Document:

exv4w2

Exhibit
4.2

EXECUTION COPY

 

SERVICE CORPORATION INTERNATIONAL

as Issuer

and

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee

$150,000,000

8.00% SENIOR NOTES DUE 2021

EIGHTH

SUPPLEMENTAL

INDENTURE

Dated as of November 10, 2009

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	ARTICLE I  ESTABLISHMENT OF NEW SERIES	 	 	2	 
	 
	 	Section 1.01	 	Establishment of New Series	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE II  DEFINITIONS	 	 	2	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE III  THE NOTES	 	 	5	 
	 
	 	Section 3.01	 	Form	 	 	5	 
	 
	 	Section 3.02	 	Limitation on Ability of the Issuer to Release Funds from Escrow	 	 	5	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE IV  REDEMPTION	 	 	5	 
	 
	 	Section 4.01	 	Optional Redemption	 	 	5	 
	 
	 	Section 4.02	 	Mandatory Redemption	 	 	6	 
	 
	 	Section 4.03	 	Change of Control	 	 	6	 
	 
	 	Section 4.04	 	Special Redemption	 	 	8	 
	 
	 	Section 4.05	 	Deposit of Redemption Price in the Event of Special Redemption	 	 	8	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE V  AMENDMENT OF ORIGINAL INDENTURE	 	 	8	 
	 
	 	Section 5.01	 	Amendment of Article One of Original Indenture	 	 	8	 
	 
	 	Section 5.02	 	Amendment of Article Three of Original Indenture	 	 	8	 
	 
	 	Section 5.03	 	Amendment of Article Four of Original Indenture	 	 	9	 
	 
	 	Section 5.04	 	Amendments of Article Five of Original Indenture	 	 	10	 
	 
	 	Section 5.05	 	Amendment of Article Eleven of Original Indenture	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VI  ADDITIONAL EVENT OF DEFAULT	 	 	12	 
	 
	 	Section 6.01	 	Event of Default	 	 	12	 
	 
	 	Section 6.02	 	Notice of Default	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	ARTICLE VII  MISCELLANEOUS	 	 	12	 
	 
	 	Section 7.01	 	Integral Part	 	 	12	 
	 
	 	Section 7.02	 	Adoption, Ratification and Confirmation	 	 	12	 
	 
	 	Section 7.03	 	Counterparts	 	 	12	 
	 
	 	Section 7.04	 	Governing Law	 	 	12	 
	 
	 	Section 7.05	 	Trustee Makes No Representation	 	 	12	 
	 
	 	 	 	 	 	 	 	 
	EXHIBIT A: Form of Note	 	 	 	 
	EXHIBIT B: Form of Escrow Agreement	 	 	 	 

 

 

          EIGHTH SUPPLEMENTAL INDENTURE dated as of November 10, 2009 (this “Supplemental
Indenture”), between Service Corporation International, a Texas corporation (the
“Issuer”), and The Bank of New York Mellon Trust Company, N.A., a national banking
corporation, as successor to The Bank of New York, as trustee (the “Trustee”).

W I T N E S S E T H:

          WHEREAS, the Issuer has heretofore entered into a Senior Indenture, dated as of February 1,
1993 (the “Original Indenture”), with the Trustee, a First Supplemental Indenture, dated as
of April 14, 2004, with the Trustee (the “First Supplemental Indenture”), a Second
Supplemental Indenture, dated as of June 15, 2005, with the Trustee (the “Second Supplemental
Indenture”) a Third Supplemental Indenture, dated as of October 3, 2006, with the Trustee (the
“Third Supplemental Indenture”), a Fourth Supplemental Indenture, dated as of October 3,
2006, with the Trustee (the “Fourth Supplemental Indenture”), a Fifth Supplemental
Indenture, dated as of November 28, 2006, with the Trustee (the “Fifth Supplemental
Indenture”); a Sixth Supplemental Indenture, dated as of April 9, 2007, with the Trustee (the
“Sixth Supplemental Indenture”) and a Seventh Supplemental Indenture, dated as of April 9,
2007, with the Trustee (the “Seventh Supplemental Indenture”);

          WHEREAS, the Original Indenture, as supplemented by this Supplemental Indenture, is herein
called the “Indenture”;

          WHEREAS, under the Original Indenture, the form and terms of a new series of Securities may at
any time be established by a supplemental indenture executed by the Issuer and the Trustee;

          WHEREAS, the Issuer proposes to create under the Indenture a new series of Securities;

          WHEREAS, additional Securities of this series and other series hereafter established, except
as may be limited in the Original Indenture as at the time supplemented and modified, may be issued
from time to time pursuant to the Original Indenture as at the time supplemented and modified; and

          WHEREAS, all conditions necessary to authorize the execution and delivery of this Supplemental
Indenture and to make it a valid and binding obligation of the Issuer have been done or performed;

          NOW, THEREFORE, in consideration of the agreements and obligations set forth herein and for
other good and valuable consideration, the sufficiency of which is hereby acknowledged, the parties
hereto hereby agree as follows:

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ARTICLE I

ESTABLISHMENT OF NEW SERIES

Section 1.01 Establishment of New Series.

          (a) There is hereby established a new series of Securities to be issued under the
Indenture, to be designated as the Issuer’s 8.00% Senior Notes due 2021 (the
“Notes”).

          (b) On the Issue Date, the Trustee shall authenticate and deliver $150,000,000 of the
Notes and, at any time and from time to time thereafter, the Trustee shall authenticate and
deliver Additional Notes for original issue in accordance with Sections 2.3 and 2.4 of the
Original Indenture in an aggregate principal amount specified in the applicable Issuer
Order. Further, from time to time after the original issue date, Notes shall be
authenticated and delivered upon registration of transfer of, or in exchange for, or in lieu
of other Notes as set forth in the Original Indenture.

          (c) The Notes shall be issued initially in the form of one or more Global Securities in
substantially the form set out in Exhibit A hereto. The Depositary with respect to the
Notes shall be The Depository Trust Company.

          (d) Each Note shall be dated the date of authentication thereof and shall bear interest
as provided in the form of Note in Exhibit A hereto. The date on which principal is payable
on the Notes shall be as provided in the form of Note in Exhibit A hereto.

          (e) The record dates for the Notes and the manner of payment of principal and interest
on the Notes shall be as provided in the form of Note in Exhibit A hereto. The Place of
Payment shall be as designated in Section 3.2 of the Original Indenture.

          (f) The terms of Section 10.1(C) of the Original Indenture shall be applicable to the
Notes. If and to the extent that the provisions of the Original Indenture are duplicative
of, or in contradiction with, the provisions of this Supplemental Indenture, the provisions
of this Supplemental Indenture shall govern, but solely with respect to the Notes.

ARTICLE II

DEFINITIONS

          For purposes of this Supplemental Indenture and the Notes, the following terms have the
meanings indicated below. All capitalized terms used herein and not otherwise defined below shall
have the meanings ascribed thereto in the Original Indenture.

          “Additional Notes” means Notes issued in compliance with the terms of this
Supplemental Indenture subsequent to the Issue Date and in compliance with Sections 2.3 and 2.4 of
the Original Indenture.

          “Acquisition” means the acquisition of the shares of Keystone tendered pursuant to the
offer made by SCI Alliance Acquisition Corporation, a wholly owned subsidiary of the Issuer
governed

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by the laws of the Province of Ontario, pursuant to the Acquisition Agreement to acquire all of
the outstanding common shares of Keystone.

          “Acquisition Agreement” means the support agreement dated as of October 14, 2009
(together with the schedules and exhibits thereto), among the Issuer, SCI Alliance Acquisition
Corporation and Keystone.

          “Adjusted Consolidated Net Tangible Assets” means, at the time of determination, the
aggregate amount of total assets included in the Issuer’s most recent quarterly or annual
consolidated balance sheet prepared in accordance with generally accepted accounting principles,
net of applicable reserves reflected in such balance sheet, after deducting the following amounts
reflected in such balance sheet: (a) goodwill; (b) deferred charges and other assets; (c) preneed
funeral receivables and trust investments; (d) preneed cemetery receivables and trust investments;
(e) cemetery perpetual care trust investments; (f) current assets of discontinued operations; (g)
non-current assets of discontinued operations; (h) other like intangibles; and (i) current
liabilities (excluding, however, current maturities of long-term debt).

          “Attributable Indebtedness,” when used with respect to any sale and leaseback
transaction (as contemplated by Section 3.7 of the Original Indenture), means, at the time of
determination, the present value (discounted at the rate set forth or implicit in the terms of the
lease included in such transaction) of the total obligations of the lessee for rental payments
(other than amounts required to be paid on account of property taxes, maintenance, repairs,
insurance, assessments, utilities, operating and labor costs and other items that do not constitute
payments for property rights) during the remaining term of the lease included in such transaction
(including any period for which such lease has been extended). In the case of any lease that is
terminable by the lessee upon the payment of a penalty or other termination payment, such amount
shall be the lesser of the amount determined assuming termination upon the first date such lease
may be terminated (in which case the amount shall also include the amount of the penalty or
termination payment, but no rent shall be considered as required to be paid under such lease
subsequent to the first date upon which it may be so terminated) or the amount determined assuming
no such termination.

          “Capital Stock” of any Person means any and all shares, interests (including
partnership interests), rights to purchase, warrants, options, participations or other equivalents
of or interests in (however designated) equity of such Person, including any preferred stock, but
excluding any debt securities convertible into such equity.

          “Change of Control” has the meaning attributed thereto in Section 4.03 of this
Supplemental Indenture.

          “Change of Control Offer” has the meaning attributed thereto in Section 4.03 of this
Supplemental Indenture.

          “Credit Facilities” means one or more debt facilities with banks or other
institutional lenders providing for revolving credit or term loans or letters of credit.

          “Escrow Agent” means The Bank of New York Mellon Trust Company, N.A.

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          “Escrow Agreement” means the escrow agreement relating to the Notes dated as of the
date hereof among the Issuer, the Escrow Agent and the Trustee.

          “Holder” means, in the case of any Note, the Person in whose name such Note is
registered in the security register kept by the Issuer for that purpose in accordance with the
terms of the Indenture.

          “Issue Date” means November 10, 2009.

          “Keystone” means Keystone North America Inc., a company amalgamated under the laws of
the Province of Ontario.

          “Notes” has the meaning assigned to it in Section 1.01(a) hereof.

          “Optional Redemption Premium” has the meaning attributed thereto in Exhibit A hereto.

          “Perpetual Care Trust” means a trust established to provide perpetual care or
maintenance for any cemetery, mausoleum or columbarium.

          “Pre-Need Trust” means a trust established to hold funds related to the purchase of
funeral or cemetery goods or services on a pre-need basis.

          “Securities Act” means the Securities Act of 1933, as amended.

          “Special Redemption” means (i) the mandatory redemption, in whole, but not in part,
of the Notes pursuant to the Escrow Agreement and paragraph 6 of the Notes required to take place
in the event the Acquisition is not consummated on or prior to June 30, 2010, or (ii) the optional
redemption, in whole, but not in part, at any time prior to June 30, 2010, if, in the Issuer’s sole
judgment, the Acquisition will not be consummated by that date.

          “Subsidiary” means with respect to any Person: (a) any corporation, association,
limited liability company or other business entity (other than a partnership) of which more than
50% of the total voting power of shares of Capital Stock entitled (without regard to the occurrence
of any contingency) to vote in the election of directors, managers or trustees thereof is at the
time owned or controlled, directly or indirectly, by such Person or one or more of the other
Subsidiaries of that Person (or a combination thereof); and (b) any partnership, (i) the sole
general partner or the managing general partner of which is such Person or a Subsidiary of such
Person, or (ii) the only general partners of which are such Person or of one or more Subsidiaries
of such Person (or any combination thereof); provided, however, that no Pre-Need Trust or Perpetual
Care Trust shall be deemed to be a Subsidiary for purposes of this Supplemental Indenture.

          “Underwriters” means J.P. Morgan Securities Inc., Banc of America Securities LLC,
Morgan Keegan & Company, Inc., Raymond James & Associates, Inc., Scotia Capital (USA) Inc. and
SunTrust Robinson Humphrey, Inc.

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          “Voting Stock” of a Person means all classes of Capital Stock of such Person then
outstanding and normally entitled (without regard to the occurrence of any contingency) to vote in
the election of directors, managers or trustees thereof.

ARTICLE III

THE NOTES

          Section 3.01 Form. Provisions relating to the Notes are set forth in Exhibit A
hereto, which are hereby incorporated in and expressly made a part of this Supplemental Indenture.
The Notes and the Trustee’s certificate of authentication thereto shall be substantially in the
form of Exhibit A, which is hereby incorporated in and expressly made a part of this Supplemental
Indenture. The Notes may have notations, legends or endorsements required by law, stock exchange
rule, agreements to which the Issuer is subject, if any, or usage (provided that any such notation,
legend or endorsement is in a form acceptable to the Issuer). Each Note shall be dated the date of
its authentication. The Notes shall be issuable only in registered form without interest coupons
and only in denominations of $2,000 and integral multiples of $1,000. The terms of the Notes set
forth in Exhibit A are part of the terms of this Supplemental Indenture.

          Section 3.02 Limitation on Ability of the Issuer to Release Funds from Escrow. At the
date of this Supplemental Indenture, the Trustee, the Issuer and the Escrow Agent shall enter into
an Escrow Agreement substantially in the form attached as Exhibit B hereto. The net proceeds from
the offering of the Notes will be paid into an Escrow Account by the Underwriters of the Notes and
held in the name of the Trustee on behalf of the Holders under the terms of the Escrow Agreement.
In accordance with the terms of the Escrow Agreement, the Escrow Property (as defined in the Escrow
Agreement) will be released to the Issuer upon delivery to the Escrow Agent and the Trustee of a
certificate signed by an officer of the Issuer (the “Escrow Release Certificate”), in the
form attached to the Escrow Agreement. The Issuer agrees for the benefit of the Holders to comply
with the terms and conditions of the Escrow Agreement and shall use its reasonable best efforts to
satisfy the conditions precedent to release of the Escrow Property, deliver the Escrow Release
Certificate and receive the net proceeds from the offering and sale of the Notes as provided in the
Escrow Agreement, as soon as practicable following the date hereof. The Issuer agrees that (i) the
terms of the Escrow Agreement shall exclusively control the conditions under which and procedures
pursuant to which Escrow Property (as defined in the Escrow Agreement) can be released and (ii) it
will not attempt to have any Escrow Property (as defined in the Escrow Agreement) released from
escrow except in accordance with the Escrow Agreement.

ARTICLE IV

REDEMPTION

          Section 4.01 Optional Redemption.

          (a) At its option, the Issuer may choose to redeem all or any portion of the Notes, at
once or from time to time.

          (b) To redeem the Notes, the Issuer must pay a redemption price in an amount determined
in accordance with the provisions of the form of Note set out in Exhibit A hereto.

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          (c) Any redemption pursuant to this Section 4.01 shall be made pursuant to the
provisions of Sections 12.1 through 12.3 of the Original Indenture.

          Section 4.02 Mandatory Redemption. Except as set forth in Section 4.04 below, the
Issuer shall not be required to make mandatory redemption or sinking fund payments with respect to
the Notes. However, the Issuer may be required to offer to purchase Notes as described in Section
4.03 below. The Issuer may at any time and from time to time purchase Notes in the open market or
otherwise.

          Section 4.03 Change of Control. Upon the occurrence of any of the following events
(each a “Change of Control”), each Holder shall have the right to require that the Issuer
repurchase such Holder’s Notes at a purchase price in cash equal to 101% of the principal amount
thereof on the date of purchase plus accrued and unpaid interest, if any, to the date of purchase
(subject to the right of Holders of record on the relevant record date to receive interest due on
the relevant interest payment date):

	(1)	 	any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) becomes the “beneficial owner” (as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, except that for purposes of this clause (1)
such person shall be deemed to have “beneficial ownership” of all shares that any such person
has the right to acquire, whether such right is exercisable immediately or only after the
passage of time), directly or indirectly, of more than 35% of the total voting power of the
Voting Stock of the Issuer;
	 
	(2)	 	individuals who on the Issue Date constituted the board of directors (together with any new
directors whose election by such board of directors or whose nomination for election by the
shareholders of the Issuer was approved by a vote of at least a majority of the directors of
the Issuer then still in office who were either directors on the Issue Date or whose election
or nomination for election was previously so approved) cease for any reason to constitute a
majority of the board of directors then in office;
	 
	(3)	 	the Issuer is liquidated or dissolved or adopts a plan of liquidation or dissolution; or
	 
	(4)	 	the merger or consolidation of the Issuer with or into another Person or the merger of
another Person with or into the Issuer, or the sale of all or substantially all the assets of
the Issuer (determined on a consolidated basis) to another Person, other than a transaction
following which (i) in the case of a merger or consolidation transaction, holders of
securities that represented 100% of the Voting Stock of the Issuer immediately prior to such
transaction (or other securities into which such securities are converted as part of such
merger or consolidation transaction) own directly or indirectly at least a majority of the
voting power of the Voting Stock of the surviving Person in such merger or consolidation
transaction immediately after such transaction and (ii) in the case of a sale of assets
transaction, each transferee becomes an obligor in respect of the Notes and a subsidiary of
the transferor of such assets.

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Within 30 days following any Change of Control, the Issuer will mail a notice to each Holder with a
copy to the Trustee (the “Change of Control Offer”) stating:

	(1)	 	that a Change of Control has occurred and that such Holder has the right to require the
Issuer to purchase such Holder’s Notes at a purchase price in cash equal to 101% of the
principal amount thereof on the date of purchase, plus accrued and unpaid interest, if any, to
the date of purchase (subject to the right of Holders of record on the relevant record date to
receive interest on the relevant interest payment date);
	 
	(2)	 	the circumstances and relevant facts regarding such Change of Control (including information
with respect to pro forma historical income, cash flow and capitalization, in each case after
giving effect to such Change of Control);
	 
	(3)	 	the purchase date (which shall be no earlier than 30 days nor later than 60 days from the
date such notice is mailed); and
	 
	(4)	 	the instructions, as determined by the Issuer, consistent with this Section 4.03, that a
Holder must follow in order to have its Notes purchased.

The Issuer will not be required to make a Change of Control Offer with respect to a series of Notes
following a Change of Control if (1) a third party makes the Change of Control Offer in the manner,
at the times and otherwise in compliance with the requirements set forth hereunder applicable to a
Change of Control Offer made by the Issuer and purchases all Notes of such series validly tendered
and not withdrawn under such Change of Control Offer or (2) notice of redemption of all of such
series of Notes has been given pursuant hereto unless and until there has been a default in payment
of the applicable redemption price. A Change of Control Offer may be made in advance of a Change
of Control, conditional upon the Change of Control, if a definitive agreement is in place for the
Change of Control at the time of making of the Change of Control Offer.

The Issuer shall comply, to the extent applicable, with the requirements of Section 14(e) of the
Exchange Act and any other securities laws or regulations in connection with the repurchase of
Notes pursuant to this Section 4.03. To the extent that the provisions of any securities laws or
regulations conflict with the provisions of this Section 4.03, the Issuer shall comply with the
applicable securities laws and regulations and shall not be deemed to have breached its obligations
under this Section 4.03 by virtue thereof.

Holders electing to have a Note purchased will be required to surrender the Note, with an
appropriate form duly completed, to the Issuer at the address specified in the notice at least
three Business Days prior to the purchase date. Holders will be entitled to withdraw their
election if the Trustee or the Issuer receives not later than one Business Day prior to the
purchase date, a telegram, telex, facsimile transmission or letter setting forth the name of the
Holder, the principal amount of the Note which was delivered for purchase by the Holder and a
statement that such Holder is withdrawing his election to have such Note purchased.

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On the purchase date, all Notes purchased by the Issuer under this Section 4.03 shall be delivered
by the Issuer to the Trustee for cancellation, and the Issuer shall pay the purchase price plus
accrued and unpaid interest, if any, to the Holders entitled thereto.

In the event that at the time of any Change of Control the terms of any Credit Facility restrict or
prohibit the purchase of Notes following such Change of Control, then prior to the mailing of the
notice to Holders but in any event within 30 days following any Change of Control, the Issuer shall
undertake to (1) repay in full all such indebtedness under any applicable Credit Facility or (2)
obtain the requisite consents under the agreements governing such indebtedness under any applicable
Credit Facility to permit the repurchase of the Notes.

          Section 4.04 Special Redemption. Any Special Redemption shall be made in whole, and
not in part, pursuant to the provisions of Sections 12.1 through 12.3 of the Original Indenture;
provided, however, that notice of any Special Redemption shall not be required to be given by the
Issuer to the Holders, but shall instead be given by the Issuer to the Trustee and the Escrow Agent
three (3) Business Days before the redemption date; provided, further, that if the Acquisition has
not been consummated on or prior to June 30, 2010, the Issuer does not need to provide notice of
Special Redemption to the Trustee or Escrow Agent.

          Section 4.05 Deposit of Redemption Price in the Event of Special Redemption. In the
event of a Special Redemption, the Issuer shall cause the Escrow Agent to deposit with the Trustee
or the Paying Agent an amount of money sufficient to redeem on the redemption date all the Notes so
called for redemption at the appropriate redemption price, together with accrued interest, if any,
to the date fixed for redemption.

ARTICLE V

AMENDMENT OF ORIGINAL INDENTURE

          Section 5.01 Amendment of Article One of Original Indenture. The second paragraph of
Section 1.1 of the Original Indenture is hereby amended and restated, but only with respect to the
Notes, to read in its entirety as follows:

“All accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted accounting principles,
and the term “generally accepted accounting principles” means such accounting
principles as are generally accepted in the United States at the date of the
supplemental indenture authorizing the issuance of the related Notes of such
series.”

          Section 5.02 Amendment of Article Three of Original Indenture. Section 3.6 of the
Original Indenture is hereby amended and restated, but only with respect to the Notes, to read in
its entirety as follows:

“The Issuer will not mortgage, pledge, encumber or subject to any lien or security
interest, and no Subsidiary will mortgage, pledge, encumber or subject to any lien
or security interest, to secure any Indebtedness of the Issuer or any Indebtedness
of any Subsidiary (other than Indebtedness owing to the Issuer or a wholly-owned

8

 

Subsidiary) any assets, without providing that the Notes shall thereby be secured
equally and ratably with (or prior to) any other Indebtedness so secured, unless,
after giving effect thereto, the aggregate outstanding amount of all such secured
Indebtedness of the Issuer and its Subsidiaries (excluding secured Indebtedness
existing as of September 30, 2009, and any extensions, renewals or refundings
thereof that do not increase the principal amount of Indebtedness so extended,
renewed or refunded and excluding secured Indebtedness incurred pursuant to
subparagraphs (a), (b), (c), (d) and (e) below), together with all outstanding
Attributable Indebtedness from sale and leaseback transactions described in Section
3.7(1) of this Indenture, would not exceed 10% of Adjusted Consolidated Net Tangible
Assets of the Issuer and its Subsidiaries on the date such Indebtedness is so
secured; provided, however, that nothing in this Section 3.6 shall prevent the
Issuer or any Subsidiary:

(a) from acquiring and retaining property subject to mortgages, pledges,
encumbrances, liens or security interests existing thereon at the date of
acquisition thereof, or from creating within one year of such acquisition mortgages,
pledges, encumbrances or liens upon property acquired by it after September 30,
2009, as security for purchase money obligations incurred by it in connection with
the acquisition of such property, whether payable to the Person from whom such
property is acquired or otherwise;

(b) from mortgaging, pledging, encumbering or subjecting to any lien or security
interest Current Assets to secure Current Liabilities;

(c) from mortgaging, pledging, encumbering or subjecting to any lien or security
interest property to secure Indebtedness under one or more Credit Facilities in an
aggregate principal amount not to exceed $500 million;

(d) from extending, renewing or refunding any Indebtedness secured by a mortgage,
pledge, encumbrance, lien or security interest on the same property theretofore
subject thereto, provided that the principal amount of such Indebtedness so
extended, renewed or refunded shall not be increased; or

(e) from securing the payment of workmen’s compensation or insurance premiums or
from making good faith pledges or deposits in connection with bids, tenders,
contracts (other than contracts for the payment of money) or leases, deposits to
secure public or statutory obligations, deposits to secure surety or appeal bonds,
pledges or deposits in connection with contracts made with or at the request of the
United States Government or any agency thereof, or pledges or deposits for similar
purposes in the ordinary course of business.”

     Section 5.03 Amendment of Article Four of Original Indenture. Section 4.3 of the
Original Indenture is hereby amended and restated, but only with respect to the Notes, to read in
its entirety as follows:

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“Section 4.3 Reports by the Issuer. (a) Whether or not required by the Commission,
so long as any Notes of any series are Outstanding, the Issuer will furnish to the
Trustee and to any Holders of Notes of such series who so request, within 15 days of
the time periods specified in the Commission’s rules and regulations:

     (i) all quarterly and annual financial information that would be required to be
contained in a filing with the Commission on Forms 10-Q and 10-K if the Issuer were
required to file such Forms, including a “Management’s Discussion and Analysis of
Financial Condition and Results of Operations” and, with respect to the annual
information only, a report on the annual financial statements by the Issuer’s
independent accountants; and

     (ii) all current reports that would be required to be filed with the Commission
on Form 8-K if the Issuer were required to file such reports.

(b) Whether or not required by the Commission, the Issuer will file a copy of all of
the information and reports referred to in Sections 4.3(a)(i) and (ii) with the
Commission for pubic availability within the time periods specified in the
Commission’s rules and regulations (unless the Commission will not accept such a
filing) and make such information available to securities analysts and prospective
investors upon request.

(c) The Issuer will comply with the requirements of Section 314 of the Trust
Indenture Act of 1939.

(d) The Issuer will furnish to the Trustee, not less than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer as to his knowledge of the Issuer’s compliance with all
conditions and covenants under this Indenture. For purposes of this subsection (d),
such compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.”

Section 5.04 Amendments of Article Five of Original Indenture.

     (a) Section 5.1(g) of the Original Indenture is hereby amended and restated, but only
with respect to the Notes, to read in its entirety as follows:

“(g) default under any bond, debenture, note or other evidence of
Indebtedness for money borrowed by the Issuer or any Subsidiary or under any
mortgage, indenture or instrument under which there may be issued or by
which there may be secured or evidenced any Indebtedness for money borrowed
by the Issuer or any Subsidiary (other than Non-Recourse Indebtedness),
whether such Indebtedness exists on the date hereof or shall hereafter be
created, which default shall have resulted in such Indebtedness becoming or
being declared due and payable prior to the date on which it
would otherwise have become due and payable, or any default in payment of

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such Indebtedness (after the expiration of any applicable grace periods and
the presentation of any debt instruments, if required), if the aggregate
amount of all such Indebtedness which has been so accelerated and with
respect to which there has been such a default in payment shall exceed
$10,000,000, without each such default and acceleration having been
rescinded or annulled within a period of 30 days after there shall have been
given to the Issuer by the Trustee by registered mail, or to the Issuer and
the Trustee by the Holders of at least 25 percent in aggregate principal
amount of the Notes then Outstanding, a written notice specifying each such
default and requiring the Issuer to cause each such default and acceleration
to be rescinded or annulled and stating that such notice is a “Notice of
Default” hereunder; or”

     (b) The first sentence of the first paragraph following Section 5.1(h) of the Original
Indenture is hereby amended and restated, but only with respect to the Notes, to read in its
entirety as follows:

“If an Event of Default with respect to Notes then Outstanding occurs and is
continuing, then and in each and every such case, unless the principal of
all of the Notes shall have already become due and payable, either the
Trustee or the Holders of not less than 25 percent in aggregate principal
amount of the Notes then Outstanding, by notice in writing to the Issuer
(and to the Trustee if given by Noteholders), may declare the unpaid
principal amount (or, if the Notes are Original Issue Discount Notes, such
portion of the principal amount as may be specified in the terms) of all the
Notes of such series then Outstanding and the Optional Redemption Premium,
if any, due thereon, and the interest, if any, accrued thereon to be due and
payable immediately, and upon any such declaration the same shall become and
shall be immediately due and payable.”

     Section 5.05 Amendment of Article Eleven of Original Indenture. Article Eleven of the
Original Indenture is hereby amended, but only with respect to the Notes, by the addition of the
following new Section at the end thereof:

“Section 11.11 Usury. It is the intent of the parties in the execution and
performance of the Notes and the Indenture to contract in strict compliance with
applicable usury laws from time to time in effect. The Issuer and the Trustee on
behalf of the Holders stipulate and agree that none of the terms in the Notes or the
Indenture are intended or shall ever be construed to create a contract to pay
interest in an amount in excess of the maximum nonusurious amount or at a rate in
excess of the highest lawful rate. In the event any payment includes any such excess
interest, the Issuer stipulates that such excess interest shall have been paid as a
result of error on the part of the Trustee and the Issuer.”

11

 

ARTICLE VI

ADDITIONAL EVENT OF DEFAULT

     Section 6.01 Event of Default. An additional Event of Default under Section 5.1 of
the Original Indenture occurs if the Issuer fails to comply with, or breaches, any material
provision of the Escrow Agreement.

     Section 6.02 Notice of Default. During the term of the Escrow Agreement, the Trustee
shall provide written notice to the Escrow Agent thereunder (i) upon the occurrence of an Event of
Default or (ii) if the principal amount of and accrued but unpaid interest on the Notes has become
immediately due and payable pursuant to Section 5.1 of the Original Indenture.

ARTICLE VII

MISCELLANEOUS

     Section 7.01 Integral Part. This Supplemental Indenture constitutes an integral part
of the Indenture.

     Section 7.02 Adoption, Ratification and Confirmation. The Original Indenture, as
supplemented and amended by this Supplemental Indenture, is in all respects hereby adopted,
ratified and confirmed.

     Section 7.03 Counterparts. This Supplemental Indenture may be executed in any number
of counterparts, each of which when so executed shall be deemed an original; and all such
counterparts shall together constitute but one and the same instrument.

     Section 7.04 Governing Law. THIS SUPPLEMENTAL INDENTURE AND THE NOTES SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS.

     Section 7.05 Trustee Makes No Representation. The Trustee makes no representation as
to the validity or sufficiency of this Supplemental Indenture. The recitals and statements herein
are deemed to be those of the Issuer and not of the Trustee.

[Signatures on following page]

12

 

     IN WITNESS WHEREOF, the parties hereto have executed this Supplemental Indenture on the date
first set forth above.

	 	 	 	 	 
	 	ISSUER:

SERVICE CORPORATION INTERNATIONAL

 	 
	 	By:  	/s/ Eric D. Tanzberger	 
	 	 	Eric D. Tanzberger 	 
	 	 	Senior Vice President,

Chief Financial Officer and Treasurer 	 
	 
	 	TRUSTEE:

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee

 	 
	 	By:  	/s/ Julie Hoffman-Ramos	 
	 	 	Name:  	Julie Hoffman-Ramos 	 
	 	 	Title:  	Senior Associate 	 

13

 

EXHIBIT A

[FORM OF FACE OF NOTES]

     UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION (“DTC”), NEW YORK, NEW YORK, TO THE ISSUER OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME
OF CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY
PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

     TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO
NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR’S NOMINEE AND TRANSFERS OF PORTIONS OF
THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET
FORTH IN THE INDENTURE REFERRED TO ON THE REVERSE HEREOF.

 

 

	 	 	 
	REGISTERED

No. __________

	 	CUSIP: 817565BU7

ISIN: US817565BU72

$ __________

8.00% Senior Notes Due 2021

     Service
Corporation International, a Texas corporation, promises to pay to __________,
or registered assigns, the principal sum of
___________ Dollars on
November 15, 2021.

     Interest Payment Dates: May 15 and November 15.

     Record Dates: May 1 and November 1.

     Additional provisions of this Note are set forth on the other side of this Note.

Dated:

	 	 	 	 	 
	 	SERVICE CORPORATION

INTERNATIONAL,

 	 
	 	By  	
 	 
	 	 	Name:  	 	 
	 	 	Title:  	 	 
	 

	 	 	 	 	 
	 	TRUSTEE’S CERTIFICATE OF

AUTHENTICATION

THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.

as Trustee, certifies

that this is one of

the Notes referred

to in the Supplemental Indenture.

 	 	 
	By  	 	 	 
	 	Authorized Signatory 	 	 
	 	 	 	 
	 

 

 

[FORM OF REVERSE SIDE OF NOTES]

1. Interest

     Service Corporation International, a Texas corporation (such corporation, and its successors
and assigns under the Indenture hereinafter referred to, being herein called the “Issuer”),
promises to pay interest on the principal amount of this Note at the rate per annum shown above.
The Issuer will pay interest semiannually on May 15 and November 15 of each year, commencing May
15, 2010. Interest on the Notes will accrue from November 10, 2009. Interest will be computed on
the basis of a 360-day year of twelve 30-day months.

2. Method of Payment

     The Issuer will pay interest on the Notes (except defaulted interest) to the Persons who are
registered holders of Notes at the close of business on the May 1 or November 1 next preceding the
interest payment date even if Notes are canceled after the record date and on or before the
interest payment date. Holders must surrender Notes to a Paying Agent to collect principal
payments. The Issuer will pay principal and interest in money of the United States that at the
time of payment is legal tender for payment of public and private debts. Payments in respect of
the Notes represented by a Global Security (including principal, premium and interest) will be made
by wire transfer of immediately available funds to the accounts specified by the Depositary. The
Issuer will make all payments in respect of a certificated Note (including principal, premium and
interest) by mailing a check to the registered address of each Holder thereof; provided,
however, that payments on a certificated Note will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such Holder elects
payment by wire transfer by giving written notice to the Trustee or the Paying Agent to such effect
designating such account no later than 30 days immediately preceding the relevant due date for
payment (or such other date as the Trustee may accept in its discretion).

3. Paying Agent and Registrar

     Initially, The Bank of New York Mellon Trust Company, N.A., a New York banking corporation
(the “Trustee”), will act as Paying Agent and Registrar. The Issuer may appoint and change
any Paying Agent, Registrar or co-registrar without notice.

4. Indenture

     The Issuer issued the Notes under an Indenture dated as of February 1, 1993, as amended by the
Eighth Supplemental Indenture dated as of November 10, 2009 (together, the “Indenture”),
each between the Issuer and the Trustee. The terms of the Notes include those stated in the
Indenture and those made part of the Indenture by reference to the Trust Indenture Act of 1939 (15
U.S.C. §§ 77aaa-77bbbb) as in effect on the date of the Eighth Supplemental Indenture (the
“Act”). Terms defined in the Indenture and not defined herein

 

 

have the meanings ascribed thereto in the Indenture. The Notes are subject to all such terms, and
Noteholders are referred to the Indenture and the Act for a statement of those terms.

     The Notes are general unsecured obligations of the Issuer. The Issuer shall be entitled to
issue Additional Notes pursuant to Section 2.3 of the Original Indenture. The Notes issued on the
Issue Date and any Additional Notes will be treated as a single class for all purposes under the
Indenture. The Indenture contains covenants that limit the ability of the Issuer and its
subsidiaries to create liens on assets; consolidate, merge or transfer all or substantially all of
its assets and the assets of its subsidiaries; and engage in sale/leaseback transactions. These
covenants are subject to important exceptions and qualifications.

5. Optional Redemption

     Except as set forth below and in Section 6, the Issuer shall not be entitled to redeem the
Notes.

     The Notes will be redeemable, in whole or in part, at the Issuer’s option at any time, upon at
least 30 days’ and not more than 60 days’ notice to the Holders, at a redemption price equal to the
greater of (1) 100% of the principal amount of such Notes, and (2) as determined by the Quotation
Agent, the sum of the present values of the remaining scheduled payments of principal and interest
thereon (not including any portion of such payments of interest accrued as of the date of
redemption) discounted to the date of redemption on a semi-annual basis (assuming a 360-day year
consisting of twelve 30-day months) at the Adjusted Treasury Rate plus 50 basis points (the greater
of (1) and (2), the “Optional Redemption Premium”), plus in each case, accrued interest
thereon to (but not including) the date of redemption.

     Notice of optional redemption pursuant to this Section 5 will be mailed at least 30 days but
not more than 60 days before the redemption date to each Holder of Notes to be redeemed at his
registered address. Notes in denominations larger than $2,000 principal amount may be redeemed in
part but only in whole multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Notes (or portions thereof) to be redeemed on the redemption date is
deposited with the Paying Agent on or before the redemption date and certain other conditions are
satisfied, on and after such date interest ceases to accrue on such Notes (or such portions
thereof) called for redemption.

     “Adjusted Treasury Rate” means, with respect to any redemption date, the rate per
annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue,
assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal
amount) equal to the Comparable Treasury Price for such redemption date.

     “Comparable Treasury Issue” means the United States Treasury security selected by the
Quotation Agent as having a maturity comparable to the remaining term of the Notes to be redeemed
that would be utilized, at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of comparable maturity to the
remaining term of such Notes.

 

 

     “Comparable Treasury Price” means, with respect to any redemption date, (i) the
average of the Reference Treasury Dealer Quotations for such redemption date, after excluding the
highest and lowest such Reference Treasury Dealer Quotations, or (ii) if the Trustee obtains fewer
than three such Reference Treasury Dealer Quotations, the average of all such Quotations.

     “Quotation Agent” means the Reference Treasury Dealer appointed by the Issuer.

     “Reference Treasury Dealer” means J.P. Morgan Securities Inc. (and its successors) and
any other nationally recognized investment banking firm that is a primary U.S. government
securities dealer specified from time to time by the Issuer.

     “Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Issuer, of the bid and asked
prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal
amount) quoted in writing to the Trustee by such Reference Treasury Dealer as of 5:00 p.m., New
York time, on the third Business Day preceding the redemption date.

6. Escrow; Special Mandatory Redemption

     Pursuant to the Escrow Agreement, the net proceeds of the Notes issued on the Issue Date will
be deposited into escrow. The Notes issued on the Issue Date are subject to special mandatory
redemption, in whole, but not in part, in the event that the Acquisition is not consummated on or
prior to June 30, 2010. All of the Notes issued on the Issue Date may also be redeemed, at the
Issuer’s option, in whole, but not in part, at any time prior to June 30, 2010, if, in the Issuer’s
sole judgment, the Acquisition will not be consummated by that date. The redemption price in
either case will be 101% of the issue price of the Notes, plus accrued and unpaid interest to the
redemption date.

7. Put Provisions

     Upon a Change of Control, any Holder of Notes will have the right to cause the Issuer to
repurchase all or any part of the Notes of such Holder at a repurchase price equal to 101% of the
principal amount of the Notes to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to receive interest due on
the related interest payment date) as provided in, and subject to the terms of, the Indenture.

8. Denominations; Transfer; Exchange

     The Notes are in registered form without coupons in denominations of $2,000 principal amount
and whole multiples of $1,000. A Holder may transfer or exchange Notes in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish appropriate
endorsements or transfer documents and to pay any taxes and fees required by law or permitted by
the Indenture. The Registrar need not register the transfer of

 

 

or exchange any Notes selected for redemption (except, in the case of a Note to be redeemed in part, the portion of the Note not to be redeemed) or any Notes for a period of 15 days
before a selection of Notes to be redeemed or 15 days before an interest payment date.

9. Persons Deemed Owners

          Except as provided in Section 2 hereto, the registered Holder of this Note may be treated as
the owner of it for all purposes.

10. Unclaimed Money

          If money for the payment of principal or interest remains unclaimed for two years, the Trustee
or Paying Agent shall pay the money back to the Issuer at its request unless an abandoned property
law designates another Person. After any such payment, Holders entitled to the money must look
only to the Issuer as general creditors and not to the Trustee for payment.

11. Discharge and Defeasance

          Subject to certain conditions, the Issuer at any time shall be entitled to terminate some or
all of its obligations under the Notes and the Indenture (insofar as the Indenture applies to the
Notes) if the Issuer deposits with the Trustee money or U.S. Government Obligations for the payment
of principal and interest on the Notes to redemption or maturity, as the case may be.

12. Amendment; Waiver

          Subject to certain exceptions set forth in the Indenture, (a) the Indenture (insofar as the
Indenture applies to the Notes) and the Notes may be amended with the written consent of the
Holders of at least a majority in principal amount outstanding of the Notes and (b) any default or
noncompliance with any provision may be waived with respect to the Notes with the written consent
of the Holders of a majority in principal amount outstanding of the Notes. Subject to certain
exceptions set forth in the Indenture, without the consent of any Noteholder, the Issuer and the
Trustee shall be entitled to amend the Indenture or the Notes to evidence the assumption by a
successor corporation of the Issuer’s obligations under the Indenture, or to add covenants or make
the occurrence and continuance of a default in such additional covenants a new Event of Default for
the protection of the Holders of debt securities, or to cure any ambiguity or correct any
inconsistency in the Indenture or amend the Indenture in any other manner which the Issuer may deem
necessary or desirable and which will not adversely affect the interests of the Holders of senior
debt securities issued thereunder, or to establish the form and terms of any series of senior debt
securities to be issued pursuant to the Indenture, or to evidence the acceptance of appointment by
a successor Trustee, or to secure the senior debt securities with any property or assets.

 

 

	13.	 	Defaults and Remedies

          Under the Indenture, Events of Default include (a) default for 30 days in payment of interest
on the Notes; (b) default in payment of principal on the Notes at maturity, upon redemption
pursuant to Section 5 hereto, upon acceleration or otherwise, or failure by the Issuer to redeem or
purchase Notes when required; (c) failure by the Issuer to comply with other agreements in the
Indenture or the Notes, in certain cases subject to notice and lapse of time; (d) certain
accelerations (including failure to pay within any grace period after final maturity) of other
Indebtedness of the Issuer if the amount accelerated (or so unpaid) exceeds $10 million; (e)
certain events of bankruptcy or insolvency with respect to the Issuer; and (f) with respect to the
Notes issued on the Issue Date, failure by the Issuer to comply with, or any breach of, any
material provision of the Escrow Agreement. If an Event of Default occurs and is continuing, the
Trustee or the Holders of at least 25% in principal amount of the Notes may declare all the Notes
to be due and payable immediately. Certain events of bankruptcy or insolvency are Events of
Default which will result in the Notes being due and payable immediately upon the occurrence of
such Events of Default.

          Noteholders may not enforce the Indenture or the Notes except as provided in the Indenture.
The Trustee may refuse to enforce the Indenture or the Notes unless it receives indemnity or
security satisfactory to it. Subject to certain limitations, Holders of a majority in principal
amount of the Notes may direct the Trustee in its exercise of any trust or power. The Trustee may
withhold from Noteholders notice of any continuing Default (except a Default in payment of
principal or interest) if it determines that withholding notice is in the interest of the Holders.

14. Trustee Dealings with the Issuer

          Subject to certain limitations imposed by the Act, the Trustee under the Indenture, in its
individual or any other capacity, may become the owner or pledgee of Notes and may otherwise deal
with and collect obligations owed to it by the Issuer or its Affiliates and may otherwise deal with
the Issuer or its Affiliates with the same rights it would have if it were not Trustee.

15. No Recourse Against Others

          A director, officer, employee or stockholder, as such, of the Issuer or the Trustee shall not
have any liability for any obligations of the Issuer under the Notes or the Indenture or for any
claim based on, in respect of or by reason of such obligations or their creation. By accepting a
Note, each Noteholder waives and releases all such liability. The waiver and release are part of
the consideration for the issue of the Notes.

16. Authentication

          This Note shall not be valid until an authorized signatory of the Trustee (or an
authenticating agent) manually signs the certificate of authentication on the other side of this
Note.

 

 

17. Abbreviations

          Customary abbreviations may be used in the name of a Noteholder or an assignee, such as TEN
COM (=tenants in common), TEN ENT (=tenants by the entireties), JT TEN (=joint tenants with rights
of survivorship and not as tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to
Minors Act).

18. CUSIP Numbers

          Pursuant to a recommendation promulgated by the Committee on Uniform Security Identification
Procedures the Issuer has caused CUSIP numbers to be printed on the Notes and has directed the
Trustee to use CUSIP numbers in notices of redemption as a convenience to Noteholders. No
representation is made as to the accuracy of such numbers either as printed on the Notes or as
contained in any notice of redemption and reliance may be placed only on the other identification
numbers placed thereon.

19. Governing Law

          THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
TEXAS.

          The Issuer will furnish to any Noteholder upon written request and without charge to the Note
holder a copy of the Indenture which has in it the text of this Note in larger type. Requests may
be made to:

1929 Allen Parkway

Houston, Texas 77019

Attention: Secretary

 

 

 

ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

          (Print or type assignee’s name, address and zip code)

          (Insert assignee’s soc. sec. or tax I.D. No.)

and irrevocably appoint            agent to transfer this Security on the books of the
Issuer. The agent may substitute another to act for him.

	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Your Signature:	 	 
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	 

Sign exactly as your name appears on the other side of this Security

 

 

OPTION OF HOLDER TO ELECT PURCHASE

               If you want to elect to have this Security purchased by the Issuer pursuant to Section 4.03 of
the Supplemental Indenture, check the box: o

               If you want to elect to have only part of this Security purchased by the Issuer pursuant to
Section 4.03 of the Supplemental Indenture, state the amount in principal amount: $

	 	 	 	 	 	 	 	 	 
	 
	 
	 	 	 	 	 	 	 	 
	Dated:

	 	 	 	 	 	Your Signature:	 	 
	 

	 	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	 	 	(Sign exactly as your name appears

on the other side of this Security.)
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 
	Signature Guarantee:
	 	 
	 

	 	 
	 

	 	(Signature must be guaranteed)

          Signatures must be guaranteed by an “eligible guarantor institution” meeting the requirements
of the Registrar, which requirements include membership or participation in the Security Transfer
Agent Medallion Program (“STAMP”) or such other “signature guarantee program” as may be determined
by the Registrar in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

 

 

[TO BE ATTACHED TO GLOBAL SECURITIES]

SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

          The following increases or decreases in this Global Security have been made:

	 	 	 	 	 	 	 	 	 
	Date of
Exchange

	 	Amount of decrease
in Principal
amount of this
Global Security
	 	Amount of increase
in Principal amount
of this Global
Security
	 	Principal amount of
this Global
Security following
such decrease or
increase)
	 	Signature of
authorized officer
of Trustee or
Securities
Custodian

 

 

EXHIBIT B

[FORM OF ESCROW AGREEMENT]exv10w1

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

WVA MANUFACTURING, LLC

DATED AS OF NOVEMBER 5, 2009

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page
	ARTICLE I
	 	 	 	 
	 
	 	 	 	 
	DEFINED TERMS
	 	 	 	 
	 
	 	 	 	 
	Section 1.01 Certain Definitions

	 	 	2	 
	Section 1.02 Other Interpretive Provisions

	 	 	3	 
	 
	 	 	 	 
	ARTICLE II
	 	 	 	 
	 
	 	 	 	 
	ORGANIZATION
	 	 	 	 
	 
	 	 	 	 
	Section 2.01 Name

	 	 	3	 
	Section 2.02 Effective Date; Authorized Signatory

	 	 	4	 
	Section 2.03 Principal Office of the Company

	 	 	4	 
	Section 2.04 Registered Office and Registered Agent

	 	 	4	 
	Section 2.05 Purposes of the Company

	 	 	4	 
	Section 2.06 Term of the Company

	 	 	4	 
	 
	 	 	 	 
	ARTICLE III
	 	 	 	 
	 
	 	 	 	 
	MEMBERS
	 	 	 	 
	 
	 	 	 	 
	Section 3.01 Initial Members

	 	 	4	 
	Section 3.02 Issuance of Membership Units

	 	 	5	 
	Section 3.03 Admission of Additional Members

	 	 	5	 
	Section 3.04 Authority; Liability to Third Parties

	 	 	6	 
	Section 3.05 Actions by the Company

	 	 	6	 
	 
	 	 	 	 
	ARTICLE IV
	 	 	 	 
	 
	 	 	 	 
	MANAGEMENT OF THE COMPANY
	 	 	 	 
	 
	 	 	 	 
	Section 4.01 Management Generally

	 	 	6	 
	Section 4.02 Board of Representatives; Number and Election; Committees

	 	 	7	 
	Section 4.03 Voting by Representatives

	 	 	8	 
	Section 4.04 Matters Requiring a Supermajority Vote of the Board of Representatives

	 	 	8	 
	Section 4.05 Place of Meetings; Chairperson

	 	 	11	 
	Section 4.06 Regular Meetings

	 	 	11	 
	Section 4.07 Special Meetings

	 	 	11	 
	Section 4.08 Video and Tele-Conference Meetings

	 	 	12	 
	Section 4.09 Quorum

	 	 	12	 
	Section 4.10 Compensation

	 	 	12	 
	Section 4.11 Resignation and Removal

	 	 	12	 

 

 

	 	 	 	 	 
	 	 	Page
	Section 4.12 Vacancies

	 	 	12	 
	Section 4.13 Action by Written Consent

	 	 	12	 
	Section 4.14 Provision of Notice to the Representatives

	 	 	13	 
	Section 4.15 Management of the Company’s Subsidiaries

	 	 	13	 
	Section 4.16 Appointment of Independent Auditors

	 	 	13	 
	Section 4.17 Internal Controls

	 	 	13	 
	Section 4.18 Company Policies; Use of Landfill

	 	 	14	 
	Section 4.19 Operating Committee

	 	 	14	 
	Section 4.20 Preparation of the Annual Budget

	 	 	14	 
	Section 4.21 Transactions with Affiliates

	 	 	15	 
	Section 4.22 Retained Membership Units

	 	 	16	 
	 
	 	 	 	 
	ARTICLE V
	 	 	 	 
	 
	 	 	 	 
	OFFICERS
	 	 	 	 
	 
	 	 	 	 
	Section 5.01 Appointment of Officers

	 	 	16	 
	Section 5.02 Resignation; Removal; Vacancies

	 	 	16	 
	Section 5.03 Delegation of Authority

	 	 	17	 
	Section 5.04 Authority, Duties and Compensation

	 	 	17	 
	Section 5.05 Benefit Plans

	 	 	17	 
	 
	 	 	 	 
	ARTICLE VI
	 	 	 	 
	 
	 	 	 	 
	CAPITAL CONTRIBUTIONS, MEMBERSHIP UNITS
AND CAPITAL ACCOUNTS
	 	 	 	 
	 
	 	 	 	 
	Section 6.01 Capital Contributions

	 	 	17	 
	Section 6.02 Additional Capital Contributions

	 	 	18	 
	Section 6.03 Funds for Special Projects

	 	 	19	 
	Section 6.04 Capital Accounts

	 	 	19	 
	Section 6.05 Return of Capital

	 	 	20	 
	Section 6.06 No Interest on Capital Contribution

	 	 	20	 
	Section 6.07 Loans from Members

	 	 	20	 
	Section 6.08 Issuance of Membership Units

	 	 	20	 
	 
	 	 	 	 
	ARTICLE VII
	 	 	 	 
	 
	 	 	 	 
	DISTRIBUTIONS
	 	 	 	 
	 
	 	 	 	 
	Section 7.01 Initial Distribution

	 	 	20	 
	Section 7.02 Distributions

	 	 	21	 
	Section 7.03 Limitations on Distribution

	 	 	21	 
	Section 7.04 Withholding

	 	 	21	 
	Section 7.05 Offset

	 	 	22	 
	Section 7.06 Distributions in Liquidation

	 	 	22	 

ii

 

	 	 	 	 	 
	 	 	Page
	ARTICLE VIII
	 	 	 	 
	 
	 	 	 	 
	ALLOCATIONS
	 	 	 	 
	 
	 	 	 	 
	Section 8.01 Calculation of Net Profits and Net Losses

	 	 	22	 
	Section 8.02 Allocations of Net Profits and Net Losses

	 	 	24	 
	Section 8.03 Loss Limitation

	 	 	24	 
	Section 8.04 Qualified Income Offset

	 	 	24	 
	Section 8.05 Nonrecourse Deductions

	 	 	25	 
	Section 8.06 Member Nonrecourse Deductions

	 	 	25	 
	Section 8.07 Minimum Gain Chargeback

	 	 	25	 
	Section 8.08 Member Minimum Gain Chargeback

	 	 	25	 
	Section 8.09 Section 754 Adjustment

	 	 	25	 
	Section 8.10 Tax-Related Regulatory Provisions

	 	 	26	 
	Section 8.11 Tax Allocations

	 	 	26	 
	Section 8.12 Allocations by the Board of Representatives

	 	 	27	 
	 
	 	 	 	 
	ARTICLE IX
	 	 	 	 
	 
	 	 	 	 
	[RESERVED]
	 	 	 	 
	 
	 	 	 	 
	ARTICLE X
	 	 	 	 
	 
	 	 	 	 
	TRANSFERS
	 	 	 	 
	 
	 	 	 	 
	Section 10.01 Transfer Restrictions Generally

	 	 	27	 
	Section 10.02 Rights of First Refusal

	 	 	29	 
	Section 10.03 Rights Upon a Change of Control Event

	 	 	30	 
	Section 10.04 Tag Along Rights

	 	 	32	 
	Section 10.05 Transfers to Affiliates

	 	 	33	 
	Section 10.06 [Reserved]

	 	 	34	 
	Section 10.07 Rights and Obligations of Transferees

	 	 	34	 
	 
	 	 	 	 
	ARTICLE XI
	 	 	 	 
	 
	 	 	 	 
	FIDUCIARY DUTIES
	 	 	 	 
	 
	 	 	 	 
	Section 11.01 Waiver of Certain Corporate Opportunities; Permitted Competition

	 	 	34	 
	Section 11.02 Fiduciary Duties

	 	 	34	 
	 
	 	 	 	 
	ARTICLE XII
	 	 	 	 
	 
	 	 	 	 
	DISPUTE RESOLUTION
	 	 	 	 
	 
	 	 	 	 
	Section 12.01 Amicable Resolution

	 	 	35	 
	Section 12.02 Mediation

	 	 	35	 
	Section 12.03 Arbitration

	 	 	35	 

iii

 

	 	 	 	 	 
	 	 	Page
	Section 12.04 Non-Exclusive Remedy

	 	 	36	 
	Section 12.05 Enforcement by Members

	 	 	36	 
	 
	 	 	 	 
	ARTICLE XIII
	 	 	 	 
	 
	 	 	 	 
	RESERVES, BOOKS AND RECORDS,
TAX MATTERS
	 	 	 	 
	 
	 	 	 	 
	Section 13.01 Reserves

	 	 	37	 
	Section 13.02 Fiscal Year and Method of Accounting

	 	 	37	 
	Section 13.03 Company Books and Records

	 	 	37	 
	Section 13.04 Access to Books and Records

	 	 	37	 
	Section 13.05 Financial Statements and Reports

	 	 	38	 
	Section 13.06 Tax Classification

	 	 	38	 
	Section 13.07 Tax Matters Member

	 	 	39	 
	Section 13.08 Preparation of Tax Returns

	 	 	39	 
	Section 13.09 The Initially Transferred Assets

	 	 	39	 
	 
	 	 	 	 
	ARTICLE XIV
	 	 	 	 
	 
	 	 	 	 
	LIABILITY AND INDEMNIFICATION
	 	 	 	 
	 
	 	 	 	 
	Section 14.01 Liability

	 	 	41	 
	Section 14.02 Indemnification

	 	 	41	 
	Section 14.03 Exclusivity

	 	 	42	 
	 
	 	 	 	 
	ARTICLE XV
	 	 	 	 
	 
	 	 	 	 
	DISSOLUTION, LIQUIDATION AND TERMINATION
	 	 	 	 
	 
	 	 	 	 
	Section 15.01 Dissolution

	 	 	42	 
	Section 15.02 Cancellation of Certificate

	 	 	42	 
	Section 15.03 Liquidation

	 	 	42	 
	Section 15.04 Accounting on Liquidation

	 	 	43	 
	Section 15.05 Return of Members’ Capital Contribution

	 	 	43	 
	Section 15.06 Termination

	 	 	43	 
	 
	 	 	 	 
	ARTICLE XVI
	 	 	 	 
	 
	 	 	 	 
	MISCELLANEOUS PROVISIONS
	 	 	 	 
	 
	 	 	 	 
	Section 16.01 Notices

	 	 	43	 
	Section 16.02 Entire Agreement

	 	 	44	 
	Section 16.03 Confidentiality

	 	 	44	 
	Section 16.04 Amendments

	 	 	45	 
	Section 16.05 Withdrawal of Members

	 	 	45	 
	Section 16.06 Governing Law; Jurisdiction

	 	 	45	 
	Section 16.07 Severability

	 	 	45	 

iv

 

	 	 	 	 	 
	 	 	Page
	Section 16.08 Further Assurances

	 	 	46	 
	Section 16.09 Binding Effect

	 	 	46	 
	Section 16.10 Waivers

	 	 	46	 
	Section 16.11 Third Parties

	 	 	46	 
	Section 16.12 Counterparts

	 	 	46	 
	Section 16.13 No Assignment

	 	 	46	 
	Section 16.14 Guarantee

	 	 	46	 
	Section 16.15 Enforcement of Certain Agreements

	 	 	47	 
	 
	 	 	 	 
	Exhibit A Code of Conduct
	 	 	 	 
	Exhibit B Reasonable Care Guiding Principles
	 	 	 	 
	Exhibit C Annual Budget
	 	 	 	 
	Exhibit D Operating Committee Members
	 	 	 	 

v

 

AMENDED AND RESTATED

LIMITED LIABILITY COMPANY

OPERATING AGREEMENT

OF

WVA MANUFACTURING, LLC

          This Amended and Restated Limited Liability Company Operating Agreement (this
“Agreement”) of WVA Manufacturing, LLC (the “Company”), dated as of November 5,
2009, is entered into by GSM Alloys I Inc., a Delaware corporation (“GSMSUB1”), GSM Alloys
II Inc., a Delaware corporation (“GSMSUB2”) and each of GSMSUB1 and GSMSUB2 a “Series A
Member” and together the “Series A Members”) and Dow Corning Enterprises, Inc., a
Delaware corporation (“DCE” or the “Series B Member”), and any other parties that
are admitted as members of the Company in accordance with the terms hereof (each a
“Member,” and collectively, the “Members”), the Company, Globe Specialty Metals,
Inc., a Delaware corporation (solely for the purpose of Sections 4.22, 10.3 and 16.14 hereof
(“Globe”)) and Dow Corning Corporation, a Michigan corporation (solely for the purposes of
Sections 4.22 and 16.14 hereof (“DCC Parent”)).

WITNESSETH:

     WHEREAS, on September 25, 2009, an authorized person has formed the Company pursuant to and in
accordance with the Delaware Limited Liability Company Act, as amended (the “Act”);

     WHEREAS, DCC Parent and Globe have entered into that certain Purchase Agreement, dated as of
November 5, 2009 (the “Purchase Agreement”), pursuant to which DCE acquired forty-nine
percent (49%) of the equity interests in the Company; and GSMSUB1 and GSMSUB2 own, in the
aggregate, the remaining fifty-one percent (51%) of the equity interests in the Company;

     WHEREAS, DCC Parent, GMI, Globe and the Company entered into that certain Output and Supply
Agreement; dated as of November 5, 2009, setting forth the terms upon
which the Company will produce and supply metallurgical and/or chemical grade casted silicon
to DCC Parent and GMI (as amended from time to time, the “Output and Supply Agreement”);
and

 

 

     WHEREAS, the Series A Members desire to amend and restate the limited liability company
operating agreement of the Company entered into on September 25, 2009 as amended and restated on
October 30, 2009, among other things, to admit the Series B Member, to set forth the respective
rights, powers and interests of the Members with respect to the Company and each Member’s
Membership Units (as defined in Section 3.02(c)) herein and to provide for the management of the
business and operations of the Company.

     NOW, THEREFORE, in consideration of the foregoing and of the mutual promises of the parties
hereto, and other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties, intending to be legally bound, agree as follows.

ARTICLE I

DEFINED TERMS

Section 1.01 Certain Definitions. As used in this Agreement, each of the following terms has the meaning
specified on the page set forth opposite such term:

	 	 	 	 	 
	AAA
	 	 	35	 
	Accounting Firm
	 	 	38	 
	Act
	 	 	6	 
	Additional Cash Contributions
	 	 	18	 
	Adjusted Capital Account Deficit
	 	 	24	 
	Affected Interests
	 	 	30	 
	Affiliate
	 	 	15	 
	Agreement
	 	 	1	 
	Alloy Benefit Plans
	 	 	17	 
	Annual Budget
	 	 	14	 
	Auditor
	 	 	13	 
	beneficial owner
	 	 	31	 
	Board of Representatives
	 	 	6	 
	Business Day
	 	 	11	 
	Capital Account
	 	 	19	 
	Capital Contribution
	 	 	17	 
	Certificate of Formation
	 	 	4	 
	Change of Control Event
	 	 	31	 
	Change of Control Member
	 	 	29	 
	Code
	 	 	19	 
	Code of Conduct
	 	 	13	 
	Commission
	 	 	13	 
	Company
	 	 	1	 
	Company Minimum Gain
	 	 	25	 
	Confidential Information
	 	 	43	 
	Contribution Agreement
	 	 	46	 
	Control
	 	 	15	 
	Controlled
	 	 	15	 
	Covered Person
	 	 	40	 
	DCC Parent
	 	 	1	 
	DCE
	 	 	1	 
	Depreciation
	 	 	23	 
	Designated Officers
	 	 	16	 
	Discretionary Indemnified Person
	 	 	40	 
	Discussion Period
	 	 	30	 
	Dispute
	 	 	34	 
	Electrode Supply Agreement
	 	 	10	 
	Exchange Act
	 	 	31	 
	Excluded Conduct
	 	 	40	 
	GAAP
	 	 	36	 
	Garnet
	 	 	1	 
	GMI
	 	 	10	 
	Governmental Body
	 	 	4	 
	Gross Asset Value
	 	 	22	 
	group
	 	 	31	 
	GSMSUB1
	 	 	1	 
	GSMSUB2
	 	 	1	 
	Indemnified Person
	 	 	40	 
	Majority Vote
	 	 	8	 
	Member
	 	 	1	 
	Member Nonrecourse Debt
	 	 	24	 

2

 

	 	 	 	 	 
	Member Nonrecourse Debt Minimum Gain
	 	 	25	 
	Member Nonrecourse Deductions
	 	 	24	 
	Members
	 	 	1	 
	Membership Units
	 	 	5	 
	Net Loss
	 	 	22	 
	Net Profit
	 	 	22	 
	Offer Notice
	 	 	28	 
	Officers
	 	 	16	 
	Operating Committee
	 	 	14	 
	Output and Supply Agreement
	 	 	1	 
	person
	 	 	31	 
	Person
	 	 	4	 
	Policies
	 	 	13	 
	Purchase Agreement
	 	 	1	 
	Put Trigger Date
	 	 	30	 
	Representative
	 	 	6	 
	Requirements of Law
	 	 	13	 
	Rules
	 	 	35	 
	Securities Act
	 	 	10	 
	Series A Member
	 	 	1	 
	Series A Members
	 	 	1	 
	Series A Membership Units
	 	 	5	 
	Series A Representatives
	 	 	7	 
	Series B Member
	 	 	1	 
	Series B Membership Units
	 	 	5	 
	Series B Representatives
	 	 	7	 
	SOX
	 	 	13	 
	Subsidiary
	 	 	13	 
	Supermajority Vote
	 	 	8	 
	Tag-Along Notice
	 	 	32	 
	Tag-Along Per Unit Consideration
	 	 	32	 
	Tagging Member
	 	 	32	 
	Tag-long Transfer
	 	 	32	 
	Tax-Related Regulatory Provisions
	 	 	25	 
	Termination Date
	 	 	42	 
	transfer
	 	 	27	 
	Transfer
	 	 	27	 
	transferee
	 	 	27	 
	Transferee
	 	 	27	 
	transferred
	 	 	27	 
	Transferred
	 	 	27	 
	Transferred Assets
	 	 	39	 
	Transferring Member
	 	 	32	 
	Treasury Regulations
	 	 	19	 
	Valuation Price
	 	 	30	 
	Woodchip Supply Agreement
	 	 	10	 
	WVA
	 	 	8	 

Section 1.02 Other Interpretive Provisions. Each definition used in this Agreement includes the singular and
the plural, and reference to the neuter gender includes the masculine and feminine where
appropriate. The definition ascribed to any capitalized term herein shall govern all uses of such
term, including uses of such term prior to the appearance of the definition thereof. Reference to
any Requirements of Law (as defined in Section 4.14) means such Requirements of Law in effect as of
the time of determination and includes any successor Requirements of Law. Reference to any dollar
amount means such dollar amount in United States currency. The headings to the Articles and
Sections are for convenience of reference and will not affect the meaning or interpretation of this
Agreement. Except as otherwise stated, reference to Articles, Sections and Schedules means the
Articles, Sections and Schedules of this Agreement. The Schedules referred to throughout this
Agreement are hereby incorporated by reference into, and will be deemed a part of, this Agreement.
Unless the context clearly indicates otherwise, the word “including” when used in this Agreement
means “including but not limited to” and the words “hereof”, “herein” and “hereunder” and words of
similar import when used in this Agreement refer to this Agreement as a whole and not to any
particular provision of this Agreement.

3

 

ARTICLE II

ORGANIZATION

Section
2.01 Name. The name of the Company is WVA Manufacturing, LLC.

Section
2.02 Effective Date; Authorized Signatory. This Agreement is made effective as of the date hereof,
except that this Section 2.02 is made effective as of the formation of the Company. The person who
executed and filed the certificate of formation (the “Certificate of Formation”) in respect
of the Company in the office of the Secretary of State of the State of Delaware is hereby
designated an authorized person for purposes of the execution and filing of the Certificate of
Formation.

Section
2.03 Principal Office of the Company. The Company shall have its principal office at Route 60 East,
Alloy, West Virginia, and may establish such other offices or places of business as the Board of
Representatives (as defined in Section 4.01) may deem appropriate.

Section
2.04 Registered Office and Registered Agent. The address of the registered office of the Company in the
State of Delaware is 1209 Orange Street, Wilmington, Delaware 19801. The name and address of the
registered agent of the Company for service of process on the Company in the State of Delaware is
the Corporation Trust Company, 1209 Orange Street, Wilmington, Delaware 19801.

Section
2.05 Purposes of the Company. The purposes of the Company shall be, directly or indirectly, to (a)
operate the Company’s plants and produce metallurgical and/or chemical grade silicon and other
materials at the Company’s plants for sale (other than in the case of by-products) exclusively to
the Members and their Affiliates, in each case, in accordance with the Output and Supply Agreement,
and (b) engage in any other lawful act or activity for which limited liability companies may be
formed under the Act and engage in any and all activities related or incidental to the foregoing.

Section
2.06 Term of the Company. The existence of the Company commenced as of the date the Certificate of
Formation was filed with the Secretary of State of the State of Delaware and shall continue in
perpetuity unless and until terminated in accordance with the provisions of this Agreement.

ARTICLE III

MEMBERS

Section
3.01 Initial Members. As of the date hereof, (i) the sole members of the Company are the Series A
Members and the Series B Member, and (ii) no other Person (as defined in this Section 3.01) has any
right to take part in the ownership of the Company. For purposes of this Agreement: (i)
“Person” means any individual, partnership, corporation, limited liability company,
unincorporated organization, trust, joint venture, other entity or Governmental Body (as defined in
this Section 3.01); and (ii) “Governmental Body” means any foreign or domestic federal,
state, local, supranational or other governmental authority or regulatory body or any foreign or
domestic entity, authority, board, agency,
commission, arbitral tribunal, ministry or similar body exercising executive, legislative,
judicial, regulatory or administrative authority or functions of

4

 

 or pertaining to government,
including any authority or other quasi-governmental entity established to perform any of such
functions.

Section
3.02 Issuance of Membership Units. (a) On or prior to the date of this Agreement, the Company shall
have issued to the Series A Members (or their predecessors in interest) the number of Series A
Membership Units (as defined in Section 3.02(c)), and to the Series B Member the number of Series B
Membership Units (as defined in Section 3.02(c)), set forth opposite each such Member’s name on
Schedule 3.02 in respect of each such Member’s Membership Units and each such Member shall have
obtained all other rights provided to such Member pursuant to this Agreement. Schedule 3.02 shall
set forth (and shall be amended by the Board of Representatives accordingly to reflect any changes
to) each Member’s name, business address and U.S. federal employer identification number, the
number and series of Membership Units (as defined in Section 3.02(c)) owned by such Member, the
Capital Account (as defined in Section 6.04(a)) of such Member, as of the date hereof and after
giving effect to the distributions contemplated by Section 7.01, and the percentage interest which
such Membership Units represent; provided that, as of the date hereof, the Capital Accounts
reflected on Schedule 3.02 do not reflect any adjustment to the Alloy Interests Contribution (as
defined in the Purchase Agreement) pursuant to Section 2.3 of the Purchase Agreement and the
Company shall make appropriate adjustments to the Capital Accounts to account for such adjustments
upon the final determination thereof in accordance with Section 2.3 of the Purchase Agreement.

          (b) The Company may issue additional Membership Units only upon the approval of the Board of
Representatives, by a Supermajority Vote (as hereinafter defined), in accordance with Section 4.04.
Following any such approval, this Agreement, including Schedule 3.02, shall be amended to
reflect the issuance of additional Membership Units, the creation, to the extent applicable, of any
new series of Membership Units to be issued, and the modification of any existing rights approved
as part of any such authorization. Except as otherwise explicitly set forth in, or explicitly
permitted by, this Agreement, each Membership Unit (as defined in Section 3.02(c)) shall be
identical in all respects with each other Membership Unit. Unless the Board of Representatives
determines otherwise, the Membership Units will not be certificated.

          (c) For purposes of this Agreement: (i) “Membership Units” means, collectively, the
Series A Membership Units and the Series B Membership Units which represent such Member’s share of
the profits and, if applicable, losses of the Company and such Member’s rights to receive
distributions of the Company’s assets in accordance with the provisions of this Agreement and any
other rights provided to such Member pursuant to this Agreement; (ii) “Series A Membership
Units” means the Membership Units designated as “Series A Membership Units” issued to
the Series A Member; and (iii) “Series B Membership Units” means the Membership Units
designated as “Series B Membership Units” issued to the Series B Member.

Section
3.03 Admission of Additional Members. Except (i) in connection with the issuance, if any, of new
Membership Units approved by the Board of Representatives pursuant to a Supermajority Vote in
accordance with Section 4.04 or (ii) in connection with a Transfer (as defined in
Section 10.01) of
already outstanding Membership Units in accordance with Article X and as contemplated in

5

 

 the
following sentence, there shall be no new Members admitted to the Company. One (1) or more
additional or substitute Members of the Company shall be admitted in connection with a Transfer of
Membership Units from an existing Member, directly or indirectly, to any such proposed additional
Member; provided that such Transfer is made in conformity with Article X. Notwithstanding anything
herein to the contrary, no additional or substitute Member of the Company may be admitted unless
such proposed additional or substitute Member executes a counterpart of, or an agreement adopting,
this Agreement in a form reasonably satisfactory to the Board of Representatives. The Board of
Representatives shall amend Schedule 3.02 to reflect the admission of any additional or substitute
Members.

Section
3.04 Authority; Liability to Third Parties. No Member (acting in its capacity as such) has the
authority or power, except pursuant to a resolution duly adopted by the Board of Representatives
expressly authorizing such action, to vote or provide consent on any matter (including, but not
limited to, any matter that may otherwise require a vote or consent of a Member, the Members or any
class or group of Members under the Act, including, but not limited to, Sections 18-209(b),
18-213(b), 18-215(f), 18-215(j)(3), 18-215(k), 18-216(b), 18-301(b)(1), 18-302(d), 18-402,
18-502(b), 18-801(a)(3) and 18-803(a) thereof), to act for or on behalf of the Company, to do any
act that would be binding on the Company or to incur any expenditures on behalf of the Company. No
Member will be liable for the debts, obligations or liabilities of the Company, including under a
judgment, decree or order of a court.

Section
3.05 Actions by the Company. Whenever this Agreement or the Output and Supply Agreement requires the
Company to abide by the terms hereof or thereof, such requirement shall also be deemed to include
an undertaking on the part of the Member or Members who at such time have the power to designate a
majority of the Members of the Board of Representatives to use its or their commercially reasonable
efforts to cause the Company, to the extent permitted by the Requirements of Law, to so abide;
provided, however, that no Member shall have to expend any funds in connection therewith (except as
contemplated by the Management Services Agreement).

ARTICLE IV

MANAGEMENT OF THE COMPANY

Section
4.01 Management Generally. The powers of the Company shall be exercised by or under the authority of,
and the business and affairs of the Company shall be managed fully and exclusively by, the Members,
by and through a board of representatives (the “Board of Representatives”) as described
herein. The foregoing powers and the authority to manage the business and affairs of the Company
are hereby delegated in full by the Members to the Board of Representatives, and the Board of
Representatives shall, pursuant to such delegation, be responsible for the management and
operations of the Company and have all powers necessary to manage and control the Company, to
conduct its business and to implement any decision of the Members adopted pursuant to this
Agreement. Pursuant to the foregoing
delegation, the Board of Representatives will possess all power, on behalf of the Company, to do or
authorize the Company or to direct the Officers (as defined in Section 5.01), employees and agents
of the Company, on behalf of the Company, to do all things necessary or convenient to carry out the
business and affairs of the Company. Notwithstanding the foregoing, neither the Board of

6

 

Representatives nor any member of the Board

of Representatives (each, a “Representative”)
or any other Person shall be a “manager” of the Company for purposes of the Act. It is expressly
agreed by the Members that each Representative shall not constitute a representative of the Company
but shall serve as a representative of the Member or Members that designated and elected such
Representative hereunder, and shall act (or refrain from acting), vote and provide or withhold
consent with respect to any matter in accordance with the interests and directions of the Member or
Members that designated and elected such Representative hereunder. Unless otherwise expressly
provided herein, any action to be taken or approved by the Board of Representatives must be taken
or approved by a Majority Vote (as defined in Section 4.03(a)) of the Board of Representatives, and
any action so taken or approved will be the act of the Board of Representatives.

Section
4.02 Board of Representatives; Number and Election; Committees. (a) The Board of Representatives shall
consist of five (5) Representatives. To the extent that the Board of Representatives by a
Supermajority Vote changes the size of the Board, the provisions of this Section 4.02 shall be
modified accordingly.

          (b) The holder(s) of the Series A Membership Units will have the sole right to designate,
elect, appoint or remove three (3) Representatives (collectively, the “Series A
Representatives”), subject to the provisions of Section 4.02(f). The initial Series A
Representatives are set forth on Schedule 4.02.

          (c) The holder(s) of the Series B Membership Units will have the sole right to designate,
elect, appoint or remove two (2) Representatives (collectively, the “Series B
Representatives”), subject to the provisions of Section 4.02(f). The initial Series B
Representatives are set forth on Schedule 4.02.

          (d) Each Representative shall serve until such Representative resigns or is removed by the
Member(s) that designated and elected such Representative. In the event that any Representative
shall be unable to attend any regular or special meeting of the Board of Representatives, the
Member(s) that designated and elected such Representative may designate a substitute for such
Representative, and such substitute shall have the right to attend and vote at such meeting on
behalf of such Representative.

          (e) Any committees or subcommittees may be formed and shall be comprised of at least one (1)
Series A Representative and of one (1) Series B Representative, and shall have such power and
authority as delegated, by the Board of Representatives; provided that any action requiring a
Supermajority Vote may only be approved by the Board of Representatives and only upon receipt of
the required vote.

          (f) Notwithstanding anything in Section 4.02(b) or Section 4.02(c), if the percentage of
output acquired by the Series A Members or their Affiliates under the Output and Supply Agreement
during any two consecutive twelve-month periods is less than 25% of the

7

 

total output produced by
the Company during such two-year period, then the Series B Member shall be entitled, at its sole
option (which option shall be effective upon providing sixty (60) days written notice to the Series
A Members) to (i) assume the operation of the Company (including, for the sake of clarity, all
responsibilities under the Management Services Agreement), (ii) remove one of the Series A
Representatives and (iii) appoint one (1) additional Representative to the Board of
Representatives. Following the exercise of such option, subject to the immediately following
sentence, the Series A Member will be entitled to appoint only two (2) Representatives and the
Series B Member shall be entitled to appoint three (3) Representatives. Following the exercise of
such option, if during any two consecutive twelve-month periods, the Series A Members or their
Affiliates acquire at least 40% of the total output produced by the Company during such two-year
period, then the provisions of Section 4.02(b) and 4.02(c) shall once again apply and the Series A
Members shall re-assume the operation of the Company and shall have the right to remove one of the
Series B Representatives and appoint one additional Series A Representative.

Section
4.03 Voting by Representatives. (g) With respect to all matters before the Board of Representatives,
each Representative shall be entitled to one vote. Except with respect to matters requiring a
Supermajority Vote hereunder, all actions presented to the Board of Representatives shall be deemed
authorized if approved by a Majority Vote.

          (h) For purposes of this Agreement: (i) a “Majority Vote” of the Board of
Representatives means the affirmative vote of a majority of the Representatives then in office; and
(ii) a “Supermajority Vote” of the Board of Representatives means a Majority Vote, which
includes the affirmative vote or consent of at least one (1) Series A Representative and one (1)
Series B Representative.

Section
4.04 Matters Requiring a Supermajority Vote of the Board of Representatives. The following actions may
not be taken by the Company unless such action is approved by a Supermajority Vote of the Board of
Representatives or specifically contemplated by the Annual Budget approved in accordance with this
Section 4.04 (any action so taken without a Supermajority Vote shall be void and not within the
powers of the Company):

          (a) amendment of this Agreement or the Company’s or any Subsidiary’s other organizational
documents, or any change in the size of the Board of Representatives;

          (b) formation of any Subsidiary (as defined in Section 4.15(b)) or, except as expressly
permitted under Article X to be effected without the prior approval of the Board of
Representatives, the Transfer of any interest therein;

          (c) change, in any material respect, in the Company’s operations or business (since the
formation of the Company, which for these purposes, shall be the Alloy
Business (as defined in the Purchase Agreement) as conducted by West Virginia Alloys, Inc.
(“WVA”) immediately prior to the Restructuring Transactions (as defined in the Purchase
Agreement) and by the Company immediately prior to the date hereof), including a material

8

 

change in
the products produced by the Company or any other changes that could materially and adversely
impact the performance by the Company of its obligations under the Output and Supply Agreement;

          (d) adoption of the Annual Budget and the related production/scheduling plan in accordance
with Section 4.20 and any material amendments thereto or deviations therefrom;

          (e) merger, acquisition, consolidation or disposition by the Company or any Subsidiary of any
businesses, securities or assets with a value in excess of $500,000, individually, or $2,000,000 in
the aggregate in any twelve month period, other than (i) as contemplated in the Annual Budget, (ii)
the disposition of products produced by the Company in the ordinary course of business pursuant to
the Output and Supply Agreement or (iii) the disposition of by-products produced by the Company in
the ordinary course of business;

          (f) sale, transfer or other disposition by the Company or its Subsidiaries (if any) of all or
substantially all of its assets or any merger or consolidation or other extraordinary business
combination involving the Company or its Subsidiaries (if any);

          (g) sale, disposition, license, transfer, or encumbrance of any material intellectual property
of the Company;

          (h) incurrence of indebtedness or issuance, redemption or repurchase of any debt securities of
the Company or any of its Subsidiaries that individually exceeds $500,000, other than (i) as
contemplated in the Annual Budget, (ii) occurring as part of the accounts payable in the ordinary
course of business or (iii) pursuant to Section 6.02(b);

          (i) assumption, guarantee, or endorsement of the obligations of any other Person or business
entity, or making of any loans, advances, capital contributions or investments in, any other Person
or business entity, other than short-term investments of cash on hand in the ordinary course of
business;

          (j) entry of any agreement in which the Company or its Subsidiaries (if any) are, directly or
indirectly, assuming responsibility for the performance of any Member or any Affiliate of any
Member;

          (k) declaration, setting aside, or payment of any dividend or other distribution, irrespective
of the form of such dividend or distribution, other than as contemplated by this Agreement;

9

 

          (l) sale or issuance of newly issued equity securities of, interests in (including any
Membership Units) or debt of, the Company or any of its Subsidiaries, or any redemption or
repurchase of equity securities of or interests in the Company or any of its Subsidiaries or
repayment of any debt of the Company or any of its Subsidiaries (except in accordance with its
terms);

          (m) call for capital other than to fund maintenance or compliance projects contemplated by the
Annual Budget or any other item contemplated by the Annual Budget;

          (n) entry into any agreement with annual payments expected to exceed $500,000 or which has a
duration of three (3) years or greater and under which payments are expected to exceed $1,500,000
in the aggregate, excluding purchases made in the ordinary course of business consistent with past
practice;

          (o) entry into, or modification of, any power supply agreement and/or a collective bargaining
agreement, which will contemplate, or result in, a material increase in cost to the Company or have
a material and adverse effect on the Company’s ability to satisfy its obligations under the Output
and Supply Agreement;

          (p) make any material change in the scope of existing insurance coverages, other than changes
consistent with industry practice;

          (q) registration of any security under the Securities Act of 1933, as amended (the
“Securities Act”);

          (r) grant of any registration rights with respect to any security of the Company;

          (s) entry of transactions with a value greater than $1,000,000 in the aggregate per annum
with any Member or an Affiliate thereof (other than pursuant to the terms of the Annual Budget or
the terms of any agreement in effect on the date hereof, including, without limitation, the Output
and Supply Agreement, the Electrode Supply Agreement by and among Ningxia Yonvey Coal Industry Co.,
Ltd. and the Company, dated as of the date hereof (the “Electrode Supply Agreement”), the
Management Services Agreement, the Woodchip Supply Agreement by and among Globe Metallurgical Inc.
(the “GMI”) and the Company, dated as of the date hereof (the “Woodchip Supply 
Agreement”), or the Purchase Agreement) or any amendment of an agreement then existing
between the Company and any Member or an Affiliate thereof, including, without limitation, the
Output and Supply Agreement, the Management Services Agreement, the Electrode Supply Agreement, the
Woodchip Supply Agreement and the Purchase Agreement;

10

 

          (t) settlement of any litigation for an amount in excess of $750,000 or on terms which may
reasonably have a material adverse effect on the Company’s ability to perform its obligations under
the Output and Supply Agreement;

          (u) increase in the compensation or benefits of any Officer (as defined in Section 5.01) of
the Company (other than in the ordinary course of business and in accordance with the Annual
Budget);

          (v) selection of, or change in, the Auditor (as defined in Section 4.16);

          (w) voluntary adoption or modification of any material tax or accounting practice or policy
of the Company which is reasonably likely to have a material adverse effect on any Member, except
for modifications which are reasonably necessary for such practice or policy to comply with any
Requirements of Law or any applicable accounting standard;

          (x) other Tax matters requiring the approval, authorization or determination of the Board of
Representatives as set forth in this Agreement; and

          (y) adoption of a plan for complete or partial liquidation or dissolution of the Company or
the filing of any petition under the applicable bankruptcy or insolvency laws.

To the extent that any matter requires, under either this Agreement or applicable Law, action to be
taken by the Board of Representatives, such action may be taken only following receipt of a
Majority Vote, or to the extent required, a Supermajority Vote of the Board of Representatives, and
cannot be taken by the Officers, employees or agents of the Company on behalf of the Company
without such authorization or approval; provided, however, that such Officers, employees
and agents may implement any actions previously approved by the Board of Representatives. In
addition, the parties shall use their reasonable best efforts to keep each other informed as to
material developments regarding the venture, irrespective of whether such developments require a
Supermajority Vote.

Section
4.05 Place of Meetings; Chairperson. Meetings of the Board of Representatives may be held either within
or without the State of Delaware at whatever place is specified in the call of the meeting. In the
absence of specific designation, such meetings will be held at the principal office of the Company
as provided in Section 2.03. The Board of Representatives will appoint one (1) of the
Representatives to be the chairperson to preside at meetings of the Board of Representatives and to
perform such other tasks as may from time to time be determined by the Board of Representatives.
Any Representative will be permitted to attend any meeting of the Board of Representatives in
person or as provided in Section 4.08.

Section
4.06 Regular Meetings. The Board of Representatives will hold regular meetings at least two (2) times
annually; provided, that the Board of Representatives by a Supermajority Vote thereof may

11

 

 agree to
reduce such number of regular meetings of the Board of Representatives to be held during any year.
No notice is required to be given to Representatives of regular meetings for which the Board of
Representatives previously has designated a time and place.

Section
4.07 Special Meetings. Special meetings of the Board of Representatives may be held at any time upon
the request of the President, the Vice President — Director of Finance, the Board of
Representatives or any Representative, in each case made to the Secretary of the Company (or, if
there is no Secretary, any other Officer performing duties similar to those to be performed by the
Secretary pursuant to Schedule 5.04). A notice setting forth the date, time, place and purpose
(including, without limitation, the intention to consider any matter requiring a Supermajority
Vote) of the special meeting of the Board of Representatives will be sent by the Secretary of the
Company (or such other Officer) to the last known address of each Representative and to each Member
at the address set forth on Schedule 16.01 to ensure receipt of such notice at least ten (10)
Business Days (as defined in this Section 4.07) prior to such meeting; provided that a special
meeting held at the request of the President or the Vice President — Director of Finance may be
held on shorter notice which shall be given at least twenty-four (24) hours prior to the scheduled
time of such meeting. The Representatives will cooperate and use their reasonable best efforts to
schedule meetings at times and places which will maximize attendance. Attendance of a
Representative at such meeting will also constitute a waiver of notice thereof, except where such
Representative attends for the express purpose of objecting to the transaction of any business on
the ground that the meeting is not lawfully called or convened. For purposes of this Agreement,
“Business Day” means any day other than a Saturday, Sunday or a day on which commercial
banks located in New York, New York or Detroit, Michigan are required or authorized by law to be
closed.

Section
4.08 Video and Tele-Conference Meetings. Meetings of the Board of Representatives may be held by means
of video conference, conference telephone or similar communications equipment so long as all
Representatives participating in the meeting can hear each other. In furtherance thereof, the
Company shall obtain appropriate video conference, conference telephone or similar communications
equipment or devices to conduct any meetings of the Board of Representatives in accordance with
this Section 4.08. Any Representative, to the extent so requesting, shall be entitled to
participate by such means. The foregoing notwithstanding, Members shall use their reasonable best
efforts to cause their designated Representatives to attend all regular meetings in person.
Participation in a meeting by means of video conference, conference telephone or such similar
communications equipment will constitute presence in person at such meeting, except where a
Representative participates in the meeting for the express purpose of objecting to the transaction
of any business thereof on the ground that the meeting is not lawfully called or convened.

Section
4.09 Quorum. The presence, in person or by proxy, of at least one (1) Series B Representative and one
(1) Series A Representative is required to constitute a quorum at any meeting of the Board of
Representatives. The Board of Representatives may not take any action or provide any approval at a
meeting, except an adjournment of such meeting, without the presence, in person or by proxy, of
such a quorum.

Section
4.10 Compensation. No Representative shall receive compensation from the Company in connection with the
performance of services in such capacity; provided that the Company shall reimburse

12

 

 each
Representative for reasonable out-of-pocket expenses incurred in connection therewith; provided
further, that nothing herein shall limit or restrict the right of a Member to provide additional
compensation in connection with the performance of such services by, or to otherwise employ and
provide compensation to, any Representative designated and elected by such Member.

Section 4.11 Resignation and Removal. Any Representative may resign at any time by giving notice to the Company
and the Member or Members that designated and elected such Representative. Such resignation will
be made in writing and will take effect immediately upon delivery of such notice or at such later
time as may be specified in such notice. Any Representative serving on the Board of
Representatives may be removed, either with or without cause, by the Member(s) that designated and
elected such Representative.

Section 4.12 Vacancies. Any vacancy occurring with respect to a Representative serving on the Board of
Representatives will be filled solely by the Member(s) that designated and elected such
Representative.

Section 4.13 Action by Written Consent. Any action that may be taken or approval that may be provided at a
meeting of the Board of Representatives may be taken or provided without a meeting if a consent in
writing, setting forth the action to be taken or approval to be provided, is signed by all
Representatives. Prior to its execution, the writing referred to in the preceding sentence of this
Section 4.13 will be sent to all Representatives on the Board of Representatives at substantially
the same time and by the same manner of transmission.

Section 4.14 Provision of Notice to the Representatives. Any notice required or permitted to be given to any
Representative pursuant to any Requirements of Law or this Agreement shall be prepared in writing
and given or made by the Secretary of the Company (or, if there is no Secretary, any other Officer
performing duties similar to those to be performed by the Secretary), and shall be deemed to have
been duly given or made upon receipt, by personal hand-delivery, by facsimile transmission, by
electronic mail or by air courier guaranteeing overnight delivery, sent to such address as such
Representative may specify by notice to the Secretary of the Company (or such other Officer). For
purposes of this Agreement, “Requirements of Law” means the organizational documents of an
entity, and any law, regulation, ordinance, code, decree, treaty, ruling or determination of an
arbitrator, court or other governmental authority, in each case applicable to or binding upon such
Person or to which such Person, any of its property or the conduct of its business is subject.

Section 4.15 Management of the Company’s Subsidiaries.

          (a) To the extent that a Subsidiary is created, such Subsidiary shall be treated like the
Company for all purposes, including the requirements relating to (i) the constitution of the board
of representatives or directors thereof and (ii) matters requiring a Supermajority Vote before the
taking of an action. For the sake of clarity, any action which may not be taken by the Company
except in accordance with the terms of this Agreement, may not be taken by the Subsidiary except in
accordance with the terms of this Agreement and a provision to such effect will be included in any
Subsidiary’s organizational documents.

13

 

          (b) For the purposes of this Agreement, “Subsidiary” means with respect to any
specified Person, (a) a corporation of which more than fifty percent (50%) of the voting or capital
stock is, as of the time in question, directly or indirectly owned by such Person and (b) any
partnership, joint venture, association, or other entity in which such Person, directly or
indirectly, owns more than fifty percent (50%) of the equity or economic interest thereof or has
the power to elect or direct the election of more than fifty percent (50%) of the members of the
governing body of such entity.

Section 4.16 Appointment of Independent Auditors. The Company shall, at all times, retain an independent
auditor of the Company (the “Auditor”) to audit the books and records of the Company. The
Auditor shall be KPMG LLP, unless and until another nationally recognized accounting firm is
selected by a Supermajority Vote of the Board of Representatives.

Section 4.17 Internal Controls. The Company will use its reasonable best efforts to implement and maintain a
system of internal controls over financial reporting meeting the requirements of the Securities and
Exchange Commission (the “Commission”), for a company that is subject to the rules of the
Commission, and the Sarbanes-Oxley Act of 2002, as amended (“SOX”), no later than the date
that Globe Specialty Metals, Inc. is required to implement and maintain such a system of internal
controls over financial reporting by the rules of the Commission. The Company shall keep each of
the Members informed of its efforts to implement such procedures and provide the Members with the
results of any assessments as to the effectiveness of such controls.

Section 4.18 Company Policies; Use of Landfill.

          (a) The Company hereby agrees to manage its business and operations consistent with the
principles set forth in the following policies (the “Policies”): (a) the Code of Conduct
attached hereto as Exhibit A (the “Code of Conduct”); and (b) the Responsible Care Guiding
Principles attached hereto as Exhibit B or a similarly comprehensive health, safety and
environmental program reasonably acceptable to the Members. The Company shall and shall direct its
Officers to conduct the activity of the Company in accordance with the Policies and at a level
commensurate with industry standards and, in all cases, in accordance with all Requirements of Law
(including, without limitation, those related to labor, safety and environmental matters) and
otherwise in accordance with past practices and generally accepted industry standards. For the
avoidance of doubt, the Policies do not apply to Members in their capacity as Members. The Members
and/or Officers of the Company may from time to time propose additional operating policies and
other policies, for the
consideration and subject to the approval of the Members or the Board of Representatives by a
Supermajority Vote.

          (b) The Company hereby agrees to use its reasonable best efforts to maintain, or cause to be
maintained on its behalf, insurance coverage at least as favorable to the Company as the coverage
in place on the date hereof, except as otherwise may be approved by the Members in accordance with
Section 4.04. The Company shall also consider in good faith any requests by any of the Members
that the Company enhance the coverage maintained.

14

 

          (c) Without the prior consent of the Board of Representatives pursuant to Supermajority Vote
of the Board of Representatives, the Company agrees that at no time will it directly or indirectly
use the landfill referred to as the Jarrett Branch Landfill to dispose or deposit of any substance,
material, pollutant, waste or other product of the Company.

Section 4.19 Operating Committee. Each of the Series A Members acting together and the Series B Member shall
appoint three (3) members of their respective senior management teams to an executive operating
committee (“Operating Committee”). The Operating Committee shall meet not more often than
once per quarter (unless otherwise requested to meet more frequently by any Representative) and
shall be generally responsible for receiving reports upon and discussing operational matters
between the parties, including, without limitation, the parameters of a budget, pricing of Output
and related production schedules, and any disputes or differences of the Members under this
Agreement and/or the Output and Supply Agreement. The Operating Committee shall report the results
of their discussions to the Board of Representatives, and shall endeavor in good faith to provide a
consensus view on issues. The manager of the plant shall be an ex-officio member of the Operating
Committee. The Operating Committee is a working committee of the Company whose members need not be
Representatives. The initial Operating Committee members are set forth in Exhibit D hereto.

Section 4.20 Preparation of the Annual Budget.

          (a) On a date during the first two (2) weeks of November of each year or such other date as
agreed by the Members, the Operating Committee shall prepare, with the assistance of the management
of the plant, and submit to the Board of Representatives for its approval the Annual Budget and
corresponding production/scheduling plan for the operation of the Company and its Subsidiaries (if
any), during the next calendar year (including the annual capital expenditure plans for maintenance
and compliance and as contemplated by the Output and Supply Agreement). The Annual Budget shall
substantially be in the form of the budget attached hereto as Exhibit C (the “Annual
Budget”). The Annual Budget shall show, on a month-by-month basis (or such other periods as
shall be approved by the Members), in reasonable detail, each line item of anticipated income and
expense for the Company in such form as shall be approved by the Operating Committee from time to
time and, with respect to the calendar year in which the Closing Date (as defined in the Purchase
Agreement) occurs, shall be prorated for the remaining term of the then current calendar year. The
Annual Budget shall note the cost of any raw materials to be supplied by a Member or its
Affiliates and include a production schedule for the manufacture of each Member’s portion of
the plant’s production.

          (b) If the Board of Representatives fails to approve any portion of the Annual Budget
pursuant to Section 4.20(a) prior to the commencement of the fiscal year to which such budget
relates, the Company shall be operated during such fiscal year (i) in accordance with such portions
of the Annual Budget as to which agreement has been reached, and (ii) with respect to those
portions of the Annual Budget as to which agreement has not been reached, at rates or levels of
expenditures comparable to those reflected in the Annual Budget for the preceding year increased by
the lesser of (x) five percent (5%) or (y) the percentage of increase as in the consumer price
index (applicable to Alloy, West Virginia, as published by the

15

 

U.S. Department of Labor, Bureau of
Labor Statistics) from the first day of the last fiscal year for which an Annual Budget was
approved to the last day of the fiscal year immediately preceding the fiscal year to which the
Annual Budget in dispute relates; provided, however, the Board of Representatives
shall have the power to approve the expenditure of a reasonable amount of funds under the
circumstances for emergency repairs required to operate the business in its ordinary course.

          (c) Neither party may use its rights to approve the Annual Budget and the related
production/scheduling plan, as well as material amendments thereto, to alter, indirectly, its
rights and obligations under the Output and Supply Agreement, including without limitation, Section
2.3 thereof.

Section 4.21
Transactions with Affiliates. Subject to Section 4.04, the Company may enter into a transaction or
series of related transactions with the Members or any of their Affiliates (including, for the sake
of clarity, the Management Services Agreement) so long as such transaction or series of related
transactions is on terms, from the Company’s perspective, generally consistent with those
achievable on an arms-length basis. At least once per year the Company shall provide each Member
with a true and correct summary of the material terms of any such transactions and the Members
shall be entitled to all audit rights under Section 13.04 in connection with any such transactions.
In addition to the foregoing, in entering into such transactions, the Members shall not
intentionally disadvantage the Company, in relation to the Members’ and its Affiliates’ other
facilities, in terms of the procurement of raw materials or other items. For purposes of this
Agreement; (i) “Affiliate” means, with respect to any Person, any other Person that,
directly or indirectly, Controls (as defined in this Section 4.21), is Controlled by, or is under
common Control with, such Person; provided, that the Company shall not be deemed an Affiliate of
any Member; and (ii) “Control” means the possession, direct or indirect, of the power to
direct or cause the direction of the management and policies of a Person, whether through the
ownership of voting securities, by contract or otherwise, and “Controlled” has a
correlative meaning.

Section 4.22
Retained Membership Units. Globe and DCC Parent each agree, as of the date hereof and at all times
prior to a permitted Transfer by the Series A Members or Series B Member, as applicable, to an
unaffiliated party in accordance with ARTICLE X, to directly or indirectly retain 100% of the
equity interests in any entity that owns any Membership Interests or rights under the Output
and Supply Agreement; provided, however, each of Globe and DCC Parent may transfer, or permit the
transfer of, equity interests in any such entity to any direct or indirect wholly owned Affiliate
of Globe or DCC Parent, as applicable; provided, further that no such transfer shall relieve any
Member of any of its obligations hereunder.

ARTICLE V

OFFICERS

Section 5.01
Appointment of Officers. The Board of Representatives may appoint a Chairperson, a Chief Executive
Officer, a President, a Chief Operating Officer, a Chief or Senior Financial Officer (subject to
clause (b) below), a Secretary, a Treasurer and one (1) or more Senior Vice Presidents

16

 

 or Executive
Vice Presidents and (b) the Series B Representatives may appoint, and fill any related vacancy of,
a Chief or Senior Financial Officer, which may be the Vice President — Director of Finance, in each
case, subject to the approval by the Series A Representatives, which approval shall not be
unreasonably withheld (the officers identified in clauses (a) and (b) collectively, the
“Designated Officers”). As of the date hereof, the persons listed on Schedule 5.01 are the
Designated Officers of the Company. The appointment and hiring of other officers of the Company,
including, but not limited to, one (1) or more Vice Presidents and Directors (together with the
Designated Officers, the “Officers”), will be made by the President or the Board of
Representatives from time to time. Unless otherwise specified by the Board of Representatives or
the President at the time of appointment, each Designated Officer and other Officer, respectively,
will hold office until his or her death, resignation or removal. Except as set forth in Section
4.04, the employment or retention of any agents or representatives as may be necessary or
appropriate for the conduct of the Company’s business will be made by the President. No Member or
Representative may appoint officers or employees or employ or retain agents and representatives of
the Company.

Section 5.02
Resignation; Removal; Vacancies. Any Designated Officer may resign at any time by giving written
notice to the Board of Representatives and any other Officer may resign at any time by giving
written notice to the President. Unless otherwise stated in a notice of resignation, such
resignation will take effect when received by the Board of Representatives or the President, as
applicable, without any need for acceptance. Subject to Section 5.01, the Board of Representatives
will have the right to remove any Designated Officer, with or without cause, at any time and,
subject to Section 5.01, the President and the Board of Representatives will each have the right to
remove any other Officers, with or without cause, at any time. In the event of a vacancy occurring
in (i) any Designated Officer position, such vacancy will be filled by the Board of Representatives
and (ii) any other Officer position, such vacancy will be filled by the President or the Board of
Representatives.

Section 5.03
Delegation of Authority. Subject to Section 4.04, the Board of Representatives hereby delegates to
the Officers the authority, right and power to manage the Company’s business and to do any and all
acts and things necessary, proper, convenient or advisable to effectuate the purposes of this
Agreement; provided that the delegation of authority in this Section 5.03, (i) to the President may
be revoked in whole or in part at any time or from time to time by the Board of Representatives,
and (ii) to the other Officers may be revoked in whole or in part at any time or
from time to time by the President; provided, further, that no such revocation will affect the
rights of a third party under a contract entered into by the Company pursuant to such delegated
authority prior to the revocation thereof. Except as otherwise expressly provided for in this
Agreement, no Member or Representative may delegate any authority, right or power to manage the
Company’s business or to take actions on behalf of the Company to any other Person.

Section 5.04
Authority, Duties and Compensation. Except as otherwise set forth in this Agreement and subject to
the provisions of Section 4.04, the powers and responsibilities of (i) each Designated Officer will
be comparable to those normally assigned to corporate officers of equivalent title or as otherwise
determined by the Board of Representatives and (ii) each other Officer will be comparable to those
normally assigned to corporate officers of equivalent title or as otherwise determined by the
President. Any number of offices may be held by the same person. The initial

17

 

 salaries and
compensation arrangements of the Designated Officers shall generally be consistent with those in
effect on the date hereof.

Section 5.05
Benefit Plans. Subject to approval, from time to time, by the Board of Representatives, the
Company shall maintain each and every benefit plan presently in existence and set forth on Schedule
5.05 (the “Alloy Benefit Plans”) and shall continue to be responsible for all benefits and
liabilities with respect to such Alloy Benefit Plans, as such Alloy Benefit Plans may be amended or
modified from time to time.

ARTICLE VI

CAPITAL CONTRIBUTIONS, MEMBERSHIP UNITS

AND CAPITAL ACCOUNTS

Section 6.01
Capital Contributions. (a) On or prior to the date of this Agreement, each of the Series A
Members (or their predecessors in interest) and Series B Member shall have made (or been deemed to
have made) a Capital Contribution to the Company in the amount set forth opposite such Member’s
name on Schedule 3.02 (which amount is net of any amounts distributed in accordance with Section
7.01) and, in consideration thereof, the Company shall have issued to such Member (or its
predecessor in interest) the number of Membership Units of such series as is set forth opposite
such Member’s name on Schedule 3.02. Upon the admission of any additional Member of the Company,
Schedule 3.02 will be restated to reflect the admission of such additional Member, the Capital
Contribution made to the Company by such additional Member and the number and series of Membership
Units issued to such additional Member.

          (b) For purposes of this Agreement, “Capital Contribution” means, with respect to any
Member, the total amount of cash and the Gross Asset Value (as defined in Section 8.01(b)) of any
other property (other than cash) contributed (or deemed to be contributed) to the Company by such
Member pursuant to this Agreement and, with respect to the initial Capital Contributions through
the date hereof, pursuant to the Purchase Agreement and taking into account, for the avoidance of
doubt, Section 2.3 thereof.

Section 6.02
Additional Capital Contributions. (a) No Member shall be obligated to make Capital Contributions
to the Company without the consent of such Member, nor shall any Member be
entitled to make any Capital Contribution other than as contemplated by Section 6.01 or pursuant to
this Section 6.02 or Section 6.03, provided that this sentence shall not limit the obligations of
Members to make payments pursuant to Section 10.01(d). The Board of Representatives shall amend
Schedule 3.02 to reflect the making of any additional Capital Contributions and the issuance of any
additional Membership Units hereunder.

          (b) Subject to Section 6.02(c), in the event that the Board of Representatives determines that
the Company requires additional funds for proper Company purposes other than making distributions
to the Members, the Company, on behalf of the Board of Representatives (following approval pursuant
to Section 4.04), shall make one (1) or more written requests for the Members to make additional
Capital Contributions in cash (the

18

 

“Additional Cash Contributions”). The respective
portion of any Additional Cash Contributions will be determined pro rata based on
the number of Membership Units held by such Member relative to the number of Membership Units held
by all Members at the time of such request. Members, when so requested, will have the obligation
to make their full requested Additional Cash Contributions. Such request will specify the date on
or before which the contributions must be delivered to the Company, which date will not be earlier
than thirty (30) calendar days after the provision of notice of such request to all Members. In
the event that any Member fails to make any required Additional Cash Contribution, the other
Members shall have the right to loan to the Company (in proportion to their relative ownership
interest in the Company) the amount of such Additional Cash Contribution on an unsecured basis at
an interest rate of LIBOR (London Interbank Offered Rates with a term of three (3) months as
published in The Wall Street Journal) plus 10% (1000 basis points); provided that (i) the making of
a loan by any other Member pursuant to this Section 6.02(b) shall not relieve a non-contributing
Member’s obligation to make the applicable Additional Cash Contribution (together with any accrued,
but unpaid, interest) and (ii) on the last business day of each calendar quarter, such
non-contributing Member shall contribute to the Company an amount equal to the aggregate amount of
interest accrued (whether or not paid) on such loan during such quarter. No additional Membership
Units shall be issued by the Company with respect to any Additional Cash Contributions or
contributions made relating to the Company’s interest expense incurred pursuant to any loan
accepted pursuant to this Section 6.02(b) unless approved by the Board of Representatives by
Supermajority Vote.

     
     (c) Prior to requesting any future funding from the Members, the Board of Representatives, by
a Supermajority Vote, shall confirm whether such funding shall be in the form of equity or debt
(and if debt, the terms thereof).

Section
6.03 Funds for Special Projects. In the event that any Member desires to make funds available for the
purpose of modifying or building equipment in order to satisfy the production needs solely of such
Member, the Members agree to use reasonable efforts to determine, in good faith, an appropriate
method to allow such Member to make the funds available and to modify this Agreement accordingly;
provided, however, except as specifically agreed upon by all Members, no such funding by a Member
shall be deemed a Capital Contribution and no such funding shall alter the relative ownership
interests of the Members in the Company or their Capital Accounts.

Section
6.04 Capital Accounts.

      
    (a) The Company shall maintain a separate capital account (a “Capital Account”) for
each Member in accordance with the following provisions. The Capital Accounts shall be maintained
for each Member in accordance with Treasury Regulations Sections 1.704-1(b) and 1.704-2. The
initial Capital Accounts of the Series A Members and the Series B Member shall be as set forth on
Schedule 3.02.

          (i) Each Member’s Capital Account shall be increased by the amount of such
Member’s Capital Contributions, if any (to the extent not taken into account in the
initial Capital Account set forth on Schedule 3.02), the amount of Net Profits (as
defined in Section 8.01(a)) allocated to such Member pursuant

19

 

to Article VIII, and
the amount of any Company liabilities assumed by such Member (or taken subject to).

          (ii) Each Member’s Capital Account shall be decreased by the amount of cash and
the Gross Asset Value of any other Company property distributed to such Member
pursuant to any provision of this Agreement, any Net Losses (as defined in Section
8.01(a)) allocated to such Member pursuant to Article VIII and the amount of any
liabilities of such Member assumed by the Company (or taken subject to).

   
       (iii) In the event all of a Member’s Membership Units are Transferred (as
defined in Section 10.01) in accordance with the terms of this Agreement, the
Transferee shall succeed to the Capital Account of such Member to the extent such
Capital Account relates to the Transferred Membership Units.

          (iv) In determining the amount of liability for purposes of Section 6.04(a)(i)
and Section 6.04(a)(ii), there shall be taken into account Section 752(c) of the
Internal Revenue Code of 1986, as amended (the “Code”) and any other
applicable provisions of the Code and the treasury regulations promulgated
thereunder (the “Treasury Regulations”).

      
    (b) The foregoing provisions and the other provisions of this Agreement relating to the
maintenance of Capital Accounts are intended to comply with Treasury Regulations Section 1.704-1(b)
and shall be interpreted and applied in a manner consistent with such Treasury Regulations. The
Board of Representatives shall be authorized to make appropriate amendments to the allocations of
items pursuant to this Section 6.04 if necessary in order to comply with Section 704 of the Code,
Treasury Regulations Section 1.704-1 and other applicable Treasury Regulations.

Section
6.05 Return of Capital. Except upon the dissolution of the Company or as otherwise provided herein, no
Member shall have the right to withdraw from the Company or to demand or to receive the return of
all or any part of its Capital Account or its Capital Contributions.

Section
6.06 No Interest on Capital Contribution. No Member shall be paid interest on any of its Capital
Contributions or on its Capital Accounts, except as specifically provided herein.

Section
6.07 Loans from Members. Subject to Section 4.04, the Board of Representatives may request one (1) or
more Members to make loans to the Company or, except as contemplated by Section 6.02, otherwise
advance funds to the Company in excess of the amounts required hereunder to be contributed by such
Member to the capital of the Company; provided that no Member shall be required to make any such
loans or advances to the Company. Such loans
or advances by a Member to the Company shall not be
considered Capital Contributions. If any Member shall make such loans or advances, the making of
such loans or advances shall not result in any increase in the amount of the Capital Account of
such Member. The amounts of any such loans

20

 

or advances shall be a debt of the Company to such
Member and shall be payable or collectible only out of the Company assets in accordance with the
terms and conditions upon which such advances are made. The repayment of such loans or advances
from a Member to the Company upon liquidation shall be subject to the order of priority set forth
in Section 15.03. No act or failure to act of any such Member(s) making loans to the Company shall
affect the rights of such Member(s) as a lender to the Company.

Section
6.08 Issuance of Membership Units. Except as provided in Section 6.03, as evidence of any Capital
Contribution by a Member that is not pro rata based on the number of Membership Units held by such
Member relative to the number of Membership Units held by all Members, the Company shall issue
Membership Units. The Membership Units shall be issued at fair market value as determined by the
Board of Representatives in its reasonable, good faith judgment. In the event Membership Units are
issued to a Member after the date of this Agreement, Schedule 3.02 will be amended to reflect such
issuance.

ARTICLE VII

DISTRIBUTIONS

Section
7.01 Initial Distribution.

          (a) On the date hereof, in connection with the Purchase Agreement and the transactions
contemplated thereby, the Company shall make a distribution, in cash, to the Series A Members in
the aggregate amount of one hundred million dollars ($100,000,000) in proportion of their equity
interests in the Company, of which Eighty Eight Million Sixty Three Thousand Dollars ($88,063,000)
shall be treated for income tax purposes as consideration for the sale to the Company of the
assets, or the portion of the assets, set forth on Schedule 13.09 pursuant to Treasury
Regulations Section 1.707-3(a) and Eleven Million Nine Hundred Thirty Seven Thousand Dollars
($11,937,000) shall be treated for income tax purposes as a reimbursement of pre-formation
expenditures pursuant to Treasury Regulations Section 1.707-4(d).

          (b) In addition, promptly following the determination of the Closing Date Alloy Balance Sheet
(as such term is defined in the Purchase Agreement), the Members and the Company shall make all
payments contemplated by Section 2.3 of the Purchase Agreement.

Section
7.02 Distributions. (a) Subject to Section 7.01 and except as otherwise set forth herein,
distributions to the Members shall be made at such times and in such amounts as the Board of
Representatives shall determine in its sole discretion in accordance with Section 4.04, pro rata
based on the number of Membership Units held by each Member relative to the aggregate number of
Membership Units held by all Members; provided, however, that it is the intention of the Members
that, to the extent there is cash available in excess of ordinary or anticipated working capital
requirements and reasonable reserves, the Company shall distribute such excess cash to the Members
on a regular basis but at least quarterly.

21

 

          (b) Distributions may be made in cash or property on the basis of such property’s Gross Asset
Value, as determined by the Board of Representatives in its reasonable judgment; provided that any
such distributions to the Members shall consist of the same relative composition of cash and/or
property to each Member, except as otherwise expressly permitted herein and subject to approval by
a Supermajority Vote of the Board of Representatives.

       
    Section 7.03 Limitations on Distribution. Notwithstanding any provision to the contrary contained in this
Agreement, the Company shall not make a distribution to any Member on account of its Membership
Units if such distribution would violate Section 18-607 of the Act or other applicable law.

       
    Section 7.04 Withholding. Notwithstanding any provision to the contrary contained in this Agreement, the Board
of Representatives is authorized to take any action that it reasonably determines in good faith to
be necessary or appropriate to cause the Company to comply with any federal, state, local or
foreign withholding or deduction requirement with respect to any allocation, payment or
distribution by the Company to any Member or other Person. All amounts so withheld or deducted,
and amounts withheld or deducted with respect to any allocation, payment, or distribution by any
Person to the Company, shall be treated as distributed to the applicable Member for purposes of
this Agreement. If any such withholding or deduction requirement with respect to any Member
exceeds the amount allocated or distributed to such Member under this Agreement or if any such
withholding or deduction requirement was not, for whatever reason, satisfied with respect to any
amount previously allocated or distributed to such Member, such Member and any successor or
assignee with respect to such Member’s interest in the Company hereby indemnifies and agrees to
hold harmless the other Members, the Company and the Board of Representatives for such excess
amount, interest, penalties, additions to tax and costs and expenses of the Company and the Board
of Representatives with respect to such withholding or deduction requirement, as the case may be.
In furtherance of the foregoing, such Member shall provide the Company with immediately available
funds to satisfy such obligation. Each Member shall promptly give the Company any certification or
affidavit that the Company may request in connection with this Section 7.04.

       
    Section 7.05 Offset. Whenever the Company is to pay any sum to any Member, any amounts such Member owes the
Company or any of its Affiliates pursuant to this Agreement, as determined by the
Board of Representatives in its good faith reasonable judgment, may be deducted from such sum
before payment, to the extent permitted by applicable law, and the amount so deducted shall be
treated as distributed to such Member for purposes of this Agreement.

       
    Section 7.06 Distributions in Liquidation. Upon the liquidation of the Company, liquidation proceeds, if any,
shall be distributed in accordance with the provisions of Section 15.03(b).

ARTICLE VIII

ALLOCATIONS

       
    Section 8.01 Calculation of Net Profits and Net Losses. (a) For purposes of this agreement, “Net
Profit” or “Net Loss” as the case may be, means, for each fiscal year, the Company’s
taxable income and

22

 

loss for such fiscal year as determined in accordance with the accounting
methods followed by the Company for federal income tax purposes and in accordance with Section
703(a) of the Code (including for this purpose, all items of income, gain, loss or deduction
required to be separately stated pursuant to Section 703(a)(1) of the Code), with the following
adjustments:

          (i) Any income of the Company that is exempt from federal income tax and
described in Section 705(a)(1)(B) of the Code and not otherwise taken into account
in computing Net Profit and Net Loss pursuant to this definition shall be added to
such taxable income or loss;

          (ii) Any expenditures of the Company described in Section 705(a)(2)(B) of the
Code or treated as Section 705(a)(2)(B) of the Code expenditures pursuant to
Treasury Regulations Section 1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Net Profit and Net Loss pursuant to this definition shall be
subtracted from taxable income or loss;

          (iii) In the event the Gross Asset Value of any Company asset is adjusted
pursuant to Section 8.01(b)(ii) or (b)(iii), the amount of such adjustment shall be
taken into account as gain (if the adjustment increases the Gross Asset Value of the
asset) or loss (if the adjustment decreases the Gross Asset Value of the asset) from
the disposition of such Company asset for purposes of computing Net Profit and Net
Loss;

          (iv) Gain or loss resulting from any disposition of any Company asset with
respect to which gain or loss is recognized for federal income tax purposes shall be
computed by reference to the Gross Asset Value of the Company asset disposed of,
notwithstanding that the adjusted tax basis of such Company asset may differ from
its Gross Asset Value; and

          (v) In lieu of depreciation, amortization and other cost recovery deductions
taken into account in computing such taxable income or loss, Depreciation (as
defined in Section 8.01(c)) for such fiscal year shall be taken into account.

          (b) For purposes of this Agreement, “Gross Asset Value” means, with respect to any
Company asset, the adjusted basis of such asset for federal income tax purposes, except as follows:

          (i) The initial Gross Asset Value of any Company asset (other than cash)
contributed by a Member to the Company shall be (i) in the case of the initial
capital contributions made on or prior to the date hereof, the fair market

23

 

value
amount set forth on Schedule 13.09 next to each asset and (ii) in the case
of subsequent capital contributions, the gross fair market value of such Company
asset as of the date of such contribution, as determined in good faith by the Board
of Representatives;

          (ii) The Gross Asset Value of each Company asset shall be adjusted in
accordance with Treasury Regulations Section 1.704-1(b)(2)(iv)(f) and (g) to equal
its gross fair market value, as determined in good faith by the Board of
Representatives, as of the following times: (A) immediately before the admission of
a new Member to the Company or the acquisition of an additional interest in the
Company by any existing Member in exchange for more than a de minimis capital
contribution, in either case by the issuance of additional Membership Units to such
Member by the Company; (B) immediately before the distribution by the Company of
money or other property (other than a de minimis amount) as consideration for all or
part of a Member’s Membership Units; (C) immediately before the liquidation of the
Company within the meaning of Treasury Regulations Section 1.704-1(b)(2)(ii)(g); and
(D) immediately before the grant of Membership Units in the Company (other than a de
minimis interest) as consideration for the provision of services to or for the
benefit of the Company by an existing Member acting in a Member capacity, or by a
new Member acting in a Member capacity in anticipation of being a Member; provided
that an adjustment described in (A), (B) and (D) of this paragraph shall be made
only if the Board of Representatives, in its sole discretion determines that such
adjustment is necessary to reflect the relative economic interests of the Members in
the Company;

          (iii) The Gross Asset Value of a Company asset distributed to any Member shall
be the gross fair market value of such Company asset as of the date of distribution
thereof, as determined in good faith by the Board of Representatives; and

          (iv) If the Gross Asset Value of a Company asset has been determined or
adjusted pursuant to Section 8.01(b)(i) or Section 8.01(b)(ii), such Gross Asset
Value shall thereafter be adjusted to reflect Depreciation taken into account with
respect to such Company asset for purposes of computing Net Profits and Net Losses.

          (c) For purposes of this Agreement, “Depreciation” means, for each fiscal year, an
amount equal to the depreciation, amortization, or other cost recovery deduction allowable with
respect to an asset for such fiscal year, except that if the Gross Asset Value of an asset differs
from its adjusted basis for federal income tax purposes at the beginning of such fiscal year,
Depreciation shall be an amount that bears the same ratio to such beginning Gross Asset Value as
the federal income tax depreciation, amortization, or other cost recovery deduction for such fiscal
year bears to such beginning adjusted tax basis, provided, however, that

24

 

if the
adjusted basis for federal income tax purposes of an asset at the beginning of such fiscal year is
zero, Depreciation shall be determined with reference to such beginning Gross Asset Value using any
reasonable method selected by the Board of Representatives.

       
    Section 8.02 Allocations of Net Profits and Net Losses. After giving effect to the special allocations set
forth in this Article VIII, Net Profit, Net Loss and items thereof for any fiscal year shall be
allocated to the Members pro rata based on the number of Membership Units held by each Member
relative to the aggregate number of Membership Units held by all Members.

       
    Section 8.03 Loss Limitation. Notwithstanding any provision of Section 8.02, no item of Net Loss or other
deduction or loss shall be allocated to a Member to the extent the allocation would cause or
increase a negative balance in such Member’s Capital Account (after taking into account the
adjustments, allocations and distributions described in Treasury Regulations Section
1.704-1(b)(2)(ii)(d)(4), (5) and (6)) (“Adjusted Capital Account Deficit”). In the event
some but not all of the Members would have Adjusted Capital Account Deficits as a consequence of
such allocation of Net Loss or other deduction or loss, the limitation set forth in this Section
8.03 shall be applied on a Member-by-Member basis so as to allocate the maximum permissible
deduction or loss to each Member under Treasury Regulations Section 1.704-1(b)(2)(ii)(d). In the
event any loss or deduction shall be specially allocated to a Member pursuant to the preceding
sentence, an equal amount of income of the Company shall be specially allocated to such Member
prior to any allocation pursuant to Section 8.02.

       
    Section 8.04 Qualified Income Offset. In the event any Member unexpectedly receives any adjustments,
allocations, or distributions described in Treasury Regulations Sections 1.704-1(b)(2)(ii)(d)(4),
(5) and (6), items of Company income and gain shall be specially allocated to such Member in an
amount and manner sufficient to eliminate as quickly as possible any Adjusted Capital Account
Deficit. Any special allocation of items of income or gain pursuant to this Section 8.04 shall be
taken into account in computing subsequent allocations pursuant to Section 8.02 so that the net
amount of any items so allocated and all other items allocated to each Member pursuant to this
Section 8.04 shall, to the extent possible, be equal to the net amount that would have been
allocated to each such Member pursuant to the provisions of Section 8.02 if such unexpected
adjustments, allocations or distributions had not occurred. This Section 8.04 is intended to
constitute a “qualified income offset” pursuant to Treasury Regulations Section
1.704-1(b)(2)(ii)(d) and shall be interpreted and applied consistently therewith.

       
    Section 8.05 Nonrecourse Deductions. Nonrecourse deductions, within the meaning of Treasury Regulations Section
1.704-2(b)(1) and (c), for any fiscal year shall be specially allocated to the Members pro rata
based on the number of Membership Units held by each Member relative to the aggregate number of
Membership Units held by all Members.

       
    Section 8.06 Member Nonrecourse Deductions. Any Member Nonrecourse Deductions (as defined in this Section 8.06)
for any fiscal year shall be specially allocated to the Member who bears the economic risk of loss
with respect to the Member Nonrecourse Debt to which such Member Nonrecourse Deductions are
attributable in accordance with Treasury Regulations Section 1.704-2(i)(1). For purposes of this
Agreement (i) “Member Nonrecourse Debt” has the same meaning as the term “partner
nonrecourse debt” set forth in Treasury Regulations Section 1.704-2(b)(4) and (ii) “Member
Nonrecourse Deductions” has the same meaning as the term “partner

25

 

nonrecourse deductions” set
forth in Treasury Regulations Section 1.704-2(i)(1) and 1.704-2(i)(2).

Section
8.07 Minimum Gain Chargeback. In the event there is a net decrease in Company Minimum Gain (as defined
in this Section 8.07) during any fiscal year, each Member shall be allocated items of income and
gain for such year equal to such Member’s share of the net decrease in Company Minimum Gain within
the meaning of Treasury Regulations Section l.704-2(g)(2), except to the extent not required by
Treasury Regulations Section 1.704-2(f). For purposes of this Agreement, “Company Minimum
Gain” has the same meaning as the term “partnership minimum gain” set forth in Treasury
Regulations Section 1.704-2(b)(2) and (d). This Section 8.07 is intended to constitute a “minimum
gain chargeback” as set forth in Treasury Regulations Section 1.704-2(f) and shall be interpreted
and applied consistently therewith.

Section
8.08 Member Minimum Gain Chargeback. In the event there is a net decrease in Member Nonrecourse Debt
Minimum Gain (as defined in this Section 8.08) during any fiscal year, each Member who has a share
of the Member Nonrecourse Debt Minimum Gain attributable to Member Nonrecourse Debt (as defined in
this Section 8.08), determined in accordance with Treasury Regulations Section 1.704-2(i)(5), shall
be allocated items of income and gain for such fiscal year (and, if necessary, subsequent fiscal
years) equal to such Member’s share of the net decrease in Member Nonrecourse Debt Minimum Gain.
This allocation shall be made in accordance with Treasury Regulations Section 1.704-2(i)(4) and
(f). For purposes of this Agreement “Member Nonrecourse Debt Minimum Gain” has the same
meaning as the term “partner nonrecourse debt minimum gain” set forth in Treasury Regulations
Section 1.704-2(i)(2). This Section 8.08 is intended to constitute a “partner nonrecourse debt
minimum gain chargeback” as set forth in Treasury Regulations Section 1.704-2(i) and shall be
interpreted and applied consistently therewith.

Section
8.09 Section 754 Adjustment. In the event of a Transfer (as defined in Section 10.01(b)) of a Member’s
Membership Units pursuant to Article X, at the request of the Member Transferring such Membership
Units or its successor in interest that the Company make an election under Section 754 of the Code,
the Board of Representatives may, in its sole discretion after making a good faith determination,
cause the Company to make such election (which election, unless
properly revoked, will, in accordance with Section 754 of the Code and the Treasury Regulations
thereunder, be binding with respect to all subsequent Transfers of Membership Units of the Company
and with respect to certain distributions of property by the Company).

Section
8.10 Tax-Related Regulatory Provisions. The provisions of Section 8.03 through Section 8.09
(collectively, the “Tax-Related Regulatory Provisions”) are intended to comply with certain
requirements of the Treasury Regulations. It is the intent of the Members that, to the extent
possible, all allocations pursuant to the Tax-Related Regulatory Provisions shall be offset either
with other allocations pursuant to the Tax-Related Regulatory Provisions or, if necessary, with
corrective allocations of other items of income, gain, loss or deduction pursuant to this Section
8.10. Therefore, notwithstanding any other provision of this Agreement, other than the Tax-Related
Regulatory Provisions, allocations pursuant to the Tax-Related Regulatory Provisions shall be taken
into account in allocating other items of income, gain, expense or loss among the Members so that,
to the extent possible, the net amount of such allocations of other items and the allocations
pursuant to the Tax-Related Regulatory Provisions to each Member are equal to the

26

 

net amount that
would have been allocated to such Member if the Tax-Related Regulatory Provisions were not part of
this Agreement.

Section
8.11 Tax Allocations.

          (a) Items of income, gain, loss, deduction and credit realized by the Company shall, for each
fiscal year, be allocated, for federal, state and local income tax purposes, among the Members in
the same manner as the Net Profit or Net Loss of which such items are components were allocated
pursuant to this Article VIII.

          (b) Notwithstanding the provisions of Section 8.11(a), items of income, gain, loss, deduction
and credit realized by the Company, for each fiscal year, with respect to which there is a
difference between the adjusted basis for federal income tax purposes and the Gross Asset Value on
the date of contribution or on the date such Gross Asset Value is adjusted pursuant to Section
8.01(b)(ii), as applicable, shall be allocated in accordance with Section 704(c) of the Code and
the Treasury Regulations thereunder as determined by the Board of Representatives, taking into
account the provisions of Treasury Regulations Section 1.704-3(a)(2); provided,
however, that such items the Company realizes with respect to the assets, or the portion of
any assets, that are treated as contributed by the Series A Members to the Company on or prior to
the date hereof for federal income tax purposes after taking into account the Treasury Regulations
promulgated under Section 707 of the Code, as set forth on Schedule 13.09, shall be allocated in
accordance with the remedial allocation method set forth in Treasury Regulations Section
1.704-3(d).

          (c) The Members acknowledge that they are aware of the tax consequences of the allocations
made by this Section 8.11 and hereby agree to be bound by the provisions of this Section 8.11 in
reporting their respective shares of items of Company income, gain, loss, deduction and expense.

Section
8.12 Allocations by the Board of Representatives. All elections, decisions and other matters concerning
the allocation of income, gains and losses among the Members, and accounting procedures, not
specifically and expressly provided for by the terms of this Agreement, shall be determined by the
Board of Representatives in good faith. Such determination made in good faith by the Board of
Representatives shall, absent manifest error, be final and conclusive as to all Members.

27

 

ARTICLE IX

[RESERVED]

ARTICLE X

TRANSFERS

Section
10.01 Transfer Restrictions Generally. (a) For a period of five (5) years after the date hereof, no
Member is entitled to Transfer Membership Units without the prior written consent of the other
Members (which consent may be withheld for any or no reason), except as provided in Section 10.05.
In addition, no Member may at any time Transfer less than one hundred percent (100%) of its (and
its Affiliates’) Membership Units. A Series A Member may only Transfer its Series A Membership
Units in conjunction with a Transfer by the other Series A Member of its Series A Membership Units,
except as provided in Section 10.05. All permitted Transfers (other than Transfers contemplated by
Section 10.05) are subject to a corresponding transfer of all of a Member’s (and its Affiliates’)
rights and obligations under the Output and Supply Agreement. Each Member may Transfer its (and
its Affiliates’) Membership Units only in accordance with, and subject to the provisions of, this
Article X. For purposes of this Agreement, each of “Transfer” and “transfer”
means, with respect to any Membership Units, a transfer, sale, exchange, assignment, pledge,
hypothecation or other encumbrance or disposition, including the grant of an option or other right,
whether directly or indirectly, whether voluntarily, involuntarily, by operation of law or pursuant
to a merger, consolidation or similar business combination, of such Membership Units; provided,
that a pledge of Membership Units to a financial institution in connection with any bona fide loan
to a Member or its Affiliates from such financial institution in which such financial institution
does not have the power to vote or dispose of such Membership Units other than in case of a default
caused by the action or inaction of such Member, and in such case, such financial institution holds
the Membership Units subject to the terms and conditions of this Agreement, shall not be deemed a
Transfer; provided further, that (i) a transfer of equity interests in Globe Specialty Metals, Inc.
shall not be deemed a Transfer (although, if applicable, may give rise to a right under Section
10.03 below), (ii) a transfer of the equity interests of DCC Parent shall not be deemed a Transfer,
(iii) a transfer of the equity interests of a Member substantially all of whose assets are
comprised of Membership Units shall be deemed a Transfer and (iv) “Transferred”,
“transferred”, “Transferee”, and “transferee” each have a correlative
meaning. Upon any foreclosure by a financial institution on the Membership Units of the Series A
Members pledged to such financial institution in accordance with the first proviso in the foregoing
sentence, the Series B Member
shall have the right to (i) assume the operation of the Company (including, for the sake of
clarity, all responsibilities under the Management Services Agreement), (ii) remove one of the
Series A Representatives and (iii) appoint one (1) additional Representative to the Board of
Representatives. Following the exercise of such option, the Series A Member(s) will be entitled to
appoint only two (2) Representatives and the Series B Member shall be entitled to appoint three (3)
Representatives. Upon any foreclosure by a financial institution on the Membership Units of the
Series B Member pledged to such financial institution in accordance with the first proviso in the
fourth sentence of this Section 10.01(a), if at the time of such foreclosure the Series B Member
has the right to appoint the majority of Representatives to the Board of Representatives, then the
Series A

28

 

 Members shall have the right to (i) assume the operation of the Company (including, for
the sake of clarity, all responsibilities under the Management Services Agreement), (ii) remove one
of the Series B Representatives and (iii) appoint one (1) additional Representative to the Board of
Representatives. Following the exercise of such option, the Series B Member will be entitled to
appoint only two (2) Representatives and the Series A Member(s) shall be entitled to appoint three
(3) Representatives.

          (b) Notwithstanding anything herein to the contrary, no Member shall be entitled to Transfer
Membership Units (including to an Affiliate) at any time if such Transfer would violate the
Securities Act or any state (or other jurisdiction) securities or “Blue Sky” laws applicable to the
Company or the Membership Units.

          (c) Any purported Transfer of Membership Units (and the related transfer of the Output and
Supply Agreement) other than in accordance with this Agreement shall be null and void, and the
Company shall refuse to recognize any such Transfer of the Membership Units or related rights under
the Output and Supply Agreement for any purpose and shall not reflect in its records any change in
record ownership of Membership Units pursuant to any such Transfer. Any Member purporting to make
a Transfer which is null and void pursuant to this Agreement shall (until such time as such Member
agrees in a writing executed by such Member and delivered to the Company that such purported
Transfer is rescinded and shall have no force or effect) cease to have any rights and powers
otherwise provided to such Member pursuant to this Agreement or pursuant to the Act with respect to
the Company, except that such Member shall have the right to share in such profits and losses, to
receive such distributions, and to receive such allocation of income, gain, loss, deduction, or
credit or similar item to which such Member is otherwise entitled pursuant to this Agreement. Any
purported Transferee of a Transfer which is null and void pursuant to this Agreement shall have no
rights or powers with respect to the Company pursuant to this Agreement or pursuant to the Act. To
the extent that any purported Transfer which is null and void pursuant to this Agreement is
nonetheless construed to be a valid assignment under applicable law, the rights and powers with
respect to the Company of the Member making such Transfer and of the Transferee shall be as
provided in Section 18-702(b) of the Act with respect to assignors/members and assignees,
respectively, and, therefore, (i) the Transferee will not become or be entitled to exercise any
rights or powers of a member of the Company, (ii) the Transferee will be entitled to share in such
profits and losses, to receive such distributions, and to receive such allocation of income, gain,
loss, deduction, or credit or similar item to which the Member making such Transfer was otherwise
entitled pursuant to this Agreement, to the extent assigned, and (iii) the Member making such
Transfer
shall cease to be a member of the Company and to have the power to exercise any rights or
powers of a member if such Transfer is a valid assignment under applicable law of all of such
Member’s Membership Units; provided, however, any purported assignment or transfer of the Output
and Supply Agreement related thereto shall nevertheless be null and void and of no effect.

          (d) Any Member that proposes to Transfer Membership Units in accordance with the terms and
conditions hereof shall be responsible for any expenses incurred by the Company in connection with
such Transfer.

29

 

Section
10.02 Rights of First Refusal. Following the five (5) year period immediately following the date hereof,
if either of the Series A Members acting together or the Series B Member desire to Transfer one
hundred percent (100%) of its (and its Affiliates’) Membership Units (it being agreed that it (and
its Affiliates) shall not be entitled to Transfer less than such one hundred percent (100%) amount)
and such party shall have received a bona fide written proposal from a third party to acquire its
or their Interests in the Company and such party’s rights under the Output and Supply Agreement
which otherwise complies with the terms of this Agreement, then the Transfer shall be permitted as
provided herein, subject to a right of first refusal in favor of the other Member(s) in accordance
with the following provisions:

          (a) The transferring Member(s) shall provide the other Member(s) having a right of first
refusal under this Section 10.02 with written notice (an “Offer Notice”) of its or their
desire to Transfer its Membership Units. The Offer Notice shall state that such Member(s) wish(es)
to Transfer its Membership Units, the name and identity of the transferee, the proposed purchase
price for its Membership Units and any other terms and conditions material to the sale set forth in
the bona fide offer and contain a copy of the bona fide offer.

          (b) The other Member(s) shall have a period of up to thirty (30) days following receipt of an
Offer Notice from the transferring Member to elect to purchase (or to cause one (1) or more of its
Affiliates to elect to purchase), all of such transferring Member’s (and its Affiliates’)
Membership Units (and rights under the Output and Supply Agreement) on the terms and conditions set
forth in the Offer Notice, including, for the sake of clarity, any terms of any supply agreement or
arrangement to be entered into with such third party in conjunction with any such Transfer, by
delivering to the transferring Member a written notice of such election.

          (c) If the Series A Members or the Series B Member, as applicable, elects to purchase (or to
cause one (1) or more of its Affiliates to elect to purchase), all of the Membership Units (and
rights under the Output and Supply Agreement) which are the subject of the proposed Transfer, on
the terms and conditions set forth in the Offer Notice within the applicable thirty (30) day
period, such purchase shall be consummated within three (3) months (or such longer period as may be
reasonably required to obtain any necessary regulatory approval) after the date on which the
purchasing Member notifies the transferring Member of such election.

          (d) If none of the Members nor any of their Affiliates elects to purchase, in the aggregate,
all of the transferring Member’s (and its Affiliates’) Membership Units (and rights under the
Output and Supply Agreement) on such terms and conditions within such initial thirty (30) day
period, the transferring Member (and its transferring Affiliates) may Transfer such Membership
Units to the proposed transferee at any time within six (6) months following such period on terms
and conditions, including purchase price, no more favorable to the transferee than those specified
in the Offer Notice.

Section
10.03 Rights Upon a Change of Control Event. A put in favor of the Series B Member shall be applicable
in accordance with the following provisions if Globe or the applicable Series A

30

 

 Member is the
subject of a Change of Control Event (as defined in Section 10.03(h)) (in such case, each Series A
Member shall be a “Change of Control Member”).

          (a) In the event that the Series B Member elects to sell its Membership Units in accordance
with this Section 10.03, the Series B Member shall have the right, at its sole option, to retain
all or any portion of its rights (and the corresponding obligations) under the Output and Supply
Agreement for a period of up to two (2) years, with any amendments or modifications as may be
mutually agreed to by the Members (and their Affiliates).

          (b) Not later than 2 business days following either (x) the execution of a definitive
agreement providing for a Change of Control Event or (y) in the event there is no definitive
agreement for the Change of Control Event or the Change of Control Event occurs without the consent
of the board of directors of Globe or the Change of Control Member, receipt of notice by Globe or
the Change of Control Member of the occurrence of a Change of Control Event, Globe or the Change of
Control Member, as applicable, shall provide the Series B Member and the Board of Representatives
with written notice (a “Put Notice”) describing in reasonable detail the material terms of
a contemplated Change of Control Event or all material information with respect to the Change of
Control Event. In the event the Series B Member is interested in the possibility of selling its
Membership Units, the Series B Member shall notify Globe or such Change of Control Member, as
applicable, that it wishes to consider such a sale of its Membership Units in the manner described
below in this Section 10.03, provided that such notice must be provided within twenty (20) business
days of the date the Series B Member received the Put Notice (the date that such notice of
consideration of a sale is provided by the Series B Member, the “Put Trigger Date”). Globe
or the applicable Change of Control Member, as applicable, shall use its reasonable efforts to make
available to the Series B Member, Representatives of the other party to the Change of Control
Event.

          (c) The fair market value (the “Valuation Price”) of all of the Membership Units owned
by the Series B Member (and its Affiliates) (the “Affected Interests”) will be determined
pursuant to the procedure described below.

          (d) During the fifteen (15) day period (the “Discussion Period”) following the Put
Trigger Date, the Series B Member and Globe or the Change of Control Member, as applicable, will
negotiate in good faith to determine such fair market value of the Affected Interests. If the
Series B Member and Globe or the Change of Control Member, as applicable, agree on such valuation,
then such agreed-upon amount shall be the Valuation Price of the Affected Interests for purposes of
this Section 10.03. If the Series B Member and Globe or the Change of Control Member, as
applicable, are unable to agree on such valuation by the end of the Discussion Period, such parties
shall submit such valuation for determination by appraisal pursuant to the procedures set forth in
Section 10.03(e). The Company shall make available to the Series B Member and Globe or the Change
of Control Member, as applicable, such information that may be reasonably requested by either of
them for the purposes of making this determination.

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          (e) Within ten (10) days after the expiration of the Discussion Period, the Series B Member
and Globe or the Change of Control Member, as applicable, will appoint an independent investment
bank with a national reputation, who has not performed services for Globe or DCC Parent in the
preceding two (2) years, as an appraiser. In the event that such parties fail to jointly select an
appraiser within such time period, then at the request of the Series B Member or Globe or the
Change of Control Member, as applicable, the American Arbitration Association located in New York,
NY, shall provide the Series B Member and Globe or the Change of Control Member, as applicable,
with a list of five (5) appraiser candidates of which each of the Series B Member and Globe or the
Change of Control Member, as applicable, shall be allowed to strike one (1) name and both parties
shall rank the remaining appraiser candidates in order of acceptance. The American Arbitration
Association shall select one of the appraiser candidates remaining on the lists, taking into
account the rankings of such candidates by the parties. The Company will provide the appraiser
with any information which they reasonably request (subject to any applicable confidentiality
restrictions) relating to the Company and/or its business and operations. The appraiser so
appointed will determine the market value of the Affected Interests by determining the price that a
willing seller and a willing buyer would agree to, in either case not under duress, but without
giving effect to a control premium or to the premium that a strategic buyer may pay for the
acquisition of the entire entity but giving effect to the obligations under the Output and Supply
Agreement. The appraiser shall be requested to make its determination within a period of seven (7)
business days.

          (f) The Series B Member shall have up to fifteen (15) days following the determination of the
Valuation Price of the Affected Interests to elect to sell all of the Affected Interests for an
amount in cash equal to the Valuation Price of the Affected Interests by delivering to Globe or the
Change of Control Member, as applicable, a written notice of such election within such fifteen (15)
day period.

          (g) If the Series B Member elects to sell (or to cause one (1) or more of its Affiliates to
elect to sell) the Affected Interests, the closing of the sale of the Affected Interests, for an
amount in cash equal to the Valuation Price of the Affected Interests, shall occur within thirty
(30) days of delivery to Globe or the Change of Control Member, as applicable, of
the written notice of such election as provided in Section 10.03(f), or such longer period as
may be required to permit receipt of any required regulatory approval and such closing shall be
conditioned on the closing of the Change of Control Event (to the extent that such Change of
Control Event has not already occurred). At the closing of the transactions contemplated by this
Section 10.03, the Members and the Company shall execute all documents reasonably required to
effectuate such transactions. Notwithstanding anything herein to the contrary, there shall be no
liability on the part of Globe or the Change of Control Member, as applicable, in the event that
the Change of Control Event shall not be consummated for whatever reason. Whether a transaction
constituting a Change of Control Event is effected by Globe or a Change of Control Member shall be
in the sole discretion of Globe or such Change of Control Member, as applicable.

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          (h) For purposes of this Agreement, “Change of Control Event” means the occurrence of
any of the following: (a) the direct or indirect transfer, conveyance or other disposition (other
than by way of merger or consolidation), in one (1) or a series of related transactions, of all or
substantially all of the properties and assets of (i) Globe and its subsidiaries or (ii) the Change
of Control Member and its subsidiaries taken as a whole to any “person” or “group”
(as such terms are used in Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”)); (b) the consummation of any transaction or series of related transactions
(including, without limitation, any merger or consolidation) the result of which is that any
“person” or “group” (as defined above) other than an Affiliate of Globe or the
applicable Change of Control Member on the date hereof (but including any holding company formed by
Globe subsequent to the date hereof as part of an internal restructuring) becomes the
“beneficial owner” (as such term is used in Rule 13d-3 promulgated under the Exchange Act),
directly or indirectly, of 50% or more of the capital stock or other equity interests of Globe or
the Change of Control Member, measured by voting power or economic interest rather than number of
shares or other equity interests; (c) the consummation of any transaction or series of related
transactions (including, without limitation, any merger or consolidation) the result of which is
that the beneficial owners (as defined above) of the capital stock or other equity interests of
Globe or the Change of Control Member immediately prior to such transaction or transactions cease
to be the beneficial owners of at least 50% of the capital stock, measured by voting power or
economic interest rather than number of shares or other equity interests, of the surviving or
resulting entity of such transaction or transactions; or (d) during any period of two (2)
consecutive years, individuals who at the beginning of such period constituted the Board of
Directors (or similar board of managers) of Globe (together with any new directors or similar
managers whose election by the Board of Directors (or similar board of managers) or whose
nomination for election by the shareholders (or other equity holders) of Globe was approved by a
vote of a majority of the directors or similar managers then still in office who were either
directors or similar managers at the beginning of such period or whose election or nomination for
election was previously approved) cease to constitute a majority of the directors or similar
managers then in office; provided, that in the case of any of clauses (a)(ii), (b) or (c) above, if
the Membership Units held by the Change of Control Member constitute all or substantially all of
the assets of the Change of Control Member, then such event shall not constitute a Change of
Control Event and shall not be subject to this Section 10.3, but rather shall be deemed a Transfer
and subject to the provisions of Section 10.2 and Section 10.4 hereof. For the sake of clarity, no
sale of equity securities by Globe in a public offering shall in and of itself constitute a
Change of Control Event. Similarly, any such transaction by DCC Parent, its direct and indirect
shareholders or its Affiliates where the Series B Membership Units do not constitute all or
substantially all of the assets sold shall not be deemed to be a Transfer of the Series B
Membership Units giving rise to rights under Section 10.02.

Section
10.04 Tag Along
Rights. (a) In the case of a proposed Transfer (a “Tag-long Transfer”) of the
Series A Membership Units by the Series A Members and/or any of its Affiliates, or the Series B
Membership Units by the Series B Member and/or any of its Affiliates (in each case, the
“Transferring Member”), the other Member(s) owning Membership Units may exercise tag-along
rights in accordance with the following provisions (any such Member exercising such rights, a
“Tagging Member”).

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          (b) The Transferring Member shall promptly give notice (a “Tag-Along Notice”) to the
other Member(s) owning Membership Units of any Tag-Along Transfer, setting forth that all of its
Membership Units are proposed to be Transferred by the Transferring Member, the name and address of
the proposed Transferee, the proposed purchase price for each of its Membership Unit (the
“Tag-Along Per Unit Consideration”), and any other material terms and conditions of the
Tag-Along Transfer; it being understood that such Tag-Along Notice may be given after the terms of
the Tag-Along Transfer have been finalized and does not accord the Tagging Member with any rights
to information as to the Transfer not required to be included in the Tag-Along Notice. The other
Member(s) shall have a period of ten (10) days following the expiration of the period in which it
must determine whether to elect to purchase all of the Transferring Member’s Member Units pursuant
to Section 10.2(b) within which to elect to sell all of its Membership Units at a price per
Membership Unit equal to the Tag-Along Per Unit Consideration in connection with such Tag-Along
Transfer. Any other Member may exercise such right by delivery of an irrevocable written notice to
the Transferring Member specifying such other Member desires to include in the Tag-Along Transfer
all of its Membership Units. If the Transferring Member is unable to cause the proposed Transferee
to purchase all the Membership Units proposed to be Transferred by the Transferring Member and the
Tagging Members, then the Transferring Member may not make such Transfer. The Transferring Member
shall have a period of sixty (60) days following the expiration of the ten (10) day period
mentioned above to sell all the Membership Units agreed to be purchased by the Transferee, on the
payment terms specified in the Tag-Along Notice. The sale of the Tagging Members’ Membership Units
shall occur simultaneously with the sale of the Transferring Members’ Membership Units.

          (c) The Tagging Member shall agree (i) to make substantially the same representations and
warranties to the Transferee with respect to itself and related items as the Transferring Member
makes with respect to itself and related items in connection with the Tag-Along Transfer, (ii) to
substantially the same covenants, indemnities and agreements with respect to itself and related
items as agreed by the Transferring Member with respect to themselves and related items in
connection with the Tag-Along Transfer (other than any non-competition or similar agreements or
covenants that would bind such Tagging Member or its Affiliates), and (iii)
to substantially the same terms and conditions to the Transfer of Membership Units as the
Transferring Members agree. Notwithstanding the foregoing, however, all such representations,
warranties, covenants, indemnities and agreements shall be made by each Tagging Member and each
Transferring Member severally and not jointly. Notwithstanding anything herein to the contrary,
there shall be no liability on the part of the Transferring Member in the event that the Tag-Along
Transfer shall not be consummated for whatever reason. Whether a sale of Membership Units is
effected by a Transferring Member shall be in the sole discretion of such Transferring Member.

Section
10.05 Transfers to Affiliates. Notwithstanding anything herein to the contrary, any Member may Transfer
any Membership Units to a direct or indirect, wholly-owned Affiliate of such Member or other entity
which indirectly wholly owns all of the equity interests of such Member; provided that Transfers to
Affiliates shall not trigger the rights described in Sections 10.02, 10.03 or 10.04. Any Transfer
pursuant to this Section 10.05 need not result in a Transfer of all of such Member’s rights under
the Output and Supply Agreement.

34

 

Section
10.06 [Reserved].

Section
10.07 Rights and Obligations of Transferees. Any Transferee of Membership Units (including Affiliates of
the transferor) pursuant to a Transfer made in accordance with this Agreement shall be required, at
the time of and as a condition to such permitted Transfer, to become a party to this Agreement by
executing and delivering such documents as may be necessary, in the reasonable opinion of the Board
of Representatives, to make such Person a party hereto, whereupon such Transferee will be admitted
as a Member for all purposes of this Agreement. Upon such permitted Transfer and admission, such
Transferee shall be entitled to receive distributions and allocations of income, gain, loss,
deduction, credit or similar items to which the transferring Member would be entitled with respect
to such Membership Units, and shall be entitled to exercise any of the other rights of a Member
with respect to such transferring Member’s Membership Units.

ARTICLE XI

FIDUCIARY DUTIES

Section
11.01 Waiver of Certain Corporate Opportunities; Permitted Competition. The Company and each Member
agree that except as expressly provided in this Agreement, the Purchase Agreement or the Output and
Supply Agreement, no Member shall have any duty to disclose any information to the Company or
permit the Company to participate in any projects or investments or any other opportunity that may
be of interest to the Company if it were aware of such information or opportunity, and the Company
hereby waives, to the extent permitted by law, any claim based on the corporate opportunity
doctrine or any similar legal doctrine. The Company and each Member agree that, subject to
fulfillment of their obligations in this Agreement, the Purchase Agreement and the Output and
Supply Agreement, any Member may compete or engage in activities that are competitive, directly or
indirectly, with the Company or any other Member. Notwithstanding the foregoing, whenever this
Agreement requires any Person (including the Board of Representatives) to make any determination or
take any action in “good faith”, such
requirement shall include the obligation to not favor any Member or Members over any other Member
or Members.

Section
11.02 Fiduciary Duties. The Members and the Company each hereby agree that: (i) all fiduciary duties
owed under applicable law by any Member, in its capacity as a Member, to any other Person are
hereby eliminated, or otherwise restricted, to the fullest extent permitted under the Act and any
other applicable law; and (ii) all fiduciary duties owed under applicable law by any
Representative, in its capacity as a Representative, to any other Person, except to the Member that
designated and elected such Representative, are hereby eliminated, or otherwise restricted, to the
fullest extent permitted under the Act and any other applicable law. Nothing in this Section 11.02
shall eliminate or limit each Member’s obligation to act in good faith in carrying out the
provisions of, and fulfilling its obligations pursuant to, this Agreement.

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ARTICLE XII

DISPUTE RESOLUTION

Section 12.01 Amicable Resolution. The Members mutually desire that friendly collaboration will continue among
them with respect to the relationship created by this Agreement and the Output and Supply
Agreement. Accordingly, they will try, and they will cause their respective Subsidiaries and
Affiliates to try, to resolve in an amicable manner all disagreements and misunderstandings
connected with their respective rights and obligations under this Agreement, including any
amendments hereto. In furtherance thereof, in the event of any dispute or disagreement between the
Members, as to the interpretation of any provision of this Agreement or any agreements related
hereto or arising out of the transactions contemplated by this Agreement, or the performance of
obligations hereunder or thereunder, including for the purposes of an inability to obtain a
Supermajority Vote when required, other than disputes under Section 8.01(b)(i) or (iii) (with
respect to the determination of gross fair market value of a Company asset) and Section 13.08,
which shall be resolved in the manner set forth in Section 13.08 and the determination of Valuation
Price which shall be resolved in the manner set forth in Section 10.03(g) (each a
“Dispute”), then unless otherwise expressly provided in such other agreement related hereto
(it being understood that Disputes under the Output and Supply Agreement shall be resolved in
accordance with the terms thereof), upon written request of either party, the matter will be
referred for resolution to the Operating Committee. The Operating Committee will make a good faith
effort to promptly resolve all Disputes referred to it. Operating Committee decisions will be
unanimous and will be binding on the Company. If the Operating Committee does not agree to a
resolution of a Dispute within thirty (30) days after the reference of the matter to it, the
Dispute will be referred to a senior officer of each Member (as so designated by each Member). If
the specified senior officers of the Members do not agree to a resolution of the Dispute within
thirty (30) days after the reference of the matter to them, then the parties will be free to
exercise the remedies available to them under applicable law, subject to Sections 12.02 and 12.03.

Section 12.02 Mediation. In the event any Dispute cannot be resolved in an amicable manner as set forth in
Section 12.01, the Members intend that such Dispute be resolved by mediation. If the Operating
Committee and the applicable senior officers of each Member are unable to resolve the Dispute as
contemplated by Section 12.01, any of the Members may demand mediation of the Dispute by
written notice to the other in which case the parties will select a mediator within ten (10) days
after the demand. The mediator shall be by a single qualified mediator experienced in the matters
at issue, such mediator to be mutually agreed upon by the Members. Neither party may unreasonably
withhold consent to the selection of the mediator. Each Member will bear its own costs of
mediation but both parties will share the costs of the mediator equally.

Section 12.03 Arbitration.

          (a) In the event that the Dispute is not resolved in accordance with Section 12.01 or 12.02,
either party involved in the Dispute may submit the Dispute to binding arbitration pursuant to this
Section 12.03; provided that no Dispute arising out of the failure to obtain a Supermajority Vote
pursuant to Section 4.04 shall be eligible for or submitted to binding arbitration pursuant to this
Section 12.03. All Disputes submitted to arbitration pursuant this

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Section 12.03 shall be resolved
in accordance with the Commercial Arbitration Rules (the “Rules”) of the American
Arbitration Association (the “AAA”). All cost and expenses incurred by the arbitrators
shall be shared equally by the applicable parties and each party shall bear its own costs and
expenses in connection with any such arbitration proceeding.

          (b) In any Dispute submitted to binding arbitration pursuant this Section 12.03, there shall
be three (3) arbitrators: (i) one (1) appointed by the Series A Members, (ii) one (1) appointed by
the Series B Member and (iii) one (1) appointed by the two (2) arbitrators appointed by the
Members. Each party to a Dispute shall choose an arbitrator within thirty (30) days of receipt by
a party of the demand for arbitration. If any party fails to appoint an arbitrator within the time
periods specified herein or if the two arbitrators appointed by the Members are unable to agree
upon a third, such arbitrator shall, at any party’s request, be appointed by the AAA, pursuant to a
listing, ranking and striking procedure in accordance with the Rules. Any arbitrator appointed by
the AAA shall have no less than fifteen (15) years of experience with large, complex commercial
cases, and shall be an experienced arbitrator.

          (c) The language of the arbitration shall be English. The place of arbitration shall be New
York, New York. In addition to the authority conferred on the arbitral tribunal by the Rules, the
arbitral tribunal shall have the authority to order such production of documents and such
depositions of witnesses as may reasonably be requested by either party or by the arbitral tribunal
itself. The award rendered in any arbitration commenced hereunder shall be final and binding upon
the applicable parties and judgment thereon may be entered in any court of competent jurisdiction.
By agreeing to arbitration, the parties do not intend to deprive any court of its jurisdiction to
issue a pre-arbitral injunction, pre-arbitral attachment, or other order in aid of arbitration
proceedings and/or the enforcement of any award. Without prejudice to such provisional remedies as
may be available under the jurisdiction of a court, the arbitral tribunal shall have full authority
to grant provisional remedies and to direct the applicable parties to request that any court modify
or vacate any temporary or preliminary relief issued by such court, and to award damages for the
failure of any applicable party to respect the arbitral tribunal’s orders to that effect. Any
arbitration hereunder shall be confidential and all
information about the arbitration or the substance of the proceedings thereunder shall be
treated as Confidential Information pursuant to Section 16.03 hereof.

Section 12.04 Non-Exclusive Remedy. The Members acknowledge and agree that money damages would not necessarily
be a sufficient remedy for any breach of this Agreement by the Members. Accordingly, nothing in
this Agreement will prevent the Members from seeking injunctive or similar relief in the event: (i)
any delay resulting from efforts to resolve such Dispute pursuant to Sections 12.02 and 12.03 could
result in serious and irreparable injury to either party; or (ii) of any actual or threatened
breach of any provisions of this Agreement. All actions for such injunctive or interim relief
shall be brought in a court of competent jurisdiction in accordance with this Agreement. Such
remedy shall not be deemed to be the exclusive remedy for breach of this Agreement.

Section 12.05 Enforcement by Members. Notwithstanding anything in this Agreement or the Output and Supply
Agreement, each Member shall have the right, but not the obligation, to enforce this

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Agreement and
the Output and Supply Agreement on behalf of the Company with respect to the obligations of the
other Member(s) hereunder and thereunder.

ARTICLE XIII

RESERVES, BOOKS AND RECORDS,

TAX MATTERS

Section 13.01 Reserves. Appropriate reserves for contingent liabilities may be withheld from distribution to the
Members, as determined by the Board of Representatives in its sole discretion.

Section 13.02 Fiscal Year and Method of Accounting. The fiscal year of the Company shall be determined by the
Board of Representatives in its sole discretion. If not otherwise determined by the Board of
Representatives, the fiscal year of the Company shall end on June 30th of each year
(except for the last fiscal year of the Company, which shall end on the date on which the Company
is terminated), and each fiscal year of the Company shall begin on July 1st of each year
(except for the first fiscal year of the Company, which shall begin on the date upon which its
Certificate of Formation was filed). Subject to Section 8.01, the Board of Representatives shall
select the appropriate method of accounting for the Company in accordance with Section 4.04.

Section 13.03 Company Books and Records. The Company will keep proper and complete records and books of account
in which will be entered fully and accurately all transactions and other matters relative to the
Company’s business as are usually entered into records and books of account maintained by Persons
engaged in businesses of a like character, including the Capital Account established for each
Member. The Company’s books and records will be kept in accordance with U.S. generally accepted
accounting principles in effect from time to time (“GAAP”) and any applicable Requirements
of Law. The books and records will at all times be maintained at the principal office of the
Company, or at such other place(s) as may be approved by the Board of Representatives.

Section 13.04 Access to Books and Records. Subject to the provisions of this Section 13.04, the Company shall
provide the Members and their agents and attorneys access to the books and records of the
Company and other information and documents concerning the Company, upon reasonable notice to the
Company during regular business hours and in a manner reasonably designed to minimize any
interference with the normal operations of the Company, for any purpose reasonably related to the
demanding Member’s interest in the Company. The Company may impose reasonable standards (including
standards governing what information and documents are to be furnished at what time and location
and at whose expense) with respect to the exercise of such rights of access, and each Member agrees
that such Member and its auditors shall have the right to conduct a reasonable audit of the
financial records of the Company no more than once per fiscal year. The Members shall additionally
have all audit rights under this Agreement as set forth in Section 8.1 of the Output and Supply
Agreement. The Series A Member shall use reasonable efforts to cause the Auditor and senior
financial officers of the Company to cooperate with the auditors of the Series B Member and the
Series B Member shall have the right, at its own cost and expense, to engage an auditor to audit
the books and records of the Company (and the Company and the Series A Member shall provide
reasonable cooperation with respect to such

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 audit). Any demand by or on behalf of a Member under
this Section 13.04 shall be in writing and shall state the purpose of such demand. Each Member
hereby agrees that neither such Member nor its agents and attorneys will have any right of access
to the books and records of the Company or other information and documents concerning the Company
except as expressly authorized in this Section 13.04.

Section
13.05 Financial Statements and Reports. The Board of Representatives shall oversee the accounting, tax
and recordkeeping matters of the Company. The Company shall use its reasonable best efforts to
provide each Member with, in accordance with such Members’ own internal reporting deadlines (and,
if required by any Member for purposes of reporting under the Exchange Act or compliance with SOX),
but, in any case, not later than one hundred twenty (120) days after year-end, for year-end
statements, and forty-five (45) days after each quarter-end, for quarterly statements (or such
shorter periods as Globe Specialty Metals, Inc. is required to file such financial statements with
the Commission), (i) audited financial statements including a balance sheet and statements of
income and cash flows together with a statement showing the balance of each Member’s Capital
Account at the end of such fiscal year, and (ii) unaudited quarterly financial statements with
respect to the applicable fiscal quarter, including a balance sheet and statements of income and
cash flows together with a statement showing the balance of each Member’s Capital Account at the
end of such fiscal quarter. All such statements shall be prepared in accordance with GAAP (or such
other accounting principles utilized by such Member in preparation of its own financial statements;
provided, however, that any incremental costs incurred by the Company in preparing financial
statements not in accordance with GAAP shall be borne by the Member(s) requesting such non-GAAP
financial statements). In addition, the Company shall use its reasonable best efforts to cause
each Member to receive (i) within thirty (30) days of the end of each month, monthly financial
statements, forecasts and internal budgets, and (ii) any other financial or tax related information
that shall describe in reasonable detail the financial and business activities and performance of
the Company, as the Members may reasonably request from time to time. All periodic financial
statements provided in accordance with the preceding sentence shall be accompanied by a written
certification of an appropriate Officer or the Auditor that such statements have been prepared in
accordance with GAAP consistently applied or this Agreement, as the case may be. In furtherance of
the foregoing, the Company shall use its reasonable best efforts to have the Company’s auditors and
senior financial personnel provide reasonable cooperation to each Member and its auditors,
including the provision of any required audit reports and customary officer certificates.
Notwithstanding the foregoing event, the Company shall use its reasonable efforts to provide copies
of all information required to be provided under this Section 13.05 contemporaneously to all
Members.

Section
13.06 Tax Classification. It is the intention of the parties hereto that the Company be treated as a
partnership for federal, state and local income tax purposes. The Company shall not elect to be
treated as other than a partnership under Treasury Regulations Section 301.7701-3(c) (or any
corresponding applicable provisions of state or local law) unless such election is approved by all
the Members. Subject to such election, neither the Company nor any Member shall take any other
action that may cause the Company to be treated as other than a partnership for federal, state and
local income tax purposes.

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Section
13.07 Tax Matters Member. Pursuant to Section 6231(a)(7) of the Code, the Series A Member is hereby
designated as the tax matters member, and shall assume and be responsible for duties provided in
the Code for the “tax matters partner.”

Section
13.08 Preparation of Tax Returns.

          (a) The Company shall provide the Series B Member with a copy of each income, franchise or
other comparable tax return that the Company is required to file, together with copies of all
supporting documentation and information, at least thirty (30) Business Days prior to the original
due date for filing such tax return (without taking into account any extensions or waivers) or, if
the Company decides to file for extension with respect to such tax return, by November 30 following
the end of the fiscal year. The Series B Member shall be entitled to provide the Company comments
to such tax return within twenty (20) Business Days of receiving the copy of the tax return and all
supporting documentation and information and the Company shall incorporate all such reasonable
comments. The Company shall notify the Series B Member within five (5) Business Days of receiving
the Series B Member’s comments in writing of its decision with respect to the Series B Member’s
comments. If the Series B Member disputes the Company’s decision, the Series B Member and the
Company shall attempt in good faith to resolve any such dispute within five (5) Business Days. To
the extent the Series B Member and the Company are unable to resolve the dispute within such time
period, then the Series B Member and the Company shall jointly engage an internationally recognized
accounting firm (the “Accounting Firm”) and the Accounting Firm shall resolve any such
dispute within five (5) Business Days. The Series B Member and the Company shall cooperate with
each other and shall promptly provide to the Accounting Firm such information as the Accounting
Firm may reasonably request in order to enable the Accounting Firm to render a proper decision.
The fees and expenses of the Accounting Firm shall be borne 49% by the Series B Member and 51% by
the Series A Members. The resolution by the Accounting Firm of the dispute shall be used for
purposes of preparing all of the tax returns of the Company to the extent applicable. The Series B
Member, the Series A Members and the Company agree that the procedure set forth in this Section
13.08 for resolving disputes with respect to the preparation of the Company’s tax returns shall be
the sole and exclusive method for resolving any such disputes.

          (b) The Company shall provide the Series B Member with a copy of all other tax returns filed
by the Company, together with copies of all supporting documentation and information, promptly
after their filing.

Section
13.09 The Initially Transferred Assets.

          (a) Schedule 13.09(a)(i) hereof sets forth the tax basis as of June 30, 2009 of the
assets transferred by GMI, WVA and the Series A Members to the Company on or before the date hereof
(the “Transferred Assets”). Schedule 13.09(a)(ii) hereof sets forth an
illustrative example of the manner in which the portion of the distribution referenced in Section
7.01 (plus the appropriate portion of the liabilities assumed by the Company), which is to
be treated for federal income tax purposes as consideration for the sale to the Company by the
Series A Members (or their predecessors in interest) of a portion of the Transferred Assets (the

40

 

“Sale Amount”), is to be allocated among such Transferred Assets grouped into the seven asset
classes set forth in Treasury Regulations Section 1.338-6(b) and in accordance with Section 1060 of
the Code. For the avoidance of doubt, it is clarified that, although the Sale Amount set forth in
Schedule 13.09(a)(ii) is illustrative only, its allocation to the Treasury Regulations Section
1.338-6(b) asset classes is indicative of the relative Gross Asset Values of the Transferred Assets
grouped into such asset classes.

          (b) Within 20 Business Days after the date hereof, the Series A Members shall provide the
Company and the Series B Member with their proposal for Schedule 13.09(b) which shall set forth all
the Transferred Assets, including for the avoidance of doubt, goodwill and going concern and,
opposite each Transferred Asset, the following information: (i) the adjusted tax basis of the
Transferred Asset for federal income tax purposes immediately before its transfer to the Company;
(ii) the fair market value of the Transferred Asset for federal income tax purposes immediately
before its transfer to the Company; (iii) the Gross Asset Value of the Transferred Asset or portion
thereof, if any, that is treated as contributed by the applicable transferor to the Company for
federal income tax purposes, (iv) the fair market value for federal income tax purposes of the
portion, if any, of the Transferred Asset that is treated as sold by the applicable transferor to
the Company pursuant to Treasury Regulations Section 1.707-3(a), (v) the percentage of the fair
market value amount as provided pursuant to clause (iv) out of the fair market value of the entire
Transferred Asset as provided pursuant to clause (ii); (vi) the depreciation or amortization method
applicable to the Transferred Asset, if any, for both federal income tax and Net Profit and Net
Loss purposes; and (vii) the depreciation or amortization period applicable to the Transferred
Asset, if any, for both federal income tax and Net Profit and Net Loss purposes. In the case of
any Transferred Asset that is treated for federal income tax purposes as contributed to the Company
in part and sold to the Company in part, the information referred to in clauses (vi) and (vii)
above shall be set forth separately with respect to the contributed portion and the sold portion,
to the extent it differs. For the avoidance of doubt, the Company and the Members shall determine
the allocation of the deemed consideration applicable to the Transferred Assets, or the portion
thereof, that are treated as sold to the Company pursuant to Treasury Regulations Section
1.707-3(a), in accordance with Section 1060 of the Code based on the fair market value amounts
provided pursuant to clauses (ii) and (iv) above. Schedule 13.09(b) shall be prepared in a manner
consistent with the Schedule 13.09(a)(ii)
referenced in Section 13.09(a). The Series B Member shall have twenty (20) Business Days to
review such proposal and provide the Series A Members with its written comments and the Series A
Members shall have five (5) Business Days to notify the Series B Member in writing whether or not
they accept such comments, if any. If the Series B Member does not respond in writing within the
timeframe allotted to it as set forth above, the proposed Schedule 13.09(b) as it stands at the
time shall become final and binding on the Company and the Members for all purposes of this
Agreement. Otherwise, the Series A Members and the Series B Member shall submit any dispute
regarding the Schedule 13.09(b) to the Accounting Firm for resolution in the manner set forth in
Section 13.08. Schedule 13.09(b) as resolved by the Accounting Firm shall become final and binding
on the Company and the Members for all purposes of this Agreement.

41

 

ARTICLE XIV

LIABILITY AND INDEMNIFICATION 

Section
14.01 Liability. (a) No Covered Person (as defined in this Section 14.01(a)) shall be liable,
responsible or accountable in damages or otherwise to the Company or to any Member or their
respective successors or assigns except with respect to Excluded Conduct (as defined in this
Section 14.01(a)). The foregoing limitation of liabilities shall continue as to a Person who has
ceased to be a Covered Person and shall inure to the benefit of any heirs, executors,
administrators and personal representatives, or any permitted successors and assigns, of such
specified Person. For purposes of this Agreement, (i) “Covered Person” shall mean (A) each
Member (except with respect to damages or liabilities resulting from a breach by such Member of
this Agreement or any other agreement between such Member and the Company) and each Members’ direct
or indirect partners, members, shareholders (except for Globe with respect to Sections 4.22, 10.3
and 16.14 and DCC Parent with respect to Sections 4.22 and 16.14), employees, directors, officers,
agents and Representatives and (B) the Representatives, Officers and employees of the Company or
any of its subsidiaries, and (ii) “Excluded Conduct” shall mean any breach of this
Agreement by reason of acts or omissions related to (x) the receipt of an improper personal benefit
or a knowing and intentional violation of any Requirements of Law by such Covered Person, or (y)
the Company which are found by a court of competent jurisdiction upon entry of a final and
non-appealable judgment to be the result of such Covered Person’s fraud, gross negligence or
willful misconduct.

          (b) No Member shall be liable under a judgment, decree, or order of a court, or in any other
manner, for a debt, obligation, or liability of the Company or of any other Member.

Section
14.02 Indemnification. To the fullest extent permitted by law, the Company shall indemnify, defend and
hold harmless each Representative and Officer (an “Indemnified Person”) and may, at the
discretion of the Board of Representatives pursuant to a resolution with respect to an employee who
is not an Officer (each, a “Discretionary Indemnified Person”), indemnify, defend and hold
harmless each
Discretionary Indemnified Person, from and against any loss, liability, damages, cost or expense
(including legal fees and expenses and any amounts paid in settlement) resulting from a claim,
demand, lawsuit, action or proceeding by reason of any act or omission performed or omitted by such
Indemnified Person or Discretionary Indemnified Person on behalf of the Company and in a manner
reasonably believed to be within the scope of the authority conferred on such Indemnified Person or
Discretionary Indemnified Person by or pursuant to this Agreement, except with respect to such
Indemnified Person’s or Discretionary Indemnified Person’s Excluded Conduct. Expenses, including
legal fees, incurred by an Indemnified Person or Discretionary Indemnified Person and relating to
any claim, demand, lawsuit, action or proceeding for which indemnification may be sought under this
Section 14.02 shall be paid by the Company upon demand by such Person; provided that the
Indemnified Person or Discretionary Indemnified Person shall reimburse the Company for such
expenses if it is ultimately determined that such Person is not entitled to indemnification
hereunder. The foregoing rights to indemnification and payment of expenses shall continue as to a
person who has ceased to be an Indemnified Person or Discretionary Indemnified Person and shall
inure to

42

 

 the benefit of any heirs, executors, administrators and personal representatives of such
specified person.

Section 14.03 Exclusivity. The remedies provided for in this Article XIV are not exclusive with respect to, and
shall not limit any rights or remedies that may otherwise be available to, any Indemnified Person
or any Discretionary Indemnified Person or other employee at law or in equity. Any claim, demand,
lawsuit, action or proceeding in respect of any Officer (including any Designated Officer) or
employee of the Company, whether pursuant to this Agreement or otherwise, may only be brought by
the Company, and may not be brought by or on behalf of any Member.

ARTICLE XV

DISSOLUTION, LIQUIDATION AND TERMINATION

Section 15.01 Dissolution. (a) The Company shall be dissolved and its affairs shall be wound up upon the first
of the following to occur:

          (i) a determination by the Board of Representatives to dissolve the Company in
accordance with Section 4.04; or

          (ii) any dissolution required by operation of law.

          (b) Dissolution of the Company shall be effective as of the day on which the event occurs
giving rise to the dissolution, but the Company shall not terminate until there has been a winding
up of the Company’s business and affairs, and the Company’s assets have been distributed as
provided in Section 15.03 and in the Act.

          (c) Notwithstanding any other provision of this Agreement, neither the bankruptcy of a Member
nor the occurrence of any other event with respect to a Member set
forth in Section 18-304 of the Act shall cause such Member to cease to be a Member of the
Company and despite the occurrence of any such event, the business of the Company shall continue
without dissolution.

          (d) Notwithstanding any other provision of this Agreement, each Member waives any right it
might have under the Act or otherwise to agree in writing to dissolve the Company upon such
Member’s bankruptcy, or upon the occurrence of an event that causes such Member to cease to be a
member of the Company.

Section 15.02 Cancellation of Certificate. Upon the dissolution and completion of the winding up of the Company
and the termination of this Agreement, the Certificate of Formation shall be canceled in accordance
with the provisions of Section 18-203 of the Act and the Members shall be promptly notified of such
cancellation.

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Section 15.03 Liquidation. Upon dissolution of the Company, as expeditiously as is reasonable, the Board of
Representatives shall cause the Company to pay its liabilities and make distributions in the
following order of priority:

          (a) to creditors, including Members who are creditors, to the extent permitted by law, in
satisfaction of liabilities of the Company (whether by payment or by establishment of reserves);
and

          (b) to the Members, pro rata in accordance with the positive balances in their
respective Capital Accounts.

Section 15.04 Accounting on Liquidation. Upon liquidation, a proper accounting shall be made by the Company’s
accountants of the Company’s assets, liabilities and results of operations through the last day of
the month in which the Company is terminated.

Section 15.05 Return of Members’ Capital Contribution. A Member shall look solely to the Company’s assets for
the return of such Member’s Capital Contribution. If the assets remaining after payment or
discharge of all debts and liabilities of the Company are insufficient to return such Member’s
Capital Contribution, the Member shall have no recourse against any other Member except to the
extent of any required Capital Contribution of any other Member which has not been paid when due.

Section 15.06 Termination. At such time (the “Termination Date”) as the distributions provided for in
Section 15.03 have been made, the Company and this Agreement shall terminate. Upon the termination
of this Agreement, no party shall have any liability or obligation to any other party hereunder,
provided that (i) the termination of this Agreement shall not relieve a party from liability for
any breach of this Agreement on or prior to the Termination Date, and (ii) Articles XIV and XVI and
this Section 15.06 shall survive termination of this Agreement in accordance with its terms.

ARTICLE XVI

MISCELLANEOUS PROVISIONS

Section 16.01 Notices. Unless otherwise specified herein, all notices, consents, approvals, reports,
designations, requests, waivers, elections and other communications authorized or required to be
given pursuant to this Agreement shall be in writing and shall be given or made (and shall be
deemed to have been duly given or made upon receipt) by personal hand-delivery, by facsimile
transmission, by electronic mail or by air courier guaranteeing overnight delivery, sent to the
Member at the address given for such Member on Schedule 16.01 hereto or such other address as such
Member may specify by notice to the Company and the other Members. Any notice, request, or consent
to the Company must be sent to the Company at the following address with a copy to each Member at
the respective address set forth above:

WVA Manufacturing, LLC

c/o Globe Specialty Metals, Inc.

44

 

One Penn Plaza

750 W. 34th Street, Suite 2514

New York, New York 10119

Attention: General Counsel

Email: slebowitz@glbsm.com

Fax: (212) 798-8185

Each party may modify the address for future communications and notices by so notifying the other
parties in accordance with this Section 16.01.

Section 16.02 Entire Agreement. This Agreement, including the Schedules referred to herein, together with the
Purchase Agreement and the Output and Supply Agreement, and any other agreements entered into in
connection therewith, constitute the entire agreement and understanding of the parties in respect
of the matters contemplated by this Agreement and supersede all prior agreements and understandings
among the parties with respect to such matters.

Section 16.03 Confidentiality.

          (a) The contents of this Agreement and all information furnished to one Member by any Member
or the Company or derived from the information furnished by a Member or the Company in the
performance of this Agreement or otherwise relating to the Alloy Business, however obtained
(“Confidential Information”), are to be kept confidential between the parties, not
disclosed to any third party and not used by a receiving party except as permitted herein and
except for the specific purpose of performing its obligations or exercising its rights hereunder.
Notwithstanding the foregoing, each Member may share such confidential information with its
Affiliates and include any financial and other information in its or its parent entities’ financial
reports and public disclosures as it believes are required to comply with applicable law or
accounting requirements. For the avoidance of doubt, Dow Chemical Company and Corning Incorporated
are Affiliates of the Series B Member for these purposes. This Section 16.03 shall survive the
termination of this Agreement.

          (b) Exceptions. Each Member may disclose (subject to applicable laws) Confidential
Information if (a) any such Confidential Information is or becomes generally available to the
public other than as a result of disclosure by a party (or any of its Affiliates) that does not own
such Confidential Information, (b) any such Confidential Information (including any report,
statement, testimony or other submission to a governmental authority) is required by applicable
laws, including but not limited to applicable securities laws, applicable tax laws and accounting
regulations, after prior notice has been given to the disclosing party to the extent such notice is
permitted by applicable law, provided that no such notice is required if prohibited by applicable
law, (c) any such Confidential Information is reasonably necessary to be disclosed in connection
with any dispute with respect to this Agreement (including in response to any summons, subpoena or
other legal process or formal or informal investigative demand issued to the disclosing party in
the course of any litigation, arbitration, mediation, investigation or administrative proceeding),
(d) any such Confidential Information was or becomes available to a party on a non-confidential
basis and from a source (other than a party to this Agreement or any

45

 

Affiliate or representative of
such party) that is not bound by a confidentiality agreement with respect to such information or
(e) any such Confidential Information that was previously or is after the date hereof independently
developed without the aid, application or use of any information that is to be kept confidential
under this Section 16.03 is evidenced by a written record proving such independent development.

          (c) Exploration of Transfer. Nothing shall prevent any Member from sharing
information with another Person who executes a confidentiality agreement in customary form
reasonably acceptable to the Company (designating the Company as a third party beneficiaries) in
connection with the exploration of a possible Transfer of such Member’s Membership Units.

Section 16.04 Amendments. Except as otherwise provided in Sections 3.02(b), the terms and provisions of this
Agreement may not be modified or amended at any time except in accordance with Section 4.04.

Section
16.05 Withdrawal of Members. If a Member has Transferred all of its Membership Units in one (1) or more
Transfers permitted hereunder, then such Member shall withdraw from the Company, and thereby cease
to be a Member and no longer be entitled to exercise any rights or powers of a Member under this
Agreement, on the date upon which each Transferee of such Membership Units has been admitted as a
Member hereunder. Except as otherwise provided by the foregoing, no Member shall be entitled to
withdraw from the Company.

Section
16.06 Governing Law; Jurisdiction. EXCEPT AS OTHERWISE PROVIDED IN THIS AGREEMENT, THIS AGREEMENT SHALL
BE GOVERNED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF DELAWARE, WITHOUT REGARD TO
THE CONFLICTS OF LAW PRINCIPLES THEREOF. ANY ACTION OR PROCEEDING AGAINST ANY PARTY RELATING IN
ANY WAY TO THIS AGREEMENT SHALL BE BROUGHT AND ENFORCED EXCLUSIVELY IN THE COURTS OF THE STATE OF
DELAWARE, AND THE PARTIES IRREVOCABLY SUBMIT TO THE EXCLUSIVE JURISDICTION OF SUCH COURTS IN
RESPECT OF ANY SUCH ACTION OR PROCEEDING; PROVIDED, THAT SUCH ACTION OR PROCEEDING MAY BE BROUGHT
AND ENFORCED IN THE U.S. DISTRICT COURT FOR THE DISTRICT OF
DELAWARE IF NO COURT OF THE STATE OF DELAWARE HAS JURISDICTION OF SUCH ACTION OR PROCEEDING, AND
THE PARTIES IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE U.S. DISTRICT COURT FOR THE DISTRICT OF
DELAWARE IN RESPECT OF ANY SUCH ACTION OR PROCEEDING. EACH OF THE PARTIES HEREBY IRREVOCABLY
WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATED TO THIS
AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

Section
16.07 Severability. If any provision of this Agreement shall be held to be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired thereby. If for any reason any term or provision containing a
restriction set forth herein is held to cover an area or to be for a length of time which is
unreasonable, or in any other way is construed to be too broad or to any extent invalid, such term
or provision shall not be determined to be null, void and of no effect, but to the extent the same
is

46

 

 or would be valid or enforceable under applicable law, any court of competent jurisdiction shall
construe and interpret or reform this Agreement so as to effect the original intent of the parties
as closely as possible in order that the provision contemplated thereby be valid and enforceable
under applicable laws.

Section
16.08 Further Assurances. In connection with this Agreement and the transactions contemplated hereby,
each party shall execute and deliver any additional documents and instruments and perform any
additional acts that the Board of Representatives determines to be necessary or appropriate to
effectuate and perform the provisions of this Agreement and those transactions.

Section
16.09 Binding Effect. Except as otherwise provided in this Agreement to the contrary, this Agreement
shall be binding upon and inure to the benefit of the parties, their distributees, heirs, legal
representatives, executors, administrators, successors and permitted assigns.

Section
16.10 Waivers. No waiver of any breach of any of the terms of this Agreement shall be effective unless
such waiver is made expressly in writing and executed and delivered by the party against whom such
waiver is claimed. No waiver of any breach shall be deemed to be a further or continuing waiver of
such breach or a waiver of any other or subsequent breach. Except as otherwise expressly provided
herein, no failure on the part of any party to exercise, and no delay in exercising, any right,
power or remedy hereunder, or otherwise available in respect hereof at law or in equity, shall
operate as a waiver thereof, nor shall any single or partial exercise of such right, power or
remedy by such party preclude any other or further exercise thereof, or the exercise of any other
right, power or remedy.

Section
16.11 Third Parties. Except as provided in Article XIV, this Agreement does not create any rights,
claims or benefits inuring to any Person that is not a party hereto, and it does not create or
establish any third party beneficiary hereto. Each Member agrees to cause its Affiliates to comply
with the provisions of this Agreement applicable to such Affiliates, and shall be liable for any
failure of any such Affiliate to comply with such provisions.

Section
16.12 Counterparts. This Agreement may be executed in multiple counterparts, each of which shall be
deemed to be an original and shall be binding upon the Person who executed the same, but all of
such counterparts shall constitute the same Agreement.

Section
16.13 No Assignment. Except as otherwise provided in this Agreement, neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any party hereto without the
prior written consent of each other party.

Section
16.14 Guarantee.

          (a) Globe hereby irrevocably and unconditionally guarantees to the Series B Member the
punctual and full performance of all obligations (including performance of any payment or
contribution) of GSMSUB1 or GSMSUB2 (or such Affiliate), as applicable, pursuant to this Agreement.
To the extent that GSMSUB1 or GSMSUB2 (or any of their Affiliates), as applicable, fails to make
any payment or contribution pursuant to this Agreement, Globe will make such payment or
contribution specifically in accordance with the applicable

47

 

provision of this Agreement, as if such
payment were being made by GSMSUB1 or GSMSUB2 (or such Affiliate), as applicable.

          (b) DCC Parent hereby irrevocably and unconditionally guarantees to the Series A Members the
punctual and full performance of all obligations (including performance of any payment or
contribution) of DCE (or such Affiliate) pursuant to this Agreement. To the extent that DCE (or
any of its Affiliates) fails to make any payment or contribution pursuant to this Agreement, DCC
Parent will make such payment or contribution specifically in accordance with the applicable
provision of this Agreement, as if such payment were being made by DCE (or such Affiliate).

Section
16.15 Enforcement of Certain Agreements. The Members hereby agree that (a) at all times while the Series
A Members are entitled to appoint a majority of the Representatives, the Series B Member shall be
entitled, at its sole election and upon written notice to the Company, to direct the actions of the
Company and to otherwise enforce on behalf of the Company, any rights and potential claims
involving the Company under all agreements between the Company, on the one hand, and either Series
A Member (or any of their Affiliates), on the other hand, including, but not limited to, (i) the
Asset Contribution and Membership Interest Subscription Agreement dated as of October 28, 2009 by
and among GMI, WVA and the Company (the “Contribution Agreement”), (ii) the Management
Services Agreement, (iii) the Output and Supply Agreement, (iv) the Alloy Intellectual Property
Cross-License Agreement by and between GMI and the Company, dated as of the date hereof and (v) the
Electrode Supply Agreement, whether such claim is made by or against the Company and (b) at all
times while the Series B Member is entitled to appoint a majority of the Representatives, the
Series A Members shall be entitled, at their sole election and upon written notice to the Company,
to direct the actions of the Company and to otherwise enforce on behalf of the Company, any rights
and potential claims involving the Company under any agreement between the Company, on the one
hand, and the Series B Member (or any of its Affiliates), on the other hand, including, but not
limited to, the Output and Supply Agreement, whether such claim is made by or against the Company.

[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]

48

 

IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	THE COMPANY

WVA Manufacturing, LLC

 	 
	 	By:  	/s/
Jeff Bradley	 
	 	 	Name:  	Jeff Bradley	 
	 	 	Title:  	Vice President	 
	 
	 	THE MEMBERS

GSM Alloys I Inc.

 	 
	 	By:  	/s/
Jeff Bradley	 
	 	 	Name:  	Jeff Bradley	 
	 	 	Title:  	President	 
	 
	 	GSM Alloys II Inc.

 	 
	 	By:  	/s/
Jeff Bradley	 
	 	 	Name:  	Jeff Bradley	 
	 	 	Title:  	President	 
	 
	 	Dow Corning Enterprises, Inc.

 	 
	 	By:  	/s/
Joe Rinaldi	 
	 	 	Name:  	Joe Rinaldi	 
	 	 	Title:  	Vice President	 
	 

49

 

	 	 	 	 	 

	 	 	 	 	 
	 	GUARANTORS

Globe Specialty Metals, Inc., solely for the

purpose of Sections 4.22, 10.3 and 16.14

hereof

 	 
	 	By:  	/s/
Jeff Bradley	 
	 	 	Name:  	Jeff Bradley	 
	 	 	Title:  	Chief Executive Officer	 
	 
	 	Dow Corning Corporation, solely for the

purpose of Sections 4.22 and 16.14 hereof

 	 
	 	By:  	/s/
Robert D. Hansen	 
	 	 	Name:  	Robert D. Hansen	 
	 	 	Title:  	Executive Vice President and General Manager
Core Products Business	 
	 

50

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