EXCHANGE AGENT AGREEMENT

Exhibit 10.32


EXCHANGE AGENT AGREEMENT


December 20, 2004


HSBC Bank USA, National Association Corporate Trust 452 Fifth Avenue New York, New York 10018-2706


Ladies and Gentlemen:


Hawk Corporation, a Delaware corporation (the "Company"), proposes to make an offer (the "Exchange Offer") to exchange up to $110,000,000 in principal amount of the Company's 8 3/4% Senior Notes due 2014 (the "New Notes")) for a like principal amount of its outstanding 8 3/4% Senior Notes due 2014 (the "Old Notes"). The terms and conditions of the Exchange Offer as currently contemplated are set forth in a prospectus (the "Prospectus" included in the Company's registration statement on Form S-4 (File No. 333-120991) as amended (the "Registration Statement")) filed with the Securities and Exchange Commission (the "SEC"), and proposed to be distributed to all record holders of the Old Notes. The Old Notes and the New Notes are collectively referred to herein as the "Notes" or the "Securities." Capitalized terms used herein and not defined shall have the respective meanings ascribed to them in the Prospectus or the accompanying Letter of Transmittal.


The Company hereby appoints HSBC Bank USA, National Association to act as exchange agent (the "Exchange Agent") in connection with the Exchange Offer. References hereinafter to "you" shall refer to HSBC Bank USA, National Association.


The Exchange Offer is expected to be commenced by the Company on or about December 21, 2004. The Letter of Transmittal accompanying the Prospectus is to be used by the holders of the Old Notes to accept the Exchange Offer, and contains instructions with respect to the delivery of Old Notes tendered. The Exchange Agent's obligations with respect to receipt and inspection of the Letter of Transmittal in connection with the Exchange Offer shall be satisfied for all purposes hereof by inspection of the electronic message transmitted to the Exchange Agent by Exchange Offer participants in accordance with the Automated Tender Offer Program ("ATOP") of The Depository Trust Company ("DTC"), and by otherwise observing and complying with all procedures established by DTC in connection with ATOP, to the extent that ATOP is utilized by Exchange Offer participants.


The Exchange Offer shall expire at 5:00 p.m., New York City time, on January 21, 2005 or on such later date or time to which the Company may extend the Exchange Offer (the "Expiration Date"). Subject to the terms and conditions set forth in the Prospectus, the Company expressly reserves the right to extend the


Exchange Offer from time to time and may extend the Exchange Offer by giving oral (confirmed in writing) or written notice to you at any time before 9:00 a.m., New York City time, on the business day following the previously scheduled Expiration Date, and in such case the term "Expiration Date" shall mean the time and date on which such Exchange Offer as so extended shall expire.


The Company expressly reserves the right, in its sole discretion, to delay, amend or terminate the Exchange Offer, and not to accept for exchange any Old Notes not theretofore accepted for exchange upon the occurrence of certain events, including any of the conditions of the Exchange Offer specified in the Prospectus under the captions "The Exchange" and "Exchange Offer Procedures." The Company will give to you as promptly as practicable oral (confirmed in writing) or written notice of any delay, amendment, termination or non-acceptance.


In carrying out your duties as Exchange Agent, you are to act in accordance with the following instructions:


1. You will perform such duties and only such duties as are specifically set forth herein or in the section of the Prospectus captioned the "The Exchange" or in the Letter of Transmittal accompanying the Prospectus and such duties which are necessarily incidental thereto.


2. You will establish an account with respect to the Old Notes at The Depository Trust Company (the "Book-Entry Transfer Facility") for purposes of the Exchange Offer within two business days after the date of the Prospectus, and any financial institution that is a participant in the Book-Entry Transfer Facility's systems may make book-entry delivery of the Old Notes by causing the Book-Entry Transfer Facility to transfer such Old Notes into your account in accordance with the Book-Entry Transfer Facility's procedure for such transfer.


3. You are to examine each of the Letters of Transmittal and certificates for Old Notes (or confirmation of book-entry transfers into your account at the Book-Entry Transfer Facility) and any other documents delivered or mailed to you by or for holders of the Old Notes to ascertain whether: (i) the Letters of Transmittal, certificates and any such other documents are duly executed and properly completed in accordance with instructions set forth therein and in the Prospectus and that such book-entry confirmations are in due and proper form and contain the information required to be set forth therein, and (ii) the Old Notes have otherwise been properly tendered. In each case where the Letter of Transmittal or any other document has been improperly completed or executed or where book-entry confirmations are not in due and proper form or omit certain information or any of the certificates for Old Notes are not in proper form for transfer or some other irregularity in connection with the acceptance of the Exchange Offer exists, you will endeavor to inform the presenters of the need for fulfillment of all requirements and to take any other action as may be necessary or advisable to cause such irregularity to be corrected.


4. With the written approval of any executive officer of the Company, you are authorized to waive any irregularities in connection with any tender of Old Notes pursuant to the Exchange Offer.


5. Tenders of Old Notes may be made only as set forth in the Letter of Transmittal and in the section of the Prospectus captioned "The Exchange Offer - Exchange Offer Procedures" and Old Notes shall be considered properly tendered to you only when tendered in accordance with the procedures set forth therein. Notwithstanding the provisions of this paragraph 5, Old Notes which any executive officer of the Company shall approve in writing as having been properly tendered shall be considered to be properly tendered. The determination of all questions as to the proper completion or execution of the Letters of Transmittal and other related documents as to the validity, form, eligibility (including time of receipt), acceptance for payment, withdrawal of any tender of the Old Notes and revocation of delivered consents shall be made by the Company, in its sole discretion, which determination shall be final and binding.


6. You shall advise the Company with respect to any Old Notes delivered subsequent to the Expiration Date and accept its instructions with respect to disposition of such Old Notes.


7. You shall accept tenders:


(a) in cases where the Old Notes are registered in two or more names only if signed by all named holders;


(b) in cases where the signing person (as indicated on the Letter of Transmittal) is acting in a fiduciary or a representative capacity only when proper evidence of his or her authority so to act is submitted; and


(c) from persons other than the registered holder of Old Notes provided that customary transfer requirements, including any applicable transfer taxes, are fulfilled.


You shall accept partial tenders of Old Notes where so indicated and as permitted in the Letter of Transmittal and deliver certificates for Old Notes to the transfer agent for split-up and return any untendered Old Notes to the holder (or such other person as may be designated in the Letter of Transmittal) as promptly as practicable after expiration or termination of the Exchange Offer.


8. Upon satisfaction or waiver of all of the conditions to the Exchange Offer, the Company will notify you (such notice if given orally, promptly to be confirmed in writing) of its acceptance, promptly after the Expiration Date, of all Old Notes properly tendered and you, on behalf of the Company, will exchange such Old Notes for New Notes and c ...