Haynes International - Amendment No. 6




Exhibit 10.1




[Execution Copy]






AMENDMENT NO. 6 TO CREDIT AGREEMENT 






        This AMENDMENT NO. 6 TO CREDIT
AGREEMENT (this “Amendment”), dated as of January 30,
2004, is entered into by and among Haynes International, Inc., a Delaware
corporation (the “Borrower”), the financial institutions
party to the below-defined Credit Agreement (the
“Lenders”), Fleet Capital Corporation, in its capacity
as administrative agent for itself as a Lender and the other Lenders (the
“Administrative Agent”). Each capitalized term used
herein and not otherwise defined herein shall have the meaning given to it in
the Credit Agreement.




PRELIMINARY STATEMENTS 




        WHEREAS, the Borrower, the
Lenders and the Administrative Agent are parties to a Credit Agreement, dated as
of November 22, 1999 (as amended, restated, supplemented or otherwise modified
from time to time, the “Credit Agreement”);




        WHEREAS, the Borrower, the
Lenders and the Administrative Agent have agreed to enter into an amendment to
the Credit Agreement as set forth herein, in each case upon the terms and
conditions contained in this Amendment.




        NOW, THEREFORE, in consideration
of the premises set forth above, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Borrower, the
Lenders and the Administrative Agent hereby agree as follows:




        SECTION
1.    Definitions.    As
used herein, the following terms shall have the meanings set forth
below:




        “Suspension
Period” shall mean the period beginning on January 30, 2004 and
ending on the Suspension Termination Event.




        “Suspension Termination
Event” shall mean the earlier to occur of (a) February 29, 2004 or (b) the
existence or occurrence of any one or more of the following:




        (i)       
The failure of the Borrower to comply with any term, condition or covenant set
forth in this Amendment.




        (ii)       
The occurrence of any Default under the Loan Documents.




        SECTION
2.    Temporary Suspension of Senior Note Reserve
During Suspension Period.    The Borrower, the
Lenders and the Administrative Agent agree that, notwithstanding anything to the
contrary in the Credit Agreement, immediately upon the effectiveness of this
Amendment, the Senior Note Reserve shall equal $0 at all times during the
Suspension Period only. Upon a Suspension Termination Event, the agreement set
forth in the preceding sentence shall immediately terminate and the reduction of
the Senior Note Reserve to $0 shall have no force or effect, all without the
requirement of any demand, presentment, protest or notice of any kind, all of
which the Borrower hereby waives. Upon a Suspension Termination Event, the
definition of the term “Senior Note Reserve” as set forth in the
Credit Agreement shall be immediately reinstated and shall be in full force and
effect, including, without limitation, for the purposes of calculating the
Borrowing Base and the Borrower’s prepayment obligation under and in
accordance with Section 2.3(B)(i) of the Credit Agreement, and the
Administrative Agent and the Lenders may proceed to exercise any and all of
their rights and remedies as if the Senior Note Reserve had not been reduced to
$0.






        SECTION
3.    Reservation of
Rights.    Notwithstanding any of the foregoing to
the contrary, the Administrative Agent and the Lenders expressly reserve all of
their rights, powers, privileges and remedies under the Credit Agreement and the
other Loan Documents and/or applicable law with respect to any event,
circumstance, act or omission which has occurred or exists or which may occur or
exist on or after the date hereof, in each case whether known or unknown, and
the Administrative Agent’s or any Lender’s; failure to exercise any
such rights, powers, privileges or remedies shall not be deemed a waiver of such
rights, powers, privileges or remedies. No oral representations or course of
dealing on the part of the Administrative Agent or any Lender or any of their
officers, employees or agents, and no failure or delay by the Administrative
Agent or any Lender with respect to the exercise of any right, power, privilege
or remedy under the Credit Agreement and the other Loan Documents or applicable
law shall operate as a waiver thereof, and the single or partial exercise of any
such right, power, privilege or remedy shall not preclude any later exercise of
any other right, power, privilege or remedy.



        SECTION
4.    Amendments to the Credit
Agreement.    Effective as of the date first above
written, unless otherwise specified herein, and subject to the execution of this
Amendment by the parties hereto and the satisfaction of the conditions precedent
set forth in Section 7 below, the Credit Agreement shall be and hereby is
amended as follows:




        4.1        
Clause (x) of Section 7.1(A)(v) is amended and restated to read in
its entirety as follows:



	 	
“(x)    each calendar week, with such Borrowing Base
Certificate being delivered to the Administrative Agent on the third Business
Day following the last Business Day in such calendar week, with respect to the
Eligible Inventory and the Net Amount of Eligible Accounts related to the
Borrower”
	 








        4.2        
Section 7.1(A)(vii) is amended and restated to read in its entirety as follows:


	 	
“(vii)    Cash Flow Forecast.    Beginning November
1, 2003, (i) an eight week statement of projected cash flow and projected
average daily Revolving Credit Availability in form and substance acceptable to
the Administrative Agent, with such projections being updated and delivered to
the Administrative Agent, on a weekly basis and



(ii)    together with the delivery of each such
projected cash flow and projected average daily Revolving Credit Availability, a
statement comparing actual results with projected results for the prior week
period.”
	 













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        4.3        
Section 8.1(B)(i) is amended and restated to read in its entirety as follows:


	 	
“(i)    Sections 7.1(A)(i), (v), (vi), and
(vii);"
	 







        SECTION
5.    Covenants.    Notwithstanding
anything contained in this Amendment or in any Loan Document to the contrary,
during the Suspension Period (i) neither the Borrower nor any of its
Subsidiaries may make any Permitted Acquisition that would otherwise be
permitted to be made pursuant to Section 7.3(F) of the Credit Agreement or any
Investment in Permitted Acquisition that would otherwise be permitted to be made
pursuant to Section 7.3(D)(vi) of the Credit Agreement, (ii) neither the
Borrower nor any of its Subsidiaries may make any payment of the Blackstone
Monitoring Fees that would otherwise be permitted to be made pursuant to Section
7.3(E)(iii) of the Credit Agreement, and (iii) without the prior written consent
of the Administrative Agent, neither the Borrower nor any of its Subsidiaries
may sell, assign, transfer, lease, convey or otherwise dispose of any assets
outside of the ordinary course of business that would otherwise be permitted to
be disposed of pursuant to Section 7.3(B)(iii) of the Credit
Agreement.




        SECTION
6.    Interest
Expense.    For the avoidance of doubt, the
Borrower, the Administrative Agent and the Lenders acknowledge and agree that
any semi-annual interest payment due on the Senior Notes (including, without
imitation, such interest payment due on March 1, 2004) shall constitute and
shall be deemed to be an Interest Expense under the Credit Agreement, whether
actually paid or not.




        SECTION
7.    Condition
Precedent.    This Amendment shall become effective
as of the date above written, if, and only if, (i) the Administrative Agent has
received an executed copy of this Amendment from the Borrower, the Lenders, and
the Administrative Agent, (ii) the Administrative Agent has received (for the
account of each Lender) a non-refundable and fully earned amendment fee in
immediately available funds equal to such Lender’s Pro Rata Share of
$72,000 and (iii) Administrative Agent has received from Parent a duly executed
Consent and Reaffirmation in the form of Exhibit A attached hereto.




        SECTION
8.    Release.    The
Borrower hereby represents and warrants that the Credit Agreement and the other
Loan Documents are enforceable in accordance with their respective terms (except
as the enforcement thereof may be limited by applicable bankruptcy, insolvency
or similar law affecting creditors’ rights generally and by general
principles of equity) and are not subject to any defenses or offsets of any kind
whatsoever (“Defenses”) and that there are no
liabilities, claims, suits, debts, liens, losses, causes of action, demands,
rights, damages or costs, or expenses of any kind, character or nature
whatsoever, known or unknown, fixed or contingent (collectively, the
“Claims”), which the Borrower may have or claim to have
against the Administrative Agent or any Lender, or any of their respective
affiliates, agents, employees, officers, directors, representatives, attorneys,
successors and assigns (collectively, the “Lender Released
Parties”), which might arise out of or be connected with or related
to any act of commission or omission of the Lender Released Parties existing or
occurring on or prior to the date of this Amendment relating to or arising out
of or in connection with the Obligations or any Loan Document or any other
agreement or transaction contemplated thereby. In furtherance of the foregoing,
the Borrower hereby waives, releases, acquits and forever discharges the Lender
Released Parties from any and all (i) Defenses which it may have as of the date
hereof in connection with or relating to the Credit Agreement or any other Loan
Document, and (ii) Claims that the Borrower may have or claim to have as of the
date hereof, relating to or arising out of or in connection with or relating to
the Obligations or any Loan Document or any other agreement or transaction
contemplated thereby or any action taken in connection therewith from the
beginning of time up to and including the date of the execution and delivery of
this Amendment. The Borrower further agrees forever to refrain from commencing,
instituting or prosecuting any lawsuit, action or other proceeding against any
Lender Released Parties with respect to any and all Claims expressly released
herein.









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        SECTION
9.    Representations and
Warranties.    The Borrower represents and warrants
that:




        9.1        
The execution, delivery and performance by Borrower of this Amendment have been
duly authorized by all necessary corporate action.




        9.2        
This Amendment and the Credit Agreement, as amended hereby, constitute legal,
valid and binding obligation of the Borrower and are enforceable against the
Borrower in accordance with their terms (except as the enforcement thereof may
be limited by applicable bankruptcy, insolvency or similar law affecting
creditors’ rights generally and by general principles of
equity).




        9.3        
Each of the representations and warranties contained in the Credit Agreement and
the other Loan Documents is true and correct in all material respects on and as
of the date hereof as if made on the date hereof, except to the extent that such
representations and warranties expressly relate to an earlier date;




        9.4        
Neither the execution, delivery and performance of this Amendment nor the
consummation of the transactions contemplated hereby does or shall contravene,
result in a breach of, or violate (i) any provision of the Borrower’s
certificate or articles of incorporation or bylaws, (ii) any law or regulation,
or any order or decree of any court or government instrumentality, or (iii) any
indenture, mortgage, deed of trust, lease, agreement or other instrument to
which the Borrower is a party or by which Borrower or any of its property is
bound, except in any such case to the extent such conflict or breach has been
waived by a written waiver document, a copy of which has been delivered to Agent
on or before the date hereof; and




        9.5        
No Unmatured Default or Default has occurred and is continuing under the Loan
Documents.









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        SECTION
10.    Reference to and Effect on the Credit Agreement
and the other Loan Documents.




        10.1        Neither
the reduction of the Senior Note Reserve to $0 set forth in Section 2 above nor
any anything in this Amendment or in any ongoing discussions or negotiations
which may take place between the Administrative Agent, any Lender, the Borrower
or any other Person shall directly or indirectly (i) create any obligation to
defer any enforcement action, (ii) constitute a consent or waiver of any past,
present or future Default or other violation of any provisions of the Credit
Agreement and the other Loan Documents, (iii) amend, modify or operate as a
waiver of any provision of the Credit Agreement and the other Loan Documents,
except as expressly set forth herein, or any right, power, privilege or remedy
of the Administrative Agent and the Lenders thereunder, or (iv) constitute a
course of dealing or other basis for altering any Obligation of the Borrower or
any other Person obligated under the Credit Agreement and the other Loan
Documents or any other contract or instrument.



        10.2        
The reduction of the Senior Note Reserve to $0 set forth in Section 2 above is
effective solely during the Suspension Period and such reduction and the
amendments set forth herein are effective solely for the purposes set forth
herein and shall be limited precisely as written, and shall not be deemed to (i)
except as expressly provided in this Amendment, be a consent to any amendment,
waiver or modification of any term or condition of the Credit Agreement or of
any other Loan Document or (ii) prejudice any right or rights that the Agent or
any Lender may now have or may have in the future under or in connection with
the Credit Agreement or any other Loan Document.




        10.3        
This Amendment shall be construed in connection with and as part of the Credit
Agreement and all terms, conditions, representations, warranties, covenants and
agreements set forth in the Credit Agreement and each other Loan Document,
except as herein amended or waived, are hereby ratified and confirmed and shall
remain in full force and effect.




        10.4        
Upon the effectiveness of this Amendment, each reference in the Credit Agreement
to “this Credit Agreement”, “hereunder”, “hereof”,
“herein” or words of similar import shall mean and be a reference to
the Credit Agreement as amended hereby.




        SECTION
11.    Costs And
Expenses.    As provided in Section 10.7(A) of the
Credit Agreement, the Borrower agrees to reimburse the Administrative Agent for
all reasonable costs, internal charges, and out-of-pocket expenses (including
reasonable attorneys’ and paralegals’ fees and time charges of
attorneys and paralegals) paid or incurred in connection with the preparation,
execution, delivery and administration of this Amendment (and the other
documents to be delivered in connection herewith).




        SECTION
12.    No Third Party
Beneficiaries.    This Amendment does not create,
and shall not be construed as creating, any rights enforceable by any person not
a party to this Amendment.




        SECTION
13.    Loan
Document.    This Amendment shall constitute a Loan
Document.









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        SECTION
14.    
Severability.    In case any provision in or
obligation under this Amendment shall be invalid, illegal or unenforceable in
any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.




        SECTION
15.    Governing
Law.    This Amendment shall be governed and
construed in accordance with laws (including 735 ILCS Section 105/5-1 et seq.
but otherwise without regard to conflict of law provisions) of the State of
Illinois.




        SECTION
16.    Headings.    Section
headings in this Amendment are included herein for convenience of reference only
and shall not constitute a part of this Amendment for any other
purposes.




        SECTION
17.    Counterparts.    This
Amendment may be executed by one or more of the parties to the Amendment on any
number of separate counterparts and all of said counterparts taken together
shall be deemed to constitute one and the same instrument.




        SECTION
18.    Signatures by
Fax.    Delivery of an executed counterpart of this
Amendment by fax shall have the same force and effect as the delivery of an
original executed counterpart of this Amendment. Any party delivering an
executed counterpart of this Amendment by fax shall also deliver an original
executed counterpart, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Amendment.




[The remainder of this page is internationally blank] 









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        IN WITNESS WHEREOF, this
Amendment has been duly executed and delivered on the date first above written.




	 	
HAYNES INTERNATIONAL, INC.





By:  /s/  Calvin S. McKay



Print Name:  Calvin S. McKay



Title:  VP Finance





FLEET CAPITAL CORPORATION, as a Lender

and as Administrative Agent





By:  /s/  Robert J. Lund



Print Name:  Robert J. Lund



Title:  Senior Vice President





THE CIT GROUP/BUSINESS CREDIT, INC.,

as a Lender





By:  /s/  Glenn P. Bartley



Print Name:  Glenn P. Bartley



Title:  Vice President




NATIONAL CITY COMMERICIAL FINANCE, INC.,

as a Lender





By:  /s/  Elizabeth M. Lynch



Print Name:  Elizabeth M. Lynch



Title:  SVP















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Signature Page to Amendment

No. 6 to Credit Agreement








EXHIBIT A 






CONSENT AND REAFFIRMATION 






        The undersigned hereby (i)
acknowledges receipt of a final, signed copy of the foregoing Amendment No. 6 to
Credit Agreement (the “Amendment”; capitalized terms
used and not defined herein having the meanings assigned thereto in the
Amendment); (ii) consents to the execution and delivery by the Borrower of the
Amendment; (iii) agrees to cause Borrower to comply with the terms and
conditions of the Amendment; and (iv) affirms that nothing contained in the
Amendment shall modify in any respect whatsoever its guaranty of the Obligations
of the Borrower to the Agent for the benefit of the Lenders as provided in that
certain Guaranty, dated as of November 22, 1999 (as amended, restated,
supplemented or otherwise modified from time to time, the
“Guaranty”) or any other Loan Document to which it is a
party and reaffirms that the Guaranty and all other Loan Documents to which it
is a party shall continue to remain in full force and effect. Although the
undersigned have been informed of the matters set forth herein and has
acknowledged and agreed to same, the undersigned understands that neither the
Administrative Agent nor any Lender has any obligation to inform the undersigned
of such matters in the future or to seek either of the undersigned’s
acknowledgment or agreement to future amendments, waivers or consents, and
nothing herein shall create such a duty.




        IN WITNESS WHEREOF, the
undersigned has executed this Consent and Reaffirmation on and as of the date of
the Agreement.



	 	
HAYNES HOLDINGS, INC.,

a Delaware corporation







By:  /s/  Calvin S. McKay



Print Name:  Calvin S. McKay



Title:  VP Finance









Exhibti A to Amendment No. 6 To

Credit Agreement