Exhibit 99.2
AMENDMENT NO. 4
TO
LOAN AGREEMENT
This AMENDMENT NO. 4 TO LOAN AGREEMENT (this "Amendment"), made as of
October 23, 2002, among OGLEBAY NORTON COMPANY ("Borrower"), the banking
institutions named in Schedule 1 to the Loan Agreement (as hereinafter defined)
(collectively, the "Banks" and individually, "Bank"), KEYBANK NATIONAL
ASSOCIATION, as administrative agent for the Banks ("Agent"), BANK ONE, MICHIGAN
(now known as Bank One, NA), as syndication agent ("Syndication Agent") and THE
BANK OF NOVA SCOTIA, as documentation agent ("Documentation Agent"),
WITNESSETH:
WHEREAS, Borrower, the Banks, the Agent, the Syndication Agent and the
Documentation Agent have entered into that certain Loan Agreement, dated as of
April 3, 2000, and as subsequently amended by that certain Amendment No. 1 to
Loan Agreement, dated as of June 30, 2001, and Amendment No. 2 to Loan
Agreement, dated as of November 9, 2001, and Amendment No. 3 to Loan Agreement
and Waiver, dated as of December 24, 2001 (as amended from time to time, the
"Loan Agreement"), pursuant to which the Banks have made certain loans and other
financial accommodations available to Borrower; and
WHEREAS, Borrower and the Banks desire to amend the Loan Agreement as
hereinafter set forth;
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, Borrower and the Banks do hereby
agree as follows:
1. DEFINED TERMS.
Each defined term used herein and not otherwise defined herein shall have
the meaning ascribed to such term in the Loan Agreement.
2. SCHEDULES 2 AND 3 TO LOAN AGREEMENT; UPDATED DISCLOSURE SCHEDULES.
Schedules 2 and 3 to the Loan Agreement are amended by deleting the
existing Schedules 2 and 3 and replacing such schedules with Schedule 2 and
Schedule 3 as attached hereto and such revised Schedules 2 and 3 shall be
incorporated into the Loan Agreement as if fully written therein. In addition
the following Schedules to the Loan Agreement, In addition, the following
Schedules to the Loan Agreement, Schedules 6.1, 6.4, 6.5, 6.17 and 6.19, are
amended by deleting the existing Schedules 6.1, 6.4, 6.5, 6.17 and 6.19, and
replacing such schedules with new Schedules 6.1, 6.4, 6.5, 6.17 and 6.19,
attached hereto as Annex I, and such revised Schedules 6.1, 6.4, 6.5, 6.17 and
6.19 shall be incorporated into the Loan Agreement as if fully written therein.
3. AMENDMENT TO THE LOAN AGREEMENT.
3.1 Amendment to Article I. Article I, Definitions, is amended by: (i)
adding thereto new definitions "Amendment No. 4 Closing Date," "Noteholder
Intercreditor Agreement," "Maturity Date," "Material Recovery Event," "Net Cash
Proceeds," "Note Purchase Agreement," and "2002 Senior Secured Fund Notes" to be
inserted into Article I in appropriate alphabetical order and (ii) amending the
definitions of "Applicable Margin" and "Change of Control" to read as follows:
"Amendment No. 4 Closing Date" shall mean date on which the "Amendment
Effective Date" (as such term is defined in Section 5 hereof) occurs.
"Applicable Margin" shall mean:
(a) for the period commencing on the Amendment No. 4 Closing Date
until but excluding the first day of the month after the date of receipt by
Agent of the financial statements for the fiscal quarter ending December
31, 2002, (i) four hundred twenty five (425) basis points for each LIBOR
Interest Segment, and (ii) two hundred (200) basis points for the Prime
Interest Segment, and
(b) commencing on the first day of the month after the date of receipt
by Agent of the financial statements for the fiscal quarter ending December
31, 2002, the number of basis points (for each LIBOR Interest Segment or
the Prime Interest Segment, as appropriate) set forth in the following
matrix, based upon the result of the computation of the Leverage Ratio,
shall be used to establish the number of basis points that will go into
effect on such date and thereafter; provided, however that, in the event
Borrower does not permanently reduce aggregate amount of the Term Loan
Commitment under the Term Loan Agreement and the Revolving Credit
Commitment under the Credit Agreement by a minimum of $75,000,000
(exclusive of the $60,000,000 permanent reduction of the Revolving Credit
Commitments of the Banks under the Credit Agreement effective as of the
Amendment No. 4 Closing Date) within one (1) year after the Amendment No. 4
Closing Date, the number of basis points established with respect to each
level of the matrix for the Applicable Margin for LIBOR Loans and the
Applicable Margin for Prime Rate Loans will in each case be increased by
fifty (50) basis points (with such increased pricing remaining effective
until such reduction does take place at which time the pricing indicated on
the matrix shall again be controlling); provided, further, however, that
the increase otherwise required pursuant to this proviso shall not be
required if: (i) the Borrower has proposed one or more asset sales or
capital market transactions the aggregate proceeds of which would have
resulted in the required permanent reduction in the Revolving Credit
Commitment, (ii) the Agent has determined, in the exercise of its good
faith discretion (which determination the Agent hereby agrees to complete
in a reasonably prompt time schedule), that such proposed asset sale or
sales or capital market transactions are financially reasonable from a
credit perspective and (iii) notwithstanding such determination, the Banks
have not consented to such sales or transactions:
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- ---------------------------------------------------------------------------------------
Applicable Margin Applicable Margin
Leverage Ratio for each LIBOR for the Prime
Interest Segment Interest Segment
- ---------------------------------------------------------------------------------------
Greater than 6.50 to 1.00 450 basis points 225 basis points
- ---------------------------------------------------------------------------------------
Greater than or equal to 6.00 to 1.00 but 425 basis points 200 basis points
less than or equal to 6.50 to 1.00
- ---------------------------------------------------------------------------------------
Greater than or equal to 5.50 to 1.00 but 400 basis points 175 basis points
less than 6.00 to 1.00
- ---------------------------------------------------------------------------------------
Greater than or equal to 5.00 to 1.00 but 375 basis points 150 basis points
less than 5.50 to 1.00
- ---------------------------------------------------------------------------------------
Greater than or equal to 4.50 to 1.00 but 350 basis points 125 basis points
less than 5.00 to 1.00
- ---------------------------------------------------------------------------------------
Greater than or equal to 4.00 to 1.00 but 325 basis points 100 basis points
less than 4.50 to 1.00
- ---------------------------------------------------------------------------------------
Greater than or equal to 3.50 to 1.00 but 300 basis points 75 basis points
less than 4.00 to 1.00
- ---------------------------------------------------------------------------------------
Less than 3.50 to 1.00 275 basis points 50 basis points
- ---------------------------------------------------------------------------------------
Changes to the Applicable Margin shall be effective on the first day of the
month following the date upon which Agent received, or, if earlier, Agent should
have received, pursuant to Section 5.3 (a) or (b) hereof, the quarterly or
annual financial statements of the Companies and the Compliance Certificate with
respect thereto The above matrix does not modify or waive, in any respect, the
requirements of Section 5.7 hereof, the rights of the Banks to charge the
Default Rate in lieu of the rate specified in the matrix above, or the rights
and remedies of Agent and the Banks pursuant to Articles VII and VIII hereof.
"Change of Control" shall mean the occurrence of any one of any the
following events: (a) the acquisition of, or, if earlier, the shareholder or
director approval of the acquisition of, ownership or voting control, directly
or indirectly, beneficially or of record, on or after the Closing Date, by any
Person or group (as the terms beneficial ownership, person, and group are used
for purposes of or are within the meaning of Rule 13d-3 of the SEC under the
Securities Exchange Act of 1934, as then in effect), shares representing more
than fifty-percent (50%) of the aggregate Voting Power (whether exclusive or
non-exclusive) represented by the issued and outstanding capital stock of
Borrower; (b) the occupation of a majority of the seats (other than vacant
seats) on the board of directors of Borrower by Persons who were neither (i)
nominated by the board of directors of Borrower nor (ii) appointed by directors
so nominated; (c) the Board of Directors or stockholders of Borrower shall
approve (i) any consolidation or merger of the Borrower where the stockholders
of Borrower, immediately prior to the consolidation or merger, would not,
immediately after the consolidation or merger, beneficially own, directly or
indirectly, shares representing in the aggregate 50% or more of the voting
shares of the corporation issuing cash or securities in the consolidation or
merger (or of its ultimate parent corporation, if any), (ii) any asset sale of
all or substantially all of the assets of the Borrower or
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any division thereof, and (iii) any plan or proposal for the liquidation or
dissolution of the Borrower; or (d) the 2002 Senior Secured Fund Notes (or any
of them) or any other Indebtedness under the 2002 Senior Secured Fund Notes
shall cease to constitute, or the Borrower and its Subsidiaries (or any of them)
shall challenge in writing or otherwise that, the 2002 Senior Secured Fund Notes
(or any of them) or any other Indebtedness under the 2002 Senior Secured Fund
Notes constitute "Senior Indebtedness" and "Designated Senior Indebtedness" in
each case as such term is defined in the Indenture.
"Material Recovery Event" shall mean (a) any casualty loss in respect of
assets of Borrower or any of its Subsidiaries covered by casualty insurance, (b)
any compulsory transfer or taking under threat of compulsory transfer of any
asset of Borrower or any of its Subsidiaries with a fair market value in excess
of One Hundred Thousand Dollars ($100,000) by any agency, department, authority,
commission, board, instrumentality or political subdivision of the United
States, any state or municipal government, and (c) any recovery in good funds by
Borrower or any of its Subsidiaries by reason of a nonappealable judgment
against any other Person in excess of One Hundred Thousand Dollars ($100,000) to
the full extent thereof.
"Maturity Date" shall means the earlier of: (i) October 31, 2004, (ii) the
date upon which the Credit Agreement is terminated or (iii) so long as the
Noteholder Intercreditor Agreement remains in effect, the date on which there
has been full, final and indefeasible repayment of all Debt hereunder and under
the Credit Agreement (as referenced in section 2.10 of the Noteholder
Intercreditor Agreement).
"Net Proceeds" shall mean:
(a) the cash proceeds (including cash proceeds subsequently received in
respect of non-cash consideration initially received) from any sale, transfer or
other disposition of assets of Borrower or any of its Subsidiaries to a Person
(other than: (i) any sale of inventory in the ordinary course, (ii) disposition
in the ordinary course of Borrower's or any of its Subsidiaries' business of
assets that are obsolete, worn out or no longer used or useful in Borrower's or
any of its Subsidiaries business, (iii) any sale of accounts or contract claims
in each case reasonably deemed by Borrower to be of questionable collectability,
(iv) disposition of capital assets the proceeds of which (net of taxes payable
with respect to the disposition and the reasonable costs and expenses of sale)
are reinvested within a reasonable period of time and in the ordinary course of
business in capital assets of Borrower or its Subsidiaries, or (v) any sale,
transfer or other disposition of assets of Borrower or any of its Subsidiaries
to Borrower or any Subsidiary of Borrower) to the extent that such sale proceeds
(in each case, net of (x) selling expenses, including without limitation any
reasonable broker's fees or commissions, costs of discontinuing operations
associated with such assets and sales, transfer and similar taxes and (y) the
repayment of any Indebtedness secured by a purchase money Lien on such assets
that is permitted under this Agreement) exceeds Two Hundred and Fifty Thousand
Dollars ($250,000) in any fiscal year of Borrower and its consolidated
Subsidiaries and only to the extent of such excess;
(b) the cash proceeds from the issuance and/or sale of equity or debt
securities of any Borrower or any Subsidiaries thereof pursuant to any public
offering, Rule 144A offering, or private placement with one or more
institutional investors, net of transaction costs (including customary fees,
costs and expenses including, without limitation, underwriters' or placement
agents' discounts and commissions and transfer and similar taxes) (excluding any
(i) proceeds from the issuance or sale of equity or debt securities in
connection with a Permitted Acquisition
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and (ii) proceeds from the issuance of any equity or debt securities pursuant to
compensation plans for employees or executive officers of Borrower and the
Subsidiaries thereof), and
(c) the cash proceeds from any Material Recovery Event (net of any amounts
in respect of insurance proceeds or proceeds of compulsory takings which are
reinvested in repair or replacement of the capital assets of Borrower or the
Subsidiaries thereof which were subject to such casualty or taking within a
reasonable period of time and in the ordinary course of business).
"Noteholder Intercreditor Agreement" shall mean that certain Noteholder
Intercreditor Agreement, dated as of October 25, 2002, between the holders of
the 2002 Senior Secured Fund Notes, The 1818 Mezzanine Fund II, L.P., in its
capacity as collateral agent for such holders, and the Agent on behalf of itself
and the Banks.
"Note Purchase Agreement" shall mean that certain Senior Secured Note
Purchase Agreement, dated as of October 25, 2002, among Borrower, the guarantors
listed therein, The 1818 Mezzanine Fund II, L.P. and the other Purchasers which
are signatories thereto (as therein defined).
"2002 Senior Secured Fund Notes" shall mean those certain Senior Notes of
Borrower in the original principal amount of $75,000,000 with a coupon of 18%
per annum, of which 13% per annum is payable in cash and 5% per annum is
payable, at the option of Borrower, in cash or in-kind and having a final
maturity date of October 25, 2008 issued by Borrower pursuant to the Note
Purchase Agreement.
3.2 Amendment to Section 2.8 Section 2 of the Loan Agreement shall be
amended by adding thereto Section 2.8 to read as follows:
SECTION 2.8. MANDATORY APPLICATION OF NET PROCEEDS; RESULTING
MANDATORY REDUCTION IN REVOLVING CREDIT COMMITMENTS AND TERM LOANS.
(a) APPLICATION OF NET PROCEEDS. From and after the Amendment No. 4
Closing Date, Borrower shall apply all Net Proceeds relating to Borrower
promptly upon receipt thereof to prepay Revolving Loans under the Credit
Agreement and Term Loans hereunder outstanding at the time of such receipt
with such prepayments being applied pro rata among the Banks; provided,
however, that Borrower shall have the option of specifying the portion of
the proceeds to be applied to outstanding Term Loans under the Loan
Agreement, in the inverse order of maturity and to outstanding Revolving
Loans; provided, further, that nothing in this Subsection or in the
definition of "Net Proceeds" shall (i) constitute authorization not
otherwise permitted by this Agreement for Borrower or any Subsidiary
thereof to enter into any transaction that would generate Net Proceeds and
(ii) affect the application of proceeds of the 2002 Senior Secured Fund
Notes to prepayment of the Revolving Credit Loans and the reduction
immediately thereafter to the Revolving Credit Commitments of the Banks as
required by Amendment No. 4 to Loan Agreement.
(b) POSTPONEMENT OF PREPAYMENT; EFFECT OF PREPAYMENT AS COMMITMENT
REDUCTION. Unless an Event of Default has occurred which is continuing and
has not been waived in accordance with Section 10.3 hereof, in the event
that the making of any prepayment of Revolving Loans or Term Loans required
by this
5
Section would result in an obligation on the part of Borrower to make a
breakage payment in respect thereof under Section 2.4 of this Agreement
(unless waived in accordance with Section 10.3 hereof), Borrower may upon
notice to Agent postpone making such prepayment for a period of up to 30
days or such shorter period as will result in no such breakage payment
being payable. Each prepayment with respect to Term Loans and Revolving
Loans required by this Section 2.7 shall constitute not only a prepayment
but also a permanent reduction in the amount of the applicable Term Loan
Commitment hereunder and Revolving Credit Commitment of the Banks under the
Credit Agreement. Amounts prepaid with respect to Term Loans may not be
reborrowed.
3.3 Amendment to Section 5.7 Section 5.7 of the Agreement shall be modified
by amending Subsections (a), (b), (c), (d), (e), (f) and (g) thereof to read as
follows:
SECTION 5.7 FINANCIAL COVENANTS
(a) LEVERAGE RATIO. The Companies shall not suffer or permit at
any time the Leverage Ratio to exceed: (i) 6.75 to 1.00 on July 1, 2002
through September 30, 2002, (ii) 6.35 to 1.00 on October 1, 2002 through
December 31, 2002, (iii) 6.50 to 1.00 on January 1, 2003 through March 31,
2003, (iv) 6.55 to 1.00 on April 1, 2003 through June 30, 2003, (v) 6.25 to
1.00 on July 1, 2003 through September 30, 2003, (vi) 5.90 to 1.00 on
October 1, 2003 through December 31, 2003, (vii) 6.20 to 1.00 on January 1,
2004 through March 31, 2004, (viii) 6.15 to 1.00 on April 1, 2004 through
June 30, 2004, and (ix) 5.85 to 1.00 on July 1, 2004 and thereafter.
(b) SENIOR SECURED DEBT RATIO. The Companies shall not suffer or
permit at any time the ratio of: (x) Total Senior Funded Indebtedness to
the extent such Indebtedness is a secured obligation (but excluding for
purposes hereof, the Indebtedness evidenced by the 2002 Senior Secured Fund
Notes) to (y) Consolidated Pro-Forma EBITDA to be greater than: (i) 4.60 to
1.00 on July 1, 2002 through September 30, 2002, (ii) 3.55 to 1.00 on
October 1, 2002 through December 31, 2002, (iii) 3.75 to 1.00 on January 1,
2003 through March 31, 2003, (iv) 3.80 to 1.00 on April 1, 2003 through
June 30, 2003, (v) 3.55 to 1.00 on July 1, 2003 through September 30, 2003,
(vi) 3.25 to 1.00 on October 1, 2003 through December 31, 2003, (vii) 3.55
to 1.00 on January 1, 2004 through June 30, 2004, and (viii) 3.25 to 1.00
on July 1, 2004 and thereafter, in each case, based upon the financial
statements of the Companies for the most recently completed four (4) fiscal
quarters.
(c) INTEREST COVERAGE. The Companies shall not suffer or permit
at any time the ratio of: (x) Consolidated Pro-Forma EBITDA to (y)
Consolidated Pro-Forma Interest Expense (less non cash amortized financing
and FAS 133 costs to the extent included in Consolidated Pro-Forma Interest
Expense in accordance with GAAP) to be less than: (i) 1.49 to 1.00 on July
1, 2002 through December 31, 2002, (ii) 1.47 to 1.00 on January 1, 2003
through March 31, 2003, (iii) 1.45 to 1.00 on April 1, 2003 through June
30, 2003, (iv) 1.48 to 1.00 on July 1, 2003 through September 30, 2003, (v)
1.53 to 1.00 on October 1, 2003 through December 31, 2003, (vi) 1.55 to
1.00 on January 1, 2004 through March 31, 2004, (vii) 1.60 to 1.00 on April
1, 2004 through June 30, 2004, and (viii) 1.64 to 1.00 on July 1, 2004 and
thereafter, in each case, based upon the financial statements of the
Companies for the most recently completed four (4) fiscal quarters.
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(d) CASH-FLOW COVERAGE. The Companies shall not suffer or permit at
any time the ratio of: (x) Consolidated Pro-Forma Cash Flow to (y)
Consolidated Pro-Forma Fixed Charges (excluding from Pro-Forma Fixed
Charges for purposes of calculating compliance with this covenant, amounts
payable with respect to the Revolving Loans and the Term Loans (as defined
in the Loan Agreement) to be less than: (i) 0.92 to 1.00 on July 1, 2002
through September 30, 2002, (ii) 1.00 to 1.00 on October 1, 2002 through
December 31, 2002, (iii) 0.95 to 1.00 on January 1, 2003 through March 31,
2003, (iv) 0.94 to 1.00 on April 1, 2003 through June 30, 2003, (v) 0.98 to
1.00 on July 1, 2003 through September 30, 2003, (vi) 1.00 to 1.00 on
October 1, 2003 through December 31, 2003, (vii) 1.03 to 1.00 on January 1,
2004 through March 31, 2004, (viii) 1.08 to 1.00 on April 1, 2004 through
June 30, 2004, and (ix) 1.14 to 1.00 on July 1, 2004 and thereafter, in
each case, based upon the financial statements of the Companies for the
most recently completed four (4) fiscal quarters.
(e) NET WORTH. The Companies shall not suffer or permit Consolidated
Net Worth at any time, based upon the Consolidated financial statements of
the Companies for the most recently completed fiscal quarter, to fall below
the current minimum amount required, which current minimum amount required
shall be: (i) as of June 30, 2002 the amount required pursuant to this
clause (e) as in effect prior to the Amendment No. 4 to Credit Agreement,
(ii) as of September 30, 2002, an amount equal to $108, 513,000, (iii) as
of December 31, 2002, an amount equal to $104,768,000, (iv) as of March 31,
2003, an amount equal to $98,643,000, (v) as of June 30, 2003, an amount
equal to $101,512,000, (vi) as of September 30, 2003, an amount equal to
$104,524,000, (vii) as of December 31, 2003 an amount equal to
$102,120,000, (viii) as of March 31, 2004, an amount equal to $96,395,000,
(ix) as of June 30, 2004, an amount equal to $99,664,000 and (x) as of
September 30, 2004 and thereafter, an amount equal to $103,250,000;
provided, however, in each case, that (i) any non-cash impact to
Consolidated Net Worth related to FAS 142 shall be excluded in calculating
Borrower's compliance with this covenant and (ii) any potential non-cash
impact associated with the extinguishment of Indebtedness (as a result of
the issuance of the 2002 Senior Secured Fund Notes and the required
repayment of a portion of the Revolving Credit Loans) as indicated pursuant
to EITF 96.19/SFAS 140 shall likewise be excluded in calculating Borrower's
compliance with this covenant.
(f) MINIMUM CONSOLIDATED PRO-FORMA EBITDA. The Companies shall not
suffer or permit at any time Consolidated Pro-Forma EBITDA to be less than:
(i) $61,000,000 from the Amendment No. 4 Closing Date through September 30,
2002, (ii) $63,500,000 on October 1, 2002 through December 31, 2002, (ii)
$65,000,000 on January 1, 2003 through March 31, 2003, (iii) $66,000,000 on
April 1, 2003 through June 30, 2003, (iv) $67,500,000 on July 1, 2003
through September 30, 2003, and (v) $68, 000,000 on October 1, 2003 and
thereafter, in each case, based upon the financial statements of the
Companies for the most recently completed four (4) fiscal quarters.
3.4 Amendment to Section 5.1. Section 5.1 is amended by deleting in its
entirety the proviso to the third sentence thereof.
3.5 Amendment to Section 5.8. Section 5.8 is amended by (i) deleting the
word "or" at the end of subsection (g), (ii) deleting the period at the end of
subsection (h) and adding a
7
semicolon followed by the word "or" and (iii) adding the following subsection
(i) at the end thereof to read as follows:
. . .
(i) the Indebtedness incurred under the 2002 Senior Secured Fund Notes
and, without effecting the limitation set forth in section 7.5(y) hereof,
the Note Purchase Agreement.
3.6 Amendment to Section 5.9. Section 5.9 is amended by (i) deleting the
word "or" at the end of subsection (h), (ii) deleting the period at the end of
subsection (i) and adding a semicolon followed by the word "or" and (iii) adding
the following subsection (j) at the end thereof to read as follows:
. . .
(i) the Liens securing the 2002 Senior Secured Fund Notes but only to the
extent such Liens are subordinated by agreement, in form and substance
satisfactory to the Agent on behalf of the Banks, providing that such Liens
can not be enforced against any collateral and such collateral can not be
realized upon pursuant to such Liens until prior full, final and
indefeasible payment of the Debt.
3.7 Amendment to Section 5.13. Section 5.13 is amended to read as follows:
SECTION 5.13. ACQUISITIONS. Without the prior written consent of
Agent and the Majority Banks, no Company shall effect an Acquisition or
Permitted Acquisition; provided the Banks hereby consent to the Acquisition
of Erie Sand and Gravel so long as the Companies are in compliance with the
Loans Documents both before and after such Acquisition and provided the
total consideration paid does not exceed the amount specified in section
6.15 of the Note Purchase Agreement as originally executed.
3.8 Amendment to Section 5.17. Section 5.17 is amended by adding the
following proviso at the end thereof to read as follows:
... ; provided, however, that no portion of the proceeds of the Loans shall
be used to refund or repay or otherwise retire or redeem any portion of the
Indebtedness with respect to the Indenture or the 2002 Senior Secured Fund
Notes; provided, further, however that Borrower may use any portion of the
proceeds to make scheduled interest payments with respect to such
Indebtedness and to make the redemption payment required upon Borrower's
failure to consummate the Acquisition of Erie Sand and Gravel as such
requirement is specified in the Note Purchase Agreement as originally
executed.
3.9 Amendment to Section 5.18. Section 5.18 is amended to read as follows:
SECTION 5.18. CAPITAL EXPENDITURES. Borrower and its Subsidiaries
shall not invest in Consolidated Capital Expenditures in an aggregate
amount exceeding $27,500,000 in any fiscal year.
3.10 Amendment to Section 5.21. Section 5.21 is amended to read as follows:
SECTION 5.21. RESTRICTED PAYMENTS. No Company shall (a) make any
payment including, but not limited to, any prepayment, mandatory redemption
or optional redemption of any kind, or (b) exercise any right of defeasance
or covenant defeasance or similar right, with respect to any Subordinated
Indebtedness or the 2002
8
Senior Secured Funds Notes, except that: (i) Borrower may (x) make
regularly scheduled payments of interest with respect to the 2002 Senior
Secured Fund Notes, (y) elect to make cash payments in lieu of additions to
principal with respect to "PIK Interest" under and as defined in the Note
Purchase Agreement and (z) make the redemption payment with respect to the
2002 Senior Secured Fund Notes permitted by the final proviso to Section
5.17 hereof and (ii) if no Event of Default shall then exist or immediately
thereafter shall begin to exist, Borrower may: (x) make regularly scheduled
payments of interest with respect to any Subordinated Indebtedness.
3.11 Addition of Section 5.30 Article V is amended by adding Section 5.30
thereto to read as follows:
SECTION 5.30. APPRAISAL EXECUTIVE SUMMARY. Prior to the Amendment
No. 4 Closing Date, Borrower shall have furnished to Agent, in scope
mutually acceptable to Agent and Borrower, and in form and substance
acceptable to Agent, executive summary reports of appraisals by an
independent third party appraiser recognized in the industry of Companies'
material mineral rights.
3.12 Addition of Section 5.31 Article V is amended by adding Section 5.31
thereto to read as follows:
SECTION 5.31. OTHER COVENANTS. In the event that Borrower shall
enter into, or shall have entered into, any material Indebtedness
(including the Indebtedness evidenced by the 2002 Senior Secured Fund
Notes), wherein the covenants (excluding covenants relating to the
preservation of personal property) are more restrictive than the covenants
set forth herein, Borrower shall be bound hereunder by such covenants with
the same force and effect as if such covenants and agreements were written
herein and fully incorporated herein.
3.13 Amendment to Section 7.2. Section 7.2 is amended in its entirety to
read as follows:
SECTION 7.2. SPECIAL COVENANTS. If any Company or any Obligor
shall fail or omit to perform and observe Sections 5.1, 5.2, 5.3, 5.4, 5.5,
5.6, 5.7, 5.8, 5.9, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16, 5.17, 5.18, 5.19,
5.20, or 5.21 hereof.
3.14 Amendment to Section 7.3. Section 7.3 is amended to replace the words
"thirty (30) days" with the words "fifteen (15) days" therein.
3.15 Amendment to Section 7.5. Section 7.5 is amended in its entirety to
read as follows:
SECTION 7.5. CROSS DEFAULT. If any Company or any Obligor (x) shall
default in the payment of principal or interest due and owing upon any (A)
obligation for borrowed money or in respect of any Indebtedness, other than
Indebtedness incurred in the ordinary course of business and owed to trade
creditors, in excess of One Hundred Thousand Dollars ($100,000) or (B)
Indebtedness incurred in the ordinary course of business and owed to trade
creditors in excess of Three Million Dollars ($3,000,000) beyond any period
of grace provided with respect thereto or in the performance or observance
of any other agreement, term or condition contained in any agreement under
which such obligation is created, if the effect of such default is to allow
the acceleration of the maturity of such Indebtedness or to permit the
holder thereof to
9
cause such Indebtedness to become due prior to its stated maturity or (y)
suffer any event or condition which would allow the holder or holders of
such obligations to require the mandatory repurchase or redemption of all
or a portion of such Indebtedness (other than scheduled redemptions and
other than the redemption required by section 6.15 of the Note Purchase
Agreement as originally executed).
3.16 Amendment to Section 7.6. Section 7.6 is amended to replace the words
"Two Million Five Hundred Thousand Dollars ($2,500,000)" with the words "One
Million Dollars ($1,000,000)" therein.
3.17 Amendment to Section 7.8. Section 7.8 is amended to replace the words
"One Million Five Hundred Thousand Dollars ($1,500,000)" with the words "Five
Hundred Thousand Dollars ($500,000)" therein.
3.18 Amendment to Section 7.12. Clause (d) of Section 7.12 is amended to
read as follows:
. . . (d) any Company incurs (as defined in the Indenture) any Designated
Senior Indebtedness (as defined in the Indenture) other than the Debt or
the Debt (as defined in the Credit Agreement) or the Indebtedness evidenced
by the 2002 Senior Secured Fund Notes; . . .
3.19 Amendment to Section 7.14. Article VII is amended by adding Section
7.14 and 7.15 thereto to read as follows:
SECTION 7.14. NOTE PURCHASE AGREEMENT. If (a) any Event of Default
(as defined in the Note Purchase Agreement), or any event or condition that
with the lapse of time or the giving of notice or both would constitute an
Event of Default (as defined in the Note Purchase Agreement), shall exist
under the Note Purchase Agreement or any agreement executed in connection
therewith; (b) without the prior written consent of the Majority Banks, the
financial covenants set forth in Article VIII of the Note Purchase
Agreement shall be amended, restated or modified to be more restrictive
than those set forth in the Note Purchase Agreement as originally executed
or the Note Purchase Agreement is amended, restated or modified to add
additional financial covenants not set forth in the Note Purchase Agreement
as originally executed; provided, however, the limitation set forth in this
clause (b) shall not prohibit the creation of a more restrictive covenant
to the extent the creation of such more restrictive covenant does not
decrease the proportional differential existing between such financial
covenant in the Note Purchase Agreement as originally executed to the
corresponding financial covenant in this Agreement as amended by Amendment
No. 4 to Credit Agreement; (c) the Indebtedness incurred in connection with
the Note Purchase Agreement shall be accelerated for any reason; (d)
Borrower shall exercise any rights of prepayment, optional redemption or
similar right under the Note Purchase Agreement other than the redemption
payment with respect to the 2002 Senior Secured Fund Notes permitted by the
final proviso to Section 5.17 hereof.
SECTION 7.15 NOTEHOLDER INTERCREDITOR AGREEMENT. The Noteholder
Intercreditor Agreement is attempted to be revoked by any holder of the
2002 Junior Secured Fund Notes or any collateral agent thereof or is
otherwise asserted to be invalid or unenforceable by the Company or any
holder of the 2002 Junior Secured Fund
10
Notes or any collateral agent thereof, or any such party asserts the
invalidity or unenforceability of the Debt in connection with its rights
under the Noteholder Intercreditor Agreement.
3.20 Amendment to Section 10.3. Section 10.3 is amended to add the
following sentence at the end thereof to read as follows:
No amendment, modification, action, notice or waiver of any provision of
the Noteholder Intercreditor Agreement shall be taken by the Agent without
the written consent of the Majority Banks.
4. REPRESENTATIONS AND WARRANTIES.
Borrower hereby represents and warrants as follows:
4.1 The Amendment. This Amendment has been duly and validly executed by an
authorized executive officer of Borrower and constitutes the legal, valid and
binding obligation of Borrower enforceable against Borrower in accordance with
its terms. The execution, delivery, and performance of this Amendment, the Loan
Agreement (as amended hereby), and the other Loan Documents to which Borrower is
a party are within Borrower's corporate powers, have been duly authorized, and
are not in contravention of Law or the terms of Borrower's Certificate of
Incorporation or By-Laws or any indenture (including the Indenture) or other
document or instrument evidencing borrowed money or any other agreement or
undertaking to which Borrower is a party or by which it or its property is
bound.
4.2 The Note Purchase Agreement. The Note Purchase Agreement, the 2002
Senior Secured Fund Notes and the other Junior Credit Document (as defined in
the Noteholder Intercreditor Agreement) shall have been executed in the form
delivered to the Agent by the Borrower simultaneously herewith.
4.3 Claims and Defenses. As of the date of this Amendment, neither Borrower
nor any of the Companies has any defenses, claims, counterclaims or setoffs with
respect to the Loan Agreement, the Loan Documents or any obligations thereunder
or with respect to any actions of Agent, the Syndication Agent, the
Documentation Agent, the Banks or any of their respective officers, directors,
shareholders, employees, agents or attorneys, and Borrower irrevocably and
absolutely waives any such defenses, claims, counterclaims and setoffs and
releases Agent, the Syndication Agent, the Documentation Agent, the Banks, and
each of their respective officers, directors, shareholders, employees, agents
and attorneys, from the same.
4.4 Loan Agreement; Status of Loan Agreement The Loan Agreement, as amended
by this Amendment, remains in full force and effect and remains the valid and
binding obligation of Borrower enforceable against Borrower in accordance with
its terms. As of the date of this Amendment, (i) the representations and
warranties of Borrower set forth in the Loan Agreement are true and correct with
the same force and effect as if made on and as of such date except to the extent
that any thereof expressly relate to an earlier date and except as Annex I
hereto amends those certain disclosure schedules set forth therein and except
that Borrower reserves the right to update the disclosures set forth in Schedule
6.3 relating to permits such within 14 days after the date hereof ( such
reservation being subject (a) to the condition that such updated disclosure is
in form and substance satisfactory to the Majority Banks and (b) to Borrower's
affirmation by execution hereof that the representations and warranties of
Borrower set forth in Section 6.3 are
11
true and correct with the same force and effect as if made on and as of such
date) and (ii) no Unmatured Event of Default or Event of Default shall then
exist.
4.5 Nonwaiver. The execution, delivery, performance and effectiveness of
this Amendment shall not, except to the extent provided in Article 6 of this
Amendment, operate, be deemed to be, or be construed to be a waiver: (i) of any
right, power or remedy of Agent, the Syndication Agent, the Documentation Agent,
any Bank under the Loan Agreement or (ii) of any term, provision,
representation, warranty or covenant contained in the Loan Agreement or any
other documentation executed in connection therewith. Further, except to the
extent provided in Article 6 of this Amendment, none of the provisions of this
Amendment shall constitute, be deemed to be or construed to be: (i) a waiver of
any Event of Default under the Loan Agreement as previously amended and as
further amended by this Amendment or (ii) a revocation of any prior written
waivers of any Events of Default thereunder.
4.6 Reference to and Effect on the Loan Agreement. Upon the effectiveness
of this Amendment, each reference in the Loan Agreement to "this Agreement,"
"hereunder," "hereof," "herein," or words of like import shall mean and be a
reference to the Loan Agreement, as previously amended and as further amended
hereby, and each reference to the Loan Agreement in any other document,
instrument or agreement executed and/or delivered in connection with the Loan
Agreement shall mean and be a reference to the Loan Agreement, as previously
amended and as further amended hereby.
5. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT NO.4.
This Amendment shall become effective as of the time (the "Amendment
Effective Date") on which each of the following conditions precedent shall have
been fulfilled:
5.1 Amendment No. 4 to Loan Agreement. Agent shall have received from
Borrower and each of the Majority Banks an original counterpart of this
Amendment No. 4 to Loan Agreement, executed and delivered by a duly authorized
officer of Borrower or each such Bank, as the case may be.
5.2 Amendment No. 4 to Credit Agreement. Agent shall have received from
Borrower and each of the Banks an original counterpart of Amendment No. 4 to
Credit Agreement, in form and substance acceptable to Agent, executed and
delivered by a duly authorized officer of Borrower or each such Bank, as the
case may be.
5.3 Acknowledgment of Guarantors. Agent shall have received the
Acknowledgment of Guarantors, attached hereto, executed and delivered by a duly
authorized officer of each of the Guarantors.
5.4 Amendment No. 1 to Security Agreements. Agent shall have received from
Borrower and each of the Banks an original counterpart of Amendment No. 1 to
Security Agreements, in form and substance acceptable to Agent, executed and
delivered by a duly authorized officer of Borrower or such Bank, as the case may
be.
5.5 Issuance of 2002 Senior Secured Fund Notes; Permanent Reduction of
Revolving Credit Commitment. Borrower shall have (i) successfully issued its
2002 Senior Secured Fund Notes and received net proceeds ($75,000,000, net of
selling expenses, including without limitation, any reasonable broker's fees or
commissions, and other costs directly related to such sales) from such issuance,
(ii) used, immediately upon receipt by Borrower of the funds,
12
not less than $57,000,000 to repay, ratably among the Banks, the Revolving
Credit Loans and (iii) immediately thereafter shall permanently reduce by
$60,000,000 the Revolving Credit Commitment of the Banks; provided, however that
such repayment of the outstanding Revolving Loans shall not require Borrower to
pay any prepayment fee pursuant to Section 2.4 of the Credit Agreement. The Note
Purchase Agreement and the other Junior Credit Documents shall have been
executed by the parties thereto.
5.6 Noteholder Intercreditor Agreement. The Intercreditor Agreement, dated
as of October 25, 2002, between the holders of the 2002 Senior Secured Fund
Notes, The 1818 Mezzanine Fund II, L.P., in its capacity as secured collateral
agent for such holders, Borrower and its Subsidiaries which are Pledgors, and
the Agent on behalf of itself and the Banks, shall have been duly executed and
delivered by and to all parties thereto (the Agent being hereby authorized to
execute the Noteholder Intercreditor Agreement on behalf of the Banks as the
secured party for the Banks under the Loan Documents).
5.7 Amendment Fee; Agent Fees. Agent shall have received, for the benefit
of each Bank (including Agent in its capacity as a Bank) approving both this
Amendment and Amendment No. 4 to Loan Agreement, a one time amendment fee in the
amount of one hundred (100.00) basis points multiplied by the sum of the
Revolving Credit Commitment of such Bank plus the Term Loan Commitment Amount
(as defined in the Loan Agreement) of such Bank.
5.8 Opinion Concerning Amendment No. 4 to Loan Agreement and Noteholder
Intercreditor Agreement. Agent shall have received an opinion of counsel to
Borrower and its subsidiaries, in form and substance satisfactory to the Agent,
as to the authorization, due execution and delivery, and enforceability by and
against Borrower and the Subsidiaries thereof which are parties thereto of this
Amendment No. 4 to Loan Agreement, Amendment No. 4 to Credit Agreement and the
Noteholder Intercreditor Agreement.
5.9 Opinion Concerning Indenture. Agent shall have received the opinion
issued by counsel to Borrower to the purchasers of the 2002 Senior Secured Fund
Notes as to the issuance of such notes in compliance with the Indenture and a
reliance letter from such counsel in favor of the Agent allowing the Agent to
rely on such opinion.
So long as each other conditions precedent is then satisfied, this Amendment
shall be deemed to be effective simultaneously with the satisfaction of the
conditions set forth in section 5.5 hereof.
6. Waiver of Covenant Violation.
The Banks hereby waive Borrower's violation of Section 5.7(b) [Senior
Secured Debt Ratio] as of September 30, 2002 and agree not to enforce their
rights and remedies under the Loan Agreement with respect to the resulting
Events of Default; provided, however, that: (i) as of the effective time of this
waiver, in all other respects Borrower shall be in full compliance with the Loan
Agreement and (ii) the foregoing waiver shall not extend to or prejudice any
rights of the Agent and the Banks in respect of any other breach, if any, by
Borrower of any other provisions of the Loan Agreement. The execution of this
Amendment by Borrower shall serve as an acknowledgment (i) that the foregoing
waiver shall not affect the continued legality, validity and binding effect of
the Loan Agreement in its entirety and (ii) that the Loan Agreement continues to
be fully enforceable, in each case, except as otherwise waived herein.
13
7. MISCELLANEOUS.
7.1 Governing Law. This Amendment has been delivered and accepted at and
shall be deemed to have been made at Cleveland, Ohio. This Amendment shall be
interpreted and the rights and liabilities of the parties hereto determined in
accordance with the laws of the State of Ohio, without regard to principles of
conflict of law, and all other laws of mandatory application.
7.2 Severability. Each provision of this Amendment shall be interpreted in
such manner as to be valid under applicable law, but if any provision hereof
shall be invalid under applicable law, such provision shall be ineffective to
the extent of such invalidity, without invalidating the remainder of such
provision or the remaining provisions hereof.
7.3 Counterparts. This Amendment may be executed in one or more
counterparts, each of which, when taken together, shall constitute but one and
the same agreement.
[Signature Page to Follow]
14
IN WITNESS WHEREOF, Borrower has caused this Amendment No. 4 to Loan
Agreement to be duly executed and delivered by its duly authorized officer as of
the date first above written.
Address: 1100 Superior Avenue OGLEBAY NORTON COMPANY
Cleveland, Ohio 44114
Attention: Treasurer By: /s/ Julie A. Boland
---------------------------------
Name: Julie A. Boland
-------------------------------
Title: Chief Financial Officer
------------------------------
Address: Key Center KEYBANK NATIONAL ASSOCIATION,
127 Public Square as a Bank and as Agent
Cleveland, Ohio 44114-1306
Attention: Large Corporate By: /s/ Thomas J. Purcell
Banking Division ---------------------------------
Name: Thomas J. Purcell
-------------------------------
Title: Sr. Vice President
------------------------------
Address: 611 Woodward Avenue BANK ONE, NA (formerly known as Bank
Detroit, Michigan 48226 One, Michigan)
Attention: Large Corporate By: /s/ Glenn A. Currin
Banking Division ---------------------------------
Name: Glenn A. Currin
-------------------------------
Title: Director
------------------------------
Address: 600 Peachtree Street THE BANK OF NOVA SCOTIA
Suite 2700
Atlanta, Georgia 30308 By: /s/ N. Bell
Attention: Large Corporate ---------------------------------
Banking Division Name: N. Bell
-------------------------------
Title: Assistant Agent
------------------------------
S-1
Address: 500 Woodward Avenue, 9th Fl. COMERICA BANK
Detroit, Michigan 48226
Attention: Large Corporate By: /s/ Jeffrey J. Judge
Banking Division ---------------------------------
Name: Jeffrey J. Judge
-------------------------------
Title: Vice President
------------------------------
Address: 231 S. LaSalle Street BANK OF AMERICA, N.A.
Chicago, Illinois 60697
Attention: By: /s/ Ronald Prince
Banking Division ---------------------------------
Name: Ronald Prince
-------------------------------
Title: Sr. Vice President
------------------------------
Address: 111 West Monroe, 10W HARRIS TRUST AND SAVINGS BANK
Chicago, Illinois 60603
Attention: Large Corporate By: /s/ Sarah U. Johnston
Banking Division ---------------------------------
Name: Sarah U. Johnston
-------------------------------
Title: Vice President
------------------------------
Address: 975 Euclid Avenue THE HUNTINGTON NATIONAL BANK
Cleveland, Ohio 44115
Attention: Large Corporate By: /s/ John R. Macks
Banking Division ---------------------------------
Name: John R. Macks
-------------------------------
Title: Vice President
------------------------------
Address: 6 High Ridge Park GE CAPITAL CFE, INC.
Building 6 C, Mail Stop 4097-203
Stamford, Ct., 06927-5100 By: /s/ William S. Richardson
Attention: Commercial Finance ---------------------------------
Name: William S. Richardson
-------------------------------
Title: Duly Authorized Signatory
------------------------------
Address: 1900 East Ninth Street NATIONAL CITY BANK
Cleveland, Ohio 44114
Attention: Large Corporate By: /s/ Janice E. Focke
Banking Division ---------------------------------
Name: Janice E. Focke
-------------------------------
Title: Sr. Vice President
------------------------------
Address: 250 West Huron JPMORGAN CHASE BANK
Cleveland, Ohio 44113
Attention: Large Corporate By: /s/ Henry W. Centa
Banking Division ---------------------------------
Name: Henry W. Centa
-------------------------------
Title: Vice President
------------------------------
S-2
Address: 1404 East Ninth Street FIFTH THIRD BANK
Cleveland, Ohio 44114
Attention: Large Corporate By: /s/ Roy C. Lanctot
Banking Division --------------------------------------
Name: Roy C. Lanctot
------------------------------------
Title: Vice President
-----------------------------------
Address: 1350 Euclid Avenue U. S. BANK, NATIONAL ASSOCIATION
Cleveland, Ohio (f\k\a Firstar Bank National Association)
Attention: Commercial By: /s/ Christine C. Gencer
Banking Division --------------------------------------
Name: Christine C. Gencer
------------------------------------
Title: Vice President
-----------------------------------
Address: 1185 Avenue of the Americas FLEET NATIONAL BANK
New York, New York 10036
Attention: Manhattan By: /s/ Thomas G. Carley
Commercial --------------------------------------
Name: Thomas G. Carley
------------------------------------
Title: Vice President
-----------------------------------
Address: 110 South Stratford Road BRANCH BANKING & TRUST CO.
Suite 301
Winston-Salem, NC 27104 By: /s/ James C. Stallings
Attention: Large Corporate --------------------------------------
Banking Division Name: James C. Stallings
------------------------------------
Title: Assistant Vice President
-----------------------------------
S-3
ACKNOWLEDGMENT OF GUARANTORS
Each of the undersigned consents and agrees to and acknowledges the terms
of the foregoing Amendment No. 4 to Loan Agreement as of the date first above
written. Each of the undersigned further agrees that the obligations of each of
the undersigned pursuant to the Guaranty of Payment, the Security Agreement and
any other Loan Document to which any of the undersigned is a party shall remain
in full force and effect and be unaffected hereby.
ONCO Investment Company
Oglebay Norton Management Company
Oglebay Norton Industrial Sands, Inc.
Oglebay Norton Terminals, Inc.
Oglebay Norton Engineered Materials, Inc.
Michigan Limestone Operations, Inc.
Global Stone Corporation (successor by merger to
Oglebay Norton Acquisition Company)
Global Stone Tenn Lutrell Company
Global Stone Chemstone Corporation
Global Stone St. Clair, Inc.
Global Stone Management Company
Global Stone Filler Products Company
Global Stone James River, Inc.
GS PC, Inc.
Oglebay Norton Minerals, Inc.
Oglebay Norton Specialty Minerals, Inc.
ON Coast Petroleum Company
ON Marine Services Company
ONCO WVA, Inc.
ONTEX, Inc.
Saginaw Mining Company
By: /s/ Rochelle F. Walk
------------------------------------------
Rochelle F. Walk, as Vice President and
Secretary of each of the companies listed above.
Texas Mining, LP, by its General Partner
ONTEX, Inc.
By: /s/ Rochelle F. Walk
----------------------------------
Rochelle F. Walk
Vice President and Secretary
Global Stone PenRoc, LP, by its General Partner,
GS PC, Inc,.
By: /s/ Rochelle F. Walk
----------------------------------
Rochelle F. Walk,
Vice President and Secretary
Oglebay Norton Marine Services Company, L.L.C., by its
Member ON Marine Services Company
By: /s/ Rochelle F. Walk
----------------------------------
Rochelle F. Walk
Vice President and Secretary
S-4
Oglebay Norton Marine Management Company, LLC. by its member
Oglebay Norton Marine Services Company
By: /s/ Rochelle F. Walk
---------------------------------
Rochelle F. Walk
Vice President and Secretary
Global Stone Portage, LLC by its member Global Stone Corporation
---------------------------
By: /s/ Rochelle F. Walk
---------------------------------
Rochelle F. Walk
Vice President and Secretary
S-5