Document:

Exhibit 10.19

[Execution]

AMENDMENT NO. 4

TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

AMENDMENT NO.4 TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT, dated August 31, 2005, by and among Haynes International,
Inc., a Delaware corporation (“Haynes Parent”), Haynes Wire Company, a Delaware
corporation (“Haynes Wire” and together with Haynes Parent, each individually,
a “Borrower” and collectively, “Borrowers”), the parties from time to time to
the Loan Agreement (as hereinafter defined) as lenders (each individually, a “Lender”
and collectively, “Lenders”) and Wachovia Capital Finance Corporation
(Central), formerly known as Congress Financial Corporation (Central), an
Illinois corporation, in its capacity as agent for Lenders pursuant to the Loan
Agreement (in such capacity, “Agent”).

W I T N E S S
E T H

WHEREAS, Borrowers have entered into financing
arrangements with Agent and Lenders pursuant to which Lenders (or Agent on
behalf of Lenders) have made and may make loans and advances and provide other
financial accommodations to Borrowers as set forth in, and subject to the terms
and conditions of, the Amended and Restated Loan and Security Agreement, dated
August 31, 2004, by and among Agent, Lenders, JPMorgan Chase Bank N.A.,
successor by merger to Bank One, NA, in its capacity as documentation agent for
Lenders, and Haynes Parent, as amended by Amendment No. 1 to Amended and
Restated Loan and Security Agreement dated November 5, 2004, Amendment No. 2 to
Amended and Restated Loan and Security Agreement dated as of January 27, 2005
and Amendment No. 3 to Amended and Restated Loan and Security Agreement dated
May 1, 2005 (as amended and supplemented hereby and as the same may hereafter
be further amended, modified, supplemented, extended, renewed, restated or
replaced, the “Loan Agreement”) and the other Financing Agreements (as defined
therein); and

WHEREAS, Borrowers, Agent and Lenders have agreed to
certain amendments to the Loan Agreement, subject to the terms and conditions
herein; and

WHEREAS, by this Amendment No. 4, Borrowers, Agent and
Lenders desire and intend to evidence such consents and amendments;

NOW, THEREFORE, in consideration of the foregoing, the
mutual conditions and agreements and covenants set forth herein and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:

1.  Definitions.

1.1.  Additional
Definitions.  As used herein, the
following terms shall have the respective meanings given to them below and the
other Financing Agreements shall be deemed and are hereby amended to include,
in addition and not in limitation, each of the following definitions:

(a)  “Amendment
No. 4” shall mean this Amendment No. 4 to Amended and 

      
 

Restated Loan and Security Agreement by and among Borrower, Agent and
Lenders, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

(b)  “Amendment
No. 4 Effective Date” shall mean the date of the effectiveness of this
Amendment No. 4 in accordance with Section 7 of this Amendment No. 4.

(c)  “Approved
Fund” shall mean with respect to any Lender that is a fund or similar
investment vehicle that makes or invests in commercial loans, any other fund or
similar investment vehicle that invests in commercial loans which is managed or
advised by the same investment advisor as such Lender or by an Affiliate of
such investment advisor.

(d)  “Early
Termination Fee” shall mean the fee payable by Borrowers pursuant to Section
13.1(b) of the Loan Agreement.

(e)  “Enforcement
Action” shall mean the exercise by Agent (or its assignee or designee) in good
faith and in a commercially reasonable manner of any of its material
enforcement rights and remedies as a secured creditor hereunder or under the
other Financing Agreements, applicable law or otherwise, in respect of any of
the Collateral, at any time following the occurrence of an Event of Default
(including, without limitation, the demand for the immediate payment of all or
any portion of the Obligations, the solicitation of bids from third parties to
conduct the liquidation of any of the Collateral, the engagement or retention
of sales brokers, marketing agents, investment bankers, accountants,
appraisers, auctioneers or other third parties for the purposes of valuing,
marketing, promoting and selling any of the Collateral, the opposition of the
sale of assets constituting Collateral in any bankruptcy or insolvency
proceeding, the commencement of any action to foreclose on the security interests
or liens of Agent in all or any material portion of the Collateral or
commencement of any legal proceedings or actions against any Borrower or with
respect to all or any portion of the Collateral).

(f)  “Priority
Event” shall mean the occurrence of any one or more of the following: (i) the
occurrence and continuance of an Event of Default under Section 10.1(a)(i) of
the Loan Agreement with respect to any Borrower’s failure to pay any of the
Obligations arising pursuant  to the
Revolving Loans (including principal, interest, fees and expenses attributable
thereto); (ii) the occurrence and continuance of an Event of Default under
Sections 10.1(e), 10.1(f) or 10.1(g) of the Loan Agreement; (iii) the
occurrence of any other Event of Default and the acceleration by Agent of the
payment of all or a material portion of the Obligations; or (iv) Agent shall
have received the written notice from Term B Loan Lender of a Term B Loan
Action Default as provided in Section 10.2(i) of the Loan Agreement.

(g)  “Registered
Term B Loan” shall have the meaning set forth in Section 2.5 of this Amendment
No. 4.

(h)  “Registered
Term B Note” shall have the meaning set forth in Section 2.5 of this Amendment
No. 4.

(i)  “Revolving
Loan Commitment” shall mean, with respect to each Revolving Loan Lender, the
principal amount set forth on Exhibit A to this Amendment No. 4 for such Lender
or for any party becoming a Revolving Loan Lender after the date hereof the
amount of such Lender’s Commitment as set forth on Schedule 1 to the Assignment
and Acceptance 

 2
 

Agreement pursuant to which such Lender may become a Lender hereunder
in accordance with the provisions of Section 13.7 of the Loan Agreement; as the
same may be adjusted in accordance with the terms hereof; sometimes being collectively
referred to as “Revolving Loan Commitments”.

(j)  “Revolving
Loan Lender” shall mean a Lender with a Revolving Loan Commitment; sometimes
being referred to herein collectively as “Revolving Loan Lenders”.

(k)  “Term
B Loan” shall mean the Loan made by or on behalf of Term B Loan Lender or by
Agent for the account of Term B Loan Lender as set forth in Section 2 of this
Amendment No. 4.  The Term B Loan shall
not be deemed either a Prime Rate Loan or a Eurodollar Rate Loan.

(l)  “Term
B Loan Action Default” shall mean an Event of Default under Sections
10.1(a)(i), 10.1(d), 10.1(e), 10.1(f), 10.1(i), 10.1(1) or 10.1(m), or
10.1(a)(ii) and 10.1(a)(iii) of the Loan Agreement (to the extent arising as a
result of the failure to comply with Sections 9.7, 9.8, 9.9, 9.10, 9.11, 9.12,
9.17 or 9.18 of the Loan Agreement), in each case after giving effect to all
applicable cure periods, if any.

(m)  “Term
B Loan Commitment” shall mean, at any time, as to Term B Loan Lender, the
principal amount designated as its Term B Loan Commitment set forth on Exhibit
A to this Amendment No. 4.

(n)  “Term
B Loan Fee Letter” shall mean the letter agreement, dated of even date
herewith, by and among Borrower, Term B Loan Lender and Agent, setting forth
certain fees payable by Borrower to Agent for the benefit of Term B Loan
Lender, as the same now exists or may hereafter be amended, modified,
supplemented, extended, renewed, restated or replaced.

(o)  “Term
B Loan Interest Rate” shall mean a rate equal to four and three-quarters
(4.75%) percent per annum in excess of the Adjusted Eurodollar Rate (as such
rate is determined from time to time in accordance with the Loan Agreement),
provided, that, the Term B Loan Interest Rate shall be seven and one-quarter
(7.25%) percent per annum in excess of the Adjusted Eurodollar Rate, at the
option of the Term B Loan Lender, after notice to Agent, for the period from
and after the date of the occurrence of any Event of Default, and for so long
as such Event of Default is continuing as determined by Agent; provided,
that, if any of the conditions described in Sections 3.3(b)(i),
3.3(b)(ii) or 3.3(b)(iii) of the Loan Agreement exist with respect to
Eurodollar Rate Loans, or if the adoption of or any change in any law, treaty,
rule or regulation or final, non-appealable determination of an arbitrator or a
court or other Governmental Authority or in the interpretation or application
thereof, in each case, occurring after the date hereof shall make it unlawful
for Term B Loan Lender to make or maintain loans based on the Adjusted
Eurodollar Rate, then Term B Loan Lender may, at its option, after notice to
Agent, convert the interest rate on the Term B Loan to three and one-quarter
(3.25%) percent per annum in excess of the Prime Rate (or at the option of the
Term B Loan Lender, after notice to Agent, 
for the period from and after the date of the occurrence of any Event of
Default, and for so long as such Event of Default is continuing as determined
by Agent, to five and three-quarters (5.75%) percent per annum in excess of the
Prime Rate).

(p)  “Term
B Loan Lender” shall mean Ableco Finance LLC, a Delaware limited liability
company, together with its successors and assigns.

 3
 

1.2.  Amendments
to Definitions.  Each of the defined
terms in the Loan Agreement or any of the other Financing Agreements set forth
below shall be deemed to be amended and restated in their entirety to have the
meaning as to such term set forth below:

(a)  “Applicable
Margin” shall be deemed and each such reference is hereby amended to mean at
any time, as to the interest rate for Prime Rate Loans, the interest rate for
Prime Rate Fixed Asset Loans, the interest rate for Eurodollar Rate Loans, the
interest rate for Eurodollar Rate Fixed Asset Loans, the interest rate for
Prime Rate Equipment Purchase Loans, the interest rate for Eurodollar Rate
Equipment Purchase Loans and the Letter of Credit Fee, the applicable
percentage (on a per annum basis) set forth below indicated for the Monthly
Average Excess Availability for the immediately preceding month is at or within
the amounts indicated for such percentage:

	
   

  	
   

  	
  Loans Based on

  Accounts and Inventory

  	
   

  	
  Loans based on Fixed Asset

  Availability and Equipment

  Purchase Loans

  	
   

  	
   

  	
   

  
	
  Monthly Average

  Excess Availability

  	
   

  	
  Applicable

  Prime Rate

  Margin

  	
   

  	
  Applicable

  Eurodollar

  Margin

  	
   

  	
  Applicable

  Prime Rate

  Margin

  	
   

  	
  Applicable

  Eurodollar

  Margin

  	
   

  	
  L/C Rate

  	
   

  
	
  1. Greater than
  $20,000,000

  	
   

  	
  0

  	
  %

  	
  1.50

  	
  %

  	
  .50

  	
  %

  	
  2.00

  	
  %

  	
  1.50

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  2. Greater than
  $10,000,000 and equal to or less than $20,000,000

  	
   

  	
  .25

  	
  %

  	
  1.75

  	
  %

  	
  .75

  	
  %

  	
  2.25

  	
  %

  	
  1.75

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  3. Greater than
  $5,000,000 and equal to or less than $10,000,000

  	
   

  	
  .50

  	
  %

  	
  2.00

  	
  %

  	
  1.00

  	
  %

  	
  2.50

  	
  %

  	
  2.00

  	
  %

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  4. Equal to or less
  than $5,000,000

  	
   

  	
  .75

  	
  %

  	
  2.25

  	
  %

  	
  1.25

  	
  %

  	
  2.75

  	
  %

  	
  2.25

  	
  %

  

 

provided, that, the Applicable Margin shall be calculated and
established on the first day of each month (commencing on March 1, 2005) and
shall remain in effect until adjusted thereafter at the beginning of the next
month.

(b)  “Commitments” shall mean,
collectively, the Revolving Loan Commitments and the Term B Loan Commitment.

(c)  “Equipment Purchase Loan
Limit” shall mean at any time the lesser of (i) $10,000,000 or (ii) the amount
equal to: (A) $120,000,000 minus (B) the sum of (1) the Revolving Loans then
outstanding, plus (2) the undrawn amount of Letter of Credit 

 4
 

Accommodations then outstanding.

(d)  “Haynes
Parent Fixed Asset Availability” shall mean $19,214,275; provided, that,
effective on the first day of each month after the date hereof the Hayes Parent
Fixed Asset Availability shall be reduced by the amount equal to $266,865 on
the first day of each such month.

(e)  “Haynes
Wire Fixed Asset Availability” shall mean $2,203,450; provided, that, effective
on the first day of each month after the date hereof the Hayes Wire Fixed Asset
Availability shall be reduced by the amount equal to $30,603 on the first day
of each such month.

(f)  “Lenders”
shall mean, collectively, the Revolving Loan Lenders and the Term B Loan Lender
(sometimes being referred to individually as a “Lender”),  except that for purposes of
Sections 1.65, 1.85, 1.106, 2.1, 2.2, 2.3, 3.1, 3.2, 3.3, 6.11, 12.8 and
13.1(b) of the Loan Agreement, all references to the term “Lenders” in such
Sections shall be deemed and each such reference is hereby amended to mean the
Revolving Loan Lenders only.

(g)  “Loans”
shall mean the Revolving Loans, the Equipment Purchase Loans and the Term B
Loan (sometimes referred to individually as a “Loan”), except that
for purposes of Sections 1.18, 1.34, 1.57, 1.116, 1.125, 2.1(a), 3.2, 6.3(c),
6.6, 6.7, 6.10, 6.11 and 12.8 of the Loan Agreement, all references to the term
“Loans” in such Sections and each such reference is hereby amended to mean the
Revolving Loans and the Equipment Purchase Loans.

(h)  “Maturity
Date” shall mean April 12, 2009.

(i)  “Maximum
Credit” shall mean $130,000,000.

(j)  “Pro
Rata Share” shall mean:

(i) 
with respect to a Revolving Loan Lender’s obligation to make Revolving
Loans and Equipment Purchase Loans and to acquire interests in Letter of Credit
Accommodations and receive payments of interest and principal with respect
thereto, the fraction (expressed as a percentage) the numerator of which is
such Lender’s Revolving Loan Commitment and the denominator of which is the
aggregate amount of all of the Revolving Loan Commitments, as adjusted from
time to time in accordance with the provisions of Section 13.7 of the Loan
Agreement; provided, that, if the Revolving Loan Commitments have been
terminated, the numerator shall be the unpaid amount of such Lender’s Revolving
Loans and Equipment Purchase Loans and its interest in the Letter of Credit
Accommodations and the denominator shall be the aggregate amount of all unpaid
Revolving Loans, Equipment Purchase Loans and Letter of Credit Accommodations;

(ii) 
with respect to the Term B Loan Lender’s obligations to make the Term B
Loan and receive payments of principal, interest, fees, costs and expenses with
respect thereto, one hundred (100%) percent;

(iii) 
with respect to all other matters as to a particular Lender (including
the indemnification obligations arising under Section 11.5 of the Loan
Agreement and the voting rights set forth in Section 11.3 of the Loan
Agreement), the fraction (expressed as a percentage) 

 5
 

the numerator of which is the aggregate amount of all of such Lender’s
Commitments and the denominator of which is the aggregate amount of all of the
Commitments of all Lenders; provided, that, if the Revolving Loan Commitments
have been terminated, the numerator shall be the unpaid amount of each Lender’s
Loans (and in the case of Revolving Loan Lenders, its interest in the Letter of
Credit Accommodations) and the denominator shall be the aggregate amount of all
unpaid Revolving Loans, Equipment Purchase Loans, Letter of Credit
Accommodations and Term B Loan.

(k)  “Revolving
Loan Limit” shall mean, at any time, the amount equal to: (i) $120,000,000 minus,
(ii) the then outstanding aggregate principal amount of Equipment Purchase
Loans.

1.3.  Interpretation.  For purposes of this Amendment No. 4, unless
otherwise defined or amended herein, including, but not limited to, those terms
used and/or defined in the recitals hereto, all terms used herein shall have
the respective meanings assigned to such terms in the Loan Agreement.

2.  Term B Loan.

2.1.  Making
of Term B Loan.  Subject to and upon
the terms and conditions contained herein, Term B Loan Lender agrees to make
the Term B Loan to Borrowers on the Amendment No. 4 Effective Date in the
amount of the Term B Loan Commitment.

2.2.  Term
B Loan Interest.

(a) 
Subject to Section 6.4 of the Loan Agreement, Borrower shall pay to
Agent, for the benefit of Term B Loan Lender, interest on the outstanding
principal amount of the Term B Loan at the Term B Loan Interest Rate.  All interest accruing with respect to the
Term B Loan hereunder on and after the Maturity Date or the date of any Event
of  Default or termination  hereof shall be payable on demand in
accordance with Section 6.4 of the Loan Agreement.

(b) 
All interest charges related to the Term B Loan shall be (i) calculated
based upon the applicable Term B Loan Interest Rate, (ii) calculated on the
basis of a three hundred sixty (360) day year and actual days elapsed and (iii)
paid monthly in arrears to Agent on the first day of each calendar month, or at
Agent’s option, charged to Borrower’s account(s) maintained by Agent as of the
first day of each calendar month subject to Section 6.4 hereof.

(c)  In
no event shall charges constituting interest payable by Borrowers to Agent, for
the benefit of Term B Loan Lender, exceed the maximum amount or the rate
permitted under any applicable law or regulation, and if any such part or
provision of this Amendment No. 4 or any of the other Financing Agreements is
in contravention of any such law or regulation, such part or provision shall be
deemed amended to conform thereto.

2.3.  Repayment
of Term B Loan.  The Term B Loan
shall be repaid in full on the Maturity Date (or if earlier, upon an Event of
Default as provided in Section 10.2 of the Loan Agreement).  Borrowers shall not make any prepayments in
respect of the Term B Loan unless each of the following conditions is
satisfied: (a) as of the date of any such prepayment and after giving effect
thereto, no Default or Event of Default shall exist or have occurred and be
continuing and (b) for each of the thirty (30) consecutive days prior to any
such prepayment, Excess Availability shall have been not less than $15,000,000
and immediately after giving effect to any such prepayment, 

 6
 

Excess Availability shall be not less than $15,000,000.  Any principal amount of the Term B Loan which
is repaid or prepaid may not be reborrowed.

2.4.  Term
B Loan Fees.  Borrower agrees to pay
Agent for the benefit of the Term B Loan Lender the fees and other amounts set
forth in the Term B Loan Fee Letter in the amounts and at the time specified
therein.

2.5.  Registered
Term B Loan.  Agent, on behalf of
Borrowers, agrees to record the Term B Loan on the Register referred to in
Section 13.7(b) of the Loan Agreement. 
The Term B Loan recorded on the Register (the “Registered Term B Loan”)
may not be evidenced by promissory notes other than a Registered B Term Note
(as defined below).  Upon the
registration of the Term B Loan, any promissory note (other than a Registered
Term B Note) evidencing the same shall be null and void and shall be returned
to Borrowers.  Borrowers agree, at the
request of Term B Loan Lender, to execute and deliver to Term B Loan Lender a
promissory note in registered form reasonably acceptable to Term B Loan Lender
to evidence such Registered Term B Loan (that is, containing registered note
language) and registered as provided in Section 13.7(b) of the Loan Agreement
(a “Registered Term B Note”), payable to the order of Term B Loan Lender and
otherwise duly completed.  Once recorded
on the Register, the Obligations evidenced by such Registered Term B Note may
not be removed from the Register so long as it remains outstanding, and a
Registered Term B Note may not be exchanged for a promissory note that is not a
Registered Term B Note.

3.  Amendments.

3.1.  Financing
Agreements.  The term “Financing
Agreements” as used in the Loan Agreement and in the other Financing Agreements
shall be deemed and each such reference is hereby amended to include, in
addition and not in limitation, this Amendment No. 4, the Term B Loan Fee
Letter and the Amendment Fee Letter, as each of the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

3.2.  Reserves.  Section 1.125 of the Loan Agreement is hereby
amended by adding the following at the end thereof: “Without limiting the
generality of the foregoing, the Revolving Loans and Letter of Credit
Accommodations otherwise available to Borrowers shall, at Agent’s option, be
subject to a special reserve, in an amount up to any unpaid interest, fees,
costs, expenses or other charges with respect to the Term B Loan.”

3.3.  Revolving
Loans.  Section 2.1 (a) is hereby
amended by deleting the references to “Commitments” contained therein and
substituting the following therefor: “Revolving Loan Commitments”.

3.4.  Equipment
Purchase Loans.  Section 2.3(d)(vi)
of the Loan Agreement is hereby deleted in its entirety and the following
substituted therefor:

“(vi) as of the date of
such Equipment Purchase Loan, and after giving effect thereto, the aggregate
amount of the Revolving Loans and the Letter of Credit Accommodations shall not
exceed the amount equal to $120,000,000 minus the sum of (A) the aggregate
amount of the Revolving Loans then outstanding, and (B) the aggregate amount of
the undrawn Letter of Credit Accommodations then outstanding;”

 7
 

3.5.  Payments.

(a) 
Section 6.4(a) of the Loan Agreement is hereby deleted in its entirety
and the following substituted therefor:

“(a) All Obligations
shall be payable to the Agent Payment Account as provided in Section 6.3 or
such other place as Agent may designate from time to time.  The foregoing shall not apply to payments
with proceeds of Loans to a Bank Product Provider for Obligations to such Bank
Product Provider in connection with checks or other items issued by Borrower
drawn on such Bank Product Provider. 
Subject to the other terms and conditions contained herein, Agent shall
apply payments received or collected from Borrower or for the account of Borrower
(including the monetary proceeds of collections or of realization upon any
Collateral) as follows:

(i)  first, to the payment in full of any
fees, indemnities or expense reimbursements then due to Agent and Lenders from
Borrower;

(ii)  second, to the payment in full of
interest then due in respect of any Loans (and including any Special Agent
Advances);

(iii)  third, to the payment or prepayment in
full of principal in respect of Special Agent Advances;

(iv) fourth, to
the payment or prepayment in full of principal in respect of the Revolving
Loans or to pay or prepay Obligations arising under or pursuant to any Hedge
Agreement of Borrower that has been approved in writing by Agent (up to the
amount of any then effective Reserve established in respect of such
Obligations) on a pro rata basis;

(v) fifth, to the
payment in full of principal in respect of Equipment Purchase Loans then due;

(vi) sixth, to the
payment in full of principal in respect of the Term B Loan then due;

(vii) seventh, to
the payment or prepayment in full of any other Obligations whether or not then
due, in such order and manner as Agent reasonably determines or to be held as
cash collateral in connection with any Letter of Credit Accommodations or other
contingent Obligations (but not including for purposes of this clause “seventh”
any Obligations arising under or pursuant to any Hedge Agreement or in
connection with any Bank Products);

(viii) eighth, to
the payment or prepayment in full of any of the UK Obligations after demand for
payment under the Guarantee by Borrower in favor of UK Lender; provided, that,
any such amounts received for application to the UK Obligations shall not be
applied to such UK Obligations for a period of sixty (60) days (or such longer
period as UK Lender may agree) after the date of such demand and shall be held
as cash collateral in connection with the UK Obligations until the end of such
sixty (60) day period (or such longer period as UK Lender may agree); and

 8
 

(ix) ninth, to the
payment or prepayment in full of any Obligations arising under or pursuant to
Hedge Agreements that have been approved in writing by Agent (other than to the
extent provided for above) and any Obligations then due to any Bank Provider
arising from or in connection with any Bank Products, as to all of such
Obligations on a pro rata basis.

Provided, that, in each instance set forth above in
Section 6.4(a) above so long as no Priority Event has occurred and is
continuing, this Section 6.4(a) shall not be deemed to apply to any payment by
a Borrower specified by such Borrower to be for the payment of specific
Obligations then due and payable (or prepayable) under and in accordance with
any provision of this Agreement. 
Notwithstanding anything to the contrary contained in this Agreement,
except as Agent may from time to time otherwise determine at any time an Event
of Default exists or has occurred and is continuing, payments with proceeds of
Collateral of Haynes Parent shall be applied to the payment of the Obligations
of Haynes Parent and payments with proceeds of Collateral of Haynes Wire shall
be applied to the payment of the Obligations of Haynes Wire.”

(b)  Section 6.4 is hereby
amended to add new Sections 6.4(e) and 6.4(f) as follows:

“(e) Notwithstanding
anything to the contrary contained in Section 6.4(a) above or otherwise herein,
at any time on and after a Priority Event and for so long as the same is
continuing, Agent shall apply payments received or collected from Borrower or
for the account of Borrower (including the monetary proceeds of collections or
of realization upon any Collateral) as follows:

(i) first, to the
payment in full of any fees (other than the Early Termination Fee), indemnities
or expense reimbursements then due to Agent and Lenders from Borrower;

(ii) second, to
the payment in full of interest then due in respect of any Revolving Loans and
Equipment Purchase Loans (and including any Special Agent Advances);

(iii) third, to
the payment or prepayment in full of principal in respect of Special Agent
Advances;

(iv) fourth, to
the payment or prepayment in full of principal in respect of the Revolving
Loans or to the payment or prepayment in full of Obligations arising under or
pursuant to any Hedge Agreement of Borrower that has been approved in writing
by Agent (up to the amount of any then effective Reserve established in respect
of such Obligations) on a pro rata basis;

(v) fifth, to the
payment in full of principal in respect of Equipment Purchase Loans then due;

(vi) sixth, to be
held as cash collateral in connection with any Letter of Credit Accommodations
or other contingent Obligations (but not including for purposes of this clause “sixth”
any Obligations arising under or pursuant to any Hedge Agreement or in
connection with any Bank Products and as to Letter of Credit Accommodations
only up to the amount provided for in Section 13.1 (a) for such Obligations);

 9

(vii) seventh, to
the payment in full of interest then due in respect of Term B Loan;

(viii) eighth, to
the payment in full of principal in respect of the Term B Loan then due;

(ix) ninth, to the
payment or prepayment in full of any other Obligations whether or not then due
(including the Early Termination Fee), in such order and manner as Agent
reasonably determines;

(x) tenth, to the
payment or prepayment in full of any of the UK Obligations after demand for
payment under the Guarantee by Borrower in favor of UK Lender; provided, that,
any such amounts received for application to the UK Obligations shall not be
applied to such UK Obligations for a period of sixty (60) days (or such longer
period as UK Lender may agree) after the date of such demand and shall be held
as cash collateral in connection with the UK Obligations until the end of such
sixty (60) day period (or such longer period as UK Lender may agree); and

(xi) eleventh, to
the payment or prepayment in full of any Obligations arising under or pursuant
to Hedge Agreements that have been approved in writing by Agent (other than to
the extent provided for above) and any Obligations then due to any Bank
Provider arising from or in connection with any Bank Products, as to all of
such Obligations on a pro rata basis.

(f)            All references to “payment in full”
or “payment or prepayment in full” in this Section 6.4 means all amounts owing
in respect of the Obligations referred to, including any principal, interest,
fees, costs, expenses and other amounts owed to Agent or any Lender which would accrue and become due but for
the commencement of any case under the Bankruptcy Code or any similar
statute, whether or not such amounts are 
allowed or allowable in whole or in part in such a case, but excluding
(A) interest to the extent paid in excess of amounts based on the pre-default
rates (but not any other interest) and (B) fees paid in respect of the waiver
of an Event of Default, in each case as to 
amounts under clause (A) and (B) only to the extent that such amounts
are disallowed in any case with respect to Borrowers under the Bankruptcy Code.”

3.6.  Taxes.  Section 6.5(e) of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:

“(e) Each Lender that is
organized under the laws of a jurisdiction outside the United States (a “Non-U.S.
Lender”) agrees that it shall, no later than the Effective Date (or, in the
case of a Lender which becomes a party hereto pursuant to Section 13.7 hereof
after the Effective Date, promptly after the date upon which such Lender
becomes a party hereto) deliver to the Agent (or, in the case of an assignee of
a Lender which (x) is an Affiliate of such Lender or a Related Fund of such
Lender and (y) does not deliver an Assignment and Acceptance to the Agent
pursuant to the last sentence of Section 13.7(a) for recordation pursuant to
Section 13.7(b), to the assigning Lender only, and in the case of a
participant, to the Lender granting the participation only) two properly
completed and duly executed copies of either U.S. Internal Revenue Service Form
W-8BEN, W-8ECI or W-8IMY or any subsequent versions thereof or successors
thereto, in each case 

 10
 

claiming complete
exemption from, or reduced rate of, U.S. Federal withholding tax and payments
of interest hereunder.  In addition, in
the case of a Non-U.S. Lender claiming exemption from U.S. Federal withholding
tax under Section 871(h) or 881(c) of the Internal Revenue Code, such Non-U.S.
Lender hereby represents to the Agent and the Borrowers that such Non-U.S.
Lender is not a bank for purposes of Section 881(c) of the Internal Revenue
Code, is not a 10-percent shareholder (within the meaning of Section
871(h)(3)(B) of the Internal Revenue Code) of the Parent and is not a
controlled foreign corporation related to the Parent (within the meaning of
Section 864(d)(4) of the Internal Revenue Code), and such Non-U.S. Lender
agrees that it shall promptly notify the Agent in the event any such
representation is no longer accurate. 
Such forms shall be delivered by each Non-U.S. Lender on or before the
date it becomes a party to this Agreement and on or before the date, if any,
such Non-U.S. Lender changes its applicable lending office by designating a
different lending office (a “New Lending Office”).  In addition, such Non-U.S. Lender shall
deliver such forms within 20 days after receipt of a written request therefor
from the Agent, the assigning Lender or the Lender granting a participation, as
applicable.  Notwithstanding any other
provision of this Section 6.5, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this Section 6.5(e) that such Non-U.S. Lender is
not legally able to deliver.”

3.7.  Costs and Expenses.

(a)  Section 9.21 of the Loan
Agreement is hereby amended to insert the following on the second line after
the word “all” and before the word “costs”: “of Agent’s and Term B  Loan Lender’s”.

(b)  Section 9.21(g) of the Loan
Agreement is hereby amended to insert the following after the word “Agent” and
before the word “in”: “and Term B Loan Lender”.

3.8.  Remedies.  Section 10.2 of the Loan Agreement is hereby
amended to add the following new Section 10.2(i) at the end thereof.

“(i) Notwithstanding
anything to the contrary contained herein, except as the Term B Loan Lender
shall otherwise agree, Agent shall demand payment of the Obligations and
commence and pursue such other Enforcement Actions as Agent in good faith deems
appropriate within ninety (90) days (except with respect to Events of Default
described in Sections 10.1(g) and 10.1(h), Agent shall take such Enforcement
Actions as it deems appropriate under the circumstances promptly upon receipt
of notice) after the date of the receipt by Agent of written notice executed
and delivered by the Term B Loan Lender of a Term B Loan Action Default, and
requesting that Agent commence Enforcement Actions, provided, that, (i) such
Term B Loan Action Default has not been waived or cured, (ii) in the good faith
determination of Agent, taking an Enforcement Action is permitted under the
terms of this Agreement and applicable law, (iii) taking an Enforcement Action
shall not result in any liability of Agent or Lenders to any Borrower or any
other person, (iv) Agent shall be entitled to all of the benefits of Sections
12.2, 12.3 and 12.5 hereof, and (v) Agent shall not be required to take an
Enforcement Action so long as within the ninety (90) day period provided above,
Agent shall, at its option, appoint Term B Loan Lender, as an agent of Agent
for purposes of exercising the rights of Agent to take an Enforcement Action,
subject to the terms hereof.”

 11
 

3.9.  Amendments and Waivers.  Section 11.3 of the Loan Agreement is hereby
amended by adding a new Section 11.3(e) at the end thereof as follows:

“(e) Notwithstanding
anything to the contrary contained in Section 11.3(a), no such amendment,
waiver, discharge or termination shall provide for any such amendment, waiver,
discharge or termination of any of the following to the extent provided below
without the consent of Agent and Term B Loan Lender:

(i)  the terms of Section 9.17 or 9.18 hereof (or
any definition with respect to financial terms used in such financial covenant
in a manner which has the effect of reducing the amounts which Borrowers are
required to maintain pursuant to such financial covenants);

(ii)  the definitions of “Adjusted Eurodollar Rate”,
“Borrowing Base” (but only to the extent such proposed change in the definition
would increase the advance rates above those in effect on the date hereof), “Change
of Control”, “Consolidated Adjusted Net Income”, “EBITDA”, “Eligible Accounts”,
“Eligible Inventory”, “Eligible Transferee”, “Enforcement Action”, “Excess
Availability”, “Material Adverse Effect”, “Net Recovery Percentage”, “Priority
Event”, “Pro Rata Share”, “Term B Loan”, “Term 
B Loan Action Default”, or “Term B Loan Interest Rate”;

(iii)  the terms of Section 2 of Amendment No. 4;

(iv)  any of the following Sections hereof in any
material respect: 6.4, 7.7, 9.7, 9.8, 9.9, 9.10, 9.11, 9.12(b), 9.16, 9.21,
10.2, 11.3, 12.8, 12.11, 13.1(a), or 13.7 hereof,

(v)  an increase in the Maximum Credit or the
Revolving Loan Limit or the outstanding principal amount of the Term B Loan;

(vi)  forgiveness, compromise or cancellation of
any of the Term B Loan.

In addition, Agent shall
not make any Special Agent Advance pursuant to Section 12.1(a)(i) or Section
12.11(a)(ii), or additional Revolving Loan or Letter of Credit Accommodation as
provided in Section 12.8, without the prior consent of Term B Loan Lender if
after giving effect thereto the sum of the then outstanding Special Agent
Advances pursuant to such Sections and any then outstanding Revolving Loans and
Letter of Credit Accommodations in excess of the Borrowing Base as provided in
Section 12.8, would exceed the lesser of $10,000,000 or ten (10%) percent of
the Borrowing Base (determined as of the date of such Special Agent Advance
based on the then most recent information received and accepted by Agent) .”

3.10.  The Agent.  Section 12.13 of the Loan Agreement is hereby
amended by adding the following at the end thereof:

“In the event that all
Obligations other than in respect of the Term B Loan are fully and finally paid
and satisfied or Term B Loan Lender has exercised its option to purchase
Obligations owing to the Revolving Loan Lenders as provided in Amendment No. 4,
(a) Agent may, at its option, appoint Term B Loan Lender as successor agent 

 12
 

hereunder and (b)
Term B Loan Lender shall have the right, but not the obligation, upon written
notice to Agent, to require Agent to resign under this Section 12.13 (and in
the case of the exercise by Term B Loan Lender of its purchase option provided
in Amendment No. 4, such resignation to be effective immediately upon the
effectiveness of the purchase by Term B Loan Lender of the Obligations owing to
the Revolving Loan Lenders pursuant to the purchase option granted to Term B
Loan Lender set forth in Amendment No. 4).”

3.11.  Maturity Date.  The first sentence of Section 13.1 (a) of the
Loan Agreement is hereby deleted in its entirety and the following substituted
therefor:

“(a) This Agreement and
the other Financing Agreements shall become effective as of the date set forth
on the first page hereof and shall continue in full force and effect for a term
ending on April 12, 2009 (the “Maturity Date”), unless sooner terminated
pursuant to the terms hereof.”

3.12.  Early Termination Fee.  Section 13.1(b) of the Loan Agreement is
hereby deleted in its entirety and the following substituted therefor:

“(b) If for any
reason this Agreement is terminated prior to the Maturity Date, in view of the
impracticality and extreme difficulty of ascertaining actual damages and by
mutual agreement of the parties as to a reasonable calculation of Agent’s and
each Lender’s lost profits as a result thereof, Borrowers shall pay to Agent,
for the account of Lenders (in accordance with the arrangements by and among
the Lenders), upon the effective date of such termination, an early termination
fee in the amount equal to

	
  Amount

  	
   

  	
  Period

  
	
  (i) 1% of the Maximum
  Credit

  	
   

  	
  From the date hereof to and excluding the fourth
  anniversary of the date hereof

  
	
   

  	
   

  	
   

  
	
  (ii) 1⁄2% of the Maximum
  Credit

  	
   

  	
  From and after the fourth anniversary hereof at any
  time prior to the Maturity Date.

  

 

Notwithstanding anything to the contrary contained in
this Section, in the event of the termination of this Agreement by Borrowers
prior to the Maturity Date and the full and final repayment in cash of all of
the Obligations and receipt by Agent of cash collateral or at its option a
letter of credit for contingent obligations in accordance with the terms hereof
with the proceeds of initial loans and advances or other financial
accommodations to Borrowers pursuant to a credit facility provided by Wachovia
Bank, National Association or its affiliates (or for which Wachovia Bank,
National Association or any of its affiliates is acting as agent), Borrowers
shall not be required to pay the early termination fee provided for above.”

3.13.  Assignments;
Participations.

 13
 

(a)  Section 13.7(a) of the Loan
Agreement is hereby deleted in its entirety and the following substituted
therefor:

“(a) Each Lender may,
with the prior written consent of Agent, assign all or, if less than all, a
portion equal to at least $10,000,000 in the aggregate for the assigning Lender
(or in the case of Term B Loan Lender, a portion equal to at least $2,000,000),
of such rights and obligations under this Agreement to one or more Eligible
Transferees (but not including for this purpose any assignments in the form of
a participation), each of which assignees shall become a party to this
Agreement as a Lender by execution of an Assignment and Acceptance; provided,
that, (i) such transfer or assignment will not be effective until recorded by
Agent on the Register and (ii) Agent shall have received for its sole account
payment of a processing fee from the assigning Lender or the assignee in the
amount of $5,000; provided, that, such fee shall not be
applicable to any assignments made to Affiliates of the assigning Lender or
Approved Funds.  Notwithstanding anything
to the contrary contained in this Section 13.7(a), Term B Loan Lender may
assign any or all of its rights under the Financing Agreements to an Affiliate
of Term B Loan Lender or an Approved Fund of Term B Loan Lender without the
prior written consent of Agent and without delivering an Assignment and
Acceptance to Agent or Borrowers, provided, that, (i) Borrowers and Agent may
continue to deal solely and directly with such Term B Loan Lender until a fully
executed Assignment and Acceptance has been delivered to Agent for recordation
on the Register, (ii) the failure of Term B Loan Lender to deliver an
Assignment and Acceptance to Agent or Borrowers shall not affect the legality,
validity or binding effect of such assignment and (iii) an Assignment and
Acceptance between Term B Loan Lender and an Affiliate of Term B Loan Lender or
an Approved Fund of Term B Loan Lender shall be effective as of the date
specified in such Assignment and Acceptance.”

(b)  Section 13.7(b) of the Loan
Agreement is hereby amended by adding the following at the end thereof: “In the
case of an assignment by a Lender to any of its Approved Funds that is not
reflected in Agent’s Register, the assigning Lender shall maintain a comparable
register on behalf of Agent.”

(c)  Section 13.7 of the Loan
Agreement is hereby amended to add a new Section 13.7(i) as follows:

“(i) A Registered Term B
Loan (and the Registered Term B Note, if any, evidencing the same) may be
assigned or sold in whole or in part only by registration of such assignment or
sale on the Register or comparable register (and each Registered Term B Note
shall expressly so provide).  Any
assignment or sale of all or part of such Registered Term B Loan (and the
Registered Term B Note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register (or comparable
register), together with the surrender of the Registered Term B Note, if any,
evidencing the same duly endorsed by (or accompanied by a written instrument of
assignment or sale duly executed by) the holder of such Registered Term B Note,
whereupon, at the request of the designated assignee(s) or transferee(s), one
or more new Registered Term B Notes in the same aggregate principal amount
shall be issued to the designated assignee(s) or transferee(s).  Prior to the registration of assignment or
sale of any Registered Term B Loan (and the Registered Term Note, if any
evidencing the 

 14
 

same), Agent and
Borrowers shall treat the Person in whose name such Loan (and the Registered
Term Note, if any, evidencing the same) is registered as the owner thereof for
the purpose of receiving all payments thereon and for all other purposes,
notwithstanding notice to the contrary. 
In the event that Term B Loan Lender sells participations in a
Registered Term B Loan, Term B Loan Lender shall maintain a register on which
it enters the name of all participants in the Registered Term B Loan (the “Participant
Register”).  A Registered Term B Loan
(and the Registered Term B Note, if any, evidencing the same) may be
participated in whole or in part only by registration of such participation on
the Participant Register (and each Registered Term B Note shall expressly so
provide).  Any participation of such Registered
Term Loan (and the Registered Term Note, if any, evidencing the same) may be
effected only by the registration of such participation on the Participant
Register.”

4.  Term B Lender Purchase Option.

4.1.  Notice
of Exercise.  Upon the occurrence and
during the continuance of a Priority Event, Term B Loan Lender shall have the
option at any time upon five (5) business days’ prior written notice to Agent
to purchase all of the Obligations (other than those already owing to Term B
Loan Lender) from the Revolving Loan Lenders. 
Such notice from Term B Loan Lender to Agent shall be irrevocable.

4.2.  Purchase
and Sale.  On the date specified by
Term B Loan Lender in such notice (which shall not be less than five (5)
business days, nor more than twenty (20) days, after the receipt by Agent of
the notice from Term B Loan Lender of its election to exercise such option),
Revolving Loan Lenders shall sell to Term B Loan Lender, and Term B Loan Lender
shall purchase from Revolving Loan Lenders, the Obligations (other than those
already owing to Term B Loan Lender), provided that, Lenders shall retain all
rights to be indemnified or held harmless by Borrowers in accordance with the
terms of the Loan Agreement and the other Financing Agreements but shall not
retain any rights to the security therefor. 
Agent hereby represents and warrants that, as to Obligations owing to it
as a Lender, as of the date hereof, no approval of any court or other
regulatory or governmental authority is required for such sale.

4.3.  Payment
of Purchase Price.  Upon the date of
such purchase and sale, Term B Loan Lender shall (a) pay to Agent on behalf of
Revolving Loan Lenders as the purchase price therefor the full amount of all
the Obligations (other than those already owing to Term B Loan Lender) then
outstanding and unpaid (including principal, interest, fees and expenses,
including reasonable attorneys’ fees and legal expenses but excluding the Early
Termination Fee), (b) furnish cash collateral to Agent in a manner and in such
amounts as Agent determines is reasonably necessary to secure Agent and
Revolving Loan Lenders in connection with any issued and outstanding Letter of
Credit Accommodations (but not in any event in an amount greater than one
hundred five (105%) percent of the aggregate undrawn face amount of such Letter
of Credit Accommodations), (c) agree to reimburse Agent and Revolving Loan
Lenders for any loss, cost, damage or expense (including reasonable attorneys’
fees and legal expenses) in connection with any commissions, fees, costs or
expenses related to any issued and outstanding Letter of Credit Accommodations
as described above and any checks or other payments provisionally credited to
the Obligations (other than those already owing to Term B Loan Lender), and/or
as to which Agent or any Revolving Loan Lender has not yet received final
payment and for any other amounts which Agent may be required to pay to any
bank or other 

 15
 

financial institution that is a party to a Deposit Account Control
Agreement (and, in each case, all of such payments shall be made without
offset, deduction or defense), (d) agree to reimburse Agent and Revolving Loan
Lenders in respect of indemnification obligations of Borrowers under the Loan
Agreement and the other Financing Agreements as to matters or circumstances
known to Term B Loan Lender at the time of the purchase and sale which would
reasonably be expected to result in any loss, cost, damage or expense
(including reasonable attorneys’ fees and legal expenses) to Agent or Revolving
Loan Lenders, provided that, in no event will Term B Loan Lender have any
liability for such amounts in excess of proceeds of Collateral received by Term
B Loan Lender, (e) agree to indemnify and hold harmless Agent and Revolving
Loan Lenders from and against any loss, liability, claim, damage or expense
(including reasonable fees and expenses of legal counsel) arising out of any
claim asserted by a third party as a direct result of any acts by Term B Loan
Lender occurring after the date of such purchase and (f) agree to pay to Agent
and Revolving Loan Lenders the Early Termination Fee within three (3) business
days after receipt by Term B Loan Lender of amounts sufficient to pay such
Early Termination Fee, after the payment in full in cash to Term B Loan Lender of
the Term B Loan and the other Obligations purchased by Term B Loan Lender
pursuant to this Section 4, including principal, interest and fees thereon and
costs and expense of collection thereof (including reasonable attorneys’ fees
and legal expenses), provided, that, the notice of termination or effective
date of termination of the Loan Agreement occurs within ninety (90) days after
the effective date of the purchase of the Obligations by Term B Loan Lender.
Term B Loan Lender shall not agree to any amendment to the terms of the Loan
Agreement with respect to the Early Termination Fee during such ninety (90) day
period.  Such purchase price and cash
collateral shall be remitted by wire transfer in federal funds to such bank
account of Agent in New York, New York, as Agent may designate in writing to
Term B Loan Lender for such purpose. 
Interest shall be calculated to but excluding the Business Day on which
such purchase and sale shall occur if the amounts so paid by Term Loan Agent to
the bank account designated by Working Capital Agent are received in such bank
account prior to 1:00 p.m., New York City time and interest shall be calculated
to and including such business day if the amounts so paid by Term B Loan Lender
to the bank account designated by Agent are received in such bank account later
than 1:00 p.m., New York City time.

4.4.  Limitation
on Representations and Warranties. 
Such purchase shall be expressly made without representation or warranty
of any kind by Agent or any Revolving Loan Lender as to the Obligations owing
to any of them or otherwise and without recourse to Agent or any Revolving Loan
Lender, except that each Revolving Loan Lender shall represent and warrant: (a)
the amount of its portion of the Obligations being purchased, (b) that such
Revolving Loan Lender owns its portion of the Obligations free and clear of any
Liens or encumbrances and (c) such Revolving Loan Lender has the right to
assign such Obligations and the assignment is duly authorized.

4.5.  Notice
of Exercise of Remedies.  Agent
agrees that it will give Term B Loan Lender five (5) Business Days’ prior
written notice of its intention to commence the exercise of any enforcement
right or remedy against the Collateral and/or to accelerate all or any material
portion of the Obligations, except that such period of prior written notice may
be less (but in any event concurrently with exercise thereof) as to any portion
of the Collateral to the extent that in the good faith determination of Agent
there are events or circumstances that imminently threaten the value of such
Collateral or the ability of Agent to exercise its rights with respect to such
Collateral, including the removal, diversion, concealment, abscondment,
destruction or waste thereof.  In the
event that during such five (5) Business Day period (or such lesser period as 

 16
 

provided above), Term B Loan Lender shall send to Agent the irrevocable
notice of Term B Loan Lender’s intention to exercise the purchase option given
by Revolving Loan Lenders to Term B Loan Lender under this Section 4, Agent
shall not commence any foreclosure or other action to sell or otherwise realize
upon the Collateral or accelerate all or any material portion of the
Obligations (provided that continuing collection of accounts receivable and other
actions permitted under the Loan Agreement and other Financing Agreements shall
not be prohibited hereunder), provided, that, the purchase and sale with
respect to the Obligations provided for herein shall have closed within five
(5) Business Days thereafter and Agent shall have received payment in full of
the Obligations as provided for herein within such five (5) Business Day
period.

5.  Amendment Fees.  Borrowers shall pay to Agent, or Agent may,
at its option charge  to the loan account
of Borrowers, the fees provided for in the Amendment Fee Letter, dated of even
date herewith, by Borrowers in favor of Agent (the “Amendment Fee Letter”).

6.  Representations and Warranties.  Each Borrower hereby represents and warrants
to Agent and Lenders the following (which shall survive the execution and
delivery of this Amendment No. 4), the truth and accuracy of which on the date
hereof are a continuing condition of the making of Loans and providing Letter
of Credit Accommodations to Borrowers:

6.1. 
This Amendment No. 4 has been duly authorized, executed and delivered by
it, and has been authorized by all necessary action on the part of such
Borrower which is a party hereto (and, if necessary, their respective
stockholders) and each such agreement is in full force and effect as of the
date hereof, and the agreements and obligations of Haynes Parent-and Haynes
Wire, as the case may be, contained herein, constitute the legal, valid and
binding obligations of such Borrower, enforceable against it in accordance with
its terms, except as such enforceability may be limited by any applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting
creditors’ rights generally and by general principles of equity.

6.2. 
The execution, delivery and performance of this Amendment No. 4 (a) are
all within the corporate powers of Haynes Parent and Haynes Wire and (b) are
not in contravention of law or the terms of such Borrower’s certificate of
incorporation, by-laws, or other organizational documentation, or any
indenture, agreement or undertaking to which such Borrower is a party or by
which such Borrower or its property are bound.

6.3. 
After giving effect to this Amendment No. 4, no Default or Event of
Default exists or has occurred and is continuing.

7.  Conditions Precedent.  The amendments contained herein shall only be
effective upon the receipt by Agent of each of the following, in each case in
form and substance reasonably satisfactory to Agent:

7.1. 
an executed original or executed original counterparts of this Amendment
No. 4 (as the case may be), Term B Loan Fee Letter (as the case may be) and the
Amendment Fee Letter (as the case may be), in each case duly authorized,
executed and delivered by the respective party or parties hereto;

7.2.  a
true and correct copy of any consent, waiver or approval (if any) to or of this
Amendment No. 4, which any Borrower is required to obtain from any other
Person; and

 17
 

7.3. 
such approvals of Lenders, in form and substance satisfactory to Agent,
to the terms and conditions of this Amendment No. 4 as are required under the
terms of the Loan Agreement.

8.  Provisions of General Application.

8.1.  Effect of this Amendment.  Except as expressly amended pursuant hereto,
no other changes or modifications to the Financing Agreements are intended or
implied and, in all other respects, the Financing Agreements are hereby
specifically ratified, restated and confirmed by all parties hereto as of the
effective date hereof.  To the extent that
any provision of the Loan Agreement or any of the other Financing Agreements
are inconsistent with the provisions of this Amendment No. 4, the provisions of
this Amendment No. 4 shall control.  The
Loan Agreement and this Amendment No. 4 shall be read and construed as one
Agreement.

8.2.  Costs, Fees and Expenses.  Borrowers agree to reimburse Agent and each
Lender (including Term B Loan Lender) upon demand by Agent for all costs, fees
and expenses (including the reasonable fees and expenses of counsels to Agent
and each Lender (including Term B Loan Lender)) incurred in connection with the
preparation, execution and delivery of this Amendment No. 4.

8.3.  Governing Law.  The validity, interpretation and enforcement
of this Amendment No. 4 and the other Financing Agreements (except as otherwise
provided therein) and any dispute arising out of the parties hereto, whether in
contract, tort, equity or otherwise, shall be governed by the internal laws of
the State of Illinois, but excluding any principles of conflicts of law or
other rule of law that would cause the application of the law of any
jurisdiction other than the laws of the State of Illinois.

8.4.  Binding Effect.  This Amendment No. 4 shall be binding upon
and inure to the benefit of each of the parties hereto and their respective
successors and assigns.  Any
acknowledgments or consents contained herein shall not be construed to
constitute a consent to any other or further action by a Borrower or to entitle
such Borrower to any other consent.

8.5.  Further Assurances.  Each Borrower shall execute and deliver such
additional documents and take such additional action as may be reasonably
requested by Agent and Lenders to effectuate the provisions and purposes of
this Amendment No. 4.

8.6.  Headings.  The headings listed herein are for convenience
only and do not constitute matters to be construed in interpreting this
Amendment No. 4.

8.7.  Counterparts.  This Amendment No. 4 may be executed in any
number of counterparts, each of which shall be an original but all of which
taken together shall constitute one and the same Agreement.  Delivery of an executed counterpart of this
Amendment No. 4 by telefacsimile or other electronic means shall have the same
force and effect as the delivery of an original executed counterpart of this
Amendment No. 4.  Any party delivering an
executed counterpart of this Amendment No. 4 by telefacsimile or other
electronic means shall also deliver an originally executed counterpart of this
Amendment No. 4, but the failure to do so shall not affect the validity, enforceability
or binding effect of this Amendment No. 4.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 18

IN WITNESS WHEREOF, the parties hereto have caused
this Amendment No. 4 to be duly executed and delivered by their authorized
officers as of the date and year first above written.

	
  

  	
  WACHOVIA CAPITAL FINANCE CORPORATION

  (CENTRAL), formerly known as Congress Financial

  Corporation (Central), as Agent and as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Vicky Geist

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAYNES INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcel Martin

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO — V.P. Finance

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAYNES WIRE COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Marcel Martin

  
	
   

  	
   

  
	
   

  	
  Title:

  	
  CFO — V.P. Finance

  
					

 

	
  AGREED:

  	
   

  
	
   

  	
   

  
	
  JPMORGAN CHASE BANK, N.A.,

  successor by merger to BANK ONE, NA (Main Office Chicago)

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ John Freeman

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  WESTERNBANK PUERTO RICO

  BUSINESS CREDIT DIVISION

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Julia Fuentes

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Senior Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ABLECO FINANCE LLC

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/ Daniel E. Wolf

  	
   

  
	
   

  	
   

  
	
  Title:

  	
  Senior Vice President

  	
   

  
							

 

EXHIBIT A

TO

AMENDMENT NO. 4 TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

	
  Revolving Loan Lenders

  	
   

  	
  Revolving
  Loan Commitment

  
	
   

  	
   

  	
   

  
	
  Wachovia Bank, National Association

  	
   

  	
  $50,000,000

  
	
   

  	
   

  	
   

  
	
  JPMorgan Chase Bank N.A.

  	
   

  	
  $45,000,000

  
	
   

  	
   

  	
   

  
	
  Westernbank
  Puerto Rico Credit

  Business Division

  	
   

  	
  $25,000,000

  
	
   

  	
   

  	
   

  
	
  Term B Loan Lender

  	
   

  	
  Term B Loan Commitment

  
	
   

  	
   

  	
   

  
	
  Ableco Finance LLC

  	
   

  	
  $10,000,000EXHIBIT
10.20

[Execution]

AMENDMENT NO. 5

TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 5 TO AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT, dated as of
February 2, 2006, by and among Haynes International, Inc., a Delaware
corporation (“Haynes Parent”), Haynes Wire Company, a Delaware corporation (“Haynes
Wire” and together with Haynes Parent, each individually, a “Borrower” and
collectively, “Borrowers”), the parties from time to time to the Loan Agreement
(as hereinafter defined) as lenders (each individually, a “Lender” and
collectively, “Lenders”) and Wachovia Capital Finance Corporation (Central), an
Illinois corporation, in its capacity as agent for Lenders pursuant to the Loan
Agreement (in such capacity, “Agent”).

W I
T N E S S E T H

WHEREAS, Borrowers have
entered into financing arrangements with Agent and Lenders pursuant to which
Lenders (or Agent on behalf of Lenders) have made and may make loans and
advances and provide other financial accommodations to Borrowers as set forth
in, and subject to the terms and conditions of, the Amended and Restated Loan
and Security Agreement, dated August 31, 2004, by and among Agent, Lenders,
JPMorgan Chase Bank N.A., successor by merger to Bank One, NA, in its capacity
as documentation agent for Lenders, and Haynes Parent, as amended by Amendment
No. 1 to Amended and Restated Loan and Security Agreement dated November 5,
2004, Amendment No. 2 to Amended and Restated Loan and Security Agreement dated
as of January 27, 2005, Amendment No. 3 to Amended and Restated Loan and
Security Agreement dated May 1, 2005 and Amendment No. 4 to Amended and
Restated Loan and Security Agreement dated August 31, 2005
(as amended and supplemented hereby and as the same may hereafter be further
amended, modified, supplemented, extended, renewed, restated or replaced, the “Loan
Agreement”) and the other Financing Agreements (as defined therein); and

WHEREAS, Borrowers, Agent
and Lenders have agreed to certain amendments to the Loan Agreement, subject to
the terms and conditions herein; and

WHEREAS, by this
Amendment No. 5, Borrowers, Agent and Lenders desire and intend to evidence
such consents and amendments;

NOW, THEREFORE, in
consideration of the foregoing, the mutual conditions and agreements and
covenants set forth herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:

1.     Definitions.

1.1      The
term “Financing Agreements” as used in the Loan Agreement and in the other
Financing Agreements shall be deemed and each such reference is hereby amended
to include, in addition and not in limitation, this Amendment No. 5, as the
same now exists or may hereafter be amended, modified, supplemented, extended,
renewed, restated or replaced.

 

1.2      Interpretation.  For purposes of this Amendment No. 5, unless
otherwise defined or amended herein, including, but not limited to, those terms
used and/or defined in the recitals hereto, all terms used herein shall have
the respective meanings assigned to such terms in the Loan Agreement.

2.     Loans, Investments, Etc.  Section 9.10(d) of the Loan Agreement is
hereby amended by deleting “$100,000” and replacing it with “$1,000,000”.

3.     Representations and Warranties.  Each Borrower hereby represents and warrants
to Agent and Lenders the following (which shall survive the execution and
delivery of this Amendment No. 5), the truth and accuracy of which on the date
hereof are a continuing condition of the making of Loans and providing Letter
of Credit Accommodations to Borrowers:

3.1      This
Amendment No. 5 has been duly authorized, executed and delivered by it, and has
been authorized by all necessary action on the part of such Borrower which is a
party hereto (and, if necessary, their respective stockholders) and each such
agreement is in full force and effect as of the date hereof, and the agreements
and obligations of Haynes Parent and Haynes Wire, as the case may be, contained
herein, constitute the legal, valid and binding obligations of such Borrower,
enforceable against it in accordance with its terms, except as such
enforceability may be limited by any applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting creditors’ rights
generally and by general principles of equity.

3.2      The
execution, delivery and performance of this Amendment No. 5 (a) are all within
the corporate powers of Haynes Parent and Haynes Wire and (b) are not in
contravention of law or the terms of such Borrower’s certificate of
incorporation, by-laws, or other organizational documentation, or any
indenture, agreement or undertaking to which such Borrower is a party or by
which such Borrower or its property are bound.

3.3      After
giving effect to this Amendment No. 5, no Default or Event of Default exists or
has occurred and is continuing.

4.     Conditions Precedent.  The amendments contained herein shall only be
effective upon the receipt by Agent of each of the following, in each case in
form and substance reasonably satisfactory to Agent:

4.1      an
executed original or executed original counterparts of this Amendment No. 5 (as
the case may be), duly authorized, executed and delivered by the respective
party or parties hereto;

4.2      a
true and correct copy of any consent, waiver or approval (if any) to or of this
Amendment No. 5, which any Borrower is required to obtain from any other
Person; and

4.3      such
approvals of Lenders, in form and substance satisfactory to Agent, to the terms
and conditions of this Amendment No. 5 as are required under the terms of the Loan
Agreement.

5.     Provisions of General
Application.

 3
 

 

5.1      Effect
of this Amendment.  Except as
expressly amended pursuant hereto, no other changes or modifications to the
Financing Agreements are intended or implied and, in all other respects, the
Financing Agreements are hereby specifically ratified, restated and confirmed
by all parties hereto as of the effective date hereof.  To the extent that any provision of the Loan
Agreement or any of the other Financing Agreements are inconsistent with the
provisions of this Amendment No. 5, the provisions of this Amendment No. 5
shall control.  The Loan Agreement and
this Amendment No. 5 shall be read and construed as one Agreement.

5.2      Governing
Law.  The validity, interpretation
and enforcement of this Amendment No. 5 and the other Financing Agreements
(except as otherwise provided therein) and any dispute arising out of the
parties hereto, whether in contract, tort, equity or otherwise, shall be
governed by the internal laws of the State of Illinois, but excluding any
principles of conflicts of law or other rule of law that would cause the
application of the law of any jurisdiction other than the laws of the State of
Illinois.

5.3      Binding
Effect.  This Amendment No. 5 shall
be binding upon and inure to the benefit of each of the parties hereto and
their respective successors and assigns. 
Any acknowledgments or consents contained herein shall not be construed
to constitute a consent to any other or further action by a Borrower or to
entitle such Borrower to any other consent.

5.4      Further
Assurances.  Each Borrower shall
execute and deliver such additional documents and take such additional action
as may be reasonably requested by Agent and Lenders to effectuate the
provisions and purposes of this Amendment No. 5.

5.5      Headings.  The headings listed herein are for
convenience only and do not constitute matters to be construed in interpreting
this Amendment No. 5.

5.6      Counterparts.  This Amendment No. 5 may be executed in any
number of counterparts, each of which shall be an original but all of which
taken together shall constitute one and the same Agreement.  Delivery of an executed counterpart of this
Amendment No. 5 by telefacsimile or other electronic means shall have the same force
and effect as the delivery of an original executed counterpart of this
Amendment No. 5.  Any party delivering an
executed counterpart of this Amendment No. 5 by telefacsimile or other
electronic means shall also deliver an originally executed counterpart of this
Amendment No. 5, but the failure to do so shall not affect the validity,
enforceability or binding effect of this Amendment No. 5.

[REMAINDER OF PAGE
INTENTIONALLY LEFT BLANK]

 4
 

 

IN WITNESS
WHEREOF, the parties hereto have caused this Amendment No. 5 to be duly
executed and delivered by their authorized officers as of the date and year
first above written.

	
   

  	
   

  	
   

  	
  WACHOVIA CAPITAL FINANCE
  CORPORATION

  (CENTRAL), as Agent and as Lender

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   /s/ Vicky Geist

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   Vice President

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  HAYNES INTERNATIONAL,
  INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   /s/ Marcel Martin

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   Chief Financial Officer, Vice President
  Finance

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  HAYNES WIRE
  COMPANY

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
   /s/ Marcel Martin

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Title:

  	
   Chief Financial Officer, Vice President
  Finance

  
	
  AGREED:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  JPMORGAN CHASE
  BANK, N.A.,

  	
   

  	
   

  	
   

  
	
  successor by
  merger to BANK ONE, NA (Main Office Chicago)

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Grey

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   Regional Portfolio Manager

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  WESTERNBANK
  PUERTO RICO

  	
   

  	
   

  	
   

  
	
  BUSINESS CREDIT
  DIVISION

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Miguel A. Vazquez

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   President

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ABLECO FINANCE
  LLC

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  By:

  	
   /s/ Daniel E.
  Wolf, Sr.

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Title:

  	
   Senior Vice President

  	
   

  	
   

  	
   

  
						

 

 5

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