Exhibit 10.3
WAIVER AND AMENDMENT NO. 2
TO NOTE PURCHASE AGREEMENT
WAIVER AND AMENDMENT NO. 2 TO NOTE PURCHASE AGREEMENT (this "Waiver and
Amendment") dated as of September 11, 2003, by and among Oglebay Norton Company,
an Ohio corporation (the "Company") and the Noteholders signatories hereto.
WITNESSETH:
WHEREAS, the Company and Noteholders are parties to the Senior Secured
Note Purchase Agreement dated as of October 25, 2002 (as amended and otherwise
modified by the Letter Waiver dated as of January 6, 2003 and the Waiver and
Amendment dated as of July 9, 2003, the "Note Purchase Agreement") pursuant to
which the Noteholders hold the Senior Notes issued by the Company;
WHEREAS, the Company has advised the Noteholders that certain Events of
Default have occurred under the Note Purchase Agreement, as more fully described
on Schedule I hereto (the "Designated Events of Default");
WHEREAS, subject to the terms and conditions hereof, the Noteholders
are willing to waive the Designated Events of Default;
WHEREAS, the parties also desire to amend certain provisions of the
Note Purchase Agreement as set forth herein; and
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 Company and the Noteholders
hereby agree as follows:
1. DEFINED TERMS
Each capitalized term used herein and not otherwise defined herein
shall have the meaning ascribed to such term in the Note Purchase Agreement, as
amended hereby.
2. UPDATED SCHEDULES TO NOTE PURCHASE AGREEMENT
Schedules 3.8, 5.4, 5.5, 5.7, 5.19, 5.22, 5.25, 5.28 and 6.2, are
hereby amended by deleting the existing Schedules 3.8, 5.4, 5.5, 5.7, 5.19,
5.22, 5.25, 5.28 and 6.2, and replacing such schedules with new Schedules 3.8,
5.4, 5.5, 5.7, 5.19, 5.22, 5.25, 5.28 and 6.2, each as attached hereto as Annex
I, and such revised Schedules 3.8, 5.4, 5.5, 5.7, 5.19, 5.22, 5.25, 5.28 and 6.2
shall be incorporated into the Note Purchase Agreement as if fully written
therein. New Schedule 7.5.2(j) to the Note Purchase Agreement, as attached
hereto as Annex II, is hereby incorporated into the Note Purchase Agreement as
if fully written therein.
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3. AMENDMENTS TO THE NOTE PURCHASE AGREEMENT
3.1. Amendments to Section 1.1. Section 1.1 of the Note Purchase
Agreement shall be amended by: (i) adding thereto the new definitions "Amended
Interest Rate", "Consolidated Pro forma EBITDA," "Initial Interest Rate," and
"Permitted Asset Dispositions"; and (ii) amending the definition of "Interest
Rate" to read as follows:
"Amended Interest Rate" shall have the meaning assigned to it in
Section 2.1.
"Consolidated Pro forma EBITDA" shall mean the sum of (a) Consolidated
EBITDA, plus (b )(i) without duplication, the EBITDA of Persons acquired by the
Company and its Subsidiaries during the most recently completed four fiscal
quarters to the extent that the EBITDA of such Persons is confirmed by audited
financial or other information satisfactory to the Noteholders, minus (ii)
EBITDA of Persons disposed of by the Company and its Subsidiaries during the
most recently completed four fiscal quarters, plus (c) the amount by which
professional fees incurred by the Company through September 11, 2003 exceeded
the Company's budget set forth in Schedule IA to Amendment No. 8 to the
Syndicated Credit Agreement, dated as of September 11, 2003, plus (d) the amount
of professional fees and expenses incurred by the Company after September 11,
2003 for professionals listed on Schedule IB to such Amendment No. 8.
"Initial Interest Rate" shall have the meaning assigned to it in
Section 2.1.
"Interest Rate" shall mean either the Initial Interest Rate or the
Amended Interest Rate, as applicable pursuant to Section 2.1.
"Permitted Asset Dispositions" shall have the meaning assigned to it in
Section 7.5.2(j).
3.2. Amendment to Section 2.1. Section 2.1 of the Note Purchase
Agreement shall be deleted and replaced in its entirety as follows:
2.1 The Senior Notes. The Company has authorized the issuance of
its Senior Secured Notes due October 25, 2008 in the aggregate original
principal amount of $75,000,000 in the form set forth as Exhibit 2.1
attached hereto (referred to herein individually as a "Senior Note" and
collectively as the "Senior Notes", which terms shall also include any
notes delivered in exchange therefor or replacement thereof).
Commencing on the date of issuance through and including September 10,
2003, the Senior Notes will accrue interest on the unpaid principal
amount thereof at an interest rate of 18% per annum (the "Initial
Interest Rate"), consisting of 13% in cash interest and 5% either, at
the Company's option, in cash interest or to be added automatically to
the unpaid principal amount of the Senior Notes ("PIK Interest") on
each March 31, June 30, September 30, and December 31 (each, an
"Interest Payment Date"). Commencing on September 11, 2003, the Senior
Notes will accrue interest on the unpaid principal amount thereof at an
interest rate of 19% per annum (the "Amended Interest Rate"),
consisting of 13% in cash interest and 6% either, at the Company's
option, in cash interest or PIK
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Interest to be added automatically to the unpaid principal amount of
the Senior Notes on each Interest Payment Date. Interest on the Senior
Notes shall be computed based on a 360-day year of twelve 30-day
months, and all PIK Interest on the Senior Notes will be compounded
quarterly. Cash interest on the Senior Notes shall be payable quarterly
in arrears on each Interest Payment Date commencing on December 31,
2002 by wire transfer of immediately available funds to one or more
accounts designated by the Noteholders. On each Interest Payment Date,
the Company shall deliver a copy of Schedule I to the Senior Notes to
the Noteholders, which shall detail the outstanding principal balance
of the Senior Notes as of such date, including all PIK Interest
previously added to the principal amount thereof.
3.3. Amendment to Article VI. Article VI of the Note Purchase Agreement
shall be amended by adding new Section 6.18 thereto to read as follows:
6.18 Engagement of Financial Advisers.
(a) The Company agrees to the engagement by the Noteholders of a
financial consultant to review and monitor the condition of the Company and its
Subsidiaries. The Company agrees to pay any and all reasonable fees and expenses
of, and/or to reimburse the Noteholders for any and all fees and expenses
incurred by the Noteholders in connection with the services provided by, such
financial consultant retained by the Noteholders, subject to an aggregate cap of
$500,000. The Company will, and will cause each of its Subsidiaries to,
cooperate fully with such financial consultant in providing information and
access to personnel.
(b) In addition to the financial consultant retained by the
Noteholders as set forth in the preceding paragraph (a), the Company shall
retain on or before September 30, 2003 a financial consultant on its own behalf
to analyze and explore re-structuring alternatives, which financial consultant
shall be reasonably satisfactory to the Noteholders. The Company shall be
responsible for the payment of all fees and expenses of such financial
consultant retained by the Company. The Company shall not change such financial
consultant retained by it without the prior written consent of the Noteholders,
which consent shall not be unreasonably withheld. Subject to reasonable
confidentiality restrictions imposed by the Board of the Company, the Company
hereby authorizes the Noteholders to have direct access to and contact with such
financial consultant retained by the Company with respect to all matters
pertaining to the Company and its Subsidiaries and will direct such financial
consultant to cooperate with the Noteholders and to provide direct access and
information to the Noteholders. The Board of the Company agrees that the
confidentiality provisions in Section 11.21 hereof shall be deemed reasonable.
Any confidential information obtained by the Noteholders pursuant to this
Section 6.18(b) shall be subject to the requirements of Section 11.21 hereof.
3.4. Amendment to Section 6.4(f)(ii). Clause (ii) of paragraph (f) of
Section 6.4 of the Note Purchase Agreement shall be deleted and replaced in its
entirety to read as follows:
... (ii) all financial information, forecasts, budgets, and reports
provided to the Agent and/or the Banks under the Syndicated Facility
Documents and the Vessel Financing Documents;
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3.5. Amendment to Section 6.4(g). Paragraph (g) of Section 6.4 of the
Note Purchase Agreement shall be redesignated as paragraph (h), and a new
paragraph (g) shall be added to Section 6.4 immediately before such paragraph
(h), to read as follows:
(g) promptly, and in any event no later than the date each of the
following is provided to the Agent and/or the Banks under the
Syndicated Facility Documents and the Vessel Financing Documents in
connection with any proposed sale of any assets of the Company and its
Subsidiaries (including without limitation all Permitted Asset
Dispositions): (i) each final offering memorandum generated with
respect thereto; (ii) all preliminary indications of interest received
with respect thereto; (iii) copies of all management presentations in
connection therewith; (d) draft and final term sheets discussed or
negotiated with prospective buyers, (iv) draft and execution copies of
all purchase documentation; and (v) copies of all applicable financing
commitments; provided, however, that the Company shall not be required
to deliver any of the foregoing to any Noteholder who has not executed
and delivered to the Company a confidentiality agreement in the form of
Exhibit 6.14.
3.6. Amendment to Section 7.1(a) Paragraph (a) of Section 7.1 of the
Note Purchase Agreement shall be deleted and replaced in its entirety to read as
follows:
(a) Syndicated Debt consisting of (i) Senior Secured Indebtedness
(as such term is defined in the Intercreditor Agreement) under the
Syndicated Facility Documents, (ii) solely to the extent permitted
under Amendment No. 8 to the Syndicated Credit Agreement and under
Amendment No. 8 to the Syndicated Loan Agreement, each dated as of
September 11, 2003, Indebtedness under the Syndicated Facility
Documents other than Senior Secured Indebtedness, (iii) Indebtedness
under the Vessel Financing Documents that does not exceed $16,000,000
(and a guaranty by ON Marine Management Company L.L.C. of Indebtedness
under the Vessel Financing Documents on the same terms as the guarantee
thereof in effect on the date hereof, so long as the time of the
issuance of such guarantee there is no Event of Default hereunder or
resulting therefrom) and (iv) the Indebtedness existing on the date
hereof identified on Schedule 7.1(a);
3.7. Amendment to Section 7.5.2. Section 7.5.2 of the Note Purchase
Agreement shall be amended by adding new paragraph (j) thereto as follows:
(j) Asset Sales of Property of the Company and its Subsidiaries
(other than any such Asset Sales permitted under other subsections of
this Section 7.5.2) described on Schedule 7.5.2(j) hereto (such Asset
Sales, the "Permitted Asset Dispositions").
3.8. Amendment to Section 7.10. Section 7.10 shall be deleted and
replaced in its entirety to read as follows:
7.10 Capital Expenditures. The Company and its Subsidiaries will
not make Capital Expenditures (including, without limitation, by way of
Capitalized Leases) which, in the aggregate, as to the Company and its
Subsidiaries, during fiscal year 2003 and 2004 exceed $23,500,000 per
fiscal year and $27,500,000 per fiscal year ending
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thereafter (each such maximum amount, as applicable, the "Capital
Expenditure Amount")
3.9. Amendments to Articles VIII and VIII.B. Article VIII and VIII.B of
the Note Purchase Agreement shall be deleted and replaced in its entirety by the
following (and all references to Article VIII.B shall be deemed to be references
to Article VIII):
ARTICLE VIII - FINANCIAL COVENANTS OF THE COMPANY
The Company covenants and agrees that, so long as any Senior Note
is outstanding the Company will observe the following covenants:
8.1. Total Leverage Ratio. The Company shall not suffer or permit
at the end of any fiscal quarter, based upon the financial statements
most recently delivered pursuant to Section 6.4, the Total Leverage
Ratio to exceed:
(a) 10.50 to 1.00 as of September 30, 2003;
(b) 10.25 to 1.00 as of December 31, 2003;
(c) 10.40 to 1.00 as of March 31, 2004;
(d) 9.90 to 1.00 as of June 30, 2004;
(e) 9.10 to 1.00 as of September 30, 2004;
(f) 8.40 to 1.00 as of December 31, 2004;
(g) 8.00 to 1.00 as of March 31, 2005;
(h) 8.00 to 1.00 as of June 30, 2005;
(i) 7.50 to 1.00 as of September 30, 2005;
(j) 7.10 to 1.00 as of December 31, 2005;
(k) 7.35 to 1.00 as of March 31, 2006;
(l) 7.35 to 1.00 as of June 30, 2006;
(m) 7.00 to 1.00 as of September 30, 2006;
(n) 6.65 to 1.00 as of December 31, 2006;
(o) 6.65 to 1.00 as of March 31, 2007;
(p) 6.65 to 1.00 as of June 30, 2007;
(q) 6.65 to 1.00 as of September 30, 2007; and
(r) 6.65 to 1.00 as of December 31, 2007 and thereafter.
8.2. Syndicated Debt Ratio. The Company shall not suffer or permit
at the end of any fiscal quarter the ratio of Syndicated Debt to
Consolidated Pro forma EBITDA to exceed:
(a) 6.40 to 1.00 as of September 30, 2003;
(b) 6.15 to 1.00 as of December 31, 2003;
(c) 6.35 to 1.00 as of March 31, 2004;
(d) 6.15 to 1.00 as of June 30, 2004;
(e) 5.60 to 1.00 as of September 30, 2004;
(f) 5.00 to 1.00 as of December 31, 2004;
(g) 4.80 to 1.00 as of March 31, 2005;
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(h) 4.80 to 1.00 as of June 30, 2005;
(i) 4.50 to 1.00 as of September 30, 2005;
(j) 4.10 to 1.00 as of December 31, 2005;
(k) 4.40 to 1.00 as of March 31, 2006;
(l) 4.40 to 1.00 as of June 30, 2006;
(m) 4.10 to 1.00 as of September 30, 2006;
(n) 3.75 to 1.00 as of December 31, 2006;
(o) 3.75 to 1.00 as of March 31, 2007;
(p) 3.75 to 1.00 as of June 30, 2007;
(q) 3.75 to 1.00 as of September 30, 2007; and
(r) 3.75 to 1.00 as of December 31, 2007 and thereafter.
in each case, based upon the most recently completed four fiscal
quarters reflected in the financial statements most recently delivered
pursuant to Section 6.4.
8.3. Interest Coverage. The Company shall not suffer or permit
at the end of any fiscal quarter the ratio of Consolidated Pro forma
EBITDA to 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:
(a) 0.92 to 1.00 as of September 30, 2003;
(b) 0.91 to 1.00 as of December 31, 2003;
(c) 0.96 to 1.00 as of March 31, 2004;
(d) 1.04 to 1.00 as of June 30, 2004;
(e) 1.12 to 1.00 as of September 30, 2004;
(f) 1.20 to 1.00 as of December 31, 2004;
(g) 1.35 to 1.00 as of March 31, 2005;
(h) 1.40 to 1.00 as of June 30, 2005;
(i) 1.40 to 1.00 as of September 30, 2005;
(j) 1.40 to 1.00 as of December 31, 2005;
(k) 1.40 to 1.00 as of March 31, 2006;
(l) 1.40 to 1.00 as of June 30, 2006;
(m) 1.40 to 1.00 as of September 30, 2006;
(n) 1.40 to 1.00 as of December 31, 2006;
(o) 1.40 to 1.00 as of March 31, 2007;
(p) 1.40 to 1.00 as of June 30, 2007;
(q) 1.40 to 1.00 as of September 30, 2007; and
(r) 1.40 to 1.00 as of December 31, 2007 and thereafter.
in each case, based upon the most recently completed four fiscal
quarters reflected in the financial statements most recently delivered
pursuant to Section 6.4.
8.4. Cash-Flow Coverage. The Company shall not suffer or
permit at the end of any fiscal quarter the ratio of Consolidated Pro
forma Cash Flow to Consolidated Pro forma Fixed Charges (excluding from
Pro Forma Fixed Charges for purposes of
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calculating compliance with this covenant, amounts scheduled to be
paid in the current period with respect to the Revolving Loans and the
Term Loans (each as defined in the Syndicated Credit Agreement)) to be
less than:
(a) 0.41 to 1.00 as of September 30, 2003;
(b) 0.45 to 1.00 as of December 31, 2003;
(c) 0.46 to 1.00 as of March 31, 2004;
(d) 0.55 to 1.00 as of June 30, 2004;
(e) 0.62 to 1.00 as of September 30, 2004;
(f) 0.67 to 1.00 as of December 31, 2004;
(g) 0.80 to 1.00 as of March 31, 2005;
(h) 0.85 to 1.00 as of June 30, 2005;
(i) 0.85 to 1.00 as of September 30, 2005;
(j) 0.88 to 1.00 as of December 31, 2005;
(k) 0.88 to 1.00 as of March 31, 2006;
(l) 0.88 to 1.00 as of June 30, 2006;
(m) 0.80 to 1.00 as of September 30, 2006;
(n) 0.80 to 1.00 as of December 31, 2006;
(o) 0.85 to 1.00 as of March 31, 2007;
(p) 0.90 to 1.00 as of June 30, 2007;
(q) 1.00 to 1.00 as of September 30, 2007; and
(r) 1.00 to 1.00 as of December 31, 2007 and thereafter.
in each case, based upon the most recently completed four fiscal
quarters reflected in the financial statements most recently delivered
pursuant to Section 6.4.
8.5 Net Worth. The Company shall not suffer or permit
Consolidated Net Worth at any time, based upon the most recent fiscal
quarter reflected in the financial statements most recently delivered
pursuant to Section 6.4, to fall below the current minimum amount
required, which current minimum amount required shall be:
(a) $74,500,000 as of September 30, 2003;
(b) $66,500,000 as of December 31, 2003;
(c) $60,000,000 as of March 31, 2004;
(d) $58,500,000 as of June 30, 2004;
(e) $58,500,000 as of September 30, 2004;
(f) $51,000,000 as of December 31, 2004;
(g) $45,500,000 as of March 31, 2005;
(h) $45,500,000 as of June 30, 2005;
(i) $45,500,000 as of September 30, 2005;
(j) $39,500,000 as of December 31, 2005;
(k) $28,000,000 as of March 31, 2006;
(l) $28,000,000 as of June 30, 2006;
(m) $28,000,000 as of September 30, 2006;
(n) $20,000,000 as of December 31, 2006;
(o) $10,000,000 as of March 31, 2007;
(p) $10,000,000 as of June 30, 2007;
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(q) $12,500,000 as of September 30, 2007; and
(r) $8,500,000 as of December 31, 2007 and thereafter.
provided, however, that (i) any non-cash impact to Consolidated Net Worth
related to FAS 142 shall be excluded in calculating the Company's
compliance with this covenant and (ii) any potential non-cash impact
associated with the extinguishment of Indebtedness (as a result of
Amendment No. 8 to the Syndicated Credit Agreement and Amendment No. 8 to
the Syndicated Loan Agreement, each dated as of September 11, 2003, and
Waiver and Amendment No. 2 to this Agreement, dated as of September 11,
2003) as indicated pursuant to EITF 96.19/SFAS 140 shall likewise be
excluded in calculating the Company's compliance with this covenant.
3.10. Amendment to Section 9.1(h). Section 9.1(h) of the Note Purchase
Agreement shall be deleted and replaced in its entirety to read as follows:
(h) Any "Event of Default" (as defined therein) under the
Subordinated Notes Indenture, provided, however, that an Event of Default
(or an event that with the lapse of time would become an Event of
Default) under the Subordinated Notes Indenture arising solely from the
Company's failure to make the interest payment due under the Subordinated
Notes Indenture on August 1, 2003 or February 1, 2004, shall not
constitute an Event of Default under this Agreement so long as all of the
following conditions continue to be met: (i) the Indebtedness under the
Indenture has not been accelerated, (ii) neither the trustee under the
Indenture nor any of the holders thereunder have taken any action to
enforce any rights and remedies under the Indenture, and (iii) no Default
or Event of Default under (and each as defined in) the Syndicated
Facility Documents shall have occurred or be continuing with respect to
the Company's failure to make such payment;
4. REPRESENTATIONS AND WARRANTIES
The Company hereby represents and warrants to the Noteholders as follows:
4.1. Authorization. This Waiver and Amendment has been duly and validly
executed by an authorized executive officer of the Company and constitutes a
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms. The execution, delivery and performance of
this Waiver and Amendment, the Note Purchase Agreement and the other Senior
Notes Documents to which the Company or any of its Subsidiaries is a party and
the transactions contemplated hereby and thereby (a) are within the authority of
such Person, (b) have been duly authorized by all necessary proceedings, (c) do
not violate, conflict with or result in any breach or contravention of any
provision of law, statute, rule or regulation to which the Company or any of its
Subsidiaries is subject or any judgment, order, writ, injunction, license or
permit applicable to the Company or any of its Subsidiaries and (d) do not
violate, conflict with, or result in the creation of any Lien on the properties
or assets of the Company or any of its Subsidiaries under, any provision of the
Organizational Documents of, or any material agreement or other material
instrument (including, without limitation, any of the Syndicated Facility
Documents, Subordinated Notes Indenture or the Subordinated Notes) binding upon,
the Company or any of its Subsidiaries.
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4.2. Claims and Defenses. As of the date of this Waiver and Amendment,
neither the Company nor any of its Subsidiaries has any defenses, claims,
counterclaims or setoffs with respect to the Note Purchase Agreement, the Senior
Notes Documents or any obligations thereunder or with respect to any actions of
the Noteholders, the Collateral Agent or any of their respective officers,
directors, partners, members, shareholders, employees, agents or attorneys, and
the Company hereby irrevocably and absolutely waives any such defenses, claims,
counterclaims and setoffs and releases the Noteholders, the Collateral Agent or
any of their respective officers, directors, partners, members, shareholders,
employees, agents or attorneys from the same.
4.3. Status of Senior Notes Documents. The Note Purchase Agreement, the
Senior Notes and each of the other Senior Notes Documents, as specifically
amended by this Waiver and Amendment, are hereby in all respects ratified and
confirmed and, except to the extent of the waivers specifically provided herein,
are and shall continue to be in full force and effect and remain valid and
binding obligations of the Company enforceable against the Company in accordance
with their terms. Without limiting the generality of the foregoing, the Security
Documents and all of the collateral described therein do and shall continue to
secure the payment of all obligations of the Company and the Guarantors under
the Senior Notes Documents. As of the date of this Waiver and Amendment, the
representations and warranties of the Company set forth in the Note Purchase
Agreement as amended hereby are true and correct in all material respects 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.
4.4. Permitted Asset Dispositions. The consummation of any or all of the
Permitted Asset Dispositions will not constitute an Asset Sale of all or
substantially all of the assets of the Company or any division thereof for
purposes of the definition of "Mandatory Repurchase Event" as defined in Section
1.1 of the Note Purchase Agreement.
4.5. Nonwaiver. The execution, delivery and effectiveness of this Waiver
and Amendment shall not, except as expressly provided in Section 7 hereof,
operate as, be deemed to be, or be construed to be a waiver of: (i) any right,
power or remedy of the Collateral Agent or any Noteholder under the Note
Purchase Agreement or any other Senior Notes Document, or (ii) of any term,
provision, representation, warranty or covenant contained in the Note Purchase
Agreement, the other Senior Notes Documents or any other documentation executed
in connection therewith. Further, except as provided in Section 7 hereof, none
of the provisions of this Waiver and Amendment shall constitute, be deemed to be
or construed to be: (i) a waiver of any Event of Default under the Note Purchase
Agreement as previously amended and as further amended by this Waiver and
Amendment or (ii) a revocation of any prior written waivers of any Events of
Default thereunder.
4.6. References to Note Purchase Agreement. On and after the
effectiveness of this Waiver and Amendment, each reference in the Note Purchase
Agreement to "this Agreement", "hereunder", "hereof" or words of like import
referring to the Note Purchase Agreement, and each reference in the Senior Notes
and each of the other Senior Notes Documents and the other Transaction Documents
to "the Note Purchase Agreement", "thereunder", "thereof" or words of like
import referring to the Note Purchase Agreement, shall mean and be a reference
to the Note Purchase Agreement as amended hereby.
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5. GENERAL RELEASE
To the extent not otherwise set forth herein, the Company hereby remises,
releases, acquits, satisfies and forever discharges the Noteholders, the
Collateral Agent and the Representative, their agents, employees, officers,
directors, predecessors, attorneys and all others acting on behalf of or at the
direction of the Noteholders, the Collateral Agent or the Representative, of and
from any and all manner of actions, causes of action, suit, debts, accounts,
covenants, contracts, controversies, agreements, variances, damages, judgments,
claims and demands whatsoever, in law or in equity, which any of such parties
ever had, now have or can, shall or may at any time have against the
Noteholders, the Collateral Agent or the Representative, their agents,
employees, officers, directors, attorneys and all persons acting or purporting
to act on behalf of or at the direction of the Noteholders, the Collateral Agent
or the Representative (the "Releasees") under or with respect to the Senior
Notes Documents or the transactions contemplated thereby, for, upon or by reason
of any matter, cause or thing whatsoever through the date hereof. Without
limiting the generality of the foregoing, the Company waives and affirmatively
agrees not to allege or otherwise pursue any defenses, affirmative defenses,
counterclaims, claims, causes of action, setoffs or other rights it does, shall
or may have as of the date hereof, including, but not limited to, the rights to
contest: (a) the right to exercise any right, power or remedy of the Collateral
Agent or any Noteholder under the Note Purchase Agreement or any other Senior
Notes Document; (b) any term, provision, representation, warranty or covenant
contained in this Waiver and Amendment, the Note Purchase Agreement, the other
Senior Notes Documents or any other documentation executed in connection
therewith; (c) the liens, pledges, assignments, security interests and other
collateral or security granted by the Senior Notes Documents; or (d) any conduct
of the Noteholders, the Collateral Agent or the Representative under or with
respect to the Senior Notes Documents or the transactions contemplated thereby.
6. CONDITIONS PRECEDENT TO EFFECTIVENESS
This Waiver and Amendment is subject to the provisions of Sections 11.2
and 11.4 of the Note Purchase Agreement and shall become effective as of the
date first above written when, and only when each of the following conditions
precedent shall have been fulfilled:
6.1. Waiver and Amendment. This Waiver and Amendment shall have been
executed by the Company and the holders, voting together as a single class, of
at least 50% in principal amount of all Senior Notes outstanding as of the date
hereof.
6.2. Consent of Guarantors. The consent attached hereto shall have been
executed by each Guarantor.
6.3. Waiver and Amendment under Syndicated Facility Documents. The
Noteholders shall have received written evidence, in form and substance
satisfactory to them, that (a) the Company has obtained a waiver of any Events
of Default (to the extent such exist) under the Syndicated Credit Agreement, the
Syndicated Loan Agreement and the Vessel Financing Documents and (b) the
Syndicated Credit Agreement, the Syndicated Loan Agreement and such other
Syndicated Facility Documents as may require amendment in connection with this
Waiver and Amendment and the transactions contemplated hereby have been so
amended.
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6.4. Investment Bank Engagement Letters. The Company shall have furnished
to the Noteholders copies of the Harris Williams and Cobblestone investment bank
engagement letters with the Company covering the sale of assets (including
without limitation the Permitted Asset Dispositions).
6.5. Opinions. The Noteholders shall have received (a) appropriate and
customary opinions relating to this Waiver and Amendment and the transactions
contemplated hereby and such other matters as are deemed appropriate by
Noteholders and their counsel and (b) copies of all opinions delivered to the
Banks in connection with the waivers and amendments referred to in Section 6.3
hereof, in each case in form and substance satisfactory to the Noteholders.
6.6. Waiver and Amendment Fee; Legal Expenses. The Noteholders shall have
received a one time Waiver and Amendment Fee in an amount equal to $775,915.14
for the ratable benefit of each Noteholder signatory hereto based on the
proportion that the amount of Senior Notes held by each such Noteholder (which
amount is accurately set forth next to each Noteholder's name on the signature
pages hereof) bears to the total amount of Senior Notes held by all Noteholders
signatories hereto. In addition, the Noteholders shall have received payment of
all currently outstanding fees and expenses of counsel to the Noteholders
incurred in connection with the matters contemplated hereby or undertaken to
date in connection with the Note Purchase Agreement and the Senior Notes
Documents.
6.7. Other Deliveries. The Noteholders shall have received from the
Company such other agreements as the Noteholders may request in connection with
this Waiver and Amendment, in such form and substance acceptable to the
Noteholders, executed and delivered by a duly authorized officer of Company.
The effectiveness of this Waiver and Amendment is further conditioned
upon the accuracy in all material respects of the factual matters, taken as a
whole, described herein.
7. AGREEMENT TO WAIVE
Notwithstanding the occurrence or continuation of the Designated Events
of Default, subject to satisfaction of the conditions precedent set forth in
Section 6 hereof, the Noteholders hereby waive the Designated Events of Default
from and after the date of occurrence thereof, and the Noteholders and the
Collateral Agent waive any right to exercise the rights and remedies available
under the Note Purchase Agreement and the other Senior Notes Documents as a
result of the occurrence of such Designated Events of Default. Nothing contained
in this Waiver and Amendment shall prejudice any rights or remedies the
Noteholders or the Collateral Agent may have, or the right of the Noteholders or
the Collateral Agent to exercise any such rights and remedies, at any time with
respect to Events of Default (whether now existing or hereafter occurring) other
than the Designated Events of Default. The Company acknowledges and agrees that
the foregoing waiver shall not affect the continued legality, validity and
binding effect of the Note Purchase Agreement and the other Senior Notes
Documents (as amended or otherwise modified hereby), and, except with respect to
such waiver, the Note Purchase Agreement continues to be fully enforceable.
Nothing contained in this Waiver and Amendment shall be construed as a waiver
under or a modification to the terms of the Intercreditor Agreement,
-11-
including without limitation with respect to the maximum amount of accrued
interest that constitutes "Senior Secured Indebtedness" (as defined in the
Intercreditor Agreement).
8. MISCELLANEOUS
8.1. Governing Law. This Waiver and Amendment shall be governed by, and
construed in accordance with, the laws of the State of New York.
8.2. Severability. The invalidity or unenforceability of any provision
hereof shall in no way affect the validity or enforceability of any other
provision.
8.3. Counterparts. This Waiver and Amendment may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Waiver and Amendment by
telecopier shall be effective as delivery of a manually executed counterpart of
this Waiver and Amendment.
[signature pages follow]
-12-
IN WITNESS WHEREOF, the parties hereto have executed this Waiver and
Amendment as of the date first above written.
COMPANY: OGLEBAY NORTON COMPANY
By:______________________________________
Name:
Title:
NOTEHOLDERS: THE 1818 MEZZANINE FUND II, L.P.
By: Brown Brothers Harriman & Co.,
General Partner
By:______________________________________
Name: Robert R. Gould
Title: Partner
Amount of Senior Notes: $25,000,000
SANKATY HIGH YIELD PARTNERS II, L.P.
By:______________________________________
Name: Stuart Davies
Title: Senior Vice President
Amount of Senior Notes: $3,000,000
SANKATY HIGH YIELD PARTNERS III, L.P.
By:______________________________________
Name: Stuart Davies
Title: Senior Vice President
Amount of Senior Notes: $3,000,000
BRANT POINT CBO 1999-1, LTD.
By: SANKATY ADVISORS, LLC, as
Collateral Manager
By:______________________________________
Name: Stuart Davies
Title: Senior Vice President
Amount of Senior Notes: $500,000
GREAT POINT CBO 1998-1 LTD.
By: SANKATY ADVISORS, LLC, as Collateral
Manager
By:______________________________________
Name: Stuart Davies
Title: Senior Vice President
Amount of Senior Notes: $1,000,000
GREAT POINT CLO 1999-1 LTD.
By: SANKATY ADVISORS, LLC, as
Collateral Manager
By:______________________________________
Name: Stuart Davies
Title: Senior Vice President
Amount of Senior Notes: $250,000
RACE POINT CLO, LIMITED
By: SANKATY ADVISORS, LLC, as
Collateral Manager
By:______________________________________
Name: Stuart Davies
Title: Senior Vice President
Amount of Senior Notes: $250,000
SANKATY CREDIT OPPORTUNITIES, L.P.
By:______________________________________
Name: Stuart Davies
Title: Senior Vice President
Amount of Senior Notes: $6,000,000
TEACHERS INSURANCE AND ANNUITY
ASSOCIATION OF AMERICA
By:______________________________________
Name:
Title:
Amount of Senior Notes: $17,000,000
COHANZICK HIGH YIELD PARTNERS, LP
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $600,000
COHANZICK CREDIT OPPORTUNITIES FUND,
LTD.
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $400,000
GABRIEL CAPITAL GROUP
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $1,000,000
RESTORATION HOLDINGS, LTD.
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $2,000,000
LEGACY AGGRESSIVE HIGH YIELD FUND
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $100,000
THE ONE GROUP HIGH YIELD BOND FUND
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $2,150,000
PACHOLDER HIGH YIELD FUND, INC.
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $500,000
DB DISTRESSED OPPORTUNITIES FUND, LTD.
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $2,500,000
SPRUGOS INVESTMENTS IV, LLC
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $2,500,000
MW POST PORTFOLIO FUND, LTD.
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $2,000,000
PACHOLDER 2000 OPPORTUNITY FUND LP
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $250,000
DELAWARE STREET CAPITAL FUND, LTD
By:
By:______________________________________
Name:
Title:
Amount of Senior Notes: $5,000,000
CONSENT
Dated as of September 11, 2003
Each of the undersigned as a Guarantor under the Note Purchase
Agreement referred to in the foregoing Waiver and Amendment and a grantor,
pledgor and mortgagor, as the case may be, under the Security Documents executed
and delivered pursuant to the Note Purchase Agreement, in each case, in favor of
the Collateral Agent, for its benefit and the benefit of the Noteholders parties
to the Note Purchase Agreement referred to in the foregoing Waiver and
Amendment, hereby consents and agrees to such Waiver and Amendment and hereby
confirms and agrees that (a) the Note Purchase Agreement, as amended and
otherwise modified by such Waiver and Amendment, and each Security Document to
which such Guarantor is party is, and shall continue to be, in full force and
effect and is hereby ratified and confirmed in all respects, and (b) all of the
collateral described in such Security Documents do, and shall continue to,
secure the payment of all of the obligations provided therein.
[signature pages follow]
1
ONCO INVESTMENT COMPANY
OGLEBAY NORTON MANAGEMENT COMPANY
OGLEBAY NORTON INDUSTRIAL SANDS, INC.
OGLEBAY NORTON TERMINALS, INC.
OGLEBAY NORTON ENGINEERED MATERIALS, INC.
OGLEBAY NORTON MINERALS, INC.
OGLEBAY NORTON SPECIALTY MINERALS, INC.
ON MARINE SERVICES COMPANY
MICHIGAN LIMESTONE OPERATIONS, INC.
GLOBAL STONE CORPORATION
GLOBAL STONE TENN LUTTRELL COMPANY
GLOBAL STONE CHEMSTONE CORPORATION
GLOBAL STONE ST. CLAIR, INC.
GLOBAL STONE FILLER PRODUCTS, INC.
GLOBAL STONE JAMES RIVER, INC.
GS PC, INC.
ON COAST PETROLEUM COMPANY
ONCO WVA, INC.
ONTEX, INC.
SAGINAW MINING COMPANY
GLOBAL STONE MANAGEMENT COMPANY
ERIE SAND AND GRAVEL COMPANY
ERIE NAVIGATION COMPANY
ERIE SAND STEAMSHIP CO.
MOUNTFORT TERMINAL, LTD.
SERV-ALL CONCRETE, INC.
S&J TRUCKING, INC.
By:______________________________________
Name:
Title:
2
OGLEBAY NORTON MARINE SERVICES COMPANY,
L.L.C.
By: ON MARINE SERVICES COMPANY, its
Member
By:______________________________________
Name:
Title:
GLOBAL STONE PENROC, LP
By: GS PC, Inc.,
its General Partner
By:______________________________________
Name:
Title:
TEXAS MINING, LP
By: ONTEX, Inc.,
its General Partner
By:______________________________________
Name:
Title:
OGLEBAY NORTON MARINE MANAGEMENT COMPANY,
L.L.C.
By: OGLEBAY NORTON MARINE SERVICES
COMPANY, L.L.C., its Member
By:______________________________________
Name:
Title:
3
GLOBAL STONE PORTAGE, LLC
By: ONCO INVESTMENT COMPANY,
its Member
By:______________________________________
Name:
Title:
4