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                                                                    EXHIBIT 10.1
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HAWK CORPORATION                                              SEPTEMBER 27, 2002
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                                HAWK CORPORATION
                        SENIOR SECURED CREDIT FACILITIES

                         SUMMARY OF TERMS AND CONDITIONS

                               SEPTEMBER 27, 2002

BORROWERS:              Hawk Corporation ("HAWK") and certain of its domestic
                        subsidiaries (each a "BORROWER" and collectively, the
                        "BORROWERS"). Domestic subsidiaries of Hawk which are
                        Borrowers will be joint and several co-Borrowers.

GUARANTORS:             Each of Hawk's existing and future domestic
                        subsidiaries, and certain of its foreign subsidiaries
                        (to the extent that such guaranty would not create undue
                        adverse tax consequences to such party), that are not a
                        Borrower shall be required to guaranty the obligations
                        of the Borrowers under the Credit Facility
                        (collectively, the "GUARANTORS" and together with the
                        Borrowers, the "CREDIT PARTIES").

ADMINISTRATIVE AGENT    JPMorgan Chase Bank ("JPM CHASE") shall act as sole and
AND ADVISOR:            exclusive Administrative Agent and Collateral Agent (the
                        "AGENT"). J. P. Morgan Business Credit Corp. ("JPMBC"
                        and, together with JPM Chase, "JPM") shall act as
                        Advisor.

LENDERS:                PNC Business Credit Corporation, Fleet Capital
                        Corporation and JPM (collectively, the "LENDERS").

DESCRIPTION OF THE      The credit facility shall consist of (i) a revolving
CREDIT FACILITY:        line of credit (the "REVOLVING CREDIT FACILITY") in a
                        maximum amount (including up to $5,000,000 of Letters of
                        Credit (the "LC SUBLIMIT")) not to exceed $50,000,000
                        (the "MAXIMUM REVOLVING COMMITMENT AMOUNT") and (ii) a
                        capital expenditure facility (the "CAPEX FACILITY") in a
                        maximum amount not to exceed $3,000,000. The Revolving
                        Credit Facility and the Capex Facility are collectively
                        referred to as the "CREDIT FACILITY".

REVOLVING FACILITY:     The Revolving Credit Facility shall expire and
                        terminate, unless extended in accordance with the terms
                        of the Facility Documents, four years from the Closing
                        Date (the "FINAL MATURITY DATE"); provided that, subject
                        to the terms stated herein, the Final Maturity shall in
                        no event be later than the date which is 120 days prior
                        to the maturity date of the Exchange Notes referred to
                        below. The Borrowers shall be

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                        permitted to borrow, repay and reborrow loans and
                        advances under the Revolving Credit Facility ("REVOLVING
                        CREDIT LOANS"), and have Letters of Credit issued for
                        their accounts (up to the LC Sublimit) until the Final
                        Maturity Date; provided, however, that the sum of (i)
                        the aggregate amount of all Revolving Credit Loans
                        (including all principal, accrued interest, fees and
                        charges), (ii) the aggregate amount available to be
                        drawn under all outstanding Letters of Credit, and (iii)
                        the aggregate exposure under all Hedging Agreements
                        shall not exceed the lesser of (a) the Maximum Revolving
                        Commitment Amount or (b) the Borrowing Base (as defined
                        below). All Letters of Credit issued under the Credit
                        Facility shall expire within 364 days from the date of
                        issuance and in any event no later than 30 days prior to
                        the Final Maturity Date.

CAPEX FACILITY:         The Capex Facility shall expire and terminate on the
                        Final Maturity Date. The Borrowers shall be permitted to
                        borrow advances under the Capex Facility ("CAPEX LOANS",
                        and together with the Revolving Credit Loans, the
                        "LOANS") in a maximum principal amount of up to
                        $2,000,000 during the calendar year ended 12/31/03, and
                        up to $1,000,000 in any subsequent calendar year. Draws
                        may finance up to 80% of the hard cost of equipment
                        purchased after the Closing Date, supported by invoices,
                        as reviewed by Agent in its sole discretion. Capex Loans
                        may be borrowed no more often than once in any fiscal
                        quarter and must be in minimum principal amounts of
                        $250,000.

                        At the end of each calendar year, beginning with the
                        year ending December 31, 2003, the principal amount of
                        all Capex Loans borrowed during such calendar year will
                        begin to amortize on a seven year, straight-line basis.
                        The remaining outstanding principal amount of all Capex
                        Loans will be due and payable on the Final Maturity
                        Date.

COMMITMENT:             The Lenders will commit to provide the entire amount of
                        the Credit Facility.

CLOSING DATE:           On or before 11/30/2002, unless otherwise extended by
                        the Lenders.

BORROWING BASE:         The Borrowing Base shall equal the sum of:

                        A.  Up to 85% of Eligible Accounts (as defined below);
                            plus

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                        B.  Up to the lesser of (I) the sum of (a) 65% of the
                            cost of Eligible Inventory (as defined below) which
                            is not work-in-process and (b) 25% of the cost of
                            Eligible Inventory which is work-in-process, capped
                            at $4,000,000, (ii) 85% of the appraised net
                            recovery value of Eligible Inventory based on an
                            inventory appraisal acceptable to the Agent in its
                            discretion, (iii) $15,000,000; plus

                        C.  The Fixed Asset Availability (as defined below)

                        "ELIGIBLE ACCOUNTS" shall mean those domestic accounts
                        receivable of Hawk and its domestic subsidiaries for
                        which an invoice has been sent for goods sold or
                        services rendered by Hawk or such subsidiaries that are
                        not subject to any offset or deduction, and that meet
                        customary criteria for eligibility as determined by the
                        Agent in its discretion. Ineligible receivables may
                        include, but are not limited to:

                        (a) receivables that are more than 90 days from invoice
                            date or more than 60 days from due date (the Lenders
                            may from time to time, in their reasonable
                            discretion, elect to treat certain trade receivables
                            which are the subject of normal seasonal dating
                            terms programs, assuming they meet all other
                            criteria for eligibility, as Eligible Accounts);

                        (b) foreign receivables (other than certain Canadian
                            receivables) (the Lenders may from time to time, in
                            their reasonable discretion, elect to treat certain
                            foreign trade receivables as Eligible Accounts,
                            assuming they meet all other criteria for
                            eligibility, if (1) a payment guaranty for such
                            trade receivable has been submitted from a reputable
                            U.S. domiciled corporation, which such guaranty is
                            acceptable in form and substance to the Lenders and
                            their counsel, or (2) a letter of credit has been
                            submitted which secures such foreign trade
                            receivable and is otherwise acceptable to the
                            Lenders and their counsel);

                        (c) receivables owing from affiliated companies;

                        (d) contra accounts (i.e. receivables owing from
                            entities to whom there also offsetting payables or
                            other liabilities);

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                        (e) bill and hold accounts;

                        (f) chargebacks;

                        (g) receivables evidenced by promissory notes, warrants
                            or other instruments or chattel paper,

                        (h) receivables owing from individuals and governmental
                            authorities;

                        (i) receivables owing from an account debtor where more
                            than 50% of the total receivables owing from such
                            account debtor are deemed ineligible;

                        (j) the portion, if any, of the aggregate amount of
                            receivables owing from any single account debtor
                            that exceeds 20% of the aggregate amount of
                            receivables owing from all account debtors at such
                            time;

                        (k) receivables owing from account debtors with an
                            unsatisfactory credit standing as determined by the
                            Agent in its reasonable discretion;

                        (1) receivables relating to the sale of goods or
                            rendering of services outside the ordinary course of
                            business;

                        (m) receivables which are not subject to a first
                            priority and perfected security interest in favor of
                            the Agent; and

                        (n) other receivables determined by the Agent in its
                            reasonable discretion not to be usual and customary
                            for the Credit Parties' type of business or
                            otherwise ineligible for inclusion in the Borrowing
                            Base.

                        "ELIGIBLE INVENTORY" shall be determined by the Agent in
                        its discretion based on periodic field examinations and
                        inventory appraisals to be conducted by the Agent from
                        time to time, in each case, as described in "CONDITIONS
                        PRECEDENT" below. Eligible Inventory shall generally
                        include raw material, work in process and finished goods
                        inventory that is located in the United States on
                        premises owned or leased by Hawk and its domestic
                        subsidiaries (provided that all leased facilities shall
                        be covered by satisfactory landlord waiver
                        documentation). Ineligible inventory may include, but
                        not be limited to packaging, slow moving or obsolete
                        inventory, damaged or

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                        defective inventory, inventory on consignment, inventory
                        held for return to vendors, and other inventory which
                        the Agent deems unacceptable in its good faith
                        discretion.

                        The "FIXED ASSET AVAILABILITY" shall initially be equal
                        to the lesser of:

                        A.  81% of the sum of (i) the net forced liquidation
                            value of the machinery and equipment of Hawk and its
                            domestic subsidiaries, based on an appraisal
                            acceptable to the Agent in its discretion and (ii)
                            the net liquidation value of the real property owned
                            by Hawk and its domestic subsidiaries located in the
                            United States, based on an appraisal acceptable to
                            the Agent in its discretion; and

                        B.  $13,000,000.

                        The "FIXED ASSET ADVANCE" shall mean the principal
                        amount of Revolving Credit Loans which shall be drawn
                        fully on the Closing Date pursuant to the Fixed Asset
                        Availability. On the last day of each calendar month
                        beginning in March, 2003, the Fixed Asset Advance will
                        amortize based on a seven year, straight-line
                        amortization schedule, and the Fixed Asset Availability
                        will be reduced dollar for dollar with such
                        amortization.

                        The advance rates for Eligible Accounts are subject to
                        the Agent's confirmation of a receivables dilution
                        percentage of not more than 5%, based on periodic field
                        examinations to be completed by the Agent. The advance
                        rate and dollar limit on Eligible Inventory is subject
                        to the Agent's review and satisfaction with the results
                        of a field examination and an inventory appraisal. The
                        Agent shall have the right, upon the completion of field
                        examinations and inventory and other appraisals
                        conducted prior to the term of the Credit Facility, and
                        periodic field examinations and inventory appraisals
                        conducted from time to time by the Agent during the term
                        of the Credit Facility, in each case, as described in
                        "CONDITIONS PRECEDENT" below, to reduce advance rates,
                        impose further dollar limits on eligible collateral,
                        establish reserves and impose other criteria for
                        determining the eligibility of collateral.

COLLATERAL              "COLLATERAL AVAILABILITY" will be defined as the amount
AVAILABILITY:           by which (a) the Borrowing Base exceeds (b) the sum of
                        all

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                        outstanding Revolving Credit Loans, Letters of Credit,
                        accrued charges, interest and fees, and exposure under
                        Hedging Agreements.

REVOLVING               "REVOLVING AVAILABILITY" will be defined as the amount
AVAILABILITY:           by which (a) the lesser of (i) the Borrowing Base and
                        (ii) the Maximum Revolving Commitment Amount exceeds (b)
                        the sum of all outstanding Revolving Credit Loans,
                        Letters of Credit, accrued charges, interest and fees,
                        and exposure under Hedging Agreements. The Credit
                        Parties shall have minimum Revolving Availability as of
                        the Closing Date (after giving effect to the funding of
                        all Revolving Credit Loans and the issuance of all
                        Letters of Credit to be funded or issued as of the
                        Closing Date) of not less than $9,000,000.

PURPOSE:                The proceeds of the Credit Facility shall be used
                        solely: (i) to refinance existing senior secured
                        indebtedness of the Credit Parties, (ii) to pay fees and
                        expenses incurred in connection with the closing of the
                        Credit Facility and the Exchange Notes, (iii) to finance
                        the ongoing working capital requirements of the Credit
                        Parties, (iv) for the issuance of letters of credit for
                        the accounts of the Credit Parties up to the LC
                        Sublimit, (v) subject to the terms and conditions set
                        forth below, to redeem certain of the Borrowers 10.25%
                        senior notes due December 1, 2003 (the "PRE-EXCHANGE
                        NOTES"), and (vi) for general corporate purposes. The
                        Credit Parties will not be permitted to utilize proceeds
                        from the Credit Facility to redeem, repay or prepay, in
                        whole or in part, the Exchange Notes at any time.

REDEMPTION OF PRE-      Beginning on the date on which the Borrowers shall have
EXCHANGE NOTES USING    submitted their fiscal year end audit report for the
PROCEED OF THE          year ended 12/31/2002, so long as the Borrowers are in
CREDIT FACILITY:        compliance with the Credit Facility at such date,
                        the Borrowers shall be permitted to redeem certain of
                        their Pre-Exchange Notes then outstanding using proceeds
                        from Revolving Loans (the "PRE-EXCHANGE NOTE
                        REDEMPTION"), PROVIDED THAT the Borrowers demonstrate
                        average excess Collateral Availability, during the 30
                        calendar day period immediately preceding such proposed
                        Pre-Exchange Note Redemption (or, in the case that the
                        amount of Pre-Exchange Notes then outstanding is in
                        excess of $3,000,000, during the 60 calendar day period
                        immediately preceding such proposed Pre-Exchange Note
                        Redemption), of the sum of (a) the face amount of
                        Pre-Exchange Notes proposed for a Pre-Exchange Note
                        Redemption, PLUS (b) an amount to be determined, but not
                        less than $6,000,000.

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COLLATERAL:             All obligations of the Borrowers under the Credit
                        Facility (and under all foreign exchange contracts and
                        interest rate protection agreements between the
                        Borrowers and the Lenders (collectively, the "HEDGING
                        AGREEMENTS")) shall be secured by an exclusive first
                        priority security interest in all tangible and
                        intangible property and assets of the Credit Parties,
                        including, without limitation, 100% of the outstanding
                        capital stock of each direct or indirect domestic
                        subsidiary of Hawk and 65% of the outstanding capital
                        stock of each direct or indirect foreign subsidiary of
                        Hawk (including, in each case, any subsidiaries that may
                        be formed, created or acquired after the Closing Date),
                        all cash and cash equivalents, deposit accounts,
                        accounts receivable, instruments, inventory, fixtures,
                        machinery, equipment, real property, rights under
                        contracts and licenses, patents, copyrights and
                        trademarks, and all products and proceeds of any and all
                        of the foregoing (collectively, the "COLLATERAL").

INTEREST RATES:         See Schedule "A" attached hereto.

DOCUMENTATION:          All loan, security and other documents (collectively,
                        the "FACILITY DOCUMENTS"), shall be prepared by counsel
                        for the Agent and shall contain, among other things,
                        customary conditions precedent, representations and
                        warranties, affirmative covenants (including reporting
                        requirements), negative covenants, and events of
                        default. Such covenants shall include, but not be
                        limited to: delivery of financial statements and
                        Borrowing Base certificates, access to financial
                        information, field examination and inspection rights,
                        compliance with financial covenants, restrictions on
                        liens, indebtedness, capital and operating leases, the
                        sale or transfer of assets, mergers and acquisitions,
                        investments (including officer loans), dividends,
                        management fees and distributions, restrictions on
                        voluntary prepayment of other debt, compliance with
                        laws, maintenance of insurance, compliance with the
                        Financial Covenants and other covenants to be determined
                        in the reasonable discretion of the Agent. All Facility
                        Documents shall be mutually acceptable to the Borrowers,
                        the Agent, the Lenders, and their respective counsel.

FINANCIAL COVENANTS:    The Credit Parties shall be required to maintain or meet
                        certain mutually agreed upon financial ratios or other
                        tests including but not limited to:

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                        (1) EBITDA of not less than 95% of that which was
                            forecast in the Borrowers' submitted financial
                            statement projections for the fiscal year ended
                            12/31/2002.

                        (2) Maximum Capital Expenditures of not more than
                            $13,000,000 for the fiscal year ended 12/31/2002.

                        (3) Fixed Charge Coverage Ratio of not less than: (a)
                            1.05 to 1.00 for the quarterly LTM periods ending
                            3/31/2003 through and including 6/30/2004 and (b)
                            1.10 to 1.00 for the quarterly LTM periods ending
                            thereafter.

                        (4) Leverage Ratio (to be measured quarterly) (a) of not
                            more than 4.85 to 1.00 at the Closing Date and as
                            measured as of the fiscal quarter ended 12/31/2002,
                            and (b) of an amount not greater than 4.85 to 1.00,
                            and declining over time on a schedule to be
                            determined, for fiscal quarters ended 3/31/2003 and
                            thereafter.

                        The "FIXED CHARGE COVERAGE RATIO" shall be defined as
                        (x) consolidated EBITDA for the period of twelve
                        consecutive months most recently ended ("LTM"), divided
                        by (y) the sum of (1) cash interest expense during the
                        LTM, plus (2) scheduled payments in respect of long term
                        indebtedness during the LTM (excluding amortization on
                        the refinanced Key Bank Facilities, but including
                        pro-forma amortization of the Fixed Asset Advance), plus
                        (3) cash taxes paid during the LTM, plus (4) cash
                        dividends and distributions during the LTM, plus (5)
                        management fees paid in cash during the LTM, plus (6)
                        capital expenditures during the LTM not financed with
                        indebtedness for borrowed money. The Fixed Charge
                        Coverage Ratio shall be tested as of the end of each
                        fiscal quarter commencing 3/31/2003.

                        The "LEVERAGE RATIO" shall be defined as (x)
                        consolidated total funded debt for borrowed money
                        divided by (y) EBITDA for the LTM.

COVENANT REGARDING      If any amount of Pre-Exchange Notes remain outstanding
PRE-EXCHANGE NOTES:     following the Closing Date, the Borrowers agree to
                        submit to the Lenders, upon the request of any one or
                        more of the Lenders, a written plan describing how they
                        will refinance such Pre-Exchange Notes which such plan
                        will include, among other things, the planned execution
                        timetable for such refinance.

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                        At any time on or after June 1, 2003, the Agent and/or
                        any of the Lenders, may require that the Borrower fully
                        repay or refinance all Pre-Exchange Notes then
                        outstanding, and the Borrower acknowledges its
                        obligation to comply with any such requirement by not
                        later than sixty days following the date of such notice.

CONDITIONS              Prior to or simultaneously with the Closing Date, each
PRECEDENT:              of the following conditions (together with such other
                        conditions precedent as the Agent or the Lenders shall
                        reasonably require) shall have been satisfied by the
                        Credit Parties (as determined by the Agent, in its
                        discretion):

                        1.  The Credit Parties, the Agent and the Lenders shall
                            have entered into the Facility Documents containing,
                            among other things, customary representations and
                            warranties, conditions precedent, events of default
                            and affirmative and negative covenants.

                        2.  The Lenders shall have received and be satisfied
                            with the prior three most recent years' historical
                            audited financial statements for Hawk, specifically
                            the fiscal years ended December 31, 1999, 2000, and
                            2001 and the unaudited financial statements for Hawk
                            for the fiscal quarters ended March 31, 2002 and
                            June 30, 2002. Additionally, the Agent shall have
                            received and be satisfied with all written
                            materials, reports and/or management letters, if
                            any, prepared by the Borrowers' current independent
                            accountants with respect to the Borrowers. All
                            financial statements shall consist of at least a
                            balance sheet, income statement and statement of
                            cash flows in accordance with GAAP.

                        3.  The Lenders shall have received and be satisfied
                            with pro forma projections of balance sheets, income
                            and cash flow statements of the Credit Parties for
                            the fiscal years ended December 31, 2002, 2003 and
                            2004. The projections shall be prepared in
                            accordance with GAAP, with sufficient detail to
                            determine fixed and variable costs, as well as
                            provide adequate text explaining the significant
                            assumptions from which they were prepared. For the
                            fiscal year ended December 31, 2002, such
                            projections shall be prepared on a monthly basis and
                            for the fiscal year ended December 31, 2003, such
                            projections shall be prepared on at least a
                            quarterly basis (demonstrating projected financial
                            results for the

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                            subsequent 12-month period). For the fiscal year
                            ended December 31, 2004, such projections shall be
                            prepared on an annual basis.

                        4.  The Lenders shall have received and be satisfied
                            that August 2002 and September 2002 EBITDA results
                            are at least 95% of that which was forecast in
                            Hawk's submitted financial projections.

                        5.  The Agent shall have conducted both initial and
                            takedown field examinations of the Credit Parties'
                            assets, liabilities, management information and cash
                            management systems, books and records, and the
                            results of such field examination shall be
                            satisfactory to the Agent in all respects. After the
                            Closing Date, field examinations will be required at
                            least semi-annually at the sole cost of the Credit
                            Parties.

                        6.  The Agent, on behalf of the Lenders, shall have
                            conducted and be satisfied with reasonable due
                            diligence checks on the Credit Parties' customers
                            and suppliers.

                        7.  The Agent shall be satisfied with the Credit Parties
                            management information systems and cash management
                            systems.

                        8.  The Credit Parties shall have satisfied the Agent as
                            to the existence of adequate casualty, all-risk,
                            liability and other insurance coverage in form and
                            substance satisfactory to the Agent and shall have
                            satisfactorily named the Agent as mortgagee, loss
                            payee and additional insured on all such policies.

                        9.  The Credit Parties shall have demonstrated to the
                            Agent that they are in compliance with all federal
                            and state governmental regulations, licensing and
                            registration requirements applicable to the Credit
                            Parties' industry, except where the failure to so
                            comply could not be expected to have a material
                            adverse effect.

                        10. The Agent shall have obtained first priority liens
                            and security interests on all Collateral of the
                            Credit Parties.

                        11. The Agent shall have received and be satisfied with
                            opinions of counsel to the Credit Parties covering
                            such

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                            matters as the Agent shall reasonably require.

                        12. The Agent shall have received, and be satisfied with
                            an appraisal, to be performed by a third party
                            appraiser acceptable to the Agent, of the Borrower's
                            inventory. Thereafter periodic inventory appraisals
                            will be required at the Agent's discretion and at
                            the Borrower's expense. Such inventory appraisals
                            shall generally be conducted on an annual basis,
                            subject to the Agent's discretion to conduct such
                            appraisals more or less frequently.

                        13. The Agent shall have received, reviewed and be
                            satisfied with an appraisal of the Borrower's
                            machinery & equipment and real property, all
                            prepared using valuation methodology acceptable to
                            the Agent. To the extent existing appraisals are
                            deemed acceptable in form and content to the Agent,
                            Borrower will be required to direct such appraisers
                            to "recertify" such appraisals directly to the
                            Agent.

                        14. The Agent shall have received and be satisfied with
                            landlord's waivers on the Borrowers' leased
                            facilities. Such landlord's waivers shall be in a
                            form and substance satisfactory to the Agent.

                        15. Hawk shall have completed its offer to exchange
                            Pre-Exchange Notes for new senior notes (the
                            "EXCHANGE NOTES"), which Exchange Notes shall be in
                            an amount, and have terms, conditions, covenants and
                            a maturity date satisfactory to the Lenders in their
                            sole discretion.

                        16. The Agent shall be satisfied in its sole discretion
                            with the environmental reviews performed with
                            respect to the Credit Parties' owned real property.

CONDITIONS PRECEDENT    Prior to or simultaneously with the making of any
TO ALL LOANS:           Revolving Credit Loan (including the initial Loans) or
                        any Capex Loan, each of the following conditions
                        (together with such other customary conditions precedent
                        as the Agent or the Lenders shall reasonably require)
                        shall have been satisfied by the Credit Parties (as
                        determined by the Agent, in its discretion): (i) all
                        representations and warranties shall be true and correct
                        in all respects (or, in the case of any Loan other than
                        the initial Loans, true and correct in all material
                        respects) as of the date

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                        of such Loan and (ii) no event of default or unmatured
                        event of default under the Credit Facility shall have
                        occurred and be continuing.

CASH MANAGEMENT:        The Credit Parties shall be required to establish and
                        maintain a cash management system acceptable to the
                        Agent that provides for the Credit Parties' account
                        debtors to remit all payments in respect of receivables
                        and other amounts due to the Credit Parties to lockbox
                        and blocked accounts maintained by the Credit Parties
                        with JPM Chase or with such other financial institutions
                        as shall be acceptable to the Agent. All such financial
                        institutions at which such lockbox or blocked accounts
                        are maintained shall be required to enter into account
                        control agreements in form and substance satisfactory to
                        the Agent that provide for the daily collection and
                        remittance to a collection account at JPM Chase of all
                        proceeds of accounts receivable and other cash received
                        by the Credit Parties. The outstanding loan balance
                        under the Credit Facility shall increase with each new
                        borrowing and decrease upon the receipt and application
                        by the Agent of cash collections (using a one business
                        day collection process).

REPORTING:              The Credit Parties will provide the Agent with
                        Collateral reporting as the Agent may request, which may
                        include, but not by way of limitation, weekly sales and
                        collection reports, and monthly summary and/or detailed
                        aging reports for accounts payable and accounts
                        receivable, monthly inventory declarations and monthly
                        Borrowing Base Certificates. The Credit Parties shall
                        also deliver to the Agent: (i) monthly consolidated and
                        consolidating financial statements (including balance
                        sheet and income statement) and covenant compliance
                        certificates prepared and certified by management in
                        accordance with GAAP (subject to normal year-end
                        adjustments and the absence of footnotes) not later than
                        15 business days after the end of each month; (ii)
                        quarterly consolidated and consolidating financial
                        statements (including balance sheet, income statement
                        and cash flow statement) and compliance certificates
                        prepared and certified by management in accordance with
                        GAAP (subject to normal year-end adjustments) not later
                        than 45 days after the end of each fiscal quarter; (iii)
                        annual audited (with unqualified opinion) financial
                        statements of the Credit Parties prepared by an
                        independent certified public accounting firm
                        satisfactory to the Agent not later than 90 days after
                        the end of each year; (iv) preliminary annual financial
                        projections (prepared using projected monthly data) of
                        the Credit Parties for the

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                        subsequent year prepared by management in accordance
                        with GAAP to be submitted as soon as they are prepared,
                        and in any case not later than 12/31 of the year
                        preceding the projection year, and (v) finalized annual
                        financial projections (prepared using projected monthly
                        data) of the Credit Parties for the subsequent year
                        prepared by management in accordance with GAAP to be
                        submitted as soon as they are prepared, but in any case
                        not later than 1/31 of the projection year.

EXPENSES:               The Borrowers shall reimburse JPM for all out-of-pocket
                        costs and expenses incurred by JPM in connection with
                        the delivery of JPM's commitment and for all
                        out-of-pocket costs incurred by the Agent and JPMBC in
                        connection with the arrangement, establishment,
                        syndication and administration of the Credit Facility,
                        including, without limitation, all field examination
                        fees and expenses, appraisal costs, travel costs,
                        reasonable fees and expenses of Agent's counsel incurred
                        in connection with the preparation, execution and
                        administration of the Facility Documents, filing fees,
                        search fees, recording fees, accounting and appraisal
                        fees, and other customary fees and expenses, whether or
                        not the Credit Facility is established.

INDEMNIFICATION:        The Borrowers shall indemnify JPM and the Lenders and
                        their respective affiliates from and against any and all
                        losses, claims, damages, liabilities, deficiencies,
                        judgments or expenses, other than for their own gross
                        negligence or willful misconduct (as determined by a
                        final, non-appealable judgment of a court of competent
                        jurisdiction), incurred by any of them arising out of or
                        by result of the Credit Facility, the commitments
                        thereunder, the use of the proceeds of the Credit
                        Facility thereof or any related transaction or any
                        litigation, investigation, claim or proceeding, pending
                        or threatened (whether or not any indemnified person is
                        a party thereto), which arise out of or are in any way
                        based upon any of the foregoing, including without
                        limitation, amounts paid in settlement, court costs and
                        the fees and disbursements of counsel incurred in
                        connection with any such litigation, investigation,
                        claim or proceedings.

REQUIRED LENDERS:       The consent of Lenders holding in the aggregate 51% of
                        the total commitments shall be required for consents,
                        waivers and other actions, except that (i) certain
                        customary consents and waivers shall require the
                        unanimous consent of all affected Lenders, and (ii) if
                        at any time there are only two Lenders holding interests
                        in the Credit Facility, the unanimous consent

J.P. MORGAN BUSINESS CREDIT CORP.                                   CONFIDENTIAL
<PAGE>

                        of both Lenders shall be required for all consents,
                        waivers and other actions.

GOVERNING LAW:          New York

AGENT'S COUNSEL:        Jones, Day, Reavis & Pogue

J.P. MORGAN BUSINESS CREDIT CORP.                                   CONFIDENTIAL
<PAGE>

                                  SCHEDULE "A"

           TO SUMMARY OF TERMS AND CONDITIONS DATED SEPTEMBER 27, 2002
                                HAWK CORPORATION

                         INTEREST RATES & COMMITMENT FEE

INTEREST RATES:         With respect to all outstanding Revolving Credit Loans,
                        other than the Fixed Asset Advance, the initial
                        applicable interest rate will be (i) LIBOR plus 250
                        basis points, or (ii) Prime plus 0 basis points. With
                        respect to outstanding Revolving Credit Loans which are
                        part of the Fixed Asset Advance and any advances under
                        the Capex Facility, the initial applicable interest rate
                        will be (i) LIBOR plus 300 basis points, or (ii) Prime
                        plus 50 basis points. The initial interest rates will be
                        in effect until the earlier of (1) receipt of the Credit
                        Parties' audited financial statements for the fiscal
                        year ending December 31, 2002, or (2) March 31, 2003,
                        and thereafter will be subject to the performance
                        pricing grid set forth below.

                        As used herein, (a) "LIBOR" means the London Interbank
                        Offered Rates quoted by recognized financial sources
                        such as Reuters or Bloomberg, adjusted if necessary for
                        any statutory reserves, and (b) "PRIME" means the rate
                        announced by J.P. Morgan Chase & Co. as its prime rate.
                        LIBOR-based Revolving Credit loans will be available for
                        interest periods of one, two or three months, and
                        available in amounts not less than $500,000 each. All
                        interest rates shall be calculated based on a 360 day
                        year.

COMMITMENT FEE:         The Borrowers shall be required to pay a commitment fee
                        of 0.375% per annum (subject to the grid set forth
                        below) on the average daily unused amount of the sum of
                        Revolving Credit Commitment and the Capex Commitment
                        during the preceding quarter and calculated on the basis
                        of a 360 day year, payable quarterly in arrears
                        commencing on the first day of the calendar quarter
                        following the Closing Date. The commitment fee will be
                        subject to the pricing grid set forth below, commencing
                        on the date on which the pricing grid comes into effect
                        with respect to interest rates.

PERFORMANCE
PRICING GRID:           Initial pricing for Revolving Credit Loans which are not
                        part of the Fixed Asset Advance will be at Level 3, and
                        will be in effect until the earlier of (1) receipt of
                        the Borrowers audited financial statements for the
                        fiscal year ending December 31, 2002, or (2) March 31,
                        2003. Thereafter pricing will be subject to the
                        following pricing grid:

J.P. MORGAN BUSINESS CREDIT CORP.                                   CONFIDENTIAL
<PAGE>

                        -------------------------------------------------------
                                                LIBOR     Prime
                        Level  Leverage Ratio   Margin    Margin  Commitment Fee
                        --------------------------------------------------------
                          1    4.75 or higher   325 bps   50 bps      50 bps
                        --------------------------------------------------------
                          2     4.00 -- 4.75    275 bps   25 bps     37.5 bps
                        --------------------------------------------------------
                          3     3.00 -- 3.99    250 BPS   0 BPS      37.5 BPS
                        --------------------------------------------------------
                          4      Below 3.00     225 bps   0 bps       25 bps
                        --------------------------------------------------------

                        Revolving Credit Loans which comprise the Fixed Asset
                        Advance, as well as any advances under the Capex
                        Facility, shall bear interest at rates which shall be 50
                        basis points higher than the above applicable LIBOR and
                        Prime Margins.

DEFAULT RATE:           At the discretion of the Agent and the Required Lenders,
                        all outstanding principal shall bear interest at a rate
                        equal to 200 basis points in excess of the otherwise
                        applicable rate upon the occurrence and during the
                        continuance of an event of default and all overdue
                        interest, fees and other amounts shall bear interest at
                        a rate equal to 200 basis points in excess of the rate
                        applicable to Prime Rate Loans upon the occurrence and
                        during the continuance of an event of default.

J.P. MORGAN BUSINESS CREDIT CORP.                                   CONFIDENTIAL<PAGE>
                                                                   Exhibit 4(c)

                       AMENDMENT NO. 2 TO RIGHTS AGREEMENT

         AMENDMENT NO. 2 TO RIGHTS AGREEMENT (this "Amendment") dated as of
September 30, 2002 and effective as of October 4, 2002, between A. Schulman,
Inc., a Delaware corporation (the "Company"), and National City Bank, a national
banking association ("National City Bank").

                              W I T N E S S E T H

         WHEREAS, the Company and Society National Bank (n/k/a KeyBank National
Association), a national banking association ("KeyBank") entered into that
certain Rights Agreement dated January 12, 1996 (the "Rights Agreement"),
pursuant to which the Company appointed KeyBank, and KeyBank agreed to act as,
the "Rights Agent", as that term is defined in and pursuant to the terms and
conditions set forth therein;

         WHEREAS, effective May 27, 1997, pursuant to that certain Amendment No.
1 to Rights Agreement dated November 21, 1997, KeyBank resigned as the Rights
Agent and the Company appointed EquiServe Trust Company, N.A. (f/k/a/ First
Chicago Trust Company of New York) ("EquiServe") as successor Rights Agent; and

         WHEREAS, the Company has determined that it is in its best interest to
remove EquiServe as the Rights Agent pursuant to its rights under Section 21 of
the Rights Agreement, and appoint National City Bank as the successor Rights
Agent.

         NOW, THEREFORE, in consideration of the premises and the mutual
agreements set forth herein, the parties agree as follows:

         Section 1. APPOINTMENT OF SUCCESSOR RIGHTS AGENT. The Company hereby
appoints National City Bank as successor Rights Agent under the Rights
Agreement, effective as of the close of business on October 4, 2002, and
National City Bank hereby accepts such appointment.

         Section 2. AMENDMENT OF RIGHTS AGREEMENT. Effective as of the
appointment of National City Bank as successor Rights Agent, the Rights
Agreement shall be and hereby is amended as follows:

                  (a) Section 25 of the Rights Agreement hereby is amended
deleting the following address for notice or demand to be given to the Rights
Agent:

               "First Chicago Trust Company of New York
               525 Washington Boulevard
               Mall Suite 4660
               Jersey City, New Jersey  07303-2533
               Attention:  Tenders & Exchanges Administration"

and substituting in lieu thereof the following:

               "National City Bank
               Corporate Trust Administration
               629 Euclid Avenue, Suite 635
               Cleveland, Ohio 44114"

                                       1
<PAGE>

                  (b) All references in the Rights Agreement to "First Chicago
Trust Company of New York" as Rights Agent shall for all purposes be deemed to
refer instead to "National City Bank".

         Section 3. RIGHTS AGREEMENT AS AMENDED. The term "Agreement" as used in
the Rights Agreement shall be deemed to refer to the Rights Agreement as amended
hereby. This Amendment shall be effective as of October 4, 2002 and, except as
set forth herein, the Rights Agreement shall remain in full force and effect and
otherwise shall be unaffected hereby.

         Section 4. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.

         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
duly executed and their respective corporate seals to be herewith affixed and
attested, as of the day and year first above written.

Attest:                                     A. SCHULMAN, INC.

                                            By:    /S/ ROBERT A. STEFANKO
--------------------------------               --------------------------------
Name:                                       Name:  Robert A. Stefanko
     ---------------------------
Title:                                      Title: Executive Vice President -
      --------------------------                   Finance and Administration

Attest:                                     NATIONAL CITY BANK

   /s/ KIMBERLY A. EDMOND                   By: /s/ SHARON R. BOUGHTER
--------------------------------                --------------------------------
Name:  Kimberly A. Edmond                   Name:   Sharon R. Boughter
     ---------------------------                   -----------------------------
Title: Administrative Assistant             Title:  Account Administrator
      --------------------------                   -----------------------------

                                       2

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