Document:

Supplemental
      Agreement

    

    Dated
      30
      April 2007

    

    

    Haynes
      International Limited

    (as
      Company)

    

    Burdale
      Financial Limited

    (as
      Burdale)

    

    

    

    

    

    

    
 

    

    

    Denton
      Wilde Sapte LLP

    One
      Fleet
      Place

    London
      EC4M 7WS

    United
      Kingdom

    T
      +44
      (0)20 7242 1212

    F
      +44
      (0)20 7246 7777

    Telex
      887793

    DX
      242

    info@dentonwidesapte.com

    www.dentonwildesapte.com

    International
      Lawyers

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Contents

    
      	 	 	 
	
              1

            	
              Interpretation

            	
              1

            
	 	 	 
	
              2

            	
              Amendments
                to Facility Agreements

            	
              1

            
	 	 	 
	
              3

            	
              Representations
                and warranties

            	
              2

            
	 	 	 
	
              4

            	
              Confirmations

            	
              2

            
	 	 	 
	
              5

            	
              Fee

            	
              2

            
	 	 	 
	
              6

            	
              Counterparts

            	
              2

            
	 	 	 
	
              7

            	
              Law

            	
              3

            
	 	 	 
	
              Schedule
                - Conditions Precedent

            	
              4

            
	 	 	 
	
              Signatories

            	
              5

            

      
        
           

        

        
           

          
            

          

        

        
           

        

      

    

    

    Supplemental
      Agreement

    

    Dated

    

    Between

    

    
      	
              (1)

            	
              Haynes
                International Limited
                (Registered in England and Wales No. 01209891) the Company);

            

    

    

    
      	
              (2)

            	
              Burdale
                Financial Limited
                (registered in England and Wales with number 2656007) (Burdale)

            

    

    

    Recitals

    

    
      	
              A

            	
              Pursuant
                to the terms of a facility agreement dated 2 April 2004 (as supplemented
                and amended from time to time, the Facility
                Agreement),
                between the Company and Burdale, Burdale agreed to make available
                certain
                term, revolving credit and receivables finance
                facilities.

            

    

    

    
      	
              B

            	
              The
                Company and Burdale have agreed to amend the Facility Agreement as
                set out
                in, and subject to the terms of, this Supplemental
                Agreement.

            

    

    

    It
      is agreed

    

    
      	
              1

            	
              Interpretation

            

    

    

    
      	 	
              Capitalised
                terms defined in the Facility Agreement have the same meaning when
                used in
                this Supplemental Agreement (including the Recitals and the Schedule)
                unless the context requires otherwise
                and:

            

    

    

    
      	 	
              Effective
                Date
                means the date on which Burdale confirms to the Company that it has
                received all of the documents and evidence specified in the Schedule
                in a
                form and substance satisfactory to
                it

            

    

    

    
      	
              2

            	
              Amendments
                to Facility Agreement

            

    

    

    
      	
              2.1

            	
              On
                and from the Effective Date the Facility Agreement shall be amended
                as
                follows:

            

    

    

    
      	 	
              (a)

            	
              the
                definition of Final
                Repayment Date
                in
                Clause 1.1 of the Facility Agreement shall be deleted and replaced
                with
                the following:

            

    

    

    Final
      Repayment Date means
      2
      April 2008

    

    
      	 	
              (b)

            	
              the
                definition of Margin
                in
                Clause 1.1 of the Facility Agreement shall be amended by deleting
                the
                reference to “3% per annum” and replacing it with a reference to “2.25%
                per annum”;

            

    

    

    
      	 	
              (c)

            	
              in
                Clause 13.11 of the Facility Agreement, the word “quarterly” shall be
                deleted and replaced with the words “semi-annual”;
                and

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    
      	 	
              (d)

            	
              in
                Clause 17.3.2 of the Facility Agreement, the reference to “0.375%” shall
                be deleted and replaced with a reference to
                “0.25%”.

            

    

    

    
      	
              2.2

            	
              On
                and from the Effective Date, the Facility Agreement shall have effect
                as
                supplemented and amended by Clause 2.1 and all references in the
                Facility
                Agreement to “this Agreement” and like terms shall be construed as a
                reference to the Facility Agreement as supplemented and amended by
                such
                Clause or Clauses (as applicable) of this Supplemental
                Agreement.

            

    

    

    
      	
              3

            	
              Representations
                and warranties

            

    

    

    
      	 	
              The
                Company represents and warrants to and for the benefit of Burdale
                that:

            

    

    

    
      	 	
              (a)

            	
              Power
                and authority:
                It has the power to enter into and perform, and has taken all necessary
                action to authorise the entry into, performance and delivery of,
                this
                Supplemental Agreement and the transactions contemplated by this
                Supplemental Agreement.

            

    

    

    
      	 	
              (b)

            	
              Legal
                Validity:
                This Supplemental Agreement constitutes its legal, valid and binding
                obligations which are enforceable in accordance with their
                terms.

            

    

    

    
      	 	
              (c)

            	
              Non-conflict:
                The entry into and performance by it of, and the transactions contemplated
                by, this Supplemental Agreement does not and will
                not:

            

    

    

    
      	 	 	
              (i)

            	
              conflict
                with any law or regulation or any official or judicial order binding
                on it
                or any of its assets; or

            

    

    
      

      
        	 	 	
                (ii)

              	
                conflict
                  with its constitutional documents;
                  or

              

      

    

    
      
        

        
          	 	 	
                  (iii)

                	
                  conflict
                    with any document which is binding on it or any of its
                    assets

                

        

      

    

    

    
      	 	
              (d)

            	
              Authorisations:
                All authorisations, approvals, consents, licenses, exemptions, filings,
                registrations, notarisations and other matters, official or otherwise,
                required by it in connection with the entry into, performance, validity
                and enforceability of, and the transactions contemplated by this
                Supplemental Agreement have been obtained or effected (as appropriate)
                and
                are in full force and effect.

            

    

    

    
      	 	
              (e)

            	
              Representations
                in the Facility Agreement:
                The representations and warranties set out in Clause 12 of the Facility
                Agreement which are deemed to be repeated on the date of delivery
                of a
                Request are true as if made on the date of this Supplemental Agreement
                in
                all material respects.

            

    

    

    
      	
              4

            	
              Confirmations

            

    

    

    
      	
              4.1

            	
              The
                Borrower confirms that the security interests created by it in favour
                of
                Burdale in the Security Documents remain in full force and effect
                and are
                a continuing security for its obligations to Burdale as supplemented
                and
                amended by this Supplemental
                Agreement.

            

    

    

    
      	
              4.2

            	
              The
                parties agree that this Supplemental Agreement is a Finance
                Document.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

       

    

    
      	
              5

            	
              Fee

            

    

    

    
      	 	
              In
                consideration of Burdale entering into this Supplemental Agreement
                at the
                request of the Company, the Company shall pay to Burdale, on the
                date of
                this Supplemental Agreement, a fee of
                $25,000.

            

    

    

    
      	
              6

            	
              Counterparts

            

    

    

    
      	 	
              This
                Supplemental Agreement may be executed in any number of counterparts
                and
                all of such counterparts taken together shall be deemed to constitute
                one
                and the same instrument.

            

    

    

    
      	
              7

            	
              Law

            

    

    

    
      	 	
              This
                Supplemental Agreement shall be governed by and construed in accordance
                with English law.

            

    

    

    Signed
      by the
      parties

    

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    Schedule
      - Conditions Precedent

    

    The
      documents and other evidence referred to in the definition of Effective
      Date
      are as
      follows:

    

    
      	
              1

            	
              Certified
                Copies of the minutes of a meeting of the Company (including the
                resolutions passed at that meeting) approving and authorising the
                execution, delivery and performance of this Supplemental
                Agreement.

            

    

    

    
      	
              2

            	
              Satisfactory
                results to all final company and winding up searches in respect of
                the
                Company.

            

    

    

    
      	
              3

            	
              A
                confirmation from Haynes US in relation to the continuation of its
                obligations under the Parent Guarantee and the Security Interests
                pursuant
                to the Share Mortgage and notwithstanding the merger of Haynes US
                and
                Haynes Holdings, Inc.

            

    

    

    
      	
              4

            	
              Copies
                of such other deeds, documents, consents or authorities as it requires
                having regard to the transactions contemplated by this Supplemental
                Agreement and the reasonable requirements of Burdale to protect its
                interests as a lender.

            

    

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
Signatories

    

    The
      Company

    

    Haynes
      International Limited

     

     

    
      
        	By:	 	/ss/ Phil L. Crawshaw
	 	 	 

      

    

     

    Burdale

    

    Burdale
      Financial Limited

    
 

    
      	By:	 	/ss/ Kevin McKnight 
	 	 	/ss/ Brian
              GitlinExhibit
      10.1

     

    Summary
      of Compensation Arrangements

    With
      Non-Management Directors

    

    Directors
      who are employees of the Company do not receive any compensation for service
      as
      Directors. Effective as of the Company’s Annual Meeting of Stockholders on
      February 6, 2007 (the “2007 Annual Meeting”), each non-management Director is
      paid an annual retainer of $150,000, which is paid partly in restricted stock
      and partly in cash, as recommended each year by the Corporate Governance and
      Nominating Committee and approved by the Board. Effective as of the 2007 Annual
      Meeting, the restricted stock portion of the annual retainer is $100,000, with
      the award of restricted stock made on the date of the Company's Annual Meeting
      of Stockholders to those non-management Directors who are elected or re-elected
      at, or who continue in office after, such Annual Meeting. The cash portion
      of
      the annual retainer is $50,000, paid on a monthly basis. The restricted stock
      award does not vest and cannot be sold until the Director's retirement or
      earlier death, disability or a change of control of the Company. Non-management
      Directors receive dividends with respect to such restricted stock. If a
      Director's tenure on the Board ends for any other reason, the restrictions
      will
      lapse unless it is determined that the participant has acted in a manner
      detrimental to the Company or has failed to fulfill his or her responsibilities
      in a satisfactory manner. If the restrictions on the shares do not lapse, such
      shares will be forfeited to, and acquired at no cost by, the
      Company.

    

    Each
      non-management Director is paid $1,500 plus expenses for attendance at each
      Board meeting. Effective as of the 2007 Annual Meeting, each committee Chairman
      is paid an annual retainer of $12,000, except the Chairman of the Audit
      Committee who is paid an annual retainer of $15,000, and each committee member
      is paid $1,500 plus expenses for attendance at each committee
      meeting.

    

    Directors
      may elect to defer all or a part of cash compensation; such deferred amounts
      are
      credited with interest quarterly at the prime rate charged by Bank of America,
      N.A. In the alternative, Directors may elect to have deferred fees converted
      into units equivalent to shares of Emerson common stock and their accounts
      credited with additional units representing dividend equivalents. All deferred
      fees are payable only in cash.

    

    The
      Company has eliminated its Continuing Compensation Plan for Non-Management
      Directors who assumed office on or after June 4, 2002. Non-management Directors
      in office on that date who are not fully vested continue to vest in the plan.
      A
      non-management Director who assumed office prior to June 4, 2002, and who serves
      as a Director for at least five years will, after the later of termination
      of
      service as a Director or age 72, receive for life a percentage of the annual
      $30,000 cash retainer for non-management Directors in effect on June 4, 2002.
      Such percentage is 50% for five years' service and increases by 10% for each
      additional year of service to 100% for ten years' or more service. In the event
      that service as a covered Director terminates because of death, the benefit
      will
      be paid to the surviving spouse for five years.

    

    As
      part
      of the Company’s overall charitable contributions practice, the Company may, in
      the sole and absolute discretion of the Board and its Committees, make a
      charitable contribution in the name of a Director upon his or her retirement
      from the Board (as determined by the Board and its Committees), taking into
      account such Director’s tenure on the Board, his or her accomplishments and
      service on the Board, and other relevant factors.

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