Exhibit 10.1

MASTER LEASE AGREEMENT

This Master Lease Agreement (this “Master Lease Agreement”) is made this 28th
day of September 2009 between the undersigned:

 

  (1) DB ENERGY TRADING LLC (“DB”), a Delaware limited liability company, having
its offices at 60 Wall Street, New York, NY 10036, hereinafter referred to as
the “Lessor.”

 

  (2) AGY HOLDING CORP., a Delaware corporation, having its offices at 2556
Wagener Road, Aiken, South Carolina, 29801, hereinafter referred to as the
“Lessee.”

Each a “Party” and together the “Parties”

Whereas:

 

  1. Pursuant to a tripartite agreement entered into on October 25, 2008,
between Lessor, Lessee and Owens Corning (the “Tripartite Agreement”), Lessor
acquired the CFM Metal and Lessee agreed to enter into that certain Master Lease
Agreement dated October 25, 2008, covering such CFM Metal (the “CFM Master Lease
Agreement”);

 

  2. In connection with this Master Lease Agreement, the Sale and Purchase
Agreement, and the transactions contemplated hereby and thereby, Lessor and
Lessee intend, shortly after the date hereof, to terminate such CFM Master Lease
Agreement (including each lease governed by the CFM Master Lease Agreement) in
accordance with its terms; and

 

  3. Lessor and Lessee desire that this Master Lease Agreement shall supplant
the CFM Master Lease Agreement, and intend that this Master Lease Agreement
provide for the lease of both the CFM Metal, as well as the Yarns Metal, in each
instance, on the terms and subject to the conditions of this Master Lease
Agreement.

IT IS AGREED as follows:

 

1. Interpretation

 

1.1 The headings do not affect the interpretation of this Agreement and the
schedules form part of this Agreement.

 

1.2 In this Agreement, all capitalized terms shall have the meaning set forth in
the Schedule 1 to this Agreement.

 

2. General Obligations

 

2.1 During the Lease Commitment Period the Parties agree, so long as no Default
exists and is then continuing, to enter into Leases from time to time whereby
the Lessor shall make available to the Lessee under each Lease the Metal Amount
contained in one Unit for use at the Lessee’s Facilities, provided that the
total Metal Amounts in all outstanding Leases shall not exceed the Maximum Lease
Amount.

 

2.2 A Lease executed by each of the Lessor and Lessee substantially in the form
of Schedule 2 incorporating the Lease details as set out in clause 3 shall be
exchanged between the Parties in respect of the Metal Amount in each Unit.

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2.3 Any renewal or amendments to a Lease shall only be effective if confirmed in
writing between the Parties.

 

2.4 The Lessee shall maintain an Inventory of all current Leases and shall
supply the Lessor with an updated Inventory every calendar month or promptly on
request.

 

2.5 This Master Lease Agreement, each Lease and all amendments thereto shall
constitute a single contract.

 

2.6 The Lessee shall settle each Lease on the Termination Date applicable to
that Lease, as determined in accordance with clause 7.

 

2.7 Provided that no Lease Term shall have a Lease Expiration Date later than
the end of the Lease Commitment Period, the Lessee shall, so long as no Default
exists and is then continuing, be entitled to renew any Lease by giving notice
in writing (the “Renewal Notice”) of such to the Lessor no less than two
(2) Business Days prior to the relevant Lease Expiration Date. Upon receipt of a
Renewal Notice, such Lease shall promptly be renewed. Notwithstanding the
previous sentence, no Renewal Notice shall be effective if, at the time such
Renewal Notice is given, a Default exists and is then continuing and no Lease
shall be renewed if the effect of any renewal would be to extend the Lease
Expiration Date for that Lease to a date falling (x) less than one month
following the original Lease Expiration Date for that Lease or (y) more than
twelve months after the original Commencement Date of that Lease.

 

2.8 The Lessee shall not sublease any of the Metal or the Units to any third
party or allow the Metal or Units to be removed from the Facilities, except as
otherwise permitted pursuant to this Agreement, or until the relevant Lease has
been settled in accordance with clause 7.2.

 

2.9 Without in anyway limiting the Lessor’s rights under this Master Lease
Agreement or under any Lease, in the event that the Master Lease Agreement or
any Lease is subsequently characterized as a capitalized lease or a secured
financing, the Lessee shall hereby be deemed to have granted to Lessor a first
priority security interest in the Units listed in the Inventory, whether in its
possession or control and wherever located, which security interest shall attach
upon delivery by Lessor of such leased Metal to the Lessee in accordance with
this Master Lease Agreement. The Lessee hereby authorizes Lessor to prepare and
file any security that Lessor deems necessary in order to perfect and maintain
such security.

 

2.10

As of the date hereof, in consideration for Lessor’s agreement hereunder to
enter into Leases hereunder from time to time, Lessee hereby grants to Lessor a
continuing security interest in all of the Lessee’s right, title and interest,
whether now existing or hereafter arising or acquired, in and to (i) the
Unallocated Rhodium Account (as such term is defined in the Sale and Purchase
Agreement); (ii) all Rhodium therein or represented thereby; and (iii) all
proceeds thereof as security for the payment and performance in full of all of
its obligations under this Agreement; provided, that Lessor hereby acknowledges
and agrees that the aggregate dollar value of such security interest shall in no
event exceed the dollar value of the lesser of (a) thirty-five percent (35%) of
the aggregate dollar value of the Platinum subject to one or more Yarns Leases
in accordance with the terms hereof, and (b) $24,400,000 (the “Security
Interest”). Such Security Interest shall remain in full force and effect until,
and shall terminate upon, indefeasible payment and performance in full of all of
such obligations. Lessee agrees to promptly execute and deliver, and hereby
authorizes Lessor to file without Lessee’s signature (to the extent permitted by
applicable law), all further instruments and documents as Lessor may reasonably
request, in order to perfect, preserve and protect the Security Interest granted
or purported to be granted hereby or to enable Lessor to exercise and enforce
its rights and remedies hereunder with

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respect to such Security Interest, including financing or continuation
statements, or amendments thereto. If any default by Lessee of its obligations
under this Agreement shall have occurred and be continuing, Lessor may exercise
in respect of such Security Interest, in addition to other rights and remedies
provided for herein or otherwise available to it, all the rights and remedies of
a secured party on default under the UCC, as enacted in the State of New York
(the “UCC”), including, without limitation, exercising its control over any
“account” (as such term is defined in the UCC), and without notice except as
specified below or, if notice cannot be waived under the UCC, as required to be
provided by the UCC, sell the collateral that is the subject of the Security
Interest or any part thereof in one or more parcels at public or private sale,
at any of Lessor’s offices or elsewhere, for cash, on credit or for future
delivery, and upon such other terms as Lessor may deem commercially reasonable.

 

2.11 Both parties acknowledge Lessor retains absolute and unencumbered title to
the Units and Metal leased hereunder. Other than any interests created by the
Lessee in favor of the Lessor, at no time shall the Lessee have, or have the
ability to create in favor of any third party, any property or other interest in
the Units or the leased Metal or otherwise dispose of or encumber any of the
Units or the leased Metal until the relevant Lease has been settled in
accordance with clause 7.2.

 

2.12 The Lessor shall not be liable in any way for the maintenance or
performance of the Units.

 

3. Lease Details

 

3.1 During the Lease Commitment Period the Lessee may request the Lessor enter
into a new Lease or renew an existing Lease by sending a request for such in
writing to the Lessor in accordance with clause 2.7 hereof.

 

3.2 Where the Parties agree to enter into a new Lease or renew an existing Lease
each new or renewed Lease shall be executed by both Parties and shall contain
the following information:

 

  (a) The Unit identification/ serial number in which the Metal is contained;

 

  (b) the Metal Amount;

 

  (c) the Location;

 

  (d) the Commencement Date;

 

  (e) the Lease Expiration Date;

 

  (f) the Lease Fee; and

 

  (g) whether it is a CFM Lease or a Yarn Lease

 

3.3 Notwithstanding clause 3.2 hereof, the Parties hereto acknowledge and agree
that the Lessee shall have no obligation hereunder to pay any Lease Fee
associated with any Rhodium Amount in any Yarns Lease, as such Rhodium Amount is
offset by the Unallocated Rhodium Account.

 

3.4 In the event of any inconsistency between the terms of this Master Lease
Agreement and the terms of any Lease or amendment thereto that has been executed
by both parties, the terms of the Lease or such executed amendment shall
prevail.

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4. Lease Fee

 

4.1 The Lease Fee for the Metal will be payable on each Payment Date, where a
Payment Date means the tenth (10th) day of the next following calendar month in
respect of each calendar month during a Lease and the Termination Date of that
Lease. In the event that a Payment Date does not fall on a Business Day, the
Payment Date shall be the first Business Day preceding such Payment Date.

 

4.2 In the event that the period between the Commencement Date and the first
Payment Date and/or the period between the penultimate Payment Date and the
Termination Date is not a full calendar month, the Lease Fee shall be
apportioned accordingly.

 

4.3 The Lessee shall pay to the Lessor on each Payment Date a monthly fee
(“Lease Fee”) for each Metal Amount that is the subject of a Lease calculated
(on the basis of a 360-day year and actual days per month) by multiplying:

(Metal Amount) X (Value of the Metal) X (Lease Rate Index + Margin) X (actual
days/ 360)

Where:

the “Value” means the Benchmark Value for the relevant Metal on the day that is
two Business Days prior to the Commencement Date of the relevant Lease;

the “Lease Rate Index” means, in the case of Platinum, the offered rate for
Platinum as published two Business Days prior to the commencement of the
applicable Lease Term on Deutsche Bank’s Daily Precious Metal Rates Sheet
“DBRates.xls”; and in the case of Rhodium, the offered rate for Rhodium as
published two Business Days prior to the commencement of the applicable Lease
Term on Deutsche Bank’s Daily Precious Metal Rates Sheet “DBRates.xls”; and

the “Margin” for (x) Platinum is the number of basis points determined in
accordance with the pricing matrix set out in table 1 in Schedule 6 hereto and
(y) for Rhodium is [***] basis points.

The Adjusted EBITDA figure that shall be used for the purposes of determining
the relevant Platinum Margin that shall apply for a particular Lease and that
shall be used in calculating the Lease Fee applicable thereto shall be
determined in accordance with table 2 in Schedule 6 to this Master Lease
Agreement. For the avoidance of doubt, table 2 of Schedule 6 provides that the
Adjusted EBITDA figure that shall be used to determine the Platinum Margin for a
Lease shall be determined as follows: whenever a Lease commences or is renewed
(in accordance with clause 2.7 above), the Lessor shall determine the Platinum
Margin that shall apply to such Lease or such renewed Lease by reference to the
Adjusted EBITDA contained in the quarterly financial statements of the Lessee
that are published in the Quarter (the “Relevant Quarter”) immediately preceding
the Quarter in which such Lease commences or is renewed, which such quarterly
financial statements reflect the performance of the Lessee and contain the
Adjusted EBITDA for the Quarter immediately preceding the Relevant Quarter. The
Parties agree that Adjusted EBITDA is equivalent to the definition of
“Consolidated Cash Flow” in the Indenture dated as of October 25, 2006, by and
among the Lessee, the Guarantors party thereto (as such term is defined in the
Indenture) and U.S. Bank National Association. The term “Quarter” shall have the
meaning given to such term in table 2 of Schedule 6 hereto.

 

5. Delivery

The Metal Amount set out in the Lease shall be deemed to have been delivered by
the Lessor to the Lessee on the Lease Commencement Date to the Location
specified in such Lease.

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6. Change Outs and Refabrication and Fabrication of Metal

 

6.1 Change Out for any Yarns Lease:

 

  (a) Where acting as a reasonable and prudent operator the Lessee determines
that a Unit under a Yarns Lease needs to be refurbished (a “Change Out”), it
shall notify the Lessor in writing as soon as practicable of the intended date
of such Change Out specifying the serial number of the Unit to be Changed Out,
and the day preceding each Change Out shall be a “Change Out Date.”

 

  (b) Provided that the Lessee is replacing a Unit that is to be Changed Out (an
“Old Unit”) with a replacement Unit (a “New Unit”) on the Change Out Date, then
the Lessee may, in lieu of terminating the relevant Lease, at the same time as
notifying the Lessor of the intended Change Out notify the Lessor that it
intends to amend the relevant Lease so the Unit identification/serial number of
the Old Unit (as contained in the terms of the Lease which relates to the Old
Unit) is deleted and replaced with the Unit Identification/ serial number of the
New Unit, and in such event:

 

  (i) at 2pm (New York time) on the Change Out Date the New Unit shall be deemed
to be delivered by the Lessee, and full and unencumbered title in the New Unit
shall be automatically transferred from the Lessee to the Lessor in
consideration of full and unencumbered title to the Old Unit passing from the
Lessor to the Lessee; and

 

  (ii) the Lessee shall amend the Inventory accordingly, with such updated
reporting to be provided to Lessor on a monthly basis, or upon such other
frequency as Lessor may reasonably request.

 

  (c) Lessee hereby acknowledges and agrees that if Change Outs within any month
exceed 15% of total Metal, Lessee will immediately provide Lessor an updated
Inventory listing.

 

6.2 Refabrication and Fabrication for any CFM Lease:

 

  (a) For any CFM Lease, Lessee shall be allowed to refabricate a Unit into a
new Unit (“Refabrication”); provided, that Lessee gives the Lessor at least five
(5) days prior written notice of its intention to refabricate one or more Units,
specifying in each instance the serial number of the Unit to be refabricated.

 

  (b) In the event that the leased Metal under any CFM Lease includes
Unallocated Metal, Lessee shall be allowed to fabricate the Unallocated Metal
into a Unit (“Fabrication”); provided, that Lessee gives the Lessor at least
five (5) days prior written notice of its intention to fabricate one or more
Units.

 

  (c) In connection with the Refabrication or Fabrication of each Unit, as
applicable, Lessee hereby agrees and acknowledges that it shall:

 

  (i) Conduct such Refabrication or Fabrication itself or obtain the prior
written consent of Lessor to use a third party reasonably agreeable to Lessor,
which such consent shall not be unreasonably delayed, conditioned, or withheld;

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  (ii) In the event such Refabrication or Fabrication is conducted at a location
other than the Facilities, be responsible for all shipping and other costs and
expenses, including the purchase of any additional metal required to conduct
such Refabrication or Fabrication (“Additional Metal”);

 

  (iii) in the event such Refabrication or Fabrication is conducted by a third
party at a location other than the Facilities, ensure that Lessor and third
party have entered into a collateral access agreement for the benefit of Lessor
in form and substance reasonably agreeable to Lessor (and, for the avoidance of
doubt, such Refabrication or Fabrication shall not occur until such time as the
collateral access agreement has been entered into by the Lessor), provided that
the Parties agree that for so long as the Waiver Letter between the Lessor and
Owens Corning is in effect, then any Refabrications or Fabrications being
performed by Owens Corning or an affiliate thereof shall not be subject to the
foregoing provisions of this paragraph;

 

  (iv) In the event that any Additional Metal is required to conduct any
Refabrication or Fabrication, that such Additional Metal shall not be subject to
any Lien or third party right and if such Additional Metal becomes commingled
with any leased Metal, that ownership and title to any Additional Metal used in
connection with such Refabrication or Fabrication shall pass to Lessor, free and
clear of any Liens and neither the Lessee nor any other third party shall retain
any property or other interest in or Lien over, the leased Metal or the
Additional Metal; and

 

  (v) Upon completion of any refabricated or fabricated Unit, notify Lessor of
the serial number of such new Unit and shall deliver to Lessor an updated
Inventory.

 

7. Termination and Return

 

7.1 Each Lease shall terminate on the Termination Date which shall be the
earlier of:

 

  (a) The Lease Expiration Date relevant to that Lease;

 

  (b) The Change Out Date, if not replaced pursuant to clause 6.1(b); or

 

  (c) The Early Termination Date;

 

7.2 Upon the termination of a Lease the Lessee shall settle the lease:

 

  (a) by physical delivery of the Unit containing the leased Metal on the
Termination Date to the Lessor, which shall occur or shall be deemed to have
occurred at the same Location of delivery of such Unit; or

 

  (b) in lieu of physically delivering the Unit containing the leased Metal, the
Lessee may purchase or cause a third party to purchase the relevant Unit
containing the leased Metal, in which case:

 

  (i) The Lessee shall transfer consideration for such purchase, on the date to
be agreed in writing between the Lessor and the Lessee, to the Lessor in an
amount in immediately available funds equal to:

 

  (A)

(i) the Benchmark Value of that Metal Amount determined as of two Business Days
prior to the Termination

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Date; or (ii) an amount of unallocated Platinum delivered to the Lessor’s
account as specified at the time, equal to the Platinum Amount in that Lease;
plus

 

  (B) (to the extent not already covered in (A)(i) above) unallocated Rhodium
equal to the Rhodium Amount,

(the “Consideration”); and

 

  (ii) full and unencumbered title in the Unit shall be transferred to the
Lessee on receipt by the Lessor of the Consideration.

 

  (c) When terminating a Yarns Lease, the Lessee may without prior notice to the
Lessor set off any amount of Rhodium owed to the Lessor pursuant to clause
7.2(b)(i)(B) against the same amount of Rhodium held in the Unallocated Rhodium
Account (as defined in the Sale and Purchase Agreement).

 

7.3 Notwithstanding anything herein to the contrary, in the event of:

 

  (a) a Default pursuant to clause 8; or

 

  (b) the failure by Lessee to comply with this clause 7, with such failure
remaining uncured for two (2) Business Days; or

 

  (c) there shall occur, in the opinion of the Lessor, a material adverse change
in the business, assets or condition (financial or otherwise) of the Lessee
which is reasonably likely to materially and adversely affect the ability of the
Lessee to perform its obligations under this Master Lease Agreement and/or any
Lease thereunder,

then, in any such event, the Lessor shall have the right (but not the
obligation) to terminate this Master Lease Agreement and any Leases entered into
hereunder by delivery of written notice of such termination to Lessee
specifying, inter alia, the date on which such termination is to be effective
(such date, an “Early Termination Date” and the occurrence of such an event, an
“Early Termination”) and demand the return of any Metal leased to Lessee under
this Master Lease Agreement; provided, however, that any Default under clause
8.1 (e) shall constitute an automatic termination event without any need for
Lessor to deliver written notice of such termination or demand and the Early
Termination Date, in such circumstances, shall occur on the date on which the
Default under clause 8.1(e) occurs.

 

7.4 In the event that the Lessee makes physical return of any leased Metal in
accordance with 7.2(a) the Lessee shall, from the Termination Date until the
Unit containing the Metal has been fully recovered by the Lessor, afford the
Lessor unencumbered access to the Location for the purpose of such recovery and
the Lessee shall afford the Lessor any assistance reasonably requested to
facilitate the recovery of the relevant Unit. In the event of an Early
Termination the Lessee shall be liable for all reasonable costs of such recovery
which shall be payable promptly on receipt by the Lessee of reasonable written
proof that such costs were incurred.

 

8. Default

 

8.1 It is hereby understood and agreed that in the event Lessee shall:

 

  (a) fail to return to Lessor any Metal upon termination of the Lease Term or,

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  (b) fail to pay any amount due pursuant to this Master Lease Agreement, and
such failure shall remain unremedied for five (5) days; or

 

  (c) make any representation or warranty hereunder that is incorrect in any
material respect; or

 

  (d) shall breach in any manner any covenant or undertaking hereunder, or shall
fail to perform or observe, in any respect, any other term or provision
contained in this agreement and such breach of covenant or failure to perform or
serve shall remain unremedied for ten (10) days; or

 

  (e) (1) dissolve (other than pursuant to a consolidation, amalgamation or
merger); (2) become insolvent or unable to pay its debts or fail or admit in
writing its inability generally to pay its debts as they become due; (3) make a
general assignment, arrangement or composition with or for the benefit of its
creditors; (4)(A) institute or have instituted against it, by a regulator,
supervisor or any similar official with primary insolvency, rehabilitative or
regulatory jurisdiction over it in the jurisdiction of its incorporation or
organisation or the jurisdiction of its head or home office, a proceeding
seeking a judgment of insolvency or bankruptcy or any other relief under any
bankruptcy or insolvency law or other similar law affecting creditors’ rights,
or a petition is presented for its winding-up or liquidation by it or such
regulator, supervisor or similar official, or (B) have instituted against it a
proceeding seeking a judgment of insolvency or bankruptcy or any other relief
under any bankruptcy or insolvency law or other similar law affecting creditors’
rights, or a petition is presented for its winding-up or liquidation, and such
proceeding or petition is instituted or presented by a person or entity not
described in clause (A) above and either (I) results in a judgment of insolvency
or bankruptcy or the entry of an order for relief or the making of an order for
its winding-up or liquidation or (II) is not dismissed, discharged, stayed or
restrained in each case within 15 days, or such other time period as may agreed
to by the Lessor in its sole discretion provided the Lessee is defending such
proceedings in good faith, of the institution or presentation thereof; (5) have
a resolution passed for its winding-up, official management or liquidation
(other than pursuant to a consolidation, amalgamation or merger); (6) seek or
becomes subject to the appointment of an administrator, provisional liquidator,
conservator, receiver, trustee, custodian or other similar official for it or
for all or substantially all its assets; (7) have a secured party take
possession of all or substantially all its assets or has a distress, execution,
attachment, sequestration or other legal process levied, enforced or sued on or
against all or substantially all its assets and such secured party maintains
possession, or any such process is not dismissed, discharged, stayed or
restrained, in each case within 15 days thereafter; (8) cause or subject to any
event with respect to it which, under the applicable laws of any jurisdiction,
has an analogous effect to any of the events specified in clauses (1) to
(7) above (inclusive); or (9) take any action in furtherance of, or indicating
its consent to, approval of, or acquiescence in, any of the foregoing acts; or

 

  (f) suffer the occurrence of any loss, theft or destruction of, or damage to,
any of the Metal leased hereunder or Units that is not covered by a policy of
insurance under which Lessor has been named the loss payee, or the occurrence of
any attachment of a Lien on any of the Metal leased hereunder or Units which is
not discharged within ten (10) days after the date of such attachment; or

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  (g) suffer a default or an event of default under any credit facility or any
other consignment or leasing facility of a notional principal amount of $500,000
or more to which the Lessee is a party which results in the obligations of the
Lessee thereunder becoming accelerated (whether automatically or at the election
of the lender or lessor, as applicable); or

 

  (h) suffer a default under any Specified Agreements;

then a Default shall have occurred in respect of the Lessee.

 

8.2 Without prejudice to any other remedy at law, in the event of an Early
Termination triggered by the provisions set out in clause 8.1, Lessee shall pay
to Lessor all reasonable costs and out-of-pocket expenses of physical recovery
of the Metal and Units.

 

9. Representation and Undertakings

 

9.1 The Lessor represents and warrants to the Lessee on the date of this Master
Lease Agreement and on each day for the duration of the Master Lease Agreement
that it has the power to enter into and exercise its rights and perform and
comply with its obligations under this Master Lease Agreement, each Lease, and
each Specified Agreement, and this Master Lease Agreement, each Lease, and each
Specified Agreement are or will be valid, legally binding and enforceable
against the Lessor, except as such enforceability may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors’ rights generally, and (ii) the availability
of injunctive relief and other equitable remedies:

 

9.2 The Lessee represents and warrants to the Lessor on the date of this Master
Lease Agreement and on each day for the duration of the Master Lease Agreement
that:

 

  (d) it has the power and authority to own its assets and to conduct its
business as presently conducted;

 

  (e) it has the power to enter into and exercise its rights and perform and
comply with its obligations under this Master Lease Agreement, each Lease and
each Specified Agreement, and this Master Lease Agreement, each Lease and each
Specified Agreement, are or will be valid, legally binding and enforceable
against the Lessee, except as such enforceability may be limited by
(i) bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting or relating to creditors’ rights generally, and (ii) the availability
of injunctive relief and other equitable remedies;

 

  (f) all actions required to be taken and conditions required to be fulfilled
(including the obtaining of any necessary consents) have been taken or fulfilled
in all respects in order to enable it lawfully to enter into, exercise its
rights and perform and comply with its obligations under the Master Lease
Agreement, each Lease and each Specified Agreement;

 

  (g) its entry into, exercise of its rights and/or performance of or compliance
with its obligations under this Master Lease Agreement, each Lease and each
Specified Agreement do not and will not violate:

 

  (i) any law to which it is subject; or

 

  (ii) any of its organizational documents; or

 

  (iii)

any material agreement to which it is a party or to which its properties are
bound;

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or

 

  (iv) any order or decree which is binding upon Lessee.

 

9.3 The Lessee shall permit agents or representatives of Lessor to inspect,
during normal business hours and upon reasonable notice, or at its own
discretion should the Lessee be in Default, any Unit containing leased Metal
hereunder and/or the Lessee’s books and records solely as they relate to such
Unit, and Lessee agrees to make and deliver to Lessor abstracts or reproductions
of such portions of such books and records at the reasonable request of the
Lessor (collectively, the “Metal Information”); provided that the Lessor shall
keep confidential, and shall cause its agents and representatives to keep
confidential, and shall not, and shall not permit its agents or representatives
to, directly or indirectly, without the prior written consent of the Lessee,
disclose to any third party or otherwise any Metal Information except: (i) to
the extent the Metal Information is already in the public domain; or (ii) to the
extent reasonably required, to its directors, agents, officers and employees or
the directors, agents, officers or employees of other members of the Deutsche
Bank AG group of companies; or (iii) to the extent reasonably required, to its
professional advisers; or (iv) as may be required by any applicable law, court,
stock exchange, regulation or regulator.

 

9.4 The Lessee shall not create or permit the creation of any Lien of any kind
with respect to the Metal or the Units, and shall defend Lessor’s interest in
such against any claims and demands of any persons at any time claiming the same
or any interest therein. The Lessee shall notify Lessor as soon as reasonably
practicable of the occurrence of any loss, theft or destruction of the Metal or
the Units of which it is aware.

 

9.5 Until such time as the leased Metal is returned, recovered or repossessed to
Lessor or purchased by Lessee, Lessee shall afford the Units containing the
Metal no less safekeeping protection than it affords its own property.

 

9.6 Lessee shall procure insurance coverage reasonably satisfactory to the
Lessor for the Units containing leased Metal in such amounts and covering such
risks as is usually carried by companies engaged in a similar business; Lessee
shall provide Lessor with a certificate evidencing such insurance, naming Lessor
as the loss payee, and stating that Lessor shall be given at least thirty
(30) days prior written notice in the event of termination or expiration of the
policy. Lessee shall be responsible for all loss, damage, or disappearance of
the Metal or Units from any cause whatsoever from the time the Metal is made
available to the Lessee at the Facilities until the Lease is settled in
accordance with clause 7.2 of this agreement. The leased Metal shall be received
by the Lessor at the end of the relevant lease in substantially the same
condition as it was received by the Lessee; provided that such Metal shall be
required to meet the standards set forth on Schedule 4 and Schedule 5 hereto, as
applicable.

 

9.7 The Lessor gives no warranty or any assurance whatsoever relating to the
quality, fitness for any purpose or relating in any way to the performance of
the Metal or a Unit.

 

10. Lessee Covenants

 

10.1 The Lessee covenants:

 

(a) that it shall not, without Lessor’s prior written agreement, enter into any
lease agreement or financing agreement with any third party for Metal or Units
to be used in the operation of its glassfiber yarns or its continuous filament
mat business in the Facilities during the duration of this Master Lease
Agreement.

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(b) that it shall not enter into any lease, financing, security or other
agreement in relation to the Metal or Units which would or might interfere with
the Lessor’s absolute and unencumbered title in the Metal or Units or restrict
the Lessor’s ability to regain possession of the Metal or Units.

 

(c) that each month during the Lease Commitment Period, the Lessee shall provide
the Lessor with a certified inventory of the Metal and Units held at the
Facilities and shall promptly inform the Lessor of any damage to or loss of
Metal or Units.

 

(d) that the Lessee shall permit agents or representatives of Lessor to inspect,
during normal business hours and upon reasonable notice, or at its own
discretion should the Lessee be in Default, any Metal leased to the Lessee
hereunder and the Units and/or the Metal Information request of the Lessor.

 

11 Force majeure

If the performance of any obligation under this Master Lease Agreement is
prevented by an event beyond the control and without the fault or negligence of
the Party affected thereby including acts of God or the public enemy; acts,
laws, orders or regulations or any government or department or agency thereof;
wars or other civil or military disturbances, such Party will be excused from
such performance to the extent of the duration of such interference or the
direct effects thereof; provided, however, that the duration of any such period
in which such Party will be excused from performance will not exceed one
(1) month and provided further that the Lessee shall continue to pay the Lease
Fee provided that Metal had been previously delivered by the Lessor to the
Lessee. If this period of one month is exceeded, then the parties will meet in
order to decide whether and under what condition this Master Lease Agreement can
be performed.

 

12 Indemnities

 

12.1 The Lessee shall within five (5) Business Days of notice by the Lessor
indemnify in full and hold harmless, the Lessor, its officers, employees,
agents, advisors, consultants and legal counsel and the Lessor’s successors and
assigns, (each an “Indemnified Person”) from and against any and all claims
(whether or not successful, compromised or settled), actions, liabilities,
demands, proceedings or judgments which may be instituted, made, threatened,
alleged, asserted or established (each a “Claim”) in any jurisdiction against or
otherwise involving an Indemnified Person and from all losses, costs, damages,
charges or expenses (including legal expenses reasonably incurred) (each an
“Expense”) which an Indemnified Person suffers or incurs from time to time
(including all Expenses reasonably incurred in disputing any Claim and/or in
establishing a right to be indemnified pursuant to this clause 12 and/or in
seeking advice regarding any Claim or in any way related to or in connection
with this indemnity), in any such case arising out of, based upon or in
connection with, whether directly or indirectly;

 

(a) the operation of the Lessee’s business including the use of any Units;

 

(b) any tax obligations not relating directly to the receipt of the Lease Fees.

 

13 Amendments

This Master Lease Agreement (together with the details of each Lease and any
amendments thereto) constitutes the entire understanding between the parties
with respect to Leases of Metal, and this Master Lease Agreement may not be
amended except in writing signed by both parties. Notwithstanding the previous
sentence, upon delivery of an Inventory by Lessee to Lessor in accordance with
the terms hereof and without any additional action by either of the Parties,
(a) Schedule 3 hereto shall be deemed to have been updated and (b) this
Agreement shall be automatically amended to incorporate such update.

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14 Notices

 

14.1 All notices hereunder shall be in writing and deemed given when received
(by mail or facsimile) at the respective parties address set forth below:

To Lessor:

DB

c/o Deutsche Bank AG London branch

1 Winchester House

Great Winchester Street

London EC2N 2DB

Tel: +44 20 7545 3745

Facsimile: +44 20 7545 1280

Attn: Precious Metals Department

With a copy to:

DB Energy Trading LLC

60 Wall Street, 36th Floor

New York, New York 10035

Attention: Commodities Legal

Tel.: (212) 250 8992

Facsimile: (212) 767 4565

To Lessee:

AGY Holding Corp.

Attn: Chief Financial Officer

2556 Wagener Road

Aiken SC 29801

Tel: 803.643.1257

Fax: 803.643.1180

Attn: Chief Financial Officer

Each Party’s designated address may be changed by notice to the other Party
which shall be effective upon receipt.

 

15 Assignment

The Lessee may not assign, transfer or dispose of any of its rights or delegate
its obligations in any way under this Master Lease Agreement or any Lease.

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16 Settlement of Dispute

 

16.1 Dispute Resolution. If there shall be any dispute, controversy or claim
(“Dispute”) between the parties arising out of, relating to, or connected with
this Master Lease Agreement or any Lease, the breach, termination or invalidity
hereof, or the provisions contained herein or omitted herefrom, the parties
shall use their best efforts to resolve the matter on an amicable basis and in a
manner fair and equitable to the parties. If one Party notifies the other Party
that a Dispute has arisen and the parties are unable to resolve such Dispute
within ten (10) days from such notice, then the matter shall be referred to the
Chief Operating Officer of the Commodities Business within the Global Markets
Division of Deutsche Bank AG, London Branch and the Chief Executive Officer of
Lessee, who shall act by unanimous consent on all such matters. No recourse to
arbitration under this Master Lease Agreement shall take place unless and until
such representatives of the parties have been unable to resolve the Dispute
within ten (10) days after the expiration of the ten (10) day period referred to
above.

 

16.2 Arbitration. The parties irrevocably agree that any Disputes, that are not
resolved in accordance with clause 15.1 hereof shall be finally settled by
arbitration in New York City, New York, by three arbitrators appointed and
proceeding in accordance with the Rules of Arbitration (the “ICC Rules”) of the
International Chamber of Commerce (the “ICC”) as the exclusive means of
resolving such disputes. For purposes of appointing such arbitrators, each Party
shall appoint one arbitrator. The third arbitrator shall be selected by the two
Party-appointed arbitrators or, failing agreement within five (5) days after the
Party-appointed arbitrators have been confirmed, by the ICC in accordance with
the ICC Rules. In addition:

 

(a) All submissions and awards in relation to arbitration under this Master
Lease Agreement shall be made in English and all arbitration proceedings and all
pleadings shall be in English.

 

(b) Any monetary award shall be made in U.S. Dollars.

 

(c) Any award shall be final and not subject to appeal and the parties hereby
waive all challenge to any award by the arbitrators under this clause 15. The
decision of the arbitrators shall be final and binding on the parties and may be
presented by any Party for enforcement in any court of competent jurisdiction.
In any such enforcement action, irrespective of where it is brought, no Party
will (and the parties hereby waive any right to) seek to invalidate or modify
the decision of the arbitrators or otherwise to invalidate or circumvent the
procedures set forth in this clause15. Further, the parties understand and agree
that the provisions of this clause 15 may be specifically enforced by injunction
or otherwise in any court of competent jurisdiction.

 

(d) The fees and expenses, if any, of the arbitrators shall be shared by the
Parties in inverse proportion to their respective success on the merits and such
allocation of fees and expenses shall be calculated by the arbitrators and shall
be conclusive and binding on the Parties.

 

(e) Except as may be required by applicable law, stock exchange rules,
governmental authorities, or in connection with the ordinary course operation of
their respective businesses, the parties agree to maintain confidentiality as to
all aspects of the arbitration, including its existence and results, except that
nothing herein shall prevent any Party from disclosing information regarding the
arbitration for purposes of enforcing the judgment of the arbitral tribunal or
in any court proceedings involving the Parties. The Parties further agree to
obtain the arbitral tribunal’s agreement to preserve the confidentiality of the
arbitration.

 

(f)

Notwithstanding the foregoing Dispute Resolution and Arbitration provisions, the
Parties acknowledge that remedies contained in the foregoing Dispute Resolution
and Arbitration provisions and at law may be inadequate to protect a Party (the
“Affected Party”) against any breach of this Agreement by the other Party or by
the other Party’s professional advisers, directors,

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officers, servants or employees and without prejudice to any other rights and
remedies otherwise available to the Affected Party, the non-Affected Party
agrees to the granting of injunctive relief in the Affected Party’s favour
without proof of actual damages provided, however, that the Affected Party shall
not be relieved from proving any breach hereunder. In such circumstances, the
Parties submit to the non-exclusive jurisdiction of the federal and state courts
of New York.

 

17 Governing Law.

This Master Lease Agreement shall be governed by, and construed in accordance
with, the laws of the State of New York, without giving effect to its conflict
of laws principles.

 

18 Counterparts.

This Master Lease Agreement may be signed by facsimile or other electronic
method of transmission and in any number of counterparts with the same effect as
if the signatures thereto and hereto were original and upon the same instrument.

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IN WITNESS WHEREOF, the parties hereto have caused this Master Lease Agreement
to be executed by their duly authorized representative as of the date first
above written.

 

DB ENERGY TRADING LLC,

as Lessor

By:

 

 

Name:

Position:

Date:

AGY HOLDING CORP.,

as Lessee

By:

 

 

Name:

Position:

Date:

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Schedule 1

Definitions

“Benchmark Value” means the spot rate announced by Johnson Matthey Base Price at
9:30 a.m. (London time) as at a certain date.

“Business Day” means a day where the banks are open for business in London and
New York.

“CFM Lease” means a Lease where the leased Metal is utilized solely in the
Lessee’s CFM manufacturing operation.

“CFM Lease Metal” means the CFM Metal that is utilized in the Lessee’s
Continuous Filament Mat (CFM) manufacturing operation.

“CFM Metal” means Metal that is utilized in the Lessee’s Continuous Filament Mat
(CFM) manufacturing operation.

“Change Out Date” has the meaning given in clause 6.1(a).

“Commencement Date” means the date the Metal is delivered or is deemed to be
delivered to the Lessee at the Location.

“Consideration” means the Consideration transferred by the Lessee to the Lessor
in accordance with clause 3.3 of the Sale and Purchase Agreement.

“Default” means any event or circumstance specified in clause 8.

“Dispute” has the meaning set forth in clause 16.1.

“Facilities” means the Lessee’s plants located at Aiken, South Carolina, and
Huntingdon, Pennsylvania, each individually a “Facility.”

“Inventory” means the record of each of the Leases as set out in Schedule 3 to
this Agreement and as amended from time to time.

“Lease” means a lease agreement between Lessor and Lessee for the Metal
contained in one Unit entered into pursuant to this Master Lease Agreement.

“Lease Commitment Period” means the period commencing on the Closing Date (as
such term is defined in the Sale and Purchase Agreement) and ending thirty-six
(36) months thereafter.

“Lease Expiration Date” means, with respect to each Lease, the date set out in
the Lease terms applicable to that Lease, which such date shall occur no more
than twelve months after the Commencement Date of that Lease.

“Lease Fee” has the meaning set forth in clause 4.3.

“Lease Rate Index” has the meaning set forth in clause 4.3.

“Lease Term” means, the period from and including the Commencement Date to and
including the Termination Date.

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“Lessee” has the meaning set forth in the introductory paragraph to this Master
Lease Agreement.

“Lessor” has the meaning set forth in the introductory paragraph to this Master
Lease Agreement.

“Lien” means any mortgage, pledge, hypothecation, right of others, claim,
security interest, encumbrance, adverse claim or interest, easement, covenant,
encroachment, servitude, option, lien, put or call right, right of first
refusal, voting right, charge or other restrictions or limitations of any nature
whatsoever.

“Location” means the Facilities where the Lessor delivers or is to be deemed to
have delivered the leased Metal to the Lessee.

“Margin” has the meaning set forth in clause 4.3.

“Master Lease Agreement” means this agreement.

“Maximum Lease Amount” means 51,057 troy ounces of Platinum and 3,308 troy
ounces of Rhodium.

“Metal” means the Platinum or Rhodium contained in any of the Units that are
subject to a Lease.

“Metal Amount” means (i) the amount of Platinum (in the case of a lease of Yarns
Metal) or (ii) the amount of Platinum and Rhodium (in the case of a lease of CFM
Metal), in each instance contained in a Unit in Troy ounces as set out in the
Inventory.

“Platinum” means platinum meeting the standards set forth in Schedule 4 for
Grade 99.95% pure platinum.

“Platinum Amount” means the amount of Platinum contained in a Unit in Troy
ounces as set out in the Inventory.

“Renewal Notice” has the meaning given in clause 2.6.

“Rhodium” means rhodium meeting the standards set forth in Schedule 5 for Grade
99.90% pure rhodium.

“Rhodium Amount” means the amount of Rhodium contained in a Unit in Troy ounces
as set out in the Inventory.

“Sale and Purchase Agreement” means the Sale and Purchase Agreement entered into
between the Lessee and DB on or around 25th September 2009.

“Specified Agreements” means (i) in relation to the Lessee, that certain
insurance policy issued by Factory Mutual naming DB as the sole loss payee in
respect of the Metal or Units and (ii) any other agreement between the parties
relating to Metal or Units.

“Termination Date” has the meaning given in clause 7.1.

“Unallocated Metal Account” means that certain pool account maintained by Owens
Corning for AGY’s CFM metal, with such account located at Owens Corning’s
Concord, North Carolina, facility.

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

“Unit” means each bushing together with the attached furnace each identified by
the serial numbers noted in each Lease (which such serial numbers shall be
updated to reflect any subsequent change out, fabrication or refabrication in
accordance with the terms of this Agreement).

“Waiver Letter” means the waiver letter entered into by and between the Lessor,
the Lessee and Owens Corning on or around the date of this Master Lease
Agreement.

“Yarns Lease” means a Lease where the leased Metal is utilized solely in the
Lessee’s glassfiber yarn manufacturing operation and not in the Lessee’s CFM
manufacturing operation.

“Yarns Metal” means Metal that is utilized in the Lessee’s glassfiber yarn
manufacturing operation.

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Schedule 2

Form Lease

In accordance with the Master Lease Agreement dated as of
                    (as amended supplemented otherwise modified, renewed or
replaced from time to time, between the undersigned (the “Master Lease
Agreement”) we hereby confirm the following Lease terms applicable to the
following quantity of Metal.

Capitalized terms used but not defined otherwise shall have the meanings
attributed to them in the Master Lease Agreement.

Lease Terms

 

Unit identification/serial number   :    Metal Amount   :    Location   :   
Commencement Date   :    Lease Expiration Date   :    CFM Lease/Yarn Lease   :
   Lease Fee   :    Payment Date   :   

Lessee hereby represents and warrants to the Lessee that as of the commencement
of the Lease Term, the quantities of Metal referred to in each of the Leases
were computed in accordance with the various schedules to the Master Lease
Agreement and meet the purity and/or maximum level of contaminant criteria set
forth in those schedules.

Agreed and accepted

[            ]                                         

DB Energy Trading LLC                                        

 

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Schedule 3

Inventory

 

Unit

 

Metal Amount in Troy ounces

of Platinum

 

Rhodium Amount in Troy

ounces of Rhodium

       

 

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Schedule 4

Platinum Pure Metal Standards

[Rest of the page intentionally left blank]

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Schedule 5

Rhodium Pure Metal Standards

[Rest of the page intentionally left blank]

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Schedule 6

 

  1. Platinum Margin Pricing Matrix

 

Adjusted EBITDA   Platinum Margin Less than USD [***]   [***] bps Greater than
or equal to USD [***]   [***] bps Greater than or equal to USD [***]   [***] bps
Greater than USD [***]   [***]bps

 

  2. Relevant Quarterly Financial Statements for the relevant Quarter

 

Quarter (in any calendar year) in which

Leases are entered into or renewed

  

Relevant Quarterly Financial Statements

for purposes of determining relevant

Adjusted EBITDA for determining

applicable Lease Fee

From first day in January to last day in March

(“Quarter 1”)

   Quarterly financial statements published in Quarter 4 in the previous year
(the “Relevant Quarter”), which detail the performance of the Lessee and the
Adjusted EBITDA of the Lessee for the Quarter immediately preceding the Relevant
Quarter.

From first day in April to last day in June

(“Quarter 2”)

   Audited quarterly financial statements published in Quarter 1 of that year
(the “Relevant Quarter”), which detail the performance of the Lessee and the
Adjusted EBITDA of the Lessee for the Quarter immediately preceding the Relevant
Quarter.

From first day in July to last day in September

(“Quarter 3”)

   Quarterly financial statements published in Quarter 2 of that year (the
“Relevant Quarter”), which detail the performance of the Lessee and the Adjusted
EBITDA of the Lessee for the Quarter immediately preceding the Relevant Quarter.

From first day in October to last day in

December (“Quarter 4”)

   Quarterly financial statements published in Quarter 3 of that year (the
“Relevant Quarter”), which detail the performance of the Lessee and the Adjusted
EBITDA of the Lessee for the Quarter immediately preceding the Relevant Quarter.

Portions of this Exhibit, as indicated by [***], are omitted and have been filed
separately with the Secretary of the Commission pursuant to the Registrant’s
application requesting confidential treatment under Rule 24b-2 of the Securities
Exchange Act of 1934, as amended.