AMENDMENT NO. 2 TO CREDIT AGREEMENT AND WAIVER

Exhibit 10.1

AMENDMENT NO. 2
TO
CREDIT AGREEMENT
AND WAIVER

       This AMENDMENT NO. 2 TO CREDIT AGREEMENT AND WAIVER (this “Amendment”), made as of November 9, 2001, among OGLEBAY NORTON COMPANY (“Borrower”), the banking institutions named in Schedule 1 to the Credit Agreement (as hereinafter defined) (collectively, the “Banks” and individually, “Bank”), KEYBANK NATIONAL ASSOCIATION, as administrative agent for the Banks (“Agent”), BANK ONE, MICHIGAN, 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 Credit Agreement, dated as of May 15, 1998, as amended and restated as of April 3, 2000, and as subsequently amended by that certain Amendment No. 1 to Credit Agreement and Waiver, dated as of June 30, 2001 (as amended from time to time, the “Credit Agreement”), pursuant to which the Banks have made certain loans and other financial accommodations available to Borrower; and

       WHEREAS, Borrower, the Banks, the Agent, the Syndication Agent and the Documentation Agent desire to amend the Credit 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, the Banks, the Agent, the Syndication Agent and the Documentation Agent 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 Credit Agreement.

2.    AMENDMENT TO THE CREDIT AGREEMENT.

       2.1 Amendment to Article I. DEFINITIONS. The new definition of “Amendment No. 2 Closing Date” shall be inserted into Article I in appropriate alphabetical order and the definitions of “Derived LIBOR Rate” and “Total Commitment Amount” in Article I shall be amended to read as follows:

       “Amendment No. 2 Closing Date shall mean November 9, 2001.

       “Derived LIBOR Rate” shall mean a rate per annum equal to:

             (a) for the period from the Amendment No. 2 Closing Date through December 28, 2001, the LIBOR Rate plus 350 Basis Points; and

             (b) commencing December 29, 2001 and at all times thereafter, the sum of the Applicable Margin (from time to time in effect) plus the LIBOR Rate.

       “Total Commitment Amount” shall mean the principal amount of Two Hundred Seven Million Dollars ($207,000,000) (or such lesser amount as shall be determined pursuant to Section 2.5 hereto).

       2.2    Amendment to Section 2.5 COMMITMENT AND OTHER FEES; REDUCTION OF COMMITMENT. Section 2.5 (c) is amended to read as follows:

              (c) Except for the mandatory Commitment reduction required by Section 5.28 hereof, Borrower may at any time or from time to time permanently reduce in whole or ratably in part the Commitment of the Banks hereunder to an amount not less than the then existing Revolving Credit Exposure, by giving Agent not fewer than three (3) Business Days’ written notice of such reduction, provided that any such partial reduction shall be in and aggregate amount for all of the Banks of not less than Five Million Dollars ($5,000,000), increased by increments of One Million Dollars ($1,000,000). Any reduction in the Total Commitment Amount shall be on a pro rata basis in accordance with the respective Commitment Percentages of the Banks. Agent shall promptly notify each Bank of the date of each such reduction and such Bank’s proportionate share thereof. After each such reduction, the commitment fees payable hereunder shall be calculated upon the Total Commitment Amount as so reduced. If Borrower reduces in whole the Commitment, on the effective date of such reduction (Borrower having prepaid in full the unpaid principal balance, if any, of the Notes, together with all interest and commitment and other fees accrued and unpaid, and provided that no issued and outstanding Letters of Credit shall exist), all of the Notes shall be delivered to agent marked “Canceled” and Agent shall redeliver such Notes to Borrower. Any partial reduction in the Commitment shall be effective during the remainder of the Commitment Period, and, if the entire Commitment is terminated, then the Commitment Period shall be deemed to have ended on the date of such termination.

       2.3    Amendment to Section 5.20 CAPITAL DISTRIBUTIONS. Section 5.20 is amended to read as follows:

       SECTION 5.20.  CAPITAL DISTRIBUTIONS. No Company shall pay or commit themselves to pay any Capital Distributions at any time; provided, however, that any Company may pay or commit itself to pay a Capital Distribution at any time to Borrower or a Pledgor.

       2.4    Addition of Section 5.28 APPLICATION OF RIVERSIDE AND MARBLE CITY SALE PROCEEDS; REDUCTION OF COMMITMENT. The following Section 5.28 shall be inserted into Article V after Section 5.27:

       SECTION 5.28.  APPLICATION OF RIVERSIDE AND MARBLE CITY SALE PROCEEDS; REDUCTION OF COMMITMENT. The Borrower shall cause all proceeds (net of selling expenses, including without limitation, any reasonable broker’s fees or commissions, other costs directly related to such sales, and transfer and similar taxes) from sale of: (i) the

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Limestone Fine-Grind Processing Assets and stockpiled materials of Global Stone St. Clair, Inc. in Marble City, Oklahoma and (ii) the fine grinding operations of Oglebay Norton Industrial Sands, Inc. in Riverside, California, to be applied to the outstanding balance of the Revolving Loans and the Commitment of the Banks hereunder shall be permanently reduced in an amount equal to the amount of such proceeds.

3.    WAIVER.

       3.1    Waiver.  Subject to and conditioned on the effectiveness of this Amendment, to the extent that the following actions or circumstances have resulted in Borrower’s failure to comply with the Credit Agreement, the Banks, in accordance with Section 10.3 of the Credit Agreement, hereby waive as of the date of this Amendment:

       (a) Borrower’s failure to comply with the requirements set forth in Sections 5.7(a), 5.7(b) and 5.7(c) of the Credit Agreement at September 30, 2001, or for the period ended September 30, 2001, as the case may be; and

       (b) solely with respect to defaults waived pursuant to Section 3.1(a) above, any Event of Default under Section 7.2 of the Credit Agreement resulting therefrom;

provided, however that the waiver set forth in this Section 3.1 shall continue to be effective only until December 28, 2001, and shall not after such date be effective as a waiver pursuant to the terms hereof of any right, power or remedy of Agent, the Syndication Agent, the Documentation Agent, any Bank under the Credit Agreement unless on or prior to December 28, 2001, the Borrower shall have executed an amendment to the Credit Agreement amending the financial covenants thereof in a manner satisfactory to the Agent and 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 Credit 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   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 Credit Agreement, the Loan Documents or any obligations thereunder or with respect to any actions of the 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

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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.

       4.3    Credit Agreement. The Credit 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.

       4.4    Nonwaiver. Except as expressly provided in Section 3 hereto, the execution, delivery, performance and effectiveness of this Amendment shall not 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 Credit Agreement or (ii) of any term, provision, representation, warranty or covenant contained in the Credit Agreement or any other documentation executed in connection therewith. Further, except as set forth in Section 3 of this Agreement, none of the provisions of this Amendment shall constitute, be deemed to be or construed to be, a waiver of any Event of Default under the Credit Agreement as previously amended and as further amended by this Amendment.

       4.5    Reference to and Effect on the Credit Agreement. Upon the effectiveness of this Amendment, each reference in the Credit Agreement to “this Agreement,” “hereunder,” “hereof,” “herein,” or words of like import shall mean and be a reference to the Credit Agreement, as previously amended and as further amended hereby, and each reference to the Credit Agreement in any other document, instrument or agreement executed and/or delivered in connection with the Credit Agreement shall mean and be a reference to the Credit Agreement, as previously amended and as further amended hereby.

5. CONDITIONS PRECEDENT TO EFFECTIVENESS OF THIS AMENDMENT NO. 2 AND WAIVER.

       This Amendment shall become effective as of the date (the “Amendment Effective Date”) on which each of the following conditions precedent shall have been fulfilled:

       5.1    Amendment No. 2 to Credit Agreement and Waiver. The Agent shall have received from Borrower and a requisite number of Banks constituting the Majority Banks (as defined in the Credit Agreement) an original counterpart of this Amendment No. 2 to Credit Agreement and Waiver, executed and delivered by a duly authorized officer of Borrower or each such Bank, as the case may be.

       5.2    Amendment No. 2 to Loan Agreement and Waiver. The Agent shall have received from Borrower and a requisite number of Banks constituting the Majority Banks an original counterpart of Amendment No. 2 to Loan Agreement and Waiver, in form and substance acceptable to the 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. The Agent shall have received the Acknowledgment of Guarantors, attached hereto, executed and delivered by a duly authorized officer of each of the Guarantors.

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6.    MISCELLANEOUS.

       6.1    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.

       6.2    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.

       6.3    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]

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IN WITNESS WHEREOF, Borrower has caused this Amendment No. 2 to Credit Agreement and Waiver to be duly executed and delivered by its duly authorized officer as of the date first above written.

ACKNOWLEDGMENT OF GUARANTORS

          Each of the undersigned consents and agrees to and acknowledges the terms of the foregoing Amendment No. 2 to Credit Agreement and Waiver. 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.