MODIFICATION AND LIMITED WAIVER
AGREEMENT
THIS MODIFICATION
AND LIMITED WAIVER AGREEMENT (this “ Agreement
”), dated as of the March 31, 2009, is by and among
BALDWIN TECHNOLOGY COMPANY, INC., a Delaware corporation (“
Parent ”), BALDWIN GERMANY HOLDING GMBH, a German
company (“ Newco ”), BALDWIN GERMANY GMBH, a
German company (“ BGG ”), BALDWIN OXY-DRY GMBH
(formerly known as “OXY-DRY MASCHINEN GMBH”), a German
company (“ Oxy-Dry GmbH ” and, collectively with
the Parent, Newco and BGG, the “ Borrowers ”),
the other Credit Parties (as defined in the Guaranty and Collateral
Agreement (as defined below)) a party hereto, and BANK OF AMERICA,
N.A., a national banking association (as successor-by-merger to
LASALLE BANK NATIONAL ASSOCIATION), in its capacity as a Lender and
as Administrative Agent and the other Lenders (as defined in the
Credit Agreement referred to below) signatory hereto. Capitalized
terms used in this Agreement and not defined herein shall have the
meanings ascribed to such terms in the Credit Agreement unless
otherwise stated herein.
A. The
Borrowers, the Lenders and the Administrative Agent are parties to
that certain Credit Agreement dated as of November 21, 2006,
as amended by that certain Amendment to Credit Agreement dated as
of December 29, 2006, by a Waiver, Consent and Amendment
No. 2, dated as of April 18, 2007, by a Waiver, Consent
and Amendment No. 3 to Credit Agreement dated as of
January 3, 2008, and by an Amendment No. 4 to Credit
Agreement dated as of February 26, 2008 (as so amended, the
“ Credit Agreement ”); and
B. The
Borrowers, the other Credit Parties and the Administrative Agent
are parties to the Guaranty and Collateral Agreement (as defined in
the Credit Agreement); and
C. The
Borrowers are in breach of (i) the financial covenant set
forth in Section 11.14.1 of the Credit Agreement with respect
to the requirement to not permit EBITDA to be less than $12,000,000
for the Computation Period ending March 31, 2009 and
(ii) Section 11.14.3 of the Credit Agreement with respect
to the requirement to maintain a Total Debt to EBITDA Ratio of not
less than 3.50 to 1.0 as of the last day of the Computation Period
ending March 31, 2009. Each of the breaches referred to in
clauses (i) and (ii) of the immediately preceding
sentence constitute an Event of Default under Section 13.1.5
of the Credit Agreement (the Events of Default resulting from such
breaches are collectively referred to below as the “
Specified Events of Default ” and individually as a
“ Specified Event of Default ”). Each of the
Specified Events of Default would (if not for the limited waiver
granted (subject to the terms and conditions hereof) herein)
entitle the Lenders and the Administrative Agent to immediately
exercise their respective rights and remedies under the Loan
Documents and applicable law with respect to an Event of Default;
and
D. The Borrowers
have requested that Lenders representing at least the Required
Lenders grant a limited waiver of the Specified Events of Default;
and the Lenders signatory
hereto,
representing at least the Required Lenders, are willing to grant
such limited waiver, on the terms and subject to the conditions
provided herein.
NOW,
THEREFORE , in consideration of the premises herein contained
and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties,
intending to be legally bound, agree as follows:
ARTICLE I
CERTAIN DEFINITIONS
1.01 The
term “ Limited Waiver Period ” shall mean the
period from (and including) March 31, 2009 to (and including)
May 15, 2009.
1.02 The
term “ Dollar Equivalent of Euro Revolving
Outstandings ” shall mean the aggregate Dollar Equivalent
of the sum of (a) the aggregate principal amount of all
outstanding Parent Revolving Loans borrowed in Euros, (b) the
Parent Stated Amounts with respect to Parent Letters of Credit
issued in Euros, (c) the aggregate principal amount of all
outstanding German Revolving Loans borrowed in Euros, and
(d) the German Stated Amounts with respect to German Letters
of Credit issued in Euros.
ARTICLE II
LIMITED WAIVER
2.01 The
undersigned Lenders (representing at least the Required Lenders)
hereby waive (subject to the terms and conditions hereof), for the
Limited Waiver Period only, the Specified Events of Default (the
waiver granted in this sentence is referred to below as the “
Limited Waiver ”). (For the avoidance of doubt, the
Required Lenders shall not have the right to impose during the
Limited Waiver Period the additional 2% default rate(s) under
Sections 4.1 or 5.2(a) of the Credit Agreement by reason of
the Specified Events of Default but shall have the right to do so
upon the occurrence and during the continuance of any other Event
of Default.) The Limited Waiver is limited solely to the Specified
Events of Default and shall not apply to any other Events of
Default and is also limited solely to the Limited Waiver Period and
shall not extend to any period beyond the Limited Waiver Period.
Without limiting the generality of the immediately preceding
sentence, the Borrowers (and other Credit Parties) hereby
acknowledge and agree that (i) the Limited Waiver does not
apply to any breach of Sections 11.14.1 or 11.14.3 of the
Credit Agreement other than the breach of Section 11.14.1 for
the Computation Period ending March 31, 2009 and the breach of
Section 11.4.3 as of the last day of the Computation Period
ending March 31, 2009 and (ii) after the Limited Waiver
Period, the Specified Events of Default shall (unless otherwise
hereafter waived in writing by the Required Lenders (it being
understood and agreed that any such waiver would be at the sole and
absolute discretion of the Required Lenders and no Lender has any
obligation to grant such waiver)) exist and be continuing Events of
Default for all purposes and the Lenders and the Administrative
Agent shall have the right at any time (including immediately) to
exercise any or all of their respective rights and remedies under
the Loan Documents and under applicable law with respect to the
Specified Events of Default including without limitation the right
to impose the default rates under Section 4.1 or 5.2(a) of the
Credit Agreement, accelerate any or all the Loans or other
Obligations, refuse to make any additional Revolving Loans or to
issue any additional Letters of Credit, terminate
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the Commitments
and/or realize on the Collateral. Each of the Borrowers and the
other Credit Parties hereby consents to, and acknowledges the
availability of, each and every right and remedy set forth in the
Credit Agreement, the Guaranty and Collateral Agreement and the
other Loan Documents with respect to the Specified Events of
Default after the Limited Waiver Period.
ARTICLE III
LIMITED WAIVER AND MODIFICATION
3.01 Certain
Agreements Regarding Limited Waiver Period . In consideration
of the Lenders’ granting (subject to the terms and conditions
hereof) the Limited Waiver above, each of the Borrowers and the
other Credit Parties hereby acknowledges and agrees as
follows:
(a)
Notwithstanding anything to the contrary contained in the Credit
Agreement, the Notes or the other Loan Document, the Applicable
Margin during the Limited Waiver Period for all of the Loans and
the undrawn amounts of each Letter of Credit, as the case may be,
shall be the following applicable rates per annum:
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LIBOR
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Base Rate
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Non-Use
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L/C Fee
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Margin
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Margin
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Fee Rate
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Rate
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3.00
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%
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0.500
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%
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4.50
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%
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(b) With respect
to any LIBOR Loan borrowed or continued during the Limited Waiver
Period, and with respect to any Base Rate Loan converted into a
LIBOR Loan during the Limited Waiver Period, the only Interest
Period that may be selected is a period of one month.
(c) The Borrowers
shall not request any Letters of Credit to be issued or to be
extended during the Limited Waiver Period. Oxy-Dry GmbH shall not
request any new German Revolving Loans in the Limited Waiver
Period.
(d) No Borrower
shall make any borrowing of a Revolving Loan during the Limited
Waiver Period if immediately after such borrowing the Dollar
Equivalent of all Revolving Outstandings shall exceed $17,100,000.
In addition to (and not in limitation of) the restriction set forth
in the immediately preceding sentence, (i) no Borrower shall
make any borrowing of a Revolving Loan in Euros during the Limited
Waiver Period if immediately after such borrowing the Dollar
Equivalent of Euro Revolving Outstandings exceeds $4,000,000 and
(ii) if at any time(s) during the Limited Waiver Period the
Dollar Equivalent of Euro Revolving Outstandings exceeds $4,000,000
(it being agreed that for purposes of this clause (ii) the
Revaluation Date shall be each day in the Limited Waiver Period),
the Parent shall immediately cause the prepayment ( i.e. ,
shall cause a mandatory prepayment) of a sufficient amount of
Revolving Loans borrowed in Euros so that the Dollar Equivalent of
Euro Revolving Outstandings no longer exceed $4,000,000. For the
avoidance of doubt, the provisions of Section 8.4 of the
Credit Agreement shall apply to any prepayment made pursuant to the
immediately preceding sentence. Upon the request of the Parent, the
Administrative Agent shall have the right (but not the obligation
and shall have no liability for its refusal to do so) to make the
provisions of Section 6.2.2(d)
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of the Credit
Agreement apply to any such prepayment with such conforming changes
to Section 6.2.2(d) (as such Section applies to any such
prepayment) as the Administrative Agent shall require in connection
with any such prepayment.
(e) No
(i) Specified Permitted Redemption shall be made during the
Limited Waiver Period and (ii) Rabbi Trust Permitted Payment
under clause (a) of the definition of Rabbi Trust Permitted
Payments shall be made during the Limited Waiver Period. The
Borrowers and other Credit Parties represent and warrant that no
Specified Permitted Redemption Payment and no Rabbi Trust Permitted
Payment has been made from (and including) January 1, 2009 to
(and including) the date hereof.
(f) The
restrictions and other provisions of (1) the definition of
Asset Dispositions and (2) Sections 10.2, subclauses (v),
(vi) and (vii) of Section 11.5, 11.11(a), and
11.11(j) of the Credit Agreement that apply if there is an Event of
Default shall be deemed to apply during the Limited Waiver Period
whether or not an Event of Default exists. The Borrowers also agree
that, with respect to any Debt that would otherwise be permitted
under the terms of subclauses (ii) and (iii) of
subsections 11.1(d) of the Credit Agreement and is created during
the Limited Waiver Period, (a) such Debt shall (in addition to
complying with any other restrictions in the Credit Agreement) only
consist of Debt incurred in the ordinary course of business of the
Parent and its Subsidiaries consistent with prior practices of the
Parent and its Subsidiaries and (b) no such Debt shall consist
of loans to or other Debt owed by Japan-Baldwin Ltd. Borrowers and
other Credit Parties represent and warrant that, with respect to
any Debt created under such subclauses (ii) and (iii) in
the period from January 1, 2009 to (and including) the date
hereof, (a) all such Debt was incurred in the ordinary course
of business of the Parent and its Subsidiaries consistent with
prior practices of the Parent and its Subsidiaries and (b) no
such Debt consists of loans to or other Debt owed by Japan-Baldwin
Ltd.
3.02
Swedish Letter of Credit . It is acknowledged that the
Parent had previously requested, and the Administrative Agent has
issued, a Parent Letter of Credit in the amount of 5,000,000
Swedish Krona (LaSalle Bank National Association letter of credit
#S605274 and Bank of America, N.A. letter of credit #68030846) (as
same may be modified from time to time, the “ Swedish
Letter of Credit ”). It is acknowledged and agreed that
the Swedish Letter of Credit is one of the Parent Letters of Credit
and that the terms and provisions of the Credit Agreement
(including without limitation Sections 2.1.5 and 2.3 of the
Credit Agreement) and the other Loan Documents shall apply to the
Swedish Letter of Credit. The term “Euros” as used in
the Credit Agreement (and any other applicable Loan Document) shall
be deemed to mean “Swedish Krona” in connection with
the Swedish Letter of Credit. Without limiting the generality of
the immediately preceding sentence, the Dollar Equivalent of the
Stated Amount of the Swedish Letter of Credit shall be the
equivalent amount thereof in Dollars as determined by the
Administrative Agent or the Issuing Lender, as the case may be, at
such time on the basis of the Spot Rate (determined in respect of
the most recent Revaluation Date) for the purchase of Dollars with
Swedish Krona.
3.03
Modifications . The Credit Agreement is hereby deemed
modified to reflect all of the terms and provisions of
Sections 3.01 and 3.02 above. Any breach by any Borrower (or
other
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Credit Party)
of the provisions of Section 3.01 or other term or provision
of this Agreement shall be deemed an Event of Default for all
purposes.
ARTICLE IV
CONDITIONS PRECEDENT
4.01
Conditions to Effectiveness . The effectiveness of the
Limited Waiver and the modifications set forth in Article III
hereof is subject to the satisfaction of the following conditions
precedent, unless specifically waived in writing by the
Administrative Agent:
(a) The
Administrative Agent shall have received this Agreement duly
executed by the Borrowers, the other Credit Parties and Lenders
constituting at least the Required Lenders.
(b) The
representations and warranties contained herein and in the Credit
Agreement, the Guaranty and Collateral Agreement and the other Loan
Documents shall be true and correct in all respects (or if the
applicable representation or warranty is not qualified by a
materiality qualifier, true and correct in all material respects)
with the same effect as if made on the date hereof
(except
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