AMENDMENT NO. 2 AND CONSENT to CREDIT AND SECURITY AGREEMENT and OMNIBUS AMENDMENT TO CERTAIN OTHER LOAN DOCUMENTS

This AMENDMENT NO. 2 AND CONSENT TO CREDIT AND SECURITY AGREEMENT AND OMNIBUS AMENDMENT TO CERTAIN OTHER LOAN DOCUMENTS , made as of February 1, 2007 (this “Amendment”), among HAWK CORPORATION , a Delaware corporation, ALLEGHENY CLEARFIELD, INC. , a Pennsylvania corporation, FRICTION PRODUCTS CO. , an Ohio corporation, HAWK MIM, INC. , an Ohio corporation, HAWK MOTORS, INC. , a Delaware corporation, HAWK PRECISION COMPONENTS GROUP, INC. , an Ohio corporation, HELSEL, INC. , a Delaware corporation, LOGAN METAL STAMPINGS, INC. , an Ohio corporation, NET SHAPE TECHNOLOGIES LLC , a Delaware limited liability company, QUARTER MASTER INDUSTRIES, INC. , a Delaware corporation, SINTERLOY CORPORATION , a Delaware corporation, S.K. WELLMAN CORP. , a Delaware corporation, S.K. WELLMAN HOLDINGS, INC. , a Delaware corporation, TEX RACING ENTERPRISES, INC. , a Delaware corporation, WELLMAN PRODUCTS GROUP, INC. , an Ohio corporation,   and WELLMAN PRODUCTS, LLC , an Ohio limited liability company, each as a Borrower and collectively as the Borrowers, the LENDERS listed on the signature pages of this Agreement, KEYBANK NATIONAL ASSOCIATION , a national banking association, as Administrative Agent, and KEYBANK NATIONAL ASSOCIATION, a national banking association, as LC Issuer,

WHEREAS , the Borrowers have been extended certain financial accommodations pursuant to that certain Credit and Security Agreement, dated as of November 1, 2004, as amended by that certain Amendment No. 1 to Credit and Security Agreement, dated as of August 31, 2006 (as so amended, the “Credit Agreement”), among the Borrowers, the Lenders, the Administrative Agent, and the LC Issuer;

WHEREAS , the Borrower Representative has informed the Administrative Agent that Hawk Corporation desires to sell Hawk Precision Components Group, Inc. and certain of its direct or indirect Subsidiaries, namely, Allegheny Clearfield, Inc., Hawk MIM, Inc., Helsel, Inc., Sinterloy Corporation, and Net Shape Technologies LLC, in one or more stock transactions (the “Sale”);

WHEREAS , the Borrower Representative has also informed the Administrative Agent that prior to the sale of Hawk Precision Components Group, Inc., certain subsidiaries of Helsel, Inc. shall be transferred to Wellman Products Group, Inc., namely Hawk Mauritius, Ltd. Hawk Motors, Inc., and Hawk Motors de Mexico, S. de R.L. de C.V. (the “Transfer”);

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

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

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

Section 1    .DEFINED TERMS.

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

Section 2    CONSENT.

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

(a)    the transfer by Helsel, Inc. of the shares of Hawk Mauritius, Ltd., Hawk Motors, Inc., and Hawk Motors de Mexico, S. de R.L. de C.V to Wellman Products Group, Inc.;

(b)    the transactions contemplated in that certain Stock Purchase Agreement, dated as of December 21, 2006 (the “Purchase Agreement”), among the Hawk Corporation, as Selling Shareholder, and PCG Holdings Group Inc., as Buyer (the “Buyer”), including the sale or other disposition of Hawk Precision Components Group, Inc., and its Subsidiaries: Allegheny Clearfield, Inc., Hawk MIM, Inc., Helsel, Inc., Sinterloy Corporation, and Net Shape Technologies LLC (Hawk Precision Components Group, Inc. together with such Subsidiaries collectively referred to as “Sold Subsidiaries”);

(c)    the release of the Liens of the Administrative Agent for the benefit of the Lenders on (i) the stock or other equity interests of the Sold Subsidiaries and (ii) all of the personal property and assets of the Sold Subsidiaries which are being acquired by the Buyer pursuant to the terms of the Purchase Agreement;

(d)    the application of any or all of the proceeds remaining one hundred eighty (180) days after the date the transactions contemplated in the Purchase Agreement are consummated to the redemption of Senior Notes in accordance with the terms and conditions set forth in the Senior Note Indenture; and ;

(e)    the continuation of certain guarantees provided by Hawk Corporation to secure indebtedness of Allegheny Clearfield, Inc. to the Pennsylvania Industrial Development Authority ("PIDA") during the transition period in which such obligations shall be transferred to Buyer; provided, however, that Hawk Corporation shall use its best efforts to obtain a full release from such guarantee obligations no later than April 30, 2007.

Section 3    AMENDMENTS TO THE CREDIT AGREEMENT:

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

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

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

3.3    Amendment to Annex IV to Credit Agreement. Annex IV to the Credit Agreement is hereby amended by deleting the existing Annex IV and replacing it with the Annex IV attached hereto as Exhibit I. In addition, within thirty (30) days of the date of this Amendment, the Company shall deliver to the Administrative Agent, any additional updates to such Disclosure Schedules, in form and substance satisfactory to the Administrative Agent, provided , however , that the Borrowers understand that such updates shall not be perm