Document:

Shareholders' Agreement

 Exhibit 10.3 
 THIS SHAREHOLDERS’ AGREEMENT (this “Agreement”) is made the 10th day of June, 2009 (the “Effective Date”). 
 BETWEEN: 
  

	(1)	Grace Technology Investment Co., Ltd., a company incorporated in British Virgin Islands whose registered office is P.O. Box 957, offshore Incorporation Centre, Road Town,
Tortola, British Virgin Islands, British West Indies (“Grace”); 

  

	(2)	AGY (Cayman), a company incorporated in the Cayman Islands whose registered office is at Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9002, Cayman Islands
(“AGY”); and 

  

	(3)	Main Union Industrial Ltd., a company incorporated in Hong Kong whose registered office is at Suite 1112A, Ocean Centre, Harbour City, 5 Canton Road, Kowloon, Hong Kong,
which promptly after the Effective Date will change its name to AGY Hong Kong Ltd. (the “Company”). 

 WHEREAS:

  

	(A)	Grace and AGY desire to enter into a joint venture relationship that has as its principal purpose the development, manufacture, distribution and sale of certain glass yarn products
(the “Joint Venture”). 

  

	(B)	Grace Holdings (as defined below), Grace, AGY Holding Corp., AGY, the Company and the PRC Affiliate (as defined below) have entered into that certain Framework Agreement dated
12th March, 2009 (the “Framework Agreement”) and the other agreements referenced therein, which contemplate that the Business (as defined below) of the Joint Venture will be conducted by the Company and the PRC Affiliate, and
that AGY will hold a majority interest of the Company and Grace will own a minority interest in the Company, subject to certain options as described in the Option Agreement (as defined below). 

  

	(C)	Grace Holdings, Grace, and AGY have entered into a sale and purchase agreement (the “Share Sale Agreement”) dated 12th March, 2009 pursuant to which AGY has
agreed to purchase from Grace, and Grace has agreed to sell, upon the terms and conditions therein, a 70% equity interest in the Company. 

  

	(D)	The parties hereto agree to enter into this Agreement for the purposes of regulating the business, affairs and management of the Company and the PRC Affiliate (as defined below) as
from the Effective Date. 

 NOW IT IS HEREBY AGREED as follows: 
  

	1.	INTERPRETATION 

 In this Agreement, including the Recitals,
the following expressions shall, except where the context otherwise requires, have the following meanings: 
 “Affiliate(s)”
means in relation to any specified body corporate or Person, any other body corporate, unincorporated entity or Person directly or indirectly Controlling, directly or indirectly Controlled by or under direct or indirect common Control with such
specified body corporate or Person; 
 “Articles” means the Articles of Association of the Company, as amended from time to
time; 
 “Asia” means the commercial and business territory defined by the primary yarn consuming countries between the
western coast of the Pacific Ocean and 100°E Longitude. Notwithstanding anything in the foregoing sentence to the contrary, (a) Asia includes, without limitation, PRC, Hong Kong, Japan, South Korea, Singapore, Malaysia, Indonesia, Macau,
Brunei, Cambodia, Laos, Mongolia, Australia, New Zealand, the Philippines, Thailand, and Vietnam; and (b) Asia excludes, without limitation, North and South America, Europe, Africa, India, the Middle East, Russia, North Korea, Burma, and
Taiwan; provided that Taiwan will be included in the definition of Asia at such time that the Company is permitted to sell to customers in Taiwan under all applicable laws and regulations; 
 “Basic Documents” means the documents agreed by the Parties to be of essential importance to the arrangements contemplated herein, being
the Framework Agreement, Share Sale Agreement, Option Agreement, Intellectual Property Licence Agreement, Intercompany Agreement, Mutual Distributorship Agreement, Supply Agreement, Local Site Services Agreement, and the Technical Services Agreement
(each as defined in the Framework Agreement) and all other documents incidental to the consummation of the transactions contemplated under the aforesaid documents; 
 “Big 4 Accounting Firm” means KPMG, PricewaterhouseCoopers, Deloitte Touche Tohmatsu or Ernst & Young, or any other internationally recognized accounting firm as may be agreed to by the
Parties from time to time; 
 “Board” means the Board of Directors of the Company; 
 “Business” means manufacturing electronic grade direct melt E-Glass glass yarn and selling such products as conducted by the PRC
Affiliate and the Company and as proposed to be conducted as of the Effective Date in accordance with the Basic Documents, and as otherwise may be determined by the Board following the Effective Date; 
 “Business Day” means any day other than a Saturday, Sunday or other day on which commercial banks in the PRC or 

 
Hong Kong are required or authorized by law or executive order to be closed or on which a tropical cyclone warning no. 8 or above or a “black”
rainstorm warning signal is hoisted in Hong Kong at any time between 9:00 a.m. and 5:00 p.m. Hong Kong time; 
 “Competing
Business” means any business competing with the Business, including producing or selling glass fibre; 
 “Completion”
has the meaning set forth in the Share Sale Agreement; 
 “Completion Date” has the meaning set forth in the Share Sale
Agreement; 
 “Confidential Information” has the meaning set forth in the Framework Agreement; 
 “Control” means, in relation to a specified body corporate or Person, the power of any other Person directly or indirectly to secure that
the affairs of such specified body corporate or Person are conducted in accordance with the wishes of that other Person: 
  

	 	(i)	by means of the holding of Equity Securities or the possession of voting power (either at the shareholder, director or other comparable level) in or in relation to that specified
body corporate or Person or an intermediate Person; or 

  

	 	(ii)	by virtue of any powers conferred by the memorandum and articles of association or by-laws or other similar documents regulating that specified body corporate or Person or an
intermediate Person; 

 “Deferred Consideration Payment Notice” means the Deferred Consideration Payment Notice
under the Share Sale Agreement. 
 “Director” means any director of the Company and where applicable, any alternate director;

 “Encumbrance” means any mortgage, charge, pledge, lien (otherwise than arising by statute or operation of law),
hypothecation, equities, adverse claims, or other encumbrance, priority or security interest, over or in any property, assets or rights of whatsoever nature or interest or any agreement for any of the same and “Encumber” shall be
construed accordingly; 
 “Equity Securities” means, with respect to any Person, such Person’s capital stock, membership
interests, partnership interests, registered capital, joint venture or other ownership interests or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or exchangeable for, such capital stock,
membership interests, partnership interests, registered capital or joint venture or other ownership interests (whether or not such derivative securities are issued by such Person); 

 “Governmental Authority” means any government or political subdivision thereof; any
department, agency or instrumentality of any government or political subdivision thereof; any court or arbitral tribunal; and the governing body of any securities exchange, in each case having competent jurisdiction; 
 “Grace Fabric” means Shanghai Grace Fabric Co., Ltd; 
 “Grace Holdings” means Grace THW Holding Limited, a company incorporated in the Cayman Islands, being the parent company of Grace; 
 “Group Companies” means the Company and the PRC Affiliate and “Group Company” means any of them; 
 “Hong Kong” means the Hong Kong Special Administrative Region of the PRC; 
 “Inter-Company Funding” has the meaning ascribed to it in the Share Sale Agreement. 
 “New Funding Arrangements” means the New Funding Arrangements under the Share Sale Agreement. 
 “New Funding Notice” means the New Funding Notice under the Share Sale Agreement. 
 “Memorandum” means the Memorandum of Association of the Company, as amended from time to time; 
 “Options” has the meaning set forth in the Option Agreement; 
 “Option Agreement” means the Option Agreement made between AGY, Grace and the Company pursuant to which Grace has agreed to grant AGY a
call option and AGY has agreed to grant Grace a put option, in respect of the Remaining Grace Interest in the Company; 
 “Option
Exercise Date” means the date on which AGY exercises its call option or Grace exercises its put option in accordance with the terms of the Option Agreement; 
 “Party” means one of the parties to this Agreement; 
 “Person” means any
natural person, firm, company, Governmental Authority, joint venture, partnership, association or other entity (whether or not having separate legal personality); 
 “PRC” means the People’s Republic of China and for the purposes of this Agreement excludes Taiwan and the Special Administrative Regions of Hong Kong and Macau; 

 “PRC Affiliate” means Shanghai Grace Technology Co., Ltd 

, the particulars of which are set out in Schedule 2 to the Share Sale Agreement, which promptly after the Effective Date will change its name as contemplated in Clause 2.2; 
 “Refinancing Arrangements” means the new financing arrangements currently expected to be entered into by the PRC Affiliate with Bank of
Shanghai following Completion pursuant to which the PRC Affiliate’s existing bank debt will be refinanced and a new loan of not less than US$52,000,000 shall be extended to the PRC Affiliate; 
 “Related Person” means (i) any shareholder, director, or officer of AGY or Grace or any Affiliate of either of them, (ii) any
relative of such shareholders, directors or officers, (iii) any Person in which any shareholder, director or officer of the AGY or Grace owns Equity Securities, other than a passive shareholding of less than two percent (2%) in a publicly
listed company, or over which a Related Person exercises, or all Related Persons together can exercise, control or significant influence through voting, position or ownership, or its Affiliate and (vi) any other Affiliate of the AGY or Grace;

 “Remaining Grace Interest” means the Shares held by Grace as of the date of the Agreement or such other Equity Securities
in the Company as Grace may hold as at the Option Exercise Date; 
 “Senior Management” means Chief Executive Officer, Chief
Operating Officer, Chief Financial Officer and any other senior executives; 
 “Shares” means the common shares of par value
of HK$1.00 each in the capital of the Company carrying the rights and privileges as set forth in the Articles; 
 “Shareholders” means any or all of those Persons at any time holding any Shares in the Company; 
 “Subscription Shares” means the Subscription Shares issuable pursuant to the Share Sale Agreement; 
 “Transfer” means to transfer, sell, assign, pledge, hypothecate, give, create a security interest in or lien on, place in trust (voting or otherwise), transfer by operation of law (other than a merger or consolidation of
the Company) or in any other way Encumber or dispose of, directly or indirectly and whether or not voluntarily, any Equity Securities; 
 “Warranties” means the representations, warranties and undertakings given or made by Grace and/or Grace Holdings and contained in the Share Sale Agreement including, without limitation, those warranties, representations,
indemnities and undertakings as set out in Clause 9 of, and Schedule 5 to, the Share Sale Agreement; 
  

 In this Agreement: 
  

	 	(i)	references to this Agreement include the Schedules, Exhibits and Appendices, which form an integral part hereof. A reference to any Clause, Schedule, Exhibit or Appendix is, unless
otherwise specified, to such Clause of, or Schedule, Exhibit or Appendix to, this Agreement. The words “hereof,” “hereunder” and “hereto,” and words of like import, unless the context requires otherwise, refer to this
Agreement as a whole and not to any particular Clause hereof or Schedule, Exhibit or Appendix hereto. A reference to any document (including this Agreement) is to that document as amended, consolidated, supplemented, novated or replaced from time to
time; 

  

	 	(ii)	references to “law” shall include all applicable laws, regulations, rules and orders of any Governmental Authority, including any common or customary law, constitution,
code, ordinance, statute or other legislative measure and any regulation, rule, treaty, order, decree or judgment; and “lawful” shall be construed accordingly; 

  

	 	(iii)	references to any statutory provision or any law, rule or regulation (whether or not having the force of law) shall be construed as references to the same as amended, varied,
modified, consolidated or re-enacted from time to time and to any subordinate legislation made under such statutory provision; 

  

	 	(iv)	words importing the singular include the plural and vice versa, words importing one gender include every gender, and references to persons include bodies corporate and
unincorporated; 

  

	 	(v)	headings are for ease of reference only and shall not affect the interpretation of this Agreement; 

  

	 	(vi)	references to writing include any mode of reproducing words in a legible and non-transitory form; 

  

	 	(vii)	the expression “Shareholders” shall, where the context permits, include their respective successors, assigns and personal representatives (where applicable);

  

	 	(viii)	all references to the “right to nominate” mean and include the exclusive right to vote for the appointment and removal of person(s), and a person (A) “nominated
by” another person (B) means the exercise by person (A) of such exclusive right to vote for the appointment or removal of person (B), and “nominate” shall be construed accordingly; 

  

	 	(ix)	any reference to a number or price of Shares shall be appropriately adjusted to reflect any share split, share consolidation, share dividend, share reclassification, reorganization,
capitalization issuance or similar transaction affecting the share capital of the Company; 

	 	(x)	if a period of time is specified and dates from a given day or the day of a given act or event, such period shall be calculated exclusive of that day; if the day on or by which
something must be done is not a Business Day, that thing must be done on or by the Business Day immediately following such day; 

  

	 	(xi)	references to the provision of written or verbal materials (including notices, reports, circulars, papers and correspondence) by, between or among the Company, the Shareholders and
the Directors means communications using the English language (unless specifically authorized herein to be provided in one or more languages); and 

  

	 	(xii)	the phrase “directly or indirectly” means directly, or indirectly through one or more intermediate persons or through contractual or other arrangements, and “direct
or indirect” has the correlative meaning. 

  

	2.	BUSINESS OF THE GROUP COMPANIES 

  

	2.1	The Company shall procure that the PRC Affiliate will not conduct any business or activity other than the sale, distribution and manufacturing of glass fibre products as permitted
by its business licence. 

  

	2.2	Promptly after the Effective Date, and in any event within thirty (30) days after the Effective Date, the Company shall change its name to “AGY Hong Kong Ltd.”, and
within sixty (60) days after the Effective Date, the Company shall cause the PRC Affiliate to change its name to “AGY Shanghai Technology Co., Ltd.” 

 or such other Chinese name as AGY may choose and the PRC authorities may approve. The Parties will use good faith efforts to design a special logo for the Company and the PRC Affiliate to use during the
period prior to the exercise of one of the Options, reasonably agreeable to both AGY and Grace in which the “G” in “AGY” is larger than “A” and “Y”. 

  

	3.	SHARE CAPITAL OF THE COMPANY 

  

	3.1	Authorized Capital. 

 As of the Effective Date, the
authorised capital of the Company is HK$20,000 divided into 20,000 Shares of HK$1.00 each. 20,000 Shares have been issued of which AGY holds 14,000 Shares and Grace holds 6,000 Shares. 
  

	3.2	Equity Ownership by the Parties. 

 As of the
Effective Date the equity ownership structure in the Company shall be that AGY owns seventy percent (70%) and Grace owns thirty percent (30%) of the Company’s outstanding Equity Securities. 

	3.3	Option and Adjustment in Equity Ownership  

 AGY,
Grace and the Company acknowledge that they have entered into the Option Agreement and that the initial equity structure described in Clause 3.2 above is subject to change through the exercise of an Option. 
 AGY, Grace and the Company further acknowledge that the initial equity structure described in Clause 3.2 above may also be subject to adjustment if the
Subscription Shares are issued. 
  

	4.	BOARD CONSTITUTION AND BOARD AND SHAREHOLDERS’ MEETINGS 

  

	4.1	The number of Persons comprising the Board shall be five (5), of which three (3) shall be nominated by AGY and two (2) shall be nominated by Grace. The PRC Affiliate
(after amendment of its articles of association with which Grace hereby agrees to assist, support and take all necessary corporate steps to achieve) shall have a sole Executive Director who shall be appointed by the Board. Each Party’s right to
nominate Directors will roughly reflect its relative ownership percentage of the Company and the constitution of the Board shall be adjusted in accordance with the shareholding proportion when further fundraising occurs or the shareholding structure
of the Company changes after any Option Exercise Date. 

  

	4.2	A Director shall be removed from the Board, with or without cause, upon, and only upon, the affirmative vote of the Shareholders in accordance with this Clause. Each Shareholder
shall vote for the removal of such Director upon the request of the Shareholder that nominated such Director. Otherwise, no Shareholder shall vote for the removal of such Director. 

  

	4.3	In the event any Director resigns or is removed in accordance with Clause 4.2, the Shareholder that nominated such Director will have the right to nominate such Director’s
successor or replacement, and such successor or replacement Director shall be nominated and elected on or as soon as practicable after the date of such resignation or removal. 

  

	4.4	Each Director may, by giving written notification to the Company Secretary, nominate any other Person (including another Director) to be his alternate for such period of time as may
be specified therein, and may in like manner at any time terminate such appointment in accordance with the Articles. If such alternate Director is a Director himself, such alternate Director would, for the purposes of quorum and voting, count for
himself and, in addition, the Person for whom he is an alternate. 

  

	4.5	Each Director shall be entitled to, and the Shareholders shall ensure that each Director shall be entitled to, examine the books and accounts of the Company and have free access, at
all reasonable times, to any and all properties and facilities of the Company and the PRC Affiliate. The Shareholders shall procure that the Company shall provide such available information relating to the business affairs and financial position of
the Company and the PRC Affiliate as any Director may reasonably require. A Director may provide such information to the Shareholders who nominated the Director. 

	4.6	Save for matters stated herein as requiring Shareholder consent: 

  

	 	(i)	the Board shall have ultimate responsibility for management and operation of the Company and the PRC Affiliate; and 

  

	 	(ii)	the Board shall be required to make all major decisions of the Company and the PRC Affiliate and all decisions outside the day to day business of the Company and the PRC Affiliate.
All matters in respect of such decisions must be referred to the Board, and no Shareholder or officer of the Company or the PRC Affiliate shall take any actions purporting to commit the Company or PRC Affiliate in relation to any such matters
without the approval of the Board. Each Shareholder shall cause the Director nominated by it, if any, not to take any such actions or authorize any officers to take any such actions without the approval of the Board. 

  

	4.7	The Chairman of the Board shall be selected by a majority vote of the Directors. 

  

	4.8	Meetings of the Board shall take place as frequently as required to operate the business of the same in an efficient manner but in any case shall take place generally at least once
in every three (3) month period. Meetings shall be conducted in English and held in a location approved by a majority of the Directors of the Company having regard to potential tax consequences to the Group Companies of having meetings in such
location. Either Party may bring a Chinese translator to meetings of the Board. Minutes of each Board meeting shall be written in the English language and translated to Chinese. 

  

	4.9	In relation to meetings of the Board, a meeting may be called by the Chairman of the Board or by any Director of the Company giving notice in writing to the Company Secretary or
Chairman specifying the date, time and agenda for such meeting. The Company Secretary or Chairman shall upon receipt of such notice give a copy of such notice by registered post to all Directors at such addresses that the Directors shall inform the
Company in writing from time to time of such meeting, accompanied by a written agenda specifying the business of such meeting and copies of all papers relevant for such meeting. A copy of such notice shall be provided as well by electronic mail or
facsimile at the address or number, as the case may be, provided by the Directors. Not less than fourteen (14) Business Days’ notice shall be given to all Directors; provided, however, that such notice period may be reduced with the
written consent of all of the Directors. 

  

	4.10	 All meetings of the Board shall require a quorum of at least a majority of the Directors attending in person or by proxy; provided, however, that the quorum must
include one Director nominated by Grace if there is at least one nominated by Grace and one Director nominated by AGY if there is at least one nominated by AGY. Notwithstanding the foregoing, if such a quorum is not present within one hour from the
time appointed for the meeting of the Board, such Board meeting shall be 

	 	 
adjourned to a meeting to be held on the 10th Business Day following such meeting at the same time and place of such meeting, and any Director present at
such second meeting shall constitute a quorum. 

  

	4.11	At any Board meeting of the Company each Director may exercise one vote. Any Director may, by written notice to the Company Secretary, authorize another Director to attend and vote
by proxy for such Director at any such meetings. 

  

	4.12	Except as otherwise provided in this Clause 4.12, all decisions of the Board of the Company should be made by a simple majority vote of the Directors present at a meeting at which a
quorum has been achieved. However, decisions of the Board with respect to the following matters will require the unanimous vote of the Directors present at a meeting at which a quorum has been achieved: 

  

	 	(i)	Any amendment to this Agreement (except to implement the terms and conditions upon which any new Equity Securities of the Company or the PRC Affiliate are issued in accordance with
this Agreement) or the Memorandum and the Articles; 

  

	 	(ii)	The termination or dissolution of the Company; and 

  

	 	(iii)	The change of the Company’s name. 

  

	4.13	If the agenda for any meeting of the Directors contemplates that the Board will take action with respect to any of the following material transactions: 

  

	 	(i)	the issuance of new shares or alteration of the equity structure of the Company (other than as provided in this Agreement, the Option Agreement, or the Share Sale Agreement);

  

	 	(ii)	any merger, or sale of the equity or substantially all the assets of the Company; 

  

	 	(iii)	the acquisition of any material business; 

  

	 	(iv)	the incurrence of material debt, other than trade debt incurred in the ordinary course of business; 

  

	 	(v)	any capital expenditure in excess of US$1 million; 

  

	 	(vi)	the lease or acquisition of real property; or 

  

	 	(vii)	any confirmation requested by either Party as to the calculation or treatment of Non-Reoccurring Items or Occasional Items (each as defined in the Option Agreement).

 then the Director nominated by Grace may, by providing written notice to AGY, request that that the Chief Executive Officers
of each of Grace Holdings and AGY Holding Corp. meet in person or by phone to discuss any such matter in advance of such 

 
Directors’ meeting. In such event, the Chief Executive Officers shall meet in person or by phone within thirty (30) days of AGY’s receipt of
such request, and the meeting of the Board will be delayed until such meeting takes place or until the expiration of such thirty (30) day period in the event that the Chief Executive Officer of Grace Holdings does not make himself reasonably
available during such period. In no event, however, will this Clause 4.13 be interpreted as requiring more than a majority vote of the Board on such matters or limiting the discretion of the Directors nominated by AGY. 
  

	4.14	Directors may participate in Board meetings by telephone, and such participation shall constitute presence for purposes of the quorum provisions of Clause 4.10 and the Company shall
ensure that (i) each such Director is able to hear all other Directors and (ii) if such Director wishes, he is able to address other Directors. Each of AGY and Grace shall have the right to have one or more of observers attend the meetings
of the Board upon advance written notice to the Board. The individual observers who are not employees of AGY or Grace or a Related Person shall be subject to the reasonable approval of the Board. 

  

	4.15	The Company shall reimburse the Directors quarterly for, and hold the Directors harmless against liability for the payment of, all of the Directors’ reasonable out-of pocket
costs, fees and expenses incurred in connection with or related to attending meetings of the Board, the Shareholders’ investment in the Company and travelling to and within China and Hong Kong, including all reasonable travel, lodging and
related expenses incurred by the Directors during business trips to and within China and Hong Kong which are attributable to the Shareholders’ investment in the Company. 

  

	4.16	Any action that may be taken by the Directors at a meeting may be taken by a written resolution prepared in English signed by all of the Directors. 

  

	4.17	Subject to other provisions of this Agreement, the Board shall have the authority to determine the extent of, and the means of satisfying, any future funding needs of the Company
or, as the case may be, the PRC Affiliate, and shall have the discretion to determine the terms of any future issuance of securities or incurrence of indebtedness by the Company; provided, however, that no Shareholder shall have any
obligation to provide any indemnity, guarantee or other security to any other Shareholder or any third party in support of loans, overdraft facilities, borrowings or other financial arrangements entered into, required by or otherwise procured for
the Company. 

  

	4.18	The Board shall give not less than fourteen (14) Business Days notice of meetings of Shareholders to those Persons whose names on the date the notice is given appear as
Shareholders in the share register of Company and are entitled to vote at the meeting. 

  

	4.19	The notice provisions described above as applicable to a Board meeting shall also apply to a Shareholders’ meeting. The quorum of Shareholders’ meetings shall be all
Shareholders or their authorized representatives/proxies. A quorum must be present at the beginning of and throughout each meeting. For the time of the meeting:- 

  

	 	(i)	if within thirty (30) minutes from the time appointed for a meeting a quorum is not present, the meeting shall stand adjourned until the same time and place on the same day in
the next week; 

	 	(ii)	if at such adjourned meeting a quorum is not present within thirty (30) minutes from the time appointed for such adjourned meeting (or such longer interval as the chairman of
the meeting may think fit to allow), the meeting shall stand further adjourned until the same time and place on the same day in the next week; and 

  

	 	(iii)	if at the second adjourned meeting a quorum is not present within thirty (30) minutes from the time appointed for such meeting (or such longer interval as the chairman of the
meeting may think fit to allow), any Shareholder present shall constitute a quorum. 

  

	4.20	A Shareholder or its authorised representative/proxy at the meeting of Shareholders may participate in the meeting of Shareholders by means of telephone conference or similar means
of communication and any Person participating in a meeting of the Shareholders in such manner shall be deemed to be present in person at such meeting and shall be taken into account for the purpose of a quorum and can take part in the vote. The
Company shall ensure that (i) each such Shareholder is able to hear all other Shareholders and (ii) subject to the same treatment of Shareholders present at the meeting in person, if such Shareholder wishes, he is able to address other
Shareholders. 

 The Chairman of the Board from time to time shall preside as Chairman at every Shareholders’ meeting. Any
resolution proposed at any Shareholders’ meeting shall be decided by a simple majority of votes by the voting Shareholders except where a greater majority is required or required otherwise by this Agreement and/or the Articles. In the case of
an equality of votes, the Chairman shall have no casting vote. Shareholders’ resolutions may be passed by written resolution prepared in English and Chinese languages, circulated and signed by all the Shareholders. Any such resolution may
consist of several documents in like form each signed by one or more Shareholders. 
  

	4.21	Each Shareholder shall exercise any voting rights or other powers of control so as to ensure the passing of resolution(s) necessary or appropriate to enable the affairs of the Group
Company to be conducted in accordance with the provisions of this Agreement or to give full effect to the provisions of this Agreement, and to ensure that no resolution which does not accord with such provisions will be passed.

  

	4.22	The Shareholders and the Company shall, so far as is practicable, procure that the provisions of Clause 4 shall apply in accordance with the Articles of Association of the PRC
Affiliate (to the extent permissible under applicable laws). 

	4.23	Unless otherwise expressly required by laws or as set out in this Agreement for which the Shareholders’ approval is required, all other matters relating to the Company or the
PRC Affiliate shall be decided by the Board, and the Board shall have full powers to do so. 

  

	4.24	The Shareholders shall vote for any decision made by the Board in accordance with this Agreement if such decision shall be required by the applicable laws to be passed at the
general meeting of the Company. 

  

	4.25	The Shareholders shall procure that all decisions made by the Board in respect of the PRC Affiliate in accordance with this Agreement shall be passed by the general meeting and/or
the meeting of the Board. 

  

	4.26	Each of the Shareholders shall exercise all voting rights and other powers of control available to them to ensure that the Articles and the Articles of Association of the PRC
Affiliate shall comply and be consistent with the provisions of this Agreement. 

  

	5.	REPRESENTATIONS, WARRANTIES AND UNDERTAKINGS 

  

	5.1	Each Party represents, warrants and undertakes to each other Party that: 

  

	 	(i)	it is a company duly incorporated or established and validly existing in all respects under the laws of its place of incorporation and it is established with full power and
authority to own its assets and to carry on its business as such business is now being conducted and no action has been taken or threatened (whether by it or any third party) for or with a view to its liquidation, receivership or analogous process.
The execution of this Agreement and all other ancillary documents by such Party has been validly authorised; 

  

	 	(ii)	the obligations expressed as being assumed by it under this Agreement constitute its valid, legal and binding obligations enforceable against it in accordance with the terms of this
Agreement; 

  

	 	(iii)	neither the execution or delivery by it of this Agreement or of any ancillary document nor the performance or observance of any of its obligations under this Agreement, does or
will: 

  

	 	(a)	conflict with, or result in any breach or violation of, any judgment, order or decree, trust deed, mortgage, agreement or other instrument or arrangement by which it is bound; or

  

	 	(b)	where applicable, cause any limitation imposed on any of its powers, or on the right or ability of its Directors to exercise such powers to be exceeded. 

	5.2	Further Assurances 

  

	 	(i)	Each Party agrees that it shall do and execute or procure to be done and executed all such further acts, deeds, documents and things as may be necessary to give full effect to the
terms and intent of this Agreement. 

  

	 	(ii)	Each of Grace and AGY agree that it shall do and procure to be done all such acts as may be necessary to cause the Shares to be treated identically. 

  

	6.	COVENANTS 

  

	6.1	Within five (5) Business Days following the issuance of the New Funding Notice by Grace in accordance with the Share Sale Agreement (or on a date otherwise agreed by the
parties thereto), AGY shall subscribe for the Subscription Shares on the basis described in the Share Sale Agreement. 

  

	6.2	Prior to the Completion Date Grace shall have procured that the Company make an application for the registered capital of the PRC Affiliate to be increased to an amount not less
than the then outstanding Inter-Company Funding. 

  

	6.3	The Company shall procure that the PRC Affiliate will use commercially reasonable efforts to conclude the proposed Refinancing Arrangements. If a New Funding Notice is issued in
accordance with the Share Sale Agreement, the Company shall procure that the PRC Affiliate (a) will promptly use funds made available to the Company through the New Funding Arrangements to repay the Inter-Company Funding and (b) for the
avoidance of doubt, will draw down such funds as are sufficient to repay the Inter-Company Funding within five (5) Business Days of such funding becoming available. 

  

	6.4	The Parties acknowledge that it has been agreed under the Share Sale Agreement that upon the expiry of 3 months Grace may issue a Deferred Consideration Payment Notice and in such
circumstances, AGY shall pay the Deferred Consideration (as defined therein) to Grace in lieu of subscribing for the Subscription Shares on the basis described in the Share Sale Agreement. 

  

	7.	MANAGEMENT 

  

	7.1	Save as otherwise provided in this Agreement or agreed between the Parties, the Shareholders shall, and shall procure the Directors nominated by them to exercise their powers and
control in relation to the PRC Affiliate so as to ensure that the PRC Affiliate shall: 

  

	 	(i)	carry on and conduct businesses and affairs in a proper and efficient manner and for its own benefit; 

  

	 	(ii)	transact its business on arm’s length terms or on terms not less favourable than arm’s length terms; 

  

	 	(iii)	keep proper books of account and therein make true and complete entries of all its dealings and transactions of and in relation to its business; 

	 	(iv)	conduct its business in accordance with all applicable legal requirements, including the obtaining of all necessary licences, consents and approvals; and 

 

	 	(v)	ensure that all major documents and agreements subject to Board approval shall be presented to the Board with true and correct translations in the English language.

  

	7.2	The Shareholders shall vote in general meeting and shall cause the Directors appointed or nominated by each of them, when determining the amount of dividends to be distributed by
the Company, to give effect to the Shareholders’ intention that, subject to the Board’s determination of constraints imposed by (a) prudent financial management and (b) the working capital requirements of the Company, a cash
dividend be distributed at the conclusion of each financial year equivalent to the net profit after tax of the Company, as calculated by the Board in good faith, and provided that the rights of the Shareholders with respect to payment of the annual
cash dividend under this Clause 7.2 will not be prejudiced by the issuance of the Subscription Shares pursuant to the Share Sale Agreement. 

  

	7.3	AGY confirm and agree that any calculation or valuation relating to the Company or the PRC Affiliate that may be required in connection with the arrangements contemplated by clauses
2 or 3 of the Option Agreement or by Clause 10.1 (ii) hereof, shall be made in good faith and will not result from or be distorted by unnecessary transfers of assets or funds between either Main Union or the PRC Affiliate and any other
affiliate or subsidiary of either of them which is intended to reduce the calculation of EBITDA (as defined in the Option Agreement) or otherwise materially reduce amounts which would otherwise have been payable to Grace.

  

	8.	FINANCING OBLIGATIONS 

  

	8.1	In the event that the Company needs additional resources to fund operations or capital projects and at such time, the number of authorized but unissued Shares shall not be
sufficient to allow the issuance of additional Shares in connection with a Shareholder’s equity contribution, the Company and the Shareholders may instead provide funding in the form of shareholder loans until such time as new applications or
an increase in registered capital are approved. 

  

	9.	RESTRICTIONS ON TRANSFER OF SHARES 

  

	9.1	Except for (i) Transfers in accordance with Clauses 10.1 and 10.2, (ii) Transfers pursuant to the Option Agreement and (iii) the grant of any proxy or power of
attorney by any Shareholder for the purpose of exercising the right of such Shareholder to attend meetings of Shareholders of the Company and to exercise the voting right of such Shareholder at such meeting, no Shareholder shall Transfer any Shares
owned by such Shareholder unless prior written approval shall have been obtained from the other Shareholder. Any attempt to Transfer any Shares in violation of the preceding sentence shall be null and void ab initio, and the Shareholders shall
procure that the Company shall not register any such Transfer. 

	9.2	Notwithstanding any other provisions of this Agreement, neither of the Shareholders shall Transfer any Shares unless: 

  

	 	(i)	the transferee has agreed in writing to be bound by the terms and conditions of this Agreement pursuant to a Deed of Adherence substantially in the form attached hereto as
Exhibit A; and 

  

	 	(ii)	the Transfer complies in all respects with the other applicable provisions of this Agreement and applicable laws and regulations. 

  

	9.3	The provisions set forth in Clauses 9.1 and 9.2 cannot be avoided by the Transfer of any direct or indirect interest, legal or beneficial, in the Equity Securities in either
Shareholder. 

  

	9.4	The Transfer restrictions in this Agreement and in the Articles shall not be capable of being avoided by the holding of Shares indirectly through any entity that can itself be sold
in order to Transfer an indirect interest in Shares free of such restrictions, or any trust, derivative contract or other economic arrangement transferring the benefits of ownership of any Shares. Each of the Shareholders undertakes that it shall
not take any action intended to avoid such restrictions in any manner. 

  

	10.	DRAG-ALONG AND CO-SALE RIGHTS 

  

	10.1	Drag-Along Right. 

  

	 	(i)	In the event that any third Person makes a bona fide offer to purchase all of the issued and outstanding capital stock of the Company and the Board approves such offer (a
“Drag-Along Sale”), then AGY shall have the right, but not the obligation, to require that Grace sell all its Shares and shareholder loans owing by the Company to Grace to such third Person at the same price per Share as AGY
receives for its Shares and on the same terms and conditions as applicable (the “Drag-Along Right”). Not later than thirty (30) days prior to the date on which such Drag-Along Sale is anticipated to be consummated, the Board
shall give written notice of such Drag-Along Sale to Grace. Grace agrees to vote all of its Shares in favour of the Drag-Along Sale and will otherwise cooperate with and take all necessary and appropriate steps to facilitate the proposed Drag-Along
Sale on such terms and conditions as AGY or the Board shall reasonably propose, including (i) executing waivers of any right of pre-emption or similar right it may have over the Shares, (ii) delivering such Share certificates duly endorsed
for transfer and/or with a duly executed instrument of transfer, as well as an assignment of any shareholder loan and related note, and (iii) entering into any share or security sale agreement, merger agreement or similar agreement; provided
that AGY must also enter into the same agreement or a substantially similar agreement, and such agreement must provide that Grace will be entitled to the same type of consideration and the same conditions as AGY (e.g., cash or securities or a
combination thereof). AGY and Grace will each bear its pro rata share (based upon its equity ownership percentage) of the expenses of such Drag-Along Sale. 

	 	(ii)	If AGY chooses to exercise its Drag-Along Right within twelve (12) months of Completion, AGY will guarantee that the net consideration received by Grace for its Shares in the
Company will not be less than the amount that would be payable pursuant to Clause 2.2 (a) of the Option Agreement in circumstances where the Call Option provided for therein is exercised and on the assumption of an EBITDA of US$12,000,000
having been achieved. 

  

	 	(iii)	If AGY chooses to exercise its Drag-Along Rights after the twelve (12) months period envisaged by (ii) above the net consideration payable to Grace for its Shares will be
calculated on the basis of the Call Option being exercised pursuant to the terms of the Option Agreement on the date notice of the Drag-Along Sale was given to Grace (and on the assumption that the same was exercisable at such time).

  

	 	(iv)	Any exercise by AGY of its Drag-Along-Rights at a time prior to the repayment or cancellation of the Inter-Company Funding shall be subject to arrangements being made to ensure that
new registered capital invested in the PRC Affiliate will be used for the purposes described in Clause 6.2. 

  

	10.2	Right of Co-Sale. 

  

	 	(i)	In the event that AGY receives a bona fide offer from a third Person to purchase all or any of AGY’s Shares in the Company, Grace will have the right, but not an obligation, to
participate on a pro rata basis in such proposed Transfer and otherwise on the same terms and conditions as AGY (the “Right of Co-Sale”). 

  

	 	(ii)	AGY will deliver a written notice to Grace (the “Co-Sale Notice”) not later than thirty (30) days prior to the consummation of such proposed Transfer. Such
Co-Sale Notice shall contain the material terms and conditions, including the number of Shares being the subject of the bona fide offer, the full name and address of the proposed purchaser; and the full terms and conditions of the proposed offer
including the price payable per Share, and any additional consideration which is or may become payable to AGY and any of its Affiliates, which is attributable directly or indirectly to the offer. 

  

	 	(iii)	 If Grace desires to exercise its Right of Co-Sale, Grace must give AGY written notice to that effect within fifteen (15) days after receiving the Co-Sale
Notice described above, and upon giving such notice, Grace shall be deemed to have effectively and irrevocably exercised the Right of Co-Sale. Upon such exercise, Grace may include in the Transfer all or any part of Grace’s Shares equal to the
product obtained by multiplying (a) the aggregate number of Shares subject to the proposed 

	 	 
Transfer, as specified in the Co-Sale Notice by (b) a fraction, the numerator of which is the number of Shares owned by Grace immediately before
consummation of the proposed Transfer and the denominator of which is the total number of Shares owned, in the aggregate, by AGY and Grace immediately prior to the consummation of the proposed Transfer. If Grace elects to transfer all its Shares, it
shall also assign any shareholder loan owed to it by the Company to the third Person transferee. 

  

	 	(iv)	At the closing of the proposed Transfer, AGY, and Grace, as applicable, shall effect its participation in the proposed Transfer by delivering one or more certificates representing
the number of its Shares which are being sold, properly endorsed for transfer, duly executed instrument of transfer, sold note and assignment of any shareholder loan to the third Person transferee. AGY and Grace hereby agree that the terms and
conditions of any such Transfer will be memorialized in, and governed by, a written purchase and sale agreement with customary terms and provisions for such a transaction including a provision relating to the repayment or cancellation of the
Inter-Company Funding similar to that contemplated by Clause 10.1 (iii) above, and the Parties further covenant and agree to enter into such an agreement as a condition precedent to any Transfer pursuant to this Clause 10.2.

  

	10.3	Non-Cash Consideration. If the consideration proposed to be paid for the Shares pursuant to the transactions contemplated by Clauses 10.1 and 10.2 is cash or publicly traded
securities, then Grace will receive cash or such publicly traded securities pursuant to Clauses 10.1 and 10.2. However, if the consideration proposed to be paid for the Shares pursuant to the transactions contemplated by Clauses 10.1 and 10.2 is in
property or services other than cash or publicly traded securities, the Board shall instruct independent assessment agency to evaluate the fair market value of such consideration, and AGY will cause Grace to be paid in cash.

  

	11.	Intentionally omitted. 

  

	12.	ACCESS TO INFORMATION 

  

	12.1	As of the Effective Date, so long as any Shareholder holds any Shares, the Company shall deliver to such Shareholder the following documents of each Group Company:

  

	 	(i)	annual audited consolidated financial statements within one hundred and twenty (120) days after the end of each financial year, audited by a Big 4 Accounting Firm at the
Company’s election (with draft copies provided within sixty (60) days after the end of each financial year); 

  

	 	(ii)	unaudited consolidated quarterly financial statements within forty-five (45) days of the end of each financial quarter together with a good faith calculation of EBITDA (as
defined in the Option Agreement) as at the end of each such quarter; 

	 	(iii)	unaudited consolidated monthly financial statements within ten (10) days of the end of each month, together with a good faith calculation of EBITDA as at the end of each such
month; 

  

	 	(iv)	copies of all documents and information sent to any Shareholder (in his capacity as a shareholder of the Company); 

  

	 	(v)	an annual budget and business plans within thirty (30) days prior to the end of each financial year. The budget and business plans shall include detailed capital expenditure
plans, financial projections (including an income statement, balance sheet and cash flow statement etc.), debt financing/repayment requirements, business strategy and detailed arrangements associated with the expected creation of any subsidiaries,
partnerships and joint ventures. The Board shall as soon as practicable adopt detailed budgets and business plans for the Company before the commencement of the relevant financial year; 

  

	 	(vi)	an executive summary, in the English language, of the business activities of the PRC Affiliate within ten (10) days of the end of each month, including any inter-company
transactions or transactions with Related Persons or members of the Board; and 

  

	 	(vii)	such other information of any Group Company as may be reasonably requested by any of the Shareholders. 

 All the financial statements referred to in this Clause 12.1 shall be prepared in conformance with Generally Accepted Accounting Principles (GAAP) in the
United States of America and shall include a balance sheet, income statement and statement of cash flows. 
  

	12.2	For so long as any Shares are outstanding, such Shareholder shall have the following rights during normal business hours: (i) inspection rights of the books and records of the
PRC Affiliate; (ii) inspection rights of any of the facilities of the PRC Affiliate and (iii) the right to discuss the business, operations and management and other matters of the PRC Affiliate with the Directors, officers, employees,
accountants, legal counsel and investment bankers. 

  

	13.	COMMENCEMENT, TERMINATION AND BREACH 

  

	13.1	This Agreement shall only take effect and become legally binding on the Parties immediately upon (and only upon) Completion. If for any reason the arrangements relating to
Completion envisaged by the Share Sale Agreement are not completed, this Agreement shall have no legal force or effect nor binding on the Parties. 

  

	13.2	Except as otherwise provided in Clause 13.3, this Agreement shall continue in full force and effect until the Company has been dissolved, wound up or otherwise ceases to exist as a
separate corporate entity; 

	13.3	This Agreement shall terminate: 

  

	 	(i)	if all the outstanding Shares are held beneficially by one Shareholder; or 

  

	 	(ii)	in relation to any Shareholder, after such Shareholder shall have ceased to be a shareholder of Company. 

  

	13.4	Termination of this Agreement shall not release any Party from any liability which at the time of termination has already accrued to the other Parties or any liability arising or
maturing after such termination as a result of any breach, omission committed or omitted prior to such termination. 

  

	13.5	The Parties hereto agree that any new shareholder, who will hold more than five percent (5%) of any Shares of Company, shall be required to sign a deed confirming its agreement
to be bound by this Agreement as a condition of its becoming a shareholder or increasing the amount of Shares held in the Company, as the case may be. 

  

	14.	SEVERABILITY 

 If at any time any one or more
provisions hereof is or becomes invalid, illegal, unenforceable or incapable or performance in any respect, the validity, legality, enforceability or performance of the remaining provisions hereof shall not thereby in any way be affected or
impaired, and this Agreement shall be construed as if such invalid, illegal or unenforceable provision had never been contained herein. 
  

	15.	INDEMNIFICATION 

 Grace (the
“Indemnifying Party”) shall indemnify, defend and hold harmless AGY (the “Indemnified Party”) from and against any and all losses, damages, liabilities, claims, proceedings, costs and expenses (including the fees,
disbursements and other charges of counsel incurred by the Indemnified Party in any action between the Indemnifying Party and the Indemnified Party or between the Indemnified Party and any third party, in connection with any investigation or
evaluation of a claim or otherwise) (collectively, “Losses”) resulting from or arising out of any breach by the Indemnifying Party of any representation, warranty, covenant or agreement in this Agreement. The amount of any payment
to the Indemnified Party shall be sufficient to make the Indemnified Party whole for any diminution in value of the Shares. In connection with the obligation of the Indemnifying Party to indemnify for expenses as set forth above, the Indemnifying
Party shall, upon presentation of appropriate invoices containing reasonable detail, reimburse the Indemnified Party for all such expenses as they are incurred by the Indemnified Party. 

	16.	ENTIRE AGREEMENT 

 This Agreement, together
with the Option Agreement and the Share Sale Agreement, constitutes the entire agreement and understanding between the Parties in connection with the subject- matter of this Agreement and supersedes all previous proposals, representations,
warranties, agreements or undertakings relating thereto whether oral, written or otherwise and no Party hereto has relied on any such proposals, representations, warranties, agreements or undertakings. Nothing in this Clause 16 shall impair or limit
any rights or remedies of the Parties and their Affiliates under the Basic Documents or relieve any Party or other Person from liability for fraud or wilful misrepresentation. 
  

	17.	NATURE OF THIS AGREEMENT 

 In the event of
any conflict between the provisions of the Agreement and the terms of the Memorandum or the Articles, the provisions of this Agreement shall prevail and, if any of the Parties hereto shall so require, the Memorandum and the Articles shall be revised
so as to reflect the provisions of this Agreement. 
  

	18.	TIME 

  

	18.1	Time shall be of the essence of this Agreement. 

  

	18.2	No time or indulgence given by any Party to the other shall be deemed or in any way be construed as a waiver of any of its rights and remedies hereunder. 

 

	19.	ASSIGNMENT AND COUNTERPARTS 

  

	19.1	This Agreement shall be binding on and shall inure for the benefits of the successors and assigns of the Parties hereto. 

  

	19.2	Save as aforesaid, and save as provided herein, no Party hereto may assign or transfer any of his or its rights or obligations under this Agreement. 

  

	19.3	This Agreement may be executed in one or more counterparts including counterparts transmitted by telecopier or facsimile, each of which shall be deemed an original, but all of which
signed and taken together, shall constitute one document. 

  

	20.	NOTICES AND OTHER COMMUNICATION 

  

	20.1	 Any notice or other communication to be given under this Agreement shall be in writing and may be sent by post or delivered by hand or given by facsimile or by
courier to the address or fax number from time to time designated, the initial address and fax number so designated by each Party are set out in Schedule 1. Any such notice or communication shall be sent to the Party to whom it is addressed and must
contain sufficient reference and/or particulars to render it readily identifiable with the subject-matter of this Agreement. If so delivered by hand or given by facsimile such notice or communication shall be deemed received 

	 	 
on the date of despatch and if so sent by post (or, if sent to an address outside of Hong Kong, so sent by courier) shall be deemed received three
(3) Business Days after the date of despatch (in the case of local mail) and five (5) Business Days after the date of despatch (in case of overseas registered/certified mail). 

  

	20.2	Each Person making a communication hereunder by facsimile shall promptly confirm by telephone to the Person to whom such communication was addressed each communication made by it by
facsimile pursuant thereto, but the absence of such confirmation shall not affect the validity of any such communication. 

  

	21.	GOVERNING LAW, JURISDICTION AND PROCESS AGENTS 

  

	21.1	This Agreement shall be governed by, and construed in accordance with, the laws of Hong Kong, without regard to the principles of conflicts of law of any jurisdiction.

  

	21.2	All of the provisions of the Framework Agreement that apply to the Basic Documents, including, without limitation, Clause 5 (Confidentiality) and Clause 6 (Dispute Resolution), are
hereby incorporated into this Agreement by reference. 

  

	22.	U.S. TAX MATTERS 

 The Company and Grace
hereby authorize and empower AGY on behalf of and in the name of the Company to make such elections, filings and determinations (or cause the Company to make such elections, filings, and determinations on behalf of any other Group Company)
under the tax laws of the United States, any state in the United States or the District of Columbia, as AGY may in its sole discretion determine. In addition, the Company will provide AGY in a timely manner all information requested
by AGY to assist AGY and its beneficial owners in completing any U.S. tax returns or otherwise complying with U.S. tax laws. 
  

	23.	MISCELLANEOUS 

  

	23.1	No waiver of any provision of this Agreement shall be effective unless set forth in a written instrument signed by the Party waiving such provision. No failure or delay by a Party
in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof, nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without
limiting the foregoing, no waiver by a Party of any breach by any other Party of any provision hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof. 

  

	23.2	 No Shareholder, acting solely in its capacity as a Shareholder, shall act as an agent of the Company or have any authority to act for or to bind the Company, except
as authorized by the Board. For the purposes of this Clause, unless acting expressly solely in its capacity as a Shareholder, any Shareholder who is a director or officer or employee of the Company or its Subsidiaries acting 

	 	 
in the ordinary course of business of the Company or its Subsidiaries shall be conclusively deemed to act for and on behalf of, and shall not be regarded as
acting as an agent of, the Company or such Subsidiary, as the case may be. Any Shareholder that takes any action or binds the Company in violation of this Clause shall be solely responsible for, and shall indemnify the Company and each other
Shareholder against, any losses, claims, damages, liabilities, judgments, fines, obligations, expenses and liabilities of any kind or nature whatsoever (including but not limited to any investigative, legal and other expenses reasonably incurred in
connection with, and any amounts paid in settlement of, any pending or threatened legal action or proceeding) that the Company, or such other Shareholder, as the case may be, may at any time become subject to or liable for by reason of such
violation. The provisions of this Clause survive the termination of this Agreement. 

  

	23.3	The Shareholders expressly do not intend hereby to form a partnership, either general or limited, under any jurisdiction’s partnership law. The Shareholders do not intend to be
partners one to another, or partners as to any third party, or create any fiduciary relationship among themselves, solely by virtue of their status as Shareholders. To the extent that any Shareholder, by word or action, represents to another Person
that any Shareholder is a partner or that the Company is a partnership, the Shareholder making such representation shall be liable to any other Shareholders that incur any losses, claims, damages, liabilities, judgments, fines, obligations, expenses
and liabilities of any kind or nature whatsoever (including but not limited to any investigative, legal or other expenses reasonably incurred in connection with, and any amount paid in settlement of, any pending or threatened legal action or
proceeding) arising out of or relating to such representation. The provisions of this Clause survive the termination of this Agreement. 

 [Signature Page Follows] 

 IN WITNESS whereof the parties executed this Agreement the day and year first above written. 
  

			
	SIGNED by	 	)
		 	)
	For and on behalf	 	)
	GRACE TECHNOLOGY	 	)
	INVESTMENT CO., LTD.	 	)
	in the presence of:	 	)
		
	SIGNED by	 	)
		 	)
	for and on behalf	 	)
	AGY (CAYMAN)	 	)
	In the presence of :	 	)
		
	SIGNED by	 	)
		 	)
	for and on behalf	 	)
	MAIN UNION INDUSTRIAL LTD.	 	)
	In the presence of :	 	)Option Agreement

 Exhibit 10.4 
 Portions of this Exhibit, as indicated by [***], are omitted and have been filed separately with the Securities and Exchange Commission pursuant to the Registrant’s application requesting confidential treatment under Rule 24b-2 of
the Securities Exchange Act of 1934, as amended. 
 THIS AGREEMENT is dated the 10th day of June, 2009 and is made 
 BETWEEN 
  

	(1)	Grace Technology Investment Co., Ltd, a company incorporated in British Virgin Islands whose registered office is P.O. Box 957, offshore Incorporation Centre, Road Town,
Tortola, British Virgin Islands, British West Indies (“Grace”); 

  

	(2)	AGY (Cayman), a company incorporated in the Cayman Islands whose registered office is at Walker House, 87 Mary Street, George Town, Grand Cayman KY1-9002, Cayman Islands
(“AGY”); and 

  

	(3)	Main Union Industrial Ltd., a company incorporated in Hong Kong whose registered office is at Suite 1112A, Ocean Centre, Harbour City, 5 Canton Road, Kowloon, Hong Kong,
which promptly after the Effective Date will change its name to AGY Hong Kong, Ltd. (the “Company”). 

 Background 
  

	(A)	AGY, AGY Holding Corp., Grace, Grace THW Holding Limited, the Company and the PRC Affiliate (as defined below) have entered into a framework agreement dated as of March 12,
2009 (the “Framework Agreement”) in which the parties have agreed to conclude certain arrangements described therein. 

  

	(B)	Pursuant to the Framework Agreement, AGY, Grace and Grace THW Holding Limited have entered into a sale and purchase agreement dated as of March 12, 2009 (the “Share
Sale Agreement”) pursuant to which AGY has agreed to purchase a 70% equity interest in the Company from Grace. 

  

	(C)	Grace will continue to hold a 30% interest in the Company following the sale of shares as contemplated in the Share Sale Agreement. 

  

	(D)	AGY and Grace have further agreed that AGY shall have the option to purchase and Grace shall have the option to put to AGY the Option Interest (as defined below) in the Company on
the terms set out herein. 

 BY WHICH IT IS AGREED as follows: 
  

	1.	Definitions and Interpretation 

  

	1.1	Defined Terms 

 In this Agreement, unless the
context requires otherwise: 
 “Affiliate” means in relation to any specified body corporate or Person, any other body
corporate, unincorporated entity or 

 
Person directly or indirectly Controlling, directly or indirectly Controlled by or under direct or indirect common Control with such specified body corporate
or Person; 
 “Bank Debt” means the consolidated bank debt of the Company and the PRC Affiliate as accumulated at such time
as either of the Options is Exercised, as calculated by the Company’s board of directors in good faith; 
 “Big 4 Accounting
Firm” means KPMG, PricewaterhouseCoopers, Deloitte Touche Tohmatsu or Ernst & Young, or any other internationally recognized accounting firm as may be agreed to by the Parties from time to time; 
 “Business Day” means a day, other than a Saturday or Sunday, on which banks are open in Hong Kong and Shanghai to the general public for
business; 
 “Call Option” means the right granted to AGY hereunder to require Grace to sell to it the Option Interest as
provided for in Clause 2; 
 “Call Option Price” means the price for the sale of the Option Interest, as calculated in
accordance with Clause 2.4; 
 “Cash” means the consolidated cash of the Company and the PRC Affiliate at such time as either
Option is Exercised, as calculated by the Company’s board of directors in good faith, including (i) all cash held by the Company or the PRC Affiliate in coins and bank notes and (ii) all amounts standing to the credit of the Company
or the PRC Affiliate’s bank accounts, other than cheques received but which remain unpaid and which have not been credited to the Company’s or the PRC Affiliate’s bank account, less all amounts (A) the use of which is
subject to restriction or which amounts are held in reserve, (B) are subject to cheques that have been written by the Company or the PRC Affiliate but not yet cashed or (C) have been set aside for specific purposes and are unavailable for
the settlement of current obligations of the Company or the PRC Affiliate; 
 “Change of Control” means, with respect to a
Person, (i) a merger or consolidation of such Person with a third party which results in the holders of the voting securities of such Person outstanding immediately prior thereto ceasing to represent at least fifty percent (50%) of the
combined voting power of the surviving entity immediately after such merger or consolidation, or (b) except in the case of a bona fide equity financing in which such Person issues new shares of its capital stock, a transaction or series of
related transactions in which a third party, together with its Affiliates, becomes the beneficial owner of fifty percent (50%) or more of the combined voting power of the outstanding securities of such Person, or (c) the sale or other
transfer to a third party of all or substantially all of such Person’s businesses and assets, but excluding any financial factoring arrangements; 
 “Completion” means a completion of the sale and purchase of all or any portion of the Option Interest in accordance with this Agreement; 
 “Completion Date” means, in relation to any Completion, the date on which such Completion occurs in accordance with this Agreement;

  

 “Control” means, in relation to a specified body corporate or Person, the power of any
other Person directly or indirectly to secure that the affairs of such specified body corporate or Person are conducted in accordance with the wishes of that other Person: 
  

	 	(i)	by means of the holding of Equity Securities or the possession of voting power (either at the shareholder, director or other comparable level) in or in relation to that specified
body corporate or Person or an intermediate Person; or 

  

	 	(ii)	by virtue of any powers conferred by the memorandum and articles of association or by-laws or other similar documents regulating that specified body corporate or Person or an
intermediate Person; 

 “EBITDA” means, as of the date of a determination thereof under this Agreement, the
product of (i) 4 times (ii) the consolidated earnings of the Company and the PRC Affiliate, before interest, tax, depreciation and amortisation, for the most recent 3 full calendar months preceding such date of determination
adjusted for, to the extent reflected in such consolidated earnings, any Non-Recurring Items or Occasional Items, 
 less 

  

	 	(a)	to the extent included in such consolidated earnings, any earnings of the Company or the PRC Affiliate that are attributable to the sale of products not manufactured by the PRC
Affiliate; and 

 plus 
  

	 	(b)	to the extent already deducted from such consolidated earnings, the consolidated metal operating losses of the Company and the PRC Affiliate, 

 all as calculated in good faith by the Company’s board of directors based on the consolidated financial statements of the Company and the PRC
Affiliate for such 3-calendar-month period and (if either AGY or Grace should require) confirmed by any Big 4 Accounting Firm. 
 It is
understood that neither Grace nor AGY shall use adjustments in respect of Non-Recurring Items and Occasional Items to manipulate valuations under the Option Price calculations contemplated by this Agreement, and such exclusions will be used merely
to more closely model true ongoing operational performance; 
 “Equity Securities” means, with respect to any Person, such
Person’s capital stock, membership interests, partnership interests, registered capital, joint venture or other ownership interests or any options, warrants or other securities that are directly or indirectly convertible into, or exercisable or
exchangeable for, such capital stock, membership interests, partnership interests, registered capital or joint venture or other ownership interests (whether or not such derivative securities are issued by such Person); 

 “Exercise” means the exercise by AGY of the Call Option or by Grace of the Put Option,
in accordance with the terms and conditions of this Agreement and “Exercised” shall be constructed accordingly; 
 “Governmental Authority” means any government or political subdivision thereof; any department, agency or instrumentality of any government or political subdivision thereof; any court or arbitral tribunal; and the governing
body of any securities exchange, in each case having competent jurisdiction; 
 “NEV” means the net equity value of the
Company at such time as either of the Options is Exercised, as calculated by the Company’s board of directors in good faith and in accordance with the formula set forth in Clauses 2.4 and 3.4 (as the context may require); 
 “Non-Recurring Items” means earnings charges or credits which are considered to be “one time” in nature, unlikely to recur on
an annual basis, and not reflective of ongoing operational results. Examples of such charges or credits include (but are not limited to): gain or loss on sale of fixed assets, asset impairment charges, reversal of balance sheet allowance accounts or
prepaid expense asset accounts established prior to closing, and one time government subsidies or charges. 
 “Notice” means
either the Call Option notice or the Put Option notice (as the context may require) substantially in the form set out in Schedule 1. Once served, the Notice shall be irrevocable; 
 “Occasional Items” means earnings charges or credits which are considered to be a normal part of business operations, likely to recur on
an annual basis, but not necessarily likely to occur each and every month. Examples of such charges or credits include (but are not limited to): alloy recoveries, abnormal foreign exchange contract gain / loss, and bushing fabrication charges. As
nearly as possible, Occasional Items will be spread across financial reporting months evenly via accrual accounting; 
 “Option
Interest” means, as of any given time, all Shares owned by Grace as of that time, which as of the date of this Agreement represent 30% of the issued and outstanding Shares; 
 “Option Interest Percentage” means, as of any given time, the percentage of the total number of issued and outstanding Shares represented
by the Option Interest as of such time; 
 “Option Period” means the period commencing on the execution date of this
Agreement and ending at the 31st day of December, 2013 (both dates inclusive), unless extended by agreement in writing between the Parties; 
 “Option Price” means, as the context requires, the Call Option Price or the Put Option Price; 
 “Option” means, as the context requires, the Call Option or the Put Option; 

 “Outstanding Net Bank Debt” means net Bank Debt, as calculated by the Company’s
board of directors in good faith and in accordance with the formula set in Clause 2.4 or 3.4, as the context may require. 
 “Party” means one of the parties to this Agreement; 
 “Person” means any natural person, firm,
company, Governmental Authority, joint venture, partnership, association or other entity (whether or not having separate legal personality); 
 “PRC” means People’s Republic of China and for the purpose of this Agreement excludes Taiwan and the Special Administrative Regions of Hong Kong and Macau; 
 “PRC Affiliate” means Shanghai Grace Technology Co Ltd., a company formed in the PRC which is wholly owned by the Company. 
 “Put Option” means the right of Grace to require AGY to purchase the Option Interest granted under Clause 3; 
 “Put Option Price” means the price for the sale of the Option Interest, as calculated in accordance with Clause 3.4. 
 “Shares” means the common shares of par value of HK$1.00 each in the capital of the Company carrying the rights and privileges as set
forth in the Articles; 
 “TEV” means the total enterprise value of the Company, as calculated in accordance with the formula
set in Clauses 2.4 or 3.4 (as the context may require). 
 “Transferred Option Interest” means the portion of the Option
Interest being transferred on a particular Completion Date, which in the case of the Call Option, will be the entire Option Interest, and, in the case of the Put Option will be either the entire Option Interest or, if AGY validly elects to acquire
the Option Interest in two stages pursuant to Clause 4.1(b), the portion of the Option Interest being acquired at the stage of the acquisition to which such Completion Date relates. 
  

	2.	Call Option 

  

	2.1	Grant of Call Option 

 Grace irrevocably grants to
AGY during the Option Period, the Call Option to require Grace to sell to AGY the Option Interest subject to the conditions provided for in Clause 2.2 below and at the price as calculated in accordance with Clause 2.4. 
  

	2.2	Conditions for Exercise of the Call Option  

  

	 	(a)	Except as provided below in Clause 2.2(b), the grant of the Call Option in Clause 2.1 above shall be subject to and become exercisable only when an EBITDA of [***] has been
achieved and shall remain effective during the Option Period until the Exercise of either the Put Option by Grace or the Call Option by AGY. 

	 	(b)	If AGY Holding Corp., a Delaware corporation and ultimate parent company of AGY (“AGY Parent”) undergoes a Change of Control before the Call Option would otherwise
be exercisable under Clause 2.2(a), then AGY must give written notice to Grace of the Change of Control of AGY Parent (the “Change of Control Notice”) within sixty (60) days after the consummation of such Change of Control and
the following provisions shall then apply: 

  

	 	(i)	If the Change of Control Notice is given within twelve (12) months after completion under the Share Sale Agreement, AGY may, at any time within thirty (30) days after
giving such notice, Exercise the Call Option, but only on the assumption of an EBITDA of [***] for purposes of calculating the Call Option Price. 

  

	 	(ii)	If the Change of Control Notice is given any time after the twelve (12)-month anniversary of the completion under the Share Sale Agreement, AGY may, at any time within thirty
(30) days after giving such notice, Exercise the Call Option, notwithstanding that the Call Option may not then be otherwise exercisable under Clause 2.2(a) because an EBITDA of [***] has not then been achieved. 

 

	 	(iii)	If AGY does not Exercise the Call Option within that thirty (30)-day period, then the Call Option will thereafter become exercisable, if at all, only as provided in Clause 2.2(a).

  

	2.3	Exercise of Call Option 

  

	 	(a)	All parties agree that the Call Option may be Exercised by AGY in respect of the full Option Interest by serving on Grace a duly completed Notice of the Exercise of the Call Option
during the Option Period. 

  

	 	(b)	Grace agrees and acknowledges that its obligation to sell the Option Interest under the Call Option is binding upon it and it will take all necessary and reasonable steps to
facilitate the proposed transaction, including (i) executing waivers of any statutory appraisal rights or dissenters’ rights or any right of pre-emption or similar right it may have over the Option Interest and (ii) delivering such
share certificates duly endorsed for transfer, duly executed instrument of transfer, sold note and assignment of shareholders loans (if any). From and after Grace’s receipt of full payment for the Option Interest, all rights of Grace shall
cease with respect to such Option Interest or any shareholders loans (if any). 

  

	2.4	Purchase Price 

  

	 	(a)	The Call Option Price payable by AGY for the Option Interest following an Exercise of the Call Option shall be calculated in accordance with the following formula:

 Call Option Price = NEV × the Option Interest Percentage 

 Where 
 NEV = TEV– Outstanding Net Bank Debt 
 Where 
 TEV = (i) EBITDA as of the date the duly completed Notice of the Exercise of the Call Option is served on Grace ×
(ii) [***]  
 and 
 Outstanding Net Bank Debt = Bank Debt – Cash 
  

	 	(b)	 It is understood and agreed that in the calculation of the NEV for the purpose of determining the Call Option Price, both increases in the amount of outstanding
debt of the Company after the completion under the Share Sale Agreement (save for debt attributable to the working capital needs of the PRC Affiliate) and any increase in Cash balances after the completion under the Share Sale Agreement shall not be
taken into account. 

  

	3.	Put Option  

  

	3.1	Grant of Put Option 

 AGY irrevocably grants
to Grace during the Option Period, the Put Option to require AGY to purchase from Grace the Option Interest subject to the conditions provided for in Clause 3.2 below and at the price as calculated in accordance with Clause 3.4. 
  

	3.2	Conditions for Exercise of the Put Option  

  

	 	(a)	Except as otherwise provided in Clause 3.2(b), the grant of the Put Option in Clause 2.1 above shall first become exercisable upon the first anniversary of the completion under the
Share Sale Agreement and shall remain effective during the Option Period until the Exercise of Put Option by Grace or Call Option by AGY. 

  

	 	(b)	If AGY Parent undergoes a Change of Control before the Put Option is exercisable under Clause 3.2(a), then Grace may, at any time within thirty (30) days after AGY’s
giving of the Change of Control Notice under Clause 2.2(b), Exercise the Put Option, notwithstanding that the Put Option may not then be otherwise exercisable under Clause 3.2(a). If Grace does not Exercise the Put Option within that thirty (30)-day
period, then the Put Option will thereafter become exercisable, if at all, only as provided in Clause 3.2(a). 

	3.3	Exercise of Put Option 

  

	 	(a)	All parties agree that the Put Option may be Exercised by Grace in respect of the Option Interest by serving on AGY a duly completed Notice of the Exercise of the Put Option during
the Option Period. 

  

	 	(b)	AGY agrees and acknowledges that its obligation to purchase the Option Interest under the Put Option is binding upon it. 

  

	 	(c)	Grace agrees that it will take all necessary and reasonable steps to facilitate the proposed transaction, including (i) executing waivers of any statutory appraisal rights or
dissenters’ rights or any right of pre-emption or similar right it may have over the Option Interest, (ii) delivering such share certificates duly endorsed for transfer, duly executed instrument of transfer, sold note and assignment of
shareholders loans (if any) and (iii) entering into any share or security sale agreement or similar agreement. From and after Grace’s receipt of full payment for the Option Interest, all rights of Grace shall cease with respect to the
Option Interest or any shareholders loans (if any). 

  

	3.4	Sale Price  

  

	 	(a)	Except as otherwise provided in Clause 3.4(c), the Put Option Price payable by AGY for the Option Interest following the Exercise of the Put Option by Grace shall be calculated in
accordance with the following formula: 

 Put Option Price = NEV × the Option Interest Percentage 
 Where 
 NEV = TEV – Outstanding Net Bank
Debt 
 Where 
 TEV = (i) EBITDA as of the date the duly completed Notice of the Exercise of the Put Option is served on AGY × (ii) [***] 
 and 
 Outstanding Net Bank Debt = Bank Debt – Cash 
  

	 	(b)	 It is understood and agreed that in the calculation of the NEV for the purpose of determining the Put Option Price, both increases in the amount of outstanding debt
of the Company after the completion under the Share Sale Agreement (save for debt attributable to the working capital needs of the PRC Affiliate) and any increase in Cash balances after the completion under the Share Sale Agreement shall not be
taken into account. 

  

	 	(c)	If, following the Exercise by Grace of the Put Option, AGY elects to acquire the Option Interests in two stages pursuant to Clause 4.1(b) below, then: 

  

	 	(i)	 the portion of the Put Option Price payable at Completion of the first stage of the acquisition will be equal to the 

	 	 
product of (A) the Put Option Price times (B) the percentage of the entire Option Interest represented by the portion of the Option Interest
being acquired in the first stage of the acquisition; and 

  

	 	(ii)	the portion of the Put Option Price payable at Completion of the second stage of the acquisition will be equal to the product of (A) the Put Option Price (calculated, for
purposes of this Clause 3.4(c)(ii), as though the formula contained in Clause 3.4(a) provided that TEV = (i) EBITDA as of the date the duly completed Notice of the Exercise of the Put Option is served on AGY × (ii) [***])
times (B) the percentage of the entire Option Interest represented by the portion of the Option Interest that was not acquired in the first stage of the acquisition. 

  

	4.	Completions 

  

	4.1	Time and Place of Completions 

  

	 	(a)	Except as otherwise provided in Clause 4.1(b), each Completion shall occur at the offices of the Company (or at such other place as the parties may agree in writing) no later than
12:00 noon on the 20th Business Day following the receipt of the Notice by the relevant Party or such later date as all required regulatory approvals, if any, have been obtained. A confirmation letter shall be signed by both AGY and Grace confirming
the completion of the actions as listed in Clause 4.2 below. 

  

	 	(b)	Notwithstanding any other provision of this Agreement, at any time within 10 Business Days after the Exercise by Grace of the Put Option, AGY will have the option to elect to
acquire the Option Interest in two stages by sending written notice to Grace of AGY’s election to do so, which notice will state the portion of the Option Interest that AGY intends to purchase in the first stage of such acquisition. If AGY
makes such an election, then Completion of the first stage of the acquisition of the Option Interest will take place at the time contemplated by Clause 4.1(a) and Completion of the second stage of the acquisition will take place by the six-month
anniversary of Completion of the first stage or such later date as all required regulatory approvals, if any, have been obtained. 

  

	4.2	Action to be Taken at a Completion 

  

	 	(i)	Grace shall execute and deliver to AGY an instrument of transfer in favour of AGY in respect of the Transferred Option Interest and such other documents (if any) as may be required
to give good title to the Transferred Option Interest and to enable AGY to become the registered holder thereof. 

  

	 	(ii)	Grace shall deliver or cause to be delivered to AGY: 

  

	 	a.	share certificate(s) in respect of the Shares constituting the Transferred Option Interest; 

	 	b.	certified true copy of the resolutions or certified extract of resolutions passed by the board of directors of Grace authorizing the execution of, and the performance by Grace of
its obligations under this Agreement; 

  

	 	c.	written resignation of the director(s) and any company secretary(ies) of the Company nominated by Grace, and in each case acknowledging that they have no outstanding rights or
claims of any kind, whether for compensation for loss of office or on any other grounds, against the Company or its Affiliates; 

  

	 	d.	to the extent in Grace’s possession, all statutory books (which shall be written up to but not including the applicable Completion Date), certificate of incorporation,
certificate of business registration, constitution documents including memorandum and articles of association, and common seal (if any) of the Company or the PRC Affiliate; 

  

	 	e.	to the extent in Grace’s possession, all and any other books and records of the Company or the PRC Affiliate of whatever nature including any confidential information held by
Grace about the Company or the PRC Affiliate in any format (both written and electronically recorded); 

  

	 	f.	to the extent in Grace’s possession, all the current cheque books of the Company or the PRC Affiliate together with currently available statements of all bank accounts; and

  

	 	g.	a certificate signed by a director of Grace confirming that all representations and warranties given pursuant to this Agreement remain true and correct, that Grace is in full
compliance with the terms hereof and that Grace waives and releases all rights and claims of any kind against the Company and its Affiliates, other than the right to receive the Option Price, subject to the terms and conditions contained in this
Agreement. 

  

	 	(iii)	Grace shall pass resolutions (provided that if such resolutions are dated more than six months prior to the date of the applicable Completion Grace shall procure the same shall be
confirmed, ratified or restated) under which the transfer of the Transferred Option Interest to AGY, and the registration of AGY as the holder of the Transferred Option Interest shall be approved, and the execution, delivery, and performance of this
Agreement shall be approved and ratified. 

  

	 	(iv)	Grace shall support board resolutions of the Company to be passed at or before the first Completion under this Agreement, under which: 

  

	 	a.	the resignations of each of the director(s) of the Company nominated by Grace with effect from the first Completion Date shall be approved or noted; and 

  

	 	b.	the persons nominated by AGY in writing not less than three Business Days prior to the first Completion Date shall be appointed as directors of the Company;

	 	(v)	Grace shall deliver to AGY a legal opinion in an agreed form addressed to AGY and issued by a British Virgin Islands law firm as to (i) the due incorporation of Grace,
(ii) the due execution of this Agreement by Grace, and (iii) the due authorization of this Agreement by Grace, and due authorization by Grace of the sale and purchase of the Transferred Option Interest; 

  

	 	(vi)	AGY shall pay to Grace the Call Option Price or the Put Option Price (or, if AGY has validly elected to acquire the Option Interest in two stages pursuant to Clause 4.1(b), the
portion of Put Option Price payable for the Transferred Option Interest, calculated pursuant to Clause 3.4(c)), as the case may be, by telegraphic transfer to such account as shall be notified by Grace to AGY pursuant to the equity transfer
agreement. 

  

	 	(vii)	Upon receiving written evidence of the delivery to Grace of the Option Price or the Put Option Price (or, if AGY has validly elected to acquire the Option Interest in a two stages
pursuant to Clause 4.1(b), the portion of Put Option Price payable for the Transferred Option Interest, calculated pursuant to Clause 3.4(c)), as the case may be, the Company shall issue a share certificate in respect of the Transferred Option
Interest to AGY. 

  

	4.3	Without prejudice to any other remedy which may be available to them, neither Party shall be obliged to complete this Agreement or perform any obligations under Clause 4.2 unless
they are satisfied (acting reasonably) that the requirements of Clause 4.2 will be complied with by the other Party in all respects. Nothing in this Clause 4.3 shall entitle any Party not to complete this Agreement or not to perform any obligations
under Clause 4.2 by reason of such Party’s own inability or failure to comply with any requirements of Clause 4.2. 

  

	5.	Warranties and Indemnities 

  

	5.1	Warranties 

 Grace represents, warrants and
undertakes to and with AGY and its successors in title that each of the following statements (the “Warranties”) is true, accurate and complete in all respects and not misleading as at the date of this Agreement, and will continue to
be so on each day up to and including Completion with reference to the facts and circumstances subsisting from time to time: 
  

	 	(a)	Grace has the right and authority and has taken all action necessary to enter into and perform this Agreement and all other agreements to be executed at or before Completion;

  

	 	(b)	this Agreement constitutes its legal, valid and binding obligations enforceable in accordance with their terms; 

  

	 	(c)	all authorisations required in connection with its entry into and performance of this Agreement and to ensure the legality, validity, binding effect and enforceability of this
Agreement have been obtained or effected and are in full force and effect; 

	 	(d)	Grace is the sole legal and beneficial owner of the Option Interest and is entitled to sell and transfer and will sell and transfer the full legal and beneficial ownership of the
Option Interest to AGY free from all encumbrances and with all rights attaching to each Transferred Option Interest as at the Completion related thereto; 

  

	 	(e)	there are no encumbrances on, over or affecting any of the Option Interest and there is no agreement or commitment to give or create any encumbrance and no claim has been made by
any person to be entitled to any encumbrance which has not been waived in its entirety or satisfied in full; 

  

	 	(f)	the Option Interest comprises 30% of the Shares issued and outstanding as of the date of this Agreement and all of the Shares constituting the Option Interest are fully paid up or
credited as fully paid up; 

  

	 	(g)	no consent of any third party is required to be obtained in respect of the sale of the Option Interest or any portion thereof; and 

  

	 	(h)	the information relating to the Option Interest and all information disclosed regarding the Warranties as provided to AGY by Grace and its directors, officers, employees, agents and
advisers is true, complete, accurate and not misleading. 

  

	5.2	Reliance on Warranties 

 Grace acknowledges and
accepts that AGY is entering into this Agreement in reliance upon each of the Warranties and that the Warranties have also been given as representations with the intention of inducing AGY to enter into this Agreement. 
  

	5.3	Indemnity 

 Grace undertakes to indemnify, defend
and hold harmless AGY from and against any and all losses, diminution in value, damages, liabilities, claims, proceedings, costs and expenses (including the fees, disbursements and other charges of counsel incurred by AGY in any action between AGY
and Grace or between AGY and any third party, in connection with any investigation or evaluation of a claim or otherwise) (collectively, “Losses”) resulting from or arising out of any breach by Grace of any representation, warranty,
covenant or agreement in this Agreement, including, without limitation, any such Losses incurred by AGY in connection with: 
  

	 	(a)	the settlement of any claim that any of the Warranties are untrue or misleading or have been breached; 

  

	 	(b)	any legal proceedings in which AGY claims that any of the Warranties are untrue or misleading or have been breached and in which judgment is given for AGY; or

  

	 	(c)	the enforcement of any such settlement or judgment. 

	5.4	Separate Warranties 

 Each of the Warranties shall
be construed as a separate Warranty and (save as expressly provided to the contrary) shall not be limited or restricted by reference to or inference from the terms of any other Warranty or any other terms of this Agreement. 
  

	5.5	Grace’s Obligation to Disclose 

 Grace
undertakes that it will from time to time and at any time, whether before or after Completion, forthwith disclose in writing to AGY any event, fact or circumstance which may become known to it after the date of this Agreement and which is materially
inconsistent with any of the Warranties or which could reasonably be expected materially to affect a purchaser for value of the Option Interest or which may entitle AGY to make any claim under this Agreement. No such disclosure shall limit or
otherwise affect any claims, rights or other remedies that AGY may have against Grace or any of its Affiliates under this Agreement or otherwise (including claims with respect to matters so disclosed), all of which are hereby reserved. 

 

	6.	Survival 

 Any provision of this Agreement
which is capable of being performed after but which has not been performed at or before a Completion shall remain in full force and effect notwithstanding such Completion (except insofar as they set out obligations which have been fully performed at
such Completion). For the avoidance of doubt, the Warranties will survive each Completion. 
  

	7.	Public Announcement and Confidentiality  

  

	7.1	Treatment of confidential information exchanged by and among the Parties and their Affiliates and the making of public announcements and disclosures regarding the terms of this
Agreement and the transactions contemplated hereby shall be governed by Clause 5 of the Framework Agreement, which is hereby incorporated into this Agreement by this reference. 

  

	7.2	This Clause 7 shall survive the last Completion under this Agreement. 

  

	8.	Entire Agreement 

 This Agreement, the
Framework Agreement, the Shareholders’ Agreement and the Share Sale Agreement constitutes the entire agreement and understanding between the Parties and their respective Affiliates in connection with the subject matter of this Agreement and
supersede all previous term sheets, proposals, representations, warranties, agreements or undertakings relating thereto whether oral, written or otherwise and neither Party has relied on any such term sheets, proposals, representations, warranties,
agreements or undertakings. Nothing in this Clause 8 shall impair or limit any rights or remedies of the Parties and their Affiliates under this Agreement or any agreements related hereto or relieve any Party or other Person from liability for fraud
or wilful misrepresentation. 

	9.	Remedies Cumulative 

 The rights of the
parties under this Agreement are cumulative and do not exclude or restrict any other rights (except as otherwise provided in this Agreement). 
  

	10.	No Waiver 

 No waiver of any provision of
this Agreement shall be effective unless set forth in a written instrument signed by the Party waiving such provision. No failure or delay by a Party in exercising any right, power or remedy under this Agreement shall operate as a waiver thereof,
nor shall any single or partial exercise of the same preclude any further exercise thereof or the exercise of any other right, power or remedy. Without limiting the foregoing, no waiver by a Party of any breach by the other Party of any provision
hereof shall be deemed to be a waiver of any subsequent breach of that or any other provision hereof. 
  

	11.	Severance 

 If any provision of this
Agreement is not or ceases to be legal, valid, binding and enforceable under the law of any jurisdiction, neither the legality, validity, binding effect or enforceability of the remaining provisions under that law nor the legality, validity, binding
effect or enforceability of that provision under the law of any other jurisdiction shall be affected. 
  

	12.	Amendments 

 No amendment to this Agreement
will be effective unless in writing and executed by all the Parties. 
  

	13.	Further Assurance; AGY Sale Process 

  

	 	(a)	Each of the Parties hereto shall, at his or its (as the case may be) own expense, execute, sign, perfect, do all such further instrument, assurance, acts and things as the other
Party may, in his/its or their absolute discretion, require from time to time for facilitating the exercise of all powers, authorities and discretions vested in the other Party and/or giving full effect to the terms and conditions of this Agreement,
including without limitation, ensuring that this Agreement is enforceable. 

  

	 	(b)	If the Board of Directors of AGY Parent determines to solicit bids to sell AGY Parent, then AGY will notify Grace of such determination and invite Grace to participate in the sale
process as a potential bidder. 

  

	14.	Counterparts 

 This Agreement may be executed
in any number of counterparts and by different Parties on separate counterparts, each of which is an original but, together, they constitute one and the same agreement. 

	15.	Successors  

 This Agreement is binding on
and shall inure to the benefit of the Parties and their respective successors and permitted assigns. 
  

	16.	Assignment 

 No Party may assign any of the
rights or obligations of that Party under this Agreement save that AGY may assign its rights, benefits, and obligations under this Agreement provided the New Funding Arrangements (as defined in the Share Sale Agreement) have been completed
(a) to an Affiliate, (b) to any Person that acquires, whether by purchase of assets, merger, consolidation, reorganization, or other corporate-level transaction, by operation of law or otherwise, all or substantially all of AGY’s
assets; or (c) by way of security to a lender pursuant to financing arrangements. 
  

	17.	Tax 

  

	17.1	Registration fees, stamp duty and any other taxes which may arise as a result of the sale of the Option Interest from Grace to AGY shall be borne in equal proportions between Grace
and AGY. 

  

	17.2	The Parties, their Affiliates and their respective representatives may disclose to any and all Persons, without limitation of any kind, the tax treatment and tax structure of the
transactions contemplated by this Agreement and all materials of any kind (including opinions or other tax analyses) that relate to such tax treatment and tax structure, all as contemplated by U.S. Treasury Regulations section 1.6011-4(b).

  

	18.	Notices  

 Any notice or other communication
(and all supporting documents required in respect of Completion) to be given under this Agreement shall be in writing in English. Such documents may be sent by post or delivered by hand or given by facsimile or by courier to the address or fax
number from time to time designated, the initial address and fax number so designated by each Party are set out below. Any such notice or communication shall be sent to the Party to whom it is addressed and must contain sufficient reference and/or
particulars to render it readily identifiable with the subject-matter of this Agreement. If so delivered by hand or given by facsimile such notice or communication shall be deemed received on the date of dispatch and if so sent by post shall be
deemed received three (3) Business Days after the date of dispatch (in the case of local mail) and five (5) Business Days after the date of dispatch (in the case of overseas mail or courier). Each Person making a communication hereunder by
facsimile shall promptly confirm by email to the person to whom such communication was addressed. 
 To AGY 
  

					
	Name	 	:	  	AGY Cayman
	Address	 	:	  	c/o AGY Holding Corp. 2556 Wagener Road Aiken, SC 29801 U.S.A.
	Fax	 	:	  	1-803-643-4085
	For the attention of	 	:	  	Chief Executive Officer

					
	To Grace	 		  	
			
	Name	 	:	  	Grace Technology Investment Co. Ltd.
	Address	 	:	  	P.O. Box 975, offshore Incorporation Centre Road Town, Tortola, British Virgin Islands, British West Indies
	Fax	 	:	  	+886 2 25082113
	For the attention of	 	:	  	Cheng Taishan 

			
	To the Company	 		  	
			
	Name	 	:	  	Main Union Industrial Ltd.
	Address	 	:	  	Suite 1112A, Ocean Centre, Harbour City, 5 Canton Road, Kowloon, Hong Kong
	Fax	 	:	  	1-803-643-4085
	For the attention of	 	:	  	Douglas Mattscheck

  

	19.	Governing Law and Dispute Resolution 

  

	 	(a)	Governing Law This Agreement is governed by and will be construed in accordance with Hong Kong law. 

  

	 	(b)	Dispute Resolution Any disputes or claim arising out of or in connection with or relating to this Agreement, or the breach, termination or invalidity hereof shall be finally
resolved in accordance with Clause 6 of the Framework Agreement, which is hereby incorporated into this Agreement by reference. 

 [Remainder of Page Intentionally Blank] 

 Schedule 1 
 A. Form of Call Option Notice 
  

	To:	Grace Technology Investment Co. Ltd. 

 P.O. Box 975,
offshore Incorporation Centre Road Town, 
 Tortola, 
 British Virgin Islands, 
 British West Indies 
  

	Attn:	Cheng Taishan 

 

 Date: [—] 
 Dear Sirs, 
 We refer to the Option Agreement (the
“Agreement”) dated the                      day of     , 2009 made between you and us. 
 We give you notice that we require you to sell to us in accordance with the terms and conditions of the Agreement, the Option Interest (as defined in the Agreement).

 Yours faithfully, 
  

			
	 For and on behalf of
 AGY
(Cayman)

	
	  

  

 B. Form of Put Option Notice 
  

	To:	AGY (Cayman) 

 c/o AGY Holding Corp. 2556 Wagener Road

 Aiken, SC 29801 U.S.A. 
  

	Attn:	[—] 

 Date: [—] 
 Dear Sirs, 
 We refer to the
Option Agreement (the “Agreement”) dated the                      day of     , 2009 made between you and us.

 We give you notice that we require you to purchase from us in accordance with the terms and conditions of the Agreement, the Option Interest (as defined
in the Agreement). 
 Yours faithfully, 
  

			
	 For and on behalf of
 Grace Technology
Investment Co. Ltd.

	
	  

  

 EXECUTED by the parties 
  

			
	SIGNED for and on behalf of	  	)
	AGY (Cayman)	  	)
		  	)
	In the presence of:-	  	)
	Date:	  	
		
	SIGNED for and on behalf of	  	)
	Grace Technology Investment Co., Ltd.	  	)
		  	)
	In the presence of:-	  	)
	Date:	  	
		
	SIGNED for and on behalf of	  	)
	Main Union Industrial Ltd.	  	)
		  	)
	In the presence of:-	  	)
	Date:

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