Document:

Exhibit
10.13

[Execution]

AMENDMENT NO. 1 TO

AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT

AMENDMENT NO. 1 TO
AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT dated as of November 5, 2004
by and among Haynes International, Inc., a Delaware corporation (“Haynes Parent”),
Haynes Wire Company, a Delaware corporation (“Haynes Wire” and together with
Haynes Parent, each individually, a “Borrower” and collectively, “Borrowers”),
the parties from time to time to the Loan Agreement (as hereinafter defined) as
lenders (each individually, a “Lender” and collectively, “Lenders”) and
Congress Financial Corporation (Central), an Illinois corporation, in its
capacity as agent for Lenders pursuant to the Loan Agreement (in such capacity,
“Agent”).

W I T N E S S E T H

WHEREAS, Haynes
Parent has entered into financing arrangements with Agent and Lenders pursuant
to which Lenders (or Agent on behalf of Lenders) have made and may make loans
and advances and provide other financial accommodations to Haynes Parent as set
forth in, and subject to the terms and conditions of, the Amended and Restated
Loan and Security Agreement, dated August 31, 2004, by and among Agent,
Lenders, Bank One, NA, in its capacity as documentation agent for Lenders, and
Haynes Parent ( as amended and supplemented hereby and as the same may
hereafter be further amended, modified, supplemented, extended, renewed, restated
or replaced, the “Loan Agreement”) and the other Financing Agreements (as
defined therein); and

WHEREAS, Haynes
Parent has formed Haynes Wire, which is a wholly-owned subsidiary of Haynes
Parent; and

WHEREAS, Haynes
Parent and Haynes Wire have requested that Agent and Lenders consent to the
acquisition by Haynes Wire of certain assets of the Sellers (as hereinafter
defined) pursuant to the Branford Purchase Documents (as hereinafter defined)
and enter into certain amendments to the Financing Agreements in connection
therewith; and

WHEREAS, Haynes
Parent and Haynes Wire have requested that Agent and Lenders provide certain
consents and agree to certain amendments to the Loan Agreement in connection
with the formation of Haynes Wire, the addition of Haynes Wire as an additional
party to the Loan Agreement as a Borrower and certain of the other Financing
Agreements and certain related matters, and Agent and Lenders are willing to
provide such consents and agree to such amendments, subject to the terms and
conditions herein; and

WHEREAS, by this
Amendment No. 1, Haynes Parent, Haynes Wire, Agent and Lenders desire and
intend to evidence such consents and amendments;

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

   
 

Section 1.               DEFINITIONS.

1.1           DEFINED TERMS. For purposes of this
Amendment No. 1, unless otherwise defined herein, all capitalized terms used
herein shall have the meanings assigned thereto in the Loan Agreement.

1.2           ADDITIONAL DEFINITIONS. As used
herein, the following terms shall have the meanings given to them below, and
the Loan Agreement is hereby amended to include the following definitions:

(a)           “Amendment No. 1” shall mean
Amendment No. 1 to Amended and Restated Loan and Security Agreement by and
among Haynes Parent, Haynes Wire, Agent and Lenders, as it now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

(b)           “Branford Purchase Agreement” shall
mean the Asset Purchase Agreement, dated as of October 28, 2004, by and among
Haynes Wire, Sellers and Richard Harcke, as the same now exists or may
hereafter be amended, modified, supplemented, extended, renewed, restated or
replaced.

(c)           “Branford Purchased Assets” shall
mean, collectively, the “Acquired Assets”, as such term is defined in the
Branford Purchase Agreement as in effect on the date hereof.

(d)           “Branford Purchase Documents” shall
mean, collectively, the following (as the same now exist or may hereafter be
amended, modified, supplemented, extended, renewed, restated or replaced): (i)
the Branford Purchase Agreement, (ii) all bills of sale, deeds, and such
instruments of transfer as are referred to therein, and (iii) all side letters
with respect thereto and all other agreements, documents and instruments
executed and/or delivered by Sellers, Richard Harcke or Borrowers in connection
therewith; PROVIDED, THAT, the term “Branford Purchase Documents” shall not
include this Amendment No. 1 or any of the other Financing Agreements.

(e)           “Haynes Parent” shall mean Haynes
International, Inc., a Delaware corporation, and its successors and assigns.

(f)            “Haynes Parent Borrowing Base” shall
mean, at any time, the amount equal to:

(i)            eighty-five (85%) percent of the
Eligible Accounts of Haynes Parent, plus

(ii)           the lesser of: (A) the sum of (1) the
Kokomo Facility Inventory Availability, plus (2) the Arcadia Facility Inventory
Availability, plus (3) the Service Center Inventory Availability or (B) the
Inventory Loan

Limit applicable to
Haynes Parent, plus

(iii)          Haynes Parent Fixed Asset
Availability, less

(iv)          Reserves attributable to Haynes
Parent.

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For purposes only of
applying the Inventory Loan Limit as to Haynes Parent, Agent may treat the then
undrawn amounts of outstanding Letter of Credit Accommodations issued for the
purpose of purchasing Eligible Inventory of Haynes Parent as Loans to Haynes
Parent to the extent Agent is in effect basing the issuance of the Letter of
Credit Accommodations on the Value of the Eligible Inventory of Haynes Parent
being purchased with such Letter of Credit Accommodations. In determining the
actual amounts of such Letter of Credit Accommodations to be so treated for
purposes of the sublimit, the outstanding Loans and Reserves shall be
attributed first to any components of the lending formulas set forth above that
are not subject to such sublimit, before being attributed to the components of
the lending formulas subject to such sublimit. The amounts of Eligible
Inventory of Haynes Parent shall, at Agent’s option, be determined based on the
lesser of the amount of Inventory set forth in the general ledger of Haynes
Parent or the perpetual inventory record maintained by Haynes Parent.

(g)           “Haynes Parent Excess Availability”
shall mean at any time and without duplication, the sum of:

(i)            the amount calculated at such time
equal to: (A) the lesser of: (1) the Haynes Parent Borrowing Base and (2) the
Maximum Credit minus the then outstanding Loans to Haynes Wire (in each case
under (1) or (2) after giving effect to any applicable Reserves), minus (B) the
sum of: (1) the amount of the then outstanding and unpaid principal amount of
the Loans to Haynes Parent (other than Equipment Purchase Loans) and the
undrawn amount of Letter of Credit Accommodations issued on behalf or for the
benefit of Haynes Parent, plus (2) the aggregate amount of all payables or
other obligations of Haynes Parent outstanding more than forty-five (45) days
after the due date therefor as of such time (and for this purpose the due date
for payables incurred prior to the commencement of the Chapter 11 Case (or
during the course thereof) will be the date for payment of such payables as
established pursuant to the Plan and the claims administration process provided
for in the Chapter 11 Case and as to those payables or other obligations that
are subject to a dispute or are not otherwise allowed, prior to the
establishment of the due date for such payables or other obligations pursuant
to the Plan and the claims administration process, such payables and other
obligations shall not be deemed outstanding more than forty-five (45) days
after the due date therefor for purposes of this definition), plus (3) the
amount of checks issued by Haynes Parent to pay payables and other obligations
which are more than such number of days past due, but not yet sent (without
duplication of amounts included in clause (i)(B)(2) herein); plus

(ii)           the amount calculated at such time
equal to the total amount available for Utilisation (as such term is defined in
the UK Financing Agreements), subject to the limitations contained in Sections
5.3 and 5.5 of the Facility Agreement referred to in the definition of the UK
Financing Agreements, after giving effect to all then outstanding Utilisations
and net of the aggregate of all Past Due Payables (as such term is defined in
the UK Financing Agreements).

(h)           “Haynes Parent Fixed Asset
Availability” shall mean $15,949,276; PROVIDED, THAT, effective on the first
day of each month after the date hereof the Haynes Parent Fixed Asset
Availability shall be reduced by the amount equal to $231,681 on the first day
of each such month.

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(i)             “Haynes Wire” shall mean Haynes
Wire Company, a Delaware corporation, and its successors and assigns.

(j)            “Haynes Wire Borrowing Base” shall
mean, at any time, the amount equal to:

(i)            eighty-five (85%) percent of the
Eligible Accounts of Haynes Wire, plus

(ii)           the lesser of: (A) sixty (60%)
percent multiplied by the Value of the Eligible Inventory of Haynes Wire, (B)
eighty-five (85%) percent of the Net Recovery Percentage of Eligible Inventory
of Haynes Wire or (C)the Inventory Loan Limit applicable to Haynes Wire, plus

(iii)          the Haynes Wire Fixed Asset
Availability, less

(iv)          Reserves attributable to Haynes Wire.

For purposes only of
applying the Inventory Loan Limit as to Haynes Wire, Agent may treat the then
undrawn amounts of outstanding Letter of Credit Accommodations issued for the
purpose of purchasing Eligible Inventory of Haynes Wire as Loans to Haynes Wire
to the extent Agent is in effect basing the issuance of the Letter of Credit
Accommodations on the Value of the Eligible Inventory of Haynes Wire being
purchased with such Letter of Credit Accommodations. In determining the actual
amounts of such Letter of Credit Accommodations to be so treated for purposes
of the sublimit, the outstanding Loans and Reserves shall be attributed first
to any components of the lending formulas set forth above that are not subject
to such sublimit, before being attributed to the components of the lending formulas
subject to such sublimit. The amounts of Eligible Inventory of Haynes Wire
shall, at Agent’s option, be determined based on the lesser of the amount of
Inventory set forth in the general ledger of Haynes Wire or the perpetual
inventory record maintained by Haynes Wire.

(k)           “Haynes Wire Excess Availability”
shall mean at any time and without duplication, the amount calculated at such
time equal to:

(i)            the lesser of: (A) the Haynes Wire
Borrowing Base and (B) the amount equal to the Maximum Credit minus the then
outstanding Loans to Haynes Parent (in each case under (A) or (B) after giving
effect to any applicable Reserves), minus

(ii)           the sum of: (A) the amount of the
then outstanding and unpaid principal amount of the Loans to Haynes Wire (other
than Equipment Purchase Loans) and the undrawn amount of Letter of Credit
Accommodations issued on behalf or for the benefit of Haynes Wire, plus (B) the
aggregate amount of all payables or other obligations of Haynes Wire
outstanding more than forty-five (45) days after the due date therefor as of
such time, plus (C) the amount of checks issued by Haynes Wire to pay payables
and other obligations which are more than such number of days past due, but not
yet sent (without duplication of amounts included in clause (i)(B)(2) herein).

(l)            “Haynes Wire Fixed Asset
Availability” shall mean shall mean $2,165,000; PROVIDED, THAT, effective on
the first day of each month after December 31, 2004 the Haynes Wire

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Fixed Asset Availability
shall be reduced by the amount equal to $30,069 on the first day of each such
month.

(m)          “Sellers” shall mean, collectively,
the following (together with their respective successors and assigns): (i)
Branford Wire and Manufacturing Company, a Connecticut corporation and (ii)
Carolina Industries, Inc., a Connecticut corporation; sometimes being referred
to herein individually as a “Seller”.

1.3           AMENDMENTS TO DEFINITIONS. Each of
the defined terms below shall be deemed to be amended and restated in their
entirety to have the meaning as to such term set forth below.

(a)           “Borrower” and “Borrowers” shall mean
Haynes Parent and Haynes Wire, individually and collectively, and jointly and
severally, except for purposes of Sections 1.25, 1.33, 1.41, 1.43, 1.45, 1.65,
1.95(a), 1.112, 2.1(b), 8.16, 9.6(a) (but only to the extent of the financial
statements referenced therein), 9.17 and 9.18, where the references to Borrower
shall mean only Haynes Parent.

(b)           “Borrowing Base” shall mean, at any
time, collectively, the Haynes Parent Borrowing Base and the Haynes Wire
Borrowing Base at such time.

(c)           “Collateral” shall mean,
collectively, “Collateral” as defined in Section 5 hereof and “Collateral” as
described in Section 4 of Amendment No. 1.

(d)           “Financing Agreements” shall mean,
collectively, this Agreement, Amendment No. 1 and all notes, guarantees,
security agreements, Deposit Account Control Agreements, Investment Property
Control Agreements, intercreditor agreements and all other agreements,
documents and instruments now or at any time hereafter executed and/or
delivered by Borrower in connection with this Agreement.

(e)           “Fixed Asset Availability” shall
mean, at any time, collectively, the Haynes Parent Fixed Asset Availability and
the Haynes Wire Fixed Asset Availability at such time.

(f)            “Information Certificate” shall
mean, collectively, the Information Certificate of Parent constituting Exhibit
C hereto and the Information Certificate of Haynes Wire constituting Exhibit B
to Amendment No. 1. each containing material information with respect to Borrower,
its business and assets provided by or on behalf of Borrower to Agent in
connection with the preparation of this Agreement and the other Financing
Agreements and the financing arrangements provided for herein.

(g)           “Inventory Loan Limit” shall mean at
any time, (i) as to Haynes Parent, the amount equal to (A) $70,000,000 minus
(B) the sum of (1) the US Dollar Equivalent of the then outstanding amount of
loans to Haynes UK (and including letter of credit accommodations to the extent
provided in its borrowing base as such term is defined in the UK Financing
Agreements) based on eligible inventory (as such term is defined in the UK
Financing Agreements) of Haynes UK and (2) the then outstanding amount of Loans
to Haynes Wire (and including Letter of Credit Accommodations to the extent
provided in Haynes Wire Borrowing Base) based on Eligible Inventory of Haynes
Wire and (ii) as to Haynes Wire, the amount equal to (A) $70,000,000 minus (B)
the sum of (1) the US Dollar Equivalent of the then outstanding amount of loans
to 

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Haynes UK (and including
letter of credit accommodations to the extent provided in its borrowing base as
such term is defined in the UK Financing Agreements ) based on eligible
inventory (as such term is defined in the UK Financing Agreements) of Haynes UK
plus (2) the then outstanding amount of Loans to Haynes Parent (and including
Letter of Credit Accommodations to the extent provided in Haynes Parent
Borrowing Base) based on Eligible Inventory of Haynes Parent.

(h)           “Maximum Credit” shall mean
$110,000,000.

(i)            “Mortgages” shall mean, individually
and collectively, each of the following (as the same now exist or may hereafter
be amended, modified, supplemented, extended, renewed, restated or replaced):
(a) the Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing, dated of even date herewith, by Haynes Parent in favor of Agent
with respect to the Real Property and related assets of Haynes Parent located
in Kokomo, Indiana, (b) the Mortgage, Assignment of Leases and Rents, Security
Agreement and Fixture Filing, dated of even date herewith, by Haynes Parent in
favor of Agent with respect to the Real Property and related assets of Haynes
Parent located in Arcadia, Louisiana, and (c) the Deed of Trust, Assignment of
Leases and Rents, Security Agreement and Fixture Filing, dated the date of
Amendment No. 1, by Haynes Wire in favor of Agent with respect to the Real
Property of Haynes Wire located in Mountain Home, North Carolina.

(j)            “Tranche A Commitment” shall mean,
with respect to each Lender, the principal amount set forth opposite such
Lender’s name on Schedule 1.134 hereto and designated “Tranche A Commitment” or
on Schedule 1 to the Assignment and Acceptance Agreement pursuant to which such
Lender became a Lender hereunder in accordance with the provisions of Section
13.7 hereof, as the same may be adjusted in accordance with the terms hereof;
sometimes being collectively referred to as “Tranche A Commitments”.

(k)           “Tranche A Loan Limit” shall mean at
any time the amount equal to the lesser of: (i) $95,000,000 or (ii) the
aggregate amount of the Borrowing Base of Borrowers at such time.

(l)            “Tranche B Borrowing Base” shall
mean, as to each Borrower, the amount equal to (i) such Borrower’s Borrowing
Base minus (ii) the Tranche A Loans then outstanding to such Borrower.

Section 2.               CONSENTS. Subject to the terms
and conditions contained herein, to the extent such consents are or may be
required under the Loan Agreement, Agent and Lenders hereby consent to:

2.1           the formation by Haynes Parent of
Haynes Wire, as a wholly-owned subsidiary of Haynes Parent, and the investments
made by Haynes Parent in Haynes Wire in connection with the initial
capitalization of Haynes Wire and the purchase of the Branford Purchased
Assets; and

2.2           the purchase by Haynes Wire of the
Branford Purchased Assets pursuant to the terms of the Branford Purchase
Documents as in effect on the date hereof.

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Section 3.               ASSUMPTION OF OBLIGATIONS AND
ACKNOWLEDGEMENT OF FINANCING AGREEMENTS. 
Haynes Wire hereby expressly:

3.1           assumes and agrees to be directly
liable to Agent and Lenders, jointly and severally, with Haynes Parent, for all
Obligations under, contained in, or arising pursuant to the Loan Agreement or
any of the other Financing Agreements;

3.2           agrees to perform, comply with and be
bound by all terms, conditions and covenants of the Loan Agreement and the
other Financing Agreements applicable to Borrower; and

3.3           agrees that Agent and Lenders shall
have all rights, remedies and interests, including security interests in and to
the Collateral granted pursuant to Section 4 hereof, the Loan Agreement and the
other Financing Agreements, with respect to Haynes Wire and its properties and
assets with the same force and effect as Agent and Lenders have with respect to
Haynes Parent and its assets and properties.

Section 4.               GRANT OF SECURITY INTEREST.

4.1           Without limiting the provisions of
Section 3 hereof, the Loan Agreement and the other Financing Agreements, to
secure payment and performance of its Secured Obligations, Haynes Wire hereby
grants to Agent, for the benefit of Secured Parties, a continuing security
interest in, a lien upon, and a right of set off against, all personal property
and fixtures, and interests in personal property and fixtures, of Haynes Wire,
whether now owned or hereafter acquired or existing, and wherever located,
including without limitation, the following:

(a)           all Accounts;

(b)           all general intangibles, including,
without limitation, all Intellectual Property;

(c)           all goods, including, without
limitation, Inventory and Equipment;

(d)           all chattel paper, including, without
limitation, all tangible and electronic chattel paper;

(e)           all instruments, including, without
limitation, all promissory notes;

(f)            all documents;

(g)           all deposit accounts;

(h)           all letters of credit, banker’s
acceptances and similar instruments and including all letter-of-credit rights;

(i)            all supporting obligations and all
present and future liens, security interests, rights, remedies, title and
interest in, to and in respect of Receivables and other Collateral, including
(i) rights and remedies under or relating to guaranties, contracts of
suretyship, letters of credit and credit and other insurance related to the
Collateral, (ii) rights of stoppage in transit, replevin, repossession,
reclamation and other rights and remedies of an unpaid vendor, lienor or

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secured party, (iii)
goods described in invoices, documents, contracts or instruments with respect
to, or otherwise representing or evidencing, Receivables or other Collateral,
including returned, repossessed and reclaimed goods, and (iv) deposits by and
property of account debtors or other persons securing the obligations of
account debtors;

(j)            all (i) investment property
(including securities, whether certificated or uncertificated, securities
accounts, security entitlements, commodity contracts or commodity accounts) and
(ii) monies, credit balances, deposits and other property of Haynes Wire now or
hereafter held or received by or in transit to Agent, any Lender or its
Affiliates or at any other depository or other institution from or for the
account of Haynes Wire, whether for safekeeping, pledge, custody, transmission,
collection or otherwise;

(k)           all commercial tort claims listed on
Schedule 4.1 hereto;

(l)            to the extent not otherwise
described above, all Receivables;

(m)          all Records; and

(n)           all products and proceeds of the
foregoing, in any form, including insurance proceeds (other than business
interruption insurance proceeds) and all claims against third parties for loss
or damage to or destruction of or other involuntary conversion of any kind or
nature of any or all of the other Collateral described above, it being
understood and agreed that for the purposes of this grant, the term “Borrower”
as the same appears in the definitions of Accounts, Intellectual Property,
Inventory, Equipment, Receivables and Records which are incorporated herein by
reference to the Loan Agreement shall mean Haynes Wire.

4.2           Without limiting the generality of
the foregoing, the Collateral shall include, and Haynes Wire hereby grants (and
Haynes Parent hereby confirms its grant of) a security interest in and lien
upon, to Agent, for the benefit of the Secured Parties, to secure payment in
full of all of the Secured Obligations, all of such Borrower’s now existing or
hereafter arising right, title and interest in and to each of the Branford
Purchase Documents and all proceeds thereunder, including, but not limited to,
(a) all rights of such Borrower to receive monies due to become due to it
thereunder or in connection therewith; (b) all rights of such Borrower to
indemnification and claims for damages or other relief pursuant to or in
respect of the Branford Purchase Documents; (c) all rights of such Borrower to
perform and exercise all remedies thereunder and to require performance by the
other parties to the Branford Purchase Documents of its obligations thereunder;
and (d) all proceeds, collections, recoveries and rights of subrogation with
respect to the foregoing. The grant of security interest and lien is provided
only as security for the Secured Obligations and, therefore shall not subject
Agent or any Lender to, or transfer or pass to Agent or any Lender, or in any
way affect or modify, the liability of a Borrower under any of the Branford
Purchase Documents. In no event shall the grant of the security interest and
lien provided for herein or the exercise by Agent or any Lender of any rights
hereunder or assigned hereby, constitute an assumption of any liability or
obligation of Agent or any Lender to any of the other parties to the Branford
Purchase Documents or any other persons.

4.3           Notwithstanding anything to the
contrary set forth in Section 4.1 above, the types or items of Collateral
described in such Section shall not include:

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(a)           any rights or interests in any
contract, lease, permit, license, charter or license agreement covering real or
personal property, as such, if under the terms of such contract, lease, permit,
license, charter or license agreement, or applicable law with respect thereto,
the valid grant of a security interest or lien therein to Agent is prohibited
and such prohibition has not been or is not waived or the consent of the other
party to such contract, lease, permit, license, charter or license agreement
has not been or is not otherwise obtained or under applicable law such
prohibition cannot be waived; provided, that, the foregoing exclusion shall in
no way be construed (A) to apply if any such prohibition is unenforceable under
Sections 9-406, 9-407 or 9-408 of the UCC or other applicable law or (B) so as
to limit, impair or otherwise affect Agent’s unconditional continuing security
interests in and liens upon any rights or interests of a Borrower in or to
monies due or to become due under any such contract, lease, permit, license,
charter or license agreement (including any Receivables);

(b)           trademark or servicemark applications
that have been filed with the U.S. Patent and Trademark Office on the basis of
an “intent-to-use” with respect to such marks, unless and until a statement of
use or amendment to allege use is filed or any other filing is made or
circumstances otherwise change so that the interests of Haynes Wire in such
marks is no longer on an “intent-to-use” basis, at which time such marks shall
automatically and without further action by the parties be subject to the
security interests and liens granted by Haynes Wire to Agent hereunder.

4.4           Each Borrower irrevocably and
unconditionally authorizes Agent (or its agent) to file at any time and from
time to time such financing statements with respect to the Collateral naming
Agent as the secured party and such Borrower as Debtor, as Agent may require,
and including any other information with respect to such Borrower or otherwise
required by Part 5 of Article 9 of the Uniform Commercial Code of such
jurisdiction as Agent may determine, together with any amendment and
continuations with respect thereto, which authorization shall apply to all
financing statements filed on, prior to or after the date hereof. Such
financing statements may describe the Collateral in the same manner as
described herein or in any security agreement or pledge agreement entered into
by the parties in connection herewith or may contain an indication or
description of collateral that describes such property in any other manner as
the Agent may determine, in its sole discretion, is necessary, advisable or
prudent to ensure the perfection of the security interest in the Collateral
granted to the Agent in connection herewith or therewith. Each Borrower hereby
ratifies and approves all financing statements naming Agent or its designee as
secured party and such Borrower, as debtor with respect to the Collateral (and
any amendments with respect to such financing statements) filed by or on behalf
of Agent prior to the date hereof and ratifies and confirms the authorization
of Agent to file such financing statements (and amendments, if any). Each
Borrower hereby authorizes Agent to adopt on behalf of such Borrower any symbol
required for authenticating any electronic filing. In the event that the
description of the collateral in any financing statement naming Agent or its designee
as the secured party and any Borrower as debtor includes assets and properties
of such Borrower that do not at any time constitute Collateral, whether
hereunder, under any of the other Financing Agreements or otherwise, the filing
of such financing statement shall nonetheless be deemed authorized by such
Borrower to the extent of the Collateral included in such description and it
shall not render the financing statement ineffective as to any of the Collateral
or otherwise affect the financing statement as it applies to any of the
Collateral.

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Section 5.               AMENDMENTS TO LOAN AGREEMENT.

5.1           Section 2.1(a) of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:

“(a)         Subject
to and upon the terms and conditions contained herein, each Tranche A Lender
severally (and not jointly) agrees to make its Pro Rata Share of Tranche A
Loans to: (i) Haynes Parent from time to time in amounts requested by Haynes
Parent in the aggregate amount for the Tranche A Loans of all Tranche A Lenders
of up to the lesser of (A) the Borrowing Base of Haynes Parent at such time or
(B) the Tranche A Commitments minus the then outstanding Tranche A Loans to
Haynes Wire and (ii) Haynes Wire from time to time in amounts requested by or
on behalf of Haynes Wire in the aggregate amount for the Tranche A Loans of all
Tranche A Lenders of up to the lesser of: (A) the Borrowing Base of Haynes Wire
at such time or (B) the Tranche A Commitments minus the then outstanding
Tranche A Loans to Haynes Parent.”

5.2           Section 2.1(b) of the Loan Agreement
is hereby deleted in its entirety and the following is substituted therefor:

“(b)         Subject
to and upon the terms and conditions contained herein, each Tranche B Lender
severally (and not jointly) agrees to make its Pro Rata Share of Tranche B
Loans to: (i) Haynes Parent from time to time in amounts requested by Haynes
Parent in the aggregate amount for the Tranche B Loans of all Tranche B Lenders
of up to the lesser of (A) the Tranche B Borrowing Base of Haynes Parent at
such time and (B) the Tranche B Commitments minus the then outstanding Tranche
B Loans to Haynes Wire and (ii) Haynes Wire in amounts requested by or on
behalf of Haynes Wire in the aggregate amount for the Tranche B Loans of all
Tranche B Lenders up to the lesser of (A) the Tranche B Borrowing Base of
Haynes Wire at such time and (B) the Tranche B Commitments minus the then
outstanding Tranche B Loans to Haynes Parent; PROVIDED, THAT, Tranche B Loans
will only be made at such time as the then outstanding amount of Trache A Loans
equals or exceeds the Tranche A Loan Limit .”

5.3           Section 2.1(c) of the Loan Agreement
is hereby amended by adding new clauses (vii), (viii), (ix) and (x) at the end
thereof as follows:

“(vii)       the
aggregate principal amount of the Tranche A Loans and Tranche B Loans to Haynes
Parent outstanding at any time shall not exceed the Haynes Parent Borrowing
Base, (viii) the aggregate principal amount of Tranche A Loans and Tranche B
Loans to Haynes Wire outstanding at any time shall not exceed the Haynes Wire
Borrowing Base, (ix) the aggregate principal amount of the Loans to Haynes
Parent outstanding at any time based on Eligible Inventory of Haynes Parent
shall not exceed the Inventory Loan Limit applicable to Haynes Parent, and (x)
the aggregate principal amount of the Loans to Haynes Wire

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outstanding at any time based on Eligible Inventory of Haynes Wire
shall not exceed the Inventory Loan Limit applicable to Haynes Wire.”

5.4           Section 2.1(d) of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:

“(d)         In
the event that the aggregate principal amount of the Loans and Letter of Credit
Accommodations outstanding at any time exceeds the Maximum Credit, or the
aggregate principal amount of the Tranche A Loans and the Tranche B Loans
exceeds the Borrowing Base, or the aggregate principal amount of outstanding
Tranche A Loans exceeds the Tranche A Loan Limit, or the aggregate principal
amount of outstanding Tranche B Loans exceeds the Tranche B Loan Limit, or the
aggregate principal amount of Loans and Letter of Credit Accommodations based
on the Eligible Inventory exceed the Inventory Loan Limit, or the aggregate
amount of the outstanding Letter of Credit Accommodations exceed the sublimit
for Letter of Credit Accommodations set forth in Section 2.2(e), or the
aggregate principal amount of the Tranche A Loans and Tranche B Loans
applicable to Haynes Parent outstanding at any time exceed the Haynes Parent
Borrowing Base, or the aggregate principal amount of Tranche A Loans to Haynes
Wire outstanding at any time exceed the Haynes Wire Borrowing Base, or the aggregate
principal amount of the Loans to Haynes Parent outstanding at any time based on
Eligible Inventory of Haynes Parent exceed the Inventory Loan Limit applicable
to Haynes Parent, or the aggregate principal amount of the Loans to Haynes Wire
outstanding at any time based on Eligible Inventory of Haynes Wire exceed the
Inventory Loan Limit applicable to Haynes Wire, in any case such event shall
not limit, waive or otherwise affect any rights of Agent or Lenders in such
circumstances or on any future occasions and Borrower shall, upon demand by
Agent, which may be made at any time or from time to time, immediately repay to
Agent the entire amount of any such excess(es) for which payment is demanded.”

5.5           Section 2.1(e) of the Loan Agreement
is hereby amended (a) to delete the reference to the figure “$85,000,000”
contained therein and substitute the following therefor: “$95,000,000” and (b)
to delete the reference to “and 1.117(b)” and substitute the following
therefor: “1.117(b) and 6.4(a)”

5.6           Section 2.1(f) of the Loan Agreement
is hereby deleted in its entirety and the following substituted therefor:

“(f)          The method for
calculating the Pro Rata Shares of each Lender as set forth in Section 2.1(e)
above shall apply as to each Lender whether or not such Lender has only a
Tranche A Commitment, only a Tranche B Commitment or both and shall apply as to
such Lender’s obligation to make Loans and receive payments (pursuant to any
section of this Agreement, including Section 6.4(a)) in respect of such Loans
in the circumstances when Section 2.1(e) hereof is applicable regardless of
whether any such loans would be deemed to constitute Tranche A Loans

 11
 

or Tranche B Loans and regardless of whether any such payments would
otherwise be allocated to Tranche A Loans or Tranche B Loans for purposes of
Section 6.4(a) hereof and, for purposes of this Section 2.1, regardless of
whether such Lender is a Tranche A Lender and/or a Tranche B Lender. Nothing
contained herein shall be construed to mean that any Lender that has only a
Tranche A Commitment also has a Tranche B Commitment for purposes of the Loan Agreement
or that any Lender has only a Tranche A Commitment is a Tranche B Lender for
purposes of the Loan Agreement.”

5.7           Section 6.4(a) of the Loan Agreement
is hereby amended to add the following at the end thereof: “Notwithstanding
anything to the contrary contained in this Agreement, payments with proceeds of
Collateral of Haynes Parent shall be applied to the payment of the Obligations
of Haynes Parent and payments with proceeds of Collateral of Haynes Wire shall
be applied to the payment of the Obligations of Haynes Wire, except (at any
time an Event of Default exists or has occurred and is continuing) as Agent may
from time to time otherwise determine.”

5.8           Section 9.7(b)(i) of the Loan
Agreement is hereby amended by adding the following words thereto at the end
thereof: “and transfers of Inventory by Haynes Wire to the Sellers pursuant to
the post-closing adjustment contemplated under the Branford Purchase Agreement
as in effect on the date of Amendment No. 1.”

5.9           Section 9.10 of the Loan Agreement is
hereby amended to add a new Section 9.10(j) at the end thereof as follows:

“(j)          loans
by Haynes Parent to Haynes Wire from time to time on and after the date of
Amendment No. 1, PROVIDED, THAT, (i) the Indebtedness arising pursuant to any
such loan shall not be evidenced by a promissory note or other instrument,
unless the single original of such note or other instrument is promptly
delivered to Agent upon its request to hold as part of the Collateral, with
such endorsement and/or assignment by the payee of such note or other
instrument as Agent may require, (ii) as of the date of any such loan and after
giving effect thereto, the Haynes Parent Excess Availability shall be not less
than $500,000, (iii) except as Agent may from time to time otherwise agree,
Haynes shall not make, and shall not be required to make, any payments in
respect of the Indebtedness of Haynes Wire to Haynes Parent arising pursuant to
such loans, unless as of the date of any such payments, and after giving effect
thereto, the Haynes Wire Excess Availability shall be not less than $250,000,
and (iv) except as Agent may from time to time otherwise agree, as of the date
of any such loan, or the repayment of any Indebtedness arising pursuant to such
loan, and in each case after giving effect thereto, no Default or Event of Default
shall exist or have occurred and be continuing.”

5.10         Section 9.12(a) of the Loan Agreement
is hereby amended to delete the reference to “Sections 9.10(g) and 9.10(h)”
contained therein and substitute the following therefor: “Sections 9.10(g),
9.10(h) and 9.10(j).

 12
 

5.11         Section 9.16(d)(ii) of the Loan
Agreement is hereby amended by adding the following words thereto at the end
thereof: “and the other Financing Agreements”.

5.12         Section 13.2 of the Loan Agreement is
hereby amended by adding a new clause (n) at the end thereof as follows:

“(n)         From
and after the effective date of Amendment No. 1 (i) all payment and indemnity
obligations of the “Borrower” contained herein shall constitute the joint and
several obligations of each Borrower, and all other obligations of the “Borrower”
contained herein shall constitute obligations of each Borrower and (ii) all
references to information contained on the “Information Certificate” shall,
with respect to each Borrower, be a reference to the Information Certificate
delivered by such Borrower.”

Section 6.               APPOINTMENT OF HAYNES PARENT AS
AGENT FOR REQUESTING LOANS AND RECEIPTS OF LOANS AND STATEMENTS.

6.1           Haynes Wire hereby irrevocably
appoints and constitutes Haynes Parent as its agent to request Loans and Letter
of Credit Accommodations pursuant to the Loan Agreement and the other Financing
Agreements from Agent or any Lender in the name or on behalf of such Borrower.
Agent and Lenders shall disburse the Loans to such bank account of Haynes
Parent or Haynes Wire or otherwise make such Loans and provide such Letter of
Credit Accommodations to a Borrower as Haynes Parent may designate or direct.
Notwithstanding anything to the contrary contained herein, Agent may at any
time and from time to time require that Loans to or for the account of any
Borrower be disbursed directly to an operating account of such Borrower.

6.2           Haynes Parent hereby accepts the
appointment by Haynes Wire to act as the agent of Haynes Wire pursuant to this
Section 6. Haynes Parent shall ensure that the disbursement of any Loans to
each Borrower requested by or paid to or for the account of such Borrower, or
the issuance of any Letter of Credit Accommodations for a Borrower hereunder,
shall be paid to or for the account of such Borrower.

6.3           Haynes Wire hereby irrevocably
appoints and constitutes Haynes Parent as its agent to receive statements on
account and all other notices from Agent and Lenders with respect to the
Obligations or otherwise under or in connection with this Agreement and the
other Financing Agreements.

6.4           Any notice or election, (and any
representation, warranty, agreement or undertaking made in connection
therewith) by or on behalf of Haynes Wire by Haynes Parent shall be deemed for
all purposes to have been made by Haynes Wire, and shall be binding upon and
enforceable against Haynes Wire to the same extent as if made directly by
Haynes Wire.

6.5           No purported termination of the
appointment of Haynes Parent as agent as aforesaid shall be effective, except
after ten (10) days’ prior written notice to Agent.

 13
 

Section 7.               SCHEDULES.

7.1           Each of Schedule 6.6(b) of the Loan
Agreement is hereby amended and restated in its entirety by Amended and
Restated Schedule 6.6(b) to this Amendment No. 1.

7.2           Schedule 1.134 hereto is hereby added
to the Loan Agreement as Schedule 1.134 and made a part thereof.

7.3           AMENDMENT FEE. In addition to all the
other fees, charges, interest and expenses payable to Borrowers to Agent and
Lenders under the Loan Agreement and the other Financing Agreements, Borrowers
shall pay to Agent for the account of Lenders, contemporaneously with the
effectiveness of this Agreement, an amendment fee in the amount of $50,000,
which fee shall be fully earned and payable on the effective date hereof and
may be charged to any loan account of Borrowers.

Section 8.               REPRESENTATIONS AND WARRANTIES.
Each Borrower (including Haynes Wire) hereby represents and warrants to Agent and
Lenders the following (which shall survive the execution and delivery of this
Amendment No. 1), the truth and accuracy of which on the date hereof are a
continuing condition of the making of Loans and providing Letter of Credit
Accommodations to Borrowers:

8.1           This Amendment No. 1 and each other
Agreement or instrument to be executed and delivered by Haynes Parent or Haynes
Wire pursuant hereto have been duly authorized, executed and delivered by it,
and has been authorized by all necessary action on the part of such Borrower
which is a party hereto and thereto (and, if necessary, their respective
stockholders) and each such agreement is in full force and effect as of the
date hereof, and the agreements and obligations of Haynes Parent and Haynes
Wire, as the case may be, contained herein and therein, constitute the legal,
valid and binding obligations of such Borrower, enforceable against it in
accordance with their respective terms, except as such enforceability may be
limited by any applicable bankruptcy, insolvency, reorganization, moratorium or
similar laws affecting creditors’ rights generally and by general principles of
equity.

8.2           The execution, delivery and
performance of this Amendment No. 1 (a) are all within the corporate powers of
Haynes Parent and Haynes Wire and (b) are not in contravention of law or the
terms of such Borrower’s certificate of incorporation, by-laws, or other
organizational documentation, or any indenture, agreement or undertaking to
which such Borrower is a party or by which such Borrower or its property are
bound.

8.3           Haynes Wire is a Delaware
corporation, duly organized and validly existing in good standing under the
laws of the State of Delaware and has all requisite power and authority to own,
lease and operate its properties, if any, and to carry on its business as it is
now being conducted.

8.4           All of the outstanding shares of
Capital Stock of Haynes Wire have been duly authorized, validly issued and are
fully paid and non-assessable, free and clear of all claims, liens, pledges and
encumbrances of any kind. Haynes Parent is the beneficial and direct owner of
record of one hundred (100%) percent of the issued and outstanding shares of
Capital Stock of Haynes Wire. There is no debt outstanding that is convertible
into Capital Stock of Haynes

 14
 

Wire, and there are no
outstanding rights, options or warrants to acquire any Capital Stock or debt
convertible into capital stock of Haynes Wire.

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

8.6           Haynes Wire has acquired all of the
Sellers’ rights, title and interest in and to the Branford Purchased Assets,
free and clear of all liens, claims, charges and encumbrances in accordance
with the Branford Purchase Documents.

8.7           Neither the execution and delivery of
the Branford Purchase Documents, nor the consummation of the transactions
contemplated by the Branford Purchase Documents, nor compliance with the
provisions of the Branford Purchase Documents or instruments thereunder shall
result in (a) the creation or imposition of any lien, claim, charge or
encumbrance upon any of the Collateral, except in favor of Agent, for the
benefit of the Secured Parties, or as expressly permitted by Section 9.8 of the
Loan Agreement and by the other Financing Agreements or (b) the incurrence,
creation or assumption of any Indebtedness of a Borrower, except as expressly
permitted under Section 9.9 of the Loan Agreement.

8.8           All actions and proceedings required
by the Branford Purchase Documents, applicable law or regulation have been duly
and validly taken and consummated.

8.9           No court of competent jurisdiction
has issued any injunction, restraining order or other order which prohibits
consummation of the transactions contemplated in respect of the Branford
Purchase Documents and no governmental or other action or proceeding has been
threatened or commenced in the United States of America, seeking any
injunction, restraining order or other order which seeks to void or otherwise
modify the transactions described in the Branford Purchase Documents, nor
compliance with the provisions thereof, has violated or shall violate any
Federal or State securities laws or any other law or regulation or any order or
decree of any court or governmental instrumentality in respect or does or shall
conflict with or result in the breach of, or constitute a default in any
respect under, any indenture, mortgage, deed of trust, security agreement or
other agreement or instrument to which a Borrower is a party or may be bound,
or violate any provision of the organizational documents of a Borrower.

8.10         Agent has, on or before the date
hereof, received from Haynes Wire, true and complete copies of the Branford
Purchase Documents and all notices, consents, instruments, documents and
agreements relating thereto, including all exhibits and schedules thereto, all
as duly executed and delivered by the parties thereto.

8.11         Borrowers shall take such steps and
execute and deliver, such further agreements, documents and instruments as
Agent may require in order to more fully evidence, perfect and protect Agent’s
security interest in, among other Collateral, the Branford Purchased Assets.

8.12         Each of the Branford Purchase Documents
has been duly authorized, executed and delivered by Haynes Wire, and each is in
full force and effect as of the date hereof. No material default by Haynes Wire
under or with respect to the Branford Purchase Documents exists or has
occurred. To the best of the knowledge of Borrowers, no default by any party
(other than Haynes Wire) under or with respect to any material agreement
contained in the Branford

 15
 

Purchase Documents exists
or has occurred. Borrowers have obtained all consents required for the valid
and binding assignment of, and grant to Agent of a security interest in, the
Branford Purchase Documents and such consents are in full force and effect.

Section 9.               COVENANTS.

9.1           Borrowers will not consent to or
enter into any modification, alteration, amendment or cancellation of the
Branford Purchase Documents or any agreement or instrument related thereto, or
waive or release any rights, remedies or benefits of a Borrower under the
Branford Purchase Documents or any agreement or instrument related thereto,
without the prior written consent of Agent in each case. Borrowers will give
prompt notice to Agent of any notice of default or any other notice under any
of the Branford Purchase Documents at any time received by a Borrower promptly
upon receipt thereof or sent by a Borrower or on its behalf concurrently with
the sending thereof, in each case together with a complete copy of such notice.
Borrowers shall promptly and faithfully abide by, perform and discharge in all
material respects the obligations, covenants, conditions and duties which the
Branford Purchase Documents provide are to be performed by a Borrower.

9.2           Borrowers shall: (a) promptly notify
Agent of any amounts required to be paid by or to a Borrower (or for its
benefit) in connection with the Branford Purchase Documents, including as part
of any purchase price adjustment, (b) promptly notify Agent of each and every
dispute with, proceeding or claim against, cause of action or litigation
involving any Person for which a Borrower has or may have any right to
indemnification or claim for damages or other relief or remedies, whether at
law or in equity, arising under or in connection with the Branford Purchase
Documents, (c) diligently enforce all rights to indemnification or claim for
damages or other relief or remedies, whether at law or in equity, arising under
or in connection with the Branford Purchase Documents, (d) promptly provide
Agent with copies of all notices, demands, requests or other communications
sent or received by, or on behalf of, a Borrower pursuant to the Branford
Purchase Documents, as well as prior written notice of a Borrower’s intention
to exercise any power, right or remedy pursuant to the Branford Purchase
Documents and (e) not take any action that adversely affects, in the good faith
judgment of Agent, the rights of a Borrower under the Branford Purchase
Documents in any material respect.

9.3           In no event shall a Borrower, without
the prior written consent of Agent, waive, release or discharge any of its
rights or any of the obligations, duties or liabilities of any other party to
any of the Branford Purchase Documents or compromise or settle any right or any
claim or dispute with respect to any of its rights or any of the obligations,
duties or liabilities of any other party to any of the Branford Purchase
Documents. No such waiver, release, discharge, compromise or settlement shall
be effective without the prior written consent of Agent.

9.4           At any time an Event of Default
exists or has occurred and is continuing, without limiting any other rights or
remedies of Agent or Lenders, Agent shall have all rights and remedies under
the Loan Agreement and the other Financing Agreements, the Uniform Commercial
Code and other applicable law, and shall have the absolute right to enforce, in
its name, any and all rights to indemnification or claim for damages or other
relief or remedies, whether at law or in equity, arising under or in connection
with the Branford Purchase Documents, or otherwise and apply the proceeds
thereof to the Obligations in such order or

 16
 

manner as Agent shall
determine. In order to effectuate the foregoing, each Borrower, for itself and
its respective successors and assigns, hereby constitutes and appoints Agent
and each officer and employee thereof (effective at any time an Event of
Default exists or has occurred and is continuing) as its attorney-in-fact with
power to assert claims and commence and prosecute suit against any Person or to
settle or compromise any such claim or suit relating to any such right, claim,
relief or remedy, and to sign and file any and all papers required in
connection therewith and to take any and all other action which Agent may, in
its good faith discretion, deem appropriate. Each Borrower hereby ratifies and
approves all acts which Agent or any officer or employee thereof as attorney
may do and this power of attorney, being coupled with an interest, is irrevocable
as long as any of the Obligations remain outstanding.

Section 10.             CONDITIONS PRECEDENT. The consents
and amendments contained herein shall only be effective upon the receipt by
Agent of each of the following, in each case in form and substance reasonably
satisfactory to Agent:

10.1         an executed original or executed
original counterparts of this Amendment No. 1 (as the case may be), duly
authorized, executed and delivered by the respective party or parties hereto;

10.2         all consents, waivers, acknowledgments
and other agreements from third persons (other than Deposit Account Control
Agreements and Collateral Access Agreements relating to those accounts and
premises not identified on Schedule 10.2 hereto) which Agent may deem necessary
or desirable in order to permit, protect and perfect its security interests in
and liens upon the Collateral of Haynes Wire, including, without limitation,
the Branford Purchased Assets, in favor of Agent or to effectuate the
provisions or purposes of this Amendment No. 1 and the other Financing
Agreements;

10.3         Deposit Account Control Agreements by
and among Agent, Haynes Wire and each bank where Haynes Wire has a deposit
account identified on Schedule 10.3 hereto, in each case, duly authorized,
executed and delivered by such bank and Haynes Wire;

10.4         the properly completed Information
Certificate of Haynes Wire duly authorized, executed and delivered by Haynes
Wire;

10.5         (a) a copy of the Certificate of
Incorporation of Haynes Wire, and all amendments thereto, certified by the
Secretary of State of its jurisdiction of incorporation as of the most recent
practicable date certifying that each of the foregoing documents remains in
full force and effect and has not been modified or amended, except as described
therein, (b) a copy of the By-Laws of Haynes Wire, certified by the Secretary
of Haynes Wire, and (c) a certificate from the Secretary of Haynes Wire dated
the date hereof certifying that each of the foregoing documents remains in full
force and effect and has not been modified or amended, except as described
therein;

10.6         Secretary’s Certificates of Directors’
Resolutions evidencing the adoption and subsistence of corporate resolutions
approving the execution, delivery and performance by Borrowers of this
Amendment No. 1 and the agreements, documents and instruments to be delivered
pursuant to this Amendment No. 1;

 17
 

10.7         original good standing certificates (or
its equivalent) from the Secretary of State (or equivalent Governmental
Authority) from each jurisdiction where Haynes Wire conducts business;

10.8         a true and correct copy of any consent,
waiver or approval (if any) to or of this Amendment No. 1, which any Borrower
is required to obtain from any other Person;

10.9         such opinion letter(s) of counsel to
Borrowers with respect to the matters contemplated by this Amendment No. 1 and
such other matters as Agent may reasonably request;

10.10       lien and judgment search results for the
jurisdiction of incorporation of Haynes Wire and each Seller, the jurisdiction
of the chief executive office of Haynes Wire and each Seller and all
jurisdictions in which assets of Haynes Wire and each Seller are located, which
search results shall be in form and substance satisfactory to Agent;

10.11       evidence of insurance and loss payee
endorsement required hereunder and under the other Financing Agreements with
respect to Haynes Wire and certificates of insurance policies and/or
endorsement naming Agent as loss payee;

10.12       a Pledge and Security Agreement by Haynes
Parent in favor of Agent for the benefit of the Secured Parties, with respect
to the pledge of all of the issued and outstanding shares of capital stock of
Haynes Wire by Haynes Parent to Agent for the benefit of Secured Parties, duly
authorized, executed and delivered by Haynes Parent;

10.13       a Mortgage by Haynes Wire in favor of
Agent, for the benefit of the Secured Parties, with respect to the Real
Property of Haynes Wire acquired from Sellers, duly authorized, executed and
delivered by Haynes Wire;

10.14       Agent shall have received environmental
audits of the Real Property of Haynes Wire to be subject to the Mortgage by
Haynes Wire in favor of Agent conducted by an independent environmental
engineering firm acceptable to Agent, and in form, scope and methodology
satisfactory to Agent, confirming that (i) Haynes Wire (and its predecessor
owner) is in compliance with all material applicable Environmental Laws and
(ii) the absence of any material environmental problems;

10.15       Agent shall have received, in form and
substance satisfactory to Agent, a valid and effective title insurance policy
issued by a company and agent acceptable to Agent: (i) insuring the priority,
amount and sufficiency of the Mortgages, (ii) insuring against matters that
would be disclosed by surveys and (iii) containing any legally available
endorsements, assurances or affirmative coverage requested by Agent for
protection of its interests;

10.16       all releases, terminations and such other
documents as Agent may request to evidence and effectuate the termination or
the release by any party of any interest in and to any of the Branford
Purchased Assets, including, without limitation, a termination agreement duly
authorized, executed and delivered by First-Citizens Bank and Trust Company and
UCC termination statements for all UCC financing statements previously filed by
any such person against a Seller, as debtor;

 18
 

10.17       evidence that the Branford Purchase
Documents have been duly authorized, executed and delivered by and to the
appropriate parties thereto and that the transactions contemplated under the
terms and conditions of the Branford Purchase Documents have been consummated
prior to or contemplated with the execution of this Amendment No. 1;

10.18       true and complete copies of the Branford
Purchase Documents and all notices, consents, instruments, documents and
agreements relating thereto, including all exhibits and schedules thereto, all
as duly executed and delivered by the parties thereto; and

10.19       a Seller Acknowledgment Letter by Sellers
in favor of Agent with respect to the Branford Purchase Documents, duly
authorized, executed and delivered by Sellers.

Section 11.             ADDITIONAL EVENTS OF DEFAULT. The
parties hereto acknowledge, confirm and agree that the failure of a Borrower to
comply with the covenants, conditions and agreements contained herein shall
constitute an Event of Default under the Loan Agreement and the other Financing
Agreements (subject to the applicable cure period, if any, with respect thereto
provided for in the Loan Agreement as in effect on the date hereof).

Section 12.             PROVISIONS OF GENERAL APPLICATION.

12.1         EFFECT OF THIS AMENDMENT. Except as
expressly amended pursuant hereto and except for the consents expressly granted
herein, no other changes or modifications to the Financing Agreements are
intended or implied and, in all other respects, the Financing Agreements are
hereby specifically ratified, restated and confirmed by all parties hereto as
of the effective date hereof. To the extent that any provision of the Loan
Agreement or any of the other Financing Agreements are inconsistent with the
provisions of this Amendment No. 1, the provisions of this Amendment No. 1
shall control. The Loan Agreement and this Amendment No. 1 shall be read and
construed as one Agreement.

12.2         GOVERNING LAW. The validity,
interpretation and enforcement of this Amendment No. 1 and the other Financing
Agreements (except as otherwise provided therein) and any dispute arising out
of the parties hereto, whether in contract, tort, equity or otherwise, shall be
governed by the internal laws of the State of Illinois, but excluding any
principles of conflicts of law or other rule of law that would cause the
application of the law of any jurisdiction other than the laws of the State of
Illinois.

12.3         BINDING EFFECT. This Amendment No. 1
shall be binding upon and inure to the benefit of each of the parties hereto
and their respective successors and assigns. Any acknowledgments or consents
contained herein shall not be construed to constitute a consent to any other or
further action by a Borrower or to entitle such Borrower to any other consent.

12.4          FURTHER ASSURANCES. Each Borrower shall
execute and deliver such additional documents and take such additional action
as may be reasonably requested by Agent and Lenders to effectuate the
provisions and purposes of this Amendment No. 1.

12.5         HEADINGS. The headings listed herein
are for convenience only and do not constitute matters to be construed in
interpreting this Amendment No. 1.

 19
 

12.6         COUNTERPARTS. This Amendment No. 1 may
be executed in any number of counterparts, each of which shall be an original
but all of which taken together shall constitute one and the same Agreement.
Delivery of an executed counterpart of this Amendment No. 1 by telefacsimile
shall have the same force and effect as the delivery of an original executed
counterpart of this Amendment No. 1. Any party delivering an executed
counterpart of this Amendment No. 1 by telefacsimile shall also deliver an
originally executed counterpart of this Amendment No. 1, but the failure to do
so shall not affect the validity, enforceability or binding effect of this
Amendment No. 1.

[REMAINDER OF THIS
PAGE INTENTIONALLY LEFT BLANK]

 20
 

IN
WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to be duly
executed and delivered by their authorized officers as of the date and year
first above written.

	
  

  	
  CONGRESS
  FINANCIAL CORPORATION

  
	
   

  	
  (CENTRAL), as
  Agent and as Lender

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Vicky Geist

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
    Vice
  President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HAYNES
  INTERNATIONAL, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  MARCEL MARTIN

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
    Vice
  President, Finance and CFO

  	
   

  
	
   

  
	
   

  
	
   

  	
   

  
	
   

  	
  HAYNES WIRE
  COMPANY

  
	
   

  	
   

  
	
   

  	
  By:

  	
    /s/
  Marcel Martin

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
    Vice
  President, Finance and CFO

  	
   

  
	
   

  
	
  BANK ONE, NA
  (Main Office Chicago)

  
	
   

  
	
  By:

  	
    /s/
  James Gurgone

  	
   

  
	
   

  
	
  Title:

  	
    Director

  	
   

  
	
   

  
	
  WESTERNBANK
  PUERTO RICO

  
	
  BUSINESS CREDIT
  DIVISION

  
	
   

  
	
  By:

  	
   /s/ Miguel
  A. Vazquez

  	
   

  
	
   

  
	
  Title:

  	
   President,
  Westernbank Business Credit Division

  	
   

  
												

 

[The Disclosure
Schedules have been omitted from the Agreement as filed with the Securities and
Exchange Commission (the “SEC”). The omitted information is considered
immaterial from an investor’s perspective. The Registrant will furnish
supplementally a copy of any of the schedules to the SEC upon request from the
SEC.]

 21EXHIBIT 10.14

CONSULTING,
NON-COMPETITION AND

CONFIDENTIALITY
AGREEMENT

This
Consulting, Non-Competition and Confidentiality Agreement (the “AGREEMENT”) is
made as of the 5th day of November 2004 (the “EFFECTIVE DATE”), by and between
Richard Harcke (“HARCKE”) and Haynes Wire Company, a Delaware corporation (“BUYER”).

PRELIMINARY
STATEMENT

Prior
to the date hereof, Sellers have engaged in the business of owning and
operating a wire manufacturing business (the “BUSINESS”). This Agreement is
made in connection with and as a condition to consummation of the transactions
contemplated by a certain Asset Purchase Agreement dated October 28, 2004, by
and among Harcke, The Branford Wire and Manufacturing Company, a Connecticut
corporation (“BRANFORD”), Carolina Industries, Inc. a Connecticut corporation (“CAROLINA
INDUSTRIES”) (Branford and Carolina Industries together, “SELLERS”) and Buyer
(the “ASSET PURCHASE AGREEMENT”). Under the terms of the Asset Purchase
Agreement, Buyer has agreed to purchase, and Sellers have agreed to sell, the
assets used in Sellers’ operation of the Business. Harcke has acquired
extensive knowledge about the conduct of the Business as the owner and operator
of Sellers. This Agreement is entered into between Buyer and Harcke to protect the
goodwill of the Business that is being sold to Buyer by Sellers and to protect
against unfair competition by Harcke. All capitalized terms not herein defined
have the meaning ascribed to them in the Asset Purchase Agreement.

AGREEMENT

In
consideration of the premises and mutual covenants contained in this Agreement
and as an inducement to Buyer to enter into the Asset Purchase Agreement, the
parties hereby agree as follows:  

I.                                         CONSULTING

A.
SERVICES. For a period of six (6) months from the Effective Date, Harcke will,
at the request of the officers of Buyer from time to time, provide consulting
services to Buyer or any affiliate of Buyer with respect to all aspects of the
Business, including without limitation the provision of advice on business
strategy and operations for the Business and management advice and consultation
to the officers of Buyer (collectively, the “SERVICES”). Harcke shall provide
the Services at such times as may be reasonably requested by Buyer.

II.                                     NON-COMPETITION

A.
AGREEMENT NOT TO COMPETE. To protect Buyer’s interest in the goodwill acquired
by Buyer from Sellers and to prevent unfair competition, for a period of seven
(7) years from the Effective Date (the “RESTRICTED PERIOD”), except as provided
in SECTION II(A) and subject to the geographical limitations set forth in
SECTION II(B), Harcke shall not:

1.
Engage in any activity directly or indirectly, as an owner, consultant,
independent contractor or otherwise in the Business or any related business
that is competitive with Buyer, including without limitation any activity that
is necessary or incident to the conduct of the Business or any related business
in a manner similar to any of the business practices engaged in by either
Seller during Harcke’s ownership and operation of such Seller; provided,
however, nothing contained in this Agreement shall prevent either Seller from
continuing to sell the Excess Inventory (as such term is defined in the Asset Purchase
Agreement);

2.
Perform, on behalf of himself or any person or entity, the same or similar
services as those performed by Harcke for either Seller prior to the date of
this Agreement;

3.
Hire or employ or attempt to hire or employ any person who on or after the date
hereof, is an employee, manager, or officer of Buyer (each, an “EMPLOYEE”), or
in any way cause or assist or attempt to cause or assist, or, directly or
indirectly, seek to solicit, induce, bring about, influence, promote,
facilitate, cause, assist or encourage any Employee to leave Buyer’s employ or
to accept employment with or otherwise perform services for on or on behalf of
any person or entity that engages in, or otherwise competes with, the Business
or any related business (“COMPETITOR”); or

4.
Contact any customers or suppliers of Buyer, either directly or indirectly, for
himself or for others, so as to (i) directly or indirectly divert or influence
or attempt to divert or influence any business of Buyer to a Competitor, or
(ii) directly or indirectly solicit or provide services similar to those
provided by Buyer, or (iii) otherwise directly or indirectly interfere in any fashion
with Buyer’s relationship with such customers or suppliers, or with the
business or operations then being conducted by Buyer.

B.
GEOGRAPHICAL LIMITATIONS. The restrictions set forth in SECTION II(A) in this
Agreement shall be applicable to the following geographic areas that can be
enforced against Harcke during the Restricted Period:

1.
In North America;

2.
In the United States of America;

3.
In each State in which Sellers previously had operations and/or conducted
significant activities relating to the Business, and all contiguous states;

4.
In the State of North Carolina;

5.
In Henderson County, North Carolina, and all contiguous counties; and

6.
Within a fifty (50) mile radius of any location at which Sellers conducted the
Business.

 2
 

III.           CONFIDENTIALITY

A.
CONFIDENTIAL INFORMATION DEFINED. “CONFIDENTIAL INFORMATION” as used in this
Agreement shall mean, collectively, any and all data and information about
Buyer’s or Sellers’ businesses including, but not limited to (i) all information
relating to selling or financing processes, specifications and procedures
relating to the Business; (ii) customer lists and other customer-related
information including names, addresses, specifications or requirements,
purchase or delivery quantities, lines of credit, and delivery, financing, and
auction schedules; (iii) supplier lists; (iv) marketing plans and concepts; and
(v) sales, costs, profits, profit margins, salaries and other financial
information pertaining to Buyer or either Seller; provided, however, that “Confidential
Information” shall in no event include data or information that (a) was
available to the public prior to the date hereof or (b) becomes available to
the public other than as a result of disclosure by Harcke in violation hereof.

B.
USE OR DISCLOSURE OF CONFIDENTIAL INFORMATION. Throughout the Restricted
Period, Harcke agrees to (i) keep confidential and not to disclose to anyone
except the authorized representatives of Buyer all Confidential Information;
and (ii) refrain from using such Confidential Information in any manner adverse
to the interests of Buyer.

C.
RECORDS AND COPIES. Any and all records and copies of records pertaining to the
Confidential Information that were or are made or received by either Seller or
Harcke shall be kept confidential and Harcke shall not disclose any such
records or copies of records to anyone except Buyer and its authorized representatives.
All records and copies of records of Buyer are and shall remain the property of
Buyer and shall be subject to Buyer’s custody and control.

IV.           COMPENSATION

A.
COMPENSATION. In full payment and satisfaction for the Services and Harcke’s
agreements and understandings in SECTIONS I and II and subject to the terms and
conditions of this Agreement, Buyer shall compensate Harcke as follows:

1.
Buyer shall pay Harcke seven (7) equal annual installments of $110,000.00 each.
The first installment shall be paid on the Effective Date and one (1)
additional installment shall be paid on each of the first six (6) anniversaries
of the Effective Date; provided that Buyer shall not be required to make any
payment due on any anniversary following a breach by Harcke of his obligations
under SECTIONS I or II of this Agreement. At any time on or after April 1,
2005, Buyer shall, upon three (3) Business Days written request from Harcke,
escrow the remaining $660,000 of installments to be paid in exchange for Harcke’s
performance under this Agreement with Investors Bank and Trust Company. In the
event that Harcke requests that Buyer provide the escrow as set forth above and
Buyer does not provide such escrow, this Agreement shall automatically
terminate, including all obligations of Harcke not to compete under ARTICLE II
and of Buyer to make payments to Harcke under this ARTICLE IV.

 3
 

2.
For a period of three (3) years following the Effective Date, Buyer shall
provide Harcke with office space at the facilities of Buyer located at 158 N.
Egerton Road, Mountain Home, North Carolina 28758, as the parties shall
mutually agree.

3.
During the Restricted Period, Buyer shall provide Harcke and his spouse with
medical benefits comparable to those previously provided to Harcke and his
spouse by Sellers.

V.            GENERAL PROVISIONS

A.
REMEDIES. Harcke acknowledges and agrees that any violation by Harcke of this
Agreement will cause Buyer to suffer irreparable harm for which Buyer will not
have any adequate remedy at law. Therefore, if Harcke threatens to violate or
violates any provision of this Agreement, Buyer shall be entitled to injunctive
relief without bond, including, but not limited to, temporary restraining
orders and/or preliminary or permanent injunctions, to restrain or enjoin any
violation or threatened violation of this Agreement. Buyer’s right to injunctive
relief shall be in addition to, and not in lieu of, any other legal or
equitable remedies that may be available to Buyer, including but not limited to
monetary damages to the extent they are calculable, including lost profits.

B.
CLAIMS BY HARCKE. Any claim or cause of action by Harcke against Buyer shall
not constitute a defense to the enforcement of the restrictions and covenants
set forth in this Agreement and shall not be used to prohibit injunctive
relief.

C.
GOVERNING LAW; JURISDICTION AND VENUE. This Agreement shall be construed and
enforced in accordance with, and governed by, the Laws of the State of Indiana
(without giving effect to the principles of conflicts of Laws thereof). The
parties hereto irrevocably agree and consent to the non-exclusive jurisdiction
of the courts of the State of Indiana and the federal courts of the United
States, sitting in Indianapolis, Indiana for the adjudication of any matters
arising under or in connection with this Agreement.

D.
COSTS AND ATTORNEYS’ FEES. In the event any party brings suit to construe or
enforce the terms hereof, or raises this Agreement as a defense in a suit
brought by another party, the prevailing party shall be entitled to recover its
reasonable costs and expenses, including, without limitation, reasonable attorneys’
fees incurred by that party in enforcing the terms and conditions of this
Agreement.

E.
SEVERABILITY. Harcke acknowledges and agrees that the restrictions contained in
this Agreement are reasonable and necessary to safeguard the protectable
interests of Buyer. If, notwithstanding such acknowledgement and agreement, any
clause, portion, section, restriction or paragraph of this Agreement is
determined to be unreasonable, unenforceable or invalid for any reason, such
determination shall not affect the enforceability or validity of the remainder
of this Agreement, and the unreasonable, unenforceable or invalid provision
shall be deemed amended and modified and shall be given effect and enforced to
the maximum extent that is determined to be reasonable and enforceable.

 4
 

F.
ENTIRE AGREEMENT, MODIFICATIONS, INTERPRETATION. This Agreement constitutes the
entire agreement by and between Buyer and Harcke with respect to the matters
addressed herein and shall supersede all prior and contemporaneous agreements,
representations, and understandings whether written or oral, with respect to
such obligations. No amendment to or modification of this Agreement shall be
effective unless the amendment or modification is in writing and signed by the
parties. This Agreement shall be construed as a whole, according to its fair
meaning, and not strictly construed for or against either party.

G.
SUCCESSORS AND ASSIGNS. Neither party hereto shall assign or delegate this
Agreement or any rights or obligations hereunder without the prior written
consent of the other party hereto, and any attempted assignment or delegation
without prior written consent shall be void and of no force or effect;
provided, however, Buyer may without consent assign this Agreement and all of
its rights and delegate its obligations hereunder to an affiliate of Buyer or
to any person or entity who shall acquire all or substantially all of the
assets of Buyer. This Agreement shall inure to the benefit of and shall be binding
upon the successors and permitted assigns of the parties hereto.

H.
NON-WAIVER. No act or omission by Buyer shall be deemed a waiver by Buyer of
any of Buyer’s rights under this Agreement. Therefore, the failure of Buyer to
enforce any restriction against Harcke or to seek a different remedy shall not
be construed as a waiver or estoppel to the enforcement of the restrictions
against Harcke.

I.
NOTICES. All notices, requests and other communications hereunder must be in
writing and will be deemed to have been duly given only if delivered personally
or by facsimile transmission, with confirmation of successful transmission, and
mailed (first class postage prepaid) to the parties at the following addresses
or facsimile numbers:

	
  If to Buyer:

  	
  Haynes Wire Company

  
	
   

  	
  1020 West Park
  Avenue

  
	
   

  	
  P.O. Box 9013

  
	
   

  	
  Kokomo, IN
  46904-9013

  
	
   

  	
  Tel. No.  (765) 456-6000

  
	
   

  	
  Fax. No. (765)
  456-6125

  
	
   

  	
  Attn: Francis J.
  Petro, President and CEO

  
	
   

  	
   

  
	
  With a copy to:

  	
  Ice Miller

  
	
   

  	
  One American
  Square, Box 82001

  
	
   

  	
  Indianapolis, IN
  46282-0200

  
	
   

  	
  Facsimile No.:
  (317) 592-4666

  
	
   

  	
  Attn: Stephen J.
  Hackman

  
	
   

  	
   

  
	
  If to Harcke:

  	
  Richard Harcke

  
	
   

  	
  420 Vanderbilt
  Road

  
	
   

  	
  Asheville, NC
  28803

  
	
   

  	
  Tel. No.
  828-692-5791

  
	
   

  	
  Fax No.
  828-697-9818

  

 

 5
 

J.
COUNTERPARTS. This Agreement may be executed in one or more counterparts, any
one of which need not contain the signatures of more than one party, and all
such counterparts taken together shall constitute one and the same instrument.
Signatures on this Agreement may be communicated by facsimile transmission and
shall be binding upon the parties transmitting the same by facsimile
transmission. Counterparts with original signatures shall be mailed to the
other parties within three (3) calendar days of the applicable facsimile transmission;
PROVIDED, that the failure to provide the original counterpart shall have no
effect on the validity or the binding nature of this Agreement.

[SIGNATURES
ON FOLLOWING PAGE]

 6
 

THE
PARTIES HERETO ACKNOWLEDGE THAT THEY HAVE READ THIS AGREEMENT, UNDERSTAND IT,
AND AGREE TO BE BOUND BY ITS TERMS. They further acknowledge that they have
exercised due diligence in reviewing this Agreement, and that each has had
adequate opportunity to consult with legal counsel or other advisors to the extent
that each deemed such consultation necessary.

IN
WITNESS WHEREOF, Buyer and Harcke have executed this Agreement effective for
all purposes as of the Effective Date.

	
  “BUYER”

  	
  “HARCKE”

  
	
   

  	
   

  
	
  HAYNES WIRE
  COMPANY

  	
   

  
	
   

  	
   

  
	
  By:

  	
  /s/Marcel Martin

  	
   

  	
  By:

  	
  /s/Richard Harcke

  	
   

  
	
   

  	
  Marcel Martin,
  Vice President-Finance,

  	
   

  	
  Richard Harcke

  
	
   

  	
  Chief Financial
  Officer and Treasurer

  	
   

  	
   

  
						

 

 7

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