Document:

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                                                                   EXHIBIT 10.21

             Universal Stainless & Alloy Products Sales Agreement

This AGREEMENT is made and entered into as of the 1st day of July     ,
                                                  ---        ----------
2001, by and between UNIVERSAL STAINLESS & ALLOY PRODUCTS, INC., a Delaware
corporation (hereinafter "Universal") and TALLEY METALS TECHNOLOGY, a Carpenter
Company (hereinafter "Talley Metals").

                                  WITNESSETH:
                                  -----------

WHEREAS, Talley Metals desires to insure a supply of billets for use in its
rolling and finishing operations; and

WHEREAS, Universal desires to sell billets and allocate a portion of its monthly
capacity to manufacture billets on a continuing basis;

NOW, THEREFORE, Universal and Talley Metals the ("Parties" or separately
"Party"), intending to be legally bound, in consideration of the premises and
the mutual covenants and agreements contained herein, agree as follows:

1.  BILLET QUANTITIES  During the term of this Agreement, Universal shall sell
    -----------------
    to Talley Metals and Talley Metals shall purchase from Universal, stainless
    steel billets (hereinafter the "Billets") in an aggregate quantity, of no
    less than two million (2,000,000) pounds and no more than six million
    (6,000,000) pounds per month. On an annual basis Talley Metals purchases
    from Universal will average two million five hundred thousand pounds
    (2,500,000) pounds per month .

2.  RESERVED CAPACITY  Universal will set aside such capacity as necessary to
    -----------------
    produce the billet quantities as ordered during the first week in any month
    for a shipment in the subsequent month, according to the terms of this
    Agreement. Talley Metals will give as much advanced notice as possible if
    the order quantity will vary significantly from month to month. Reserved
    capacity is based on heat-lot quantities. If product is rejected by
    Universal during processing, the order will be considered complete based on
    the shipped weight.

3.  BILLET SIZES AND SPECIFICATIONS  The Billets shall be provided by Universal
    -------------------------------
    in the sizes and grades requested by Talley Metals' purchase orders and
    "Stainless grades" regularly produced by Universal and requested in
    accordance with the specifications set forth by Talley Metals and previously
    approved by Universal. The Billets shall be square, with rounded corners, in
    thickness of four and one-half (4.5") to eight (8") inches by ten (10")
    inches, and shall be delivered in such lengths as Talley Metals shall
    specify in its monthly purchase orders, but in no event shorter than twenty-
    two feet (22') or longer than forty feet (40').

    Universal represents and warrants to Talley Metals that the Billets
    delivered by Universal pursuant to this Agreement have been produced in
    accordance with good mill practice with respect to dimensions, weight,
    straightness,

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    section, composition and mechanical properties and has been inspected to
    assure Billets will meet all applicable standard industry specifications and
    all of the specifications set forth in this Agreement and Talley Metals
    purchase orders.

4.  BILLET PRICES  Pricing will be based on Universal's offering to Talley
    -------------
    metals dated 5/28/98 and 6/1/98. Exhibit "A" of this Agreement. Monthly
    adjustments to that offering will be made to address market changes in key
    raw material prices per existing formulas.

    Any price changes, outside established formulas to adjust for raw material
    price fluctuation, must be negotiated in good faith and agreed to in
    writing by both parties prior to implementation and be consistent with
    market conditions and price changes then common in the industry.

5.  BILLET ORDER; DELIVERY
    ----------------------
(a)  Talley Metals will place orders in heat lot quantities specifying grade,
     billet size, and requested delivery on their standard purchase order form.
     Orders will be acknowledged by Universal on their standard acknowledgement
     form.

(b)  The parties acknowledge that this Agreement has been entered into with the
     intention that Universal shall retain the capacity needed to supply Talley
     Metals with its desired quantity of Billets. Universal must report all
     material changes in their plans, forecast, etc. for manufacturing Billets
     to Talley Metals as soon as such plans are known.  Talley Metals will
     advise Universal of any change to monthly purchases or changes in usage by
     grade as soon as such information is available.

(c)  The prices and delivery for Billets ordered outside of the first week of
     any calendar month shall be as agreed upon by the parties at the time of
     order placement.

(d)  The Billet prices in all cases shall be exclusive of freight and insurance,
     the payment of which shall be solely Talley Metals' responsibility.

          Billets are purchased F.O.B. Bridgeville, PA and Talley Metals accepts
          all risk of loss at that time.  It is recognized that Billets are not
          accepted by Talley Metals until they have arrived at Talley metals and
          have been inspected to determine acceptability under quality standards
          specified in this Agreement.

(e)  Talley Metals guarantees the minimum order quantity of two million pounds
     (2,000,000) of Billet each month during the term of this Agreement.

(f)  Talley Metals purchase orders are placed upon the condition that Universal
     shall not assign it or any interest therein, including any payment due or
     to become due with respect thereto, and any assignment or any attempt to
     assign shall be void without Talley Metals prior written consent and that
     Talley Metals shall be entitled at all times, to setoff any

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     undisputed amounts owing from Universal to Talley against any amount due or
     owing Universal with respect to this order.

6.  PAYMENT.  Talley Metals will pay to Universal the full invoiced amount
    --------
    within forty-five (45) days of delivery of material.

7.  TERM.  The term of this Agreement shall commence on the date hereof and
    -----
    continue for a period of eighteen (18) months. This Agreement will
    automatically renew each month with the placement of each separate order
    placed by Talley Metals unless and until notice not to renew is given in
    writing by either party.

    Notwithstanding the foregoing Agreement is cancelable at any time after
    the expiration of the initial eighteen (18) month period upon the
    provision of 90 days prior written notice by either party.   Either party
    may terminate the Agreement at any time in the event that the other party
    materially breaches its obligations as stated in this Agreement.

    Either Party may terminate immediately upon the other Party declaring
    insolvency or bankruptcy.

8.  FORCE MAJEURE.  Both parties will make a good faith effort to perform
    --------------
    hereunder. Neither party, however, shall be liable for delay in performance
    or for failure to render any performance under this Agreement (and without
    in any way limiting the generality of the foregoing, any such delay or
    failure shall be excused) when such delay or failure is caused by
    governmental regulations (whether or not valid, fire, strike, war, flood,
    accident, epidemic, embargo, appropriation of plant or product, in whole or
    in part by Federal or State authority and any other cause or causes, whether
    of like or different nature, beyond the reasonable control of such party;
    provided, however that notwithstanding any provisions herein to the
    contrary, Talley Metals shall be entitled, in any such event, to purchase
    its required amounts in whole or in part from other vendors and, if
    necessary, to reduce its obligations hereunder in order to contract for such
    other supply requirements at such times that Universal cannot meet the
    supply requirements. Once events change allowing Universal to again supply
    Talley Metals, Talley Metals must do so in accordance with the terms and
    conditions set forth in this Agreement. Each party shall promptly notify the
    other of the occurrence (and the likelihoods of the occurrence) of any such
    event or condition and shall keep the other party fully informed of all
    relevant information. In the event Talley Metals purchases billets from
    another source under circumstances where Universal cannot or does supply the
    same, such purchases shall be counted for purposes of the purchase
    requirements and restriction set forth in this Agreement.

9.  SUCCESSOR AND ASSIGNS.  This Agreement shall be binding on and inure to the
    ----------------------
    benefit of the parties hereto and their respective successors and assigns.

10.  GOVERNING LAW.  This Agreement and the rights and obligations of the
     --------------
     parties hereunder shall be governed by and construed in accordance with the
     laws of Pennsylvania

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11.  CONFIDENTIALITY;DISCLOSURE.  The parties hereby agree that they will
     ---------------------------
     direct, and will use their best efforts to cause their directors, officers,
     employees, advisors and representatives of their advisors (collectively,
     the "Permitted Persons") to use the information in this Agreement solely
     for the purpose of evaluating and/or affecting the purchase and sale of
     Billets and that such information will be kept confidential by the parties
     and their Permitted Persons (it being understood and agreed that the
     efforts used to keep such request for information confidential shall not be
     less than the efforts currently used to keep non-public information about
     themselves confidential); provided, however, that any disclosure of such
     information may be made to which both parties consent in writing prior to
     the disclosure of such request. Notwithstanding the foregoing, either party
     hereto will be permitted to make disclosures required by law.

     The parties also hereby agree that all designs, drawings, patterns or
     customer chemistries provided by or on behalf of Talley Metals to
     Universal or information or material regarding or relating to Talley
     Metals' customers shall be deemed "Confidential Information" of Talley
     Metals whether or not such information is marked confidential.

12.  ENTIRE AGREEMENT; NO ORAL MODIFICATION.  This Agreement represents the
     ---------------------------------------
     entire agreement of the parties with respect to the subject matter hereof,
     and all prior agreements, whether oral or written, are revoked and
     superseded by this Agreement. No representation, warranty, inducement or
     oral agreements have been made or relied upon by either party except as
     expressly stated herein. This Agreement may not be changed, modified,
     altered or amended in any way except in writing signed by both parties. Any
     attempt at oral modification shall be void and of no force or effect.

13.  HEADINGS; CONSTRUCTION.  The Articles and Section headings contained in
     -----------------------
     this Agreement are for reference purposes only and will not affect in any
     way the meaning or interpretation of this Agreement. Unless the context
     clearly otherwise requires, the words "hereby", "hereof", "herein",
     "hereto", "hereunder", and "hereinafter" and any similar term used in this
     Agreement refers to this Agreement as a whole and not merely the subsection
     or section in which such terms are used.

14.  COUNTERPARTS.  This Agreement may be executed in counterparts, each of
     -------------
     which shall be deemed an original, but both of which shall be deemed one
     and the same Agreement.

15.  SEVERABILITY.  The parties agree that should any part or portion of this
     ------------
     Agreement be found to be unenforceable, that the remainder of this
     Agreement be enforced, to the extent that it is legal and practicable to do
     so.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

Universal Stainless & Alloy Products       Talley Metals Technology,
Inc., a Delaware Corporation               A Carpenter Company

By:  /s/ C. M. McAninch                    By:   /s/ Bruce P. Bogardus
     ------------------                       ----------------------------

Its: President & C.E.O.                    Its: Vice President - Materials
     ------------------                         --------------------------

                                           Carpenter Technology Corporation

                                           By:   /s/ Raymond L. Teders
                                              -----------------------------

                                           Its:   V.P. & General Manager
                                               ----------------------------

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                                                                   EXHIBIT 10.22

                                PERSONAL PROPERTY
                            ASSET PURCHASE AGREEMENT

     THIS PERSONAL PROPERTY ASSET PURCHASE AGREEMENT, made and entered into as
of February 8, 2002, by and among NEW YORK JOB DEVELOPMENT AUTHORITY d/b/a
EMPIRE STATE DEVELOPMENT CORPORATION, (the "Seller"), and DUNKIRK ACQUISITION,
LLC (the "Buyer") provides:

                                    RECITALS

     WHEREAS, Seller is the secured creditor of and has liens on certain assets
owned by EMPIRE SPECIALTY STEEL, INC. ("ESSI") located in Chautauqua County, New
York ("Facility"); and

     WHEREAS, Seller desires to sell to Buyer substantially all of ESSI's
personal property constituting all of the Assets (as defined below) relating to
ESSI's business, and Buyer desires to purchase such Assets all on the terms and
conditions set forth below (the "Transaction"); and

     NOW THEREFORE, in consideration of the promises and of the mutual
agreements and covenants contained herein, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto, each intending to be legally bound, do hereby agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

                             INTENTIONALLY OMITTED

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                                   ARTICLE 2

                               PURCHASE AND SALE

     ARTICLE 2.1 AGREEMENT TO PURCHASE AND SELL. Subject to and in accordance
with the terms and conditions of this Agreement, at Closing, Buyer agrees to
purchase from Seller in a secured creditor's private sale pursuant to Article 9
of the New York Uniform Commercial Code, and Seller agrees to sell, in a secured
creditor's private sale pursuant to Article 9 of the New York Uniform Commercial
Code, on February 13, 2002, transfer, convey and assign all of its rights, title
and interests in and good and marketable title, free and clear of all claims,
liabilities, obligations, security interests, liens (including tax liens),
mortgages, leases or leasehold interests, encumbrances and rights of others of
any kind whatsoever (except as permitted in Article 2.5 below) to the following
assets (collectively, the "Assets"):

               a)   EQUIPMENT: machinery and equipment including all machine
                    tools, cranes, spare parts, operating supplies, mobile
                    equipment, office furniture, office equipment, computer
                    equipment (collectively or "PP&E") with respect to the
                    Facility, as listed on Appendix A attached hereto and
                    incorporated herein;

               b)   INVENTORY: Raw materials including scrap, work-in-process,
                    and finished goods inventory (collectively, the "INVENTORY")
                    located at the Facility or held by others, including any
                    inventory on consignment by ESSI as listed on Appendix B
                    attached hereto and incorporated herein;

               c)   INTANGIBLES: All of the general intangibles as the phrase
                    was defined under New York Uniform Commercial Code prior to
                    the recent statutory revisions that became effective on July
                    1, 2001, excluding therefrom any and all accounts, chattel
                    paper, payment intangibles, or promissory notes;

               d)   CONTRACT RIGHTS: All of Seller's rights to all contracts and
                    contract rights, which Buyer so chooses and which were
                    entered into by ESSI in the ordinary course of its business
                    prior to the Closing Date (as defined below) relating to the
                    Assets to be acquired as listed on Appendix C attached
                    hereto and incorporated herein [the parties hereby
                    acknowledge that their intent is to sell all of the
                    contracts identified in Appendix C and

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                    that the parties will cooperatively work to achieve such
                    sale but that Seller is not warranting that all such
                    contracts are freely assignable];

     ARTICLE 2.2 PURCHASE PRICE.

               a) Buyer agrees to pay an aggregate amount to Seller of Two
Million, Nine Hundred Thousand and 00/100 Dollars ($2,900,000.00) pursuant to
the payment schedule outlined in this Agreement (the "Purchase Price"). All
funds payable under this Article shall be paid by means of a wire transfer to an
account designated by Seller, unless otherwise mutually agreed to by Buyer and
Seller.

               b) MANNER OF PAYMENT.

                    (i) Buyer has paid to Escrow Agent concurrent with Buyer's
execution and delivery of this Agreement, an initial deposit (the "Deposit") of
One Million and no/100 Dollars ($1,000,000.00) and Escrow Agent acknowledges
receipt of the initial deposit, which shall be credited towards the Purchase
Price. Buyer acknowledges and agrees that if it is in default of this Agreement
or the Real Property Asset Purchase Agreement and fails to consummate Buyer's
purchase of the Assets pursuant to the terms and conditions herein contained,
Seller shall be entitled to retain the Deposit as its non-exclusive liquidated
damages. Seller acknowledges and agrees that if Seller fails to deliver the
Assets pursuant to this Agreement and the Assets as described in and pursuant to
the Real Property Asset Purchase Agreement that the Buyer shall be entitled to
the return of the Deposit on February 15, 2002.

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                    (ii)  The sum of One Million, Nine Hundred Thousand and
no/100 Dollars ($1,900,000.00) consisting of the balance of the Purchase Price
shall be paid to Seller at the Closing of the Buyer purchasing the Real Property
in the form of a promissory note (the "Note") in the form of the Attached
Appendix D, in the principal amount of $1,900,000.00, which note shall bear
interest at a rate of five percent per annum. No payments or interest shall
accrue until the first anniversary of the Closing Date. Thereafter, principal
and interest shall be paid in one hundred and eight equal monthly installments
beginning on the first day of the month following the first anniversary of the
Closing Date.

     ARTICLE 2.3. EXCLUDED ASSETS AND LIABILITIES. The list of Assets described
in this Agreement as being purchased is pursuant to the descriptions herein and
the attached Appendices and the Parties agree that all remaining assets of ESSI
and/or Seller are not to be purchased pursuant to this Agreement and shall be
Excluded Assets. It is further agreed that in acquiring the Assets, Buyer is not
assuming or undertaking to assume and shall have no responsibility for any
liabilities whether fixed or contingent, past, present or future, or direct or
indirect, arising out of or in connection with the Assets, or any other acts or
omissions of Seller or ESSI in connection therewith prior to the Closing
(collectively referred to as the "Excluded Liabilities"), including without
limitation, (i) any claim arising out of or in connection with the failure by
Seller or ESSI to comply with any applicable government regulation; (ii)
federal, state or local tax liabilities (including any depreciation, investment
tax credit recapture and rollback taxes); (iii) any claim arising out of or in
connection with any Employee Plans of Seller or ESSI or with the employment by
Seller or ESSI of any of its employees or any past employees or with the
termination of any current employees; (iv) any claim resulting from defective
products or workmanship (including any recalls or returns with respect thereto)
related to goods or services

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invoiced prior to Closing; (v) any claim arising from environmental liabilities,
and (vi) any claim under any provision of the New York Uniform Commercial Code
or bulk sales law.

     LIMITATIONS ON WARRANTIES. EXCEPT FOR THOSE WARRANTIES EXPRESSLY SET FORTH
IN THIS AGREEMENT, SELLER EXPRESSLY DISCLAIMS AND NEGATES AND BUYER HEREBY
WAIVES, ALL OTHER REPRESENTATIONS AND WARRANTIES, EXPRESS, IMPLIED, STATUTORY OR
OTHERWISE. AS EXAMPLES AND FOR THE AVOIDANCE OF DOUBT, BUT WITHOUT LIMITATION OF
THE FOREGOING, THE ASSETS SHALL BE CONVEYED PURSUANT HERETO WITHOUT ANY WARRANTY
OR REPRESENTATION WHETHER EXPRESS, IMPLIED, STATUTORY OR OTHERWISE, WITH RESPECT
TO THE QUANTITY, PROFITABILITY, COLLECTIBILITY, QUALITY, CONDITION, SIZE,
WEIGHT, SERVICEABILITY, CONFORMITY TO SAMPLES OR ANY OTHER ASPECT OF THE
FIXTURES, EQUIPMENT OR OTHER PERSONAL PROPERTY INCLUDED AMONG THE ASSETS, ALL OF
WHICH SHALL BE CONVEYED TO THE BUYER AS IS, WHERE IS, AND WITH ALL FAULTS AND
DEFECTS AND IN THEIR PRESENT CONDITION AND STATE OF REPAIR AND WITHOUT ANY
WARRANTIES WHATSOEVER OF MERCHANTABILITY OR OF FITNESS FOR A PARTICULAR PURPOSE.
THE BUYER ACKNOWLEDGES THAT THIS WAIVER IS CONSPICUOUS.

                                       5
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     ARTICLE 2.4. ESCROW.

               a) DEPOSIT OF DEPOSIT. The Deposit shall be held in escrow by
Escrow Agent in an interest bearing account until the Closing of the Transaction
as contemplated herein and the transaction contemplated in the Real Property
Asset Purchase Agreement, at which time the Deposit shall be paid to Seller, or
shall be paid over to the party who is entitled to same as otherwise provided
under the terms of this Agreement.

               b) NOTICE. Notwithstanding the foregoing or any provisions herein
regarding the disbursement of the escrowed funds, Escrow Agent shall not
disburse the escrowed funds (except pursuant to this Agreement or pursuant to a
writing signed by all Parties and containing instructions to Escrow Agent
concerning the payment of the Deposit) unless it shall first give notice, to the
Seller and Buyer, in accordance with the notice provisions of this Agreement of
its intent to disburse the escrowed funds, together with a statement describing
the amount of the proposed disbursement and the party to whom such disbursement
is to be made. If Escrow Agent shall receive written notice of objection to the
disbursement from either Buyer or Seller on or before the fifth (5th) business
day after the giving of such notice of intent to disburse, it shall not disburse
said funds. Escrow Agent may give such notice one or more times, as it deems
warranted under the circumstances. Buyer and/or Seller can compel Escrow Agent
to disperse the Deposit in accordance with this Agreement.

               c) CONFLICTS. The duties of the Escrow Agent are purely
ministerial in nature. Buyer and Seller acknowledge that McNamee, Lochner, Titus
& Williams, P.C. is the Escrow Agent as well as counsel to the Seller. Buyer and
Seller agree that the dual role of Escrow Agent, by itself alone, is not a
conflict of interest, and that such role will serve to expedite the transactions
contemplated by this Agreement. If a conflict arises as to the disbursement of
the deposit, the Escrow Agent shall disburse the funds solely in accordance with
the terms of this

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Agreement, but shall otherwise be free and unencumbered to aggressively
represent the interests of its client.

               d) CONFLICT RESOLUTION. If Buyer and Seller disagree as to the
disposition of the Deposit or if the Deposit disposition conditions shall be
unsatisfied within a period of time which Escrow Agent, in its sole discretion
shall deem unreasonable, or should Escrow Agent otherwise deem it appropriate in
its sole discretion, the Escrow Agent may, in its sole discretion, file an
action in the Supreme Court located in Chautauqua County New York to resolve the
disagreement or seek a resolution as to the distribution of the Deposit and the
Escrow Agent shall have the right to deposit the Deposit with the Supreme Court
located in Chautauqua County New York to permit the Buyer and the Seller to
assert a claim to such monies in an interpleader action. Upon such deposit with
such court, the Escrow Agent shall be relieved and discharged of all obligations
and responsibilities hereunder.

               e) RESIGNATION OF ESCROW AGENT. The Escrow Agent may at any time
resign upon ten (10) days written notice to Seller and Buyer. If a successor
Escrow Agent is not appointed by agreement of the Buyer and the Seller within
this ten (10) day period, the Escrow Agent may, but is under no obligation to,
petition a court of competent jurisdiction to place the escrow monies into court
and to permit the Buyer and the Seller to assert a claim to such monies in an
interpleader action

               f) TERMINATION. Escrow Agent's obligations hereunder, and any and
all liability of Escrow Agent hereunder, shall immediately cease upon the
transfer of the escrowed funds in accordance with the terms of this Agreement,
or upon the resignation of Escrow Agent as set forth above.

                                       7
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         ARTICLE 2.5 SECURITY INTEREST. At the Closing, Buyer shall grant to
Seller a Security Interest in the Assets to secure the Note. Buyer agrees to
execute all documents necessary to grant to Seller such a Security Interest,
including but not limited to the documents ordinarily used by Seller. Copies of
such documents that are applicable to this transaction are attached hereto as
Appendix E.

                                   ARTICLE 3

                                    CLOSING

     ARTICLE 3.1. CLOSING. The Closing of the sale of the Assets contemplated by
this Agreement ( "Closing") shall take place as soon as possible according to
the foreclosure process on personal property and when all contingency items have
been released, but not later than February 13, 2002 (the "Closing Date"), at a
mutually agreeable location in Chautauqua County, New York or such other earlier
time and place as the Parties may mutually agree. All funds transfers to be made
and documents to be delivered on the Closing Date shall be consummated at that
time and place. Delivery in place and peaceful possession of the Assets shall be
contemporaneous therewith. TIME IS OF THE ESSENCE.

     ARTICLE 3.2. SELLER'S CLOSING DOCUMENTS. At the Closing, Seller shall
deliver or cause to be delivered to Buyer in form satisfactory to Buyer's
counsel a Bill of Sale and Assignment necessary to convey title and possession
to the Assets into the name of the Buyer, free and clear of all liens and
encumbrances and UCC-3 termination statements, terminating all liens and
security interests on the Assets held by Seller by assignment or otherwise. A
copy of the Bill of Sale and Assignment is attached hereto as Appendix F.

                                       8
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     A certificate signed by Seller's authorized officer that the
representations and warranties herein are true as of the Closing Date.

     ARTICLE 3.3. BUYER'S CLOSING DOCUMENTS. At the Closing, Buyer shall deliver
or cause to be delivered to Seller in form satisfactory to Seller's Escrow Agent
payment of the Purchase Price.

     A certificate signed by Buyer's authorized officer that the representations
and warranties herein are true as of the Closing Date.

                                   ARTICLE 4

                                   COVENANTS

     ARTICLE 4.1. COVENANTS OF SELLER.

               a) The Seller, to the best of its ability and to the extent such
books, records and properties are available from ESSI, will afford Buyer, its
advisors and representatives, and its potential debt and equity financing
sources and their advisors and representatives, immediate and continuing access
to such of the books, records and properties of ESSI as may be necessary in the
opinion of Buyer, its counsel, accountants, environmental consultants and other
representatives to conduct a satisfactory due diligence investigation of all
aspects of ESSI, including, without limitation, the following areas:
environmental, employee obligations, intellectual property, financial, labor
agreements, commercial, operations, utilities, real estate orders and contracts.

     In connection with Buyer's due diligence investigation, the Seller will
permit Buyer and its counsel, financial and other advisors, accountants,
environmental consultants, potential debt

                                       9
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and equity financing sources, and their representatives to conduct such
investigation of ESSI's businesses, assets, liabilities, books and records as
Buyer may desire, and will cooperate fully with Buyer in such investigation.
Buyer will be afforded an opportunity to discuss the environmental status and
condition of the PP&E with applicable government authorities. Further, the
Seller will use its reasonable best efforts to cooperate with Buyer and its
auditors in connection with the review of all available financial statements and
tax returns of ESSI and the determination that ESSI's fixed assets and inventory
balances are reasonably stated in accordance with generally accepted accounting
principles.

               b) Seller shall use its reasonable efforts to cause the
transactions contemplated by this Agreement to be consummated, and shall use its
reasonable efforts to obtain all consents and authorizations of third parties
and to make all filings with and give all notices to third parties which may be
necessary or reasonably required in order to effect the transactions
contemplated hereby.

         c) From the date of this  Agreement  Seller will not sell,  exchange or
compromise its existing claims against ESSI or its property.

     ARTICLE 4.2. COVENANTS OF BUYER.

               a) Buyer shall use its reasonable efforts to cause the
transactions contemplated by this Agreement to be consummated, and shall use its
reasonable efforts to obtain all consents and authorizations of third parties
and to make all filings with and give all notices to third parties which may be
necessary or reasonably required in order to effect the transactions
contemplated hereby.

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<PAGE>

               b) After Closing, Buyer will preserve for a reasonable length of
time all books and records included in the Assets and will give Seller the
right, during normal business hours, to inspect the same and make copies thereof
for all reasonable purposes.

                                   ARTICLE 5

                 MATERIAL TERMS AND CONDITIONS TO TRANSACTION

In addition to the satisfactory completion of due diligence, the Closing is
subject to satisfaction of various conditions, including the following unless
such condition is waived by Buyer in writing if Seller, through no fault of
Buyer, is unable to satisfy:

               a)   DEFINITIVE AGREEMENT AND RELATED DOCUMENTATION

                    .    The negotiation, execution and delivery of a definitive
                         Real Property Asset Purchase Agreement in form and
                         substance satisfactory to Buyer and its counsel and to
                         Seller and its counsel.

                    .    The assignment by Seller to Buyer of all executory
                         contracts and unexpired leases, to be identified by
                         Buyer and listed in Appendix C to this Agreement
                         (collectively, the "ASSUMED Contracts"). Except as
                         otherwise expressly stated, there shall be no claims by
                         the other parties to the Assumed Contracts against
                         Buyer for any pre-assignment claims or defaults under
                         said contracts.

                    .    Obtaining any necessary consents from the parties to
                         such Assumed Contracts.

                    .    The execution and delivery of all necessary permits,
                         and all supply and utility agreements necessary to the
                         respective operations of the Facility on terms
                         satisfactory to Buyer by February 12, 2002.

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               b) PROTECTION OF PURCHASED ASSETS

                    .    Seller will immediately take all necessary steps to
                         protect the Assets from exposure to adverse weather
                         conditions.

               c) FINANCING

                    .    The obtaining of all necessary consents from Buyer's
                         lenders. o There shall have been no material adverse
                         change, in the condition of the Assets since June 29,
                         2001, except as set forth in Appendix G.

               d) REGULATORY CONSENTS

                    .    Obtaining appropriate antitrust and other regulatory
                         permits, consents and approvals and the absence of any
                         injunction or proceeding which seeks to block the
                         consummation of the Transaction or any related
                         transaction.

               e) ENVIRONMENTAL MATTERS

                    .    With respect to any existing environmental condition,
                         on or at the Facility or in connection with the Assets,
                         that may be reasonably expected to impose requirements
                         for remediation in order to comply with existing
                         environmental laws, obtaining the agreement or approval
                         from applicable federal and state regulatory agencies
                         (in the form of a prospective purchaser agreement,
                         voluntary remediation agreement, or similar arrangement
                         under applicable federal or state environmental laws
                         and programs) as to remediation requirements with
                         respect to such existing environmental conditions, on
                         terms that are reasonably acceptable to Buyer. In this
                         regard, Buyer shal1 have entered into an agreement with

                                      12
<PAGE>

                         the New York DEC regarding environmental matters, the
                         terms of which shall be satisfactory to Buyer.

               f) CORPORATE APPROVALS

                    .    The receipt of all required approvals of the Board of
                         Managers of Buyer with respect to the consummation of
                         the Transaction and related transactions.

                    .    The receipt of all required approvals of the Board of
                         Directors of the Seller with respect to the
                         consummation of the Transaction and related
                         transactions.

               g) Title and Possession of Assets

                    .    Seller, on to the Closing Date, shall transfer good and
                         marketable title to and possession of the Assets, free
                         and clear of all liens, claims and encumbrances.

                                   ARTICLE 6

                        REPRESENTATIONS AND WARRANTIES

     Seller hereby represents and warrants to Buyer as follows:

     .    Organization and Qualification. Seller is a public benefit corporation
          duly organized, validly existing and in good standing under the laws
          of the State of New York, and has all requisite corporate power and
          authority to own, and lease the properties and assets it now owns, or
          is foreclosing on and to carry on its business as presently conducted
          to execute and deliver this Agreement and the other documents and
          instruments to be executed and delivered by Seller

                                      13
<PAGE>

          hereunder, and to consummate the transactions contemplated hereby and
          thereby. Seller is duly licensed or qualified to do business and is in
          good standing in each jurisdiction in which the ownership, operation
          or lease of the Assets by it, except where the failure to be so
          licensed or qualified or in good standing would not have a material
          adverse effect on the business or financial condition of Seller taken
          as a whole. Seller has delivered to Buyer true and correct copies of
          its Amended Articles of Incorporation and Regulations, in each case as
          presently in effect.

     .    Authority Concerning this Agreement. The execution and delivery of
          this Agreement and the other documents and instruments to be executed
          and delivered by Seller hereunder, the performance by Seller of its
          obligations hereunder and thereunder, and the consummation by Seller
          of the transactions contemplated hereby and thereby have been duly
          authorized by the Board of Directors, of Seller. Seller will deliver
          to Buyer at or prior to the Closing a complete and correct copy,
          certified by its corporate secretary or assistant secretary, of all
          resolutions theretofore duly and validly adopted by its Board of
          Directors evidencing such authorization (which resolution will not
          have been modified or rescinded prior to and will be in full force and
          effect on the Closing Date). No other corporate act or proceeding on
          the part of Seller is necessary to approve the execution and delivery
          of this Agreement by Seller, the execution and delivery of the other
          documents and instruments to be executed and delivered by Seller
          hereunder, the performance by Seller of its obligations hereunder and
          thereunder and the consummation of the transactions contemplated
          hereby and thereby.

     .    Execution and Binding Effect. This Agreement has been duly and validly
          executed and delivered by Seller and constitutes, and the other
          documents and

                                      14
<PAGE>

          instruments to be executed and delivered by Seller hereunder upon
          their execution and delivery by Seller on or prior to the Closing Date
          will constitute (assuming in each case the due and valid
          authorization, execution and delivery thereof by the other parties
          thereto), valid and binding agreements of Seller, enforceable against
          Seller in accordance with their respective terms, except that
          enforceability may be limited by (a) bankruptcy, insolvency,
          reorganization, moratorium or other similar laws now or hereafter in
          effect relating to creditors' rights, and (b) the remedies of specific
          performance or injunctive and other forms of equitable relief may be
          subject to certain equitable defenses and to the discretion of the
          court before which any proceeding therefor may be brought.

     .    Absence of Certain Changes or Events. Except as contemplated by this
          Agreement or as set forth on Appendix G attached hereto, since June
          29, 2001, there has not been:

          a)   Any mortgage or pledge or material lien or other encumbrance
               which has not been extinguished by Seller's UCC sale to Buyer,
               upon any of the Assets, other than Permitted Liens (as set forth
               in Appendix E hereof);

          b)   Any sale, transfer or other disposition of any assets of ESSI
               that would be included in this Agreement but for such sale,
               transfer or other disposition by Seller, and Seller has not
               entered into any contract or commitment material to the business
               or operations of ESSI, except in the course of business with
               Buyer.

          c)   Any destruction or casualty loss, whether or not covered by
               insurance, adversely affecting the Assets.

                                      15
<PAGE>

          d)   Seller knows of no material adverse change, in the condition of
               the Assets since June 29, 2001, except as set forth in Appendix
               G.

     .    Seller has the right to sell and deliver peaceful possession of the
          Assets to Buyer and such sale is free and clear of all liens, claims
          and encumbrances.

          .    Seller has legally enforceable debt and lien claims against ESSI
               as follows:

               1.   Note dated January 31, 2001, in the face amount of
                    $3,360,000.00 amount owed: $2,523,971.39 plus interest and
                    other charges from December 14, 2001 secured by: mortgage
                    dated January 31, 2001, executed by Empire Specialty Steel
                    Inc. to New York Job Development Authority, and recorded in
                    the Chautauqua County Clerk's Office on January 31, 2001, in
                    Book 02434 at Page 0372; security agreement in machinery,
                    equipment furniture and fixtures dated January 31, 2001
                    between Empire Specialty Steel Inc. and New York Job
                    Development Authority d\b\a Empire State Development Corp.;
                    security agreement dated October __, 1999 between Dunkirk
                    Specialty Steel Inc. and Atlas Steels Inc. and thereafter
                    assigned to New York Job Development Authority d\b\a Empire
                    State Development Corp. pursuant to a subordination
                    agreement dated January 31, 2001.

               2.   Note dated October __, 1999, in the face amount of
                    $2,499.000.00 amount owed: $1,990,666.60 plus interest and
                    other charges from October 31, 2001 secured by: mortgage in
                    the face amount of $10,000,000.00 given by Al Tech Specialty
                    Steel Corporation to New York State, Department of Commerce-
                    Trust Fund 226-01, and recorded in the Chautauqua County
                    Clerk's office on August 2, 1976, in Book 1376 of Mortgages
                    at page 175, as corrected by correction mortgage recorded in
                    the Chautauqua County Clerk's office on January 25, 1979, in
                    Book 1501 of Mortgages at page 186, which was subsequently
                    subordinated to the aforementioned mortgage dated January
                    31, 2001; security agreement in equipment dated October __,
                    1999 between Dunkirk Specialty Steel Inc. and New York Job
                    Development Corp. d\b\a Empire State Development Corp.

                                      16
<PAGE>

               3.   Note dated January 31, 2001, in the face amount of
                    $1,000,000.00 amount owed: $973,395.15 plus interest and
                    other charges from October 31, 2001 secured by: security
                    agreement in machinery, equipment, furniture and fixtures
                    dated January 31, 2001, between Empire Specialty Steel Inc.
                    and New York Job Development Authority d\b\a Empire State
                    Development Corp.

          Buyer hereby represents and warrants to Seller as follows:

          Organization and Qualification. Buyer is a Limited Liability Company
     duly organized, validly existing and in good standing under the laws of the
     State of Delaware, and has all requisite corporate power and authority to
     own, and lease the properties and assets it now owns, or is foreclosing on
     and to carry on its business as presently conducted to execute and deliver
     this Agreement and the other documents and instruments to be executed and
     delivered by Buyer hereunder, and to consummate the transactions
     contemplated hereby and thereby. Buyer is duly licensed or qualified to do
     business and is in good standing in each jurisdiction in which the
     ownership, operation or lease of the Assets by it or the conduct of the
     business of Dunkirk requires such licensing or qualification, except where
     the failure to be so licensed or qualified or in good standing would not
     have a material adverse effect on the business or financial condition of
     Buyer taken as a whole. Buyer has delivered to Buyer true and correct
     copies of its Articles of Organization and Operating Agreement, in each
     case as presently in effect.

          Authority Concerning this Agreement. The execution and delivery of
     this Agreement and the other documents and instruments to be executed and
     delivered by Buyer hereunder, the performance by Buyer of its obligations
     hereunder and thereunder, and the consummation by Buyer of the transactions
     contemplated hereby and thereby

                                      17
<PAGE>

     have been duly authorized by the Board of Managers, of Buyer. Buyer will
     deliver to Seller at or prior to the Closing a complete and correct copy,
     certified by its corporate secretary or assistant secretary, of all
     resolutions theretofore duly and validly adopted by its Board of Managers
     evidencing such authorization (which resolution will not have been modified
     or rescinded prior to and will be in full force and effect on the Closing
     Date). No other corporate act or proceeding on the part of Buyer is
     necessary to approve the execution and delivery of this Agreement by Buyer,
     the execution and delivery of the other documents and instruments to be
     executed and delivered by Buyer hereunder, the performance by Buyer of its
     obligations hereunder and thereunder and the consummation of the
     transactions contemplated hereby and thereby.

          Execution and Binding Effect. This Agreement has been duly and validly
     executed and delivered by Buyer and constitutes, and the other documents
     and instruments to be executed and delivered by Buyer hereunder upon their
     execution and delivery by Buyer on or prior to the Closing Date will
     constitute (assuming in each case the due and valid authorization,
     execution and delivery thereof by the other parties thereto), valid and
     binding agreements of Buyer, enforceable against Buyer in accordance with
     their respective terms, except that enforceability may be limited by (a)
     bankruptcy, insolvency, reorganization, moratorium or other similar laws
     now or hereafter in effect relating to creditors' rights, and (b) the
     remedies of specific performance or injunctive and other forms of equitable
     relief may be subject to certain equitable defenses and to the discretion
     of the court before which any proceeding therefor may be brought.

                                      18
<PAGE>

                                   ARTICLE 7

                             CONDITIONS PRECEDENT

     ARTICLE 7.1. CONDITIONS PRECEDENT TO OBLIGATIONS OF SELLER. Subject to
Article 9.1 of this Agreement, Seller's obligations hereunder are contingent
upon the fulfillment of the following conditions:

               a)   Buyer shall not be in default of any of its other agreements
                    with Seller and shall have performed in all material
                    respects its obligations hereunder to be performed on or
                    before the Closing Date.

               b)   The Seller shall have signed an Agreement (acceptable to
                    Seller) with the New York State Department of Environmental
                    Conservation regarding the environmental condition of the
                    Facility and release from liabilities relating thereto.

               c)   Satisfactory completion of Article 5 of the Agreement
                    applicable to Seller.

               d)   Seller to receive Representations and Warranties from Buyer
                    as to the authority to buy the Property.

     ARTICLE 7.2. CONDITIONS PRECEDENT TO OBLIGATIONS OF BUYER. Subject to
Article 9.1 of this Agreement, Buyer's obligations hereunder (unless waived by
Buyer in writing) are contingent upon the fulfillment of the following
conditions:

                                      19
<PAGE>

               a)   Seller shall not be in default of any of its other
                    agreements with Buyer and shall have performed in all
                    material respects its obligations hereunder to be performed
                    on or before the Closing Date.

               b)   Buyer shall have performed its due diligence, as discussed
                    in Article 4.1, no later than 1 day prior to the Closing
                    date and Buyer has not terminated this Agreement as a result
                    thereof.

               c)   The Closing shall have occurred not later than February 13,
                    2002.

               d)   The Buyer shall have signed an Agreement (acceptable to
                    Buyer) with the New York State Department of Environmental
                    Conservation regarding the environmental condition of the
                    Facility and release from liabilities relating thereto.

               e)   The Buyer shall have received from the New York State
                    Department of Environmental Conservation and others all
                    applicable permits to operate the Facility.

               f)   Seller and Buyer shall have entered into a Real Property
                    Asset Purchase Agreement for the real property with Buyer
                    and such agreements shall be in full force and affect.

               g)   The conditions contained in Article 5 and 8 applicable to
                    Buyer.

                                      20
<PAGE>

                                   ARTICLE 8

                            RISK OF LOSS; INSURANCE

     ARTICLE 8.1 The risk of loss to any of the Assets shall remain with Seller
until Seller verifies receipt of the portion of the Purchase Price to be paid at
Closing, and shall then pass to Buyer and from that time on Buyer shall be
entitled to the proceeds of any insurance obtained by the Buyer and covering the
Assets upon loss due to an insured event or occurrence. In the event of any
material destruction of, or loss or damage to all or any material portion of the
Assets by any casualty prior to the Closing, Buyer may, at its option, either
(i) terminate this Agreement or (ii) waive the foregoing right of termination
and notify Seller of its election to hold the Closing as provided herein. If
Buyer shall so notify Seller, any proceeds of insurance shall be paid to Seller
and Seller, to the extent of insurance proceeds received by Seller, plus any
coinsurance penalty stipulated in the insurance policy promptly, but in any
event not later than thirty (30) days after the casualty, shall replace or
repair that portion of the Assets so damaged such that the Assets are in as good
condition and equivalent value and fit for Buyer's purposes as were the Assets
immediately prior to the casualty, to Buyer's reasonable satisfaction, and the
Purchase Price payable hereunder as to the affected Assets shall not be
adjusted. In the event of any non-material destruction of, or damage or other
casualty to, any of the Assets, or any part thereof, any proceeds of insurance
shall be paid to the Seller, and the Purchase Price payable hereunder as to the
affected Assets shall be appropriately adjusted on the Closing Date.

                                   ARTICLE 9

                                  TERMINATION

     ARTICLE 9.1 TERMINATION EVENTS. This Agreement may be terminated by:

     a) Buyer, upon written notice to Seller prior to the Closing Date, if any
of the conditions in Article 7.2 have not been satisfied as of the Closing Date
or if satisfaction of such a condition is or becomes impossible (other than
through the failure of Buyer to comply with its obligations under this
Agreement) and Buyer has not waived such condition on or before the Closing
Date; or

                                      21
<PAGE>

     b) Seller, upon written notice to Buyer prior to the Closing Date, if any
of the conditions in Article 7.1 have not been satisfied as of the Closing Date
or if satisfaction of such a condition is or becomes impossible (other than
through the failure of Seller to comply with its obligations under this
Agreement) and Seller has not waived such condition on or before the Closing
Date; or

     c) By Buyer if no later than 1 day prior to the Closing date the results of
the Due Diligence conducted by the Buyer are not satisfactory.

     d) Mutual consent of Buyer and Seller.

                                  ARTICLE 10

                                 MISCELLANEOUS

     ARTICLE 10.1 CONFIDENTIALITY. This Agreement and any and all discussions
and negotiations related hereto shall be treated as confidential and proprietary
information by each Party, and shall not be disclosed to any third party, except
those parties with a need to know such information to assist such Party in
completing its obligations hereunder, and each Party shall use at least the same
degree of care in protecting such confidential information as it uses in
protecting its own proprietary and confidential information. This obligation of
confidentiality shall terminate with respect to the existence of this Agreement
on the date upon which the Parties jointly and publicly announce the signing of
this Agreement. Any such public announcement shall be mutually agreed to by
Buyer and Seller prior to dissemination.

                                      22
<PAGE>

     ARTICLE 10.2 EXPENSES AND COMMISSIONS. Seller and Buyer agree to bear their
own legal, accounting and other expenses in connection with the preparation and
consummation of this Agreement and the transactions contemplated hereby. In the
event of a breach of this Agreement, the prevailing party in a lawsuit or other
dispute resolution procedure shall be entitled to recover its reasonable
attorney's fee, costs and expenses from the other party.

     ARTICLE 10.3 BENEFIT OF AGREEMENT; ASSIGNMENT. The terms of this Agreement
shall be binding upon and inure to the benefit of the heirs, successors and
assigns of the Parties hereto. No Party shall assign its interest under this
Agreement, by operation of law or otherwise, without the prior written consent
of the other Parties.

     ARTICLE 10.4 NOTICES. All notices, demands or other communications given
under this Agreement shall be in writing, and shall be sent by certified or
registered mail, postage prepaid, return receipt requested or by personal
delivery or by overnight courier and addressed as follows: if to Buyer at:
Dunkirk Acquisition LLC, C/O Universal Stainless & Alloy Products, Inc., General
Counsel, 600 Mayer Street, Bridgeville, Pennsylvania 15017, with a copy to
Buyer's counsel at William J. Brown, Esq., 3400 HSBC Center, Buffalo, New York
14203; if to Seller at Empire State Development Corporation, Garry Ryan, 633
Third Avenue, New York, New York 10017 with a copy to Seller's counsel at
McNamee, Lochner, Titus & Williams, P.C. , Attn: Kevin Laurilliard, Esq., 75
State Street, P.O. Box 459, Albany, New York 12201-0459; or to such other
address as may be designated in writing, which notice of change of address shall
be given in the same manner. A notice shall be deemed delivered (a) three (3)
business days after sending, if sent by certified or registered mail, (b) upon
delivery, if personally delivered, or (c) one (1) business day after sending if
sent by overnight courier.

                                      23
<PAGE>

         Notices relating to Article 9, Termination may be made by facsimile, e-
mail or in person and are effective immediately upon sending such notice.

     ARTICLE 10.5 SEVERABILITY. All agreements and covenants herein are
severable. In the event that any provision of this Agreement should be held to
be unenforceable, the validity and enforceability of the remaining provisions
hereof shall not be affected thereby.

     ARTICLE 10.6 GOVERNING LAW; JURISDICTION. This Agreement shall be enforced,
construed and performed in accordance with the laws of the State of New York as
applied to contracts made and fully performed in such state, without any effect
to the choice of law principles thereof. Seller and Buyer hereby agree that any
suit, action or proceeding arising out of or based upon any claim under this
Agreement shall be instituted in the Supreme Court located in Chautauqua County,
New York, and the Seller and Buyer waive any objection which it may have to the
laying of venue of such suit, action or proceeding therein.

     ARTICLE 10.7 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts (by
facsimile or otherwise), each of which, when so executed and delivered, shall be
an original, but all the counterparts shall together constitute one and the same
instrument.

     ARTICLE 10.8 ENTIRE AGREEMENT. This Agreement, together with agreements
executed contemporaneously herewith, constitutes the entire agreement among the
Parties in respect of the transactions contemplated hereby and supersedes all
prior agreements, arrangements and undertakings relating to the subject matter
hereof. No covenants or conditions not expressed in this Agreement or in the
agreements executed contemporaneously herewith shall affect or be

                                      24
<PAGE>

effected to interpret, change or restrict this Agreement. This Agreement may be
amended only by a writing specifically amending the Agreement and signed by all
of the Parties hereto.

     ARTICLE 10.9 MODIFICATION; WAIVER. This Agreement may not be modified,
terminated, rescinded, discharged or canceled, nor may any provision be waived
without the prior written consent of the Party or Parties against whom such
modification, termination, recision, discharge, cancellation or waiver is or may
be asserted. No delay or omission by any Party to exercise any right or power
shall impair any such right or power or be construed to be a waiver thereof. A
waiver of any provision of this Agreement on any occasion shall not constitute a
waiver of such provision on any succeeding occasion.

     ARTICLE 10.10 CUMULATIVE REMEDIES. Unless stated otherwise, all remedies
available under this Agreement shall be cumulative and in addition to and not in
lieu of any other remedies available at law, in equity or otherwise. The use of
any one right or remedy by any Party shall not preclude or waive its right to
use any or all other remedies.

     ARTICLE 10.11 HEADINGS. The section headings and subheadings contained in
this Agreement, Exhibits, and Schedules are for convenient reference only, and
shall not in any way affect the meaning or interpretation of this Agreement.

     ARTICLE 10.12. STRICT CONSTRUCTION. The parties agree that this Agreement
was a result of their joint representation and negotiations. IN THE EVENT THAT
ANY PARTY TO THIS AGREEMENT IS NOT REPRESENTED BY AN ATTORNEY, THEY ARE HEREBY
ADVISED THAT THEY SHOULD CONSULT WITH AN ATTORNEY AND THAT THEY HAVE THE RIGHT
TO NEGOTIATE THE TERMS OF THIS AGREEMENT. THIS CONSTITUTES A VALID AND BINDING
AGREEMENT. The parties hereby agree that no

                                      25
<PAGE>

provision shall be construed against a particular party to this Agreement on the
basis that this Agreement or any particular provision in this Agreement was
proposed, negotiated or written by such party. This rule of construction is
important so that none of the parties are discouraged from drafting this
Agreement.

     ARTICLE 10.13 GUARANTEE. All of Buyer's obligations under this Agreement
are hereby unconditionally and irrevocably guaranteed by Universal Stainless &
Alloy Products, Inc. upon the conveyance to Buyer of the Premises pursuant to
and as defined in the Real Property Asset Purchase Agreement of even date
herewith.

     ARTICLE 10.14 INDEMNIFICATION. Seller shall indemnify and hold each of
Universal Stainless & Alloy Products, Inc. and Dunkirk Acquisition, LLC and
their respective directors, managers, officers, employees and related parties
harmless from, and against, any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses, and
disbursements of any kind or nature whatsoever (including without limitation,
counsel and special counsel fees and disbursements in connection with any
litigation, investigation, hearing or other proceeding) (collectively,
"Liabilities") in connection with, or with respect or in any way related to, or
arising directly or indirectly from this Agreement or Transaction related to
Seller's failure to dispose of the Assets according to law and in a commercially
reasonable manner or to sell, transfer, convey and assign title and interests in
and good and marketable title, free and clear of liabilities, obligations,
security interests, liens (including tax liens), mortgages, leases or leasehold
interests, encumbrances and rights of others of any kind whatsoever (except as
permitted in Article 2.5 herein). This indemnification shall survive the Closing
and the termination of this Agreement.

                                     * * *

[Note: In accordance with Item 601(b)(2) of Regulation S-K, the registrant has
omitted the appendices to this Agreement referenced herein. The registrant
hereby agrees to furnish supplementally a copy of any omitted appendix to the
Commission upon request.]

                                      26
<PAGE>

     IN WITNESS WHEREOF, the Parties have executed, or caused to be executed,
this Agreement in a manner sufficient to bind them as of the day and year first
above written.

<TABLE>
<S>                                                                <C>
STATE OF NEW YORK                                                   NEW YORK JOB
COUNTY OF ______________________________________                    DEVELOPMENT AUTHORITY
                                                                    d/b/a EMPIRE STATE
                                                                    DEVELOPMENT CORPORATION
On this the __________ day of _________, 20 ____,

Before me __________________________________, the                   By:  /s/ Garry P. Ryan
undersigned officer, personally appeared, known                          ----------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for                   Its: Controller
the purposes therein contained.                                          ----------------------------

In witness whereof, I hereunto set my hand and
Official seals.

________________________________________________
Notary Public

COMMONWEALTH OF PENNSYLVANIA                                        DUNKIRK ACQUISITION, LLC
COUNTY OF ______________________________________

On this the _______________ day of _________, 20____,

Before me __________________________________, the                   By:  /s/ Paul A. McGrath
undersigned officer, personally appeared, known                          ----------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for                   Its: Executive Officer
the purposes therein contained.                                          ----------------------------

In witness whereof, I hereunto set my hand and
Official seals.

________________________________________________
Notary Public
</TABLE>

                                      27
<PAGE>

<TABLE>
<S>                                                           <C>
COMMONWEALTH OF PENNSYLVANIA                                  UNIVERSAL STAINLESS & ALLOY
                                                              PRODUCTS, INC.
COUNTY OF _______________________________________             Guarantor pursuant to Article 10.13

On this the __________ day of ______________, 20_____,

Before me __________________________________, the             By:  /s/ C.M. McAninch
undersigned officer, personally appeared, known                    -------------------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for             Its: President and Chief Executive Officer
the purposes therein contained.                                    -------------------------------------

In witness whereof, I hereunto set my hand and
Official seals.

_________________________________________________
Notary Public

STATE OF NEW YORK                                             MCNAMEE, LOCHNER, TITUS & WILLIAMS, P.C.
COUNTY OF _______________________________________             ESCROW AGENT

On this the __________ day of ______________, 20_____,

Before me __________________________________, the             By:  /s/ Kevin Laurilliard
undersigned officer, personally appeared, known                    -------------------------------------
to me (or satisfactorily proven) to be the person
whose name is subscribed to the within instrument,
and acknowledge that he/she executed the same for             Its: Principal
the purposes therein contained.                                    -------------------------------------

In witness whereof, I hereunto set my hand and
Official seals.

_________________________________________________
Notary Public
</TABLE>

                                      28

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