S-4/A

Registration No. 333-90556

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 1

to

Form S-4

REGISTRATION STATEMENT UNDER

THE SECURITIES ACT OF 1933

Hawk Corporation

(Exact name of Registrant as specified in its charter)

Delaware	34-1608156	6719
(State or other jurisdiction	(I.R.S. Employer	(Primary Standard Industrial
of incorporation or organization)	Identification Number)	Classification Code Number)

200 Public Square, Suite 30-5000

Cleveland, Ohio 44114

(216) 861-3553

(Address, including zip code, and telephone number,

including area code, of Registrant’s principal executive offices)

SEE TABLE OF ADDITIONAL REGISTRANTS

Ronald E. Weinberg

Chairman of the Board and Chief Executive Officer

200 Public Square, Suite 30-5000

Cleveland, Ohio 44114

(216) 861-3553

(Name, address, including zip code, and telephone number,

including area code, of agent for service)

With copies to:

Marc C. Krantz, Esq.	Jane Whitt Sellers, Esq.
Steven C. Bersticker, Esq.	McGuireWoods LLP
Kohrman Jackson & Krantz P.L.L.	One James Center
1375 East Ninth Street, 20th Floor	901 East Cary Street
Cleveland, Ohio 44114	Richmond, Virginia 23219
(216) 736-7204	(804) 775-1000

      Approximate date of commencement of proposed sale to the public: As soon as practicable after this Registration Statement becomes effective.

      If the securities being registered on this Form are being offered in connection with the formation of a holding company and there is compliance with General Instruction G, check the following box.     o

      If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

      If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

      The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

TABLE OF ADDITIONAL REGISTRANTS

      The address of the principal executive offices of each of the additional Registrants listed below, and the name and address of the agent for service therefor, is the same as is set forth for Hawk Corporation on the facing page of this Registration Statement.

	State or other		Primary Standard
	jurisdiction of		Industrial		I.R.S. Employer
Exact name of additional Registrant	incorporation or		Classification Code		Identification
as specified in its charter	organization		Number		Number
Allegheny Clearfield, Inc.		Pennsylvania		3499		25-1408704
Friction Products Co.		Ohio		3499		34-1608009
Hawk MIM, Inc.		Ohio		6719		34-1940518
Hawk Motors, Inc.		Delaware		3363		31-1815526
Hawk Precision Components Group, Inc.		Ohio		6719		30-0018123
Helsel, Inc.		Delaware		3499		35-1957561
Logan Metal Stampings, Inc.		Ohio		3460		34-1608159
Net Shape Technologies LLC		Delaware		3499		34-1899581
Quarter Master Industries, Inc.		Delaware		3714		36-4323703
S.K. Wellman Corp.		Delaware		3499		34-1804995
S.K. Wellman Holdings, Inc.		Delaware		6719		34-1805476
Sinterloy Corporation		Delaware		3499		31-1549254
Tex Racing Enterprises, Inc.		Delaware		3714		56-1323370

The information in this prospectus is not complete and may change. We may not complete this exchange offer and issue these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it does not seek an offer to buy these securities in any jurisdiction where the offer or sale is not permitted.

Subject to Completion.

PROSPECTUS AND CONSENT SOLICITATION STATEMENT

Offer to Exchange

      We are offering to exchange $                    of           % Senior Notes due 2       , of which $           in principal amount constitutes a consent payment for consents received before the consent payment deadline, for each $1,000 principal amount of outstanding 10 1/4% Senior Notes due 2003 of Hawk Corporation (CUSIP Nos. 420089AA2 and 420089AC8), and we are soliciting consents to amend the indenture for the 10 1/4% Senior Notes due 2003.

      The consent payment deadline (the time by which you must tender to receive the consent payment) will be 5:00 p.m., New York City time, on the later to occur of the date that we receive the required consents to amend the indenture or                     , 2002.

      The exchange offer will expire at 5:00 p.m., New York City time, on                               , 2002, unless extended or earlier terminated.

•  The exchange offer and consent solicitation are subject to the valid tenders of at least a majority in aggregate principal amount of the old notes, to the refinancing of our old credit facility on terms acceptable to us in our sole discretion and to other customary conditions.

•  If the conditions of the exchange offer and consent solicitation are satisfied or waived by us, we will accept for exchange the old notes that are validly tendered and not withdrawn as of 5:00 p.m., New York City time, on the expiration date of the exchange offer.

•  You may withdraw tenders of old notes at any time before we notify the trustee for the old notes that we have received valid and unrevoked consents representing a majority in aggregate principal amount of old notes.

•  We will pay in cash the accrued and unpaid interest on the old notes we acquire in the exchange.

•  The exchange of old notes for new notes will be a taxable event for U.S. federal income tax purposes.

•  The new notes will have the same interest payment dates but a different maturity date, a different optional redemption schedule and a different interest rate than the old notes. Other terms of the new notes will be substantially the same as the old notes before giving effect to the proposed amendments to the old indenture.

•  Our domestic subsidiaries will guarantee the payment of interest and principal under the new notes.

•  We have applied to list the new notes on the New York Stock Exchange.

•  Concurrently with the exchange offer, we are soliciting consents from the holders of old notes to amend the old indenture. The proposed amendments would eliminate all of the subsidiary guarantees, all of the restrictive covenants and some of the events of default in the old indenture.

•  You must consent to tender your old notes, and you must tender to consent.

•  If the proposed amendments are adopted, you will be bound by the proposed amendments even if you do not consent.

•  Any untendered old notes will be effectively subordinated in right of payment to the new notes.

      You should consider the “Risk Factors” beginning on page 13 of this prospectus and consent solicitation statement when you evaluate the exchange offer and consent solicitation.

      Neither the Securities and Exchange Commission nor any state securities regulator has approved or disapproved these securities, or determined if this prospectus and consent solicitation statement is adequate or accurate. Any representation to the contrary is a criminal offense.

Exclusive Dealer Manager

Banc of America Securities LLC

The date of this prospectus and consent solicitation statement is                   , 2002

TABLE OF CONTENTS

EX-1.1 Form of Dealer Management Agreement

EX-4.6 Form of Supplemental Indenture

EX-4.7 Form of Indenture

EX-4.8 Form of Specimen

EX-21.1 Subsidiaries

EX-23.1 Consent of Ernst & Young

TABLE OF CONTENTS

	Page
Summary		1
Risk Factors		13
Special Note Concerning Forward-Looking Statements		19
Where You Can Find Additional Information		19
Use of Proceeds		21
Capitalization		21
The Exchange Offer		22
The Consent Solicitation		30
Business		33
Selected Consolidated Financial and Other Data		49
Management’s Discussion and Analysis of Financial Condition and Results of Operations		51
Management		63
Certain Transactions		64
Description of Other Indebtedness		65
Summary Comparison of the Key Differences between the Old Indenture, as Amended, and the New Indenture		67
Description of the New Notes		69
Material U.S. Federal Income Tax Consequences		98
Plan of Distribution		105
Legal Matters		105
Experts		105
Index to Financial Statements		F-1
Annex A — Deleted Provisions of the Old Indenture		A-1

      Hawk Corporation is not making the exchange offer and consent solicitation to, and will reject exchanges or consents from, holders of old notes in any jurisdiction where the exchange offer, the consent solicitation or the acceptance of outstanding old notes in exchange for new notes would violate the securities or blue sky laws of that jurisdiction.

      None of Hawk Corporation, any of its subsidiaries, the dealer manager, the exchange agent, the information agent or the trustee under the old indenture and the new indenture makes any recommendation as to whether holders of old notes should exchange their securities in the exchange offer and consent to the proposed amendments to the old indenture.

      You should rely only on the information contained or incorporated by reference in this prospectus and consent solicitation statement. We have not authorized any person (including any dealer, salesman or broker) to provide information or make any representations other than as provided in this prospectus and consent solicitation statement and, if given or made, you should not rely on any other information or representations as having been authorized by Hawk Corporation, any of its subsidiaries, the dealer manager or any agent or dealer. We are not making an offer of new notes in any state where the offer is not permitted. You should not assume that the information in this prospectus and consent solicitation statement is accurate as of any date other than the date on the cover page or that any information contained in any document we have incorporated by reference is accurate as of any date other than the date of the document we incorporated by reference.

      Our federally registered trademarks include Hawk®, Wellman Friction Products®, Velvetouch®, Fibertuff®, Feramic®, Velvetouch Feramic®, Velvetouch Organik®, Velvetouch Metalik®, Hawk Brake® and Hawk Performance®. Velvetouch® is our principal trademark for use in the friction products aftermarket segment and is registered in 26 countries. We have applied for the registration of the Hawk Motors, Hawk Precision Components Group, Hawk Rotors, Mega V, Pro V, Quarter Master, Trilite, Tex Racing and Wellman Products Group trademarks. We also refer to trademarks of other corporations in this prospectus and consent solicitation statement.

SUMMARY

      This summary highlights selected information from this prospectus and consent solicitation statement. It may not contain all of the information that is important to you. We urge you to carefully read and review the entire prospectus and consent solicitation statement and the other documents to which it refers to fully understand the terms of the new notes, the exchange offer and the consent solicitation. The terms “Hawk,” “the company,” “we,” “us” and “our” used in this prospectus and consent solicitation statement refer to Hawk Corporation and its subsidiaries as a combined entity, except where it is made clear that the terms mean only Hawk. Throughout this prospectus and consent solicitation statement, we refer to our 10 1/4% Senior Notes due 2003 and our Series B 10 1/4% Senior Notes due 2003 as the “old notes,” and to the indenture that governs them and its supplemental indentures as the “old indenture.” We refer to our        % Senior Notes due 2       as the “new notes” and to the indenture that will govern them as the “new indenture.” We refer to our existing secured credit facility, as amended, as the “old credit facility” and to the new secured credit facility that we will obtain in conjunction with the exchange offer as the “new credit facility.”

Our Company

      We are a leading supplier of friction products and precision components for industrial, agricultural and aerospace applications. We focus on designing, manufacturing and marketing products requiring sophisticated engineering and production techniques for applications in markets in which we have achieved a significant market share. Our products include friction parts for brakes, clutches and transmissions used in construction vehicles, agricultural vehicles, trucks, motorcycles and race cars, and parts for brake systems used in commercial and general aviation. Our precision components are used in pumps, motors, transmissions, anti-lock brake systems and other applications for industrial equipment, lawn and garden equipment, appliances, small hand tools and trucks. Our friction and precision components are made principally from proprietary formulations and designs of metal powders and composite materials.

      We benefit from a deep and diversified customer base, with approximately 2,500 total customers, none of which accounted for more than 7% of our net sales in 2001. We are a preferred supplier to many of the world’s largest and well known brand name original equipment manufacturers, deriving more than 80% of our sales from products for which we are the sole source provider for specific customer applications. We offer our customers full service capabilities, from design through production, and work closely with original equipment manufacturers to improve performance and develop product innovations to generate increased sales. We also benefit from a diversified product list, with over 5,000 total products, none of which accounted for more than 5% of our net sales in 2001. We do not target the cyclical consumer automotive sector. Consequently, less than 7% of our net sales in any of the last five years was to the consumer automotive and light truck market. For the three months ended March 31, 2002, we generated net sales of $49.8 million and income from operations plus depreciation and amortization, or EBITDA, of $4.3 million. For the year ended December 31, 2001, we generated net sales of $184.4 million and EBITDA of $19.5 million. Our common stock has been publicly traded since 1998.

      Through our subsidiaries, we operate primarily in four reportable segments:

•   Friction Products

We believe that, based on net sales, we are one of the top worldwide manufacturers of friction products used in industrial, agricultural and aerospace applications. Our friction products segment manufactures products made from proprietary formulations of composite materials that primarily consist of metal powders and synthetic and natural fibers. Friction products are the parts used in brakes, clutches and transmissions to absorb vehicular energy and dissipate it through heat and normal mechanical wear. The principal markets served by our friction products segment include construction vehicles, agricultural vehicles, trucks, commercial aviation and general aviation. We believe we are:

•  a leading domestic supplier of friction products for construction equipment, agricultural equipment and trucks,

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•  the only independent supplier of friction materials for braking systems for new and existing series of many commercial aircraft models, including the Boeing 737 and 757 and the MD-80, and several regional jets used by commuter airlines, including the Canadair regional jet series,

•  the largest supplier of friction materials for the growing general aviation market, including numerous new and existing series of Gulfstream, Cessna, Lear and Beech aircraft, and

•  a leading domestic supplier of friction products into specialty markets such as motorcycles, all terrain vehicles (ATVs) and snowmobiles.

For the three months ended March 31, 2002, our friction products segment generated net sales of $26.0 million, representing 52% of our total net sales, and EBITDA of $2.7 million, representing 63% of our total EBITDA. For the year ended December 31, 2001, our friction products segment generated net sales of $104.1 million, representing 56% of our total net sales, and EBITDA of $15.7 million, representing 80% of our total EBITDA.

•   Precision Components

We are a leading supplier of powder metal components for industrial equipment, lawn and garden equipment, appliances, hand tools and trucks. We use composite metal alloys in powder form to manufacture high quality custom-engineered metal components. According to the Metal Powder Industries Federation, the powder metal market has historically grown at approximately 10% per year as original equipment manufacturers substitute precision components made from metal powders for forged, cast or stamped parts. Our precision components segment serves three specific areas of the powder metal marketplace:

•  tight tolerance fluid power components, such as pump elements and gears,

•  large powder metal components used primarily in construction equipment, agricultural equipment and trucks, and

•  high volume parts for the lawn and garden, appliance, hand tool and other markets.

For the three months ended March 31, 2002, our precision components segment generated net sales of $17.2 million, representing 35% of our total net sales, and EBITDA of $1.1 million, representing 26% of our total EBITDA. For the year ended December 31, 2001, our precision components segment generated net sales of $58.3 million, representing 32% of our total net sales, and EBITDA of $5.2 million, representing 27% of our total EBITDA.

•   Performance Automotive

We engineer, manufacture and market premium branded clutch and drive-train components for the performance automotive racing market. Through this segment, we supply parts for NASCAR, CART, IRL, SCCA and ASA race cars and other road racing and competition cars. For the three months ended March 31, 2002, our performance automotive segment generated net sales of $3.9 million, representing 8% of our total net sales, and EBITDA of $0.8 million, representing 19% of our total EBITDA. For the year ended December 31, 2001, our performance automotive segment generated net sales of $13.0 million, representing 7% of our total net sales, and EBITDA of $1.0 million, representing 5% of our total EBITDA.

•   Motor

We design and manufacture die-cast aluminum rotors for fractional and subfractional horsepower electric motors. These parts are used in a wide variety of motor applications, including appliances, business equipment, pumps and fans. We believe our motor segment is the largest independent U.S. manufacturer of die-cast aluminum rotors for use in fractional and subfractional horsepower electric motors. We also believe our motor segment has significant growth opportunities arising from the trend by original equipment motor manufacturers, which we estimate still produce more than half of all rotors in the U.S. fractional and subfractional horsepower motor market, to outsource their production

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of rotors to independent suppliers. For the three months ended March 31, 2002, our motor segment generated net sales of $2.7 million, representing 5% of our total net sales, and an EBITDA loss of $0.3 million. For the year ended December 31, 2001, our motor segment generated net sales of $9.0 million, representing 5% of our total net sales, and an EBITDA loss of $2.4 million. Our facility in Mexico accounted for $0.2 million of the EBITDA loss in the first quarter of 2002, and $2.0 million of the EBITDA loss in the year 2001, as a result of start-up operating costs.

Business Strategy

      Our business strategy includes the following principal elements:

•   Focus on High-Margin, Specialty Applications. We focus on markets that require sophisticated engineering and production techniques and in which we have achieved a significant market share. In developing new applications, we seek to compete in markets requiring a high level of engineering expertise and technical capability, rather than in markets in which the primary competitive factor is product pricing. We believe margins for our products in these markets are higher than in other manufacturing markets that use standardized products. Our gross margins were 21.6% for the three months ended March 31, 2002, 25.7% for the three months ended March 31, 2001, 21.7% for the year 2001, and 27.1% for the year 2000.

•   Introduce New Products. A key part of our strategy is the introduction of products for new applications that incorporate improved performance characteristics or reduced costs in response to customer needs. Our engineers proactively focus on developing new product solutions that enhance performance and reduce manufacturing costs, including instances where we are the incumbent supplier. We also grow by applying our existing products and technologies to new specialized applications where our products have a performance or technological advantage.

•   Expand Customer Relationships. We seek to provide advanced solutions to customers, enhancing our long-term relationships. Our engineers work closely with customers to develop and design new products and improve the performance of existing products. We believe that more than 80% of our net sales are from products and materials for which we are the sole source provider for specific customer applications. Our predecessors formed, and we have continued to build, relationships with these customers, some of which date back over 50 years. Our commitment to quality, service and just-in-time delivery enables us to build and maintain strong and stable customer relationships. We believe that strong relationships with our customers provide us with significant competitive advantages in obtaining and maintaining new business opportunities.

•   Capitalize on Aftermarket Opportunities. Our stable aftermarket sales enable us to minimize our exposure to adverse economic cycles. Because friction products are the consumable, or wear, component of brake, clutch and transmission systems, the use of our friction products in conjunction with a new or existing system provides us with the opportunity to supply the aftermarket for the life of the system, typically through sales to the original equipment manufacturer. For example, the ability to service the aftermarket for a particular aircraft braking system will likely provide us with a stable market for our friction products for the life of the product, which can be 30 years or more. Aftermarket sales of friction products have comprised approximately 50% of our friction product sales in recent years.

•   Selectively Expand Internationally. Through our friction and motor segments, which have foreign manufacturing facilities in Italy, Canada, China and Mexico, and our friction segment’s worldwide distribution network, we continue to selectively expand our international operations in established markets throughout Europe, Asia, North America and Australia. Our friction products facility in Suzhou, China, which opened in 2000, and our rotor manufacturing facility in Monterrey, Mexico, which began production in 2000, are both expected to reach full production levels in 2002. Our international net sales represented $7.0 million, or 14.1%, of our consolidated net sales in the first quarter of 2002, and $23.6 million, or 12.8%, of our consolidated net sales in 2001.

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Summary of the Exchange Offer

Purpose of the Exchange Offer	The old notes that are currently outstanding have an aggregate principal amount of $65.0 million and mature on December 1, 2003. The purpose of the exchange offer is to extend the maturity of the old notes.
The Exchange Offer	We are offering to exchange each $1,000 of your 10 1/4% senior notes due 2003 for $               in principal amount of new        % senior notes due 2     , of which $               in principal amount constitutes a consent payment that will only be made for consents received before the consent payment deadline.
	You will be paid in cash the accrued and unpaid interest on old notes we acquire in the exchange.
	The new notes will accrue interest in cash at the rate of        % per annum on the principal amount, payable semi-annually on each June 1 and December 1, commencing December 1, 2002. The new notes will mature on December 1, 2       .
	The new notes will have the same interest payment dates but a different maturity date, a different optional redemption schedule and a different interest rate than the old notes. Other terms of the new notes will be substantially the same as the old notes before giving effect to the proposed amendments to the old indenture. Our domestic subsidiaries will guarantee the payment of interest and principal under the new notes.
	To validly tender your old notes, you must give a valid consent to the proposed amendments to the old indenture. You will be deemed to have given this consent when you tender your old notes.
	Outstanding old notes may be exchanged only in denominations of $1,000 and integral multiples of $1,000 in excess of that amount. New notes will be issued only in denominations of $1,000 and integral multiples of $1,000 in excess of that amount, except that we may elect to issue new notes in denominations of less than $1,000. If under the terms of the exchange offer any tendering participant in the Depository Trust Company, or DTC, is entitled to receive, through DTC, new notes in a principal amount that is not an integral multiple of $1,000 and we elect not to issue new notes in denominations of less than $1,000, then we will reduce the principal amount of that DTC participant’s new notes to the nearest $1,000 and substitute a cash payment equal to the principal amount by which that DTC participant’s new notes are reduced.
	If the specified conditions are met or waived, then we will exchange new notes for old notes that are validly tendered and not withdrawn before the exchange offer expires. If the exchange offer is consummated, then we will exchange new notes for corresponding old notes on the third business day after the exchange offer expiration date, or as soon as practicable after that date.
Consent Solicitations; Consent Payments	Concurrently with the exchange offer, we are soliciting consents to the proposed amendments to the old indenture from the holders of

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	old notes. Holders of old notes may give their consent to the proposed amendments only by tendering their old notes in the exchange offer and will be deemed to have given their consent by so tendering. We must receive consents from holders of at least a majority in aggregate principal amount outstanding of old notes to amend the old indenture and release the subsidiary guarantees as described in this prospectus and consent solicitation statement. We are offering, subject to conditions, to pay each holder who gives a valid consent, that is not revoked, on or before 5:00 p.m., New York City time, on the later to occur of the date we receive the required consents to amend the old indenture or                , 2002 (we refer to this date and time as the consent payment deadline) a consent payment, included in the principal amount of the new notes, in the amount of $               for each $1,000 in principal amount of old notes for which the holder has given valid consent. Our obligation to complete the exchange offer and to make the consent payments is conditioned on, among other things, receipt of valid consents to effect the proposed amendments to the old indenture, although we may waive this or any other condition to the exchange offer.
Expiration Date	The exchange offer will expire at 5:00 p.m., New York City time, on                     , 2002, unless we, in our sole discretion, elect to extend the offer, in which case the expiration date will be the latest date and time to which we extend the offer. We will return any old note rejected for exchange for any reason, without expense to you, as promptly as practicable after the expiration or termination of the exchange offer.
Withdrawal of Tenders	You may withdraw tenders of old notes at any time before the time we notify the trustee for the old notes that we have received valid and unrevoked consents representing a majority in aggregate principal amount of the old notes. You may not withdraw tenders of old notes after that time unless we extend the exchange offer with changes in the terms of the exchange offer that are, in our reasonable judgment, materially adverse to the tendering holders of old notes. We will announce that we have received the required consents no later than 9:00 a.m., New York City time, on the first business day following their receipt.
	A valid withdrawal of tendered old notes before the time we notify the trustee for the old notes that we have received valid and unrevoked consents will also constitute the revocation of the related consent to the proposed amendments to the old indenture. You may only revoke a consent by validly withdrawing your tender of old notes before that time.
Taxation	The receipt of new notes will be a taxable transaction for U.S. federal income tax purposes, and holders of old notes validly tendered in the exchange offers will, accordingly, recognize gain or loss, as described below in “Material U.S. Federal Income Tax Consequences.”

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Conditions to the Exchange Offer and Consent Solicitation	The exchange offer and consent solicitation are subject to customary conditions, which we may assert or waive. See “The Exchange Offer — Conditions to the Exchange Offer.” These conditions include requirements that (1) we receive valid and unrevoked tenders and consents representing at least a majority in aggregate outstanding principal amount of the old notes, and (2) we are able to refinance the old credit facility on terms satisfactory to us in our sole discretion. We reserve the right to terminate or amend the exchange offer at any time before the expiration date if any of these conditions are not satisfied.
Procedures for Tendering and Consenting	If you wish to accept the exchange offer and consent solicitation and your old notes are held by a custodial entity such as a bank, broker, dealer, trust company or other nominee, then only that custodial entity can tender your old notes. In that case, you must instruct the custodial entity to tender your old notes on your behalf pursuant to the procedures of the custodial entity.
	Custodial entities that are DTC participants must tender old notes through the Automated Tender Offer Program, known as ATOP, maintained by DTC.
	A consent and letter of transmittal need not accompany tenders effected through ATOP.
	The delivery of an agent’s message through ATOP will constitute the giving of consent to the proposed amendments with respect to the old notes so tendered, and the agreement by the custodial entity and the beneficial holder to be bound by the consent and letter of transmittal.
Consequences of Failure to Exchange	For a description of the consequences of a failure to exchange the old notes, see “Risk Factors — Consequences of a Failure to Exchange the Old Notes.”
Exchange Agent	HSBC Bank USA is the exchange agent for the exchange offer and consent solicitation. The address and telephone number of the exchange agent are on the back cover page of this prospectus and consent solicitation statement.
Information Agent	D.F. King & Co., Inc. is the information agent for the exchange offer and consent solicitation. The address and telephone numbers of the information agent are on the back cover page of this prospectus and consent solicitation statement.
Exclusive Dealer Manager	Banc of America Securities LLC is the exclusive dealer manager for the exchange offer and consent solicitation. The address and telephone numbers of the dealer manager are on the back cover page of this prospectus and consent solicitation statement.

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Summary of the New Notes

Issuer	Hawk Corporation
Maturity Date	December 1, 2
Aggregate Principal Amount	Up to $65.0 million
Interest	%
	Interest will be payable semi-annually in cash on each June 1 and December 1, commencing December 1, 2002. Interest will accrue from the settlement date of the exchange offer and consent solicitation. You will be paid accrued and unpaid interest in cash through the settlement date on old notes that we acquire in the exchange.
Guarantees	The new notes will be fully and unconditionally guaranteed by all of our domestic subsidiaries, jointly and severally. These guarantors are Allegheny Clearfield, Inc., Friction Products Co., Hawk MIM, Inc., Hawk Motors, Inc., Hawk Precision Components Group, Inc., Helsel, Inc., Logan Metal Stampings, Inc., Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman Holdings, Inc., S.K. Wellman Corp., Sinterloy Corporation and Tex Racing Enterprises, Inc. If we cannot make interest or principal payments on the new notes when they are due, then these subsidiaries, as the guarantors of the new notes, must make them instead, subject to the rights of holders of the new credit facility and any other secured debt.
Ranking	The new notes and guarantees will:

•  be general unsecured obligations of Hawk and the subsidiary guarantors,

•  be effectively senior in right of payment to the old notes, any other debt of Hawk that is not guaranteed by its subsidiaries and any subordinated debt of Hawk and the subsidiary guarantors,

•  rank equal in right of payment with all unsecured and unsubordinated debt of Hawk and the subsidiary guarantors,

•  be effectively subordinated in right of payment to all secured debt of Hawk and the subsidiary guarantors, including any amounts Hawk borrows under the new credit facility, and

•  be effectively subordinated in right of payment to all existing and future debt, including trade payables, of our subsidiaries that are not guarantors of the new notes.

	See “Risk Factors — Risks Relating to the New Notes.”
Ratings	The new notes are expected to be rated                by Moody’s Investors Service, Inc. and                by Standard & Poor’s Ratings Services. A rating reflects only the views of Moody’s or Standard

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	& Poor’s and is not a recommendation to buy, sell or hold the new notes.
Change of Control	If we undergo a change of control, the new indenture will require that we offer to repurchase the new notes at a purchase price equal to 101% of their principal amount, plus accrued and unpaid interest, if any, to the date of repurchase. See “Description of the New Notes — Change of Control.”
Optional Redemption	The new indenture will also permit us, at our option, to redeem any or all of the new notes for cash on or after                , 2       , at        % of their principal amount plus accrued and unpaid interest, if any, to the date of redemption. See “Description of the New Notes — Redemption.”
Restrictive Covenants	The new indenture will contain the same restrictive covenants, on substantially the same terms, as the old indenture before giving effect to the proposed amendments, including, among other things, covenants that limit our ability to:

•  incur additional debt,

•  pay dividends and other restricted payments,

•  create liens,

•  sell assets,

•  engage in sale and leaseback transactions,

•  engage in transactions with affiliates,

•  cause our subsidiaries to issue capital stock, and

•  consolidate or merge with, or into, or transfer all or substantially all of our assets to, another person.

	These restrictions and requirements are subject to a number of important qualifications and exceptions. See “Description of the New Notes — Covenants.”
Events of Default	The events that will permit acceleration of the payment of the principal of and accrued interest on the new notes will be substantially the same as those under the old indenture before giving effect to the proposed amendments. For a description of these events, see “Description of the New Notes — Events of Default.”
Form and Denomination	The new notes will be issued only in the form of a global note. See “Description of the New Notes — Book-Entry, Delivery and Form.” The global note will be deposited with DTC for credit to the account of a direct or indirect participant of DTC. Investors in the global note who are participants in DTC may hold their interests in the global note directly through DTC. Investors in the global note who are not participants in DTC may hold their interests indirectly through organizations that are participants in DTC. Interests in the global note will be shown on, and transfers of the global note will be effected only through, records

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	maintained by DTC and its participants, including Euroclear and Clearstream.
	Except as set forth under “Description of the New Notes — Book-Entry; Delivery and Form,” participants and indirect participants will not receive physical delivery of certificated new notes or have new notes issued and registered in their names and will not be considered the owners or holders of the new notes under the new indenture.
	Interests in the new notes will be issued in denominations of $1,000 and integral multiples of $1,000 in excess of that amount, except that we may elect to issue new notes in denominations of less than $1,000.
Governing Law	The new notes and the new indenture will be governed by, and construed in accordance with, the laws of the State of Ohio.
Trustee, Registrar, Book-Entry Depository and Paying Agent	HSBC Bank USA

Summary of the Proposed Amendments

      The proposed amendments to the old indenture will not affect the interest rate and payment and maturity dates of the old notes. The proposed amendments will, however, reduce the protections that holders of the old notes receive under the old indenture. The amendments will eliminate all of the restrictive covenants in the old indenture. These covenants currently limit our ability to:

     •  incur debt,

     •  make investments and payments,

     •  incur liens,

     •  pay dividends;

     •  sell capital stock of our subsidiaries,

     •  enter into transactions with stockholders and affiliates,

     •  sell assets, and

     •  consolidate or merge.

      The proposed amendments will also remove requirements in connection with:

     •  preserving material rights and franchises,

     •  paying taxes and other claims,

     •  maintaining property and insurance coverage,

     •  waiving defenses to payment of the old notes,

     •  providing information to the trustee and holders of the old notes,

     •  repurchasing old notes on a change of control or sale of assets, and

     •  requiring any subsidiaries we create or acquire to become guarantors.

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      In addition, the proposed amendments will release our subsidiaries from their guarantees of the old notes, which will relieve them of any further obligation to repay the old notes. The amendments will also remove some of the events of default under the old indenture, including but not limited to:

     •  a default by us or the guarantors on other debt,

     •  final judgments or orders not paid or discharged, and

     •  bankruptcy, insolvency or liquidation.

      The consent of holders of at least a majority of the aggregate outstanding principal amount of the old notes is required to effect the proposed amendments to the old indenture.

      If you withdraw your tender of old notes, then you will also be withdrawing your consent to the proposed amendments. You may not withdraw your consent without withdrawing your tender of old notes.

      If the proposed amendments become effective and you did not tender your old notes in the exchange offer, then you will be bound by the proposed amendments to the old indenture even though you did not consent. You will continue to be entitled to receive principal and interest payments on your old notes and all other remaining rights conferred by the old indenture, as amended.

      See “The Consent Solicitation — The Proposed Amendments” and Annex A to this prospectus and consent solicitation statement.

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SUMMARY HISTORICAL CONSOLIDATED FINANCIAL AND OPERATING DATA

(in millions, except per share data)

      You should read this data in conjunction with the more detailed information contained in the consolidated financial statements, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included in this prospectus and consent solicitation statement.

	Three Months
	ended
	March 31,						Year ended December 31,
	2002			2001			2001			2000			1999
	(Unaudited)
Statement of Operations Data:
Net sales	$	49.8		$	53.8		$	184.4		$	202.3		$	187.6
Cost of sales		39.0			40.0			144.4			147.4			138.8
Gross profit		10.8			13.8			40.0			54.9			48.8
Restructuring costs(1)		—			—			1.1			—			—
Income from operations		1.2			3.9			3.6			19.5			18.6
Interest expense		2.3			2.4			9.5			9.0			9.4
Other expense (income), net		0.2			(0.1	)		0.5			0.5			(0.4	)
(Loss) income before income taxes		(1.2	)		1.6			(6.2	)		10.1			10.0
Income tax (benefit) provision		(0.6	)		0.7			(1.9	)		4.4			3.7
Net (loss) income	$	(0.6	)	$	0.9		$	(4.3	)	$	5.8		$	6.3
(Loss) Earnings Per Share:
Basic (loss) earnings per share	$	(.07	)	$	.10		$	(.52	)	$	.66		$	.71
Diluted (loss) earnings per share	$	(.07	)	$	.10		$	(.52	)	$	.66		$	.71
Other Data:
EBITDA(2)	$	4.3		$	7.8		$	19.5		$	34.5		$	32.3
EBITDA, as a percentage of net sales(2)		8.6	%		14.5	%		10.6	%		17.1	%		17.2	%
Depreciation	$	2.7		$	2.8		$	11.4		$	10.8		$	9.9
Amortization	$	0.4		$	1.1		$	4.5		$	4.2		$	3.8
Capital expenditures (including capital leases)	$	1.9		$	2.8		$	9.1		$	10.5		$	10.2
Ratio of EBITDA to interest expense(2)		1.9x			3.3x			2.1x			3.8x			3.4x
Ratio of long-term debt (including current portion) to EBITDA(2)(3)		5.9x			3.4x			5.0x			3.0x			3.3x
Ratio of earnings to fixed charges(4)		—			1.6	x		—			2.0x			2.0x

	March 31,
	2002
Balance Sheet Data:	(Unaudited)
Cash and cash equivalents	$	2.4
Working capital		9.8
Property, plant and equipment, net		66.3
Total assets		210.0
Total long-term debt (including current portion)		101.0
Shareholders’ equity		65.5

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(1)	Reflects primarily a work force reduction charge at our domestic facilities for approximately 160 salaried and production personnel.
(2)	We define “EBITDA” as income from operations plus depreciation and amortization. We present EBITDA because it is:

•  a widely accepted financial indicator of a company’s ability to incur and service debt, and

•  the basis on which our compliance with financial covenants contained in the old indenture, new indenture, old credit facility and new credit facility is principally determined.

However, EBITDA does not purport to represent cash provided by operating activities as reflected in our consolidated statements of cash flow, is not a measure of financial performance under accounting principles generally accepted in the United States and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States. Also, our measure of EBITDA may not be comparable to similar measures reported by other companies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

(3)  We determine the ratio of long-term debt to EBITDA:

•  for the years 2001, 2000 and 1999, by dividing long-term debt, including current portion, at December 31 for each of these years by EBITDA for the same years, and

•  for the first quarter of 2002 and 2001, by dividing long-term debt, including current portion, at the end of each of these quarters by the product of four times EBITDA for the same quarters.

(4)  We determine the ratio of earnings to fixed charges by dividing:

•  the sum of earnings before interest expense, amortization of deferred financing costs, taxes and a portion of rent expense representative of interest, by

•  the sum of interest expense, amortization of deferred financing costs and a portion of rent expense representative of interest.

     For the three month period ended March 31, 2002 and the year ended December 31, 2001, our earnings were insufficient to cover fixed charges. The additional earnings required to cover fixed charges would have been $1.2 million for the three month period ended March 31, 2002, and $6.2 million for the year ended December 31, 2001.

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RISK FACTORS

      By exchanging your old notes in the exchange offer, you will be investing in the new notes. If you do not participate in the exchange offer, then you will continue to hold the old notes subject to the terms of the old indenture. Investing in the new notes involves risk. In addition to the other information contained in this prospectus and consent solicitation statement, you should carefully consider the following risk factors when deciding whether to exchange your old notes for new notes. Additional risks and uncertainties described in this prospectus and consent solicitation statement may also impair our financial condition, results of operations or prospects.

Risks Relating to Our Business and Financial Condition

We have incurred losses in the past and we may incur losses in the future.

      We experienced a net loss of $0.6 million in the first quarter of 2002 compared to net income of $0.9 million in the comparable period of 2001. For the year ended December 31, 2001, we experienced a net loss of $4.3 million compared to net income of $5.8 million for the same period in 2000. If we continue to incur losses in the future, then our growth potential and our ability to execute our business strategy may be constrained. In addition, our ability to service our debt, including our obligations under the new notes, may be harmed because we may not generate sufficient cash flow from operations to pay principal or interest when due. These decreases were primarily attributable to volume declines in most of the end-markets served by our friction and precision components segments, including the aircraft industry following the events of September 11.

We have substantial debt, which increases our vulnerability to adverse business developments and could prevent us from meeting our obligations under our debt instruments.

      We have a substantial amount of outstanding debt and will continue to have a substantial amount of debt following the exchange offer. As of March 31, 2002, our total debt, including our obligations under the old notes, was approximately $101.0 million, and our ratio of long-term debt (including the current portion) to total capitalization was 60.7%. Our ability to service our debt following the exchange offer, including our obligations under the new notes and any old notes that remain outstanding, and to meet our other financial obligations will depend on our future operating performance, which is subject to market conditions and other factors beyond our control.

      Our high level of debt and related obligations, among other things:

• decreases the amount of cash available to us for operations and future business opportunities,

• increases our vulnerability to adverse economic conditions and competition,

• subjects us to operational restrictions contained and expected to be contained in the new indenture, the new credit facility and other debt agreements,

• limits our ability to borrow additional funds, dispose of assets, pay dividends or distributions or make acquisitions,

• limits funds available to us for working capital, capital expenditures, acquisitions and general corporate purposes, and

• limits our operational and financial flexibility as compared to those of our competitors that operate on a less leveraged basis.

      If we default under the terms of our debt agreements, then the market value of the new notes could be adversely affected.

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We may be unable to repay the principal amount of the old notes if the exchange offer is not completed.

      The old notes, having an outstanding principal balance at March 31, 2002 of $65.0 million, will mature on December 1, 2003. The primary source of funds for servicing our debt obligations and conducting our operations is cash generated from operations. Our current cash from operations is insufficient to repay the principal amount plus accrued and unpaid interest that would have to be paid upon maturity of the old notes. Our ability to repay the old notes depends on our ability to complete the exchange offer and obtain the new credit facility.

We may be unable to repay the principal amount of our old credit facility, and we may be unable to obtain the new credit facility on favorable terms.

      The old credit facility, having an outstanding principal balance at March 31, 2002 of $29.4 million, will mature on March 31, 2003. We believe that it is highly unlikely that we will be able to repay this debt with cash generated from our operations. Accordingly, we will have to refinance or extend the due date of the old credit facility. Our ability to do so will depend on, among other things, our financial condition, market conditions and other factors beyond our control. If we are unable to complete the exchange offer, then we may be unable to obtain the new credit facility. If we are able to obtain a new credit facility, then the terms of the facility may not be satisfactory or favorable to us.

The exchange offer will result in a one-time, non-cash charge.

      Assuming all of the old notes are exchanged in the exchange offer, we expect to incur a one-time, non-cash charge of approximately $0.8 million (approximately $0.5 million after tax) at the time of the exchange offer as a result of a write-off of previously capitalized deferred financing costs necessitated by the exchange of the old notes and the termination of the old credit facility.

We may be unable to service our debt because of our corporate structure.

      As a holding company, virtually all of Hawk’s assets consist of investments in its subsidiaries, and its operations are conducted through its subsidiaries. Hawk has no available sources of cash with which to service its debt other than dividends and repayment of loans made by Hawk to its subsidiaries. These payments from its subsidiaries are and will continue to be subject to statutory restrictions and covenants under our debt agreements. If the subsidiaries can not or do not distribute a sufficient portion of their earnings to Hawk, then Hawk will be unable to service its debt, including its obligations under the new notes.

We operate in a highly competitive industry, which may prevent us from growing and may decrease our business.

      We operate in an industry that is highly competitive and fragmented. There are many small manufacturers in our industry and only a few generate annual sales in excess of $50.0 million. Our larger competitors have greater financial resources to devote to manufacturing, promotion and sales, which could adversely affect our customer relationships or product mix.

      We compete for new business primarily when our existing customers develop new applications or redesign existing applications, which may involve lengthy periods of development and testing. For example, developing new aircraft braking systems typically begins two to five years before full-scale production. Although we have successfully obtained this business from our customers in the past, we may be unable to obtain this business in the future, which could adversely affect our financial condition, results of operations and prospects.

      Some of our competitors use different technologies, such as carbon composite friction material for braking system components. We also compete with manufacturers using more traditional forging, casting and stamping technology. Our competitors use of different technology may adversely affect our ability to compete and negatively impact our financial condition, results of operations and prospects.

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We are subject to governmental regulations that may affect our ability to implement our business objectives.

      Our net sales to manufacturers of aircraft braking systems represented 11.4% of our consolidated net sales in the first quarter of 2002 and 14.1% of our consolidated net sales in 2001. Every aircraft braking system, including those containing components supplied by us, must satisfy Federal Aviation Administration criteria and testing requirements. While we have met these requirements in the past, if we fail to meet these requirements or any new or changed requirements, then our results of operations may be adversely affected or we may not be able to meet our business objectives. There can be no assurance that Federal Aviation Administration review of an aircraft braking system containing components supplied by us will result in a favorable determination or that we or our customers will continue to meet Federal Aviation Administration criteria and testing requirements, which are subject to change in the discretion of the Federal Aviation Administration.

      We are also subject to strict environmental regulations imposed by federal, state, local and foreign environmental and worker health and safety laws. Under some environmental laws, we may be liable for releases of hazardous or toxic materials, pollutants or contaminants on the properties that we own and operate even if the release was caused by a prior owner or operator. Compliance with environmental laws may require us to adhere to standards or procedures in connection with our operations or acquire permits or authorizations to conduct some activities. We are also subject to the federal Occupational Safety and Health Act and similar foreign and state laws. The nature of our operations, the extensive uses of our existing and former facilities, and the operations of prior owners and operators expose us to the risk of liabilities or claims concerning environmental and health and safety laws and regulations.

We may not be able to receive favorable prices for, or continued supplies of, raw materials, which may affect our ability to obtain enough supplies to conduct our business.

      We primarily use copper, steel, iron powders, aluminum ingot and custom-fabricated cellulose sheet in our operations. Although we have been able to obtain the necessary amount of raw materials for our operations on acceptable terms in the past, there can be no assurance that we will be able to obtain the necessary raw materials or that the purchase terms will be satisfactory or favorable to us, which may adversely affect our financial condition, results of operations and prospects.

We are subject to risks associated with international operations.

      We conduct business outside the United States, which may subject us to the risks inherent in international operations. For example, we may be harmed financially and operationally by changes in foreign economic and political conditions, exchange controls, laws, regulations, tariffs or taxes, trade barriers and management and staffing. Foreign laws and regulations may also prohibit the payment of dividends or transfer of profits to us or any of our U.S. subsidiaries. In addition, legal remedies may be difficult to pursue abroad, if necessary. Our international net sales represented $7.0 million, or 14.1%, of our consolidated net sales in the first quarter of 2002, and $23.6 million, or 12.8%, of our consolidated net sales in 2001.

We depend on our key personnel.

      Our performance depends on our ability to retain and motivate officers and key employees. The loss of any of our executive officers or other key employees could materially and adversely affect our financial condition, results of operations and prospects. Hawk has an employment agreement with Ronald E. Weinberg, its Chairman of the Board and Chief Executive Officer, and maintains a “key person” life insurance policy on the life of Mr. Weinberg in the face amount of $1.0 million.

      Our future success also depends on identifying, attracting, hiring, training, retaining and motivating other highly skilled technical, managerial and marketing personnel. Competition for these employees is intense, and we may be unable to successfully attract, integrate or retain sufficiently qualified personnel.

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Risks Relating to the New Notes

Some of our other debt will rank ahead of the new notes. If we default on that debt, then we may not be able to pay principal or interest on the new notes.

      The new notes and the guarantees of the new notes will be senior unsecured obligations. Thus, the holders of our secured debt will have a prior claim on our assets if we default. As a result, they will be paid before you receive any amounts due under the terms of the new notes and the guarantees of the new notes, but only to the extent of the value of the assets securing their debt.

      Assuming we had exchanged all of the outstanding old notes for the new notes, as of March 31, 2002, Hawk’s and its subsidiaries’ total outstanding debt, would have been approximately $101.0 million, including amounts outstanding under the old credit facility. As of March 31, 2002, your right of payment under the new indenture and new notes would have been:

•  effectively subordinated in right of payment to all of Hawk’s and the guarantors’ secured debt, including the old credit facility, in the amount of $32.4 million;

•  effectively subordinated in right of payment to all debt of Hawk’s direct and indirect subsidiaries that are not guarantors of the new notes in the amount of $0.5 million; and

•  equal in right of payment to all of Hawk’s and the guarantors’ unsecured and unsubordinated debt in the amount of $3.1 million.

      The new indenture and new notes will be effectively senior in right of payment to the old notes that remain outstanding after the completion of the exchange offer, any other debt of Hawk that is not guaranteed by its subsidiaries and all existing or future subordinated debt of Hawk and the guarantors, and will be effectively subordinated in right of payment to all trade payables of Hawk’s direct and indirect subsidiaries that are not guarantors of the new notes, which at March 31, 2002 were $3.6 million.

      Under the new credit facility, which will be secured debt, we anticipate that we will be entitled to borrow up to $53.0 million in the aggregate. Thus, with the new credit facility, we expect that we will have greater borrowing availability than at March 31, 2002, thereby permitting us to incur additional secured debt.

The new notes, new indenture and new credit facility contain covenants restricting our operations.

      The new notes and the new indenture contain, and we expect the new credit facility to contain, a significant number of covenants that, among other things, will limit our ability to dispose of assets, incur additional debt, satisfy other debt, amend other debt instruments, pay dividends, make distributions, create liens on assets, enter into investments, merge with other entities, make capital expenditures and otherwise restrict our corporate activities. In addition, the new credit facility is expected to contain financial covenants that are customary for a secured asset-based credit facility.

      Our ability to comply with these covenants may be affected by events beyond our control, including prevailing economic, financial and industry conditions. If we fail to comply with the covenants that are expected to be contained in the new credit facility, then the lenders under the new credit facility will have the option to declare all borrowed amounts due and payable, together with accrued and unpaid interest, and could refuse to extend additional credit to us under the facility. If we were unable to repay the lenders under the new credit facility, then they could foreclose on our assets that are securing our debt to them, which consists primarily of equipment, real estate, accounts receivable and inventory of Hawk’s direct or indirect domestic subsidiaries.

Our ability to effect a change in control is limited by the terms of the new notes, new indenture and new credit facility, and we may be required to repurchase the new notes in the event of a change in control.

      The terms of the new notes provide that in the event of a change in control, we will be required to repurchase all of the outstanding new notes at 101% of the principal amount, plus accrued and unpaid

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interest. The source of funds for any repurchase would be available cash generated from operations or other sources, including borrowings, asset sales or the infusion of cash from new equity investors. We also expect a change in control to be an event of default under the new credit facility, which would permit the lenders to accelerate the debt under the new credit facility. There can be no assurance that sufficient funds will be available at the time we sustain a change in control to make any required repurchase of any of the new notes or repay any outstanding debt due under the new credit facility.

The guarantees of the new notes by the guarantors could be held to be unenforceable or enforceable only to a limited extent.

      The new notes will be Hawk’s obligation and will be unconditionally guaranteed by the subsidiary guarantors. The guarantors will not be receiving any direct value or direct consideration in exchange for their guarantees. Any of the guarantors may be viewed as insolvent if, at the time of or as a result of the exchange offer, the sum of its debts is greater than the sum of its assets, or if it is not paying its debts as they become due.

      Under applicable provisions of the U.S. Bankruptcy Code or comparable provisions of state fraudulent transfer laws, a court could void the guarantees by the guarantors or other debt obligations of the guarantors, or subordinate claims in respect of the guarantees or other debt obligations to all other debts of the guarantors, if, among other things, any of the guarantors, at the time it incurred the debt evidenced by the guarantees or debt obligations, incurred the debt with the intent to hinder, delay or defraud creditors or received less than reasonably equivalent value or fair consideration for the incurrence of the guarantees or debt, and:

•  was insolvent,

•  was rendered insolvent as a result of the incurrence,

•  was engaged or about to engage in a business or transaction for which the guarantor’s remaining assets constituted unreasonably small capital, or

•  intended to incur, or believed it would incur, debts beyond its ability to satisfy them as they become due.

      In that event, any payment by a guarantor in connection with the guarantees or debt obligations could be voided and required to be returned to the guarantor or to a fund for the benefit of the other creditors of that guarantor.

We expect a limited trading market for the new notes, which may make it difficult for you to sell the new notes.

      Although we intend to list the new notes on the New York Stock Exchange, we can not assure you that an active trading market will develop for the new notes. Accordingly, you may have difficulty selling the new notes.

Consequences of a Failure to Exchange the Old Notes

Since the old notes will effectively rank junior to the new notes, in the event of a default, we will only be able to make payments to the holders of the old notes after the new notes and all of our other senior debt has been paid in full.

      The old notes will effectively rank junior in right of payment to the new notes. The risk of non-payment to holders of the old notes will increase following the exchange offer because, in the event of a payment default, we will only be able to make payments to holders of the old notes after we fully satisfy our payment obligations under all of our debt ranking senior in right of payment to the old notes, including the new notes and the new credit facility.

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If you do not tender your old notes and we complete the exchange offer, then your rights under the old indenture will be substantially diminished.

      If you do not exchange your old notes in the exchange offer and we complete the exchange offer, then you will continue to hold your old notes subject to the terms of the old indenture after giving effect to the proposed amendments. The proposed amendments will eliminate the principal source of security for the repayment of the old notes by releasing all of the subsidiary guarantees of the old notes. In addition, the proposed amendments will remove all of the operating restrictions and some of the events of default that can be removed by majority consent of the holders consistent with the old indenture and the requirements of the Trust Indenture Act of 1939. These amendments will result in less protection for holders of old notes than the protection that is currently provided by the old indenture. As a result, if you fail to exchange your old notes, then you will be able to look only to Hawk, and not to any of the subsidiary guarantors, for payment. Hawk has no available sources of cash to pay the amounts due under the old notes other than dividends from its subsidiaries and repayments of the loans Hawk makes to its subsidiaries.

If you do not exchange your old notes in the exchange offer, then you may not be able to sell them in the secondary market.

      The trading market for any old notes that are not tendered in the exchange offer is likely to be significantly more limited than it is at present. Therefore, if you do not tender your old notes in the exchange offer, then it may become more difficult for you to sell or transfer your unexchanged existing notes. This reduction in liquidity may in turn increase the volatility of the market price for the old notes. In addition, the credit rating of the old notes may not remain the same after the closing of the exchange offer. If the rating of the existing notes is lowered, then their liquidity may be further reduced.

      If you did not exchange your unregistered old note for a registered Series B note in the exchange offer we made in 1997, then your unregistered old note will continue to be subject to the restrictions on transfer set forth in the old note and the old indenture. There is no public market for old notes that were not exchanged for registered Series B notes in the 1997 exchange offer.

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

      Statements that are not historical facts, including statements about our confidence in our prospects and strategies and our expectations about the strength or growth of existing markets and our ability to expand into new markets, to identify and acquire complementary businesses and to attract new sources of financing, are forward-looking statements that involve risks and uncertainties. In addition to statements that are forward-looking by reason of context, the words “believe,” “expect,” “anticipate,” “intend,” “designed,” “goal,” “objective,” “optimistic,” “will” and other similar expressions identify forward-looking statements. Because of the risks and uncertainties inherent in all future projections, the inclusion of the forward-looking statements should not be regarded as a representation by us or any other person that our objectives or plans will be achieved. Many factors could cause our actual results to differ materially and adversely from those in the forward-looking statements, including the following:

•  our ability to complete the exchange offer for the old notes and refinance the old credit facility before their maturity in 2003,

•  our ability to continue to meet the terms of our debt, which contain a number of significant financial covenants and other restrictions, including the old credit facility which we had to amend twice in 2001 and once in 2002,

•  the willingness of our banks to further amend the old credit facility, if necessary,

•  the effect of our debt service requirements on funds available for operations and future business opportunities and our vulnerability to adverse general economic and industry conditions and competition,

•  the continuing impact of the decline in the aircraft market on our gross margins,

•  our ability to use all of our manufacturing capacity because of continuing softness in the commercial and industrial end-markets we serve,

•  our ability to begin generating profits from our facilities in Mexico and China, as well as our ability to turn a profit at the start-up operations at Hawk MIM,

•  the effect of competition by manufacturers using new or different technologies,

•  the effect on our international operations of unexpected changes in regulatory requirements, export restrictions, currency controls, tariffs and other trade barriers, difficulties in staffing and managing foreign operations, political and economic instability, fluctuations in currency exchange rates, difficulty in accounts receivable collection and potentially adverse tax consequences,

•  our ability to negotiate new agreements, as they expire, with our unions representing some of our employees, on terms favorable to us or without experiencing work stoppages,

•  the effect of any interruption in our supply of raw materials or a substantial increase in the price of any raw materials,

•  the continuity of business relationships with major customers, and

•  the ability of our aircraft brake products to meet stringent Federal Aviation Administration criteria and testing requirements.

      You must consider these risks and others that are detailed in this prospectus and consent solicitation statement in deciding whether to participate in the exchange offer and consent solicitation.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

      This prospectus and consent solicitation statement is part of a registration statement that we have filed with the SEC. You should read this prospectus and consent solicitation statement and the information incorporated by reference, including the exhibits to the registration statement.

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      We file annual, quarterly and special reports, proxy statements and other information with the SEC. Our SEC filings are available to the public over the Internet at the SEC’s web site at http://www.sec.gov. You may also read and copy any document we file at the SEC’s public reference room at 450 Fifth Street, N.W., Washington, D.C. 20549. You may obtain information on the operation of the SEC’s public reference room in Washington, D.C. by calling the SEC at 1-800-SEC-0330. We also file information with the New York Stock Exchange. These reports, proxy statements and other information may be read and copied at 30 Broad Street, New York, New York 10005.

      Our periodic reports under the Exchange Act contain, in addition to our consolidated financial statements, a note with tabular consolidating condensed financial statements for Hawk, the guarantor subsidiaries as a group and our non-guarantor subsidiaries as a group, together with any other required disclosure. This prospectus and consent solicitation statement does not present separate financial statements and other disclosures concerning the guarantors because our management has determined they are not material to investors.

      We and the guarantors agree that, whether or not required to do so by the rules and regulations of the SEC, for so long as any of the new notes remain outstanding, we will furnish to the holders of the new notes and file with the SEC (unless the SEC will reject the filing) (1) all quarterly and annual financial information that we would be required to file with the SEC on Forms 10-Q and 10-K if we and the guarantors were required to file these forms, including a “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and, with respect to the annual information only, a report by our certified independent accountants, (2) all reports that we would be required to file with the SEC on Form 8-K if we and the guarantors were required to file these reports and (3) any other information, documents and other reports that we and the guarantors would be required to file with the SEC if we were subject to Section 13 or 15(d) of the Exchange Act.

      We have elected to incorporate by reference into this prospectus and consent solicitation statement some of the information we file with the SEC under the Securities Exchange Act of 1934. This means that we are disclosing important information to you by referring you to those filings. The information we incorporate by reference is considered a part of this prospectus and consent solicitation statement, and any subsequent information that we file with the SEC will automatically update and supercede this information. Any information that we subsequently modify or supercede will not constitute a part of this prospectus and consent solicitation statement, except as so modified or superceded. Specifically, we incorporate by reference the documents listed below and any future filings we make with the SEC (including any filings we make before the effectiveness of the registration statement) under Section 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934 until the offering is terminated:

•  our Annual Report on Form 10-K for the year ended December 31, 2001,

•  our Quarterly Report on Form 10-Q for the quarter ended March 31, 2002,

•  the sections captioned “Board of Directors — Director Compensation,” “Executive Compensation and Other Information” and “Principal Stockholders” from the proxy statement we filed on Form 14A on April 5, 2002, and

•  our Current Report on Form 8-K dated July 24, 2002.

      You may request a copy of the information that we have incorporated by reference, at no cost, by writing or telephoning us at the following address:

Hawk Corporation

200 Public Square, Suite 30-5000

Cleveland, Ohio 44114

Attn: Vice President — Finance

Telephone: (216) 861-3553

      We expect the exchange offer to expire on                     , 2002. To obtain timely delivery of any requested information, you must request this information by                     , 2002 or the date that is no later than five business days before the expiration date.

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      You should rely only on the information contained or incorporated by reference in this prospectus and consent solicitation statement. We have not authorized any person (including any dealer, salesman or broker) to provide information or make any representations other than as provided in this prospectus and consent solicitation statement and, if given or made, you should not rely on any other information or representations as having been authorized by Hawk, any of its subsidiaries, the dealer manager or any agent or dealer. We are not making an offer of new notes in any state where the offer is not permitted. You should not assume that the information in this prospectus and consent solicitation statement is accurate as of any date other than the date on the cover page or that any information contained in any document we have incorporated by reference is accurate as of any date other than the date of the document we incorporated by reference.

USE OF PROCEEDS

      The new notes issued in connection with the exchange offer are only being issued in exchange for your old notes and in payment of any consent payments. We will not receive any cash proceeds from the issuance of new notes pursuant to the exchange offer. All old notes accepted by us in the exchange offer will be cancelled.

CAPITALIZATION

      The following table describes our consolidated capitalization at March 31, 2002 and as adjusted to give effect to (1) the exchange offer and consent solicitation and (2) the replacement of our old credit facility with the new credit facility. The table assumes that we will exchange 100% of the old notes and that we will incur deferred financing costs of $          in connection with the exchange offer and consent solicitation and the refinancing of the old credit facility. You should read this table in conjunction with our consolidated financial statements included in this prospectus and consent solicitation statement.

			March 31, 2002
					As
			Actual		Adjusted
			(in millions)
Cash and Cash Equivalents			$	2.4
Long-term obligations (including current portion)
	Old credit facility(1)		$	29.4		—
	New credit facility(2)			—
	Old notes		$	65.0		—
	New notes			—
	Other debt(3)		$	6.6
		Total long-term obligations	$	101.0
Total shareholders’ equity(4)			$	65.5
Total Capitalization			$	166.5

(1)

The old credit facility is comprised of a $25.0 million revolving credit component and a $16.3 million amortizing term loan subject to a borrowing base formula. The old credit facility has a maturity date of March 31, 2003. The interest rates on the old credit facility range from 250 to 450 basis points over the Eurodollar rate, or alternatively, 125 to 325 basis points over the prime rate based on our quarterly performance. The old credit facility is collateralized by a security interest in our domestic subsidiaries’ accounts receivable, inventory, equipment and real estate and other assets, and we have pledged the stock of all of our U.S. subsidiaries and the stock of some of our foreign subsidiaries as collateral. We expect to terminate the old credit facility at the closing of the exchange offer.

(2)

Concurrently with the closing of the exchange offer, we expect to enter into the new credit facility. We expect to use the proceeds of the new credit facility to pay off the old credit facility in full, pay transaction costs and provide for our future working capital needs. We expect the new credit facility to have a maximum commitment of $53.0 million, subject to a borrowing base, and to mature no later than the earlier of four years from closing or 120 days prior to the maturity date of the new notes. In addition, we expect the interest rates on the new credit facility to range from 200 to 300 basis points over the London Interbank Offered Rates (LIBOR), or alternatively, 0 to 50 basis points over the prime rate on all loans other than capital expenditure loans and loans based on the fixed assets of the Company and our U.S. subsidiaries, and from 250 to 350 basis points over LIBOR, or alternatively, 50 to 100 basis points over the prime rate on all capital expenditure loans and fixed asset loans. We expect that the initial interest rate on all loans except capital expenditure loans and fixed asset loans will be LIBOR plus 225 basis points, or alternatively, 0 basis points over the prime rate, and that any capital expenditure loans and fixed asset loans will have an initial interest rate of LIBOR plus 275 basis points, or alternatively, 50 basis points over the prime rate. We also expect the new credit facility to be collateralized by a security

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	interest in our domestic subsidiaries’ accounts receivable, inventory, equipment and real estate and other assets, and by a pledge of the stock of all of our U.S. subsidiaries. We have not yet entered into a commitment letter with respect to the new credit facility, and the funding of the new credit facility will be subject to customary terms and conditions, including completion of due diligence and the exchange offer. See “Description of Other Indebtedness — New Credit Facility.”
(3)	Includes capital leases and other obligations.
(4)	As a result of the exchange offer, we will incur a one-time, non-cash charge of approximately $0.8 million (approximately $0.5 million after tax), as a result of a write-off of previously capitalized deferred financing costs necessitated by the exchange of the old notes and the termination of the old credit facility.

THE EXCHANGE OFFER

Purpose of the Exchange Offer

      We are making the exchange offer to extend the maturity of the old notes.

Terms of the Exchange Offer

      We are offering to exchange $               in principal amount of our new        % senior notes due 2       , of which $               in principal amount constitutes a consent payment that will only be made for consents received before the consent payment deadline, for each $1,000 in principal amount of our 10 1/4% Senior Notes due 2003 (CUSIP No. 420089AA2) and Series B 10 1/4% Senior Notes due 2003 (CUSIP No. 420089AC8) that you tender before the expiration of the exchange offer.

      To validly tender your old notes, you must give a valid consent to the proposed amendments to the old indenture. You will be deemed to have given this consent when you tender your old notes. For purposes of this section, we refer to the exchange offer and consent solicitation together as the “exchange offer.” See “The Consent Solicitation — The Proposed Amendments.” The consent payment will be included in the principal amount of the new notes you receive upon completion of the exchange offer. You must consent to the proposed amendments to tender your old notes, and you must tender to consent. The transmission of an agent’s message through the automated tender offer program at DTC, known as ATOP, will constitute consent to the proposed amendments with respect to the old notes specified in the message.

      We will issue the new notes in exchange for the old notes in the exchange offer, if consummated, on the settlement date, which will be the third business day following the expiration date of the exchange offer, or as soon as practicable after that date.

      Outstanding old notes may be exchanged only in denominations of $1,000 and integral multiples of $1,000 in excess of that amount. New notes will be issued only in denominations of $1,000 and integral multiples of $1,000 in excess of that amount, except that we may elect to issue new notes in denominations of less than $1,000. If under the terms of the exchange offer any tendering DTC participant is entitled to receive, through DTC, new notes in a principal amount that is not an integral multiple of $1,000 and we elect not to issue new notes in denominations of less than $1,000, then we will reduce the principal amount of that DTC participant’s new notes to the nearest $1,000 and substitute a cash payment equal to the principal amount by which that DTC participant’s new notes are reduced.

      We have applied to list the new notes on the New York Stock Exchange.

Conditions to the Exchange Offer

      We may terminate, modify, extend or otherwise amend the exchange offer at any time. Our obligation to complete the exchange offer and to make the consent payments relating to the proposed amendments is subject to our satisfaction or waiver of the following conditions:

      (1) receipt of valid and unrevoked tenders and consents representing at least a majority in aggregate outstanding principal amount of old notes (as of March 31, 2002, $64,725,000 in principal amount of the old notes are deemed to be outstanding and $275,000 in old notes held by some of our affiliates are deemed not to be outstanding, for purposes of determining satisfaction of this condition);

      (2) we have successfully completed the refinancing of the old credit facility on terms satisfactory to us in our sole discretion;

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      (3) we have received the requisite consents from the lenders under the new credit facility;

      (4) (a) there is not:

  •  in our sole judgment, any actual or threatened legal impediment, including a default under an agreement, indenture or other instrument or obligation to which we are party or by which we are bound, to the consummation of the exchange offer, or

  •  any change or development, including a prospective change or development, that in our sole judgment, has or may have a material adverse effect on us or on the value of the exchange offer to us; and

(b)  the trustee of the old indenture has executed and delivered a supplemental indenture giving effect to the proposed amendments and has not objected in any respect to, or taken any action that could in our reasonable judgment adversely affect the consummation of:

  •  the exchange offer,

  •  the exchange of old notes under the exchange offer,

  •  the consent solicitation, or

  •  our ability to effect the proposed amendments; and

(c)  the trustee of the old indenture has not taken any action that challenges the validity or effectiveness of the procedures we use in soliciting consents, including the form of the consents, or in making the exchange offer, the exchange of the old notes under the exchange offer.

      All of these conditions are for our sole benefit and may be waived by us in whole or in part. Any determination we make concerning an event, development or circumstance described or referred to above will be conclusive and binding.

      If any of the foregoing conditions are not satisfied, then we may, at any time before or concurrently with the expiration date for the exchange offer:

(1)	terminate the exchange offer and return all tendered old notes to their holders;
(2)	modify, extend or otherwise amend the exchange offer and retain all tendered old notes until the expiration date, as extended, of the exchange offer, subject, however, to the withdrawal rights of holders (see “— Withdrawal of Tenders and Revocation of Consents” and “— Expiration Date; Extensions; Amendments; Termination”); or
(3)	waive the unsatisfied conditions with respect to the exchange offer and accept all old notes tendered and not previously withdrawn.

      We reserve the right to purchase or offer to purchase any old notes in the open market, in privately negotiated transactions or otherwise. The terms of these purchases or offers could differ from the terms of the exchange offer. Any purchase or offer to purchase we make will be in accordance with applicable law.

Consequences to Holders of Old Notes Not Tendering in the Exchange Offer

      Consummation of the exchange offer and the adoption of the proposed amendments to the old indenture may have adverse consequences to holders who elect not to tender old notes in the exchange offer. In particular, the amendments would eliminate all of the operating restrictions, including our ability to incur additional debt and debt secured by liens, and some of the events of default that may be removed by majority consent of the holders consistent with the old indenture and the requirements of the Trust Indenture Act of 1939. In addition, the amendments would eliminate the principal source of security for the repayment of the old notes by releasing all of the subsidiary guarantees of the old notes. These amendments will result in less protection for holders than the protection that is currently provided by the old indenture. See “Risk Factors — Consequences of a Failure to Exchange the Old Notes” and “The Consent Solicitation — The Proposed Amendments.”

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Expiration Date; Extensions; Amendments; Termination

      For purposes of the exchange offer, the term “expiration date” means 5:00 p.m., New York City time, on                , 2002, unless we elect to extend the offer, in which case the expiration date will be the latest date and time to which we extend the offer.

      We reserve the right to:

  •  extend the exchange offer,

  •  terminate the exchange offer if a condition to our obligation to exchange new notes is not satisfied or waived at the expiration date, or

  •  amend the exchange offer by giving oral or written notice of the delay, extension, termination or amendment to the exchange agent.

      If the exchange offer is amended in a manner that we determine constitutes a material change, then we will extend the exchange offer for a period of five to ten business days, depending upon the significance of the amendment and the manner of disclosure to the holders, if the exchange offer would otherwise have expired during this period. Any change in the consideration offered to holders of old notes pursuant to the exchange offer will be paid to all holders who have previously tendered and not withdrawn old notes.

      We will promptly announce any extension, amendment or termination of the exchange offer by issuing a press release to the Dow Jones News Service. We will announce any extension of the expiration date or the consent payment deadline by no later than 9:00 a.m., New York City time, on the first business day after the previously scheduled expiration date or consent payment deadline. We have no other obligation to publish, advertise or otherwise communicate any information about any extension, amendment or termination.

Effect of Tender

      Your tender (and our subsequent acceptance of your tender) of old notes will constitute a binding agreement between you and us upon the terms and subject to the conditions of the exchange offer described in this prospectus and consent solicitation statement and in the consent and letter of transmittal. The acceptance of the exchange offer by you will constitute your agreement to deliver good and marketable title to the tendered old notes, free and clear of any and all liens, restrictions, charges, pledges, security interests, encumbrances or rights of any kind of third parties. By tendering your old notes, you will also give consent to the proposed amendments of the old indenture.

Consent and Letter of Transmittal; Representations, Warranties and Covenants of Holders of Old Notes

      Upon your submission of the consent and letter of transmittal, or agreement to the terms of the consent and letter of transmittal pursuant to an agent’s message, you will, subject to your ability to withdraw your consent as described in “— Withdrawal of Tenders and Revocations of Consents,” and subject to the terms and conditions of the exchange offer generally, be deemed, among other things, to:

  •  irrevocably sell, assign and transfer to or upon our order or the order of our nominee, all right, title and interest in and to, and any and all claims in respect of or arising or having arisen as a result of your status as a holder of, all old notes you tender, so that after that time you will have no contractual or other rights or claims in law or equity against us or any fiduciary, trustee, fiscal agent or other person connected with the old notes arising under, from or in connection with your old notes,

  •  waive any and all rights with respect to the old notes you tender (including, without limitation, any existing or past defaults and their consequences in respect of the old notes), and

  •  release and discharge us, the guarantors of the old notes and the trustee from any and all claims you may have, now or in the future, arising out of or related to the old notes you tender, including, without limitation, any claims that you are entitled to receive additional principal or interest payments with respect to the old notes you tender (other than as expressly provided in

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this prospectus and consent solicitation statement and in the consent and letter of transmittal) or to participate in any redemption or defeasance of the old notes you tender.

      In addition, you will be deemed to represent, warrant and agree that:

•  you have received and reviewed this prospectus and consent solicitation statement,

•  you are the beneficial owner (as defined below) of, or a duly authorized representative of one or more beneficial owners of, the old notes tendered and you have full power and authority (1) to execute the consent and letter of transmittal, and (2) to consent to the proposed amendments to the old indenture as set forth under “The Consent Solicitation — The Proposed Amendments” or to deliver a duly executed consent (which is included in the consent and letter of transmittal) from a person or entity having that power and authority,

•  the old notes being tendered were owned, as of the date of tender, free and clear of any liens, charges, claims, encumbrances, interests and restrictions of any kind, and acknowledge that we will acquire good, indefeasible and unencumbered title to the old notes, free and clear of all liens, charges, claims, encumbrances, interests and restrictions of any kind, when we accept the same,

•  you will not sell, pledge, hypothecate or otherwise encumber or transfer any old notes tendered from the date of the consent and letter of transmittal or agent’s message and agree that any purported sale, pledge, hypothecation or other encumbrance or transfer will be void and of no effect,

•  in evaluating the exchange offer and deciding to participate in the exchange offer by submitting a consent and letter of transmittal or agent’s message and tendering your old notes, you have made your own independent appraisal of the matters referred to in this prospectus and consent solicitation statement and in any related communications and are not relying on any statement, representation or warranty, express or implied, made to you by us or the dealer manager other than those contained in this prospectus and consent solicitation statement (as supplemented to the expiration date),

•  the execution and delivery of the consent and letter of transmittal or agent’s message constitutes an undertaking to execute any further documents and give any further assurances that may be required in connection with any of the foregoing, in each case on and subject to the terms and conditions set out or referred to in this prospectus and consent solicitation statement,

•  the submission of the consent and letter of transmittal or agent’s message to the exchange agent will, subject to your ability to withdraw your consent, and subject to the terms and conditions of the exchange offer generally, constitute the irrevocable appointment of the exchange agent as your attorney and agent, and an irrevocable instruction to that attorney and agent to complete and execute all or any forms of transfer and other documents at the discretion of that attorney and agent in relation to the old notes you tender in favor of the company or any other person or persons that we may direct and to deliver the forms of transfer and other documents in the attorney’s and agent’s discretion and the certificates and other documents of title relating to the old notes’ registration and to execute all other documents and to do all other acts and things that may in the opinion of that attorney or agent be necessary or expedient for the purpose of, or in connection with, the acceptance of the exchange offer, and to vest the old notes in us or our nominees,

•  subject to your ability to withdraw consent, and subject to the terms and conditions of the exchange offer generally, the submission of the consent and letter of transmittal or agent’s message to the exchange agent constitutes the irrevocable appointment by you of the exchange agent as proxy to approve on your behalf, and to vote in favor of, the proposed amendments to the old indenture substantially in the form described under “The Consent Solicitation — The Proposed Amendments” at any duly called meeting of old note holders and at any adjournment of the meeting, or to execute on your behalf any written instrument evidencing the amendments, and

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•  that the terms and conditions of the exchange offer will be deemed to be incorporated in, and form a part of, the consent and letter of transmittal or agent’s message, which will be read and construed accordingly.

      The representations and warranties and agreements of a holder tendering old notes will be deemed to be repeated and reconfirmed on and as of the expiration date and the settlement date. For purposes of this prospectus and consent solicitation statement, the “beneficial owner” of any old notes means any holder that exercises sole investment discretion with respect to the old notes.

Absence of Dissenters’ Rights

      You do not have any appraisal or dissenters’ rights in connection with the exchange offer under the laws of the State of Ohio, which govern the old indenture and the old notes.

Accounting Treatment of Exchange Offer

      We will account for the exchange offer as an exchange of debt under accounting principles generally accepted in the United States. The new notes to be issued in the exchange offer will be recorded at the same carrying value as the old notes. Accordingly, we will recognize no gain or loss for accounting purposes upon the consummation of the exchange offer. However, we will incur a one-time, non-cash charge of approximately $0.8 million (approximately $0.5 million after tax) at the time of the exchange offer as a result of a write-off of previously capitalized deferred financing costs necessitated by the exchange of the old notes and the termination of the old credit facility. We will also amortize the expenses of the exchange offer over the term of the new notes issued in the exchange offer.

Acceptance of Old Notes for Exchange; Delivery of New Notes

      On the settlement date, we will deliver the new notes to be issued in exchange for old notes in the exchange offer in book-entry form.

      We will be deemed to have accepted validly tendered old notes and properly given consents that have not been validly withdrawn or revoked as provided in this prospectus and consent solicitation statement when, and if, we have given oral or written notice of acceptance to the exchange agent. Subject to the terms and conditions of the exchange offer, delivery of new notes through the settlement date will be made by the exchange agent on the settlement date upon receipt of that notice. The exchange agent will act as agent for tendering holders of the old notes for the purpose of receiving old notes and transmitting new notes as of the settlement date with respect to the old notes. If any tendered old notes are rejected for any reason set forth in the terms and conditions of the exchange offer, then the unaccepted old notes will be returned without expense to the tendering holder as soon as possible after the expiration or termination of the exchange offer.

Procedures for Tendering and Consenting

      The procedures by which you may tender or cause to be tendered old notes will depend on the manner in which you hold the old notes.

      If you wish to accept the exchange offer and give your consent and your old notes are held by a custodial entity such as a bank, broker, dealer, trust company or other nominee, then only that custodial entity can tender your old notes. In that case, you must instruct the custodial entity to tender your old notes on your behalf pursuant to the procedures of the custodial entity.

      If you wish to accept the exchange offer and give your consent and your old notes are not held by a custodial entity, then you must either:

•  complete, sign and date the consent and letter of transmittal according to the instructions (including guaranteeing the signatures to the consent and letter of transmittal, if required), and deliver the consent and letter of transmittal, together with the certificates representing the old

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	notes, to the exchange agent at its address on the back cover page of this prospectus and consent solicitation statement for receipt on or before the expiration date, or
•	comply with the ATOP procedures for book-entry transfer described below on or before the expiration date.

      The exchange agent and DTC have confirmed that the exchange offer is eligible for ATOP. The consent and letter of transmittal (or facsimile copy), with any required signature guarantees or, in the case of book-entry transfer, an agent’s message in lieu of the consent and letter of transmittal, and any other required documents, must be transmitted to and received by the exchange agent on or before the expiration date of the exchange offer at its address set forth on the back cover page of this prospectus and consent solicitation statement. Old notes will not be deemed surrendered until the exchange agent receives the consent and letter of transmittal and signature guarantees, if any, or agent’s message.

      The method of delivery of old notes, the consent and letter of transmittal, and all other required documents to the exchange agent is at your election and risk. Instead of delivery by mail, you should use an overnight or hand delivery service, properly insured. In all cases, you should allow sufficient time to assure delivery to and receipt by the exchange agent on or before the expiration date. Send the consent and letter of transmittal or any old notes only to the exchange agent.

      All new notes will be delivered only in book-entry form through DTC. Accordingly, if you anticipate tendering other than through DTC, then you are urged to contact promptly a bank, broker or other intermediary (that has the capability to hold securities custodially through DTC) to arrange for receipt of any new notes to be delivered to you pursuant to the exchange offer and to obtain the information necessary to provide the required DTC participant with account information for the consent and letter of transmittal.

Book-Entry Delivery Procedures for Tendering Old Notes Held with DTC

      If you wish to tender old notes held on your behalf by a nominee with DTC, then you must:

•  inform your nominee of your interest in tendering your old notes pursuant to the exchange offer, and

•  instruct your nominee to tender all old notes you wish to be tendered in the exchange offer into the exchange agent’s account at DTC on or before the expiration date.

      Any financial institution that is a nominee in DTC, including Euroclear and Clearstream, must tender old notes by effecting a book-entry transfer of the old notes to be tendered in the exchange offer into the account of the exchange agent at DTC by electronically transmitting its acceptance of the exchange offer through the ATOP procedures for transfer. DTC will then verify the acceptance, execute a book-entry delivery to the exchange agent’s account at DTC, and send an agent’s message to the exchange agent. An “agent’s message” is a message, transmitted by DTC to and received by the exchange agent and forming part of a book-entry confirmation, that states that DTC has received an express acknowledgement from an organization that participates in DTC (a “participant”) tendering old notes that the participant has received and agrees to be bound by the terms of the consent and letter of transmittal and that we may enforce the agreement against the participant. The proper tender by the nominee of your old notes will constitute the giving of a consent to the proposed amendments of the old indenture. You do not need to execute a consent and letter of transmittal if you tender your old notes through ATOP.

Proper Execution and Delivery of Consent and Letter of Transmittal

      An eligible institution must guarantee signatures on a consent and letter of transmittal or notice of withdrawal described below (see “— Withdrawal of Tenders and Revocation of Consents”), as the case may be, unless the old notes tendered pursuant to the consent and letter of transmittal are tendered:

•  by a holder who has not completed the box entitled “Special Delivery Instructions” or “Special Issuance Instructions” on the consent and letter of transmittal, or

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•  for the account of an eligible institution.

      If signatures on a consent and letter of transmittal, or notice of withdrawal are required to be guaranteed, then the guarantee must be made by an eligible institution.

      If you sign the consent and letter of transmittal, then your signature must correspond with the name as written on the face of the old notes without alteration, enlargement or any change whatsoever. If two or more holders hold any of the old notes tendered, then all of the holders must sign the consent and letter of transmittal. If any of the old notes you tender are registered in different names on different old notes, then it will be necessary for you to complete, sign and submit as many separate consents and letters of transmittal, and any accompanying documents, as there are different registrations of certificates.

      If you do not tender old notes for exchange pursuant to the exchange offer and the old notes are to be returned to a person other than you, then the certificates for these old notes must be endorsed or accompanied by an appropriate instrument of transfer, signed exactly as the name of the registered owner appears on the certificates, with the signatures on the certificates or instruments of transfer guaranteed by an eligible institution.

      If a person other than you signs the consent and letter of transmittal, then those old notes must be properly endorsed or accompanied by a properly completed bond power, signed by you exactly as your name appears on the old notes. If the consent and letter of transmittal or any old notes, bond powers or other instruments of transfer are signed by trustees, executors, administrators, guardians, attorneys-in-fact, officers of corporations or others acting in a fiduciary or representative capacity, then those persons should so indicate when signing, and, unless waived by us, evidence satisfactory to us of their authority to so act must be submitted with the consent and letter of transmittal.

      We will reject any alternative, conditional, irregular or contingent tenders or consents. By executing the consent and letter of transmittal, you waive any right to receive any notice of the acceptance for exchange of your old notes. You should indicate in the applicable box in the consent and letter of transmittal the name and address to which payments or substitute certificates evidencing old notes for amounts not tendered or not exchanged should be issued or sent, if different from yours. If these instructions are not given, then any old notes not tendered or exchanged will be returned to you.

      All questions as to the validity, form, eligibility (including time of receipt), and acceptance and withdrawal of tendered old notes will be determined by us in our absolute discretion, which determination will be final and binding. We reserve the absolute right to reject any and all tendered old notes determined by us not to be in proper form or not to be properly tendered or any tendered old notes our acceptance of which would, in the opinion of our counsel, be unlawful. We also reserve the right to waive, in our absolute discretion, any defects, irregularities or conditions of tender as to particular old notes, whether or not waived in the case of other old notes. Our interpretation of the terms and conditions of the exchange offer (including the instructions in the consent and letter of transmittal) will be final and binding on all parties. Unless waived, you must cure any defects or irregularities in connection with tenders of old notes within the time that we shall determine.

      Although we intend to notify you of defects or irregularities with respect to tenders of old notes, neither we, the exchange agent, the information agent, the dealer manager nor any other person will be under any duty to give this notification or will incur any liability for failure to give this notification. Tenders of old notes will not be deemed to have been made until any defects or irregularities have been cured or waived.

      If your old notes have been mutilated, lost, stolen or destroyed, it will be your responsibility to obtain replacement securities or to arrange for indemnification with the trustee of the old notes. You may contact the information agent for assistance with these matters.

Withdrawal of Tenders and Revocation of Consents

      The valid withdrawal of tendered old notes will be deemed to be a revocation of your consent to the proposed amendments, and the revocation of your consent will be deemed a withdrawal of your tendered old

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notes. You may withdraw tenders of old notes at any time before the time we notify the trustee of the old notes that we have received valid and unrevoked consents representing a majority in aggregate principal amount of old notes. You may not withdraw your consents of old notes after that time. We will announce that we have received the required consents by no later than 9:00 a.m., New York City time, on the first business day following their receipt.

      Beneficial owners desiring to withdraw old notes previously tendered should contact the DTC participant that holds their old notes. To withdraw old notes previously tendered, a DTC participant may, before the date that we have received valid and unrevoked consents representing a majority in aggregate principal amount of old notes, withdraw its instruction previously transmitted through ATOP by:

•  withdrawing its acceptance through ATOP, or

•  delivering to the exchange agent by mail, hand delivery or facsimile transmission, notice of withdrawal of the instruction.

      The notice of withdrawal must contain the name and number of the DTC participant. Withdrawal of a prior instruction will be effective upon receipt of the notice of withdrawal by the exchange agent. All signatures on a notice of withdrawal must be guaranteed by a recognized participant in the Securities Transfer Agents Medallion Program, the NYSE Medallion Signature Program or the Stock Exchange Medallion Program, except that signatures on the notice of withdrawal must be guaranteed if the old notes being withdrawn are held for the account of an eligible institution. A withdrawal of an instruction must be executed by a DTC participant in the same manner as the DTC participant’s name appears on its transmission through ATOP to which the withdrawal relates. A DTC participant may withdraw a tender only if the withdrawal complies with the provisions described in this paragraph.

      Withdrawal of tenders of old notes may not be rescinded, and any old notes properly withdrawn will be deemed not validly tendered for purposes of the exchange offer. Properly withdrawn old notes may, however, be retendered by again following one of the procedures described in “— Procedures for Tendering and Consenting” before the expiration date of the exchange offer.

Exchange Agent

      We have appointed HSBC Bank USA as the exchange agent for the exchange offer. You should send or deliver consents and letters of transmittal and all correspondence in connection with the exchange offer to the exchange agent at the address and telephone number set forth on the back cover page of this prospectus and consent solicitation statement. We will pay the exchange agent reasonable and customary fees for its services and will reimburse it for its reasonable, out-of-pocket expenses in connection with the exchange offer.

Information Agent

      We have appointed D.F. King & Co., Inc. as the information agent for the exchange offer and will pay customary compensation for its services. You should direct questions concerning tender procedures and requests for additional copies of this prospectus and consent solicitation statement or the consent and letter of transmittal to the information agent at the address and telephone numbers set forth on the back cover page of this prospectus and consent solicitation statement. You may also contact your commercial banks, brokers, dealers, trust companies or other nominees for assistance concerning the exchange offer and consent solicitation.

Dealer Manager

      We have retained Banc of America Securities LLC to act as exclusive dealer manager in connection with the exchange offer. We will pay the dealer manager a fee for soliciting acceptances of the exchange offer. The fee is based on the aggregate principal amount of the old notes exchanged and will be payable on the date the new notes are issued in the exchange offer. We will also reimburse the dealer manager for its reasonable out-of-pocket expenses. The obligations of the dealer manager to perform this function are subject to conditions. We have agreed to indemnify the dealer manager against some kinds of liability, including

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some liabilities under the federal securities laws. Questions regarding the terms of the exchange offer may be directed to the dealer manager at the address and telephone number set forth on the back cover page of this prospectus and consent solicitation statement.

      The dealer manager has provided us, and expects to provide us in the future, with financial advisory, investment banking and general banking services, for which it has received and expects to receive customary fees and commissions.

      At any given time, the dealer manager may trade the old notes, new notes and other of our securities for its own account or for the accounts of its customers, and accordingly, may hold a long or short position in the old notes, new notes or our other securities.

Other Fees and Expenses

      We will bear the expenses of soliciting tenders of the old notes and consents to the proposed amendments to the old indenture. We are making the principal solicitation by mail. However, the dealer manager and the information agent, as well as our officers and other employees and those of our affiliates, may make additional solicitations by telegraph, facsimile transmission, telephone or in person.

      If you tender your old notes, then you will not be required to pay any fee or commission to the dealer manager. If, however, you handle the transaction through your broker, dealer, commercial bank, trust company or other institution, then you may be required to pay brokerage fees or commissions.

THE CONSENT SOLICITATION

      In connection with the exchange offer, we are soliciting consents to the proposed amendments to the old indenture. It is a condition of the exchange offer, which we may choose to waive in our sole discretion, that as of the expiration of the exchange offer we receive valid and unrevoked tenders of old notes and consents to the proposed amendments representing at least a majority in aggregate outstanding principal amount of old notes. The proper completion, execution, and delivery of a consent and letter of transmittal (or the delivery of an agent’s message) tendering old notes pursuant to the exchange offer will constitute the consent of the tendering holder to the proposed amendments. Holders may not provide consents without tendering their old notes in the exchange offer and may not tender their old notes without consenting to the proposed amendments.

Consent Payments

      If you give a valid consent, that is not revoked, on or before the consent payment deadline, we will make a consent payment to you consisting of $               in principal amount of new notes for each $1,000 principal amount of old notes with respect to which you give consent. This consent payment will be included in the $               per $1,000 principal amount of the new notes you receive upon completion of the exchange offer. If you do not give a valid consent, or revoke your consent, on or before the consent payment deadline, you will only receive $                    in principal amount of new notes for each $1,000 principal amount of old notes that you tender before the expiration of the exchange offer, and you will not receive a consent payment.

      For purposes of the exchange offer and consent solicitation, the term “consent payment deadline” means 5:00 p.m., New York City time, on the later to occur of the date we receive the required consents to effect the proposed amendments or                     , 2002. If we change the consent payment deadline, we will announce the new consent payment deadline no later than 9:00 a.m., New York City time, on the first business day after we make the change.

Required Consents

      We must receive consents from holders of at least a majority in aggregate outstanding principal amount of old notes to amend the old indenture in the manner contemplated by the proposed amendments. It is also a condition of the exchange offer, which we may choose to waive in our sole discretion, that as of the

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expiration of the exchange offer we receive valid and unrevoked tenders and consents representing at least a majority in aggregate outstanding principal amount of old notes.

      Some of our affiliates are holders of approximately 0.4% of the outstanding aggregate principal amount of old notes. Although these affiliates intend to tender their notes and consent to the proposed amendments, the old indenture prohibits us from counting their tenders and consents toward the satisfaction of the condition to the exchange offer that we receive valid and unrevoked tenders and consents representing at least a majority in aggregate outstanding principal amount of old notes. See “Certain Transactions.”

      If the required consents are received and the exchange offer is consummated, we and the trustee for the old indenture will execute a supplemental indenture to the old indenture setting forth the proposed amendments, and the old indenture, as so supplemented, will become operative immediately after the expiration date of the exchange offer. Each non-exchanging holder of old notes will be bound by the supplemental indenture, even if the holder did not give its consent. The old indenture, without giving effect to the proposed amendments, will remain in effect until the proposed amendments become operative. If the exchange offer is terminated or withdrawn, then the proposed amendments will not become operative.

The Proposed Amendments

      The proposed amendments to the old indenture will not affect the interest rate and payment and maturity dates of the old notes. The proposed amendments will, however, reduce the protections afforded holders of the old notes under the current form of the old notes.

      The proposed amendments will eliminate all of the restrictive covenants in the old indenture. These covenants currently limit our ability to:

•  incur debt,

•  make some kinds of investments and payments,

•  incur liens,

•  pay dividends,

•  sell capital stock of our subsidiaries,

•  enter into transactions with stockholders and affiliates,

•  sell assets, and

•  consolidate or merge.

      The proposed amendments will also remove requirements in connection with:

•  preserving material rights and franchises,

•  paying taxes and other claims,

•  maintaining property and insurance coverage,

•  waiving some of the defenses to payment of the old notes,

•  providing SEC reports to the trustee and holders of the old notes,

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•  repurchasing old notes on a change of control or sale of assets, and

•  requiring any subsidiaries we create or acquire to become guarantors.

      In addition, the proposed amendments will release our subsidiaries from their guarantees of the old notes, which will relieve them of any further obligation to repay the old notes. The amendments will also remove some of the events of default under the old indenture, including but not limited to:

•  a default by us or the guarantors on other debt,

•  final judgments or orders not paid or discharged, and

•  bankruptcy, insolvency or liquidation.

      We and the trustee intend to sign the supplemental indenture giving effect to the proposed amendments on the date we receive consents from holders of a majority in aggregate outstanding principal amount of old notes. However, the proposed amendments will only become effective on the closing of the exchange offer.

      See “Risk Factors — Consequences of a Failure to Exchange the Old Notes.” Also see “Summary Comparison of the Key Differences between the Old Indenture, as Amended, and New Indenture” below and Annex A to this prospectus and consent solicitation statement for further details concerning the effect of the proposed amendments.

Withdrawal of Consents

      You may not revoke your consents except by the valid withdrawal of your tender of old notes in accordance with the instructions for withdrawal. See “The Exchange Offer — Withdrawal of Tenders and Revocation of Consents.”

      A valid withdrawal of tendered old notes before the time we notify the trustee for the old notes that we have received valid and unrevoked consents representing a majority in aggregate principal amount of old notes will also constitute the revocation of the related consent to the proposed amendments to the old indenture. You may only revoke your consent to the proposed amendments by validly withdrawing your tender of old notes before that time.

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BUSINESS

      We are a leading supplier of friction products and precision components for industrial, agricultural and aerospace applications. We focus on designing, manufacturing and marketing products requiring sophisticated engineering and production techniques for applications in markets in which we have achieved a significant market share. Our products include friction parts for brakes, clutches and transmissions used in construction vehicles, agricultural vehicles, trucks, motorcycles and race cars, and parts for brake systems used in commercial and general aviation. Our precision components are used in pumps, motors, transmissions, anti-lock brake systems and other applications for industrial equipment, lawn and garden equipment, appliances, small hand tools and trucks. Our friction and precision components are made principally from proprietary formulations and designs of metal powders and composite materials.

      We benefit from a deep and diversified customer base, with approximately 2,500 total customers, none of which accounted for more than 7% of our net sales in 2001. We are a preferred supplier to many of the world’s largest and well known brand name original equipment manufacturers, deriving more than 80% of our sales from products for which we are the sole source provider for specific customer applications. We offer our customers full service capabilities, from design through production, and work closely with original equipment manufacturers to improve performance and develop product innovations to generate increased sales. We also benefit from a diversified product list, with over 5,000 total products, none of which accounted for more than 5% of our net sales in 2001. We do not target the cyclical consumer automotive sector. Consequently, less than 7% of our net sales in any of the last five years was to the consumer automotive and light truck market. For the three months ended March 31, 2002, we generated net sales of $49.8 million and EBITDA of $4.3 million. For the year ended December 31, 2001, we generated net sales of $184.4 million and EBITDA of $19.5 million. Our common stock has been publicly traded since 1998.

      Through our subsidiaries, we operate primarily in four reportable segments:

•   Friction Products

We believe that, based on net sales, we are one of the top worldwide manufacturers of friction products used in industrial, agricultural and aerospace applications. Our friction products segment manufactures products made from proprietary formulations of composite materials that primarily consist of metal powders and synthetic and natural fibers. Friction products are the parts used in brakes, clutches and transmissions to absorb vehicular energy and dissipate it through heat and normal mechanical wear. The principal markets served by our friction products segment include construction vehicles, agricultural vehicles, trucks, commercial aviation and general aviation. We believe we are:

•  a leading domestic supplier of friction products for construction equipment, agricultural equipment and trucks,

•  the only independent supplier of friction materials for braking systems for new and existing series of many commercial aircraft models, including the Boeing 737 and 757 and the MD-80, and several regional jets used by commuter airlines, including the Canadair regional jet series,

•  the largest supplier of friction materials for the growing general aviation market, including numerous new and existing series of Gulfstream, Cessna, Lear and Beech aircraft, and

•  a leading domestic supplier of friction products into specialty markets such as motorcycles, all terrain vehicles (ATVs) and snowmobiles.

For the three months ended March 31, 2002, our friction products segment generated net sales of $26.0 million, representing 52% of our total net sales, and EBITDA of $2.7 million, representing 63% of our total EBITDA. For the year ended December 31, 2001, our friction products segment generated net sales of $104.1 million, representing 56% of our total net sales, and EBITDA of $15.7 million, representing 80% of our total EBITDA.

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•   Precision Components

We are a leading supplier of powder metal components for industrial equipment, lawn and garden equipment, appliances, hand tools and trucks. We use composite metal alloys in powder form to manufacture high quality custom-engineered metal components. The market for this segment is growing at approximately 10% per year as original equipment manufacturers substitute precision components made from metal powders for forged, cast or stamped parts. Our precision components segment serves three specific areas of the powder metal marketplace:

•  tight tolerance fluid power components, such as pump elements and gears,

•  large powder metal components used primarily in construction equipment, agricultural equipment and trucks, and

•  high volume parts for the lawn and garden, appliance, hand tool and other markets.

For the three months ended March 31, 2002, our precision components segment generated net sales of $17.2 million, representing 35% of our total net sales, and EBITDA of $1.1 million, representing 26% of our total EBITDA. For the year ended December 31, 2001, our precision components segment generated net sales of $58.3 million, representing 32% of our total net sales, and EBITDA of $5.2 million, representing 27% of our total EBITDA.

•   Performance Automotive

We engineer, manufacture and market premium branded clutch and drive-train components for the performance automotive racing market. Through this segment, we supply parts for NASCAR, CART, IRL, SCCA and ASA race cars and other road racing and competition cars. For the three months ended March 31, 2002, our performance automotive segment generated net sales of $3.9 million, representing 8% of our total net sales, and EBITDA of $0.8 million, representing 19% of our total EBITDA. For the year ended December 31, 2001, our performance automotive segment generated net sales of $13.0 million, representing 7% of our total net sales, and EBITDA of $1.0 million, representing 5% of our total EBITDA.

•   Motor

We design and manufacture die-cast aluminum rotors for fractional and subfractional horsepower electric motors. These parts are used in a wide variety of motor applications, including appliances, business equipment, pumps and fans. We believe our motor segment is the largest independent U.S. manufacturer of die-cast aluminum rotors for use in fractional and subfractional horsepower electric motors. We also believe our motor segment has significant growth opportunities arising from the trend by original equipment motor manufacturers, which we estimate still produce more than half of all rotors in the U.S. fractional and subfractional horsepower motor market, to outsource their production of rotors to independent suppliers. For the three months ended March 31, 2002, our motor segment generated net sales of $2.7 million, representing 5% of our total net sales, and an EBITDA loss of $0.3 million. For the year ended December 31, 2001, our motor segment generated net sales of $9.0 million, representing 5% of our total net sales, and an EBITDA loss of $2.4 million. Our facility in Mexico accounted for $0.2 million of the EBITDA loss in the first quarter of 2002, and $2.0 million of the EBITDA loss in the year 2001, as a result of start-up operating costs.

Business Strategy

      Our business strategy includes the following principal elements:

•   Focus on High-Margin, Specialty Applications. We focus on markets that require sophisticated engineering and production techniques and in which we have achieved a significant market share. In developing new applications, we seek to compete in markets requiring a high level of engineering expertise and technical capability, rather than in markets in which the primary competitive factor is product pricing. We believe margins for our products in these markets are higher than in other

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	manufacturing markets that use standardized products. Our gross margins were 21.6% for the three months ended March 31, 2002, 25.7% for the three months ended March 31, 2001, 21.7% for the year 2001, and 27.1% for the year 2000.
•	Introduce New Products. A key part of our strategy is the introduction of products for new applications that incorporate improved performance characteristics or reduced costs in response to customer needs. Our engineers proactively focus on developing new product solutions that enhance performance and reduce manufacturing costs, including instances where we are the incumbent supplier. We also grow by applying our existing products and technologies to new specialized applications where our products have a performance or technological advantage.
•	Expand Customer Relationships. We seek to provide advanced solutions to customers, enhancing our long-term relationships. Our engineers work closely with customers to develop and design new products and improve the performance of existing products. We believe that more than 80% of our net sales are from products and materials for which we are the sole source provider for specific customer applications. Our predecessors formed, and we have continued to build, relationships with these customers, some of which date back over 50 years. Our commitment to quality, service and just-in-time delivery enables us to build and maintain strong and stable customer relationships. We believe that strong relationships with our customers provide us with significant competitive advantages in obtaining and maintaining new business opportunities.
•	Capitalize on Aftermarket Opportunities. Our stable aftermarket sales enable us to minimize our exposure to adverse economic cycles. Because friction products are the consumable, or wear, component of brake, clutch and transmission systems, the use of our friction products in conjunction with a new or existing system provides us with the opportunity to supply the aftermarket for the life of the system, typically through sales to the original equipment manufacturer. For example, the ability to service the aftermarket for a particular aircraft braking system will likely provide us with a stable market for our friction products for the life of the product, which can be 30 years or more. Aftermarket sales of friction products have comprised approximately 50% of our friction product sales in recent years.
•	Selectively Expand Internationally. Through our friction and motor segments, which have foreign manufacturing facilities in Italy, Canada, China and Mexico, and our friction segment’s worldwide distribution network, we continue to selectively expand our international operations in established markets throughout Europe, Asia, North America and Australia. Our friction products facility in Suzhou, China, which opened in 2000, and our rotor manufacturing facility in Monterrey, Mexico, which began production in 2000, are both expected to reach full production levels in 2002. Our international net sales represented $7.0 million, or 14.1%, of our consolidated net sales in the first quarter of 2002, and $23.6 million, or 12.8%, of our consolidated net sales in 2001.

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Our Principal Markets and Products

      We focus on supplying the industrial, agricultural, aerospace, performance automotive and motor markets with components that require sophisticated engineering and production techniques for applications where we have achieved a significant market share. We have diversified our end markets through acquisitions and product line expansions. We believe that diversification has reduced our economic exposure to the cyclical effects of any particular industry. At March 31, 2002, our sales by segments and principal markets were:

Segments

Principal Markets

Friction Products

      Friction products are the replacement elements used in brakes, clutches and transmissions to absorb vehicular energy and dissipate it through heat and normal mechanical wear. For example, the friction components in construction vehicles enable their braking systems to slow and stop the vehicles and enable their clutches and transmissions to perform their part in controlling the motion of the vehicles. Our friction products also include friction components for use in automatic and power shift transmissions, clutch facings that serve as the main contact point between an engine and a transmission, and brake components for use in many truck, construction, agriculture, aircraft and specialty vehicle braking systems. Our friction products segment manufactures products made from proprietary formulations of composite materials that primarily consist of metal powders and synthetic and natural fibers.

      Our friction products are custom-designed to meet the performance requirements of a specific application and must meet temperature, pressure, component life and noise level criteria. The engineering required in designing a friction material for a specific application dictates a balance between the component life cycle and the performance application of the friction material in, for example, stopping or starting movement. Friction products are consumed through customary use in a brake, clutch or transmission system and require regular replacement. Because the friction material is the consumable, or wear, component of these systems,

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new friction product introduction in conjunction with a new system provides us with the opportunity to supply the aftermarket with that friction product for the life of the system.

      The principal markets served by our friction segment include manufacturers of truck clutches, heavy-duty construction and agricultural vehicle brakes, aircraft brakes, motorcycle and snowmobile brakes and transmissions. Based on net sales, we believe that we are among the top worldwide manufacturers of friction products used in industrial and aerospace applications. We estimate that aftermarket sales of friction products have comprised approximately 50% of our net friction product sales in recent years. We believe that our stable aftermarket sales component enables us to minimize our exposure to adverse economic cycles.

      Construction/ Agriculture/ Trucks/ Specialty. We supply a variety of friction products for use in brakes, clutches and transmissions on construction and agriculture equipment, trucks and specialty vehicles. These components are designed to precise tolerances and permit brakes to stop or slow a moving vehicle and the clutch or transmission systems to engage or disengage. We believe we are a leading supplier to original equipment manufacturers and to the aftermarket. We also believe that our trademarks, including Velvetouch® and Sheepbridge®, are well known in the aftermarket for these components. The use of our friction products in conjunction with a new or existing brake, clutch or transmission system provides us with the opportunity to supply the aftermarket with the friction product for the life of the system.

•  Construction Equipment. We supply friction products such as transmission discs, clutch facings and brake components to manufacturers of construction equipment, including Caterpillar. We believe we are the second largest domestic supplier of these types of friction products. Replacement components for construction equipment are sold through original equipment manufacturers as well as various aftermarket distributors.

•  Agriculture Equipment. We supply friction products such as clutch facings, transmission discs and brake components to manufacturers of agriculture equipment, including John Deere and CNH (formerly Case New Holland). We believe we are the second largest domestic supplier of these friction products. Replacement components for agricultural equipment are sold through original equipment manufacturers as well as various aftermarket distributors.

•  Medium and Heavy Trucks. We supply friction products for clutch facings used in medium and heavy trucks to original equipment manufacturers, such as Eaton. We believe we are the leading domestic supplier of replacement friction products used in these applications. Replacement components are sold through original equipment manufacturers and various aftermarket distributors.

•  Specialty Friction. We supply friction products for use in specialty applications, such as brake pads for Harley- Davidson motorcycles, General Motors’ Hummer and Bombardier, Polaris and Arctic Cat snowmobiles. We believe that these markets are experiencing significant growth, and that we have increased our market share with our combination of superior quality and product performance. Replacement components are sold through original equipment manufacturers and various aftermarket distributors.

      Aerospace. We believe we are the only independent supplier of friction materials to the manufacturers of braking systems for the Boeing 727, 737 and 757, the DC-9, DC-10, MD-80 and Bombardier’s Canadair regional jet series used by commuter airlines. We believe we are also the largest supplier of friction materials to the general aviation (non-commercial airline, non-military) market, supplying friction materials for aircraft manufacturers such as Cessna, Lear, Gulfstream and Beech.

      Each aircraft braking system, including the friction materials supplied by us, must meet stringent Federal Aviation Administration criteria and certification requirements. New model development and Federal Aviation Administration testing for our aircraft braking system customers generally begins two to five years before full scale production of new braking systems. If we and our aircraft brake system manufacturing partner are successful in obtaining the rights to supply a particular model of aircraft, we will typically supply our friction products for that model’s aircraft braking system for as long as the model continues to fly because it is generally not economically feasible to redesign a braking system once it is certified by the Federal Aviation Administration. Moreover, Federal Aviation Administration maintenance requirements mandate that brake

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components be changed after a specified number of take-offs and landings, which we expect to result in a continued and steady market for our aerospace friction products.

      As a result of the terrorist attacks on September 11, 2001, the aerospace markets we serve suffered an immediate downturn. Air travel schedule curtailments by the airlines were significant as a result of the steep declines in customer traffic. Based on recent trends, however, we expect air travel growth to gradually return as 2002 progresses. However, any sustained decline in airline traffic, such as the decline that occurred after the tragic events of September 11, 2001, will have a negative impact on our aerospace business.

      Our friction products for commercial aerospace applications are primarily used on “single-aisle” aircraft that are flown on shorter routes, resulting in more takeoffs and landings than those experienced by “wide-body” aircraft. We believe our friction products provide an attractive combination of performance and cost effectiveness in these applications. According to Boeing’s 2001 Current Market Outlook, which was published before September 11, 2001, approximately 74% of the 14,548 airplanes in the world fleet are single-aisle commercial aircraft. The report also forecasts single-aisle aircraft to increase by approximately 9,497 to 24,045 by the end of 2020. The Boeing report also states that world airline passenger traffic is projected to increase 4.7% per year through 2020. We expect that long-term growth in world airline traffic, combined with the increasing number of single-aisle aircraft, will cause long-term demand for our aerospace friction products to be strong, although this market is expected to remain soft for the remainder of 2002.

Precision Components

      Our precision components segment is a leading supplier of powder metal components consisting primarily of pump, motor and transmission elements, gears, pistons and other component parts for applications ranging from lawn and garden tractors to industrial equipment. Since we were founded, we have participated in the growing powder metal products industry with a focus on the North American industrial market. The Metal Powder Industries Federation, an industry trade group, estimates that the powder metal market for automotive and non-automotive applications had sales of over $5.0 billion in 2001.

      Applications. We manufacture a variety of components made from powder metals for use in (1) fluid power applications, such as pumps and other hydraulic mechanisms, (2) transmissions, other drive mechanisms and anti-lock braking systems used in trucks and off-road and lawn and garden equipment, (3) gears and other components for use in home appliances, small hand tools and office equipment and (4) components used in automotive applications. Powder metal components can often be produced at a lower cost per unit than products manufactured with forging, casting or stamping technologies due to the elimination of, or substantial reduction in, secondary machining and the virtual elimination of raw material waste. In addition, we expect advances in our core powder metal technology to permit production of powder metal components with improved strength, hardness and durability for demanding applications and with greater design flexibility. As a result, we believe that the current trend of substituting powder metal components for forged, cast or stamped components in industrial applications will continue for the foreseeable future, providing us with increased product and market opportunities.

      Our precision component segment proactively targets four specific niches in the market place:

•  High Precision. Our pressing and finishing capabilities enable us to specialize in tight tolerance fluid power components such as pump elements and gears. In addition, we believe that our machining capabilities provide us with a competitive advantage by giving us the ability to supply a completed part to our customers, typically without any subcontracted precision machining. We expect that our growth in this niche will be driven by existing customers’ new design requirements and new product applications primarily for pumps, motors and transmissions.

•  Large Size Capability. We have the capability to make powder metal components that are among the largest used in North America. For example, we make reactor plates having diameters up to 19 inches for use in transmissions in construction equipment. We expect our sales of large powder metal components to continue to grow as we create new designs for existing customers and benefit from market growth, primarily in current construction, agricultural and truck applications.

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•  High Volume. We also target smaller, high volume parts where we can use efficient pressing and sintering capabilities to our best advantage. In this niche, our primary markets have been powder metal components for the lawn and garden, home appliance, power hand tool, truck, automotive and business equipment markets. We believe that our high volume capabilities will provide us with opportunities to cross-sell numerous of our other precision components. Several of our leading original equipment customers have a variety of applications that we supply from both our friction and precision components segments.

•  Metal Injection Molding. We also manufacture small, complex metal injection molded parts for a variety of industries, such as small hand tools and telecommunications. We believe that many of our traditional powder metal customers may also be attractive prospects for metal injected molded parts. For instance, we were able to provide one of our powder metal customers with a hydraulic valve component with a precisely controlled flow path because of the fine details achievable in metal injected molded parts as compared to standard powder metal components.

Performance Automotive

      We supply premium clutch and drive-train components under our Quarter Master and Tex Racing brands. These products are used by leading teams in the National Association for Stock Car Auto Racing (NASCAR), Championship Auto Racing Teams (CART) and Indy Racing League (IRL) racing series and by weekend enthusiasts in the Sports Car Club of America (SCCA) and American Speed Association (ASA) racing clubs, as well as in other road racing and oval track competition cars. We supply the official brake pad of the SCCA and are a participating manufacturer sponsor of the SCCA, ASA and several other racing series.

Motor

      We believe our motor segment is the largest independent U.S. manufacturer of die-cast aluminum rotors for use in fractional and subfractional horsepower electric motors. These motors are used in a wide variety of applications such as small household appliances, business equipment, pumps and fans. We believe our motor segment has significant growth opportunities arising from the trend by original equipment motor manufacturers, which we estimate still produce more than half of all rotors in the U.S. fractional and subfractional horsepower motor market, to outsource their production of rotors to independent suppliers. In 2000, we commenced production at our rotor manufacturing factory in Monterrey, Mexico, a city where a large portion of fractional and subfractional motors are manufactured. Output at our Monterrey facility is expected to reach full production levels during 2002. We also design and produce integral horsepower custom motors and generators through a manufacturing and sales relationship with Potencia Industrial, located in Mexico City, Mexico.

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Information About Our Business Segments

      The following table sets forth comparative operating results and total assets (in millions) by each of our operating segments:

			Three Months ended
			March 31,
													Year ended December 31,
			2002					2001
													2001					2000					1999
			(Unaudited)
Net sales to external customers:
	Friction products*		$	26.0		52.2	%	$	29.6		55.0	%	$	104.1		56.5	%	$	116.3		57.5	%	$	117.4		62.6	%
	Precision components			17.2		34.6	%		17.8		33.1	%		58.3		31.6	%		72.0		35.6	%		61.1		32.6	%
	Performance automotive*			3.9		7.8	%		4.2		7.8	%		13.0		7.0	%		5.6		2.8	%		0.5		0.2	%
	Motor			2.7		5.4	%		2.2		4.1	%		9.0		4.9	%		8.4		4.1	%		8.6		4.6	%
		Consolidated	$	49.8		100.0	%	$	53.8		100.0	%	$	184.4		100.0	%	$	202.3		100.0	%	$	187.6		100.0	%
Gross profit (loss):
	Friction products*		$	6.1		56.5	%	$	7.8		56.5	%	$	24.9		62.3	%	$	30.9		56.3	%	$	28.5		58.4	%
	Precision components			3.1		28.7	%		4.4		31.9	%		11.5		28.8	%		19.4		35.3	%		17.8		36.5	%
	Performance automotive*			1.4		13.0	%		1.4		10.1	%		3.9		9.7	%		2.8		5.1	%		0.2		0.4	%
	Motor			0.2		1.8	%		0.2		1.5	%		(0.3	)	(0.8	)%		1.8		3.3	%		2.3		4.7	%
		Consolidated	$	10.8		100.0	%	$	13.8		100.0	%	$	40.0		100.0	%	$	54.9		100.0	%	$	48.8		100.0	%
Operating income (loss):
	Friction products*		$	0.8		66.7	%	$	2.8		71.8	%	$	6.4		177.8	%	$	11.5		59.0	%	$	10.2		54.8	%
	Precision components			0.1		8.3	%		1.1		28.2	%		0.3		8.3	%		8.4		43.1	%		8.7		46.8	%
	Performance automotive*			0.8		66.7	%		0.4		10.3	%		0.3		8.3	%		0.9		4.6	%		—		—	%
	Motor			(0.5	)	(41.7	)%		(0.4	)	(10.3	)%		(3.4	)	(94.4	)%		(1.3	)	(6.7	)%		(0.3	)	(1.6	)%
		Consolidated	$	1.2		100.0	%	$	3.9		100.0	%	$	3.6		100.0	%	$	19.5		100.0	%	$	18.6		100.0	%

					December 31,
			March 31,
			2002		2001		2000
			(Unaudited)
Total assets:
	Friction products*		$	106.6	$	104.1	$	113.1
	Precision components			70.6		69.0		72.6
	Performance automotive*			15.6		14.6		14.4
	Motor			17.2		16.4		15.3
		Consolidated	$	210.0	$	204.1	$	215.4

*  As of January 1, 2002, we reclassified an operating unit formerly associated with our performance automotive segment to our friction products segment as a result of changes in the internal operating responsibility of that unit. We have reclassified all prior periods discussed in this prospectus and consent solicitation statement to reflect this change.

Our Customers

      We seek to provide advanced solutions to customers, enhancing our long-term relationships. Our engineers work closely with our customers to develop and design new products and improve the performance of existing products. We believe that more than 80% of our sales are from products and materials for which we are the sole source provider for specific customer applications. Our predecessors formed, and we have continued to build, relationships with these customers, some of which date back over 50 years. Our commitment to quality, service and just-in-time delivery enables us to build and maintain strong and stable customer relationships. We believe that strong relationships with our customers provide us with significant competitive advantages in obtaining and maintaining new business opportunities.

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      Through various acquisitions since our formation, we have broadened our product lines, increased our technological capabilities, further enhanced our customer relationships and further expanded our preferred supplier status. As a result of our commitment to customer service and satisfaction, we are a preferred supplier to many of the world’s leading original equipment manufacturers, including Aircraft Braking Systems, Goodrich, Caterpillar, Eaton, Deere, CNH, Hydro-Gear, Sauer-Danfos, Parker Hannifin, Electrolux, Haldex, AO Smith, Emerson and FASCO.

      Our top five customers accounted for 20.8% of our consolidated net sales in the first quarter of 2002, 24.4% of our consolidated net sales in 2001 and 24.8% of our consolidated net sales in 2000.

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      The following table describes some of our key customers in each of our business segments for the three months ended March 31, 2002, the approximate number of years they have been our customers, the principal products we sell to them and selected applications for those products:

		Selected Key Customers
Business Segment		(and Years as a Customer)	Principal Products Sold	Selected Applications
Friction Products Construction		Caterpillar (54 years) Allison Transmission (54 years) Dana Clark Hurth (35 years)	Brake Linings Transmission Discs	Tractors, Motor Graders and Wheel Loaders Lift Trucks and Mining Trucks
	Agriculture	John Deere (44 years) CNH (40 years) AGCO (35 years)	Brake Linings Transmission Discs	Tractors
	Truck	Eaton (30 years) ZF Meritor (1 year)	Clutch Buttons Transmission Discs	On-highway Trucks
	Aerospace	Aircraft Braking Systems (35 years) BFGoodrich (35 years) Parker Hannifin (21 years) Bombardier (8 years)	Brake Linings	Commercial Airliners Commuter Planes Military Helicopters
	Specialty and Other	Hayes Brake (21 years) Bombardier (15 years) TRW (8 years)	Brake Linings	Harley-Davidson Motorcycles Snowmobiles General Motors Hummer
Precision Components		Eaton (27 years) Electrolux Home Products (19 years) Parker Hannifin (18 years) MTD (17 years) Haldex Barnes (16 years) Hydro-Gear (13 years) Sauer-Danfos (14 years) Honda (6 years)	Powder Metal Gears Rotors Transmission Components Hubs, Bearings, Spacers and Structural Components	Hydrostatic Transmissions Fluid Power Controls Construction Equipment Industrial Pumps Gasoline Pumps Truck Transmissions Lawn and Garden Equipment Washing Machines
Performance Automotive		Petty Enterprises (21 years) Richard Childress Racing (25 years) Robert Yates Racing (17 years) Hendrick Motorsports (18 years)	Gears Transmission Components Clutch and Drive-train Components	Race Cars
Motor		Jakel (30 years) Emerson (2 years) FASCO (7 years) AO Smith (2 years)	Die-cast Rotors Integral Horsepower Motors	Home Appliances Business Equipment Pumps and Fans

Our Manufacturing Processes

      The manufacturing processes for most of our friction products, performance automotive brake products and powder metal precision components are similar. In general, all use composite metal alloys in powder

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form to make high quality powder metal components. The basic manufacturing steps of blending/ compounding, molding/ compacting, sintering (or bonding) and secondary machining/treatment are as follows:

•  Blending/compounding: Composite metal alloys in powder form are blended with lubricants and other additives according to scientific formulas, many of which are proprietary. The formulas are designed to produce precise performance characteristics necessary for a customer’s particular application. We often work together with our customers to develop new formulas that will produce materials with greater energy absorption characteristics, durability and strength.

•  Molding/compacting: At room temperature, a specific amount of a powder alloy is compacted under pressure into a desired shape. Our molding presses are capable of producing pressures of up to 3,000 tons. We believe that we have some of the largest presses in the powder metal industry, enabling us to produce large, complex components. We can create complex shapes not obtainable with conventional powder metal presses with our metal injection molding equipment.

•  Sintering: After compacting, molded parts are heated in furnaces to specific temperatures slightly below their melting point, enabling metal powders to metallurgically bond, harden and strengthen while permitting the molded parts to retain their desired shape. For friction materials, the friction composite part is also bonded directly to a steel plate or core, creating a strong continuous metallic part.

•  Secondary machining/treatment: If required by customer specifications, a sintered part undergoes additional processing. This processing is generally necessary to attain increased hardness or strength, tighter dimensional tolerances or corrosion resistance. To achieve these specifications, parts are heat or steam treated, precision coined or flattened, ground, machined or treated with a corrosion resistant coating.

      Some of our friction products, including those used in oil-cooled brakes and power shift transmissions, do not require all of the foregoing steps. For example, composite friction materials are molded under high temperatures and cured in electronically-controlled ovens and then bonded to a steel plate or core with a resin-based polymer.

      Our die-cast aluminum rotors are produced in a three-step process. Steel stamped disks forming the laminations of the rotors are first skewed (stacked) and then loaded into dies into which molten aluminum is injected to create the rotors. The rotor castings created in the dies are then machined to produce finished rotors. We manufacture these rotors in a variety of sizes and shapes to customers’ design specifications.

Our Quality Control Procedures

      Throughout our design and manufacturing process, we focus on quality control. For product design, each manufacturing facility uses state-of-the-art testing equipment to replicate virtually any application required by our customers. This equipment is essential to our ability to manufacture components that meet stringent customer specifications. To ensure that tolerances have been met and that the requisite quality is inherent in our finished products, we use statistical process controls, a variety of electronic measuring equipment and computer-controlled testing machinery. We have also established programs within each of our facilities to detect and prevent potential quality problems.

      In 2001, we launched a Six Sigma initiative focused on creating a culture of continuous improvement. Six Sigma is a discipline that aims to eliminate costly process variation in a company’s operations and bring more value to its customers. To achieve this, Six Sigma managers use data and statistical analysis to locate process errors. We have trained approximately 200 managers to date and currently have over 50 Six Sigma projects in process throughout our business segments. Many of these projects involve direct customer participation.

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Our Company History

      Since 1989, when our company was formed, we have pursued a strategic growth plan by making complementary acquisitions and broadening our customer base:

Acquired	Effective Date		Year
Subsidiary	of Acquisition	Primary Business	Founded
Friction Products and Logan Metal Stampings	March 1989	Friction products for brakes, clutches and transmissions used in aerospace, industrial and specialty applications and large powder metal components, primarily used in construction, agriculture and truck applications		1961
Helsel	June 1994	High precision powder metal components used in fluid power applications		1974
S.K. Wellman	June 1995	Friction products for industrial applications		1924
Hawk Motors	January 1997	Die-cast aluminum rotors for small electric motors used in appliances and business equipment, and integral horsepower custom motors and generators		1947
Sinterloy	August 1997	Powder metal components for business equipment and automotive applications		1969
Clearfield Powdered Metals	June 1998	Powder metal components for appliance, truck, lawn and garden, and automotive applications		1984
Allegheny Powder Metallurgy	March 1999	Powder metal components for lawn and garden, appliance, automotive and power hand tool applications		1981
Quarter Master Industries	November 1999	Precision-engineered clutch and drive-train components for motorsports and performance automotive applications		1960
Tex Racing Enterprises	November 2000	Precision-engineered transmission components for motorsports and performance automotive applications		1975
Hawk MIM	December 2000	High precision powder metal injection molded components for telecommunications and industrial applications		1999

Our Technology

      We believe we are an industry leader in the development of systems, processes and technologies that enable the manufacturing of friction products with numerous performance advantages, such as greater wear resistance, increased stopping power, lower noise and smoother engagement. Our expertise is evidenced by our aircraft brake components, which are currently being installed on many of the braking systems of the Boeing 737-600, -700, -800 and -900 commercial airliners and Bombardier’s Canadair regional jet series of commuter aircraft, as well as new series of industrial equipment from various original equipment manufacturers, such as a new friction material being used by ZF Meritor for truck clutches.

      We maintain an extensive library of proprietary friction product formulas that serve as starting points for new product development. Each formula has a specific set of ingredients and processes to generate repeatability in production. A slight change in a mixture can produce significantly different performance characteristics. We use a variety of technologies and materials in developing and producing our products, such as graphitic and cellulose composites. We believe our expertise in the development and production of products using these different technologies and materials gives us a competitive advantage over other friction product manufacturers, which typically have expertise in only one or two types of friction material.

      We also believe that our precision components business is able to produce a wide range of products from small precise components to large parts. We have presses that produce some of the largest powder metal parts in the world, and our powder metal technology permits the manufacture of complex components with specific performance characteristics and close dimensional tolerances that would be impractical to produce using conventional metalworking processes such as forging, casting or stamping. With our metal injection molding technology, we are able to create complex shapes previously not available using conventional powder metal technology.

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      Our motor business is able to produce a wide range of rotors for the fractional and subfractional motor industries. We have developed customized manufacturing processes for rotors and created specialty rotor die construction techniques. We have also designed highly automated machines necessary for the production of our rotors.

How We Market and Sell Our Products

      We market our products globally through 20 product managers and direct sales professionals, who operate primarily from our facilities in the United States, Italy, China and Canada. Our product managers and sales force work directly with our engineers who provide the technical expertise necessary for the development and design of new products and for the improvement of the performance of existing products. Our friction products are sold both directly to original equipment manufacturers and to the aftermarket through our original equipment customers and a network of distributors and representatives throughout the world. We also sell our precision components and motor components to original equipment manufacturers through independent sales representatives. Sales to customers in our performance automotive segment are sold directly to race teams and distributors throughout the United States.

Our Competition

      The principal segments in which we operate are competitive and fragmented, with many small manufacturers and only a few manufacturers that generate annual sales in excess of $50 million. Our larger competitors may have financial and other resources substantially greater than ours. We compete for new business principally at the beginning of the development of new applications and at the redesign of existing applications by our customers. For example, new model development for our aircraft braking system customers generally begins two to five years before full-scale production of new braking systems. Initiatives by customers to upgrade existing products typically involve long lead times as well. We also compete with manufacturers using different technologies, such as carbon composite (“carbon-carbon”) friction materials for braking systems components. Carbon-carbon braking systems are significantly lighter than the metallic aircraft braking systems that we supply friction materials for, but are generally more expensive. The carbon-carbon brakes are typically used on wide-body aircraft, such as the Boeing 747, and on military aircraft, where the advantages in reduced weight may justify the additional expense.

      In addition, as powder metal components are increasingly substituted for wrought steel or iron components due to advances in powder metal technology, we increasingly compete with companies using forging, casting or stamping technologies to produce precision components. Powder metal components can often be produced at a lower cost per unit than products manufactured with forging, casting or stamping technologies due to the elimination of, or substantial reduction in, secondary machining and the virtual elimination of raw material waste.

The Suppliers and Prices of the Raw Materials We Use

      The principal raw materials that we use are copper, steel and iron powders, aluminum ingot and custom-fabricated cellulose sheet. We have generally been able to obtain sufficient supplies of raw materials for our operations, and changes in prices of our supplies over the past few years have not had a significant effect on our operations.

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Our Properties

      Our operations are conducted through the following facilities, which are owned by us except as otherwise indicated:

	Approximate
Location	Square Footage		Principal Functions
Medina, Ohio		176,000	Manufacturing of friction products and powder metal components, sales and marketing, product engineering, customer service and support, and administration
Brook Park, Ohio		113,000	Manufacturing of friction products, domestic and international sales and marketing, product engineering, customer service and support, and administration
Falls Creek, Pennsylvania		85,000	Manufacturing of powder metal components, sales and marketing, research and development, product engineering, customer service and support, and administration
Orzinuovi, Italy		70,000	Manufacturing of friction products, international sales and marketing, and administration
Akron, Ohio		71,000	Manufacturing of metal stampings
Campbellsburg, Indiana		60,000	Manufacturing of powder metal components, sales and marketing, product engineering, customer service and support, and administration
Solon, Ohio(1)		58,000	Research and development
Clearfield, Pennsylvania		50,000	Manufacturing of powder metal components, sales and marketing, product engineering, customer service and support, and administration
Spring Grove, Illinois(1)		42,000	Manufacturing of powder metal components, sales and marketing, customer service and support, and administration
Alton, Illinois		41,000	Manufacturing of die-cast aluminum rotors, sales and marketing, product engineering, customer service and support, and administration
Solon, Ohio(1)		27,000	Manufacturing of powder metal injection molded components, sales and marketing, product engineering, customer service and support, and administration
Lake Zurich, Illinois(1)		25,000	Manufacturing of automotive clutches and drive-train components, sales and marketing, product engineering, customer service and support, and administration
Ether, North Carolina(1)		23,000	Manufacturing of transmissions and drive-train components, sales and marketing, product engineering, customer service and support, and administration
Monterrey, Mexico(1)		23,000	Manufacturing of die-cast aluminum rotors, sales and marketing, customer service and support, and administration
Concord, Ontario, Canada(1)		15,000	Manufacturing of friction products, distribution and warehousing, and administration
Suzhou, China(1)		35,000	Manufacturing of friction products, sales and marketing, customer service and support, and administration
Cleveland, Ohio(1)(2)		6,200	Principal executive offices

(1)	Leased.
(2)	We are a party to an expense sharing arrangement under which we share the expenses of our Cleveland, Ohio headquarters with Weinberg Capital Corporation, of which Ronald E. Weinberg is President and sole shareholder.

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     We believe that substantially all of our property and equipment is maintained in good condition, adequately insured and suitable for its present and intended use.

Our Intellectual Property

      Our federally registered trademarks include Hawk®, Wellman Friction Products®, Velvetouch®, Fibertuff®, Feramic®, Velvetouch Feramic®, Velvetouch Organik®, Velvetouch Metalik®, Hawk Brake® and Hawk Performance®. Velvetouch® is our principal trademark for use in the friction products aftermarket segment and is registered in 26 countries. We have applied for the registration of the Hawk Motors, Hawk Precision Components Group, Hawk Rotors, Mega V, Pro V, Quarter Master, Trilite, Tex Racing and Wellman Products Group trademarks. Although we maintain patents related to our business, we do not believe that our competitive position is dependent on patent protection or that our operations are dependent on any individual patent. We have applied for U.S. patents relating to a method and equipment for high velocity powder metal injection molding, and we expect to commercialize this technology by licensing these patents to manufacturers of powder metal injection molding equipment. To protect our intellectual property, we rely on a combination of internal procedures, confidentiality agreements, patents, trademarks, trade secrets law and common law, including the law of unfair competition.

Our Foreign Operations

      Our foreign operations are subject to the usual risks of operating in foreign jurisdictions. They include, but are not limited to, exchange controls, currency restrictions and fluctuations, changes in local economic and political conditions, changes in laws, regulations, tariffs or taxes, the establishment of trade barriers and difficulties in management and staffing. For financial information regarding our international operations, see “Note M — Business Segments” and “Note N — Supplemental Guarantor Information” to the accompanying consolidated financial statements beginning on page F-21 of this prospectus and consent solicitation statement.

Personnel

      At March 31, 2002, we had approximately 1,190 domestic employees and 360 international employees. Approximately 180 employees at our Brook Park, Ohio plant are covered under a collective bargaining agreement with the Paper, Allied Industrial, Chemical and Energy Workers International Union (PACE) expiring in October 2004; approximately 55 employees at our Akron, Ohio facility are covered under a collective bargaining agreement with the United Automobile Workers expiring in July 2003; approximately 190 employees at our Orzinuovi, Italy plant are represented by a national mechanics union under an agreement that expires in December 2002 and by a local union under an agreement that expires in December 2004; and approximately 60 hourly employees at our Alton, Illinois facility are covered under a collective bargaining agreement with the International Association of Machinists and Aerospace Workers expiring in June 2004. We have experienced no strikes and believe we have good relations with our employees and their unions.

Government Regulation of Our Businesses

      Our sales to manufacturers of aircraft braking systems represented 11.4% of our consolidated net sales in the first quarter of 2002 and 14.1% of our consolidated net sales in 2001. Each aircraft braking system, including the friction products supplied by us, must meet stringent Federal Aviation Administration criteria and testing requirements. We have been able to meet these requirements in the past and we continuously review Federal Aviation Administration compliance procedures to help ensure our continued and future compliance.

Environmental, Health and Safety Matters

      We are subject to stringent environmental standards imposed by federal, state, local and foreign environmental laws and regulations, including those related to air emissions, wastewater discharges, chemical

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and hazardous waste management and disposal. Some of these environmental laws hold owners or operators of land or businesses liable for their own and for previous owners’ or operators’ releases of hazardous or toxic substances, materials or wastes, pollutants or contaminants. Our compliance with environmental laws also may require the acquisition of permits or other authorizations for some kinds of activities and compliance with various standards or procedural requirements. We are also subject to the federal Occupational Safety and Health Act and similar foreign and state laws. The nature of our operations, the long history of industrial uses at some of our current or former facilities, and the operations of predecessor owners or operators of some of the businesses expose us to risk of liabilities or claims with respect to environmental and worker health and safety matters. We review our procedures and policies for compliance with environmental and health and safety laws and regulations and believe that we are in substantial compliance with all material laws and regulations applicable to our operations. Our costs of complying with environmental, health and safety requirements have not been material.

Legal Proceedings

      We are involved in various lawsuits arising in the ordinary course of our business. In our opinion, the outcome of these matters will not have a material adverse effect on our financial condition, liquidity or results of operations.

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SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

(in millions, except per share data)

      We have derived the selected consolidated financial and other data presented below under the captions “Statement of Operations Data,” “(Loss) Earnings per Share,” “Other Data” and “Balance Sheet Data” as of and for each of the years ended December 31, 2001, 2000, 1999, 1998 and 1997 from our audited consolidated financial statements. We have derived the selected consolidated financial and other data for the three months ended March 31, 2002 and 2001 from our unaudited consolidated financial statements, which management has prepared on the same basis as our audited consolidated financial statements and, in the opinion of management, reflect all adjustments, consisting only of normal recurring adjustments, necessary for a fair statement of that data for those periods and as of those dates. Our operating results for the three months ended March 31, 2002 and 2001, are not necessarily indicative of the results that may be expected for any other quarterly period or for the full year. We acquired our Net Shape subsidiary in December 2000, our Tex Racing subsidiary in November 2000, our Quarter Master subsidiary in November 1999, our Allegheny subsidiary in March 1999, our Clearfield subsidiary in June 1998 (Allegheny and Clearfield are now operated together as Allegheny Clearfield), our Sinterloy subsidiary in August 1997 and our Hutchinson subsidiary (now known as Hawk Motors) in January 1997. You should read this data in conjunction with the more detailed information contained in the consolidated financial statements, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and other financial information included in this prospectus and consent solicitation statement.

		Three Months
		ended
		March 31,					Year ended December 31,
		2002			2001		2001			2000		1999		1998			1997
		(Unaudited)
Statement of Operations Data:
	Net sales	$	49.8		$	53.8	$	184.4		$	202.3	$	187.6	$	182.3		$	160.7
	Cost of sales		39.0			40.0		144.4			147.4		138.8		124.6			114.8
	Gross profit		10.8			13.8		40.0			54.9		48.8		57.7			45.9
	Restructuring costs(1)		—			—		1.1			—		—		—			—
	Income from operations		1.2			3.9		3.6			19.5		18.6		32.8			22.1
	Interest expense		2.3			2.4		9.5			9.0		9.4		11.9			15.3
	(Loss) income before income taxes and extraordinary charge		(1.2	)		1.6		(6.2	)		10.1		10.0		21.9			6.6
	Income tax (benefit) provision		(0.6	)		0.7		(1.9	)		4.4		3.7		9.7			3.7
	Extraordinary charge(2)		—			—		—			—		—		3.1			—
	Net (loss) income	$	(0.6	)	$	0.9	$	(4.3	)	$	5.8	$	6.3	$	9.1		$	2.9
(Loss) Earnings per Share:
	Basic (loss) earnings before extraordinary charge	$	(.07	)	$	.10	$	(.52	)	$	.66	$	.71	$	1.59		$	.55
	Extraordinary charge(2)		—			—		—			—		—		(.41	)		—
	Basic (loss) earnings per share	$	(.07	)	$	.10	$	(.52	)	$	.66	$	.71	$	1.18		$	.55
	Diluted (loss) earnings before extraordinary charge	$	(.07	)	$	.10	$	(.52	)	$	.66	$	.71	$	1.51		$	.45
	Extraordinary charge(2)		—			—		—			—		—		(.39	)		—
	Diluted (loss) earnings per share	$	(.07	)	$	.10	$	(.52	)	$	.66	$	.71	$	1.12		$	.45

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		Three Months
		ended
		March 31,						Year ended December 31,
		2002			2001			2001			2000			1999			1998			1997
		(Unaudited)
Other Data:
	EBITDA(3)	$	4.3		$	7.8		$	19.5		$	34.5		$	32.3		$	44.3		$	32.6
	EBITDA, as a percentage of net sales(3)		8.6	%		14.5	%		10.6	%		17.1	%		17.2	%		24.3	%		20.3	%
	Depreciation	$	2.7		$	2.8		$	11.4		$	10.8		$	9.9		$	8.0		$	7.1
	Amortization	$	0.4		$	1.1		$	4.5		$	4.2		$	3.8		$	3.5		$	3.4
	Capital expenditures (including capital leases)	$	1.9		$	2.8		$	9.1		$	10.5		$	10.2		$	15.2		$	9.6
	Ratio of EBITDA to interest expense(3)		1.9	x		3.3	x		2.1	x		3.8	x		3.4	x		3.7	x		2.1x
	Ratio of long-term debt (including current portion) to EBITDA(3)(4)		5.9	x		3.4	x		5.0	x		3.0	x		3.3	x		2.3	x		4.1x
	Ratio of earnings to fixed charges(5)		—			1.6	x		—			2.0	x		2.0	x		2.7	x		1.4x

		March 31,				December 31,
		2002		2001		2001		2000		1999		1998		1997
		(Unaudited)
Balance Sheet Data:
	Cash and cash equivalents	$	2.4	$	3.2	$	3.1	$	4.0	$	4.0	$	14.3	$	4.4
	Working capital		9.8		38.6		31.5		36.5		33.5		39.9		28.8
	Property plant and equipment, net		66.3		70.1		67.4		70.4		70.2		64.3		52.5
	Total assets		210.0		218.4		204.1		215.4		209.6		203.4		173.1
	Total long-term debt (including current portion)		101.0		104.6		97.8		103.9		105.4		102.5		132.1
	Shareholders’ equity		65.5		72.0		66.4		71.7		66.5		64.4		(2.2	)

(1)	Reflects primarily a work force reduction at our domestic facilities for approximately 160 salaried and production personnel.
(2)	Reflects premium paid on a partial redemption of old notes and a write-off of deferred financing costs in conjunction with our initial public offering, net of $2.3 million in income taxes.
(3)	We define “EBITDA” as income from operations plus depreciation and amortization. We present EBITDA because it is:

     •  a widely accepted financial indicator of a company’s ability to incur and service debt, and

     •  the basis on which our compliance with financial covenants contained in the old indenture, new indenture, old credit facility and new credit facility is principally determined.

However, EBITDA does not purport to represent cash provided by operating activities as reflected in our consolidated statements of cash flow, is not a measure of financial performance under accounting principles generally accepted in the United States and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with accounting principles generally accepted in the United States. Also, our measure of EBITDA may not be comparable to similar measures reported by other companies. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations.”

(4)  We determine the ratio of long-term debt to EBITDA:

     •  for the years 2001, 2000, 1999, 1998 and 1997 by dividing long-term debt, including current portion, at December 31 for each of these years by EBITDA for the same years, and

     •  for the first quarter of 2002 and 2001, by dividing long-term debt, including current portion, at the end of each of these quarters by the product of four times EBITDA for the same quarters.

(5)  We determine the ratio of earnings to fixed charges by dividing:

     •  the sum of earnings before extraordinary charge, interest expense, amortization of deferred financing costs, taxes and a portion of rent expense representative of interest, by

     •  the sum of interest expense, amortization of deferred financing costs and a portion of rent expense representative of interest.

For the three month period ended March 31, 2002 and the year ended December 31, 2001, our earnings were insufficient to cover fixed charges. The additional earnings required to cover fixed charges would have been $1.2 million for the three month period ended March 31, 2002, and $6.2 million for the year ended December 31, 2001.

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MANAGEMENT’S DISCUSSION AND ANALYSIS OF

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

      You should read this discussion in conjunction with the consolidated financial statements, notes and tables included in this prospectus and consent solicitation statement. Management’s discussion and analysis may contain forward-looking statements that are provided to assist in the understanding of anticipated future financial performance. However, this performance involves risks and uncertainties that may cause actual results to differ materially from those expressed in the forward-looking statements.

Recent Events

      In the second quarter of 2002, our net sales increased by 6% to $50.3 million from $47.4 million from the comparable period in 2001. Income from operations increased to $3.0 million in the second quarter of 2002, compared to a loss from operations of $0.1 million in the year-ago period. Net income was $0.02 per diluted share for the second quarter of 2002, versus a net loss of $0.17 per diluted share during the same period last year. We benefited from improved conditions in most of our markets, increased production and sales levels at our Mexican motor components facility and new product introductions leading to market share gains. These positive results overshadowed the continued softness in the aircraft market.

      As previously disclosed, we adopted Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets” (FAS 142), effective January 1, 2002. FAS 142 prohibits the amortization of goodwill and intangible assets with indefinite useful lives. As a result of the adoption of FAS 142, amortization expense decreased $0.8 million in the second quarter of 2002 compared to the same period in 2001. The pro forma effect of applying the non-amortization provision of FAS 142 to the quarter ended June 30, 2001 would have changed the reported loss from operations in that quarter of $0.1 million to income from operations of $0.7 million, and reported loss per diluted share of $0.17 to $0.12.

      For the six month period ended June 30, 2002, net sales were $100.2 million, a 1% decline from $101.2 million in the prior year’s comparable period. Income from operations for the same six month period increased 8% to $4.2 million from $3.9 million in the six month period ended June 30, 2002. The pro forma effect of applying the non-amortization provision of FAS 142 to our financial results for the six months ended June 30, 2001 would have decreased amortization expense by $1.6 million, changing reported income from operations of $3.9 million to $5.5 million, and the reported loss per diluted share of $0.07 to earnings per diluted share of $0.04. We reported a net loss before the cumulative effect of change in accounting principle related to our adoption of FAS 142 for the six month period ended June 30, 2002 of $0.05 per diluted share compared to a net loss per diluted share of $0.07 for the comparable year-ago period.

      FAS 142 changed the accounting for goodwill and other indefinite-lived intangible assets from an amortization methodology to an impairment-only methodology. FAS 142 provided a six-month transitional period from the effective date of adoption to June 30, 2002, during which we performed an initial assessment of whether there was an indication that the carrying value of our goodwill was impaired. We performed the assessment by comparing the fair value of each of our reporting units, as determined in accordance with FAS 142, to its book value. The rules under FAS 142 require that any initial impairment be taken as a charge to income as a cumulative effect of change in accounting principle retroactive to January 1, 2002.

      We, with the assistance of independent valuation experts, have completed our initial assessment test and have concluded that certain of our goodwill was impaired at January 1, 2002, resulting in an after-tax charge of $17.2 million. In accordance with FAS 142, this charge was recorded as a cumulative effect of a change in accounting principle, retroactive to January 1, 2002. The transitional impairment charge is a one-time non-cash charge and did not have an effect on our current business activities or existing debt covenants.

      The first step of the test required us to compare the book value of the net assets to the fair value of each related reporting unit. In three of our reporting units, the fair value was determined to be less than the book value of the respective unit. Accordingly, under the rules of FAS 142, we performed the second step of the test to determine the amount of the impairment loss to be recognized by each unit.

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      The following is a summary of the impairment charge by affected business segment, net of a $4.3 million tax benefit:

Reporting Unit (Business Segment)		Charge
		(in millions)
Friction products		$	8.4
Motor			6.3
Performance automotive			2.5
	Total	$	17.2

      In future periods, the assessment must be performed annually at the reporting unit level, and any impairment must be recorded as a charge to operating earnings. We cannot assure you that future goodwill impairments will not occur or that they will not adversely affect our financial position and results of operations.

Results of Operations

      Through our subsidiaries, we operate primarily in four reportable segments: friction products, precision components, performance automotive and motors. Our results of operations are affected by a variety of factors, including but not limited to, general economic conditions, customer demand for our products, competition, raw material pricing and availability, labor relations with our personnel and political conditions in the countries in which we operate. We sell a wide range of products that have a corresponding range of gross margins. Our consolidated gross margin is affected by product mix, selling prices, material and labor costs as well as our ability to absorb overhead costs resulting from fluctuations in demand for our products.

      We experienced a net loss of $0.6 million in the first quarter of 2002 compared to net income of $0.9 million in the comparable period of 2001. For the year ended December 31, 2001, we experienced a net loss of $4.3 million compared to net income of $5.8 million for the same period in 2000. These decreases were primarily attributable to volume declines in most of the end-markets served by our friction and precision component segments, including the aircraft industry following the events of September 11. In addition, our effective tax rate decreased to a benefit of 50% for the three month period ended March 31, 2002 from a tax expense of 46% for the same period in 2001, and decreased to a benefit of 30% in 2001 from a tax expense of 43% in 2000, primarily due to our losses in 2001.

      We expect that 2002 will be a challenging year in most of the markets we serve. However, we are forecasting a gradual improvement in revenues for the remainder of the year, as most of our markets experienced signs of slight improvement. We expect the aerospace market, which is served by our friction products segment, to continue to experience a soft operating environment for the full year of 2002. We expect sales in our aerospace market to improve as airline traffic increases throughout the year, but for the entire year 2002 to remain approximately 10% to 20% below 2001 levels. In response to the weak global business environment, and the anticipated lack of any major recovery in our end-markets through the remainder of 2002, we are continuing to seek additional opportunities to reduce costs across our operating segments. Additionally, we expect to benefit from new product introductions throughout our operating segments and the achievement of higher operating production levels at our start-up Mexican and Chinese facilities during 2002. As a result of expected, gradual improvement in the economic conditions as well as the continued impact of our cost cutting efforts, we expect our income from operations plus depreciation and amortization, or EBITDA, in 2002 to be approximately 20% higher than our EBITDA for 2001.

Significant Accounting Policies

      Our discussion and analysis of our financial condition and results of operations are based on our consolidated financial statements, which we have prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure

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of contingent assets and liabilities. On an on-going basis, we evaluate our estimates, including those related to bad debts, inventories, intangible assets, income taxes, financing operations, pensions and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions. Our significant accounting policies include the following:

•  Revenue Recognition and Credit Risk. Our revenue recognition policy is to recognize revenues when products are shipped and title has transferred. We maintain an allowance for trade accounts receivable for which collection on specific customer accounts is doubtful. In determining collectibility, our management reviews available customer financial statement information, credit rating reports as well as other external documents and public filings. When we deem it probable that a particular customer account is uncollectible, that balance is included in the reserve calculation. Actual results could differ from our estimates.

•  Foreign Currency Translation and Transactions. We translate assets and liabilities of our foreign operations using period-end exchange rates, and we translate revenues and expenses using exchange rates as determined throughout the period. We include gains or losses resulting from translation in a separate component of our shareholder’s equity. We translate gains or losses resulting from foreign currency transactions to local currency at the rates of exchange prevailing on the dates of the transactions. We translate accounts receivable or payable in foreign currencies, other than the subsidiary’s local currency, at the rates of exchange prevailing at the balance sheet date. We include the effect of the transaction’s gain or loss in other income (expense) in our statement of operations.

Three Months Ended March 31, 2002 Compared to Three Months Ended March 31, 2001

      Net Sales. Our consolidated net sales for the first quarter of 2002 were $49.8 million, a decrease of $4.0 million or 7% from the comparable period in 2001. The decline in net sales was primarily the result of the continuing weakness in the industrial markets we serve.

•  Friction Segment. Our net sales in the friction segment during the first quarter of 2002, were $26.0 million, a decrease of 12% compared to 2001. The major markets served by this segment all experienced weak operating conditions during the quarter when compared to the first quarter of 2001. Net sales to the aerospace market declined 27% during the first quarter of 2002 compared to the same period in 2001, primarily as a result of the events of September 11. We also experienced declines in heavy truck, agriculture, construction and specialty friction as a result of the soft operating conditions in the United States and Europe. We continue to expect that most of the markets served by this segment will remain soft in 2002. Volumes in the aerospace market for all of 2002 are expected to decline approximately 10% to 20% compared to 2001, as a result of the decline in air travel following September 11.

•  Precision Components Segment. Our net sales in the precision components segment for the first quarter of 2002 were $17.2 million, a decrease of $0.6 million, or 3% compared to 2001. The decrease in net sales was primarily attributable to decreased sales to customers in the lawn and garden, truck and business equipment markets, as a result of the continuing softness in the general industrial segments of the domestic economy.

•  Performance Automotive Segment. Net sales in our performance automotive segment during the first quarter of 2002 were $3.9 million, a decrease of 7% compared to net sales of $4.2 million in 2001. The decrease in net sales was primarily attributable to the decline in purchases as a result of reduced inventory commitments by race teams primarily in the NASCAR and CART racing series, our primary customer base.

•  Motor Segment. Net sales in our motor segment during the first quarter of 2002 were $2.7 million, an increase of $0.5 million, or 23% from the same period in 2001. All of the sales growth in the

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motor segment came from our new rotor manufacturing facility in Monterrey, Mexico. Net sales from our Alton, Illinois facility were down slightly during the first quarter of 2002.

      Gross Profit. Our gross profit decreased $3.0 million to $10.8 million during the first quarter of 2002, a 22% decrease compared to gross profit of $13.8 million in the comparable period of 2001. The gross profit margin decreased to 22% of net sales in the first quarter of 2002 from 26% of net sales in the comparable period in 2001. Each of our segments, with the exception of the performance automotive segment, experienced decreased margins primarily as a result of lower sales volumes and changes in product mix, especially as a result of the reduction in sales to the aerospace market during the quarter.

•  Friction Segment. Our friction segment reported gross profit of $6.0 million or 23% of net sales in the first quarter of 2002 compared to $7.8 million or 26% of net sales in the first quarter of 2001. The decline in our gross profit margin was the result of lower sales volumes, product mix and our inability to absorb all of the fixed costs of our manufacturing facilities. We also continued to support our start-up facility in China during the first quarter of 2002. Although the facility is shipping product, it experienced negative operating margins during the quarter as it was unable to absorb all of the costs incurred to bring the facility into production status.

•  Precision Components Segment. Our gross profit in the precision components segment during the first quarter of 2002 was $3.1 million or 18% of net sales in the first quarter of 2002 compared to $4.4 million or 25% of net sales in 2001. The decline in this segment’s margins was primarily the result of volume declines in the end markets served by this segment and our inability to completely absorb all of the fixed manufacturing costs associated with this segment.

•  Performance Automotive Segment. Our performance automotive segment reported gross profit of $1.4 million or 36% of net sales in the first quarter of 2002 compared to $1.4 million or 33% of net sales in 2001. The increase in gross profit margin was primarily the result of manufacturing efficiencies and cost reductions implemented by the segment.

•  Motor Segment. Our motor segment reported a gross margin of $0.2 million or 7% of net sales during the first quarter of 2002 compared to $0.2 million or 9% of net sales in 2001. The decline in gross margin was primarily the result of our continued support of our start-up rotor manufacturing facility in Mexico. Additionally, as a result of continuing softness in the domestic motor business in the first quarter of 2002, our domestic margin declined in the first quarter of 2002 as we were unable to absorb all of our fixed manufacturing costs.

      Selling, Technical and Administrative Expenses. Our selling, technical and administrative (“ST&A”) expenses increased $0.4 million, or 5%, to $9.2 million in the first quarter of 2002 from $8.8 million in the comparable period of 2001. The increase in ST&A expenses is primarily attributable to legal expenses related to litigation involving a former employee in our performance automotive segment and personnel costs associated with our long-term sales and growth initiatives. The litigation was settled in the fourth quarter of 2001. Additionally, during the first quarter of 2001, we benefited from income received as a result of the termination of insurance policies.

      Amortization of Intangibles. Amortization of intangibles decreased by $0.8 million during the first quarter of 2002 as a result of our implementation of FAS 142 on January 1, 2002. Upon adoption of FAS 142, we stopped amortizing existing goodwill.

      Income from Operations. Income from operations decreased $2.7 million or 69% to $1.2 million in the first quarter of 2002 from $3.9 million in 2001. Income from operations as a percentage of net sales decreased to 2% in 2002 from 7% in 2001. The decline was primarily the result of the sales volume declines due to the economic slowdown that continued to impact our markets.

      As a result of the items discussed above, results from operations at our segments were as follows:

•  The friction segment’s income from operations decreased $2.1 million or 72% to $0.8 million in the first quarter of 2002 from $2.9 million in the comparable period in 2001.

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•  Income from operations in the precision components segment was $0.1 million in the first quarter of 2002, a decrease of $1.0 million or 91% compared to $1.1 million in the comparable period in 2001.

•  Income from operations at the performance automotive segment was $0.8 million in the first quarter of 2002, an increase of $0.4 million or 100% compared to $0.4 million in the comparable period in 2001.

•  The loss from operations in the motor segment increased to $0.5 million in the first quarter of 2002 from $0.4 million in the comparable period in 2001.

      Interest Expense. Interest expense decreased $0.1 million, or 4%, to $2.3 million in the first quarter of 2002 from $2.4 million in 2001. The decrease is primarily attributable to lower borrowing costs partially offset by our increased borrowing levels during the quarter.

      Other (Expense) Income. Other expense was $0.2 million in the first quarter of 2002. The expense in the first quarter of 2002 consisted primarily of fees we paid to effect the amendment of the old credit facility, partially offset by income recorded from a mark to market adjustment from our swap agreement.

      Income Taxes. We recorded a credit for income taxes in the first quarter of 2002 as a result of losses incurred during the quarter.

      Net (Loss) Income. As a result of the factors noted above, we reported a net loss of $0.6 million in the first quarter of 2002, compared to net income of $0.8 million in 2001.

Year Ended December 31, 2001 Compared to Year Ended December 31, 2000

      Net Sales. Our consolidated net sales for 2001 were $184.4 million, a decrease of $17.9 million or 9% from the same period in 2000. The decline in net sales, primarily a result of the prolonged weakness in the markets we serve, resulted in a difficult operating environment in most of our reporting segments. The terrorist attacks on September 11, 2001, in particular, had a significant negative impact on our aircraft friction business.

•  Friction Segment. Net sales in the friction segment were $104.1 million in 2001, a decrease of 10% compared to 2000. The major markets served by this segment all experienced weak operating conditions in 2001. We experienced declines in heavy truck, agriculture, construction and specialty friction for the full year 2001 as a result of the soft operating conditions in the United States and Europe. Net sales in the aerospace market showed a decline for the year, most notably in the fourth quarter of 2001, as a result of the events of September 11. Although we expect most of the markets served by this division to remain soft in 2002, we expect the aerospace market will experience volume declines of approximately 10 to 20% compared to 2001, as a result of the decline in air travel.

•  Precision Components Segment. Net sales in the precision components segment were $58.3 million, a decrease of 19% compared to 2000. The decrease was primarily attributable to continuing softness in the general industrial segments of the domestic economy. We experienced sales weakness in nearly all of the markets served by this segment, including heavy truck, lawn and garden, pump and motor, appliance and office equipment. While net sales in the segment were down as a result of the general softness of economic operating environment, we feel the sales declines were further exacerbated by negative inventory realignments by our customers in the last half of 2001.

•  Performance Automotive Segment. Net sales in our performance automotive segment were $13.0 million, an increase of 132% compared to net sales of $5.6 million in 2000. The increase in revenues was primarily attributable to the acquisition of our Tex Racing subsidiary in November 2000. Additionally, net sales in this segment benefited from the continued popularity of racing, particularly in the NASCAR and CART racing series, both served by us.

•  Motor Segment. Net sales in our motor segment were $9.0 million, an increase of 7% from the same period in 2000. The sales growth in the motor segment came from our new rotor manufacturing

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facility in Monterrey, Mexico, which began shipments in 2001. This facility is expected to service the growing motor manufacturing base in that region. Net sales from our Alton, Illinois facility were flat in 2001 as a result of the soft economic conditions experienced in the United States.

      Gross Profit. Gross profit decreased $14.9 million to $40.0 million during 2001, a 27% decrease compared to gross profit of $54.9 million in 2000. The gross profit margin decreased to 22% of net sales in 2001 from 27% of net sales in the comparable period in 2000. Each of our segments experienced decreased margins primarily as a result of the deteriorating economic conditions experienced in 2001.

•  Friction Segment. Our friction segment reported gross profit of $24.9 million or 24% of net sales in 2001 compared to $30.9 million or 27% of net sales in 2000. The decline in our gross profit margin was the result of lower sales volumes, product mix and our inability to absorb all of the fixed costs of our manufacturing facilities as a result of the deteriorated economic conditions experienced in 2001, especially the impact of the reduction in sales to the aircraft market in the fourth quarter as a result of the events of September 11. We also continued to support our start-up facility in China during 2001. Although the facility began shipments in 2001, it operated at negative margins for the entire year.

•  Precision Components Segment. Gross profit in the precision components segment was $11.5 million or 20% of net sales in 2001 compared to $19.4 million or 27% of net sales in 2000. The sharp decline in this segment’s margins was primarily the result of the severe economic downturn and the resulting volume declines and our inability to cover all of the unabsorbed fixed charges generated by the segment. We also provided operating support to our start-up metal injection molding company, Net Shape, which was acquired in December 2000. We anticipate that start-up costs will continue into 2002, although at reduced levels from 2001.

•  Performance Automotive Segment. Our performance automotive segment reported gross profit of $3.9 million or 30% of net sales in 2001 compared to $2.8 million or 50% of net sales in 2000. The decline in gross profit was primarily the result of manufacturing inefficiencies and inventory realignments at our performance clutch manufacturing facility.

•  Motor Segment. We reported a gross margin loss in the motor segment for 2001. The loss was $0.3 million compared to a gross profit of $1.8 million in 2000. The negative gross margin was primarily the result of our continued support of our start-up rotor manufacturing facility in Mexico during 2001. We expect to continue supporting this facility in 2002. However, as the facility moves to full production, this support is expected to decline in the latter half of 2002. Additionally, as a result of softness in the domestic motor business in 2001, our domestic margin declined in 2001, since we were unable to absorb all of the fixed costs.

      Selling, Technical and Administrative Expenses. Selling, technical and administrative (“ST&A”) expenses decreased $0.5 million, or 2%, to $30.8 million in 2001 from $31.3 million during 2000. As a percentage of net sales, ST&A increased to 17% in 2001 from 15% in 2000. The increase in ST&A expenses as a percentage of net sales resulted primarily from sales volume reductions, continuing start-up expenditures incurred at our Mexican rotor manufacturing and Chinese friction material facilities, personnel costs associated with our long-term sales and growth initiatives and charges to settle litigation in our friction segment. We spent $3.9 million, or 2% of our net sales on product research and development compared to $3.5 million in 2000.

      Restructuring Costs. In June 2001, we announced a restructuring program to adjust our near-term business plan to reflect the current economic slowdown. This restructuring initiative included a workforce reduction at our domestic facilities and other charges. As a result of the restructuring initiative, we recorded an expense of $1.1 million in 2001. The restructuring program included a reduction of approximately 160 employees, including salary and production personnel, primarily at our domestic locations.

      Income from Operations. Income from operations decreased $15.9 million or 82% to $3.6 million in 2001 from $19.5 million in 2000. Income from operations as a percentage of net sales decreased to 2% in 2001 from 10% in 2000. The decline was primarily the result of the sales volume declines due to the economic slowdown affecting our markets, continuing support of our start-up operations, charges to settle

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litigation in our performance automotive segment, increased depreciation expense and the restructuring charge we took in the second quarter of 2001.

      As a result of the items discussed above, results from operations at our segments were as follows:

•  the friction segment’s income from operations decreased $5.1 million or 44% to $6.4 million in 2001 from $11.5 million in 2000,

•  income from operations at the precision components segment was $0.3 million in 2001, a decrease of $8.1 million or 96% compared to $8.4 million in 2000,

•  the performance automotive segment reported income from operations of $0.3 million, a decrease of $0.6 million in 2001 compared to 2000, and

•  the loss from operations in the motor segment increased to $3.4 million in 2001 from $1.3 million in 2000.

      Other (Expense) Income. Other expense was $0.5 million in 2001, the same as reported in 2000. The expense in 2001 primarily reflected the fair value of our interest rate swap agreement and foreign currency transaction losses we incurred primarily through our Italian facility. Additional information regarding our interest rate swap agreement is contained in “Note B — Significant Accounting Policies” in the accompanying consolidated financial statements on page F-10 of this prospectus and consent solicitation statement.

      Interest Expense. Interest expense increased $0.5 million, or 6%, to $9.5 million in 2001 from $9.0 million in 2000. The increase is primarily attributable to increased borrowings by us during the year partially offset by lower interest rates.

      Income Taxes. The provision for income taxes decreased $6.2 million to a benefit of $1.8 million in 2001 from a tax expense of $4.4 million in 2000 primarily because of the losses incurred in 2001. Our effective tax benefit for the year ended is 30% compared to a tax provision of 43% in 2000. The primary factors affecting our effective tax rate in 2001 are nondeductible goodwill amortization and required state and local tax provisions. An analysis of changes in income taxes and our effective tax rate is contained in “Note J — Income Taxes” in the accompanying consolidated financial statements on page F-17 of this prospectus and consent solicitation statement.

      Net (Loss) Income. As a result of the factors noted above, we reported a net loss of $4.3 million in 2001, compared to net income of $5.8 million in 2000.

Year Ended December 31, 2000 Compared to Year Ended December 31, 1999

      Net Sales. Consolidated net sales for 2000 were $202.3 million, an increase of $14.7 million or 8% over 1999. The increase in net sales came primarily from our precision components and performance automotive segments. The net sales increase was attributable to the acquisition of our Allegheny subsidiary in March 1999, our Quarter Master subsidiary in November 1999 and our Tex Racing subsidiary in November 2000. Net sales in 2000 from these acquisitions represented $9.4 million, or 64%, of the total net sales increase reported during 2000. Net sales in the friction segment were $116.3 million in 2000, a decrease of 0.1% compared to 1999. Net sales increases in the construction and specialty markets served by the friction segment were offset by declines in the truck, non-performance automotive and agriculture markets, and to a lesser extent, the aerospace market. In our precision components segment, net sales increased to $72.0 million, or 18%, from 1999. The increase was the result of the acquisition of Allegheny and strength in the fluid power, appliance and lawn and garden markets that we serve. This increase was offset by the continued reduction in volumes from a customer that moved its production offshore.

      Gross Profit. Gross profit increased $6.2 million to $54.9 million during 2000, a 13% increase compared to gross profit of $48.8 million in 1999. The gross profit margin increased to 27% in 2000 from 26% in the comparable period in 1999. The increase in margins was led by the friction segment, primarily as a result of product mix benefits and cost reduction programs initiated in 1999. In the precision components

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segment, while we benefited from volume increases from the acquisition of our Allegheny subsidiary, the softness in the agriculture and heavy truck markets served by this segment, the loss of a customer and changes in the product-mix caused a reduction in margins achieved during 1999. Gross profit margins in our performance automotive segment increased 10% in 2000 as compared to 1999, while the gross profit margin in our motor segment declined in 2000 primarily as a result of the startup costs associated with our Mexican facility.

      Selling, Technical and Administrative Expenses. ST&A expenses increased $4.9 million, or 19%, from $26.4 million during 1999 to $31.3 million in 2000. As a percentage of net sales, ST&A increased to 16% in 2000 from 14% in 1999. The increase in ST&A expenses as a percentage of net sales, resulted primarily from expenditures incurred by our entry into Mexico and China, personnel costs associated with our growth initiatives and increased depreciation expenses. We spent $3.5 million, or 2% of our net sales on product research and development compared to $3.2 million in 1999.

      Income from Operations. Income from operations increased $0.9 million, or 5%, from $18.6 million in 1999 to $19.5 million in 2000. Income from operations as a percentage of net sales decreased to 10% in 2000 from 10% in 1999.

      Other (Expense) Income. Other expense was $0.5 million in 2000, an increase of $0.9 million, from income of $0.4 million reported in 1999. The expense reported in 2000 was primarily the result of foreign currency transaction losses that we incurred at our Italian facility. In addition, we reported income in 1999 as the result of the receipt of a contingent receivable.

      Interest Expense. Interest expense decreased $0.4 million, or 4%, to $9.0 million in 2000 from $9.4 million in 1999. The decrease is attributable to lower debt levels during 2000 compared with 1999.

      Income Taxes. The provision for income taxes increased $0.7 million to $4.4 million in 2000 from $3.7 million in 1999 primarily because of the increase in our effective tax rate during 2000 as a result of higher tax rates at our foreign operations. In 1999, we benefited from state investment and job creation tax credits. The increase in the state and local effective tax rate and the impact of foreign taxes is outlined in “Note J — Income Taxes” in the accompanying consolidated financial statements starting on page F-17 of this prospectus and consent solicitation statement, on the lines captioned “State and local tax, net of federal tax benefit” and “Adjustment to worldwide tax accrual and other, net.”

      Net Income. As a result of the factors noted above, net income was $5.8 million in 2000, a decrease of 8%, compared to net income of $6.3 million reported in 1999.

Liquidity and Capital Resources

      Our primary financing requirements are (1) for capital expenditures for maintenance, replacement and acquisitions of equipment, expansion of capacity, productivity improvements and product development, (2) for funding our day-to-day working capital requirements and (3) to pay interest on, and to repay principal of, our debt. Our primary source of funds for conducting business activities and servicing our debt has been cash generated from operations and borrowings under our old credit facility.

      The old notes, with an outstanding principal balance of $65.0 million at March 31, 2002, bear interest at 10.25% per annum and mature December 1, 2003. The old notes are general unsecured senior obligations and are fully and unconditionally guaranteed, on a joint and several basis, by all of our domestic wholly-owned subsidiaries. We have the option to redeem the old notes in whole or in part during the twelve months beginning December 1, 2001 at 102.563%, and beginning December 1, 2002 at 100.0% together with any interest accrued and unpaid to the redemption date. Upon a change of control as defined in the old indenture, each holder of the old notes will have the right to require us to repurchase all or any part of that holder’s old notes at a purchase price equal to 101% of the aggregate principal amount of the old notes, plus accrued and unpaid interest to the date of purchase.

      The old indenture permits us and our subsidiaries to incur additional debt without limitation, so long as we meet a cash flow coverage ratio at the time of incurrence. As of March 31, 2002, we did not meet the

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prescribed ratio. Our failure to meet the ratio does not constitute a default under the old indenture. Rather, the old indenture continues to permit some other types of debt, subject to limitations. Our old credit facility, which is secured by liens on all of our assets and the assets of our subsidiaries, is permitted. We do not believe that our operations will be materially impacted by the limitation on debt arising under the old indenture.

      The old indenture prohibits the payment of cash dividends on our Class A Common Stock. The old indenture also contains other covenants limiting our ability and the ability of our subsidiaries to, among other things, make other kinds of restricted payments, make some kinds of investments, permit liens, incur dividend and other payment restrictions affecting our subsidiaries, enter into consolidation, merger, conveyance, lease or transfer transactions, make asset sales, enter into transactions with affiliates or engage in unrelated lines of business. These covenants are subject to exceptions and qualifications. The old indenture considers non-compliance with the limitations to be events of default. In addition to non-payment of interest and principal amounts, the old indenture also considers default with respect to other debt in excess of $5.0 million to be an event of default. In the event of a default, the principal and interest could be accelerated upon written notice by 25% or more of the holders of the old notes. As of March 31, 2002, we were in compliance with these covenants.

      In addition, we have available the old credit facility which may be used for general corporate purposes. At March 31, 2002, the old credit facility was comprised of a $25.0 million revolving credit component and a $16.3 million amortizing term loan subject to a borrowing base formula. The term loan has quarterly maturities of $1.25 million and the facility has a maturity date of March 31, 2003. As of March 31, 2002, we had $13.1 million outstanding under the revolving credit component of the facility. The old credit facility is collateralized by a security interest in our accounts receivable, inventory, equipment and real estate and other assets, and we have pledged the stock of all of our U.S. subsidiaries and the stock of some of our foreign subsidiaries as collateral. Restrictive terms of the old credit facility require that we maintain specified financial ratios including leverage, interest coverage and fixed charge ratios, and comply with other loan covenants. We were in compliance with the financial covenants as of March 31, 2002. As of March 31, 2002, we had approximately $8.2 million available for future borrowing as determined by the borrowing base under the old credit facility.

      Net cash provided by operating activities was $14.5 million in 2001 compared to $21.6 million in 2000. Cash provided by operations in 2001 was primarily attributable to non-cash charges of depreciation and amortization partially offset by the loss experienced in 2001. Cash provided by operations in 2000 was the result of net income and the non-cash charges of depreciation and amortization. Net working capital was $31.5 million at year-end 2001 compared to $36.5 million at year-end 2000.

      Net cash used in operating activities was $1.9 million for the quarterly period ended March 31, 2002. Net cash provided by operating activities was $1.2 million for the comparable quarterly period of 2001. The decline in cash from operations was caused primarily by the net loss for the period, reduction in amortization expense and an increase in working capital assets during the quarter. The increase in working capital was caused primarily by the increase in accounts receivables due to our increased net sales during the quarter compared to the fourth quarter of 2001 as well as customary extended payment term programs to the lawn and garden markets in our precision component segment. Customer payments under these programs are due during the second quarter.

      Net cash used in investing activities was $9.1 million in 2001 and $16.9 million in 2000. The cash used in investing activities in 2001 consisted of purchases of property, plant and equipment. The cash used in investing activities in 2000 consisted primarily of $6.5 million for the acquisitions of our Tex Racing and Hawk MIM subsidiaries and $10.5 million for the purchase of property, plant and equipment. Net cash used in investing activities was $1.9 million for the quarterly period ended March 31, 2002 and $2.8 million for the comparable period in 2001. The cash used in investing activities during the quarterly periods ended March 31, 2002 and 2001, was for the purchase of property, plant and equipment. To achieve long-term growth prospects and enhance product quality, we planned for our capital spending program in 2002 to be approximately $12.0 million.

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      Net cash used in financing activities was $6.2 million in 2001 and $4.6 million in 2000, both primarily for the payment of long-term debt. Net cash provided by financing activities was $3.2 million for the quarterly period ended March 31, 2002 and $0.9 million for the comparable period in 2001 as a result of our increased borrowings. The increase in borrowings during the three month period ended March 31, 2002 was used primarily to support the increase in our working capital assets.

      We believe that if we are able to improve our working capital, through the active management of our working capital assets, along with our available cash, anticipated cash flow from operations, and availability under the old credit facility, we will be able to fund our operations for at least the next twelve months. However, should we not achieve our working capital initiatives, our operations and our capital expenditures program may be adversely impacted, including the ability to borrow under the old credit facility. We believe we are taking appropriate steps, including the reduction of operating expenses which are not critical to meeting our business objectives, to ensure that we have adequate sources of cash to meet our working capital needs for at least the next twelve months. In addition, we are pursuing strategic financing alternatives, including modification, extension or refinancing of the old notes and old credit facility, both of which are due during 2003. We cannot assure you that we will be able to modify, extend or refinance the old notes and old credit facility. We also cannot assure you that if we are able to modify, extend or refinance the old notes and old credit facility that the new terms will be as favorable to us as our existing facilities. If we are unable to modify, extend or refinance the old notes and old credit facility, then our financial position will be materially and adversely affected.

Net Operating Loss Carrybacks

      As of December 31, 2001, we had U.S. net operating loss carrybacks of approximately $2.4 million available for refund.

Effects of Recently Issued Accounting Pronouncements

      Effective January 1, 2001, we adopted Statement of Financial Accounting Standards (SFAS) No. 133, “Accounting for Derivative Instruments and Hedging Activities” (FAS 133), as amended by SFAS No. 138 (FAS 138). As amended, FAS 133 requires that an entity recognize all derivatives as either assets or liabilities in the statement of financial position, measure those instruments at fair value and recognize changes in the fair value of derivatives in earnings in the period of change unless the derivative qualifies as an effective hedge that offsets some types of exposure.

      We periodically enter into interest-rate swap agreements to moderate exposure to interest-rate changes and to lower the overall cost of borrowing. During the quarter ended March 31, 2001, we entered into an interest-rate swap agreement that effectively converts a portion of our floating rate debt to a fixed rate of 5.34% on $10.0 million notional amount on our variable-rate debt maturing in 2003. Although this financial instrument did not meet the hedge accounting criteria of FAS 133, it continues to be effective in achieving the risk management objectives for which it was intended. The change in the fair value of the interest rate swap did not have a material impact on our financial position or results of operations for the first quarter of 2002.

      In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, “Business Combinations” (FAS 141), and SFAS No. 142, “Goodwill and Other Intangible Assets” (FAS 142). These statements eliminate the pooling of interest method of accounting for business combinations after June 30, 2001 and eliminate the amortization of goodwill for all fiscal years beginning after December 15, 2001. We adopted FAS 141 and FAS 142 with respect to new goodwill as of July 1, 2001 and adopted FAS 142 with respect to existing goodwill as of January 1, 2002, the first day of our 2002 fiscal year. The adoption of FAS 141 has not impacted our financial condition or results of operations. In accordance with FAS 142, we amortized existing goodwill through fiscal 2001.

      As of the date of issuance of our first quarter 2002 financial statements, we had not yet completed the first step of the prescribed transitional goodwill impairment test with respect to existing goodwill, and we had not yet determined what the effect of the transitional goodwill impairment test was on our financial position

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or results of operations. We are required to complete step 1 of the transitional goodwill impairment test by June 30, 2002, and step 2 of the test by December 31, 2002. For additional information with respect to FAS 142, see “— Recent Events.” In future periods, the impairment test must be performed annually at the reporting unit level, and any impairment must be recorded as a charge to operating earnings. We cannot assure you that future goodwill impairments will not occur. The unaudited pro forma effect of applying the non-amortization provisions of FAS 142 to the quarter ended March 31, 2001 and the years ended December 31, 2001, 2000 and 1999 would have been to decrease amortization expense by approximately $0.8 million, $3.2 million, $2.8 million and $2.1 million, respectively, resulting in unaudited pro forma basic and diluted earnings (loss) per share of $0.15, $(0.30), $0.86 and $0.86, respectively.

      In June 2001, the Financial Accounting Standards Board issued SFAS No. 143, “Accounting for Asset Retirement Obligations” (FAS 143). FAS 143 addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. It applies to legal obligations associated with the retirement of long-lived assets that result from the acquisition, construction, development and/or normal operation of a long-lived asset, except for some particular obligations of lessees. FAS 143 is effective for financial statements issued for fiscal years beginning after June 15, 2002. FAS 143 will have no effect on our consolidated financial condition or results of operations.

      In October 2001, the Financial Accounting Standards Board issued SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets” (FAS 144). FAS 144 supersedes FASB No. 121, “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed Of” (FAS 121), but it retains the fundamental provisions of that statement related to the recognition and measurement of the impairment of long-lived assets to be “held and used.” In addition, FAS 144 provides more guidance on estimating cash flows when performing a recoverability test, requires that a long-lived asset (group) to be disposed of other than by sale (e.g., abandoned) be classified as “held and used” until it is disposed of, and establishes more restrictive criteria to classify an asset (group) as “held for sale.” FAS 144 is effective for fiscal years beginning after December 15, 2001. The adoption of FAS 144 did not have a material impact on our consolidated financial condition or results of operations.

Quantitative and Qualitative Disclosures about Market Risk

      Market Risk Disclosures. The following discussion about our market risk disclosures involves forward-looking statements. Actual results could differ materially from those projected in the forward-looking statements. We are exposed to market risk related to changes in interest rates and foreign currency exchange rates. We do not use derivative financial instruments for speculative or trading purposes.

      Interest Rate Sensitivity. At March 31, 2002, approximately 33.0%, or $32.2 million, of our debt obligations bore interest at a variable rate. To mitigate the risk associated with interest rate fluctuations, in January 2001, we entered into an interest rate swap essentially converting $10.0 million notional amount of our variable rate debt to a fixed base rate of 5.34%. The notional amount is used to calculate the contractual cash flow to be exchanged and does not represent exposure to credit loss. Although this financial instrument did not meet the hedge accounting criteria of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” it continues to be effective in achieving the risk management objectives for which it was intended. The carrying value and the fair value of the interest rate swap at March 31, 2002 was $0.3 million (liability). The change in the fair value is reflected in the Consolidated Statement of Operations in other (expense) income, net. Our primary interest rate risk exposure results from floating rate debt. If interest rates were to increase by 100 basis points (1.0%) from March 31, 2002 rates, and assuming no changes in debt from March 31, 2002 levels, then our additional annual interest expense would be approximately $0.2 million. We do not engage in activities using complex or highly leveraged instruments.

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      Commitments. The following table presents our total contractual obligations and other commercial commitments as of March 31, 2002 (in millions):

				April 1, 2002–				2004–		2007 and
		Total		December 31, 2002		2003		2006		beyond
Contractual Cash Obligations
	Revolver	$	13.1		—	$	13.1		—		—
	Term Loan		16.3	$	3.8		12.5		—		—
	Old notes		65.0		—		65.0		—		—
	Capital lease and other obligations		6.6		1.4		2.6	$	2.1	$	0.5
	Operating leases		6.4		1.4		1.6		3.0		0.4
Total Contractual Cash Obligations		$	107.4	$	6.6	$	94.8	$	5.1	$	0.9
Other Commercial Commitments
	Stand-by letters of credit	$	1.3	$	1.3		—		—		—

      Foreign Currency Exchange Risk. The majority of our receipts and expenditures are contracted in U.S. dollars, and we do not consider the market risk exposure relating to currency exchange to be material at this time. We currently do not hedge our foreign currency exposure and, therefore, have not entered into any forward foreign exchange contracts to hedge foreign currency transactions. We have operations outside the United States with foreign-currency denominated assets and liabilities, primarily denominated in Italian lira, Canadian dollars, Mexican pesos and Chinese renminbi. Because we have foreign-currency denominated assets and liabilities, financial exposure may result, primarily from the timing of transactions and the movement of exchange rates. Our unhedged foreign currency balance sheet exposures as of March 31, 2002 are not expected to result in a significant impact on our earnings or cash flows.

MANAGEMENT

Directors and Executive Officers

Name	Age		Position
Ronald E. Weinberg		60	Chairman of the Board, Chief Executive Officer and Director
Norman C. Harbert		68	Senior Chairman of the Board, Founder and Director
Jeffrey H. Berlin		40	President, Chief Operating Officer and Director
Thomas A. Gilbride		48	Vice President – Finance and Treasurer
Joseph J. Levanduski		40	Vice President – Controller
Steven J. Campbell		48	President — Friction Products Co. and S.K. Wellman Corp.
W. Michael Corkran		48	President — Hawk Precision Components Group, Inc.
Paul R. Bishop		59	Director
Jack Kemp		66	Director
Byron S. Krantz		66	Secretary and Director
Dan T. Moore, III		62	Director

      Ronald E. Weinberg is our Chairman of the Board and Chief Executive Officer and has served as a Director since March 1989. He has also served us in various other capacities since 1989. Mr. Weinberg has over 28 years of experience in the ownership and management of operating companies, including businesses in manufacturing, publishing and retailing. Since December 1997, Mr. Weinberg has been the Chairman of the Board of New Channel Communications Corp., a company specializing in direct marketing and the providing of computer software solutions. Mr. Weinberg was the Chairman and Chief Executive Officer of SunMedia Corp., a communications company that published weekly suburban newspapers, until it was sold in 1997, and the Chairman of New West Eyeworks, Inc., a chain of retail optical stores, which was sold in 1998.

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      Norman C. Harbert is our Senior Chairman of the Board and Founder and has served as a Director since March 1989. He has also served us in various other capacities since 1989. Mr. Harbert has over 40 years of manufacturing experience. From 1987 to 1988, Mr. Harbert was Chairman, President and CEO of Maverick Tube Corporation, an oil drilling equipment manufacturer, and from 1981 to 1986, he served as President and CEO of Ajax Magnethermic Corporation, an international manufacturer of induction heating and melting equipment. Before that time, Mr. Harbert served at Reliance Electric Company for 22 years where, in 1980, his last position was as General Manager, Rotating Products Group, with primary responsibility for a division with annual sales of $250 million. Mr. Harbert is a director of Second Bancorp Inc., a bank holding company. Mr. Harbert was a former director of Caliber Systems, Inc., a transportation company formerly known as Roadway Services, Inc., until October 1997.

      Jeffrey H. Berlin has served as a Director since May 2001 and as our President and Chief Operating Officer since May 1999. From May 1997 to May 1999, he served as our Executive Vice President. Between July 1994 and May 1997, Mr. Berlin served as our Vice President of Marketing and Corporate Development. From August 1991 to July 1994, Mr. Berlin served as our Director of Corporate Development.

      Thomas A. Gilbride has served as our Vice President – Finance since January 1993. Between March 1989 and January 1993, Mr. Gilbride was employed by us in various financial and administrative functions.

      Joseph J. Levanduski has served as our Controller since April 1997 and was named Vice President – Controller in May 2000. From August 1995 until April 1997, he was Controller of our subsidiary Friction Products, and from March 1996 until April 1997, he was also Group Controller coordinating the accounting functions of both Friction Products Company and another subsidiary of ours, S.K. Wellman Corp.

      Steven J. Campbell has served as President of Friction Products Co. and S.K. Wellman Corp., two of our wholly owned subsidiaries, since 2001. From 1999 through 2000, Mr. Campbell served as Chief Financial Officer and Project Director for a division of Cooper Industries in connection with its expansion into Mexico. From 1997 through 1999, Mr. Campbell was the President of Unarco LLC, a national manufacturer of retail products, and from 1995 through 1997, he served as Vice President – International Operations for Cooper Industries’ Hand Tool Division.

      W. Michael Corkran has been President of Hawk Precision Components Group, Inc., one of our wholly owned subsidiaries, since 2001. Before becoming President of Hawk Precision Components Group, Inc., Mr. Corkran served as President of the North American and Asian Pacific divisions of Reltec Corporation, a telecommunications equipment manufacturer, from 1999 through 2000. From 1977 until he joined Reltec Corporation, Mr. Corkran was employed by Reliance Electric.

      Paul R. Bishop has served as a Director since May 1993. Mr. Bishop has served as Chairman, President and Chief Executive Officer of H-P Products, Inc., a manufacturer of central vacuum systems and fabricated tubing and fittings, since 1977.

      Jack Kemp has served as a Director since September 1999. Mr. Kemp is a co-director of Empower America, a public policy and advocacy organization he co-founded in 1993. In 1996, Mr. Kemp received the Republican Party’s nomination for Vice President of the United States. Before co-founding Empower America, Mr. Kemp served for four years as Secretary of Housing and Urban Development. Before his appointment to the Cabinet, Mr. Kemp represented New York for eighteen years in the United States House of Representatives. Mr. Kemp is also a director of Oracle Corporation, a computer software company, Speedway Motorsports, Inc., a promoter, marketer and sponsor of motor sports activities, Sideware Systems Inc., a producer of internet training video, SVT Inc., a provider of IT related professional services to businesses and Velocity Express Corporation, a large same-day delivery company.

      Byron S. Krantz has been the Secretary and a Director since March 1989. Mr. Krantz has been a partner in the law firm of Kohrman Jackson & Krantz P.L.L. since its formation in 1984.

      Dan T. Moore, III has served as a Director since March 1989. Mr. Moore has been the founder and owner of Dan T. Moore Company, Inc. since 1969 and the principal owner and Chairman of Flow Polymers since 1985, Soundwich, Inc. since 1988, Advanced Ceramics Corporation since 1993, and Team Wendy, LLC

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since 1998, all of which are manufacturing companies. He has been a director of Invacare Corporation, a manufacturer of health care equipment, since 1979, and a director of USEC Inc., a global energy company, since 1998. Mr. Moore is also a Trustee of the Cleveland Clinic Foundation and Chairman of Cleveland Clinic Home Care.

CERTAIN TRANSACTIONS

      Mr. Harbert holds $250,000 in principal amount of old notes and Mr. Berlin holds $25,000 in principal amount of old notes, totalling approximately 0.4% of the outstanding aggregate principal amount of old notes. Although these affiliates intend to tender their notes and consent to the proposed amendments, the old indenture prohibits us from counting their tenders and consents toward the satisfaction of the condition to the exchange offer that we receive valid and unrevoked tenders and consents representing at least a majority in aggregate outstanding principal amount of old notes.

      Mr. Weinberg and Mr. Harbert each issued notes to Hawk to repay debt incurred by them with respect to the acquisition of Helsel, Inc. in June 1995. The original principal amount of each note was $802,000. The notes are due and payable on July 1, 2005 and bear interest at the prime rate. In May 1998, each of Messrs. Weinberg and Harbert repaid $302,000 of their notes. The remaining outstanding principal amount of each note is $500,000.

      We are a party to an expense sharing arrangement under which we share the expenses of our Cleveland, Ohio headquarters with Weinberg Capital Corporation, of which Mr. Weinberg is President and sole shareholder. Pursuant to a formula based on full-time equivalent personnel, we pay approximately 98.3% of the overhead costs of the headquarters, including rent, utilities and copying, telephone and other expenses. The aggregate amounts of our payments for the shared headquarters were $98,299 in the first quarter of 2002, $417,518 in 2001, $354,365 in 2000 and $366,000 in 1999.

      Byron S. Krantz, a director and our Secretary, is a partner of the law firm of Kohrman Jackson & Krantz P.L.L., which provides legal services to us. We paid legal fees to Kohrman Jackson & Krantz P.L.L. of $179,796 in the first quarter of 2002, $384,287 in 2001, $462,704 in 2000 and $452,000 in 1999 for legal services in connection with a variety of legal matters.

      We purchase raw materials from Advanced Ceramics Corporation, of which Dan T. Moore, III is the Chairman of the Board, a director and a principal shareholder. Mr. Moore is one of our directors. The amounts of our payments for these raw materials were approximately $211,000 in the first quarter of 2002, $800,000 in 2001, $960,000 in 2000 and $874,000 in 1999, each of which represents less than 5% of either our or Advanced Ceramics’ consolidated gross revenues during the applicable period.

      We believe that the terms of the transactions and the agreements described above are on terms at least as favorable as those which we could otherwise have obtained from unrelated parties. On-going and future transactions with related parties will be on terms at least as favorable as those that we would be able to obtain from unrelated parties, for bona fide business purposes, and approved by a majority of the disinterested and non-employee directors.

DESCRIPTION OF OTHER INDEBTEDNESS

New Credit Facility

      Concurrently with the closing of the exchange offer, we expect to enter into the new credit facility. We expect to use the proceeds of the new credit facility to pay off the old credit facility in full, as well as pay transaction costs and provide for our future working capital needs. We expect the new credit facility to have a maximum commitment of $53.0 million and to mature no later than the earlier of four years from closing or 120 days prior to the maturity date of the new notes. In addition, we expect the interest rates on the new credit facility to range from 200 to 300 basis points over the London Interbank Offered Rates (LIBOR), or alternatively, 0 to 50 basis points over the prime rate on all loans other than capital expenditure loans and

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loans based on the fixed assets of the company and our U.S. subsidiaries, and from 250 to 350 basis points over LIBOR, or alternatively, 50 to 100 basis points over the prime rate on all capital expenditure loans and fixed asset loans. We expect that the initial interest rate on all loans except capital expenditure loans and loans based on the fixed assets of the company and its U.S. subsidiaries will be LIBOR plus 225 basis points, or alternatively, 0 basis points over the prime rate, and that any capital expenditure loans and fixed asset loans will have an initial interest rate of LIBOR plus 225 basis points, or alternatively, 50 basis points over the prime rate. We expect to have the ability to choose whether the interest rate on each loan is based on LIBOR or the prime rate, subject to customary restrictions.

      We expect that availability to borrow under the new credit facility will be subject to a borrowing base equal to the sum of (a) 85% of our eligible accounts receivable, plus (b) the lesser of 85% of the appraised net value of our inventory or 65% of the cost of our eligible inventory, plus (c) the lesser of 81% of the sum of the appraised net forced liquidation value of the machinery and equipment of the company and its U.S. subsidiaries plus the appraised net liquidation value of the real property of the company and its U.S. subsidiaries or $13.0 million. However, we expect availability based on clause (c) of the borrowing base description to be reduced on a straight line basis after the closing based on seven year amortization.

      Initially, we expect to pay a 0.375% per annum fee on the unused amount of the new credit facility. The fee is subject to change based on our future performance. We also expect the new credit facility to be subject to an early termination fee of 1.00% of the average commitment in case of termination prior to the first anniversary of the closing, 0.75% in case of termination prior to the second anniversary and 0.50% in case of termination prior to the third anniversary.

      We expect the new credit facility to be collateralized by a security interest in our domestic subsidiaries’ accounts receivable, inventory, equipment and real estate and other assets, and by a pledge of the stock of all of our U.S. subsidiaries. Restrictive terms of the new credit facility will require that we maintain specified financial ratios, including leverage and fixed charge coverage ratios, and comply with other loan covenants.

      We have not yet entered into a commitment letter with respect to the new credit facility, and the funding of the new credit facility will be subject to customary terms and conditions, including completion of due diligence and the exchange offer.

      The exchange offer and consent solicitation are subject to our ability to replace the old credit facility with the new credit facility on terms satisfactory to us in our sole discretion. See “The Exchange Offer — Conditions to the Exchange Offer.” We cannot assure you that we will be able to refinance the old credit facility by the expiration date of the exchange offer or any extension of that date.

Old Credit Facility

      At March 31, 2002, the old credit facility was comprised of a $25.0 million revolving credit component and a $16.3 million amortizing term loan subject to a borrowing base formula. The term loan has quarterly maturities of $1.25 million and the facility has a maturity date of March 31, 2003. As of March 31, 2002, we had $13.1 million outstanding under the revolving credit component of the facility and $1.3 million outstanding under standby letters of credit. The interest rates on the old credit facility range from 250 to 450 basis points over the Eurodollar rate, or alternatively, 125 to 325 basis points over the prime rate based on specified quarterly performance criteria. The old credit facility is collateralized by a security interest in our domestic subsidiaries’ accounts receivable, inventory, equipment and real estate and other assets, and we have pledged the stock of all of our U.S. subsidiaries and the stock of some of our foreign subsidiaries as collateral. Restrictive terms of the old credit facility require that we maintain specified financial ratios, including leverage, interest coverage and fixed charge ratios, and comply with other loan covenants. As of March 31, 2002, we were in compliance with the financial covenants set forth in the old credit facility, and we had approximately $8.2 million available for future borrowings under the old credit facility.

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Old Notes

      In November 1996, we issued $100.0 million in principal amount of old notes, of which $65.0 million in principal amount was outstanding at March 31, 2002. The old notes bear interest at 10.25% per annum and mature December 31, 2003. The old notes are general unsecured senior obligations and are fully and unconditionally guaranteed, on a joint and several basis, by all of our domestic wholly-owned subsidiaries. We have the option to redeem the old notes in whole or in part during the twelve months beginning December 1, 2001 at 102.563%, and beginning December 1, 2002 at 100.0% together with any interest accrued and unpaid to the redemption date. Upon a change of control as defined in the old indenture, each holder of the old notes will have the right to require us to repurchase all or any part of that holder’s old notes at a purchase price equal to 101% of the aggregate principal amount of the old notes, plus accrued and unpaid interest to the date of purchase.

      The old indenture permits us and our subsidiaries to incur additional debt without limitation, so long as we meet a cash flow coverage ratio at the time of occurrence. As of March 31, 2002, we did not meet the prescribed ratio. Our failure to meet the ratio does not constitute a default under the old indenture. Rather, the old indenture continues to permit some other types of debt, subject to limitations. The old credit facility, which is secured by liens on all of our assets and the assets of our the subsidiaries, is permitted. We do not believe our operations will be materially impacted by the limitations on debt arising under the old indenture.

      The old indenture prohibits the payment of cash dividends on our common stock. The old indenture also contains other covenants limiting our and our subsidiaries’ ability to, among other things, make some other kinds of restricted payments, make some kinds of investments, permit liens, incur dividend and other payment restrictions affecting subsidiaries, enter into consolidation, merger, conveyance, lease or transfer transactions, make asset sales, enter into transactions with affiliates or engage in unrelated lines of business. These covenants are subject to exceptions and qualifications. The old indenture considers non-compliance with these limitations to be events of default. In addition to non-payment of interest and principal amounts, the old indenture also considers a default with respect to other debt in excess of $5.0 million to be an event of default. In the event of a default, the principal and interest could be accelerated upon written notice by 25% or more of the holders of the old notes. As of March 31, 2002, we were in compliance with these covenants.

      In March 1997, we offered to exchange the initial unregistered series of old notes for a new series of old notes registered with the SEC and listed on the New York Stock Exchange.

Other Debt

      In addition to the old credit facility and old notes, as of March 31, 2002, we had approximately $6.6 million in outstanding debt under various loans and capital leases.

SUMMARY COMPARISON OF THE KEY DIFFERENCES BETWEEN

THE OLD INDENTURE, AS AMENDED, AND THE NEW INDENTURE

      The following table summarizes the key differences between the provisions of the new indenture as compared to the old indenture after giving effect to the proposed amendments. The definitions of some of the terms used in the following summary are set forth below under “Description of the New Notes — Definitions.” In this description, the word “Hawk” means only Hawk Corporation and not any of its subsidiaries. You should read the old indenture and the new indenture to determine the full extent of the differences. This summary is qualified in its entirety by reference to both indentures.

Old Indenture, as amended	New Indenture
Interest Rate: 10 1/4% per annum	Interest Rate:    % per annum
Maturity Date: December 1, 2003	Maturity Date: December 1, 2
Guarantees: None	Guarantees: The new notes will be fully and unconditionally guaranteed, on a joint and several basis, by our domestic wholly-owned subsidiaries.

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Old Indenture, as amended	New Indenture
Ranking: The old notes will be unsecured and will be: • effectively subordinated to the new notes and all of Hawk’s and the guarantors’ secured debt, including any amounts we borrow under the new credit facility, • effectively subordinated to all debt, including trade payables, of all of Hawk’s direct or indirect subsidiaries, • equal to all of Hawk’s unsecured, unguaranteed and unsubordinated debt, and • senior to all subordinated debt, if any, of Hawk.	Ranking: The new notes will be unsecured and will be: • effectively senior to the old notes, any other debt of Hawk that is not guaranteed by its subsidiaries and all subordinated debt, if any, of Hawk and the guarantors, • equal to all of Hawk’s and the guarantors’ unsecured and unsubordinated debt, • effectively subordinated to all of Hawk’s and the guarantors’ secured debt, including any amounts we borrow under the new credit facility, and • effectively subordinated to all debt, including trade payables, of Hawk’s direct or indirect subsidiaries that are not guarantors of the new notes.
Optional Redemption: We have the option to redeem the old notes in whole or in part during the twelve months beginning December 1, 2001 at 102.563%, and beginning December 1, 2002 and thereafter at 100.000% together with any interest accrued and unpaid to the redemption date.	Optional Redemption: We will not be able to redeem the new notes before                , 2   . Thereafter, we will have the option to redeem the new notes in whole or in part at    % of their principal amount together with any interest accrued and unpaid to the redemption date.
Restrictive Covenants: None	Restrictive Covenants: The new indenture will contain all of the covenants relating to the old notes before giving effect to the amendments of the old indenture and on substantially the same terms. See “Description of the New Notes — Covenants” for more details.
Defaults: The following will no longer constitute events of default: • a default by us or the guarantors on other debt, • final judgments or orders not paid or discharged, • bankruptcy, insolvency or liquidation, and • a default under any Guarantee.	Defaults: The new indenture will contain all of the events of default that were in the old indenture before giving effect to the proposed amendments, and on the same terms. See “Description of the New Notes — Events of Default” for more details.

      See “The Consent Solicitation — The Proposed Amendments” and Annex A to this prospectus and consent solicitation statement for the reprinted text of the provisions of the old indenture that will be deleted by the proposed amendments.

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DESCRIPTION OF THE NEW NOTES

      In this section, the words “company,” “we,” “us” and “our” refer to Hawk and not to any of its subsidiaries and the term “New Credit Facility” has the meaning described in the definitions section below. In addition, we use defined terms in this section to simplify the description of the new notes. The definitions can be found under “ — Definitions” beginning on page 84. Other terms are defined in the new indenture.

      We will issue the new notes under an indenture by and between Hawk, the guarantors and HSBC Bank USA, as trustee, which we refer to as the new indenture in this prospectus and consent solicitation statement. The terms of the new notes include those stated in the new indenture and those made part of the new indenture by reference to the Trust Indenture Act of 1939.

      The following description is a summary of selected provisions of the new indenture and the new notes. We have not restated the new indenture in its entirety. We urge you to read the new indenture because it, and not this description, will control your rights as a holder of the new notes. A copy of the new indenture may be obtained as described under “Where You Can Find Additional Information” or from the information agent.

General

      The new notes will:

•   be general unsecured obligations of the company,

•   be unconditionally guaranteed by the guarantors, jointly and severally,

•   be effectively senior in right of payment to the old notes, any other Indebtedness of the company that is not guaranteed by its Subsidiaries and any Subordinated Indebtedness of the company and the guarantors,

•   rank equal in right of payment with all unsecured and unsubordinated Indebtedness of the company and the guarantors, which totalled $3.1 million at March 31, 2002,

•   be effectively subordinated in right of payment to all secured Indebtedness of the company and the guarantors, which totalled $32.4 million at March 31, 2002, and would include any amounts we borrow under any New Credit Facility,

•   be effectively subordinated in right of payment to all existing and future Indebtedness of the company’s Subsidiaries that are not guarantors, which totalled $0.5 million at March 31, 2002, and

•   be effectively subordinated in right of payment to all trade payables of the company’s direct and indirect Subsidiaries that are not guarantors, which totalled $3.6 million at March 31, 2002.

      See “Risk Factors — Risks Relating to the New Notes — Some of our other debt will rank ahead of the new notes.”

Principal, Maturity and Interest

      The new notes will be limited to $        million in aggregate principal amount, and we will issue new notes of up to $65.0 million in the exchange offer. Subject to the foregoing, we may, without notice to or the consent of any holder, issue additional notes of this series from time to time. Any additional new notes will form a single series with the new notes issued in the exchange offer. The issuance of additional new notes is subject to the limitations set forth below under “— Covenants — Limitation on Incurrence of Indebtedness.”

      The new notes will mature on December 1, 2                              . Interest on the new notes will accrue at the rate of           % per annum and will be payable semi-annually in arrears on June 1 and December 1 in each year, commencing on December 1, 2002. We will make each interest payment to the holders of record of the new notes on the immediately preceding May 15 and November 15. Interest on the new notes will accrue from the date of issuance and from the most recent date thereafter. Interest will be computed on the basis of a 360-day year consisting of twelve 30-day months.

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      We will pay principal of, premium, if any, and interest on, the new notes at the office or agency of the company maintained for that purpose in the City of New York or, at our option, pay interest by mailing checks to the holders of the new notes at their respective addresses as set forth in the register of holders of new notes. Until we designate otherwise, our office or agency in the City of New York will be the office of the trustee maintained for that purpose. We will issue the new notes in fully registered form, without coupons, and in denominations of $1,000 and integral multiples of that amount, except that we may, in our sole discretion, elect to issue new notes in denominations of less than $1,000. We will not assess a service charge for any transfer, exchange or redemption of new notes except for any applicable taxes or other governmental charges.

The Guarantees

      The guarantors will jointly and severally guarantee (each, a “Guarantee”) our obligations under the new notes and the new indenture. The guarantors are all of our direct or indirect domestic Subsidiaries. If we create or acquire a new domestic subsidiary that is not already a guarantor, then that Subsidiary will become a guarantor under the new notes and the new indenture. We are not restricted from selling or otherwise disposing of any of the guarantors except as provided below in “— Covenants — Limitation on Asset Sales” and “— Covenants — Merger, Consolidation and Sale of Assets.”

      Each guarantor will irrevocably and unconditionally guarantee, jointly and severally, the punctual payment of all of our obligations under the new notes. Although there can be no assurance that a court would not hold otherwise, each Guarantee will contain provisions intended to prevent the Guarantee from constituting a fraudulent conveyance under applicable law.

      Each Guarantee will:

•   be a general, unsecured obligation of the guarantor,

•   be effectively senior in right of payment to the old notes, any other Indebtedness of the company that is not guaranteed by its subsidiaries and any Subordinated Indebtedness of the company and the guarantor,

•   rank equal in right of payment with all existing and future unsecured and unsubordinated Indebtedness of the guarantor and the company,

•   be effectively subordinated in right of payment to all secured Indebtedness of the guarantor and the company, including any amounts we borrow under any New Credit Facility, and

•   be effectively subordinated in right of payment to all existing and future Indebtedness, including trade payables, of the company’s Subsidiaries that are not guarantors of the new notes.

      Pursuant to the Guarantees, if we default in payment of any amount owing in respect of any new notes, each guarantor will be obligated to duly and punctually pay the same. Pursuant to the terms of the new indenture, each of the guarantors has agreed that its obligations under its Guarantee will be unconditional, irrespective of the validity, regularity or enforceability of the new notes or the new indenture, the absence of any action to enforce the same or any other circumstance that might otherwise constitute a legal or equitable discharge or defense of a guarantor.

      Concurrently with the creation or acquisition by the company of any Subsidiary (other than a Foreign Subsidiary and other than an Unrestricted Subsidiary), the company, the Subsidiary and the trustee will execute and deliver a supplement to the new indenture providing that the Subsidiary will be a guarantor thereunder.

      If no Default exists or would exist under the new indenture, concurrently with any sale or disposition (by merger or otherwise) of any guarantor (other than a transaction subject to the provisions described under “— Covenants — Merger, Consolidation and Sale of Assets”) by the company or a Restricted Subsidiary to any person that is not an Affiliate of the company or any of the Restricted Subsidiaries that is in compliance

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with the terms of the new indenture, then the guarantor and each Subsidiary of the guarantor that is also a guarantor will automatically and unconditionally be released from all obligations under its Guarantee.

      The obligations of each guarantor will be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of the guarantor, result in the obligations of the guarantor under the Guarantee not constituting a fraudulent conveyance or fraudulent transfer under federal or state law.

Redemption

      Mandatory Redemption. We will not be required to make any mandatory sinking fund payments with respect to the new notes before their maturity.

      Optional Redemption. We may at our option redeem all or any part of the new notes at any time on or after December 1, 2                              , at the redemption prices (expressed as percentages of the principal amount of the new notes) set forth below, plus in each case accrued and unpaid interest, if any, to the date of redemption, if redeemed during the twelve-month period beginning on December 1 of the years indicated below:

Year Percentage

      If we elect to redeem less than all of the new notes at any time, then the trustee will select the new notes to be redeemed in compliance with the requirements of the principal national securities exchange, if any, on which the new notes are listed or, if the new notes are not listed on a securities exchange, on a pro rata basis or by lot or any other method the trustee deems fair and appropriate, except that partially redeemed new notes will only be redeemed in integral multiples of $1,000. We will mail notices of any redemption by first class mail at least 30 but not more than 60 days before the redemption date to each holder of new notes to be redeemed at the holder’s registered address. If any new note is to be redeemed in part only, then the notice of redemption that relates to the new note will state the portion of the principal amount of the new note to be redeemed, and the trustee will authenticate and mail to the holder of the original new note a replacement new note in principal amount equal to the unredeemed portion of the original new note promptly after the original new note has been canceled. On and after the redemption date, interest will cease to accrue on the new notes called for redemption.

Change of Control

      In the event of a Change of Control, each holder of new notes will have the right, unless we have given a notice of redemption, subject to the terms and conditions of the new indenture, to require us to offer to purchase all or any portion of the holder’s new notes at a purchase price in cash equal to 101% of the aggregate principal amount of the new notes plus accrued and unpaid interest, if any, to the date of purchase (a “Change of Control Offer”).

      We expect any New Credit Facility to restrict our ability to purchase new notes pursuant to a Change of Control Offer. Any additional credit agreements or other agreements relating to unsubordinated debt to which we become a party may contain similar restrictions. Moreover, we expect any New Credit Facility to contain a “change of control” provision that is similar to the provision in the new indenture relating to a Change of Control, in which event the occurrence of a “change of control” would constitute a default under that New Credit Facility.

      If we are unable to obtain the requisite consents or repay all debt that restricts our ability to repurchase the new notes upon the occurrence of a Change of Control, then we may not be able to commence a Change of Control Offer to purchase the new notes within 30 days of the occurrence of the Change of Control. This failure would constitute an Event of Default under the new indenture. Any failure to commence a Change of Control Offer is also expected to constitute an event of default under any New Credit Facility that would permit the lenders thereunder to accelerate all of our debt under that New Credit Facility. If a Change of Control were to occur, we cannot assure you that the company would have sufficient assets to first satisfy its

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obligations under any New Credit Facility or other agreements relating to debt, if accelerated, and then to purchase all of the new notes that might be delivered by holders seeking to accept a Change of Control Offer.

      On or before the 30th day following the occurrence of any Change of Control, we will mail to each holder of new notes, at the holder’s registered address, a notice stating:

•   that a Change of Control has occurred and that the holder has the right to require us to purchase all or a portion (equal to $1,000 or an integral multiple of that amount) of the holder’s new notes at a purchase price in cash equal to 101% of the aggregate principal amount of the new notes, plus accrued and unpaid interest, if any, to the date of purchase (the “Change of Control Purchase Date”), which must be a business day, specified in the notice, that is not earlier than 30 days or later than 60 days from the date the notice is mailed,

•   the amount of accrued and unpaid interest, if any, as of the Change of Control Purchase Date,

•   that any new note not tendered will continue to accrue interest,

•   that, unless we default in the payment of the purchase price for the new notes payable pursuant to the Change of Control Offer, any new notes accepted for payment pursuant to the Change of Control Offer will cease to accrue interest on the Change of Control Purchase Date,

•   the procedures, consistent with the Indenture, to be followed by a holder of new notes to accept a Change of Control Offer or to withdraw the acceptance, and

•   any other information required by the new indenture and applicable laws and regulations.

      On the Change of Control Purchase Date, we will:

•   accept for payment all new notes tendered pursuant to the Change of Control Offer,

•   deposit with the Paying Agent the aggregate purchase price of all new notes accepted for payment, and

•   deliver or cause to be delivered to the trustee all new notes tendered pursuant to the Change of Control Offer.

      The Paying Agent will promptly mail to each holder of new notes accepted for payment an amount equal to the purchase price for the new notes plus accrued and unpaid interest, if any, due under the new notes, and the trustee will promptly authenticate and mail to each holder of new notes accepted for payment in part a replacement new note equal in principal amount to any unpurchased portion of the new notes, and any new note rejected for payment in whole or in part will be promptly returned to the holder of the new note. On and after a Change of Control Purchase Date, interest will cease to accrue on the new notes accepted for payment, unless we default in the payment of the purchase price. We will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Purchase Date.

      We will comply with the applicable tender offer rules, including the requirements of Section 14(e) and Rule 14e-1 under the Exchange Act of 1934, and all other applicable securities laws and regulations in connection with any Change of Control Offer and will be deemed not to be in violation of any of the covenants under the new indenture to the extent that compliance is in conflict with those covenants.

Covenants

      Limitation on Incurrence of Indebtedness. The new indenture provides that we will not, and will not permit any Restricted Subsidiary to, create, incur, issue, assume or directly or indirectly guarantee or in any other manner become directly or indirectly liable for (“incur”) any Indebtedness (including Acquired Debt), except that we may incur Indebtedness (including Acquired Debt) if, at the time of, and immediately after giving pro forma effect to, the incurrence of Indebtedness, the Consolidated Cash Flow Coverage Ratio of the company for the most recently ended four fiscal quarters would be at least 2.25 to 1.0.

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      The foregoing limitations do not apply to the incurrence of any of the following (collectively, “Permitted Indebtedness”), each of which will be given independent effect:

•   Indebtedness arising under any New Credit Facility in an aggregate principal amount not to exceed, at any time outstanding, the greater of (1) $55.0 million, less any permanent reduction in commitments under any New Credit Facility that result from the application of Excess Proceeds from an Asset Sale as provided below in “— Covenants — Limitation on Asset Sales,” or (2) the sum, at that time, of (a) 85% of the consolidated book value of net accounts receivable of the company and the Restricted Subsidiaries, plus (b) 60% of the consolidated book value of inventory of the company and the Restricted Subsidiaries, plus (c) $13.0 million, less any scheduled permanent reductions in commitments under any New Credit Facility.

•   Indebtedness represented by the new notes and the Guarantees,

•   other Indebtedness that is outstanding on the Issue Date (“Existing Indebtedness”),

•   Indebtedness owed by any Restricted Subsidiary to the company or to another Restricted Subsidiary, or owed by us to any Restricted Subsidiary that, if owed to a Restricted Subsidiary that is not a guarantor, is unsecured and subordinated in right of payment to the payment and performance of our obligations under the new indenture and the new notes, except that this Indebtedness must at all times be held by a Person that is either the company or a Restricted Subsidiary, and except that upon either (1) the transfer or other disposition of any of the Indebtedness to a Person other than the company or another Restricted Subsidiary or (2) the sale, lease, transfer or other disposition of shares of Capital Stock (including by consolidation or merger) of that Restricted Subsidiary to a Person other than the company or another Restricted Subsidiary, the incurrence of the Indebtedness will be deemed to be an incurrence of Indebtedness that is not permitted by this bullet point,

•   Indebtedness arising with respect to Interest Rate Agreement Obligations and Currency Agreement Obligations we incur for the purpose of fixing or hedging interest rate risk or currency risk with respect to any fixed or floating rate Indebtedness that the terms of the new indenture permit to be outstanding or with respect to any receivable or liability the payment of which is determined by reference to a foreign currency,

•   Indebtedness represented by performance, completion, guarantee, surety and similar bonds provided by the company or any Restricted Subsidiary in the ordinary course of business consistent with past practice,

•   Any Indebtedness incurred in connection with or given in exchange for the renewal, extension, substitution, refunding, defeasance, refinancing or replacement (a “refinancing”) of any Indebtedness of the company or a Restricted Subsidiary incurred as permitted under the first paragraph of the description of this covenant or any Indebtedness described in the first three bullet points of this paragraph on Permitted Indebtedness and this bullet point (“Refinancing Indebtedness”), except that:

•  the principal amount of the Refinancing Indebtedness may not exceed the principal amount (or accreted amount, if less) of the Indebtedness so refinanced (plus the premiums and reasonable expenses to be paid in connection with the Refinancing Indebtedness, that, with respect to those premiums, may not exceed the stated amount of any premium or other payment required to be paid in connection with a refinancing pursuant to the terms of the Indebtedness being refinanced),

•  the maturity of the Refinancing Indebtedness may not be shorter than the maturity of the Indebtedness being refinanced,

•  the Refinancing Indebtedness must have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being refinanced, and

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•  the Refinancing Indebtedness must be at least as subordinated in right of payment to the new notes as the Indebtedness being refinanced,

•   Indebtedness of the company or any Restricted Subsidiary (1) representing Capitalized Lease Obligations and any refinancings of Capitalized Lease Obligations or (2) in respect of Purchase Money Obligations for property acquired, constructed or improved in the ordinary course of business and any refinancings of Capitalized Lease Obligations, that taken together do not exceed $5.0 million in the aggregate at any time outstanding,

•   Commodity agreements entered into in the ordinary course of business to protect against fluctuations in the prices of raw materials and not for speculative purposes,

•   Indebtedness constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance,

•   guarantees by the company of Indebtedness of a Restricted Subsidiary that the new indenture permits to be incurred and guarantees by the guarantors of Indebtedness of the company or a Restricted Subsidiary that the new indenture otherwise permits to be incurred,

•   Indebtedness arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other than guarantees of Indebtedness incurred by any Person acquiring all or any portion of the business, assets or a Subsidiary for the purpose of financing the acquisition, so long as the maximum liability in respect of the Indebtedness does not exceed the gross proceeds actually received by the company and its Restricted Subsidiaries in connection with the disposition, and

•   Indebtedness in addition to that described in the foregoing bullet points, and any renewals, extensions, substitutions, refinancings or replacements of that Indebtedness, so long as the aggregate principal amount of all the Indebtedness incurred pursuant to this bullet point does not exceed $5.0 million at any one time outstanding.

      For purposes of determining any particular amount of Indebtedness under this covenant, if an item of Indebtedness meets the criteria of more than one of the categories of Permitted Indebtedness described in the foregoing bullet points or is entitled to be incurred pursuant to the Consolidated Cash Flow Coverage Ratio provision, then we will classify or later reclassify that item of Indebtedness in any manner that complies with this covenant. In addition, guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of the particular amount will not be included for purposes of determining any particular amount of Indebtedness under this covenant.

      Accrual of interest, accretion or amortization of original issue discount, the payment of interest on Indebtedness in the form of additional Indebtedness with the same terms and the payment of dividends on Disqualified Stock in the form of additional shares of the same class of Disqualified Stock will not be deemed to be an incurrence of additional Indebtedness or an issuance of Disqualified Stock for purposes of this covenant.

      Indebtedness of any Person that is outstanding at the time that Person becomes a Restricted Subsidiary or is merged with or into or consolidated with us or a Restricted Subsidiary will be deemed to have been incurred at the time the Person becomes a Restricted Subsidiary or is merged with or into or consolidated with us or a Restricted Subsidiary, and Indebtedness that is assumed at the time of the acquisition of any asset will be deemed to have been incurred at the time of the acquisition.

      Limitation on Restricted Payments. The new indenture provides that we will not, and will not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment, unless at the time of and

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immediately after giving effect to the proposed Restricted Payment (with the value of that Restricted Payment, if other than cash, to be determined reasonably and in good faith by our Board of Directors):

•   no Default or Event of Default has occurred and is continuing or would occur as a consequence of making the Restricted Payment,

•   we could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the covenant described under “— Covenants — Limitation on Incurrence of Indebtedness,” and

•   the aggregate amount of all Restricted Payments made after the Issue Date does not exceed the sum of:

•  an amount equal to 50% of our aggregate cumulative Consolidated Net Income accrued on a cumulative basis during the period (treated as one accounting period) beginning on November 27, 1996 and ending on the date of the proposed Restricted Payment (or, if our aggregate cumulative Consolidated Net Income for that period is a deficit, minus 100% of the deficit), plus

•  the aggregate amount of all net cash proceeds we received after November 27, 1996 from the issuance and sale (other than to a Restricted Subsidiary) of, or equity contribution with respect to, Capital Stock (other than Disqualified Stock) and the principal amount of Indebtedness of the company or any Restricted Subsidiary that has been converted into or exchanged for Capital Stock (other than Disqualified Stock), in each case to the extent that the proceeds are not used to (1) redeem, repurchase, retire or otherwise acquire Capital Stock or any Indebtedness of the company or any Restricted Subsidiary pursuant to the second bullet point of the next paragraph on Permitted Payments or (2) make any Restricted Investment pursuant to the fourth bullet point of the next paragraph on Permitted Payments, plus

•  the amount of the net reduction in Investments in Unrestricted Subsidiaries resulting from (1) the payment of dividends or the repayment in cash of the principal of loans or the cash return on any Investment, in each case to the extent received by us or any Restricted Subsidiary from Unrestricted Subsidiaries, (2) the release or extinguishment of any guarantee of Indebtedness of any Unrestricted Subsidiary and (3) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued as provided in the definition of “Investment”), and the aggregate amount of the net reduction in Investments does not exceed in the case of any Unrestricted Subsidiary the amount of Restricted Investments previously made by us or any Restricted Subsidiary in the Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments; plus

•  to the extent that any Restricted Investment we made after November 27, 1996 is sold for cash or otherwise liquidated or repaid for cash, the amount of cash proceeds received with respect to that Restricted Investment, net of taxes and the cost of disposition, which amount may not exceed the amount of Restricted Investments made after November 27, 1996.

      The foregoing provisions will not prohibit us from taking any of the following actions (collectively, “Permitted Payments”):

•   paying any dividend within 60 days after the date of its declaration, if at the declaration date the new indenture would have permitted the payment (which payment will be deemed to have been paid on the date of declaration for purposes of the third bullet point of the preceding paragraph),

•   redeeming, repurchasing, retiring or otherwise acquiring any Capital Stock or any Subordinated Indebtedness of the company or any Restricted Subsidiary in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Restricted Subsidiary) of, or equity contribution with respect to, our Capital Stock (other than any Disqualified Stock),

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•   purchasing or defeasing Subordinated Indebtedness to the extent made with permitted Refinancing Indebtedness or required upon a change of control or asset sale by the agreement or instrument pursuant to which the Subordinated Indebtedness was issued, but only if we (1) in the case of a Change of Control, have complied with our obligations under the provisions described under “— Change of Control” or (2) in the case of an Asset Sale, have applied the Net Proceeds from the Asset Sale in accordance with the provisions described under “— Covenants — Limitation on Asset Sales,”

•   making any Restricted Investment with the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, or equity contribution with respect to, our Capital Stock (other than any Disqualified Stock),

•   making loans or advances to our or our Subsidiaries’ employees to the extent they exist on the Issue Date or are made after the Issue Date to pay reasonable relocation expenses,

•   making Restricted Investments to the extent the sum of the aggregate amount of Restricted Investments made pursuant to this bullet point after the Issue Date does not exceed $5.0 million at any time, and

•   paying any dividend on, or redeeming any or all of, our redeemable 9.8% cumulative preferred stock, par value, $0.01 per share, Series D, outstanding on the Issue Date,

so long as, in the case of the third and sixth bullet points above, no Default or Event of Default has occurred and is continuing.

      For purposes of the third bullet point of the first paragraph of the description of this covenant, the Permitted Payments referred to in the first and sixth bullet points describing Permitted Payments above will be included in the aggregate amount of Restricted Payments made since the Issue Date, and any other Permitted Payments described above will be excluded.

      Limitation on Asset Sales. The new indenture provides that we will not, and will not permit any Restricted Subsidiary to, make any Asset Sale unless (1) we or the Restricted Subsidiary, as the case may be, receive consideration at the time of the Asset Sale at least equal to the fair market value (as evidenced by a resolution of our Board of Directors set forth in an Officers’ Certificate we deliver to the trustee) of the assets or other property sold or disposed of in the Asset Sale and (2) at least 75% of the consideration consists of either cash or Cash Equivalents.

      For purposes of this covenant, “cash” will include (1) the amount of any Indebtedness (other than any Indebtedness that is by its terms subordinated to the new notes) of the company or the Restricted Subsidiary as shown on the most recent balance sheet of the company or the Restricted Subsidiary or in the notes thereto that is assumed by the transferee of any of those assets or other property in the Asset Sale (and excluding any liabilities that are incurred in connection with or in anticipation of the Asset Sale), but only to the extent that the assumption is effected so that there is no further recourse to the company or any of the Restricted Subsidiaries with respect to those liabilities and (2) any notes, obligations or securities received by the company or the Restricted Subsidiary from the transferee that we or the Restricted Subsidiary converts into cash within 60 days (to the extent of the cash received).

      Within 365 days after any Asset Sale, we may elect to apply the Net Proceeds from the Asset Sale to (1) permanently reduce any of our Senior Debt or (2) make an investment in, or acquire assets and properties that will be used in, the business of the company and the Restricted Subsidiaries existing on the Issue Date or in businesses reasonably related thereto. Pending the final application of any of the Net Proceeds, the company or any Restricted Subsidiary may temporarily reduce the Indebtedness under any New Credit Facility or temporarily invest the Net Proceeds in any Investments described under the first three bullet points of the description of Permitted Investments above. Any Net Proceeds from an Asset Sale not applied or invested as provided in the first sentence of this paragraph within 365 days of the Asset Sale will be deemed to constitute “Excess Proceeds.”

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      Each date that the aggregate amount of Excess Proceeds in respect of which an Asset Sale Offer (as defined below) has not been made exceeds $5.0 million will be deemed an “Asset Sale Offer Trigger Date.” As soon as practicable, but in no event later than 20 business days after each Asset Sale Offer Trigger Date, we will commence an offer (an “Asset Sale Offer”) to purchase the maximum principal amount of new notes that may be purchased out of the Excess Proceeds. We will purchase any new notes to be purchased pursuant to an Asset Sale Offer pro rata based on the aggregate principal amount of new notes outstanding, and will purchase all new notes at an offer price in cash in an amount equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to the date of purchase. To the extent that any Excess Proceeds remain after completion of an Asset Sale Offer, we may use the remaining amount for general corporate purposes otherwise permitted by the new indenture. If we are prohibited under the terms of any agreement governing our outstanding Senior Debt from repurchasing new notes with Excess Proceeds pursuant to an Asset Sale Offer as set forth in the first sentence of this paragraph, then we will promptly use all Excess Proceeds to permanently reduce our outstanding Senior Debt. Upon consummation of any Asset Sale Offer, the amount of Excess Proceeds will be deemed to be reset to zero.

      We will mail notice of an Asset Sale Offer not later than the 20th business day after the related Asset Sale Offer Trigger Date to each holder of new notes, at the holder’s registered address, stating:

•   that an Asset Sale Offer Trigger Date has occurred and that we are offering to purchase the maximum principal amount of new notes that may be purchased out of the Excess Proceeds (to the extent provided in the preceding paragraph), at an offer price in cash in an amount equal to 100% of their principal amount, plus accrued and unpaid interest, if any, to the date of the purchase (the “Asset Sale Offer Purchase Date”), which must be a business day, specified in the notice, that is not earlier than 30 days or later than 60 days from the date the notice is mailed,

•   the amount of accrued and unpaid interest, if any, as of the Asset Sale Offer Purchase Date,

•   that any new note not tendered will continue to accrue interest,

•   that, unless we default in the payment of the purchase price for the new notes payable pursuant to the Asset Sale Offer, any new notes we accept for payment pursuant to the Asset Sale Offer will cease to accrue interest after the Asset Sale Offer Purchase Date,

•   the procedures, consistent with the new indenture, that a holder of new notes must follow to accept an Asset Sale Offer or to withdraw its acceptance, and

•   any other information required by the new indenture and applicable laws and regulations.

      On the Asset Sale Offer Purchase Date, we will:

•   accept for payment the maximum principal amount of new notes tendered pursuant to the Asset Sale Offer that we can purchase out of the Excess Proceeds from the Asset Sale that are to be applied to the Asset Sale Offer,

•   deposit with the Paying Agent the aggregate purchase price of all new notes accepted for payment, and

•   deliver to the trustee all new notes tendered pursuant to the Asset Sale Offer.

      If we accept less than all new notes tendered pursuant to the Asset Sale Offer for payment for any reason consistent with the new indenture, then the selection of the new notes we will purchase will be in compliance with the requirements of the principal national securities exchange, if any, on which the new notes are then listed or, if the new notes are not so listed, on a pro rata basis or by lot, except that any new notes we accept for payment in part will only be purchased in integral multiples of $1,000. The Paying Agent will promptly mail to each holder of new notes accepted for payment an amount equal to the purchase price for the new notes plus accrued and unpaid interest, if any, and the trustee will promptly authenticate and mail to the holder of new notes accepted for payment in part a replacement new note equal in principal amount to any unpurchased portion of the new notes, and will promptly return any new note we do reject for payment in whole or in part to the holder of the new note. On and after an Asset Sale Offer Purchase Date, interest will

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cease to accrue on the new notes accepted for payment, unless we default in the payment of the purchase price. We will publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Asset Sale Offer Purchase Date.

      The foregoing provisions will not apply to any transaction we consummate in compliance with the provisions of the new indenture described under “— Covenants — Merger, Consolidation and Sale of Assets” below.

      We will comply with the applicable tender offer rules, including the requirements of Section 14(e) and Rule 14e-1 under the Exchange Act, and all other applicable securities laws and regulations in connection with any Asset Sale Offer and we will be deemed not to be in violation of any of the covenants under the new indenture to the extent that compliance is in conflict with those covenants.

      Limitation on Liens. The new indenture provides that we will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Lien securing Indebtedness (other than Permitted Liens) on any asset now owned or hereafter acquired, or any income or profits from that asset, or assign or convey any right to receive income from that asset to secure that Indebtedness, except that (1) if the Lien secures Indebtedness that is equal in right of payment with the new notes, then the new notes must be secured on an equal and ratable basis with the obligations so secured until the obligation is no longer secured by a Lien or (2) if the Lien secures Indebtedness that is subordinated to the new notes, then the Lien must be subordinated to a Lien granted to the holders of the new notes in the same collateral as that securing the Lien to the same extent as the subordinated Indebtedness is subordinated to the new notes.

      Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries. The new indenture provides that we will not, and will not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause to become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to:

•   pay dividends or make any other distributions to the company or any other Restricted Subsidiary on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the company or any other Restricted Subsidiary,

•   make loans or advances to, or issue guarantees for the benefit of, the company or any other Restricted Subsidiary, or transfer any of its properties or assets to the company or any other Restricted Subsidiary, except for any encumbrances or restrictions existing under or by reason of:

•  any New Credit Facility,

•  applicable law,

•  any instrument governing Indebtedness or Capital Stock of an Acquired Person acquired by the company or any of its Restricted Subsidiaries as in effect at the time of the acquisition (except to the extent the Indebtedness was incurred in connection with or in contemplation of the acquisition), so long as the encumbrance or restriction is not applicable to any Person, or the properties or assets of any Person, other than the Acquired Person,

•  customary non-assignment, subletting or net worth provisions in leases or other agreements entered into in the ordinary course of business and consistent with past practices,

•  Purchase Money Indebtedness for property acquired in the ordinary course of business that impose restrictions only on the property so acquired,

•  an agreement for the sale or disposition of assets or the Capital Stock of the Restricted Subsidiary, so long as the restriction or encumbrance is only applicable to the Restricted Subsidiary or assets, as applicable, and the sale or disposition otherwise is permitted by the provisions described under “— Covenants — Limitation on Asset Sales,” and so long as the restriction or encumbrance is effective only for a period from the execution and delivery of the agreement through a termination date not later than 180 days after its execution and delivery,

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•  Refinancing Indebtedness permitted under the new indenture,

•  the new indenture, the new notes and the Guarantees,

•  other Indebtedness permitted to be incurred after the Issue Date pursuant to the provisions of the covenant described under “— Covenants — Limitation on Incurrence of Indebtedness,” so long as the restrictions are ordinary and customary with respect to the type of Indebtedness being incurred,

•  encumbrances and restrictions imposed by Liens incurred in accordance with the covenant described in “— Covenants — Limitation on Liens,”

•  customary provisions in joint venture agreements and other similar agreements, and

•  encumbrances and restrictions imposed by amendments, restatements, renewals, replacements or refinancings of the contracts, instruments or obligations referred to in the foregoing bullet points, so long as the encumbrances and restrictions are, in the good faith judgment of our Board of Directors, no more restrictive, in any material respect, than those contained in the contracts, instruments or obligations immediately before the amendment, restatement, renewal, replacement or refinancing.

      Limitation on Transactions with Affiliates. We will not, and will not permit any Restricted Subsidiary to, directly or indirectly, enter into, renew or extend any transaction or series of related transactions (including the sale, purchase, exchange or lease of assets, property or services) with any of our Affiliates unless (1) the transaction or series of transactions is on terms that are no less favorable to the company or the Restricted Subsidiary, as the case may be, than those that could reasonably be obtainable at that time in a comparable transaction in arm’s-length dealings with an unrelated third party and (2) we deliver to the trustee:

•   with respect to any transaction or series of transactions involving aggregate payments in excess of $500,000 annually, an Officers’ Certificate certifying that the transaction or series of related transactions complies with clause (1) above, and

•   with respect to any transaction or series of transactions involving aggregate payments in excess of $2.0 million annually, an Officers’ Certificate certifying that the transaction or series of related transactions has been approved by a majority of the members of our Board of Directors (and approved by a majority of the Independent Directors or, in the event there is only one Independent Director, by the Independent Director), and

•   with respect to any transaction or series of transactions involving aggregate payments in excess of $5.0 million annually, an opinion as to the fairness to the company from a financial point of view issued by an investment banking firm of national standing.

      However, this covenant will not apply to:

•   employment agreements or compensation or employee benefit arrangements with any officer, director or employee of the company or any of its Restricted Subsidiaries entered into in the ordinary course of business (including customary benefits thereunder and including reimbursement or advancement of out-of-pocket expenses, and director’s and officer’s liability insurance),

•   the expense sharing arrangement between the company and Weinberg Capital Corporation regarding the expenses incurred with respect to our Cleveland, Ohio headquarters,

•   any transaction entered into by or among the company or any of its Restricted Subsidiaries with one or more of its Restricted Subsidiaries,

•   any transaction permitted under the second paragraph of “— Covenants — Limitation on Restricted Payments,”

•   transactions permitted by, and complying with, the provisions described under “— Covenants — Merger, Consolidation and Sale of Assets,” and

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•   transactions with suppliers or other purchases or sales of goods or services, in each case in the ordinary course of business (including, without limitation, pursuant to joint venture agreements) and otherwise in compliance with the terms of the new indenture which, in the reasonable determination of our Board of Directors, are on terms no less favorable to the company or its Restricted Subsidiaries than those we could reasonably have obtained at that time from an unaffiliated party.

      Limitation on Designation of Unrestricted Subsidiaries. The new indenture provides that we will not designate any Subsidiary (other than a newly created Subsidiary in which no Investment has previously been made) as an “Unrestricted Subsidiary” under the new indenture (a “Designation”) unless:

•   no Default has occurred and is continuing at the time of or after giving effect to the Designation,

•   immediately after giving effect to the Designation, we would be able to incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under “— Covenants — Limitation on Incurrence of Indebtedness,” and

•   the new indenture would not prohibit us from making an Investment at the time of Designation in an amount (the “Designation Amount”) equal to the greater of (1) the book value of the Restricted Subsidiary on that date and (2) the Fair Market Value of the Restricted Subsidiary on that date.

      In the event of a Designation, we will be deemed to have made an Investment in the Designation Amount constituting a Restricted Payment under “— Covenants — Limitation on Restricted Payments” for all purposes of the new indenture.

      The new indenture will further provide that we will not designate an Unrestricted Subsidiary as a Restricted Subsidiary (a “Redesignation”), unless (1) no Default has occurred and is continuing at the time of and after giving effect to the Redesignation, and (2) all Liens and Indebtedness of the Unrestricted Subsidiary outstanding immediately following the Redesignation are deemed to have been incurred at that time and have been permitted to be incurred for all purposes of the new indenture.

      An Unrestricted Subsidiary will be deemed to be redesignated as a Restricted Subsidiary at any time if:

•   the company or any other Restricted Subsidiary (1) provides credit support for, or a guarantee of, any Indebtedness of the Unrestricted Subsidiary (including any undertaking, agreement or instrument evidencing that Indebtedness) or (2) is directly or indirectly liable for any Indebtedness of the Unrestricted Subsidiary,

•   a default with respect to any Indebtedness of the Unrestricted Subsidiary (including any right that the holders of that Indebtedness may have to take enforcement action against it) would permit (upon notice, lapse of time or both) any holder of any other Indebtedness of the company or any Restricted Subsidiary to declare a default on the other Indebtedness or cause the payment of that Indebtedness to be accelerated or payable before its final scheduled maturity, or

•   the Unrestricted Subsidiary incurs Indebtedness pursuant to which the lender has recourse to any of the assets of the company or any Restricted Subsidiary.

      All Designations and Redesignations must be evidenced by Board Resolutions delivered to the trustee certifying compliance with the foregoing provisions. Subsidiaries that are not designated by our Board of Directors as Restricted or Unrestricted Subsidiaries will be deemed to be Restricted Subsidiaries. The Designation of a Restricted Subsidiary as an Unrestricted Subsidiary will be deemed a Designation of all of the Subsidiaries of the Unrestricted Subsidiary as Unrestricted Subsidiaries.

      Provision of Financial Statements and Information. The new indenture provides that, whether or not we are subject to Section 13(a) or 15(d) of the Exchange Act, we will file with the Commission, so long as any new notes are outstanding, the annual reports, quarterly reports and other periodic reports that we would have been required to file with the Commission pursuant to Section 13(a) or 15(d) if we were so subject, and the documents must be filed with the Commission on or before the respective dates (the “Required Filing Dates”) by which we would have been required so to file the documents if we were so subject, unless the Commission will not accept the filings. We will also in any event (1) within 15 days of each Required Filing

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Date, file with the trustee, and supply the trustee with copies for delivery to the holders of the new notes, the annual reports, quarterly reports and other periodic reports that we would have been required to file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if we were subject to those Sections and (2) if the Commission will reject the filing of those documents, promptly upon written request and payment of the reasonable cost of duplication and delivery, supply copies of those documents to any prospective holder of the new notes.

      Additional Covenants. The new indenture also contains covenants with respect to the following matters:

•   payment of principal, premium and interest,

•   maintenance of an office or agency in the City of New York,

•   maintenance of our corporate existence,

•   payment of taxes and other claims,

•   maintenance of our properties, and

•   maintenance of insurance.

Merger, Consolidation and Sale of Assets

      The new indenture provides that we may not, in any single transaction or series of related transactions, consolidate or merge with or into (whether or not we are the Surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of our properties or assets (determined on a consolidated basis for the company and its Restricted Subsidiaries) in one or more related transactions to, another Person, and we will not permit any Restricted Subsidiary to enter into that transaction or series of related transactions if the transaction or series of related transactions, in the aggregate, would result in a sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties and assets of the company and the Restricted Subsidiaries, taken as a whole, to another Person, unless:

•   the Surviving Person is a corporation organized or existing under the laws of the United States, any of its states or the District of Columbia,

•   the Surviving Person (if other than the company or a guarantor) assumes all the obligations of the company under the new notes and the new indenture pursuant to a supplemental indenture or other written agreement, as the case may be, in a form reasonably satisfactory to the trustee,

•   immediately after the transaction, no Default or Event of Default has occurred and is continuing,

•   immediately after giving effect to the transaction or series of related transactions, (1) in the case of a transaction involving the company, the Surviving Person has a Consolidated Net Worth equal to or greater than our Consolidated Net Worth immediately before the transaction or series of related transactions or (2) in the case of a transaction involving one of our Restricted Subsidiaries, the Surviving Person has a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Restricted Subsidiary immediately before the transaction or series of related transactions, and

•   after giving effect to the transaction, it is expected that the Surviving Person would be permitted to incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to the covenant described under “— Covenants — Limitation on Incurrence of Indebtedness.”

      Despite the third, fourth and fifth bullet points above, any Restricted Subsidiary that is a guarantor may consolidate with, merge into or transfer all or part of its properties and assets to the company or another Restricted Subsidiary that is a guarantor.

      If the company or a guarantor is not the Surviving Person in any transaction (other than a lease) described in and complying with the conditions listed in the preceding paragraph, then the Surviving Person

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will succeed to, and be substituted for, and may exercise every right and power of, the company, and the company will be discharged from its obligations under, the new indenture and the new notes.

Events of Default

      The new indenture will provide that each of the following constitutes an Event of Default:

•   a default for 30 days in the payment when due of interest on any new note,

•   a default in the payment when due of principal on any new note, whether upon maturity, acceleration, optional or mandatory redemption, required repurchase or otherwise,

•   failure to perform or comply with any covenant, agreement or warranty in the new indenture (other than the defaults specified in the first two bullet points above) which failure continues for 60 days after written notice of the failure has been given to the company by the trustee or to the company and the trustee by the holders of at least 25% in aggregate principal amount of the then outstanding new notes,

•   the occurrence of one or more defaults under any agreements, indentures or instruments under which the company or any Restricted Subsidiary then has outstanding Indebtedness in excess of $5.0 million in the aggregate and, if not already matured at its final maturity in accordance with its terms, the Indebtedness has been accelerated and the acceleration is not rescinded, annulled or cured within 10 days,

•   one or more judgments, orders or decrees for the payment of money in excess of $5.0 million, either individually or in the aggregate, are entered against the company or any Restricted Subsidiary or any of their respective properties and which judgments, orders or decrees are not paid, discharged, bonded or stayed or stayed pending appeal for a period of 60 days after their entry,

•   the bankruptcy, insolvency or reorganization of the company or any Restricted Subsidiary, or

•   any Guarantee ceases for any reason to be in full force and effect or becomes invalid.

      If any Event of Default (other than as specified in the sixth bullet point of the preceding paragraph with respect to the company) occurs and is continuing, then the trustee or the holders of at least 25% in aggregate principal amount of the then outstanding new notes may, and the trustee at the request of those holders must, declare all the new notes to be due and payable immediately by notice in writing to the company, and to the company and the trustee if by the holders, specifying the respective Event of Default and that the notice is a “notice of acceleration,” and the new notes will become immediately due and payable. However, if an Event of Default arises from the event specified in that bullet point with respect to the company, then the principal of, premium, if any, and any accrued interest on all outstanding new notes will automatically become immediately due and payable without further action or notice. Holders of the new notes may not enforce the new indenture or the new notes except as provided in the new indenture.

      The holders of a majority in aggregate principal amount of the new notes then outstanding, by notice to the trustee, may on behalf of the holders of all of the new notes waive any existing Default or Event of Default and its consequences under the new indenture except (1) a continuing Default or Event of Default in the payment of the principal of, or premium, if any, or interest on, the new notes (which may only be waived with the consent of each holder of new notes affected), or (2) in respect of a covenant or provision which under the new indenture cannot be modified or amended without the consent of the holder of each affected new note outstanding. Subject to limitations, the holders of a majority in principal amount of the then outstanding new notes may direct the trustee in its exercise of any trust or power. The trustee may withhold from holders of the new notes notice of any continuing Default or Event of Default (except a Default or Event of Default relating to the payment of principal, premium or interest) if it determines that withholding notice is in their interest.

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      We are required to deliver to the trustee annually a statement regarding compliance with the new indenture, and we are required, upon becoming aware of any Default or Event of Default, to deliver to the trustee a statement specifying the Default or Event of Default.

No Personal Liability of Directors, Officers, Employees and Stockholders

      The new indenture provides that no recourse for the payment of the principal of, premium, if any, interest on or Liquidated Damages, if any, with respect to any of the new notes or for any claim based on the new notes or otherwise, and no recourse under or upon any obligation, covenant or agreement of the company in the new indenture, or in any of the new notes or because of the creation of any Indebtedness represented by the new notes, may be had against any incorporator, shareholder, officer, director, employee or controlling person of the company or any of its successors. Each holder, by accepting the new notes, waives and releases all of these liabilities.

Defeasance

      We may, at our option and at any time, elect to have the obligations of the company and the guarantors discharged with respect to the outstanding new notes and the Guarantees (a “defeasance”). A defeasance means that we will be deemed to have paid and discharged the entire Indebtedness represented by the outstanding new notes and to have satisfied all other obligations under the new notes and the new indenture except for:

•   the rights of holders of the outstanding new notes to receive, solely from the trust fund described below, payments in respect of the principal of, premium, if any, and interest on the new notes when the payments are due,

•   our obligations to issue temporary new notes, register new notes, replace mutilated, destroyed, lost or stolen new notes, and maintain an office or agency for payment,

•   the rights, powers, trusts, duties and immunities of the trustee under the new indenture, and

•   the defeasance provisions of the new indenture.

      In addition, we may, at our option and at any time, elect to have the obligations of the company and the guarantors released with respect to some of covenants that are described in the new indenture (a “covenant defeasance”) and any failure to comply with those obligations will not constitute a Default or an Event of Default with respect to the new notes. If a covenant defeasance occurs, then some of the events (not including non-payment, bankruptcy and insolvency events) described under “— Events of Default” will no longer constitute Events of Default with respect to the new notes.

      To exercise either a defeasance or covenant defeasance:

•   we must irrevocably deposit with the trustee, as trust funds in trust, for the benefit of the holders of the new notes, cash in United States dollars, U.S. Government Obligations (as defined in the new indenture), or a combination of the foregoing, in amounts that will be sufficient, in the report of a nationally recognized firm of independent public accountants or a nationally recognized investment banking firm, to pay and discharge the principal of, premium, if any, and interest on the outstanding new notes to redemption or maturity,

•   we must deliver to the trustee an opinion of counsel in the United States that the holders of the outstanding new notes will not recognize income, gain or loss for federal income tax purposes as a result of the defeasance or covenant defeasance, as the case may be, and will be subject to federal income tax on the same amounts, in the same manner and at the same times as would have been the case if the defeasance or covenant defeasance, as the case may be, had not occurred (in the case of defeasance, the opinion must refer to and be based upon a ruling of the Internal Revenue Service or a change in applicable federal income tax laws),

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•   no Default or Event of Default may have occurred and be continuing on the date of the deposit or at any time during the period ending on the 91st day after the date of deposit,

•   the defeasance or covenant defeasance may not result in a breach or violation of, or constitute a Default under, the new indenture or any other agreement or instrument to which the company or any guarantor is a party or by which any of them is bound,

•   we must deliver to the trustee an opinion of counsel that (1) the trust funds will not be subject to any rights of any creditors of the company of any guarantor (other than holders of the new notes) and (2) after the 91st day following the deposit, the trust funds will not be subject to the effect of any applicable bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally, and

•   we must deliver to the trustee an Officers’ Certificate and an opinion of counsel, each stating that we have complied with all conditions precedent under the new indenture to either the defeasance or covenant defeasance, as the case may be, and that no violations under agreements governing any other outstanding Indebtedness would result from the defeasance or covenant defeasance.

Satisfaction and Discharge

      The new indenture will be discharged and will cease to have any further effect (except as to surviving rights of registration of transfer or exchange of the new notes, as expressly provided for in the new indenture) as to all outstanding new notes when:

•   either (1) all the new notes previously authenticated and delivered (except lost, stolen or destroyed new notes that have been replaced or paid and new notes for whose payment money has previously been deposited in trust and thereafter repaid to the company) have been delivered to the trustee for cancellation or (2) all new notes not previously delivered to the trustee for cancellation have become due and payable or have been called for redemption and we have irrevocably deposited or caused to be deposited with the trustee an amount in United States dollars sufficient to pay and discharge the entire Indebtedness on the new notes not previously delivered to the trustee for cancellation, for the principal of, premium, if any, and interest to the date of deposit or redemption together with an irrevocable instruction from us directing the trustee to apply the funds to the payment of that Indebtedness at maturity or redemption, as the case may be,

•   the company and the guarantors have paid or caused to be paid all other sums payable under the new indenture, the new notes and the Guarantees, and

•   we have delivered to the trustee an Officers’ Certificate and an opinion of counsel each stating that we have complied with all conditions precedent under the new indenture relating to the satisfaction and discharge of the new indenture.

Amendment, Supplement and Waiver

      Except as provided in the next two paragraphs, the holders of at least a majority in principal amount of the then outstanding new notes may consent in writing to (1) any amendment or supplement of the new indenture, the new notes or the Guarantees and (2) the waiver of any existing Default or Event of Default or compliance with any provision of the new indenture, the new notes or the Guarantees, whether in connection with a tender offer or exchange offer for new notes or otherwise.

      Without the consent of each holder affected, an amendment, supplement or waiver may not:

•   reduce the principal amount of the new notes whose holders must consent to the amendment, supplement or waiver,

•   reduce the principal of or change the fixed maturity of any new note, or alter or waive the provisions with respect to the redemption of the new notes in a manner adverse to the holders of the new notes other than with respect to a Change of Control Offer or an Asset Sale Offer,

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•   reduce the rate of or change the time for payment of interest on any new notes,

•   waive a Default or Event of Default in the payment of principal of, premium, if any, or interest on the new notes, except that holders of at least a majority in aggregate principal amount of the then outstanding new notes may (1) rescind an acceleration of the new notes that resulted from a non-payment default and (2) waive the payment default that resulted from the acceleration,

•   make any new note payable in money other than that stated in the new notes,

•   make any change in the provisions of the new indenture relating to waivers of past Defaults or relating to waivers of the rights of holders of new notes to receive payments of principal of, or premium, if any, or interest on, the new notes,

•   following the occurrence of a Change of Control, amend, change or modify our obligation to make and consummate a Change of Control Offer in the event of a Change of Control in a manner adverse to the holders of the new notes, or following the occurrence of an Asset Sale, amend, change or modify the company’s obligation to make and consummate an Asset Sale Offer in a manner adverse to the holders of the new notes, or

•   release any guarantor from any of its obligations under its Guarantee or the new indenture other than in compliance with the new indenture.

      In addition, without the consent of any of the holders of new notes or the guarantors, the company and the trustee may amend or supplement the new indenture, the new notes or the Guarantees to:

•   cure any ambiguity, defect or inconsistency,

•   provide for the issuance of uncertificated new notes in addition to or in place of certificated new notes,

•   provide for the assumption of our obligations to holders of the new notes in the event of any Disposition involving the company in which we are not the Surviving Person,

•   make any change that would provide any additional rights or benefits to the holders of the new notes or that does not adversely affect the rights of the holders,

•   release any Guarantee permitted to be released under the new indenture, or

•   comply with the requirements of the Commission to effect or maintain the qualification of the new indenture under the Trust Indenture Act.

Transfer and Exchange

      The registered holder of a new note will be treated as its owner for all purposes. A holder may transfer or exchange new notes in accordance with the new indenture. The exchange agent and the trustee may require a holder, among other things, to furnish appropriate endorsements and transfer documents, and we may require a holder to pay any taxes and fees required by law or permitted by the new indenture.

      Neither the company nor the exchange agent will be required to issue, register the transfer of or exchange any new note:

•   during a period beginning at the opening of business on the day the trustee receives notice of any redemption from the company and ending at the close of business on the day the notice of redemption is sent to holders,

•   selected for redemption, in whole or in part, except the unredeemed portion of any new note being partially redeemed may be transferred or exchanged, and

•   during a Change of Control Offer or an Asset Sale Offer if the new note is tendered pursuant to the Change of Control Offer or Asset Sale Offer and not withdrawn.

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The Trustee

      HSBC Bank USA will be the trustee under the new indenture and has been appointed by the company as exchange agent, book-entry depository and paying agent with regard to the new notes.

      The new indenture (including the provisions of the Trust Indenture Act incorporated by reference in the new indenture) will contain limitations on the rights of the trustee, if it becomes a creditor of the company, to obtain payment of claims in some cases or to realize on property received by it in respect of those claims, as security or otherwise. The trustee will be permitted to engage in other transactions, but if it acquires any conflicting interest, it must either eliminate the conflict or resign.

Governing Law

      The new indenture, the new notes and the Guarantees will be governed by the laws of the State of Ohio.

Definitions

      The following are some of the defined terms used in the new indenture that we refer to in this description of the new notes. We refer you to the new indenture for the definition of all other terms used in the new indenture.

      “Acquired Debt” means, with respect to any specified Person, Indebtedness of any Acquired Person existing at the time the Acquired Person merges with or into, or becomes a Restricted Subsidiary of, the specified Person, including Indebtedness incurred in connection with, or in contemplation of, the Acquired Person merging with or into, or becoming a Restricted Subsidiary of, the specified Person, except that Indebtedness of the Acquired Person that is redeemed, defeased, retired or otherwise repaid at the time of or immediately upon consummation of the transactions by which the Acquired Person merges with or into or becomes a Restricted Subsidiary of the specified Person may not be Acquired Debt.

      “Acquired Person” means a Person that is merged with or into the company or that becomes a Restricted Subsidiary of the Company.

      “Affiliate” means, with respect to any specified Person, any other Person directly or indirectly controlling or controlled by or under direct or indirect common control with the specified Person. For purposes of this definition, “control” (including, with correlative meanings, the terms “controlling,” “controlled by” and “under common control with”) of any Person means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of the Person, whether through the ownership of voting securities, by agreement or otherwise.

      “Asset Sale” means (1) any sale, lease, conveyance or other disposition by the company or any Restricted Subsidiary of any assets (including by way of a sale-and-leaseback) other than in the ordinary course of business, or (2) the issuance or sale of Capital Stock of any Restricted Subsidiary, in the case of each of clauses (1) and (2), whether in a single transaction or a series of related transactions, to any Person (other than to the company or a Restricted Subsidiary and other than directors’ qualifying shares) for Net Proceeds in excess of $100,000.

      “Board of Directors” means, as to (1) any corporate Person, the board of directors of such Person or any duly authorized committee thereof, (2) any partnership, limited liability company or comparably organized Person that is ultimately controlled by a corporate general partner, managing member or other corporation, the “Board of Directors” of such corporation as specified in the first clause of this definition, and (3) any partnership, limited liability company or comparably organized Person which is ultimately controlled by individuals, such controlling individuals.

      “Board Resolution” means, with respect to any Person, a duly adopted resolution of the Board of Directors.

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      “Capital Lease Obligation” of any Person means, at the time the determination is to be made, the amount of the liability in respect of a capital lease for property leased by the Person that would at that time be required to be capitalized on the balance sheet of the Person in accordance with GAAP.

      “Capital Stock” of any Person means any and all shares, interests, rights to purchase, warrants, options, participations or other equivalents of or interests in (however designated) corporate stock or other equity participations, including partnership and limited liability company interests, whether general or limited, of the Person, including any Preferred Stock.

      “Cash Equivalents” means:

•  marketable direct obligations issued by, or unconditionally guaranteed by, the United States Government or issued by any of its agencies and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition of the obligations,

•  marketable direct obligations issued by any state of the United States of America or any political subdivision or public instrumentality of that state maturing within one year from the date of acquisition of the obligations and, at the time of acquisition, having one of the two highest ratings obtainable from either Standard & Poor’s Rating Services or Moody’s Investors Service, Inc.,

•  commercial paper maturing no more than one year from the date of creation of the commercial paper and, at the time of acquisition, having a rating of at least A-1 from Standard & Poor’s Rating Services or at least P-1 from Moody’s Investors Service, Inc.,

•  certificates of deposit or bankers’ acceptances (or, with respect to foreign banks, similar instruments) maturing within one year from the date of their acquisition issued by any bank organized under the laws of the United States of America or any of its states or the District of Columbia or any U.S. branch of a foreign bank having at the date of their acquisition combined capital and surplus of not less than $200 million,

•  repurchase obligations with a term of not more than seven days for underlying securities of the types described in the first bullet point above entered into with any bank meeting the qualifications specified in the fourth bullet point above, and

•  investments in money market funds that invest substantially all their assets in securities of the types described in the foregoing bullet points.

      “Cash Flow” means, with respect to any period, Consolidated Net Income for that period, plus, to the extent deducted in computing that Consolidated Net Income:

•  extraordinary net losses, plus

•  provision for taxes based on income or profits and any provision for taxes used in computing the extraordinary net losses under the first bullet point above, plus

•  Consolidated Interest Expense, plus

•  depreciation, amortization and all other non-cash charges (including amortization of goodwill and other intangibles).

      “Change of Control” means the occurrence of any of the following events:

•  any “person” or “group” (as those terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other than Permitted Holders) is or becomes (including by merger, consolidation or otherwise) the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a Person will be deemed to have beneficial ownership of all shares that the Person has the right to acquire, whether the right is exercisable immediately or only after the passage of time), directly or indirectly, of 50% or more of the voting power of the our total outstanding Voting Stock,

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•  during any period of two consecutive years, individuals who at the beginning of that period constituted our Board of Directors (together with any new directors whose election to the Board of Directors, or whose nomination for election by our stockholders, was approved by a vote of 66 2/3% of the directors then still in office who were either directors at the beginning of that period or whose election or nomination for election was previously so approved) cease for any reason to constitute a majority of our Board of Directors then in office,

•  the approval by the holders of Capital Stock of the company of any plan or proposal for the liquidation or dissolution of the company (whether or not otherwise in compliance with the terms of the new indenture), or

•  the sale or other disposition (including by merger, consolidation or otherwise) of all or substantially all of the Capital Stock or assets of the company to any Person or group (as defined in Rule 13d-5 of the Exchange Act) (other than to the Permitted Holders) as an entirety or substantially as an entirety in one transaction or a series of related transactions.

      “Consolidated Cash Flow Coverage Ratio” means, for any period, the ratio of:

•  the aggregate amount of Cash Flow for that period, to

•  Consolidated Interest Expense for that period, determined on a pro forma basis after giving pro forma effect to:

•  the incurrence of the Indebtedness giving rise to the calculation of the Consolidated Cash Flow Coverage Ratio and (if applicable) the application of the net proceeds therefrom, including to refinance other Indebtedness, as if the Indebtedness was incurred, and the application of those proceeds occurred, at the beginning of that period,

•  the incurrence, repayment or retirement of any other Indebtedness by the company and its Restricted Subsidiaries since the first day of that period as if the Indebtedness was incurred, repaid or retired at the beginning of that period (except that, in making the computation, the amount of Indebtedness under any revolving credit facility will be computed based upon the average balance of the Indebtedness at the end of each month during that period,

•  in the case of Acquired Debt, the related acquisition as if the acquisition had occurred at the beginning of that period, and

•  any acquisition or disposition by the company and its Restricted Subsidiaries of any company or any business or any assets out of the ordinary course of business, or any related repayment of Indebtedness, in each case since the first day of that period, assuming the acquisition or disposition had been consummated on the first day of that period.

      “Consolidated Interest Expense” means, with respect to any period, the sum of:

•  the interest expense of the company and its Restricted Subsidiaries for that period, including, without limitation:

•  amortization of debt discount,

•  the net payments, if any, under interest rate contracts (including amortization of discounts),

•  the interest portion of any deferred payment obligation, and

•  accrued interest, plus

•  the interest component of the Capital Lease Obligations paid, accrued and/or scheduled to be paid or accrued by the company and its Restricted Subsidiaries during that period, and all capitalized interest of the company and its Restricted Subsidiaries, plus

•  all dividends paid during that period by the company and its Restricted Subsidiaries with respect to any Disqualified Stock (other than by any Restricted Subsidiary to the company or any other

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Restricted Subsidiary and other than any dividend paid in Capital Stock (other than Disqualified Stock)), and all dividends paid during that period by any Restricted Subsidiary with respect to any Preferred Stock, in each case, as determined on a consolidated basis in accordance with GAAP consistently applied.

      “Consolidated Net Income” means, with respect to any period, the net income (or loss) of the company and its Restricted Subsidiaries for that period, determined on a consolidated basis in accordance with GAAP consistently applied, adjusted to the extent included in calculating the net income (or loss), by excluding, without duplication:

•  all extraordinary gains but not losses (less all fees and expenses relating thereto),

•  the portion of net income (or loss) of the company and its Restricted Subsidiaries allocable to interests in unconsolidated Persons or Unrestricted Subsidiaries, except to the extent of the amount of dividends or distributions actually paid to the company or its Restricted Subsidiaries by that other Person during that period,

•  net income (or loss) of any Person combined with the company or any of its Restricted Subsidiaries on a “pooling-of-interests” basis attributable to any period before the date of combination,

•  net gain but not losses (less all fees and expenses relating thereto) in respect of disposition of assets (including, without limitation, pursuant to sale and leaseback transactions) other than in the ordinary course of business, or

•  the net income of any Restricted Subsidiary to the extent that the declaration of dividends or similar distributions by that Restricted Subsidiary of that income to the company is not at the time permitted, directly or indirectly, by operation of the terms of its charter or any agreement, instrument, judgment, decree, order, statute, rule or governmental regulation applicable to that Restricted Subsidiary or its stockholders.

      “Consolidated Net Worth” of any Person means the consolidated stockholders’ equity of that Person, determined on a consolidated basis in accordance with GAAP, less (without duplication) amounts attributable to Disqualified Stock of that Person.

      “Currency Agreement Obligations” means the obligations of any person under a foreign exchange contract, currency swap agreement or other similar agreement or arrangement to protect that person against fluctuations in currency values.

      “Default” means any event that is, or after the giving of notice or passage of time or both would be, an Event of Default.

      “Disposition” means, with respect to any Person, any merger, consolidation or other business combination involving that Person (whether or not that Person is the Surviving Person) or the sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of that Person’s assets.

      “Disqualified Stock” means (1) any Preferred Stock of any Restricted Subsidiary and (2) any Capital Stock that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable), or upon the happening of any event, matures or is mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable at the option of the holder of the Capital Stock (other than upon a change of control of the company in circumstances where the holders of the new notes would have similar rights), in whole or in part on or before the stated maturity of the new notes.

      “Exchange Act” means the Securities Exchange Act of 1934, as amended.

      “Fair Market Value” means, with respect to any asset or property, the sale value that would be obtained in an arm’s-length transaction between an informed and willing seller under no compulsion to sell and an informed and willing buyer under no compulsion to buy.

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      “Foreign Subsidiary” means a Restricted Subsidiary not organized under the laws of the United States or any of its political subdivisions and the operations of which are located entirely outside the United States.

      “GAAP” means generally accepted accounting principles in the United States set forth in the Statements of Financial Accounting Standards and the Interpretations, Accounting Principles Board Opinions and AICPA Accounting Research Bulletins.

      “guarantee”, depending on the context, means, as applied to any obligation, (1) a guarantee (other than endorsement of negotiable instruments for collection in the ordinary course of business), direct or indirect, in any manner, of any part or all of that obligation and (2) an agreement, direct or indirect, contingent or otherwise, the practical effect of which is to assure in any way the payment or performance (or payment of damages in the event of non-performance) of all or any part of that obligation, including, without limiting the foregoing, the payment of amounts drawn down by letters of credit.

      “Guarantee” has the meaning given that term under “— The Guarantees” above.

      “guarantor” means (1) each of Allegheny Clearfield, Inc., Friction Products Co., Hawk MIM, Inc., Hawk Motors, Inc., Hawk Precision Components Group, Inc., Helsel, Inc., Logan Metal Stampings, Inc., Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman Holdings, Inc., S.K. Wellman Corp., Sinterloy Corporation and Tex Racing Enterprises, Inc., and (2) any other Subsidiary of the company that guarantees the new notes.

      “Indebtedness” means, with respect to any Person, without duplication, and whether or not contingent:

•  all indebtedness of that Person for borrowed money or that is evidenced by a note, bond, debenture or similar instrument,

•  all obligations of that Person to pay the deferred or unpaid purchase price of property or services, which purchase price is due more than six months after the date of placing that property in service or taking delivery and title thereto or the completion of that service,

•  all Capital Lease Obligations of that Person,

•  all obligations of that Person in respect of letters of credit or bankers’ acceptances issued or created for the account of that Person,

•  to the extent not otherwise included in this definition, all net obligations of that Person under Interest Rate Agreement Obligations or Currency Agreement Obligations of that Person,

•  all liabilities of others of the kind described in the first three bullet points above that are secured by any Lien on any property owned by that Person, but if the obligations secured by a Lien (other than a Permitted Lien not securing any liability that would itself constitute Indebtedness) or any assets or property have not been assumed by that Person in full or are not that Person’s legal liability in full, then the amount of the Indebtedness for purposes of this definition will be limited to the lesser of the amount of Indebtedness secured by that Lien and the Fair Market Value of the property subject to that Lien,

•  all Disqualified Stock issued by that Person and all Preferred Stock issued by a Subsidiary of that Person, and

•  to the extent not otherwise included, any guarantee by that Person of any other Person’s indebtedness or other obligations described in the foregoing bullet points.

      “Indebtedness” of the company and the Restricted Subsidiaries will not include current trade payables incurred in the ordinary course of business and payable in accordance with customary practices, and non-interest bearing installment obligations and accrued liabilities incurred in the ordinary course of business that are not more than 90 days past due. The principal amount outstanding of any Indebtedness issued with original issue discount is the accreted value of the Indebtedness. However, Indebtedness will not include Indebtedness arising from the honoring by a bank or other financial institution of a check, draft or similar

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instrument inadvertently drawn against insufficient funds in the ordinary course of business; so long as the Indebtedness is extinguished within 3 business days of its incurrence.

      “Independent Director” means a director of the company other than a director (1) who (apart from being a director of the company or any Subsidiary of the company) is an employee, associate or Affiliate of the company or a Subsidiary of the company, or (2) who is a director, employee, associate or Affiliate of another party (other than the company or any of its Subsidiaries) to the transaction in question.

      “Interest Rate Agreement Obligations” means, with respect to any Person, the Obligations of that Person under (1) interest rate swap agreements, interest rate cap agreements and interest rate collar agreements and (2) other agreements or arrangements designed to protect that Person against fluctuations in interest rates.

      “Investment” means, with respect to any Person, any direct or indirect loan or other extension of credit (including, without limitation, a guarantee) or capital contribution to (by means of any transfer of cash or other property to others or any payment for property or services for the account or use of others), or any purchase or acquisition by that Person of any Capital Stock, bonds, notes, debentures or other securities or evidences of Indebtedness issued by, any Person. “Investment” will exclude extensions of trade credit by the company and its Restricted Subsidiaries on commercially reasonable terms in accordance with normal trade practices of the company or the Restricted Subsidiary, as the case may be. For the purposes of the “Limitation on Restricted Payments” covenant, (1) “Investment” will include and be valued at the Fair Market Value of the net assets of any Restricted Subsidiary at the time that the Restricted Subsidiary is designated an Unrestricted Subsidiary and will exclude the Fair Market Value of the net assets of any Unrestricted Subsidiary at the time that the Unrestricted Subsidiary is designated a Restricted Subsidiary and (2) the amount of any Investment will be the original cost of the Investment plus the cost of all additional Investments by the company or any of its Restricted Subsidiaries, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to the Investment, reduced by the payment of dividends or distributions in connection with the Investment or any other amounts received in respect of the Investment, except that no payment of dividends or distributions or receipt of any of those other amounts will reduce the amount of any Investment if the payment of dividends or distributions or receipt of any of those amounts would be included in Consolidated Net Income. If we or any Restricted Subsidiary of the company sells or otherwise disposes of any Common Stock of any direct or indirect Restricted Subsidiary of the company so that, after giving effect to the sale or disposition, we no longer own, directly or indirectly, greater than 50% of the outstanding Common Stock of the Restricted Subsidiary, we will be deemed to have made an Investment on the date of the sale or disposition equal to the Fair Market Value of the Common Stock of the Restricted Subsidiary not sold or disposed of.

      “Issue Date” means                     , 2002.

      “Lien” means, with respect to any asset, mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of that asset, whether or not filed, recorded or otherwise perfected under applicable law (including any conditional sale or other title retention agreement, any lease of a similar nature, any option or other agreement to sell or give a security interest in any asset and any filing of, or agreement to give, any financing statement under the Uniform Commercial Code (or equivalent statutes) of any jurisdiction).

      “Net Proceeds” means, with respect to any Asset Sale by any Person, the aggregate cash or Cash Equivalent proceeds received by that Person and/or its Affiliates in respect of that Asset Sale, which amount is equal to the excess, if any, of:

•  the cash or Cash Equivalent received by that Person and/or its Affiliates (including any cash payments received by way of deferred payment pursuant to, or monetization of, a note or installment receivable or otherwise, but only as and when received) in connection with that Asset Sale, over

•  the sum of:

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•  the amount of any Indebtedness that is secured by that asset and that is required to be repaid by that Person in connection with that Asset Sale, plus

•  all fees, commissions and other expenses incurred by that Person in connection with that Asset Sale, plus

•  provision for taxes, including income taxes, directly attributable to the Asset Sale or to required prepayments or repayments of Indebtedness with the proceeds of that Asset Sale, plus

•  if that Person is a Restricted Subsidiary, any dividends or distributions payable to holders of minority interests in the Restricted Subsidiary from the proceeds of that Asset Sale.

      “New Credit Facility” means any new senior secured credit facilities among the company, some of its Subsidiaries and the lenders named in the facilities as the same may be amended, modified, renewed, refunded, replaced or refinanced from time to time, including (1) any related notes, letters of credit, guarantees, collateral documents, instruments and agreements executed in connection with any New Credit Facility, and in each case as amended, modified, renewed, refunded, replaced or refinanced from time to time, and (2) any notes, guarantees, collateral documents, instruments and agreements executed in connection with any amendment, modification, renewal, refunding, replacement or refinancing of any New Credit Facility.

      “Officer” means, with respect to any Person, the Chairman of the Board, the Senior Chairman of the Board, the Chief Executive Officer, the President, any Vice President, the Chief Operating Officer, the Controller, or the Secretary of such Person, or any other officer designated by the Board of Directors serving in a similar capacity.

      “Officers’ Certificate” means, with respect to any Person, a certificate signed by two Officers or by an Officer and either an Assistant Treasurer or an Assistant Secretary of such Person and otherwise complying with the requirements of the new indenture as they relate to the making of an Officers’ Certificate.

      “Obligations” means any principal, interest, penalties, fees, indemnifications, reimbursement obligations, damages and other liabilities payable under the documentation governing any Indebtedness.

      “Permitted Holders” means any of Norman C. Harbert, Ronald E. Weinberg, Byron S. Krantz or any “group” (as defined in Rule 13d-5 of the Exchange Act) consisting of any or all of the foregoing.

      “Permitted Investments” means:

•  any Investment in the company or any Restricted Subsidiary that is a guarantor,

•  any Investment in Cash Equivalents,

•  any Investment in an Acquired Person if, as a result of that Investment, (1) the Acquired Person becomes a Restricted Subsidiary of the company and becomes a guarantor of the new notes, or (2) the Acquired Person either is merged, consolidated or amalgamated with or into the company or one of its Restricted Subsidiaries that is a guarantor of the new notes and the company or that Restricted Subsidiary is the Surviving Person, or transfers or conveys substantially all of its assets to, or is liquidated into, the company or one of its Restricted Subsidiaries that is a guarantor of the new notes,

•  Investments in accounts and notes receivable acquired in the ordinary course of business,

•  any securities received in connection with an Asset Sale that complies with the covenant described under “— Covenants — Limitations on Asset Sales,”

•  Interest Rate Obligations and Currency Agreement Obligations permitted pursuant to the second paragraph of the covenant described under “— Covenants — Limitation on Incurrence of Indebtedness” above, and

•  investments in or acquisitions of Capital Stock or similar interests in Persons (other than Affiliates of the company) received in the bankruptcy or reorganization of or by that Person or

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any exchange of that investment with the issuer or taken in settlement of or other resolution of claims or disputes.

      “Permitted Liens” means:

•  Liens securing Indebtedness under any New Credit Facility,

•  Liens securing Indebtedness of a Person existing at the time that the Person is merged into or consolidated with the company or a Restricted Subsidiary, so long as the Liens were in existence before the contemplation of the merger or consolidation and do not extend to any assets other than those of that Person,

•  Liens on property acquired by the company or a Restricted Subsidiary, so long as the Liens were in existence before the contemplation of the acquisition and do not extend to any other property,

•  Liens in respect of Interest Rate Obligations and Currency Agreement Obligations permitted under the new indenture,

•  Liens in favor of the company, any Restricted Subsidiary or any guarantor,

•  Liens existing or created on the Issue Date,

•  Liens securing the new notes, and

•  Liens securing Permitted Indebtedness of the company or any Restricted Subsidiary representing Capitalized Lease Obligations and any refinancings of Capitalized Lease Obligations or, in respect of Purchase Money Obligations for property acquired, constructed or improved in the ordinary course of business and any refinancings of Purchase Money Obligations, that taken together in the aggregate do not exceed $5.0 million at any time outstanding.

      “Person” means any individual, corporation, partnership, joint venture, association, joint-stock company, limited liability company, trust, unincorporated organization or government or any government agency or political subdivision.

      “Preferred Stock” as applied to the Capital Stock of any Person, means Capital Stock of any class or classes (however designated) that is preferred as to the payment of dividends or distributions, or as to the distribution of assets upon any voluntary or involuntary liquidation or dissolution of that Person, over Capital Stock of any other class of that Person.

      “Purchase Money Obligation” means any Indebtedness secured by a Lien on assets related to the business of the company or the Restricted Subsidiaries, and any additions and accessions thereto, that are purchased, constructed or improved by the company or any Restricted Subsidiary at any time after the Issue Date, so long as:

•  any security agreement or conditional sales or other title retention contract pursuant to which the Lien on the assets is created (collectively, a “Security Agreement”) is entered into within 90 days after the purchase or substantial completion of the construction of the assets and is at all times confined solely to the assets so purchased or acquired, any additions and accessions thereto and any proceeds therefrom,

•  the aggregate principal amount of the outstanding Indebtedness secured by the Lien is at no time increased, except in connection with the purchase of additions and accessions thereto and except in respect of fees and other obligations in respect of the Indebtedness, and

•  the aggregate outstanding principal amount of Indebtedness secured by the Lien (determined on a per asset basis in the case of any additions and accessions) does not at the time the Security Agreement is entered into exceed 100% of the purchase price to the company or any Restricted Subsidiary of the assets subject to the Lien or (2) the Indebtedness secured by the Lien may be with recourse solely to the assets so purchased or acquired, any additions and accessions to those assets and any proceeds derived from those assets.

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      “Restricted Investment” means an Investment other than a Permitted Investment.

      “Restricted Payment” means:

•  any dividend or other distribution declared or paid on any Capital Stock of the company (other than (1) dividends or distributions payable solely in Capital Stock (other than Disqualified Stock) of the company or (2) dividends or distributions payable to the company or any Restricted Subsidiary),

•  any payment to purchase, redeem or otherwise acquire or retire for value any Capital Stock of the company,

•  any payment to purchase, redeem, defease or otherwise acquire or retire for value, before any scheduled maturity, repayment or sinking fund payment, any Indebtedness that is subordinated in right of payment to the new notes other than a purchase, redemption, defeasance or other acquisition or retirement for value that is paid for with the proceeds of Refinancing Indebtedness permitted under the covenant described in “— Covenants — Limitation on Incurrence of Indebtedness,” or

•  any Restricted Investment.

      “Restricted Subsidiary” means each direct or indirect Subsidiary of the company other than an Unrestricted Subsidiary.

      “Senior Debt” means the principal of and interest (including post-petition interest) on, and all other amounts owing in respect of, any New Credit Facility, Indebtedness evidenced by the new notes and any other Indebtedness incurred by the company (including, but not limited to, reasonable fees and expenses of counsel and all other charges, fees and expenses incurred in connection with the Indebtedness), unless the instrument creating or evidencing the Indebtedness or pursuant to which the Indebtedness is outstanding expressly provides that the Indebtedness is subordinated in right of payment to the new notes. However, Senior Debt will not include:

•  any Indebtedness for federal, state, local or other taxes,

•  any Indebtedness among or between the company, any of its Subsidiaries or their Affiliates,

•  any Indebtedness incurred for the purchase of goods or materials, or for services obtained, in the ordinary course of business or any obligations in respect of any the Indebtedness,

•  any Indebtedness that is incurred in violation of the new indenture, or

•  Indebtedness of the company that is expressly subordinate or junior in right of payment to any other Indebtedness of the company.

      “Subordinated Indebtedness” means Indebtedness of the company subordinated in right of payment to the new notes.

      “Subsidiary” of a Person means:

•  any corporation of which more than 50% of the outstanding voting power of the Voting Stock is owned or controlled, directly or indirectly, by that Person or by one or more other Subsidiaries of that Person, or by that Person and one or more other Subsidiaries of that Person,

•  any limited partnership of which that Person or any Subsidiary of that Person is a general partner,

•  any limited liability company of which that Person or any Subsidiary of that Person is a manager, or

•  any other Person (other than a corporation, limited partnership or limited liability company) in which that Person or one or more other Subsidiaries of that Person, or that Person and one or more other Subsidiaries of that Person, directly or indirectly, has more than 50% of the

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outstanding partnership or similar interests or has the power, by contract or otherwise, to direct or cause the direction of the policies, management and affairs of that other Person.

      “Surviving Person” means, with respect to any Person involved in or that makes any Disposition, the Person formed by or surviving that Disposition or the Person to which that Disposition is made.

      “Unrestricted Subsidiary” means a Subsidiary of the company designated as an Unrestricted Subsidiary pursuant to and in compliance with the covenant described under “— Covenants — Limitation on Designation of Unrestricted Subsidiaries” and not redesignated a Restricted Subsidiary in compliance with that covenant.

      “Voting Stock” of a Person means Capital Stock of that Person of the class or classes pursuant to which the holders of that Capital Stock have the general voting power under ordinary circumstances to elect at least a majority of the board of directors, managers or trustees of that Person (irrespective of whether or not at the time stock of any other class or classes have or might have voting power by reason of the happening of any contingency).

      “Weighted Average Life to Maturity” means, when applied to any Indebtedness at any date, the number of years obtained by dividing (1) the sum of the products obtained by multiplying (a) the amount of each then remaining installment, sinking fund, serial maturity or other required scheduled payment of principal, including payment at final maturity, in respect of the Indebtedness with (b) the number of years (calculated to the nearest one-twelfth) that will elapse between that date and the making of the payment, by (2) the then outstanding aggregate principal amount of the Indebtedness.

Book-Entry; Delivery and Form

      Except as set forth below, we will issue new notes in registered, global form in denominations of $1,000 and integral multiples of $1,000 in excess of $1,000, except that we may elect to issue new notes in denominations of less than $1,000. We will issue new notes at the closing of the exchange offer only pursuant to valid tenders of old notes.

      We expect that the new notes initially will be represented by a single note in registered, global form without interest coupons (the “Global Note”). We will deposit the Global Note upon issuance with the trustee as custodian for the Depository Trust Company (“DTC”) in New York, New York, and register it in the name of DTC or its nominee, in each case for credit to an account of a direct or indirect participant in DTC as described below.

      Except as set forth below, the Global Note may be transferred, in whole and not in part, only to another nominee of DTC or to a successor of DTC or its nominee. You may not exchange beneficial interests in the Global Note for notes in certificated form except in the limited circumstances described below. See “—Exchange of Interests in the Global Note for Certificated Notes” below.

      Transfers of beneficial interests in the Global Note will be subject to the applicable rules and procedures of DTC and its direct or indirect participants (including, if applicable, those of Euroclear and Clearstream), which may change from time to time.

Depository Procedures

      We are providing the following description of the operations of DTC, Euroclear and Clearstream solely as a matter of convenience. These operations and procedures are solely within the control of the respective settlement systems and are subject to changes by them. We take no responsibility for these operations and procedures and urge you to contact the system or their participants directly to discuss these matters. DTC has advised us that it is a limited-purpose trust company created to hold securities for its participating organizations (collectively, the “Participants”) and to facilitate the clearance and settlement of transactions in those securities between Participants through electronic book-entry changes in accounts of its Participants. The Participants include securities brokers and dealers, banks, trust companies, clearing corporations and other organizations. Access to DTC’s system is also available to other entities such as banks, brokers, dealers and trust companies that maintain a custodial relationship with a Participant, either directly or indirectly

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(collectively, the “Indirect Participants”). Persons who are not Participants may beneficially own securities held by or on behalf of DTC only through Participants or the Indirect Participants.

      The ownership of interests in, and transfers of ownership interests in, each security held by or on behalf of DTC are recorded on the records of the Participants and the Indirect Participants. DTC has also advised us that, pursuant to procedures established by it: (1) upon deposit of the Global Note, DTC will credit the accounts of the Participants designated by holders of old notes who exchange their old notes in the exchange offer with portions of the principal amount of the Global Note, and (2) ownership of these interests in the Global Note will be shown on, and the transfer of ownership of these interests will be effected only through, records maintained by DTC (with respect to the Participants) or by the Participants and the Indirect Participants (with respect to other owners of beneficial interest in the Global Note).

      Investors in the Global Note who are Participants in DTC’s system may hold their interests in the Global Note directly through DTC. Investors in the Global Note that are not Participants may hold their interests indirectly though organizations (including Euroclear and Clearstream) which are Participants in that system. All interests in the Global Note, including those held through Euroclear or Clearstream, may be subject to the procedures and requirements of DTC. Those interests held through Euroclear or Clearstream may also be subject to the procedures and requirements of those systems. The laws of some states require that some persons take physical delivery in definitive form of securities they own. Consequently, the ability to transfer beneficial interests in the Global Note to other persons will be limited to that extent. Because DTC can act only on behalf of Participants, which in turn act on behalf of Indirect Participants, the ability of a person having beneficial interests in the Global Note to pledge those interests to persons that do not participate in the DTC system, or otherwise take actions in respect of those interests, may be affected by the lack of a physical certificate evidencing those interests.

      Except as described below, owners of interests in the Global Note will not have new notes registered in their name, will not receive physical delivery of new notes in certificated form and will not be considered the registered owners or “holders” of new notes under the new indenture for any purpose.

      Payments in respect of the principal of, and interest (including additional interest) and premium, if any, on the Global Note registered in the name of DTC or its nominee will be payable to DTC in its capacity as the registered holder under the new indenture. Under the terms of the new indenture, we and the trustee will treat the persons in whose names the new notes, including the Global Note, are registered as the owners of the new notes for the purpose of receiving payments and all other purposes. Consequently, neither we, the trustee nor any agent of us or the trustee has or will have any responsibility or liability for: (1) any aspect of DTC’s records or any Participant’s or Indirect Participant’s records relating to payments made on account of beneficial ownership interests in the Global Note or for maintaining, supervising or reviewing any of DTC’s records or any Participant’s or Indirect Participant’s records relating to the beneficial ownership interests in the Global Note, or (2) any other matter relating to the actions or practices of DTC or any of its Participants or Indirect Participants.

      DTC has advised us that its current practice, upon receipt of any payment in respect of securities such as the new notes (including principal and interest), is to credit the accounts of the relevant Participants with the payment on the payment date unless DTC has reason to believe it will not receive payment on the payment date. Each relevant Participant is credited with an amount proportionate to its beneficial ownership of an interest in the principal amount of the relevant security as shown on the records of DTC. Payments by the Participants and the Indirect Participants to the beneficial owners of new notes will be governed by standing instructions and customary practices and will be the responsibility of the Participants or the Indirect Participants and will not be the responsibility of DTC, the trustee or the company. Neither we nor the trustee will be liable for any delay by DTC or any of its Participants in identifying the beneficial owners of the new notes, and we and the trustee may conclusively rely on and will be protected in relying on instructions from DTC or its nominee for all purposes.

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      Transfers between Participants in DTC will be effected in accordance with DTC’s procedures, and will be settled in same-day funds, and transfers between Participants in Euroclear and Clearstream will be effected in accordance with their respective rules and operating procedures.

      Cross-market transfers between the Participants in DTC, on the one hand, and Euroclear or Clearstream participants, on the other hand, will be effected through DTC in accordance with DTC’s rules on behalf of Euroclear or Clearstream, as the case may be, by its respective depositary; however, these cross-market transactions will require delivery of instructions to Euroclear or Clearstream, as the case may be, by the counterparty in that system in accordance with the rules and procedures and within the established deadlines (Brussels time) of that system. Euroclear or Clearstream, as the case may be, will, if the transaction meets the settlement requirements, deliver instructions to its respective depositary to take action to effect final settlement on its behalf by delivering or receiving interests in the Global Note in DTC, and making or receiving payment in accordance with normal procedures for same day fund settlement applicable to DTC. Euroclear participants and Clearstream participants may not deliver instructions directly to the depositories for Euroclear or Clearstream.

      DTC has advised us that it will take any action permitted to be taken by a holder of new notes only at the direction of one or more Participants to whose account DTC has credited the interests in the Global Note and only in respect of the portion of the aggregate principal amount of the new notes to which the Participant or Participants has or have given the direction. However, if there is an Event of Default under the new notes, then DTC reserves the right exchange the Global Note for new notes in certificated form, and to distribute the new notes to its Participants.

      Although DTC, Euroclear and Clearstream have agreed to the foregoing procedures to facilitate transfers of interests in the Global Note among Participants in DTC, Euroclear and Clearstream, they are under no obligation to perform or to continue to perform these procedures, and may discontinue these procedures at any time. Neither we nor the trustee nor any of our respective agents will have any responsibility for the performance by DTC, Euroclear or Clearstream or their respective participants or indirect participants of their respective obligations under the rules and procedures governing their operations.

Exchange of Interests in the Global Note for Certificated Notes

      We may exchange beneficial interests in the Global Note for definitive new notes in registered certificated form (“Certificated Notes”) if:

•  DTC has (1) notified us that it is unwilling or unable to continue as depositary for the Global Note, and we fail to appoint a successor depositary or (2) ceased to be a clearing agency registered under the Exchange Act,

•  at our option, we notify the trustee in writing that we elect to cause the issuance of the Certificated Notes, or

•  there has occurred and is continuing a Default or Event of Default with respect to the new notes.

      In addition, we may exchange beneficial interests in the Global Note for Certificated Notes upon prior written notice given to the trustee by or on behalf of DTC in accordance with the new indenture. In all cases, the Certificated Notes we deliver in exchange for the beneficial interests in the Global Note will be registered in the names, and issued in any approved denominations, requested by or on behalf of the depositary (in accordance with its customary procedures).

Same Day Settlement and Payment

      We will make payments in respect of the new notes represented by the Global Note (including principal, premium, if any, interest and liquidated damages, if any) by wire transfer of immediately available funds to the accounts specified by the Global Note holder. We will make all payments of principal, interest and premium and liquidated damages, if any, with respect to Certificated Notes by wire transfer of immediately available funds to the accounts specified by the holders of new notes or, if no account is specified, by mailing

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a check to that holder’s registered address. The new notes represented by the Global Note are expected to trade in DTC’s Same Day Funds Settlement System, and any permitted secondary market trading activity in the new notes will, therefore, be required by DTC to be settled in immediately available funds. We expect that secondary trading in any Certificated Notes will also be settled in immediately available funds.

      Because of time zone differences, the securities account of a Euroclear or Clearstream participant purchasing an interest in the Global Note from a Participant in DTC will be credited and any crediting of this type will be reported to the relevant Euroclear or Clearstream participant, during the securities settlement processing day (which must be a business day for Euroclear and Clearstream) immediately following DTC’s settlement date. DTC has advised us that cash received in Euroclear or Clearstream as a result of sales of interests in the Global Note by or through a Euroclear or Clearstream participant to a Participant in DTC will be received with value on the settlement date of DTC but will be available in the relevant Euroclear or Clearstream cash account only as of the business day for Euroclear or Clearstream following DTC’s settlement date.

MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES

United States Tax Consequences

      The following is a general discussion of the United States federal income tax consequences associated with the exchange offer and the ownership and disposition of the new notes offered in this prospectus and consent solicitation statement. Except where noted, it deals only with those holders who hold the old notes and new notes as capital assets and does not deal with special situations, like those of brokers, dealers in securities or currencies, financial institutions, tax exempt entities, insurance companies, persons liable for alternative minimum tax, U.S. persons whose “functional currency” is not the U.S. dollar, persons holding old notes or new notes, as the case may be, as part of a hedging, integrated, conversion or constructive sale transaction or a straddle, and traders in securities that elect to use a mark-to-market method of accounting for their securities holdings. The following summary does not address state or local or non United States tax consequences or United States federal tax consequences (e.g., estate or gift tax) other than those pertaining to the income tax.

      We have not requested and do not intend to request a ruling from the Internal Revenue Service (the “IRS”). At the closing, we will receive an opinion of Kohrman Jackson & Krantz P.L.L. that the discussion of the federal income tax consequences contained in this prospectus and consent solicitation statement is accurate in all material respects. Opinions of counsel, such as that to be provided to us, merely reflect counsel’s best judgment based on existing authorities. These opinions are not binding on the IRS or the courts. The IRS may disagree with the opinion, and a court may sustain the position of the IRS.

      This discussion is based on provisions of the Internal Revenue Code of 1986, as amended (the “Code”), the Treasury Regulations promulgated thereunder, and administrative and judicial interpretations of the foregoing, all as in effect as of the date hereof and all of which are subject to change, possibly with retroactive effect. This discussion does not address tax consequences of the purchase, ownership or disposition of the new notes to holders of new notes other than those holders who acquired their new notes pursuant to the exchange offer. If a partnership holds the old notes or new notes, the tax treatment of a partner will generally depend upon the status of the partner and the activities of the partnership. Partners of partnerships that hold old notes or will acquire new notes pursuant to the exchange offer should consult their own tax advisors.

      As used in this prospectus and consent solicitation statement, the term “U.S. Holder” means a holder of old notes or new notes, as the case may be, that is, for United States federal income tax purposes, a U.S. Person as defined below under “— U.S. Federal Income Tax Documentation Requirements” below. The term “non-U.S. Holder” means a holder of old or new notes that is not a U.S. Person.

      Each U.S. Holder and non-U.S. Holder should consult its tax advisor regarding the particular tax consequences to that holder of the exchange offer, the ownership and disposition of the old notes and

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new notes, as well as any tax consequences that may arise under the laws of any other relevant foreign, state, local or other taxing jurisdiction.

U.S. Holders

Exchange Offer

      Under general principles of tax law, the “significant modification” of a debt instrument creates a deemed exchange (upon which gain or loss may be recognized) if the modified debt instrument differs materially either in kind or in extent from the original debt instrument. Under applicable Treasury Regulations, the modification of a debt instrument is a significant modification that will create a deemed exchange if, based on all the facts and circumstances and taking into account some of the modifications of the debt instrument collectively, the legal rights or obligations that are altered and the degree to which they are altered is “economically significant.” In addition, a significant modification that will create a deemed exchange occurs if one of the bright line tests set forth in Treasury Regulations Section 1.1001-3(e) is met.

      The exchange of old notes for new notes pursuant to the exchange offer will constitute a significant modification of a debt instrument pursuant to Treasury Regulations Section 1.1001-3(e). Accordingly, a U.S. Holder who exchanges old notes for the new notes pursuant to the exchange offer will realize gain or loss equal to the difference between the amount realized by the U.S. Holder on the exchange and the U.S. Holder’s adjusted basis in the old notes immediately prior to the date of the exchange. The amount realized by a U.S. Holder on the exchange of old notes for new notes will, based on the position that we intend to take with respect to the consent payments, be the issue price of the new notes received by the U.S. Holder. Because the new notes will be publicly traded within the meaning of Treasury Regulations section 1.1273-2(f), the issue price of the new notes will be their fair market value on the date of their issue. The accrued but previously unpaid interest that will be paid, in cash, on the old notes in the exchange will be reportable as ordinary interest income by a U.S. Holder in accordance with its method of accounting.

      The proper treatment of the consent payments is unclear. However, we intend to take the position that the payments will represent additional consideration received by U.S. Holders in exchange for their old notes. You should consult your own tax advisor as to possible alternative treatments of the consent payments.

      The tax treatment of gain or loss realized by a U.S. Holder on the exchange of old notes for new notes depends upon whether both the old and the new notes constitute “securities” for U.S. federal income tax purposes, as discussed further below.

      Exchanges of debt instruments for other debt instruments in the same corporation may qualify as a tax-free recapitalization for the holder of the debt instruments if both the old and new debt instruments qualify as securities for federal income tax purposes. If the exchange qualifies as a tax-free recapitalization, a U.S. Holder would not recognize a taxable loss and would recognize taxable gain only up to the amount which is the lesser of the fair market value of “other property” received by the U.S. Holder in the exchange or U.S. Holder’s realized gain on the exchange. Based on the position that we intend to take with respect to the consent payments, no “other property” would be received in the exchange. If the exchange of the old notes for the new notes qualifies as a tax-free recapitalization, a U.S. Holder would take an initial tax basis in the new notes equal to its adjusted tax basis in the old notes immediately before the exchange, increased by the amount of gain recognized by the U.S. Holder in the recapitalization. A U.S. Holder’s holding period for the new notes would include the period during which it held the old notes surrendered in the exchange. U.S. Holders are urged to consult their own tax advisors regarding the possible tax-free treatment for exchanges of the old notes for the new notes, including whether the old and the new notes qualify as securities for federal income tax purposes.

      If the exchange does not qualify as a tax-free recapitalization, then a U.S. Holder would recognize the entire gain or loss realized on the transaction. The U.S. Holder would take an initial tax basis in the new notes equal to their issue price.

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      Any gain or loss recognized by a U.S. Holder would be capital gain or loss, subject to the market discount rules discussed in the following paragraph. The deductibility of any recognized capital loss would be subject to limitations.

      A U.S. Holder who has acquired the old notes with market discount (i.e., an excess of the stated redemption price at maturity over the basis of the old note immediately after acquisition by the U.S. Holder) in excess of a statutorily defined de minimis amount generally will be required to treat gain on the exchange of the old notes as ordinary income to the extent of the market discount accrued to the date of the disposition, less any accrued market discount income previously included in the U.S. Holder’s income pursuant to an election, if any.

      If the issue price of the new notes is less than their stated redemption price at maturity, the exchange could result in the new notes being deemed to be issued with original issue discount (“OID”), which would be included in the U.S. Holder’s income over the term of the new notes. If the exchange is treated as a recapitalization, a U.S. Holder would amortize any premium (i.e., any excess of the U.S. Holder’s tax basis in the new notes immediately after the exchange over the issue price of the new notes, reduced by an amount equal to any accrued but unpaid interest on the old notes) under a constant yield-to-maturity basis as an offset to interest on the new notes. The issue price of the new notes may be less than their stated redemption price at maturity. See “— Original Issue Discount.”

      Each U.S. Holder should consult its tax advisor regarding the particular tax consequences to that U.S. Holder of the exchange transaction.

Consequences to Non-Tendering U.S. Holders

      Under general principles of tax law, the significant modification of a debt instrument creates a deemed exchange (upon which gain or loss may be recognized) if the modified debt instrument differs materially either in kind or in extent from the original debt instrument. Applicable Treasury Regulations contain the general rule that the modification of a debt instrument is a significant modification that will create a deemed exchange if, based on all the facts and circumstances and taking into account some of the modifications of the debt instrument collectively, the legal rights or obligations that are altered and the degree to which they are altered is economically significant.

      Under Treasury Regulations Section 1.1001-3(e)(6), a modification that adds, deletes or alters customary accounting or financial covenants is not a significant modification. In addition, under Treasury Regulations Sections 1.1001-3(e)(4)(iv) and (v), a modification that releases, substitutes, adds or otherwise alters the collateral for, a guarantee on or other form of credit enhancement for, a recourse note is not a significant modification unless the modification results in a “change in payment expectations,” which is defined, in so far as relevant, as occurring if there is a substantial impairment of the obligor’s capacity to meet the payment obligations under a debt instrument and that capacity was adequate prior to the modification and primarily speculative after the modification.

      Although the matter is not entirely free from doubt, the adoption of the proposed amendments to the old indenture should not cause the non-tendering U.S. Holders of the old notes (“Non-Tendering U.S. Holders”) to be deemed to have exchanged the old notes for “deemed new” notes as the proposed amendments to the old indenture should be viewed as modifications that (a) add, delete or alter customary accounting or financial covenants and (b) while eliminating guarantees, do not result in a “change in payment expectations.” Accordingly, the proposed amendments to the old indenture should not constitute a significant modification of the old notes, and Non-Tendering U.S. Holders of the old notes should not realize any gain or loss with respect to the adoption of those amendments.

      If the adoption of the proposed amendments to the old indenture were not viewed by the Internal Revenue Service as effecting a change only to customary accounting or financial covenants, then this adoption would only trigger a realization event for the Non-Tendering U.S. Holders if the adoption of the amendments to the old indenture is economically significant and consequently constitutes a significant modification. If it were determined by the Internal Revenue Service that the adoption of the amendments to the old indenture

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constitutes a significant modification, then a Non-Tendering U.S. Holder would recognize gain or loss equal to the difference between the issue price of the deemed new notes (less an amount equal to any accrued and unpaid interest on the old notes) and that Non-Tendering U.S. Holder’s adjusted tax basis in the old notes immediately before the date of the deemed exchange. Since the deemed new notes are publicly traded within the meaning of Treasury Regulations Section 1.1273-2(f)(4), the issue price of the deemed new notes would be their fair market value on the exchange date.

      If the adoption of the proposed amendments to the old indenture were treated as a deemed exchange and if the issue price of the deemed new notes were less than their stated redemption price at maturity, then the exchange could result in the deemed new notes being deemed to be issued with OID, which would be included in the Non-Tendering U.S. Holder’s income over the term of the deemed new notes. See “— Original Issue Discount.” Each Non-Tendering U.S. Holder should consult its tax advisor regarding the particular tax consequences to that holder of a failure to tender the old notes in the exchange offer, including any possible deemed exchange of the old notes that may result from the adoption of the proposed amendments to the old indenture.

Payment of Interest

      Stated interest payable on the new notes generally will be included in the gross income of a U.S. Holder as ordinary interest income at the time accrued or received, in accordance with that U.S. Holder’s method of accounting for United States federal income tax purposes.

Original Issue Discount

      If the new notes are issued at a discount from their stated redemption price at maturity (the sum of all payments to be made on the new notes other than payments of qualified stated interest), and the discount is equal to or more than the product of 0.25% of the stated redemption price at maturity of the new notes multiplied by the number of full years to their maturity, then the difference between the issue price and the stated redemption price at maturity of the new notes will be OID. U.S. Holders should be aware that, as described in greater detail below, they generally must include OID in gross income as it accrues, in advance of the receipt of cash attributable to that income.

      The amount of OID includible in income by the initial U.S. Holder of the new notes is the sum of the “daily portions” of OID with respect to the new notes for each day during the taxable year or portion of the taxable year in which that U.S. Holder held the new notes (“accrued OID”). The daily portion is determined by allocating to each day in any “accrual period” a pro rata portion of the OID allocable to that accrual period. The “accrual period” for the new notes may be of any length and may vary in length over the term of the new notes, so long as each accrual period is no longer than one year and each scheduled payment of principal or interest occurs either on the first day or the final day of an accrual period. The amount of OID allocable to any accrual period is an amount equal to the excess, if any, of (i) the product of the new note’s adjusted issue price at the beginning of the accrual period and its yield to maturity (determined on the basis of compounding at the close of each accrual period and properly adjusted for the length of the accrual period) less (ii) the amount of any qualified stated interest allocable to the accrual period. OID allocable to a final accrual period is the difference between the amount payable at maturity (other than a payment of qualified stated interest) and the adjusted issue price at the beginning of the final accrual period (this is referred to as the constant yield method). Special rules will apply for calculating OID for an initial short accrual period. The adjusted issue price of the new notes at the beginning of any accrual period is equal to its issue price increased by the accrued OID for each prior accrual period previously includible in the gross income of the U.S. Holder and decreased by the amount of any payments previously made on the new notes (other than qualified stated interest payments). Under these rules, a U.S. Holder will have to include in income increasingly greater amounts of OID in successive accrual periods. Finally, we are required to provide information returns stating the amount of OID accrued on the new notes held of record by the various holders.

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      U.S. Holders may elect to treat all interest on the new notes as OID and calculate the amount included in gross income under the constant yield method. For the purposes of this election, interest includes stated interest, acquisition discount, OID, de minimis OID, market discount, de minimis discount and unstated interest, as adjusted by any amortizable bond premium or acquisition premium. The election is to be made for the taxable year in which the U.S. Holder acquired the new notes and may not be revoked without the consent of the Internal Revenue Service. U.S. Holders should consult with their own tax advisors about this election.

Sale, Exchange and Retirement of New Notes

      Upon the sale, exchange, retirement at maturity, or other taxable disposition of the new notes, a U.S. Holder generally will recognize capital gain or loss equal to the difference between the amount realized by that holder (less an amount equal to any accrued and unpaid interest not previously included in income, which will be treated as ordinary interest income) and that holder’s adjusted tax basis in the new notes. A U.S. Holder’s adjusted tax basis in the new notes would generally be equal to its initial tax basis in those notes (see discussion under “The Exchange Offer” above), increased by OID included in the gross income of the U.S. Holder and reduced by any payments on the new notes other than qualified stated interest payments. The deductibility of capital losses is subject to limitations.

Backup Withholding and Information Reporting

      In general, information reporting requirements will apply to accrual of OID and some of the payments of principal and interest paid on the new notes and to the proceeds of the sale of new notes or old notes made to U.S. Holders other than some exempt recipients (like corporations). A backup withholding tax will apply to payments of those amounts if the U.S. Holder fails to provide a taxpayer identification number on a Form W-9, furnishes an incorrect taxpayer identification number, fails to certify foreign or other exempt status from backup withholding or fails to report in full dividend and interest income.

      Backup withholding is not an additional tax. Any amounts withheld from a payment to a U.S. Holder under the backup withholding rules will be allowed as a credit against the holder’s United States federal income tax liability and may entitle the holder to a refund, so long as the required information is furnished to the Internal Revenue Service.

Non-U.S. Holders

      Subject to the discussion of backup withholding and information reporting below, the interest income and gains that a non-U.S. Holder derives in respect of the old notes and the new notes generally will be exempt from U.S. federal income taxes, including withholding tax.

      Payments of interest or principal in respect of the new notes, including interest that is due as a result of the exchange transaction, by us or our paying agent to a holder that is a non-U.S. Holder will not be subject to withholding of United States federal income tax, so long as, in the case of payments of interest (including OID):

•   the income is effectively connected with the conduct by that non-U.S. Holder of a trade or business carried on in the United States and the non-U.S. Holder complies with applicable identification requirements (described below under “— Backup Withholding and Information Reporting”); or

•   the non-U.S. Holder and each securities clearing organization, bank or other financial institution that holds the new notes on behalf of that non-U.S. Holder in the ordinary course of its trade or business, in the chain between the non-U.S. Holder and the paying agent, complies with applicable identification requirements (described below under “—Backup Withholding and Information Reporting”) to establish that the holder is a non-U.S. Holder and in addition, that the following requirements of the “portfolio interest” exception under the Code are satisfied:

•  the non-U.S. Holder does not actually or constructively own 10% or more of our voting stock,

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•  the non-U.S. Holder is not a controlled foreign corporation with respect to us,

•  the non-U.S. Holder is not a bank whose receipt of interest on the new notes is described in Section 881(c)(3)(A) of the Code, and

•  the interest is not contingent interest described in Section 871(h)(4) of the Code.

      Any gain that a non-U.S. Holder realizes on a sale or exchange of the old notes or the new notes generally will be exempt from U.S. federal income tax, including withholding tax, unless:

•   the gain is effectively connected with the conduct of a trade or business in the United States (or if a tax treaty applies, the gain is attributable to a permanent establishment of the non-U.S. Holder),

•   in the case of a non-U.S. Holder that is an individual, that non-U.S. Holder is present in the United States for 183 days or more during the taxable year in which the sale, exchange or other disposition occurs, or

•   in the case of gain representing accrued interest, the requirements of the portfolio interest exception are not satisfied and no applicable income tax treaty between the United States and a foreign country exempts that income from U.S. taxation.

      In the case of a non-U.S. Holder that is subject to United States federal income taxation on a net basis in respect of the notes, that holder will generally be taxed under the same rules that govern the taxation of a U.S. Holder. In addition, if that holder is a foreign corporation, it may be subject to an additional branch profits tax.

      In addition, a non-U.S. Holder that has acquired the old notes with market discount (i.e., an excess of the stated redemption price at maturity over the basis of the notes immediately after acquisition by the non-U.S. Holder in excess of a statutorily defined de minimis amount) generally will be required to treat gain on the exchange of the old notes as ordinary income to the extent of the market discount accrued to the date of the disposition, less any accrued market discount income previously included in the non-U.S. Holder’s income pursuant to an election, if any. A non-U.S. Holder will not be subject to U.S. withholding tax on this portion of the gain.

Backup Withholding and Information Reporting

      Payment of the proceeds of a sale of a note or payment of interest (including OID) will be subject to information reporting requirements and backup withholding tax unless the beneficial owner certifies its non-U.S. status under penalties of perjury or otherwise establishes an exemption (absent actual knowledge by the paying agent that the holder is actually a U.S. Holder). Treasury Regulations provide some presumptions under which a non-U.S. Holder will be subject to backup withholding and information reporting unless the holder certifies as to its non-U.S. status or otherwise establishes an exemption. In addition, the Treasury Regulations contain some procedural requirements related to establishing a holder’s non-U.S. status. Non-U.S. Holders should consult with their own tax advisors regarding the foregoing issues.

      Any amounts withheld from a payment to a non-U.S. Holder under the backup withholding rules will be allowed as a credit against the holder’s United States federal income tax liability and may entitle the holder to a refund, so long as the required information is furnished to the Internal Revenue Service.

      Applicable identification requirements generally will be satisfied if the following is delivered to the person from whom you receive payment or who credits your account before the payment of the stated interest or OID:

•   a Form W-8BEN signed under penalties of perjury by the non-U.S. Holder, stating that the holder of the new notes is not a U.S. person and providing the non-U.S. Holder’s name and address,

•   with respect to non-U.S. Holders of the new notes residing in a country that has a tax treaty with the United States who seek an exemption or reduced tax rate (depending on the treaty terms), Form W-8BEN (if the treaty provides only for a reduced rate, then withholding tax will be imposed at

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	that rate unless the non-U.S. Holder qualifies under the portfolio interest rules set forth in the Code and files a W-8BEN), or
•	with respect to interest income effectively connected with the conduct by the non-U.S. Holder of a trade or business carried on in the United States, Form W-8ECI,

      as long as in each of the foregoing cases:

•   the applicable form is delivered pursuant to applicable procedures and is properly transmitted to the U.S. withholding agent otherwise required to withhold tax, and

•   none of the entities receiving the form has actual knowledge or reason to know that the holder is a U.S. Holder.

U.S. Federal Income Tax Documentation Requirements

      A non-U.S. beneficial owner of the new notes holding them through a paying agent will be subject to U.S. withholding tax that generally applies to payments of interest (including OID) on registered debt issued by U.S. Persons as well as interest (including OID) that is due as a result of the exchange transaction, unless (i) each clearing system, bank or other financial institution that holds customers’ securities in the ordinary course of its trade or business in the chain of intermediaries between that beneficial owner and the U.S. entity required to withhold tax complies with applicable certification requirements and (ii) that beneficial owner takes one of the following steps to obtain an exemption or reduced tax rate:

      Exemption for non-U.S. Persons (Form W-8BEN). A beneficial owner of the new notes that is a non-U.S. Person can obtain a complete exemption from the withholding tax by qualifying under the portfolio interest rules set forth in the Code and by filing a Form W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Withholding), or otherwise satisfying the documentary evidence requirements for establishing that it is a non-U.S. Person. If the information shown on Form W-8BEN changes, the withholding agent or payer must be notified within 30 days of the change in circumstances and a new Form W-8BEN must be filed.

      Exemption for non-U.S. Persons with effectively connected income (Form W-8ECI). A non-U.S. Person, including a non-U.S. corporation or bank with a U.S. branch, for which the interest income is effectively connected with its conduct of a trade or business in the United States, can obtain an exemption from the withholding tax by filing Form W-8ECI (Certificate of Foreign Person’s Claim for Exemption from Withholding on Income Effectively Connected with the Conduct of a Trade or Business in the United States).

      Exemption or reduced rate of non-U.S. Persons resident in treaty countries (Form W-8BEN). Alternatively, non-U.S. Persons that are new notes owners residing in a country that has an income tax treaty with the United States can obtain an exemption or reduced tax rate (depending on the treaty terms) by filing Form W-8BEN, or otherwise satisfying the documentary evidence requirements. If the treaty provides only for a reduced rate, withholding tax will be imposed at that rate unless the filer qualifies under the portfolio interest rules set forth in the Code and files Form W-8BEN, or otherwise satisfies the documentary evidence requirements.

      Exemption for U.S. Persons (Form W-9). U.S. Persons can obtain a complete exemption from the withholding tax by filing Form W-9 (Payer’s Request for Taxpayer Identification Number and Certification).

      U.S. Federal Income Tax Reporting Procedure. A holder of new notes files by submitting the appropriate form to the person through whom it holds (the clearing agency, in the case of persons holding directly on the books of the clearing agency). Forms W-8BEN and W-8ECI are effective for three calendar years unless a change in circumstances makes any information in the form incorrect.

      The term “U.S. Person” means (1) a citizen or resident of the United States, (2) a corporation or partnership organized in or under the laws of the United States or any of its states, (3) an estate or trust the income of which is includible in gross income for United States tax purposes, regardless of its source, or

103

(4) a trust which is subject to the supervision of a court within the United States and the control of a United States person as described in Code Section 7701(a)(30).

      This summary does not deal with all aspects of U.S. federal income tax withholding that may be relevant to non-U.S. Holders of the new notes. Investors are advised to consult their own tax advisors for specific tax advice concerning their holding and disposing of the new notes.

PLAN OF DISTRIBUTION

      We will receive no proceeds in connection with the exchange offer. We will distribute the new notes in the manner described in “The Exchange Offer — Acceptance of Old Notes for Exchange; Delivery of New Notes” above.

LEGAL MATTERS

      Kohrman Jackson & Krantz P.L.L. has passed on various legal matters for us with respect to the new notes and the guarantees. Byron S. Krantz, a partner in Kohrman Jackson & Krantz P.L.L., is one of our stockholders and directors and is also our Secretary. Marc C. Krantz, a son of Byron S. Krantz and a partner in Kohrman Jackson & Krantz P.L.L., is our Assistant Secretary and a stockholder. We paid legal fees of $179,796 in the quarterly period ended March 31, 2002, and $384,287 for the year ended December 31, 2001, to Kohrman Jackson & Krantz P.L.L. for legal services rendered in connection with a variety of matters.

      McGuireWoods LLP will pass on a number of legal matters with respect to the new notes for the dealer manager.

EXPERTS

      Ernst & Young LLP, independent auditors, have audited our consolidated financial statements at December 31, 2001 and 2000, and for each of the three years in the period ended December 31, 2001, as set forth in their report. We have included our financial statements in this prospectus and consent solicitation statement and elsewhere in the registration statement in reliance on Ernst & Young LLP’s report, given on their authority as experts in accounting and auditing.

104

THE HAWK CORPORATION

INDEX TO FINANCIAL STATEMENTS

Contents

	Page
Report of Independent Auditors		F-2
Consolidated Balance Sheets at March 31, 2002 (unaudited) and December 31, 2001 and 2000		F-3
Consolidated Statements of Operations for the three months ended March 31, 2002 and 2001 (unaudited) and for the years ended December 31, 2001, 2000 and 1999		F-4
Consolidated Statements of Shareholders’ Equity for the three months ended March 31, 2002 (unaudited) and for the years ended December 31, 2001, 2000 and 1999		F-5
Consolidated Statements of Cash Flows for the three months ended March 31, 2002 and 2001 (unaudited) and for the years ended December 31, 2001, 2000 and 1999		F-6
Notes to Consolidated Financial Statements		F-7

F-1

Report of Independent Auditors

Shareholders and Board of Directors
Hawk Corporation

      We have audited the accompanying consolidated balance sheets of Hawk Corporation and subsidiaries as of December 31, 2001 and 2000 and the related consolidated statements of operations, shareholders’ equity, and cash flows for each of the three years in the period ended December 31, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of Hawk Corporation and subsidiaries at December 31, 2001 and 2000 and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 2001, in conformity with accounting principles generally accepted in the United States.

/s/ ERNST & YOUNG LLP

Cleveland, Ohio
March 25, 2002,
except for Notes D and M, as to which the date is May 15, 2002

F-2

Hawk Corporation

Consolidated Balance Sheets

(In Thousands, except share data)

						December 31,
			March 31,
			2002			2001			2000
			(Unaudited)
Assets
Current assets:
	Cash and cash equivalents		$	2,412		$	3,084		$	4,010
	Accounts receivable, less allowance of $480 in 2002, $455 in 2001 and $372 in 2000			32,708			25,773			29,602
	Inventories:
		Raw materials and work-in-process		20,723			19,360			20,140
		Finished products		8,875			9,792			11,724
				29,598			29,152			31,864
	Deferred income taxes			1,199			1,200			1,113
	Other current assets			5,206			4,638			2,976
Total current assets				71,123			63,847			69,565
Property, plant and equipment:
	Land and improvements			1,608			1,608			1,603
	Buildings and improvements			18,781			18,657			18,240
	Machinery and equipment			96,839			96,688			89,330
	Furniture and fixtures			7,593			7,168			5,584
	Construction in progress			2,267			1,450			3,316
				127,088			125,571			118,073
	Less accumulated depreciation and amortization			60,771			58,208			47,672
Total property, plant and equipment				66,317			67,363			70,401
Other assets:
	Goodwill			53,877			53,877			56,629
	Other intangible assets			12,472			12,828			14,084
	Shareholder notes			1,010			1,010			1,010
	Other			5,196			5,180			3,696
Total other assets				72,555			72,895			75,419
Total assets			$	209,995		$	204,105		$	215,385
Liabilities and shareholders’ equity
Current liabilities:
	Accounts payable		$	15,214		$	13,432		$	11,579
	Accrued compensation			4,722			5,233			7,791
	Other accrued expenses			9,202			6,832			6,446
	Current portion of long-term debt			32,153			6,862			7,273
Total current liabilities				61,291			32,359			33,089
Long-term liabilities:
	Long-term debt			68,841			90,957			96,661
	Deferred income taxes			10,976			10,978			11,554
	Other			3,392			3,374			2,392
Total long-term liabilities				83,209			105,309			110,607
Shareholders’ equity:
	Series D preferred stock, $.01 par value; an aggregate liquidation value of $1,530, plus any unpaid dividends with 9.8% cumulative dividend (1,530 shares authorized, issued and outstanding)			1			1			1
	Class E preferred stock, $.01 par value; 100,000 shares authorized; none issued or outstanding			—			—			—
	Class A common stock, $.01 par value; 75,000,000 shares authorized; 9,187,750 issued; and 8,557,240, 8,552,920 and 8,548,520 outstanding in 2002, 2001 and 2000, respectively			92			92			92
	Class B common stock, $.01 par value; 10,000,000 shares authorized; none issued or outstanding			—			—			—
	Additional paid-in capital			54,619			54,626			54,631
	Retained earnings			18,985			19,623			24,109
	Accumulated other comprehensive loss			(3,530	)		(3,201	)		(2,409	)
	Treasury stock, at cost, 633,006, 634,830 and 639,230 shares in 2002, 2001 and 2000, respectively			(4,672	)		(4,704	)		(4,735	)
Total shareholders’ equity				65,495			66,437			71,689
Total liabilities and shareholders’ equity			$	209,995		$	204,105		$	215,385

See notes to consolidated financial statements.

F-3

Hawk Corporation

Consolidated Statements of Operations

(In Thousands, except per share data)

		Three Months
		ended March 31,						Year ended December 31,
		2002			2001			2001			2000			1999
		(Unaudited)
Net sales		$	49,804		$	53,781		$	184,388		$	202,329		$	187,638
Cost of sales			39,025			39,961			144,409			147,387			138,879
Gross profit			10,779			13,820			39,979			54,942			48,759
Operating expenses:
	Selling, technical and administrative expenses		9,198			8,780			30,804			31,318			26,366
	Restructuring costs		—			—			1,055			—			—
	Amortization of intangibles		356			1,131			4,548			4,161			3,829
Total operating expenses			9,554			9,911			36,407			35,479			30,195
Income from operations			1,225			3,909			3,572			19,463			18,564
Interest expense			(2,298	)		(2,443	)		(9,469	)		(9,016	)		(9,409	)
Interest income			63			42			233			218			431
Other (expense) income, net			(202	)		78			(530	)		(535	)		405
(Loss) income before income taxes			(1,212	)		1,586			(6,194	)		10,130			9,991
Income tax (benefit) provision			(612	)		729			(1,858	)		4,360			3,662
Net (loss) income		$	(600	)	$	857		$	(4,336	)	$	5,770		$	6,329
Earnings per share:
	Basic (loss) earnings per share	$	(.07	)	$	.10		$	(.52	)	$	.66		$	.71
	Diluted (loss) earnings per share	$	(.07	)	$	.10		$	(.52	)	$	.66		$	.71

See notes to consolidated financial statements.

F-4

Hawk Corporation

Consolidated Statements of Shareholders’ Equity

(In Thousands)

													Accumulated Other
													Comprehensive Loss
							Additional						Foreign			Minimum
			Preferred		Common		Paid-in			Retained			Currency			Pension			Treasury
			Stock		Stock		Capital			Earnings			Translation			Liability			Stock			Total
Balance at January 1, 1999			$	1	$	92	$	54,645		$	12,310		$	(640	)	$	—		$	(1,993	)	$	64,415
	Net income										6,329												6,329
	Other comprehensive income:
		Foreign currency translation												(1,309	)								(1,309	)
	Total comprehensive income																						5,020
	Preferred stock dividend										(148	)											(148	)
	Repurchase of common stock																			(2,798	)		(2,798	)
Balance at December 31, 1999				1		92		54,645			18,491			(1,949	)		—			(4,791	)		66,489
	Net income										5,770												5,770
	Other comprehensive income:
		Minimum pension liability (net of tax)															(83	)					(83	)
		Foreign currency translation												(377	)								(377	)
	Total comprehensive income																						5,310
	Preferred stock dividend										(152	)											(152	)
	Issuance of common stock from treasury as compensation							(14	)											56			42
Balance at December 31, 2000				1		92		54,631			24,109			(2,326	)		(83	)		(4,735	)		71,689
	Net loss										(4,336	)											(4,336	)
	Other comprehensive loss:
		Minimum pension liability (net of tax)															(495	)					(495	)
		Foreign currency translation												(297	)								(297	)
	Total comprehensive loss																						(5,128	)
	Preferred stock dividend										(150	)											(150	)
	Issuance of common stock from treasury as compensation							(5	)											31			26
Balance at December 31, 2001				1		92		54,626			19,623			(2,623	)		(578	)		(4,704	)		66,437
	Net loss (unaudited)										(600	)											(600	)
	Other comprehensive loss:
		Foreign currency translation (unaudited)												(329	)								(329	)
	Total comprehensive loss (unaudited)																						(929	)
	Preferred stock dividend (unaudited)										(38	)											(38	)
	Issuance of common stock from treasury as compensation (unaudited)							(7	)											32			25
Balance at March 31, 2002 (unaudited)			$	1	$	92	$	54,619		$	18,985		$	(2,952	)	$	(578	)	$	(4,672	)	$	65,495

See notes to consolidated financial statements.

F-5

Hawk Corporation

Consolidated Statements of Cash Flows

(In Thousands)

				Three Months
				ended March 31,						Year ended December 31,
				2002			2001			2001			2000			1999
				(Unaudited)
Cash flows from operating activities
Net (loss) income				$	(600	)	$	857		$	(4,336	)	$	5,770		$	6,329
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
		Depreciation and amortization			3,093			3,911			15,929			14,976			13,673
		Deferred income taxes						(81	)		(637	)		1,650			1,440
		Loss on fixed assets									399			216			518
		Changes in operating assets and liabilities, net of acquired assets:
			Accounts receivable		(7,067	)		(5,667	)		3,495			590			(2,690	)
			Inventories		(565	)		13			2,453			(3,622	)		121
			Other assets		(185	)		(26	)		(3,156	)		57			581
			Accounts payable		1,847			2,553			2,006			(205	)		(67	)
			Other liabilities		1,557			(382	)		(1,683	)		2,132			(159	)
Net cash provided by operating activities					(1,920	)		1,178			14,470			21,564			19,746
Cash flows from investing activities
Business acquisitions					—			—			—			(6,510	)		(19,350	)
Purchases of property, plant and equipment					(1,931	)		(2,840	)		(9,096	)		(10,489	)		(10,134	)
Proceeds from sale of assets					—			—			—			69			3,682
Net cash used in investing activities					(1,931	)		(2,840	)		(9,096	)		(16,930	)		(25,802	)
Cash flows from financing activities
Payments on short-term debt					—			—			—			(808	)		—
Proceeds from long-term debt					15,838			13,733			40,457			30,217			38,022
Payments on long-term debt					(12,569	)		(12,781	)		(46,520	)		(33,886	)		(39,701	)
Payments of preferred stock dividends					(38	)		(37	)		(150	)		(152	)		(148	)
Repurchase of common stock					—			—			—			—			(2,798	)
Net cash used in financing activities					3,231			915			(6,213	)		(4,629	)		(4,625	)
Effect of exchange rate changes on cash					(52	)		(109	)		(87	)		12			357
Net (decrease) increase in cash and cash equivalents					(672	)		(856	)		(926	)		17			(10,324	)
Cash and cash equivalents at beginning of year					3,084			4,010			4,010			3,993			14,317
Cash and cash equivalents at end of year				$	2,412		$	3,154		$	3,084		$	4,010		$	3,993
Supplemental cash flow information
Cash payments for interest				$	465		$	565		$	8,940		$	9,045		$	9,403
Net cash payments (refunds) for income taxes				$	(288	)	$	(41	)	$	871		$	3,685		$	2,596
Non-cash investing and financing activities:
	Equipment purchased with capital leases and notes payable			$	333		$	441		$	422		$	24		$	85
	Issuance of common stock from treasury			$	25		$	26		$	26		$	42		$	—

See notes to consolidated financial statements.

F-6

Hawk Corporation

Notes to Consolidated Financial Statements

Years ended December 31, 2001, 2000 and 1999

Three Months ended March 31, 2002 (Unaudited)

(Dollars in Thousands, except per share data)

A.     Basis of Presentation

      Hawk Corporation (the Company) designs, engineers, manufactures and markets specialized components used in a wide variety of aerospace, industrial and commercial applications.

      The consolidated financial statements of the Company include its wholly owned subsidiaries. Beginning in December 2000, the financial statements also include the Company’s majority ownership interest in Net Shape Technologies LLC (Net Shape). All significant intercompany accounts and transactions have been eliminated in the accompanying financial statements. Certain amounts have been reclassified in 2000 and 1999 to conform with the 2001 presentation.

      In the fourth quarter of 2000, the Company adopted Emerging Issues Task Force Issue 00-10 “Accounting for Shipping and Handling Fees and Costs,” and changed its accounting policy to reflect in its consolidated statement of operations all shipping and handling costs as cost of sales and related shipping revenue in net sales. All prior periods have been changed to conform to current year presentation.

      The accompanying unaudited consolidated financial statements at March 31, 2002 and for the three months ended March 31, 2002 and 2001 have been prepared in accordance with generally accepted accounting principles for interim financial information and Article 10 of Regulation S-X. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three month period ended March 31, 2002 and 2001 are not necessarily indicative of the results that may be expected for future interim periods or the year ending December 31, 2002.

B.     Significant Accounting Policies

Cash and Cash Equivalents

      The Company considers all highly liquid investments with maturity of three months or less when purchased to be cash equivalents.

Inventories

      Inventories are stated at the lower of cost or market. Cost is determined by the first-in, first-out (FIFO) method.

Property, Plant and Equipment

      Property, plant and equipment are recorded at cost and include expenditures for additions and major improvements. Expenditures for repairs and maintenance are charged to operations as incurred. The Company uses the straight-line method of depreciation for financial reporting purposes. Buildings and improvements are depreciated over periods ranging from 15 to 33 years. Machinery and equipment is depreciated over periods ranging from 4 to 12 years. Furniture and fixtures are depreciated over periods ranging from 3 to 10 years. Accelerated methods of depreciation are used for federal income tax purposes. The Company’s depreciation expense was $11,381 in 2001, $10,815 in 2000 and $9,844 in 1999.

Intangible Assets

      Intangible assets are amortized using the straight-line method over periods ranging from 5 to 40 years (See Note D). The Company evaluates the recoverability of long-lived assets (under Statement of Financial Accounting Standards (SFAS) No. 121 “Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to

F-7

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

B.     Significant Accounting Policies (Continued)

Be Disposed Of”) and the related estimated remaining lives at each balance sheet date. The Company would record an impairment charge or change in the useful life whenever events or changes in circumstances indicate that the carrying amount may not be recoverable, determined using undiscounted cash flows and measured using discounted cash flows (generally, at the subsidiary level), or the useful life has changed.

Foreign Currency Translation

      The assets and liabilities of the Company’s foreign subsidiaries are translated into U.S. dollars at year-end exchange rates.

      Revenues and expenses are translated at weighted average exchange rates. Gains and losses from transactions are included in results of operations.

      Gains and losses resulting from translation are included in accumulated other comprehensive loss, a component of shareholders’ equity.

Revenue Recognition

      In accordance with Staff Accounting Bulletin (SAB) No. 101, “Revenue Recognition in Financial Statements,” which became effective in 2000, revenue from the sale of the Company’s products is recognized upon shipment to the customer and when title has transferred. Substantially all of the Company’s revenues are derived from fixed price purchase orders. Costs and related expenses to manufacture the products are recorded as costs of sales when the related revenue is recognized. The Company establishes bad debt reserves based on historical experience and believes that collections of revenues, net of the bad debt reserves, is reasonably assured.

Significant Concentrations

      The Company provides credit, in the normal course of its business, to original equipment and aftermarket manufacturers. The Company’s customers are not concentrated in any specific geographic region. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses which, when realized, have been within the range of management’s expectations.

Product Research and Development

      Product research and development costs are expensed as incurred. The Company’s expenditures for product research and development and engineering were approximately $3,893 in 2001, $3,533 in 2000 and $3,229 in 1999.

Income Taxes

      The Company uses the liability method in measuring the provision for income taxes and recognizing deferred tax assets and liabilities in the balance sheet. The liability method requires that deferred income taxes reflect the tax consequences of currently enacted rates for differences between the tax and financial reporting bases of assets and liabilities.

Fair Value of Financial Instruments

      The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments:

      Cash and Cash Equivalents — The carrying amounts reported in the consolidated balance sheets for cash and cash equivalents approximate fair value.

F-8

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

B.     Significant Accounting Policies (Continued)

      Long-Term Debt (including Current Portion) — The fair values of the Company’s publicly traded debentures, shown in the following table, are based on quoted market prices. The fair values of the Company’s non-traded debt, also shown in the following table, are estimated using discounted cash flow analysis, based on the Company’s current incremental borrowing rates for similar types of borrowing arrangements.

					December 31,
	March 31, 2002				2001				2000
	Carrying		Fair		Carrying		Fair		Carrying		Fair
	Amount		Value		Amount		Value		Amount		Value
	(Unaudited)
Publicly traded debt	$	65,000	$	62,156	$	65,000	$	62,156	$	65,000	$	61,100
Non-traded debts (including capital leases)	$	35,994	$	35,994	$	32,819	$	32,819	$	38,934	$	38,934

      Interest Rate Swap — The Company enters into interest rate swaps primarily to hedge against interest rate risks. These agreements generally involve the exchange of fixed and floating rate interest payment obligations without the exchange of the underlying principal amounts. Counterparties to this agreement are major financial institutions. During the first quarter of 2001, the Company entered into an interest rate swap agreement to moderate exposure to interest rate changes. Under this agreement, the Company effectively converted a portion of its floating rate debt to a fixed rate of 5.34% on $10,000 notional amount. Although this financial instrument did not meet the hedge accounting criteria of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” it continues to be effective in achieving the risk management objectives for which it was intended. The carrying value and the fair value of the interest rate swap at December 31, 2001 is $400 (liability). The change in the fair value is reflected in the Consolidated Statement of Operations in other (expense) income, net.

Use of Estimates

      The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that effect the amounts reported in the financial statements and accompanying notes. Actual results could differ from those estimates.

Recently Issued Accounting Pronouncements

      Effective January 1, 2001, the Company adopted SFAS No. 133, as amended by SFAS No. 138 “Accounting for Certain Derivative Instruments and Certain Hedging Activities.” SFAS No. 133, as amended, requires that an entity recognize all derivatives as either assets or liabilities in the balance sheet and measure those instruments at fair value and recognize changes in the fair value of derivatives in earnings in the period of change unless the derivative qualifies as an effective hedge that offsets certain exposures. The adoption of SFAS No. 133 did not have a material effect on January 1, 2001.

      In June 2001, the Financial Accounting Standards Board issued SFAS No. 141, “Business Combinations,” and SFAS No. 142, “Goodwill and Other Intangible Assets.” SFAS No. 141 requires that the purchase method of accounting be used for all business combinations initiated after June 30, 2001. SFAS No. 141 also includes guidance on the initial recognition and measurement of goodwill and other intangible assets arising from business combinations completed after June 30, 2001. SFAS No. 142 prohibits the amortization of goodwill and intangible assets with indefinite useful lives. SFAS No. 142 requires that these assets be reviewed for impairment at least annually. Intangible assets with finite lives will continue to be amortized over their useful lives. Additionally, SFAS No. 142 requires that goodwill included in the carrying value of equity method investments no longer be amortized.

F-9

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

B.     Significant Accounting Policies (Continued)

      The Company is currently in the process of performing the first step of the prescribed transitional goodwill impairment test with respect to existing goodwill. The first step of the transitional goodwill impairment test involves a comparison of the fair value of a reporting unit, as defined under FAS 142, with its carrying amount. If the carrying amount exceeds the fair value of any reporting unit, the Company will perform step 2 of the transitional goodwill impairment test, which will be used to measure the amount of any impairment loss. The Company has not yet determined what the effect of these tests will be on its financial position or results of operations. As of March 31, 2002, the Company has recognized no impairment of goodwill. The Company is required to complete step 1 of the transitional goodwill impairment test by June 30, 2002, and step 2 by December 31, 2002. The Company cannot assure you that future goodwill impairments will not occur. The unaudited pro forma effect of applying the non-amortization provisions of FAS 142 to the quarter ended March 31, 2001 and the years ended December 31, 2001, 2000 and 1999 would have been to decrease amortization expense by approximately $0.8 million, $3.2 million, $2.8 million and $2.1 million, respectively, resulting in unaudited pro forma basic and diluted earnings (loss) per share of $0.15, $(0.30), $0.86 and $0.86, respectively.

C.     Business Acquisitions

      In March 1999, the Company acquired all of the outstanding stock of Allegheny Powder Metallurgy, Inc. (Allegheny) for $14,500 in cash and $2,000 in notes payable to the selling shareholders. The acquisition was accounted for as a purchase. The excess of the purchase price over the estimated fair value of the net assets acquired of $8,110 is currently being amortized over 30 years and is included in intangible assets. The results of operations of Allegheny are included in the Company’s consolidated statements of operations since the date of acquisition.

      In November 1999, the Company acquired substantially all of the assets (except cash) and assumed certain liabilities of Quarter Master Industries, Inc. (Quarter Master) for $4,850 in cash and a $1,000 note payable to the selling shareholder. The purchase price also includes future contingent payments based on earnings. The Company does not anticipate these contingent payments to be material. The acquisition was accounted for as a purchase. The excess of the purchase price over the estimated fair value of the net assets acquired of $4,240 is currently being amortized over 15 years and is included in intangible assets. The results of operations of Quarter Master are included in the Company’s consolidated statements of operations since the date of acquisition.

      In November 2000, the Company acquired all of the outstanding stock of Tex Racing Enterprises, Inc. (Tex Racing) for $6,030 in cash and a $1,500 note payable to the selling shareholder. The purchase price also includes future contingent payments based on earnings. The Company does not anticipate these contingent payments to be material. The acquisition was accounted for as a purchase. The excess of the purchase price over the estimated fair value of the net assets acquired of $4,700 is currently being amortized over 15 years and is included in intangible assets. The results of operations of Tex Racing are included in the Company’s consolidated statements of operations since the date of acquisition.

      In December 2000, the Company acquired a majority of Net Shape membership interests for $480 in cash. The acquisition was accounted for as a purchase. The excess of the purchase price over the estimated fair value of net assets acquired in the amount of $742 is currently being amortized over 10 years and is included in intangible assets. The results of operations of Net Shape are included in the Company’s consolidated statements of operations since the date of acquisition.

      The following unaudited pro forma consolidated results of operations for 2000 give effect to the Allegheny, Quarter Master, Tex Racing and Net Shape acquisitions as though they had occurred on January 1, 2000 and include certain adjustments, such as additional goodwill amortization expense.

F-10

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

C.     Business Acquisitions (Continued)

	Year ended
	December 31, 2000
Net sales	$	209,435
Net income	$	5,658
Income per share — basic	$	.64
Income per share — diluted	$	.64

      Pro forma net sales and net income are not necessarily indicative of the net sales and net income that would have occurred had the acquisitions been made at the beginning of 2000 or the results that may occur in the future.

D.     Goodwill and Other Intangible Assets

      The components of goodwill and other intangible assets and the related accumulated amortization are as follows:

								December 31,
		March 31, 2002						2001							2000
				Accumulated						Accumulated							Accumulated
		Gross		Amortization		Net		Gross		Amortization		Net			Gross		Amortization		Net
		(Unaudited)
Goodwill, beginning of the period		$	67,808	$	13,931	$	53,877	$	67,380	$	10,751	$	56,629		$	61,895	$	7,941	$	53,954
	Additions		—		—		—		428		3,180		(2,752	)		5,485		2,810		2,675
Goodwill, end of the period		$	67,808	$	13,931	$	53,877	$	67,808	$	13,931	$	53,877		$	67,380	$	10,751	$	56,629
Other intangible assets subject to amortization:
	Product certifications	$	20,820	$	9,724	$	11,096	$	20,820	$	9,544	$	11,276		$	20,820	$	8,824	$	11,996
	Deferred financing		4,693		3,746		947		4,693		3,593		1,100			4,693		2,981		1,712
	Other intangible assets		3,013		2,584		429		3,013		2,561		452			2,901		2,525		376
Subtotal		$	28,526	$	16,054	$	12,472	$	28,526	$	15,698	$	12,828		$	28,414	$	14,330	$	14,084
Total		$	96,334	$	29,985	$	66,349	$	96,334	$	29,629	$	66,705		$	95,794	$	25,081	$	70,713

      Product certifications were acquired and valued based on the acquired company’s position as a certified supplier of friction materials to the major manufacturers of commercial aircraft brakes.

      A summary of the Company’s net goodwill for the periods ended March 31, 2002, December 31, 2001 and 2000 by reportable operating segment is as follows:

				December 31,
		March 31,
		2002		2001		2000
		(Unaudited)
Friction products		$	11,100	$	11,100	$	12,219
Precision components			28,039		28,039		29,092
Performance automotive			8,392		8,392		8,720
Motor			6,346		6,346		6,598
	Consolidated	$	53,877	$	53,877	$	56,629

      The Company estimates its amortization expense for the next five years to be as follows: 2002 — $1,422; 2003 — $1,257; 2004 — $789; 2005 — $789 and 2006 — $776.

F-11

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

E.     Financing Arrangements

			December 31,
	March 31,
	2002		2001		2000
	(Unaudited)
Senior Notes	$	65,000	$	65,000	$	65,000
Term Loan		16,250		17,500		22,500
Revolver		13,058		8,337		8,145
Other		6,686		6,982		8,289
		100,994		97,819		103,934
Less current portion		32,153		6,862		7,273
	$	66,841	$	90,957	$	96,661

      In November 1996, the Company issued $100,000 in Senior Notes (Senior Notes) due on December 1, 2003, of which $65,000 is outstanding at December 31, 2001. In accordance with the terms of the Senior Notes agreement, the Company has the option to redeem the Senior Notes prior to the due date. Interest is payable semi-annually on June 1 and December 1 of each year commencing June 1, 1997, at a fixed rate of 10.25%. In March 1997, the Senior Notes were exchanged for notes registered with the Securities and Exchange Commission. The Senior Notes are fully and unconditionally guaranteed on a joint and several basis by each of the direct and indirect wholly owned domestic subsidiaries of the Company (Guarantor Subsidiaries) (See Note N).

      In May 1998, the Company entered into a $35,000 term loan facility and a $50,000 revolving credit facility (the Credit Facility). The term loan has quarterly maturities of $1,250 beginning September 30, 1998 with the remaining principal of $12,500 due on March 31, 2003. The revolving credit facility matures March 31, 2003. As of December 31, 2001, the Company was paying an average rate of 6.4% on its Credit Facility outstanding compared to an average rate of 8.7% at December 31, 2000.

      On March 25, 2002, the Company amended the Credit Facility reducing the revolving credit component of the facility to $25,000, modifying the terms of financial covenants as of December 31, 2001 and for future reporting periods and increasing the margin over the base interest rates. The interest rates on the credit facility range from 250 to 450 basis points over the Eurodollar rate, or alternatively, 125 to 325 basis points over the prime rate based on certain quarterly performance criteria. The Company is required to pay a facility fee of 0.50% on the commitment amount of the Credit Facility. The Credit Facility is collateralized by a security interest in the accounts receivable, inventory, equipment and real estate and other assets of the Company and its subsidiaries, and the Company has pledged the stock of all of its U.S. subsidiaries and certain stock of its foreign subsidiaries as collateral. Restrictive terms of the credit facility require that the Company maintain specified financial ratios and comply with other loan covenants. Based on the amended Credit Facility, the Company was in compliance with the financial covenants as of December 31, 2001.

      As of March 31, 2002 and December 31, 2001, the Company had approximately $8,200 (unaudited) and $6,200, respectively, available for future borrowings under its Credit Facility, as amended.

      The Company has stand-by Letters of Credit totaling $1,262. There are no outstanding balances at December 31, 2001.

      Aggregate principal payments due on long-term debt as of December 31, 2001 are as follows: 2002 — $6,862; 2003 — $88,215; 2004 — $1,325; 2005 — $826; 2006 — $118; and thereafter — $473.

F-12

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

F.     Shareholders’ Equity

      Dividends on the Series D preferred stock are cumulative at a rate of 9.8%. Each share of Series D preferred stock is (1) entitled to a liquidation preference equal to $1,000 per share plus any accrued or unpaid dividends, (2) not entitled to vote, except in certain circumstances, and (3) redeemable in whole, at the option of the Company, for $1 per share plus all accrued dividends to the date of redemption. The Company also has 100,000 authorized shares of $.01 par value, Series E preferred stock, of which no shares are issued or outstanding. Each share of Series E preferred stock is (1) not redeemable and is entitled to dividends in the amount of 1,000 times the per share dividend received by the holders of common stock, (2) entitled to 1,000 votes per share, and (3) entitled to a liquidation right of 1,000 times the aggregate amount distributed per share to the holder of common stock.

      On November 13, 1997, the Board of Directors declared a dividend of one Series E preferred share purchase right (a Right) for each outstanding share of common stock. The dividend was payable to the shareholders of record as of January 16, 1998, and with respect to common stock, issued thereafter until the Distribution Date, as defined in the Rights Agreement, and in certain circumstances, with respect to common stock issued after the Distribution Date. Except as set forth in the Rights Agreement, each Right, when it becomes exercisable, entitles the registered holder to purchase from the Company one one-thousandth of a share of Series E preferred stock at a price of $70 per one one-thousandth share of a Series E preferred stock, subject to adjustment.

G.     Employee Stock Option Plan

      The Company grants stock options to certain employees under various plans, to purchase shares of Class A common stock. During 2001, 2000 and 1999, the Company granted stock options to purchase an aggregate of 701,594, 328,878 and 147,400 shares, respectively, at exercise prices representing the closing market price of the Company’s stock at the date of grant. The options vest ratably over specific defined periods. Canceled options are available for future issuance under the provisions of the stock option plans.

      The following table summarizes the stock option activity for the years ended December 31, 2001, 2000 and 1999:

	2001					2000					1999
				Weighted					Weighted					Weighted
				Average					Average					Average
				Exercise					Exercise					Exercise
	Options			Price		Options			Price		Options			Price
Options outstanding at beginning of year		766,267		$	10.51		472,600		$	13.78		340,200		$	16.50
Granted		701,594			3.64		328,878			6.11		147,400			7.47
Exercised		—			—		—			—		—			—
Canceled		(143,215	)		10.45		(35,211	)		13.16		(15,000	)		13.83
Options outstanding at end of year		1,324,646		$	6.73		766,267		$	10.51		472,600		$	13.78
Exercisable at the end of the year		242,169		$	12.36		159,300		$	14.91		65,340		$	16.62
Weighted average fair value of options granted during the year				$	2.56				$	4.00				$	4.13
Shares available for future grant		75,354					633,733					227,400

F-13

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

G.     Employee Stock Option Plan (Continued)

      Exercise prices for options outstanding as of December 31, 2001 ranged from $3.00 to $18.70. A summary of the options by range of exercise prices is as follows:

	Outstanding						Exercisable
					Weighted
			Weighted		Average				Weighted
			Average		Remaining				Average
Range of			Exercise		Contractual				Exercise
Exercise Price	Options		Price		Life (years)		Options		Price
$3.00 to $6.00		850,246	$	3.96		9.5		30,709	$	5.49
$6.01 to $12.00		263,700	$	7.30		8.0		82,640	$	7.42
$12.01 to $18.70		210,700	$	17.17		5.7		128,820	$	17.17

      The Company has adopted the disclosure-only provisions of SFAS No. 123, “Accounting for Stock-Based Compensation,” but applies Accounting Principles Board Opinion No. 25 and related interpretations in accounting for its stock option plans. Accordingly, no compensation expense has been reflected in the accompanying consolidated financial statements related to the stock options issued pursuant to these plans. If the Company had elected to recognize compensation expense based on the fair value at the grant dates for awards consistent with the method prescribed by SFAS No. 123, net income and net income per share would have been changed to the pro forma amounts indicated below:

		Year ended December 31,
		2001			2000		1999
Net (loss) income:
	As reported	$	(4,336	)	$	5,770	$	6,329
	Pro forma		(5,158	)		4,975		5,469
(Loss) earnings per share (basic and diluted):
	As reported		(.52	)		.66		.71
	Pro forma		(.62	)		.58		.63

      The fair value of the options granted used to compute pro forma net (loss) income and (loss) earnings per share disclosures is the estimated present value at the grant date using the Black-Scholes option-pricing model with the following assumptions:

	Year ended December 31,
	2001		2000		1999
Dividend yield		0%		0%		0%
Expected volatility		58.4%		57.8%		48.8%
Risk free interest rate		5.00%		5.25%		6.5%
Expected average holding period		7 years		7 years		7 years

H.     Employee Benefits

      The Company has several defined benefit pension plans that cover certain employees. Benefits payable are based primarily on compensation and years of service or a fixed annual benefit for each year of service. Certain hourly employees are also covered under collective bargaining agreements. The Company funds the plans in amounts sufficient to satisfy the minimum amounts required under the Employee Retirement Income Security Act of 1974.

F-14

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

H.     Employee Benefits (Continued)

      The components of the defined benefit pension plans are as follows:

			December 31,
			2001			2000
Change in benefit obligation:
	Benefit obligation at beginning of year		$	15,003		$	12,530
	Service cost			550			508
	Interest cost			1,148			1,019
	Actuarial losses			1,609			1,601
	Plan amendments			—			220
	Foreign currency exchange rate charges			(41	)		(25	)
	Benefits paid			(741	)		(850	)
Benefit obligation at end of year			$	17,528		$	15,003
Change in plan assets:
	Fair value of plan assets at beginning of year		$	19,449		$	20,270
	Actual return on plan assets			(190	)		(398	)
	Foreign currency exchange rate charges			(67	)		(45	)
	Company contributions			948			472
	Benefits paid			(741	)		(850	)
Fair value of plan assets at end of year			$	19,399		$	19,449
Funded status of the plans			$	1,871		$	4,446
Unrecognized net actuarial losses (gains)				1,484			(1,882	)
Unrecognized prior service cost				500			576
Net prepaid benefit cost			$	3,855		$	3,140
Amounts recognized in the balance sheet consist of the following:
		Prepaid benefit cost	$	3,855		$	3,140
		Accrued benefit liability		(1,400	)		(393	)
		Intangible asset		454			253
		Cumulative other comprehensive loss		946			140
Net amount recognized			$	3,855		$	3,140

      Amounts applicable to the Company’s underfunded pension plans at December 31, 2001 and 2000 are as follows:

	December 31,
	2001		2000
Projected benefit obligation	$	4,877	$	4,303
Accumulated benefit obligation		4,877		4,269
Fair value of plan assets		4,120		4,139
Amounts recognized as accrued benefit liabilities		1,400		393
Amounts recognized as intangible asset		454		253

F-15

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

H.     Employee Benefits (Continued)

		Year ended December 31,
		2001			2000			1999
Components of net periodic pension cost:
	Service cost	$	550		$	508		$	613
	Interest cost		1,148			1,019			920
	Expected return on plan assets		(1,585	)		(1,455	)		(1,498	)
	Amortization of prior service cost		76			67			60
	Recognized net actuarial loss (gain)		10			(26	)		58
		$	199		$	113		$	153

      The plans’ assets are primarily invested in fixed income and equity securities. In addition, one of the Company’s defined benefit plans also contains investments in the Company’s stock. As of December 31, 2001 60,000 shares of the Company’s stock were held by the defined benefit plan at a cost of $717. The market value of these investment as of December 31, 2001 was $216.

      The following assumptions were used in accounting for the defined benefit plans:

		2001			2000			1999
Used to compute the projected benefit obligation as of December 31:
	Weighted average discount rate		7.25	%		7.5	%		8.0	%
	Annual salary increase		3.0	%		3.0	%		3.0	%
	Weighted average expected long-term rate of return on plan assets for the year ended December 31		9.0	%		9.5	%		9.5	%

      The Company also sponsors several defined contribution plans which provide voluntary employee contributions and, in certain plans, matching and discretionary employer contributions. Expenses associated with these plans were approximately $581 in 2001, $1,444 in 2000 and $1,263 in 1999. In 2001, the Company made no discretionary employer contributions.

I.     Lease Obligations

      The Company has capital lease commitments for buildings and equipment. Future minimum annual rentals are: 2002 — $300; 2003 — $218; 2004 — $206; 2005 — $151; 2006 — $35; and thereafter — $0. Amount representing interest is $130. Total capital lease obligations are included in other long-term debt. Amortization of assets recorded under capital leases is included with depreciation expense.

      The Company leases certain office and warehouse facilities and equipment under operating leases. Rental expense was approximately $2,131 in 2001, $1,828 in 2000 and $1,127 in 1999. Future non-cancelable minimum lease commitments under these agreements that have an original or existing term in excess of one year as of December 31, 2001 are as follows: 2002 — $1,864; 2003 — $1,550; 2004 — $1,437; 2005 — $1,054; 2006 — $502; and thereafter — $474.

F-16

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

J.     Income Taxes

      The (benefit) provision for income taxes consists of the following:

		Year ended December 31,
		2001			2000		1999
Current:
	Federal	$	(2,792	)	$	2,020	$	1,771
	State and local		(26	)		171		113
	Foreign		297			527		251
			(2,521	)		2,718		2,135
Deferred:
	Federal		1,118			1,468		1,259
	State and local		62			119		138
	Foreign		(517	)		55		130
			663			1,642		1,527
Total income tax (benefit) provision		$	(1,858	)	$	4,360	$	3,662

      Deferred income taxes reflect the net effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting and income tax purposes. Significant components of the Company’s deferred tax assets and liabilities as of December 31 are as follows:

		2001		2000
Deferred tax assets:
	Accrued vacation	$	529	$	530
	Other accruals		836		639
	Foreign capital leases		1,278		1,304
	Foreign net operating loss carryforwards		496		—
	Inventory		472		871
Total deferred tax assets			3,611		3,344
Deferred tax liabilities:
	Tax over book depreciation and amortization		11,381		11,384
	Employee benefits		373		687
	Foreign leased property		1,627		1,666
	Other		8		48
Total deferred tax liabilities			13,389		13,785
Net deferred tax liabilities		$	9,778	$	10,441

F-17

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

J.     Income Taxes (Continued)

      The (benefit) provision for income taxes differs from the amounts computed by applying the federal statutory rate as follows:

	December 31,
	2001			2000			1999
Income tax (benefit) expense at federal statutory rate		(35.0	)%		35.0	%		35.0	%
State and local tax, net of federal tax benefit		0.4			1.8			1.6
Nondeductible goodwill amortization		6.2			3.9			4.0
Adjustment to worldwide tax accrual and other, net		(1.6	)		2.3			(3.9	)
Provision for income taxes		(30.0	)%		43.0	%		36.7	%

      The increase in the Company’s effective tax rate from 1999 to 2000 was primarily attributable to the increase in higher tax rate foreign earnings relative to the domestic earnings taxed at the federal statuary rate. The adjustment to worldwide tax accrual and other, net component of the income tax rate reconciliation includes adjustments to tax accruals as a result of the resolution of certain tax contingencies during the periods presented.

      Undistributed earnings of the Company’s foreign subsidiaries amounted to approximately $6,500 at December 31, 2001. These earnings are considered to be indefinitely reinvested and, accordingly, no provision for U.S. federal and state income taxes has been provided. The Company cannot determine in any practical manner the amount of income tax liability that would result had these earnings actually been repatriated. Upon distribution of these earnings in the form of dividends or otherwise, the Company would be subject to both U.S. income taxes, which may be offset by foreign tax credits, and withholding taxes payable to various foreign countries.

F-18

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

K.     (Loss) Earnings per Share

      Basic and diluted (loss) earnings per share are computed as follows:

			Three Months
			ended
			March 31,						Year ended December 31,
			2002			2001			2001			2000		1999
			(Unaudited)
(Loss) income available to common shareholders:
Net (loss) income			$	(600	)	$	857		$	(4,336	)	$	5,770	$	6,329
Less: Preferred stock dividends				(38	)		(37	)		150			152		148
Net (loss) income attributable to common shareholders			$	(638	)	$	820		$	(4,486	)	$	5,618	$	6,181
Weighted average shares (in thousands):
		Basic weighted average shares		8,555			8,550			8,552			8,548		8,657
	Diluted:
		Basic from above		8,555			8,550			8,552			8,548		8,657
		Effect of stock options		—			19			—			21		—
Diluted weighted average shares				8,555			8,569			8,552			8,569		8,657
(Loss) earnings per share:
	Basic (loss) earnings per share		$	(.07	)	$	.10		$	(.52	)	$	.66	$	.71
	Diluted (loss) earnings per share		$	(.07	)	$	.10		$	(.52	)	$	.66	$	.71

      Stock options outstanding were not included in the computation of diluted earnings per share for 2001 and 1999, since it would have resulted in an anti-dilutive effect.

L.     Related Parties

      In July 1995, certain shareholders of the Company issued interest-bearing notes to the Company in the amount of $2,000, enabling them to repay certain indebtedness incurred by them with respect to an acquisition. The notes are due and payable on December 31, 2005 and bear interest at the prime rate. The balance outstanding at December 31, 2001 and 2000 is $1,010.

M.     Business Segments

      During 2000, as a result of recent acquisitions, the Company changed its segment reporting structure to match management’s internal reporting of businesses operations. Significant changes include the segregation of the performance automotive and motor businesses.

      The Company now operates in four primary business segments: friction products, precision components (formerly powder metal), performance automotive and motors. The Company’s reportable segments are strategic business units that offer different products and services. They are managed separately based on fundamental differences in their operations.

      The friction products segment engineers, manufactures and markets specialized components, used in a variety of aerospace, industrial and commercial applications. The Company, through this segment, is a worldwide supplier of friction components for brakes, clutches and transmissions.

F-19

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

M.     Business Segments (Continued)

      The precision components segment engineers, manufactures and markets specialized powder metal components, used primarily in industrial applications. The Company, through this segment, targets three areas of the powder metal component marketplace: high precision components that are used in fluid power applications, large powder metal parts used in construction, agricultural and truck applications, and smaller high-volume parts.

      The performance automotive segment engineers, manufactures and markets premium branded clutch and drive-train components. The Company, through this segment, targets leading teams in the NASCAR, CART and IRL racing series, as well as other road race and oval track competition cars. An operating unit formerly associated with the Company’s performance automotive segment was reclassified as of January 1, 2002 to the Company’s friction products segment as a result of changes in the internal operating responsibility of that unit. All prior periods have been reclassified to reflect this change.

      The motor segment engineers, manufactures and markets die-cast aluminum rotors for use in fractional and subfractional electric motors. The Company, through this segment, targets a wide variety of application such as small household appliances and business equipment.

      The information by segment is as follows:

		Three Months
		ended March 31,				Year ended December 31,
		2002		2001		2001			2000		1999
		(Unaudited)
Net sales to external customers:
	Friction products	$	26,033	$	29,563	$	104,127		$	116,267	$	117,430
	Precision components		17,206		17,846		58,272			72,019		61,063
	Performance automotive		3,895		4,161		12,967			5,612		514
	Motor		2,670		2,211		9,022			8,431		8,631
Consolidated		$	49,804	$	53,781	$	184,388		$	202,329	$	187,638
Depreciation and amortization:
	Friction products	$	1,908	$	2,306	$	9,276		$	9,297	$	8,888
	Precision components		944		1,194		4,886			4,525		4,080
	Performance automotive		203		183		742			386		54
	Motor		38		228		1,025			768		651
Consolidated		$	3,093	$	3,911	$	15,929		$	14,976	$	13,673
Gross profit (loss):
	Friction products	$	6,036	$	7,761	$	24,899		$	30,901	$	28,414
	Precision components		3,127		4,446		11,495			19,360		17,806
	Performance automotive		1,413		1,404		3,854			2,856		241
	Motor		203		209		(269	)		1,825		2,298
Consolidated		$	10,779	$	13,820	$	39,979		$	54,942	$	48,759

F-20

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

M.     Business Segments (Continued)

			Three Months
			ended March 31,						Year ended December 31,
			2002			2001			2001			2000			1999
			(Unaudited)
Operating income (loss):
	Friction products		$	772		$	2,871		$	6,386		$	11,403		$	10,187
	Precision components			121			1,102			312			8,419			8,737
	Performance automotive			824			381			285			907			(10	)
	Motor			(492	)		(445	)		(3,411	)		(1,266	)		(350	)
Consolidated			$	1,225		$	3,909		$	3,572		$	19,463		$	18,564
Capital expenditures:
(including capital leases):
		Friction products	$	996		$	1,361		$	5,000		$	3,912		$	5,626
		Precision components		177			977			2,882			4,416			3,015
		Performance automotive		152			20			171			230			2
		Motor		606			482			1,043			1,955			1,576
Consolidated			$	1,931		$	2,840		$	9,096		$	10,513		$	10,219

				December 31,
		March 31,
		2002		2001		2000
		(Unaudited)
Total assets:
	Friction products	$	106,626	$	104,095	$	113,066
	Precision components		70,601		69,002		72,603
	Performance automotive		15,613		14,633		14,402
	Motor		17,155		16,375		15,314
Consolidated		$	209,995	$	204,105	$	215,385

      Geographic information for the years ended December 31, 2001, 2000 and 1999 is as follows:

	2001									2000							1999
	Domestic			Foreign						Domestic		Foreign					Domestic		Foreign
	Operations			Operations			Total			Operations		Operations			Total		Operations		Operations			Total
Net sales	$	160,810		$	23,578		$	184,388		$	180,632	$	21,697		$	202,329	$	166,429	$	21,209		$	187,638
Income (loss) from operations		6,980			(3,408	)		3,572			19,499		(36	)		19,463		18,131		433			18,564
Net (loss) income		(211	)		(4,125	)		(4,336	)		7,274		(1,504	)		5,770		6,916		(587	)		6,329
Total assets		186,532			17,573			204,105			194,659		20,726			215,385		187,363		22,257			209,620

      The Company has foreign operations in Canada, Italy, Mexico and China.

F-21

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information

      As discussed in Note E, each of the Guarantor Subsidiaries has fully and unconditionally guaranteed, on a joint and several basis, the obligation to pay principal, premium, if any, and interest with respect to the Senior Notes. The Guarantor Subsidiaries are direct or indirect wholly owned subsidiaries of the Company.

      The following supplemental consolidating condensed financial statements present:

•  Consolidating condensed balance sheets as of March 31, 2002 (Unaudited), December 31, 2001 and December 31, 2000, consolidating condensed statements of operations for the three months ended March 31, 2002 (Unaudited) and the years ended December 31, 2001, 2000 and 1999 and consolidating condensed statements of cash flows for the three months ended March 31, 2002 (Unaudited) and the years ended December 31, 2001, 2000 and 1999.

•  Hawk Corporation (Parent), combined Guarantor Subsidiaries and combined Non-Guarantor Subsidiaries consisting of the Company’s subsidiaries in Canada, Italy, Mexico and China with their investments in subsidiaries accounted for using the equity method.

•  Elimination entries necessary to consolidate Parent and all of its subsidiaries.

      Management does not believe that separate financial statements of the Guarantor Subsidiaries are material to investors. Therefore, separate financial statements and other disclosures concerning the Guarantor Subsidiaries are not presented.

F-22

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		March 31, 2002
				Combined			Combined
				Guarantor			Non-Guarantor
		Parent		Subsidiaries			Subsidiaries			Eliminations			Consolidated
		(Unaudited)
Assets
Current assets:
	Cash and cash equivalents	$	720	$	108		$	1,584					$	2,412
	Accounts receivable, net				25,196			7,512						32,708
	Inventories, net				22,502			7,096						29,598
	Deferred income taxes		1,111					88						1,199
	Other current assets		2,841		1,516			849						5,206
Total current assets			4,672		49,322			17,129						71,123
Investment in subsidiaries			794		(1,911	)				$	1,117
Inter-company advances, net			160,428		15,826			(14,245	)		(162,009	)
Property, plant and equipment, net			16		57,413			8,888						66,317
Intangible assets			199		66,150									66,349
Other			1,010		5,198			1,008			(1,010	)		6,206
Total assets		$	167,119	$	191,998		$	12,780		$	(161,902	)	$	209,995
Liabilities and shareholders’ equity
Current liabilities:
	Accounts payable			$	11,623		$	3,591					$	15,214
	Accrued compensation	$	318		3,506			898						4,722
	Other accrued expenses		3,495		4,450			1,257						9,202
	Current portion of long-term debt		26,000		2,722			3,431						32,153
Total current liabilities			29,813		22,301			9,177						61,291
Long-term liabilities:
	Long-term debt		65,000		3,499			342						68,841
	Deferred income taxes		10,894					82						10,976
	Other				2,157			1,232						3,389
	Inter-company advances, net		1,130		157,434			3,858		$	(162,422	)
Total long-term liabilities			77,024		163,090			5,514			(162,422	)		83,206
Total liabilities			106,837		185,391			14,691			(162,422	)		144,497
Shareholders’ equity (deficit)			60,282		6,607			(1,911	)		520			65,498
Total liabilities and shareholders’ equity		$	167,119	$	191,998		$	12,780		$	(161,902	)	$	209,995

F-23

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		December 31, 2001
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents	$	1,073		$	247		$	1,764					$	3,084
	Accounts receivable, net		160			18,828			6,785						25,773
	Inventories		42			22,566			6,544						29,152
	Deferred income taxes		1,111						89						1,200
	Other current assets		2,976			1,143			519						4,638
Total current assets			5,362			42,784			15,701						63,847
Investment in subsidiaries			794			(1,080	)				$	286
Inter-company advances, net			153,455			9,447			(8,555	)		(154,347	)
Property, plant and equipment			18			58,026			9,319						67,363
Intangible assets			199			66,506									66,705
Other			1,010			5,082			1,108			(1,010	)		6,190
Total assets		$	160,838		$	180,765		$	17,573		$	(155,071	)	$	204,105
Liabilities and shareholders’ equity
Current liabilities:
	Accounts payable				$	10,292		$	3,140					$	13,432
	Accrued compensation	$	(18	)		4,440			811						5,233
	Other accrued expenses		1,449			4,345			1,038						6,832
	Current portion of long-term debt		5,000			1,669			193						6,862
Total current liabilities			6,431			20,746			5,182						32,359
Long-term liabilities:
	Long-term debt		82,450			4,765			3,742						90,957
	Deferred income taxes		10,894						84						10,978
	Other					2,154			1,220						3,374
	Inter-company advances, net		1,350			144,786			8,425		$	(154,561	)
Total long-term liabilities			94,694			151,705			13,471			(154,561	)		105,309
Total liabilities			101,125			172,451			18,653			(154,561	)		137,668
Shareholders’ equity			59,713			8,314			(1,080	)		(510	)		66,437
Total liabilities and shareholders’ equity		$	160,838		$	180,765		$	17,573		$	(155,071	)	$	204,105

F-24

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		December 31, 2000
				Combined		Combined
				Guarantor		Non-Guarantor
		Parent		Subsidiaries		Subsidiaries			Eliminations			Consolidated
Assets
Current assets:
	Cash and cash equivalents	$	553	$	1,027	$	2,430					$	4,010
	Accounts receivable, net				22,785		6,817						29,602
	Inventories				25,792		6,072						31,864
	Deferred income taxes		1,199				(86	)					1,113
	Other current assets		967		1,363		646						2,976
Total current assets			2,719		50,967		15,879						69,565
Investment in subsidiaries			794		3,168				$	(3,962	)
Inter-company advances, net			160,192		5,784		(5,084	)		(160,892	)
Property, plant and equipment			26		61,219		9,156						70,401
Intangible assets			207		70,506								70,713
Other			1,010		3,931		775			(1,010	)		4,706
Total assets		$	164,948	$	195,575	$	20,726		$	(165,864	)	$	215,385
Liabilities and shareholders’ equity
Current liabilities:
	Accounts payable			$	8,313	$	3,266					$	11,579
	Accrued compensation	$	5		6,854		932						7,791
	Other accrued expenses		633		5,047		766						6,446
	Current portion of long-term debt		5,000		1,901		372						7,273
Total current liabilities			5,638		22,115		5,336						33,089
Long-term liabilities:
	Long-term debt		90,645		5,574		442						96,661
	Deferred income taxes		11,128				426						11,554
	Other				1,237		1,155						2,392
	Inter-company advances, net		1,197		149,909		10,199		$	(161,305	)
Total long-term liabilities			102,970		156,720		12,222			(161,305	)		110,607
Total liabilities			108,608		178,835		17,558			(161,305	)		143,696
Minority interest Shareholders’ equity			56,340		16,740		3,168			(4,559	)		71,689
Total liabilities and shareholders’ equity		$	164,948	$	195,575	$	20,726		$	(165,864	)	$	215,385

F-25

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Three Months Ended March 31, 2002
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations		Consolidated
		(Unaudited)
Net sales					$	42,756		$	7,048				$	49,804
Cost of sales						32,800			6,225					39,025
Gross profit						9,956			823					10,779
Expenses:
	Selling, technical and administrative expenses	$	400			7,725			1,073					9,198
	Amortization of intangible assets		2			354								356
Total expenses			402			8,079			1,073					9,554
(Loss) income from operations			(402	)		1,877			(250	)				1,225
Interest income (expense), net			911			(2,938	)		(208	)				(2,235	)
Income (loss) from equity investees			(1,192	)		(581	)				$	1,773
Other income (expense), net			(177	)		20			(45	)				(202	)
Income (loss) before income taxes and minority interest			(860	)		(1,622	)		(503	)		1,773		(1,212	)
Income tax (benefit) provision			(260	)		(430	)		78					(612	)
Net (loss) income		$	(600	)	$	(1,192	)	$	(581	)	$	1,773	$	(600	)

		Three Months Ended March 31, 2001
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations		Consolidated
		(Unaudited)
Net sales					$	47,093		$	6,688				$	53,781
Cost of sales						34,362			5,599					39,961
Gross profit						12,731			1,089					13,820
Expenses:
	Selling, technical and administrative expenses	$	(412	)		8,074			1,118					8,780
	Amortization of intangible assets		3			1,128								1,131
Total expenses			(409	)		9,202			1,118					9,911
Income from operations			409			3,529			(29	)				3,909
Interest income (expense), net			925			(3,132	)		(194	)				(2,401	)
Income (loss) from equity investees			(213	)		(417	)				$	630
Other income (expense), net						(64	)		142					78
Income (loss) before income taxes and minority interest			1,121			(84	)		(81	)		630		1,586
Income taxes			264			129			336					729
Net income (loss)		$	857		$	(213	)	$	(417	)	$	630	$	857

F-26

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Year ended December 31, 2001
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations		Consolidated
Net sales					$	160,810		$	23,578				$	184,388
Cost of sales						122,070			22,339					144,409
Gross profit						38,740			1,239					39,979
Expenses:
	Selling, technical and administrative expenses	$	(545	)		27,152			4,197					30,804
	Restructuring costs					605			450					1,055
	Amortization of intangible assets		9			4,539								4,548
Total expenses			(536	)		32,296			4,647					36,407
Income (loss) from operations			536			6,444			(3,408	)				3,572
Interest (income) expense, net			(3,686	)		12,050			872					9,236
Income (loss) from equity investees			(7,520	)		(4,125	)				$	11,645
Other (income) expense			579			(114	)		65					530
Income (loss) before income taxes			(3,877	)		(9,617	)		(4,345	)		11,645		(6,194	)
Income tax (benefit) provision			459			(2,097	)		(220	)				(1,858	)
Net income (loss)		$	(4,336	)	$	(7,520	)	$	(4,125	)	$	11,645	$	(4,336	)

		Year ended December 31, 2000
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales					$	180,632		$	21,697					$	202,329
Cost of sales		$	285			129,265			17,837						147,387
Gross profit			(285	)		51,367			3,860						54,942
Expenses:
	Selling, technical and administrative expenses		(274	)		27,696			3,896						31,318
	Amortization of intangible assets		9			4,152									4,161
Total expenses			(265	)		31,848			3,896						35,479
Income from operations			(20	)		19,519			(36	)					19,463
Interest (income) expense, net			(3,803	)		11,947			654						8,798
Income (loss) from equity investees			2,898			(1,504	)				$	(1,394	)
Other (income) expense						394			141						535
Income (loss) before income taxes			6,681			5,674			(831	)		(1,394	)		10,130
Income taxes			911			2,776			673						4,360
Net income (loss)		$	5,770		$	2,898		$	(1,504	)	$	(1,394	)	$	5,770

F-27

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Year ended December 31, 1999
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations			Consolidated
Net sales					$	166,429		$	21,209					$	187,638
Cost of sales		$	(165	)		121,163			17,881						138,879
Gross profit			165			45,266			3,328						48,759
Expenses:
	Selling, technical and administrative expenses		(283	)		23,754			2,895						26,366
	Amortization of intangible assets		8			3,821									3,829
Total expenses			(275	)		27,575			2,895						30,195
Income from operations			440			17,691			433						18,564
Interest (income) expense, net			(3,782	)		12,220			540						8,978
Income (loss) from equity investees			3,688			(587	)				$	(3,101	)
Other (income) expense			(4	)		(500	)		99						(405	)
Income (loss) before income taxes			7,914			5,384			(206	)		(3,101	)		9,991
Income taxes			1,585			1,696			381						3,662
Net income (loss)		$	6,329		$	3,688		$	(587	)	$	(3,101	)	$	6,329

F-28

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Three Months ended March 31, 2002
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations	Consolidated
		(Unaudited)
Net cash provided by (used in) operating activities		$	(3,865	)	$	1,661		$	284			$	(1,920	)
Cash flows from investing activities:
	Purchase of property, plant and equipment					(1,830	)		(101	)			(1,931	)
Net cash used in investing activities						(1,830	)		(101	)			(1,931	)
Cash flows from financing activities:
	Proceeds from debt		15,505			333							15,838
	Payments on debt		(11,955	)		(545	)		(69	)			(12,569	)
	Payment of preferred stock dividend		(38	)									(38	)
Net cash provided by (used in) financing activities			3,512			(212	)		(69	)			3,231
Net (decrease) increase in cash and cash equivalents			(353	)		(381	)		114				(620	)
Effect of currency rate changes						242			(294	)			(52	)
Cash and cash equivalents at beginning of period		$	1,073		$	247		$	1,764			$	3,084
Cash and cash equivalents at end of period		$	720		$	108		$	1,584			$	2,412

F-29

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Three Months Ended March 31, 2001
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations	Consolidated
		(Unaudited)
Net cash provided by operating activities		$	2,207		$	1,922		$	(2,951	)		$	1,178
Cash flows from investing activities:
	Purchase of property, plant and equipment					(2,242	)		(598	)			(2,840	)
Net cash used in investing activities						(2,242	)		(598	)			(2,840	)
Cash flows from financing activities:
	Proceeds from long-term debt		10,190						3,543				13,733
	Payments on long-term debt		(12,085	)		(534	)		(162	)			(12,781	)
	Payment of preferred stock dividend		(37	)									(37	)
Net cash (used in) provided by financing activities			(1,932	)		(534	)		3,381				915
Net decrease in cash and cash equivalents			275			(854	)		(168	)			(747	)
Effect of currency rate changes									(109	)			(109	)
Cash and cash equivalents at beginning of period		$	553		$	1,027		$	2,430			$	4,010
Cash and cash equivalents at end of period		$	828		$	173		$	2,153			$	3,154

F-30

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Year ended December 31, 2001
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations	Consolidated
Net cash provided by (used in) operating activities		$	8,865		$	7,445		$	(1,840	)		$	14,470
Cash flows from investing activities:
	Purchases of property, plant and equipment					(7,183	)		(1,913	)			(9,096	)
Net cash used in investing activities						(7,183	)		(1,913	)			(9,096	)
Cash flows from financing activities:
	Proceeds from long-term debt		35,820			1,126			3,511				40,457
	Payments on long-term debt		(44,015	)		(2,168	)		(337	)			(46,520	)
	Payment of preferred stock dividends		(150	)									(150	)
Net cash (used in) provided by financing activities			(8,345	)		(1,042	)		3,174				(6,213	)
	Effect of exchange rate changes on cash								(87	)			(87	)
Net (decrease) increase in cash and cash equivalents			520			(780	)		(666	)			(926	)
Cash and cash equivalents, at beginning of period			553			1,027			2,430				4,010
Cash and cash equivalents, at end of period		$	1,073		$	247		$	1,764			$	3,084

F-31

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Year ended December 31, 2000
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations	Consolidated
Net cash provided by operating activities		$	7,330		$	9,976		$	4,258			$	21,564
Cash flows from investing activities:
	Business acquisitions		(6,510	)									(6,510	)
	Purchases of property, plant and equipment					(7,747	)		(2,742	)			(10,489	)
	Proceeds from sale of assets					69							69
Net cash used in investing activities			(6,510	)		(7,678	)		(2,742	)			(16,930	)
Cash flows from financing activities:
	Payments on short-term debt								(808	)			(808	)
	Proceeds from long-term debt		29,443			774							30,217
	Payments on long-term debt		(31,249	)		(2,238	)		(399	)			(33,886	)
	Payment of preferred stock dividends		(152	)									(152	)
Net cash used in financing activities			(1,958	)		(1,464	)		(1,207	)			(4,629	)
	Effect of exchange rate changes on cash								12				12
Net (decrease) increase in cash and cash equivalents			(1,138	)		834			321				17
Cash and cash equivalents, at beginning of period			1,691			193			2,109				3,993
Cash and cash equivalents, at end of period		$	553		$	1,027		$	2,430			$	4,010

F-32

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

N.     Supplemental Guarantor Information (Continued)

		Year ended December 31, 1999
					Combined			Combined
					Guarantor			Non-Guarantor
		Parent			Subsidiaries			Subsidiaries			Eliminations	Consolidated
Net cash provided by operating activities		$	11,158		$	4,886		$	3,702			$	19,746
Cash flows from investing activities:
	Business acquisitions		(19,350	)									(19,350	)
	Purchases of property, plant and equipment					(7,953	)		(2,181	)			(10,134	)
	Proceeds from sale of assets					3,682							3,682
Net cash used in investing activities			(19,350	)		(4,271	)		(2,181	)			(25,802	)
Cash flows from financing activities:
	Proceeds from long-term debt		37,897			125							38,022
	Payments on long-term debt		(37,946	)		(1,147	)		(608	)			(39,701	)
	Payment of preferred stock dividends		(148	)									(148	)
	Repurchase of common stock		(2,798	)									(2,798	)
Net cash used in financing activities			(2,995	)		(1,022	)		(608	)			(4,625	)
	Effect of exchange rate changes on cash					554			(197	)			357
Net (decrease) increase in cash and cash equivalents			(11,187	)		147			716				(10,324	)
Cash and cash equivalents, at beginning of period			12,878			46			1,393				14,317
Cash and cash equivalents, at end of period		$	1,691		$	193		$	2,109			$	3,993

F-33

Hawk Corporation

Notes to Consolidated Financial Statements (Continued)

O.     Summary of Quarterly Results of Operations (Unaudited)

	March 31,		June 30,			September 30,			December 31,
	2001		2001			2001			2001
Net sales	$	53,781	$	47,419		$	42,208		$	40,980
Gross profit		13,820		10,334			8,704			7,121
Net income (loss)		857		(1,419	)		(953	)		(2,821	)
Basic earnings (loss) per share	$	.10	$	(.17	)	$	(.12	)	$	(.33	)
Diluted earnings (loss) per share	$	.10	$	(.17	)	$	(.12	)	$	(.33	)

	March 31,		June 30,		September 30,		December 31,
	2000		2000		2000		2000
Net sales	$	55,170	$	53,837	$	47,861	$	45,461
Gross profit		14,943		14,958		13,362		11,679
Net income (loss)		2,164		1,910		1,493		203
Basic earnings (loss) per share	$	.25	$	.22	$	.17	$	.02
Diluted earnings (loss) per share	$	.25	$	.22	$	.17	$	.02

F-34

ANNEX A

Deleted Provisions of the Old Indenture

      If the proposed amendments to the old indenture become effective, then we will delete the provisions set forth in the form of italicized clauses below from the old indenture, as well as those definitions from the old indenture that are used only in the provisions that would be eliminated as part of the proposed amendments. We and the trustee for the old indenture will make these deletions in the form of a supplemental indenture to the old indenture. In addition, certain other provisions of the old indenture will be amended, deleted or renumbered to conform them to reflect the changes described below.

      The provisions of the old indenture reprinted below are qualified in their entirety by reference to the old indenture. Capitalized terms used but not otherwise defined in this Annex A have the meanings set forth in the old indenture.

ARTICLE IV

* * *

COVENANTS

      SECTION 4.3     Corporate Existence.

      [Delete: Except as otherwise permitted by Article V or by Section 4.16, the Company shall do or cause to be done, at its own cost and expense, all things necessary to preserve and keep in full force and effect its corporate existence and the corporate existence of each of the Restricted Subsidiaries in accordance with the respective organizational documents of each such Restricted Subsidiary and the material rights (charter and statutory) and franchises of the Company and each such Restricted Subsidiary; provided, however, that the Company shall not be required to preserve, with respect to itself, any material right or franchise and, with respect to any Restricted Subsidiary, any such existence, material right or franchise, if the Board of Directors of the Company shall determine in good faith that the preservation thereof is no longer desirable in the conduct of the business of the Company and the Restricted Subsidiaries, taken as a whole.]

      SECTION 4.4     Payment of Taxes and Other Claims.

      [Delete: The Company shall pay or discharge or cause to be paid or discharged, before the same shall become delinquent, (i) all material taxes, assessments and governmental charges (including withholding taxes and any penalties, interest and additions to taxes) levied or imposed upon it or any Restricted Subsidiary or properties of it or any Subsidiary and (ii) all material lawful claims for labor, materials and supplies that, if unpaid, might by law become a Lien upon the property of it or any Restricted Subsidiary; provided, however, that the Company shall not be required to pay or discharge or cause to be paid or discharged any such tax, assessment, charge or claim whose amount, applicability or validity is being contested in good faith by appropriate negotiations or proceedings properly instituted and diligently conducted for which adequate reserves, to the extent required under GAAP, have been taken.]

      SECTION 4.5     Maintenance of Properties and Insurance.

      [Delete: (a) The Company shall, and shall cause each Restricted Subsidiary to, maintain all properties used or useful in the conduct of its business in good working order and condition (subject to ordinary wear and tear) and make all necessary repairs, renewals, replacements, additions, betterments and improvements thereto and actively conduct and carry on its business; provided, however, that nothing in this Section 4.5 shall prevent the Company or any Restricted Subsidiary from discontinuing the operation and maintenance of any of its properties, if such discontinuance is (i) in the ordinary course of business pursuant to customary business terms or (ii) in the good faith judgment of the Board of Directors or other governing body of the Company or the Restricted Subsidiary, as the case may be, desirable in the conduct of their respective businesses and is not disadvantageous in any material respect to the Holders.

      (b) The Company shall provide or cause to be provided, for itself and each Restricted Subsidiary, insurance (including appropriate self-insurance) against loss or damage of the kinds that, in the good faith judgment of the

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Company, are adequate and appropriate for the conduct of the business of the Company and such Restricted Subsidiary in a prudent manner, with reputable insurers or with the government of the United States of America or an agency or instrumentality thereof, in such amounts, with such deductibles, and by such methods as shall be customary, in the good faith judgment of the Company, for companies similarly situated in the industry.]

* * *

      SECTION 4.8     Waiver of Stay, Extension or Usury Laws.

      [Delete: The Company covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive the Company from paying all or any portion of the principal of or interest on the Notes as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) the Company hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.]

      SECTION 4.9     Provision of Financial Statements and Information.

      (a) [Delete: Following effectiveness of the Exchange Offer (as defined in the Registration Rights Agreement), whether or not the Company is then subject to Section 13(a) or 15(d) of the Exchange Act, the Company will file with the Commission, so long as any Notes are outstanding, the annual reports, quarterly reports and other periodic reports which the Company would have been required to file with the Commission pursuant to such Section 13(a) or 15(d) if the Company were so subject, and such documents shall be filed with the Commission on or prior to the respective dates (the “Required Filing Dates”) by which the Company would have been required so to file such documents if the Company were so subject; provided the Commission will accept such filings.] Upon qualification of this Indenture under the TIA, the Company shall [delete: also] comply with the provisions of TIA § 314(a).

      [Delete: (b) The Company will also in any event (i) within 15 days of each Required Filing Date, file with the Trustee, and supply the Trustee with copies for delivery to the holders of the Notes, the annual reports, quarterly reports and other periodic reports which the Company would have been required to file with the Commission pursuant to Section 13(a) or 15(d) of the Exchange Act if the Company were subject to such Sections and (ii) if the Commission will not accept the filing of such documents promptly upon written request and payment of the reasonable cost of duplication and delivery, supply copies of such documents to any prospective holder of the Notes.

      (c) The Company shall provide to any Holder or any beneficial owner of Notes any information reasonably requested by such Holder or such beneficial owner concerning the Company and the Subsidiaries (including financial statements) necessary in order to permit such Holder or such beneficial owner to sell or transfer Notes in compliance with Rule 144A under the Securities Act.]

      SECTION 4.10     Limitation on Incurrence of Indebtedness.

      [Delete: (a) The Company shall not, and shall not permit any Restricted Subsidiary to, create, incur, issue, assume or directly or indirectly guarantee or in any other manner become directly or indirectly liable for (“incur”) any Indebtedness (including Acquired Debt), except that the Company may incur Indebtedness (including Acquired Debt) if, at the time of, and immediately after giving pro forma effect to, such incurrence of Indebtedness, the Consolidated Cash Flow Coverage Ratio of the Company for the most recently ended four fiscal quarters would be at least 2.0 to 1.0 if incurred during the period from the Issue Date through December 1, 1998, and 2.25 to 1.0 if incurred thereafter.

      (b) The foregoing limitations will not apply to the incurrence of any of the following (collectively, “Permitted Indebtedness”), each of which shall be given independent effect:

A-2

      (i) Indebtedness of the Company arising under the New Revolving Credit Facility in an aggregate principal amount not to exceed at any time outstanding the greater of (x) $25.0 million, less any permanent reduction in commitments thereunder, and (y) the sum, at such time, of (I) 85% of the consolidated book value of net accounts receivable of the Company and the Restricted Subsidiaries and (II) 60% of the consolidated book value of inventory of the Company and the Restricted Subsidiaries;

      (ii) Indebtedness of the Company represented by the Initial Notes and the Exchange Notes and Indebtedness of the Guarantors represented by the Guarantees;

      (iii) Indebtedness of the Company or any Restricted Subsidiary not covered by any other clause of this paragraph which is outstanding on the Issue Date (“Existing Indebtedness”);

      (iv) Indebtedness owed by any Restricted Subsidiary to the Company or to another Restricted Subsidiary, or owed by the Company to any Restricted Subsidiary that, if owed to a Restricted Subsidiary that is not a Guarantor, is unsecured and subordinated in right of payment to the payment and performance of the Company’s obligations under the Indenture and the Notes; provided, however, that any such Indebtedness shall at all times be held by a Person which is either the Company or a Restricted Subsidiary; provided, further, however, that upon either (a) the transfer or other disposition of any such Indebtedness to a Person other than the Company or another Restricted Subsidiary or (b) the sale, lease, transfer or other disposition of shares of Capital Stock (including by consolidation or merger) of any such Restricted Subsidiary to a Person other than the Company or another Restricted Subsidiary, the incurrence of such Indebtedness shall be deemed to be an incurrence that is not permitted by this clause (iv);

      (v) Indebtedness of the Company or any Restricted Subsidiary arising with respect to Interest Rate Agreement Obligations and Currency Agreement Obligations incurred for the purpose of fixing or hedging interest rate risk or currency risk with respect to any fixed or floating rate Indebtedness that is permitted by the terms of this Indenture to be outstanding or with respect to any receivable or liability the payment of which is determined by reference to a foreign currency;

      (vi) Indebtedness represented by performance, completion, guarantee, surety and similar bonds provided by the Company or any Restricted Subsidiary in the ordinary course of business consistent with past practice;

      (vii) Any Indebtedness incurred in connection with or given in exchange for the renewal, extension, substitution, refunding, defeasance, refinancing or replacement, in whole or in part, (a “refinancing”) of any Indebtedness incurred as permitted under Section 4.10(a) or any Indebtedness described in clauses (i), (ii) or (iii) above and this clause (vii) (“Refinancing Indebtedness”); provided, however, that (a) the principal amount of such Refinancing Indebtedness shall not exceed the principal amount (or accreted amount, if less) of the Indebtedness so refinanced (plus the premiums and reasonable expenses to be paid in connection therewith, which, with respect to such premiums, shall not exceed the stated amount of any premium or other payment required to be paid in connection with such a refinancing pursuant to the terms of the Indebtedness being refinanced); (b) if the Weighted Average Life to Maturity of the Indebtedness being refinanced is equal to or greater than the Weighted Average Life to Maturity of the Notes, the Refinancing Indebtedness shall have a Weighted Average Life to Maturity equal to or greater than the Weighted Average Life to Maturity of the Indebtedness being refinanced; (c) with respect to Refinancing Indebtedness other than Senior Debt incurred by the Company, such Refinancing Indebtedness shall rank no more senior than, and, if applicable, shall be at least as subordinated in right of payment to the Notes as, the Indebtedness being refinanced; and (d) the obligor on such Refinancing Indebtedness shall be the obligor on the Indebtedness being refinanced or the Company;

      (viii) Indebtedness of the Company or any Restricted Subsidiary (a) representing Capitalized Lease Obligations and any refinancings thereof and/or (b) in respect of Purchase Money Obligations for property acquired, constructed or improved in the ordinary course of business and any refinancings thereof, which taken together in the aggregate do not exceed $5.0 million at any time outstanding;

A-3

      (ix) Indebtedness of the Company or any Restricted Subsidiary relating to the acquisition of Hutchinson Foundry Products Company in an aggregate amount not to exceed $2.0 million (the “Hutchinson Notes”);

      (x) commodity agreements entered into in the ordinary course of business to protect against fluctuations in the prices of raw materials and not for speculative purposes;

      (xi) Indebtedness incurred by the Company or any Restricted Subsidiary constituting reimbursement obligations with respect to letters of credit issued in the ordinary course of business, including, without limitation, letters of credit in respect of workers’ compensation claims or self-insurance, or other Indebtedness with respect to reimbursement type obligations regarding workers’ compensation claims or self-insurance;

      (xii) (a) Guarantees by the Company of Indebtedness of a Restricted Subsidiary permitted to be incurred under this Indenture and (b) Guarantees of the Notes by the Guarantors;

      (xiii) Indebtedness of the Company or any Restricted Subsidiary arising from agreements providing for indemnification, adjustment of purchase price or similar obligations, in each case incurred or assumed in connection with the disposition of any business, assets or a Subsidiary, other guarantees of Indebtedness incurred by any Person acquiring all or any portion of such business, assets or a Subsidiary for the purpose of financing such acquisition; provided that the maximum liability in respect of such Indebtedness shall not exceed the gross proceeds actually received by the Company and its Restricted Subsidiaries in connection with such disposition; and

      (xiv) Indebtedness of the Company or any Restricted Subsidiary in addition to that described in clauses (i) through (xiii) above, and any renewals, extensions, substitutions, refinancings or replacements of such Indebtedness, so long as the aggregate principal amount of all such Indebtedness incurred pursuant to this clause (xiv) does not exceed $5.0 million at any one time outstanding.

      (c) For purposes of determining any particular amount of Indebtedness under this Section 4.10, guarantees, Liens or obligations with respect to letters of credit supporting Indebtedness otherwise included in the determination of such particular amount shall not be included.

      (d) Indebtedness of any Person which is outstanding at the time such Person becomes a Restricted Subsidiary or is merged with or into or consolidated with the Company or a Restricted Subsidiary shall be deemed to have been incurred at the time such Person becomes a Restricted Subsidiary or is merged with or into or consolidated with the Company or a Restricted Subsidiary, and Indebtedness which is assumed at the time of the acquisition of any asset shall be deemed to have been incurred at the time of such acquisition.]

      SECTION 4.11     Limitations on Restricted Payments.

      [Delete: (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, make any Restricted Payment, unless at the time of and immediately after giving effect to the proposed Restricted Payment (with the value of any such Restricted Payment, if other than cash, to be determined reasonably and in good faith by the Board of Directors of the Company):

      (i) no Default or Event of Default shall have occurred and be continuing or would occur as a consequence thereof;

      (ii) the Company could incur at least $1.00 of additional Indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10(a); and

      (iii) the aggregate amount of all Restricted Payments made after the Issue Date shall not exceed the sum of:

      (A) an amount equal to 50% of the Company’s aggregate cumulative Consolidated Net Income accrued on a cumulative basis during the period (treated as one accounting period) beginning on the Issue Date and ending on the date of such proposed Restricted Payment (or, if such aggregate

A-4

cumulative Consolidated Net Income for such period shall be a deficit, minus 100% of such deficit); plus

      (B) the aggregate amount of all net cash proceeds received since the Issue Date by the Company from the issuance and sale (other than to a Restricted Subsidiary) of, or equity contribution with respect to, Capital Stock (other than Disqualified Stock) and the principal amount of Indebtedness of the Company or any Restricted Subsidiary that has been converted into or exchanged for Capital Stock (other than Disqualified Stock), in any such case to the extent that such proceeds are not used (x) to redeem, repurchase, retire or otherwise acquire Capital Stock or any Indebtedness of the Company or any Restricted Subsidiary pursuant to clause (ii) of the next paragraph or (y) to make any Restricted Investment pursuant to clause (iv) of the next paragraph; plus

      (C) the amount of the net reduction in Investments in Unrestricted Subsidiaries resulting from (x) the payment of dividends or the repayment in cash of the principal of loans or the cash return on any Investment, in each case to the extent received by the Company or any Restricted Subsidiary from Unrestricted Subsidiaries, (y) the release or extinguishment of any guarantee of Indebtedness of any Unrestricted Subsidiary, and (z) the redesignation of Unrestricted Subsidiaries as Restricted Subsidiaries (valued as provided in the definition of “Investment”), such aggregate amount of the net reduction in Investments not to exceed in the case of any Unrestricted Subsidiary the amount of Restricted Investments previously made by the Company or any Restricted Subsidiary in such Unrestricted Subsidiary, which amount was included in the calculation of the amount of Restricted Payments; plus

      (D) to the extent that any Restricted Investment that was made after the Issue Date is sold for cash or otherwise liquidated or repaid for cash, the amount of cash proceeds received with respect to such Restricted Investment, net of taxes and the cost of disposition, not to exceed the amount of Restricted Investments made after the Issue Date.

      (b) Section 4.11(a) shall not prohibit the following actions (collectively, “Permitted Payments”):

      (i) the payment of any dividend within 60 days after the date of declaration thereof, if at such declaration date such payment would have been permitted under this Indenture (which payment shall be deemed to have been paid on such date of declaration for purposes of Section 4.11(a)(iii));

      (ii) the redemption, repurchase, retirement or other acquisition of any Capital Stock or any Indebtedness of the Company or any Restricted Subsidiary in exchange for, or out of the proceeds of, the substantially concurrent sale (other than to a Restricted Subsidiary) of, or equity contribution with respect to, Capital Stock of the Company (other than any Disqualified Stock), including without limitation the Hawk Controlling Stockholder Merger that will occur concurrently with the Offering;

      (iii) any purchase or defeasance of Subordinated Indebtedness to the extent required upon a Change of Control or Asset Sale (as defined therein) by the indenture or other agreement or instrument pursuant to which such Subordinated Indebtedness was issued, but only if the Company (x) in the case of a Change of Control, has complied with its obligations under Section 4.15 or (y) in the case of an Asset Sale, has applied the Net Proceeds from such Asset Sale in accordance with Section 4.16;

      (iv) any Restricted Investment the sole consideration for which consists of, or is made with the proceeds of the substantially concurrent sale (other than to a Restricted Subsidiary) of, or equity contribution with respect to, Capital Stock of the Company (other than any Disqualified Stock);

      (v) loans or advances to employees of the Company or any of its Subsidiaries which loans or advances exist on the Issue Date, and other loans or advances to employees of the Company or any Subsidiary to pay reasonable relocation expenses;

      (vi) Restricted Investments in an amount such that the sum of the aggregate amount of Restricted Investments made pursuant to this clause (vi) after the Issue Date does not exceed $2.0 million at any one time outstanding; and

A-5

      (vii) the payment of any dividend on, or redemption of any or all of, the Company’s redeemable 10% cumulative preferred stock, par value, $0.01 per share, Series A; redeemable 9% cumulative preferred stock, par value, $0.01 per share, Series B; and redeemable 10% cumulative preferred stock, par value, $0.01 per share, Series C, in each case, outstanding on the Issue Date.

provided, however, that in the case of clauses (iii) and (vi) of this Section 4.11(b), no Default or Event of Default shall have occurred and be continuing.

      (c) For purposes of Section 4.11(a)(iii), the Permitted Payments referred to in clauses (i) and (vi) of Section 4.11(b) shall be included in the aggregate amount of Restricted Payments made since the Issue Date, and any other Permitted Payments described above shall be excluded.

      (d) Not later than thirty (30) days after the end of any fiscal quarter of the Company during which any Restricted Payment or Restricted Investment has been made, the Company shall deliver to the Trustee an Officers’ Certificate stating that such Restricted Payment or Restricted Investment complies with this Indenture and setting forth in reasonable detail the basis upon which the required calculations were computed, which calculations may be based upon the Company’s latest available internal quarterly financial statements.]

      SECTION 4.12     Limitation on Liens.

      [Delete: The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create, incur, assume or suffer to exist any Lien securing Indebtedness (other than Permitted Liens) on any asset now owned or hereafter acquired, or any income or profits therefrom, or assign or convey any right to receive income therefrom to secure any such Indebtedness, unless (i) if such Lien secures Indebtedness that is pari passu with the Notes, then the Notes are secured on an equal and ratable basis with the obligations so secured until such time as such obligation is no longer secured by a Lien or (ii) if such Lien secures Indebtedness that is subordinated to the Notes, any such Lien shall be subordinated to a Lien granted to the Holders of the Notes in the same collateral as that securing such Lien to the same extent as such subordinated Indebtedness is subordinated to the Notes.]

     SECTION  4.13 Limitation on Dividends and Other Payment Restrictions Affecting Restricted Subsidiaries.

      [Delete: The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, create or otherwise cause to become effective any consensual encumbrance or consensual restriction on the ability of any Restricted Subsidiary to (i) pay dividends or make any other distributions to the Company or any other Restricted Subsidiary on its Capital Stock or with respect to any other interest or participation in, or measured by, its profits, or pay any Indebtedness owed to the Company or any other Restricted Subsidiary, (ii) make loans or advances to, or issue guarantees for the benefit of, the Company or any other Restricted Subsidiary or (iii) transfer any of its properties or assets to the Company or any other Restricted Subsidiary, except for such encumbrances or restrictions existing under or by reason of:

      (a) the New Revolving Credit Facility;

      (b) applicable law;

      (c) any instrument governing Indebtedness or Capital Stock of an Acquired Person acquired by the Company or any of its Restricted Subsidiaries as in effect at the time of such acquisition (except to the extent such Indebtedness was incurred in connection with or in contemplation of such acquisition); provided, however, that no such encumbrance or restriction is applicable to any Person, or the properties or assets of any Person, other than the Acquired Person;

      (d) by reason of customary non-assignment, subletting or net worth provisions in leases or other agreements entered into the ordinary course of business and consistent with past practices;

      (e) Purchase Money Indebtedness for property acquired in the ordinary course of business that impose restrictions only on the property so acquired;

A-6

      (f) an agreement for the sale or disposition of assets or the Capital Stock of a Restricted Subsidiary; provided, however, that such restriction or encumbrance is only applicable to such Restricted Subsidiary or assets, as applicable, and such sale or disposition otherwise is permitted by Section 4.16; provided, further, however, that such restriction or encumbrance shall be effective only for a period from the execution and delivery of such agreement through a termination date not later than 180 days after such execution and delivery;

      (g) this Indenture, the Notes and the Guarantees;

      (h) Indebtedness (including Refinancing Indebtedness) permitted to be incurred subsequent to the Issue Date pursuant to Section 4.10; provided, however, that any such restrictions are ordinary and customary with respect to the type of Indebtedness being incurred;

      (i) encumbrances and restrictions imposed by Liens incurred in accordance with Section 4.12;

      (j) customary provisions in joint venture agreements and other similar agreements; and

      (k) encumbrances and restrictions imposed by amendments, restatements, renewals, replacements or refinancings of the contracts, instruments or obligations referred to in clauses (a) through (j) above; provided that such encumbrances and restrictions are, in the good faith judgment of the Company’s Board of Directors, no more restrictive, in any material respect, than those contained in such contracts, instruments or obligations immediately prior to such amendment, restatement, renewal, replacement or refinancing.]

      SECTION 4.14     Limitation on Transactions with Affiliates.

      [Delete: (a) The Company shall not, and shall not permit any Restricted Subsidiary to, directly or indirectly, enter into or suffer to exist any transaction or series of related transactions (including, without limitation, the sale, purchase, exchange or lease of assets, property or services) with any Affiliate of the Company unless (1) such transaction or series of transactions is on terms that are no less favorable to the Company or such Restricted Subsidiary, as the case may be, than those that could reasonably be obtainable at such time in a comparable transaction in arm’s-length dealings with an unrelated third party, and (2) the Company delivers to the Trustee (a) with respect to any transaction or series of transactions involving aggregate payments in excess of $500,000, an Officers’ Certificate certifying that such transaction or series of related transactions complies with clause (1) above and (b) with respect to any transaction or series of transactions involving aggregate payments in excess of $2.0 million, an Officers’ Certificate certifying that such transaction or series of related transactions has been approved by a majority of the members of the Board of Directors of the Company (and approved by a majority of the Independent Directors or, in the event there is only one Independent Director, by such Independent Director), and (c) with respect to any transaction or series of transactions involving aggregate payments in excess of $5.0 million, an opinion as to the fairness to the Company from a financial point of view issued by an investment banking firm of national standing.

      (b) Section 4.14(a) will not apply to (i) employment agreements or compensation or employee benefit arrangements with any officer, director or employee of the Company or any of its Restricted Subsidiaries entered into in the ordinary course of business (including customary benefits thereunder and including reimbursement or advancement of out-of-pocket expenses, and director’s and officer’s liability insurance); (ii) the expense sharing arrangement between the Company and Weinberg Capital Corporation regarding the expenses incurred with respect to the Company’s Cleveland, Ohio headquarters; (iii) the Hawk Controlling Stockholder Merger that will occur concurrently with the Offering; (iv) the secured promissory note in the original principal amount of $500,000 issued to Helco, Inc.; (v) the Hutchinson Notes; (vi) any transaction entered into by or among the Company or one of its Restricted Subsidiaries with one or more Restricted Subsidiaries of the Company; (vii) any transaction permitted by Section 4.11(b); (viii) transactions permitted by, and complying with, Article Five; and (ix) transactions with suppliers or other purchases or sales of goods or services, in each case in the ordinary course of business (including, without limitation, pursuant to joint venture agreements) and otherwise in compliance with the terms of this Indenture which, in the reasonable determination of the Board of Directors of the Company, are on terms no less favorable to the Company or its Restricted Subsidiaries than those that could reasonably have been obtained at such time from an unaffiliated party.]

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      SECTION 4.15     Change of Control.

      [Delete: (a) In the event of a Change of Control, each Holder shall have the right, unless the Company has given a notice of redemption, subject to the terms and conditions of this Indenture, to require the Company to offer to purchase all or any portion (equal to $1,000 or an integral multiple thereof) of such Holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof plus accrued and unpaid interest, if any, to the date of purchase, in accordance with the terms set forth below (a “Change of Control Offer”).

      In the event of any Change of Control, the Company shall not, and shall not cause or permit any of the Restricted Subsidiaries to, purchase, redeem or otherwise acquire or retire any Indebtedness of the Company ranking junior or subordinate to the Notes pursuant to any analogous provisions relating to such Indebtedness until after the 91st day after the Change of Control Payment Date (as such date may be extended).

      (b) On or before the 30th day following the occurrence of any Change of Control, the Company shall mail, by first-class mail (with a copy to the Trustee), to each Holder at such Holder’s registered address a notice stating: (i) that a Change of Control has occurred and that such holder has the right to require the Company to purchase all or a portion (equal to $1,000 or an integral multiple thereof) of such holder’s Notes at a purchase price in cash equal to 101% of the aggregate principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase (the “Change of Control Purchase Date”), which shall be a Business Day, specified in such notice, that is not earlier than 30 days or later than 60 days from the date such notice is mailed; (ii) the amount of accrued and unpaid interest, if any, as of the Change of Control Purchase Date; (iii) that any Note not tendered will continue to accrue interest; (iv) that, unless the Company defaults in the payment of the purchase price for the Notes payable pursuant to the Change of Control Offer, any Notes accepted for payment pursuant to the Change of Control Offer shall cease to accrue interest on the Change of Control Purchase Date; (v) that Holders electing to have a Note purchased pursuant to a Change of Control Offer will be required to surrender the Note, with the form entitled “Option of Holder to Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the second Business Day prior to the Change of Control Purchase Date; (vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Change of Control Purchase Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Notes purchased; (vii) that Holders whose Notes are purchased only in part will be issued new Notes in a principal amount equal to the unpurchased portion of the Notes surrendered; provided, however, that each Note purchased and each new Note issued shall be in an original principal amount of $1,000 or integral multiples thereof; (viii) the circumstances and relevant facts regarding such Change of Control; and (ix) such other information as may be required by applicable laws and regulations.

      (c) On the Change of Control Purchase Date, the Company will (i) accept for payment all Notes or portions thereof tendered pursuant to the Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender Sufficient to pay the aggregate purchase price of all Notes or portions thereof accepted for payment, and (iii) deliver or cause to be delivered to the Trustee all Notes tendered pursuant to the Change of Control Offer. The Paying Agent shall promptly mail to each holder of Notes or portions thereof accepted for payment an amount equal to the purchase price for such Notes plus accrued and unpaid interest, if any, thereon, and the Trustee shall promptly authenticate and mail to each holder of Notes accepted for payment in part a new Note equal in principal amount to any unpurchased portion of the Notes, and any Note not accepted for payment in whole or in part shall be promptly returned to the holder of such Note. On and after a Change of Control Purchase Date, interest will cease to accrue on the Notes or portions thereof accepted for payment, unless the Company defaults in the payment of the purchase price therefor. The Company will publicly announce the results of the Change of Control Offer on or as soon as practicable after the Change of Control Purchase Date.

      (d) The Company will comply with the applicable tender offer rules, including the requirements of Section 14(e) and Rule 14e-1 under the Exchange Act, and all other applicable securities laws and regulations in connection with any Change of Control Offer and will be deemed not to be in violation of any of the covenants under this Indenture to the extent such compliance is in conflict with such covenants.]

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      SECTION 4.16     Limitation on Asset Sales.

      [Delete: (a) The Company shall not, and shall not permit any Restricted Subsidiary to, make any Asset Sale unless (i) the Company or such Restricted Subsidiary, as the case may be, receives consideration at the time of such Asset Sale at least equal to the Fair Market Value (as evidenced by a resolution of the Board of Directors set forth in an Officers’ Certificate delivered to the Trustee) of the assets or other property sold or disposed of in the Asset Sale and (ii) at least 75% of such consideration consists of either cash or Cash Equivalents; provided, however, that for purposes of this Section 4.16, “cash‘ shall include (x) the amount of any Indebtedness (other than any Indebtedness that is by its terms subordinated to the Notes) of the Company or such Restricted Subsidiary as shown on the Company’s or such Restricted Subsidiary’s most recent balance sheet or in the notes thereto that is assumed by the transferee of any such assets or other property in such Asset Sale (and excluding any liabilities that are incurred in connection with or in anticipation of such Asset Sale), but only to the extent that such assumption is effected on a basis such that there is no further recourse to the Company or any of the Restricted Subsidiaries with respect to such liabilities and (y) any notes, obligations or securities received by the Company or such Restricted Subsidiary from such transferee that are converted within 60 days by the Company or such Restricted Subsidiary into cash (to the extent of the cash received).

      (b) Within 180 days after any Asset Sale, the Company may elect to apply the Net Proceeds from such Asset Sale to (a) permanently reduce any Senior Debt of the Company and/or (b) make an investment in, or acquire assets and properties that will be used in, the business of the Company and the Restricted Subsidiaries existing on the Issue Date or in businesses reasonably related thereto. Pending the final application of any such Net Proceeds, the Company or any Restricted Subsidiary may temporarily reduce Indebtedness of the Company under the New Revolving Credit Facility or temporarily invest such Net Proceeds in any Investments described under clauses (i) through (iii) of the definition of Permitted Investments. Any Net Proceeds from an Asset Sale not applied or invested as provided in the first sentence of this Section 4.16(b) within 180 days of such Asset Sale will be deemed to constitute “Excess Proceeds.”

      (c) Each date that the aggregate amount of Excess Proceeds in respect of which an Asset Sale Offer (as defined below) has not been made exceeds $5.0 million shall be deemed an “Asset Sale Offer Trigger Date.” As soon as practicable, but in no event later than 20 business days after each Asset Sale Offer Trigger Date, the Company shall commence an offer (an “Asset Sale Offer”) to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds. Any Notes to be purchased pursuant to an Asset Sale Offer shall be purchased pro rata based on the aggregate principal amount of Notes outstanding, and all Notes shall be purchased at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of purchase. To the extent that any Excess Proceeds remain after completion of an Asset Sale Offer, the Company may use the remaining amount for general corporate purposes otherwise permitted by this Indenture. In the event that the Company is prohibited under the terms of any agreement governing outstanding Senior Debt of the Company from repurchasing Notes with Excess Proceeds pursuant to an Asset Sale Offer as set forth in the first sentence of this Section 4.16(c), the Company shall promptly use all Excess Proceeds to permanently reduce such outstanding Senior Debt of the Company. Upon the consummation of any Asset Sale Offer, the amount of Excess Proceeds shall be deemed to be reset to zero.

      (d) Notice of an Asset Sale Offer shall be mailed, by first-class mail (with a copy to the Trustee), by the Company not later than the 20th business day after the related Asset Sale Offer Trigger Date to each holder of Notes at such holder’s registered address, stating: (i) that an Asset Sale Offer Trigger Date has occurred and that the Company is offering to purchase the maximum principal amount of Notes that may be purchased out of the Excess Proceeds (to the extent provided in the immediately preceding paragraph), at an offer price in cash in an amount equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of the purchase (the “Asset Sale Offer Purchase Date”), which shall be a business day, specified in such notice, that is not earlier than 30 days or later than 60 days from the date such notice is mailed, (ii) the amount of accrued and unpaid interest, if any, as of the Asset Sale Offer Purchase Date, (iii) that any Note not tendered will continue to accrue interest, (iv) that, unless the Company defaults in the payment of the purchase price for the Notes payable pursuant to the Asset Sale Offer, any Notes accepted for payment pursuant to the Asset Sale Offer shall cease to accrue interest after the Asset Sale Offer Purchase Date, (v) that Holders electing to have a Note purchased pursuant to a Asset Sale Offer will be required to surrender the Note, with the form entitled “Option of Holder to

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Elect Purchase” on the reverse of the Note completed, to the Paying Agent at the address specified in the notice prior to the close of business on the third Business Day prior to the Asset Sale Offer Purchase Date, (vi) that Holders will be entitled to withdraw their election if the Paying Agent receives, not later than the second Business Day prior to the Asset Sale Offer Purchase Date, a facsimile transmission or letter setting forth the name of the Holder, the principal amount of the Notes the Holder delivered for purchase and a statement that such Holder is withdrawing his election to have such Note purchased, (vii) that Holders whose Notes are purchased only in part will be issued new Notes in a principal amount equal to the unpurchased portion of the Notes surrendered; provided, however, that each Note purchased and each new Note issued shall be in an original principal amount of $1,000 or integral multiples thereof, and (viii) such other information as may be required by applicable laws and regulations.

      (e) On the Asset Sale Offer Purchase Date, the Company will (i) accept for payment the maximum principal amount of Notes or portions thereof tendered pursuant to the Asset Sale Offer that can be purchased out of Excess Proceeds from such Asset Sale that are to be applied to an Asset Sale Offer, (ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the aggregate purchase price of all Notes or portions thereof accepted for payment, and (iii) deliver or cause to be delivered to the Trustee all Notes tendered pursuant to the Asset Sale Offer. If less than all Notes tendered pursuant to the Asset Sale Offer are accepted for payment by the Company for any reason consistent with this Indenture, selection of the Notes to be purchased by the Company shall be in compliance with the requirements of the principal national securities exchange, if any, on which the Notes are listed or, if the Notes are not so listed, on a pro rata basis or by lot; provided, however, that Notes accepted for payment in part shall only be purchased in integral multiples of $1,000. The Paying Agent shall promptly mail to each holder of Notes or portions thereof accepted for payment an amount equal to the purchase price for such Notes plus accrued and unpaid interest, if any, thereon, and the Trustee shall promptly authenticate and mail to such holder of Notes accepted for payment in part a new Note equal in principal amount to any unpurchased portion of the Notes, and any Note not accepted for payment in whole or in part shall be promptly returned to the holder of such Note. On and after an Asset Sale Offer Purchase Date, interest will cease to accrue on the Notes or portions thereof accepted for payment, unless the Company defaults in the payment of the purchase price therefor. The Company will publicly announce the results of the Asset Sale Offer on or as soon as practicable after the Asset Sale Offer Purchase Date.

      (f) This Section 4.16 will not apply to a transaction consummated in compliance with Article Five.

      (g) The Company will comply with the applicable tender offer rules, including the requirements of Section 14(e) and Rule 14e-1 under the Exchange Act, and all other applicable securities laws and regulations in connection with any Asset Sale Offer and will be deemed not to be in violation of any of the covenants under this Indenture to the extent such compliance is in conflict with such covenants.]

SECTION  4.17  Limitation on Designation of Unrestricted Subsidiaries.

      (a) The Company shall not designate any Subsidiary of the Company (other than a newly created Subsidiary in which no Investment has previously been made) as an “Unrestricted Subsidiary” under this Indenture (a “Designation”) unless:

      (i) no Default shall have occurred and be continuing at the time of or after giving effect to such Designation;

      (ii) [delete: immediately after giving effect to such Designation, the Company would be able to incur $1.00 of additional Indebtedness (other than Permitted Indebtedness) under Section 4.10(a); and

      (iii) the Company would not be prohibited under this Indenture from making an Investment at the time of Designation in an amount (the “Designation Amount”) equal to the greater of (x) the book value of such Restricted Subsidiary on such date and (y) the Fair Market Value of such Restricted Subsidiary on such date] [add: intentionally omitted].

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In the event of any such Designation, the Company shall be deemed to have made an Investment constituting a Restricted Payment pursuant to for all purposes of this Indenture in an amount equal to the Designation Amount.

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ARTICLE V

SUCCESSOR CORPORATION

SECTION  5.1 Merger, Consolidation and Sale of Assets.

      (a) The Company shall not, in any single transaction or series of related transactions, consolidate or merge with or into (whether or not the Company is the Surviving Person), or sell, assign, transfer, lease, convey or otherwise dispose of all or substantially all of its properties or assets (determined on a consolidated basis for the Company and its Restricted Subsidiaries) in one or more related transactions to, another Person, and the Company will not permit any Restricted Subsidiary to enter into any such transaction or series of related transactions if such transaction or series of related transactions, in the aggregate, would result in a sale, assignment, transfer, lease, conveyance or other disposition of all or substantially all of the properties and assets of the Company and the Restricted Subsidiaries, taken as a whole, to another Person, unless (i) the Surviving Person is a corporation organized or existing under the laws of the United States, any state thereof or the District of Columbia; [add: and] (ii) the Surviving Person (if other than the Company [delete: or a Guarantor]) assumes all the obligations of the Company under the Notes, this Indenture and, if then in effect, the Registration Rights Agreement pursuant to a supplemental indenture or other written agreement, as the case may be, in a form reasonably satisfactory to the Trustee [delete:; (iii) immediately after such transaction, no Default or Event of Default shall have occurred and be continuing; (iv) immediately after giving effect to such transaction or series of related transactions, (a) in the case of a transaction involving the Company, the Surviving Person shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of the Company immediately prior to such transaction or series of related transactions or (b) in the case of a transaction involving a Restricted Subsidiary of the Company, the Surviving Person shall have a Consolidated Net Worth equal to or greater than the Consolidated Net Worth of such Restricted Subsidiary immediately prior to such transaction or series of related transactions; and (v) after giving pro forma effect to such transaction, the Surviving Person would be permitted to incur at least $1.00 of additional indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10(a). Notwithstanding clauses (iii), (iv) and (v) above, any Restricted Subsidiary that is a Guarantor may consolidate with, merge into or transfer all or part of its properties and assets to the Company or another Restricted Subsidiary that is a Guarantor].

      In the event of any transaction (other than a lease) described in and complying with the conditions listed in the immediately preceding paragraph in which the Company [delete: or a Guarantor] is not the Surviving Person, such Surviving Person shall succeed to, and be substituted for, and may exercise every right and power of, the Company, and the Company shall be discharged from its obligations under, this Indenture, the Notes and the Registration Rights Agreement.

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ARTICLE VI

DEFAULT AND REMEDIES

      SECTION 6.1     “Events of Default”, wherever used herein, means any one of the following events (whatever the reason for such Event of Default and whether it shall be voluntary or involuntary or be effected by operation of law or pursuant to any judgment, decree or order of any court or any order, rule or regulation of any administrative or governmental body):

      (i) the Company defaults for 30 days in the payment when due of interest on, or Liquidated Damages (if any) with respect to, any Note;

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      (ii) the Company defaults in the payment when due of principal on any Note, whether upon maturity, acceleration, optional or mandatory redemption, required repurchase or otherwise;

      (iii) the Company’s [delete: or any Guarantor’s] failure to perform or comply with any covenant, agreement or warranty in this Indenture (other than the defaults specified in clauses (i) and (ii) above) which failure continues for 60 days after written notice thereof has been given to the Company by the Trustee or to the Company and the Trustee by the Holders of at least 25% in aggregate principal amount of the then outstanding Notes;

      [delete: (iv) the occurrence of one or more defaults under any agreements, indentures or instruments under which the Company or any Restricted Subsidiary then has outstanding Indebtedness in excess of $5.0 million in the aggregate and, if not already matured at its final maturity in accordance with its terms, such Indebtedness shall have been accelerated and such acceleration is not rescinded, annulled or cured within 10 days thereafter;

      (v) one or more judgments, orders or decrees for the payment of money in excess of $5.0 million, either individually or in the aggregate, shall be entered against the Company or any Restricted Subsidiary or any of their respective properties and which judgments, orders or decrees are not paid, discharged, bonded or stayed or stayed pending appeal for a period of 60 days after their entry; or

      (vi) the Company or any Significant Subsidiary shall (A) commence a voluntary case or proceeding under any Bankruptcy Law with respect to itself, (B) consent to the entry of a judgment, decree or order for relief against it in an involuntary case or proceeding under any Bankruptcy Law, (C) consent to the appointment of a Custodian of it or for substantially all of its property, (D) consent to or acquiesce in the institution of a bankruptcy or an insolvency proceeding against it, (E) make a general assignment for the benefit of its creditors, (F) admit in writing its inability to pay its debts as they become due, or (G) take any corporate action to authorize or effect any of the foregoing; or

      (vii) a court of competent jurisdiction shall enter a judgment, decree or order for relief in respect of the Company or any Significant Subsidiary in an involuntary case or proceeding under any Bankruptcy Law which shall (A) approve as properly filed a petition seeking reorganization, arrangement, adjustment or composition in respect of the Company or any Significant Subsidiary, (B) appoint a Custodian of the Company or any Significant Subsidiary or for substantially all of its property or (C) order the winding-up or liquidation of its affairs; and such judgment, decree or order shall remain unstayed and in effect for a period of 60 consecutive days; or

      (viii) any Guarantee ceases to be in full force and effect (except as contemplated by the terms of this Indenture) or any Guarantor denies or disaffirms its obligations under this Indenture or its Guarantee.]

      The Company shall provide an Officers’ Certificate to the Trustee within five days of the occurrence of any Default or Event of Default [delete: (provided, however, that pursuant to Section 4.6 hereof the Company shall provide such certification at least annually whether or not they know of any Default or Event of Default)] that has occurred and, if applicable, describe such Default or Event of Default and the status thereof.

      SECTION 6.2     Acceleration.

      (a) If any Event of Default [delete: (other than as specified in clause (vi) or (vii) of Section 6.1 with respect to the Company)] occurs and is continuing, the Trustee or the Holders of at least 25% in aggregate principal amount of the then outstanding Notes may, and the Trustee at the request of such Holders shall, declare all the Notes to be due and payable immediately by notice in writing to the Company, and to the Company and the Trustee if by the Holders, specifying the respective Event of Default and that such notice is a “notice of acceleration,” and the Notes shall become immediately due and payable. [Delete: Notwithstanding the foregoing, in the case of an Event of Default arising from the events specified in clause (vi) or (vii) of Section 6.1 with respect to the Company, the principal of, premium, if any, and any accrued interest on all outstanding Notes shall ipso facto become immediately due and payable without further action or notice.]

      (b) Any time after a declaration of acceleration, but before a judgment or decree for payment of the money due has been obtained by the Trustee, the Holders of a majority in principal amount of the Notes outstanding, by

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written notice to the Company and the Trustee, may rescind and annul such declaration and its consequences if (i) the Company has paid or deposited with the Trustee a sum sufficient to pay (A) all sums paid or advanced by the Trustee and the reasonable compensation, expenses, disbursements and advances of the Trustee, its agents and counsel, (B) all overdue interest [delete: (including any interest accrued subsequent to an Event of Default specified in clause (vi) or (vii) of Section 6.1 hereof)] on all Notes, (C) the principal of and premium, if any, on any Notes which have become due otherwise than by such declaration or occurrence of acceleration and interest thereon at the rate borne by the Notes, and (D) to the extent that payment of such interest is lawful, interest upon overdue interest at the rate borne by the Notes; and (ii) all Events of Default, other than the non-payment of principal of Notes which have become due solely by such declaration or occurrence of acceleration, have been cured or waived; and (iii) the rescission would not conflict with any judgment, order or decree of any court of competent jurisdiction.

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ARTICLE X

GUARANTEES

      SECTION 10.1     Unconditional Guarantee.

      [Delete: Each Guarantor hereby unconditionally, jointly and severally, guarantees of a senior unsecured basis (such guarantee to be referred to herein as a “Guarantee”) to each Holder of a Note authenticated and delivered by the Trustee and to the Trustee and its successors and assigns that: (i) the principal of, premium, if any, and interest on the Notes will be promptly paid in full when due, subject to any applicable grace period, whether at maturity, by acceleration or otherwise and interest on the overdue principal and interest on any overdue interest, to the extent lawful, of the Notes and all other Obligations of the Company to the Holders of the Notes or the Trustee hereunder or thereunder will be promptly paid in full or performed, all in accordance with the terms hereof and thereof; and (ii) in case of any extension of time of payment or renewal of any Notes or of any such other Obligations, the same will be promptly paid in full when due or performed in accordance with the terms of the extension or renewal, subject to any applicable grace period, whether at stated maturity, by acceleration or otherwise, subject, however, in the case of clauses (i) and (ii) above, to the limitations set forth in Section 10.4. Each Guarantor hereby agrees that its obligations hereunder shall be unconditional, irrespective of the validity, regularity or enforceability of the Notes or this Indenture, the absence of any action to enforce the same, any waiver or consent by any Holder of the Notes with respect to any provisions hereof or thereof, the recovery of any judgment against the Company, and action to enforce the same or any other circumstance which might otherwise constitute a legal or equitable discharge or defense of a guarantor. Each Guarantor hereby waives diligence, presentment, demand of payment, filing of claims with a court in the event of insolvency or bankruptcy of the Company, any right to require a proceeding first against the Company, protest, notice and all demands whatsoever and covenants that this Guarantee will not be discharged except by complete performance of the Obligations contained in the Notes, this Indenture and in this Guarantee. If any Holder of the Notes or the Trustee is required by any court or otherwise to return to the Company or any Guarantor, or any custodian, trustee, liquidator or other similar official acting in relation to the Company or any Guarantor, any amount paid by the Company or any Guarantor to the Trustee or such Holder, this Guarantee, to the extent theretofore discharged, shall be reinstated in full force and effect. Each Guarantor further agrees that, as between each Guarantor, on the one hand, and the Holders of the Notes and the Trustee, on the other hand, (x) the maturity of the obligations guaranteed hereby may be accelerated as provided in Article VI for the purposes of this Guarantee, notwithstanding any stay, injunction or other prohibition preventing such acceleration in respect of the Obligations guaranteed hereby, and (y) in the event of any acceleration of such Obligations as provided in Article VI, such obligations (whether or not due and payable) shall forthwith become due and payable by each Guarantor for the purpose of this Guarantee.]

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      SECTION 10.2     Severability.

      [Delete: In case any provision of this Article X or any Guarantee shall be invalid, illegal or unenforceable, the validity, legality, and enforceability of the remaining provisions hereof or thereof shall not in any way be affected or impaired thereby.]

      SECTION 10.3     Successors and Assigns; Release of a Guarantor.

      [Delete: This Article X shall be binding upon the Guarantors and their successors and assigns and shall enure to the benefit of the successors and assigns of the Trustee and the Holders and, in the event of any transfer or assignment of rights by any Holder or the Trustee, the rights and privileges conferred upon that party in this Indenture and in the Notes shall automatically extend to and be vested in such transferee or assignee, all subject to the terms and conditions of this Indenture.

      If no Default exists or would exist under this Indenture, if all of the assets of any Guarantor or all of the Capital Stock of any Guarantor is sold or disposed of (including by merger, consolidation, issuance or otherwise) by the Company or any of the Restricted Subsidiaries to any person that is not an Affiliate of the Company or any of the Restricted Subsidiaries if a transaction constituting an Asset Sale (other than pursuant to a transaction subject to the provisions of clause (a) or (b) of Section 5.1), and if the Net Proceeds from such Asset Sale are used in accordance with Section 4.16, then (a) such Guarantor and each wholly-owned Restricted Subsidiary of such Guarantor that is also a Guarantor (in the event of a sale or other disposition of all of the Capital Stock of such Guarantor) or (b) the corporation or other entity acquiring such assets (in the event of a sale or other disposition of all or substantially all of the assets of such Guarantor) shall be released and discharged of its Guarantee obligations.

      The Trustee shall deliver an appropriate instrument evidencing such release upon receipt of a request by the Company accompanied by an Officers’ Certificate of the Company and Opinion of Counsel certifying as to the compliance with this Section 10.3. Any Guarantor not so released remains liable for the full amount of principal of, premium and interest on the Securities and other Obligations as provided in this Article X.]

      SECTION 10.4     Limitation of Guarantor’s Liability.

      [Delete: Each Guarantor and by its acceptance hereof each Holder of Notes hereby confirms that it is the intention of all such parties that the guarantee by such Guarantor pursuant to its Guarantee not constitute a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To effectuate the foregoing intention, the Holders of Notes and such Guarantor hereby irrevocably agree that the obligations of such Guarantor under its Guarantee shall be limited to the maximum amount as will, after giving effect to all other contingent and fixed liabilities of such Guarantor and after giving effect to any collections from or payments made by or on behalf of any other Guarantor in respect of the Obligations of such other Guarantor under its Guarantee or pursuant to Section 10.5, result in the obligations of such Guarantor under its Guarantee not constituting such fraudulent transfer or conveyance.]

      SECTION 10.5     Contribution.

      [Delete: In order to provide for just and equitable contribution among the Guarantors, the Guarantors agree, inter se, that in the event any payment or distribution is made by any Guarantor (a “Funding Guarantor”) under its Guarantee, such Funding Guarantor shall be entitled to a contribution from all other Guarantors in a pro rata amount based on the Adjusted Net Assets (as defined below) of each Guarantor (including the Funding Guarantor) for all payments, damages and expenses incurred by that Funding Guarantor in discharging the Company’s obligations with respect to the Notes or any other Guarantor’s obligations with respect to its Guarantee. “Adjusted Net Assets” of such Guarantor at any date shall mean the lesser of (x) the amount by which the fair value of the property of such Guarantor exceeds the total amount of liabilities, including, without limitation, contingent liabilities (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date (other than liabilities of such Guarantor under Indebtedness subordinated to such Guarantor’s Guarantee)), but excluding liabilities under the Guarantee, of such Guarantor at such date and (y) the amount by which the present fair salable value of the assets of such Guarantor at such date exceeds the

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amount that will be required to pay the probable liability of such Guarantor on its debts (after giving effect to all other fixed and contingent liabilities incurred or assumed on such date and after giving effect to any collection from any Subsidiary of such Guarantor in respect of the obligations of such Subsidiary under its Guarantee, if any), excluding debt in respect of the Guarantee of such Guarantor, as they become absolute and matured.]

      SECTION 10.6     Waiver of Subrogation.

      [Delete: Until all Guarantee Obligations are paid in full, each Guarantor hereby irrevocably waives any claims or other rights which it may now or hereafter acquire against the Company that arise from the existence, payment, performance or enforcement of such Guarantor’s obligations under its Guarantee and this Indenture, including, without limitation, any right of subrogation, reimbursement, exoneration, indemnification, and any right to participate in any claim or remedy of any holder of Notes against the Company, whether or not such claim, remedy or right arises in equity, or under contract, statute or common law, including, without limitation, the right to take or receive from the Company, directly or indirectly, in cash or other property or by set-off or in any other manner, payment or security on account of such claim or other rights. If any amount shall be paid to any Guarantor in violation of the preceding sentence and the Notes shall not have been paid in full, such amount shall have been deemed to have been paid to such Guarantor for the benefit of, and held in trust for the benefit of, the Holders of the Notes, and shall forthwith be paid to the Trustee for the benefit of such Holders to be credited and applied upon the Notes, whether matured or unmatured, in accordance with the terms of this Indenture. Each Guarantor acknowledges that it will receive direct and indirect benefits from the financing arrangements contemplated by this Indenture and that the waiver set forth in this Section 10.6 is knowingly made in contemplation of such benefits.]

      SECTION 10.7     Execution of Guarantee.

      [Delete: To evidence its guarantee to the Holders of Notes set forth in this Article X, each Guarantor hereby agrees to execute its Guarantee in substantially the form included in the Notes, which shall be endorsed on each Note ordered to be authenticated and delivered by the Trustee. Each Guarantor hereby agrees that its Guarantee set forth in this Article X shall remain in full force and effect notwithstanding any failure to endorse on each Note a notation of such Guarantee. Each such Guarantee shall be signed on behalf of each Guarantor by two Officers, or an Officer and an Assistant Secretary or one Officer shall sign and one Officer or an Assistant Secretary (each of whom shall, in each case, have been duly authorized by all requisite corporate actions) shall attest to such Guarantee prior to the authentication of the Notes on which it is endorsed, and the delivery of such Notes by the Trustee, after the authentication thereof hereunder, shall constitute due delivery of such Guarantee on behalf of such Guarantor. Such signatures upon the Guarantee may be by manual or facsimile signature of such officers and may be imprinted or otherwise reproduced on the Guarantee, and in case any such officer who shall have signed the Guarantee shall cease to be such officer before the Notes on which such Guarantee is endorsed shall have been authenticated and delivered by the Trustee or disposed of by the Company, such Notes nevertheless may be authenticated and delivered or disposed of as though the person who signed the Guarantee had not ceased to be such officer of the Guarantor.]

      SECTION 10.8     Waiver of Stay, Extension or Usury Laws.

      [Delete: Each Guarantor covenants (to the extent that it may lawfully do so) that it will not at any time insist upon, plead, or in any manner whatsoever claim or take the benefit or advantage of, any stay or extension law or any usury law or other law that would prohibit or forgive each such Guarantor from performing its Guarantee as contemplated herein, wherever enacted, now or at any time hereafter in force, or which may affect the covenants or the performance of this Indenture; and (to the extent that it may lawfully do so) such Guarantor hereby expressly waives all benefit or advantage of any such law, and covenants that it will not hinder, delay or impede the execution of any power herein granted to the Trustee, but will suffer and permit the execution of every such power as though no such law had been enacted.]

      SECTION 10.9     Additional Guarantors.

      [Delete: Concurrently with the creation or acquisition by the Company of any Subsidiary (other than a Foreign Subsidiary and other than an Unrestricted Subsidiary), the Company, such Subsidiary and the Trustee

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shall execute and deliver a supplement to this Indenture providing that such Subsidiary will be a Guarantor hereunder. Each such supplement shall be in a form reasonably satisfactory to the Trustee.]

      SECTION 10.10     Modification.

      [Delete: No modification, amendment or waiver of any provision of this Article X, nor the consent to any departure by the Guarantors therefrom, shall in any event be effective unless the same shall be in writing and signed by the Trustee, and then such waiver or consent shall be effective only in the specific instance and for the purpose for which given. No notice to or demand on the Guarantors in any case shall entitle the Guarantors to any other or further notice or demand in the same, similar or other circumstances.]

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The exchange agent for the exchange offer is:

By Mail, Overnight Courier or Hand Delivery:

HSBC Bank USA

One Hanson Place

Lower Level

Brooklyn, New York 11243

By Facsimile (for Eligible Institutions only):

(718) 488-4488

Confirm by Telephone:

(718) 488-4475

Questions, requests for assistance and requests for additional copies of this prospectus and consent solicitation

statement and related letter of transmittal may be directed to the information agent or

the dealer manager at each of their addresses set forth below.

The information agent for the exchange offer is:

D.F. King & Co., Inc.

77 Water Street

20th Floor

New York, New York 10005

Banks and Brokerage Firms, Please Call: (212) 269-5550

All Others Call Toll-free: (800) 290-6430

The exclusive dealer manager for the exchange offer is:

Banc of America Securities LLC

100 North Tryon Street, 12th Floor

Charlotte, North Carolina 28255

Attention: High Yield Special Products

(888) 292-0070 (toll-free)

(704) 388-4813 (collect)

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 20.     Indemnification of Directors and Officers.

      Reference is made to Section 102(b)(7) of the Delaware General Corporation Law, as amended (the “DGCL”), which enables a corporation in its original certificate or an amendment thereto to eliminate or limit the personal liability of a director for violations of the director’s fiduciary duty, except (1) for any breach of the director’s duty of loyalty to the corporation or its stockholders, (2) for acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, (3) pursuant to Section 174 of the DGCL (providing for liability of directors for unlawful payment of dividends or unlawful stock purchases or redemptions) or (4) for any transaction from which a director derived an improper personal benefit. The certificates of incorporation of the Registrants that are Delaware corporations contain provisions permitted by Section 102(b)(7) of the DGCL.

      Reference also is made to Section 145 of the DGCL, which provides that a corporation may indemnify any persons, including officers and directors, who are, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was an officer, director, employee or agent of such corporation, or is or was serving at the request of such corporation as a director, officer, employee or agent of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such officer, director, employee or agent acted in good faith and in a manner he reasonably believed to be in or not opposed to the corporation’s best interests and, for criminal proceedings, had no reasonable cause to believe that his conduct was unlawful. A Delaware corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if the officer or director is adjudged to be liable to the corporation. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses (including attorneys’ fees) which such officer or director actually and reasonably incurred. An indemnification made under Section 145, unless ordered by a court, shall be authorized upon a determination that indemnification of the director, officer, employee or agent is proper because the person has met the applicable standard of conduct required by this section. Such determination shall be made with respect to a person who is a director or officer at the time of such determination by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or by a committee of such directors designated by a majority vote of such directors, even though less than a quorum, or if there are no such directors, or if such directors so direct, by independent legal counsel, or by the stockholders.

      In addition, reference is made to Section 1701.13(E) of the Ohio General Corporation Law, as amended (the “OGCL”), which provides that a corporation may indemnify or agree to indemnify any person who was or is a party, or is threatened to be made a party, to any threatened, pending, or completed action, suit, or proceeding, whether civil, criminal, administrative, or investigative, other than an action by or in the right of the corporation, by reason of the fact that he is or was a director, officer, employee, or agent of the corporation, or is or was serving at the request of the corporation as a director, trustee, officer, employee, member, manager, or agent of another corporation or other enterprise, against expenses, including attorney’s fees, judgments, fines, and amounts paid in settlement actually and reasonably incurred by him in connection with such action, suit, or proceeding, if he acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the corporation, and, with respect to any criminal action or proceeding, if he had no reasonable cause to believe his conduct was unlawful. An Ohio corporation may indemnify officers and directors in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted (1) without judicial approval if the officer or director is adjudged to be liable to the corporation, and (2) in connection with any action or suit in which the only liability

II-1

asserted against a director is pursuant to Section 1701.95 of the OGCL with respect to the making of an unlawful loan, dividend or other distribution. Where an officer or director is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him against the expenses which such officer or director actually and reasonably incurred.

      Further Reference is made to Sections 1741 through 1750 of the Pennsylvania Business Corporation Law of 1988, as amended (the “PBCL”), which provides that a corporation may indemnify any person, including officers and directors, who are, or are threatened to be made, parties to any threatened, pending or completed legal action, suit or proceeding, whether civil, criminal, administrative or investigative (other than an action by or in the right of such corporation), by reason of the fact that such person was a representative of the corporation, or is or was serving at the request of the corporation as a representative of another corporation or enterprise. The indemnity may include expenses (including attorneys’ fees), judgments, fines and amounts paid in settlement actually and reasonably incurred by such person in connection with such action, suit or proceeding, provided such person acted in good faith and in a manner he or she reasonably believed to be in or not opposed to the corporation’s best interests and, for criminal proceedings, had no reasonable cause to believe that his or her conduct was unlawful. A Pennsylvania corporation may indemnify any person, including officers and directors, in an action by or in the right of the corporation under the same conditions, except that no indemnification is permitted without judicial approval if such person is adjudged to be liable to the corporation. Where such a person is successful on the merits or otherwise in the defense of any action referred to above, the corporation must indemnify him or her against the expenses (including attorneys’ fees) that such representative actually and reasonably incurred. Unless ordered by a court, indemnification must be made by the corporation upon a determination that indemnification of the representative is proper because he or she has met the applicable standard of conduct required by the sections referred to above. This determination may be made by a majority vote of the directors who are not parties to such action, suit or proceeding, even though less than a quorum, or by a committee of such directors designated by the board of directors by a majority vote of a quorum consisting of directors who were not parties to the action or proceeding, or if such a quorum is not available or if obtainable and a majority vote of a quorum of disinterested directors so directs, by independent legal counsel in a written opinion, or by the shareholders of the corporation.

      The certificates of incorporation of the Registrants that are Delaware corporations provide for the indemnification of directors and officers of those Registrants to the fullest extent permitted by the DGCL, the articles of incorporation of the Registrants that are Ohio corporations provide for the indemnification of directors and officers of those Registrants to the fullest extent permitted by the OGCL and the certificate of incorporation of the Registrants that is a Pennsylvania corporation provides for the indemnification of directors and officers of that Registrant to the fullest extent permitted by the PBCL. At present, there is no pending litigation or proceeding involving a director or officer of any Registrant as to which indemnification is being sought, and no Registrant is aware of any threatened litigation that may result in claims for indemnification by any officer or director.

      The Registrants maintain an insurance policy that provides protection, within the maximum liability limits of the policy and subject to a deductible amount for each claim, to the Registrants under their respective indemnification obligations and to the directors and officers with respect to certain matters that are not covered by the Registrants’ respective indemnification obligations.

      The employment agreements of Ronald E. Weinberg and Norman C. Harbert with Hawk Corporation provide that each of them shall be indemnified to the fullest extent provided by the articles or certificate of incorporation and by-laws or code of regulations (or other governing document), as amended or restated from time to time, of Hawk Corporation and any of its wholly-owned subsidiaries. Mr. Weinberg is the Chairman of the Board and Chief Executive Officer, and a director, of the Registrants. Mr. Harbert is the Senior Chairman of the Board and Founder, and a director, of the Registrants.

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Item 21.     Exhibits and Financial Statement Schedules.

      (a) Exhibits: See the Exhibit Index following the signature pages to this Registration Statement.

      (b) Financial Statement Schedules: All schedules for which provision is made in the applicable accounting regulations of the Securities and Exchange Commission are not required under the related instructions or are not applicable, and therefore have been omitted.

Item 22.     Undertakings.

      (a) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers and controlling persons of the Registrants pursuant to the foregoing provisions, or otherwise, the Registrants have been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act of 1933 and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrants of expenses incurred or paid by a director, officer or controlling person of the Registrants in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrants will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act of 1933 and will be governed by the final adjudication of such issue.

      (b) The undersigned Registrants hereby undertake:

      (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this Registration Statement:

(i)  To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933;

(ii)  To reflect in the prospectus any facts or events arising after the effective date of the Registration Statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the Registration Statement; and

(iii)  To include any material information with respect to the plan of distribution not previously disclosed in the Registration Statement or any material change to such information in the Registration Statement.

      (2) That, for the purpose of determining any liability under the Securities Act of 1933, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initialbona fide offering thereof.

      (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering.

      (c) The undersigned Registrants hereby undertake to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the Registration Statement through the date of responding to the request.

      (d) The undersigned Registrants hereby undertake to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the Registration Statement when it became effective.

II-3

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

HAWK CORPORATION

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	President, Chief Operating Officer and Director	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-4

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

ALLEGHENY CLEARFIELD, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-5

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

FRICTION PRODUCTS CO.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-6

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

HAWK MIM, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-7

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

HAWK MOTORS, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-8

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

HAWK PRECISION COMPONENTS GROUP, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-9

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

HELSEL, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-10

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

LOGAN METAL STAMPINGS, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-11

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

NET SHAPE TECHNOLOGIES LLC

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Manager	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board and Manager (principal executive officer)	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Chief Executive Officer and Manager	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Manager	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Manager	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Manager	July 31, 2002
JACK KEMP* Jack Kemp	Manager	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-12

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

QUARTER MASTER INDUSTRIES, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-13

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

S.K. WELLMAN CORP.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-14

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

S.K. WELLMAN HOLDINGS, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-15

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

SINTERLOY CORPORATION

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-16

SIGNATURES

      Pursuant to the requirements of the Securities Act of 1933, the Registrant has duly caused this Amendment No. 1 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Cleveland, State of Ohio, on July 31, 2002.

TEX RACING ENTERPRISES, INC.

By:  /s/ RONALD E. WEINBERG

Ronald E. Weinberg,

Chairman of the Board and

Chief Executive Officer

      Pursuant to the requirements of the Securities Act of 1933, this Amendment No. 1 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

NORMAN C. HARBERT* Norman C. Harbert	Senior Chairman of the Board, Founder and Director	July 31, 2002
/s/ RONALD E. WEINBERG Ronald E. Weinberg	Chairman of the Board, Chief Executive Officer and Director (principal executive officer)	July 31, 2002
THOMAS A. GILBRIDE* Thomas A. Gilbride	Vice President – Finance and Treasurer (principal financial and accounting officer)	July 31, 2002
/s/ BYRON S. KRANTZ Byron S. Krantz	Secretary and Director	July 31, 2002
JEFFREY H. BERLIN* Jeffrey H. Berlin	Director	July 31, 2002
PAUL R. BISHOP* Paul R. Bishop	Director	July 31, 2002
DAN T. MOORE, III* Dan T. Moore, III	Director	July 31, 2002
JACK KEMP* Jack Kemp	Director	July 31, 2002

*By: /s/ BYRON S. KRANTZ
Byron S. Krantz
Attorney-in-Fact

II-17

EXHIBIT INDEX

Exhibit			Description
	1.1*		Form of Dealer Manager Agreement by and between the Company and Banc of America Securities LLC (omitting certain exhibits, which the Registrants undertake to furnish supplementally to the Securities and Exchange Commission upon request)
	3.1		Form of the Company’s Second Amended and Restated Certificate of Incorporation (Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the Securities and Exchange Commission (Reg. No. 333-40535))
	3.2		The Company’s Amended and Restated By-laws (Incorporated by reference to the Company’s Current Report on Form 8-K dated March 2, 2000 as filed with the Securities and Exchange Commission)
	4.1		Form of Rights Agreement between the Company and Continental Stock Transfer & Trust Company, as Rights Agent (Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the Securities and Exchange Commission (Reg. No. 333-40535))
	4.2		Indenture, dated as of November 27, 1996, by and among the Company, Friction Products Co., Hawk Brake, Inc., Logan Metal Stampings, Inc., Helsel, Inc., S.K. Wellman Holdings, Inc., S.K. Wellman Corp., Wellman Friction Products U.K. Corp., Hutchinson Products Corporation, and Bank One Trust Company, NA, as Trustee (Incorporated by reference to the Company’s Registration Statement on Form S-4 as filed with the Securities and Exchange Commission (Reg. No. 333-18433)) (omitting certain supplemental indentures adding certain Registrants as guarantors, which omitted supplements the Registrants undertake to furnish supplementally to the Securities and Exchange Commission upon request)
	4.3		Agreement of Resignation, Appointment and Acceptance, dated as of April 25, 2002, by and among Bank One Trust Company, N.A., HSBC Bank USA and the Company (Incorporated by reference to the Company’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2002, as filed with the Securities and Exchange Commission (Reg. No. 333-40535))
	4.4		Specimen 10 1/4% Senior Note due 2003 (Incorporated by reference to the Company’s Registration Statement on Form S-4 as filed with the Securities and Exchange Commission (Reg. No. 333-18433))
	4.5		Specimen Series B 10 1/4% Senior Note due 2003 (Incorporated by reference to the Company’s Registration Statement on Form S-4 as filed with the Securities and Exchange Commission (Reg. No. 333-18433))
	4.6*		Form of Supplemental Indenture for 10 1/4% Senior Notes due 2003 by and among the Registrants and HSBC Bank of USA, as Trustee
	4.7*		Form of Indenture for      % Senior Notes due 200 by and among the Registrants and HSBC Bank USA, as Trustee
	4.8*		Form of Specimen      % Senior Note due 200
	4.9		Stockholders’ Voting Agreement, effective as of November 27, 1996, by and among the Company, Norman C. Harbert, the Harbert Family Limited Partnership, Ronald E. Weinberg, the Weinberg Family Limited Partnership, Byron S. Krantz and the Krantz Family Limited Partnership (Incorporated by reference to the Company’s Registration Statement on Form S-4 as filed with the Securities and Exchange Commission (Reg. No. 333-18433))
	4.10		Letter agreement, dated January 5, 1998, amending the Stockholders’ Voting Agreement, effective as of November 27, 1996, by and among the Company, Norman C. Harbert, the Harbert Family Limited Partnership, Ronald E. Weinberg, the Weinberg Family Limited Partnership, Byron S. Krantz and the Krantz Family Limited Partnership (Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the Securities and Exchange Commission (Reg. No. 333-40535))
	5.1	†	Opinion of Kohrman Jackson & Krantz P.L.L. as to the validity of the new notes being registered
	8.1	†	Opinion of Kohrman Jackson & Krantz P.L.L. as to the material U.S. federal income tax consequences to the holders of the securities being offered

Exhibit			Description
	10.1		Employment Agreement, dated as of November 1, 1996, between the Company and Norman C. Harbert (Incorporated by reference to the Company’s Registration Statement on Form S-4 as filed with the Securities and Exchange Commission (Reg. No. 333-18433))
	10.2		Form of Amended and Restated Wage Continuation Agreement between the Company and Norman C. Harbert (Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the Securities and Exchange Commission (Reg. No. 333-40535))
	10.3		Employment Agreement, dated as of November 1, 1996, between the Company and Ronald E. Weinberg (Incorporated by reference to the Company’s Registration Statement on Form S-4 as filed with the Securities and Exchange Commission (Reg. No. 333-18433))
	10.4		Amendment No. 1 to the Employment Agreement, dated as of October 24, 2000, between the Company and Norman C. Harbert (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended March 31, 2001 as filed with the Securities and Exchange Commission)
	10.5		Amendment No. 1 to the Employment Agreement, dated as of October 24, 2000, between the Company and Ronald E. Weinberg (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended March 31, 2001 as filed with the Securities and Exchange Commission)
	10.6		Amended and Restated Employment Agreement, dated as of December 31, 2001, by and among the Company, Friction Products Co. and Ronald E. Weinberg (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2001 as filed with the Securities and Exchange Commission)
	10.7		Amended and Restated Employment Agreement, dated as of December 31, 2001, by and among the Company, Friction Products Co. and Norman C. Harbert (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2001 as filed with the Securities and Exchange Commission)
	10.8		Amended and Restated Wage Continuation Agreement, dated as of December 31, 2001, by and among the Company, Friction Products Co. and Norman C. Harbert (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2001 as filed with the Securities and Exchange Commission)
	10.9		Consultant Agreement, dated as of December 31, 2001, by and among the Company, Friction Products Co. and Norman C. Harbert (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2001 as filed with the Securities and Exchange Commission)
	10.10		Letter agreement, dated as of March 26, 1998, amending the Employment Agreement and the Consulting Agreement, each dated July 1, 1994, between Helsel, Inc. and Jess F. Helsel (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 1998 as filed with the Securities and Exchange Commission)
	10.11		Hawk Corporation 1997 Stock Option Plan (Incorporated by reference to the Company’s Registration Statement on Form S-1 as filed with the Securities and Exchange Commission (Reg. No. 333-40535))
	10.12		Hawk Corporation 2000 Long Term Incentive Plan (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2001 as filed with the Securities and Exchange Commission)
	10.13		Hawk Corporation Annual Incentive Compensation Plan (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2001 as filed with the Securities and Exchange Commission)
	10.14	**	Form of the Amended and Restated Promissory Notes, each dated December 31, 2001, issued by Norman C. Harbert and Ronald E. Weinberg to the Company
	10.15		Credit Agreement, dated as of May 1, 1998, among the Company and KeyBank National Association, as Swing Line Lender, Administrative Agent and as Syndication Agent (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 1998 as filed with the Securities and Exchange Commission)

Exhibit		Description
	10.16	Subsidiary Guaranty, dated as of May 1, 1998, among the subsidiaries of the Company, as guarantors, and KeyBank National Association, as Administrative Agent (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 1998 as filed with the Securities and Exchange Commission)
	10.17	Amendment No. 1, dated as of November 22, 2000 to Credit Agreement among the Company and KeyBank National Association, as Lender, the Swing Line Lender, a Letter of Credit Issuer and as the Syndication Agent and the Administrative Agent (Incorporated by reference to the Company’s Form 10-K for the year ended December 31, 2000 as filed with the Securities and Exchange Commission)
	10.18	Amendment No. 2 to Credit Agreement, dated as of July 31, 2001, by and among the Company, the Lenders identified therein and KeyBank National Association, a national banking association, as the Administrative Agent under the Credit Agreement (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)
	10.19	Form of Security Agreement, dated as of August 10, 2001, by and between KeyBank National Association, the Company and each of the following subsidiaries of the Company: Allegheny Powder Metallurgy, Inc., Clearfield Powdered Metals, Inc., Friction Products Co., Hawk Brake, Inc., Hawk MIM, Inc., Helsel, Inc., Hawk Motors, Inc., Logan Metal Stampings, Inc., Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman Corp., S.K. Wellman Holdings, Inc., Sinterloy Corporation, Tex Racing Enterprises, Inc. and Wellman Friction Products U.K. Corp (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)
	10.20	Form of Pledge Agreement, dated as of August 10, 2001, by and between KeyBank National Association, the Company and each of the following subsidiaries of the Company: Allegheny Powder Metallurgy, Inc., Clearfield Powdered Metals, Inc., Friction Products Co., Hawk Brake, Inc., Hawk MIM, Inc., Helsel, Inc., Hawk Motors, Inc., Logan Metal Stampings, Inc., Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman Corp., S.K. Wellman Holdings, Inc., Sinterloy Corporation, Tex Racing Enterprises, Inc. and Wellman Friction Products U.K. Corp (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)
	10.21	Form of Intellectual Property Security Agreement, dated as of August 10, 2001, by and between the Company and each of the following subsidiaries of the Company: Allegheny Powder Metallurgy, Inc., Clearfield Powdered Metals, Inc., Friction Products Co., Hawk Brake, Inc., Hawk MIM, Inc., Helsel, Inc., Hawk Motors, Inc., Logan Metal Stampings, Inc., Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman Corp., S.K. Wellman Holdings, Inc., Sinterloy Corporation, Tex Racing Enterprises, Inc. and Wellman Friction Products U.K. Corp. (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)
	10.22	Form of Guaranty Agreement of Payment of Obligations, dated as of August 10, 2001, by and between KeyBank National Association and each of the following subsidiaries of the Company: Allegheny Powder Metallurgy, Inc., Clearfield Powdered Metals, Inc., Friction Products Co., Hawk Brake, Inc., Hawk MIM, Inc., Helsel, Inc., Hawk Motors, Inc., Logan Metal Stampings, Inc., Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman Corp., S.K. Wellman Holdings, Inc., Sinterloy Corporation, Tex Racing Enterprises, Inc. and Wellman Friction Products U.K. Corp. (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)
	10.23	Form of Open Ended Ohio Mortgage, executed as of August 10, 2001, in favor of KeyBank National Association by each of the following subsidiaries of the Company: Friction Products Co., Logan Metal Stampings, Inc. and S.K. Wellman Corp. (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)

Exhibit			Description
	10.24		Form of Open Ended Pennsylvania Mortgage, executed as of August 10, 2001, in favor of KeyBank National Association by each of the following subsidiaries of the Company: Allegheny Powder Metallurgy, Inc. and Clearfield Powdered Metals, Inc. (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)
	10.25		Form of Mortgage, Assignment of Leases and Rents and Fixture Filing, executed as of August 10, 2001, in favor of KeyBank National Association by each of the following subsidiaries of the Company: Hawk Motors, Inc. and Helsel, Inc. (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended June 30, 2001 as filed with the Securities and Exchange Commission)
	10.26		Amendment No. 3 to Credit Agreement, dated as of November 9, 2001, by and among the Company, the Lenders identified therein and KeyBank National Association, a national banking association, as the Administrative Agent under the Credit Agreement (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended September 30, 2001 as filed with the Securities and Exchange Commission)
	10.27		Form of Pledge Agreement, dated as of November 9, 2001, by and between KeyBank National Association, the Company and each of the following subsidiaries of the Company: Allegheny Powder Metallurgy, Inc., Clearfield Powdered Metals, Inc., Friction Products Co., Hawk Brake, Inc., Hawk MIM, Inc., Helsel, Inc., Hawk Motors, Inc., Logan Metal Stampings, Inc., Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman Corp., S.K. Wellman Holdings, Inc., Sinterloy Corporation, Tex Racing Enterprises, Inc. and Wellman Friction Products U.K. Corp (Incorporated by reference to the Company’s Form 10-Q for the quarterly period ended September 30, 2001 as filed with the Securities and Exchange Commission)
	10.28		Amendment No. 4 to Credit Agreement, dated as of March 25, 2002, by and among the Company, the Lenders identified therein and KeyBank National Association, a national banking association, as the Administrative Agent under the Credit Agreement (Incorporated by reference to the Company’s Form 10-K for the period ended December 31, 2001 as filed with the Securities and Exchange Commission)
	12.1*	*	Computation of ratio of earnings to fixed charges
	21.1*		Subsidiaries of the Company
	23.1*		Consent of Ernst & Young LLP
	23.2	†	Consent of Kohrman Jackson & Krantz P.L.L. (included in its opinion filed as Exhibit 5.1 and 8.1 hereto)
	24.1*	*	Reference is made to the Signatures section of this Registration Statement for the Power of Attorney contained therein
	25.1*	*	Form of Form T-1 Statement of Eligibility and Qualification under the Trust Indenture Act of 1939 of HSBC Bank USA with respect to the      % Senior Notes due 2
	99.1*	*	Form of Consent and Letter of Transmittal
	99.2*	*	Form of Notice of Brokers, Dealers, Commercial Banks, Trust Companies and other Nominees
	99.3*	*	Form of Notice to Clients
	99.4*	*	Form of Notice of Company Letter to Noteholders
	99.5*	*	Guidelines for Certification of Taxpayer Identification Number on Substitute Form W-9

*	Filed herewith.
**	Previously filed.

 †  To be filed by amendment.

EX-1.1

                                                                     Exhibit 1.1


                                HAWK CORPORATION


                            Dealer Manager Agreement

August __, 2002


Banc of America Securities LLC
Bank of America Corporate Center
100 North Tryon Street, Seventh Floor
Charlotte, NC 28255

Ladies and Gentlemen:

     Hawk Corporation, a Delaware corporation (the "COMPANY"), plans to make an
offer to exchange its __% Senior Notes due 20__ (the "NEW NOTES") for its
outstanding 10.25% Senior Notes due 2003 (the "OLD NOTES"), and engage in a
related solicitation of consents from holders of Old Notes to proposed
amendments (the "PROPOSED AMENDMENTS") to the Indenture among Hawk Corporation,
the Guarantors (as defined below) and HSBC Bank USA (the "NEW TRUSTEE"),
successor to Bank One Trust Company, NA, as trustee, dated as of November 27,
1996, under which the Old Notes were issued (the "OLD INDENTURE") (such offer
and solicitation of consents, as they may be amended or supplemented from time
to time, the "EXCHANGE OFFER," and such consents received from holders of Old
Notes, the "CONSENTS"). The New Notes will be guaranteed by Allegheny
Clearfield, Inc., Friction Products Co., Hawk MIM, Inc., Hawk Motors, Inc., Hawk
Precision Components, Group, Inc., Helsel, Inc., Logan Metal Stampings, Inc.,
Net Shape Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman
Holdings, Inc., S.K. Wellman Corp., Sinterloy Corporation and Tex Racing
Enterprises, Inc., each a wholly-owned direct or indirect subsidiary of the
Company, and any other wholly-owned direct or indirect subsidiary of the Company
that guarantees the Old Notes (the "GUARANTORS"). The New Notes are to be issued
under an indenture among the Company (as issuer), the Guarantors (as guarantors)
and the New Trustee (as trustee) (the "NEW INDENTURE"). The Company will
exchange $________ principal amount of New Notes of which $_________ in
principal amount constitutes a Consent payment that will only be made for
Consents received prior to [INSERT CONSENT PAYMENT DEADLINE] for each $1,000
principal amount of Old Notes tendered in the Exchange Offer and amend the Old
Indenture, on the terms and conditions set forth in the Exchange Offer Materials
(as defined in Section 2).


     1. ENGAGEMENT. The Company hereby engages Banc of America Securities LLC as
its exclusive dealer manager and solicitation agent (the "DEALER MANAGER"),
authorizes the Dealer Manager to act as such in connection with the Exchange
Offer and agrees that the Dealer Manager shall act as an independent contractor
with duties solely to the Company. The Dealer Manager agrees, in accordance with
its customary practice, to perform those services in connection with the
Exchange Offer as are customarily performed by investment banking






concerns in connection with exchange offers and consent solicitations of like
nature, including but not limited to, advising the Company with respect to the
terms and structure of the Exchange Offer, assisting with obtaining ratings from
the ratings agencies, identifying and contacting the present holders of the Old
Notes, assisting in negotiating the terms of the Exchange Offer and assisting
with the preparation of the necessary documents.

        The Company acknowledges that the Dealer Manager is a securities firm
that is engaged in securities trading and brokerage activities as well as in
providing investment banking and financial advisory services. In the ordinary
course of trading and brokerage activities, the Dealer Manager and its
affiliates may at any time hold long or short positions, and may trade or
otherwise effect transactions, for their own account or the accounts of
customers, in debt or equity securities of the Company and its affiliates or
other entities that may be involved in the transactions contemplated hereby.

     2. SOLICITATION MATERIAL; WITHDRAWAL. (a) The Company agrees to furnish the
Dealer Manager, at the Company's expense, with as many copies as the Dealer
Manager may reasonably request of the exchange offer and consent solicitation
materials, including all exhibits thereto and any documents incorporated by
reference therein, including but not limited to: (a) the Registration Statement
(as defined in Section 5(a) hereof); (b) the Prospectus (as defined in Section
5(a) hereof); (c) the form of Letter of Transmittal and Consent (the "LETTER OF
TRANSMITTAL") to be used by holders to tender Old Notes and grant Consents
pursuant to the Exchange Offer; (d) the form of letter, dated the date hereof,
from the Dealer Manger to brokers, securities dealers, commercial banks, trust
companies and nominees; (e) the form of press release, dated the date hereof,
relating to the Exchange Offer; (f) the form of letter, dated the date hereof,
to holders of Old Notes relating to the Exchange Offer; (g) any other documents
or materials permitted to be used by the Company or authorized by the Company
for use in connection with the Exchange Offer (including press releases,
advertisements and other communications, whether prior to or after the execution
of this Agreement); and (h) any amendments or supplements thereto and any other
documents or materials whatsoever relating to the Exchange Offer or to be used
by the Company in connection with the Exchange Offer (as amended or supplemented
from time to time, including all exhibits thereto and any documents incorporated
by reference therein being referred to collectively as the "EXCHANGE OFFER
MATERIAL"). The Company agrees that, within a reasonable time prior to using any
Exchange Offer Material, it will submit copies of such material to the Dealer
Manager and its counsel and will not use or publish any such material to which
the Dealer Manager or its counsel reasonably objects.

        (b) In the event that (i) the Company uses or permits the use of any
Exchange Offer Material (a) which has not been submitted to the Dealer Manager
for its comments or (b) which has been so submitted and with respect to which
the Dealer Manager has made reasonable comments, but which comments have not
resulted in a response reasonably satisfactory to the Dealer Manager and its
counsel to reflect their comments, (ii) the Company shall have breached, in any
material respect, any of its representations, warranties, agreements or
covenants herein or (iii) the Exchange Offer is terminated or withdrawn for any
reason, (iv) any stop order, restraining order, injunction or denial of an
application for approval has been issued and not thereafter stayed or vacated
with respect to the Exchange Offer, or (v) any proceeding, litigation


                                       2




or investigation has been initiated that is reasonably likely to have a material
adverse effect on the Company's ability to carry out the Exchange Offer, the
exchange of the New Notes for the Old Notes pursuant thereto or the performance
under this Dealer Manager Agreement (this "Agreement"), then in any such case
the Dealer Manager shall be entitled to withdraw as Dealer Manager without any
liability or penalty to the Dealer Manager or any other Indemnified Person (as
defined in Section 8 hereof) and without loss of any right to the payment of all
expenses payable hereunder. If the Dealer Manager withdraws as Dealer Manager
pursuant to this Section 2, the reimbursement for the Dealer Manager's expenses
through the date of such withdrawal shall be paid to the Dealer Manager promptly
after such date. The Company shall inform the Dealer Manager promptly after it
receives notice or becomes aware of the happening of any event, or the discovery
of any fact, that would require the making of any change in any Exchange Offer
Material then being used or would affect the truth or completeness of any
representation or warranty contained in this Agreement if such representation or
warranty were being made immediately after the happening of such event or the
discovery of such fact.

     3. COMPENSATION AND EXPENSES.

        (a) The Company and the Dealer Manager agree that the compensation (the
"FEE") for the Dealer Manager's services as Dealer Manager hereunder will be as
set forth in the Engagement Letter, between the Company and the Dealer Manager,
dated May 6, 2002 (the "Engagement Letter").

        (b) In addition to the compensation payable under Section 3(a) above,
the Company agrees to pay (i) all fees and expenses relating to the filing,
preparation, printing, mailing and publishing of the Exchange Offer Material,
including but not limited to the Registration Statement and the Prospectus
(including all exhibits, amendments and supplements thereto), (ii) all
reasonable fees, disbursements and expenses of the Company's counsel and
accountants and of the Exchange Agent and the Information Agent (each as defined
in Section 4), (iii) all advertisement charges, (iv) all other fees and expenses
in connection with the Exchange Offer, including those of any exchange agent,
information agent or other person rendering services in connection therewith,
(v) to brokers and dealers (including the Dealer Manager), commercial banks,
trust companies and other nominees the amount of their customary mailing and
handling expenses incurred in forwarding the Exchange Offer to their customers,
(vi) the cost of preparation, issuance, transfer and delivery of the New Notes,
including any transfer, withholding or other taxes payable thereon, (vii) the
costs and charges of the New Trustee, (viii) the cost of printing, if any, the
Blue Sky memorandum in connection with the Exchange Offer under state securities
laws and all expenses in connection with the qualification of the New Notes
under such state securities laws, including filing fees and reasonable fees and
disbursements of counsel for the Dealer Manager in connection with such
qualification and in connection with the Blue Sky memorandum, (ix) any fees
charged by rating agencies for the rating of the New Notes, (x) all advertising
charges, approved in advance by the Company, in connection with the Exchange
Offer, including those of any public relations firm or other person or entity
rendering services in connection therewith, and (xi) all other costs and
expenses incident to the performance of the obligations of the Company hereunder
for which provision is not otherwise made in this Section 3(b). The Company will
also reimburse the Dealer Manager for all out-of-pocket expenses reasonably
incurred by the Dealer Manager in connection with its



                                       3



services as Dealer Manager; provided, however that any expense over $25,000 must
be approved in advance by the Company except for the reasonable fees and
expenses of McGuireWoods LLP, as to which the Dealer Manager has provided an
estimate and will provide an updated estimate each month (or more frequently as
reasonably requested by the Company). The Company shall perform its obligations
set forth in this Section 3(b), whether or not the Exchange Offer is
consummated, and any payments due hereunder to the Dealer Manager or its
counsel, subject to the provisions of the Engagement Letter, shall be paid
promptly upon the earlier of (i) the successful completion or termination of the
Exchange Offer or (ii) the withdrawal by the Dealer Manager pursuant to Section
2 hereof.

     4. EXCHANGE AGENT AND INFORMATION AGENT. The Company will arrange for HSBC
Bank USA to serve as exchange agent (the "EXCHANGE AGENT") in connection with
the Exchange Offer and, as such, to advise the Dealer Manager at least daily as
to such matters relating to the Exchange Offer as the Dealer Manager may
request. The Company shall provide the Dealer Manager or cause the trustee under
the Old Indenture and The Depository Trust Company ("DTC") to provide the Dealer
Manager with copies of the records or other lists showing the names and
addresses of, and principal amounts of Old Notes held by, the holders of Old
Notes as of a recent date and shall, from and after such date, use reasonable
efforts to cause the Dealer Manager to be advised from day to day during the
pendency of the Exchange Offer of any change in the information previously
provided. The Company will arrange for D.F. King & Co., Inc. to serve as
information agent (the "INFORMATION AGENT") in connection with the Exchange
Offer and, as such, to advise the Dealer Manager as to such matters relating to
the Exchange Offer as the Dealer Manager may reasonably request and to furnish
the Dealer Manager with any written reports concerning any such information as
the Dealer Manager may reasonably request.

     5. REPRESENTATIONS, WARRANTIES AND CERTAIN AGREEMENTS.

        The Company and each Guarantor represents and warrants to the Dealer
Manager, and agrees with the Dealer Manager, as follows:

        (a) A registration statement on Form S-4, as amended by Amendment No.1
to such registration statement, (Registration No. 333-90556) (the "INITIAL
REGISTRATION STATEMENT") in respect of the New Notes has been filed with the
Securities and Exchange Commission (the "Commission"); the Initial Registration
Statement and any post-effective amendment thereto, each in the form heretofore
delivered to the Dealer Manager, have been declared effective by the Commission
in such form; other than (i) the documents incorporated by reference in the
prospectus included therein (which have heretofore been delivered to the Dealer
Manager), (ii) the exhibits to the Initial Registration Statement and such
documents and (iii) any prospectuses filed pursuant to Rule 424(b) under the
Securities Act of 1933, as amended (the "ACT") (which have heretofore been
delivered or made available to the Dealer Manager), no other documents with
respect to the Initial Registration Statement or documents incorporated by
reference therein has heretofore been filed with the Commission; and no stop
order suspending the effectiveness of the Initial Registration Statement or any
post-effective amendment thereto has been issued and no proceeding for that
purpose has been initiated or threatened by the Commission (any preliminary
prospectus included in the Initial Registration Statement or filed with the
Commission pursuant to Rule 424(a) of the rules and regulations of the
Commission under the



                                       4



Act, is herein called a "PRELIMINARY PROSPECTUS"); the various parts of the
Initial Registration Statement, including all exhibits (but excluding the Form
T-1), annexes and schedules thereto and including (i) the information contained
in a form of final prospectus filed with the Commission pursuant to Rule 424(b)
under the Act in accordance with Section 2(b) hereof and (ii) the documents
incorporated by reference into the prospectus contained in the Initial
Registration Statement at the time such part of the registration statement
became effective, each as amended at the time such part of the registration
statement became effective, are herein collectively called the "REGISTRATION
STATEMENT"; such final prospectus, in the form included in the Registration
Statement at the time it became effective or first filed pursuant to Rule 424(b)
under the Act, is hereinafter called the "PROSPECTUS"; and any reference herein
to any Preliminary Prospectus or the Prospectus shall be deemed to refer to and
include the documents incorporated by reference therein pursuant to the relevant
item or items of Form S-4 under the Act, as of the date of such Preliminary
Prospectus or Prospectus, as the case may be; and any reference to any amendment
or supplement to any Preliminary Prospectus or the Prospectus shall be deemed to
refer to and include any document filed after the date of such Preliminary
Prospectus or Prospectus, as the case may be, under the Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated by reference into such
Preliminary Prospectus or Prospectus, as the case may be; and any reference to
any amendment to the Registration Statement shall be deemed to refer to and
include any annual report of the Company filed pursuant to Section 13(a) or
15(d) of the Exchange Act after the effective date of the Registration Statement
that is incorporated by reference into the Registration Statement.

        (b) The documents incorporated by reference in the Prospectus, when they
became effective or were filed with the Commission, as the case may be,
conformed in all material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations of the Commission
thereunder, and none of such documents when they become effective or were filed
with the Commission, as the case may be, contained an untrue statement of a
material fact or omitted to state a material fact required to be stated therein
or necessary to make the statements therein not misleading; and any further
documents so filed and incorporated by reference in the Prospectus or any
further amendment or supplement thereto, when such documents become effective or
are filed with the Commission, as the case may be, will conform in all material
respects to the requirements of the Act or the Exchange Act, as applicable, and
the rules and regulations of the Commission thereunder, and will not contain an
untrue statement of a material fact or omit to state a material fact required to
be stated therein or necessary to make the statements therein not misleading.

        (c) The Registration Statement conforms, and the Prospectus, any further
amendments or supplements to the Registration Statement or the Prospectus and
the Exchange Offer Material will conform at the time of filing, in all material
respects to the requirements of the Act, the Exchange Act and the Trust
Indenture Act of 1939, as amended, and the rules and regulations promulgated
thereunder (the "TRUST INDENTURE ACT"), as applicable, and do not and will not,
as of the applicable effective date as to the Registration Statement and any
amendment thereto, as of the applicable filing date as to the Prospectus and any
amendment or supplement thereto and as of the date of first use as to any other
Exchange Offer Material, contain an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary to make the
statements therein not misleading.




                                       5




        (d) Neither the Company nor any of its subsidiaries which meets the
definition of a significant subsidiary as defined in Rule 1-02 of Regulation S-X
(a "SIGNIFICANT SUBSIDIARY") has sustained, since the date of the latest audited
financial statements included or incorporated by reference in the Prospectus,
any material loss or interference with its business from fire, explosion, flood
or other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree, otherwise than as set
forth or contemplated in the Prospectus; and, since the respective dates as of
which information is given in the Registration Statement and the Prospectus,
there has not been any increase in long-term debt of the Company or any of its
subsidiaries (other than borrowings under the Credit Agreement, dated May 1,
1998, and any amendments thereto, by and among the Company, the lending
institutions named therein and KeyBank National Association (the "Credit
Agreement")) or any material adverse change, in the condition, financial or
otherwise, or in the earnings, management, financial position, shareholders'
equity or results of operations or prospects whether or not arising from
transactions in the ordinary course or business, of the Company and its
subsidiaries, considered as one entity (a "Material Adverse Change") or any
development involving a prospective Material Adverse Change, otherwise than as
set forth or contemplated in the Prospectus.

        (e) The Company has been duly incorporated and is validly existing as a
corporation under the laws of the State of Delaware. The Company has corporate
power and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and to consummate the
Exchange Offer in accordance with its terms. The Company is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing, could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change.

        (f) Each of the Significant Subsidiaries and each Guarantor has been
duly incorporated and is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation and has corporate power
and authority to own, lease and operate its properties and to conduct its
business as described in the Registration Statement and, in the case of each
Guarantor, to consummate the Exchange Offer in accordance with its terms. Each
of the Significant Subsidiaries and each Guarantor is duly qualified as a
foreign corporation to transact business and is in good standing in each
jurisdiction in which such qualification is required, whether by reason of the
ownership or leasing of property or the conduct of business, except for such
jurisdictions where the failure to so qualify or to be in good standing could
not, individually or in the aggregate, reasonably be expected to result in a
Material Adverse Change. All of the issued and outstanding capital stock of each
of the Significant Subsidiaries and each Guarantor has been duly authorized and
validly issued, is fully paid and nonassessable and is owned by the Company,
directly or through subsidiaries, free and clear of any security interest,
mortgage, pledge, lien, encumbrance or claim other than the Credit Agreement.

        (g) The Company and each Guarantor has the corporate power and authority
to take, and has taken, all necessary corporate action to authorize (i) the
making and consummation of the Exchange Offer, (ii) the Proposed Amendments to
the Old Indenture; (iii)




                                       6



the execution, delivery and performance of the New Indenture and the New Notes
and (iv) the execution, delivery and performance of this Agreement and the
consummation of the transactions contemplated hereby; and the Company has the
corporate power and authority to take, and has taken, all necessary corporate
action to authorize the payment for Consents by the Company pursuant to the
Exchange Offer; and the Company and each Guarantor has taken or will take all
necessary corporate action to authorize any amendments or supplements to, or
modification of, the Exchange Offer and the Exchange Offer Materials.

        (h) This Agreement has been duly executed and delivered by, and is a
valid and binding agreement of, the Company and each Guarantor, enforceable
against the Company and each Guarantor in accordance with its terms, except as
the enforcement hereof may be limited by bankruptcy, insolvency, reorganization,
moratorium, fraudulent conveyance or other similar laws relating to or affecting
the rights and remedies of creditors or by general equitable principles (the
"ENFORCEABILITY EXCEPTIONS").

        (i) The supplemental indenture to the Old Indenture, effecting the
Proposed Amendments (the "SUPPLEMENTAL INDENTURE"), when duly executed and
delivered in accordance with its terms by each of the parties thereto, will
constitute a valid and legally binding agreement of the Company and each of the
Guarantors enforceable against the Company and each of the Guarantors in
accordance with its terms, subject to the Enforceability Exceptions; and on the
date the Company completes the Exchange Offer (the "Closing Date"), the Old
Indenture as supplemented by the Supplemental Indenture will conform in all
material respects to the requirements of the Trust Indenture Act and the rules
and regulations of the Commission applicable to an indenture that is qualified
thereunder.

        (j) On or prior to the Closing Date, the New Indenture shall have been
duly executed and delivered by the Company and each of the Guarantors and
qualified under the Trust Indenture Act and, assuming due authorization,
execution and delivery thereof by the New Trustee, will constitute a valid and
binding agreement of the Company and each Guarantor, enforceable against the
Company and each Guarantor in accordance with its terms, subject to the
Enforceability Exceptions.

        (k) The New Notes, when executed, authenticated, issued in accordance
with the terms of the New Indenture and delivered to the holders of the Old
Notes who tender their Old Notes in accordance with the terms of the Exchange
Offer, will constitute valid and binding obligations of the Company, enforceable
against the Company in accordance with their terms, and be entitled to the
benefits of the New Indenture; and the guarantees of the New Notes issued by the
Guarantors, as of the Closing Date, will be in the respective forms contemplated
by the New Indenture, will have been duly authorized by the Guarantors and, when
executed, authenticated and issued in accordance with the terms of the New
Indenture, upon endorsement of the New Notes by each of the Guarantors and when
delivered to the holders of the Old Notes who tender their Old Notes, in
accordance with the terms of the Exchange Offer, will constitute valid and
binding obligations of each of the Guarantors, enforceable against each
Guarantor in accordance with their terms, subject to the Enforceability
Exceptions, and will be entitled to the benefits of the New Indenture.




                                       7




        (l) The Old Notes, the Old Indenture, the New Notes, the Guarantees and
the New Indenture conform or will conform in all material respects to the
respective statements relating thereto contained in the Prospectus.

        (m) Except as otherwise disclosed in the Prospectus as of the date
hereof (the "Commencement Date") and except as otherwise disclosed in the
Prospectus as amended and supplemented as of the Closing Date, subsequent to the
respective dates as of which information is given in the Prospectus: (i) there
has been no Material Adverse Change, or any development that could reasonably be
expected to result in a Material Adverse Change; (ii) the Company and its
subsidiaries, considered as one entity, have not incurred any material liability
or obligation, indirect, direct or contingent, not in the ordinary course of
business nor entered into any material transaction or agreement not in the
ordinary course of business; (iii) there has been no dividend or distribution of
any kind declared, paid or made by the Company or any of its subsidiaries (other
than dividends paid to the Company or other subsidiaries of the Company) on any
class of capital stock or repurchase or redemption by the Company or any of its
subsidiaries of any class of capital stock other than regular quarterly
dividends payable on the Company's Series D Preferred Stock; and (iv) there has
been no material change in the capital stock, short-term debt or long-term debt
of the Company and its subsidiaries, considered as one entity, except in each
case described in the Prospectus.

        (n) Complete and correct copies of the Exchange Offer Material have been
furnished to the Dealer Manager or will be furnished to the Dealer Manager no
later than the Commencement Date.

        (o) Ernst & Young LLP (the "INDEPENDENT ACCOUNTANTS"), who have
expressed their opinion with respect to the financial statements (which term as
used in this Agreement includes the related notes thereto) and supporting
schedules included or incorporated by reference in the Exchange Offer Material
are independent public or certified public accountants within the meaning of the
AICPA Rules of Practice.

        (p) The statements set forth in the Prospectus as amended or
supplemented under the caption "Description of the New Notes", insofar as they
purport to constitute a summary of the terms of the New Notes, and as set forth
under the captions "Risk Factors", "Summary Comparison of the Key Differences
between the Old Indenture and the New Indenture", "The Consent Solicitation",
"Description of the New Notes" and "Material United States Federal Income Tax
Consequences", insofar as they purport to constitute a summary of the provisions
of the laws and documents referred to therein, are accurate in all material
respects.

        (q) The financial statements, together with the related schedules and
notes, included or incorporated by reference in the Exchange Offer Material
present fairly in all material respects the consolidated financial position of
the Company and its subsidiaries considered as one entity, as of and at the
dates indicated and the results of their operations and cash flows for the
periods specified. Such financial statements have been prepared in conformity
with generally accepted accounting principles as applied in the United States
applied on a consistent basis throughout the periods involved, except as may be
expressly stated in the related notes thereto.





                                       8


        (r) All of the outstanding shares of the capital stock of the Company
have been duly authorized and validly issued, are fully paid and nonassessable
and have been issued in compliance with federal and state securities laws. None
of the outstanding shares of capital stock of the Company were issued in
violation of any preemptive rights, rights of first refusal or other similar
rights to subscribe for or purchase securities of the Company. There are no
authorized or outstanding options, warrants, preemptive rights, rights of first
refusal or other rights to purchase, or equity or debt securities convertible
into or exchangeable or exercisable for, any capital stock of the Company or any
of its subsidiaries and equity interests in any firm, partnership, joint venture
or other entities, other than those described in the Prospectus.

        (s) Neither the Company nor any of its subsidiaries is in violation of
its charter or by-laws or is in default (or, with the giving of notice or lapse
of time, would be in default) ("Default") under any indenture, mortgage, loan or
credit agreement, note, contract, franchise, lease or other instrument to which
the Company or any of its subsidiaries is a party or by which it or any of them
may be bound, or to which any of the property or assets of the Company or any of
its subsidiaries is subject (each such foregoing document being referred to as
an "EXISTING INSTRUMENT"), except for such Defaults as could not, individually
or in the aggregate, reasonably be expected to result in a Material Adverse
Change. The Company's and each Guarantor's execution, delivery and performance
of this Agreement, the New Indenture, the Supplemental Indenture and any other
agreements or documents relating to any of the foregoing, and the exchange of
the New Notes for the Old Notes pursuant to the Exchange Offer, and payment for
Consents by the Company pursuant to the Exchange Offer, and the consummation of
the transactions contemplated hereby and thereby and by the Exchange Offer
Material: (i) will not result in any violation of the provisions of the charter
or by-laws of the Company or any of its subsidiaries; (ii) will not conflict
with or constitute a breach of, or Default or a Debt Repayment Triggering Event
(as defined below) under, or result in the creation or imposition of any lien,
charge or encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, or require the consent of any other party to, any
Existing Instrument, except as anticipated by the Exchange Offer, and [the new
credit facility] and for such conflicts, breaches, Defaults, liens, charges or
encumbrances as could not, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Change; and (iii) will not result in
any violation of any law, administrative regulation or administrative or court
decree applicable to the Company or any of its subsidiaries. As used herein, a
"DEBT REPAYMENT TRIGGERING EVENT" means any event or condition which gives, or
with the giving of notice or lapse of time would give, the holder of any note,
debenture or other evidence of indebtedness (or any person acting on such
holder's behalf) the right to require the repurchase, redemption or repayment of
all or a portion of such indebtedness by the Company or any of its subsidiaries.

        (t) No consent, approval, authorization or other order of, or
registration or filing with, any court or other governmental or regulatory
authority or agency, is required for the Company's or the Guarantor's execution,
delivery and performance of this Agreement, the New Indenture, the Supplemental
Indenture and any other agreements or documents relating to any of the
foregoing, and the exchange of the New Notes for the Old Notes pursuant to the
Exchange Offer, payment for Consents by the Company pursuant to the Exchange
Offer and the consummation of the transactions contemplated hereby and by the
Exchange Offer Material, except such as have been obtained or made by the
Company or the Guarantors and are in full




                                       9



force and effect under the Securities Act, applicable state securities laws or
applicable blue sky laws.

        (u) On or prior to the Commencement Date, the Company will have made
appropriate arrangements, to the extent applicable, with DTC or any other
"qualified" securities depositary to allow for the book-entry movement of the
tendered notes representing the Old Notes between depositary participants and
the Exchange Agent.

        (v) Except as contemplated by this Agreement, the Company has not paid
or agreed to pay to any person any compensation for (i) soliciting another to
purchase any of the Company's securities or (ii) the solicitation of tenders by
holders of the Old Notes pursuant to the Exchange Offer.

        (w) Neither the Company nor any of its subsidiaries nor any of their
respective directors, officers or controlling persons has taken, directly or
indirectly, any action designed to or which has constituted or which might
reasonably be expected to cause or result, under the Exchange Act or otherwise,
in stabilization or manipulation of the price of any security of the Company to
(i) facilitate the Exchange Offer or (ii) encourage tenders by holders of the
Old Notes pursuant to the Exchange Offer.

        (x) Other than as set forth in the Prospectus, there are no legal or
governmental actions, suits or proceedings pending or, to the best of the
Company's knowledge: (i) threatened against or affecting the Company or any of
its subsidiaries; or (ii) which have as the subject thereof any property owned
or leased by, the Company or any of its subsidiaries, where in any such case
there is a reasonable possibility that such action, suit or proceeding might be
determined adversely to the Company or such subsidiary and any such action, suit
or proceeding, if so determined adversely, could reasonably be expected to
result in a Material Adverse Change or adversely affect the consummation of the
transactions contemplated by this Agreement and by the Exchange Offer Material.
No material labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the best of the Company's knowledge, is threatened or
imminent.

        (y) The Company and its subsidiaries own or possess sufficient
trademarks, trade names, patent rights, copyrights, licenses, approvals, trade
secrets and other similar rights (collectively, "INTELLECTUAL PROPERTY RIGHTS")
reasonably necessary to conduct their businesses as now conducted; and the
expected expiration of any of such Intellectual Property Rights could not
reasonably be expected to result in a Material Adverse Change. Neither the
Company nor any of its subsidiaries has received any notice of infringement or
conflict with asserted Intellectual Property Rights of others, which
infringement or conflict, if the subject of an unfavorable decision, ruling or
finding would result in a Material Adverse Change.

        (z) The Company and each of its subsidiaries possesses such valid and
current certificates, authorizations, permits or licenses issued by the
appropriate state, federal or foreign regulatory agencies or bodies necessary to
conduct their respective businesses, and neither the Company nor any of its
subsidiaries has received any notice of proceedings relating to the revocation
or modification of, or non-compliance with, any such certificate, authorization,
permit




                                       10



or license which, singly or in the aggregate, if the subject of an unfavorable
decision, ruling or finding, could reasonably be expected to result in a
Material Adverse Change.

        (aa) The Company and each of its subsidiaries has good and marketable
title to all the properties and assets reflected as owned in the financial
statements described in the Exchange Offer Material, in each case, except as
disclosed in the Prospectus, free and clear of any security interests,
mortgages, liens, encumbrances, equities, claims and other defects, except such
as do not materially and adversely affect the value of such property and do not
materially interfere with the use made or proposed to be made of such property
by the Company or such subsidiary. The real property, improvements, equipment
and personal property held under lease by the Company or any of its subsidiaries
are held under valid and enforceable leases, with such exceptions as are not
material and do not materially interfere with the use made or proposed to be
made of such real property, improvements, equipment or personal property by the
Company or such subsidiary.

        (bb) The Company and its subsidiaries have filed all necessary federal,
state and foreign income and franchise tax returns and have paid all taxes
required to be paid by any of them and, if due and payable, any related or
similar assessment, fine or penalty levied against any of them except as may be
being contested in good faith and by appropriate proceedings and except, where
the failure so to file and pay could not, individually or in the aggregate,
reasonably be expected to result in a Material Adverse Change. The Company and
its subsidiaries have made adequate charges, accruals and reserves in the
applicable financial statements described in the Exchange Offer Material in
respect of all federal, state and foreign income and franchise taxes for all
periods as to which the tax liability of the Company or any of its subsidiaries
has not been finally determined.

        (cc) The Company is not, and after giving effect to the exchange of the
New Notes for the Old Notes will not be, an "investment company" within the
meaning of Investment Company Act of 1940, as amended.

        (dd) Each of the Company and its subsidiaries are insured by recognized,
financially sound institutions with policies in such amounts and with such
deductibles and covering such risks as are generally deemed adequate and
customary for their businesses including, but not limited to, policies covering
real and personal property owned or leased by the Company and its subsidiaries
against theft, damage, destruction, acts of vandalism, floods and earthquakes.
The Company has no reason to believe that: (i) it or any of its subsidiaries
will not be able to renew its existing insurance coverage as and when such
policies expire; or (ii) it or any of its subsidiaries will not obtain
comparable coverage from similar institutions as may be necessary or appropriate
to conduct its business as now conducted and at a cost that could not reasonably
be expected to result in a Material Adverse Change. Neither of the Company nor
any of its subsidiaries has been denied any insurance coverage which it has
sought or for which it has applied.

        (ee) The Company maintains a system of accounting controls sufficient to
provide reasonable assurances that (i) transactions are executed in accordance
with management's general or specific authorization; (ii) transactions are
recorded as necessary to




                                       11



permit preparation of financial statements in conformity with generally accepted
accounting principles as applied in the United States and to maintain
accountability for assets; (iii) access to assets is permitted only in
accordance with management's general or specific authorization; and (iv) the
recorded accountability for assets is compared with existing assets at
reasonable intervals and appropriate action is taken with respect to any
differences.

        (ff) Except as could not, individually or in the aggregate, reasonably
be expected to result in a Material Adverse Change: neither the Company nor any
of its subsidiaries is in violation of any federal, state, local or foreign law
or regulation relating to pollution or protection of human health or the
environment (including, without limitation, ambient air, surface water,
groundwater, land surface or subsurface strata) or wildlife, including without
limitation, laws and regulations relating to emissions, discharges, releases or
threatened releases of chemicals, pollutants, contaminants, wastes, toxic
substances, hazardous substances, petroleum and petroleum products
(collectively, "MATERIALS OF ENVIRONMENTAL CONCERN"), or otherwise relating to
the manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of Materials of Environmental Concern (collectively,
"ENVIRONMENTAL LAWS"), which violation includes, but is not limited to,
noncompliance with any permits or other governmental authorizations required for
the operation of the business of the Company or its subsidiaries under
applicable Environmental Laws, or noncompliance with the terms and conditions
thereof, nor has the Company or any of its subsidiaries received any written
communication, whether from a governmental authority, citizens group, employee
or otherwise, that alleges that the Company or any of its subsidiaries is in
violation of any Environmental Law; there is no claim, action or cause of action
filed with a court or governmental authority, no investigation with respect to
which the Company or any Guarantor has received written notice, and no written
notice by any person or entity alleging potential liability for investigatory
costs, cleanup costs, governmental responses costs, natural resources damages,
property damages, personal injuries, attorneys' fees or penalties arising out
of, based on or resulting from the presence, or release into the environment, of
any Material of Environmental Concern at any location owned, leased or operated
by the Company or any of its subsidiaries, now or in the past (collectively,
"ENVIRONMENTAL CLAIMS"), pending or, to the best of the Company's or any
Guarantor's knowledge, threatened against the Company or any of its subsidiaries
or any person or entity whose liability for any Environmental Claim the Company
or any of its subsidiaries has retained or assumed either contractually or by
operation of law; and to the best of the Company's or the Guarantor's knowledge,
there are no past or present actions, activities, circumstances, conditions,
events or incidents, including, without limitation, the release, emission,
discharge, presence or disposal of any Material of Environmental Concern, that
reasonably could result in a violation of any Environmental Law or form the
basis of a potential Environmental Claim against the Company or any of its
subsidiaries or against any person or entity whose liability for any
Environmental Claim the Company or any of its subsidiaries has retained or
assumed either contractually or by operation of law.

        (gg) The Company and its subsidiaries and any employee benefit plan (as
defined under the Employee Retirement Income Security Act of 1974, as amended,
and the regulations and published interpretations thereunder (collectively,
"ERISA")) established or maintained by the Company, its subsidiaries or their
"ERISA Affiliates" (as defined below) (an "Employee Benefit Plan") are in
compliance in all material respects with ERISA, and any




                                       12



Employee Benefit Plan is in compliance in all material respects with the
Internal Revenue Code of 1986, as amended, and the regulations and published
interpretations thereunder (the "CODE"). "ERISA Affiliate" means, with respect
to the Company or a subsidiary, any member of any group of organizations
described in Section 414 of the Code of which the Company or such subsidiary is
a member. No "reportable event" (as defined under ERISA) has occurred or is
reasonably expected to occur with respect to any "employee benefit plan"
established or maintained by the Company, its subsidiaries or any of their ERISA
Affiliates that could reasonably be expected to result in a Material Adverse
Change. Neither the Company, its subsidiaries nor any of their ERISA Affiliates
has any intention to terminate an "employee benefit plan" established or
maintained by the Company, its subsidiaries or any of their ERISA Affiliates,
that if terminated would have any "amount of unfunded benefit liabilities" (as
defined under ERISA) that could reasonably be expected to result in a Material
Adverse Change. Neither the Company, its subsidiaries nor any of their ERISA
Affiliates has incurred or reasonably expects to incur any liability under Title
IV of ERISA with respect to termination of, or withdrawal from, any "employee
benefit plan" or (ii) Sections 412, 4971, 4975 or 4980B of the Code. Each
"employee benefit plan" established or maintained by the Company, its
subsidiaries or any of their ERISA Affiliates that is intended to be qualified
under Section 401 of the Code is so qualified and nothing has occurred, whether
by action or failure to act, which would reasonably be likely to cause the loss
of such qualification, except where such failure to be qualified or loss of such
qualification could not reasonably be expected to result in a Material Adverse
Change.

     Any certificate signed by an officer of the Company or any Guarantor and
delivered to the Dealer Manager or to counsel for the Dealer Manager pursuant
hereto shall be deemed to be a representation and warranty by the Company or
such Guarantor to the Dealer Manager as to the matters set forth therein.

     6. CONDITIONS AND OBLIGATIONS. The obligation of the Dealer Manager to act
as a Dealer Manager hereunder shall at all times be subject, in its discretion,
to the conditions that:

        (a) All representations and warranties of the Company and each of the
Guarantors contained herein or in any certificate or writing delivered hereunder
at all times during the Exchange Offer shall be true and correct in all material
respects.

        (b) Each of the Company and each Guarantor at all times during the
Exchange Offer shall have performed, in all material respects, all of its
obligations hereunder required as of such time to have been performed by it.

        (c) No stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceeding for that
purpose shall have been initiated or threatened by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with.

        (d) Subsequent to the execution and delivery of this Agreement and prior
to the Closing Date, there shall not have occurred any change, or any
development involving a prospective change, in the condition, financial or
otherwise, or in the earnings, business or





                                       13



operations, of the Company and its subsidiaries, taken as a whole, from that set
forth in the Exchange Offer Material (exclusive of any amendments or supplements
thereto subsequent to the date of this Agreement) that, in the Dealer Manager's
judgment, is material and adverse and that makes it, in the Dealer Manager's
judgment, impracticable to market the New Notes on the terms and in the manner
contemplated in the Exchange Offer Material.

        (e) On or before the Closing Date, the Company shall have completed the
refinancing of the Credit Agreement.

        (f) On the Closing Date, the Dealer Manager shall have received a
letter, dated the date of delivery thereof, in form and substance satisfactory
to the Dealer Manager, from Ernst & Young LLP containing statements and
information of the type ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and certain financial
information contained in the Registration Statement.

        (g) On the Closing Date, the Dealer Manager shall have received a
certificate, dated the respective date of delivery thereof, signed by an
executive officer of the Company, to the effect set forth in Section 6(c) above
and further to the effect that the representations and warranties of the Company
and each Guarantor set forth in Section 5 of this Agreement are true and correct
as of the respective date of delivery thereof and that the Company and each
Guarantor have complied with, or received waivers from the Dealer Manager with
respect to, all of the agreements and satisfied all of the conditions contained
herein on their part to be performed or satisfied hereunder on or before the
Commencement Date and the Closing Date, as applicable. The officer signing and
delivering such certificate may rely upon the best of his or her knowledge as to
any proceedings threatened.

        (h) On the Closing Date, the Dealer Manager shall have received the
favorable opinion of Kohrman, Jackson & Krantz P.L.L., counsel for the Company
and the Guarantors, dated as of the respective date of delivery thereof,
substantially in the form of Exhibit A. The opinion of Kohrman Jackson & Krantz
P.L.L shall be rendered to the Dealer Manager at the request of the Company and
shall so state therein.

        (i) On the Closing Date, the Dealer Manager shall have received the
favorable opinion of McGuireWoods LLP, counsel for the Dealer Manager, dated as
of the respective date of delivery thereof, with respect to the matters covered
in paragraphs of 11, 12, 14 and the last paragraph of the form of opinion
contained in Exhibit A as well as such other related matters as the Dealer
Manager may reasonably request, and such counsel shall have received such papers
and information as they may reasonably request to enable them to pass upon such
matters.

        (j) On the Closing Date, the Dealer Manager shall be satisfied with the
terms and conditions of the New Indenture.

        (k) The Dealer Manager shall have received such other documents and
certificates as are reasonably requested by the Dealer Manager or its counsel.



                                       14



     7. COVENANTS. In further consideration of the Dealer Manager's agreements
herein contained, the Company covenants with the Dealer Manager as follows:

        (a) The Company will furnish to the Dealer Manager and to counsel for
the Dealer Manager, without charge, as many copies of the Exchange Offer
Material and any amendments and supplements thereto as they may reasonably
request.

        (b) Prior to amending or supplementing the Exchange Offer Material
(including any amendment or supplement through incorporation by reference of any
report filed under the Exchange Act), the Company shall furnish to the Dealer
Manager for review a copy of each such proposed amendment or supplement, and the
Company shall not use any such proposed amendment or supplement to which the
Dealer Manager reasonably object.

        (c) The Company will advise the Dealer Manager promptly of (i) the
occurrence of any event which could cause the Company to withdraw or terminate
the Exchange Offer or would permit the Company to exercise any right not to
exchange the New Notes for the tendered Old Notes, (ii) any proposal or
requirement to make, amend or supplement the Exchange Offer Material, (iii) the
issuance of any order or the taking of any other action by any administrative or
judicial tribunal or other governmental agency or instrumentality which would
delay, prevent or adversely affect the Exchange Offer (and, if in writing, will
furnish the Dealer Manager a copy thereof), (iv) any Material Adverse Change, or
any development involving a prospective Material Adverse Change, in the
condition, financial or otherwise, or in the earnings, business and operations
of the Company and its subsidiaries, taken as a whole, (v) any material
developments in connection with the Exchange Offer, including, without
limitation, the commencement of any action, suit or proceeding concerning the
Exchange Offer, and (vi) any other information relating to the Exchange Offer
which the Dealer Manager may from time to time reasonably request. In the event
of the issuance of any order as described in clause (iii), the Company shall
promptly use its best efforts to obtain the withdrawal of the same.

        (d) The Company agrees that if any event occurs or condition exists as a
result of which the Exchange Offer Material would include an untrue statement of
a material fact or omit to state any material fact necessary to make the
statements therein, in the light of the circumstances when the Exchange Offer
Material are delivered to a holder of the Old Notes, not misleading, or if, in
the opinion of the Company, after consultation with the Dealer Manager, it is
necessary at any time to amend or supplement the Exchange Offer Material to
comply with applicable law, the Company shall immediately notify the Dealer
Manager, prepare an amendment or supplement to the Exchange Offer Material that
will correct such statement or omission or effect such compliance, and supply
such amended or supplemented Exchange Offer Material to the Dealer Manager
without charge in such quantities as the Dealer Manager may reasonably request.

        (e) Prior to the Closing Date, the Company shall file, on a timely
basis, with the Commission and the New York Stock Exchange all reports and
documents required to be filed under Section 13 or 15 of the Exchange Act.



                                       15



        (f) The Company will cooperate with the Dealer Manager and use its best
efforts to permit the New Notes to be eligible for clearance and settlement
through the facilities of DTC.

        (g) During a period of three years from the effective date of the
Registration Statement, the Company shall furnish to the Dealer Manager all such
information concerning the business and financial condition of the Company as
the Dealer Manager may from time to time reasonably request.

        (h) The Company shall make generally available to its securityholders as
soon as practicable, but in any event not later than eighteen months after the
effective date of the Registration Statement (as defined in Rule 158(c) under
the Act) an earnings statement of the Company and its subsidiaries (which need
not be audited) complying with Section 11(a) of the Act (including, at the
Company's option, Rule 158 thereunder).

        (i) Neither the Company nor any entity controlled, directly or
indirectly, by the Company shall take, directly or indirectly, any action which
is designed to or which has constituted or which might reasonably be expected to
cause or result in stabilization or manipulation of the price of any security of
the Company to facilitate the sale or resale of New Notes in connection with the
Exchange Offer.

     8. INDEMNIFICATION. The Company and each Guarantor, jointly and severally,
agree to indemnify and hold harmless the Dealer Manager and its affiliates and
officers, directors, employees, agents and controlling persons (each a "DEALER
MANAGER INDEMNIFIED PERSON") from and against any and all losses, claims,
damages, liabilities and expenses, joint or several, to which any such Dealer
Manager Indemnified Person may become subject arising out of or based upon (A)
any untrue statement or alleged untrue statement of a material fact contained in
the Exchange Offer Material or any of the documents incorporated by reference
therein or in any amendment or supplement to any of the foregoing, or the
omission or alleged omission to state therein a material fact necessary in order
to make the statements therein, in the light of the circumstances under which
they were made, not misleading, (B) any breach by the Company of any
representation or warranty or failure to comply with any of the agreements of
the Company and the Guarantors set forth in this Agreement, (C) any withdrawal,
termination, rescission or modification of, or failure to make or consummate,
the Exchange Offer or to exchange any of the New Notes for the Old Notes
pursuant to the Exchange Offer or (D) the transactions contemplated by this
Agreement or the performance by the Dealer Manager hereunder, or any claim,
litigation, investigation or proceedings relating to the foregoing ("DEALER
MANAGER PROCEEDINGS") regardless of whether any Dealer Manager Indemnified
Person is a party thereto, and to reimburse such Dealer Manager Indemnified
Persons for any reasonable legal or other reasonable out-of-pocket expenses in
connection with investigating or defending any of the foregoing; provided that
the foregoing indemnification will not, as to any Dealer Manager Indemnified
Person, apply to losses, claims, damages, liabilities or expenses to the extent
that they have resulted from the gross negligence or willful misconduct of any
Dealer Manager Indemnified Person or from an untrue statement of a material fact
or omission to state a material fact in the information furnished by the Dealer
Manager in writing for inclusion in the Exchange




                                       16



Offer Material. This indemnity agreement shall be in addition to any liability
which the Company or any Guarantor may otherwise have.

     The Company and the Guarantors shall not be liable for any settlement of
any lawsuit, claim or proceeding effected without their written consent (which
consent shall not be unreasonably withheld or delayed), but if settled with such
consent, the Company and each of the Guarantors, jointly and severally, agree,
subject to the provisions of this Section 8, to indemnify the Dealer Manager
Indemnified Person from and against any loss, damage or liability by reason of
such settlement.

     The Dealer Manager agrees to indemnify and hold harmless each of the
Company and the Guarantors and their affiliates and officers, directors,
employees, agents and controlling persons (each a "COMPANY INDEMNIFIED PERSON")
from and against any and all losses, claims, damages, liabilities and reasonable
expenses, joint or several, to which any such Company Indemnified Person may
become subject arising out of or based upon the transactions contemplated by
this Agreement or the performance by the Company hereunder, or any claim,
litigation, investigation or proceedings relating to the foregoing ("Company
Proceedings") regardless of whether any Company Indemnified Person is a party
thereto, and to reimburse such Company Indemnified Persons for any reasonable
legal or other reasonable out-of-pocket expenses as they are incurred in
connection with investigating or defending any of the foregoing, but only to the
extent such losses, claims, damages, liabilities or expenses have resulted from
or arise out of (x) the gross negligence or willful misconduct of the Dealer
Manager or (y) an untrue statement of a material fact or omission to state a
material fact in the information furnished by the Dealer Manager in writing for
inclusion in the Exchange Offer Materials. The Company acknowledges that such
information in clause (y) above refers solely to (i) the identity, address and
phone number of the Dealer Manager appearing on the cover page and the back
cover page of the Offering Memorandum and (ii) the statement set forth in the
last paragraph under the caption "The Exchange Offer - Dealer Manager." The
terms "Dealer Manager Indemnified Person" and "Company Indemnified Person" are
herein collectively referred to as an "Indemnified Person" and the terms "Dealer
Manager Proceedings" and "Company Proceedings" are herein collectively referred
to as "Proceedings."

     The Dealer Manager shall not be liable for any settlement of any lawsuit,
claim or proceeding effected without its written consent (which consent shall
not be unreasonably withheld or delayed), but if settled with such consent, the
Dealer Manager agrees, subject to the provisions of this Section 8, to indemnify
the Company Indemnified Person from and against any loss, damage or liability by
reason of such settlement.

     Promptly after receipt by an Indemnified Person of notice of the
commencement of any Proceedings, such Indemnified Person will, if a claim in
respect thereof is to be made against the Dealer Manager, the Company or any
Guarantor, as the case may be, as indemnifying party (the "INDEMNIFYING PARTY")
for indemnification hereunder, notify such Indemnifying Party in writing of the
commencement thereof; provided that (i) the omission so to notify the
Indemnifying Party will not relieve any Indemnifying Party from any liability
which it may have hereunder except to the extent it has been materially
prejudiced by such failure and (ii) the omission so to notify such Indemnifying
Party will not relieve it from any liability which it may have to such
Indemnified




                                       17



Person otherwise than on account of this indemnity agreement. In case any such
Proceedings are brought against any Indemnified Person and it notifies the
applicable Indemnifying Party of the commencement thereof, such Indemnifying
Party will be entitled to participate therein, and, to the extent that it may
elect by written notice delivered to such Indemnified Person, to assume the
defense thereof, with counsel reasonably satisfactory to such Indemnified
Person; provided that if the defendants in any such Proceeding include both such
Indemnified Person and the Indemnifying Party and counsel to such Indemnified
Person shall have reasonably concluded that there may be legal defenses
available to such Indemnified Person which are different from or additional to
those available to the Indemnifying Party, such Indemnified Person shall have
the right to select separate counsel to assert such legal defenses and to
otherwise participate in the defense of such Proceedings on behalf of such
Indemnified Person. Upon receipt of notice from the Indemnifying Party to such
Indemnified Person of its election so to assume the defense of such Proceedings
and approval by such Indemnified Person of counsel, the Indemnifying Party shall
not be liable to such Indemnified Person for expenses incurred by such
Indemnified Person in connection with the defense thereof (other than reasonable
costs of investigation) unless (i) such Indemnified Person shall have employed
separate counsel in connection with the assertion of legal defenses in
accordance with the proviso to the next preceding sentence (it being understood,
however, that the Indemnifying Party shall not be liable for the expenses of
more than one separate counsel, approved by the Indemnifying Party, representing
the Indemnified Persons who are parties to such Proceedings), (ii) the
Indemnifying Party shall not have employed counsel reasonably satisfactory to
such Indemnified Person to represent such Indemnified Person within a reasonable
time after notice of commencement of the Proceedings or (iii) the Indemnifying
Party shall have authorized in writing the employment of counsel for such
Indemnified Person; and except that, if clause (i) or (iii) is applicable, such
liability shall be only in respect of the counsel referred to in such clause (i)
or (iii). The Indemnifying Party shall not effect, without the prior written
consent of the Indemnified Person, any settlement of any pending or threatened
proceeding unless such settlement includes an unconditional release from the
party bringing such proceeding of such Indemnified Person and does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any Indemnified Person.

     If for any reason the foregoing indemnification is unavailable to any
Indemnified Person or insufficient to hold it harmless, then the applicable
Indemnifying Party shall contribute to the amount paid or payable by such
Indemnified Person as a result of such loss, claim, damage, liability or expense
in such proportion as is appropriate to reflect not only the relative benefits
received by the Indemnifying Party on the one hand and such Indemnified Person
on the other hand, but also the relative fault of Indemnifying Party on the one
hand, and such Indemnified Person, on the other hand, as well as any relevant
equitable considerations. It is hereby agreed that the relevant benefits to the
Company (including its affiliates, officers, directors, employees, agents and
controlling persons) on the one hand and the Dealer Manager (including its
affiliates, officers, directors employees, agents and controlling persons) on
the other hand shall be deemed to be in the same proportion as (i) the aggregate
principal amount of the New Notes outstanding bears to (ii) the fee paid or
proposed to be paid to the Dealer Manager pursuant to Section 3(a) of this
Agreement. The relative fault of the Indemnifying Party on the one hand and the
Indemnified Person on the other hand relating to an untrue or alleged untrue
statement of material fact or the omission or alleged omission to state a
material fact shall be determined by




                                       18



reference to, among other things, whether the untrue or alleged untrue statement
of a material fact or the omission or alleged omission to state a material fact
relates to information supplied by, or relating to, the Indemnifying Party and
its affiliates or the Indemnified Person and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.

     The indemnity, reimbursement and contribution obligations of an
Indemnifying Party under this Section 8 shall be in addition to any liability
which such Indemnifying Party may otherwise have to an Indemnified Party, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of such Indemnifying Party and any such Indemnified
Person. Notwithstanding the foregoing, in no event shall the Dealer Manager be
liable under the foregoing indemnity, reimbursement and contribution provisions
in an amount in excess of the fees actually received by the Dealer Manager in
connection with the Agreement.

     9. CONFIDENTIALITY. The Dealer Manager shall use all information provided
to it by or on behalf of the Company hereunder solely for the purpose of
providing the services which are the subject of this Agreement and the
transactions contemplated hereby and shall treat confidentially all such
information; provided that nothing herein shall prevent the Dealer Manager from
disclosing any such information (i) pursuant to the order of any court or
administrative or similar proceeding, (ii) upon the request of any regulatory
authority having jurisdiction over the Dealer Manager or any of its affiliates,
(iii) to the extent that such information becomes publicly available other than
by reason of disclosure by the Dealer Manager and (iv) to its employees, legal
counsel, independent auditors and other experts or agents who need to know such
information and are informed of the confidential nature of such information. The
Dealer Manager shall be responsible for compliance by any such disclosee with
this Section 9. With respect to clause (i) or (ii) above, prior to making any
such disclosure, the Dealer Manager shall promptly notify the Company of such
order or request and use commercially reasonable efforts to cooperate with the
Company, at the Company's expense, in seeking a protective order or taking such
action as the Company may reasonably request consistent with applicable law.

     10. SURVIVAL. The agreements contained in Sections 3, 8, 9 and 11 hereof
and the representations and warranties of the Company and the Guarantor set
forth in Section 5 hereof shall remain operative and in full force and effect,
regardless of (i) any failure to commence, or the withdrawal, termination or
consummation of, the Exchange Offer or the termination or assignment of this
Agreement, (ii) any investigation made by or on behalf of the Company or any an
Indemnified Person and (iii) any withdrawal by the Dealer Manager pursuant to
Section 2 hereof.

     11. NO LIABILITY FOR ACTS OF DEALERS, BANKS AND TRUST COMPANIES. The Dealer
Manager shall have no liability to the Company or any other person for any
losses, claims, damages, liabilities and expenses (each a "Loss" and
collectively, the "LOSSES") arising from any act or omission on the part of any
broker or dealer in securities (a "DEALER") or any bank or trust company, or any
other person, and neither the Dealer Manager nor any of its affiliates shall be
liable for any Losses arising from its own acts or omissions in performing its
obligations as Dealer Manager or as a Dealer hereunder or otherwise in
connection with the Exchange Offer,





                                       19



except as expressly set forth in Section 8 and for any such Losses which are
finally judicially determined to have resulted from the Dealer Manager's gross
negligence or willful misconduct (it being understood that any such liability of
any Dealer Manager shall be several and not joint). In soliciting or obtaining
tenders of Old Notes or delivery of Consents, no Dealer, bank or trust company
shall be deemed to be acting as the agent of the Company or any of its
affiliates, and the Dealer Manager shall be deemed the agent of any Dealer, bank
or trust company or the agent or fiduciary of the Company or any of its
affiliates, equity holders, creditors or of any other person. In soliciting or
obtaining tenders of Old Notes or delivery of Consents, the Dealer Manager shall
not be nor shall the Dealer Manager be deemed for any purpose to act as partners
or joint venturers of or members of a syndicate or group with the Company or any
of its affiliates in connection with the Exchange Offer or otherwise, and
neither the Company nor any of its affiliates shall be deemed to act as the
Dealer Manager's agents. The Company shall have sole authority for the
acceptance or rejection of any and all tenders of Old Notes or deliveries of
Consents.

     12. GOVERNING LAW; JURISDICTION; JUDGMENT CURRENCY. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York
applicable to contracts to be performed wholly within the State of New York. Any
litigation based hereon, or arising out of, or in connection with this
Agreement, the Exchange Offer or any related matter shall be brought and
maintained exclusively in the courts of the State of New York and the Company
hereby expressly and irrevocably submits to the jurisdiction of such courts. All
judgments arising from such litigation or settlements related thereto shall be
paid in United States Dollars.

     13. NOTICES. Except as otherwise expressly provided in this Agreement,
whenever notice is required by the provisions of this Agreement to be given to
(i) the Company or any Guarantor, such notice shall be in writing addressed to
Hawk Corporation, Attention: Ronald E. Weinberg, Chief Executive Officer,
facsimile number: 216-861-4546 with a copy to Marc C. Krantz, Esq., Kohrman
Jackson & Krantz P.L.L., facsimile number: 216-621-6536 and (ii) the Dealer
Manager, such notice shall be in writing addressed to Banc of America Securities
LLC, Bank of America Corporate Center, 100 North Tryon Street, Seventh Floor,
Charlotte, North Carolina 28255, facsimile number: (704) 388-0830, Attention:
Andrew Karp.

     14. MISCELLANEOUS. This Agreement and the Engagement Letter contain the
entire agreement between the parties relating to the subject matter hereof and
supersede all oral statements and prior writings with respect thereto. This
Agreement may not be amended or modified except by a writing executed by each of
the parties hereto. Section headings herein are for convenience only and are not
a part of this Agreement.

        (a) This Agreement is solely for the benefit of the Company, the
Guarantors and the Dealer Manager, and no other person (except for a Indemnified
Persons, to the extent set forth in Section 8 hereof) shall acquire or have any
rights under or by virtue of this Agreement.

        (b) The Dealer Manager may (subject to Section 9 hereof) share any
information or matters relating to the Company, the Guarantors or the Exchange
Offer, and the transactions contemplated hereby with its affiliates, and such
affiliates may likewise share




                                       20



information relating to the Company with the Dealer Manager; PROVIDED, however,
that the Dealer Manager will not, and will ensure its employees and affiliates
do not, share any such information with any of its or its affiliates' employees
on the public side of the Dealer Manager's information wall. The Dealer Manager
shall be responsible for compliance by its affiliates with Section 9 and this
Section 14(b) hereof.

        (c) If any term, provision, covenant or restriction contained in this
Agreement is held by a court of competent jurisdiction to be invalid, void or
unenforceable or against public policy, the remainder of the terms, provisions,
covenants and restrictions contained herein shall remain in full force and
effect and shall in no way be affected, impaired or invalidated. The Company and
the Dealer Manager shall endeavor in good faith negotiations to replace the
invalid, void or unenforceable provisions with valid provisions, the economic
effect of which comes as close as possible to that of the invalid, void or
unenforceable provisions.

        (d) This Agreement may be executed in counterparts, each of which will
be deemed an original, but all of which, taken together, will constitute one and
the same instrument.




                                       21




        Please indicate Banc of America Securities LLC's willingness to act as
Dealer Manager on the terms set forth herein and its acceptance of the foregoing
provisions by signing in the space provided below for that purpose and returning
to the Company a copy of this letter, whereupon this letter shall constitute a
binding agreement between the Company and Banc of America Securities LLC.


                                        Very truly yours,

                                        HAWK CORPORATION, for itself and each
                                        of the Guarantors

                                        By:________________________________
                                           Name:
                                           Title:


Accepted and agreed to as of the date
first written above:

BANC OF AMERICA SECURITIES LLC


By:________________________________
   Name: Andrew C. Karp
   Title: Managing Director

EX-4.6

                                                                     Exhibit 4.6
                                                                     -----------


                             SUPPLEMENTAL INDENTURE



         SUPPLEMENTAL INDENTURE (this "Supplemental Indenture") dated as of
[August __, 2002], among Hawk Corporation, a Delaware corporation (the
"Company"); and Allegheny Clearfield, Inc., Hawk MIM, Inc., Hawk Motors, Inc.,
Hawk Precision Components Group, Inc., Net Shape Technologies LLC, Quarter
Master Industries, Inc., Tex Racing Enterprises, Inc., Friction Products Co.,
Logan Metal Stampings, Inc., S.K. Wellman Holdings, Inc., S.K. Wellman Corp.,
Sinterloy Corporation and Helsel, Inc. (each a "Guarantor" and collectively the
"Guarantors", and HSBC Bank USA, a banking corporation and trust company duly
organized and existing under the laws of the State of New York, as successor
trustee, (the "Trustee"), successor to Bank One Trust Company, N.A., a national
banking association (the "Prior Trustee").

                                    RECITALS

         WHEREAS, the Company, the Guarantors and the Prior Trustee have
heretofore executed and delivered a certain Indenture, dated as of November 27,
1996 (as amended or supplemented from time to time prior to the date hereof, the
"Indenture") with respect to the Company's Series A 10.25% Senior Notes due
December 1, 2003 and Series B 10.25% Senior Notes due December 1, 2002
(collectively, the "Notes"), and together with the Trustee have executed a
Resignation, Appointment and Acceptance Agreement, dated as of April 25, 2002,
appointing the Trustee as successor trustee;

         WHEREAS, Section 9.2 of the Indenture provides that, subject to Section
6.7 of the Indenture, the Company and the Guarantors, when authorized by a Board
Resolution, and the Trustee, together, with the written consent of the Holder or
Holders of not less than a majority in aggregate principal amount of the then
outstanding Notes (including consents obtained in connection with a tender offer
or exchange offer for the Notes), may amend or supplement the Indenture, the
Notes and the Guarantees without notice to any other Holder;

         WHEREAS, the Company has offered to exchange all of the outstanding
Notes, upon the terms and subject to the conditions set forth in its Prospectus
and Consent Solicitation Statement, dated [August __, 2002], and in the related
Letter of Transmittal and Consent (the "Exchange Offer"), and in connection
therewith, the Company has been soliciting written consents of the Holders to
the amendments to the Indenture set forth herein (and to the execution of this
Supplemental Indenture), and the Company has now obtained such written consents
from the Holders of a majority in principal amount of the outstanding Notes;
accordingly, this Supplemental Indenture and the amendments set forth herein are
authorized pursuant to Section 9.2 of the Indenture; and

         WHEREAS, the execution and delivery of this Supplemental Indenture has
been duly authorized by the parties hereto, and all other acts necessary to make
this Supplemental Indenture a valid and binding supplement to the Indenture,
effectively amending and supplementing the Indenture as set forth herein, have
been duly taken;



         NOW, THEREFORE, in consideration of the above premises and for other
good and valuable consideration, the receipt of which is hereby acknowledged, it
is mutually agreed, for the equal and proportionate benefit of all Holders, as
follows:

                                  ARTICLE ONE

         Upon consummation of the exchange by the Company of all Notes validly
tendered pursuant to the Exchange Offer and not withdrawn before the expiration
date for such Exchange Offer (as notified to the Trustee by the Company upon
which notification the Trustee may rely), then automatically (without further
act by any person) with respect to all outstanding Notes, the Indenture is
amended in the following respects:

1.1      Sections 4.3, 4.4, 4.5, 4.8, 4.10, 4.11, 4.12, 4.13, 4.14, 4.15, 4.16,
6.1(iv), 6.1(v), 6.1(vi), 6.1(vii), 6.1(viii), 10.1, 10.2, 10.3, 10.4, 10.5,
10.6, 10.7, 10.8, 10.9 and 10.10 of the Indenture and all other references to
these sections in the Indenture and the Notes shall be deleted and each of the
Company and the Guarantors shall be released from its respective obligations
thereunder.

1.2      Any failure by the Company or the Guarantors to comply with the terms
of any of the foregoing Sections of the Indenture (whether before or after the
execution of this Supplemental Indenture) shall no longer constitute a default
or an Event of Default under the Indenture and shall no longer have any other
consequence under the Indenture.

1.3      The Guarantees and all referenced thereto in the Notes shall be deleted
in their entirety. On behalf of itself, each of the Holders and their respective
heirs, beneficiaries, estates, representatives, affiliates, successors and
assigns, the Trustee shall fully and unconditionally (i) release each of the
Guarantors from all Obligations arising under its Guarantee, and (ii) release
and extinguish all of the Guarantees, which shall not hereafter be deemed
outstanding for any purpose whatsoever.

1.4      Section 4.9 of the Indenture shall be deleted in its entirely, and the
following is substituted in lieu thereof:

                  "Section 4.9 Compliance with the TIA.

                           Upon qualification of this Indenture under the TIA,
                  the Company shall comply with the provisions of TIA Section
                  314 (a)."

1.5      Section 4.17(a)(ii) of the Indenture shall be deleted in its entirely,
and the following is substituted in lieu thereof:

                  "intentionally omitted."

1.6      The second paragraph of Section 4.17(a)(iii) of the Indenture shall be
deleted in its entirety.

1.7      Section 5.1(a) of the Indenture shall be deleted in its entirety, and
the following is substituted in lieu thereof:


                                       2


                  "Section 5.1 Merger, Consolidation and Sale of Assets.

                  (a) The Company shall not, in any single transaction or series
         of related transactions, consolidate or merge with or into (whether or
         not the Company is the Surviving Person), or sell, assign, transfer,
         lease, convey or otherwise dispose of all or substantially all of its
         properties or assets (determined on a consolidated basis for the
         Company and its Restricted Subsidiaries) in one or more related
         transactions to, another Person, and the Company will not permit any
         Restricted Subsidiary to enter into any such transaction or series of
         related transactions if such transaction or series of related
         transactions, in the aggregate, would result in a sale, assignment,
         transfer, lease, conveyance or other disposition of all or
         substantially all of the properties and assets of the Company and the
         Restricted Subsidiaries, taken as a whole, to another Person, unless
         (i) the Surviving Person is a corporation organized or existing under
         the laws of the United States, any state thereof or the District of
         Columbia; and (ii) the Surviving Person (if other than the Company)
         assumes all the obligations of the Company under the Notes, and this
         Indenture pursuant to a supplemental indenture or other written
         agreement, as the case may be, in a form reasonably satisfactory to the
         Trustee;

                  In the event of any transaction (other than a lease) described
         in and complying with the conditions listed in the immediately
         preceding paragraph in which the Company is not the Surviving Person,
         such Surviving Person shall succeed to, and be substituted for, and may
         exercise every right and power of, the Company, and the Company shall
         be discharged from its obligations under, this Indenture and the
         Notes."

1.8      Section 6.1(iii) of the Indenture shall be deleted in its entirety, and
the following is substituted in lieu thereof:

                  "(iii) the Company's failure to perform or comply with any
         covenant, agreement or warranty in this Indenture (other than the
         defaults specified in clauses (i) and (ii) above) which failure
         continues for 60 days after written notice thereof has been given to
         the Company by the Trustee or to the Company and the Trustee by the
         Holders of at least 25% in aggregate principal amount of the then
         outstanding Notes;"

1.9      Section 6.2(a) of the Indenture shall be deleted in its entirety, and
the following is substituted in lieu thereof:

                  "(a) If any Event of Default occurs and is continuing, the
         Trustee or the Holders of at least 25% in aggregate principal amount of
         the then outstanding Notes may, and the Trustee at the request of such
         Holders shall, declare all the Notes to be due and payable immediately
         by notice in writing to the Company, and to the Company and the Trustee
         if by the Holders, specifying the respective Event of Default and that
         such notice is a "notice of acceleration," and Notes shall become
         immediately due and payable."

1.10     Section 6.2(b) of the Indenture shall be deleted in its entirety, and
the following is substituted in lieu thereof:

                  "Any time after a declaration of acceleration, but before a
                  judgment or decree for payment of the money due has been
                  obtained by the Trustee, the Holders of a



                                       3


                  majority in principal amount of the Notes outstanding, by
                  written notice to the Company and the Trustee, may rescind and
                  annul such declaration and its consequences if (i) the Company
                  has paid or deposited with the Trustee a sum sufficient to pay
                  (A) all sums paid or advanced by the Trustee and the
                  reasonable compensation, expenses, disbursements and advances
                  of the Trustee, its agents and counsel, (B) all overdue
                  interest on all Notes, (C) the principal of and premium, if
                  any, on any Notes which have become due otherwise than by such
                  declaration or occurrence of acceleration and interest thereon
                  at the rate borne by the Notes, and (D) to the extent that
                  payment of such interest is lawful, interest upon overdue
                  interest at the rate borne by the Notes; and (ii) all Events
                  of Default, other than the non-payment of principal of Notes
                  which have become due solely by such declaration or occurrence
                  of acceleration, have been cured or waived; and (iii) the
                  rescission would not conflict with any judgment, order or
                  decree of any court of competent jurisdiction."

1.11     Section 8.2(b) of the Indenture shall be deleted in its entirety, and
the following is substituted in lieu thereof:

                  "Subject to the satisfaction of the conditions in Section
                  8.2(c) hereof, the Company may, at its option by Board
                  Resolution, at any time, elect to effect covenant defeasance
                  ("Covenant Defeasance"). On and after the date such conditions
                  are satisfied, (i) the Company shall be released from its
                  obligations under any covenant or provision contained in
                  Sections 4.6(a), 4.7, 4.9 and 4.17 through 4.19, (ii) clause
                  (iii) of Section 6.1 hereof shall not apply, and (iii) the
                  provisions of Articles Five and Eleven shall not apply, and
                  the Notes shall thereafter be deemed to be not "outstanding"
                  for the purposes of any direction, waiver, consent or
                  declaration or act of Holders (and the consequences of any
                  thereof) in connection with such covenants and the provisions
                  of Articles Five and Eleven, but shall continue to be deemed
                  "outstanding" for all other purposes hereunder. For this
                  purpose, such covenant defeasance means that, with respect to
                  the Notes, the Company may omit to comply with and shall have
                  no liability in respect of any term, condition or limitation
                  set forth in any such Section or Article, whether directly or
                  indirectly, by reason of any reference elsewhere herein to any
                  such Section or Article or by reason of any reference in any
                  such Section or Article to any other provision herein or in
                  any other document and such omission to comply shall not
                  constitute a Default or an Event of Default under clause (iii)
                  of Section 6.1 hereof, but, except as specified above, the
                  remainder of this Indenture shall be unaffected thereby."

1.12     In connection with the amendments identified above, the following
defined terms used in Section 1.1 of the Indenture, and all references to such
defined terms in the Indenture and the Notes shall be deleted: Acquired Debt;
Asset Sale; Asset Sale Offer; Asset Sale Offer Trigger Date; Asset Sale Offer
Purchase Date; Bankruptcy Law; Cash Equivalents; Cash Flow; Change of Control;
Change of Control Offer; Change of Control Purchase Date; Consolidated Cash Flow
Coverage Ratio; Consolidated Interest Expense; Consolidated Net Worth; Excess
Proceeds;


                                       4


Existing Indebtedness; Guarantee; Guarantor; Hawk Controlling Stockholder
Merger; Independent Director; Internal Revenue Code; Net Proceeds; Permitted
Indebtedness; Permitted Investments; Permitted Holders; Permitted Liens;
Permitted Payments; Refinancing; Refinancing Indebtedness; Required Filing
Dates; Restricted Investment; Restricted Payment; and Weighted Average Life to
Maturity.

1.13     In connection with the amendments identified above, the defined term
"Consolidated Net Income" shall be deleted in its entirety, and the following is
substituted in lieu thereof.

                  ""Consolidated Net Income" means, with respect to any period,
         the net income (or loss) of the Company and its Restricted Subsidiaries
         for such period, determined on a consolidated basis in accordance with
         GAAP consistently applied, adjusted to the extent included in
         calculating such net income (or loss), by excluding, without
         duplication, (i) all extraordinary gains and losses (less all fees and
         expenses relating thereto), (ii) the portion of net income (or loss) of
         the Company and its Restricted Subsidiaries allocable to interests in
         unconsolidated Persons or Unrestricted Subsidiaries, except to the
         extent of the amount of dividends or distributions actually paid to the
         Company or its Restricted Subsidiaries by such other Person during such
         period, (iii) net gains and losses (less all fees and expenses relating
         thereto) in respect of disposition of assets (including, without
         limitation, pursuant to sale and leaseback transactions) other than in
         the ordinary course of business, or (iv) the net income of any
         Restricted Subsidiary to the extent that the declaration of dividends
         or similar distributions by that Restricted Subsidiary of that income
         to the Company is not at the time permitted, directly or indirectly, by
         operation of the terms of its charter or any agreement, instrument,
         judgment, decree, order, statute, rule or governmental regulation
         applicable to that Restricted Subsidiary or its stockholders."

1.14     In connection with the amendments identified above, the defined term
"incur" used in Section 1.1 of the Indenture shall be deleted in its entirety,
and the following is substituted in lieu thereof:

                  ""incur" means to create, incur, issue, assume or directly or
         indirectly guarantee or in any other manner become directly or
         indirectly liable for."

1.15     In connection with the amendments identified above, the defined term
"Investment" used in Section 1.1 of the Indenture shall be deleted in its
entirety and the following is substituted in lieu thereof:

                  ""Investment means, with respect to any Person, any direct or
         indirect loan or other extension of credit (including, without
         limitation, a guarantee) or capital contribution to (by means of any
         transfer of cash or other property to others or any payment for
         property or services for the account or use of others), or any purchase
         or acquisition by such Person of any Capital Stock, bonds, notes,
         debentures or other securities or evidences of Indebtedness issued by,
         any other Person. "Investment" shall exclude travel and similar
         advances to officers and employees of the Company in the ordinary
         course of business and extensions of trade credit by the Company and
         its


                                       5

         Restricted Subsidiaries on commercially reasonable terms in accordance
         with normal trade practices of the Company or such Restricted
         Subsidiary, as the case may be."

                                  ARTICLE TWO

2.1      All terms used in this Supplemental Indenture which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
such terms in the Indenture.

2.2      All of the provisions of this Supplemental Indenture shall be deemed to
be incorporated in, and made part of, the Indenture, and the Indenture, as
amended and supplemented by this Supplemental Indenture, shall be read, taken
and construed as one and the same instrument and shall be binding upon all the
Holders.

2.3      This Supplemental Indenture may be executed in any number of
counterparts, each of which so executed shall be deemed to be an original, but
all such counterparts shall together constitute but one and the same instrument.

2.4      In case any provision in this Supplemental Indenture shall be invalid,
illegal or unenforceable, the validity, legality and enforceability of the
remaining provisions shall not in any way be affected or impaired thereby.

2.5      Nothing in this Supplemental Indenture, express or implied, shall give
any person, other that the parties hereto and their successors hereunder and the
Holders, any benefit or any legal or equitable right, remedy or claim under this
Supplemental Indenture. Except as expressly supplemented or amended as set forth
in this Supplemental Indenture, the Indenture is hereby ratified and confirmed,
and all the terms, provisions and conditions thereof shall be and continue in
full force and effect. The Trustee accepts the trusts created by the Indenture,
as amended and supplemented by this Supplemental Indenture, and agrees to
perform the same upon the terms and conditions in the Indenture as amended and
supplemented by this Supplemental Indenture.

2.6      The Trustee shall not be responsible in any matter whatsoever for or in
respect of the validity or sufficiency of this Supplemental Indenture, except
with respect to the execution hereof by the Trustee, or for or in respect of the
recitals contained herein, all of which are made solely by the Company and the
Guarantors.

2.7      This Supplemental Indenture shall be governed by and construed in
accordance with the laws of the State of Ohio as applied to contracts made and
performed within the State of Ohio without regard to its principles of conflict
of laws. Each of the parties hereto agrees to submit to the jurisdiction of the
courts of the State of Ohio in any action or proceeding arising out of or
relating to this Supplemental Indenture.




                                       6



         IN WITNESS WHEREOF, the parties hereto have caused this Supplemental
Indenture to be duly executed, all as of the day and year first written above.

                                HAWK CORPORATION


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                FRICTION PRODUCTS CO.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                LOGAN METAL STAMPINGS, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                HELSEL, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                S.K. WELLMAN HOLDINGS, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg





                                       7

                                ALLEGHENY CLEARFIELD, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                HAWK MIM, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                HAWK MOTORS, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                HAWK PRECISION COMPONENTS GROUP, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                NET SHAPE TECHNOLOGIES LLC


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman









                                       8

                                QUARTER MASTER INDUSTRIES, INC.


                                By:
                                   ---------------------------------

                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                SINTERLOY CORPORATION


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                TEX RACING ENTERPRISES, INC.


                                By:
                                   ---------------------------------
                                    Name: Ronald E. Weinberg
                                    Title: Chairman



                                HSBC BANK USA, AS TRUSTEE


                                By:
                                   ---------------------------------
                                    Name:
                                    Title:




                                       9

EX-4.7

                                                                     EXHIBIT 4.7
                                                                     -----------







                                HAWK CORPORATION,

                           THE GUARANTORS NAMED HEREIN

                                       and

                                  HSBC BANK USA
                                   as Trustee

                                    INDENTURE
                       Dated as of [September ____,] 2002

                           ___% Senior Notes due 2____






                              CROSS-REFERENCE TABLE

TIA SECTION                                               INDENTURE SECTION
- -----------                                               -----------------

  310(a)(1)                                                      7.10
     (a)(2)                                                      7.10
     (a)(3)                                                      N.A.
     (a)(4)                                                      N.A.
     (a)(5)                                                      7.8; 7.10
     (b)                                                         7.8; 7.10; 11.2
     (c)                                                         N.A.
  311(a)                                                         7.11
     (b)                                                         7.11
     (c)                                                         N.A.
  312(a)                                                         2.5
     (b)                                                         11.3
     (c)                                                         11.3
  313(a)                                                         7.6
     (b)(1)                                                      N.A.
     (b)(2)                                                      7.6
     (c)                                                         7.6; 11.2
     (d)                                                         7.6
  314(a)                                                         4.6; 4.9; 11.2
     (b)                                                         N.A.
     (c)(1)                                                      11.4
     (c)(2)                                                      11.4
     (c)(3)                                                      N.A.
     (d)                                                         N.A.
     (e)                                                         11.5
     (f)                                                         N.A.
  315(a)                                                         7.1(b)
     (b)                                                         7.5; 11.2
     (c)                                                         7.1(a)
     (d)                                                         7.1(c)
     (e)                                                         6.11
  316(a)(last sentence)                                          2.9
     (a)(1)(A)                                                   6.5
     (a)(1)(B)                                                   6.4
     (a)(2)                                                      N.A.
     (b)                                                         6.7
     (c)                                                         9.4
  317(a)(1)                                                      6.8
     (a)(2)                                                      6.9
     (b)                                                         2.4
  318(a)                                                         11.1
     (b)
     (c)                                                         11.1

N.A. means Not Applicable

NOTE:    This Cross-Reference table shall not, for any purpose, be deemed to be
         a part of this Indenture.






                                TABLE OF CONTENTS



                                                                                                               Page

                                                                                                             
ARTICLE I DEFINITIONS AND INCORPORATION BY REFERENCE..............................................................1
   SECTION 1.1           Definitions..............................................................................1
   SECTION 1.2           Incorporation by Reference of TIA.......................................................14
   SECTION 1.3           Rules of Construction...................................................................15

ARTICLE II THE NOTES.............................................................................................15
   SECTION 2.1           Form and Dating.........................................................................15
   SECTION 2.2           Execution and Authentication; Aggregate Principal Amount................................16
   SECTION 2.3           Registrar and Paying Agent..............................................................17
   SECTION 2.4           Paying Agent To Hold Assets in Trust....................................................17
   SECTION 2.5           Noteholder Lists........................................................................17
   SECTION 2.6           Transfer and Exchange...................................................................18
   SECTION 2.7           Replacement Notes.......................................................................18
   SECTION 2.8           Outstanding Notes.......................................................................18
   SECTION 2.9           Treasury Notes..........................................................................19
   SECTION 2.10          Temporary Notes.........................................................................19
   SECTION 2.11          Cancellation............................................................................19
   SECTION 2.12          Defaulted Interest......................................................................20
   SECTION 2.13          CUSIP Number............................................................................20
   SECTION 2.14          Deposit of Monies.......................................................................20
   SECTION 2.15          Restrictive Legends.....................................................................21
   SECTION 2.16          Book-Entry Provisions for Global Security...............................................21

ARTICLE III REDEMPTION...........................................................................................22
   SECTION 3.1           Notices to Trustee......................................................................22
   SECTION 3.2           Selection of Notes To Be Redeemed.......................................................22
   SECTION 3.3           Notice of Redemption....................................................................23
   SECTION 3.4           Effect of Notice of Redemption..........................................................24
   SECTION 3.5           Deposit of Redemption Price.............................................................24
   SECTION 3.6           Notes Redeemed in Part..................................................................24

ARTICLE IV COVENANTS.............................................................................................25
   SECTION 4.1           Payment of Notes........................................................................25
   SECTION 4.2           Maintenance of Office or Agency.........................................................25
   SECTION 4.3           Corporate Existence.....................................................................25
   SECTION 4.4           Payment of Taxes and Other Claims.......................................................26
   SECTION 4.5           Maintenance of Properties and Insurance.................................................26
   SECTION 4.6           Compliance Certificate; Notice of Default...............................................26
   SECTION 4.7           Compliance with Laws....................................................................27
   SECTION 4.8           Waiver of Stay, Extension or Usury Laws.................................................27
   SECTION 4.9           Provision of Financial Statements and Information.......................................27
   SECTION 4.10          Limitation on Incurrence of Indebtedness................................................28


                                       i


                                                                                                             
   SECTION 4.11          Limitation on Restricted Payments.......................................................31
   SECTION 4.12          Limitation on Liens.....................................................................33
   SECTION 4.13          Limitation on Dividends and Other Payment Restrictions Affecting
                         Restricted Subsidiaries.................................................................33
   SECTION 4.14          Limitation on Transactions with Affiliates..............................................34
   SECTION 4.15          Change of Control.......................................................................35
   SECTION 4.16          Limitation on Asset Sales...............................................................37
   SECTION 4.17          Limitation on Designation of Unrestricted Subsidiaries..................................39

ARTICLE V SUCCESSOR CORPORATION..................................................................................40
   SECTION 5.1           Merger, Consolidation and Sale of Assets................................................40
   SECTION 5.2           Successor Corporation Substituted.......................................................41

ARTICLE VI DEFAULT AND REMEDIES..................................................................................42
   SECTION 6.1           Events of Default.......................................................................42
   SECTION 6.2           Acceleration............................................................................43
   SECTION 6.3           Other Remedies..........................................................................44
   SECTION 6.4           Waiver of Past Defaults.................................................................44
   SECTION 6.5           Control by Majority.....................................................................44
   SECTION 6.6           Limitation on Suits.....................................................................45
   SECTION 6.7           Rights of Holders To Receive Payment....................................................45
   SECTION 6.8           Collection Suit by Trustee..............................................................45
   SECTION 6.9           Trustee May File Proofs of Claim........................................................46
   SECTION 6.10          Priorities..............................................................................46
   SECTION 6.11          Undertaking for Costs...................................................................47

ARTICLE VII TRUSTEE..............................................................................................47
   SECTION 7.1           Duties of Trustee.......................................................................47
   SECTION 7.2           Rights of Trustee.......................................................................48
   SECTION 7.3           Individual Rights of Trustee............................................................49
   SECTION 7.4           Trustee's Disclaimer....................................................................49
   SECTION 7.5           Notice of Default.......................................................................49
   SECTION 7.6           Reports by Trustee to Holders...........................................................50
   SECTION 7.7           Compensation and Indemnity..............................................................50
   SECTION 7.8           Replacement of Trustee..................................................................51
   SECTION 7.9           Successor Trustee by Merger, Etc........................................................52
   SECTION 7.10          Eligibility; Disqualification...........................................................52
   SECTION 7.11          Preferential Collection of Claims Against Company.......................................52

ARTICLE VIII SATISFACTION AND DISCHARGE; DEFEASANCE..............................................................52
   SECTION 8.1           Satisfaction and Discharge of Indenture.................................................52
   SECTION 8.2           Defeasance or Covenant Defeasance.......................................................53
   SECTION 8.3           Application of Trust Money..............................................................55
   SECTION 8.4           Repayment to the Company................................................................56
   SECTION 8.5           Reinstatement...........................................................................56
   SECTION 8.6           Acknowledgment of Discharge by Trustee..................................................56





                                       ii


                                                                                                             
ARTICLE IX AMENDMENTS, SUPPLEMENTS AND WAIVERS...................................................................57
   SECTION 9.1           Without Consent of Holders and any Guarantor............................................57
   SECTION 9.2           With Consent of Holders.................................................................57
   SECTION 9.3           Compliance with TIA.....................................................................59
   SECTION 9.4           Revocation and Effect of Consents.......................................................59
   SECTION 9.5           Notation on or Exchange of Notes........................................................59
   SECTION 9.6           Trustee To Sign Amendments, Etc.........................................................60

ARTICLE X NOTE GUARANTEES........................................................................................60
   SECTION 10.1          Unconditional Note Guarantee............................................................60
   SECTION 10.2          Severability............................................................................61
   SECTION 10.3          Successors and Assigns; Release of a Guarantor..........................................61
   SECTION 10.4          Limitation of Guarantor's Liability.....................................................62
   SECTION 10.5          Contribution............................................................................62
   SECTION 10.6          Waiver of Subrogation...................................................................62
   SECTION 10.7          Execution of Note Guarantee.............................................................63
   SECTION 10.8          Waiver of Stay, Extension or Usury Laws.................................................63
   SECTION 10.9          Additional Guarantors...................................................................63
   SECTION 10.10         Modification............................................................................64

ARTICLE XI MISCELLANEOUS.........................................................................................64
   SECTION 11.1          TIA Controls............................................................................64
   SECTION 11.2          Notices.................................................................................64
   SECTION 11.3          Communications by Holders with Other Holders............................................65
   SECTION 11.4          Certificate and Opinion as to Conditions Precedent......................................65
   SECTION 11.5          Statements Required in Certificate or Opinion...........................................66
   SECTION 11.6          Rules by Trustee, Paying Agent, Registrar...............................................66
   SECTION 11.7          Legal Holidays..........................................................................66
   SECTION 11.8          Governing Law...........................................................................66
   SECTION 11.9          No Adverse Interpretation of Other Agreements...........................................66
   SECTION 11.10         No Recourse Against Others..............................................................67
   SECTION 11.11         Successors..............................................................................67
   SECTION 11.12         Duplicate Originals.....................................................................67
   SECTION 11.13         Severability............................................................................67
   SECTION 11.14         Independence of Covenants...............................................................67




                                      iii





         INDENTURE, dated as of September __, 2002, between Hawk Corporation, a
Delaware corporation (the "Company"), the Guarantors (as defined herein), and
HSBC Bank USA , a New York banking corporation and trust company, as Trustee
(the "Trustee").

         The Company has duly authorized the creation of an issue of ____%
Senior Notes due 2___ (collectively, the "Notes") such Notes to be issued
initially in connection with the exchange of certain 10 1/4% Senior Notes due
2003 (collectively, the "Old Notes") issued by the Company pursuant to an
indenture dated November 27, 1996 (as amended and supplemented, the "Old
Indenture") and, to provide therefor, the Company has duly authorized the
execution and delivery of this Indenture. All things necessary to make the
Notes, when duly issued and executed by the Company, and authenticated and
delivered hereunder, the valid obligations of the Company, and to make this
Indenture a valid and binding agreement of the Company, have been done.

         Each party hereto agrees as follows for the benefit of the other party
and for the equal and ratable benefit of the Holders of the Notes:

                                   ARTICLE I

                   DEFINITIONS AND INCORPORATION BY REFERENCE

         SECTION 1.1 DEFINITIONS.

                  "Acquired Debt" means Indebtedness of an Acquired Person
existing at the time the Acquired Person merges with or into, or becomes a
Restricted Subsidiary of, such specified Person, including Indebtedness incurred
in connection with, or in contemplation of, the Acquired Person merging with or
into, or becoming a Restricted Subsidiary of, such specified Person; provided,
however, that Indebtedness of such Acquired Person which is redeemed, defeased,
retired or otherwise repaid at the time of or immediately upon consummation of
the transactions by which such Acquired Person merges with or into or becomes a
Restricted Subsidiary of such specified Person shall not be Acquired Debt.

                  "Acquired Person" means a person merged with or into the
Company.

                  "Additional Notes" means Notes issued under this Indenture as
provided in Section 2.2 in addition to the Initial Notes.

                  "Affiliate" means, with respect to any specified Person, any
other Person directly or indirectly controlling or controlled by or under direct
or indirect common control with such specified Person. For purposes of this
definition, "Control" (including, with correlative meanings, the terms
"controlling", "controlled by" and "under common control with") of any Person
means the possession, directly or indirectly, of the power to direct or cause
the direction of the management and policies of such Person, whether through the
ownership of voting securities, by agreement or otherwise.

                  "Agent" means any Registrar, Paying Agent or co-Registrar.



                  "Agent Members" has the meaning provided in Section 2.16(a).

                  "Asset Sale" means (i) any sale, lease, conveyance or other
disposition by the Company or any Restricted Subsidiary of any assets (including
by way of a sale-and-leaseback) other than in the ordinary course of business,
or (ii) the issuance or sale of Capital Stock of any Restricted Subsidiary, in
the case of each of (i) and (ii), whether in a single transaction or a series of
related transactions, to any Person (other than to the Company or a Restricted
Subsidiary and other than directors' qualifying shares) for Net Proceeds in
excess of $100,000.

                  "Asset Sale Offer" has the meaning provided in Section
4.16(c).

                  "Asset Sale Offer Purchase Date" has the meaning provided in
Section 4.16(d).

                  "Asset Sale Offer Trigger Date" has the meaning provided in
Section 4.16(c).

                  "Authenticating Agent" has the meaning provided in Section
2.2.

                  "Bankruptcy Law" means Title 11, U.S. Code or any similar
Federal, state or foreign law for the relief of debtors.

                  "Board of Directors" means, as to (a) any corporate Person,
the board of directors of such Person or any duly authorized committee thereof,
(b) any partnership, limited liability company or comparably organized Person
which is ultimately controlled by a corporate general partner, managing member
or other corporation, the "Board of Directors" of such corporation as specified
in clause (a) of this definition and (c) any partnership, limited liability
company or comparably organized Person which is ultimately controlled by
individuals, such controlling individuals.

                  "Board Resolution" means, with respect to any Person, a duly
adopted resolution of the Board of Directors.

                  "Business Day" means a day that is not a Legal Holiday.

                  "Capital Lease Obligation" of any Person means, at the time
any determination thereof is to be made, the amount of the liability in respect
of a capital lease for property leased by such Person that would at such time be
required to be capitalized on the balance sheet of such Person in accordance
with GAAP.

                  "Capital Stock" of any Person means any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests in (however designated) corporate stock or other
equity participations, including partnership and limited liability company
interests, whether general or limited, of such Person, including any Preferred
Stock.

                  "Cash Equivalents" means (i) marketable direct obligations
issued by, or unconditionally guaranteed by, the United States Government or
issued by any agency thereof and backed by the full faith and credit of the
United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of



                                       2


the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from either Standard & Poor's Rating Services or
Moody's Investors Service, Inc.; (iii) commercial paper maturing no more than
one year from the date of creation thereof and, at the time of acquisition,
having a rating of at least A-1 from Standard & Poor's Rating Services or at
least P-1 from Moody's Investors Service, Inc.; (iv) certificates of deposit or
bankers' acceptances (or, with respect to foreign banks, similar instruments)
maturing within one year from the date of acquisition thereof issued by any bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or any U.S. branch of a foreign bank having at the date
of acquisition thereof combined capital and surplus of not less than $200
million; (v) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (iv) above; and
(vi) investments in money market funds that invest substantially all their
assets in securities of the types described in clauses (i) through (v) above.

                  "Cash Flow" means, with respect to any period, Consolidated
Net Income for such period, plus, to the extent deducted in computing such
Consolidated Net Income: (i) extraordinary net losses, plus (ii) provision for
taxes based on income or profits and any provision for taxes utilized in
computing the extraordinary net losses under clause (i) hereof, plus (iii)
Consolidated Interest Expense, plus (iv) depreciation, amortization and all
other non-cash charges (including amortization of goodwill and other
intangibles).

                  "Change of Control" means the occurrence of any of the
following events after the Issue Date: (i) any "person" or "group" (as such
terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other than one
or more Permitted Holders) is or becomes (including by merger, consolidation or
otherwise) the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a Person shall be deemed to have beneficial ownership
of all shares that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly or
indirectly, of 50% or more of the voting power of the total outstanding Voting
Stock of the Company; (ii) during any period of two consecutive years,
individuals who at the beginning of such period constituted the Board of
Directors of the Company (together with any new directors whose election to such
Board of Directors, or whose nomination for election by the stockholders of the
Company, was approved by a vote of 66 2/3% of the directors then still in office
who were either directors at the beginning of such period or whose election or
nomination for election was previously so approved) cease for any reason to
constitute a majority of such Board of Directors of the Company then in office;
(iii) the approval by the holders of Capital Stock of the Company of any plan or
proposal for the liquidation or dissolution of the Company (whether or not
otherwise in compliance with the terms of this Indenture); or (iv) the sale or
other disposition (including by merger, consolidation or otherwise) of all or
substantially all of the Capital Stock or assets of the Company to any Person or
group (as defined in Rule 13d-5 of the Exchange Act) (other than to one or more
of the Permitted Holders) as an entirety or substantially as an entirety in one
transaction or a series of related transactions.

                  "Change of Control Offer" has the meaning provided in Section
4.15(a).


                                       3


                  "Change of Control Purchase Date" has the meaning provided in
Section 4.15(b).

                  "Commission" means the Securities and Exchange Commission, as
from time to time constituted or, if at any time after the execution of this
Indenture such Commission is not existing and performing the duties now assigned
to it under the TIA, then the body performing such duties at such time.

                  "Common Stock" of any Person means any and all shares,
interests, participations, or other equivalents (however designated) of such
Person's common stock whether now outstanding or issued after the Issue Date.

                  "Company" means the party named as such in the first paragraph
of this Indenture until a successor replaces it pursuant to this Indenture and
thereafter means such successor.

                  "Consolidated Cash Flow Coverage Ratio" means, for any period,
the ratio of (i) the aggregate amount of Cash-Flow for such period, to (ii)
Consolidated Interest Expense for such period, determined on a pro forma basis
after giving pro forma effect to (a) the incurrence of the Indebtedness giving
rise to the calculation of the Consolidated Cash Flow Coverage Ratio and (if
applicable) the application of the net proceeds therefrom, including to
refinance other Indebtedness, as if such Indebtedness was incurred, and the
application of such proceeds occurred, at the beginning of such period; (b) the
incurrence, repayment or retirement of any other Indebtedness by the Company and
its Restricted Subsidiaries since the first day of such period as if such
Indebtedness was incurred, repaid or retired at the beginning of such period
(except that, in making such computation, the amount of Indebtedness under any
revolving credit facility shall be computed based upon the average balance of
such Indebtedness at the end of each month during such period); (c) in the case
of Acquired Debt, the related acquisition as if such acquisition had occurred at
the beginning of such period; and (d) any acquisition or disposition by the
Company and its Restricted Subsidiaries of any company or any business or any
assets out of the ordinary course of business, or any related repayment of
Indebtedness, in each case since the first day of such period, assuming such
acquisition or disposition had been consummated on the first day of such period.

                  "Consolidated Interest Expense" means, with respect to any
period, the sum of (i) the interest expense of the Company and its Restricted
Subsidiaries for such period, including, without limitation, (a) amortization of
debt discount, (b) the net payments, if any, under interest rate contracts
(including amortization of discounts), (c) the interest portion of any deferred
payment obligation and (d) accrued interest, plus (ii) the interest component of
the Capital Lease Obligations paid, accrued and/or scheduled to be paid or
accrued by the Company and its Restricted Subsidiaries during such period, and
all capitalized interest of the Company and its Restricted Subsidiaries, plus
(iii) all dividends paid during such period by the Company and its Restricted
Subsidiaries with respect to any Disqualified Stock (other than by any
Restricted Subsidiary to the Company or any other Restricted Subsidiary and
other than any dividend paid in Capital Stock (other than Disqualified Stock)),
and all dividends paid during such period by any Restricted Subsidiary with
respect to any Preferred Stock, in each case, as determined on a consolidated
basis in accordance with GAAP consistently applied.


                                       4


                  "Consolidated Net Income" means, with respect to any period,
the net income (or loss) of the Company and its Restricted Subsidiaries for such
period, determined on a consolidated basis in accordance with GAAP consistently
applied, adjusted to the extent included in calculating such net income (or
loss), by excluding, without duplication, (i) all extraordinary gains and losses
(less all fees and expenses relating thereto), (ii) the portion of net income
(or loss) of the Company and its Restricted Subsidiaries allocable to interests
in unconsolidated Persons or Unrestricted Subsidiaries, except to the extent of
the amount of dividends or distributions actually paid to the Company or its
Restricted Subsidiaries by such other Person during such period, (iii) for
purposes of Section 4.11, net income (or loss) of any Person combined with the
Company or any of its Restricted Subsidiaries on a "pooling of interests" basis
attributable to any period prior to the date of combination, (iv) net gains and
losses (less all fees and expenses relating thereto) in respect of disposition
of assets (including, without limitation, pursuant to sale and leaseback
transactions) other than in the ordinary course of business, or (v) the net
income of any Restricted Subsidiary to the extent that the declaration of
dividends or similar distributions by that Restricted Subsidiary of that income
to the Company is not at the time permitted, directly or indirectly, by
operation of the terms of its charter or any agreement, instrument, judgment,
decree, order, statute, rule or governmental regulation applicable to that
Restricted Subsidiary or its stockholders.

                  "Consolidated Net Worth" of any Person means the consolidated
stockholders' equity of such Person, determined on a consolidated basis in
accordance with GAAP, less (without duplication) amounts attributable to
Disqualified Stock of such person.

                  "Covenant Defeasance" has the meaning provided in Section
8.2(b).

                  "Currency Agreement Obligations" means the obligations of any
person under a foreign exchange contract, currency swap agreement or other
similar agreement or arrangement to protect such person against fluctuations in
currency values.

                  "Custodian" means any receiver, trustee, assignee, liquidator,
sequestrator or similar official under any Bankruptcy Law.

                  "Default" means any event that is, or after the giving of
notice or passage of time or both would be, an Event of Default.

                  "Default Interest Payment Date" has the meaning provided in
Section 2.12.

                  "Defeasance" has the meaning provided in Section 8.2(a).

                  "Designation" has the meaning provided in Section 4.17(a).

                  "Designation Amount" has the meaning provided in Section
4.17(a).

                  "Disposition" means, with respect to any Person, any merger,
consolidation or other business combination involving such Person (whether or
not such Person is the Surviving Person) or the sale, assignment, transfer,
lease, conveyance or other disposition of all or substantially all of such
Person's assets.


                                       5


                  "Disqualified Stock" means (i) any Preferred Stock of any
Restricted Subsidiary and (ii) that portion of any Capital Stock that, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event, matures or is
mandatorily redeemable, pursuant to a sinking fund obligation or otherwise, or
is redeemable at the option of the holder thereof (other than upon a change of
control of the Company in circumstances where the holders of the Notes would
have similar rights), in whole or in part on or prior to the stated maturity of
the Notes.

                  "Dollars" and "$" means lawful money of the United States of
America.

                  "DTC" means The Depository Trust Company, its nominees and
successors.

                  "Event of Default" has the meaning provided in Section 6.1.

                  "Excess Proceeds" has the meaning provided in Section 4.16(b).

                  "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

                  "Existing Indebtedness" has the meaning provided in Section
4.10(b)(iii).

                  "Fair Market Value" means, with respect to any asset or
property, the sale value that would be obtained in an arm's-length transaction
between an informed and willing seller under no compulsion to sell and an
informed and willing buyer under no compulsion to buy.

                  "Foreign Subsidiary" means a Restricted Subsidiary not
organized under the laws of the United States or any political subdivision
thereof and the operations of which are located entirely outside the United
States.

                  "GAAP" means generally accepted accounting principles in the
United States set forth in the Statements of Financial Accounting Standards and
the Interpretations, Accounting Principles Board Opinions and American Institute
of Certified Public Accountants Accounting Research Bulletins.

                  "Global Note" means a Note that evidences all or part of the
Note that is issued to a Depositary or a nominee thereof in accordance with
Section 2.2.

                  "Guarantee" means, as applied to any obligation, (1) a
guarantee (other than endorsement of negotiable instruments for collection in
the ordinary course of business), direct or indirect, in any manner, of any part
or all of such obligation and (2) an agreement, direct or indirect, contingent
or otherwise, the practical effect of which is to assure in any way the payment
or performance (or payment of damages in the event of non-performance) of all or
any part of such obligation, including, without limiting the foregoing, the
payment of amounts drawn down by letters of credit.

                  "Guarantor" means (i) each Subsidiary of the Company in
existence on the Issue Date which are each of Allegheny Clearfield, Inc.,
Friction Products Co., Hawk MIM, Inc., Hawk Motors, Inc., Hawk Precision
Components Group, Inc., Helsel, Inc., Logan Metal Stamping, Inc., Net Shape
Technologies LLC, Quarter Master Industries, Inc., S.K. Wellman


                                       6

Holdings, Inc., S.K. Wellman Corp., Sinterloy Corp., Tex Racing Enterprises,
Inc. and (ii) each Subsidiary (other than Foreign Subsidiaries and Unrestricted
Subsidiaries) created or acquired by the Company after the Issue Date that
guarantees the Notes.

                  "Holder" means the Person in whose name a Note is registered
on the Registrar's books.

                  "incur" has the meaning provided in Section 4.10(a).

                  "Indebtedness" means, with respect to any Person, without
duplication, and whether or not contingent, (i) all indebtedness of such Person
for borrowed money or which is evidenced by a note, bond, debenture or similar
instrument, (ii) all obligations of such Person to pay the deferred or unpaid
purchase price of property or services, which purchase price is due more than
six months after the date of placing such property in service or taking delivery
and title thereto or the completion of such service, (iii) all Capital Lease
Obligations of such Person, (iv) all obligations of such Person in respect of
letters of credit or bankers' acceptances issued or created for the account of
such Person, (v) to the extent not otherwise included in this definition, all
net obligations of such Person under Interest Rate Agreement Obligations or
Currency Agreement Obligations of such Person, (vi) all liabilities of others of
the kind described in the preceding clause (i), (ii) or (iii) secured by any
Lien on any property owned by such Person; provided, however, if the obligations
secured by a Lien (other than a Permitted Lien not securing any liability that
would itself constitute Indebtedness) on any assets or property have not been
assumed by such Person in full or are not such Person's legal liability in full,
the amount of such Indebtedness for purposes of this definition shall be limited
to the lesser of the amount of Indebtedness secured by such Lien and the Fair
Market Value of the property subject to such Lien, (vii) all Disqualified Stock
issued by such Person and all Preferred Stock issued by a Subsidiary of such
Person, and (viii) to the extent not otherwise included, any guarantee by such
Person of any other Person's indebtedness or other obligations described in
clauses (i) through (vii) above. "Indebtedness" of the Company and the
Restricted Subsidiaries shall not include current trade payables incurred in the
ordinary course of business and payable in accordance with customary practices,
and non-interest bearing installment obligations and accrued liabilities
incurred in the ordinary course of business that are not more than 90 days past
due. The principal amount outstanding of any Indebtedness issued with original
issue discount is the accreted value of such Indebtedness. Notwithstanding the
foregoing, Indebtedness shall not include Indebtedness arising from the honoring
by a bank or other financial institution of a check, draft or similar instrument
inadvertently drawn against insufficient funds in the ordinary course of
business; provided that such Indebtedness is extinguished within 3 Business Days
of the incurrence thereof.

                  "Indenture" means this Indenture, as amended or supplemented
from time to time in accordance with the terms hereof.

                  "Independent Director" means a director of the Company other
than a director (i) who (apart from being a director of the Company or any
Subsidiary of the Company) is an employee, associate or Affiliate of the Company
or a Subsidiary of the Company, or (ii) who is a director, employee, associate
or Affiliate of another party (other than the Company or any of its
Subsidiaries) to the transaction in question.


                                       7


                  "Initial Notes" means the Notes initially issued under this
Indenture as provided in Section 2.2 hereof.

                  "Interest" on the Notes means interest on the Notes.

                  "Interest Payment Date" means the stated maturity of a payment
of interest on the Notes.

                  "Interest Rate Agreement Obligations" means, with respect to
any Person, the Obligations of such Person under (i) interest rate swap
agreements, interest rate cap agreements and interest rate collar agreements,
and (ii) other agreements or arrangements designed to protect such Person
against fluctuations in interest rates.

                  "Internal Revenue Code" means the Internal Revenue Code of
1986, as amended, to the date hereof and from time to time hereafter.

                  "Investment" means, with respect to any Person, any direct or
indirect loan or other extension of credit (including, without limitation, a
guarantee) or capital contribution to (by means of any transfer of cash or other
property to others or any payment for property or services for the account or
use of others), or any purchase or acquisition by such Person of any Capital
Stock, bonds, notes, debentures or other securities or evidences of Indebtedness
issued by, any other Person. "Investment" shall exclude travel and similar
advances to officers and employees of the Company in the ordinary course of
business and extensions of trade credit by the Company and its Restricted
Subsidiaries on commercially reasonable terms in accordance with normal trade
practices of the Company or such Restricted Subsidiary, as the case may be. For
the purposes of Section 4.11, (i) "Investment" shall include and be valued at
the Fair Market Value of the net assets of any Restricted Subsidiary (to the
extent of the Company's equity interest in such Restricted Subsidiary) at the
time that such Restricted Subsidiary is designated an Unrestricted Subsidiary
and shall exclude the Fair Market Value of the net assets of any Unrestricted
Subsidiary at the time that such Unrestricted Subsidiary is designated a
Restricted Subsidiary and (ii) the amount of any Investment shall be the
original cost of such Investment plus the cost of all additional Investments by
the Company or any of its Restricted Subsidiaries, without any adjustments for
increases or decreases in value, or write-ups, write-downs or write-offs with
respect to such Investment, reduced by the payment of dividends or distributions
in connection with such Investment or any other amounts received in respect of
such Investment; provided, however, that no such payment of dividends or
distributions or receipt of any such other amounts shall reduce the amount of
any Investment if such payment of dividends or distributions or receipt of any
such amounts would be included in Consolidated Net Income. If the Company or any
Restricted Subsidiary of the Company sells or otherwise disposes of any Common
Stock of any direct or indirect Restricted Subsidiary of the Company such that,
after giving effect to any such sale or disposition, the Company no longer owns,
directly or indirectly, greater than 50% of the outstanding Common Stock of such
Restricted Subsidiary, the Company shall be deemed to have made an Investment on
the date of any such sale or disposition equal to the Fair Market Value of the
Common Stock of such Restricted Subsidiary not sold or disposed of.


                                       8


                  "Issue Date" means September ___, 2002, the date the Initial
Notes are issued under this Indenture.

                  "Legal Holiday" has the meaning provided in Section 11.7.

                  "Lien" means, with respect to any asset, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
asset, whether or not filed, recorded or otherwise perfected under applicable
law (including any conditional sale or other title retention agreement, any
lease in the nature thereof, any option or other agreement to sell or give a
security interest in any asset and any filing of, or agreement to give, any
financing statement under the Uniform Commercial Code (or equivalent statutes)
of any jurisdiction).

                  "Maturity Date" means December 1, 2____.

                  "Net Proceeds" means, with respect to any Asset Sale by any
Person, the aggregate cash or Cash Equivalent proceeds received by such Person
and/or its Affiliates in respect of such Asset Sale, which amount is equal to
the excess, if any, of (i) the cash or Cash Equivalent received by such Person
and/or its Affiliates (including any cash payments received by way of deferred
payment pursuant to, or monetization of, a note or installment receivable or
otherwise, but only as and when received) in connection with such Asset Sale,
over (ii) the sum of (a) the amount of any Indebtedness that is secured by such
asset and which is required to be repaid by such Person in connection with such
Asset Sale, plus (b) all fees, commissions and other expenses incurred by such
Person in connection with such Asset Sale, plus (c) provision for taxes,
including income taxes, directly attributable to the Asset Sale or to required
prepayments or repayments of Indebtedness with the proceeds of such Asset Sale.,
plus (d) if such Person is a Restricted Subsidiary, any dividends or
distributions payable to holders of minority interests in such Restricted
Subsidiary from the proceeds of such Asset Sale.

                  "New Credit Facility" means any new senior secured credit
facilities among the Company, certain of its Subsidiaries, and the lenders named
therein as the same may be amended, modified, renewed, refunded, replaced or
refinanced from time to time, including (1) any related notes, letters of
credit, guarantees, collateral documents, instruments and agreements executed in
connection therewith, and in each case as amended, modified, renewed, refunded,
replaced or refinanced from time to time, and (2) any notes, guarantees,
collateral documents, instruments and agreements executed in connection with any
such amendment, modification, renewal, refunding, replacement or refinancing.

                  "Non-U.S. Person" means a person who is not a U.S. person, as
defined in Regulation S.

                  "Note Guarantee" means the guarantee of the Notes by a
Guarantor as described in Section 10.1.

                  "Notes" mean the Initial Notes and the Additional Notes, if
any, treated as a single class of securities, as amended or supplemented from
time to time in accordance with the terms hereof, that are issued pursuant to
this Indenture.


                                       9


                  "Obligations" means any principal, interest, penalties, fees,
indemnifications, reimbursement obligations, damages and other liabilities
payable under the documentation governing any Indebtedness including all
obligations of the Company and the Guarantors under this Indenture, the Notes
and the Note Guarantees.

                  "Officer" means, with respect to any Person, the Chairman of
the Board, the Senior Chairman of the Board, the Chief Executive Officer, the
President, any Vice President, the Chief Operating Officer, the Controller, or
the Secretary of such Person, or any other officer designated by the Board of
Directors serving in a similar capacity.

                  "Officers' Certificate" means, with respect to any Person, a
certificate signed by two Officers or by an Officer and either an Assistant
Treasurer or an Assistant Secretary of such Person and otherwise complying with
the requirements of Sections 11.4 and 11.5, as they relate to the making of an
Officers' Certificate, and delivered to the Trustee.

                  "Old Indenture" has the meaning provided in the preamble to
this Indenture.

                  "Old Notes" has the meaning provide in the preamble to this
Indenture.

                  "Original Issue Date" means November 27, 1996, the issue date
of the Old Notes under the Old Indenture.

                  "Opinion of Counsel" means a written opinion from legal
counsel who is reasonably acceptable to the Trustee complying with the
requirements of Sections 11.4 and 11.5, as they relate to the giving of an
Opinion of Counsel.

                  "Paying Agent" has the meaning provided in Section 2.3.

                  "Permitted Holders" means any of Norman C. Harbert, Ronald E.
Weinberg, Byron S. Krantz or any "group" (as defined in Rule 13d-5 of the
Exchange Act) consisting of any or all of the foregoing.

                  "Permitted Indebtedness" has the meaning provided in Section
4.10(b).

                  "Permitted Investments" means (i) any Investment in the
Company or any Restricted Subsidiary that is a Guarantor of the Notes; (ii) any
investment in cash or Cash Equivalents; (iii) any Investment in an Acquired
Person if, as a result of such Investment, (a) the Acquired Person becomes a
Restricted Subsidiary and becomes a Guarantor of the Notes or (b) the Acquired
Person either (1) is merged, consolidated or amalgamated with or into the
Company or one of its Restricted Subsidiaries that is a Guarantor of the Notes
and the Company or such Restricted Subsidiary is the Surviving Person, or (2)
transfers or conveys substantially all of its assets to, or is liquidated into,
the Company or one of its Restricted Subsidiaries that is a Guarantor of the
Notes; provided that any Investment pursuant to this clause (iii) in a Person
that is or becomes a Foreign Subsidiary shall not constitute the transfer of
property (other than cash); (iv) Investments in accounts and notes receivable
acquired in the ordinary course of business; (v) any notes, obligations or other
securities received in connection with an Asset Sale that complies with Section
4.16; (vi) Interest Rate Obligations and Currency Agreement Obligations
permitted pursuant to Section 4.10(b)(v); and (vii) investments in or
acquisitions of Capital Stock or


                                       10


similar interests in Persons (other than Affiliates of the Company) received in
the bankruptcy or reorganization of or by such Person or any exchange of such
investment with the issuer thereof or taken in settlement of or other resolution
of claims or disputes.

                  "Permitted Liens" means (i) Liens securing Indebtedness under
any New Credit Facility; (ii) Liens securing Indebtedness of a Person existing
at the time that such Person is merged into or consolidated with the Company or
a Restricted Subsidiary; provided, however, that such Liens were in existence
prior to the contemplation of such merger or consolidation and do not extend to
any assets other than those of such Person; (iii) Liens on property acquired by
the Company or a Restricted Subsidiary; provided, however,, that such Liens were
in existence prior to the contemplation of such acquisition and do not extend to
any other property; (iv) Liens in respect of Interest Rate Obligations and
Currency Agreement Obligations permitted under this Indenture; (v) Liens in
favor of the Company, any Restricted Subsidiary or any Guarantor; (vi) Liens
existing or created on the Issue Date; (vii) Liens securing the Notes; and
(viii) Liens securing Permitted Indebtedness of the Company or any Restricted
Subsidiary representing the Capitalized Lease Obligations and any refinancings
thereof or, in respect of Purchase Money Obligations for property acquired,
constructed or improved in the ordinary course of business and any refinancings
thereof, that taken together in the aggregate do not exceed $5.0 million at any
time outstanding.

                  "Permitted Payments" has the meaning provided in Section
4.11(b).

                  "Person" means any individual, corporation, partnership, joint
venture, association, joint-stock company, limited liability company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.

                  "Preferred Stock" as applied to the Capital Stock of any
Person, means Capital Stock of any class or classes (however designated) which
is preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over Capital Stock of any other class of such
Person.

                  "Principal" of any Indebtedness (including the Notes) means
the principal amount of such Indebtedness plus the premium, if any, on such
Indebtedness.

                  "Public Equity Offering" means an underwritten public offering
of Capital Stock (other than Disqualified Capital Stock) of the Company pursuant
to an effective registration statement filed under the Securities Act.

                  "Purchase Money Obligation" means any Indebtedness secured by
a Lien on assets related to the business of the Company or the Restricted
Subsidiaries, and any additions and accessions thereto, which are purchased,
constructed or improved by the Company or any Restricted Subsidiary at any time
after the Issue Date; provided, however,, that (i) any security agreement or
conditional sales or other title retention contract pursuant to which the Lien
on such assets is created (collectively, a "Security Agreement") shall be
entered into within 90 days after the purchase or substantial completion of the
construction or improvement of such assets and shall at all times be confined
solely to the assets so purchased, constructed or improved, any additions and
accessions thereto and any proceeds therefrom, (ii) at no time shall the
aggregate


                                       11


principal amount of the outstanding Indebtedness secured thereby be increased,
except in connection with the purchase of additions and accessions thereto and
except in respect of fees and other obligations in respect of such indebtedness
and (iii) (a) the aggregate outstanding principal amount of Indebtedness secured
thereby (determined on a per asset basis in the case of any additions and
accessions) shall not at the time such Security Agreement is entered into exceed
100% of the purchase price or cost of construction or improvement to the Company
or any Restricted Subsidiary of the assets subject thereto or (b) the
Indebtedness secured thereby shall be with recourse solely to the assets so
purchased, constructed or improved, any additions and accessions thereto and any
proceeds therefrom.

                  "Record Date" means the Record Dates specified in the Notes;
provided, however, that if any such date is a Legal Holiday, the Record Date
shall be the first day immediately preceding such specified day that is not a
Legal Holiday.

                  "Redemption Date," when used with respect to any Note to be
redeemed, means the date fixed for such redemption pursuant to this Indenture
and the Notes.

                  "Redemption Price," when used with respect to any Note to be
redeemed, means the price fixed for such redemption pursuant to this Indenture
and the Notes.

                  "Redesignation" has the meaning provided in Section 4.17(b).

                  "Refinancing" has the meaning provided in Section
4.10(b)(vii).

                  "Refinancing Indebtedness" has the meaning provided in Section
4.10(b)(vii).

                  "Registrar" has the meaning provided in Section 2.3.

                  "Required Filing Dates" has the meaning provided in Section
4.9(a).

                  "Restricted Investment" means an Investment other than a
Permitted Investment.

                  "Restricted Payment" means (i) any dividend or other
distribution declared or paid on any Capital Stock of the Company (other than
(a) dividends or distributions payable solely in Capital Stock (other than
Disqualified Stock) of the Company or (b) dividends or distributions payable to
the Company or any Restricted Subsidiary); (ii) any payment to purchase, redeem
or otherwise acquire or retire for value any Capital Stock of the Company; (iii)
any payment to purchase, redeem, defease or otherwise acquire or retire for
value, prior to any scheduled maturity, repayment or sinking fund payment, any
Subordinated Indebtedness other than a purchase, redemption, defeasance or other
acquisition or retirement for value that is paid for with the proceeds of
Refinancing Indebtedness that is permitted under Section 4.10(b)(vii); or (iv)
any Restricted Investment.

                  "Restricted Subsidiary" means each direct or indirect
Subsidiary of the Company other than an Unrestricted Subsidiary.

                  "Securities Act" means the Securities Act of 1933, as amended,
and the rules and regulations of the Commission promulgated thereunder.


                                       12


                  "Senior Debt" means the principal of and interest (including
post-petition interest) on, and all other amounts owing in respect of, (x) any
New Credit Facility, (y) Indebtedness evidenced by the Notes and (z) any other
Indebtedness incurred by the Company (including, but not limited to, reasonable
fees and expenses of counsel and all other charges, fees and expenses incurred
in connection with such Indebtedness), unless the instrument creating or
evidencing such Indebtedness or pursuant to which such Indebtedness is
outstanding expressly provides that such Indebtedness is subordinated in right
of payment to the Notes. Notwithstanding the foregoing, Senior Debt shall not
include (i) any Indebtedness for federal, state, local or other taxes, (ii) any
Indebtedness of the Company to any of its Subsidiaries or any of its Affiliates,
(iii) any Indebtedness incurred for the purchase of goods or materials, or for
services obtained, in the ordinary course of business or any obligations in
respect of any such Indebtedness, (iv) any Indebtedness that is incurred in
violation of this Indenture or (v) Indebtedness of the Company that is expressly
subordinate or junior in right of payment (other than as a result of the
indebtedness being unsecured) to any other Indebtedness of the Company.

                  "Significant Subsidiary" means any Subsidiary that would be a
"significant subsidiary" as defined in Article 1, Rule 1-02 of Regulation S-X
promulgated pursuant to the Securities Act, as such Regulation S-X is in effect
on the Issue Date.

                  "Subordinated Indebtedness" means Indebtedness of the Company
subordinated in right of payment to the Notes.

                  "Subsidiary" of a Person means (i) any corporation more than
50% of the outstanding voting power of the Voting Stock of which is owned or
controlled, directly or indirectly, by such Person or by one or more other
Subsidiaries of such Person, or by such Person and one or more other
Subsidiaries thereof, or (ii) any limited partnership of which such Person or
any Subsidiary of such Person is a general partner, or (iii) any limited
liability company of which such Person or any Subsidiary of such Person is a
manager, or (iv) any other Person (other than a corporation, limited liability
company or limited partnership) in which such Person or one or more other
Subsidiaries of such Person, or such Person and one or more other Subsidiaries
thereof, directly or indirectly, has more than 50% of the outstanding
partnership, limited liability company or similar interests or has the power, by
contract or otherwise, to direct or cause the direction of the policies,
management and affairs thereof.

                  "Surviving Person" means, with respect to any Person involved
in or that makes any Disposition, the Person formed by or surviving such
Disposition or the Person to which such Disposition is made.

                  "TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Section
77aaa-77bbbb), as amended, as in effect on the date of this Indenture, except as
otherwise provided in Section 9.3.

                  "Trust Officer" means any officer or assistant officer of the
Trustee assigned by the Trustee to administer this Indenture, or in the case of
a successor trustee, an officer assigned to the department, division or group
performing the corporation trust work of such successor and assigned to
administer this Indenture.


                                       13


                  "Trustee" means the party named as such in this Indenture
until a successor replaces it in accordance with the provisions of this
Indenture and thereafter means such successor.

                  "Unrestricted Subsidiary" means any Subsidiary of the Company
designated as such pursuant to and in compliance with Section 4.17 and not
redesignated a Restricted Subsidiary in compliance with such covenant.

                  "U.S. Government Obligations" mean direct obligations of, and
obligations guaranteed by, the United States of America for the payment of which
the full faith and credit of the United States of America is pledged.

                  "U.S. Legal Tender" means such coin or currency of the United
States of America as at the time of payment shall be legal tender for the
payment of public and private debts.

                  "Voting Stock" of a Person means Capital Stock of such Person
of the class or classes pursuant to which the holders thereof have the general
voting power under ordinary circumstances to elect at least a majority of the
board of directors, managers or trustees of such Person (irrespective of whether
or not at the time stock of any other class or classes shall have or might have
voting power by reason of the happening of any contingency).

                  "Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (i) the sum
of the products obtained by multiplying (a) the amount of each then remaining
installment, sinking fund, serial maturity or other required scheduled payment
of principal, including payment at final maturity, in respect thereof, with (b)
the number of years (calculated to the nearest one-twelfth) that will elapse
between such date and the making of such payment, by (ii) the then outstanding
aggregate principal amount of such Indebtedness.

         SECTION 1.2 INCORPORATION BY REFERENCE OF TIA.

         Whenever this Indenture refers to a provision of the TIA, such
provision is incorporated by reference in, and made a part of, this Indenture.
The following TIA terms used in this indenture have the following meanings:

                  "Indenture Securities" means the Notes.

                  "Indenture Security Holder" means a Holder or a Noteholder.

                  "Indenture to be Qualified" means this Indenture.

                  "Indenture Trustee" or "Institutional Trustee" means the
Trustee.

                  "Obligor" on the indenture securities means the Company or any
other obligor on the Notes.



                                       14


         All other TIA terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by Commission rule and
not otherwise defined herein have the meanings assigned to them therein.

        SECTION 1.3 RULES OF CONSTRUCTION.

        Unless the context otherwise requires:

                  1. a term has the meaning assigned to it;

                  2. an accounting term not otherwise defined has the meaning
assigned to it in accordance with GAAP as in effect on the date hereof;

                  3. "or" is not exclusive;

                  4. words in the singular include the plural, and words in the
plural include the singular;

                  5. a reference to a Section or Article shall be to a Section
or Article of this Indenture;

                  6. "herein", "hereof" and other words of similar import refer
to this Indenture as a whole and not to any particular Article, Section or other
subdivision; and

                  7. any reference to a statute, law or regulation means that
statute, law or regulation as amended and in effect from time to time and
includes any successor statute, law or regulation; provided, however, that any
reference to the Bankruptcy Law shall mean the Bankruptcy Law as applicable to
the relevant case.

                                   ARTICLE II

                                    THE NOTES

         SECTION 2.1 FORM AND DATING.

         The Notes and the Trustee's certificate of authentication relating
thereto shall be substantially in the form of EXHIBIT A hereto. The Notes may
have notations, legends or endorsements required by law, stock exchange rule or
depository rule or usage. The Company and the Trustee shall approve the form of
the Notes and any notation, legend or endorsement on them. Each Note shall be
dated the date of its issuance and shall show the date of its authentication.

         The terms and provisions contained in the Notes, annexed hereto as
EXHIBIT A, shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company, the Guarantors and the
Trustee, by their execution and delivery of this Indenture, expressly agree to
such terms and provisions and to be bound thereby.


                                       15


         The Notes shall be issued initially in the form of one or more
permanent global Notes in registered form, substantially in the form set forth
in EXHIBIT A (the "Global Notes"), deposited with the Trustee, as custodian for
DTC, duly executed by the Company and authenticated by the Trustee as
hereinafter provided and shall bear the legend set forth in Section 2.15. The
aggregate principal amount of the Global Note may from time to time be increased
or decreased by adjustments made on the records of the Trustee, as custodian for
DTC, as hereinafter provided.

         SECTION 2.2 EXECUTION AND AUTHENTICATION; AGGREGATE PRINCIPAL AMOUNT.

         Two Officers, or an Officer and an Assistant Secretary, shall sign, or
one Officer shall sign and one Officer or an Assistant Secretary (each of whom
shall, in each case, have been duly authorized by all requisite corporate
actions) shall attest to, the Notes for the Company by manual or facsimile
signature.

         If an Officer or Assistant Secretary whose signature is on a Note was
an Officer or Assistant Secretary at the time of such execution but no longer
holds that office or position at the time the Trustee authenticates the Note,
the Note shall nevertheless be valid.

         A Note shall not be valid until an authorized signatory of the Trustee
manually signs the certificate of authentication on the Note. The signature
shall be conclusive evidence that the Note has been authenticated under this
Indenture.

         The Trustee shall authenticate (i) Initial Notes for original issue in
an aggregate principal amount not to exceed $____________ and upon a written
order of the Company and (ii) Additional Notes upon a written order of the
Company. Such order or orders shall specify the amount of Notes to be
authenticated and the date on which the Notes are to be authenticated, whether
the Notes are to be issued as definitive Notes or Global Notes or such other
information as the Trustee may reasonably request. The aggregate principal
amount of Notes outstanding at any time may not exceed $___________, except as
provided in Section 2.7.

         The aggregate principal amount of the Notes may be changed from time to
time in an amount not to exceed $___________, except as provided in Section 2.7.
All of the Notes need not be issued at the same time and, unless otherwise
provided, a previous issuance of Notes may be reopened, without notice to or the
consent of any Holder, for issuance of Additional Notes of the same tranche, and
the Additional Notes will be consolidated and form a single tranche with the
previously issued Notes.

         The Trustee may appoint an authenticating agent (the "Authenticating
Agent") reasonably acceptable to the Company to authenticate Notes. Unless
otherwise provided in the appointment, an Authenticating Agent may authenticate
Notes whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such Authenticating
Agent. An Authenticating Agent has the same rights as an Agent to deal with the
Company or with any Affiliate of the Company.

         Unless otherwise specified in the written order of the Company
pertaining to an issuance of Notes, the Notes shall be issuable in fully
registered form only, without coupons, and in denominations of $1,000 and
integral multiples thereof.


                                       16


         SECTION 2.3 REGISTRAR AND PAYING AGENT.

         The Company shall maintain an office or agency (which shall be located
in the Borough of Manhattan in The City of New York, State of New York) where
(a) Notes may be presented or surrendered for registration of transfer or for
exchange ("Registrar"), (b) Notes may be presented or surrendered for payment
("Paying Agent") and (c) notices and demands to or upon the Company in respect
of the Notes and this Indenture may be served. The Registrar shall keep a
register of the Notes and of their registration of transfer and exchange. The
Company, upon prior written notice to the Trustee, may have one or more
co-Registrars and one or more additional Paying Agents reasonably acceptable to
the Trustee. The term "Paying Agent" includes any additional Paying Agent. The
Company may act as its own Paying Agent, except that for the purposes of
payments on the Notes pursuant to Sections 4.15 and 4.16, neither the Company
nor any Affiliate of the Company may act as Paying Agent.

         The Company shall enter into an appropriate agency agreement with any
Agent not a party to this Indenture, which agreement shall incorporate the
provisions of the TIA and implement the provisions of this Indenture that relate
to such Agent. The Company shall notify the Trustee, in advance, of the name and
address of any such Agent. If the Company fails to maintain a Registrar or
Paying Agent, or fails to give the foregoing notice, the Trustee shall act as
such.

         The Company initially appoints the Trustee as Registrar, Paying Agent
and agent for service of demands and notices in connection with the Notes, until
such time as the Trustee has resigned or a successor has been appointed. Any of
the Registrar, the Paying Agent or any other agent may resign upon 30 days'
notice to the Company.

         SECTION 2.4 PAYING AGENT TO HOLD ASSETS IN TRUST.

         The Company shall require each Paying Agent other than the Trustee to
agree in writing that each Paying Agent shall hold in trust for the benefit of
the Holders or the Trustee all assets held by the Paying Agent for the payment
of principal of, or interest on, the Notes (whether such assets have been
distributed to it by the Company or any other obligor on the Notes), and the
Company and the Paying Agent shall notify the Trustee of any Default by the
Company (or any other obligor on the Notes) in making any such payment. The
Company at any time may require a Paying Agent to distribute all assets held by
it to the Trustee and account for any assets disbursed and the Trustee may at
any time during the continuance of any payment Default, upon written request to
a Paying Agent, require such Paying Agent to distribute all assets held by it to
the Trustee and to account for any assets distributed. Upon distribution to the
Trustee of all assets that shall have been delivered by the Company to the
Paying Agent, the Paying Agent shall have no further liability for such assets.

         SECTION 2.5 NOTEHOLDER LISTS.

         The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list available to it of the names and addresses of
the Holders. If the Trustee is not the Registrar, the Company shall furnish or
cause the Registrar to furnish to the Trustee before each Record Date and at
such other times as the Trustee may request in writing a list as of such date



                                       17


and in such form as the Trustee may reasonably require of the names and
addresses of the Holders, which list may be conclusively relied upon by the
Trustee.

         SECTION 2.6 TRANSFER AND EXCHANGE.

         When Notes are presented to the Registrar or a co-Registrar with a
request to register the transfer of such Notes or to exchange such Notes for an
equal principal amount of Notes of other authorized denominations, the Registrar
or co-Registrar shall register the transfer or make the exchange as requested if
its requirements for such transaction are met; provided, however, that the Notes
presented or surrendered for registration of transfer or exchange shall be duly
endorsed or accompanied by a written instrument of transfer in form satisfactory
to the Company or the Registrar or co-Registrar, duly executed by the Holder
thereof or his attorney duly authorized in writing. To permit registrations of
transfer and exchanges, the Company shall execute and the Trustee shall
authenticate Notes at the Registrar's or co-Registrar's request. No service
charge shall be made for any registration of transfer or exchange, but the
Company or the Trustee may require payment of a sum sufficient to cover any
transfer tax or similar governmental charge payable in connection therewith
(other than any such transfer taxes or similar governmental charge payable upon
exchanges or transfers pursuant to Sections 2.10, 3.6, 4.15, 4.16 or 9.5, in
which event the Company shall be responsible for the payment of such taxes).

         The Registrar or co-Registrar shall not be required to register the
transfer of or exchange of any Note (i) during a period beginning at the opening
of business 15 days before the mailing of a notice of redemption of Notes and
ending at the close of business on the day of such mailing, (ii) selected for
redemption in whole or in part pursuant to Article III, except the unredeemed
portion of any Note being redeemed in part and (iii) during a Change of Control
Offer or an Asset Sale Offer if such Note is tendered pursuant to such Change of
Control Offer or Asset Sale Offer and not withdrawn.

         Any Holder of the Global Note shall, by acceptance of such Global Note,
agree that transfers of beneficial interests in such Global Notes may be
effected only through a book-entry system maintained by the Holder of such
Global Note (or its agent), and that ownership of a beneficial interest in the
Note shall be required to be reflected in a book-entry system.

         SECTION 2.7 REPLACEMENT NOTES.

         If a mutilated Note is surrendered to the Trustee or if the Holder of a
Note claims that the Note has been lost, destroyed or wrongfully taken, the
Company shall issue and the Trustee shall authenticate a replacement Note if the
Trustee's requirements are met. If required by the Trustee or the Company, such
Holder must provide an indemnity bond or other indemnity of reasonable tenor,
sufficient in the reasonable judgment of both the Company and the Trustee, to
protect the Company, the Trustee or any Agent from any loss which any of them
may suffer if a Note is replaced. Every replacement Note shall constitute an
additional obligation of the Company.

         SECTION 2.8 OUTSTANDING NOTES.

         Notes outstanding at any time are all the Notes that have been
authenticated by the Trustee except those cancelled by it, those delivered to it
for cancellation and those described in


                                       18


this Section as not outstanding. Subject to the provisions of Section 2.9, a
Note does not cease to be outstanding because the Company or any of its
Affiliates holds the Note.

         If a Note is replaced pursuant to Section 2.7 (other than a mutilated
Note surrendered for replacement), it ceases to be outstanding unless the
Trustee receives proof satisfactory to it that the replaced Note is held by a
protected purchaser. A mutilated Note ceases to be outstanding upon surrender of
such Note and replacement thereof pursuant to Section 2.7.

         If on a Redemption Date or the Maturity Date the Paying Agent (other
than the Company) holds U.S. Legal Tender or U.S. Government Obligations
sufficient to pay all of the principal and interest due on the Notes payable on
that date and is not prohibited from paying such money to the Holders thereof
pursuant to the terms of this Indenture, then on and after that date such Notes
cease to be outstanding and interest on them ceases to accrue.

         SECTION 2.9 TREASURY NOTES.

         In determining (i) whether the Holders of the required principal amount
of Notes have concurred in any direction, waiver, consent or notice or (ii) how
much principal amount of Notes remains outstanding after a redemption under
Paragraph 6(b) of the Notes, Notes owned by the Company or an Affiliate shall be
considered as though they are not outstanding, except that for the purposes of
determining whether the Trustee shall be protected in relying on any such
direction, waiver or consent under clause (i) above, only Notes which a Trust
Officer of the Trustee actually knows are so owned shall be so considered.

         The Company shall notify the Trustee, in writing, when it or, to the
Company's knowledge, any of its Affiliates repurchases or otherwise acquires
Notes, of the aggregate principal amount of such Notes so repurchased or
otherwise acquired.

         SECTION 2.10 TEMPORARY NOTES.

         Until definitive Notes are ready for delivery, the Company may prepare
and the Trustee shall authenticate temporary Notes upon receipt, or a written
order of the Company in the form of an Officers' Certificate. The Officers'
Certificate shall specify the amount of temporary Notes to be authenticated and
the date on which the temporary Notes are to be authenticated. Temporary Notes
shall be substantially in the form of definitive Notes but may have variations
that the Company considers appropriate for temporary Notes and so indicates in
the Officers' Certificate. Without unreasonable delay, the Company shall prepare
and the Trustee shall authenticate upon receipt of a written order of the
Company pursuant to Section 2.2 definitive Notes in exchange for temporary
Notes.

         SECTION 2.11 CANCELLATION.

         The Company at any time may deliver Notes to the Trustee for
cancellation. The Registrar and the Paying Agent shall forward to the Trustee
any Notes surrendered to them for registration of transfer, exchange or payment.
The Trustee, or at the direction of the Trustee, the Registrar or the Paying
Agent, and no one else, shall cancel and, at the written direction of the
Company, shall dispose, in its customary manner, of all Notes surrendered for
registration of transfer, exchange, payment or cancellation. Subject to Section
2.7, the Company may not issue

                                       19


new Notes to replace Notes that it has paid or delivered to the Trustee for
cancellation. If the Company shall acquire any of the Notes, such acquisition
shall not operate as a redemption or satisfaction of the Indebtedness
represented by such Notes unless and until the same are surrendered to the
Trustee for cancellation pursuant to this Section 2.11.

         SECTION 2.12 DEFAULTED INTEREST.

         If the Company defaults in a payment of interest on the Notes, it shall
pay the defaulted interest, plus (to the extent lawful) any interest payable on
the defaulted interest to the Persons who are Holders on a subsequent special
record date, which special record date shall be the fifteenth day next preceding
the date fixed by the Company for the payment of defaulted interest or the next
succeeding Business Day if such date is not a Business Day. The Company shall
notify the Trustee in writing of the amount of defaulted interest proposed to be
paid on each Note and the date of the proposed payment (a "Default Interest
Payment Date"), and at the same time the Company shall deposit with the Trustee
an amount of money equal to the aggregate amount proposed to be paid in respect
of such defaulted interest or shall make arrangements satisfactory to the
Trustee for such deposit prior to the date of the proposed payment, such money
when deposited to be held in trust for the benefit of the Persons entitled to
such defaulted interest as provided in this Section; provided, however, that in
no event shall the Company deposit monies proposed to be paid in respect of
defaulted interest later than 11:00 a.m. of the proposed Default Interest
Payment Date. At least 15 days before the subsequent special record date, the
Company shall mail (or cause to be mailed) to each Holder, as of a recent date
selected by the Company, with a copy to the Trustee, a notice that states the
subsequent special record date, the payment date and the amount of defaulted
interest, and interest payable on such defaulted interest, if any, to be paid.
Notwithstanding the foregoing, any interest which is paid prior to the
expiration of the 30-day period set forth in Section 6.1(i) shall be paid to
Holders as of the regular record date for the Interest Payment Date for which
interest has not been paid. Notwithstanding the foregoing, the Company may make
payment of any defaulted interest in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Notes may be
listed, and upon such notice as may be required by such exchange.

         SECTION 2.13 CUSIP NUMBER.

         The Company in issuing the Notes may use a "CUSIP" number, and, if so,
the Trustee shall use the CUSIP number in notices of redemption or exchange as a
convenience to Holders; provided, however, that no representation is hereby
deemed to be made by the Trustee as to the correctness or accuracy of the CUSIP
number printed in the notice or on the Notes, and that reliance may be placed
only on the other identification number printed on the Notes. The Company shall
promptly notify the Trustee of any change in the CUSIP number.

         SECTION 2.14 DEPOSIT OF MONIES.

         Prior to 10:00 a.m. New York City time on each Interest Payment Date,
Maturity Date, Redemption Date, Change of Control, Purchase Date and Asset Sale
Offer Purchase Date, the Company shall have deposited with the Paying Agent in
immediately available funds money sufficient to make cash payments, if any, due
on such Interest Payment Date, Maturity Date, Redemption Date, Change of Control
Purchase Date and Asset Sale Control Purchase Date, as


                                       20


the case may be, in a timely manner which permits the Paying Agent to remit
payment to the Holders on such Interest Payment Date, Maturity Date, Redemption
Date, Change of Control Purchase Date and Asset Sale Offer Purchase Date, as the
case may be.

         SECTION 2.15 RESTRICTIVE LEGENDS

Each Global Note shall bear the following legend on the face thereof:

                  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE
OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE.

         SECTION 2.16 BOOK-ENTRY PROVISIONS FOR GLOBAL SECURITY.

                  (a) The Global Note initially shall (i) be registered in the
name of DTC or the nominee of such DTC, (ii) be delivered to the Trustee as
custodian for such DTC and (iii) bear legends as set forth in Section 2.15.

                  Members of, or participants in, DTC ("Agent Members") shall
have no rights under this Indenture with respect to any Global Note held on
their behalf by DTC, or the Trustee as its custodian, or under the Global Note,
and DTC may be treated by the Company, the Trustee and any Agent as the absolute
owner of the Global Note for all purposes whatsoever. Notwithstanding the
foregoing, nothing herein shall prevent the Company, the Trustee or any Agent
from giving effect to any written certification, proxy or other authorization
furnished by DTC or impair, as between DTC and its Agent Members, the operation
of customary practices governing the exercise of the rights of a holder of any
Note.

                  (b) Transfers of the Global Note shall be limited to transfers
in whole, but not in part, to DTC, its successors or their respective nominees.
Interests of beneficial owners in the Global Note may be transferred or
exchanged for definitive Notes in accordance with the rules and procedures of
DTC. In addition, definitive Notes shall be transferred to all beneficial owners


                                       21


in exchange for their beneficial interest in the Global Note if (i) DTC notifies
the Company that it is unwilling or unable to continue as DTC for the Global
Note and a successor depositary is not appointed by the Company within 90 days
of such notice or (ii) an Event of Default has occurred and is continuing and
the Registrar has received a written request from DTC to issue definitive Notes.

                  (c) In connection with any transfer or exchange of a portion
of the beneficial interest in the Global Note to beneficial owners pursuant to
paragraph (b), the Registrar shall (if one or more definitive Notes are to be
issued) reflect on its books and records the date and a decrease in the
principal amount of the Global Note in an amount equal to the principal amount
of the beneficial interest in the Global Note to be transferred, and the Company
shall execute, and the Trustee shall authenticate and deliver, one or more
definitive Notes of like tenor and amount.

                  (d) In connection with the transfer of the entire Global Note
to beneficial owners pursuant to paragraph (b), the Global Note shall be deemed
to be surrendered to the Trustee for cancellation, and the Company shall
execute, and the Trustee shall authenticate and deliver, to each beneficial
owner identified by DTC in exchange for its beneficial interest in the Global
Note, an equal aggregate principal amount of definitive Notes of authorized
denominations.

                  (e) The Holder of the Global Note may grant proxies and
otherwise authorize any person, including Agent Members and persons that may
hold interests through Agent Members, to take any action which a Holder is
entitled to take under this Indenture or the Notes.

                  (f) The Registrar shall retain copies of all letters, notices
and other written communications received pursuant to this Section 2.16. The
Company shall have the right to inspect and make copies of all such letters,
notices and other written communications at any reasonable time during the
Registrar's normal business hours upon the giving of reasonable written notice
to the Registrar.

                                  ARTICLE III

                                   REDEMPTION

         SECTION 3.1 NOTICES TO TRUSTEE.

         If the Company elects to redeem Notes pursuant to Paragraph 6 of the
Notes, it shall notify the Trustee and the Paying Agent in writing of the
Redemption Date and the principal amount of the Notes to be redeemed.

         The Company shall give each notice provided for in this Section 3.1 at
least 60 days before the Redemption Date (unless a shorter notice period shall
be satisfactory to the Trustee, as evidenced in a writing signed on behalf of
the Trustee), together with an Officers' Certificate stating that such
redemption shall comply with the conditions contained herein and in the Notes.





                                       22

         SECTION 3.2 SELECTION OF NOTES TO BE REDEEMED.

         If fewer than all of the Notes are to be redeemed at any time, the
Trustee shall select the Notes to be redeemed in compliance with the
requirements of the principal national securities exchange, if any, on which the
Notes are listed or, if the Notes are not listed on a national securities
exchange, by lot or by such method as the Trustee shall deem fair and
appropriate; provided, however, that if the Notes are redeemed pursuant to
Paragraph 6(b) of the Notes, the Notes shall be redeemed solely on a pro rata
basis or on as nearly a pro rata basis as practicable (subject to the procedures
of DTC or any other depositary), unless such method is otherwise prohibited. If
the Notes are listed on any national securities exchange, the Company shall
notify the Trustee of the requirements of such exchange in respect of any
redemption. The Trustee shall make the selection from the Notes outstanding and
not previously called for redemption and shall promptly notify the Company in
writing of the Notes selected for redemption and, in the case of any Note
selected for partial redemption, the principal amount thereof to be redeemed.
Notes in denominations of $1,000 or less may be redeemed only in whole. The
Trustee may select for redemption portions (equal to $1,000 or any integral
multiple thereof) of the principal of Notes that have denominations larger than
$1,000. Provisions of this Indenture that apply to Notes called for redemption
also apply to portions of Notes called for redemption.

         SECTION 3.3 NOTICE OF REDEMPTION.

         At least 30 days but not more than 60 days before a Redemption Date,
the Company shall mail or cause to be mailed a notice of redemption by first
class mail to each Holder whose Notes are to be redeemed, with a copy to the
Trustee and any Paying Agent. At the Company's request, the Trustee shall give
the notice of redemption in the Company's name and at the Company's expense. The
Company shall provide such notices of redemption to the Trustee at least five
days before the intended mailing date.

         Each notice for redemption shall identify (including the CUSIP number)
the Notes to be redeemed and shall state:

                  1. the Redemption Date;

                  2. the Redemption Price and the amount of accrued interest, if
any, to be paid;

                  3. the name and address of the Paying Agent;

                  4. the subparagraph of the Notes pursuant to which such
redemption is being made;

                  5. that Notes called for redemption must be surrendered to the
Paying Agent to collect the Redemption Price plus accrued interest, if any;

                  6. that, unless the Company defaults in making the redemption
payment, interest on Notes called for redemption ceases to accrue on and after
the Redemption Date, and the only remaining right of the Holders of such Notes
is to receive payment of the Redemption Price plus accrued interest, if any,
upon surrender to the Paying Agent of the Notes redeemed;


                                       23


                  7. if any Note is being redeemed in part, the portion of the
principal amount of such Note to be redeemed and that, after the Redemption
Date, and upon surrender of such Note, a new Note or Notes in the aggregate
principal amount equal to the unredeemed portion thereof will be issued; and

                  8. if fewer than all the Notes are to be redeemed, the
identification of the particular Notes (or portion thereof) to be redeemed, as
well as the aggregate principal amount of Notes to be redeemed and the aggregate
principal amount of Notes to be outstanding after such partial redemption.

         SECTION 3.4 EFFECT OF NOTICE OF REDEMPTION.

         Once notice of redemption is mailed in accordance with Section 3.3,
Notes called for redemption become due and payable on the Redemption Date and at
the Redemption Price plus accrued interest, if any. Upon surrender to the
Trustee or Paying Agent, such Notes called for redemption shall be paid at the
Redemption Price plus accrued interest thereon to the Redemption Date, but
installments of interest, the maturity of which is on or prior to the Redemption
Date, shall be payable to Holders of record at the close of business on the
relevant record dates referred to in the Notes.

         SECTION 3.5 DEPOSIT OF REDEMPTION PRICE.

         On or before 10:00 a.m., New York City time, on any the Redemption Date
and in accordance with Section 2.14 hereof, the Company shall deposit with the
Paying Agent U.S. Legal Tender sufficient into pay the Redemption Price plus
accrued interest, if any, of all Notes to be redeemed on that date. The Paying
Agent shall promptly return to the Company any U.S. Legal Tender so deposited
which is not required for that purpose, except with respect to monies owed as
obligations to the Trustee pursuant to Article Seven.

         If the Company complies with the preceding paragraph, then, unless the
Company defaults in the payment of such Redemption Price plus accrued interest,
if any, interest on the Notes to be redeemed will cease to accrue on and after
the applicable Redemption Date, whether or not such Notes are presented for
payment.

         SECTION 3.6 NOTES REDEEMED IN PART.

         Upon surrender of a Note that is to be redeemed in part, the Trustee
shall authenticate for the Holder a new Note or Notes equal in principal amount
to the unredeemed portion of the Note surrendered.


                                       24



                                   ARTICLE IV

                                    COVENANTS

         SECTION 4.1 PAYMENT OF NOTES.

                  (a) The Company shall pay the principal of and interest on the
Notes on the dates and in the manner provided in the Notes and in this
Indenture.

                  (b) An installment of principal of or interest on the Notes
shall be considered paid on the date it is due if the Trustee or Paying Agent
(other than the Company or any of its Affiliates) holds, prior to 10:00 a.m. New
York City time on that date, U.S. Legal Tender designated for and sufficient to
pay the installment in full and is not prohibited from paying such money to the
Holders pursuant to the terms of this Indenture or the Notes.

                  (c) The Company shall pay, to the extent such payments are
lawful, interest on overdue principal and on overdue installments of interest
(without regard to any applicable grace periods) from time to time on demand at
the rate borne by the Notes. Interest will be computed on the basis of a 360-day
year comprised of twelve 30-day months.

                  (d) Notwithstanding anything to the contrary contained in this
Indenture, the Company may, to the extent it is required to do so by law, deduct
or withhold income or other similar taxes imposed by the United States of
America from principal or interest payments hereunder.

         SECTION 4.2 MAINTENANCE OF OFFICE OR AGENCY.

         The Company shall maintain the office or agency required under Section
2.3. The Company shall give prior written notice to the Trustee of the location,
and any change in the location of such office or agency. If at any time the
Company shall fail to maintain any such required office or agency or shall fail
to furnish the Trustee with the address thereof, such presentations, surrenders,
notices and demands may be made or served at the address, of the Trustee set
forth in Section 11.2.

         SECTION 4.3 CORPORATE EXISTENCE.

         Except as otherwise permitted by Article V or by Section 4.16, the
Company shall do or cause to be done, at its own cost and expense, all things
necessary to preserve and keep in full force and effect its corporate existence
and the corporate existence of each of the Restricted Subsidiaries in accordance
with the respective organizational documents of each such Restricted Subsidiary
and the material rights (charter and statutory) and franchises of the Company
and each such Restricted Subsidiary; provided, however, that the Company shall
not be required to preserve, with respect to itself, any material right or
franchise and, with respect to any Restricted Subsidiary, any such existence,
material right or franchise, if the Board of Directors of the Company shall
determine in good faith that the preservation thereof is nom longer desirable in
the conduct of the business of the Company and the Restricted Subsidiaries,
taken as a whole.


                                       25


         SECTION 4.4 PAYMENT OF TAXES AND OTHER CLAIMS.

         The Company shall pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (i) all material taxes, assessments and
governmental charges (including withholding taxes and any penalties, interest
and additions to taxes) levied or imposed upon it or any Restricted Subsidiary
or properties of it or any Subsidiary and (ii) all material lawful claims for
labor, materials and supplies that, if unpaid, might by law become a Lien upon
the property of it or any Restricted Subsidiary; provided, however, that the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim whose amount, applicability
or validity is being contested in good faith by appropriate negotiations or
proceedings properly instituted and diligently conducted for which adequate
reserves, to the extent required under GAAP, have been taken.

         SECTION 4.5 MAINTENANCE OF PROPERTIES AND INSURANCE.

                  (a) The Company shall, and shall cause each Restricted
Subsidiary to, maintain all properties used or useful in the conduct of its
business in good working order and condition (subject to ordinary wear and tear)
and make all necessary repairs, renewals, replacements, additions, betterments
and improvements thereto and actively conduct and carry on its business;
provided, however, that nothing in this Section 4.5 shall prevent the Company or
any Restricted Subsidiary from discontinuing the operation and maintenance of
any of its properties, if such discontinuance is (i) in the ordinary course of
business pursuant to customary business terms or (ii) in the good faith judgment
of the Board of Directors or other governing body of the Company or the
Restricted Subsidiary, as the case may be, desirable in the conduct of their
respective businesses and is not disadvantageous in any material respect to the
Holders.

                  (b) The Company shall provide or cause to be provided, for
itself and each Restricted Subsidiary, insurance (including appropriate
self-insurance) against loss or damage of the kinds that, in the good faith
judgment of the Company, are adequate and appropriate for the conduct of the
business of the Company and such Restricted Subsidiary in a prudent manner, with
reputable insurers or with the government of the United States of America or an
agency or instrumentality thereof, in such amounts, with such deductibles, and
by such methods as shall be customary, in the good faith judgment of the
Company, for companies similarly situated in the industry.

         SECTION 4.6 COMPLIANCE CERTIFICATE; NOTICE OF DEFAULT.

                  (a) The Company shall deliver to the Trustee, within 105 days
after the end of the Company's fiscal year, a certificate signed by the Chairman
of the Board of Directors, the Vice-Chairman of the Board of Directors, the
Chief Executive Officer, the President or any Vice President and by the Chief
Financial Officer, Treasurer or any Assistant Treasurer or the Secretary or any
Assistant Secretary of the Company (provided, however, that one of such
signatories shall be the Company's principal executive officer, principal
financial officer or principal accounting officer), as to such Officers'
knowledge of the Company's compliance with all conditions and covenants under
this Indenture (without regard to any period of grace or requirement of notice
provided hereunder) and in the event any Default exists, such Officers shall
specify the nature of such Default. The Officers' Certificate shall also notify
the Trustee


                                       26


should the Company elect to change the manner in which it fixes its fiscal year
end or change its independent certified public accountants.

                  (b) (i) If any Default or Event of Default has occurred and is
continuing or (ii) if any Holder seeks to exercise any remedy hereunder with
respect to a claimed Default under this Indenture or the Notes, the Company
shall deliver to the Trustee, at its address set forth in Section 11.2 hereof,
by registered or certified mail or by facsimile transmission followed by hard
copy by registered or certified mail an Officers' Certificate specifying such
event, notice or other action within five Business Days of its becoming aware of
such occurrence.

         SECTION 4.7 COMPLIANCE WITH LAWS.

         The Company shall comply, and shall cause each Restricted Subsidiary to
comply, with all applicable statutes, rules, regulations, orders and
restrictions of the United States of America, all states and municipalities
hereof, and of any governmental department, commission, board, regulatory
authority, bureau, agency and instrumentality of the foregoing, in respect of
the conduct of their respective businesses and the ownership of their respective
properties, except for such noncompliances as would not singly or in the
aggregate have a material adverse effect on the financial condition, business or
results of operations of the Company and the Restricted Subsidiaries, taken as a
whole.

         SECTION 4.8 WAIVER OF STAY, EXTENSION OR USURY LAWS.

         The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Notes as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance of this Indenture; and (to the extent that it may
lawfully do so) the Company hereby expressly waives all benefit or advantage of
any such law, and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but will suffer and permit
the execution of every such power as though no such law had been enacted.

         SECTION 4.9 PROVISION OF FINANCIAL STATEMENTS AND INFORMATION.

                  (a) So long as any Notes are outstanding, whether or not the
Company is then subject to Section 13(a) or 15(d) of the Exchange Act, the
Company will file with the Commission, the annual reports, quarterly reports and
other periodic reports which the Company would have been required to file with
the Commission pursuant to such Section 13(a) or 15(d) if the Company were so
subject, and such documents shall be filed with the Commission on or prior to
the respective dates (the "Required Filing Dates") by which the Company would
have been required so to file such documents if the Company were so subject;
provided the Commission will accept such filings.

                  (b) The Company will also in any event (i) within 15 days of
each Required Filing Date, file with the Trustee, and supply the Trustee with
copies for delivery to the holders of the Notes, the annual reports, quarterly
reports and other periodic reports which the Company


                                       27


would have been required to file with the Commission pursuant to Section 13(a)
or 15(d) of the Exchange Act if the Company were subject to such Sections and
(ii) if the Commission will not accept the filing of such documents promptly
upon written request and payment of the reasonable cost of duplication and
delivery, supply copies of such documents to any prospective holder of the
Notes.

         SECTION 4.10 LIMITATION ON INCURRENCE OF INDEBTEDNESS.

                  (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, create, incur, issue, assume or directly or indirectly guarantee
or in any other manner become directly or indirectly liable for ("incur") any
Indebtedness (including Acquired Debt), except that the Company may incur
Indebtedness (including Acquired Debt) if, at the time of, and immediately after
giving pro forma effect to, such incurrence of Indebtedness, the Consolidated
Cash Flow Coverage Ratio of the Company for the most recently ended four fiscal
quarters would be at least 2.25 to 1.0.

                  (b) The foregoing limitations will not apply to the incurrence
of any of the following (collectively, "Permitted Indebtedness"), each of which
shall be given independent effect:

                      (i) Indebtedness of the Company and any Restricted
         Subsidiary arising under any New Credit Facility in an aggregate
         principal amount not to exceed at any time outstanding the sum, at such
         time, of (A) the greater of (x) $[55.0] million, less any permanent
         reduction in commitments thereunder that result from the application
         of Excess Proceeds from an Asset Sale as provided in Section 4.16(b)
         or (y) the sum, at such time of (I) 85% of the consolidated book
         value of net accounts receivable of the Company and the Restricted
         Subsidiaries, plus (II) 60% of the consolidated book value of
         inventory of the Company and the Restricted Subsidiaries, plus
         (III) $13.0 million, less any scheduled permanent reductions in
         commitments under the New Credit Facility;

                      (ii) Indebtedness of the Company represented by the
         Initial Notes and Indebtedness of the Guarantors represented by the
         Note Guarantees;

                      (iii) other Indebtedness of the Company or any Restricted
         Subsidiary that is outstanding on the Issue Date ("Existing
         Indebtedness");

                      (iv) Indebtedness owed by any Restricted Subsidiary to the
         Company or to another Restricted Subsidiary, or owed by the Company to
         any Restricted Subsidiary that, if owed to a Restricted Subsidiary that
         is not a Guarantor, is unsecured and subordinated in right of payment
         to the payment and performance of the Company's obligations under the
         Indenture and the Notes; provided, however, that any such Indebtedness
         shall at all times be held by a Person which is either the Company or a
         Restricted Subsidiary; provided, further, however, that upon either (A)
         the transfer or other disposition of any such Indebtedness to a Person
         other than the Company or another Restricted Subsidiary or (B) the
         sale, lease, transfer or other disposition of shares of Capital Stock
         (including by consolidation or merger) of any such Restricted
         Subsidiary to


                                       28


         a Person other than the Company or another Restricted Subsidiary, the
         incurrence of such Indebtedness shall be deemed to be an incurrence
         that is not permitted by this clause (iv);

                      (v) Indebtedness of the Company or any Restricted
         Subsidiary arising with respect to Interest Rate Agreement Obligations
         and Currency Agreement Obligations incurred for the purpose of fixing
         or hedging interest rate risk or currency risk with respect to any
         fixed or floating rate Indebtedness that is permitted by the terms of
         this Indenture to be outstanding or with respect to any receivable or
         liability the payment of which is determined by reference to a foreign
         currency;

                      (vi) Indebtedness represented by performance, completion,
         guarantee, surety and similar bonds provided by the Company or any
         Restricted Subsidiary in the ordinary course of business consistent
         with past practice;

                      (vii) any Indebtedness incurred in connection with or
         given in exchange for the renewal, extension, substitution, refunding,
         defeasance, refinancing or replacement, in whole or in part, (a
         "Refinancing") of any Indebtedness of the Company or a Restricted
         Subsidiary incurred as permitted under Section 4.10(a) or any
         Indebtedness described in clauses (i), (ii) or (iii) above and this
         clause (vii) ("Refinancing Indebtedness"); provided, however, that (A)
         the principal amount of such Refinancing Indebtedness shall not exceed
         the principal amount (or accreted amount, if less) of the Indebtedness
         so refinanced (plus the premiums and reasonable expenses to be paid in
         connection therewith, which, with respect to such premiums, shall not
         exceed the stated amount of any premium or other payment required to be
         paid in connection with such a refinancing pursuant to the terms of the
         Indebtedness being refinanced); (B) the maturity of the Refinancing
         Indebtedness shall not be shorter than the maturity of the Indebtedness
         being refinanced; (C) the Refinancing Indebtedness shall have a
         Weighted Average Life to Maturity equal to or greater than the
         Weighted Average Life to Maturity of the Indebtedness being
         refinanced; and (D) the Refinancing Indebtedness shall be at least
         as subordinated in right of payment to the Notes as the Indebtedness
         being refinanced;

                      (viii) Indebtedness of the Company or any Restricted
         Subsidiary (A) representing Capitalized Lease Obligations and any
         refinancings thereof and/or (B) in respect of Purchase Money
         Obligations for property acquired, constructed or improved in the
         ordinary course of business and any refinancings thereof, which taken
         together in the aggregate do not exceed $5.0 million at any time
         outstanding;

                      (ix) commodity agreements entered into in the ordinary
         course of business to protect against fluctuations in the prices of raw
         materials and not for speculative purposes;

                      (x) Indebtedness incurred by the Company or any Restricted
         Subsidiary constituting reimbursement obligations with respect to
         letters of credit issued in the ordinary course of business, including,
         without limitation, letters of credit in respect of workers'
         compensation claims or self-insurance, or other Indebtedness with
         respect to reimbursement type obligations regarding workers'
         compensation claims or self-insurance;


                                       29


                      (xi) (A) Guarantees by the Company of Indebtedness of a
         Restricted Subsidiary permitted to be incurred under this Indenture and
         (B) Guarantees by the Guarantors of Indebtedness of the Company or a
         Restricted Subsidiary that is otherwise permitted to be incurred under
         this Section 4.10(b);

                      (xii) Indebtedness of the Company or any Restricted
         Subsidiary arising from agreements providing for indemnification,
         adjustment of purchase price or similar obligations, in each case
         incurred or assumed in connection with the disposition of any business,
         assets or a Subsidiary, other guarantees of Indebtedness incurred by
         any Person acquiring all or any portion of such business, assets or a
         Subsidiary for the purpose of financing such acquisition; provided that
         the maximum liability in respect of such Indebtedness shall not exceed
         the gross proceeds actually received by the Company and its Restricted
         Subsidiaries in connection with such disposition;

                      (xiii) Indebtedness of the Company or any Restricted
         Subsidiary in addition to that described in clauses (i) through (xiii)
         above, and any renewals, extensions, substitutions, refinancings or
         replacements of such Indebtedness, so long as the aggregate principal
         amount of all such Indebtedness incurred pursuant to this clause (xiii)
         does not exceed $5.0 million at any one time outstanding.

                  (c) For purposes of determining any particular amount of
Indebtedness under this Section 4.10:

                      (i) in the event that an item of Indebtedness meets the
         criteria of more than one of the categories of Permitted Indebtedness
         described in clauses (i) through (xiii) of Section 4.10(b) or is
         entitled to be incurred pursuant to Section 4.10(a), the Company will,
         in its sole discretion, classify or later reclassify that item of
         Indebtedness in any manner that complies with this Section 4.10, and

                      (ii) guarantees, Liens or obligations with respect to
         letters of credit supporting Indebtedness otherwise included in the
         determination of such particular amount shall not be included.

                  (d) Accrual of interest, accretion or amortization of original
issue discount, the payment of interest on Indebtedness in the term of
additional indebtedness with the same terms and the payment of dividends in
Disqualified Stock in the form of additional shares of the same class of
Disqualified Stock will not be deemed to be an incurrence of additional
Indebtedness or an issuance of Disqualified Stock for purposes of this Section
4.10.

                  (e) Indebtedness of any Person which is outstanding at the
time such Person becomes a Restricted Subsidiary or is merged with or into or
consolidated with the Company or a Restricted Subsidiary shall be deemed to have
been incurred at the time such Person becomes a Restricted Subsidiary or is
merged with or into or consolidated with the Company or a Restricted Subsidiary,
and Indebtedness which is assumed at the time of the acquisition of any asset
shall be deemed to have been incurred at the time of such acquisition.


                                       30


         SECTION 4.11 LIMITATION ON RESTRICTED PAYMENTS.

                  (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, make any Restricted Payment, unless at
the time of and immediately after giving effect to the proposed Restricted
Payment (with the value of any such Restricted Payment, if other than cash, to
be determined reasonably and in good faith by the Board of Directors of the
Company):

                      (i) no Default or Event of Default shall have occurred and
         be continuing or would occur as a consequence thereof;

                      (ii) the Company could incur at least $1.00 of additional
         Indebtedness (other than Permitted Indebtedness) pursuant to Section
         4.10(a); and

                      (iii) the aggregate amount of all Restricted Payments made
         after the Issue Date shall not exceed the sum of:

                            (A) an amount equal to 50% of the Company's
                  aggregate cumulative Consolidated Net Income accrued on a
                  cumulative basis during the period (treated as one accounting
                  period) beginning on the Original Issue Date and ending on the
                  date of such proposed Restricted Payment (or, if such
                  aggregate cumulative Consolidated Net Income for such period
                  shall be a deficit, minus 100% of such deficit); plus

                            (B) the aggregate amount of all net cash proceeds
                  received since the Original Issue Date by the Company from the
                  issuance and sale (other than to a Restricted Subsidiary) of,
                  or equity contribution with respect to, Capital Stock (other
                  than Disqualified Stock) and the principal amount of
                  Indebtedness of the Company or any Restricted Subsidiary that
                  has been converted into or exchanged for Capital Stock (other
                  than Disqualified Stock), in any such case to the extent that
                  such proceeds are not used (x) to redeem, repurchase, retire
                  or otherwise acquire Capital Stock or any Indebtedness of the
                  Company or any Restricted Subsidiary pursuant to clause (ii)
                  of the next paragraph or (y) to make any Restricted Investment
                  pursuant to clause (iv) of the next paragraph; plus

                            (C) the amount of the net reduction in Investments
                  in Unrestricted Subsidiaries resulting from (x) the payment of
                  dividends or the repayment in cash of the principal of loans
                  or the cash return on any Investment, in each case to the
                  extent received by the Company or any Restricted Subsidiary
                  from Unrestricted Subsidiaries, (y) the release or
                  extinguishment of any guarantee of Indebtedness of any
                  Unrestricted Subsidiary, and (z) the redesignation of
                  Unrestricted Subsidiaries as Restricted Subsidiaries (valued
                  as provided in the definition of "Investment"), such aggregate
                  amount of the net reduction in Investments not to exceed in
                  the case of any Unrestricted Subsidiary the amount of
                  Restricted Investments previously made by the Company or any
                  Restricted Subsidiary in such Unrestricted Subsidiary, which
                  amount was included in the calculation of the amount of
                  Restricted Payments; plus



                                       31


                            (D) to the extent that any Restricted Investment
                  that was made after the Original Issue Date is sold for cash
                  or otherwise liquidated or repaid for cash, the amount of cash
                  proceeds received with respect to such Restricted Investment,
                  net of taxes and the cost of disposition, which amount may not
                  exceed the amount of Restricted Investments made after the
                  Original Issue Date.

                  (b) Section 4.11(a) shall not prohibit the following actions
(collectively, "Permitted Payments"):

                      (i) the payment of any dividend within 60 days after the
         date of declaration thereof, if at such declaration date such payment
         would have been permitted under this Indenture (which payment shall be
         deemed to have been paid on such date of declaration for purposes of
         Section 4.11(a)(iii));

                      (ii) the redemption, repurchase, retirement or other
         acquisition of any Capital Stock or any Subordinated Indebtedness of
         the Company or any Restricted Subsidiary in exchange for, or out of the
         proceeds of, the substantially concurrent sale (other than to a
         Restricted Subsidiary) of, or equity contribution with respect to,
         Capital Stock of the Company (other than any Disqualified Stock);

                      (iii) any purchase or defeasance of Subordinated
         Indebtedness to the extent (A) made with permitted Refinancing
         Indebtedness or (B) required by the other agreement or instrument
         pursuant to which such Subordinated Indebtedness was issued upon a
         change of control or other asset sale (as defined therein), but only if
         the Company (x) in the case of such a change of control, has complied
         with its obligations under Section 4.15 or (y) in the case of such an
         asset sale, has applied the Net Proceeds from such asset sale in
         accordance with Section 4.16;

                      (iv) any Restricted Investment the sole consideration for
         which consists of, or is made with the proceeds of the substantially
         concurrent sale (other than to a Restricted Subsidiary) of, or equity
         contribution with respect to, Capital Stock of the Company (other than
         any Disqualified Stock);

                      (v) loans or advances to employees of the Company or any
         of its Subsidiaries which loans or advances exist on the Issue Date,
         and other loans or advances to employees of the Company or any
         Subsidiary to pay reasonable relocation expenses;

                      (vi) Restricted Investments in an amount such that the sum
         of the aggregate amount of Restricted Investments made pursuant to this
         clause (vi) after the Issue Date does not exceed $5.0 million at any
         one time outstanding; and

                      (vii) the payment of any dividend on, or redemption of any
         or all of, the Company's redeemable 9.8% cumulative preferred stock,
         par value, $0.01 per share, Series D, outstanding on the Issue Date.

provided, however, that in the case of clauses (iii) and (vi) of this Section
4.11(b), no Default or Event of Default shall have occurred and be continuing.


                                       32


                  (c) For purposes of Section 4.11(a)(iii), the Permitted
Payments referred to in clauses (i) and (vi) of Section 4.11(b) shall be
included in the aggregate amount of Restricted Payments made since the Issue
Date, and any other Permitted Payments described above shall be excluded.

                  (d) Not later than thirty (30) days after the end of any
fiscal quarter of the Company during which any Restricted Payment or Restricted
Investment has been made, the Company shall deliver to the Trustee an Officers'
Certificate stating that such Restricted Payment or Restricted Investment
complies with this Indenture and setting forth in reasonable detail the basis
upon which the required calculations were computed, which calculations may be
based upon the Company's latest available internal quarterly financial
statements.

         SECTION 4.12 LIMITATION ON LIENS.

         The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create, incur, assume or suffer to exist any Lien
securing Indebtedness (other than Permitted Liens) on any asset now owned or
hereafter acquired, or any income or profits therefrom, or assign or convey any
right to receive income therefrom to secure any such Indebtedness, unless (i) if
such Lien secures Indebtedness that is pari passu with the Notes, then the Notes
are secured on an equal and ratable basis with the obligations so secured until
such time as such obligation is no longer secured by a Lien or (ii) if such Lien
secures Indebtedness that is subordinated to the Notes, any such Lien shall be
subordinated to a Lien granted to the Holders of the Notes in the same
collateral as that securing such Lien to the same extent as such subordinated
Indebtedness is subordinated to the Notes.

         SECTION 4.13 LIMITATION ON DIVIDENDS AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES.

         The Company shall not, and shall not permit any Restricted Subsidiary
to, directly or indirectly, create or otherwise cause to become effective any
consensual encumbrance or consensual restriction on the ability of any
Restricted Subsidiary to (i) pay dividends or make any other distributions to
the Company or any other Restricted Subsidiary on its Capital Stock or with
respect to any other interest or participation in, or measured by, its profits,
or pay any Indebtedness owed to the Company or any other Restricted Subsidiary,
(ii) make loans or advances to, or issue guarantees for the benefit of, the
Company or any other Restricted Subsidiary or (iii) transfer any of its
properties or assets to the Company or any other Restricted Subsidiary, except
for such encumbrances or restrictions existing under or by reason of:

                  (a) any New Credit Facility;

                  (b) applicable law;

                  (c) any instrument governing Indebtedness or Capital Stock of
an Acquired Person acquired by the Company or any of its Restricted Subsidiaries
as in effect at the time of such acquisition (except to the extent such
Indebtedness was incurred in connection with or in contemplation of such
acquisition);


                                       33


provided, however, that no such encumbrance or restriction is applicable to any
Person, or the properties or assets of any Person, other than the Acquired
Person;

                  (d) customary non-assignment, subletting or net worth
provisions in leases or other agreements entered into the ordinary course of
business and consistent with past practices;

                  (e) Purchase Money Indebtedness for property acquired in the
ordinary course of business that impose restrictions only on the property so
acquired;

                  (f) an agreement for the sale or disposition of assets or the
Capital Stock of a Restricted Subsidiary; provided, however, that such
restriction or encumbrance is only applicable to such Restricted Subsidiary or
assets, as applicable, and such sale or disposition otherwise is permitted by
Section 4.16; provided, further, however, that such restriction or encumbrance
shall be effective only for a period from the execution and delivery of such
agreement through a termination date not later than 180 days after such
execution and delivery;

                  (g) this Indenture, the Notes and the Note Guarantees;

                  (h) Indebtedness (including Refinancing Indebtedness)
permitted to be incurred subsequent to the Issue Date pursuant to Section 4.10;
provided, however, that any such restrictions are ordinary and customary with
respect to the type of Indebtedness being incurred;

                  (i) encumbrances and restrictions imposed by Liens incurred in
accordance with Section 4.12;

                  (j) customary provisions in joint venture agreements and other
similar agreements; and

                  (k) encumbrances and restrictions imposed by amendments,
restatements, renewals, replacements or refinancings of the contracts,
instruments or obligations referred to in clauses (a) through (j) above;
provided that such encumbrances and restrictions are, in the good faith judgment
of the Company's Board of Directors, no more restrictive, in any material
respect, than those contained in such contracts, instruments or obligations
immediately prior to such amendment, restatement, renewal, replacement or
refinancing.

         SECTION 4.14 LIMITATION ON TRANSACTIONS WITH AFFILIATES.

                  (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, directly or indirectly, enter into, renew or extend any
transaction or series of related transactions (including, without limitation,
the sale, purchase, exchange or lease of assets, property or services) with any
Affiliate of the Company unless (i) such transaction or series of transactions
is on terms that are no less favorable to the Company or such Restricted
Subsidiary, as the case may be, than those that could reasonably be obtainable
at such time in a comparable transaction in arm's-length dealings with an
unrelated third party, and (ii) the Company delivers to the Trustee (A) with
respect to any transaction or series of transactions involving aggregate
payments in excess of $500,000, annually, an Officers' Certificate certifying
that such transaction or series of related transactions complies with clause (i)
above and (B) with respect to


                                       34


any transaction or series of transactions involving aggregate payments in excess
of $2.0 million, annually, an Officers' Certificate certifying that such
transaction or series of related transactions has been approved by a majority of
the members of the Board of Directors of the Company (and approved by a majority
of the Independent Directors or, in the event there is only one Independent
Director, by such Independent Director), and (iii) with respect to any
transaction or series of transactions involving aggregate payments in excess of
$5.0 million, annually, an opinion as to the fairness to the Company from a
financial point of view issued by an investment banking firm of national
standing.

                  (b) Section 4.14(a) will not apply to (i) employment
agreements or compensation or employee benefit arrangements with any officer,
director or employee of the Company or any of its Restricted Subsidiaries
entered into in the ordinary course of business (including customary benefits
thereunder and including reimbursement or advancement of out-of-pocket expenses,
and director's and officer's liability insurance); (ii) the expense sharing
arrangement between the Company and Weinberg Capital Corporation regarding the
expenses incurred with respect to the Company's Cleveland, Ohio headquarters;
(iii) any transaction entered into by or among the Company or one of its
Restricted Subsidiaries with one or more Restricted Subsidiaries of the Company;
(iv) any transaction permitted by Section 4.11(b); (v) transactions permitted
by, and complying with, Article Five; and (vi) transactions with suppliers or
other purchases or sales of goods or services, in each case in the ordinary
course of business (including, without limitation, pursuant to joint venture
agreements) and otherwise in compliance with the terms of this Indenture which,
in the reasonable determination of the Board of Directors of the Company, are on
terms no less favorable to the Company or its Restricted Subsidiaries than those
that could reasonably have been obtained at such time from an unaffiliated
party.

         SECTION 4.15 CHANGE OF CONTROL.

                  (a) In the event of a Change of Control, each Holder of the
Notes shall have the right, unless the Company has given a notice of redemption,
subject to the terms and conditions of this Indenture, to require the Company to
offer to purchase all or any portion (equal to $1,000, or, if lesser
denominations have been issued, such lesser denominations, or an integral
multiple thereof) of such Holder's Notes at a purchase price in cash equal to
101% of the aggregate principal amount thereof plus accrued and unpaid interest,
if any, to the date of purchase, in accordance with the terms set forth below (a
"Change of Control Offer").

                  In the event of any Change of Control, the Company shall not,
and shall not cause or permit any of the Restricted Subsidiaries to, purchase,
redeem or otherwise acquire or retire any Indebtedness of the Company ranking
junior or subordinate to the Notes pursuant to any analogous provisions relating
to such Indebtedness until after the 91st day after the Change of Control
Payment Date (as such date may be extended).

                  (b) On or before the 30th day following the occurrence of any
Change of Control, the Company shall mail, by first-class mail (with a copy to
the Trustee), to each Holder at such Holder's registered address a notice
stating:

                      (i) that a Change of Control has occurred and that such
         holder has the right to require the Company to purchase all or a
         portion (equal to $1,000, or if lesser


                                       35


         denominations have been issued, such lesser denominations, or an
         integral multiple thereof) of such holder's Notes at a purchase price
         in cash equal to 101% of the aggregate principal amount thereof, plus
         accrued and unpaid interest, if any, to the date of purchase (the
         "Change of Control Purchase Date"), which shall be a Business Day,
         specified in such notice, that is not earlier than 30 days or later
         than 60 days from the date such notice is mailed; (ii) the amount of
         accrued and unpaid interest, if any, as of the Change of Control
         Purchase Date; (iii) that any Note not tendered will continue to accrue
         interest; (iv) that, unless the Company defaults in the payment of the
         purchase price for the Notes payable pursuant to the Change of Control
         Offer, any Notes accepted for payment pursuant to the Change of Control
         Offer shall cease to accrue interest on the Change of Control Purchase
         Date; (v) that Holders electing to have a Note purchased pursuant to a
         Change of Control Offer will be required to surrender the Note, with
         the form entitled "Option of Holder to Elect Purchase" on the reverse
         of the Note completed, to the Paying Agent at the address specified in
         the notice prior to the close of business on the second Business Day
         prior to the Change of Control Purchase Date; (vi) that Holders will be
         entitled to withdraw their election if the Paying Agent receives, not
         later than the second Business Day prior to the Change of Control
         Purchase Date, a facsimile transmission or letter setting forth the
         name of the Holder, the principal amount of the Notes the Holder
         delivered for purchase and a statement that such Holder is withdrawing
         his election to have such Notes purchased; (vii) that Holders whose
         Notes are purchased only in part will be issued new Notes in a
         principal amount equal to the unpurchased portion of the Notes
         surrendered; provided, however, that each Note purchased and each new
         Note issued shall be in an original principal amount of $1,000 or
         integral multiples thereof (or if the Notes purchased were issued in
         lesser denominations, such lesser denomination); (viii) the
         circumstances and relevant facts regarding such Change of Control; and
         (ix) such other information as may be required by applicable laws and
         regulations.

                  (c) On the Change of Control Purchase Date, the Company will
(i) accept for payment all Notes or portions thereof tendered pursuant to the
Change of Control Offer, (ii) deposit with the Paying Agent U.S. Legal Tender
Sufficient to pay the aggregate purchase price of all Notes or portions thereof
accepted for payment, and (iii) deliver or cause to be delivered to the Trustee
all Notes tendered pursuant to the Change of Control Offer. The Paying Agent
shall promptly mail to each holder of Notes or portions thereof accepted for
payment an amount equal to the purchase price for such Notes plus accrued and
unpaid interest, if any, thereon, and the Trustee shall promptly authenticate
and mail to each holder of Notes accepted for payment in part a new Note equal
in principal amount to any unpurchased portion of the Notes, and any Note not
accepted for payment in whole or in part shall be promptly returned to the
holder of such Note. On and after a Change of Control Purchase Date, interest
will cease to accrue on the Notes or portions thereof accepted for payment,
unless the Company defaults in the payment of the purchase price therefor. The
Company will publicly announce the results of the Change of Control Offer on or
as soon as practicable after the Change of Control Purchase Date.

                  (d) The Company will comply with the applicable tender offer
rules, including the requirements of Section 14(e) and Rule 14e-1 under the
Exchange Act, and all other applicable securities laws and regulations in
connection with any Change of Control Offer and will be deemed not to be in
violation of any of the covenants under this Indenture to the extent such
compliance is in conflict with such covenants.


                                       36


         SECTION 4.16 LIMITATION ON ASSET SALES.

                  (a) The Company shall not, and shall not permit any Restricted
Subsidiary to, make any Asset Sale unless (i) the Company or such Restricted
Subsidiary, as the case may be, receives consideration at the time of such Asset
Sale at least equal to the Fair Market Value (as evidenced by a resolution of
the Board of Directors set forth in an Officers' Certificate delivered to the
Trustee) of the assets or other property sold or disposed of in the Asset Sale
and (ii) at least 75% of such consideration consists of either cash or Cash
Equivalents; provided, however, that for purposes of this Section 4.16, "cash"
shall include (x) the amount of any Indebtedness (other than any Indebtedness
that is by its terms subordinated to the Notes) of the Company or such
Restricted Subsidiary as shown on the Company's or such Restricted Subsidiary's
most recent balance sheet or in the notes thereto that is assumed by the
transferee of any such assets or other property in such Asset Sale (and
excluding any liabilities that are incurred in connection with or in
anticipation of such Asset Sale), but only to the extent that such assumption is
effected on a basis such that there is no further recourse to the Company or any
of the Restricted Subsidiaries with respect to such liabilities and (y) any
notes, obligations or securities received by the Company or such Restricted
Subsidiary from such transferee that are converted within 60 days by the Company
or such Restricted Subsidiary into cash (to the extent of the cash received).

                  (b) Within 365 days after any Asset Sale, the Company may
elect to apply the Net Proceeds from such Asset Sale to (a) permanently reduce
any Senior Debt of the Company and/or (b) make an investment in, or acquire
assets and properties that will be used in, the business of the Company and the
Restricted Subsidiaries existing on the Issue Date or in businesses reasonably
related thereto. Pending the final application of any such Net Proceeds, the
Company or any Restricted Subsidiary may temporarily reduce Indebtedness of the
Company under any New Credit Facility or temporarily invest such Net Proceeds in
any Investments described under clauses (i) through (iii) of the definition of
Permitted Investments. Any Net Proceeds from an Asset Sale not applied or
invested as provided in the first sentence of this Section 4.16(b) within 365
days of such Asset Sale will be deemed to constitute "Excess Proceeds."

                  (c) Each date that the aggregate amount of Excess Proceeds in
respect of which an Asset Sale Offer (as defined below) has not been made
exceeds $5.0 million shall be deemed an "Asset Sale Offer Trigger Date." As soon
as practicable, but in no event later than 20 business days after each Asset
Sale Offer Trigger Date, the Company shall commence an offer (an "Asset Sale
Offer") to purchase the maximum principal amount of Notes that may be purchased
out of the Excess Proceeds. Any Notes to be purchased pursuant to an Asset Sale
Offer shall be purchased pro rata based on the aggregate principal amount of
Notes outstanding, and all Notes shall be purchased at an offer price in cash in
an amount equal to 100% of the principal amount thereof, plus accrued and unpaid
interest, if any, to the date of purchase. To the extent that any Excess
Proceeds remain after completion of an Asset Sale Offer, the Company may use the
remaining amount for general corporate purposes otherwise permitted by this
Indenture. In the event that the Company is prohibited under the terms of any
agreement governing outstanding Senior Debt of the Company from repurchasing
Notes with Excess Proceeds pursuant to an Asset Sale Offer as set forth in the
first sentence of this Section 4.16(c), the Company shall promptly use all
Excess Proceeds to permanently reduce such outstanding


                                       37


Senior Debt of the Company. Upon the consummation of any Asset Sale Offer, the
amount of Excess Proceeds shall be deemed to be reset to zero.

                  (d) Notice of an Asset Sale Offer shall be mailed, by
first-class mail (with a copy to the Trustee), by the Company not later than the
20th business day after the related Asset Sale Offer Trigger Date to each holder
of Notes at such holder's registered address, stating: (i) that an Asset Sale
Offer Trigger Date has occurred and that the Company is offering to purchase the
maximum principal amount of Notes that may be purchased out of the Excess
Proceeds (to the extent provided in the immediately preceding paragraph), at an
offer price in cash in an amount equal to 100% of the principal amount thereof,
plus accrued and unpaid interest, if any, to the date of the purchase (the
"Asset Sale Offer Purchase Date"), which shall be a business day, specified in
such notice, that is not earlier than 30 days or later than 60 days from the
date such notice is mailed, (ii) the amount of accrued and unpaid interest, if
any, as of the Asset Sale Offer Purchase Date, (iii) that any Note not tendered
will continue to accrue interest, (iv) that, unless the Company defaults in the
payment of the purchase price for the Notes payable pursuant to the Asset Sale
Offer, any Notes accepted for payment pursuant to the Asset Sale Offer shall
cease to accrue interest after the Asset Sale Offer Purchase Date, (v) that
Holders electing to have a Note purchased pursuant to a Asset Sale Offer will be
required to surrender the Note, with the form entitled "Option of Holder to
Elect Purchase" on the reverse of the Note completed, to the Paying Agent at the
address specified in the notice prior to the close of business on the third
Business Day prior to the Asset Sale Offer Purchase Date, (vi) that Holders will
be entitled to withdraw their election if the Paying Agent receives, not later
than the second Business Day prior to the Asset Sale Offer Purchase Date, a
facsimile transmission or letter setting forth the name of the Holder, the
principal amount of the Notes the Holder delivered for purchase and a statement
that such Holder is withdrawing his election to have such Note purchased, (vii)
that Holders whose Notes are purchased only in part will be issued new Notes in
a principal amount equal to the unpurchased portion of the Notes surrendered;
provided, however, that each Note purchased and each new Note issued shall be in
an original principal amount of $1,000 or integral multiples thereof (or if the
Notes purchased were issued in lesser denominations, such lesser denomination),
and (viii) such other information as may be required by applicable laws and
regulations.

                  (e) On the Asset Sale Offer Purchase Date, the Company will
(i) accept for payment the maximum principal amount of Notes or portions thereof
tendered pursuant to the Asset Sale Offer that can be purchased out of Excess
Proceeds from such Asset Sale that are to be applied to an Asset Sale Offer,
(ii) deposit with the Paying Agent U.S. Legal Tender sufficient to pay the
aggregate purchase price of all Notes or portions thereof accepted for payment,
and (iii) deliver or cause to be delivered to the Trustee all Notes tendered
pursuant to the Asset Sale Offer. If less than all Notes tendered pursuant to
the Asset Sale Offer are accepted for payment by the Company for any reason
consistent with this Indenture, selection of the Notes to be purchased by the
Company shall be in compliance with the requirements of the principal national
securities exchange, if any, on which the Notes are listed or, if the Notes are
not so listed, on a pro rata basis or by lot; provided, however, that Notes
accepted for payment in part shall only be purchased in integral multiples of
$1,000. The Paying Agent shall promptly mail to each holder of Notes or portions
thereof accepted for payment an amount equal to the purchase price for such
Notes plus accrued and unpaid interest, if any, thereon, and the Trustee shall
promptly authenticate and mail to such holder of Notes accepted for payment in
part a new Note equal in


                                       38


principal amount to any unpurchased portion of the Notes, and any Note not
accepted for payment in whole or in part shall be promptly returned to the
holder of such Note. On and after an Asset Sale Offer Purchase Date, interest
will cease to accrue on the Notes or portions thereof accepted for payment,
unless the Company defaults in the payment of the purchase price therefor. The
Company will publicly announce the results of the Asset Sale Offer on or as soon
as practicable after the Asset Sale Offer Purchase Date.

                  (f) This Section 4.16 will not apply to a transaction
consummated in compliance with Article Five.

                  (g) The Company will comply with the applicable tender offer
rules, including the requirements of Section 14(e) and Rule 14e-1 under the
Exchange Act, and all other applicable securities laws and regulations in
connection with any Asset Sale Offer and will be deemed not to be in violation
of any of the covenants under this Indenture to the extent such compliance is in
conflict with such covenants.

         SECTION 4.17 LIMITATION ON DESIGNATION OF UNRESTRICTED SUBSIDIARIES.

                  (a) The Company shall not designate any Subsidiary of the
Company (other than a newly created Subsidiary in which no Investment has
previously been made) as an "Unrestricted Subsidiary" under this Indenture (a
"Designation") unless:

                      (i) no Default shall have occurred and be continuing at
         the time of or after giving effect to such Designation;

                      (ii) immediately after giving effect to such Designation,
         the Company would be able to incur $1.00 of additional Indebtedness
         (other than Permitted Indebtedness) under Section 4.10(a); and

                      (iii) the Company would not be prohibited under this
         Indenture from making an Investment at the time of Designation in an
         amount (the "Designation Amount") equal to the greater of (x) the book
         value of such Restricted Subsidiary on such date and (y) the Fair
         Market Value of such Restricted Subsidiary on such date.

In the event of any such Designation, the Company shall be deemed to have made
an Investment constituting a Restricted Payment pursuant to for all purposes of
this Indenture in an amount equal to the Designation Amount.

                  (b) The Company shall not designate an Unrestricted Subsidiary
as a Restricted Subsidiary (a "Redesignation"), unless:

                      (i) no Default shall have occurred and be continuing at
         the time of and after giving effect to such Redesignation; and

                      (ii) all Liens and Indebtedness of such Unrestricted
         Subsidiary outstanding immediately following such Redesignation shall
         be deemed to have been incurred at such time and shall have been
         permitted to be incurred for all purposes of this Indenture.


                                       39


An Unrestricted Subsidiary shall be deemed to be redesignated as a Restricted
Subsidiary at any time if (a) the Company or any other Restricted Subsidiary (i)
provides credit support for, or a guarantee of, any Indebtedness of such
Unrestricted Subsidiary (including any undertaking, agreement or instrument
evidencing such Indebtedness) or (ii) is directly or indirectly liable for any
Indebtedness of such Unrestricted Subsidiary, (b) a default with respect to any
Indebtedness of such Unrestricted Subsidiary (including any right which the
holders thereof may have to take enforcement action against it) would permit
(upon notice, lapse of time or both) any holder of any other Indebtedness of the
Company or any Restricted Subsidiary to declare a default on such other
Indebtedness or cause the payment thereof to be accelerated or payable prior to
its final scheduled maturity, or (c) such Unrestricted Subsidiary incurs
indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any Restricted Subsidiary, except in the case of clause (i) to
the extent permitted under Section 4.11.

                      (c) All Designations and Redesignations shall be evidenced
by Board Resolutions delivered to the Trustee certifying compliance with the
foregoing provisions. Subsidiaries that are not designated by the Board of
Directors as Restricted or Unrestricted Subsidiaries will be deemed to be
Restricted Subsidiaries. The Designation of a Restricted Subsidiary as an
Unrestricted Subsidiary shall be deemed a Designation of all of the
Subsidiaries of such Unrestricted Subsidiary as Unrestricted Subsidiaries.

                                   ARTICLE V

                              SUCCESSOR CORPORATION

         SECTION 5.1 MERGER, CONSOLIDATION AND SALE OF ASSETS.

                  (a) The Company shall not, in any single transaction or series
of related transactions, consolidate or merge with or into (whether or not the
Company is the Surviving Person), or sell, assign, transfer, lease, convey or
otherwise dispose of all or substantially all of its properties or assets
(determined on a consolidated basis for the Company and its Restricted
Subsidiaries) in one or more related transactions to, another Person, and the
Company will not permit any Restricted Subsidiary to enter into any such
transaction or series of related transactions if such transaction or series of
related transactions, in the aggregate, would result in a sale, assignment,
transfer, lease, conveyance or other disposition of all or substantially all of
the properties and assets of the Company and the Restricted Subsidiaries, taken
as a whole, to another Person, unless (i) the Surviving Person is a corporation
organized or existing under the laws of the United States, any state thereof or
the District of Columbia; (ii) the Surviving Person (if other than the Company
or a Guarantor) assumes all the obligations of the Company under the Notes and
this Indenture pursuant to a supplemental indenture or other written agreement,
as the case may be, in a form reasonably satisfactory to the Trustee; (iii)
immediately after such transaction, no Default or Event of Default shall have
occurred and be continuing; (iv) immediately after giving effect to such
transaction or series of related transactions, (a) in the case of a transaction
involving the Company, the Surviving Person shall have a Consolidated Net Worth
equal to or greater than the Consolidated Net Worth of the Company immediately
prior to such transaction or series of related transactions or (b) in the case
of a transaction involving a Restricted Subsidiary of the Company, the Surviving
Person shall have a Consolidated Net


                                       40


Worth equal to or greater than the Consolidated Net Worth of such Restricted
Subsidiary immediately prior to such transaction or series of related
transactions; and (v) after giving pro forma effect to such transaction, the
Surviving Person would be permitted to incur at least $1.00 of additional
indebtedness (other than Permitted Indebtedness) pursuant to Section 4.10(a).
Notwithstanding clauses (iii), (iv) and (v) above, any Restricted Subsidiary
that is a Guarantor may consolidate with, merge into or transfer all or part of
its properties and assets to the Company or another Restricted Subsidiary that
is a Guarantor.

         In the event of any transaction (other than a lease) described in and
complying with the conditions listed in the immediately preceding paragraph in
which the Company or a Guarantor is not the Surviving Person, such Surviving
Person shall succeed to, and be substituted for, and may exercise every right
and power of, the Company, and the Company shall be discharged from its
obligations under, this Indenture and the Notes.

                  (b) In connection with any such consolidation, merger,
amalgamation, transfer, lease or disposition, the Company or such Person shall
have delivered to the Trustee (i) an Officers' Certificate and an Opinion of
Counsel, each in form and substance reasonably satisfactory to the Trustee,
stating that such consolidation, amalgamation, merger, sale, assignment,
conveyance, transfer, lease or disposition and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Indenture and that all conditions precedent therein provided
for relating to such transaction have been complied with, and (ii) if a
supplemental indenture is required in connection with such transaction, an
Opinion of Counsel, in form and substance reasonably satisfactory to the
Trustee, that such supplemental indenture constitutes the legal, valid, binding
and enforceable obligation of the Surviving Entity.

                  (c) For purposes of the foregoing, the transfer (by lease,
assignment, sale or otherwise, in a single transaction or series of
transactions) of all or substantially all of the properties or assets of one or
more Subsidiaries, the Capital Stock of which constitutes all or substantially
all of the properties and assets of the Company, shall be deemed to be the
transfer of all or substantially all of the properties and assets of the
Company.

         SECTION 5.2 SUCCESSOR CORPORATION SUBSTITUTED.

         Upon any consolidation, amalgamation or merger, or any sale,
assignment, conveyance, transfer, lease or disposition of all or substantially
all of the properties and assets of the Company in accordance with Section 5.1,
the Surviving Entity or the Transaction Survivor, as the case may be, shall
succeed to, and be substituted for, and may exercise every rich and power of the
Company under this Indenture, with the same effect as if such successor had been
named as the Company in this Indenture; and thereafter, except in the case of a
lease, the Company shall be discharged from all obligations and covenants under
this Indenture and the Notes.


                                       41


                                   ARTICLE VI

                              DEFAULT AND REMEDIES

         SECTION 6.1 EVENTS OF DEFAULT.

         "Events of Default", wherever used herein, means any one of the
following events (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):

                      (i) the Company defaults for 30 days in the payment when
         due of interest on any Note;

                      (ii) the Company defaults in the payment when due of
         principal on any Note, whether upon maturity, acceleration, optional or
         mandatory redemption, required repurchase or otherwise;

                      (iii) the Company's or any Guarantor's failure to perform
         or comply with any covenant, agreement or warranty in this Indenture
         (other than the defaults specified in clauses (i) and (ii) above) which
         failure continues for 60 days after written notice thereof has been
         given to the Company by the Trustee or to the Company and the Trustee
         by the Holders of at least 25% in aggregate principal amount of the
         then outstanding Notes;

                      (iv) the occurrence of one or more defaults under any
         agreements, indentures or instruments under which the Company or any
         Restricted Subsidiary then has outstanding Indebtedness in excess of
         $5.0 million in the aggregate and, if not already matured at its final
         maturity in accordance with its terms, such Indebtedness shall have
         been accelerated and such acceleration is not rescinded, annulled or
         cured within 10 days thereafter;

                      (v) one or more judgments, orders or decrees for the
         payment of money in excess of $5.0 million, either individually or in
         the aggregate, shall be entered against the Company or any Restricted
         Subsidiary or any of their respective properties and which judgments,
         orders or decrees are not paid, discharged, bonded or stayed or stayed
         pending appeal for a period of 60 days after their entry; or

                      (vi) the Company or any Significant Subsidiary shall (A)
         commence a voluntary case or proceeding under any Bankruptcy Law with
         respect to itself, (B) consent to the entry of a judgment, decree or
         order for relief against it in an involuntary case or proceeding under
         any Bankruptcy Law, (C) consent to the appointment of a Custodian of it
         or for substantially all of its property, (D) consent to or acquiesce
         in the institution of a bankruptcy or an insolvency proceeding against
         it, (E) make a general assignment for the benefit of its creditors, (F)
         admit in writing its inability to pay its debts as they become due, or
         (G) take any corporate action to authorize or effect any of the
         foregoing; or


                                       42


                      (vii) a court of competent jurisdiction shall enter a
         judgment, decree or order for relief in respect of the Company or any
         Significant Subsidiary in an involuntary case or proceeding under any
         Bankruptcy Law which shall (A) approve as properly filed a petition
         seeking reorganization, arrangement, adjustment or composition in
         respect of the Company or any Significant Subsidiary, (B) appoint a
         Custodian of the Company or any Significant Subsidiary or for
         substantially all of its property or (C) order the winding-up or
         liquidation of its affairs; and such judgment, decree or order shall
         remain unstayed and in effect for a period of 60 consecutive days; or

                      (viii) any Note Guarantee ceases to be in full force and
         effect (except as contemplated by the terms of this Indenture) or any
         Guarantor denies or disaffirms its obligations under this Indenture or
         its Note Guarantee.

         The Company shall provide an Officers' Certificate to the Trustee
within five days of the occurrence of any Default or Event of Default (provided,
however, that pursuant to Section 4.6 hereof the Company shall provide such
certification at least annually whether or not they know of any Default or Event
of Default) that has occurred and, if applicable, describe such Default or Event
of Default and the status thereof.

         SECTION 6.2 ACCELERATION.

                  (a) If any Event of Default (other than as specified in clause
(vi) or (vii) of Section 6.1 with respect to the Company) occurs and is
continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of the then outstanding Notes may, and the Trustee at the request of such
Holders shall, declare all the Notes to be due and payable immediately by notice
in writing to the Company, and to the Company and the Trustee if by the Holders,
specifying the respective Event of Default and that such notice is a "notice of
acceleration," and the Notes shall become immediately due and payable.
Notwithstanding the foregoing, in the case of an Event of Default arising from
the events specified in clause (vi) or (vii) of Section 6.1 with respect to the
Company, the principal of, premium, if any, and any accrued interest on all
outstanding Notes shall ipso facto become immediately due and payable without
further action or notice.

                  (b) Any time after a declaration of acceleration, but before a
judgment or decree for payment of the money due has been obtained by the
Trustee, the Holders of a majority in principal amount of the Notes outstanding,
by written notice to the Company and the Trustee, may rescind and annul such
declaration and its consequences if (i) the Company has paid or deposited with
the Trustee a sum sufficient to pay (A) all sums paid or advanced by the Trustee
and the reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, (B) all overdue interest (including any
interest accrued subsequent to an Event of Default specified in clause (vi) or
(vii) of Section 6.1 hereof) on all Notes, (C) the principal of and premium, if
any, on any Notes which have become due otherwise than by such declaration or
occurrence of acceleration and interest thereon at the rate borne by the Notes,
and (D) to the extent that payment of such interest is lawful, interest upon
overdue interest at the rate borne by the Notes; and (ii) all Events of Default,
other than the non-payment of principal of Notes which have become due solely by
such declaration or occurrence of acceleration, have


                                       43


been cured or waived; and (iii) the rescission would not conflict with any
judgment, order or decree of any court of competent jurisdiction.

                  (c) The Holders of a majority in aggregate principal amount of
the Notes then outstanding by notice to the Trustee may, on behalf of the
Holders of all of the Notes, waive any existing Default or Event of Default and
its consequences under this Indenture except (i) a continuing Default or Event
of Default in the payment of the principal of, or premium, if any, or interest
on, the Notes (which may be waived only with the consent of each Holder of Notes
affected), or (ii) in respect of a covenant or provision which under this
Indenture cannot be modified or amended without the consent of the Holder of
each affected Note outstanding.

         SECTION 6.3 OTHER REMEDIES.

         If an Event of Default occurs and is continuing, the Trustee may pursue
any available remedy by proceeding at law or in equity to collect the payment of
the principal of or interest on the Notes or to enforce the performance of any
provision of the Notes or this Indenture.

         The Trustee may maintain a proceeding even if it does not possess any
of the Notes or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Holder in exercising any right or remedy accruing
upon an Event of Default shall not impair the right or remedy or constitute a
waiver of or acquiescence in the Event of Default. No remedy is exclusive of any
other remedy. All available remedies are cumulative to the extent permitted by
law.

         SECTION 6.4 WAIVER OF PAST DEFAULTS.

         Subject to Sections 2.9, 6.2, 6.7 and 9.2, prior to the declaration of
acceleration of the Notes, the Holders of not less than a majority in principal
amount of the outstanding Notes by written notice to the Trustee may on behalf
of all of the Holders waive any past Default or Event of Default and its
consequences, except a Default in the payment of principal of or interest on any
Note as specified in clauses (i) and (ii) of Section 6.1 or a Default in respect
of any term or provision of this Indenture that may not be modified or amended
without the consent of each Holder affected as provided in Section 9.2. In case
of any such waiver, the Company, the Trustee and the Holders shall be restored
to their former positions and rights hereunder and under the Notes,
respectively. This paragraph of this Section 6.4 shall be in lieu of Section
316(a)(1)(B) of the TIA and such Section 316(a)(1)(B) of the TIA is hereby
expressly excluded from this Indenture and the Notes, as permitted by the TIA.

         Upon any such waiver, such Default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured and not to have occurred for every
purpose of this Indenture and the Notes, but no such waiver shall extend to any
subsequent or other Default or Event of Default or impair any right consequent
thereon.

         SECTION 6.5 CONTROL BY MAJORITY.

         Subject to Section 2.9, the Holders of a majority in principal amount
of the outstanding Notes may direct the time, method and place of conducting any
proceeding for any remedy


                                       44


available to the Trustee or exercising any trust or power conferred on it,
including, without limitation, any remedies provided for in Section 6.3;
provided, however, that the Trustee may take any other action deemed proper by
the Trustee which is not inconsistent with such direction. Subject to Section
7.1, however, the Trustee may refuse to follow any direction that the Trustee
reasonably believes conflicts with any law or this Indenture, that the Trustee
determines may be unduly prejudicial to the rights of another Holder or that
exposes the Trustee to personal liability. This Section 6.5 shall be in lieu of
Section 316(a)(1)(A) of the TIA, and such Section 316(a)(1)(A) of the TIA is
hereby expressly excluded from this Indenture and the Notes, as permitted by the
TIA.

         SECTION 6.6 LIMITATION ON SUITS.

         No Holder shall have any right to institute any proceeding, judicial or
otherwise with respect to this Indenture, or for the appointment of a receiver
or trustee, or for any other remedy hereunder, unless:

                  (a) such Holder has previously given written notice to the
Trustee of a continuing Event of Default;

                  (b) the Holders of not less than 25% in principal amount of
the outstanding Notes shall have made written request to the Trustee to
institute proceedings in respect of such Event of Default in its own name as
Trustee;

                  (c) such Holder or Holders have offered to the Trustee
reasonable indemnity against the costs, expenses and liabilities to be incurred
in compliance with such request;

                  (d) the Trustee for 60 days after its receipt of such notice,
request and offer of indemnity has failed to institute any such proceeding; and

                  (e) no direction inconsistent with such written request has
been given to the Trustee during such 60-day period by the Holders of a majority
in principal amount of the outstanding Notes.

         A Holder may not use this Indenture to prejudice the rights of another
Holder or to obtain a preference or priority over such other Holder.

         SECTION 6.7 RIGHTS OF HOLDERS TO RECEIVE PAYMENT.

         Notwithstanding any other provision of this Indenture or of the Notes,
the right of any Holder to receive payment of the principal of and interest on a
Note, on or after the respective due dates expressed in such Note, or to bring
suit for the enforcement of any such payment on or after such respective dates,
shall not be impaired or affected without the express prior written consent of
such Holder.

         SECTION 6.8 COLLECTION SUIT BY TRUSTEE.

         If an Event of Default in payment of principal or interest specified in
clause (i) or (ii) of Section 6.1 of this Indenture occurs and is continuing,
the Trustee may recover judgment in its


                                       45


own name and as trustee of an express trust against the Company or any other
obligor on the Notes for the whole amount of the principal and accrued interest
remaining unpaid, together with interest on overdue principal and, to the extent
that payment of such interest is lawful, interest on overdue installments of
interest as set forth in Section 4.1 and such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.

         SECTION 6.9 TRUSTEE MAY FILE PROOFS OF CLAIM.

         The Trustee may file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses, taxes,
disbursements and advances of the Trustee, its agents and counsel) and the
Holders allowed in any judicial proceedings relating to the Company or any other
obligor upon the Notes, any of their respective creditors or any of their
respective property and shall be entitled and empowered to collect and receive
any monies or other property payable or deliverable on any such claims and to
distribute the same, and any Custodian in any such judicial proceedings is
hereby authorized by each Holder to make such payments to the Trustee and, in
the event that the Trustee shall consent to the making of such payments directly
to the Holders, to pay to the Trustee any amount due to it for the reasonable
compensation, expenses, taxes, disbursements and advances of the Trustee, its
agent and counsel, and any other amounts due the Trustee under Section 7.7. The
Company's payment obligations under this Section 6.9 shall be secured in
accordance with the provisions of Section 7.7 hereunder. Nothing herein
contained shall be deemed to authorize the Trustee to authorize or consent to or
accept or adopt on behalf of any Holder any plan of reorganization, arrangement,
adjustment or composition affecting the Notes or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Holder in any such proceeding.

         SECTION 6.10 PRIORITIES.

         If the Trustee collects any money or property pursuant to this Article
Six, it shall pay out the money in the following order:

         First: to the Trustee for amounts due under Section 7.7, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel;

         Second: if the Holders are forced to proceed against the Company
directly without the Trustee, to Holders for their collection costs;

         Third: subject to Article Ten, to Holders for amounts due and unpaid on
the Notes for principal and interest, ratably, without preference or priority of
any kind, according to the amounts due and payable on the Notes for principal
and interest, respectively; and

         Fourth: to the Company or any other obligor on the Notes, as their
interests may appear, or as a court of competent jurisdiction may direct.

         The Trustee, upon prior notice to the Company, may fix a record date
and payment date for any payment to Holders pursuant to this Section 6.10.


                                       46


         SECTION 6.11 UNDERTAKING FOR COSTS.

         In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees and expenses, against any party litigant in the suit, having due
regard to the merits and good faith of the claims or defenses made by the party
litigant. This Section 6.11 does not apply to a suit by the Trustee, a suit by a
Holder pursuant to Section 6.6, or a suit by a Holder or group of Holders of
more than 10% in principal amount of the outstanding Notes.

                                  ARTICLE VII

                                     TRUSTEE

         SECTION 7.1 DUTIES OF TRUSTEE.

                  (a) If a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers vested in
it by this Indenture and use the same degree of care and skill in its exercise
thereof as a prudent person would exercise or use under the circumstances in the
conduct of his own affairs.

                  (b) Except during the continuance of a Default or an Event of
Default:

                      (i) The Trustee need perform only those duties as are
         specifically set forth in this Indenture and no covenants or
         obligations shall be implied in this Indenture that are adverse to the
         Trustee; and

                      (ii) In the absence of bad faith on its part, the Trustee
         may conclusively rely, as to the truth of the statements and the
         correctness of the opinions expressed therein, upon certificates or
         opinions furnished to the Trustee and conforming to the requirements of
         this Indenture. However, in the case of any such certificates or
         opinions that by any provision hereof are specifically required to be
         furnished to the Trustee, the Trustee shall examine the certificates
         and opinions to determine whether or not they conform to the
         requirements of this Indenture.

                  (c) Notwithstanding anything to the contrary herein contained,
the Trustee may not be relieved from liability for its own negligent action, its
own negligent failure to act, or its own willful misconduct, except that:

                      (i) This paragraph does not limit the effect of
         paragraph(b) of this Section 7.1;

                      (ii) The Trustee shall not be liable for any error of
         judgment made in good faith by a Trust Officer, unless it is proved
         that the Trustee was negligent in ascertaining the pertinent facts; and


                                       47


                      (iii) The Trustee shall not be liable with respect to any
         action it takes or omits to take in good faith in accordance with a
         direction received by it pursuant to Section 6.2, 6.4 or 6.5.

                  (d) No provision of this Indenture shall require the Trustee
to expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of its
rights or powers if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.

                  (e) Every provision of this Indenture that in any way relates
to the Trustee is subject to paragraphs (a), (b), (c) and (d) of this Section
7.1 and Section 7.2.

                  (f) The Trustee shall not be liable for interest on any money
or assets received by it except as the Trustee may agree in writing with the
Company. Assets held in trust by the Trustee need not be segregated from other
assets of the Trustee except to the extent required by law.

         SECTION 7.2 RIGHTS OF TRUSTEE. Subject to Section 7.1:

                  (a) The Trustee may rely and shall be fully protected in
acting or refraining from acting upon any document believed by it to be genuine
and to have been signed or presented by the proper Person. The Trustee need not
investigate any fact or matter stated in the document.

                  (b) Before the Trustee acts or refrains from acting, it may
consult with counsel of its selection and may require an Officers' Certificate
or an Opinion of Counsel, which shall conform to Sections 11.4 and 11.5. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on such Officers' Certificate or Opinion of Counsel.

                  (c) The Trustee may act through its attorneys and agents and
shall not be responsible for the misconduct or negligence of any agent appointed
with due care.

                  (d) The Trustee shall not be liable for any action that it
takes or omits to take in good faith which it reasonably believes to be
authorized or within its rights or powers.

                  (e) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, notice, request, direction, consent, order, bond,
debenture, or other paper or document, but the Trustee, in its discretion, may
make such further inquiry or investigation into such facts or matters as it may
see fit, and, if the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled, upon reasonable notice to the Company, to
examine the books, records, and premises of the Company, personally or by agent
or attorney and to consult with the officers and representatives of the Company,
including the Company's accountants and attorneys.

                  (f) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request, order or
direction of any of the Holders pursuant to the provisions of this Indenture,
unless such Holders shall have offered to the Trustee


                                       48


security or indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities which may be incurred by it in compliance with such
request, order or direction.

                  (g) The Trustee shall not be required to give any bond or
surety in respect of the performance of its powers and duties hereunder.

                  (h) Delivery of reports, information and documents to the
Trustee under Section 4.9 hereof is for informational purposes only and the
Trustee's receipt of the foregoing shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).

                  (i) The Trustee shall not be charged with knowledge of any
Default or Event of Default unless a trust officer of the Trustee (i) has actual
knowledge of such Default or Event of Default or (ii) the Trustee has been
notified in writing by the Company or any Holder of Notes.

         SECTION 7.3 INDIVIDUAL RIGHTS OF TRUSTEE.

         The Trustee in its individual or any other capacity may become the
owner or pledgee of Notes and may otherwise deal with the Company, any
Subsidiary, or their respective Affiliates with the same rights it would have if
it were not Trustee. Any Agent may do the same with like rights. However, the
Trustee must comply with Sections 7.10 and 7.11 hereof.

         SECTION 7.4 TRUSTEE'S DISCLAIMER.

         The Trustee makes no representation as to the validity or adequacy of
this Indenture or the Notes, and it shall not be accountable for the Company's
use of the proceeds from the Notes, and it shall not be responsible for any
statement of the Company in this Indenture or the Notes other than the Trustee's
certificate of authentication.

         SECTION 7.5 NOTICE OF DEFAULT.

         If a Default or an Event of Default occurs and is continuing and if it
is known to a Trust Officer, the Trustee shall mail to each Holder notice of the
uncured Default or Event of Default within 90 days after such Default or Event
of Default occurs. Except in the case of a Default or an Event of Default in
payment of principal of, or interest on, any Note, including an accelerated
payment, a Default in payment on the Change of Control Payment Date pursuant to
a Change of Control Offer or on the Proceeds Purchase Date pursuant to an Asset
Sale Offer or a Default in compliance with Article Five hereof, the Trustee may
withhold the notice if and so long as its Board of Directors, the executive
committee of its Board of Directors or a committee of its directors and/or Trust
Officers in good faith determines that withholding the notice is in the interest
of the Holders. The foregoing sentence of this Section 7.5 shall be in lieu of
the proviso to Section 315(b) of the TIA and such proviso to Section 315(b) of
the TIA is hereby expressly excluded from this Indenture and the Notes, as
permitted by the TIA.



                                       49


         SECTION 7.6 REPORTS BY TRUSTEE TO HOLDERS.

         Within 60 days after each May 15 of each year beginning with 2003, the
Trustee shall, to the extent that any of the events described in TIA Section
313(a) occurred within the previous twelve months, but not otherwise, mail to
each Holder a brief report dated as of such date that complies with TIA Section
313(a). The Trustee also shall comply with TIA Sections 313(b), (c) and (d).

         A copy of each report at the time of its mailing to Holders shall be
mailed to the Company and filed with the Commission and each stock exchange, if
any, on which the Notes are listed.

         The Company shall promptly notify the Trustee if the Notes become
listed on any stock exchange and the Trustee shall comply with TIA Section
313(d).

         SECTION 7.7 COMPENSATION AND INDEMNITY.

         The Company shall pay to the Trustee from time to time such
compensation for its services as has been agreed to in writing signed by the
Company and Trustee. The Trustee's compensation shall not be limited by any law
on compensation of a trustee of an express trust. The Company shall reimburse
the Trustee upon request for all reasonable out-of-pocket expenses incurred or
made by it in connection with the performance of its duties under this
Indenture. Such expenses shall include the reasonable fees and expenses of the
Trustee's agents and counsel.

         The Company shall indemnify each of the Trustee (or any predecessor
Trustee) and its agents, employees, stockholders, Affiliates and directors and
officers for, and hold them harmless against, any and all loss, liability,
damage, claim or expense (including reasonable fees and expenses of counsel),
including taxes (other than taxes based on the income of the Trustee) incurred
by them except for such actions to the extent caused by any negligence, bad
faith or willful misconduct on their part, arising out of or in connection with
the acceptance or administration of this trust including the reasonable costs
and expenses of defending themselves against any claim or liability in
connection with the exercise or performance of any of their rights, powers or
duties hereunder. The Trustee shall notify the Company promptly of any claim
asserted against the Trustee for which it may seek indemnity. At the Trustee's
sole discretion, the Company shall defend the claim and the Trustee shall
cooperate and may participate in the defense; provided, however, that any
settlement of a claim shall be approved in writing by the Trustee.

         Alternatively, the Trustee may at its option have separate counsel of
its own choosing and the Company shall pay the reasonable fees and expenses of
such counsel.

         To secure the Company's payment obligations in this Section 7.7, the
Trustee shall have a lien prior to the Notes on all assets or money held or
collected by the Trustee, in its capacity as Trustee, except assets or money
held in trust to pay principal of or interest on particular Notes.


                                       50


         When the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.1(vi) or (vii) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.

         The provisions of this Section 7.7 shall survive the resignation or
removal of the Trustee and the termination of this Indenture.

         SECTION 7.8 REPLACEMENT OF TRUSTEE.

         The Trustee may resign by so notifying the Company. The Holders of a
majority in principal amount of the outstanding Notes may remove the Trustee by
so notifying the Company and the Trustee and may appoint a successor Trustee.
The Company may remove the Trustee if:

                  (a) the Trustee fails to comply with Section 7.10;

                  (b) the Trustee is adjudged bankrupt or insolvent;

                  (c) a receiver or other public officer takes charge of the
Trustee or its property; or

                  (d) the Trustee becomes incapable of acting.

         If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, the Company shall notify each Holder of such
event and shall promptly appoint a successor Trustee. Within one year after the
successor Trustee takes office, the Holders of a majority in principal amount of
the Notes may appoint a successor Trustee to replace the successor Trustee
appointed by the Company.

         A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Immediately after that,
the retiring Trustee shall transfer all property held by it as Trustee to the
successor Trustee, subject to the lien provided in Section 7.7, the resignation
or removal of the retiring Trustee shall become effective, and the successor
Trustee shall have all the rights, powers and duties of the Trustee under this
Indenture. A successor Trustee shall mail notice of its succession to each
Holder.

         If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee, the Company or the
Holders of at least 10% in principal amount of the outstanding Notes may
petition any court of competent jurisdiction for the appointment of a successor
Trustee.

         If the Trustee fails to comply with Section 7.10, any Holder may
petition any court of competent jurisdiction for the removal of the Trustee and
the appointment of a successor Trustee.

         Notwithstanding any resignation or replacement of the Trustee pursuant
to this Section 7.8, the Company's obligations under Section 7.7 shall continue
for the benefit of the retiring Trustee.


                                       51


         SECTION 7.9 SUCCESSOR TRUSTEE BY MERGER, ETC.

         If the Trustee consolidates with, merges or converts into, or transfers
all or substantially all of its corporate trust business to, another
corporation, the resulting, surviving or transferee corporation without any
further act shall, if such resulting, surviving or transferee corporation is
otherwise eligible hereunder, be the successor Trustee; provided, however, that
such corporation shall be otherwise qualified and eligible under this Article
Seven.

         SECTION 7.10 ELIGIBILITY; DISQUALIFICATION.

         This Indenture shall always have a Trustee who satisfies the
requirement of TIA Sections 310(a)(1), (2) and (5). The Trustee (or, in the case
of a corporation included in a bank holding company system, the related bank
holding company) shall have a combined capital and surplus of at least $50
million as set forth in its most recent published annual report of condition. In
addition, if the Trustee is a corporation included in a bank holding company
system, the Trustee, independently of such bank holding company, shall meet the
capital requirements of TIA Section 310(a)(2). The Trustee shall comply with TIA
Section 310(b); provided, however, that there shall be excluded from the
operation of TIA Section 310(b)(1) any indenture or indentures under which other
securities, or certificates of interest or participation in other securities, of
the Company are outstanding, if the requirements for such exclusion set forth in
TIA Section 310(b)(1) are met. The provisions of TIA Section 310 shall apply to
the Company, as obligor of the Notes.

         SECTION 7.11 PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.

         The Trustee shall comply with TIA Section 311(a), excluding any
creditor relationship listed in TIA Section 311(b). A Trustee who has resigned
or been removed shall be subject to TIA Section 311(a) to the extent indicated
therein. The provisions of TIA Section 311 shall apply to the Company, as
obligor on the Notes.

                                  ARTICLE VIII

                     SATISFACTION AND DISCHARGE; DEFEASANCE

         SECTION 8.1 SATISFACTION AND DISCHARGE OF INDENTURE.

                  (a) This Indenture shall be discharged and shall cease to be
of further effect (except as to surviving rights of registration of transfer or
exchange of Notes herein expressly provided for) as to all outstanding Notes and
the Trustee, on demand of and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture,
when:

                      (i) either

                          (A) all Notes theretofore authenticated and delivered
                  (other than (x) Notes which have been lost, stolen or
                  destroyed and which have been replaced or paid as provided in
                  Section 2.7 hereof and (y) Notes for whose


                                       52


                  payment money has theretofore been deposited in trust by the
                  Company and thereafter repaid to the Company or discharged
                  from such trust) have been delivered to the Trustee for
                  cancellation; or

                          (B) all Notes not theretofore delivered to the Trustee
                  for cancellation (other than (x) Notes which have been lost,
                  stolen or destroyed and which have been replaced or paid as
                  provided in Section 2.7 hereof and (y) Notes for whose payment
                  money has theretofore been deposited in trust or segregated
                  and held in trust by the Company and thereafter repaid to the
                  Company or discharged from such trust) have been called for
                  redemption pursuant to the terms of this Indenture or have
                  otherwise become due and payable, and the Company, in each
                  case, has irrevocably deposited or caused to be deposited with
                  the Trustee in trust for the purpose U.S. Legal Tender
                  sufficient to pay and discharge the entire indebtedness on
                  such Notes not theretofore delivered to the Trustee for
                  cancellation, for the principal of, premium, if any, and
                  interest to the date of such deposit or redemption together
                  with irrevocable instructions from the Company directing the
                  Trustee to apply such funds to the payment or redemption
                  thereof, as the case may be;

                      (ii) the Company and the Guarantors have paid or caused to
         be paid all other sums payable hereunder by the Company and the
         Guarantors; and

                      (iii) the Company has delivered to the Trustee an
         Officers' Certificate and an opinion of Counsel each stating that all
         conditions precedent herein provided for relating to the satisfaction
         and discharge of this Indenture have been complied with.

                  (b) Notwithstanding the satisfaction and discharge of this
Indenture, the obligations of the Company to the Trustee under Section 7.7
hereof shall survive and, if money shall have been deposited with the Trustee
pursuant to clause (a)(i)(B) of this Section 8.1, the obligations of the Trustee
under Sections 8.3 and 8.4 shall survive.

         SECTION 8.2 DEFEASANCE OR COVENANT DEFEASANCE.

                  (a) Subject to the satisfaction of the conditions in Section
8.2(c) hereof, the Company may, at its option by Board Resolution, at any time,
with respect to the Notes, elect to have the obligations of the Company and the
Guarantors discharged with respect to the outstanding Notes ("defeasance"). Upon
such defeasance, the Company shall be deemed to have paid and discharged the
entire indebtedness represented by the outstanding Notes and the Note
Guarantees, which shall thereafter be deemed to be "outstanding" only for the
purposes of Section 8.4 hereof and the other Sections of and matters under this
Indenture referred to in clauses (i) and (ii) below, and to have satisfied all
its other obligations under such Notes and this Indenture, except for the
following, which shall survive until otherwise terminated or discharged
hereunder: (i) the rights of Holders of Notes to receive solely from the trust
fund described in Section 8.2(c) and as more fully set forth in such Section,
payments in respect of the principal of and interest on such Notes when such
payments are due, (ii) the Company's obligations under Sections 2.3, 2.5, 2.6,
2.7 and 4.2, the rights, powers, trusts, duties and immunities of the Trustee
hereunder, including, without limitation, the Trustee's rights under Section
7.7, and (iv) this


                                       53


Article Eight. Subject to compliance with this Article Eight, the Company may
exercise its option under this Section 8.2(a) notwithstanding the prior exercise
of its option under Section 8.2(b) with respect to the Notes.

                  (b) Subject to the satisfaction of the conditions in Section
8.2(c) hereof, the Company may, at its option by Board Resolution, at any time,
elect to effect covenant defeasance ("covenant defeasance"). On and after the
date such conditions are satisfied, (i) the Company shall be released from its
obligations under any covenant or provision contained in Sections 4.4, 4.5,
4.6(a), 4.7 and 4.9 through 4.19, (ii) clauses (iii) through (vi) of Section 6.1
hereof shall not apply, and (iii) the provisions of Articles Five, Ten and
Eleven shall not apply, and the Notes shall thereafter be deemed to be not
"outstanding" for the purposes of any direction, waiver, consent or declaration
or act of Holders (and the consequences of any thereof) in connection with such
covenants and the provisions of Articles Five, Ten and Eleven, but shall
continue to be deemed "outstanding" for all other purposes hereunder. For this
purpose, such covenant defeasance means that, with respect to the Notes, the
Company may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in any such Section or Article, whether
directly or indirectly, by reason of any reference elsewhere herein to any such
Section or Article or by reason of any reference in any such Section or Article
to any other provision herein or in any other document and such omission to
comply shall not constitute a Default or an Event of Default under clauses (iii)
through (vi) of Section 6.1 hereof, but, except as specified above, the
remainder of this Indenture shall be unaffected thereby.

                  (c) In order to effect defeasance or covenant defeasance, the
following conditions must be satisfied:

                      (i) the Company shall have irrevocably deposited with the
         Trustee (or another trustee satisfying the requirements of Section 7.10
         hereof who agrees to comply with the provisions of this Article Eight
         applicable to it), as trust funds in trust, for the benefit of the
         Holders of such Notes, U.S. Legal Tender, U.S. Government Obligations
         or a combination thereof, in such amounts as will be sufficient (in the
         opinion of a nationally recognized firm of independent public
         accountants or a nationally recognized investment banking firm, as
         evidenced by a written report), without consideration of reinvestment
         of interest of such U.S. Government Obligations, to pay the principal
         of, premium, if any, and interest on the outstanding Notes (except
         lost, stolen or destroyed Notes which have been replaced or paid) to
         maturity or redemption, as the case may be, and the Company shall have
         irrevocably instructed the Trustee (or such other trustee) to apply
         such U.S. Legal Tender or U.S. Government Obligations to said payments
         in respect of the Notes;

                      (ii) the Company shall have delivered to the Trustee one
         or more Opinions of Counsel in the United States (which counsel or
         counsels shall be independent of the Company) to the effect that:

                           (A) the holders of the outstanding Notes will not
                  recognize income gain or loss for Federal income tax purposes
                  as a result of such defeasance or covenant defeasance, as the
                  case may be, and will be subject to Federal income tax on the
                  same amounts, in the same manner and at the same times as
                  would


                                       54


                  have been the case if such defeasance or covenant defeasance,
                  as the case may be, had not occurred (which opinion, in the
                  case of defeasance, shall be based upon a ruling of the
                  Internal Revenue Service or a change in applicable Federal
                  income tax law occurring after the Issue Date);

                            (B) the trust funds will not be subject to any
                  rights of holders of Indebtedness of the Company (other than
                  holders of the Notes); and

                            (C) assuming no bankruptcy of the Company occurs
                  between the date of deposit and the 91st day following the
                  deposit, after the 91st day following the deposit the trust
                  funds will not be subject to the effect of any applicable
                  bankruptcy, insolvency, reorganization or similar laws
                  affecting creditors' rights generally;

                      (iii) no Default or Event of Default shall have occurred
         and be continuing on the date of such deposit, at any time during the
         period ending on the 91st day after the date of such deposit;

                      (iv) such defeasance or covenant defeasance shall not
         result in a breach or violation of, or constitute a default under, any
         other material agreement or instrument to which the Company is a party
         or by which it is bound;

                      (v) the Company shall have delivered to the Trustee an
         Officers' Certificate stating that the deposit was not made by the
         Company with the intent of defeating, hindering, delaying or defrauding
         any other creditors of the Company or others;

                      (vi) no event or condition shall exist that would prevent
         the Company from making payments of the principal of and interest on
         the Notes on the date of such deposit or at any time during the period
         ending on the 91st day after the date of such deposit; and

                      (vii) the Company shall have delivered to the Trustee an
         Officers' Certificate and an Opinion of Counsel, each stating that all
         conditions precedent (other than conditions requiring the passage of
         time) to either defeasance or covenant defeasance, as the case may be,
         have been complied with and that no violations under agreements
         governing any other outstanding Indebtedness of the Company would
         result therefrom.

Opinions required to be delivered under this Section may have qualifications
customary for opinions of the type required.

         SECTION 8.3 APPLICATION OF TRUST MONEY.

         The Trustee or Paying Agent shall hold in trust U.S. Legal Tender or
U.S. Government Obligations deposited with it pursuant to Section 8.1 or 8.2,
and shall apply the deposited U.S. Legal Tender and the money from U.S.
Government Obligations in accordance with this Indenture to the payment of the
principal of and interest on the Notes. The Trustee shall be


                                       55


under no obligation to invest said U.S. Legal Tender or U.S. Government
Obligations except as it may agree in writing with the Company.

         The Company shall pay, and indemnify the Trustee against, any tax, fee
or other charge imposed on or assessed against the Legal Tender or U.S.
Government Obligations deposited pursuant to Section 8.1 or 8.2 or the principal
and interest received in respect thereof other than any such tax, fee or other
charge which by law is for the account of the Holders of outstanding Notes.

         SECTION 8.4 REPAYMENT TO THE COMPANY.

         Subject to Sections 8.1 and 8.2, the Trustee and the Paying Agent shall
promptly pay to the Company upon request any excess U.S. Legal Tender or U.S.
Government Obligations held by them at any time and thereupon shall be relieved
from all liability with respect to such money. The Trustee and the Paying Agent
shall pay to the Company upon request any money held by them for the payment of
principal or interest that remains unclaimed for one year; provided, however,
that the Trustee or such Paying Agent, before being required to make any
payment, may at the expense of the Company cause to be published once in a
newspaper of general circulation in the City of New York or mail to each Holder
entitled to such money notice that such money remains unclaimed and that after a
date specified therein which shall be at least 30 days from the date of such
publication or mailing any unclaimed balance of such money then remaining will
be repaid to the Company. After payment to the Company, Holders entitled to such
money must look to the Company for payment as general creditors unless an
applicable law designates another Person.

         SECTION 8.5 REINSTATEMENT.

         If the Trustee or Paying Agent is unable to apply any U.S. Legal Tender
or U.S. Government Obligations in accordance with Section 8.1 or 8.2 by reason
of any legal proceeding or by reason of any order or judgment of any court or
governmental authority enjoining, restraining or otherwise prohibiting such
application, the Company's and the Guarantors' obligations under this Indenture
and the Notes shall be revived and reinstated as though no deposit had occurred
pursuant to Section 8.1 or 8.2, as the case may be, until such time as the
Trustee or Paying Agent is permitted to apply all such U.S. Legal Tender or U.S.
Government Obligations in accordance with Section 8.1 or 8.2, as the case may
be; provided, however, that if the Company has made any payment of interest on
or principal of any Notes because of the reinstatement of its obligations, the
Company shall be subrogated to the rights of the Holders of such Notes to
receive such payment from the U.S. Legal Tender or U.S. Government Obligations
held by the Trustee or Paying Agent.

         SECTION 8.6 ACKNOWLEDGMENT OF DISCHARGE BY TRUSTEE.

         After (i) the conditions of Section 8.1 or 8.2(a) have been satisfied,
(ii) the Company has paid or caused to be paid all other sums payable hereunder
by the Company and (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent referred to in clause (i), above, relating to the satisfaction and
discharge or defeasance of this Indenture have been complied with, the Trustee
upon request


                                       56


shall acknowledge in writing the discharge of the Company's and the Guarantors'
obligations under this Indenture except for those surviving obligations
specified in Section 8.1 or 8.2, as the case may be.

                                   ARTICLE IX

                       AMENDMENTS, SUPPLEMENTS AND WAIVERS

         SECTION 9.1 WITHOUT CONSENT OF HOLDERS AND ANY GUARANTOR.

         The Company, when authorized by a Board Resolution, and the Trustee,
together, may amend or supplement this Indenture, the Notes or the Note
Guarantees without notice to or consent of any Holder or any Guarantor:

                      (i) to cure any ambiguity, defect or inconsistency;
         provided, however, that such amendment or supplement does not adversely
         affect the rights of any Holder;

                      (ii) to effect the assumption by a successor Person of all
         obligations of the Company under the Notes and this Indenture in the
         event of any Disposition involving the Company in which the Company is
         not the Surviving Person;

                      (iii) to provide for uncertificated Notes in addition to
         or in place of certificated Notes;

                      (iv) to comply with any requirements of the Commission in
         order to effect or maintain the qualification of this Indenture under
         the TIA;

                      (v) to make any change that would provide any additional
         benefit or rights to the Holders;

                      (vi) to make any other change that does not adversely
         affect the rights of any Holder under this Indenture; or

                      (vii) to add Guarantees with respect to the Notes or to
         secure the Notes, or to release any Note Guarantee that is permitted to
         be released under this Indenture;

provided, however, that the Company has delivered to the Trustee an Opinion of
Counsel stating that such amendment or supplement complies with the provisions
of this Section 9.1.

         SECTION 9.2 WITH CONSENT OF HOLDERS.

                  (a) Subject to Section 6.7, the Company and the Guarantors,
when authorized by a Board Resolution, and the Trustee, together, with the
written consent of the Holder or Holders of not less than a majority in
aggregate principal amount of the then outstanding Notes (including consents
obtained in connection with a tender offer or exchange offer for the Notes), may
amend or supplement this Indenture, the Notes and the Note Guarantees without
notice to any other Holder. Subject to Section 6.2 and 6.7, the Holder or
Holders of not less than a


                                       57


majority in aggregate principal amount of the then outstanding Notes may waive
compliance by the Company with any provision of this Indenture or the Notes
without notice to any other Holder.

                  (b) Notwithstanding Section 9.2(a) hereof, no amendment,
supplement or waiver, including a waiver pursuant to Section 6.4, shall, without
the prior written consent of each Holder of each Note affected thereby:

                      (i) reduce the principal amount of the Notes whose holders
         must consent to an amendment, supplement or waiver;

                      (ii) reduce the principal of or change the fixed maturity
         of any Note, or alter or waive the provisions with respect to the
         redemption of the Notes in a manner adverse to the holders of the Notes
         other than with respect to a Change of Control Offer or an Asset Sale
         Offer;

                      (iii) reduce the rate of or change the time for payment of
         interest on any Notes;

                      (iv) waive a Default or Event of Default in the payment of
         principal of, premium, if any, or interest on the Notes (except that
         holders of at least a majority in aggregate principal amount of the
         then outstanding Notes may (A) rescind an acceleration of the Notes
         that resulted from a non-payment default and (B) waive the payment
         default that resulted from such acceleration);

                      (v) make any Note payable in money other than that stated
         in the Notes;

                      (vi) make any change in the provisions of this Indenture
         relating to waivers of (A) past Defaults or Events of Default or (B)
         the rights of holders of Notes to receive payments of principal of, or
         premium, if any, or interest on, the Notes; or

                      (vii) following the occurrence of a Change of Control,
         amend, change or modify the Company's obligation to make and consummate
         a Change of Control Offer in the event of a Change of Control or modify
         any of the provisions or definitions with respect thereto in a manner
         adverse to the holders of the Notes, or following the occurrence of an
         Asset Sale, amend, change or modify the Company's obligation to make
         and consummate an Asset Sale Offer or modify any of the provisions or
         definitions with respect thereto in a manner adverse to the holders of
         the Notes.

                  (c) It shall not be necessary for the consent of the Holders
under this Section to approve the particular form of any proposed amendment,
supplement or waiver, but it shall be sufficient if such consent approves the
substance thereof.

                  (d) After an amendment, supplement or waiver under this
Section 9.2 becomes effective, the Company shall mail to the Holders affected
thereby a notice briefly describing the amendment, supplement or waiver. Any
failure of the Company to mail such


                                       58


notice, or any defect therein, shall not, however, in any way impair or affect
the validity of any such supplemental indenture.

         SECTION 9.3 COMPLIANCE WITH TIA.

         Every amendment, waiver or supplement of this Indenture or the Notes
shall comply with the TIA as then in effect; provided, however, that this
Section 9.3 shall not of itself require that this Indenture or the Trustee be
qualified under the TIA or constitute any admission or acknowledgment by any
party hereto that any such qualification is required prior to the time this
Indenture and the Trustee are required by the TIA to be so qualified.

         SECTION 9.4 REVOCATION AND EFFECT OF CONSENTS.

         Until an amendment, waiver or supplement becomes effective, a consent
to it by a Holder is a continuing consent by the Holder and every subsequent
Holder of a Note or portion of a Note that evidences the same debt as the
consenting Holder's Note, even if notation of the consent is not made on any
Note. Subject to the following paragraph, any such Holder or subsequent Holder
may revoke the consent as to such Holder's Note or portion of such Note by
notice to the Trustee or the Company received before the date on which the
Trustee receives an Officers' Certificate certifying that the Holders of the
requisite principal amount of Notes have consented (and not theretofore revoked
such consent) to the amendment, supplement or waiver. An amendment, supplement
or waiver becomes effective upon receipt by the Trustee of such Officers'
Certificate and evidence of consent by the Holders of the requisite percentage
in principal amount of outstanding Notes.

         The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Holders entitled to consent to any amendment,
supplement or waiver, which record date shall be at least 30 days prior to the
first solicitation of such consent. If a record date is fixed, then
notwithstanding the second sentence of the immediately preceding paragraph,
those Persons who were Holders at such record date (or their duly designated
proxies), and only those Persons, shall be entitled to revoke any consent
previously given, whether or not such Persons continue to be Holders after such
record date. No such consent shall be valid or effective for more than 90 days
after such record date.

         After an amendment, supplement or waiver becomes effective, it shall
bind every Holder, unless it makes any change described in Section 9.2(b), in
which case, the amendment, supplement or waiver shall bind only each Holder of a
Note who has consented to it and every subsequent Holder of a Note or portion of
a Note that evidences the same debt as the consenting Holder's Note; provided,
however, that any such waiver shall not impair or affect the right of any Holder
to receive payment of principal of and interest on a Note, on or after the
respective due dates expressed in such Note, or to bring suit for the
enforcement of any such payment on or after such respective dates without the
consent of such Holder.

         SECTION 9.5 NOTATION ON OR EXCHANGE OF NOTES.

         If an amendment, supplement or waiver changes the terms of a Note, the
Trustee may require the Holder of such Note to deliver it to the Trustee. The
Trustee may place an appropriate notation on the Note about the changed terms
and return it to the Holder.


                                       59


Alternatively, if the Company or the Trustee so determines, the Company in
exchange for the Note shall issue and the Trustee shall authenticate a new Note
that reflects the changed terms.

         SECTION 9.6 TRUSTEE TO SIGN AMENDMENTS, ETC.

         The Trustee shall execute any amendment, supplement or waiver
authorized pursuant to this Article Nine; provided, however, that the Trustee
may, but shall not be obligated to, execute any such amendment, supplement or
waiver which affects the Trustee's own rights, duties or immunities under this
Indenture. The Trustee shall be entitled to receive, in addition to the
documents required by Section 11.4, and shall be fully protected in relying
upon, an Opinion of Counsel and an Officers' Certificate each stating that the
execution of any amendment, supplement or waiver authorized pursuant to this
Article Nine is authorized or permitted by this Indenture. Such Opinion of
Counsel shall not be an expense of the Trustee or the Holders.

                                   ARTICLE X

                                   GUARANTEES

         SECTION 10.1 UNCONDITIONAL GUARANTEE.

         Each Guarantor hereby unconditionally, jointly and severally,
guarantees of a senior unsecured basis (such guarantee to be referred to herein
as a "Note Guarantee") to each Holder of a Note authenticated and delivered by
the Trustee and to the Trustee and its successors and assigns that: (i) the
principal of, premium, if any, and interest on the Notes will be promptly paid
in full when due, subject to any applicable grace period, whether at maturity,
by acceleration or otherwise and interest on the overdue principal and interest
on any overdue interest, to the extent lawful, of the Notes and all other
Obligations of the Company to the Holders of the Notes or the Trustee hereunder
or thereunder will be promptly paid in full or performed, all in accordance with
the terms hereof and thereof; and (ii) in case of any extension of time of
payment or renewal of any Notes or of any such other Obligations, the same will
be promptly paid in full when due or performed in accordance with the terms of
the extension or renewal, subject to any applicable grace period, whether at
stated maturity, by acceleration or otherwise, subject, however, in the case of
clauses (i) and (ii) above, to the limitations set forth in Section 10.4. Each
Guarantor hereby agrees that its obligations hereunder shall be unconditional,
irrespective of the validity, regularity or enforceability of the Notes or this
Indenture, the absence of any action to enforce the same, any waiver or consent
by any Holder of the Notes with respect to any provisions hereof or thereof, the
recovery of any judgment against the Company, and action to enforce the same or
any other circumstance which might otherwise constitute a legal or equitable
discharge or defense of a guarantor. Each Guarantor hereby waives diligence,
presentment, demand of payment, filing of claims with a court in the event of
insolvency or bankruptcy of the Company, any right to require a proceeding first
against the Company, protest, notice and all demands whatsoever and covenants
that this Note Guarantee will not be discharged except by complete performance
of the Obligations contained in the Notes, this Indenture and in this Note
Guarantee. Each Guarantor hereby further waives its obligation and right to
execute, and agrees to be bound by the terms of any, supplemental indenture
entered into by the Company and the Trustee, pursuant to Section 9.1. If any
Holder of the Notes or the Trustee is required by any court or


                                       60


otherwise to return to the Company or any Guarantor, or any custodian, trustee,
liquidator or other similar official acting in relation to the Company or any
Guarantor, any amount paid by the Company or any Guarantor to the Trustee or
such Holder, this Note Guarantee, to the extent theretofore discharged, shall be
reinstated in full force and effect. Each Guarantor further agrees that, as
between each Guarantor, on the one hand, and the Holders of the Notes and the
Trustee, on the other hand, (x) the maturity of the obligations guaranteed
hereby may be accelerated as provided in Article VI for the purposes of this
Note Guarantee, notwithstanding any stay, injunction or other prohibition
preventing such acceleration in respect of the Obligations guaranteed hereby,
and (y) in the event of any acceleration of such Obligations as provided in
Article VI, such obligations (whether or not due and payable) shall forthwith
become due and payable by each Guarantor for the purpose of this Note Guarantee.

         SECTION 10.2 SEVERABILITY.

         In case any provision of this Article X or any Note Guarantee shall be
invalid, illegal or unenforceable, the validity, legality, and enforceability of
the remaining provisions hereof or thereof shall not in any way be affected or
impaired thereby.

         SECTION 10.3 SUCCESSORS AND ASSIGNS; RELEASE OF A GUARANTOR.

         This Article X shall be binding upon the Guarantors and their
successors and assigns and shall enure to the benefit of the successors and
assigns of the Trustee and the Holders and, in the event of any transfer or
assignment of rights by any Holder or the Trustee, the rights and privileges
conferred upon that party in this Indenture and in the Notes shall automatically
extend to and be vested in such transferee or assignee, all subject to the terms
and conditions of this Indenture.

         If no Default exists or would exist under this Indenture, if all of the
assets of any Guarantor or all of the Capital Stock of any Guarantor is sold or
disposed of (including by merger, consolidation, issuance or otherwise) by the
Company or any of the Restricted Subsidiaries to any person that is not an
Affiliate of the Company or any of the Restricted Subsidiaries if a transaction
constituting an Asset Sale (other than pursuant to a transaction subject to the
provisions of clause (a) or (b) of Section 5.1), and if the Net Proceeds from
such Asset Sale are used in accordance with Section 4.16, then such Guarantor
and each wholly-owned Restricted Subsidiary of such Guarantor that is also a
Guarantor (in the event of a sale or other disposition of all of the Capital
Stock of such Guarantor) or (b) the corporation or other entity acquiring such
assets (in the event of a sale or other disposition of all or substantially all
of the assets of such Guarantor) shall be released and discharged of its Note
Guarantee obligations.

         The Trustee shall deliver an appropriate instrument evidencing such
release upon receipt of a request by the Company accompanied by an Officers'
Certificate of the Company and Opinion of Counsel certifying as to the
compliance with this Section 10.3. Any Guarantor not so released remains liable
for the full amount of principal of, premium and interest on the Securities and
other Obligations as provided in this Article X.


                                       61


         SECTION 10.4 LIMITATION OF GUARANTOR'S LIABILITY.

         Each Guarantor and by its acceptance hereof each Holder of Notes hereby
confirms that it is the intention of all such parties that the guarantee by such
Guarantor pursuant to its Note Guarantee not constitute a fraudulent transfer or
conveyance for purposes of any Bankruptcy Law, the Uniform Fraudulent Conveyance
Act, the Uniform Fraudulent Transfer Act or any similar Federal or state law. To
effectuate the foregoing intention, the Holders of Notes and such Guarantor
hereby irrevocably agree that the obligations of such Guarantor under its Note
Guarantee shall be limited to the maximum amount as will, after giving effect to
all other contingent and fixed liabilities of such Guarantor and after giving
effect to any collections from or payments made by or on behalf of any other
Guarantor in respect of the Obligations of such other Guarantor under its Note
Guarantee or pursuant to Section 10.5, result in the obligations of such
Guarantor under its Note Guarantee not constituting such fraudulent transfer or
conveyance.

         SECTION 10.5 CONTRIBUTION.

         In order to provide for just and equitable contribution among the
Guarantors, the Guarantors agree, inter se, that in the event any payment or
distribution is made by any Guarantor (a "Funding Guarantor") under its Note
Guarantee, such Funding Guarantor shall be entitled to a contribution from all
other Guarantors in a pro rata amount based on the Adjusted Net Assets (as
defined below) of each Guarantor (including the Funding Guarantor) for all
payments, damages and expenses incurred by that Funding Guarantor in discharging
the Company's obligations with respect to the Notes or any other Guarantor's
obligations with respect to its Note Guarantee. "Adjusted Net Assets" of such
Guarantor at any date shall mean the lesser of (i) the amount by which the fair
value of the property of such Guarantor exceeds the total amount of liabilities,
including, without limitation, contingent liabilities (after giving effect to
all other fixed and contingent liabilities incurred or assumed on such date
(other than liabilities of such Guarantor under Indebtedness subordinated to
such Guarantor's Note Guarantee)), but excluding liabilities under the Note
Guarantee, of such Guarantor at such date and (ii) the amount by which the
present fair salable value of the assets of such Guarantor at such date exceeds
the amount that will be required to pay the probable liability of such Guarantor
on its debts (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date and after giving effect to any collection from
any Subsidiary of such Guarantor in respect of the obligations of such
Subsidiary under its Note Guarantee, if any), excluding debt in respect of the
Note Guarantee of such Guarantor, as they become absolute and matured.

         SECTION 10.6 WAIVER OF SUBROGATION.

         Until all Note Guarantee Obligations are paid in full, each Guarantor
hereby irrevocably waives any claims or other rights which it may now or
hereafter acquire against the Company that arise from the existence, payment,
performance or enforcement of such Guarantor's obligations under its Note
Guarantee and this Indenture, including, without limitation, any right of
subrogation, reimbursement, exoneration, indemnification, and any right to
participate in any claim or remedy of any holder of Notes against the Company,
whether or not such claim, remedy or right arises in equity, or under contract,
statute or common law, including, without limitation, the right to take or
receive from the Company, directly or indirectly, in cash or other property or
by set-off or in any other manner, payment or security on account of such claim
or other rights.


                                       62


If any amount shall be paid to any Guarantor in violation of the preceding
sentence and the Notes shall not have been paid in full, such amount shall have
been deemed to have been paid to such Guarantor for the benefit of, and held in
trust for the benefit of, the Holders of the Notes, and shall forthwith be paid
to the Trustee for the benefit of such Holders to be credited and applied upon
the Notes, whether matured or unmatured, in accordance with the terms of this
Indenture. Each Guarantor acknowledges that it will receive direct and indirect
benefits from the financing arrangements contemplated by this Indenture and that
the waiver set forth in this Section 10.6 is knowingly made in contemplation of
such benefits.

         SECTION 10.7 EXECUTION OF NOTE GUARANTEE.

         To evidence its guarantee to the Holders of Notes set forth in this
Article X, each Guarantor hereby agrees to execute its Note Guarantee in
substantially the form included in the Notes, which shall be endorsed on each
Note ordered to be authenticated and delivered by the Trustee. Each Guarantor
hereby agrees that its Note Guarantee set forth in this Article X shall remain
in full force and effect notwithstanding any failure to endorse on each Note a
notation of such Note Guarantee. Each such Note Guarantee shall be signed on
behalf of each Guarantor by two Officers, or an Officer and an Assistant
Secretary or one Officer shall sign and one Officer or an Assistant Secretary
(each of whom shall, in each case, have been duly authorized by all requisite
corporate actions) shall attest to such Note Guarantee prior to the
authentication of the Notes on which it is endorsed, and the delivery of such
Notes by the Trustee, after the authentication thereof hereunder, shall
constitute due delivery of such Note Guarantee on behalf of such Guarantor. Such
signatures upon the Note Guarantee may be by manual or facsimile signature of
such officers and may be imprinted or otherwise reproduced on the Note
Guarantee, and in case any such officer who shall have signed the Note Guarantee
shall cease to be such officer before the Notes on which such Note Guarantee is
endorsed shall have been authenticated and delivered by the Trustee or disposed
of by the Company, such Notes nevertheless may be authenticated and delivered or
disposed of as though the person who signed the Note Guarantee had not ceased to
be such officer of the Guarantor.

         SECTION 10.8 WAIVER OF STAY, EXTENSION OR USURY LAWS.

         Each Guarantor covenants (to the extent that it may lawfully do so)
that it will not at any time insist upon, plead, or in any manner whatsoever
claim or take the benefit or advantage of, any stay or extension law or any
usury law or other law that would prohibit or forgive each such Guarantor from
performing its Note Guarantee as contemplated herein, wherever enacted, now or
at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture; and (to the extent that it may lawfully do so)
such Guarantor hereby expressly waives all benefit or advantage of any such law,
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.

         SECTION 10.9 ADDITIONAL GUARANTORS.

         Concurrently with the creation or acquisition by the Company of any
Subsidiary (other than a Foreign Subsidiary and other than an Unrestricted
Subsidiary), the Company, such Subsidiary and the Trustee shall execute and
deliver a supplement to this Indenture providing


                                       63


that such Subsidiary will be a Guarantor hereunder. Each such supplement shall
be in a form reasonably satisfactory to the Trustee.

         SECTION 10.10 MODIFICATION.

         No modification, amendment or waiver of any provision of this Article
X, nor the consent to any departure by the Guarantors therefrom, shall in any
event be effective unless the same shall be in writing and signed by the
Trustee, and then such waiver or consent shall be effective only in the specific
instance and for the purpose for which given. No notice to or demand on the
Guarantors in any case shall entitle the Guarantors to any other or further
notice or demand in the same, similar or other circumstances.

                                   ARTICLE XI

                                  MISCELLANEOUS

         SECTION 11.1 TIA CONTROLS.

         If any provision of this Indenture limits, qualifies, or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control; provided, however, that this Section 11.1
shall not of itself require that this Indenture or the Trustee be qualified
under the TIA or constitute any admission or acknowledgment by any party hereto
that any such qualification is required prior to the time this Indenture and the
Trustee are required by the TIA to be so qualified.

         SECTION 11.2 NOTICES.

         Any notices or other communications required or permitted hereunder
shall be in writing, and shall be sufficiently given if made by hand delivery,
by telecopier or registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:

                  if to the Company or any Guarantor:

                           Hawk Corporation
                           200 Public Square,
                           Suite 30-5000
                           Cleveland, OH  44114
                           Telecopier No.:  (216) 861-4546

                           Attn:  Chief Executive Officer


                                       64


                  if to the Trustee:

                           HSBC Bank USA
                           452 Fifth Avenue
                           New York, NY  10018-2706
                           Telecopier No.:  (212) 525-1200

                           Attention:  Issuer Services

         Each of the Company, the Guarantors the Trustee by written notice to
the other may designate additional or different addresses for notices to such
Person. Any notice or communication to the Company or the Trustee shall be
deemed to have been given or made as of the date so delivered if personally
delivered; when answered back, if telexed; when receipt is acknowledged, if
faxed; and five (5) calendar days after mailing if sent by registered or
certified mail, postage prepaid (except that a notice of change of address shall
not be deemed to have been given until actually received by the addressee).

         Any notice or communication mailed to a Holder shall be mailed to him
by first class mail or other equivalent means at his address as it appears on
the registration books of the Registrar and shall be sufficiently given to him
if so mailed within the time prescribed.

         Failure to mail a notice or communication to a Holder or any defect in
it shall not affect its sufficiency with respect to other Holders. If a notice
or communication is mailed in the manner provided above, it is duly given,
whether or not the addressee receives it.

         SECTION 11.3 COMMUNICATIONS BY HOLDERS WITH OTHER HOLDERS.

         Holders may communicate pursuant to TIA Section 312(b) with their
Holders with respect to their rights under this Indenture or the Notes. The
Company, the Trustee, the Registrar and any other Person shall have the
protection of TIA Section 312(c).

         SECTION 11.4 CERTIFICATE AND OPINION AS TO CONDITIONS PRECEDENT.

         Upon any request or application by the Company to the trustee to take
any action under this Indenture, the Company shall furnish to the Trustee:

                  (a) an Officers' Certificate, in form and substance
satisfactory to the Trustee, stating that, in the opinion of the signers, all
conditions precedent to be performed by the Company, if any, provided for in
this Indenture relating to the proposed action have been complied with; and

                  (b) an Opinion of Counsel stating that, in the opinion of such
counsel, such action is authorized or permitted by this Indenture and that all
such conditions precedent to be performed by the Company, if any, provided for
in this Indenture relating to the proposed action have been complied with.


                                       65


         SECTION 11.5 STATEMENTS REQUIRED IN CERTIFICATE OR OPINION.

         Each certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture, other than the Officers' Certificate
required by Section 4.6 shall include:

                  (a) a statement that the Person making such certificate or
opinion has read such covenant or condition;

                  (b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions contained in
such certificate or opinion are based;


                  (c) a statement that, in the opinion of such Person, he has
made such examination or investigation as is reasonably necessary to enable him
to express an informed opinion as to whether or not such covenant or condition
has been complied with; and

                  (d) a statement as to whether or not, in the opinion of each
such Person, such condition or covenant has been complied with.

         SECTION 11.6 RULES BY TRUSTEE, PAYING AGENT, REGISTRAR.

         The Trustee may make reasonable rules in accordance with the Trustee's
customary practices for action by or at a meeting of Holders. The Paying Agent
or Registrar may make reasonable rules for its functions.

         SECTION 11.7 LEGAL HOLIDAYS. A "Legal Holiday" used with respect to a
particular place of payment is a Saturday, a Sunday or a day on which banking
institutions in New York, New York or at such place of payment are not required
to be open. If a payment date is a Legal Holiday at such place, payment may be
made at such place on the next succeeding day that is not a Legal Holiday, and
no interest shall accrue for the intervening period.

         SECTION 11.8 GOVERNING LAW.

         THIS INDENTURE AND THE NOTES SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO AS APPLIED TO CONTRACTS MADE AND
PERFORMED WITHIN THE STATE OF OHIO WITHOUT REGARD TO ITS PRINCIPLES OF CONFLICT
OF LAWS. Each of the parties hereto agrees to submit to the jurisdiction of the
courts of the State of Ohio in any action or proceeding arising out of or
relating to this Indenture.

         SECTION 11.9 NO ADVERSE INTERPRETATION OF OTHER AGREEMENTS.

         This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or any of the subsidiaries. Any such indenture,
loan or debt agreement may not be used to interpret this Indenture.



                                       66

         SECTION 11.10 NO RECOURSE AGAINST OTHERS.

         A director, officer, employee, stockholder or incorporator, as such, of
the Company or of the Trustee shall not have any liability for any obligations
of the Company under the Notes, the Note Guarantees or this Indenture or for any
claim based on, in respect of or by reason of such obligations or their
creations. Each Holder by accepting a Note waives and releases all such
liability. Such waiver and release are part of the consideration for the
issuance of the Notes and the Note Guarantees.

         SECTION 11.11 SUCCESSORS.

         All agreements of the Company and the Guarantors in this Indenture and
the Notes shall bind their respective successors. All agreements of the Trustee
in this Indenture shall bind its successors.

         SECTION 11.12 DUPLICATE ORIGINALS.

         All parties may sign any number of copies of this Indenture. Each
signed copy shall be an original, but all of them together shall represent the
same agreement.

         SECTION 11.13 SEVERABILITY.

         In case any one or more of the provisions in this Indenture or in the
Notes shall be held invalid, illegal or unenforceable, in any respect for any
reason, the validity, legality and enforceability of any such provision in every
other respect and of the remaining provisions shall not in any way be affected
or impaired thereby, it being intended that all of the provisions hereof shall
be enforceable to the full extent permitted by law.

         SECTION 11.14 INDEPENDENCE OF COVENANTS.

         All covenants and agreements in this Indenture and the Notes shall be
given independent effect so that if any particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or otherwise be within the limitations of, another covenant shall
not avoid the occurrence of a Default or an Event of Default if such action is
taken or condition exists.




                                       67



                                   SIGNATURES

         IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, all as of the date first written above.

                                          HAWK CORPORATION

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          ALLEGHENY CLEARFIELD, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          FRICTION PRODUCTS CO.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          HAWK MIM, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          HAWK MOTORS, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman




                                          HAWK PRECISION COMPONENTS GROUP, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          HELSEL, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          LOGAN METAL STAMPINGS, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          NET SHAPE TECHNOLOGIES LLC

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          QUARTER MASTER INDUSTRIES, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman

                                       2



                                          S.K. WELLMAN HOLDINGS, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          S.K. WELLMAN CORP.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman

                                          SINTERLOY CORPORATION

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman


                                          TEX RACING ENTERPRISES, INC.

                                          By:
                                             ----------------------------------
                                                   Name:  Ronald E. Weinberg
                                                   Title: Chairman

                                          HSBC BANK USA, as Trustee

                                          By:
                                             ----------------------------------
                                                   Name:
                                                   Title:


                                       3





                                                                       EXHIBIT A

                                HAWK CORPORATION

                  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE
OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE.



                         _______% SENIOR NOTE DUE 2____

CUSIP No.: ___________

No. __________                                                     $__________

         HAWK CORPORATION, a Delaware corporation (the "Company", which term
includes any successor entity), for value received promises to pay to or
registered assigns, the principal sum of __________ on December 1, 2____.

         Interest Payment Dates: June 1 and December 1

         Record Dates: May 15 and November 15

         Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.






         IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.

                                       HAWK CORPORATION


                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                          CERTIFICATE OF AUTHENTICATION

         This is one of the _____% Senior Notes due 2___ referred to in the
within-mentioned Indenture.

                                       HSBC BANK USA, as Trustee

                                       By:
                                           ----------------------------------
                                                  Authorized Officer

Date of Authentication:______________







                              (REVERSE OF SECURITY)

                          ______% Senior Note due 20__

         1. INTEREST. HAWK CORPORATION, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date
on which interest has been paid or, if no interest has been paid, from
[September __,] 2002. The Company will pay interest semi-annually in arrears on
each Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months and, in the case of a partial month, the actual
number of days elapsed.

         The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful, from time to time on demand at the rate borne by the Notes.

         2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.

         3. PAYING AGENT AND REGISTRAR. Initially, HSBC Bank USA (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.

         4. INDENTURE. The Company issued the Notes under an indenture, dated as
of [September ___,] 2002 (the "Indenture"), between the Company, the Guarantors
named therein (the "Guarantors") and the Trustee. This Note is one of a duly
authorized issue of Initial Notes of the Company designated as its _____% Senior
Notes due 2____. The Notes are limited in aggregate principal amount to
$___________. All of the Notes need not be issued at the same time and, unless
otherwise provided, a previous issuance of Notes may be reopened, without notice
to or the consent of any Holder, for issuance of Additional Notes of the same
tranche, and the Additional Notes will be consolidated and form a single tranche
with the previously issued Notes. Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code Section Sections 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured senior obligations of the Company. Each Holder, by
accepting a Note, agrees to be bound by all of the



terms and provisions of the Indenture, as the same may be amended from time to
time in accordance with its terms.

         5. NOTE GUARANTEES. To guarantee the due and punctual payment of the
principal and interest, if any, on the Notes and all other amounts payable by
the Company under the Indenture and the Notes when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, the Guarantors have, jointly and
severally, unconditionally guaranteed such obligations on a senior unsecured
basis pursuant to the terms of the Indenture. The Note Guarantees are general
unsecured senior obligations of the Company.

         6. OPTIONAL REDEMPTION. The Notes are redeemable, at the Company's
option, in whole or in part, at any time on and after ________________ at the
redemption prices (expressed as percentages of the principal amount of the
Notes) if redeemed during the twelve-month period commencing on December 1 of
the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the Redemption Date:

                               Year                         Percentage





         The Notes are not entitled to the benefit of any sinking fund.

         7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.

         Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.

         8. OFFERS TO PURCHASE. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein., the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.

         9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered form,
without coupons, and in denominations of $1,000 and integral multiples of
$1,000, or in such other denominations as the Company may elect. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other



things, to furnish appropriate endorsements and transfer documents and to pay
certain transfer taxes or similar governmental charges payable in connection
therewith as permitted by the Indenture. The Registrar need not register the
transfer of or exchange of any Notes or portions thereof selected for
redemption.

         10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.

         11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.

         12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).

         13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, or comply with Article Five of the Indenture or make any other change
that does not adversely affect the rights of any Holder of a Note.

         14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on
the ability of the Company and the Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make Restricted Payments or Restricted
Investments, create or incur Liens, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Restricted Subsidiaries
and issue Preferred Stock of Restricted Subsidiaries, and on the ability of the
Company and the Restricted Subsidiaries to merge or consolidate with any other
Person or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company and the Restricted Subsidiaries.
Such limitations are subject to a number of important qualifications and
exceptions. Pursuant to Section 4.6 of the Indenture, the Company must annually
report to the Trustee on compliance with such limitations.

         15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.



         16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with the effect provided in the
Indenture. Holders of Notes may not enforce the Indenture or the Notes except as
provided in the Indenture. The Trustee is not obligated to enforce the Indenture
or the Notes unless it has received indemnity reasonably satisfactory to it. The
Indenture permits, subject to certain limitations therein provided, Holders of a
majority in aggregate principal amount of the Notes then outstanding to direct
the Trustee in its exercise of any trust or power. The Trustee may withhold from
Holders of Notes notice of any continuing Default or Event of Default (except a
Default in payment of principal or interest when due, for any reason or a
Default in compliance with Article V of the Indenture) if it determines that
withholding notice is in their interest.

         17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company, the Subsidiaries or their respective
Affiliates as if it were not the Trustee.

         18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company or any Guarantor shall have
any liability for any obligation of the Company or any Guarantor under the
Notes, the Note Guarantees or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of a
Note by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the Note
Guarantees.

         19. AUTHENTICATION. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.

         20. GOVERNING LAW. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of Ohio, as applied to
contracts made and performed within the State of Ohio without regard to
principles of conflict of laws.

         21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

         22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.

         The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be



made to: Hawk Corporation, 200 Public Square, Suite 30-5000, Cleveland, OH
44114, Attn: Vice President - Finance.







                                    GUARANTEE

         The Guarantors (as defined in the Indenture referred to in the Note
upon which this notation is endorsed and each hereinafter referred to as a
"Guarantor," which term includes any successor person under the Indenture) have
unconditionally guaranteed on a senior unsecured basis (such guarantee by each
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of, premium and interest on the Notes, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal and interest, if any, on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set forth
in Article X of the Indenture and (ii) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise.

         No stockholder, officer, director, employee or incorporator, as such,
past, present or future, of any Guarantor shall have any liability under the
Guarantee by reason of his or its status as such stockholder, officer, director,
employee or incorporator.

         The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.

                                   SIGNATURES

         IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be
signed manually or by facsimile by the respective parties' duly authorized
officers.


                                       GUARANTORS:

                                       ALLEGHENY CLEARFIELD, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       FRICTION PRODUCTS CO.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:




                                       HAWK MIM, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       HAWK MOTORS, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       HAWK PRECISION COMPONENTS GROUP, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       HELSEL, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       LOGAN METAL STAMPINGS, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:




                                       NET SHAPE TECHNOLOGIES LLC

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       QUARTER MASTER INDUSTRIES, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       S.K. WELLMAN HOLDINGS, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       S.K. WELLMAN CORP.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:


                                       SINTERLOY CORPORATION

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:

                                       TEX RACING ENTERPRISES, INC.

                                       By:
                                           ----------------------------------
                                                Name:
                                                Title:





                                 ASSIGNMENT FORM

                                                                          

         If you the Holder want to assign this Note, fill in the form below and
have your signature guaranteed:

         I or we assign and transfer this Note to:
                                                   -------------------------------------
                                          (Print or type name, address and zip code and
- -----------------------------------------
                                          social security or tax ID number of assignee)
- -----------------------------------------

- -----------------------------------------

- -----------------------------------------

and irrevocably appoint                                            , agent to transfer
                        -------------------------------------------
this Note on the books of the Company.  The agent may substitute another to act for him.

Dated:                                      Signed:
       ------------------ ---, -----                ------------------------------------
                                                     (sign exactly as your name appears
                                                     on the other side of this Note)

Signature Guarantee:
                     -------------------------------------------------------------------

(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or participation in
the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Exchange Act.)








                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:

                  Section 4.15 [__]
                  Section 4.16 [__]

         If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:

$------------------

Dated:                                      Signed:
       ------------------ ---, -----               ----------------------------
                                                   NOTICE: The signature on this
                                                   assignment must correspond
                                                   with the name as it appears
                                                   upon the face of the within
                                                   Note in every particular
                                                   without alteration or
                                                   enlargement or any change
                                                   whatsoever and be guaranteed.

Signature Guarantee:
                     -----------------------------------------------------------

(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.)

EX-4.8

                                                                     EXHIBIT 4.8

                                HAWK CORPORATION

                  UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR
SECURITIES IN DEFINITIVE FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A
WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE DEPOSITORY, OR BY ANY SUCH NOMINEE
OF THE DEPOSITORY, OR BY THE DEPOSITORY OR NOMINEE OF SUCH SUCCESSOR DEPOSITORY
OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY. UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE
OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE ISSUER
OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY
CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR SUCH OTHER NAME AS
IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS
MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

                  TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO
TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF CEDE & CO. OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE.



                                          _______% SENIOR NOTE DUE 2____

CUSIP No.: ___________

No. __________                                                     $__________

         HAWK CORPORATION, a Delaware corporation (the "Company", which term
includes any successor entity), for value received promises to pay to or
registered assigns, the principal sum of __________ on December 1, 2____.

         Interest Payment Dates: June 1 and December 1

         Record Dates: May 15 and November 15

         Reference is made to the further provisions of this Note contained
herein, which will for all purposes have the same effect as if set forth at this
place.






         IN WITNESS WHEREOF, the Company has caused this Note to be signed
manually or by facsimile by its duly authorized officer.

                                          HAWK CORPORATION


                                          By:
                                             ----------------------------------
                                                   Name:
                                                   Title:


                          CERTIFICATE OF AUTHENTICATION

         This is one of the _____% Senior Notes due 2___ referred to in the
within-mentioned Indenture.

                                          HSBC BANK USA, as Trustee

                                          By:
                                             ----------------------------------
                                                   Authorized Officer

Date of Authentication:
                       --------------






                              (REVERSE OF SECURITY)

                          ______% Senior Note due 2___

         1. INTEREST. HAWK CORPORATION, a Delaware corporation (the "Company"),
promises to pay interest on the principal amount of this Note at the rate per
annum shown above. Interest on the Notes will accrue from the most recent date
on which interest has been paid or, if no interest has been paid, from
[September __,] 2002. The Company will pay interest semi-annually in arrears on
each Interest Payment Date. Interest will be computed on the basis of a 360-day
year of twelve 30-day months and, in the case of a partial month, the actual
number of days elapsed.

         The Company shall pay interest on overdue principal and on overdue
installments of interest (without regard to any applicable grace periods) to the
extent lawful, from time to time on demand at the rate borne by the Notes.

         2. METHOD OF PAYMENT. The Company shall pay interest on the Notes
(except defaulted interest) to the Persons who are the registered Holders at the
close of business on the Record Date immediately preceding the Interest Payment
Date even if the Notes are cancelled on registration of transfer or registration
of exchange after such Record Date. Holders must surrender Notes to a Paying
Agent to collect principal payments. The Company shall pay principal and
interest in money of the United States that at the time of payment is legal
tender for payment of public and private debts ("U.S. Legal Tender"). However,
the Company may pay principal and interest by its check payable in such U.S.
Legal Tender. The Company may deliver any such interest payment to the Paying
Agent or to a Holder at the Holder's registered address.

         3. PAYING AGENT AND REGISTRAR. Initially, HSBC Bank USA (the "Trustee")
will act as Paying Agent and Registrar. The Company may change any Paying Agent,
Registrar or co-Registrar without notice to the Holders.

         4. INDENTURE. The Company issued the Notes under an indenture, dated as
of [September ___,] 2002 (the "Indenture"), between the Company, the Guarantors
named therein (the "Guarantors") and the Trustee. This Note is one of a duly
authorized issue of Initial Notes of the Company designated as its _____% Senior
Notes due 2____. The Notes are limited in aggregate principal amount to
$___________. All of the Notes need not be issued at the same time and, unless
otherwise provided, a previous issuance of Notes may be reopened, without notice
to or the consent of any Holder, for issuance of Additional Notes of the same
tranche, and the Additional Notes will be consolidated and form a single tranche
with the previously issued Notes. Capitalized terms herein are used as defined
in the Indenture unless otherwise defined herein. The terms of the Notes include
those stated in the Indenture and those made part of the Indenture by reference
to the Trust Indenture Act of 1939 (15 U.S. Code Section Sections 77aaa-77bbbb)
(the "TIA"), as in effect on the date of the Indenture. Notwithstanding anything
to the contrary herein, the Notes are subject to all such terms, and Holders of
Notes are referred to the Indenture and the TIA for a statement of them. The
Notes are general unsecured senior obligations of the Company. Each Holder, by
accepting a Note, agrees to be bound by all of the



terms and provisions of the Indenture, as the same may be amended from time to
time in accordance with its terms.

         5. NOTE GUARANTEES. To guarantee the due and punctual payment of the
principal and interest, if any, on the Notes and all other amounts payable by
the Company under the Indenture and the Notes when and as the same shall be due
and payable, whether at maturity, by acceleration or otherwise, according to the
terms of the Notes and the Indenture, the Guarantors have, jointly and
severally, unconditionally guaranteed such obligations on a senior unsecured
basis pursuant to the terms of the Indenture. The Note Guarantees are general
unsecured senior obligations of the Company.

         6. OPTIONAL REDEMPTION. The Notes are redeemable, at the Company's
option, in whole or in part, at any time on and after ________________ at the
redemption prices (expressed as percentages of the principal amount of the
Notes) if redeemed during the twelve-month period commencing on December 1 of
the year set forth below, plus, in each case, accrued and unpaid interest
thereon, if any, to the Redemption Date:

                             Year                          Percentage



         The Notes are not entitled to the benefit of any sinking fund.

         7. NOTICE OF REDEMPTION. Notice of redemption will be mailed at least
30 days but not more than 60 days before the Redemption Date to each Holder of
Notes to be redeemed at such Holder's registered address. Notes in denominations
larger than $1,000 may be redeemed in part.

         Except as set forth in the Indenture, if monies for the redemption of
the Notes called for redemption shall have been deposited with the Paying Agent
for redemption on such Redemption Date, then, unless the Company defaults in the
payment of such Redemption Price plus accrued interest, if any, the Notes called
for redemption will cease to bear interest from and after such Redemption Date
and the only right of the Holders of such Notes will be to receive payment of
the Redemption Price plus accrued interest, if any.

         8. OFFERS TO PURCHASE. Sections 4.15 and 4.16 of the Indenture provide
that, after certain Asset Sales (as defined in the Indenture) and upon the
occurrence of a Change of Control (as defined in the Indenture), and subject to
further limitations contained therein., the Company will make an offer to
purchase certain amounts of the Notes in accordance with the procedures set
forth in the Indenture.

         9. DENOMINATIONS; TRANSFER; EXCHANGE. The Notes are in registered form,
without coupons, and in denominations of $1,000 and integral multiples of
$1,000, or in such other denominations as the Company may elect. A Holder shall
register the transfer of or exchange Notes in accordance with the Indenture. The
Registrar may require a Holder, among other things, to furnish appropriate
endorsements and transfer documents and to pay certain transfer taxes or similar
governmental charges payable in connection therewith as permitted by the



Indenture. The Registrar need not register the transfer of or exchange of any
Notes or portions thereof selected for redemption.

         10. PERSONS DEEMED OWNERS. The registered Holder of a Note shall be
treated as the owner of it for all purposes.

         11. UNCLAIMED MONEY. If money for the payment of principal or interest
remains unclaimed for one year, the Trustee and the Paying Agent will pay the
money back to the Company. After that, all liability of the Trustee and such
Paying Agent with respect to such money shall cease.

         12. DISCHARGE PRIOR TO REDEMPTION OR MATURITY. If the Company at any
time deposits with the Trustee U.S. Legal Tender or U.S. Government Obligations
sufficient to pay the principal of and interest on the Notes to redemption or
maturity and complies with the other provisions of the Indenture relating
thereto, the Company will be discharged from certain provisions of the Indenture
and the Notes (including certain covenants, but excluding its obligation to pay
the principal of and interest on the Notes).

         13. AMENDMENT; SUPPLEMENT; WAIVER. Subject to certain exceptions set
forth in the Indenture, the Indenture or the Notes may be amended or
supplemented with the written consent of the Holders of not less than a majority
in aggregate principal amount of the Notes then outstanding, and any past
Default or Event of Default or noncompliance with any provision may be waived
with the written consent of the Holders of not less than a majority in aggregate
principal amount of the Notes then outstanding. Without notice to or consent of
any Holder, the parties thereto may amend or supplement the Indenture or the
Notes to, among other things, cure any ambiguity, defect or inconsistency,
provide for uncertificated Notes in addition to or in place of certificated
Notes, or comply with Article Five of the Indenture or make any other change
that does not adversely affect the rights of any Holder of a Note.

         14. RESTRICTIVE COVENANTS. The Indenture imposes certain limitations on
the ability of the Company and the Restricted Subsidiaries to, among other
things, incur additional Indebtedness, make Restricted Payments or Restricted
Investments, create or incur Liens, enter into transactions with Affiliates,
create dividend or other payment restrictions affecting Restricted Subsidiaries
and issue Preferred Stock of Restricted Subsidiaries, and on the ability of the
Company and the Restricted Subsidiaries to merge or consolidate with any other
Person or sell, assign, transfer, lease, convey or otherwise dispose of all or
substantially all of the assets of the Company and the Restricted Subsidiaries.
Such limitations are subject to a number of important qualifications and
exceptions. Pursuant to Section 4.6 of the Indenture, the Company must annually
report to the Trustee on compliance with such limitations.

         15. SUCCESSORS. When a successor assumes, in accordance with the
Indenture, all the obligations of its predecessor under the Notes and the
Indenture, the predecessor, subject to certain exceptions, will be released from
those obligations.

         16. DEFAULTS AND REMEDIES. If an Event of Default occurs and is
continuing, the Trustee or the Holders of not less than 25% in aggregate
principal amount of Notes then outstanding may declare all the Notes to be due
and payable in the manner, at the time and with



the effect provided in the Indenture. Holders of Notes may not enforce the
Indenture or the Notes except as provided in the Indenture. The Trustee is not
obligated to enforce the Indenture or the Notes unless it has received indemnity
reasonably satisfactory to it. The Indenture permits, subject to certain
limitations therein provided, Holders of a majority in aggregate principal
amount of the Notes then outstanding to direct the Trustee in its exercise of
any trust or power. The Trustee may withhold from Holders of Notes notice of any
continuing Default or Event of Default (except a Default in payment of principal
or interest when due, for any reason or a Default in compliance with Article V
of the Indenture) if it determines that withholding notice is in their interest.

         17. TRUSTEE DEALINGS WITH COMPANY. The Trustee under the Indenture, in
its individual or any other capacity, may become the owner or pledgee of Notes
and may otherwise deal with the Company, the Subsidiaries or their respective
Affiliates as if it were not the Trustee.

         18. NO RECOURSE AGAINST OTHERS. No stockholder, director, officer,
employee or incorporator, as such, of the Company or any Guarantor shall have
any liability for any obligation of the Company or any Guarantor under the
Notes, the Note Guarantees or the Indenture or for any claim based on, in
respect of or by reason of, such obligations or their creation. Each Holder of a
Note by accepting a Note waives and releases all such liability. The waiver and
release are part of the consideration for the issuance of the Notes and the Note
Guarantees.

         19. AUTHENTICATION. This Note shall not be valid until the Trustee or
Authenticating Agent manually signs the certificate of authentication on this
Note.

         20. GOVERNING LAW. This Note and the Indenture shall be governed by and
construed in accordance with the laws of the State of Ohio, as applied to
contracts made and performed within the State of Ohio without regard to
principles of conflict of laws.

         21. ABBREVIATIONS AND DEFINED TERMS. Customary abbreviations may be
used in the name of a Holder of a Note or an assignee, such as: TEN COM (=
tenants in common), TEN ENT (= tenants by the entireties), JT TEN (= joint
tenants with right of survivorship and not as tenants in common), CUST (=
Custodian), and U/G/M/A (= Uniform Gifts to Minors Act).

         22. CUSIP NUMBERS. Pursuant to a recommendation promulgated by the
Committee on Uniform Security Identification Procedures, the Company has caused
CUSIP numbers to be printed on the Notes as a convenience to the Holders of the
Notes. No representation is made as to the accuracy of such numbers as printed
on the Notes and reliance may be placed only on the other identification numbers
printed hereon.

         The Company will furnish to any Holder of a Note upon written request
and without charge a copy of the Indenture, which has the text of this Note in
larger type. Requests may be made to: Hawk Corporation, 200 Public Square, Suite
30-5000, Cleveland, OH 44114, Attn: Vice President -- Finance.







                                    GUARANTEE

         The Guarantors (as defined in the Indenture referred to in the Note
upon which this notation is endorsed and each hereinafter referred to as a
"Guarantor," which term includes any successor person under the Indenture) have
unconditionally guaranteed on a senior unsecured basis (such guarantee by each
Guarantor being referred to herein as the "Guarantee") (i) the due and punctual
payment of the principal of, premium and interest on the Notes, whether at
maturity, by acceleration or otherwise, the due and punctual payment of interest
on the overdue principal and interest, if any, on the Notes, to the extent
lawful, and the due and punctual performance of all other obligations of the
Company to the Holders or the Trustee all in accordance with the terms set forth
in Article X of the Indenture and (ii) in case of any extension of time of
payment or renewal of any Notes or any of such other obligations, that the same
will be promptly paid in full when due or performed in accordance with the terms
of the extension or renewal, whether at stated maturity, by acceleration or
otherwise.

         No stockholder, officer, director, employee or incorporator, as such,
past, present or future, of any Guarantor shall have any liability under the
Guarantee by reason of his or its status as such stockholder, officer, director,
employee or incorporator.

         The Guarantee shall not be valid or obligatory for any purpose until
the certificate of authentication on the Notes upon which the Guarantee is noted
shall have been executed by the Trustee under the Indenture by the manual
signature of one of its authorized officers.

                                   SIGNATURES

         IN WITNESS WHEREOF, the parties hereto have caused this Guarantee to be
signed manually or by facsimile by the respective parties' duly authorized
officers.


                                     GUARANTORS:

                                     ALLEGHENY CLEARFIELD, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     FRICTION PRODUCTS CO.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:




                                     HAWK MIM, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     HAWK MOTORS, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     HAWK PRECISION COMPONENTS GROUP, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     HELSEL, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     LOGAN METAL STAMPINGS, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:



                                     NET SHAPE TECHNOLOGIES LLC

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     QUARTER MASTER INDUSTRIES, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     S.K. WELLMAN HOLDINGS, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     S.K. WELLMAN CORP.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:


                                     SINTERLOY CORPORATION

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:

                                     TEX RACING ENTERPRISES, INC.

                                     By:
                                         --------------------------------------
                                              Name:
                                              Title:





                                 ASSIGNMENT FORM
                                                                               
         If you the Holder want to assign this Note, fill in the form below and have your
signature guaranteed:

         I or we assign and transfer this Note to:
                                                   ----------------------------------------
                                          (Print or type name, address and zip code and
- -----------------------------------------
                                          social security or tax ID number of assignee)
- -----------------------------------------

- -----------------------------------------

- -----------------------------------------

and irrevocably appoint                                            , agent to transfer this
                        -------------------------------------------
Note on the books of the Company.  The agent may substitute another to act for him.

Dated:                                           Signed:
       ------------------ ---, -----                    -----------------------------------
                                                        (sign exactly as your name appears
                                                        on the other side of this Note)

Signature Guarantee:
                     -----------------------------------------------------------

(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or participation in
the Security Transfer Agent Medallion Program ("STAMP") or such other "signature guarantee
program" as may be determined by the Registrar in addition to, or in substitution for,
STAMP, all in accordance with the Exchange Act.)









                       OPTION OF HOLDER TO ELECT PURCHASE

         If you want to elect to have this Note purchased by the Company
pursuant to Section 4.15 or Section 4.16 of the Indenture, check the appropriate
box:

                  Section 4.15  [__]
                  Section 4.16  [__]

         If you want to elect to have only part of this Note purchased by the
Company pursuant to Section 4.15 or Section 4.16 of the Indenture, state the
amount you elect to have purchased:

$
 ------------------

Dated:                                  Signed:
       ------------------ ---, -----            -------------------------------
                                                NOTICE: The signature on this
                                                assignment must correspond with
                                                the name as it appears upon the
                                                face of the within Note in every
                                                particular without alteration or
                                                enlargement or any change
                                                whatsoever and be guaranteed.

Signature Guarantee:
                     ----------------------------------------------------------

(Signature must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.)

EX-21.1

                                                                    EXHIBIT 21.1

                         SUBSIDIARIES OF THE REGISTRANT




            PARENT                               SUBSIDIARIES                       JURISDICTION OF          PERCENT OF
            ------                               ------------                       ----------------         ----------
                                                                                      ORGANIZATION            OWNERSHIP
                                                                                      ------------            ---------
                                                                                                      
Hawk Corporation                Friction Products Co. (1)                        Ohio                           100%
                                Logan Metal Stampings, Inc. (1)                  Ohio                           100%
                                S.K. Wellman Holdings, Inc.                      Delaware                       100%
                                Quarter Master Industries, Inc. (2)              Delaware                       100%
                                Tex Racing Enterprises, Inc. (2)                 Delaware                       100%
                                Hawk Precision Components Group, Inc.            Ohio                           100%

Hawk Precision Components       Helsel, Inc. (3)                                 Delaware                       100%
Group, Inc.                     Sinterloy Corporation (3)                        Delaware                       100%
                                Allegheny Clearfield, Inc. (3)                   Pennsylvania                   100%
                                Hawk MIM, Inc.                                   Ohio                           100%

Hawk Mauritius, Ltd             Hawk Composites (Suzhou) Company Limited (4)     China                          100%

Hawk MIM, Inc.                  Net Shape Technologies LLC                       Delaware                       100%

Helsel, Inc.                    Hawk Motors, Inc.                                Delaware                       100%
                                Hawk Motors de Mexico, S. de R.L. de C.V.        Mexico                          95%
                                Hawk Mauritius, Ltd                              Mauritius                      100%

Hawk Motors, Inc.               Hawk Motors de Mexico, S. de R.L. de C.V.        Mexico                           5%
                                Hawk Motors Monterrey, S.A. de C.V.              Mexico                           5%

Hawk Motors de Mexico, S. de
R.L. de C.V.                    Hawk Motors Monterrey, S.A. de C.V.              Mexico                          95%

S.K. Wellman Holdings, Inc.     S.K. Wellman Corp. (1)                           Delaware                       100%
                                S.K. Wellman S.p.A.(1)                           Italy                           95%

S.K. Wellman Corp.              The S.K. Wellman Company of Canada Limited (1)   Canada                         100%
                                S.K. Wellman S.p.A. (1)
                                                                                 Italy                            5%


- ----------------------------------------------------------------------

(1)     These subsidiaries also conduct business under the trade name "The
        Wellman Products Group."

(2)     These subsidiaries also conduct business under the trade name "Hawk
        Performance."

(3)     These subsidiaries also conduct business under the trade name "Hawk
        Precision Components Group."

(4)     This subsidiary also conducts business under the trade name "Hawk
        Composites."

EX-23.1

                                                                    EXHIBIT 23.1

                         Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" and to the
use of our report dated March 25, 2002 (except for Notes D and  M, as to which
the date is May 15, 2002), in Amendment No. 1 to the Registration Statement
(Form S-4 No. 333-90556) and the related Prospectus and Consent Solicitation
Statement of Hawk Corporation for the registration of $65 million of Senior
Notes.

                                                         /s/ Ernst & Young LLP

Cleveland, Ohio

July 29, 2002