with such broker). The Holder
has not, in whole or in part, except as described in the preceding sentence,
(a) assigned, transferred, hypothecated, pledged, exchanged or otherwise
disposed of any of its Exchanged Securities or its rights in its Exchanged
Securities, or (b) given any person or entity any transfer order, power of
attorney or other authority of any nature whatsoever with respect to its
Exchanged Securities. Upon the Holder’s delivery of its Exchanged Securities to
the Company pursuant to the Exchange, such Exchanged Securities shall be free
and clear of all Liens created by the Holder and the Company will acquire record
and beneficial ownership thereof, free and clear of any Liens.

 

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Section 2.4 Holder Status. The Holder is either (i) a “qualified institutional
buyer” within the meaning of Rule 144A promulgated under the Securities Act of
1933 (the “Securities Act”) or (ii) an “accredited investor” within the meaning
of Rule 501 under the Securities Act.

Section 2.5 No Affiliate Status; Etc. (a) The Holder is not, and has not been
during the consecutive three month period preceding the date hereof, a director,
officer or “affiliate” within the meaning of Rule 144 promulgated under the
Securities Act (an “Affiliate”) of the Company. To its knowledge, the Holder did
not acquire any of the Exchanged Securities, directly or indirectly, from an
Affiliate of the Company.

(b) The Holder has beneficially held the Existing Securities for at least six
months, and acquired and fully paid for such securities at least six months ago.

(c) On the basis that, on each relevant date, there are outstanding
[                ] shares of common stock, par value $0.01 per share, of the
Company (the “Common Stock”),

(i) the Holder and its Affiliates do not own, as of the Closing Date (without
giving effect to the exchange contemplated by this Agreement) (i) 9.99% or more
of the outstanding Common Stock or (ii) 9.99% or more of the aggregate number of
votes that may be cast by holders of those outstanding securities of the Company
that entitle the holders thereof to vote generally on all matters submitted to
the Company’s stockholders for a vote (the “Voting Power”); and

(ii) immediately after each receipt by the Holders of the New Securities in the
Exchange, the aggregate number of shares of Common Stock beneficially owned by
the Holder and its affiliates, together with the aggregate number of shares of
Common Stock equal to the notional value of any “long” derivative transaction
relating to such Common Stock to which the Holder or its affiliate is a party
(excluding derivative transactions relating to broad based indices and any
interest in the Existing Securities), will not exceed 9.99% of the outstanding
Common Stock of the Company.

(d) The Holder is not, and will not be as of the Closing Date, a subsidiary or
Affiliate of or, to its knowledge, otherwise related to any director or officer
of the Company or beneficial owner of 9.99% or more of the outstanding Common
Stock or Voting Power (each such director, officer or beneficial owner, a
“Related Party”) and, to the Holder’s knowledge, no Related Party beneficially
owns or as of the Closing Date shall beneficially own 9.99% or more of the
outstanding voting equity, or votes entitled to be cast by the outstanding
voting equity, of the Holder.

Section 2.6 Adequate Information; No Reliance. The Holder acknowledges and
agrees that (a) the Holder has been furnished with all materials it considers
relevant to making an investment decision to enter into the Exchange and has had
the opportunity to review (and has carefully reviewed) (i) the Company’s filings
and submissions with the Securities and Exchange Commission (the “SEC”),
including, without limitation, all information filed or furnished pursuant to
the United States Securities and Exchange Act of 1934, as amended (collectively,
the “Public Filings”), (ii) this Agreement (including the exhibits hereto) and
(iii)(A) the terms of the New Notes as described in the Form of New Indenture
attached hereto as Exhibit B, (B) the Form of Junior Lien Intercreditor
Agreement (the “Junior Lien Intercreditor Agreement”), the Intercreditor
Agreement, together with the joinder thereto (the “Intercreditor Documents”) and
the Form of Junior Lien Security Agreements (the “Security Agreements”) attached
hereto as Exhibit C (collectively, the “Collateral Documents”), (b) the Holder
has had the opportunity to consult with its accounting, tax, financial and legal
advisors to be able to evaluate the risks involved in the Exchange and to make
an informed investment decision with respect to such Exchange and (c) the Holder
has such knowledge and experience in financial and business matters as to be
capable of evaluating the merits and risks of the prospective investment in the
Shares and has the ability to bear the economic risks of its investment and can
afford the complete loss of such investment.

 

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Section 2.7 Investment in the New Securities. The Holder is not acquiring the
New Securities with a view to, or for resale in connection with, any
distribution (as defined in the Securities Act and related rules and
regulations) of the New Securities.

Section 2.8 Further Action. Each of the Holder and the Undersigned agrees that
it will, upon request, execute and deliver any additional documents and perform
any additional actions deemed by the Company to be reasonably necessary to
complete the Exchange and to cause such Holder and the Undersigned’s
representations and warranties contained in this Agreement to be true and
correct as of the time of the Closing.

Section 2.9 Exchange. The terms of the Exchange are the result of negotiations
among the parties and their agents.

Article III: Covenants, Representations and Warranties of the Company

The Company hereby covenants as follows and makes the following representations
and warranties, each of which is and shall be true and correct on the date
hereof and at the Closing, to the Holders, and all such covenants,
representations and warranties shall survive the Closing.

Section 3.1 Power and Authorization. The Company is a corporation, duly
organized, validly existing and in good standing under the laws of Maryland.
Each of the Guarantors is duly organized, validly existing and in good standing
under the laws of their respective jurisdictions of formation. Each of the
Company and the Guarantors possesses all requisite power and authority necessary
to consummate the transactions contemplated by (i) this Agreement, (ii) the TSA
and (iii) the New Notes, the guarantees by the Guarantors of the New Notes and
the New Indenture (the “Guarantees”), the New Indenture, the Security Agreements
(as defined below) and the Junior Lien Intercreditor Agreement (as defined
below) (the instruments described in this clause (iii), the “Transaction
Agreements”).

Section 3.2 Valid and Enforceable Agreement and Transaction Agreements; No
Violations. Each of this Agreement and the Transaction Agreements has been duly
authorized by each of the Company and the Guarantors party thereto, and, on the
Closing Date, will have been duly executed and delivered by each of the Company
and the Guarantors party hereto or thereto and will be a valid and binding
instrument, enforceable against each of the Company and the Guarantors party
hereto or thereto in accordance with its terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization, receivership,
moratorium or other similar laws relating to or affecting creditors’ or secured
parties’ rights generally and by general principles of equity (including
concepts of materiality, reasonableness, good faith and fair dealing),
regardless of whether considered in a proceeding in equity or at law; and
limitations on enforceability of rights to indemnification by federal or state
securities laws or regulations or by public policy. This Agreement, the
Transaction Agreements and consummation of the Exchange will not violate,
conflict with or result in a breach of or default under (a) the certificate of
incorporation, bylaws or other organizational documents of the Company or the
Guarantors, (b) any material agreement or instrument to which the Company or any
Guarantor is a party or by which the Company or any Guarantor or any of their
respective assets are bound, or (c) any laws, regulations or governmental or
judicial decrees, injunctions or orders applicable to the Company or the
Guarantors.

Section 3.3 No Consent. No consent, approval, authorization or order of, or
filing, registration or qualification with any court or governmental agency or
body having jurisdiction over any of the Company or any Guarantor or any of
their respective properties or assets is required for the issue and sale of the
New Notes, the execution, delivery and performance by each of the Company and
the Guarantors of this Agreement and the Transaction Agreements (to the extent a
party thereto), except for (A) such consents, approvals, authorizations, orders,
filings, registrations or qualifications as shall have been obtained or made
prior to the Closing Date or are permitted to be obtained or made subsequent to
the Closing Date pursuant to the New Indenture or the Security Agreement, (B)
such consents, approvals, authorizations, orders, filings, registrations or
qualifications as may be required under state securities or Blue Sky laws in
connection with the purchase of the New Notes and (C) such consent, approval,
authorization, order, filing, registration or qualification, the failure of
which to obtain would not, individually or in the aggregate, reasonably be
likely to have a material adverse effect on the Company and/or the Guarantors.

 

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Section 3.4 The Holders’ Securities. The Holders’ Securities have been duly
authorized by the Company for issuance and sale pursuant to this Agreement and
the TSA and, when executed by the Company and authenticated by the New Trustee
and Collateral Agent in accordance with the New Indenture and delivered to the
Holder in accordance with the terms of this Agreement and the TSA, will
constitute valid and binding obligations of the Company entitled to the benefits
of the New Indenture and enforceable against the Company in accordance with
their terms, except as the enforceability thereof may be limited by the
Enforceability Exceptions. On the Closing Date, the New Securities, when issued,
will conform in all material respects to the description thereof in the TSA. The
New Securities are being offered and sold pursuant to, and in compliance with,
Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities
Act”), and, pursuant to Rule 144(d)(3)(ii) under the Securities Act (and related
interpretations), the New Securities will bear no restrictive legends unless the
Holder is an affiliate of the Company. The shares of Common Stock issuable upon
conversion of the New Securities (“Conversion Shares”) have been duly authorized
by the Company for issuance and, when issued pursuant to the terms of the New
Indenture, will be validly issued, fully paid and non-assessable. The Conversion
Shares will not, at the time of issuance, be subject to any preemptive or
participation rights, rights of first refusal or other similar rights.

Section 3.5 Security Agreements. As of the Closing Date, each of the Company and
the Guarantors will own and have good title to the collateral securing the New
Indenture, the New Notes and the guarantees thereof (the “Collateral”), free and
clear of all liens other than liens permitted pursuant to the Indenture, dated
as of February 8, 2016, among the Company, the Guarantors and U.S. Bank,
National Association, as trustee and collateral agent thereunder, and the New
Indenture. As of the Closing Date, each of the Security Agreements (as defined
below) will constitute a valid and continuing lien on the Collateral (other than
with respect to certain real estate assets to be perfected by mortgage filings
in accordance with the New Indenture) in favor of the New Trustee and Collateral
Agent on behalf of and for the benefit of the “Secured Parties” (as defined in
the Security Agreements), which lien on the Collateral (i) other than with
respect to liens permitted under the Security Agreements and the New Indenture
to be perfected after the Closing Date, will have been perfected to the extent
recognized by applicable law (as described in, and subject to any exceptions to
be set forth in, the New Indenture and the Security Agreements), (ii) will have
the priority given thereto pursuant to the Junior Lien Intercreditor Agreement
(as defined below), and (iii) will be enforceable as such as against creditors
of and purchasers from the Company and the Guarantors in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
affecting creditors’ rights generally or by general equitable principles,
whether considered in a proceeding at law or in equity and by an implied
covenant of good faith and fair dealing.

Section 3.6 Exchange Act Reports. The Company has filed or furnished all reports
and other materials (the “Exchange Act Reports”) required to be filed with the
Commission pursuant to Section 12(d) or 12(g) of the Securities Exchange Act of
1934 (the “Exchange Act”) and the Company acknowledges that the Holder relied on
such Exchange Act Reports as part of its determination to enter into this
Agreement and in making the investment decision to exchange its Exchanged
Securitas for New Securities.

Section 3.7 Disclosure. Prior to the opening of trading on the business day
following the date of this Agreement, the Company shall issue a publicly
available press release or file with the SEC a current report on Form 8-K
disclosing the material terms of the Exchange and all similar exchange
transactions relating to the Existing Securities (to the extent not previously
publicly disclosed). For the avoidance of doubt, such disclosure will not
include the names of or other information on the Undersigned or any other Holder
that is participating in the Exchange.

Section 3.8 No MNPI. The Company acknowledges and agrees that, as of immediately
after the filing of the Closing 8-K, the Holder will not have received from the
Company, its subsidiaries or (to its best knowledge) its other affiliates any
information that would constitute “material non-public information” for purposes
of the Securities Act or the Exchange Act.

 

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Section 3.9 Exchange. The terms of the Exchange are the result of negotiations
among the parties and their agents.

Section 3.10 Listing. At the time of issuance, the Conversion Shares will be
listed on the New York Stock Exchange.

Section 3.11 Further Action. The Company agrees that it will, upon request,
execute and deliver any additional documents and perform additional actions
deemed by the Undersigned to be reasonably necessary to complete the Exchange
and to cause the Company’s representations and warranties contained in this
Agreement to be true and correct at the time of the Closing (including, without
limitation, the payment of listing and other fees and causing its counsel to
render any necessary legal opinions).

Article IV: Miscellaneous

Section 4.1 Entire Agreement. This Agreement and any documents and agreements
executed in connection with the Exchange embody the entire agreement and
understanding of the parties hereto with respect to the subject matter hereof
and supersede all prior and contemporaneous oral or written agreements,
representations, warranties, contracts, correspondence, conversations, memoranda
and understandings between or among the parties or any of their agents,
representatives or affiliates relative to such subject matter, including,
without limitation, any term sheets, emails or draft documents.

Section 4.2 Construction. References in the singular shall include the plural,
and vice versa, unless the context otherwise requires. References in the
masculine shall include the feminine and neuter, and vice versa, unless the
context otherwise requires. Headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meanings of the
provisions hereof. Neither party, nor its respective counsel, shall be deemed
the drafter of this Agreement for purposes of construing the provisions of this
Agreement, and all language in all parts of this Agreement shall be construed in
accordance with its fair meaning, and not strictly for or against either party.

Section 4.3 Governing Law. This Agreement shall in all respects be construed in
accordance with and governed by the substantive laws of the State of New York,
without reference to its choice of law rules.

Section 4.4 Counterparts. This Agreement may be executed in counterparts, each
of which shall be deemed an original, but all of which taken together shall
constitute one and the same instrument. Any counterpart or other signature
hereon delivered by facsimile or other electronic means shall be deemed for all
purposes as constituting good and valid execution and delivery of this Agreement
by such party.

Section 4.5 Termination. The Company may terminate this Agreement if there has
occurred any breach or withdrawal by the Undersigned or a Holder of any
covenant, representation or warranty set forth in Article II. The Undersigned or
a Holder may terminate this Agreement if there has occurred any breach or
withdrawal by the Company of any covenant, representation or warranty set forth
in Article III.

[Signature Page Follows]

 

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IN WITNESS WHEREOF, each of the parties hereto has caused this Agreement to be
executed as of the date first above written.

 

“UNDERSIGNED”:     “COMPANY”:      

A.M. Castle & Co.

By:  

 

      Name:  

 

      Title:  

 

    By:  

 

      Name:  

 

      Title:  

 

[Signature Page to Exchange Agreement]

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EXHIBIT A

Exchanging Beneficial Owner Information

Exchanging Beneficial Owners:

 

Name of Beneficial Owner

   Principal
Amount of
Exchanged
Securities    Principal
Amount of
Securities to be
Delivered    Account(s) from which
Exchanged Securities will be
Delivered and to which Holder’s
Securities will be delivered    Tax ID
Number    Address                                             

Exchanging Beneficial Owner Wiring Instructions:

 

Name of Beneficial Owner

   Wiring Instructions    Wire Amount