Document:

TIMET Exhibit 10.20

    

      EXHIBIT
        10.20

      

      EMPLOYMENT
        AGREEMENT

      

      

      THIS
        EMPLOYMENT AGREEMENT (this “Agreement”) is made effective as of the
        1st
        day of
        January, 2007 by Titanium Hearth Technologies, Inc., a Delaware corporation
        (the
“Company”), and Dr. Charles H. Entrekin (“Employee”).

       

      RECITALS

       

      WHEREAS,
        the Company and its affiliates (collectively, “TIMET”) are engaged in the
        business of the development, manufacture and sale of titanium or other specialty
        metals products (the “TIMET Business”); and 

       

      WHEREAS,
        the parties have determined that it would be in the best interests of the
        Company that the Company be assured of the services of Employee;

       

      NOW,
        THEREFORE, in consideration of the premises and of the covenants and agreements
        contained herein, and for other good and valuable consideration, the receipt
        and
        sufficiency of which are hereby acknowledged, the parties hereto agree as
        follows:

       

      AGREEMENT

       

      1.  Employment.
        The
        Company hereby employs Employee, and Employee hereby agrees to be employed
        by
        the Company, upon the terms and subject to the conditions hereinafter set
        forth.

       

      2.  Term.
        The term
        of this Agreement shall begin on the date hereof and shall continue for an
        initial period of two (2) years and may be renewed for up to three additional
        one year terms thereafter as set forth below. At the end of the initial term
        and
        upon each of the next two subsequent anniversaries thereof, this Agreement
        shall
        automatically renew for successive one-year terms unless either party provides
        written notice of non-renewal at least sixty (60) days in advance of the
        anniversary date. Upon termination, all provisions of this Agreement shall
        terminate, with the exception of the post-employment provisions in Sections
        8,
        9, 10 and 11, which shall survive according to the terms provided for
        therein.

       

      3.  Duties.
        Employee
        shall initially hold the position of President and Chief Operating Officer
        of
        TIMET with the responsibilities and duties normally attendant to such position
        and shall report to the Chief Executive Officer of TIMET. Employee also shall
        undertake such different, additional or other duties and responsibilities
        as the
        Company may from time to time assign or delegate to Employee. Employee shall
        devote his entire business time, attention and energies to the Company’s
        business and shall not during the term of this Agreement be engaged in any
        other
        business activity except for those activities that do not interfere in any
        material way with the performance of his duties for TIMET and which are approved
        in advance by the Chief Executive Officer of TIMET. 

       

      4.  Compensation.

       

      (a)  As
        compensation for the services to be rendered by Employee hereunder, the Company
        agrees to pay to Employee a base salary of $550,000.00 per year (the “Base
        Salary”). Employee may receive increases to such Base Salary from time to time
        in the Company’s sole discretion. 

       

      (b)  Employee
        is eligible to participate in TIMET’s Profit Sharing Plan (the “Profit Sharing
        Plan”) according to the terms and conditions thereof. For services performed
        during calendar year 2007, Employee shall be entitled to receive a payment
        equal
        to 106% of his Base Salary for 2007 under the Profit Sharing Plan. Thereafter,
        Employee’s participation in the Profit Sharing Plan or any other bonus or profit
        sharing plan hereafter adopted shall be on the terms and conditions applicable
        to such plans.

       

      (c)  On
        March
        30, 2007, Employee shall receive a special one-time payment of $250,000.
        

       

      (d) All
        compensation payable hereunder shall be payable in accordance with the Company’s
        then-current payroll practices and shall be subject to customary payroll
        and
        other applicable taxes.

       

      5.  Other
        Benefits.
        During
        the term of his employment hereunder, Employee shall be entitled to participate
        in the Company’s employee benefit and group insurance programs, including life,
        long-term disability and health insurance programs, as well as the Company’s
        401(k) savings plan, on the same terms as the Company’s employees generally. In
        determining such benefits, Employee shall receive service credit for the
        number
        of full years of service relating to his prior employment with the Company,
        provided however, Employee acknowledges that he has no right to receive shares
        of stock or options to acquire stock of TIMET and all options and restricted
        shares of TIMET common stock that had been previously granted to Employee
        at any
        time have expired and are void. During the term hereof Employee shall also
        be
        entitled to receive a physical examination on an annual basis at the Company’s
        expense.

       

      6.  Reimbursement
        of Expenses.
        During
        the period Employee is employed hereunder, the Company shall reimburse Employee
        for reasonable and necessary out-of-pocket expenses advanced or expended
        by
        Employee or incurred by him for or on behalf of the Company in connection
        with
        his duties hereunder in accordance with the then-current policies of the
        Company
        upon presentation of appropriate vouchers or receipts as the Company may
        from
        time to time require.

       

      7.  Termination
        of Employment; Effect of Termination.

       

      (a)  The
        Company may terminate this Agreement and Employee’s employment at any time for
“cause.” For purposes hereof, “cause” shall mean: (i) Employee’s conviction of a
        felony or a crime (other than minor traffic offenses and misdemeanors not
        involving fraud, theft, embezzlement, moral turpitude or harm to persons
        or
        property) or (ii) Employee’s willful misconduct, gross negligence or
        refusal or failure to perform the duties assigned to him or as required by
        his
        position or by this Agreement. 

       

      (b)  In
        the
        event of the death or “disability” (as defined below) of Employee during the
        term of his employment or termination of Employee by the Company for “cause” (as
        defined above) or if Employee voluntarily resigns, the Company shall have
        no
        further liability hereunder other than the payment to Employee (or his estate,
        as the case may be) of: (i) accrued but unpaid Base Salary and bonus earned,
        if
        any, pursuant to the terms and conditions of the Profit Sharing Plan, in
        each
        case through the date of such termination, resignation, death or disability;
        and
        (ii) expenses incurred prior to such termination, resignation, death or
        disability that are subject to reimbursement under Section 6. 

       

      (c)  For
        purposes hereof, “disability” shall refer to Employee becoming physically or
        mentally disabled so that Employee is unable to perform his duties hereunder
        for
        a period of more than 90 consecutive days or more than 120 days in the aggregate
        during any consecutive 12 months. The disability of Employee will be determined
        by a medical doctor agreed upon in writing by Employee and the Company. If
        Employee and the Company cannot agree upon a medical doctor, each of them
        will
        select a medical doctor and the two medical doctors will select a third medical
        doctor who will determine whether Employee has a disability. The determination
        of the medical doctor selected under this Section 7(c) will be binding on
        the parties. Employee shall submit to reasonable examinations by the medical
        doctor making the determination of disability, and the other specialists
        designated by such medical doctor, and Employee hereby authorizes the disclosure
        and release to the Company of such determination and all supporting medical
        records. The Company shall be responsible for the payment of any medical
        fees
        and expenses incurred at the Company’s request in connection with the
        determination of whether or not Employee is disabled.

       

      (d) In
        the
        event of the Company’s termination of Employee without cause, or upon
        non-renewal of this Agreement by the Company prior to the termination of
        this
        Agreement on the fifth anniversary following the date of this Agreement,
        or upon
        a Change in Control (as defined below) of TIMET, Employee shall be entitled
        in
        any such case to receive as severance twelve (12) months of his then current
        Base Salary to be paid in semi-monthly installments over the twelve months
        following such termination. As used herein, a Change in Control of TIMET
        shall
        mean if any time during the term hereof the Simmons Holders (as defined below)
        shall cease to own or control at least 25% of TIMET’s issued and outstanding
        voting securities. “Simmons
        Holders”
        means
        (a) Harold C. Simmons (“Simmons”), (b) the spouse of Simmons (“Simmons Spouse”),
        (c) any trust established primarily for the benefit of Simmons or members
        of his
        family (including his spouse and/or his descendants (whether natural or
        adopted)) or both (such trusts, collectively, the “Simmons Trusts,” and such
        individuals, collectively, the “Simmons Trusts Beneficiaries”), (d) any trustee
        of the Simmons Trusts (such individuals, collectively, the “Simmons Trustees”),
        (e) any person controlled in the aggregate by any one or more of Simmons,
        Simmons Spouse, the Simmons Trusts, the Simmons Trusts Beneficiaries, the
        Simmons Trustees, Tremont LLC, Valhi, Inc., Valhi Holding Company, the Harold
        Simmons Foundation, the Simmons Family Foundation, and The Combined Master
        Retirement Trust (collectively, the “Simmons Associates” and together with
        Simmons, Simmons Spouse, the Simmons Trusts, the Simmons Trusts Beneficiaries,
        and the Simmons Trustees, the “Simmons Group”), (f) any managing director,
        general partner, director, limited partner, principal, officer, or employee
        of
        any of the Simmons Group, any employee benefit plan or pension fund of any
        of
        the Simmons Group, and any heirs, executors, administrators, testamentary
        trustees, legatees, or beneficiaries of any of the Simmons Group, or (g)
        a trust
        or custodianship, to the extent that the beneficiaries of which, or a
        corporation or partnership, the stockholders or general or limited partners
        of
        which, include only the Simmons Group, their respective spouses and former
        spouses and ancestors or lineal descendants (by blood or adoption). For purposes
        of this definition, the term “control” (including the correlative meanings, the
        terms “controlled by” and “under common control with”), as used with respect to
        any person shall mean the possession, directly or indirectly, of the power
        to
        direct or cause the direction of the management and policies of such person,
        whether through the ownership of voting securities, by contract, or
        otherwise.

      

      (e) Sections
        8, 9, 10 and 11 of this Agreement shall survive according to their terms
        any
        termination or expiration of this Agreement.

       

      8.  Non-Competition;
        Non-Interference.

       

      (a)  Employee
        agrees that he shall not in the United States or Europe, at any time during
        his
        employment by the Company and for a period equal to one (1) year following
        the
        termination of Employee’s employment with the Company, directly or indirectly,
        engage in, represent in any way, or be connected with, any titanium or specialty
        metals business competing with TIMET. For purposes of this Section 8, the
        phrase
“directly or indirectly engage in” shall include having a direct or indirect
        ownership interest (other than ownership of less than 5% of the outstanding
        voting securities of a business that is registered under Section 12 of the
        Securities Exchange Act of 1934, as amended) in any company or entity that
        engages in the business in question.

       

      (b)  Employee
        agrees that, at any time during his employment by the Company and for a period
        of
        one (1)
        year following the termination of Employee’s employment with the
        Company,
        he will
        not:

       

      (i)  Either
        directly or indirectly, seek to influence any of the Company’s employees to
        leave the Company’s employment; or 

       

      (ii)  Contact
        any person, business or entity that is a customer of TIMET as of the date
        of
        termination of Employee’s employment by the Company, or with whom Employee had
        contact during, and by reason of, Employee’s employment with the Company, for
        the purpose of developing, marketing or selling titanium or
        specialty metals
        products or services to such customers in competition with TIMET.

       

      (c)  Employee
        declares that the foregoing limitations are reasonable and necessary to protect
        the business of the Company and its affiliates. If any portion of the
        restrictions set forth in this Section 8 should, for any reason whatsoever,
        be
        declared invalid by a court of competent jurisdiction, the validity or
        enforceability of the remainder of such restrictions shall not thereby be
        adversely affected, but rather such court shall reform the provision deemed
        invalid so that it shall be as near to the terms of this Agreement as possible
        and still remain enforceable under applicable law.

       

      9.  Non-Disclosure
        of Confidential Information.
        Employee
        agrees that he shall not, during the term of his employment with the Company,
        and for three years thereafter, directly or indirectly, in any individual
        or
        representative capacity whatsoever, use for his own benefit or otherwise,
        or
        communicate to, divulge or disclose to, or use to the benefit of any person,
        firm, association, corporation or entity in any manner whatsoever, any
        confidential information of any kind, nature or description concerning any
        matter affecting or relating to the TIMET Business, including, without
        limitation: (i) the names of any of the prior or present clients, customers
        or
        accounts of TIMET; (ii) the prices for which TIMET obtains or has obtained,
        or
        at which it sells or has sold, its properties, products, services or raw
        materials; (iii) the names of the personnel of TIMET; (iv) the financial
        affairs
        of TIMET; (v) the methods and manner of operation of TIMET, including TIMET’s
        manufacturing plants, operations and third-party service providers; (iv)
        confidential or proprietary data belonging to, or developed by TIMET on behalf
        of, a TIMET customer; or (vii) the plans, trade secrets, technology, techniques,
        methods, marketing programs, confidential data or other proprietary information
        or intellectual property of any kind, nature or description of TIMET. Upon
        termination of his employment with the Company for any reason, Employee will
        promptly return all such information in his possession or under his control
        to
        the Company, together with all copies thereof. Without regard to whether
        any or
        all of the foregoing matters would be deemed confidential, material or
        important, the parties hereto stipulate that as between them, the same are
        important, material and confidential and materially affect the Company’s
        effective and successful conduct of its business. The foregoing restrictions
        and
        obligations under this Section 9 shall not apply to: (a) any information
        that is or becomes generally available to the public, other than as a result
        of
        a disclosure by Employee in violation of this Agreement; (b) information
        known
        by Employee prior to the time of disclosure by the Company; and (c) information
        disclosed in good faith to Employee by a third person legally entitled, to
        the
        best of Employee’s knowledge, to disclose the same.

       

      10.  Proprietary
        Property.
        Employee
        hereby discloses and assigns to TIMET Employee’s interest in any and all
        inventions, designs, trade secrets, processes, techniques, methods, discoveries,
        concepts, copyrightable or patentable works, or improvements (hereinafter
        collectively called “developments”), including all rights to obtain, register,
        perfect or enforce TIMET’s proprietary interest in such developments, that
        Employee discovers, conceives, and/or develops, either individually or jointly
        with others during the course of his employment with TIMET (including any
        and
        all developments based wholly or in part upon ideas conceived during Employee’s
        employment with TIMET), or while using TIMET’s data, facilities and/or materials
        provided in either such event the subject matter is one within TIMET’s field of
        interest. Employee’s obligation under this Section applies without regard to
        whether any idea for a development occurs to him during or after normal business
        hours. Employee further agrees that all developments as described herein
        are
        TIMET’s proprietary property in which TIMET has the exclusive legal rights,
        whether or not patent applications are filed thereon. “Subject matter within
        TIMET’s field of interest” includes any subject that TIMET reasonably considers
        relevant to any of its past, current or future projects or
        operations.

       

      11.  Right
        to Injunction.
        Employee
        recognizes, acknowledges and agrees that the restrictions contained in this
        Agreement are a reasonable and necessary protection of the legitimate interests
        of the Company. Employee further acknowledges and agrees that a violation
        or
        attempted violation on his part of any agreement in Section 8, 9 or 10 above
        would result in serious harm to the Company, that such harm would be
        irreparable, would be difficult to ascertain and for which there would be
        no
        adequate remedy at law. Accordingly, Employee agrees that, if Employee violates
        or attempts to violate on such Section of this Agreement, the Company shall
        be
        entitled as a matter of right to an injunction out of any court of competent
        jurisdiction, restraining any further violation of such agreements by him
        or his
        employees, partners or agents. Any exercise by the Company of its rights
        pursuant to this Section 11 shall be cumulative and in addition to any other
        remedies to which the Company may be entitled.

       

      12.  Miscellaneous.

       

      (a)  Amendment
        or Alteration.
        No
        amendment or alteration of the terms of this Agreement shall be valid unless
        made in writing and signed by both of the parties hereto.

       

      (b)  Governing
        Law.
        This Agreement shall be governed in all respects by the laws of the State
        of
        Texas, without application of the conflict of laws principles
        thereof.

       

      (c)  Severability.
        The
        holding of any provision of this Agreement to be illegal, invalid or
        unenforceable by a court of competent jurisdiction shall not affect any other
        provision of this Agreement, which shall remain in full force and
        effect.

       

      (d)  Notices.
        Any
        notice or other communication that one party desires to give to the other
        under
        this Agreement shall be in writing, and shall be deemed effectively given
        upon
        (i) personal delivery; (ii) transmission by facsimile; (iii) the third
        business day following deposit in any United States mail box, by registered
        or
        certified mail, postage prepaid, addressed to the other party at the address
        set
        forth below or at such other address as a party may designate by fifteen
        (15)
        days’ advance notice to the other party pursuant to the provisions of this
        Section; or (iv) delivery by any express service which results in personal
        delivery to the other party.

       

      If
        to
        Employee:

      

      Dr.
        Charles H. Entrekin

      150
        Foxgayte Lane

      Pottstown,
        PA 19465

      Facsimile
        No.: 610-469-0144

      

      

      If
        to the
        Company:

      

      Titanium
        Metals Corporation

      Three
        Lincoln Center

      5430
        LBJ
        Freeway

      Suite
        1700

      Dallas,
        Texas 75240

      Attention:
        Chief Executive Officer

      Facsimile
        No. 972-448-1445

      

      

      with
        a
        copy to: 

      

      Titanium
        Metals Corporation

      Three
        Lincoln Center

      5430
        LBJ
        Freeway

      Suite
        1700

      Dallas,
        Texas 75240

      Attention:
        General Counsel

      Facsimile
        No. 972-448-1445

      

      (e)  Waiver
        or Breach.
        It is
        agreed that a waiver by any party of a breach of any provision of this Agreement
        shall not operate or be construed as a waiver of any subsequent breach by
        that
        same party.

       

      (f)  Entire
        Agreement and Binding Effect.
        This
        Agreement contains the entire agreement of the parties with respect to the
        subject matter hereof and, except as otherwise specifically provided herein,
        shall be binding upon and inure to the benefit of the parties hereto and
        their
        respective legal representatives, heirs, distributees, successors and assigns.
        This Agreement supersedes and preempts any prior understandings, agreements
        or
        representations between the parties, written or oral, which may have been
        related to the subject matter hereof in any way.

       

      (g)  Assignment.
        This
        Agreement may not be transferred or assigned by Employee. Subject to the
        provisions contained in Section 7(d) of this Agreement, the Company may transfer
        or assign this Agreement to a company or firm that succeeds to the business
        of
        the Company.

       

      (h)  Headings.
        The
        Section headings appearing in this Agreement are for purposes of easy reference
        and shall not be considered a part of this Agreement or in any way modify,
        amend
        or affect its provisions.

       

      (i)  Counterparts.
        This
        Agreement may be executed in any number of counterparts, each of which shall
        be
        an original, but all of which together shall constitute one instrument. This
        Agreement may be executed by facsimile signature which shall be valid for
        all
        purposes.

       

      (j)  Attorneys’
        Fees.
        The
        prevailing party in any dispute arising under this Agreement shall be entitled
        to recover such party’s reasonable expenses, including attorneys’ fees, incurred
        in connection therewith.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

       

      

      TITANIUM
        HEARTH TECHNOLOGIES, INC.

      

      

       

      

       

      By: /s/Steven
        L. Watson        

       

      Name: Steven
        L. Watson        

       

      Title: Chief
        Executive Officer      

      

      

      

      /s/Charles
        H. Entrekin         

      Charles
        H. Entrekin, EmployeeTIMET Exhibit 10.21

    

      EXHIBIT
        10.21

      

      ACCESS
        AND SECURITY AGREEMENT

      

      This
        ACCESS AND SECURITY AGREEMENT (this “Agreement”)
        is
        made on November 17, 2006 by and between Haynes International, Inc., a Delaware
        corporation (“Haynes”),
        and
        Titanium Metals Corporation, a Delaware corporation (“TIMET”).

       

      WHEREAS,
        Haynes has excess capacity at its 4-High “Steckel” rolling mill located at its
        plant in Kokomo, Indiana and desires to monetize such excess
        capacity;

       

      WHEREAS,
        in furtherance of its continuing operations and business objectives, TIMET
        requires the services capable of being provided by Haynes and the use of
        the
        aforementioned 4-High “Steckel” rolling mill, and requires such services in such
        capacities, for such duration and on such demand as, for all practical purposes,
        can only be provided by Haynes and the use of the aforementioned 4-High
“Steckel” rolling mill;

       

      WHEREAS,
        in furtherance of its desire to utilize its excess capacity of the 4-High
        Mill,
        Haynes wishes to make to TIMET the capacity commitments described herein
        and to
        agree to supply TIMET with Titanium Conversion Services, as defined in and
        pursuant to the terms and conditions of that certain Conversion Services
        Agreement of even date herewith by and between TIMET and Haynes, the form
        of
        which is attached hereto as Exhibit A (the “Conversion
        Agreement”);

       

      WHEREAS,
        in order for Haynes to make the commitment and agreements set forth in the
        Conversion Agreement, Haynes must reserve and not fully utilize the capacity
        of
        the 4-High Mill, and Haynes is willing and able to do so only if such excess
        capacity is monetized such that Haynes does not suffer economic harm by
        reserving such excess capacity for TIMET;

       

      WHEREAS,
        TIMET has agreed to monetize such excess capacity by paying the Fee (as defined
        below) to Haynes in exchange for Haynes' execution of the Conversion Agreement
        and performance thereunder;

       

      WHEREAS,
        Haynes acknowledges that any delay in the performance of the Titanium Conversion
        Services or any default by Haynes under the Transaction Documents (as defined
        below) may cause TIMET irreparable harm and, therefore, Haynes has agreed
        to
        provide to TIMET the rights and protections set forth in the Transaction
        Documents; and

       

      WHEREAS,
        TIMET acknowledges that Haynes cannot reserve the excess capacity of the
        4-High
        Mill for the benefit of TIMET without TIMET’s monetization of such excess
        capacity without causing Haynes irreparable harm, and that any failure of
        such
        monetization, whether by reason of TIMET's default under the Transaction
        Documents or otherwise, may cause Haynes irreparable harm.

       

      NOW,
        THEREFORE, in consideration of the foregoing, the agreements, covenants,
        representations and warranties of the parties set forth herein and in the
        other
        Transaction Documents, and other good and valuable consideration, the receipt
        and sufficiency of which are acknowledged, Haynes and TIMET agree as
        follows:

       

      1.  Defined
        Terms.
        The
        following terms have the indicated meanings, unless the context otherwise
        requires:

       

      (a)  “Acceleration
        Event”
shall
        mean the exercise by TIMET of its rights under Section 5.3(a) of the Conversion
        Agreement.

       

      (b)  “Access
        Period”
has
        the
        meaning set forth in Section 4(a).

       

      (c)  “Additional
        Contracts”
means
        all Contracts that relate or pertain both to (i) the Mill, the Equipment,
        the
        Intellectual Property or the performance of the Titanium Conversion Services
        and
        (ii) other assets or operations of Haynes.

       

      (d)  “Agreement”
has
        the
        meaning set forth in the introduction hereto.

       

      (e)  “Bankruptcy
        Proceeding”
means
        any case, action, proceeding, petition or filing, voluntary or involuntary,
        under the Federal Bankruptcy Code or any similar state or federal law now
        or
        hereafter in effect pertaining to bankruptcy, reorganization, insolvency,
        composition, restructuring, dissolution, liquidation, receivership,
        custodianship, or adjustment of debts.

       

      (f)  “Change
        in Control”
has
        the
        meaning set forth in the Conversion Agreement.

       

      (g)  “Claims”
has
        the
        meaning set forth in Section 4(b)(ii).

       

      (h)  “Code”
means
        the Uniform Commercial Code as in effect in the State of Indiana as of the
        date
        of this Agreement.

       

      (i)  “Collateral”
has
        the
        meaning set forth in Section 3(a).

       

      (j)  “Conversion
        Agreement”
has
        the
        meaning set forth in the recitals hereto.

       

      (k)  “Contract
        Rights”
means
        all rights of Haynes (including to payment) arising under each Contract that
        relate or pertain only to the Mill, the Equipment, the Intellectual Property
        for
        Titanium Conversion Services or the performance of the Titanium Conversion
        Services.

       

      (l)  “Contracts”
means
        all service agreements (including utility services and supply agreements),
        permits and licenses, operating agreements, maintenance, training, operational
        and procedural manuals, leases and contract rights, choses in action or causes
        of action or claims in each case as to all of the foregoing with respect
        to the
        Equipment, the Mill, the Intellectual Property or the performance of Titanium
        Conversion Services, documents which evidence rights to Equipment, Intellectual
        Property or any portion of the Mill, guaranty or warranty claims with respect
        to
        Equipment, Intellectual Property or the Mill, and the Proceeds of all of
        the
        foregoing, other than the Transaction Documents. 

       

      (m)  “Debt
        Obligations”
means,
        collectively, (i) any outstanding principal balance under the Option Note
        and any accrued and unpaid interest thereon, if any; (ii) the entire
        unearned portion of the Fee; (iii) the amount of any Liquidated Damages (as
        defined in the Conversion Agreement); (iv) the amount of any Termination
        Fee (as
        defined in the Conversion Agreement); (v) the amount of any Non-Compete
        Amendment Fee (as defined in the Conversion Agreement); and (vi) any
        amounts owed by Haynes under Section 5.1 of the Conversion
        Agreement.

       

      (n)  “Default”
means
        any of the following events:

       

      (i)  If
        TIMET
        fails at any time to have a legal, valid, binding and enforceable first priority
        lien on the Collateral or any portion thereof that is caused by reason of
        an act
        or omission of Haynes (provided, however that a Permitted Encumbrance will
        not
        cause or be deemed to cause a default hereunder);

       

      (ii)  Violation
        of any of the terms, obligations, covenants or conditions set forth in Sections
        11(b) or (c); or

       

      (iii)  The
        failure of Haynes to pay when due any principal of or other amount due on
        the
        Debt Obligations, which failure continues for five (5) days after the date
        such
        payment becomes due;

       

      (o)  “Equipment”
means
        all of the equipment located at the Mill of any kind, nature and description,
        whether affixed to real property or not, as well as all additions to,
        substitutions for, replacements of or accessions to any of the foregoing
        items
        and all attachments, components, parts (including spare parts), and accessories
        whether installed thereon or affixed thereto in each case to the extent used
        in
        or related to the performance of the Titanium Conversion Services, including
        but
        not limited to the equipment listed on Exhibit B
        attached
        hereto, but excluding any equipment that may be temporarily located at the
        Mill
        such as forklifts, golf carts, hand tools and other portable equipment that
        is
        used in connection with the Mill and other assets of Haynes.

       

      (p)  “Fee”
has
        the
        meaning set forth in Section 2(c).

       

      (q)  “Haynes”
has
        the
        meaning set forth in the introduction hereto.

       

      (r)  “Haynes
        Bankruptcy Event”
means
        any of the following events: (i) Haynes consents to the filing of, or
        commences or consents to the commencement of, any Bankruptcy Proceeding;
        (ii) any Bankruptcy Proceeding shall have been filed against Haynes and the
        same is not withdrawn, dismissed, canceled or terminated within ninety (90)
        days
        of such filing; (iii) Haynes is adjudicated bankrupt or insolvent or a
        petition for reorganization of it is granted; (iv) a receiver, liquidator
        or trustee of it or of any of Haynes’ properties shall be appointed;
        (v) Haynes shall make an assignment for the benefit of its creditors or
        shall admit in writing the inability to pay its debts generally as they become
        due; or (vi) Haynes otherwise institutes or causes to be instituted any
        proceeding for its termination or dissolution.

       

      (s)  “Intellectual
        Property”
means
        all now existing or hereafter acquired patents, trademarks, copyrights,
        inventions, licenses, discoveries, processes, know-how, techniques, trade
        secrets, designs, specifications and the like (regardless of whether such
        items
        are now patented or registered, or registerable, or patentable in the future),
        and all technical, engineering, or other information and knowledge, production
        data and drawings, in each case to the extent used in, necessary for or related
        to the operation of the Mill and the Equipment or the performance of Titanium
        Conversion Services, including without limitation, all items, rights and
        property defined as Intellectual Property under 11 U.S.C. Section 101, as
        amended from time to time.

       

      (t)  “Intellectual
        Property for Titanium Conversion Services”
means
        all Intellectual Property that relates or pertains only to the Mill, the
        Equipment or the performance of the Titanium Conversion Services.

       

      (u)  “License”
has
        the
        meaning set forth in Section 5.

       

      (v)  “Mill”
means
        the 4-High “Steckel” rolling mill located in Building R-55 on the Real Estate,
        and all licenses, easements and appurtenances relating thereto, wherever
        located
        on the Real Estate, and any easements necessary for access thereto or necessary
        to deliver, store or ship materials thereto, and any fixtures or equipment
        located at the Real Estate which are primarily related to, and/or integral
        or
        primarily used in connection with the operation of the Mill, consisting of
        all
        pumps, pipes, plumbing, cleaning, call and sprinkler systems, fire extinguishing
        apparatuses and equipment, heating, ventilating, plumbing, incinerating,
        electrical, air conditioning and air cooling equipment and systems, pollution
        control equipment, security systems disposals, water, gas, electrical, storm
        and
        sanitary sewer facilities, utility lines and equipment, all water tanks,
        water
        supply, water power sites, fuel stations, fuel tanks, fuel supply, and all
        other
        structures, together with all accessions, appurtenances, additions,
        replacements, betterments and substitutions for any of the
        foregoing.

       

      (w)  “Obligations”
means
        the Debt Obligations together with Haynes’ obligations under the Transaction
        Documents.

       

      (x)  “Operating
        Assets”
means
        the Mill, the Contract Rights, the Equipment, the Intellectual Property for
        Titanium Conversion Services, the Real Estate and all Proceeds
        thereof.

       

      (y)  “Option”
has
        the
        meaning set forth in the Conversion Agreement.

       

      (z)  “Option
        Note”
has
        the
        meaning set forth in the Conversion Agreement.

       

      (aa)  “Permitted
        Encumbrances”
        means:

       

      (i)  Liens
        in
        favor of TIMET;

       

      (ii)  Encumbrances
        consisting of minor easements, zoning restrictions, or other restrictions
        on the
        use of real property that do not (individually or in the aggregate) materially
        affect the value of the Operating Assets or materially impair the ability
        of
        Haynes to use the Operating Assets, and none of which is violated in any
        material respect by existing or proposed structures or land use;

       

      (iii)  Liens
        for
        taxes, assessments, or other governmental charges which are not delinquent
        or
        which are being contested in good faith and for which adequate reserves have
        been established; and

       

      (iv)  Liens
        of
        mechanics, materialmen, warehousemen, carriers, or other similar statutory
        liens
        securing obligations that are not yet due and are incurred in the ordinary
        course of business; and liens resulting from good faith deposits to secure
        payments of workers’ compensation or other social security programs or to secure
        the performance of tenders, statutory obligations, surety and appeal bonds,
        bids, or contracts (other than for payment of indebtedness), or leases of
        any
        Operating Assets made in the ordinary course of business.

       

      (bb)  “Person”
means
        any individual, corporation, limited or general partnership, limited liability
        company, joint venture, association, joint stock company, trust, unincorporated
        organization, government authority or other entity.

       

      (cc)  “Proceeds”
shall
        have the meaning provided it under Section 9-102(a)(65) of the Code and,
        in any
        event, shall include, but not be limited to: (i) any and all proceeds of
        any
        insurance, indemnity, warranty, or guaranty payable to Haynes from time to
        time
        with respect to any of the Collateral; (ii) any and all payments (in any
        form
        whatsoever) made or due and payable to Haynes from time to time in connection
        with any requisition, confiscation, condemnation, seizure, or forfeiture
        of all
        or any part of the Collateral by any governmental body, authority, bureau,
        or
        agency (or any Person acting under color of governmental authority): and
        (iii)
        any and all other amounts from time to time paid or payable under or in
        connection with any of the Collateral.

       

      (dd)  “Real
        Estate”
means
        the real property on which Building R-55 at Haynes’ operations on the south side
        of Defenbaugh Street in Kokomo, Indiana is located including leasehold
        interests, together with the building and all other improvements located
        thereon, the legal description for which is set forth on Exhibit C
        hereto,
        and all licenses, easements and appurtenances relating thereto, wherever
        located
        on such real property, and any fixtures or equipment located at the Real
        Estate
        which are primarily related to, and/or integral or primarily used in connection
        with the operation of the Real Estate, consisting of all pumps, pipes, plumbing,
        cleaning, call and sprinkler systems, fire extinguishing apparatuses and
        equipment, heating, ventilating, plumbing, incinerating, electrical, air
        conditioning and air cooling equipment and systems, pollution control equipment,
        security systems disposals, water, gas, electrical, storm and sanitary sewer
        facilities, utility lines and equipment, all water tanks, water supply, water
        power sites, fuel stations, fuel tanks, fuel supply, and all other structures,
        together with all accessions, appurtenances, additions, replacements,
        betterments and substitutions for any of the foregoing, and any easements
        necessary for access thereto or to deliver, store or ship materials
        thereto.

       

      (ee)  “Right
        of Access”
has
        the
        meaning set forth in Section 4(a).

       

      (ff)  “Secured
        Facility Event”
means
        that a Secured Lender has declared Haynes to be in default of Haynes’
obligations to such Secured Lender, the Secured Lender has accelerated all
        such
        obligations to such Secured Lender, and Haynes has (i) failed to cure such
        default such that such obligations are no longer accelerated, or (ii) provide
        adequate assurance reasonably acceptable to TIMET of Haynes' continuing ability
        to perform under the terms of the Transaction Documents.

       

      (gg)  “Secured
        Lender”
means
        Wachovia Capital Finance Corporation (Central), an Illinois corporation,
        as
        agent, for itself and the parties from time to time to the loan agreement
        as
        lenders, collectively, together with their respective successors and assigns,
        herein, or any lender or lenders from time to time hereafter holding instruments
        representing Haynes’ indebtedness, the obligations under which are secured by a
        pledge of substantially all of Haynes’ assets, other than the indebtedness
        created by the Conversion Agreement.

       

      (hh)  “Titanium
        Conversion Services”
has
        the
        meaning set forth in the Conversion Agreement.

       

      (ii)  “TIMET”
has
        the
        meaning set forth in the introduction hereto.

       

      (jj)  “TIMET
        Bankruptcy Event”
means
        any of the following events: (i) TIMET consents to the filing of, or
        commences or consents to the commencement of, any Bankruptcy Proceeding;
        (ii) any Bankruptcy Proceeding shall have been filed against TIMET and the
        same is not withdrawn, dismissed, canceled or terminated within ninety (90)
        days
        of such filing; (iii) TIMET is adjudicated bankrupt or insolvent or a
        petition for reorganization of it is granted; (iv) a receiver, liquidator
        or trustee of it or of any of TIMET’s properties shall be appointed;
        (v) TIMET shall make an assignment for the benefit of its creditors or
        shall admit in writing the inability to pay its debts generally as they become
        due; or (vi) TIMET otherwise institutes or causes to be instituted any
        proceeding for its termination or dissolution.

       

      (kk)  “Transaction
        Documents”
means,
        collectively, the Conversion Agreement, the Option Note, this Agreement and
        any
        other document or instrument delivered in connection herewith or
        therewith.

       

      2.  Capacity
        Commitments, Termination of Standstill Agreement, Fee and Option
        Note.

       

      (a)  Capacity
        Commitments.
        Haynes
        agrees: (i) to reserve for the benefit of and dedicate to TIMET or its
        designee(s) adequate capacity at the Mill and the other Operating Assets
        necessary to provide the Titanium Conversion Services in accordance with
        and
        subject to all terms of the Conversion Agreement, including
        the Maximum Monthly Volume and the Maximum Annual Volume
        (as each
        such term is defined in the Conversion Agreement); and (ii) not to engage
        in any activity or transaction that is prohibited by Section 11.1 of the
        Conversion Agreement (as such term may be amended by the Non-Compete Amendment
        (as defined in the Conversion Agreement)).

       

      (b)  Termination
        of Standstill Agreement.
        Effective as of the date hereof, the provisions of the carryover paragraph
        on
        pages 3 and 4 of the Confidentiality Agreement, dated November 21, 2005,
        between
        TIMET and Houlihan Lokey Howard & Zukin Capital, Inc. are hereby terminated
        and of no further force or effect.

       

      (c)  Fee.
        As
        consideration for (i) the capacity reservations and commitments described
        in
        Section 2(a) above and in the Conversion Agreement, (ii) the termination of
        the standstill provisions as described in Section 2(b) above and (iii) the
        Option to order additional Conversion Services granted to TIMET pursuant
        to
        Section 2.1(b) of the Conversion Agreement, concurrently herewith, TIMET
        agrees to pay to Haynes an advance fee of $50,000,000 (the “Fee”)
        in
        immediately payable U.S. funds in accordance with the wiring instructions
        provided by Haynes. The Fee shall be deemed earned by Haynes during the term
        of
        the Conversion Agreement in equal amounts on the first twenty (20) anniversaries
        of the date hereof. Upon being deemed earned as set forth in the preceding
        sentence, the earned portion of the Fee shall be nonrefundable to TIMET.
        In the
        event that a Haynes Successor (as defined in the Conversion Agreement) exercises
        the option with respect to the Non-Compete Amendment (as defined in the
        Conversion Agreement), the unearned portion of the Fee shall be reduced by
        the
        Non-Compete Amendment Fee (as defined in the Conversion Agreement), and the
        amortization of the remaining unearned portion of the Fee shall be adjusted
        based upon the remaining anniversaries of this Agreement. Notwithstanding
        the
        foregoing, the Fee shall not be deemed earned by Haynes (i) from and after
        the
        time that TIMET has exercised any of its rights under Section 8(b) or (ii)
        during (but not before or after) an Access Period if for any reason TIMET
        does
        not have in all material respects all of its rights set forth in Section
        4.
        Haynes shall be required to repay the unearned portion of the Fee only in
        accordance with the requirements of the Transaction Documents. 

       

      (d)  Option
        Note.
        Upon
        the exercise of the Option under the Conversion Agreement, under the terms
        and
        conditions set forth in the Conversion Agreement, Haynes will execute the
        Option
        Note in the form attached to the Conversion Agreement as Exhibit B.

       

      3.  Grant
        of Lien and Security Interests.

       

      (a)  First
        Priority Lien Interest.
        As
        security for the Obligations, Haynes hereby grants to TIMET a continuing
        first
        priority security interest in the Operating Assets, whether now owned or
        hereafter acquired by Haynes, or in which Haynes now has or at any time in
        the
        future may acquire any right, title or interest (the “Collateral”).
        On or
        prior to the date hereof, (i) any applicable loan documents have been amended
        to
        reflect the first priority of the lien created hereunder and are otherwise
        in
        the form approved by TIMET, and (ii) any liens superior to the first priority
        lien created hereunder have been released in forms reasonably acceptable
        to
        TIMET, and such documents will be delivered to TIMET within three (3) business
        day from the date hereof.

       

      (b)  Financing
        Statements.
        Haynes
        hereby authorizes TIMET to file one or more financing statements, and amendments
        thereto, relating to the Collateral.

       

      (c)  Non-disturbance.
        On or
        prior to the date hereof, Haynes and any mortgagee or other party holding
        an
        interest in the Real Estate shall execute a non-disturbance agreement or
        similar
        agreement in favor of TIMET in form reasonably acceptable to TIMET, and such
        documents will be delivered to TIMET within three (3) business day from the
        date
        hereof.

       

      4.  Right
        of Access.

       

      (a)  General.
        Upon
        the occurrence of a Haynes Bankruptcy Event or a Secured Facility Event,
        TIMET
        or its agreed-upon designee(s) shall have a right, but not the obligation,
        to
        use and occupy the Operating Assets to perform any or all of the Titanium
        Conversion Services (the “Right
        of Access”),
        subject to the Maximum Monthly Volume and the Maximum Annual Volume, for
        a
        period commencing upon the Haynes Bankruptcy Event or Secured Facility Event,
        as
        the case may be, and ending at the earlier of (i) the expiration of the term
        of
        the Conversion Agreement or (ii) the termination of the Right of Access pursuant
        to Section 4(d), subject to reinstatement as set forth therein (the
“Access
        Period”).
        TIMET
        may invoke the Right of Access by delivering written notice to Haynes indicating
        TIMET’s intention to invoke the Right of Access. TIMET shall have no right to
        sell, transfer, or dispose of the Operating Assets as part of the Right of
        Access. 

       

      (b)  TIMET’s
        Obligations.
        If
        TIMET invokes the Right of Access for itself or its designee(s), TIMET and
        its
        designee shall:

       

      (i)  Use
        reasonable care in the custody and preservation of the Operating
        Assets;

       

      (ii)  Indemnify,
        defend and hold Haynes and its officers, directors, employees and agents
        harmless from any and all costs, expenses (including reasonable attorneys’
fees), losses, damages, liabilities or claims (collectively, “Claims”)
        with
        respect to injury to or death of persons occurring on the Real Estate to
        the
        extent arising out of the willful misconduct or gross negligence of TIMET
        or its
        officers, directors, employees or agents to the extent such Claims arise
        or
        accrue during an Access Period; and

       

      (iii)  Subject
        to TIMET’s or its designee’s right to use and occupy the Operating Assets during
        an Access Period, afford Haynes any access requested by Haynes to the Operating
        Assets provided that such access does not in any material way interfere with
        the
        performance of the Titanium Conversion Services.

       

      (c)  If
        TIMET
        invokes its Right of Access for itself or its designee(s):

       

      (i)  Haynes
        shall use commercially-reasonable efforts to continue to employ those of
        its
        employees that TIMET determines are necessary or appropriate to perform the
        Titanium Conversion Services;

       

      (ii)  If
        TIMET
        is required to retain personnel to perform Titanium Conversion Services or
        incurs any other costs or expenses to perform Haynes’ obligations under the
        Conversion Agreement, all such personnel and other costs and expenses shall
        be
        credited against the payments due to Haynes under the Conversion Agreement;
        provided, however, that such credits in a single week may not exceed the
        weekly
        average cost to Haynes in the prior fiscal year for similar personnel and
        cost
        and expenses, and any such excess shall be the sole responsibility of
        TIMET.

       

      (iii)  Haynes
        shall indemnify, defend and hold TIMET, its designee(s) and their respective
        officers, directors, employees and agents harmless from any and all Claims
        to
        the extent such Claims (1) arise or accrue prior to the commencement of an
        Access Period or (2) arise or accrue during an Access Period and are not
        covered
        by Section 4(b)(ii).

       

      (d)  Right
        to Terminate.
        TIMET
        shall have the absolute right to terminate the Right of Access upon twenty
        (20)
        days’ written notice to Haynes. Haynes shall have the right to cure a Haynes
        Bankruptcy Event or Secured Facility Event the occurrence of which gave rise
        to
        the Right of Access. Upon the completion of such cure and Haynes’ providing
        notice thereof to TIMET along with evidence that such Haynes Bankruptcy Event
        or
        Secured Facility Event, as the case may be, has been cured in form reasonably
        satisfactory to TIMET, the Right of Access shall be deemed terminated.
        Notwithstanding the foregoing, TIMET shall have the absolute right to reinvoke
        the Right of Access at any time after the occurrence of a subsequent Haynes
        Bankruptcy Event or Secured Facility Event giving rise to the Right of Access
        by
        delivering written notice to Haynes indicating TIMET’s intention to reinvoke the
        Right of Access.

       

      (e)  Irreparable
        Harm; Limitation of Notice.
        HAYNES
        ACKNOWLEDGE THAT TIMET MAY SUFFER IRREPARABLE HARM IF TIMET INVOKES THE RIGHT
        OF
        ACCESS AND HAYNES FAILS TO COOPERATE WITH TIMET IN ALLOWING TIMET TO EXERCISE
        THE RIGHT OF ACCESS UNDER THIS AGREEMENT OR IF TIMET IS OTHERWISE PREVENTED
        FROM
        EXERCISING SUCH RIGHT. ACCORDINGLY, PROVIDED THAT HAYNES RECEIVES AT LEAST
        FORTY-EIGHT (48) HOURS’ ACTUAL NOTICE OF ANY REQUEST FOR HEARINGS IN CONNECTION
        WITH PROCEEDINGS INSTITUTED BY TIMET, HAYNES WAIVES, TO THE FULLEST EXTENT
        POSSIBLE UNDER APPLICABLE LAW, THE RIGHT TO NOTICE IN EXCESS OF FORTY-EIGHT
        (48)
        HOURS IN CONNECTION WITH ANY JUDICIAL PROCEEDINGS INSTITUTED BY TIMET TO
        ENFORCE
        THE RIGHT OF ACCESS.

       

      5.  License.
        Haynes
        hereby grants TIMET a non-exclusive worldwide, irrevocable, fully paid, and
        in
        the event TIMET exercises its rights under Section 8(b) hereof, fully
        transferable, right and license to use any Intellectual Property necessary
        or
        helpful for the performance of the Titanium Conversion Services for use by
        TIMET
        or a sublicensee (the “License”).
        TIMET’s right to use the License shall include the right to grant one or more
        third parties sublicenses for the performance of the Titanium Conversion
        Services, provided, however, that any sublicensee must satisfy the terms
        of this
        Agreement, including Section 15, and sublicensing will have no effect on
        TIMET’s obligations under this Agreement.

       

      (a)  Right
        to Use License.
        Although the License is being granted to TIMET as of the date set forth above,
        TIMET agrees that, except as set forth under Section 5(e) below, neither
        it nor
        its sublicensees will utilize the License unless TIMET invokes the Right
        to
        Access and then TIMET and its sublicensee will only use the License
        (i) during an Access Period and (ii) in connection with the
        performance of the Titanium Conversion Services using the Operating
        Assets.

       

      (b)  No
        Royalty.
        For all
        purposes, Haynes has been fully paid for the License and other rights granted
        to
        TIMET under this Agreement (except as otherwise provided in this Agreement)
        and
        no royalties, fees, payments, charges or other consideration shall be due
        from
        TIMET on account of the License or this Agreement or TIMET’s (or sublicensee’s)
        use of the License or other rights granted pursuant to this Agreement. The
        above
        is not intended to relieve TIMET in any way of payment obligations under
        the
        Conversion Agreement.

       

      (c)  Protection
        of Ownership.
        TIMET
        and its sublicensees, if any, shall treat and preserve the Intellectual Property
        in accordance with the same practices employed by TIMET to safeguard its
        own
        intellectual property against unauthorized use and disclosure and, except
        as set
        forth under Section 5(e) below, will only use such information, data and
        trade
        secrets during an Access Period in connection with producing the Titanium
        Conversion Services. The foregoing obligations of TIMET shall not be applicable
        to information that is now or becomes hereafter available to the public through
        no action, conduct, admission or fault of TIMET. Except as set forth under
        Section 5(e) below, without waiving any rights under the Conversion Agreement,
        which rights, if any, are expressly reserved, no such sub-licensees shall
        have
        any rights respecting the continued use of intellectual property upon
        termination of an Access Period. The provisions of this Section 5(c) shall
        survive termination of this Agreement.

       

      (d)  Sale
        of Intellectual Property.
        Nothing
        contained herein shall prevent Haynes from marketing and selling the
        Intellectual Property subject to all rights of TIMET granted under this
        Section 5.

       

      (e)  Transferability.
        In the
        event that TIMET exercises its rights under Section 8(b) hereof, TIMET
        shall be permitted to transfer the License in connection with any sale, transfer
        or other disposition of the Operating Assets. Each transferee of the License
        shall obtain all of TIMET’s rights to the License hereunder. Each transferee
        shall be required to use the License in connection with its use of the Operating
        Assets, and any further transfer or assignment of the License may occur only
        in
        connection with a further sale, transfer or other disposition of the Operating
        Assets.

       

      6.  Protection
        of Performance.
        TIMET
        shall have the unlimited right to, among other things, enter into discussions,
        negotiations, and agreements regarding the performance of the Titanium
        Conversion Services by any potential alternative supplier(s), including without
        limitation, any current or former agents, consultants, directors, employees,
        or
        officers of Haynes so long as such parties are not subject to restrictions
        under
        a noncompetition agreement.

       

      7.  Rights
        of TIMET; Limitations on TIMET’s Obligations.
        Unless
        TIMET exercises the Right of Access, in which case TIMET shall have the
        obligations as are expressly provided in this Agreement, except as provided
        by
        applicable law, TIMET shall not have any obligation or liability by reason
        of or
        arising out of this Agreement. In no event shall TIMET be required or obligated
        in any manner to perform or fulfill any of the obligations of Haynes under
        any
        of the Transaction Documents.

       

      8.  TIMET’s
        Remedies.

       

      (a)  Right
        of Access.
        Upon a
        Haynes Bankruptcy Event or a Secured Facility Event, TIMET may exercise the
        Right of Access only on the terms and conditions set forth of Section 4.
        Further, in connection with TIMET’s rights and remedies under this Agreement and
        the other Transaction Documents:

       

      (i)  Haynes
        waives any right it may have to require TIMET to foreclose its security
        interests and liens and/or reduce the Debt Obligations to a monetary
        sum;

       

      (ii)  If
        TIMET
        exercises the Right of Access, TIMET’s use and occupancy of the Operating Assets
        will not be deemed to be acceptance of such assets in satisfaction of the
        Debt
        Obligations; and

       

      (iii)  Except
        as
        otherwise provided herein, all of TIMET’s rights and remedies under this
        Agreement are cumulative and not exclusive of any rights and remedies under
        any
        other agreement or under applicable law; provided, however, that if TIMET
        exercises its rights under Section 8(b) hereof, it shall no longer be permitted
        to exercise the, or must terminate any current, Right of Access.

       

      (b)  Right
        to Repayment of the Debt Obligations and Foreclose on the
        Collateral.

       

      (i)  In
        addition to the remedies set forth in Section 8(a), upon a Default or an
        Acceleration Event, TIMET, at TIMET’s option, may declare due and payable the
        Debt Obligations, without notice, demand or presentment, all of which are
        hereby
        waived, and upon such declaration, the same shall become and shall be
        immediately due and payable, and TIMET shall have the right to foreclose
        on the
        Collateral or otherwise enforce all liens or security interests securing
        payment
        of the Debt Obligations, or any part thereof, and offset against the Debt
        Obligations any sum or sums owed by TIMET to Haynes and exercise any powers
        and
        any and all other remedies permitted by Indiana law or provided in this
        Agreement or in any other Transaction Documents. Failure of TIMET to exercise
        the options set forth in this Section 8(b) shall not constitute a waiver of
        the right to exercise the same upon the occurrence of a subsequent Default
        or
        Acceleration Event. Haynes acknowledges that the power of sale granted by
        this
        Agreement may be exercised by TIMET without prior judicial hearing.

       

      (ii)  Upon
        a
        Default or an Acceleration Event, and provided that any access under a Right
        of
        Access is not continuing, TIMET is authorized prior or subsequent to the
        institution of any foreclosure proceedings by private power of sale or otherwise
        to enter upon the Real Estate, or any part thereof, to take possession of
        the
        Operating Assets and of all books, records and accounts relating exclusively
        to
        the Operating Assets, to have access at any reasonable time upon TIMET’s request
        to review or make copies or facsimiles of any books, records and accounts
        that
        relate in part to the Operating Assets and in part to any other assets of
        Haynes, and to exercise without interference from Haynes any and all rights
        which Haynes has with respect to the management, possession, operation,
        protection or preservation of the Operating Assets, including the right to
        operate the same for the account of Haynes and to deduct from the proceeds
        thereof all costs, expenses and liabilities of every character incurred by
        TIMET
        in collecting such proceeds and in managing, operating, maintaining, protecting
        or preserving the Operating Assets and to apply the remainder of such proceeds
        on the Debt Obligations secured hereby in such manner as TIMET may elect.
        All
        such costs, expenses and liabilities incurred by TIMET in collecting such
        proceeds and in managing, operating, maintaining, protecting or preserving
        the
        Operating Assets, if not paid out of proceeds as hereinabove provided, shall
        constitute a demand obligation owing by Haynes and shall bear interest from
        the
        date that is ten (10) days after TIMET notifies Haynes in writing of expenditure
        until the date paid at the maximum lawful interest rate under applicable
        law,
        all of which shall constitute a portion of the Debt Obligations. If necessary
        to
        obtain the possession provided for above, TIMET may invoke any and all legal
        remedies to dispossess Haynes, including specifically one or more actions
        for
        forcible entry and detainer, trespass to try title and restitution. IN
        CONNECTION WITH ANY ACTION TAKEN BY TIMET PURSUANT TO THIS SECTION 8(b)(ii),
        TIMET SHALL NOT BE LIABLE FOR ANY LOSS SUSTAINED BY HAYNES RESULTING FROM
        ANY
        FAILURE TO OPERATE THE OPERATING ASSETS, OR ANY PART THEREOF, OR FROM ANY
        OTHER
        ACT OR OMISSION OF TIMET IN MANAGING THE OPERATING ASSETS (REGARDLESS OF
        WHETHER
        SUCH LOSS IS CAUSED BY THE NEGLIGENCE OF TIMET OR ANY STRICT LIABILITY) UNLESS
        SUCH LOSS IS CAUSED BY THE GROSS NEGLIGENCE, WILLFUL MISCONDUCT, FRAUD, BAD
        FAITH OR ILLEGAL ACTION OF TIMET, NOR SHALL TIMET BE OBLIGATED TO PERFORM
        OR
        DISCHARGE ANY OBLIGATION, DUTY OR LIABILITY UNDER ANY AGREEMENT RELATING
        TO THE
        OPERATING ASSETS OR ANY PART THEREOF OR UNDER OR BY REASON OF THIS AGREEMENT
        OR
        THE EXERCISE OF RIGHTS OR REMEDIES HEREUNDER. HAYNES SHALL AND DOES HEREBY
        AGREE
        TO INDEMNIFY AND DEFEND TIMET FOR, AND TO HOLD TIMET HARMLESS FROM, ANY AND
        ALL
        LIABILITY, LOSS OR DAMAGE WHICH MAY OR MIGHT BE INCURRED BY TIMET UNDER ANY
        SUCH
        AGREEMENT OR UNDER OR BY REASON OF THIS AGREEMENT OR THE EXERCISE OF RIGHTS
        OR
        REMEDIES HEREUNDER AND FROM ANY AND ALL CLAIMS AND DEMANDS WHATSOEVER WHICH
        MAY
        BE ASSERTED AGAINST TIMET BY REASON OF ANY ALLEGED OBLIGATIONS OR UNDERTAKINGS
        ON ITS PART TO PERFORM OR DISCHARGE ANY OF THE TERMS, COVENANTS OR AGREEMENTS
        CONTAINED IN ANY SUCH AGREEMENT, REGARDLESS OF WHETHER SUCH LIABILITY, LOSS,
        DAMAGE, CLAIMS OR DEMANDS ARE THE RESULT OF THE NEGLIGENCE OF TIMET OR ANY
        STRICT LIABILITY, UNLESS SUCH LOSS IS CAUSED BY THE GROSS NEGLIGENCE, WILLFUL
        MISCONDUCT, FRAUD, BAD FAITH OR ILLEGAL ACTION OF TIMET. Should TIMET incur
        any
        such liability, the amount thereof, including costs, expenses and reasonable
        attorney’s fees, shall be secured hereby and Haynes shall reimburse TIMET within
        ten (10) days after written demand therefor. Nothing in this Section 8(b)(ii)
        shall impose any duty, obligation or responsibility upon TIMET for the control,
        care, management or repair of the Operating Assets, nor for the carrying
        out of
        any of the terms and conditions of any such agreement; nor shall it operate
        to
        make TIMET responsible or liable for any waste committed on the Operating
        Assets
        by any parties or for any dangerous or defective condition of the Operating
        Assets, OR FOR ANY NEGLIGENCE IN THE MANAGEMENT, UPKEEP, REPAIR OR CONTROL
        OF
        THE OPERATING ASSETS RESULTING IN LOSS OR INJURY OR DEATH TO ANY LICENSEE,
        EMPLOYEE OR STRANGER OR ANY STRICT LIABILITY. Haynes hereby assents to, ratifies
        and confirms any and all actions of TIMET with respect to the Operating Assets
        taken under this Section 8(b)(ii), other than any actions constituting TIMET’s
        gross negligence, willful misconduct, fraud, bad faith or illegal action.
        For
        purposes of this paragraph, the term “TIMET” shall include the directors,
        officers, employees, attorneys and agents of TIMET and any persons or entities
        owned or controlled by, owning or controlling, or under common control or
        affiliated with TIMET.

       

      (iii)  In
        addition to all other remedies herein provided for, Haynes agrees that upon
        a
        Default or an Acceleration Event, and provided that any access under a Right
        of
        Access is not continuing, TIMET shall as a matter of right be entitled to
        the
        appointment of a receiver or receivers for all or any part of the Operating
        Assets, whether such receivership be incident to a proposed sale of such
        assets
        or otherwise, and without regard to the value of the Operating Assets or
        the
        solvency of any person or persons liable for the payment of the Debt Obligations
        secured hereby, and Haynes does hereby consent to the appointment of such
        receiver or receivers, waives any and all defenses to such appointment and
        agrees not to oppose any application therefor by TIMET, but nothing herein
        is to
        be construed to deprive TIMET of any other right, remedy or privilege it
        may now
        have under the law to have a receiver appointed. Any money advanced by TIMET
        in
        connection with any such receivership shall be a demand obligation owing
        by
        Haynes to TIMET and shall bear interest from the date that is ten (10) days
        after written notice from TIMET after such advancement by TIMET until the
        date
        paid at the maximum lawful interest rate under applicable law, and all of
        which
        shall be a part of the Debt Obligations and shall be secured by this Agreement
        and by any other instrument securing the Debt Obligations.

       

      (iv)  TIMET
        shall have the right to become the purchaser at any sale held by TIMET or
        any
        trustee or substitute or successor or by any receiver or public officer,
        and in
        such event TIMET shall have the right to credit upon the amount of the bid
        made
        therefor, to the extent necessary to satisfy such bid, the Debt Obligations
        owing to TIMET.

       

      (v)  Upon
        a
        Default or an Acceleration Event, TIMET may exercise its rights of enforcement
        with respect to the Collateral under the Code, as amended, and in conjunction
        with, in addition to or in substitution for those rights and
        remedies:

       

      (1)  TIMET
        may
        enter upon the Real Property to take possession of, assemble and collect
        the
        Collateral or to render it unusable; and

       

      (2)  written
        notice mailed to Haynes as provided herein ten (10) days prior to the date
        of
        public sale of the Collateral or prior to the date after which private sale
        of
        the Collateral will be made shall constitute reasonable notice; and

       

      (3)  any
        sale
        made pursuant to the provisions of this paragraph shall be deemed to have
        been a
        public sale conducted in a commercially reasonable manner if held
        contemporaneously with the sale of the Collateral under power of sale as
        provided herein upon giving the same notice with respect to the sale of the
        Collateral hereunder as is required for such sale of the Collateral under
        power
        of sale; and

       

      (4)  in
        the
        event of a foreclosure sale, whether made by the TIMET or its designee,
        successor or substitute under the terms hereof, or under judgment of a court,
        the Collateral may, at the option of TIMET, be sold as a whole; and

       

      (5)  it
        shall
        not be necessary that TIMET take possession of the Collateral or any part
        thereof prior to the time that any sale pursuant to the provisions of this
        paragraph is conducted and it shall not be necessary that the Collateral
        or any
        part thereof be present at the location of such sale; and

       

      (6)  prior
        to
        application of proceeds of disposition of the Collateral to the Debt
        Obligations, such proceeds shall be applied to the reasonable expenses of
        retaking, holding, preparing for sale or lease, selling, leasing and the
        like
        and the reasonable attorney’s fees and legal expenses incurred by TIMET;
        and

       

      (7)  any
        and
        all statements of fact or other recitals made in any bill of sale or assignment
        or other instrument evidencing any foreclosure sale hereunder as to nonpayment
        of the indebtedness or as to the occurrence of any default, or as to TIMET
        having declared all of such indebtedness to be due and payable, or as to
        notice
        of time, place and terms of sale and of the properties to be sold having
        been
        duly given, or as to any other act or thing having been duly done by TIMET,
        shall be taken as prima facie evidence of the truth of the facts so stated
        and
        recited; and

       

      (8)  TIMET
        may
        appoint or delegate any one or more persons as agent to perform any act or
        acts
        necessary or incident to any sale held by TIMET, including the sending of
        notices and the conduct of the sale, but in the name and on behalf of
        TIMET.

       

      (vi)  All
        remedies herein expressly provided for are cumulative of any and all other
        remedies existing at law or in equity and are cumulative of any and all other
        remedies provided for in any other instrument securing the payment of the
        Debt
        Obligations, or any part thereof, or otherwise benefiting TIMET, and TIMET
        shall, in addition to the remedies herein provided, be entitled to avail
        itself
        of all such other remedies as may now or hereafter exist at law or in equity
        for
        the enforcement of the covenants herein and the foreclosure of the liens
        and
        security interests evidenced hereby, and the resort to any remedy provided
        for
        hereunder or under any such other instrument or provided for by law shall
        not
        prevent the concurrent or subsequent employment of any other appropriate
        remedy
        or remedies.

       

      (vii)  To
        the
        fullest extent permitted by law, TIMET may resort to any security given by
        this
        Agreement or to any other security now existing or hereafter given to secure
        the
        payment of the Debt Obligations, in whole or in part, and in such portions
        and
        in such order as may seem best to TIMET in its sole and uncontrolled discretion,
        and any such action shall not in anywise be considered as a waiver of any
        of the
        rights, benefits, liens or security interests evidenced by this
        Agreement.

       

      (viii)  To
        the
        full extent Haynes may do so, Haynes agrees that it will not at any time
        insist
        upon, plead, claim or take the benefit or advantage of any law now or hereafter
        in force pertaining to the rights and remedies of sureties or redemption,
        and
        Haynes, for itself and its representatives, successors and assigns, and for
        any
        and all persons ever claiming any interest in the Operating Assets, to the
        extent permitted by law, hereby waives and releases all rights of redemption,
        valuation, appraisement, stay of execution, notice of intention to mature
        or
        declare due the whole of the secured indebtedness, notice of election to
        mature
        or declare due the whole of the secured indebtedness, notices as provided
        for
        under the Code, and all rights to a marshaling of the assets of Haynes,
        including the Operating Assets, or to a sale in inverse order of alienation
        in
        the event of foreclosure of the liens and security interests hereby created.
        Haynes shall not have or assert any right under any statute or rule of law
        pertaining to the marshaling of assets, sale in inverse order of alienation,
        the
        exemption of homestead, the administration of estates of decedents or other
        matters whatever to defeat, reduce or affect the right of TIMET under the
        terms
        of this Agreement to a sale of the Operating Assets for the collection of
        the
        secured indebtedness without any prior or different resort for collection,
        or
        the right of TIMET under the terms of this Agreement to the payment of such
        Obligations out of the proceeds of sale of the Operating Assets in preference
        to
        every other claimant whatever. If any law referred to in this paragraph and
        now
        in force, of which Haynes or their representatives, successors and assigns
        and
        such other persons claiming any interest in the Operating Assets might take
        advantage despite this paragraph, shall hereafter be repealed or cease to
        be in
        force, such law shall not thereafter be deemed to preclude the application
        of
        this paragraph. Without limiting the foregoing, Haynes and any surety or
        guarantor of the indebtedness secured hereby waives, to the maximum extent
        not
        prohibited under applicable law, the following: (1) any requirement that
        TIMET
        first take any action whatsoever against Haynes or any other party, or file
        any
        claim in the event of Haynes’ bankruptcy, in order to enforce the obligations of
        Haynes under this Agreement or any other Transaction Document, (2) failure
        to
        protect, preserve or resort to any Collateral, (3) failure of TIMET to
        notify Haynes of any assignment of the Transaction Documents or any part
        thereof, (4) all rights if Haynes or any other person is found not liable
        for
        the Debt Obligations secured hereby or any part thereof for any reason, and
        regardless of any joinder of Haynes or any other person in any action to
        obtain
        payment or performance of any or all of the indebtedness secured hereby,
        and
        (5) all rights and defenses in connection with any full or partial release
        of the liability of Haynes. Haynes authorizes TIMET, without notice to or
        consent of Haynes, and without affecting Haynes’ liability hereunder, from time
        to time to change the terms under any document (other those to which Haynes
        is a
        party), including, without limitation, exchanging, enforcing, waiving or
        releasing any security with regard to the Debt Obligations, releasing any
        other
        guarantor or exercising or refraining from exercising any right or remedy
        of
        TIMET. 

       

      (ix)  Upon
        a
        Default or an Acceleration Event, Haynes shall be liable for reimbursing
        TIMET
        for all expenses incurred by TIMET as a result of such Default or Acceleration
        Event, including, but not limited to, all travel costs, third-party appraisal
        fees, report preparation and testing fees, consultants’ fees and reasonable
        legal fees and expenses.

       

      (x)  Haynes
        agrees that any disclaimer of warranties in a foreclosure sale of any or
        all of
        the Collateral will not render the sale commercially unreasonable.

       

      9.  Injunctive
        Relief.
        GIVEN
        THAT TIMET MAY INCUR SIGNIFICANT DAMAGES IF HAYNES FAILS TO TIMELY SATISFY
        ITS
        OBLIGATIONS TO TIMET AND TIMET’S OPERATIONS MAY BE NEGATIVELY IMPACTED, AND
        BECAUSE TIMET DOES NOT HAVE AN ADEQUATE REMEDY AT LAW AND WOULD BE IRREPARABLY
        HARMED BY SUCH EVENTS AND BECAUSE THE OPERATING ASSETS ARE UNIQUE, AND BECAUSE
        HAYNES IS OBTAINING INTELLECTUAL PROPERTY/KNOW-HOW FROM TIMET THAT WOULD
        COMPETITIVELY HARM TIMET, HAYNES AGREES THAT TIMET SHALL BE ENTITLED TO
        INJUNCTIVE RELIEF (BOTH PROHIBITIVE AND MANDATORY) IN CONNECTION WITH ANY
        DEFAULT BY HAYNES UNDER THIS AGREEMENT OR THE TRANSACTION DOCUMENTS TO AFFORD
        TIMET ITS RIGHT OF ACCESS UNDER THIS AGREEMENT, IN ADDITION TO ALL OTHER
        RIGHTS
        AND REMEDIES IN LAW OR AT EQUITY.

       

      10.  Representations
        and Warranties.
        Haynes
        represents and warrants to TIMET that:

       

      (a)  Title;
        No Other Security Interests.
        Except
        for the security interest granted under this Agreement to TIMET and the
        Permitted Encumbrances, Haynes owns the Collateral free and clear of any
        and all
        security interests or claims.

       

      (b)  Address;
        Etc.
        Haynes’
chief executive office is set forth in Section 22 and the location of the
        Collateral is described in Exhibit C
        and
        neither location shall not be changed without prior written notice to TIMET
        (but
        any such change or the failure of the Collateral to be located at such address
        shall not exclude any of the Collateral from being subject to the security
        interest granted therein). Haynes must immediately advise TIMET in writing
        of
        any change in its name, trade name, address, state of organization, or form
        of
        organization. Haynes’ exact name, entity type and organizational number issued
        by the Secretary of State of Delaware are set forth on the first page
        hereof.

       

      (c)  Trade
        Names.
        Any and
        all trade names under which Haynes transacts any part of its business, and
        all
        former names of Haynes used since 1986, are those that have been previously
        disclosed to TIMET in writing.

       

      (d)  Accuracy
        of Information.
        All
        information, certificates, or statements given to TIMET under this Agreement
        are
        true and complete in all material respects.

       

      11.  Covenants.
        Haynes
        covenants and agrees with TIMET that from and after the date of this Agreement
        until the Debt Obligations are paid in full:

       

      (a)  Further
        Documentation.
        At any
        time and from time to time, upon the written request of TIMET, and at Haynes’
sole expense, Haynes will promptly and duly execute and deliver to TIMET
        any and
        all such further instruments and documents and take such further action as
        TIMET
        may reasonably request for the purpose of obtaining the full benefits of
        this
        Agreement and of the rights and powers herein granted.

       

      (b)  Sales
        or Dispositions of Assets.
        Haynes
        will not sell or otherwise dispose of or encumber the Collateral, except
        for
        Permitted Encumbrances, without the written consent of TIMET; provided, however,
        that the foregoing shall not be deemed to restrict a Change in
        Control.

       

      (c)  Limitations
        on Liens.
        Haynes
        shall not permit or grant any liens (voluntary or involuntary) on any portion
        of
        the Collateral, except Permitted Encumbrances.

       

      (d)  Maintenance
        of Insurance.
        Haynes
        will at all times comply with the provisions of Section 7.1 of the Conversion
        Agreement. 

       

      (e)  Right
        of Inspection; Cooperation.
        In
        addition to any rights TIMET may have under the Conversion Agreement, TIMET
        and
        its representatives shall, at TIMET’s expense, upon reasonable request and at
        reasonable times, have the right to enter into and upon any premises where
        any
        of the Collateral is located for the purpose of inspecting the same, observing
        the use thereof or otherwise protecting TIMET’s interests therein. 

       

      (f)  Notice
        of Default.
        Haynes
        will provide immediate notice to TIMET, by way of facsimile transmission
        and
        overnight express mail service, of its or its attorneys’ or agents’ receipt of
        any notice of default under Haynes’ agreements with any secured creditors
        including but not limited to taxing authorities. Haynes hereby grants to
        TIMET
        the option, but not the obligation, to exercise whatever rights to cure defaults
        that Haynes has under such agreements or by law.

       

      (g)  Haynes
        Bankruptcy Event.
        If a
        Haynes Bankruptcy Event occurs, Haynes will support any request by TIMET
        to lift
        any stay imposed by any court (bankruptcy or otherwise) that might block
        or
        impede TIMET’s exercise of the Right of Access.

       

      (h)  Additional
        Contracts.
        Upon a
        Default, Haynes Bankruptcy Event, Secured Facility Event or Acceleration
        Event,
        Haynes covenants and agrees (i) to provide or otherwise make available to
        TIMET,
        its affiliates, designee(s), successors and permitted assigns all rights,
        privileges and benefits arising under any Additional Contract; (ii) to provide
        notice of renewal, termination, breach or threatened breach of any Additional
        Contract; and (iii) to provide notice of any lapse, revocation or threat
        of
        revocation of any permit or license that constitutes an Additional Contract.
        Haynes hereby grants TIMET the option, but not the obligation, upon a Default,
        Haynes Bankruptcy Event, Secured Facility Event or Acceleration Event, (x)
        to
        exercise whatever rights to cure any breach that Haynes has under any Additional
        Contract or by law and (y) to approach directly any party to an Additional
        Contract for the purpose of arranging to obtain directly from such party
        all
        rights, privileges and benefits arising under such Additional Contract that
        relate or pertain to the Mill, the Equipment, the Real Estate or the performance
        of the Titanium Conversion Services.

       

      12.  Haynes’
        Remedies.
        Upon
        (a) TIMET’s consent to the filing of, or TIMET’s commencement or consent to the
        commencement of, or a court’s entry of an order for relief in any TIMET
        Bankruptcy Event under Chapter 7 of Title 11, United States Code; (b) a TIMET
        Bankruptcy Event in which the Conversion Agreement is rejected by order of
        a
        court or by operation of law; or (c) the termination of the Conversion Agreement
        by TIMET for any reason other than an Event of Default (as defined in the
        Conversion Agreement) or TIMET’s exercise of its rights under Section 8(b) of
        this Agreement, the entire unearned portion of the Fee shall be deemed fully
        earned by Haynes and nonrefundable to TIMET.

       

      13.  Lessor
        Acknowledgments.
        Upon
        the request of TIMET, Haynes will use commercially reasonable efforts to
        deliver
        to TIMET acknowledgements of the lessors of leased Operating Assets to TIMET’s
        rights hereunder, in the form attached hereto as Schedule 13.

       

      14.  Term.
        The
        rights granted to TIMET under this Agreement shall continue until the expiration
        of the term of the Conversion Agreement.

       

      15.  Confidential
        Information and Data.
        Without
        limiting TIMET’s rights under this Agreement, to the extent the Operating Assets
        include, or TIMET or its designee(s) otherwise comes into possession of or
        becomes aware of, Haynes’ trade secrets or proprietary information during
        TIMET’s exercise of the Right of Access, TIMET and its designee(s) must (a) keep
        the information, data, and trade secrets confidential; and (b) only use the
        information, data, and trade secrets during an Access Period in connection
        with
        performing the Titanium Conversion Services. The provisions of this
        Section 15 shall survive the termination of this Agreement. TIMET
        acknowledges and agrees that Haynes will suffer irreparable harm if TIMET
        or its
        designee(s) violate or breach their obligations under this Section 15. TIMET
        agrees that Haynes shall be entitled to injunctive relief (both prohibitive
        and
        mandatory) in connection with any violations by TIMET or its designee(s)
        of
        their obligations under this Section 15.

       

      16.  Indemnification.
        Haynes
        shall indemnify TIMET and each of its affiliates and designees and their
        respective officers, directors, employees, attorneys, and agents from, and
        hold
        each of them harmless against, any and all Claims which any of them may become
        subject which directly or indirectly arise from or relate to (a)  TIMET’s
        exercise of any rights or remedies set forth in the Transaction Documents,
        (b) any breach by Haynes of any representation, warranty, covenant, or
        other agreement contained in any of the Transaction Documents, (c) the
        presence, release, threatened release, disposal, removal, or cleanup of any
        hazardous material located on, about, within, or affecting any of the properties
        or assets of Haynes, or (d) any investigation, litigation, or other
        proceeding, including, without limitation, any threatened investigation,
        litigation, or other proceeding, relating to any of the foregoing; provided
        that
        such indemnity shall not be available to the extent that such losses,
        liabilities, claims, damages, penalties, judgments, disbursements, costs,
        expenses or fees resulted from the gross negligence or willful misconduct
        of
        TIMET or any other indemnitee. WITHOUT
        LIMITING ANY PROVISION OF THIS AGREEMENT OR OF ANY OTHER TRANSACTION DOCUMENT,
        IT IS THE EXPRESS INTENTION OF THE PARTIES HERETO THAT EACH PERSON TO BE
        INDEMNIFIED UNDER THIS SECTION SHALL BE INDEMNIFIED FROM AND HELD HARMLESS
        AGAINST ANY AND ALL CLAIMS ARISING OUT OF OR RESULTING FROM THE SOLE OR
        CONTRIBUTORY NEGLIGENCE OF SUCH PERSON.

       

      17.  Severability.
        Should
        any provision of this Agreement be held invalid, prohibited or unenforceable
        in
        any one jurisdiction it shall, as to that jurisdiction only, be ineffective
        to
        the extent of such holding without invalidating the remaining provisions
        of this
        Agreement, and any such holding does not invalidate or render unenforceable
        that
        provision in any other jurisdiction wherein it would be valid and
        enforceable.

       

      18.  Authorization.
        The
        parties executing this Agreement as representatives warrant that they have
        the
        power and authority to execute this Agreement on behalf of the entity that
        they
        represent and that their signatures bind said entities to the terms of this
        Agreement.

       

      19.  Section
        Headings.
        The
        Section headings used in this Agreement are for convenience of reference
        only
        and are not to affect the construction hereof or be taken into consideration
        in
        the interpretation of this Agreement. All references to Sections and Schedules
        are to Sections and Schedules in or to this Agreement unless otherwise
        specified.

       

      20.  No
        Waiver; Cumulative Remedies.
        The
        Parties shall not by any act, delay, indulgence, omission, or otherwise be
        deemed to have waived any right or remedy under this Agreement or of any
        breach
        of the terms and conditions of this Agreement. A waiver by the Parties of
        any
        right or remedy under this Agreement on any one occasion shall not be construed
        as a bar to any right or remedy that the Parties would otherwise have had
        on a
        subsequent occasion. No failure to exercise nor any delay in exercising on
        the
        part of either Party of any right, power, or privilege under this Agreement,
        shall operate as a waiver, nor shall any single or partial exercise of any
        right, power or privilege under this Agreement preclude any other or future
        exercise thereof or the exercise of any other right, power or privilege.
        The
        rights and remedies under this Agreement are cumulative, may be exercised
        singly
        or concurrently, and are not exclusive of any rights and remedies provided
        by
        any other agreements or applicable law.

       

      21.  Waivers
        and Amendments; Successors and Assigns.
        No term
        or provision of this Agreement may be waived, altered, modified, or amended
        except by a written instrument, duly executed by Haynes and TIMET. This
        Agreement and all of Haynes’ obligations are binding upon the successors and
        assigns of Haynes, and together with the rights and remedies of TIMET under
        this
        Agreement, inure to the benefit of TIMET and its successors and assigns.
        Haynes
        may not assign or transfer any right or obligation under this Agreement without
        the prior written consent of TIMET. Notwithstanding the foregoing, Haynes
        shall
        be permitted to assign this Agreement to its successor in connection with
        a
        Change in Control provided that such successor assumes all of Haynes’
obligations under this Agreement and each of the other Transaction
        Documents.

       

      22.  Governing
        Law and Forum.
        Except
        with respect to the creation, perfection, priority and enforcement of the
        liens
        and security interests created hereby, which shall be construed in accordance
        with and governed by the laws of the State of Indiana, this Agreement shall
        be
        governed by, and construed and enforced in accordance with, the laws of the
        State of Delaware. Each of the parties hereby irrevocably submits to the
        jurisdiction of the courts of the State of Delaware or the United States
        District Court for the District of Delaware, over any suit, action or proceeding
        arising out of or relating to this Agreement and covenants and agrees that
        such
        courts shall have exclusive jurisdiction over any such suit, action or
        proceeding. Each party irrevocably waives, to the fullest extent permitted
        under
        applicable law, any objections it may now or hereafter have to the venue
        of any
        suit, action or proceeding brought in such court and any claim that the same
        has
        been brought in an inconvenient forum.

       

      23.  Notices.
        All
        notices, requests, and other communications that are required or may be given
        under this Agreement must be in writing, and shall be deemed to have been
        given
        on the date of delivery, if delivered by hand, telecopy or courier, or three
        days after mailing, if mailed by certified or registered mail, postage prepaid,
        return receipt requested, addressed as set forth below (which addresses may
        be
        changed, from time to time, by notice given in the manner provided in this
        Section 23):

       

      If
        to
        Haynes, to: Haynes
        International, Inc.

      1020
        West
        Park Avenue

      P.O.
        Box
        9013

      Kokomo,
        Indiana 46904-9013

      Attn:
        Marcel Martin, Chief Financial Officer

      Facsimile:
        (765) 456-6526

      Attn:
        Stacy S. Kilian, V.P. - General Counsel

      Facsimile:
        (765) 456-6935

      

      with
        a
        copy to: Ice
        Miller LLP

      One
        American Square

      34th
        Floor

      Indianapolis,
        IN 46282-0200

      Attn:
        Stephen J. Hackman

      Facsimile:
        (317) 592-4666

      

      If
        to
        TIMET, to: Titanium
        Metals Corporation

      3
        Lincoln
        Centre

      5430
        LBJ
        Freeway, Suite 1700

      Dallas,
        Texas 75240

      Facsimile:
        (972) 448-1445

      Attention:
        General Counsel

       

      with
        a
        copy to: Locke
        Liddell & Sapp LLP

      2200
        Ross
        Avenue, Suite 2200

      Dallas,
        Texas 75201

      Facsimile:
        (214) 740-8800

      Attention:
        Don M. Glendenning, Esq.

      Toni
        Weinstein, Esq.

      

      24.  No
        Intended Third Party Beneficiary.
        The
        parties hereto acknowledge and agree that, other than the rights of the
        indemnitees named herein, the rights and interests of the parties under this
        Agreement are intended to benefit solely the parties to this
        Agreement.

       

      25.  Effectiveness
        of this Agreement.
        This
        Agreement shall be effective upon the completion of the following
        conditions:

       

      (i)
        TIMET’s perfection of its first priority interest in the Collateral;
        and

       

      (ii)
        TIMET’s payment of the Fee. 

       

      26.  Counterparts.
        This
        Agreement may be executed in any number of counterparts and by each party
        hereto
        on separate counterparts, each of which when so executed and delivered shall
        be
        an original, but all of which together shall constitute one and the same
        instrument, and it shall not be necessary in making proof of this Agreement
        to
        produce or account for more than one such counterpart. For purposes of this
        Agreement, signatures obtained by facsimile shall constitute original
        signatures.

       

      27.  Entire
        Agreement; Conflicts.
        This
        Agreement together with the other Transaction Documents and the exhibits
        and
        schedules hereto and thereto, and any other agreements executed in connection
        herewith or therewith, constitutes the entire understanding of the parties
        in
        connection with the subject matter hereof. The terms and conditions of the
        Conversion Agreement shall be unaffected by this Agreement. To the extent
        any
        term or condition of this Agreement is inconsistent or in conflict with the
        terms of any Transaction Document, the terms of this Agreement shall govern
        and
        control.

       

      28.  CONSULTATION
        WITH COUNSEL.
        THE
        PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE BEEN GIVEN THE OPPORTUNITY TO CONSULT
        WITH COUNSEL BEFORE EXECUTING THIS AGREEMENT AND ARE EXECUTING SUCH AGREEMENT
        WITHOUT DURESS OR COERCION AND WITHOUT RELIANCE ON ANY REPRESENTATIONS,
        WARRANTIES OR COMMITMENTS OTHER THAN THOSE REPRESENTATIONS, WARRANTIES AND
        COMMITMENTS SET FORTH IN THIS AGREEMENT.

       

      29.  WAIVER
        OF JURY TRIAL.
        THE
        PARTIES HERETO ACKNOWLEDGE THAT THE RIGHT TO TRIAL BY JURY IS A CONSTITUTIONAL
        RIGHT, BUT THAT THIS RIGHT MAY BE WAIVED. THE PARTIES EACH HEREBY KNOWINGLY,
        VOLUNTARILY AND WITHOUT COERCION, WAIVE ALL RIGHTS TO A TRIAL BY JURY OF
        ALL
        DISPUTES ARISING OUT OF OR IN RELATION TO THIS AGREEMENT OR ANY OTHER AGREEMENTS
        BETWEEN THE PARTIES. NO PARTY SHALL BE DEEMED TO HAVE RELINQUISHED THE BENEFIT
        OF THIS WAIVER OF JURY TRIAL UNLESS SUCH RELINQUISHMENT IS IN A WRITTEN
        INSTRUMENT SIGNED BY THE PARTY TO WHICH SUCH RELINQUISHMENT WILL BE
        CHARGED.

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

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

       

      HAYNES
        INTERNATIONAL, INC.

      

      

                     
        By:         /s/FRANCIS J.
        PETRO

      Name:  
        Francis J. Petro

      Title:    
        President & CEO

      

      TITANIUM
        METALS CORPORATION

      

      

                     
        By:        /s/BOBBY D. O'BRIEN     

      Name:  
        Bobby D. O'Brien

      Title:    
        Chief Financial Officer

      

      

      

      
        
          
            

            

            DALLAS:
              589241.00002: 1547388v2

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      SCHEDULE
        13

      LESSOR’S
        ACKNOWLEDGMENT AND CONSENT

      

      While
        not
        a party to the Access and Security Agreement (the “Access Agreement”) between
        Titanium Metals Corporation (“TIMET”) and Haynes International, Inc. (“Haynes”)
        dated November 17, 2006 the undersigned leases certain real estate and/or
        equipment to Haynes and, in such capacity, the undersigned acknowledges,
        consents to, and agrees with, and agrees to be bound by, the terms and
        conditions of the foregoing Agreement, including TIMET’s right to use the
        Operating Assets during an Access Period. Capitalized terms used herein and
        not
        otherwise defined shall have the meanings assigned to such terms in the Access
        Agreement.

       

      LESSOR

       

      

      By:     

      Name: 
        

      Title:

      

       

      
        
          
            

            DALLAS:
              589241.00002: 1547388v2

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        A

       

      FORM
        OF CONVERSION AGREEMENT

       

      

       

      

       

      
        
          
            

            DALLAS:
              589241.00002: 1547388v2

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        B

       

      EQUIPMENT

       

      

       

      
        
          
            

            DALLAS:
              589241.00002: 1547388v2

          

          
          

        

        
          
          

          
            

          

        

        
          
          

          
          

        

      

      EXHIBIT
        C

       

      REAL
        PROPERTY

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