Exhibit 10.32
EXCHANGE AGENT AGREEMENT
December 20, 2004
HSBC Bank USA, National Association
Corporate Trust
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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 cause such Old Notes to be canceled. Delivery
of New Notes will be made on behalf of the Company by you at the rate of $1,000
principal amount of New Notes for each $1,000 principal amount of the Old Notes
tendered promptly after notice (such notice if given orally, promptly to be
confirmed in writing) of acceptance of said Old Notes by the Company; provided,
however, that in all cases, Old Notes tendered pursuant to the Exchange Offer
will be exchanged only after timely receipt by you of certificates for such Old
Notes (or confirmation of book-entry transfer into your account at the
Book-Entry Transfer Facility), a properly completed and duly executed Letter of
Transmittal (or facsimile thereof or an Agent's Message in lieu thereof) with
any required signature guarantees
and any other required document. Unless otherwise instructed in writing by the
Company, you shall issue New Notes only in denominations of $1,000 or any
integral multiple thereof.
9. Tenders pursuant to the Exchange Offer are irrevocable after the
Expiration Date. Subject to the terms and upon the conditions set forth in the
Prospectus and the Letter of Transmittal, Old Notes tendered pursuant to the
Exchange Offer may be withdrawn at any time on or prior to the Expiration Date
in accordance with the terms of the Exchange Offer.
10. The Company shall not be required to exchange any Old Notes
tendered if any of the conditions set forth in the Exchange Offer are not met.
Notice of any decision by the Company not to exchange any Old Notes tendered
shall be given (such notices if given orally, promptly shall be confirmed in
writing) by the Company to you.
11. If, pursuant to the Exchange Offer, the Company does not accept for
exchange all or part of the Old Notes tendered because of an invalid tender, the
occurrence of certain other events set forth in the Prospectus or otherwise, you
shall as soon as practicable after the expiration or termination of the Exchange
Offer return those certificates for unaccepted Old Notes (or effect appropriate
book-entry transfer), together with any related required documents and the
Letters of Transmittal relating thereto that are in your possession, to the
persons who deposited them (or effected such book-entry transfer).
12. All certificates for reissued Old Notes, unaccepted Old Notes or
New Notes (other than those effected by book-entry transfer) shall be forwarded
by (a) first-class mail, postage pre-paid under a blanket surety bond protecting
you and the Company from loss or liability arising out of the non-receipt or
non-delivery of such certificates or (b) by registered mail insured separately
for the replacement value of each of such certificates.
13. You are not authorized to pay or offer to pay any concessions,
commissions or solicitation fees to any broker, dealer, bank or other persons or
to engage or utilize any persons to solicit tenders.
14. As Exchange Agent hereunder you:
(a) will be regarded as making no representations and having
no responsibilities as to the validity, sufficiency, value or genuineness of any
of the Old Notes deposited with you pursuant to the Exchange Offer, and will not
be required to and will make no representation as to the validity, value or
genuineness of the Exchange Offer;
(b) shall not be obligated to take any legal action hereunder
which might in your reasonable judgment involve any expense or liability, unless
you shall have been furnished with reasonable indemnity;
(c) shall not be liable to the Company for any action taken or
omitted by you, or any action suffered by you to be taken or omitted, without
gross negligence, misconduct or bad faith on your part, by reason of or as a
result of the administration of your duties hereunder in accordance with the
terms and conditions of this Agreement or by reason of your compliance
with the instructions set forth herein or with any written or oral instructions
delivered to you pursuant hereto, and may reasonably rely on and shall be
protected in acting in good faith in reliance upon any certificate, instrument,
opinion, notice, letter, facsimile or other document or security delivered to
you and reasonably believed by you to be genuine and to have been signed by the
proper party or parties;
(d) may reasonably rely upon any tender, statement, request,
comment, agreement or other instrument whatsoever, not only as to its due
execution and validity and effectiveness of its provisions, but also as to the
truth and accuracy of any information contained therein, which you shall in good
faith reasonably believe to be genuine or to have been signed or represented by
a proper person or persons;
(e) may rely on and shall be protected in acting upon written
notice or oral instructions from any officer of the Company;
(f) shall not advise any person tendering Old Notes pursuant
to the Exchange Offer as to whether to tender or refrain from tendering all or
any portion of Old Notes or as to the market value, decline or appreciation in
market value of any Old Notes that may or may not occur as a result of the
Exchange Offer or as to the market value of the Exchange Notes; and
(g) may consult with counsel with respect to any questions
relating to your duties and responsibilities, and the written advice or opinion
of such counsel shall be full and complete authorization and protection in
respect of any action taken, suffered or omitted by you hereunder in good faith
and in reliance thereon.
15. You shall send to all holders of Old Notes a copy of the
Prospectus, the Letter of Transmittal, the Notice of Guaranteed Delivery (as
defined in the Prospectus) and such other documents (collectively, the "Exchange
Offer Documents") as may be furnished by the Company to commence the Exchange
Offer and take such other action as may from time to time be requested by the
Company or its counsel (and such other action as you may reasonably deem
appropriate) to furnish copies of the Exchange Offer Documents or such other
forms as may be approved from time to time by the Company, to all holders of Old
Notes and to all persons requesting such documents and to accept and comply with
telephone requests for information relating to the Exchange Offer, provided that
such information shall relate only to the procedures for accepting (or
withdrawing from) the Exchange Offer. The Company will furnish you with copies
of such documents at your request. All other requests for information relating
to the Exchange Offer shall be directed to the Company, Attention: ▇▇▇▇▇▇ ▇.
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16. You shall advise, by facsimile transmission or telephone, and
promptly thereafter confirm in writing, to ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, and such other
person or persons as the Company may request, daily, and more frequently during
the week immediately preceding the Expiration Date and if otherwise requested,
up to and including the Expiration Date, as to the aggregate principal amount of
Old Notes which have been tendered pursuant to the Exchange Offer and the items
received by you pursuant to the Exchange Offer and this Agreement, separately
reporting
and giving cumulative totals as to items properly received and items improperly
received. In addition, you will also inform, and cooperate in making available
to, the Company or any such other person or persons as the Company requests in
writing from time to time prior to the Expiration Date of such other information
as it or he or she reasonably requests. Such cooperation shall include, without
limitation, the granting by you to the Company and such person as the Company
may request of access to those persons on your staff who are responsible for
receiving tenders, in order to ensure that immediately prior to the Expiration
Date the Company shall have received information in sufficient detail to enable
it to decide whether to extend the Exchange Offer. You shall prepare a final
list of all persons whose tenders were accepted, the aggregate principal amount
of Old Notes tendered, the aggregate principal amount of Old Notes accepted and
the identity of any participating Broker-Dealers and the aggregate principal
amount of Exchange Notes delivered to each, and deliver said list to the
Company.
17. Letters of Transmittal and Notices of Guaranteed Delivery shall be
stamped by you as to the date and the time of receipt thereof and shall be
preserved by you for a period of time at least equal to the period of time you
customarily preserve other records pertaining to the transfer of securities, or
one year, whichever is longer, and thereafter shall be delivered by you to the
Company. You shall dispose of unused Letters of Transmittal and other surplus
materials in accordance with your customary procedures.
18. You hereby expressly waive any lien, encumbrance or right of
set-off whatsoever that you may have with respect to funds deposited with you
for the payment of transfer taxes by reasons of amounts, if any, borrowed by the
Company, or any of its subsidiaries or affiliates pursuant to any loan or credit
agreement with you or for compensation owed to you hereunder.
19. For services rendered as Exchange Agent hereunder you shall be
entitled to such compensation and reimbursement of out-of-pocket expenses as
have been separately agreed to in writing.
20. You hereby acknowledge receipt of the Prospectus, the Letter of
Transmittal and the other documents associated with the Exchange Offer attached
hereto and further acknowledge that you have examined each of them. Any
inconsistency between this Agreement, on the one hand, and the Prospectus, the
Letter of Transmittal and such other forms (as they may be amended from time to
time), on the other hand, shall be resolved in favor of the Prospectus, the
Letter of Transmittal and such other forms, except with respect to the duties,
liabilities and indemnification of you as Exchange Agent which shall be
controlled by this Agreement.
21. The Company agrees to indemnify and hold you harmless in your
capacity as Exchange Agent hereunder against any liability, cost or expense,
including reasonable attorneys' fees and expenses, arising out of or in
connection with your appointment as Exchange Agent and the performance of your
duties hereunder, including, without limitation, any act, omission, delay or
refusal made by you in reasonable reliance upon any signature, endorsement,
assignment, certificate, order, request, notice, instruction or other instrument
or document reasonably believed by you to be valid, genuine and sufficient and
in accepting any tender or effecting any transfer of Old Notes reasonably
believed by you in good faith to be authorized, and in delaying or refusing in
good faith to accept any tenders or effect any transfer of Old Notes; provided,
however, that the Company shall not be liable for indemnification or otherwise
for any loss, liability, cost or expense to the extent arising out of your gross
negligence, willful misconduct or bad faith.
22. You shall arrange to comply with all requirements under the tax
laws of the United States, including those relating to missing Tax
Identification Numbers, and shall file any appropriate reports with the Internal
Revenue Service. The Company understands that you are required, in certain
instances, to deduct twenty-eight percent (28%) with respect to interest paid on
the Exchange Notes and proceeds from the sale, exchange, redemption or
retirement of the Exchange Notes from holders who have not supplied their
correct Taxpayer Identification Numbers or required certification. Such funds
will be turned over to the Internal Revenue Service in accordance with
applicable regulations.
23. You shall notify the Company of the amount of any transfer taxes
payable in respect of the exchange of Old Notes and shall deliver or cause to be
delivered, in a timely manner, to each governmental authority to which any
transfer taxes are payable in respect of the exchange of Old Notes your check in
the amount of all transfer taxes so payable, and the Company shall reimburse you
for the amount of any and all transfer taxes payable in respect of the exchange
of Old Notes; provided, however, that you shall reimburse the Company for
amounts refunded to you in respect of your payment of any such transfer taxes,
at such time as such refund is received by you.
24. This Agreement and your appointment as Exchange Agent hereunder
shall be construed and enforced in accordance with the laws of the State of New
York applicable to agreements made and to be performed entirely within such
state, and without regard to conflicts of law principles, and shall inure to the
benefit of, and the obligations created hereby shall be binding upon, the
successors and assigns of each of the parties hereto and nothing in this
Agreement, express or implied, is intended to or shall confer upon any other
person any right, benefit or remedy of any nature whatsoever under or by reason
of this Agreement. Without limitation of the foregoing, the parties hereto
expressly agree that no holder of Old Notes or Exchange Notes shall have any
right, benefit or remedy of any nature whatsoever under or by reason of this
Agreement.
25. This Agreement may be executed in two or more counterparts, each of
which shall be deemed to be an original and all of which taken together shall
constitute one and the same agreement.
26. In case any provision of this Agreement 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.
27. This Agreement shall not be deemed or construed to be modified,
amended, rescinded, canceled or waived, in whole or in part, except by a written
instrument signed by a duly authorized representative of the party to be
charged.
28. Unless otherwise provided herein, all notices, requests and other
communications to any party hereunder shall be in writing (including facsimile)
and shall be given to such party, addressed to it, as its address or telecopy
number set forth below:
If to the Company:
Hawk Corporation
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: -▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
with a copy to
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
If to the Exchange Agent:
HSBC Bank USA, National Association
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Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Corporate Trust
29. Unless terminated earlier by the parties hereto, this Agreement
shall terminate 90 days following the Expiration Date. Notwithstanding the
foregoing, Paragraphs 18, 19, 21 and 22 shall survive the termination of this
Agreement. Upon any termination of this Agreement, you shall promptly deliver to
the Company any certificates for Notes, funds or property (including, without
limitation, Letters of Transmittal and any other documents relating to the
Exchange Offer) then held by you as Exchange Agent under this Agreement.
30. This Agreement shall be binding and effective as of the date
hereof.
Please acknowledge receipt of this Agreement and confirm the
arrangements herein provided by signing and returning the enclosed copy.
HAWK CORPORATION
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: Chairman of the Board,
Chief Executive Officer and
President
Accepted as of the date first above written:
HSBC BANK USA, NATIONAL ASSOCIATION, as exchange agent
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President