EX-10.1






Exhibit 10.1




AMENDMENT NO. 4 AND CONSENT

to

CREDIT AND SECURITY AGREEMENT

and

OMNIBUS AMENDMENT TO CERTAIN OTHER LOAN DOCUMENTS




          This AMENDMENT NO. 4 AND CONSENT TO CREDIT AND SECURITY AGREEMENT AND OMNIBUS AMENDMENT TO
CERTAIN OTHER LOAN DOCUMENTS, made as of May 30, 2008 (this “Amendment”), among HAWK CORPORATION, a
Delaware corporation, FRICTION PRODUCTS CO., an Ohio corporation, HAWK MOTORS, INC., a Delaware
corporation, LOGAN METAL STAMPINGS, INC., an Ohio corporation, QUARTER MASTER INDUSTRIES, INC., a
Delaware corporation, S.K. WELLMAN CORP., a Delaware corporation, S.K. WELLMAN HOLDINGS, INC., a
Delaware corporation, TEX RACING ENTERPRISES, INC., a Delaware corporation, WELLMAN PRODUCTS GROUP,
INC., an Ohio corporation, and WELLMAN PRODUCTS, LLC, an Ohio limited liability company, each as a
Borrower and collectively as the Borrowers, the LENDERS listed on the signature pages of this
Agreement, KEYBANK NATIONAL ASSOCIATION, a national banking association, as Administrative Agent,
and KEYBANK NATIONAL ASSOCIATION, a national banking association, as LC Issuer,




WITNESSETH:




          WHEREAS, the Borrowers have been extended certain financial accommodations pursuant to that
certain Credit and Security Agreement, dated as of November 1, 2004, as amended by that certain
Amendment No. 1 to Credit and Security Agreement, dated as of August 31, 2006, that certain
Amendment No. 2 and Consent to Credit and Security Agreement and Omnibus Amendment to Certain Other
Loan Documents, dated as of February 1, 2007, and that certain Amendment No. 3 to Credit and
Security Agreement, dated as of October 9, 2007 (as so amended, the “Credit Agreement”), among the
Borrowers, certain other entities that were formerly borrowers under the Credit Agreement, the
Lenders, the Administrative Agent, and the LC Issuer




          WHEREAS, the Borrower Representative has informed the Administrative Agent that Hawk
Corporation desires to sell all of the capital stock of Tex Racing Enterprises, Inc. (the “Sale”);




          WHEREAS, the Borrowers have requested consent to the Sale and all releases and amendments
required pursuant to the Sale; and




          WHEREAS, the Lenders which are signatories hereto constitute all of the Lenders for the
purposes of amending the Credit Agreement pursuant to Section 19.1 thereof;




 









 





          NOW THEREFORE, in consideration of the mutual promises and agreements contained herein and
other good and valuable consideration, the receipt and adequacy of which are hereby acknowledged,
the Borrowers, the Administrative Agent, the Lenders and the LC Issuer do hereby agree as follows:




Section 1. DEFINED TERMS.




          Each defined term used herein and not otherwise defined herein shall have the meaning ascribed
to such term in the Credit Agreement.




Section 2 CONSENT.




          2.1 Consents. In accordance with Section 19.1 of the Credit Agreement, the Required Lenders
hereby consent to:





     (a) the transactions contemplated in that certain Stock Purchase Agreement dated as of
May 30, 2008 (the “Purchase Agreement”), among Hawk Corporation, as Seller (the “Seller”),
Leonard C. Long, a resident of the State of Pennsylvania, as Buyer (the “Buyer”), and Long’s
Machine & Tool, Inc., a Pennsylvania corporation owned and controlled by the Buyer, as
Guarantor (the “Guarantor”), including the sale or other disposition of Tex Racing
Enterprises, Inc. (the “Sold Subsidiary”); and




     (b) the release of the Liens of the Administrative Agent for the benefit of the Lenders
on (i) the stock or other equity interests of the Sold Subsidiary and (ii) all of the real
and personal property and assets of the Sold Subsidiary which is being acquired by the Buyer
pursuant to the terms of the Purchase Agreement.



Section 3 AMENDMENTS TO THE CREDIT AGREEMENT:




          3.1 Omnibus Amendment to Credit Agreement and Certain Other Loan Documents. All references to
the Sold Subsidiary in the recitals or signature pages of the Credit Agreement shall be deleted and
the Sold Subsidiary shall no longer be party to such documents.




          3.2 Amendment to Annex II to the Credit Agreement. Annex II to the Credit Agreement is hereby
amended by deleting the existing definition of “Borrowers” and replacing it with the following new
definition:





     “Borrowers” means collectively, Hawk Corporation, a Delaware corporation,
Friction Products Co., an Ohio corporation, Hawk Motors, Inc., a Delaware
corporation, Logan Metal Stampings, Inc., an Ohio corporation, Quarter Master
Industries, Inc., a Delaware corporation, S.K. Wellman Corp., a Delaware
corporation, S.K. Wellman Holdings, Inc., a Delaware corporation, Wellman Products
Group, Inc., an Ohio corporation, and Wellman Products, LLC, an Ohio limited
liability company.



          3.3 Amendment to Annex IV to Credit Agreement. Annex IV to the Credit Agreement is hereby
amended by deleting the existing Annex IV and replacing it with the Annex IV attached hereto as
Exhibit I. In addition, within thirty (30) days of the date of this Amendment, the Company shall
deliver to the Administrative Agent, any additional updates to




2









 





such Disclosure Schedules, in form and substance satisfactory to the Administrative Agent,
provided, however, that the Borrowers understand that such updates shall not be
permitted to include additions to Schedules 11.3(a), 11.3(c), 11.3(d), 11.3(i), or 11.3(l).



Section 4 OMNIBUS AMENDMENTS TO CERTAIN OTHER LOAN DOCUMENTS:




          4.1 Omnibus Amendment to Certain Other Loan Documents. All references to the Sold Subsidiary
in the recitals or signature pages of the Notes, the Collateral Assignment of Security Interest
Patents and Patent Applications, the Collateral Assignment of Security Interest in Trademarks and
Licenses, the Collateral Assignment of Security Interest in Copyrights, the Advertising Permission
Letter, the Blocked Account Control Letter, and the Acknowledgement of Blocked Accounts is hereby
deleted and the Sold Subsidiary shall no longer be a party to such documents.




          4.2 Amendment to Certain Pledge and Security Agreements. The Pledge and Security Agreement
between Hawk Corporation and the Administrative Agent is hereby amended to replace the respective
Schedule I attached thereto with the respective Schedule I attached hereto as Exhibit II.




          4.3 Termination of Certain Landlord Waivers. The Landlord Waiver between Tex Racing
Enterprises, Inc. and Lone Star Enterprises, Group, Inc., a Delaware corporation, is herby
terminated and released.




          4.4 Termination of Certain Limited License Agreements. The Limited License Agreement between
Tex Racing Enterprises, Inc. and the Administrative Agent is hereby terminated and released.




          4.5 Amendment to Certain Collateral Assignments of Security Interest in Trademarks and
Licenses. The Collateral Assignment of Security Interest in Trademarks and Licenses by and among
the Borrowers and the Administrative Agent is hereby amended to replace the respective Exhibit A
with the respective Exhibit A attached hereto as Exhibit III.




          4.6 Amendment to Blocked Account Control Agreement. The Blocked Account Control Agreement by
and among the Borrowers, the Administrative Agent, and JPMorgan Chase Bank, to the extent not
already terminated, is hereby terminated.




          4.7 Amendment to Acknowledgement of Blocked Accounts. The Acknowledgement of Blocked Accounts
by and among the Borrowers, the Administrative Agent, and KeyBank National Association, as the Bank
is hereby amended to replace the respective Schedule I with Schedule I attached hereto as Exhibit
IV.




Section 5 REPRESENTATIONS AND WARRANTIES.




          The Borrower hereby represents and warrants to the Lenders, the Administrative Agent and the
LC Issuer as follows:




3









 





          5.1 The Amendment. This Amendment has been duly and validly executed by an authorized
executive officer of the Borrowers and constitutes the legal, valid and binding obligation of the
Borrowers enforceable against the Borrowers in accordance with its terms. The Credit Agreement, as
amended by this Amendment, remains in full force and effect and remains the valid and binding
obligation of the Borrowers enforceable against the Borrowers in accordance with its terms. Each
Borrower hereby ratifies and confirms the Credit Agreement as amended by this Amendment.




          5.2 Nonwaiver. Except as expressly set forth herein, the execution, the execution, delivery,
performance and effectiveness of this Amendment shall not operate nor be deemed to be nor construed
as a waiver (i) of any right, power or remedy of the Lenders or the Administrative Agent under the
Credit Agreement or any other Loan Document, or (ii) of any term, provision, representation,
warranty or covenant contained in the Credit Agreement or any other documentation executed in
connection therewith. Further, none of the provisions of this Amendment shall constitute, be
deemed to be or construed as, a waiver of any Potential Default or Event of Default under the
Credit Agreement, as amended by this Amendment.




          5.3 Reference to and Effect on the Credit Agreement. Upon the Effectiveness of this
Amendment, each reference in the Credit Agreement amended hereby to “this Agreement,” “hereunder,”
“hereof,” “herein,” or words of like import shall mean and be a reference to the Credit Agreement,
as amended by the prior amendments thereto and this Amendment and each reference to the Credit
Agreement in any other document, instrument or agreement executed and/or delivered in connection
with the Credit Agreement shall mean and be a reference to the Credit Agreement, as amended by the
prior amendments thereto and this Amendment.




Section 6 CONDITIONS PRECEDENT TO EFFECTIVENESS




The effectiveness of this Amendment is subject to the condition precedent that:



     6.1 Amendment No. 4 and Consent to Credit and Security Agreement. The Administrative Agent
shall have received an original counterpart of this Amendment No. 4 and Consent to Credit and
Security Agreement, executed and delivered by a duly authorized officer of each Borrower, the
Lenders and the LC Issuer.



     6.2 Release Agreement. The Administrative Agent shall have received an original counterpart
of that certain Release Agreement, dated as of even date herewith, executed and delivered by a duly
authorized officer of each Borrower which shall exist after the consummation of Sale and the Sold
Subsidiary.



Section 7 CONDITIONS SUBSEQUENT TO EFFECTIVENESS




The effectiveness of this Amendment is subject to the condition subsequent that:



     7.1 Consummation of the Sale. The Administrative Agent shall have received written evidence
in the form of a Borrower Certificate stating that the Sale has been consummated pursuant to the
terms of the Purchase Agreement and certifying a true and complete copy of the Purchase Agreement.
In the event that the Sale is not consummated on or before June 6, 2008, this Amendment shall be of
no further force and effect.



4









 





     7.2 Update of Annex IV Disclosure Schedule. The Administrative Agent shall have received, on
or before June 30, 2008, an updated Annex IV — Disclosure Schedule to the Credit and Security
Agreement in accordance with Section 3.3 of this Amendment, to reflect any changes other than those
resulting from the sale of the Sold Subsidiary pursuant to the Purchase Agreement.



     Section 8 MISCELLANEOUS.



          8.1 Governing Law. This Amendment shall be governed by and construed in accordance with the
laws of the State of Ohio with out giving effect to the conflict of laws rules thereof.




          8.2 Severability. In the event any provision of this Amendment should be invalid, the
validity of the other provisions hereof and of the Credit Agreement shall not be affected thereby.




          8.3 Counterparts. This Amendment may be executed in one or more counterparts, each of which,
when taken together, shall constitute but one and the same agreement.




5









 





     IN WITNESS WHEREOF, the Borrowers, the Administrative Agent, the Lenders and the LC Issuer
have caused this Amendment No. 4 and Consent to Credit and Security Agreement to be duly executed
by their respective officers or agents thereunto duly authorized as of the date first written
above.



	 	 	 	 	 
	 	 	BORROWERS
	 
	 	 	 	 
	 	 	HAWK CORPORATION
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	FRICTION PRODUCTS CO.
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	HAWK MOTORS, INC.
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	LOGAN METAL STAMPINGS, INC.
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	QUARTER MASTER INDUSTRIES, INC.
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	S.K. WELLMAN CORP.
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 





6









 





	 	 	 	 	 
	 	 	S.K. WELLMAN HOLDINGS, INC.
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	WELLMAN PRODUCTS GROUP, INC.
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	WELLMAN PRODUCTS, LLC
	 
	 	 	 	 
	 

	 	By:
	 	Wellman Products Group, Inc.,
its sole member
	 
	 	 	 	 
	 	 	/s/ Joseph J. Levanduski
	 	 	 
	 

	 	By:
	 	Joseph J. Levanduski
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President — Chief Financial Officer
	 

	 	 	 	 





7









 





	 	 	 	 	 
	 	 	ADMINISTRATIVE AGENT
	 
	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION
	 	 	as a Administrative Agent
	 
	 	 	 	 
	 	 	/s/ John P. Dunn
	 	 	 
	 

	 	By:
	 	John P. Dunn
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	LENDERS
	 
	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION
	 	 	as a Lender
	 
	 	 	 	 
	 	 	/s/ John P. Dunn
	 	 	 
	 

	 	By:
	 	John P. Dunn
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President
	 

	 	 	 	 
	 
	 	 	 	 
	 	 	LC ISSUER
	 
	 	 	 	 
	 	 	KEYBANK NATIONAL ASSOCIATION
	 	 	as LC Issuer
	 
	 	 	 	 
	 	 	/s/ John P. Dunn
	 	 	 
	 

	 	By:
	 	John P. Dunn
	 

	 	 	 	 
	 

	 	Its:
	 	Vice President
	 

	 	 	 	 





8









 





EXHIBIT I




ANNEX IV




TO




CREDIT AND SECURITY AGREEMENT




[see attached]




9









 








EXHIBIT II




SCHEDULE I




TO




PLEDGE AND SECURITY AGREEMENT




HAWK CORPORATION




	 	 	 	 	 	 	 
	Stock Issuer	 	Number of Shares	 	Class of Stock	 	Certificate No(s).
	 
	 	 	 	 	 	 
	Quarter Master Industries, Inc.
	 	100	 	common	 	1
	 
	 	 	 	 	 	 
	Wellman Products Group, Inc.
	 	100	 	common	 	1
	 
	 	 	 	 	 	 





10









 





EXHIBIT III




EXHIBIT A

TO

LIMITED LICENSE AGREEMENT




HAWK CORPORATION TRADEMARKS




	 	 	 	 	 
	Mark	 	Status	 	 
	 
	 	 	 	 
	“WELLMAN FRICTION PRODUCTS”

	 	Filed
	 	7/15/96
	App. No. 75/137897

	 	Issued
	 	7/28/98
	Reg. No. 2,176,037

	 	Sec. 8
	 	7/22/04
	 
	 	 	 	 
	“WELLMAN FRICTION PRODUCTS”

	 	Filed
	 	4/9/97
	App. No. 75/271649

	 	Issued
	 	10/27/98
	Reg. No. 2,199,455

	 	Sec. 8
	 	7/22/04
	 
	 	 	 	 
	“HAWK BRAKE”

	 	Filed
	 	9/18/98
	App. No. 75/556527

	 	Issued
	 	3/28/00
	Reg. No. 2,334,809
	 	 	 	 
	 
	 	 	 	 
	HAWK (design)

	 	Filed
	 	10/1/98
	App. No. 75/563232

	 	Issued
	 	3/21/00
	Reg. No. 2,331,451
	 	 	 	 
	 
	 	 	 	 
	“HAWK PERFORMANCE”

	 	Filed
	 	9/18/98
	App. No 75/556526

	 	Issued
	 	1/2/01
	Reg. No. 2,418,088
	 	 	 	 






11









 





	 	 	 	 	 
	“WELLMAN PRODUCTS GROUP”

	 	Filed
	 	1/18/02
	App. No. 76/359881

	 	Issued
	 	7/13/04
	Reg. No. 2,863,241
	 	 	 	 






S. K. WELLMAN CORP. TRADEMARKS




	 	 	 	 	 
	“FERAMIC”

	 	Filed
	 	6/6/56
	App. No. 72/009757

	 	Issued
	 	2/26/57
	Reg. No. 0642082

	 	Renewed
	 	12/9/97
	 
	 	 	 	 
	“VELVETOUCH FERAMIC”

	 	Filed
	 	3/12/56
	App. No. 72/004410

	 	Issued
	 	10/2/56
	Reg. No. 0635202

	 	Renewed
	 	11/4/97
	 
	 	 	 	 
	“VELVETOUCH”

	 	Filed
	 	7/14/44
	App. No. 71/472265

	 	Issued
	 	1/16/45
	Reg. No. 0411420

	 	Renewed
	 	1/16/85
	 
	 	 	 	 
	“VELVETOUCH”

	 	Filed
	 	1/2/32
	App. No. 71/322663

	 	Issued
	 	9/26/33
	Reg. No. 0306579

	 	Renewed
	 	9/7/93
	 
	 	 	 	 
	“FIBERTUFF”

	 	Filed
	 	9/28/89
	App. No. 73/829193

	 	Issued
	 	10/23/90
	Reg. No. 1618791
	 	 	 	 






12









 





	 	 	 	 	 
	“VELVETOUCH ORGANIK”

	 	Filed
	 	6/17/63
	App. No. 72/171208

	 	Issued
	 	3/31/64
	Reg. No. 0767578

	 	Renewed
	 	3/31/84
	 
	 	 	 	 
	“VELVETOUCH METALIK”

	 	Filed
	 	6/6/56
	App. No. 72/009757

	 	Issued
	 	2/26/57
	Reg. No. 0642082

	 	Renewed
	 	12/9/97






HAWK MOTORS, INC. TRADEMARKS




	 	 	 	 	 
	“HAWK MOTORS’

	 	Filed
	 	2/22/01
	App. No. 76/214137

	 	Issued
	 	10/8/02
	Reg. No. 2,633,043
	 	 	 	 






QUARTER MASTER INDUSTRIES, INC. TRADEMARKS




	 	 	 	 	 
	“QUARTER MASTER”

	 	Filed
	 	10/01/02
	App. No. 76/319704

	 	Issued
	 	12/10/02
	Reg. No. 2,658,830
	 	 	 	 
	 
	 	 	 	 
	“QUARTER MASTER” (design)

	 	Filed
	 	10/01/02
	App. No. 76/319705

	 	Issued
	 	11/19/02
	Reg. No. 2,651,689
	 	 	 	 






13









 





EXHIBIT IV




SCHEDULE I




TO




ACKNOWLEDGEMENT OF BLOCKED ACCOUNTS




BLOCKED ACCOUNTS AND LOCKBOXES




	 	 	 	 	 	 	 
	Company	 	Lockbox	 	Deposit Account
	 
	 	 	 	 	 	 
	Hawk Corporation

	 	None
	 	 	XXXXXXXXXXXX	 
	 
	 	 	 	 	 	 
	Quarter Master Industries, Inc.

	 	P.O. Box 712310
	 	 	XXXXXXXXXXXX	 
	 

	 	Cincinnati, Ohio 45271	 	 	 	 
	 
	 	 	 	 	 	 
	S.K. Wellman Corp.

	 	P.O. Box 74261
	 	 	XXXXXXXXXXXX	 
	 

	 	Cleveland, Ohio 44194	 	 	 	 







14