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EXHIBIT 10.27
FORM OF
FIRST AMENDMENT TO SUBORDINATED GUARANTEE AGREEMENT
This First Amendment dated as of November 27, 1996 (the or this "First
Amendment") to the Subordinated Guarantee Agreement dated as of June 30, 1995,
is between that certain subsidiary of The Hawk Group of Companies, Inc., a
Delaware corporation, now known as Hawk Corporation (the "Company"), which
subsidiary is a signatory hereto (the "Subsidary"), and each of the institutions
which is a signatory to this First Amendment (collectively, the "Noteholders").
RECITALS:
A. The Company has heretofore entered into separate and several Senior
Subordinated Note and Warrant Purchase Agreements, each dated as of June 30,
1995 (collectively, the "Note and Warrant Purchase Agreement"), with each of the
purchasers identified on Annex I thereto. The Company has heretofore issued
$30,000,000 of its 12% Senior Subordinated Notes due June 30, 2005 (the "Notes")
and 316,970 Warrants to Purchase Class B Common Stock of the Company (the
"Warrants") pursuant to the Note and Warrant Purchase Agreement. The Noteholders
are the holders of 100% of the outstanding principal amount of the Notes.
B. The Subsidiary has heretofore entered into that certain Subordinated
Guarantee Agreement dated as of June 30, 1995 (the "Subordinated Guarantee") for
the benefit of each of the purchasers identified on Annex I to the Note and
Warrant Purchase Agreement in order to guarantee unconditionally all of the
obligations of the Company under and in respect of the Notes and the Note and
Warrant Purchase Agreement pursuant to the terms thereof.
C. The Subsidiary and the Noteholders now desire to amend the
Subordinated Guarantee in the respects, but only in the respects, hereinafter
set forth.
D. Capitalized terms used herein shall have the respective meanings
ascribed thereto in the Subordinated Guarantee and the Note and Warrant Purchase
Agreement unless herein defined or the context shall otherwise require.
E. All requirements of law have been fully complied with, and all other
acts and things necessary to make this First Amendment a valid, legal and
binding instrument according to its terms for the purposes herein expressed have
been done or performed.
NOW, THEREFORE, upon the full and complete satisfaction of the
conditions precedent to the effectiveness of this First Amendment set forth in
Section 3.1 hereof, and in consideration of good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the Subsidiary and the
Noteholders hereby agree as follows:
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SECTION 1. AMENDMENTS.
1.1. The definition of "Subsidiary Senior Guarantee" in Section 3.1 of
the Subordinated Guarantee shall be and hereby is amended by deletion of the
phrase "an Acceptable Credit Facility" in the second line thereof, and
replacement of such phrase with "any Senior Debt".
SECTION 2. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
2.1. To induce the Noteholders to execute and deliver this First
Amendment, the Subsidiary represents and warrants (which representations and
warranties shall survive the execution and delivery of this First Amendment) to
the Noteholders that:
(a) this First Amendment has been duly authorized, executed
and delivered by it and this First Amendment constitutes the legal,
valid and binding obligation, contract and agreement of the Subsidiary
enforceable against it in accordance with its terms, except as
enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws or equitable principles relating to or
limiting creditors' rights generally;
(b) the Subordinated Guarantee, as amended by this First
Amendment, constitutes the legal, valid and binding obligation,
contract and agreement of the Subsidiary enforceable against it in
accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or
equitable principles relating to or limiting creditors' rights
generally;
(c) the execution, delivery and performance by the Subsidiary
of this First Amendment (i) has been duly authorized by all requisite
corporate action, and, if required, shareholder action, (ii) does not
require the consent or approval of any governmental or regulatory body
or agency, and (iii) will not (A) violate (1) any provision of law,
statute, rule or regulation or its certificate of incorporation or
bylaws, (2) any order of any court or any rule, regulation or order of
any other agency or government binding upon it, or (3) any provision of
any material indenture, agreement or other instrument to which it is a
party or by which its properties or assets are or may be bound, or (B)
result in a breach or constitute (alone or with due notice or lapse of
time or both) a default under any indenture, agreement or other
instrument referred to in clause (iii)(A)(3) of this Section 2.1(c);
and
(d) as of the date hereof and after giving effect to this
First Amendment, no Default or Event of Default has occurred or is
continuing.
SECTION 3. CONDITIONS TO EFFECTIVENESS OF THIS FIRST AMENDMENT.
3.1. This First Amendment shall not become effective until, and shall
become effective when, each and every one of the following conditions shall have
been satisfied:
(a) executed counterparts of this First Amendment, duly
executed by the Subsidiary and the holders of at least 51% of the
outstanding principal amount of the Notes shall have been delivered to
the Noteholders;
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(b) the Noteholders shall have received evidence satisfactory
to them that the Company has duly authorized the execution, delivery
and performance of the First Amendment to Note and Warrant Purchase
Agreement, dated as of November 27, 1996, and that such First Amendment
to Note and Warrant Purchase Agreement has been duly executed and
delivered by the Company; and
(c) the representations and warranties of the Subsidiary set
forth in Section 2 hereof are true and correct on and with respect to
the date hereof.
Upon receipt of all of the foregoing, this First Amendment shall become
effective.
SECTION 4. MISCELLANEOUS.
4.1. This First Amendment shall be construed in connection with and as
part of the Subordinated Guarantee, and except as modified and expressly amended
by this First Amendment, all terms, conditions and covenants contained in the
Subordinated Guarantee are hereby ratified and shall be and remain in full force
and effect.
4.2. Any and all notices, requests, certificates and other instruments
executed and delivered after the execution and delivery of this First Amendment
may refer to the Subordinated Guarantee without making specific reference to
this First Amendment but nevertheless all such references shall include this
First Amendment unless the context otherwise requires.
4.3. The descriptive headings of the various Sections or parts of this
First Amendment are for convenience only and shall not affect the meaning or
construction of any of the provisions hereof.
4.4. This First Amendment shall be governed by and construed in
accordance with internal Connecticut law.
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4.5. The execution hereof by you shall constitute a contract between us
for the uses and purposes hereinabove set forth, and this First Amendment may be
executed in any number of counterparts, each executed counterpart constituting
an original, but all together only one agreement.
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By:_________________________
Name:
Title:
Accepted and Agreed to:
CIGNA MEZZANINE PARTNERS III, L.P.
By CIGNA Investments, Inc. (Agent)
By:_________________________
Name:
Title:
CONNECTICUT GENERAL LIFE INSURANCE
COMPANY
By CIGNA Investments, Inc.
By:_________________________
Name:
Title:
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