<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
The Securities Exchange Act of 1934
For the fiscal year ended June 30, 1996 Commission file number 1-9334
BALDWIN TECHNOLOGY COMPANY, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 13-3258160
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
65 ROWAYTON AVENUE, ROWAYTON, CONNECTICUT 06853
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: 203-838-7470
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange
on Which Registered
CLASS A COMMON STOCK AMERICAN STOCK EXCHANGE
PAR VALUE $.01
Securities registered pursuant to Section 12(g) of the Act:None
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days:Yes [X] No [ ]
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to the
best of the registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [ ]
Aggregate market value of the voting stock held by non-affiliates of the
registrant as of August 31, 1996 was $43,409,713.
Number of shares of Common Stock outstanding at August 31, 1996:
<TABLE>
<S> <C>
Class A Common Stock............ 15,515,727
Class B Common Stock............ 1,835,883
----------
Total........................... 17,351,610
</TABLE>
DOCUMENTS INCORPORATED BY REFERENCE
Items 10, 11, 12 and 13 are incorporated by reference from the Baldwin
Technology Company, Inc. Proxy Statement for the 1996 Annual Meeting of
Stockholders to be held on November 19, 1996 into Part III of this Form 10-K. (A
definitive proxy statement will be filed with the Securities and Exchange
Commission within 120 days after the close of the fiscal year covered by this
Form 10-K.)
<PAGE> 2
TABLE OF CONTENTS PAGE
----
Item 1. Business................................................... 1
Item 2. Properties................................................. 6
Item 3. Legal Proceedings.......................................... 7
Item 4. Submission of Matters to a Vote of Security Holders........ 7
Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters........................................ 8
Item 6. Selected Financial Data.................................... 9
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 10
Item 8. Financial Statements and Supplementary Data................ 15
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure................................... 37
Item 10. Directors, Executive Officers and Key Employees of the
Registrant................................................. 38
Item 11. Executive Compensation..................................... 38
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................. 38
Item 13. Certain Relationships and Related Transactions............. 38
Item 14. Exhibits, Financial Statement Schedules and Reports on Form
8-K........................................................ 38
CAUTIONARY STATEMENT -- This Form 10-K may contain statements which constitute
"forward-looking" information as that term is defined in the Private Securities
Litigation Reform Act of 1995 or by the Securities and Exchange Commission
("SEC") in its rules, regulations and releases. Baldwin Technology Company, Inc.
(the "Company") cautions investors that any such forward-looking statements made
by the Company are not guarantees of future performance and that actual results
may differ materially from those in the forward-looking statements. Some of the
factors that could cause actual results to differ materially from estimates
contained in the Company's forward-looking statements are set forth in Exhibit
99 to this Report on Form 10-K for the year ended June 30, 1996.
<PAGE> 3
PART I
ITEM 1.BUSINESS
Baldwin Technology Company, Inc. ("Baldwin" or the "Company") is the leading
international manufacturer of material handling, accessory, control and
pre-press equipment for the printing industry. The Company offers its customers
a broad range of products designed to enhance the quality of printed products
and increase the productivity and cost-efficiency of printing presses while
addressing the environmental concerns and safety issues involved in the printing
process. Baldwin's products include cleaning systems, fountain solution and ink
control systems, web control and press protection systems, web and material
handling systems, newspaper inserter equipment and automated imposition and
plate exposure equipment.
The Company sells its products both to printers to upgrade the quality and
capability of existing presses and to printing press manufacturers which
incorporate the Company's products with their own equipment for sale to
printers. The Company has product development and manufacturing facilities, as
well as sales and service operations, in its three major sectors: the Americas,
Europe and Asia Pacific.
INDUSTRY OVERVIEW
Baldwin operates in a highly fragmented market. The Company defines its
business as that of providing material handling, accessory, control and
pre-press equipment for the printing industry. The Company believes that it
produces the most complete line of material handling, accessory, control and
pre-press equipment for the printing industry.
The Company's products are used by printers engaged in all printing
processes including lithography, gravure, letterpress and flexography. The
largest share of its business is in offset (lithography) printing. Offset
printing is the largest segment of the domestic printing market and is used
primarily for printing books, magazines, business forms, catalogs, greeting
cards, packaging and newspapers. The Company's products are designed to improve
the printing process in terms of both quality of the finished product as well as
its cost efficiency.
Although offset printing represents a significant segment of the U.S.
commercial printing industry, it is not as dominant in the international
printing market. The Company believes that the future growth of this
international market will be attributable in large part to the increased use of
offset printing. The Company has established operations in each of its three
major sectors to take advantage of growth opportunities in these markets.
Baldwin's worldwide operations enable it to closely monitor new product
developments in different printing markets and to introduce new products, or
adapt existing ones, to meet the printing requirements of specific local markets
throughout the world.
PRINCIPAL PRODUCTS
The Company manufactures and sells more than 200 different products to
printers and printing press manufacturers. The Company's product development is
focused on the needs of the printer. Typically, it takes a new product several
years after its introduction to make a significant contribution to the Company's
net sales. Initially, after the introduction of a new product, the Company's
marketing efforts usually focus on printers. With the exception of the Company's
Kansa and Misomex product lines, as a product progresses through its life cycle,
the percentage of sales to printing press manufacturers generally increases as
the product's acceptance by the industry increases and printers begin to specify
certain of the Company's products as part of their accessory or material
handling equipment package when ordering new presses. The Company's Kansa and
Misomex product lines are primarily marketed to printers. Historically, the
Company's products have had a long life cycle as the Company continually
upgrades and refines its product
1
<PAGE> 4
lines to meet customer needs and changes in printing press technology. The
Company's products help printers address increasingly demanding print quality,
environmental and safety issues while enhancing productivity. Nearly all of the
Company's products also significantly limit paper waste, which is especially
important given the high cost of paper. The Company's sales have historically
increased about equally through both internal product development and
acquisitions of product lines and companies.
The Company's products range in price from under $100 to approximately
$500,000. Baldwin's principal products are:
ACCESSORIES AND CONTROLS.
CLEANING SYSTEMS.The Company's first Cleaning Systems product was the Press
Washer which cleaned the ink train of an offset press. Additional Cleaning
Systems products include the Automatic Blanket Cleaner, Newspaper Blanket
Cleaner, Chill Roll Cleaner and Guide Roll Cleaner, which all reduce paper
waste, volatile organic compound ("VOC") emissions and press downtime, as well
as improve productivity, print quality and safety of operation for the press
operator. In 1995, IMPACT(TM), a patented automated blanket and press cylinder
cleaning system was introduced and won the Graphic Arts Technical Foundation
Intertech Award. In the fiscal years ended June 30, 1996, 1995 and 1994, net
sales of Cleaning Systems represented approximately 27.8%, 30.2% and 32.6% of
the Company's net sales, respectively.
Fountain Solution Control Systems.Fountain Solution Control Systems control
the supply, temperature, cleanliness, chemical composition and certain other
characteristics of water used in the offset printing process. Among the most
important of these products are the Company's Refrigerated Circulators and Spray
Dampening Systems. In the fiscal years ended June 30, 1996, 1995 and 1994, net
sales of Fountain Solution Control Systems represented approximately 13.3%,
13.2% and 12.6% of the Company's net sales, respectively.
WEB CONTROL AND PRESS PROTECTION SYSTEMS.The Company's Web Control Systems
improve print quality by precisely controlling the flow of paper through a web
offset press while also reducing waste and increasing press productivity. The
Company's Press Protection Systems, designed in response to the increasing
number of web leads used in printing today's colorful newspapers, provide an
auto-arming electronic package offering high quality press protection in the
event of a web break.
OTHER ACCESSORY AND CONTROL EQUIPMENT.The Company's Ink Control Systems
control and regulate many aspects of the ink feed system on a printing press.
These products include Ink Agitators, Ink Mixers and Ink Level Systems which
reduce wasted ink and paper and allow for the use of recyclable ink containers.
Other products include Ultra-Violet and Infra-Red Dryers for sheet-fed presses
and Gluing Systems. In the fiscal years ended June 30, 1996, 1995 and 1994, net
sales of these products represented approximately 12.0%, 10.3% and 9.8% of the
Company's net sales, respectively.
MATERIAL HANDLING.
WEB HANDLING SYSTEMS.The Company's Web Handling Systems, produced by its
Enkel and Amal subsidiaries, unwind, rewind and splice paper and other materials
supplied to presses in webs and also control the tension and position of web
materials. This equipment eliminates unnecessary press stoppages and allows a
more efficient flow of printed work. In the fiscal years ended June 30, 1996,
1995 and 1994, net sales of Web Handling Systems represented approximately
13.8%, 14.3% and 12.9% of the Company's net sales, respectively.
2
<PAGE> 5
MATERIAL HANDLING/STACKING SYSTEMS.Baldwin's Material Handling/Stacking
Systems automate the handling of the printed product. The efficient counting,
stacking, packing and compressing of printed materials helps to increase press
utilization and productivity, reduce and control waste and decrease pressroom
labor requirements.
IN-LINE FINISHING SYSTEMS.The Company's In-line Finishing products allow
printers to perform automatically, at press speeds, functions which previously
required special handling in the bindery. These functions include numbering,
perforating, gluing and cutting.
NEWSPAPER INSERTER EQUIPMENT AND MAILING MACHINE SYSTEMS.The Company's
Newspaper Inserter Equipment collates and inserts sections and advertising
material into newspapers. Rising newsprint costs in the printing industry have
increased pressure on printers to reduce other costs, particularly labor costs.
When manual processes are replaced by newspaper inserters, payback periods as
low as six months have been realized by some purchasers of this equipment. The
Company's Mailing Machine Systems fold, label and prepare newspapers for
mailing.
PRE-PRESS.
AUTOMATED IMPOSITION, PLATE EXPOSURE AND PLOTTING AND CUTTING SYSTEMS. The
Company's Automated Imposition and Plate Exposure Systems are used by printers
to automate a labor intensive operation that results in the high quality and
accuracy of images on plates used in the offset printing process. The Company's
Laserstepper(TM) is designed to expose both film images and digital information
directly onto printing plates. The Laserstepper(TM) technology allows printers
to intermix conventional film and digital data within the page, or page by page,
on the plate. Furthermore, the technology allows the printer to upgrade to more
efficient digital platemaking technologies without losing the flexibility to
work with conventional input. Printers can thus sharpen their competitive edge
in traditional markets while developing the digital capabilities needed for
future success. The Platesetter(TM) is designed to image plates directly from
digital data offering continuous "hands-off" plate production of large amounts
of digital data. In addition to accommodating both film and plate as well as
different plate sizes, it handles oversize plates, a key advantage in today's
market. The Company's Plotting and Cutting systems are widely used in the
packaging and corrugated carton industries and are designed to plot, cut, crease
and mill a wide range of materials. In the fiscal years ended June 30, 1996,
1995 and 1994, net sales of Automated Imposition and Plate Exposure Systems
represented approximately 11.4%, 11.7% and 14.0% of the Company's net sales,
respectively.
WORLDWIDE OPERATIONS
The Company believes that it is the only manufacturer of material handling,
accessory, control and pre-press equipment for the printing industry which has
complete product development, manufacturing and marketing facilities in its
three major sectors: the Americas, Europe and Asia Pacific.
The following table sets forth the percentages of the Company's net sales
attributable to its three sectors in the fiscal years ended June 30, 1996, 1995
and 1994:
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-------------------------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Americas .............. 40.7% 42.2% 42.5%
Europe ................ 34.7 29.8 29.5
Asia Pacific .......... 24.6 28.0 28.0
----- ----- -----
Total ................. 100.0% 100.0% 100.0%
===== ===== =====
</TABLE>
3
<PAGE> 6
In its Americas sector, the Company operates in North, Central and South
America through its U.S. subsidiaries. In its European sector, the Company
operates through its subsidiaries in Germany, Sweden, Italy, France, England
and the Netherlands. In its Asia Pacific sector, the Company operates
through its subsidiaries in Japan, Hong Kong, China and Australia. All of the
Company's subsidiaries are wholly owned.
For additional information relating to the Company's operations in its three
principal sectors, see Note 4 -- Notes to Consolidated Financial Statements.
ACQUISITION STRATEGY
An important element of the Company's growth strategy is to make strategic
acquisitions of companies and product lines in related business areas. The
Company's acquisition strategy involves (i) acquiring new material handling,
accessory, control and pre-press products for the printing industry which can be
sold through the Company's own, or the acquired entity's, distribution network
and which can benefit from the Company's manufacturing expertise and financial
support; (ii) entering new end-user market segments or extending existing
markets; and (iii) acquiring companies which contribute new products to the
Company. After it makes an acquisition, the Company typically supports the
existing management of the acquired entity and participates actively with that
management in implementing operational strategies with a view to enhancing the
entity's sales, productivity and operating results.
MARKETING, SALES AND SUPPORT
Marketing.The Company markets its products in almost all developed countries
throughout the world. Although Baldwin markets a similar line of products in
many of these countries, its product mix and distribution channels vary from
country to country. The Company has 152 employees devoted to marketing and sales
activities in its three principal markets and over 300 dealers worldwide. The
Company markets its products to printing press manufacturers and to printers.
For the fiscal year ended June 30, 1996 approximately 44% of the Company's net
sales were to printing press manufacturers and approximately 56% of its net
sales were directly to printers.
In its Americas and European sectors, the Company markets its products both
through direct sales representatives and an extensive dealer network. In its
Asia Pacific sector, the Company markets its products through direct sales
representatives in Japan, Hong Kong, China and Australia and through dealers
throughout the rest of Asia.
Support.The Company is committed to after-sales service and support of its
products throughout the world. Baldwin employs approximately 119 service
technicians, who are complemented by product engineers, to provide field service
for the Company's products on a global basis.
Backlog.The Company's backlog was $69,351,000 as of June 30, 1996, including
$8,444,000 of backlog related to the acquired Acrotec operations, $71,866,000 as
of June 30, 1995 and $58,455,000 as of June 30, 1994. Backlog represents product
orders which Baldwin has received from its customers under valid contracts or
purchase orders.
Customers.The Company has a diverse customer base. In the fiscal years ended
June 30, 1996, 1995 and 1994, no customer accounted for 10% or more of the
Company's net sales. The ten largest customers of Baldwin accounted for less
than 41% of the Company's net sales for the fiscal year ended June 30, 1996.
Sales of Baldwin's products are not seasonal. However, its sales have
traditionally been greater in the second six months of its fiscal year than in
the first six months of its fiscal year.
4
<PAGE> 7
RESEARCH, DEVELOPMENT AND ENGINEERING
The Company believes its research, development and engineering efforts have
been an important factor in establishing and maintaining its leadership position
in the field of material handling, accessory, control and pre-press equipment
for the printing industry. In 1995, the Company was awarded the prestigious
Intertech Award from the Graphic Arts Technical Foundation (see Principal
Products -- Cleaning Systems). This is the Company's sixth such award since the
Intertech Award was established in 1978 to recognize technologies that are
predicted to have a major impact on the graphic communications industry, but are
not yet in widespread use in the marketplace. Baldwin has devoted substantial
efforts to adapt its products to almost all models and sizes of printing presses
in use worldwide.
The Company has product development facilities at each of its manufacturing
locations. This decentralized approach to research and development permits the
Company to react quickly to meet the needs of its customers.
Baldwin employs approximately 205 persons whose primary function is new
product development or modification of existing products. The Company's total
expenditures for research, development and engineering for the fiscal years
ended June 30, 1996, 1995 and 1994 were $21,022,000, $17,296,000 and
$15,409,000, respectively, representing approximately 8% of the Company's net
sales in each year.
PATENTS
The Company owns and licenses a number of patents and patent applications
relating to a substantial number of Baldwin's products. These products
represented a substantial portion of the Company's net sales in the fiscal year
ended June 30, 1996. The Company's patents expire at different times through
June, 2013; however, the expiration of patents in the near future is not
expected to have a material adverse effect on the Company's sales. The Company
has also relied upon and intends to continue to rely upon unpatented proprietary
technology, including the proprietary engineering required to adapt its products
to a wide range of models and sizes of printing presses. The Company believes
its rights under, and interests in, its patents and patent applications, as well
as its proprietary technology, are sufficient for its business as currently
conducted.
MANUFACTURING
The Company conducts its manufacturing operations through a number of
operating subsidiaries in each of its three sectors. In North America, the
Company has subsidiaries with manufacturing facilities located on the East
Coast, in the Midwest and on the West Coast.
In Europe, the Company has subsidiaries with manufacturing and assembly
facilities in Germany, Sweden and England. These facilities manufacture and
assemble complete lines of products that are in demand by printers worldwide
and by printing press manufacturers in Europe for shipment throughout the
world. The Company also has sales/service facilities in Germany, Sweden, Italy,
France and England. In Asia, Baldwin has manufacturing and assembly facilities
in Japan and China and sales/service facilities in Japan, Hong Kong, China and
Australia.
In general, raw materials required by the Company can be obtained from
various sources in the quantities desired. The Company has no long-term supply
contracts and does not consider itself dependent on any individual supplier.
The nature of most operations of the Company is such that there is little,
if any, negative effect upon the environment, and the Company has not
experienced any serious problems in complying with environmental protection laws
and regulations.
5
<PAGE> 8
COMPETITION
The printing press accessory industry is highly fragmented. Although the
Company believes it produces the most complete line of material handling,
accessory, control and pre-press equipment for the printing industry, numerous
companies manufacture and sell products that compete with one or more of the
Company's products. The Company competes from time to time with printing press
manufacturers who, as a part of their businesses, produce material handling,
accessory and control equipment for the printing industry and who generally have
larger staffs and greater financial resources than the Company.
The Company competes by offering customers a broad product line, coupled
with a well-known reputation for the reliability of its products and its
commitment to service and after-sale support. Some of the Company's products
with patent protection have little or no direct competition. The Company's
ability to compete effectively in the future will depend upon the continued
reliability of its products, after-sale service, ability to keep its market
position as its patents expire and ability to develop new products which meet
the demands of the printing industry.
EMPLOYEES
The Company employs 1,298 persons, 611 of whom are production employees and
approximately 163 of whom are management and administrative employees.
Approximately 35% of the Company's 138 employees in its Baldwin Graphic Products
Division in the United States are represented by the International Association
of Machinists and Aerospace Workers under a contract which expires on November
9, 1996. In Europe, employees are represented by various unions, under contracts
with indefinite terms. In Sweden, 49, 30 and 3 of the Company's 134 employees at
its Misomex AB subsidiary are represented by the Swedish Industrial Salaried
Employees' Association, the Swedish Metal Workers' Union and Civilingenior
forb., respectively. At Amal AB, 4, 37 and 23 of the Company's 60 employees are
represented by Ledarna (SALF), Lundsorganisationen, Metall and Tjanstemannene
Central Organisation, and Svenska Industritjanstemanna Forbundet, respectively.
At Acrotec AB's IVT Division, 2, 8 and 13 of the Company's 36 employees
are represented by Ledarna (SALF), Lundsorganisationen, Metall and
Tjanstemannene Central Organisation, and Svenska Industritjanstemanna Forbundet,
respectively. In Germany, at Baldwin Gegenheimer GmbH, approximately 45 of the
Company's 232 employees are represented by the IG Metall (Metalworker's Union).
The Company considers relations with its employees and with its unions to be
good.
ITEM 2.PROPERTIES
The Company's facilities are divided among its three sectors and total
approximately 766,000 square feet.
In North America, manufacturing and office space leased by the Company and
its subsidiaries total approximately 329,000 square feet of which space
approximately 8,400 square feet is sublet. An additional 52,800 square feet of
office and manufacturing space is owned by Kansa Corporation, subject to an
Industrial Revenue Bond.
In Europe, the Company has leased facilities totalling approximately 194,000
square feet comprised of office and manufacturing facilities in Germany
(approximately 133,000 square feet), Sweden (approximately 29,000 square feet),
Italy (approximately 1,300 square feet), France (approximately 1,800 square
feet), the Netherlands (approximately 600 square feet) and England
(approximately 28,000 square feet of which 1,350 square feet is sublet). In
addition, the Company owns manufacturing facilities in Sweden totalling
approximately 147,000 square feet.
6
<PAGE> 9
In Asia, the Company leases office and manufacturing facilities of
approximately 40,000 square feet in Japan and 1,100 square feet in Beijing and
office facilities aggregating approximately 2,500 square feet in Hong Kong,
Shanghai, Melbourne and Sydney.
The Company believes that its facilities are adequate to carry on its
business as currently conducted.
ITEM 3.LEGAL PROCEEDINGS
There are no legal proceedings pending to which the Company is a party or to
which any of its property is subject, other than routine litigation incidental
to the Company's business or which is covered by insurance and which would not
have a material adverse effect on the Company.
ITEM 4.SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted to a vote of security holders since November 16,
1995.
7
<PAGE> 10
PART II
ITEM 5.MARKET FOR THE REGISTRANT'S COMMON STOCK AND RELATED STOCKHOLDER MATTERS
(a) PRICE RANGE OF CLASS A COMMON STOCK
The Company's Class A Common Stock is traded on the American Stock Exchange
("AMEX") under the symbol "BLD". The following chart sets forth, for the
calendar periods indicated, the range of closing prices for the Class A Common
Stock on the AMEX, as reported by the AMEX.
<TABLE>
<CAPTION>
1994 HIGH LOW
- ---- ------ ------
<S> <C> <C>
First Quarter ........................... 5.75 4.875
Second Quarter .......................... 5.625 4.25
Third Quarter ........................... 5.875 4.25
Fourth Quarter .......................... 6.625 4.625
1995
- ----
First Quarter ........................... 5.875 4.8125
Second Quarter .......................... 6.125 5.00
Third Quarter ........................... 6.5625 5.125
Fourth Quarter .......................... 6.3125 4.750
1996
- ----
First Quarter ........................... 5.1875 3.375
Second Quarter .......................... 4.25 3.50
Third Quarter (through September 15) .... 3.75 3.00
</TABLE>
(b) CLASS B COMMON STOCK
The Company's Class B Common Stock has no established public trading market.
(c) APPROXIMATE NUMBER OF EQUITY SECURITY HOLDERS
As of August 31, 1996, the approximate number of record holders (excluding
those listed under a nominee name) of the Company's Class A and Class B Common
Stock totaled 499 and 25, respectively. The Company believes, however, that
there are in excess of 4,200 beneficial owners of its Class A Common Stock.
(d) DIVIDENDS
Declarations of dividends depend upon the earnings and financial position of
the Company and are within the discretion of the Company's Board of Directors.
No dividend in cash or property can be declared or paid on shares of Class B
Common Stock unless simultaneously therewith there is declared or paid, as the
case may be, a dividend in cash or property on shares of Class A Common Stock of
at least 105% of the dividend on shares of Class B Common Stock (see Note 9 --
Notes to Consolidated Financial Statements). See Note 7 -- Notes to Consolidated
Financial Statements and "Liquidity and Capital Resources" within "Management's
Discussion and Analysis of Financial Condition and Results of Operations" for
restrictions on dividends.
8
<PAGE> 11
ITEM 6.SELECTED FINANCIAL DATA
The Company's income statement and balance sheet data as they relate to the
years ended June 30, 1996, 1995, 1994, 1993, and 1992, have been derived from
the Company's audited financial statements (including the Consolidated Balance
Sheet of the Company at June 30, 1996 and 1995 and the related Consolidated
Statement of Income of the Company for the years ended June 30, 1996, 1995 and
1994 appearing elsewhere herein). The following information should be read in
conjunction with the aforementioned financial statements and with "Management's
Discussion and Analysis of Financial Condition and Results of Operations".
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-----------------------------------------------------------
1996 1995 1994 1993 1992
--------- -------- -------- -------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Net sales .......................... $ 259,301 $222,341 $198,055 $215,759 $ 221,474
Cost of goods sold (1) ............. 173,271 146,727 130,051 142,564 147,071
--------- -------- -------- -------- ---------
Gross profit ....................... 86,030 75,614 68,004 73,195 74,403
--------- -------- -------- -------- ---------
Selling, general and administrative
expenses (2) ..................... 52,799 45,847 42,068 42,532 41,575
Research, development and
engineering expenses ............. 21,022 17,296 15,409 16,711 16,970
Restructuring charge ............... 3,000 880 1,706
--------- -------- -------- -------- ---------
Operating income ................... 9,209 12,471 10,527 13,072 14,152
--------- -------- -------- -------- ---------
Interest expense ................... 4,032 3,436 3,694 5,850 7,167
Interest income .................... 552 577 381 285 483
Other income, net .................. 1,490 1,130 887 462 809
--------- -------- -------- -------- ---------
Income from continuing operations
before taxes ..................... 7,219 10,742 8,101 7,969 8,277
--------- -------- -------- -------- ---------
Provision for income taxes ......... 4,701 5,091 3,969 4,303 7,507
--------- -------- -------- -------- ---------
Income from continuing operations .. 2,518 5,651 4,132 3,666 770
--------- -------- -------- -------- ---------
Loss from discontinued operations .. (1,842)
Loss on disposal of discontinued
operations ....................... (5,894)
Extraordinary loss on extinguishment
of debt .......................... (1,105)
Cumulative effect of change in
accounting for income taxes ...... 1,229
--------- -------- -------- -------- ---------
Net income (loss) .................. $ 2,518 $ 5,651 $ 4,132 $ 3,790 $ (6,966)
========= ======== ======== ======== =========
</TABLE>
(1) Includes all technical service expense, a portion of which ($2,732,000 and
$2,379,000 for the years ended June 30, 1993 and 1992, respectively) was
previously classified as an item of Operating Expense.
(2) Includes amortization expense ($2,499,000 and $2,474,000 for the years ended
June 30, 1993 and 1992, respectively) for intangible assets which was
previously classified as an item of Other Income and Expense.
9
<PAGE> 12
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
----------------------------------------------------------
1996 1995 1994 1993 1992
-------- -------- -------- -------- ---------
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
Income Statement Data:
Income (loss) per share from:
Continuing operations ............. $ 0.14 $ 0.32 $ 0.23 $ 0.21 $ 0.05
Discontinued operations ........... (0.11)
Disposal of discontinued operations (0.35)
Extinguishment of debt ............ (0.06)
Cumulative effect of change in
accounting for income taxes ....... 0.07
-------- -------- -------- -------- ---------
Net income (loss) per share ....... $ 0.14 $ 0.32 $ 0.23 $ 0.22 $ (0.41)
======== ======== ======== ======== =========
Cash dividends declared per share:
Class A Common Stock .............. $ 0.012
=========
Class B Common Stock .............. $ 0.01
=========
Weighted average shares
outstanding ..................... 17,793 17,939 18,015 17,593 17,106
======== ======== ======== ======== =========
Balance Sheet Data (as of the end
of each period):
Working capital ................... $ 46,050 $ 53,575 $ 45,098 $ 34,414 $ 34,313
Total assets ...................... 217,340 209,770 187,216 188,479 206,936
Short-term debt ................... 10,196 9,348 6,033 16,257 13,828
Long-term debt .................... 33,576 29,868 32,230 25,998 36,668
Shareholders' equity .............. 97,056 98,888 88,080 82,864 85,135
</TABLE>
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
General. The Company does not consider its business to be seasonal; however,
its sales have traditionally been greater in the second six months of its fiscal
year than in the first six months of its fiscal year. The following schedule
shows the Company's net sales for such six month periods over the last five
fiscal years to reflect the comparison.
<TABLE>
<CAPTION>
FIRST SIX SECOND SIX
FISCAL YEAR MONTHS MONTHS
- ----------- ------------ ------------
<S> <C> <C>
1996.......................................... $118,651,000 $140,650,000
1995.......................................... 100,352,000 121,989,000
1994.......................................... 91,858,000 106,197,000
1993.......................................... 104,376,000 111,383,000
1992.......................................... 108,310,000 113,164,000
</TABLE>
For the year ended June 30, 1996, the first six months sales include three
months of sales from the acquired Acrotec entities amounting to $6,574,000 and
the second six months sales include six months of sales from the acquired
Acrotec entities amounting to $15,266,000.
10
<PAGE> 13
RESULTS OF OPERATIONS
The following table sets forth certain of the items (expressed as a
percentage of net sales) included in the Selected Financial Data and should be
read in connection with the Consolidated Financial Statements of the Company
including the Notes thereto, presented elsewhere in this report.
<TABLE>
<CAPTION>
YEARS ENDED JUNE 30,
-----------------------
1996 1995 1994
----- ----- -----
<S> <C> <C> <C>
Net sales......................................... 100.0% 100.0% 100.0%
Cost of goods sold................................ 66.8 66.0 65.7
----- ----- -----
Gross profit...................................... 33.2 34.0 34.3
Selling, general and administrative expenses...... 20.4 20.6 21.2
Research, development and engineering expenses.... 8.1 7.8 7.8
Restructuring charge.............................. 1.1
----- ----- -----
Operating income.................................. 3.6 5.6 5.3
----- ----- -----
Interest expense.................................. 1.6 1.6 1.9
Interest income................................... .2 .3 .2
Other income, net................................. .6 .5 .5
----- ----- -----
Income from operations before taxes............... 2.8 4.8 4.1
Provision for income taxes........................ 1.8 2.3 2.0
----- ----- -----
Net income........................................ 1.0% 2.5% 2.1%
===== ===== =====
</TABLE>
COMPANY'S FISCAL YEAR ENDED JUNE 30, 1996 VERSUS FISCAL YEAR ENDED JUNE 30, 1995
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and consolidated
financial statements.
Net Sales.Net sales for the fiscal year ended June 30, 1996 increased by
$36,960,000, or 16.6%, to $259,301,000 from $222,341,000 for the fiscal year
ended June 30, 1995. Currency rate fluctuations attributable to the Company's
overseas operations decreased net sales for the current period by $2,340,000 and
acquisitions added $20,947,000 to net sales. Product volume was the primary
reason for the $18,353,000 remainder of the increase of which $11,764,000
occurred in the Americas Sector. In terms of local currency, sales changes were
mixed within the European Sector. Sales decreased in Germany by 3.5%, increased
in England by 14.7% and increased in Sweden by 5.6%. Local currency sales in the
Company's Asia Pacific Sector increased 7.1% in Japan. In the Americas Sector,
net sales increased by 12.2% for the year due to a continued strengthening and
improvement in the U.S. printing equipment market.
Gross Profit.Gross profit for the fiscal year ended June 30, 1996 was
$86,030,000 (33.2% of net sales), as compared to $75,614,000 (34.0% of net
sales) for the fiscal year ended June 30, 1995, an increase of $10,416,000 or
13.8%. Gross profit decreased by $751,000 on fluctuations in currency rates and
increased by $8,025,000 due to acquisitions with the remainder of the change due
to volume, product mix and other factors. Gross profit was lower as a percentage
of sales when compared to the prior year due primarily to the sales of products
that contribute lower gross profits, pressure on sales prices and increased
technical service costs.
Selling, General and Administrative Expenses.Selling, general and
administrative expenses were $52,799,000 (20.4% of net sales) for the fiscal
year ended June 30, 1996, as compared to $45,847,000 (20.6% of net sales) for
the prior year, an increase of $6,952,000. Currency rate fluctuations decreased
the current year's expenses by $263,000 and acquisitions added $5,561,000.
Increased sales expenses related to volume increases, additional personnel and
trade shows were primarily responsible for the remainder
11
<PAGE> 14
of the increase. Other operating expenses, before restructuring charges (see
Note 3 -- Notes to Consolidated Financial Statements) increased by $3,726,000
over the same period of the prior year. Fluctuations in currency rates decreased
these expenses by $35,000 and acquisitions increased these expenses by
$2,609,000. The remainder of the increase in these expenses relates to increased
engineering personnel and costs associated with the development of new products,
particularly in the Company's pre-press business.
Interest and Other.Interest expense for the fiscal year ended June 30, 1996
was $4,032,000, as compared to $3,436,000 for the fiscal year ended June 30,
1995. Interest expense increased by $357,000 due to acquisitions with the
remainder due primarily to an increase in the amount of outstanding indebtedness
related to the purchase of a manufacturing facility. Foreign currency rate
fluctuations increased interest expense by $16,000. Interest income was $552,000
and $577,000 for the fiscal years ended June 30, 1996 and June 30, 1995,
respectively. Currency rate fluctuations decreased interest income by $74,000
and acquisitions added $142,000 to interest income for the current period. Other
income was $1,490,000 and $1,130,000 for the fiscal years ended June 30, 1996
and June 30, 1995, respectively, and includes foreign currency transaction gains
of $594,000 and $152,000 for the current and prior period, respectively. The
remaining net decrease in other income is primarily due to increased royalty
income offset by currency rate fluctuations which decreased other income by
$200,000 and acquisitions which decreased other income by $92,000 during the
current period.
Income Taxes.The Company's effective tax rate on income before restructuring
charges (see Note 8 -- Notes to Consolidated Statements) was 46.0% for the
fiscal year ended June 30, 1996 as compared to 47.4% for the fiscal year ended
June 30, 1995. Currency rate fluctuations decreased the provision for income
taxes by $339,000 during the current period. The effective rate reflects the
impact of foreign source income which is taxed at substantially higher rates
than domestic income. No tax benefit was recorded on the $3,000,000 charge for
restructuring due to the Company's tax loss carryforward position in Germany.
The decrease from the prior year's effective rate is primarily caused by an
increase in income generated by domestic operations which is taxed at rates
which are generally lower than the rates applied to foreign income (see Note 8
- -- Notes to Consolidated Financial Statements).
Net Income.Net income for the fiscal year ended June 30, 1996 decreased by
$3,133,000 or 55.4% to $2,518,000 from $5,651,000 for the fiscal year ended June
30, 1995. Restructuring charges decreased net income by $3,000,000 and currency
rate fluctuations decreased net income by $398,000 for the current period. Net
income per share was $0.14 and $0.32 for the fiscal years ended June 30, 1996
and 1995, respectively. Net income per share was decreased by $(0.17) for
restructuring charges and the results of the acquired Acrotec operations
decreased net income per share by $(0.02). Weighted average equivalent shares
outstanding during the fiscal years ended June 30, 1996 and June 30, 1995 were
17,792,938 and 17,939,421, respectively.
COMPANY'S FISCAL YEAR ENDED JUNE 30, 1995 VERSUS FISCAL YEAR ENDED JUNE 30, 1994
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and consolidated
financial statements.
Net Sales.Net sales for the fiscal year ended June 30, 1995 increased by
$24,286,000, or 12.3%, to $222,341,000 from $198,055,000 for the fiscal year
ended June 30, 1994. Currency rate fluctuations attributable to the Company's
overseas operations accounted for an increase of $14,073,000 in net sales for
the current year. Product volume was the primary reason for the remainder of the
increase. In terms of local currency, sales changes were mixed within the
European Sector. Sales increased in Germany by 2.2%, increased in the United
Kingdom by 7.9% and decreased in Sweden by 2.3%. In the Company's
12
<PAGE> 15
Asia Pacific Sector, local currency sales decreased 1.7% in Japan and 25.4% in
Australia but increased by 33% in Hong Kong and 25.9% in China. In the Americas
Sector, net sales increased by 11.8% for the year due to a continued
strengthening and improvement in the U.S. printing equipment market.
Gross Profit.Gross profit for the fiscal year ended June 30, 1995 was
$75,614,000 (34.0% of net sales), as compared to $68,004,000 (34.3% of net
sales) for the fiscal year ended June 30, 1994, an increase of $7,610,000 or
11.2%. Currency rate fluctuations increased gross profit by $4,000,000 and the
primary reason for the remainder of the increase in gross profit was due to
increased volume.
Selling, General and Administrative Expenses.Selling, general and
administrative expenses were $45,847,000 (20.6% of net sales) for the fiscal
year ended June 30, 1995, as compared to $42,068,000 (21.2% of net sales) for
the prior year, an increase of $3,779,000. Currency rate fluctuations increased
the current year's expenses by $2,283,000. The remainder of the increase was due
to marketing expenses related to increased sales volumes and trade show activity
offset by a reduction in bad debt expense.
Interest and Other.Interest expense for the fiscal year ended June 30, 1995
was $3,436,000, as compared to $3,694,000 for the fiscal year ended June 30,
1994. Interest expense decreased primarily as a result of a reduction in the
amount of outstanding indebtedness. Foreign currency exchange effects increased
interest expense by $408,000. Interest income was $577,000 and $381,000 for the
fiscal years ended June 30, 1995 and June 30, 1994, respectively. Other income
was $1,130,000 and $887,000 for the fiscal years ended June 30, 1995 and June
30, 1994, respectively, with the increase primarily due to increased royalty
income. Foreign currency exchange effects decreased other income by $29,000
during the current period.
Income Taxes.The Company's effective tax rate was 47.4% for the fiscal year
ended June 30, 1995 as compared to 49.0% for the fiscal year ended June 30,
1994. The effective rate reflects the impact of foreign source income which is
taxed at substantially higher rates than domestic income. The decrease from the
prior year's effective rate is primarily caused by an increase in income
generated by domestic operations which is taxed at rates which are generally
lower than the rates applied to foreign income (see Note 8 -- Notes to
Consolidated Financial Statements). Foreign currency exchange effects increased
the provision for income taxes by $270,000 during the current period.
Net Income.Net income for the fiscal year ended June 30, 1995 increased by
$1,519,000 or 36.8% to $5,651,000 from $4,132,000 for the fiscal year ended June
30, 1994. Currency exchange effects increased reported net income by $148,000
for the current period. Net income per share was $0.32 and $0.23 for the fiscal
years ended June 30, 1995 and 1994, respectively. Weighted average equivalent
shares outstanding during the fiscal years ended June 30, 1995 and June 30, 1994
were 17,939,421 and 18,015,295, respectively.
IMPACT OF INFLATION
The Company's results are affected by the impact of inflation on
manufacturing and operating costs. Historically, the Company has used selling
price adjustments, cost containment programs and improved operating efficiencies
to offset the otherwise negative impact of inflation on its operations.
LIQUIDITY AND CAPITAL RESOURCES
The Company's long-term debt includes $25,000,000 of 8.17% senior notes (the
"Senior Notes") due October 29, 2000. The Company also has a three-year
$20,000,000 Revolving Credit Agreement (the "Revolver") with NationsBank of
North Carolina, National Association, as Agent, which matures in December, 1998.
The Senior Notes and the Revolver require the Company to maintain certain
financial covenants and have certain restrictions regarding the payment of
dividends, limiting them throughout
13
<PAGE> 16
the terms of the Senior Notes and the Revolver to $3,000,000 plus 50% of the
Company's net income after June 30, 1993. In addition, the Company was required
to pledge certain of the shares of its domestic subsidiaries as collateral for
both the Senior Notes and the Revolver.
Both the Senior Notes and the Revolver require the Company to maintain a
ratio of current assets to current liabilities (as those terms are defined in
the agreements) of not less than 1.4 to 1. At June 30, 1996, this ratio was 1.59
to 1.
As reflected in the Consolidated Statement of Cash Flows, the net cash used
by investing activities for the year ended June 30, 1996 was $12,086,000 as
compared to $1,507,000 for the year ended June 30, 1995. This increase was
primarily due to the acquisition of Acrotec AB and its subsidiaries, net of
acquired cash and the purchase of a previously leased Swedish manufacturing
facility for SEK 28,840,000 ($4,364,000). The net cash used by financing
activities was $4,911,000 for the year ended June 30, 1996 as compared to
$2,797,000 for the year ended June 30, 1995 primarily due to the increased
purchase of treasury stock during the current period.
The Company's working capital decreased by $7,525,000 or 14.0% from
$53,575,000 at June 30, 1995 to $46,050,000 at June 30, 1996. Currency rate
fluctuations decreased working capital by $3,792,000 and acquisitions, net of
cash acquired, added $4,912,000 to working capital for the current period. Cash
used to finance the Acrotec acquisition and to purchase the Swedish
manufacturing facility were primarily responsible for the remainder of the
change in working capital.
The Company maintains relationships with foreign and domestic banks which
have extended credit facilities to the Company totaling $39,698,000, including
amounts available under the Revolver. As of June 30, 1996, the Company had
outstanding $11,571,000 under these lines of credit, of which $1,867,000 is
classified as long-term debt. Total debt levels as reported on the balance sheet
at June 30, 1996 are $1,279,000 lower then they would have been if June 30, 1995
exchange rates had been used.
Net capital expenditures made to meet the normal business needs of the
Company for the fiscal years ended June 30, 1996 and June 30, 1995, including
commitments for capital lease payments, were $2,177,000 and $1,863,000,
respectively.
The Company believes its cash flow from operations and available bank lines
of credit are sufficient to finance its working capital and other capital
requirements for the near and long-term future.
14
<PAGE> 17
ITEM 8.FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
Report of Independent Accountants..................................... 17
Consolidated Balance Sheet at June 30, 1996 and June 30, 1995......... 18
Consolidated Statement of Income for the years ended June 30, 1996,
June 30, 1995 and June 30, 1994..................................... 20
Consolidated Statement of Changes in Shareholders' Equity for the
years ended June 30, 1996, June 30, 1995 and June 30, 1994.......... 21
Consolidated Statement of Cash Flows for the years ended June 30,
1996, June 30, 1995 and June 30, 1994............................... 22
Notes to Consolidated Financial Statements............................ 24
15
<PAGE> 18
This page intentionally left blank
16
<PAGE> 19
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors and Shareholders of
BALDWIN TECHNOLOGY COMPANY, INC.
In our opinion, the accompanying consolidated balance sheet and the related
consolidated statements of income, of changes in shareholders' equity and of
cash flows present fairly, in all material respects, the financial position of
Baldwin Technology Company, Inc. and its subsidiaries at June 30, 1996 and 1995,
and the results of their operations and their cash flows for each of the three
years in the period ended June 30, 1996, in conformity with generally accepted
accounting principles. These financial statements are the responsibility of the
Company's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with generally accepted auditing standards which
require that we plan and perform the audit to obtain reasonable assurance about
whether the financial statements are free of material misstatement. An audit
includes examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the accounting principles
used and significant estimates made by management, and evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for the opinion expressed above.
PRICE WATERHOUSE LLP
Stamford, Connecticut
August 9, 1996
17
<PAGE> 20
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS)
ASSETS
<TABLE>
<CAPTION>
June 30, June 30,
1996 1995
-------- --------
<S> <C> <C>
CURRENT ASSETS:
Cash ................................ $ 9,781 $ 12,719
Short-term securities ............... 13 470
Accounts receivable trade, net of
allowance for doubtful accounts of
$2,503 ($2,897 at June 30, 1995) .. 53,894 46,478
Notes receivable, trade ............. 9,827 16,916
Inventories ......................... 42,049 39,824
Prepaid expenses and other .......... 8,724 8,496
-------- --------
Total current assets ............ 124,288 124,903
-------- --------
MARKETABLE SECURITIES:
(Cost $742 at June 30, 1996 and
$971 at June 30, 1995) ......... 984 971
--------- --------
PROPERTY, PLANT AND EQUIPMENT, at cost:
Land and buildings .................. 7,995 2,348
Machinery and equipment ............. 10,176 8,941
Furniture and fixtures .............. 5,746 5,855
Leasehold improvements .............. 1,280 1,734
Capital leases ...................... 7,192 7,837
-------- --------
32,389 26,715
Less: Accumulated depreciation and
amortization ...................... 19,075 19,538
-------- --------
Net property, plant and equipment ... 13,314 7,177
-------- --------
PATENTS, TRADEMARKS AND ENGINEERING
DRAWINGS, at cost, less
accumulated amortization of $3,957
($3,243 at June 30, 1995) ....... 5,414 5,355
GOODWILL, less accumulated
amortization of $12,218 ($9,734
at June 30, 1995) .................. 64,381 61,477
OTHER ASSETS .......................... 8,959 9,887
-------- --------
TOTAL ASSETS .......................... $217,340 $209,770
======== ========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
18
<PAGE> 21
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED BALANCE SHEET
(IN THOUSANDS, EXCEPT SHARE DATA)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, June 30,
1996 1995
-------- --------
CURRENT LIABILITIES
Loans payable........................................ $ 9,704 $ 9,188
Current portion of long-term debt.................... 492 160
Accounts payable, trade.............................. 17,500 14,895
Notes payable, trade................................. 10,793 12,637
Accrued salaries, commissions, bonus and
profit-sharing..................................... 9,769 9,680
Customer deposits.................................... 6,686 5,410
Accrued and withheld taxes........................... 2,780 2,321
Income taxes payable................................. 5,557 4,389
Other accounts payable and accrued liabilities....... 14,957 12,648
-------- --------
Total current liabilities...................... 78,238 71,328
-------- --------
LONG-TERM LIABILITIES:
Long-term debt....................................... 33,576 29,868
Other long-term liabilities.......................... 8,470 9,686
-------- --------
Total long-term liabilities.................... 42,046 39,554
-------- --------
Total liabilities.............................. 120,284 110,882
-------- --------
SHAREHOLDERS' EQUITY:
Class A Common Stock, $.01 par, 45,000,000 shares
authorized, 16,391,683 shares issued at June 30,
1996 (16,011,586 at June 30, 1995)................. 164 160
Class B Common Stock, $.01 par, 4,500,000 shares
authorized, 2,000,000 shares issued................ 20 20
Capital contributed in excess of par value........... 57,185 54,881
Retained earnings.................................... 44,149 41,631
Cumulative translation adjustment.................... 49 4,174
Unrealized gain on investments net of $124,000 of
deferred taxes (none at June 30, 1995)............. 118
Less: Treasury stock, at cost:
Class A -- 818,156 shares (174,256 at June 30,
1995)
Class B -- 164,117 shares (164,117 at June 30,
1995)............................................ (4,629) (1,978)
-------- --------
COMMITMENTS............................................
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............. $217,340 $209,770
======== ========
The accompanying notes to consolidated financial statements
are an integral part of these statements.
19
<PAGE> 22
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENT OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
For the years ended June 30,
----------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Net sales.................................................. $259,301 $222,341 $198,055
Cost of goods sold.......................................... 173,271 146,727 130,051
-------- -------- --------
Gross profit............................................... 86,030 75,614 68,004
-------- -------- --------
Operating expenses:
General and administrative............................... 27,428 24,614 23,595
Selling.................................................. 25,371 21,233 18,473
Engineering.............................................. 13,896 12,055 9,949
Research and development................................. 7,126 5,241 5,460
Restructuring charge..................................... 3,000
-------- -------- --------
76,821 63,143 57,477
-------- -------- --------
Operating income........................................... 9,209 12,471 10,527
-------- -------- --------
Other (income) expense:
Interest expense......................................... 4,032 3,436 3,694
Interest (income)........................................ (552) (577) (381)
Other (income), net...................................... (1,490) (1,130) (887)
-------- -------- --------
1,990 1,729 2,426
-------- -------- --------
Income from operations before taxes........................ 7,219 10,742 8,101
-------- -------- --------
Provision for income taxes:
Domestic:
Federal................................................ 288 1,456 1,211
State.................................................. 772 570 637
Foreign................................................ 3,641 3,065 2,121
-------- -------- --------
Total income taxes................................... 4,701 5,091 3,969
-------- -------- --------
Net income................................................. $ 2,518 $ 5,651 $ 4,132
======== ======== ========
Net income per share....................................... $ 0.14 $ 0.32 $ 0.23
======== ======== ========
Weighted average shares outstanding........................ 17,793 17,939 18,015
======== ======== ========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
20
<PAGE> 23
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(IN THOUSANDS, EXCEPT SHARES)
<TABLE>
<CAPTION>
Class A Class B Capital
Common Stock Common Stock in Excess
-------------------------- ------------------------ of Par
Shares Amount Shares Amount Value
---------- ------ ------ ------ ---------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1993 16,000,707 $160 2,000,000 $20 $54,795
Year ended June 30, 1994:
Net income for the year
Stock options exercised 9,999 42
Purchase of treasury stock
Translation adjustment
Transaction gain on hedge of
net investment in foreign
subsidiaries
---------- ---- --------- --- -------
Balance at June 30, 1994 16,010,706 160 2,000,000 20 54,837
Year ended June 30, 1995:
Net income for the year
Stock options exercised 800 4
Purchase of treasury stock
Acquisition of treasury stock
in exchange for cancellation
of note receivable from
former officer
Issuance of common stock from
treasury to officer under
incentive compensation agreement 40
Translation adjustment
---------- ---- --------- --- -------
Balance at June 30, 1995 16,011,586 160 2,000,000 20 54,881
Year Ended June 30, 1996:
Net income for the year
Stock issued in conjunction with
the acquisition of Acrotec 350,000 4 2,184
Stock options exercised 30,097 120
Purchase of treasury stock
Unrealized gain on available
for sale securities, net of tax
Translation and adjustment
---------- ---- --------- --- -------
Balance at June 30, 1996 16,391,683 $164 2,000,000 $20 $57,185
========== ==== ========= === =======
<CAPTION>
Treasury
Cumulative Unrealized Stock
Retained Translation Gain on -----------------------
Earnings Adjustments Investments Shares Amount
---------- ----------- ----------- -------- --------
<S> <C> <C> <C> <C> <C>
Balance at June 30, 1993 $31,848 $(3,792) (27,056) $ (167)
Year ended June 30, 1994:
Net income for the year 4,132
Stock options exercised
Purchase of treasury stock (129,700) (850)
Translation adjustment 1,880
Transaction gain on hedge of
net investment in foreign
subsidiaries 12
------- ------- ---- -------- -------
Balance at June 30, 1994 35,980 (1,900) (156,756) (1,017)
Year ended June 30, 1995:
Net income for the year 5,651
Stock options exercised
Purchase of treasury stock (196,617) (965)
Acquisition of treasury stock
in exchange for cancellation
of note receivable from
former officer (25,000) (171)
Issuance of common stock from
treasury to officer under
incentive compensation agreement 40,000 175
Translation adjustment 6,074
------- ------- ---- -------- -------
Balance at June 30, 1995 41,631 4,174 (338,373) (1,978)
Year Ended June 30, 1996:
Net income for the year 2,518
Stock issued in conjunction with
the acquisition of Acrotec
Stock options exercised
Purchase of treasury stock (643,900) (2,651)
Unrealized gain on available
for sale securities, net of tax $118
Translation adjustment (4,125)
------- ------- ---- -------- -------
Balance at June 30, 1996 $44,149 $ 49 $118 (982,273) $(4,629)
======= ======= ==== ======== =======
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
21
<PAGE> 24
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
For the years ended June 30,
---------------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Cash flows from operating activities:
Income from operations .......................................... $ 2,518 $ 5,651 $ 4,132
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation and amortization ............................... 4,801 4,504 4,729
Accrued retirement pay ...................................... (289) 149 152
Provision for losses on accounts receivable ................. 95 190 1,589
Restructuring charge ........................................ 3,000
Changes in assets and liabilities:
Accounts and notes receivable ................................. 904 (14,003) 3,741
Inventories ................................................... 643 (4,586) 1,639
Prepaid expenses and other .................................... 568 (262) (3,704)
Customer deposits ............................................. (103) 1,029 612
Accrued compensation .......................................... 176 1,471 150
Accounts and notes payable, trade ............................. 2,803 2,357 (4,612)
Income taxes payable .......................................... 1,824 (51) 1,557
Accrued and withheld taxes .................................... 545 394 (163)
Other accounts payable and accrued liabilities ................ (2,520) 793 (1,675)
Interest payable .............................................. 18 (31) 353
-------- -------- --------
Net cash provided (used) by operating activities .......... 15,283 (2,395) 8,500
-------- -------- --------
Cash flows from investing activities:
Acquisition of subsidiaries, net of cash acquired ............ (5,137)
Additions or property, net .................................... (5,924) (1,331) (1,009)
Additions of patents, trademarks and drawings, net ............ (617) (532) (810)
Other assets .................................................. (408) 356 (2,644)
-------- -------- --------
Net cash used by investing activities ..................... (12,086) (1,507) (4,463)
-------- -------- --------
Cash flows from financing activities:
Long-term borrowings .......................................... 11,101 2,000 34,722
Short-term borrowings ......................................... 8,665 4,390 11,807
Long-term debt repayment ...................................... (9,970) (4,863) (35,935)
Short-term debt repayment ..................................... (10,062) (2,296) (15,301)
Stock options exercised ....................................... 120 4 42
Principal payments under capital lease obligations ............ (427) (524) (739)
Other long-term liabilities ................................... (1,687) (543) 286
Treasury stock purchased ...................................... (2,651) (965) (850)
-------- -------- --------
Net cash used by financing activities ..................... (4,911) (2,797) (5,868)
-------- -------- --------
Effect of exchange rate changes ............................... (1,681) 1,354 689
-------- -------- --------
Net decrease in cash and cash equivalents ................. (3,395) (5,345) (1,142)
Cash and cash equivalents at beginning of year .................. 13,189 18,534 19,676
-------- -------- --------
Cash and cash equivalents at end of year ........................ $ 9,794 $ 13,189 $ 18,534
======== ======== ========
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these statements.
22
<PAGE> 25
BALDWIN TECHNOLOGY COMPANY, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
----------------------------
1996 1995 1994
------ ------ ------
(IN THOUSANDS)
<S> <C> <C> <C>
Cash paid during the period for:
Interest ................................. $4,014 $3,467 $3,356
Income taxes ............................. $5,869 $5,076 $3,471
</TABLE>
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES;
Fiscal year ended June 30, 1996. The Company acquired the capital stock
of Acrotec AB and its subsidiaries (Acrotec) in a purchase transaction for
consideration of $7,848,000 ($5,660,000 in cash and 350,000 shares of the
Company's Class A Common Stock). The fair value of the acquired assets
excluding goodwill was $16,915,000 and the liabilities assumed were
$12,539,000. The excess of the purchase price over the net assets acquired of
$3,472,000 was recorded as goodwill.
A restructuring charge was expensed during the second quarter of the
fiscal year in a non-cash transaction of $3,000,000. The change in the related
liability is recorded as a change in "Other accounts payable and accrued
liabilities" for cash flow purposes. (See Note 3 -- Notes to Consolidated
Financial Statements.)
Other assets includes $267,000 of previously capitalized patent costs
unrealized as royalties at June 30, 1996.
The Company entered into capital lease agreements of $81,000 for the
year ended June 30, 1996.
Fiscal year ended June 30, 1995. The Company successfully defended a
patent which, under the terms of the patent purchase agreement with the
patent's inventor, entitles the Company to indemnification of a portion of the
legal fees incurred to defend the patent infringement. Accordingly, the Company
reclassified from patents to long term assets $693,000 of legal fees. These
previously capitalized patent costs will be realized as royalties become
payable to the patent's inventor. At June 30, 1995, other assets included
$548,000 of such costs.
In accordance with the terms of a note receivable from a former
officer, the Company canceled the note in exchange for the collateral which
consisted of 25,000 shares of the Company's Class B Common Stock. The balance
of the note together with interest receivable was $171,000.
Under an incentive compensation agreement with an officer, the Company
issued from treasury 40,000 shares of Class A Common Stock for which the
accrued compensation of $235,000 had been expensed at June 30, 1994.
The Company entered into capital lease agreements of $129,000 during
the year ended June 30, 1995.
Fiscal year ended June 30, 1994. The Company established deferred tax
assets during the current year in a non-cash transaction of $1,200,000.
The Company entered into capital lease agreements of $169,000 for the
year ended June 30, 1994.
DISCLOSURE OF ACCOUNTING POLICY:
For purposes of the statement of cash flows, the Company considers all
highly liquid instruments with original maturities of three months or less to
be cash equivalents.
The accompanying notes to consolidated financial statements
are an integral part of these statements.
23
<PAGE> 26
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 -- ORGANIZATION OF BUSINESS:
Baldwin Technology Company, Inc. and its subsidiaries ("Baldwin" or the
"Company") are engaged primarily in the development, manufacture and sale of
material handling, accessory, control and pre-press equipment for the printing
industry.
NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The following are the significant accounting policies followed by the
Company:
Consolidation. The consolidated financial statements include the accounts of
Baldwin and its wholly owned subsidiaries. All significant intercompany
transactions have been eliminated in consolidation.
Translation of Foreign Currencies. All assets and liabilities of foreign
subsidiaries are translated into dollars at year-end (current) exchange rates
and components of revenue and expense are translated at average rates for the
year. The resulting translation adjustments are included in shareholders'
equity. Gains and losses on foreign currency exchange transactions are reflected
in the statement of income. Net transaction gains, credited to income for the
years ended June 30, 1996, 1995 and 1994 were $594,000, $152,000 and $48,000,
respectively.
Inventories. Inventories are stated at the lower of cost or market. Cost is
determined on the last-in, first-out (LIFO) method for domestic inventories and
the first-in, first-out (FIFO) method for foreign inventories. If the FIFO
method had been used for all inventories, the total stated amount for
inventories would have been $778,000 and $620,000 greater as of June 30, 1996
and 1995, respectively.
Plant and Equipment. The Company depreciates its assets over their estimated
useful lives. Plant and equipment additions are depreciated using primarily the
straight-line method. Repair and maintenance expenditures are expensed as
incurred.
Patent, Trademarks and Engineering Drawings. The cost of acquired patents,
trademarks and engineering drawings are being amortized on a straight-line basis
over the estimated useful lives of the related assets.
Goodwill. Goodwill represents the excess of purchase price over the fair
market value of net assets acquired and is being amortized over 40 years on a
straight-line basis. Goodwill is measured for possible impairment, as of each
balance sheet date, based upon undiscounted future cash flows from the related
operations. Should such undiscounted future cash flows be less than the carrying
value, a charge to operations for the shortfall would be provided. Goodwill
increased $1,111,000 in fiscal 1996 (increased $3,135,000 in fiscal 1995) due to
the impact of foreign exchange fluctuations, primarily on the portion of
goodwill related to the European operations which is predominately denominated
in Swedish Krona.
Deferred Loan Origination Costs. At June 30, 1996, these costs were
$1,794,000 less $1,160,000 of accumulated amortization ($2,029,000 less
$1,076,000 of accumulated amortization at June 30, 1995) and were included in
"Other Assets".
Net Income Per Share. Net income per share is based on the weighted average
number of common and common equivalent shares outstanding during the period.
Common equivalent shares outstanding for the years ended June 30, 1996, 1995 and
1994 were 73,257, 125,370 and 83,770, respectively.
24
<PAGE> 27
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Use of Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.
Investments. The Company adopted Statement of Financial Accounting Standards
No. 115, "Accounting for Certain Investments in Debt and Equity Securities" for
the year ended June 30, 1995. The effect of adoption of this standard was
immaterial.
Long-lived Assets. The Company intends to adopt Statement of Financial
Accounting Standards No. 121, "Accounting for the Impairment of Long-Lived
Assets and Long-Lived Assets to be Disposed of" for the year ended June 30,
1997. The effect of adoption of this standard is not anticipated to have a
material impact on the Company's financial statements.
Stock Options. The Company intends to adopt Statement of Financial
Accounting Standards No. 123, "Accounting for Stock-Based Compensation" for the
year ended June 30, 1997 and will elect the disclosure method of accounting for
stock-based compensation.
NOTE 3 -- RESTRUCTURING CHARGE:
Historically, the Company has used cost containment and reduction programs
to offset unfavorable changes in business activity due to the economy. A
restructuring reserve was charged to income for the quarter ended December 31,
1995 in the amount of $3,000,000. The reserve was established in order to accrue
the costs associated with a planned workforce rationalization of the Company's
German operations as well as to accrue for dealer claims associated with changes
made to the European dealer network and distribution system. At June 30, 1996,
payments of $448,000 had been made for severance against the restructuring
reserve and the remaining reserve of $2,552,000 was classified as a liability in
"Other accrued" liabilities. At June 30, 1996, a previously recorded charge for
restructuring in the amount of $263,000, relating to an excess facility sublease
subsidy, is classified as a liability in "Other accrued" and "Other long-term"
liabilities.
NOTE 4 -- BUSINESS SEGMENT INFORMATION:
The Company operates primarily in the printing industry. The Company,
through its subsidiaries, operates in three geographic sectors: the Americas,
Europe and Asia Pacific. For the year ended June 30, 1995, the Company adopted a
revised allocation process that provides that corporate general and
administrative costs and assets are reflected as corporate expenses and assets
unless such costs or assets are associated with a business segment. The effects
of the above revised allocation methodology was to decrease previously reported
segment operating profit and general corporate expenses by $1,337,000 for the
year ended June 30, 1994.
25
<PAGE> 28
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
A summary of the results by geographic sector is as follows (in thousands):
<TABLE>
<CAPTION>
Adjustments
The Asia and
Americas Europe Pacific Eliminations Consolidated
--------- --------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED JUNE 30, 1996
Sales to unaffiliated
customers .............. $ 105,521 $ 89,725 $63,861 $ 194 $259,301
Transfers between
geographic areas ....... 4,131 11,456 1,958 (17,545) 0
--------- --------- ------- -------- --------
Total revenue ........ $ 109,652 $ 101,181 $65,819 $(17,351) $259,301
========= ========= ======= ======== ========
Operating profit ......... $ 9,722 $ (3,852) $ 7,783 $ (206) $ 13,447
========= ========= ======= ========
General corporate
expenses ............... (2,748)
Interest expense, net .... (3,480)
--------
Income from operations
before taxes ........... $ 7,219
========
Identifiable assets ...... $ 71,401 $ 97,738 $43,438 0 $212,577
========= ========= ======= ========
Corporate assets ......... 4,763
--------
Total assets ......... $217,340
========
Total liabilities .... $ 34,213 $ 59,473 $26,598 0 $120,284
========= ========= ======= ======== ========
YEAR ENDED JUNE 30, 1995
Sales to unaffiliated
customers .............. $ 93,747 $ 66,248 $62,441 $ (95) $222,341
Transfers between
geographic areas ....... 4,419 9,338 224 (13,981) 0
--------- --------- ------- -------- --------
Total revenue ........ $ 98,166 $ 75,586 $62,665 $(14,076) $222,341
========= ========= ======= ======== ========
Operating profit ......... $ 8,337 $ 997 $ 7,187 $ (132) $ 16,389
========= ========= ======= ========
General corporate
expenses ............... (2,788)
Interest expense, net .... (2,859)
--------
Income from operations
before taxes ........... $ 10,742
========
Identifiable assets ...... $ 73,217 $ 76,420 $54,874 0 $204,511
========= ========= ======= ========
Corporate assets ......... 5,259
--------
Total assets ......... $209,770
========
Total liabilities .... $ 35,884 $ 46,575 $28,423 0 $110,882
========= ========= ======= ======== ========
</TABLE>
26
<PAGE> 29
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
<TABLE>
<CAPTION>
Adjustments
The Asia and
Americas Europe Pacific Eliminations Consolidated
--------- ------- ------- ------------ ------------
<S> <C> <C> <C> <C> <C>
YEAR ENDED JUNE 30, 1994
Sales to unaffiliated
customers ................. $ 84,113 $58,456 $55,486 $ 198,055
Transfers between
geographic areas .......... 3,381 8,938 1,917 $ (14,236) 0
--------- ------- ------- --------- --------
Total revenue ........... $ 87,494 $67,394 $57,403 $ (14,236) $198,055
========= ======= ======= ========= ========
Operating profit ............ $ 6,206 $ 2,692 $ 5,282 $ 194 $ 14,374
========= ======= ======= =========
General corporate expenses ... (2,960)
Interest expense, net ....... (3,313)
--------
Income from operations
before taxes .............. $ 8,101
========
Identifiable assets ......... $ 69,610 $71,634 $40,474 0 $181,718
========= ======= ======= =========
Corporate assets ............ 5,498
--------
Total assets ............ $187,216
========
Total liabilities ....... $ 35,586 $40,112 $23,438 0 $ 99,136
========= ======= ======= ========= ========
</TABLE>
No customer accounted for 10% or more of the Company's net sales in the
fiscal years ended June 30, 1996, 1995 and 1994.
NOTE 5 -- INVENTORIES:
Inventories consist of the following:
<TABLE>
<CAPTION>
JUNE 30, 1996
---------------------------------------------------
DOMESTIC FOREIGN TOTAL
----------- ----------- -----------
<S> <C> <C> <C>
Raw materials ...... $ 8,713,000 $10,730,000 $19,443,000
In process ......... 3,183,000 11,053,000 14,236,000
Finished goods ..... 6,097,000 2,273,000 8,370,000
----------- ----------- -----------
$17,993,000 $24,056,000 $42,049,000
=========== =========== ===========
</TABLE>
<TABLE>
<CAPTION>
JUNE 30, 1995
---------------------------------------------------
DOMESTIC FOREIGN TOTAL
----------- ----------- -----------
<S> <C> <C> <C>
Raw materials ...... $ 8,880,000 $ 9,017,000 $17,897,000
In process ......... 2,839,000 7,763,000 10,602,000
Finished goods ..... 6,419,000 4,906,000 11,325,000
----------- ----------- -----------
$18,138,000 $21,686,000 $39,824,000
=========== =========== ===========
</TABLE>
Foreign inventories decreased $1,021,000 (increased $2,299,000 in 1995) due
to translation rates in effect at June 30, 1996 when compared to rates at June
30, 1995.
27
<PAGE> 30
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 6 -- LOANS PAYABLE:
<TABLE>
<CAPTION>
SHORT-TERM INDEBTEDNESS AT JUNE 30, 1996: RATE AMOUNT
- ---------------------------------- --------------- ----------
<S> <C> <C>
Foreign subsidiaries........................... 5.03% (average) $9,704,000
==========
</TABLE>
<TABLE>
<CAPTION>
SHORT-TERM INDEBTEDNESS AT JUNE 30, 1995: RATE AMOUNT
- ---------------------------------- --------------- ----------
<S> <C> <C>
Foreign subsidiary............................. 6.78% (average) $9,188,000
==========
</TABLE>
The maximum amount of loans payable to banks outstanding during the year
ended June 30, 1996 was $12,054,000 ($10,746,000 in 1995). Average rates are
weighted by month and reflect the monthly amount of short-term borrowings in use
and the respective rates of interest therein. Bank loans decreased by $776,000
(increased by $1,203,000 in 1995), due to translation rates in effect at June
30, 1996 when compared to rates at June 30, 1995.
NOTE 7 -- LONG-TERM DEBT:
<TABLE>
<CAPTION>
JUNE 30, 1996 JUNE 30, 1995
----------------------------- -----------------------------
CURRENT LONG-TERM CURRENT LONG-TERM
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Notes payable in equal annual
installments from October, 1997
through October, 2000, interest
rates 8.17% ......................... $25,000,000 $25,000,000
Note payable December, 1998 interest
rate (1.25% over LIBOR) 6.75% ....... 1,750,000 750,000
Note payable by foreign subsidiary
March, 1999, interest rate 3.8% ..... 2,715,000 3,503,000
Note payable by foreign subsidiary
August, 2004, interest rate 6.4% .... $ 301,000 2,165,000
Note payable by foreign subsidiary
through 2002, interest rate 7.7% .... 1,353,000
Industrial revenue bond payable in
annual installments through
October, 1998, interest rate 9% ..... 118,000 150,000 $ 112,000 268,000
Notes payable by foreign subsidiary
through 2002, interest rates 6.7%
9.9% and 10.25% ..................... 52,000 304,000 48,000 347,000
Notes payable by foreign subsidiary
through May, 1999, interest
rates 5.5% and 6.5% ................. 99,000
Note payable by foreign subsidiary
August, 2000, interest rate 8.25% ... 21,000 40,000
----------- ----------- ----------- -----------
$ 492,000 33,576,000 $ 160,000 29,868,000
=========== =========== =========== ===========
</TABLE>
Notes payable, denominated in currencies other than the U.S. dollar,
decreased by $503,000 (increased by $518,000 in 1995), due to translation rates
in effect at June 30, 1996 when compared to rates at June 30, 1995.
28
<PAGE> 31
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The foreign note due August, 2004, with an interest rate of 6.4%, and the
foreign note due through 2002, with an interest rate of 7.7%, and the
industrial revenue bond are collateralized by buildings and specific equipment
as outlined in the indenture relating thereto. Approximately $516,000 of the
loans included above are collateralized by assets of foreign subsidiaries of the
Company. The notes payable from October, 1997 through October, 2000 (the "Senior
Notes") and note payable December, 1998 (the "Revolver", a $20,000,000 credit
facility) are collateralized by a pledge of the capital stock of the Company's
domestic subsidiaries. The Senior Notes and the Revolver require the Company to
maintain certain financial covenants and have certain restrictions regarding the
payments of dividends, limiting them to $3,000,000 plus 50% of the Company's net
income after June 30, 1993. In addition, both the Senior Notes and the Revolver
require the Company to maintain a ratio of current assets to current liabilities
(as these terms are defined in the agreements) of not less than 1.4 to 1. At
June 30, 1996, this ratio was 1.59 to 1.
Maturities of long-term debt in each fiscal year succeeding June 30, 1996
are as follows:
<TABLE>
<CAPTION>
Fiscal Year ending June 30,
- ---------------------------
<S> <C>
1997............................................................ $ 492,000
1998............................................................ 6,799,000
1999............................................................ 11,140,000
2000............................................................ 6,594,000
2001............................................................ 6,591,000
2002 and thereafter............................................. 2,452,000
-----------
$34,068,000
===========
</TABLE>
At June 30, 1996, the Company had available lines of credit of $39,698,000
upon which $11,571,000 had been drawn and of which $1,867,000 is included in
long-term debt. Only the Revolver has associated commitment fees. The commitment
fees, which are calculated quarterly, are equal to between one-quarter and
one-half of one percent per annum of the unused portion of the Revolver.
Commitment fees for the years ended June 30, 1996 and 1995 and the seven months
ended June 30, 1994 were $71,000, $67,000 and $29,000, respectively.
29
<PAGE> 32
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 8 -- TAXES ON INCOME:
Income from operations before taxes and the provision for income taxes are
comprised of:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
---------------------------------------------
1996 1995 1994
------------ ------------ ------------
<S> <C> <C> <C>
Income from operations before taxes:
Domestic ....................... $ 12,613,000 $ 8,897,000 $ 6,656,000
Foreign ........................ (5,394,000) 1,845,000 1,445,000
------------ ------------ ------------
$ 7,219,000 $ 10,742,000 $ 8,101,000
============ ============ ============
Provision for income taxes:
Currently payable:
Domestic ....................... $ 1,060,000 $ 2,026,000 $ 3,048,000
Foreign ........................ 4,035,000 2,960,000 2,475,000
------------ ------------ ------------
5,095,000 4,986,000 5,523,000
------------ ------------ ------------
Deferred (prepaid):
Domestic ....................... (1,200,000)
Foreign ........................ (394,000) 105,000 (354,000)
------------ ------------ ------------
(394,000) 105,000 (1,554,000)
------------ ------------ ------------
Total income tax expense ........... $ 4,701,000 $ 5,091,000 $ 3,969,000
============ ============ ============
</TABLE>
Deferred income taxes are provided on temporary differences between the
financial reporting basis and tax basis of the Company's assets and liabilities.
The principal temporary differences which give rise to deferred tax assets and
liabilities at June 30, 1996 are as follows:
<TABLE>
<CAPTION>
DEFERRED TAX
-----------------------------
ASSETS LIABILITIES TOTAL
------------ ------------ ------------
<S> <C> <C> <C>
Foreign tax credit carryforwards .......... $ 2,664,000
Foreign net operating loss carryforwards .. 12,853,000
Inventories ............................... 1,853,000
Pension ................................... 1,461,000
Other, individually less than 5% of
"Net Deferred Tax Asset" ................ 2,641,000 $ 1,171,000
------------ ------------
Net Deferred Tax Asset and Liability ...... $ 21,472,000 $ 1,171,000 $ 20,301,000
============ ============
Valuation Allowance ....................... (16,957,000)
------------
Total Net Deferred Tax Assets ......... $ 3,344,000
============
</TABLE>
30
<PAGE> 33
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
At June 30, 1996, the Company has foreign tax credit carryforwards for tax
purposes of $2,664,000, which expire in fiscal 2001. At June 30, 1996, net
operating loss carryforwards of $42,662,000 are available to reduce future
foreign taxable income ($2,719,000 and $4,301,000 of which expire in fiscal
years 1997 and 1998, respectively and the remainder of which have indefinite
carryforward periods).
The Company has not had to provide for income taxes on $9,661,000 of
cumulative undistributed earnings of subsidiaries outside the United States
because of the Company's intention to reinvest those earnings. In the event that
earnings were remitted, the tax effect on the results of operations after
considering available tax credits would not be significant.
The total income tax expense allocated to operations exceeded the computed
"expected" tax (determined by applying the United States Federal statutory
income tax rate of 34% to income from operations before taxes) by $2,247,000,
$1,439,000 and $1,215,000 for the years ended June 30, 1996, 1995 and 1994. The
reasons for the difference are as follows:
<TABLE>
<CAPTION>
FOR THE YEARS ENDED JUNE 30,
-------------------------------------------
1996 1995 1994
----------- ----------- -----------
<S> <C> <C> <C>
Computed "expected" tax .................................. $2,454,000 $3,652,000 $2,754,000
State income taxes, net of federal income tax benefit .... 510,000 376,000 420,000
Foreign income taxed at higher than the U.S. .............
statutory rate ......................................... 1,745,000 985,000 1,795,000
Recognition of previously unrecognized tax benefits ...... (1,200,000)
Goodwill write-off not deductible for taxes .............. 233,000 233,000 232,000
Foreign Sales Corporation ................................ (264,000) (228,000) (55,000)
Other reconciling items, individually less than 5% of
the "expected" tax ..................................... 23,000 73,000 23,000
----------- ----------- -----------
Total income tax expense ............................. $4,701,000 $5,091,000 $3,969,000
=========== =========== ===========
</TABLE>
NOTE 9 -- COMMON STOCK:
The holders of the Company's Class A Common Stock, voting as a separate
class, are entitled to elect 25% of the members of the Board of Directors.
Holders of Class B Common Stock, voting as a separate class, are entitled to
elect the remaining Directors, so long as the number of outstanding shares of
Class B Common Stock is equal to at least 12.5% of the number of outstanding
shares of both classes of Common Stock as of the record date of the Company's
Annual Meeting. If the number of outstanding shares of Class B Common Stock is
less than 12.5% of the total number of outstanding shares of both classes of
Common Stock as of the record date of the Annual Meeting, the holders of Class A
Common Stock, voting as a separate class, continue to elect a number of
Directors equal to 25% of the total number of Directors constituting the entire
Board of Directors and the remaining directors are elected by the holders of
both classes of Common Stock, with the holders of Class A Common Stock having
one vote per share and the holders of Class B Common Stock having ten votes per
share. As of June 30, 1996, the number of outstanding shares of Class B Common
Stock constituted 10.5% (10.4% in 1995) of the total number of outstanding
shares of both classes of Common Stock.
31
<PAGE> 34
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The Class A Common Stock has no conversion rights; however, Class B Common
Stock is convertible into Class A Common Stock on a one-for-one basis. In
addition, no dividend in cash or property may be declared or paid on shares of
Class B Common Stock without a dividend being declared or paid on shares of
Class A Common Stock of at least 105% of that on the Class B Common Stock.
In March of 1996, the Company's stock repurchase program authorization for
$8,000,000 of Class A Common Stock and 500,000 shares of Class B Common Stock
was increased to $10,000,000 of Class A Common Stock and 500,000 shares of Class
B Common Stock. As of June 30, 1996, 1,663,156 shares of Class A Common Stock
(1,019,256 in 1995) and 164,117 shares of Class B Common Stock (164,117 in 1995)
had been repurchased for $8,276,000, of which $7,155,000 represents Class A
Common Stock, ($5,625,000 in 1995 of which $4,504,000 represents Class A Common
Stock) under this program.
NOTE 10 -- STOCK OPTIONS:
The 1986 Stock Option Plan, as amended and restated (the "1986 Plan"),
allows for the granting, at fair market value at the date of grant, of incentive
stock options, non-qualified stock options, and tandem stock appreciation rights
(SARS) for up to a total of 2,220,000 and 590,000 shares of Class A and Class B
Common Stock, respectively. Options to purchase shares of the Company's Class B
Common Stock are granted at a price per share of no less than 125% of the fair
market value of a share of Class A Common Stock on the date of grant. All
options become exercisable in three equal annual installments commencing on the
second anniversary of the date of grant. Unexercised options terminate no later
than ten years from the date of grant and canceled shares become available for
future grants.
The 1990 Directors' Stock Option Plan (the "1990 Plan") provides for the
granting, at fair market value at the date of grant, of up to 100,000 shares of
the Company's Class A and Class B Common Stock as non-qualified stock options to
members of the Company's Board of Directors who are not employees ("Eligible
Directors") of the Company or any of its subsidiaries. Grants are made on the
third business day subsequent to each Annual Meeting of Stockholders, including
the 1990 meeting, to each Eligible Director for 1,000 shares of Class A and
Class B Common Stock in proportion to the number of shares of each such class
then outstanding. Restrictions under the 1990 Plan are similar to those of the
1986 Plan except with regard to the exercise date, which is twelve months after
the date of grant, and termination of options, which is generally nine months
after termination of service as a director.
<TABLE>
<CAPTION>
THE 1986 PLAN THE 1990 PLAN
-------------------------------------- ------------------------------------------------
OPTION OPTION
CLASS A CLASS B PRICE RANGE TOTAL CLASS A CLASS B PRICE RANGE
--------- ------- ------------- ------- ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
Outstanding at June 30,
1994 ..................... 1,010,000 175,000 $3.88 - $9.94 16,000 14,132 1,868 $3.75 - $6.09
Granted .................... 100,000 100,000 $4.88 - $6.09 5,000 4,485 515 $5.00 - $6.25
Canceled ................... (156,667) $3.94 - $9.94
Exercised .................. (880) (880) $3.75
--------- ------- ------- ------- ------
Outstanding at June 30,
1995 ..................... 953,333 275,000 $3.88 - $9.84 20,120 17,737 2,383 $3.75 - $6.25
--------- ------- ------- ------- ------
Granted .................... 391,000 195,000 $5.38 - $6.72 5,000 4,490 510 $5.50 - $6.88
Canceled ................... (7,000) $5.63
Exercised .................. (28,333) $4.00 - $5.50 (1,764) (1,764) $4.50 - $4.75
--------- ------- ------- ------ ------
Outstanding at June 30,
1996 ..................... 1,309,000 470,000 $3.88 - $9.84 23,356 20,463 2,893 $3.75 - $6.88
========= ======= ======= ======= ======
Exercisable at June 30,
1996 ..................... 544,993 175,000 $3.88 - $9.84 18,356 15,973 2,383 $3.75 - $6.25
========= ======= ======= ======= ======
Available for future option
grants at June 30, 1996 .. 332,668 120,000 74,000
========= ======= =======
</TABLE>
32
<PAGE> 35
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 11 -- SUPPLEMENTAL COMPENSATION:
Subsidiaries within the Company's Americas Sector maintain profit sharing,
savings and retirement plans. Amounts expensed under these plans were as
follows:
<TABLE>
<CAPTION>
For the years ended June 30,
-------------------------------
1996 1995 1994
---------- -------- --------
<S> <C> <C> <C>
Baldwin Technology Corporation ("BTC")
and Baldwin Graphic Systems, Inc. ("BGS")..... $ 833,000 $647,000 $446,000
Kansa Corporation............................... 173,000 192,000 176,000
Enkel Corporation............................... 75,000 52,000 114,000
Misomex of North America, Inc................... 18,000 19,000 41,000
---------- -------- --------
Total expense........................... $1,099,000 $910,000 $777,000
========== ======== ========
</TABLE>
Company contributions to the BTC/BGS and Kansa plans are discretionary and
are subject to approval by their respective Boards. The Enkel plan requires a
company contribution equal to the total participant contribution which may not
exceed 15% of the total compensation paid to the employees of Enkel. The Misomex
of North America plan requires contributions as determined by their Board of
Directors.
Certain subsidiaries and divisions within the Company's European Sector
maintain pension plans. Amounts expensed under these plans were as follows:
<TABLE>
<CAPTION>
For the years ended June 30,
-----------------------------
1996 1995 1994
-------- -------- --------
<S> <C> <C> <C>
Baldwin Gegenheimer GmbH........................ $188,000 $426,000 $287,000
Grafotec GmbH................................... 11,000
Misomex AB...................................... 83,000 246,000 280,000
Amal AB......................................... 112,000 64,000 57,000
IVT Graphics Division........................... 91,000
Jimek Division.................................. 251,000
Baldwin Europe Consolidated B.V................. 20,000 23,000 52,000
Misomex U.K..................................... 133,000 103,000 84,000
-------- -------- --------
Total expense........................... $889,000 $862,000 $760,000
======== ======== ========
</TABLE>
33
<PAGE> 36
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
The amount of expense relating to the European pension plans is determined
based upon, among other things, the age, salary and years of service of
employees within the plans. The Company's German, English, Swedish (except
Misomex AB) and Netherlands subsidiaries make annual contributions to the plans
equal to the amounts accrued for pension expense.
In Germany, at Baldwin Gegenheimer GmbH, there is an additional pension plan
covering 3 employees, 2 of whom are retired. This defined benefit plan provides
for benefits, at maturity age, in lump sum payments on retirement or death or as
a disability pension in case of disability. This plan is partially funded by
insurance contracts. In Sweden, at Misomex AB, (as listed above), there are two
defined benefit pension plans, one covering 18 retired employees and the other
covering 78 employees, 22 of whom are retired. The unfunded recorded liability
related to the Misomex AB plan at June 30, 1996 was $3,343,000 ($3,360,000 in
1995). The recorded liability is sufficient to cover obligations earned under
the plan.
The following table sets forth the components of net pension costs of the
defined benefit plans:
<TABLE>
<CAPTION>
For the years ended June 30,
-------------------------------------
1996 1995 1994
--------- --------- ---------
<S> <C> <C> <C>
Service Cost -- benefits earned during the
period ........................................ $ 4,000 $ 29,000 $ 77,000
Interest on projected benefit obligation ........ 224,000 235,000 258,000
Annual return on plan assets .................... 21,000 11,000 9,000
Net amortization and deferrals .................. (184,000) (229,000) (93,000)
--------- --------- ---------
Net pension cost ........................ $ 65,000 $ 46,000 $ 251,000
========= ========= =========
</TABLE>
The following table sets forth the funded status of the above defined
benefit pension plans:
<TABLE>
<CAPTION>
For the years ended June 30,
----------------------------
1996 1995
----------- -----------
<S> <C> <C>
Actuarial present value of:
Vested benefit obligation ........................ $ 1,299,000 $ 1,706,000
=========== ===========
Accumulated benefit obligation ................... $ 2,344,000 $ 2,959,000
=========== ===========
Plan assets at fair value ........................ $ 81,000 $ 419,000
Projected benefit obligation ..................... 2,360,000 3,076,000
----------- -----------
Plan assets less than projected benefit
obligation ..................................... (2,279,000) (2,657,000)
Unrecognized transition asset ...................... 323,000 379,000
Unrecognized actuarial gain ........................ (1,733,000) (2,198,000)
----------- -----------
Accrued pension costs ............................ $ 3,689,000 $ 4,476,000
=========== ===========
Actuarial assumptions:
Discount rate ...................................... 3% to 8.5% 3% to 8.5%
Rate of increase in compensation levels ............ 3% to 5% 5% to 7%
Expected rate of return on plan assets ............. 3% 7%
</TABLE>
34
<PAGE> 37
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
There are two retirement plans within the Company's Asia Pacific Sector. The
Company's Japanese subsidiary maintains non-contributory retirement plans
covering all employees, excluding directors and a separate plan for its
directors. Amounts expensed under these programs are determined based on
participants' salary and length of service. The programs are fully accrued and
partially funded through insurance contracts. Expenses relating to these
programs were $606,000, $391,000 and $325,000 for the years ended June 30, 1996,
1995 and 1994, respectively.
Officers and key employees of the Company participate in various incentive
compensation plans. Amounts expensed under such plans were $2,182,000,
$2,437,000 and $2,090,000 for the years ended June 30, 1996, 1995 and 1994,
respectively.
The Company adopted FAS 112, "Employer's Accounting for Postemployment
Benefits", as of July 1, 1994, the effect of which was immaterial.
NOTE 12 -- COMMITMENTS:
Future minimum annual lease payments under capital leases, which consist of
buildings, and machinery and equipment with accumulated depreciation amounting
to $6,097,000 at June 30, 1996 and $6,495,000 at June 30, 1995, together with
the present value of the minimum lease payments are as follows at June 30, 1996:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING JUNE 30, AMOUNT
- --------------------------- ----------
<S> <C>
1997............................................................ $ 470,000
1998............................................................ 361,000
1999............................................................ 332,000
2000............................................................ 323,000
2001............................................................ 9,000
2002 and thereafter............................................. 0
----------
Total minimum lease payments.................................... 1,495,000
Less -- Amount representing interest............................ (454,000)
----------
Present value of minimum lease payments......................... $1,041,000
==========
</TABLE>
At June 30, 1996, $788,000 ($982,000 at June 30, 1995) is included in other
long-term liabilities representing the long-term portion of the present value of
minimum lease payments.
Rental expense amounted to approximately $5,370,000, $5,179,000 and
$4,672,000 for the years ended June 30, 1996, 1995 and 1994, respectively.
Aggregate future annual rentals under noncancellable leases for periods of more
than one year at June 30, 1996 are as follows:
<TABLE>
<CAPTION>
FISCAL YEAR ENDING JUNE 30, AMOUNT
- --------------------------- -----------
<S> <C>
1997............................................................ $ 5,295,000
1998............................................................ $ 4,411,000
1999............................................................ $ 3,586,000
2000............................................................ $ 3,095,000
2001............................................................ $ 2,807,000
2002 and thereafter............................................. $11,844,000
</TABLE>
35
<PAGE> 38
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
NOTE 13 -- RELATED PARTIES:
On January 1, 1990, the Company, through each of its subsidiaries, Baldwin
Americas Corporation (BAM), Baldwin Europe Consolidated Inc. (BEC) and Baldwin
Asia Pacific Corporation (BAP) entered into consulting agreements with Polestar
Limited ("Polestar"), a corporation wholly owned by Wendell M. Smith, Chairman
of the Board. The consulting agreements have terms of one year, but are
automatically extended for additional one-year terms unless either party gives
prior notice of termination. Under the consulting agreements, Polestar is
obligated to provide certain management services outside the United States and
will receive compensation equal to 2% of the annual consolidated after-tax
profits of BAM, BEC and BAP and their respective subsidiaries, in each case, not
to exceed $150,000. For the years ended June 30, 1996, 1995 and 1994 the
aggregate compensation expensed under these agreements was $158,000, $160,000
and $84,000, respectively.
On November 30, 1993, the Company entered into a loan and pledge agreement
and promissory note with Gerald A. Nathe, President and Director of the Company
and on March 11, 1994, the Company entered into loan and pledge agreements and
promissory notes with D. John Youngman, Vice President and Director and William
J. Lauricella, Chief Financial Officer and Treasurer of the Company. The loans
were made in order to enable the Company's officers to purchase shares of the
Company's Common Stock from non-employee shareholders. Mr. Nathe was loaned
$1,817,321 to purchase 315,144 shares of the Company's Common Stock and Mr.
Youngman and Mr. Lauricella were each loaned $164,063 to purchase 25,000 shares
each of the Company's Common Stock. All of the shares purchased have been
pledged as collateral for the demand promissory notes and each of the notes are
interest bearing, with interest payable on the anniversary dates at LIBOR rates
plus 1.25% reset on the first day of each succeeding January, April, July and
October.
The maximum amounts of the notes outstanding, including interest, during the
year ended June 30, 1996 were $1,623,866 and $179,669 for Mr. Nathe and Mr.
Lauricella, respectively. At June 30, 1996, the balances of the notes
receivable, including interest, were $1,560,945 and $179,669 for Mr. Nathe and
Mr. Lauricella, respectively.
The maximum amount of the notes outstanding, including interest, during the
year ended June 30, 1995 were $1,918,662, $170,744 and $174,212 for Mr. Nathe,
Mr. Youngman and Mr. Lauricella, respectively. On May 18, 1995, Mr. Nathe repaid
$317,321 of his outstanding note and on November 17, 1994, the Company exchanged
the note it held from Mr. Youngman for its collateralized shares. At June 30,
1995, the balances of the notes receivable, including interest, were $1,577,581
and $167,940 for Mr. Nathe and Mr. Lauricella, respectively.
The Company employs the firm of Morgan, Lewis & Bockius LLP as its legal
counsel. Samuel B. Fortenbaugh III, a Director of the Company, is a partner in
the firm. In the fiscal years ended June 30, 1996, 1995, and 1994, the Company
incurred legal fees of approximately $474,000, $200,000 and $252,000,
respectively, payable to Morgan, Lewis & Bockius LLP.
On July 1, 1990, Baldwin Technology Corporation and Baldwin Graphic Systems,
Inc., two subsidiaries of BAM, entered into an agreement with Harold W.
Gegenheimer, Chairman Emeritus, guaranteed by the Company, to replace various
prior agreements including royalty and employment agreements, retirement plans
and bonus arrangements. The new agreement guarantees a compensation amount of
$200,000 per year. Simultaneously, a separate agreement was made with Mr.
Gegenheimer and
36
<PAGE> 39
BALDWIN TECHNOLOGY COMPANY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
the Company whereby the Company was released from certain prior agreements, as
noted above, and agreed to pay a minimum guaranteed amount of compensation of
$200,000 per year, not to exceed $350,000 per year, based on one and one-half
percent (1.5%) of the Company's annual net after tax profits. The amount
expensed under these two agreements was $400,000 for each of the years ended
June 30, 1996, 1995 and 1994.
NOTE 14 -- QUARTERLY FINANCIAL DATA (UNAUDITED):
Summarized quarterly financial data for fiscal 1996 and fiscal 1995 are as
follows (in thousands except per share data):
<TABLE>
<CAPTION>
QUARTER
-----------------------------------------------
FISCAL 1996 FIRST SECOND THIRD FOURTH
- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales ......................... $ 52,835 $ 65,816 $ 63,812 $ 76,838
Costs and expenses
Cost of goods sold .............. 35,688 44,258 43,102 50,223
Operating expenses .............. 14,886 19,525 18,653 20,757
Restructuring charge ............ 3,000
Interest, net ................... 851 918 878 833
Other (income) .................. (429) (112) (656) (293)
-------- -------- -------- --------
Income before taxes ............... 1,839 (1,773) 1,835 5,318
Provision for income taxes ........ 846 564 844 2,447
-------- -------- -------- --------
Net income ........................ $ 993 $ (2,337) $ 991 $ 2,871
======== ======== ======== ========
Net income per share .............. $ 0.06 $ (0.13) $ 0.06 $ 0.17
======== ======== ======== ========
Weighted average shares
outstanding ..................... 17,829 18,132 17,783 17,425
======== ======== ======== ========
</TABLE>
<TABLE>
<CAPTION>
QUARTER
-----------------------------------------------
FISCAL 1995 FIRST SECOND THIRD FOURTH
- ----------- -------- -------- -------- --------
<S> <C> <C> <C> <C>
Net sales ......................... $ 47,639 $ 52,713 $ 55,375 $ 66,614
Costs and expenses
Cost of goods sold .............. 31,280 34,849 36,709 43,889
Operating expenses .............. 14,234 15,385 15,761 17,763
Interest, net ................... 708 662 752 737
Other (income) .................. (253) (307) (355) (215)
-------- -------- -------- --------
Income before taxes ............... 1,670 2,124 2,508 4,440
Provision for income taxes ........ 835 1,062 1,254 1,940
-------- -------- -------- --------
Net income ........................ $ 835 $ 1,062 $ 1,254 $ 2,500
======== ======== ======== ========
Net income per share .............. $ 0.05 $ 0.06 $ 0.07 $ 0.14
======== ======== ======== ========
Weighted average shares
outstanding ..................... 17,916 18,002 17,932 17,944
======== ======== ======== ========
</TABLE>
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
There has been no Form 8-K filed within 24 months prior to the date of the
most recent financial statements reporting a change of accountants and/or
reporting a disagreement on any matter of accounting principle or financial
statement disclosure.
37
<PAGE> 40
PART III
ITEMS 10, 11, 12 AND 13
Information required under these items is contained in the Company's 1996
Proxy Statement, which will be filed with the Securities and Exchange Commission
within 120 days after the close of the Company's fiscal year end; accordingly,
this information is therefore incorporated herein by reference.
PART IV
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) (1) Financial statements required by Item 14 are listed in the index
included in Item 8 of Part II.
(a) (2) The following is a list of financial statement schedules filed as
part of this Report:
PAGE
----
Report of Independent Accountants on Financial Statement Schedules..... 42
Schedule VIII -- Valuation and Qualifying Accounts..................... 43
All other schedules are omitted because they are not applicable or the
required information is shown in the financial statements or notes thereto.
(a) (3) The following is a list of all exhibits filed as part of this
Report:
INDEX TO EXHIBITS
3.1 Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of the State of Delaware on November 4, 1986. Filed as
Exhibit 3.1 to the Company's registration statement (No. 33-10028) on Form
S-1 and incorporated herein by reference.
3.2 Certificate of Amendment of the Certificate of Incorporation of the
Company as filed with the Secretary of State of the State of Delaware on
November 21, 1988. Filed as Exhibit 3.2 to the Company's Registration
Statement (No. 33-26121) on Form S-1 and incorporated herein by reference.
3.3 Certificate of Amendment of the Certificate of Incorporation of the
Company as filed with the Secretary of State of the State of Delaware on
November 20, 1990. Filed as Exhibit 3.3 to the Company's Report on Form
10-K for the fiscal year ended June 30, 1991 and incorporated herein by
reference.
3.4 By-Laws of the Company. Filed as Exhibit 3.2 to the Company's Registration
Statement (No. 33-10028) on Form S-1 and incorporated herein by reference.
10.1 Baldwin Technology Company, Inc. Amended and Restated 1986 Stock Option
Plan. Filed as Exhibit 10.2 to the Company's Registration Statement (No.
33-31163) on Form S-1 and incorporated herein by reference.
10.2 Amendment to the Baldwin Technology Company, Inc. Amended and Restated
1986 Stock Option Plan. Filed as Exhibit 10.2 to the Company's Report on
Form 10-K for the fiscal year ended June 30, 1991 and incorporated herein
by reference.
10.3 Baldwin Technology Company, Inc. 1990 Directors' Stock Option Plan. Filed
as Exhibit 10.3 to the Company's Report on Form 10-K for the fiscal year
ended June 30, 1991 and incorporated herein by reference.
38
<PAGE> 41
10.4 Baldwin Technology Corporation Profit Sharing Plan, as amended and
restated. Filed as Exhibit 10.2 to the Company's Registration Statement
(No. 33-10028) on Form S-1 and incorporated herein by reference.
10.5 Baldwin Technology Corporation Executive and Key Person Bonus Plan. Filed
as Exhibit 10.4 to the Company's Registration Statement (No. 33-10028) on
Form S-1 and incorporated herein by reference.
10.6 Agreement effective as of July 1, 1990 between Baldwin Technology
Corporation, Baldwin Graphic Systems, Inc. and Harold W. Gegenheimer, as
guaranteed by Baldwin Technology Company, Inc. Filed as Exhibit 10.6 to
the Company's Report on Form 10-K for the fiscal year ended June 30, 1991
and incorporated herein by reference.
10.7 Agreement effective as of July 1, 1990 between Baldwin Technology Company,
Inc. and Harold W. Gegenheimer. Filed as Exhibit 10.7 to the Company's
Report on Form 10-K for the fiscal year ended June 30, 1991 and
incorporated herein by reference.
10.8 Consulting Agreements dated as of January 1, 1990 between each of Baldwin
Americas Corporation, Baldwin Asia Pacific Corporation and Baldwin Europe
Consolidated Inc., and Polestar, Ltd. Filed as Exhibit 10.8 on the
Company's Form 10-K dated September 25, 1990 and incorporated herein by
reference.
10.9* Employment Agreement dated as of July 1, 1990 between the Company and
Wendell M. Smith filed as Exhibit 10.9 to the Company's Form 10-K dated
September 25, 1990 and incorporated herein by reference.
10.10 License Agreement between Baldwin Technology Corporation and Hans Jacobs
Moestue, as assigned to Moestue Limited. Filed as Exhibit 10.15 to the
Company's Registration Statement (No. 33-10028) on Form S-1 and
incorporated herein by reference.
10.11* Employment Agreement dated as of November 16, 1988 between Baldwin-Japan
Limited and Akira Hara. Filed as Exhibit 10.22 to the Company's
Registration Statement (No. 33-26121) on Form S-1 and incorporated herein
by reference.
10.12 Stock Purchase Agreement dated as of April 13, 1990 between RZ
Corporation, The Dyson-Kissner-Moran Corporation and the Company. Filed
as Exhibit 1 to the Company's Form 8-K dated April 26, 1990 and
incorporated herein by reference.
10.13 Amendment No. 1 to the Company's Form 8-K (as filed on April 13, 1990)
and dated October 9, 1990 for the acquisition of Misomex AB and
subsidiaries and Misomex of North America, Inc. -- Exhibits (a) and (b)
incorporated herein by reference.
10.14 Assignment of Stock Purchase Agreement dated May 27, 1990 between the
Company and Misomex Acquisition Company. Filed as Exhibit 2 to the
Company's Form 8-K dated August 13, 1990 and incorporated herein by
reference.
10.15 Assignment of Stock Purchase Agreement dated May 28, 1990 between the
Company and Misomex Acquisition AB. Filed as Exhibit 3 to the Company's
Form 8-K dated August 13, 1990 and incorporated herein by reference.
10.16 Agreement and Plan of Merger dated as of April 26, 1989 among Enkel
Corporation, Bengt Kuller, Enkel Acquisition Corporation and the Company.
Filed as Exhibit I to the Company's report on Form 8-K dated May 7, 1989
and incorporated herein by reference.
10.17 Baldwin Technology Company, Inc. Dividend Reinvestment Plan. Filed as
Exhibit 10.49 to the Company's Report on Form 10-K for the fiscal year
ended June 30, 1991 and incorporated herein by reference.
39
<PAGE> 42
10.18 Baldwin Technology Company, Inc. Employee Stock Ownership Plan. Filed as
Exhibit 10.50 to the Company's Report on Form 10-K for the fiscal year
ended June 30, 1991 and incorporated herein by reference.
10.19 Consulting Agreement dated as of June 30, 1989 between Baldwin Asia
Pacific Corporation and A-PLUS LTD. Filed as Exhibit 10.51 to the
Company's Report on Form 10-K for the fiscal year ended June 30, 1991 and
incorporated herein by reference.
10.20 Baldwin Technology Company, Inc. Worldwide Employee Stock Ownership Plan.
Filed as Exhibit 10.52 to the Company's Report on Form 10-K for the
fiscal year ended June 30, 1991 and incorporated herein by reference.
10.21* Employment Agreement effective as of August 5, 1993 between Baldwin
Technology Company, Inc. and Gerald A. Nathe. Filed as Exhibit 10.22 to
the Company's Report on Form 10-K for the fiscal year ended June 30, 1994
and incorporated herein by reference.
10.22 8.17% Senior Note Agreement dated October 29, 1993 between Baldwin
Technology Company, Inc. and its subsidiaries Baldwin Americas
Corporation and Baldwin Technology Ltd. and John Hancock Mutual Life
Insurance Company, John Hancock Variable Life Insurance Company and John
Hancock Life Insurance Company. Filed as Exhibit 10.23 to the Company's
Report on Form 10-K for the fiscal year ended June 30, 1994 and
incorporated herein by reference.
10.23 Amended and Restated $20,000,000 Revolving Credit Agreement dated as of
December 31, 1995 between Baldwin Technology Company, Inc. and its
subsidiaries, Baldwin Americas Corporation and Baldwin Technology Ltd.,
and NationsBank of North Carolina, National Association, as Agent (filed
herewith).
10.24* Amendment to the employment agreement between the Company and Wendell M.
Smith effective July 1, 1995 (filed herewith).
10.25* Amendment to the employment agreement between Baldwin-Japan Limited
and Akira Hara effective August 15, 1995 (filed herewith).
21. List of Subsidiaries of Registrant (filed herewith).
23. Consent of Price Waterhouse LLP (filed herewith).
28. Post-effective Amendment to the Company's previously filed Form S 8's,
Nos. 33-20611 and 33-30455. Filed as Exhibit 28 to the Company's Report
on Form 10-K for the fiscal year ended June 30, 1991 and incorporated
herein by reference.
99. Company statement regarding the Private Securities Litigation Reform Act
of 1995, "Safe Harbor for Forward-Looking Statements" (filed herewith).
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed by the registrant during the last quarter
of the period covered by this report.
40
<PAGE> 43
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the Registrant has duly caused this Report to be signed on
its behalf by the undersigned, thereunto duly authorized.
BALDWIN TECHNOLOGY COMPANY, INC.
--------------------------------
(REGISTRANT)
By: GERALD A. NATHE
-----------------------------
GERALD A. NATHE
(PRESIDENT AND CHIEF EXECUTIVE OFFICER)
Dated: September 27, 1996
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
SIGNATURE TITLE DATE
-------- ---- ----
WENDELL M. SMITH Chairman of the Board
- --------------------------- and Director September 27, 1996
(WENDELL M. SMITH)
GERALD A. NATHE President, Chief Executive
- --------------------------- Officer and Director September 27, 1996
(GERALD A. NATHE)
AKIRA HARA Vice President and
- --------------------------- Director September 27, 1996
(AKIRA HARA)
WILLIAM J. LAURICELLA Treasurer and Chief
- --------------------------- Financial Officer September 27, 1996
(WILLIAM J. LAURICELLA)
HELEN P. OSTER Secretary September 27, 1996
- ---------------------------
(HELEN P. OSTER)
WARREN W. SMITH Chief Accounting Officer September 27, 1996
- ---------------------------
(WARREN W. SMITH)
JUDITH A. BOOTH Director September 27, 1996
- ---------------------------
(JUDITH A. BOOTH)
SAMUEL B. FORTENBAUGH III Director September 27, 1996
- ---------------------------
(SAMUEL B. FORTENBAUGH III)
JUDITH G. HYERS Director September 27, 1996
- ---------------------------
(JUDITH G. HYERS)
M. RICHARD ROSE Director September 27, 1996
- ---------------------------
(M. Richard Rose)
RALPH R. WHITNEY, JR. Director September 27, 1996
- ---------------------------
(RALPH R. WHITNEY, JR.)
41
<PAGE> 44
REPORT OF INDEPENDENT ACCOUNTANTS ON
FINANCIAL STATEMENT SCHEDULES
To the Board of Directors and Shareholders of
BALDWIN TECHNOLOGY COMPANY, INC.
Our audits of the consolidated financial statements of Baldwin Technology
Company, Inc. and its subsidiaries referred to in our report dated August 9,
1996 appearing on page 17 in this Annual Report on Form 10-K also included an
audit of the Financial Statement Schedule listed in Item 14(a) (2) of this Form
10-K.
In our opinion, this Financial Statement Schedule presents fairly, in all
material respects, the information set forth therein when read in conjunction
with the related consolidated financial statements.
PRICE WATERHOUSE LLP
Stamford, Connecticut
August 9, 1996
42
<PAGE> 45
SCHEDULE VIII
BALDWIN TECHNOLOGY COMPANY, INC
VALUATION AND QUALIFYING ACCOUNTS
(IN THOUSANDS)
<TABLE>
<CAPTION>
BALANCE AT CHARGED TO CHARGED TO BALANCE
BEGINNING COSTS AND OTHER AT END
OF PERIOD EXPENSES ACCOUNTS DEDUCTIONS OF PERIOD
---------- ---------- ---------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Year ended June 30, 1996
Allowance for
doubtful accounts
(deducted from
accounts receivable) ... $ 2,897 $ 95 $ 489 $ 2,503
Valuation allowance
for deferred tax
asset (deducted
from prepaid and
other assets) .......... $13,313 $ 3,644(1) $16,957
Year ended June 30, 1995
Allowance for
doubtful accounts
(deducted from
accounts receivable) ... $ 3,209 $ 190 $ 502 $ 2,897
Valuation allowance
for deferred tax
asset (deducted
from prepaid and
other assets) .......... $15,665 $ 2,352(2) $13,313
Year ended June 30, 1994
Allowance for
doubtful accounts
(deducted from
accounts receivable) ... $ 1,831 $ 1,589(3) $ 211 $ 3,209
Valuation allowance
for deferred tax
asset (deducted
from prepaid and
other assets) .......... $16,537 $ 328 $ 1,200(2) $15,665
</TABLE>
(1) The increase in the amount of the valuation allowance is primarily the
result of increased foreign net operating loss carryforwards. See Note 8
-- Notes to Consolidated Financial Statements.
(2) The reduction in the amount of the valuation allowance is the result of
improved earnings in the Company's domestic operations. See Note 8 --
Notes to Consolidated Financial Statements.
(3) The amount expensed is primarily due to a potential bad debt in the
Company's Asia Pacific Sector where the debtor has filed a plan of
reorganization.
43
<PAGE> 46
INDEX TO EXHIBITS
3.1 Restated Certificate of Incorporation of the Company as filed with the
Secretary of State of the State of Delaware on November 4, 1986. Filed as
Exhibit 3.1 to the Company's registration statement (No. 33-10028) on Form
S-1 and incorporated herein by reference.
3.2 Certificate of Amendment of the Certificate of Incorporation of the
Company as filed with the Secretary of State of the State of Delaware on
November 21, 1988. Filed as Exhibit 3.2 to the Company's Registration
Statement (No. 33-26121) on Form S-1 and incorporated herein by reference.
3.3 Certificate of Amendment of the Certificate of Incorporation of the
Company as filed with the Secretary of State of the State of Delaware on
November 20, 1990. Filed as Exhibit 3.3 to the Company's Report on Form
10-K for the fiscal year ended June 30, 1991 and incorporated herein by
reference.
3.4 By-Laws of the Company. Filed as Exhibit 3.2 to the Company's Registration
Statement (No. 33-10028) on Form S-1 and incorporated herein by reference.
10.1 Baldwin Technology Company, Inc. Amended and Restated 1986 Stock Option
Plan. Filed as Exhibit 10.2 to the Company's Registration Statement (No.
33-31163) on Form S-1 and incorporated herein by reference.
10.2 Amendment to the Baldwin Technology Company, Inc. Amended and Restated
1986 Stock Option Plan. Filed as Exhibit 10.2 to the Company's Report on
Form 10-K for the fiscal year ended June 30, 1991 and incorporated herein
by reference.
10.3 Baldwin Technology Company, Inc. 1990 Directors' Stock Option Plan. Filed
as Exhibit 10.3 to the Company's Report on Form 10-K for the fiscal year
ended June 30, 1991 and incorporated herein by reference.
10.4 Baldwin Technology Corporation Profit Sharing Plan, as amended and
restated. Filed as Exhibit 10.2 to the Company's Registration Statement
(No. 33-10028) on Form S-1 and incorporated herein by reference.
10.5 Baldwin Technology Corporation Executive and Key Person Bonus Plan. Filed
as Exhibit 10.4 to the Company's Registration Statement (No. 33-10028) on
Form S-1 and incorporated herein by reference.
10.6 Agreement effective as of July 1, 1990 between Baldwin Technology
Corporation, Baldwin Graphic Systems, Inc. and Harold W. Gegenheimer, as
guaranteed by Baldwin Technology Company, Inc. Filed as Exhibit 10.6 to
the Company's Report on Form 10-K for the fiscal year ended June 30, 1991
and incorporated herein by reference.
10.7 Agreement effective as of July 1, 1990 between Baldwin Technology Company,
Inc. and Harold W. Gegenheimer. Filed as Exhibit 10.7 to the Company's
Report on Form 10-K for the fiscal year ended June 30, 1991 and
incorporated herein by reference.
10.8 Consulting Agreements dated as of January 1, 1990 between each of Baldwin
Americas Corporation, Baldwin Asia Pacific Corporation and Baldwin Europe
Consolidated Inc., and Polestar, Ltd. Filed as Exhibit 10.8 on the
Company's Form 10-K dated September 25, 1990 and incorporated herein by
reference.
<PAGE> 47
10.9* Employment Agreement dated as of July 1, 1990 between the Company and
Wendell M. Smith filed as Exhibit 10.9 to the Company's Form 10-K dated
September 25, 1990 and incorporated herein by reference.
10.10 License Agreement between Baldwin Technology Corporation and Hans Jacobs
Moestue, as assigned to Moestue Limited. Filed as Exhibit 10.15 to the
Company's Registration Statement (No. 33-10028) on Form S-1 and
incorporated herein by reference.
10.11* Employment Agreement dated as of November 16, 1988 between Baldwin-Japan
Limited and Akira Hara. Filed as Exhibit 10.22 to the Company's
Registration Statement (No. 33-26121) on Form S-1 and incorporated herein
by reference.
10.12 Stock Purchase Agreement dated as of April 13, 1990 between RZ
Corporation, The Dyson-Kissner-Moran Corporation and the Company. Filed
as Exhibit 1 to the Company's Form 8-K dated April 26, 1990 and
incorporated herein by reference.
10.13 Amendment No. 1 to the Company's Form 8-K (as filed on April 13, 1990)
and dated October 9, 1990 for the acquisition of Misomex AB and
subsidiaries and Misomex of North America, Inc. -- Exhibits (a) and (b)
incorporated herein by reference.
10.14 Assignment of Stock Purchase Agreement dated May 27, 1990 between the
Company and Misomex Acquisition Company. Filed as Exhibit 2 to the
Company's Form 8-K dated August 13, 1990 and incorporated herein by
reference.
10.15 Assignment of Stock Purchase Agreement dated May 28, 1990 between the
Company and Misomex Acquisition AB. Filed as Exhibit 3 to the Company's
Form 8-K dated August 13, 1990 and incorporated herein by reference.
10.16 Agreement and Plan of Merger dated as of April 26, 1989 among Enkel
Corporation, Bengt Kuller, Enkel Acquisition Corporation and the Company.
Filed as Exhibit I to the Company's report on Form 8-K dated May 7, 1989
and incorporated herein by reference.
10.17 Baldwin Technology Company, Inc. Dividend Reinvestment Plan. Filed as
Exhibit 10.49 to the Company's Report on Form 10-K for the fiscal year
ended June 30, 1991 and incorporated herein by reference.
10.18 Baldwin Technology Company, Inc. Employee Stock Ownership Plan. Filed as
Exhibit 10.50 to the Company's Report on Form 10-K for the fiscal year
ended June 30, 1991 and incorporated herein by reference.
10.19 Consulting Agreement dated as of June 30, 1989 between Baldwin Asia
Pacific Corporation and A-PLUS LTD. Filed as Exhibit 10.51 to the
Company's Report on Form 10-K for the fiscal year ended June 30, 1991 and
incorporated herein by reference.
10.20 Baldwin Technology Company, Inc. Worldwide Employee Stock Ownership Plan.
Filed as Exhibit 10.52 to the Company's Report on Form 10-K for the
fiscal year ended June 30, 1991 and incorporated herein by reference.
10.21* Employment Agreement effective as of August 5, 1993 between Baldwin
Technology Company, Inc. and Gerald A. Nathe. Filed as Exhibit 10.22 to
the Company's Report on Form 10-K for the fiscal year ended June 30, 1994
and incorporated herein by reference.
<PAGE> 48
10.22 8.17% Senior Note Agreement dated October 29, 1993 between Baldwin
Technology Company, Inc. and its subsidiaries Baldwin Americas
Corporation and Baldwin Technology Ltd. and John Hancock Mutual Life
Insurance Company, John Hancock Variable Life Insurance Company and John
Hancock Life Insurance Company. Filed as Exhibit 10.23 to the Company's
Report on Form 10-K for the fiscal year ended June 30, 1994 and
incorporated herein by reference.
10.23 Amended and Restated $20,000,000 Revolving Credit Agreement dated as of
December 31, 1995 between Baldwin Technology Company, Inc. and its
subsidiaries, Baldwin Americas Corporation and Baldwin Technology Ltd.,
and NationsBank of North Carolina, National Association, as Agent (filed
herewith).
10.24* Amendment to the employment agreement between the Company and Wendell M.
Smith effective July 1, 1995 (filed herewith).
10.25* Amendment to the employment agreement between Baldwin-Japan Limited
and Akira Hara effective August 15, 1995 (filed herewith).
21. List of Subsidiaries of Registrant (filed herewith).
23. Consent of Price Waterhouse LLP (filed herewith).
28. Post-effective Amendment to the Company's previously filed Form S 8's,
Nos. 33-20611 and 33-30455. Filed as Exhibit 28 to the Company's Report
on Form 10-K for the fiscal year ended June 30, 1991 and incorporated
herein by reference.
99. Company statement regarding the Private Securities Litigation Reform Act
of 1995, "Safe Harbor for Forward-Looking Statements" (filed herewith).
<PAGE> 1
EXHIBIT 10.23
AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
by and among
BALDWIN AMERICAS CORPORATION
AND
BALDWIN TECHNOLOGY LIMITED,
as Borrowers
and
BALDWIN TECHNOLOGY COMPANY, INC.
and
NATIONSBANK, NATIONAL ASSOCIATION
AND
BANK OF BOSTON CONNECTICUT,
as Lenders
and
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
As of December 31, 1995
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
ARTICLE I
DEFINITIONS AND TERMS
<S> <C>
1.1. Definitions............................................................................. 2
"Accounts".............................................................................. 2
"Advance"............................................................................... 2
"Affiliate"............................................................................. 2
"Agent's Alternative Currency Account(s)"............................................... 2
"Agent's Dollar Account"................................................................ 3
"Alternative Currency".................................................................. 3
"Alternative Currency Advance".......................................................... 3
"Applicable Commitment Percentage"...................................................... 3
"Applicable Currency"................................................................... 3
"Applicable Margin"..................................................................... 3
"Applicable Unused Fee Rate"............................................................ 4
"Assignment and Acceptance"............................................................. 4
"Authorized Officer".................................................................... 4
"Available Commitment Certificate"...................................................... 5
"Baldwin Foreign Subsidiary"............................................................ 5
"Baldwin Guaranty"...................................................................... 5
"Baldwin Pledge Agreement".............................................................. 5
"Baldwin Subsidiary".................................................................... 5
"Baldwin Technology".................................................................... 5
"Baldwin Technology Pledge Agreement"................................................... 5
"BAM Foreign Subsidiary"................................................................ 6
"BAM Subsidiary"........................................................................ 6
"BAM Subsidiary Guaranty"............................................................... 6
"Base Rate"............................................................................. 6
"Board"................................................................................. 6
"Borrower Subsidiary.................................................................... 6
"Borrowers' Alternative Currency Account(s)"............................................ 6
"Borrowers' Dollar Account"............................................................. 7
"Borrowers Pledge Agreement"............................................................ 7
"Borrowing Notice"...................................................................... 7
"BTL Subsidiary"........................................................................ 7
"BTL Foreign Subsidiary"................................................................ 7
"Business Day".......................................................................... 7
"Capital Expenditures".................................................................. 7
"Capitalized Lease Obligation".......................................................... 7
"Capitalized Leases".................................................................... 8
"Closing Date".......................................................................... 8
"Code".................................................................................. 8
"Collateral"............................................................................ 8
"Consolidated Cash Flow"................................................................ 8
"Consolidated Fixed Charge Ratio"....................................................... 8
"Consolidated Fixed Charges"............................................................ 8
"Consolidated Funded Debt".............................................................. 8
"Consolidated Group".................................................................... 8
</TABLE>
i
<PAGE> 3
<TABLE>
<CAPTION>
Page
<S> <C>
"Consolidated Indebtedness for Money Borrowed".......................................... 9
"Consolidated Indebtedness for Money
Borrowed/Cash Flow Ratio"............................................................ 9
"Consolidated Interest Expense"......................................................... 9
"Consolidated Net Income"............................................................... 9
"Consolidated Net Tangible Assets"...................................................... 10
"Consolidated Net Worth"................................................................ 10
"Consolidated Operating EBIT"........................................................... 10
"Consolidated Total Assets"............................................................. 10
"Consolidated Total Capitalization"..................................................... 10
"Consolidated Total Indebtedness"....................................................... 10
"Contingent Obligation"................................................................. 10
"Current Debt".......................................................................... 11
"Current Ratio"......................................................................... 11
"Default"............................................................................... 11
"Dollar Advance"........................................................................ 12
"Dollars"............................................................................... 12
"Eligible Capital Stock"................................................................ 12
"Enkel International"................................................................... 12
"Enkel Pledge Agreement"................................................................ 12
"Environmental Laws".................................................................... 12
"Equivalent Alternative Currency Amount"................................................ 12
"Equivalent Dollar Amount".............................................................. 12
"ERISA"................................................................................. 13
"Event of Default"...................................................................... 13
"Exchange" or "Exchanged"............................................................... 13
"Exchange Act".......................................................................... 13
"Existing Capitalized Leases"........................................................... 13
"Federal Funds Effective Rate".......................................................... 13
"Fiscal Quarter"........................................................................ 13
"Fiscal Year"........................................................................... 13
"Fixed Assets".......................................................................... 13
"Funded Debt"........................................................................... 14
"Generally Accepted Accounting Principles" or
"GAAP"............................................................................... 14
"Guaranties"............................................................................ 14
"Guarantors"............................................................................ 14
"Hazardous Material".................................................................... 14
"Indebtedness" or "Debt"................................................................ 14
"Indebtedness for Money Borrowed"....................................................... 15
"Intercreditor Agreement"............................................................... 15
"Interest Period"....................................................................... 15
"Inventory"............................................................................. 16
"Investment"............................................................................ 16
"Lending Office"........................................................................ 16
"LIBOR Business Day".................................................................... 16
"LIBOR Loan"............................................................................ 16
"LIBOR Rate"............................................................................ 16
"Lien".................................................................................. 16
"Loan" or "Loans"....................................................................... 17
"Loan Documents"........................................................................ 17
</TABLE>
ii
<PAGE> 4
<TABLE>
<CAPTION>
Page
<S> <C>
"Material Adverse Effect"............................................................... 17
"Multiemployer Plan".................................................................... 17
"Notice of Alternative Currency Borrowing".............................................. 17
"Notice of Dollar Borrowing"............................................................ 17
"Obligations"........................................................................... 17
"Permitted Encumbrances"................................................................ 17
"Person"................................................................................ 17
"Plan".................................................................................. 17
"Pledge Agreements...................................................................... 18
"Pledged Baldwin Technology Subsidiary Stock"........................................... 18
"Pledged BAM Subsidiary Stock".......................................................... 18
"Pledged Borrower Stock................................................................. 18
"Pledged Borrower Subsidiary Stock"..................................................... 18
"Pledged BTL Subsidiary Stock".......................................................... 18
"Pledged Enkel Subsidiary Stock"........................................................ 18
"Pledged Sector Subsidiary Stock"....................................................... 18
"Pledged Stock.......................................................................... 18
"Prime Loan"............................................................................ 18
"Prime Rate"............................................................................ 19
"Principal Office"...................................................................... 19
"Rate Change Date"...................................................................... 19
"Rate Hedging Obligations".............................................................. 19
"Regulation D".......................................................................... 19
"Regulatory Change"..................................................................... 19
"Related Person"........................................................................ 20
"Required Lenders"...................................................................... 20
"Reserve Requirement"................................................................... 20
"Restricted Payments"................................................................... 20
"Revolving Credit Facility"............................................................. 20
"Revolving Credit Notes"................................................................ 21
"Revolving Credit Termination Date"..................................................... 21
"Revolving Loan Commitment"............................................................. 21
"SEC"................................................................................... 21
"Sector Subsidiary...................................................................... 21
"Sector Subsidiary Guaranty"............................................................ 21
"Security Instruments".................................................................. 21
"Senior Note Agreement"................................................................. 21
"Senior Note Documents" ................................................................ 22
"Significant Subsidiary"................................................................ 22
"Single Employer Plan".................................................................. 22
"Solvent"............................................................................... 22
"Special Charges"....................................................................... 22
"Subsidiary"............................................................................ 23
"Total Commitment"...................................................................... 23
"Unavailable Commitment Amount"......................................................... 23
"Voting Stock".......................................................................... 23
1.2. Accounting Terms........................................................................ 23
1.3. Other Terms............................................................................. 23
</TABLE>
iii
<PAGE> 5
<TABLE>
<CAPTION>
Page
ARTICLE II
REVOLVING CREDIT FACILITY
<S> <C>
2.1. Commitment.............................................................................. 24
2.2. Amounts................................................................................. 24
2.3. Advances................................................................................ 25
2.4. Payment of Interest..................................................................... 26
2.5. Payment of Principal.................................................................... 27
2.6. Use of Proceeds......................................................................... 28
2.7. Notes................................................................................... 28
2.8. Pro Rata Payments....................................................................... 29
2.9. Voluntary Reduction in Commitment....................................................... 29
2.10. Prepayment of Loans..................................................................... 29
2.11. Conversions and Elections of Interest Periods........................................... 30
2.12. Fees.................................................................................... 30
2.13. Deficiency Advances..................................................................... 31
2.14. Unavailable Commitment Amount; Reduction in
Commitment.............................................................................. 31
2.15. Authority to Debit Borrower Account..................................................... 32
ARTICLE III
YIELD PROTECTION AND ILLEGALITY
3.1. Additional Costs........................................................................ 32
3.2. Suspension of Loans..................................................................... 34
3.3. Illegality.............................................................................. 35
3.4. Compensation............................................................................ 35
3.5. Substitution of Loans................................................................... 36
ARTICLE IV
CONDITIONS TO MAKING LOANS
4.1. Conditions of Initial Advance........................................................... 36
4.2. Conditions of Loans..................................................................... 39
ARTICLE V
SECURITY; GUARANTIES
5.1. Security................................................................................ 40
5.2. Guaranty................................................................................ 40
5.3. New Subsidiaries........................................................................ 40
5.4. Certain Stock Owned by Sector Subsidiaries and
Other Baldwin Subsidiaries.............................................................. 41
5.5. Filing and Recording Instruments........................................................ 41
5.6. Further Assurances...................................................................... 41
</TABLE>
iv
<PAGE> 6
<TABLE>
<CAPTION>
Page
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
<S> <C>
6.1. Organization, Etc....................................................................... 42
6.2. Business; Financial Statements.......................................................... 42
6.3. Actions Pending......................................................................... 43
6.4. Title to Properties..................................................................... 44
6.5. Tax Returns and Payments................................................................ 44
6.6. Conflicting Agreements and Other Matters................................................ 45
6.7. ERISA................................................................................... 45
6.8. Environmental Matters................................................................... 47
6.9. Labor Relations......................................................................... 48
6.10. Disclosure.............................................................................. 48
6.11. Status Under Certain Federal Statutes................................................... 48
6.12. Margin Stock............................................................................ 49
6.13. No Consents, Etc........................................................................ 49
6.14. Solvency................................................................................ 49
6.15. Restrictions on Dividends............................................................... 50
6.16. No Senior or Equal Debt................................................................. 50
6.17. Survival of Warranties and Representations.............................................. 50
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1. Financial Reporting..................................................................... 50
7.2. Inspection of Property.................................................................. 55
7.3. Corporate Existence, Etc................................................................ 55
7.4. Payment of Taxes and Claims............................................................. 55
7.5. Compliance with Laws, Etc............................................................... 56
7.6. Maintenance of Properties............................................................... 56
7.7. Insurance............................................................................... 56
7.8. Scope of Business....................................................................... 56
7.9. Environmental Compliance................................................................ 56
7.10. Maintenance of Books and Records........................................................ 57
7.11. Payment of Trade Payables............................................................... 58
7.12. Pay Indebtedness to Lenders and Perform other
Covenants............................................................................... 58
7.13. Environmental Reports................................................................... 58
7.14. Notice of Discharge of Hazardous Material or
Environmental Complaint................................................................. 58
7.15. Indemnification......................................................................... 59
7.16. Further Assurances...................................................................... 59
7.17. Use of Proceeds......................................................................... 59
7.18. New Subsidiaries........................................................................ 59
</TABLE>
v
<PAGE> 7
<TABLE>
<CAPTION>
Page
ARTICLE VIII
NEGATIVE COVENANTS
<S> <C>
8.1. Financial Covenants..................................................................... 60
8.2. Restricted Payments..................................................................... 62
8.3. Liens and Other Restrictions............................................................ 63
8.4. Indebtedness............................................................................ 71
8.5. Compliance with ERISA................................................................... 73
8.6. Tax Sharing............................................................................. 75
8.7. Fiscal Year............................................................................. 75
8.8. Amendments to Agreements................................................................ 75
8.9. Ownership of Borrower and Guarantor Stock............................................... 75
ARTICLE IX
EVENTS OF DEFAULT AND ACCELERATION
9.1. Events of Default....................................................................... 75
9.2. Agent to Act............................................................................ 79
9.3. Cumulative Rights....................................................................... 79
9.4. No Waiver............................................................................... 79
9.5. Allocation of Proceeds.................................................................. 79
ARTICLE X
THE AGENT
10.1. Appointment............................................................................. 80
10.2. Attorneys-in-fact....................................................................... 80
10.3. Limitation on Liability................................................................. 80
10.4. Reliance................................................................................ 80
10.5. Notice of Default....................................................................... 81
10.6. No Representations...................................................................... 81
10.7. Indemnification......................................................................... 82
10.8. Lender.................................................................................. 82
10.9. Resignation............................................................................. 82
10.10. Sharing of Payments, Etc................................................................ 83
10.11. Fees.................................................................................... 83
ARTICLE XI
MISCELLANEOUS
11.1. Assignments and Participations.......................................................... 84
11.2. Notices................................................................................. 86
11.3. Setoff.................................................................................. 88
11.4. Survival................................................................................ 88
11.5. Expenses................................................................................ 89
11.6. Amendments.............................................................................. 89
11.7. Counterparts............................................................................ 90
</TABLE>
vi
<PAGE> 8
<TABLE>
<CAPTION>
Page
<S> <C>
11.8. Termination............................................................................. 90
11.9. GOVERNING LAW........................................................................... 91
11.10. Representation and Warranty of the Lenders.............................................. 91
11.11. Agreement Controls...................................................................... 91
11.12. CONSENT TO JURISDICTION; OTHER WAIVERS.................................................. 91
EXHIBIT A Applicable Commitment Percentages.......................................................A-1
EXHIBIT B Form of Assignment and Acceptance.......................................................B-1
EXHIBIT C Form of Available Commitment Certificate................................................C-1
EXHIBIT D Notice of Dollar Borrowing..............................................................D-1
EXHIBIT D Notice of Alternative Currency Borrowing................................................D-3
EXHIBIT E Form of Revolving Credit Promissory Note................................................E-1
EXHIBIT F Form of Solvency Certificates...........................................................F-1
EXHIBIT G Form of Opinions of Counsel for the Borrowers
and the Guarantors......................................................................G-1
EXHIBIT G Form of Opinion of Bermuda Counsel for BTL..............................................G-2
EXHIBIT H Form of BTL Note Pledge Agreement.......................................................H-1
EXHIBIT I Form of Notice of Appointment (or Revocation)
of Authorized Officer...................................................................I-1
SCHEDULE 1.1-A Alternative Currencies........................................................I-2
SCHEDULE 6.1 Incorporation, Foreign Qualification and
Ownership of Borrowers, Borrower
Subsidiaries and Baldwin Subsidiaries.........................................I-3
SCHEDULE 6.3 Actions Pending...............................................................I-4
SCHEDULE 8.3(a) Indebtedness Secured by Liens.................................................I-5
SCHEDULE 8.3(f) Transactions with Affiliates..................................................I-6
SCHEDULE 8.4(a) Existing Junior Indebtedness..................................................I-7
SCHEDULE 8.4(b) Existing Capitalized Leases...................................................I-8
SCHEDULE 9.1(k) Permitted Holders of More than 49%
Voting Control of Baldwin.....................................................I-9
</TABLE>
vii
<PAGE> 9
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
THIS AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
December 31, 1995 (as amended or supplemented from time to time, the
"Agreement"), is made by and among:
BALDWIN AMERICAS CORPORATION, a corporation organized and existing
under the laws of the State of Delaware and currently having its principal
executive office in Rosemont, Illinois ("BAM"), and BALDWIN TECHNOLOGY LIMITED,
a corporation organized and existing under the laws of Bermuda and currently
having its principal place of business in Hamilton, Bermuda ("BTL") (BAM and BTL
being referred to collectively as the "Borrowers" and individually as a
"Borrower");
BALDWIN TECHNOLOGY COMPANY, INC., a corporation organized and existing
under the laws of the State of Delaware ("Baldwin"), of which BAM and BTL are
wholly-owned Subsidiaries,
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America (formerly
known as NationsBank of North Carolina, National Association) ("NationsBank"),
Bank of Boston Connecticut, a banking corporation organized and existing under
the laws of the State of Connecticut ("Bank of Boston") and each other lender
which may hereafter execute and deliver an Assignment and Acceptance (as defined
below) with respect to this Agreement pursuant to Section 11.1 (hereinafter
NationsBank, Bank of Boston and all such lenders may be referred to individually
as a "Lender" or collectively as the "Lenders"); and
NATIONSBANK, NATIONAL ASSOCIATION, a national banking association
organized and existing under the laws of the United States of America (formerly
known as NationsBank of North Carolina, National Association) in its capacity as
agent for the Lenders (in such capacity, the "Agent").
W I T N E S S E T H:
WHEREAS, the Borrowers, Baldwin, the Lenders party thereto, and
NationsBank, as Agent entered into that certain Revolving Credit Agreement dated
as of November 23, 1993 (the "Initial Credit Agreement"), pursuant to which the
Lenders thereunder made available to the Borrowers a revolving credit facility
in the maximum aggregate principal amount outstanding at any time of
$20,000,000; and
WHEREAS, the Borrowers, Baldwin, NationsBank, as Lender, NationsBank,
as Agent, and Bank of Boston entered into a First Amendment to Revolving Credit
Agreement dated as of March 31, 1994 (the "First Amendment"); and
<PAGE> 10
WHEREAS, the Borrowers, Baldwin, NationsBank, as Agent, NationsBank and
Bank of Boston, as Lenders entered into a Second Amendment to Revolving Credit
Agreement dated as of August 1, 1995 (the "Second Amendment") (the Initial
Credit Agreement, as amended by the First Amendment and the Second Amendment,
being referred to as the "Existing Credit Agreement"); and
WHEREAS, the parties wish to amend and restate the Existing Credit
Agreement under the terms and conditions hereinafter set forth;
NOW, THEREFORE, the Borrowers, Baldwin, the Lenders and the Agent
hereby amend and restate the Existing Credit Agreement in its entirety as
follows:
ARTICLE I
DEFINITIONS AND TERMS
1.1. DEFINITIONS. For the purposes of this Agreement, in addition to
the definitions set forth above, the following terms shall have the respective
meanings set forth below:
"Accounts" means all accounts receivable owing to any Borrower
or any of its consolidated Subsidiaries;
"Advance" means a borrowing of new funds under the Revolving
Credit Facility consisting of the aggregate principal amount of a Prime
Loan or a LIBOR Loan;
"Affiliate" means a Person (i) which directly or indirectly
through one or more intermediaries controls, or is controlled by, or is
under common control with, a Borrower, a Borrower Subsidiary, Baldwin
or a Baldwin Subsidiary; (ii) which beneficially owns or holds 5% or
more of any class of the outstanding voting stock (or in the case of a
Person which is not a corporation, 5% or more of the equity interest)
of a Borrower, a Borrower Subsidiary, Baldwin or a Baldwin Subsidiary;
or (iii) 5% or more of any class of the outstanding voting stock (or in
the case of a Person which is not a corporation, 5% or more of the
equity interest) of which is beneficially owned or held by a Borrower,
a Borrower Subsidiary, Baldwin or a Baldwin Subsidiary. The term
"control" means the possession, directly or indirectly, of the power to
direct or cause the direction of the management and policies of a
Person, whether through ownership of voting stock, by contract or
otherwise;
"Agent's Alternative Currency Account(s)" means the account(s)
of the Agent maintained by the Agent at the Principal Office or at such
other location(s) specified in writing from time to time by the Agent
to the Borrowers and the Lenders;
2
<PAGE> 11
"Agent's Dollar Account" means the account of the Agent
maintained by the Agent at the Principal Office;
"Alternative Currency" means any of the currencies specified
in Schedule 1.1-A, and any other currency as to which all Lenders and
the Borrowers from time to time may agree, in each case that is freely
transferable and available to all Lenders in the London inter-bank
deposit market;
"Alternative Currency Advance" means an Advance denominated in
an Alternative Currency;
"Applicable Commitment Percentage" means, for each Lender,
with respect to the Obligations hereunder, a fraction (expressed as a
percentage), the numerator of which shall be the amount of such
Lender's Revolving Loan Commitment at the date of determination and the
denominator of which shall be the Total Commitment, which Applicable
Commitment Percentage for each Lender as of the Closing Date is as set
forth in Exhibit A attached hereto and incorporated herein by
reference; provided that the Applicable Commitment Percentage of each
Lender shall be increased or decreased to reflect any assignments to or
by such Lender effected in accordance with Section 11.1 hereof;
"Applicable Currency" means any Alternative Currency selected
by the Borrowers pursuant to Section 2.3(c);
"Applicable Margin" means (a) initially, 1.25%, and (b)
commencing on the first Rate Change Date after December 31, 1996, the
margin set forth below opposite the applicable Consolidated
Indebtedness for Money Borrowed/Cash Flow Ratio with respect to the
LIBOR Loans:
<TABLE>
<CAPTION>
Consolidated
Indebtedness for Money Applicable
Borrowed/Cash Flow Ratio Margin
<S> <C>
Less than 2.00 to 1.00 1.00%
Less than or equal to 1.25%
2.50 to 1.00 and greater
than or equal to 2.00
to 1.00
Greater than 2.50 to 1.00 1.50%
</TABLE>
provided, however, that the Applicable Margin shall be adjusted on each
Rate Change Date from and after December 31, 1996, based upon the
Consolidated Indebtedness for Money Borrowed/Cash Flow Ratio for the
period comprised of the four consecutive Fiscal Quarters ended on the
immediately preceding Calculation Date, to be the margin set out above
opposite the
3
<PAGE> 12
applicable Consolidated Indebtedness for Money Borrowed/Cash Flow
Ratio. Such change in the Applicable Margin shall be applicable to all
LIBOR Loans extended, renewed, continued or converted on or after such
Rate Change Date.
"Applicable Unused Fee Rate" means (a) initially, .375% per
annum, and (b) commencing on the first Rate Change Date after December
31, 1996, the rate set forth below opposite the applicable
<TABLE>
<CAPTION>
Consolidated
Indebtedness for Money Applicable Unused
Borrowed/Cash Flow Ratio Fee Rate
<S> <C>
Less than 2.00 to 1.00 .300%
Less than or equal to .375%
2.50 to 1.00 and greater
than or equal to 2.00
to 1.00
Greater than 2.50 to 1.00 .450%
</TABLE>
provided, however, that the Applicable Unused Fee Rate shall be
adjusted on each Rate Change Date from and after December 31, 1996,
based upon the Consolidated Indebtedness for Money Borrowed/Cash Flow
Ratio for the period comprised of the four consecutive Fiscal Quarters
ended on the immediately preceding Calculation Date, to be the margin
set out above opposite the applicable Consolidated Indebtedness for
Money Borrowed/Cash Flow Ratio.
"Assignment and Acceptance" shall mean an Assignment and
Acceptance in the form of Exhibit B attached hereto and incorporated
herein by reference (with blanks appropriately filled in) executed by
the assignor Lender, the assignee, the Agent and the Borrowers and
delivered to the Agent in connection with an assignment of a Lender's
interest under this Agreement pursuant to Section 11.1;
"Authorized Officer" means (i) any of the Chairman, President,
Executive Vice Presidents, Senior Vice Presidents, Vice Presidents or
Chief Financial Officer of any Borrower, or (ii) any other person
expressly designated by any person described in clause (i) as an
Authorized Officer for purposes of this Agreement, as set forth from
time to time in a certificate to such effect delivered to the Agent in
substantially the form of Exhibit I hereto;
4
<PAGE> 13
"Available Commitment Certificate" means a certificate in the
form set forth in Exhibit C attached hereto and incorporated herein by
reference;
"Baldwin Foreign Subsidiary" means any Subsidiary of Baldwin
(other than BAM, BTL, any Borrower Subsidiary or any Sector Subsidiary)
that is organized and existing under the laws of a country other than
the United States;
"Baldwin Guaranty" means that Amended and Restated Guaranty
Agreement of even date herewith by and between Baldwin and the Agent,
pursuant to which Baldwin has unconditionally guaranteed the payment
and performance of the Obligations, as the same may be modified,
amended, or supplemented from time to time as therein permitted;
"Baldwin Pledge Agreement" means that Amended and Restated
Pledge Agreement of even date herewith by and between Baldwin and the
Agent, pursuant to which Baldwin has assigned, transferred, pledged and
set over unto the Agent for the benefit of the Lenders its Pledged
Borrower Stock and Pledged Sector Subsidiary Stock, together with all
dividends paid upon, all securities received in addition to and in
exchange for, and all rights to subscribe for securities incident to,
its Pledged Borrower Stock and Pledged Sector Subsidiary Stock, to
secure the payment and performance of Baldwin's obligations pursuant to
the Baldwin Guaranty and the Baldwin Pledge Agreement, as the same may
be modified, amended or supplemented from time to time as therein
permitted;
"Baldwin Subsidiary" means BAM, BTL, any Sector
Subsidiary or any other Subsidiary of Baldwin;
"Baldwin Technology" means Baldwin Technology Corporation, a
corporation organized and existing under the laws of the State of
Connecticut, and a wholly-owned Subsidiary of BAM;
"Baldwin Technology Pledge Agreement" means that Amended and
Restated Pledge Agreement of even date herewith by and between Baldwin
Technology and the Agent, pursuant to which Baldwin Technology has
assigned, transferred, pledged and set over unto the Agent for the
benefit of the Lenders its Pledged Baldwin Technology Subsidiary Stock,
together with all dividends paid upon, all securities received in
addition to and in exchange for, and all rights to subscribe for
securities incident to, its Pledged Baldwin Technology Subsidiary
Stock, to secure the payment and performance of Baldwin Technology's
obligations pursuant to the BAM Subsidiary Guaranty and the Baldwin
Technology Pledge Agreement, as the same may be modified, amended or
supplemented from time to time as therein permitted;
5
<PAGE> 14
"BAM Foreign Subsidiary" means Enkel Foreign Sales
Corporation or any other Subsidiary of BAM (other than Baldwin
Technology, Kansa Corporation, Enkel Corporation, Misomex of
North America, Inc. or Baldwin Graphic Systems, Inc.) that is
organized and existing under the laws of a country other than
the United States;
"BAM Subsidiary" means (i) Baldwin Technology, (ii) Kansa
Corporation, a Kansas corporation, (iii) Enkel Corporation, a Delaware
corporation, (iv) Enkel Foreign Sales Corporation, a United States
Virgin Islands corporation, (v) Enkel International, (vi) Misomex of
North America, Inc., a Delaware corporation, (vii) Baldwin Graphic
Systems, Inc., a Delaware corporation, or (viii) any other Person that
is, at any time, a Subsidiary of BAM;
"BAM Subsidiary Guaranty" means that Amended and Restated
Guaranty Agreement of even date herewith by and among the BAM
Subsidiaries (other than Enkel Foreign Sales Corporation and Enkel
International) and the Agent, pursuant to which such BAM Subsidiaries
have unconditionally, jointly and severally guaranteed the payment and
performance of the Obligations, as the same may be modified, amended,
or supplemented from time to time as therein permitted;
"Base Rate" means, with respect to a LIBOR Loan, in respect of
the Interest Period specified by an Authorized Officer in the Borrowing
Notice for such LIBOR Loan, the rate (expressed as a percentage and
rounded upward if necessary to the nearest 1/100 of 1%) (which shall be
the same for each day of such Interest Period) determined by the Agent
in good faith in accordance with its usual procedures for its customers
generally to be the average of the rates per annum for deposits in
Dollars or the Applicable Currency (as the case may be) offered to
major money center banks in the London interbank market at
approximately 11:00 A.M. London time two (2) LIBOR Business Days prior
to the commencement of the applicable Interest Period in an amount
approximately equal to the principal amount of, and for a period
comparable to the Interest Period for, such LIBOR Loan;
"Board" means the Board of Governors of the Federal
Reserve System (or any successor body);
"Borrower Subsidiary" means any Subsidiary of a Borrower;
"Borrower Account" means the Borrowers' Dollar Account
and the Borrowers' Alternative Currency Account, collectively;
"Borrowers' Alternative Currency Account(s)" means the
account(s) of the Borrowers maintained by the Borrowers for Alternative
Currency Advances specified in writing from time to time by the
Borrowers and the Agent;
6
<PAGE> 15
"Borrowers' Dollar Account" means (i) demand deposit account
number 001-009-27-319 in the name of BAM and BTL with NationsBank of
Georgia, National Association, or (ii) any successor account of the
Borrowers with the Agent, which may be maintained at one or more
offices of the Agent, or an agent for the Agent;
"Borrowers Pledge Agreement" means that Amended and Restated
Pledge Agreement of even date herewith by and between each Borrower and
the Agent, pursuant to which each Borrower has assigned, transferred,
pledged and set over unto the Agent for the benefit of the Lenders its
Pledged Borrower Subsidiary Stock, together with all dividends paid
upon, all securities received in addition to and in exchange for, and
all rights to subscribe for securities incident to, its Pledged
Borrower Subsidiary Stock, to secure the payment and performance of the
Obligations, as the same may be modified, amended or supplemented from
time to time as therein permitted;
"Borrowing Notice" means a Notice of Dollar Borrowing or
a Notice of Alternative Currency Borrower;
"BTL Subsidiary" means, at any time, any Subsidiary of
BTL;
"BTL Foreign Subsidiary" means any Subsidiary of BTL that is
organized and existing under the laws of a country other than the
United States;
"Business Day" means any day which is not a Saturday, Sunday
or legal holiday and which is a day on which NationsBank is open for
business generally with the public in the State of North Carolina and
commercial banks are not authorized or required to be closed in New
York City;
"Calculation Date" means the last day of each Fiscal
Quarter;
"Capital Expenditures" means for any period the sum of (i) the
aggregate gross amount of additions to property, plant and equipment
(which are classified as such in accordance with GAAP and have a useful
life in excess of one year) of Baldwin and its Subsidiaries during such
period plus (ii) with respect to any Capitalized Lease entered into by
Baldwin or any Baldwin Subsidiary during such period, the capitalized
amount of the obligations of Baldwin or such Subsidiary with respect to
such Capitalized Lease determined in accordance with GAAP applied on a
consistent basis;
"Capitalized Lease Obligation" means any payment
obligation under or with respect to any Capitalized Lease;
7
<PAGE> 16
"Capitalized Leases" means all leases which have been or
should be capitalized in accordance with GAAP as in effect from time to
time including Statement No. 13 of the Financial Accounting Standards
Board and any successor thereof;
"Closing Date" means the date as of which this Agreement is
executed by the Borrowers, the Agent and NationsBank and on which the
conditions set forth in Section 4.1 hereof have been satisfied or
waived by NationsBank;
"Code" means the Internal Revenue Code of 1986, as
amended from time to time;
"Collateral" means all assets, instruments and other
properties, real, personal and intellectual, and interests now or
hereafter subject to a Lien granted pursuant to any Security Instrument
and all products and proceeds thereof;
"Consolidated Cash Flow" means, with respect to Baldwin and
its Subsidiaries for any period, the aggregate sum of (i) Consolidated
Operating EBIT, plus (ii) depreciation and amortization, on a
consolidated basis in accordance with GAAP;
"Consolidated Fixed Charge Ratio" means, with respect to
Baldwin and its Subsidiaries for any period, the sum of (i)
Consolidated Operating EBIT, (ii) depreciation and (iii) amortization,
divided by Consolidated Fixed Charges, on a consolidated basis in
accordance with GAAP (but excluding the effect of the capital
expenditure by Misomex AB of SEK 22.4 million prior to July 5, 1995 to
acquire certain buildings in Hagersten, Sweden that are occupied by
Misomex AB), provided that for the purposes of calculating the
Consolidated Fixed Charge Ratio for the period of four consecutive
Fiscal Quarters ended December 31, 1995, March 31, 1996, June 30, 1996
or September 30, 1996, the effect of the Special Charges shall also be
excluded;
"Consolidated Fixed Charges" means, with respect to Baldwin
and its Subsidiaries for any period, the sum of (i) Consolidated
Interest Expense, (ii) current maturities of Funded Debt, (iii) (to the
extent not included in clause (ii)) current maturities of Capitalized
Leases, (iv) dividend expense and (v) without duplication, other
Capital Expenditures, on a consolidated basis in accordance with GAAP;
"Consolidated Funded Debt" means, as at any date of
determination, the aggregate total Funded Debt of Baldwin and its
Subsidiaries on a consolidated basis in accordance with GAAP;
"Consolidated Group" means Baldwin and its Subsidiaries,
taken as a whole;
8
<PAGE> 17
"Consolidated Indebtedness for Money Borrowed" means, at any
date of determination, the aggregate total Indebtedness for Money
Borrowed of Baldwin and its Subsidiaries on a consolidated basis in
accordance with GAAP;
"Consolidated Indebtedness for Money Borrowed/Cash Flow Ratio"
means, with respect to Baldwin and its Subsidiaries for any period, (i)
Consolidated Indebtedness for Money Borrowed as at the last day of such
period, divided by (ii) Consolidated Cash Flow for such period, on a
consolidated basis in accordance with GAAP;
"Consolidated Interest Expense" means, with respect to Baldwin
and its Subsidiaries for any period, the gross interest expense of
Baldwin and its Subsidiaries determined on a consolidated basis in
accordance with GAAP applied on a consistent basis, including, without
limitation, (i) the amortization of debt discounts, (ii) the
amortization of all fees (including, without limitation, fees with
respect to interest rate protection agreements) payable in connection
with the incurrence of Indebtedness to the extent included in interest
expense and (iii) the portion of any Capitalized Lease allocable to
interest expense. For purposes of the foregoing, gross interest expense
shall be determined after (x) giving effect to any net payments made or
received by Baldwin and its Subsidiaries with respect to interest rate
protection agreements entered into as a hedge against interest rate
exposure; and (y) excluding therefrom the gross interest expense of any
Person accrued prior to the date it becomes a Subsidiary;
"Consolidated Net Income" means, with respect to any period,
consolidated gross revenues of Baldwin and its Subsidiaries less all
operating and non-operating expenses of Baldwin and its Subsidiaries
including all charges of a proper character (including current and
deferred taxes on income, provision for taxes on unremitted foreign
earnings which are included in gross revenues, amortization,
depreciation and current additions to reserves), but not including in
gross revenues any gains (net of expenses and taxes applicable thereto)
in excess of losses resulting from the sale, conversion or other
disposition of assets (other than Inventory and used equipment in the
ordinary course of the business of Baldwin and its Subsidiaries), any
earnings or losses attributable to any corporation which is not a
Subsidiary of Baldwin, any gains arising from transactions of a
nonrecurring and material nature, any gains arising from the sale or
discontinuation of operations, any gains resulting from the write-up of
assets, any equity of Baldwin or any of its Subsidiaries in the
unremitted earnings of any corporation which is not a Subsidiary of
Baldwin, any earnings of any Person acquired by Baldwin or any of its
Subsidiaries through purchase, merger or consolidation or otherwise for
any year
9
<PAGE> 18
prior to the year of acquisition, any revenues of Baldwin or any of its
Subsidiaries from sales of goods or services to any other Subsidiary of
Baldwin or to Baldwin, or any deferred credit representing the excess
of equity in any Subsidiary at the date of acquisition over the cost of
the investment in such Subsidiary; all determined in accordance with
GAAP;
"Consolidated Net Tangible Assets" means (i) Consolidated
Total Assets, less (ii) the sum of (a) unamortized patents, copyrights,
trademarks, trade names, franchises, goodwill, and other similar
intangibles; (b) unamortized debt discount and expense; and (c) all
liabilities of Baldwin and its Subsidiaries on a consolidated basis as
of the most recent balance sheet, determined in accordance with GAAP,
other than Consolidated Funded Debt, minority interests and deferred
taxes;
"Consolidated Net Worth" means, on any date as of which the
amount thereof is to be determined, the shareholders' equity of Baldwin
and its Subsidiaries, determined on a consolidated basis in accordance
with GAAP, except that such amount shall (i) include preferred stock
(other than preferred stock which would not qualify as Eligible Capital
Stock), and (ii) exclude non-cash losses from discontinued operations
and any foreign exchange translation adjustments;
"Consolidated Operating EBIT" means, with respect to Baldwin
and its Subsidiaries for any period, the sum of (i) Consolidated Net
Income, (ii) Consolidated Interest Expense and (iii) (to the extent
deducted in calculating Consolidated Net Income) current and deferred
taxes on income and provision for taxes on unremitted foreign earnings
which are included in gross revenues, all on a consolidated basis in
accordance with GAAP;
"Consolidated Total Assets" means the aggregate total assets
of Baldwin and its Subsidiaries on a consolidated basis as of the most
recent balance sheet, determined in accordance with GAAP;
"Consolidated Total Capitalization" means (a) for purposes of
Section 8.4(a)(iv) hereof, the sum of (i) Consolidated Funded Debt,
plus (ii) Consolidated Net Worth; and (b) for purposes of Section
8.4(a)(v) hereof, the sum of (i) Consolidated Total Indebtedness plus
(ii) Consolidated Net Worth;
"Consolidated Total Indebtedness" means the aggregate total
Indebtedness of Baldwin and its Subsidiaries, on a consolidated basis
in accordance with GAAP;
"Contingent Obligation" of any Person means any obliga-
tion of such Person guaranteeing or in effect guaranteeing any
10
<PAGE> 19
Indebtedness, dividend or other obligation of any other Person (the
"primary obligor") in any manner, whether directly or indirectly,
including obligations of such Person however incurred:
(i) to purchase such Indebtedness or other
obligation of the primary obligor or any property or
assets constituting security therefor;
(ii) to advance or supply funds in any manner (A) for
the purchase or payment of such Indebtedness or other
obligation of the primary obligor, or (B) to maintain a
minimum working capital, net worth or other balance sheet
condition or any income statement condition of the primary
obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation;
(iii) to grant or convey any lien, security interest,
pledge, charge or other encumbrance on any property or assets
of such Person to secure payment of such Indebtedness or other
obligation of the primary obligor;
(iv) to lease property or to purchase securities or
other property or services primarily for the purpose of
assuring the owner or holder of such Indebtedness or
obligation of the ability of the primary obligor to make
payment of such Indebtedness or other obligation; or
(v) otherwise to assure the owner of the
Indebtedness or such obligation of the primary obligor
against loss in respect thereof;
"Current Debt" means, as applied to any Person, (i) all
Indebtedness of such Person that matures within one year or less from
the date of its creation and is not renewable or extendable beyond such
period at the option of such Person, including all payments in respect
of Funded Debt that are required to be made within one year from the
date of determination of such Funded Debt, and (ii) bankers and trade
acceptances, whenever maturing;
"Current Ratio" shall mean on any date as of which the amount
thereof is to be determined, the ratio of (a) the current assets of
Baldwin and its Subsidiaries, determined on a consolidated basis in
accordance with GAAP, to (b) the current liabilities of Baldwin and its
Subsidiaries, determined on a consolidated basis in accordance with
GAAP;
"Default" means any event or condition which, with the giving
or receipt of notice or lapse of time or both, would constitute an
Event of Default hereunder;
11
<PAGE> 20
"Dollar Advance" means an Advance denominated in Dollars;
"Dollars" and the symbol "$" means dollars constituting legal
tender for the payment of public and private debts in the United States
of America;
"Eligible Capital Stock" means any class or series of capital
stock of Baldwin other than any class or series which has fixed payment
obligations or is redeemable at the option of the holder unless such
fixed payment obligations or repurchase obligations on exercise of such
redemption option can be satisfied, at the election of Baldwin through
the issuance of shares of common stock;
"Enkel International" means Enkel International Sales
Corporation, an Illinois corporation;
"Enkel Pledge Agreement" means that Amended and Restated
Pledge Agreement of even date herewith by and between Enkel Corporation
and the Agent, pursuant to which Enkel Corporation has assigned,
transferred, pledged and set over to the Agent for the benefit of the
Lenders its Pledged Enkel Subsidiary Stock, together with all dividends
paid upon, all securities received in addition to and in exchange for,
and all rights to subscribe for securities incident to, its Pledged
Enkel Subsidiary Stock, to secure the payment and performance of Enkel
Corporation's obligations pursuant to the BAM Subsidiary Guaranty and
the Enkel Pledge Agreement, as the same may be modified, amended or
supplemented from time to time, as therein permitted;
"Environmental Laws" means, collectively, the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, as
amended, the Superfund Amendments and Reauthorization Act of 1986, the
Resource Conservation and Recovery Act, the Toxic Substances Control
Act, as amended, the Clean Air Act, as amended, the Clean Water Act, as
amended, any other "Superfund" or "Superlien" law or any other federal,
or applicable state or local statute, law, ordinance, code, rule,
regulation, order or decree regulating, relating to, or imposing
liability or standards of conduct concerning, any hazardous, toxic or
dangerous waste, substance or material, as now or at any time hereafter
in effect;
"Equivalent Alternative Currency Amount" means the amount of
any Alternative Currency required to purchase a given amount of
Dollars, as quoted by the Agent immediately following receipt by the
Agent of notice of any borrowing, continuation, conversion, prepayment
or repayment of Loans, or the request of any Borrower or any Lender;
"Equivalent Dollar Amount" means the amount of Dollars
that may be purchased with a given amount of an Alternative
12
<PAGE> 21
Currency, as quoted by the Agent immediately following receipt by the
Agent of notice of any borrowing, continuation, conversion, prepayment
or repayment of Loans, or the request of any Borrower or any Lender;
"ERISA" means, at any date, the Employee Retirement Income
Security Act of 1974 and the regulations thereunder, all as the same
shall be in effect at such date;
"Event of Default" means any of the occurrences set forth
as such in Section 9.1 hereof;
"Exchange" or "Exchanged" each refers to a conversion of a
Loan denominated in an Alternative Currency from such Alternative
Currency into the Equivalent Dollar Amount thereof;
"Exchange Act" means the Securities Exchange Act of 1934,
as amended;
"Existing Capitalized Leases" means those Capitalized Leases
of Baldwin and its Subsidiaries existing on the Closing Date that are
listed on Schedule 8.4;
"Federal Funds Effective Rate" for any day, as used herein,
means the rate per annum (rounded upward to the nearest 1/100 of 1%)
announced by the Federal Reserve Bank of New York (or any successor) on
such day as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the
previous trading day, as computed and announced by such Federal Reserve
Bank (or any successor) in substantially the same manner as such
Federal Reserve Bank computes and announces the weighted average it
refers to as the "Federal Funds Effective Rate" as of the date of this
Agreement; provided, if such Federal Reserve Bank (or its successor)
does not announce such rate on any day, the "Federal Funds Effective
Rate" for such day shall be the Federal Funds Effective Rate for the
last day on which such rate was announced;
"Fiscal Quarter" of Baldwin or any Borrower means the 3- month
period ending each March 31, June 30, September 30 and December 31 in
any Fiscal Year;
"Fiscal Year" of Baldwin or any Borrower means the 12- month
period of the Borrower commencing on July 1 of each calendar year and
ending on June 30 of the subsequent calendar year;
"Fixed Assets" shall mean all assets of Baldwin and its
Subsidiaries which are classified as "property, plant and equipment" on
the balance sheet in accordance with GAAP;
13
<PAGE> 22
"Funded Debt" shall mean, as applied to any Person, (i) all
Indebtedness of such Person that matures more than one year from the
date of its creation or matures within one year or less from the date
of its creation but is renewable or extendable at the option of such
Person to a date more than one year from the date of its creation, and
(ii) any Current Debt which remains outstanding beyond one year from
the date of its creation or its occurrence, but excluding bankers or
trade acceptances whenever maturing;
"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles in the United States of
America applied on a consistent basis through the relevant periods;
"Guaranties" means, collectively, the Baldwin Guaranty, the
Sector Subsidiary Guaranty, the BAM Subsidiary Guaranty and any other
guaranty executed by a BAM Subsidiary, a BTL Subsidiary or other Person
pursuant to Section 5.3 or 8.3(b) hereof, as such Guaranties may be
amended or supplemented from time to time;
"Guarantors" means, collectively, Baldwin, the Sector
Subsidiaries, the BAM Subsidiaries (other than BAM Foreign
Subsidiaries, the BTL Subsidiaries (other than BTL Foreign
Subsidiaries) and any other Person that has executed a Guaranty and
(pursuant to such Guaranty) is a guarantor of the Obligations;
"Hazardous Material" means and includes any hazardous or toxic
waste, substance or material, the generation, handling, storage,
disposal, treatment or emission of which is subject to any
Environmental Law in effect on any date;
"Indebtedness" or "Debt" of a Person shall mean (i)
indebtedness of such Person for borrowed money, whether short-term or
long-term and whether secured or unsecured, (ii) all obligations of
such Person evidenced by bonds, debentures, notes or other similar
instruments, (iii) obligations of such Person under Capitalized Leases,
(iv) obligations of such Person arising under acceptance facilities,
(v) the undrawn face amount of, and unpaid reimbursement obligations in
respect of, all letters of credit issued for the account of such
Person, (vi) all obligations of such Person upon which interest charges
are customarily paid, (vii) all obligations of such Person under
conditional sale or other title retention agreements relating to
property purchased by such Person (even though the rights and remedies
of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (viii) all
executory obligations of such Person in respect of Rate Hedging
Obligations, except that if any agreement relating to such obligations
provides for the netting of amounts payable by and
14
<PAGE> 23
to such Person thereunder or if any such agreement provides for the
simultaneous payment of amounts by and to such Person, then in each
such case, the amount of such obligations shall be the net amount
thereof, and (ix) all Contingent Obligations in respect of Indebtedness
of other Persons;
"Indebtedness for Money Borrowed" of a Person means (i) all
indebtedness, obligations and liabilities of such Person for money
borrowed which are evidenced by bonds, debentures, notes or other
similar instruments, whether short-term or long-term and whether
secured or unsecured, and (ii) all Capitalized Leases; provided,
however, the term "Indebtedness for Money Borrowed" shall specifically
exclude payroll indebtedness and trade indebtedness incurred in the
ordinary course of business provided such trade indebtedness has a
maturity of less than one year;
"Intercreditor Agreement" means that Amended and Restated
Intercreditor Agreement of even date herewith by and among NationsBank
as collateral agent thereunder, the Agent, John Hancock Mutual Life
Insurance Company, John Hancock Variable Life Insurance Company, John
Hancock Life Insurance Company of America, and acknowledged and agreed
to by BAM and BTL, as amended or supplemented from time to time;
"Interest Period" for each LIBOR Loan means a period
commencing on the date such LIBOR Loan is made or converted and each
subsequent period commencing on the last day of the immediately
preceding Interest Period for such LIBOR Loan, as the case may be, and
ending, at the Borrowers' option, on the date one, two, three or six
months thereafter as notified to the Agent by an Authorized Officer
three (3) LIBOR Business Days prior to the beginning of such Interest
Period; provided, that,
(i) if an Interest Period for a LIBOR Loan would end on a
day which is not a LIBOR Business Day, such Interest Period
shall be extended to the next LIBOR Business Day (unless such
extension would cause the applicable Interest Period to end in
the succeeding calendar month, in which case such Interest
Period shall end on the next preceding LIBOR Business Day);
(ii) any Interest Period which begins on the last LIBOR
Business Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar month at
the end of such Interest Period) shall end on the last LIBOR
Business Day of a calendar month;
(iii) no Interest Period shall extend past the third
anniversary of the Closing Date; and
15
<PAGE> 24
(iv) there shall not be more than five (5) Interest
Periods with respect to LIBOR Loans in effect on any day;
"Inventory" means and includes any and all goods, merchandise
and other personal property, including, without limitation, goods in
transit now owned or hereafter acquired by any Borrower or any of its
consolidated Subsidiaries and held for sale or lease, furnished under
any contract of service or held as raw materials, work-in-process, or
supplies or materials used or consumed in such Borrower's or Borrower
Subsidiary's business;
"Investment" means with respect to any Person any direct or
indirect loans or advances of money, credit (including all indebtedness
and accounts receivable from such other Person) or property to, or
purchases, repurchases or acquisitions of the securities or obligations
or all or a substantial part of the assets or properties of, or
partnership or joint venture interests in, or a capital contribution to
or other form of investment in, any other Person or the assumption of
any liability of another Person which, in each case, does not arise
from sales to such other Person in the ordinary course of business;
"Lending Office" means, as to each Lender, the Lending Office
of such Lender designated on the signature pages hereof or in an
Assignment and Acceptance or such other office of such Lender (or of an
affiliate of such Lender) as such Lender may from time to time specify
to the Borrower and the Agent as the office by which its Loans are to
be made and maintained;
"LIBOR Business Day" means a Business Day on which the
relevant international financial markets are open for the transaction
of the business contemplated by this Agreement in London, England and
New York, New York;
"LIBOR Loan" means all of the Loans for which the rate of
interest is determined by reference to the LIBOR Rate;
"LIBOR Rate" means, for the Interest Period for any LIBOR
Loan, the rate of interest per annum determined pursuant to the
following formula:
<TABLE>
<CAPTION>
LIBOR Rate = Base Rate + Applicable Margin
--------------------------------------------
<S> <C>
1 - Reserve Requirement
in effect on the first
day of the Interest
Period applicable to
such LIBOR Loan
</TABLE>
"Lien" means any mortgage, pledge, security interest,
encumbrance, statutory or other lien (including any agreement to give
any of the foregoing, any conditional sale or other title retention
agreement, any lease in the nature thereof and
16
<PAGE> 25
the filing of or agreement to give any financing statement under the
Uniform Commercial Code of any jurisdiction, except as a precautionary
filing in connection with true leases) or any other type of
preferential arrangement securing any obligation;
"Loan" or "Loans" means any of the LIBOR Loans or Prime Loans,
as the context may require, made pursuant to Section 2.1 hereof;
"Loan Documents" means collectively, and individually any one
of, this Agreement, the Revolving Credit Notes, the Intercreditor
Agreement, the Guaranties, the Security Instruments, and all other
instruments and documents hereafter executed and delivered by any
Borrower, any Guarantor or any other Person in connection with the
Loans made under this Agreement, as any or all of the same may be
amended, modified or supplemented from time to time;
"Material Adverse Effect" on a Person means a material adverse
effect on the business, properties or condition, financial or
otherwise, of such Person;
"Multiemployer Plan" means any Plan which is a
"multiemployer plan" as such term is defined in section
4001(a)(3) of ERISA;
"Notice of Alternative Currency Borrowing" has the
meaning specified in Section 2.3(c)(i);
"Notice of Dollar Borrowing" has the meaning specified in
Section 2.3(b)(i);
"Obligations" means all obligations, liabilities and
Indebtedness of any Borrower with respect to the payment of (i) all
principal and interest on the Loans as evidenced by the Notes, and (ii)
all fees, expenses and other payments required by or under this
Agreement or any other Loan Document to which it is a party;
"Permitted Encumbrances" means each Lien permitted under
Section 8.3(a) hereof;
"Person" means an individual, partnership, corporation, trust,
unincorporated organization, association, joint venture or a government
or agency or political subdivision thereof;
"Plan" means an "employee pension benefit plan" (as defined in
section 3(2) of ERISA) which is or has been established or maintained,
or to which contributions are or have been made, by Baldwin, any
Borrower or any of their Related Persons;
17
<PAGE> 26
"Pledge Agreements" means, collectively, the Borrowers Pledge
Agreement, the Baldwin Pledge Agreement and the Baldwin Technology
Pledge Agreement, the Enkel Pledge Agreement, or any other pledge
agreement executed by any Person pursuant to Section 5.3, 8.3(b) or
8.3(c) hereof, pursuant to which stock is pledged to secure the
Obligations, as any such Pledge Agreement may be amended or
supplemented from time to time;
"Pledged Baldwin Technology Subsidiary Stock" means all of the
capital stock of each Subsidiary of Baldwin Technology, now or
hereafter issued and outstanding;
"Pledged BAM Subsidiary Stock" means (a) all of the capital
stock, now or hereafter issued and outstanding of each BAM Subsidiary
other than a BAM Foreign Subsidiary, and (b) sixty-five percent (65%)
of all of the capital stock, now or hereafter issued and outstanding,
of each BAM Foreign Subsidiary;
"Pledged Borrower Stock" means all of the capital stock
of each Borrower, now or hereafter issued and outstanding;
"Pledged Borrower Subsidiary Stock" means the Pledged BAM
Subsidiary Stock and the Pledged BTL Subsidiary Stock,
collectively;
"Pledged BTL Subsidiary Stock" means (a) all of the capital
stock, now or hereafter issued and outstanding, of each BTL Subsidiary
other than a BTL Foreign Subsidiary, and (b) sixty-five percent (65%)
of all of the capital stock, now or hereafter issued and outstanding,
of any BTL Foreign Subsidiary;
"Pledged Enkel Subsidiary Stock" means (a) all of the capital
stock, now or hereafter issued and outstanding, of each Subsidiary of
Enkel Corporation other than a BAM Foreign Subsidiary and (b)
sixty-five percent (65%) of all of the capital stock, now or hereafter
issued and outstanding, of each Subsidiary of Enkel that is a BAM
Foreign Subsidiary;
"Pledged Sector Subsidiary Stock" means all of the
capital stock of each Sector Subsidiary now or hereafter
issued and outstanding;
"Pledged Stock" means the Pledged Borrower Stock, the
Pledged Borrower Subsidiary Stock, the Pledged Baldwin
Technology Subsidiary Stock, the Pledged Enkel Subsidiary
Stock and the Pledged Sector Subsidiary Stock, collectively;
"Prime Loan" means all of the Loans for which the rate of
interest is determined by reference to the Prime Rate, provided that no
Loan denominated in an Alternative Currency
18
<PAGE> 27
may be a Prime Loan except under the circumstances described
in Section 3.3;
"Prime Rate" means the rate of interest per annum established
by the Agent as its prime rate from time to time. The Prime Rate is not
necessarily the best or the lowest rate of interest offered by the
Agent;
"Principal Office" means the principal office of the Agent at
One Independence Center, 101 North Tryon Street, Charlotte, North
Carolina 28255-0001, Attention: Dana Weir or such other office and
address as the Agent may from time to time designate;
"Rate Change Date" means each February 15th, May 15th,
September 1st and November 15th;
"Rate Hedging Obligations" of a Person means any and all
obligations of such Person, whether absolute or contingent and however
and whenever created, arising, evidenced or acquired (including all
renewals, extensions and modifications thereof and substitutions
therefor), under (i) any and all agreements, devices or arrangements
designed to protect at least one of the parties thereto from the
fluctuations of interest rates, exchange rates or forward rates
applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, dollar-denominated or
cross-currency interest rate exchange agreements, forward currency
exchange agreements, interest rate cap or collar protection agreements,
forward rate currency or interest rate options, puts, warrants and
those commonly known as interest rate "swap" agreements; and (ii) any
and all cancellations, buybacks, reversals, terminations or assignments
of any of the foregoing;
"Regulation D" means Regulation D of the Board as the
same may be amended or supplemented from time to time;
"Regulatory Change" means, with respect to any Lender, any
change effective after the Closing Date (or in the case of an assignee
of a Lender after the effective date of such assignment) in United
States federal or state laws or regulations (including Regulation D and
capital adequacy regulations) or foreign laws or regulations or the
adoption or making after such date of any interpretations, guidelines,
policies, directives or requests applying to a class of banks, which
includes such Lender, under any United States federal or state or
foreign laws or regulations (whether or not having the force of law),
by any court or governmental or monetary authority charged with the
interpretation or administration thereof whether or not failure to
comply therewith would be unlawful and whether or not published or
proposed prior to the date hereof (and including without limitation any
such change related to or in response to the August 1988 report of the
19
<PAGE> 28
Basle Committee on Banking Regulations and Supervisory
Practices);
"Related Person" shall, for plan purposes, mean, with respect
to any Person, any trade or business, whether or not incorporated,
which, together with such Person, is under common control, as defined
in section 414(b) or (c) of the Code;
"Required Lenders" means, as of any date, Lenders on such date
having Credit Exposures (as defined below) aggregating at least
two-thirds of the aggregate Credit Exposures of all the Lenders on such
date. For purposes of the preceding sentence, the amount of the "Credit
Exposure" of each Lender shall be equal to the aggregate principal
amount of the Loans owing to such Lender, or if there are no Loans
outstanding from such Lender, the aggregate unutilized amount of such
Lender's Revolving Loan Commitment;
"Reserve Requirement" means, for any LIBOR Loan, the average
aggregate rate at which reserves (including, without limitation, any
marginal, supplemental or emergency reserves) are required to be
maintained with respect thereto under Regulation D by the Lenders with
respect to Dollar funding (or funding in the Applicable Currency, as
the case may be) in the London interbank market in the case of any
LIBOR Loan. Without limiting the effect of the foregoing, the Reserve
Requirement shall reflect any other reserves required to be maintained
by such Lenders by reason of any Regulatory Change against (i) any
category of liabilities which includes deposits by reference to which
the Base Rate is to be determined or (ii) any category of extensions of
credit or other assets which include LIBOR Loans;
"Restricted Payments" shall mean (a) the declaration, payment
or making, directly or indirectly, of any dividend, payment or other
distribution, other than dividends payable solely in common stock of
Baldwin, on or with respect to any of the capital stock of Baldwin, any
Borrower or any of their Subsidiaries or the setting apart of any funds
or property therefor, or (b) the making of any payment on account of
the purchase, redemption, retirement or other acquisition, direct or
indirect, or the forgiveness or foreclosure of any Debt owed to
Baldwin, any Borrower or any of their Subsidiaries and secured by a
pledge of, the capital stock of Baldwin, any Borrower or any of their
Subsidiaries (other than a purchase or other acquisition of capital
stock of a Sector Subsidiary from such Sector Subsidiary by Baldwin or
another Sector Subsidiary of Baldwin);
"Revolving Credit Facility" means the facility described
in Article II hereof providing for Loans to the Borrowers by
20
<PAGE> 29
the Lenders in the aggregate principal amount of the Total
Commitment;
"Revolving Credit Notes" or "Notes" means the revolving credit
promissory notes of the Borrower executed and delivered to the Lenders
as provided in Section 2.7 hereof in substantially the form attached
hereto as Exhibit E and incorporated herein by reference;
"Revolving Credit Termination Date" means the earlier to occur
of (i) the third anniversary of the Closing Date, or (ii) any other
date upon which the Total Commitment shall terminate in accordance with
the terms hereof;
"Revolving Loan Commitment" means with respect to each Lender,
the obligation of such Lender to make Loans to the Borrower up to an
aggregate principal amount at any one time outstanding equal to such
Lender's Applicable Commitment Percentage of the Total Commitment as
the same may be increased or decreased from time to time pursuant to
this Agreement;
"SEC" means the United States Securities and Exchange
Commission, or any governmental body or agency hereafter succeeding to
the functions of such securities and Exchange Commission in the
administration of the Securities Act of 1933, as amended, or the
Exchange Act;
"Sector Subsidiary" means (i) Baldwin Europe Consolidated
Inc., a Delaware corporation, or (ii) Baldwin Asia Pacific
Corporation, a Delaware corporation;
"Sector Subsidiary Guaranty" means that Amended and Restated
Guaranty Agreement of even date herewith by and among the Sector
Subsidiaries and the Agent, pursuant to which the Subsidiaries have
unconditionally, jointly and severally guaranteed the payment and
performance of the Obligations, as the same may be modified, amended,
or supplemented from time to time as therein permitted;
"Security Instruments" means collectively, and individually
any one of, the Pledge Agreements and all other agreements, instruments
and other documents, whether now existing or hereafter in effect,
pursuant to which any Borrower, any Guarantor or any other Person shall
grant or convey to the Agent for the benefit of the Lenders a Lien or
other right or interest in property as security for all or any portion
of the Obligations;
"Senior Note Agreement" means the Senior Note Agreement dated
as of October 29, 1993, among Baldwin, BAM and BTL and the Purchasers
(as defined therein);
21
<PAGE> 30
"Senior Note Documents" means, collectively, (a) the Senior
Note Agreement, (b) the Joint and Several Senior Notes by BAM and BTL
pursuant to the Senior Note Agreement, (c) the Guaranty executed by
Baldwin in favor of the Purchasers and other Assured Parties (as
defined therein), pursuant to the Senior Note Agreement, (d) the other
guaranties executed by any Borrower Subsidiaries, Sector Subsidiaries
or other Person in connection with the Joint and Several Senior Notes
or the Senior Note Agreement, (e) any pledge agreements executed by
Baldwin or any other Person in connection with the Joint and Several
Senior Notes or the Senior Note Agreement, and (f) the other Related
Agreements (as defined in the Senior Note Agreement);
"Significant Subsidiary" means (a) each Borrower, (b) each
Guarantor, and (c) each other Subsidiary of Baldwin which at the time
in question would satisfy the definition of a "Significant Subsidiary"
as set forth in Regulation S-X promulgated under the Exchange Act (17
C.F.R. Section 210.1-02(v)) on the date of this Agreement on the basis
that Baldwin's and its other Subsidiaries' equity in the income from
continuing operations of such Subsidiary exceeds 20 percent (20%) of
such income of the Consolidated Group;
"Single Employer Plan" means any Plan covered by Title IV of
ERISA of Baldwin, any Borrower or any of their Subsidiaries, which is
not a Multi-employer Plan;
"Solvent" means, when used with respect to any Person, that at
the time of determination:
(i) the fair value of its assets (both at fair valuation
and at present fair saleable value on an orderly basis) is in
excess of the total amount of its liabilities, including,
without limitation, Contingent Obligations; and
(ii) it is then able and expects to be able to pay its
debts as they mature and does not intend to, and does not
believe that it will, incur debts beyond its ability to repay
such debts as they mature; and
(iii) it has capital sufficient to carry on its
business as conducted and as proposed to be conducted.
With respect to Contingent Obligations, such liabilities shall be
computed at the amount which, in light of all the facts and
circumstances existing at the time, represent the amount which can
reasonably be expected to become an actual or matured liability;
"Special Charges" means special charges to income taken
by Baldwin prior to March 31, 1996, in an aggregate amount not
22
<PAGE> 31
to exceed $3,000,000, which special charges relate to (a) severance
amounts paid to terminated employees in Germany or (b) claims by
brokers of printing press accessories in Germany that such brokers are
entitled to compensation because of Baldwin's termination of certain
brokerage relationships with them;
"Subsidiary" means as to any Person (i) any corporation of
which such Person shall, at the time as of which any determination is
being made, own, either directly or through its Subsidiaries, more than
(x) 50% of the total combined voting power of all classes of the Voting
Stock and (y) 50% of the beneficial interest, (ii) any other
corporation which is otherwise permitted to be consolidated with such
Person under GAAP, and (iii) any partnership, association, joint
venture or other form of business organization, whether or not it
constitutes a legal entity, in which such Person directly or
indirectly, through its Subsidiaries has more than 50% of the equity
interest at the time;
"Total Commitment" means an amount equal to $20,000,000, as
reduced from time to time in accordance with Section 2.9 or Section
2.14 hereof;
"Unavailable Commitment Amount" has the meaning assigned
in Section 2.14 hereof;
"Voting Stock" shall mean any securities of any class of a
Person whose holders are entitled under ordinary circumstances to vote
for the election of directors of such Person (or Persons performing
similar functions) (irrespective of whether at the time securities of
any other class or classes shall have or might have voting power by
reason of the happening of any contingency).
1.2. ACCOUNTING TERMS. Unless otherwise specified herein, all
accounting terms not specifically defined herein shall have the meanings
assigned to such terms and shall be interpreted in accordance with GAAP applied
on a consistent basis.
1.3. OTHER TERMS. All references to the Borrower, the Lenders or the
Agent shall be deemed to include any successor or permitted assign of any
thereof. The terms "hereof," "herein," "hereunder," "hereto," and similar terms
shall be deemed to refer to this Agreement as a whole and not to any particular
provision hereof, unless the context shall clearly require otherwise. All plural
terms shall have a corresponding meaning when used in the singular, and all
singular terms shall have a corresponding meaning when used in the plural.
23
<PAGE> 32
ARTICLE II
REVOLVING CREDIT FACILITY
2.1. COMMITMENT. Subject to the terms and conditions of this Agreement,
each Lender severally agrees to make Advances to the Borrowers from time to time
from the Closing Date until, but not including, the Revolving Credit Termination
Date, each Advance to be in Dollars or an Equivalent Dollar Amount of the
Alternative Currency, in an amount calculated on a pro rata basis as to the
total borrowing requested by the Borrowers on any day determined by such
Lender's Applicable Commitment Percentage up to but not exceeding the Revolving
Loan Commitment of such Lender; provided, however, that the Lender will not be
required and shall have no obligation to make any Advance (i) so long as a
Default or an Event of Default has occurred and is continuing or (ii) if the
Agent has accelerated the maturity of the Revolving Credit Notes as a result of
an Event of Default or (iii) if the Borrowers have not furnished to the Agent
the Available Commitment Certificate required pursuant to Section 7.1(m) hereof;
provided further, however, that immediately after giving effect to each Advance,
the aggregate principal amount of outstanding Loans (including without
limitation the Equivalent Dollar Amount of outstanding Alternative Currency
Advances, based on the respective exchange rates used at the time of such
Advances) shall not exceed the Total Commitment less the Unavailable Commitment
Amount (without duplication). Within such limits, the Borrowers may borrow,
repay and reborrow hereunder, on any Business Day from the Closing Date until,
but (as to borrowings and reborrowings) not including, the Revolving Credit
Termination Date; provided, however, that (x) no LIBOR Loan shall be made less
than one month before the third anniversary of the Closing Date and (y) each
LIBOR Loan may, subject to the provisions of Section 2.5, be repaid only on the
last day of the Interest Period with respect thereto (except as permitted by
Section 2.10(c) hereof). If at any time the aggregate principal amount of
outstanding Loans (including without limitation the Equivalent Dollar Amount of
outstanding Alternative Currency Advances, based on the respective exchange
rates used at the time of such Advances) exceeds the Total Commitment less the
Unavailable Commitment Amount (without duplication), each Borrower, jointly and
severally, shall immediately reduce the outstanding principal balance of the
Loans to the extent of such excess, together with accrued and unpaid interest on
the amounts prepaid and payment of all sums payable by any Borrower as set forth
in Section 3.4 hereof.
2.2. AMOUNTS. Each Advance made hereunder and conversions under Section
2.11 shall be in an amount of at least $750,000 (or, in the case of an
Alternative Currency Advance, the Equivalent Alternative Currency Amount of at
least $750,000), or such greater amount which is an integral multiple of
$250,000 (or, in the case of an Alternative Currency Advance, the Equivalent
Alternative Currency Amount of $250,000) in excess thereof or in an amount
24
<PAGE> 33
equal to the entire difference of the Total Commitment less the aggregate
principal amount of Loans then outstanding.
2.3. ADVANCES.
(a) Each Advance shall be, at the option of the Borrowers
specified in the Borrowing Notice furnished to the Agent pursuant to subsection
2.3(b) hereof, either a Prime Loan or a LIBOR Loan, which shall in each case be
made or maintained by each Lender at its Principal Office. Not more than five
(5) Prime Loans and five (5) LIBOR Loans may be outstanding at the same time.
(b)(i) Notice of Dollar Borrowing. An Authorized Officer shall
give the Agent (1) at least three (3) LIBOR Business Days' irrevocable
telephonic notice of each Dollar Advance that will be a LIBOR Loan prior to
11:00 A.M., Charlotte, North Carolina time; or (2) irrevocable telephonic notice
of each Dollar Advance that will be a Prime Loan prior to 11:00 A.M., Charlotte,
North Carolina time, on the day of such proposed Prime Loan (each such notice
referred to in subpart (1) and (2) being referred to as a "Notice of Dollar
Borrowing"). Each such Notice of Dollar Borrowing, which shall be effective upon
receipt by the Agent, shall specify the amount of the borrowing, the type (Prime
or LIBOR) of Loan, the date of borrowing and, if a LIBOR Loan, the Interest
Period to be used in the computation of interest. An Authorized Officer shall
provide the Agent written confirmation of each such telephonic notice in the
form attached hereto as Exhibit D-1 and incorporated herein by reference with
appropriate insertions, but failure to provide such confirmation shall not
affect the validity of such telephonic notice. Notice of receipt of such Notice
of Dollar Borrowing shall be provided by the Agent to each Lender by telephone
with reasonable promptness, but not later than 1:00 P.M., Charlotte, North
Carolina time, on the same day as Agent's receipt of such telephonic notice. The
Agent shall provide each Lender written confirmation of such telephonic
confirmation, but failure to provide such notice shall not affect the validity
of such telephonic notice.
(ii) Funding of Dollar Borrowing. Not later than 3:00 P.M.,
Charlotte, North Carolina time, on the date specified for each borrowing under
this Section 2.3(b), each Lender shall, pursuant to the terms and subject to the
conditions of this Agreement, make the amount of the Dollar Advance or Dollar
Advances to be made by it on such day available to the Agent, by depositing or
transferring the proceeds thereof in Dollars and in immediately available funds
at the Agent's Dollar Account. The amount so received by the Agent shall,
subject to the terms and conditions of this Agreement, be made available to the
Borrowers by depositing the proceeds thereof in Dollars and in immediately
available funds in the Borrowers' Dollar Account.
(c)(i) Notice of Alternative Currency Borrowing. An
Authorized Officer shall give the Agent at least three (3) LIBOR
25
<PAGE> 34
Business Days' irrevocable telephonic notice of each Alternative Currency
Advance prior to 11:00 A.M., Charlotte, North Carolina time (each such notice
being referred to as a "Notice of Alternative Currency Borrowing"). Each such
Notice of Alternative Currency Borrowing, which shall be effective upon receipt
by the Agent, shall specify the amount of the borrowing, the Alternative
Currency of the borrowing, that such Loan is a LIBOR Loan, the date of borrowing
and the Interest Period to be used in the computation of interest. An Authorized
Officer shall provide the Agent written confirmation of each such telephonic
notice in the form attached hereto as Exhibit D-2 and incorporated herein by
reference with appropriate insertions, but failure to provide such confirmation
shall not affect the validity of such telephonic notice. Notice of receipt of
such Notice of Alternative Currency Borrowing shall be provided by the Agent to
each Lender by telephone with reasonable promptness, but not later than 1:00
P.M., Charlotte, North Carolina time, on the same day as Agent's receipt of such
telephonic notice. The Agent shall provide each Lender written confirmation of
such telephonic confirmation, but failure to provide such notice shall not
affect the validity of such telephonic notice.
(ii) Funding of Alternative Currency Borrowing. Not later than
3:00 P.M., Charlotte, North Carolina time, on the date specified for each
borrowing under this Section 2.3(c), each Lender shall, pursuant to the terms
and subject to the conditions of this Agreement, make the amount of the
Alternative Currency Advance or Alternative Currency Advances to be made by it
on such day available to the Agent, by depositing or transferring the proceeds
thereof in the Applicable Currency and in immediately available funds at the
Agent's Alternative Currency Account for the Applicable Currency. The amount so
received by the Agent shall, subject to the terms and conditions of this
Agreement, be made available to the Borrowers by depositing the proceeds thereof
in the Applicable Currency and in immediately available funds in the Borrowers'
Alternative Currency Account for the Applicable Currency.
2.4. PAYMENT OF INTEREST.
(a) Each Borrower, jointly and severally, shall pay interest
to the Agent for the account of each Lender on the outstanding and unpaid
principal amount of each Loan made by such Lender for the period commencing on
the date of such Loan until such Loan shall be due at the then applicable Prime
Rate for Prime Loans or LIBOR Rate for LIBOR Loans, as designated by an
Authorized Officer pursuant to Section 2.3 hereof or as otherwise provided
herein; provided, however, that if any amount shall not be paid when due (at
maturity, by acceleration or otherwise), such amount shall bear interest
thereafter (1) in the case of a LIBOR Loan, until the end of the current
Interest Period with respect to such LIBOR Loan, at a rate of two percent (2%)
above such LIBOR Rate or the maximum rate permitted by applicable law, whichever
is lower and (2) after the end of such Interest Period, and at all such
26
<PAGE> 35
times with respect to Prime Loans, at a rate of interest per annum which shall
be two percent (2%) above the Prime Rate or the maximum rate permitted by
applicable law, whichever is lower, from the date such amount was due and
payable until the date such amount is paid in full. Interest on any Loan shall
be paid in Dollars to the Agent at the Agent's Dollar Account (or, with respect
to Loans denominated in Alternative Currencies, in the Applicable Currency at
the Agent's Alternative Currency Account for the Applicable Currency).
(b) Interest on each LIBOR Loan shall be computed on the basis
of a year of 360 days and calculated for the actual number of days elapsed.
Interest on each Prime Loan shall be computed on the basis of a year of 365 days
and calculated for the actual number of days elapsed. Interest on each Loan
shall be paid (1) quarterly in arrears on each December 31, March 31, June 30
and September 30 beginning March 31, 1996 and continuing through and including
the Revolving Credit Termination Date with respect to any Prime Loan outstanding
during such quarter, (2) on the last day of the applicable Interest Period for
each LIBOR Loan, provided that if such Interest Period extends for six months,
interest shall also be paid on the day three months after the first day of such
Interest Period, and (3) upon payment in full of the principal amount of such
Loan. Payments of interest with respect to each LIBOR Loan pursuant to the
preceding sentence shall consist of accrued and unpaid interest on the
applicable LIBOR Loan from and including the first day of the Interest Period
applicable to such LIBOR Loan (or, in the case of the payment of interest on the
last day of an Interest Period of six months for a LIBOR Loan, from and
including the date of prior payment of interest on such LIBOR Loan during such
Interest Period) to but excluding the date of payment. Payments of interest with
respect to each Prime Loan pursuant to the second preceding sentence shall
consist of accrued and unpaid interest on the applicable Prime Loan from and
including the first day such Prime Loan is outstanding to but excluding either
the date of payment or conversion of such Prime Loan.
(c) Promptly after the determination of any interest
rate provided for herein or any change therein, the Agent shall give notice
thereof to the Borrowers.
2.5. PAYMENT OF PRINCIPAL.
(a) The principal amount of each Loan shall be due and payable
in full on the Revolving Credit Termination Date. Each Borrower, jointly and
severally, shall be responsible for each such principal amount.
(b) Each payment of principal (including any prepayment) of
any Loan shall be made in an amount of at least $750,000 (or in the case of Loan
denominated in an Alternative Currency, the Equivalent Alternative Currency
Amount of at least $750,000) or such greater amount which is an integral
multiple of $250,000 (or
27
<PAGE> 36
in the case of Loan denominated in an Alternative Currency, the Equivalent
Alternative Currency Amount of at least $250,000) in excess thereof or in an
amount equal to the entire outstanding principal balance of such Loan to the
Agent, for the account of each Lender's applicable Lending Office, in Dollars
and in immediately available funds before 3:00 P.M., Charlotte, North Carolina
time, on the date such payment is due. Each payment of principal on any Loan
(including any prepayment) shall be made in Dollars to the Agent at the Agent's
Dollar Account (or, with respect to Loans denominated in Alternative Currencies,
in the Applicable Currency at the Agent's Alternative Current Account for the
Applicable Currency). Payments received by the Agent after such time shall be
deemed received on the next succeeding Business Day. The Agent may, but shall
not be obligated to, debit the amount of any such payment which is not made by
such time to any ordinary deposit account of the Borrowers with the Agent. Any
Borrower shall endeavor to give the Agent prior telephonic notice of any payment
of principal, such notice to be given by not later than 11:00 A.M., Charlotte,
North Carolina time, on the date of such payment.
(c) The Agent shall deem any payment by or on behalf of the
Borrowers hereunder that is not made both (1) in Dollars (or, in the case of
Loan denominated in an Alternative Currency, in the Applicable Currency) and in
immediately available funds and (2) prior to 3:00 P.M., Charlotte, North
Carolina time (other than if such payment is made by a debit by the Agent to an
account of any Borrower therewith), to be a non-conforming payment. Any such
payment shall not be deemed to be received by the Agent until the time such
funds become available funds, provided that in the case of a nonconforming
payment described in clause (2) above such payment shall be deemed received on
the next succeeding Business Day. The Agent shall give prompt telephonic notice
to the Borrowers and each of the Lenders (confirmed in writing) if any payment
is non-conforming.
(d) In the event that any payment hereunder or under the Notes
becomes due and payable on a day other than a Business Day, then, subject to the
restrictions set forth in clause (ii) of the definition of "Interest Period,"
such due date shall be extended to the next succeeding Business Day; provided
that interest shall continue to accrue during the period of any such extension.
2.6. USE OF PROCEEDS. The proceeds of the Loans made pursuant to the
Revolving Credit Facility shall be used by the Borrowers and their Subsidiaries
to finance working capital needs, for the repayment of any debt obligations of
the Borrowers and their Subsidiaries existing on the date of this Agreement and
for general corporate purposes of the Borrowers.
2.7. NOTES. All Loans made by each Lender shall be evidenced
by, and be repayable with interest, jointly and severally by each
Borrower, in accordance with the terms of, a promissory note
28
<PAGE> 37
payable to the order of such Lender in the amount of its Applicable Commitment
Percentage of the Total Commitment, which Note shall be dated the Closing Date
or such later date pursuant to an Assignment and Acceptance and shall be duly
completed, executed and delivered by each Borrower. Each Lender is hereby
authorized to record the date and amount of each Loan made by such Lender, and
the date and amount of each payment of principal thereof, on such Lender's
internal books and records and then attach such information as a schedule to its
Note, provided that the failure of any Lender so to record any such information
(or any error in such recordation) shall not affect the Obligations of any
Borrower with respect to such Loan.
2.8. PRO RATA PAYMENTS. Except as otherwise provided herein, (a) each
payment by any Borrower on account of the principal of and interest on the Loans
and fees (other than the Agent's fees payable under Section 10.11 hereof, which
shall be retained by the Agent) described in this Agreement shall be made to the
Agent for the account of the Lenders pro rata based on their Applicable
Commitment Percentages (other than with respect to a "deficiency advance" under
Section 2.13), (b) all payments to be made by any Borrower for the account of
each of the Lenders on account of principal, interest and fees, shall be made
without set-off or counterclaim, and (c) the Agent will promptly distribute
payments received to the Lenders entitled thereto.
2.9. VOLUNTARY REDUCTION IN COMMITMENT. The Borrowers shall have the
right from time to time, upon not less than three (3) Business Days written
notice signed by all of the Borrowers to the Agent, to reduce the Total
Commitment. The Agent shall give each Lender, within one (1) Business Day,
telephonic notice (confirmed in writing) of such reduction. Each such reduction
shall be in the aggregate amount of $750,000 or such greater amount which is in
an integral multiple of $250,000 in excess thereof, or such lesser amount as
shall constitute the Total Commitment then existing as a result of any one or
more previous reductions thereof, and shall permanently reduce the Revolving
Loan Commitment of each Lender pro rata. No such reduction shall result in the
payment of any LIBOR Loan other than on the last day of the Interest Period of
such Loan (except as permitted by Section 2.10(c)). Each reduction of the Total
Commitment shall be accompanied by payment of the Notes, jointly and severally
by the Borrowers, to the extent that the aggregate principal amount of the
outstanding Loans exceeds the Total Commitment after giving effect to such
reduction, together with accrued and unpaid interest on the amounts prepaid and
payment of all sums payable by any Borrower as set forth in Section 3.4 hereof.
2.10. PREPAYMENT OF LOANS. Each Borrower shall have the right from time
to time to prepay all or a portion of outstanding principal balance under the
Loans, (a) without penalty at any time with respect to Prime Loans, (b) without
penalty at the end of the applicable Interest Period with respect to LIBOR Loans
and (c)
29
<PAGE> 38
prior to the end of the applicable Interest Period with respect to LIBOR Loans
upon receipt by the Agent, for the benefit of the Lenders entitled thereto, of
all sums payable by any Borrower as set forth in Section 3.4 hereof.
2.11. CONVERSIONS AND ELECTIONS OF INTEREST PERIODS. The duration of
the initial Interest Period for each LIBOR Loan shall be as specified in the
Borrowing Notice. Provided that no Event of Default shall have occurred and be
continuing and subject to the limitations set forth below and in Sections
3.1(b), 3.2, 3.3 and 3.5(b) hereof, the Borrowers may on three (3) LIBOR
Business Days' notice to the Agent on or before 11:00 A.M. Charlotte, North
Carolina time:
(a) elect a subsequent Interest Period for all or a
portion of the outstanding LIBOR Loans to begin on the last day of the Interest
Period for such LIBOR Loans;
(b) convert all or a portion of the outstanding LIBOR
Loans that are denominated in Dollars to Prime Loans on the last
day of the Interest Period for such LIBOR Loans; and
(c) convert all or a portion of the outstanding Prime
Loans to LIBOR Loans on any date.
Notice of any such elections or conversions shall specify the effective
date of such election or conversion and the Interest Period to be applicable to
the LIBOR Loan as continued or converted. Each election and conversion pursuant
to this Section 2.11 shall be binding on all of the Borrowers and shall be
subject to the limitations on LIBOR Loans set forth in the definition of
"Interest Period" herein and in Sections 2.1, 2.2 and 2.3 hereof. If the Agent
does not receive a notice of election of duration of an Interest Period or to
convert an outstanding LIBOR Loan by the time prescribed above, the Borrowers
shall be deemed to have elected (i) if such LIBOR Loan is denominated in
Dollars, to convert such LIBOR Loan to a Prime Loan on the last day of the
Interest Period for such LIBOR Loan, or (ii) if such LIBOR Loan is denominated
in an Alternative Currency, to choose a subsequent Interest Period of one month
for such LIBOR Loan. All such continuations or conversions of Loans shall be
effected pro rata based on the Applicable Commitment Percentages of the Lenders.
2.12. FEES.
(a) For the period beginning on the date of each Lender's commitment
hereunder and ending on the Revolving Credit Termination Date, the Borrowers
agree, jointly and severally, to pay to the Agent, for the pro rata benefit of
the Lenders based on their Applicable Commitment Percentages, an unused
commitment fee for such period equal to the sum of: (i) the amount determined by
applying the Applicable Unused Fee Rate to the amount by which the average daily
amount during such period of the Total Commitment
30
<PAGE> 39
(excluding the effect of any reductions of the Total Commitment pursuant to
Section 2.14) exceeds the sum of the average daily amount during such period of
outstanding Loans to all Borrowers (calculated in Dollars, and including without
limitation the Equivalent Dollar Amount of any outstanding Alternative Currency
Advances, based on the exchange rate used at the time of such Advances). Such
payments of fees provided for in this Section 2.12(a) shall be due in arrears on
each March 31, June 30, September 30, and December 31 beginning March 31, 1996
and continuing through and including the Revolving Credit Termination Date.
Notwithstanding the foregoing, and without limitation of or prejudice to any
other right or remedy available to the Borrower by contract or at law, so long
as any Lender fails to make available any portion of its Revolving Loan
Commitment when requested, such Lender shall not be entitled to receive payment
of its pro rata share of such fee until such Lender shall make available such
portion.
(b) The Borrowers have agreed to pay to NationsBank a
structuring fee as set forth in that Letter Agreement of even date herewith by
and between the Borrowers and NationsBank.
2.13. DEFICIENCY ADVANCES. No Lender shall be responsible for any
default of any other Lender in respect to such other Lender's obligation to make
any Loan hereunder nor shall the Revolving Loan Commitment of any Lender
hereunder be increased as a result of such default of any other Lender. Without
limiting the generality of the foregoing, in the event any Lender shall fail to
advance funds to the Borrowers as herein provided, NationsBank may in its
discretion, but shall not be obligated to, advance under the Note in its favor
as a Lender all or any portion of such amount (the "deficiency advance") and
shall thereafter be entitled to payments of principal of and interest on such
deficiency advance in the same manner and at the same interest rate or rates to
which such other Lender would have been entitled had it made such advance under
its Note; provided that, upon payment to NationsBank from such other Lender of
the entire outstanding amount of such deficiency advance, together with interest
thereon, from the most recent date or dates interest was paid to NationsBank by
any Borrower on each Loan comprising the deficiency advance at the Federal Funds
Effective Rate, then such payment shall be credited against the Note of
NationsBank in full payment of such deficiency advance and the Borrowers shall
be deemed to have borrowed the amount of such deficiency advance from such other
Lender as of the most recent date or dates, as the case may be, upon which any
payments of interest were made by any Borrower thereon.
2.14. UNAVAILABLE COMMITMENT AMOUNT; REDUCTION IN COMMITMENT. The Total
Commitment shall be reduced from time to time by an amount (the "Unavailable
Commitment Amount") equal to: (I) the aggregate amount of all then outstanding
Indebtedness for Money Borrowed (other than Existing Capitalized Leases) of each
Borrower, Borrower Subsidiary, Sector Subsidiary, Subsidiary of a Sector
31
<PAGE> 40
Subsidiary and any other Baldwin Subsidiary (other than Indebtedness under the
Senior Note Documents), less (II) $15,000,000; provided that the Unavailable
Commitment Amount shall not be less than $0.
2.15. AUTHORITY TO DEBIT BORROWER ACCOUNT. To the extent the Agent is
entitled to withdraw any amount from the Borrower Account pursuant to any Loan
Document, each Borrower hereby authorizes the Agent to debit such amount from
the Borrower Account even if it is maintained with a Person other than the
Agent.
ARTICLE III
YIELD PROTECTION AND ILLEGALITY
3.1. ADDITIONAL COSTS.
(a) Each Borrower, jointly and severally, shall promptly pay
to the Agent for the account of a Lender from time to time, following delivery
of the written explanation required under Section 3.1(c), such amounts as such
Lender may reasonably determine to be necessary to compensate it for any
material costs incurred by such Lender which it determines are attributable to
its making or maintaining any LIBOR Loan or its obligation to make any LIBOR
Loans, or any reduction in any amount receivable by such Lender under this
Agreement or the Notes in respect of any of such LIBOR Loans or such obligation,
including reductions in the rate of return on a Lender's capital (such increases
in costs and reductions in amounts receivable and returns being herein called
"Additional Costs"), resulting from any Regulatory Change which: (1) changes the
basis of taxation of any amounts payable to such Lender under this Agreement or
its Notes in respect of any of such LIBOR Loans (other than changes in respect
of taxes imposed on or measured by the income of such Lender or of its
applicable Lending Office by any jurisdiction in which the Lender is subject to
tax and other than changes for which (and only to the extent that) the Lender
may obtain a foreign tax credit or similar offset or tax benefit); or (2)
imposes or modifies any reserve, special deposit, or similar requirements
relating to any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender (other than the Reserve Requirement or any
other such reserve, deposit or requirement reflected in the LIBOR Rate, computed
in accordance with the definition of such term set forth in Section 1.1 hereof);
or (3) has or would have the effect of reducing the rate of return on capital of
any such Lender to a level below that which the Lender could have achieved but
for such Regulatory Change (taking into consideration such Lender's policies
with respect to capital adequacy); or (4) imposes any other condition, not
involving a change in the basis of taxation, adversely affecting such Lender
under this Agreement or the Notes. Each Lender will notify the Borrowers of any
event occurring after the Closing Date which would entitle it to compensation
pursuant to
32
<PAGE> 41
this Section 3.1(a) as promptly as practicable after it obtains knowledge
thereof and determines to request such compensation.
(b) Without limiting the effect of the foregoing provisions of this
Section 3.1, in the event that, by reason of any Regulatory Change, any Lender
either (1) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits or other liabilities of
such Lender which includes deposits by reference to which the interest rate on
LIBOR Loans is determined as provided in this Agreement or a category of
extensions of credit or other assets of such Lender which includes LIBOR Loans
or (2) becomes subject to restrictions on the amount of such a category of
liabilities or assets which it may hold, then, if such Lender so elects by
notice to the other Lenders, the Agent and the Borrowers, the obligation of such
Lender to make, and to convert Prime Loans into, LIBOR Loans hereunder shall be
suspended until the date such Regulatory Change ceases to be in effect and the
Borrowers shall, on the last day(s) of the then current Interest Period(s) for
outstanding LIBOR Loans, convert such LIBOR Loans into Prime Loans, in
accordance with Section 2.11 hereof.
(c) Each Lender will notify the Borrowers of any event occurring after
the date of this Agreement that will entitle such Lender to compensation under
Section 3.1 as promptly as practicable; provided, however, that each Lender will
designate a different Lending Office for the Loans of such Lender affected by
such event or by the matters requiring compensation pursuant to Section 3.4, and
take other measures, if such designation or other measures will avoid the need
for, or reduce the amount of, such compensation and will not result in a
material cost to, or be otherwise disadvantageous to, such Lender in its
determination. Determinations by any Lender for purposes of this Section 3.1 of
the effect of any Regulatory Change on its costs of making or maintaining, or
being committed to make, Loans, or on amounts receivable by it in respect of
Loans, and of the additional amounts required to compensate the Lender in
respect of any Additional Costs, shall be conclusive absent demonstrable error.
The Lender requesting such compensation shall upon request furnish to the
Borrowers a written explanation of the Regulatory Change and calculations, in
reasonable detail, and setting forth such Lender's determination of any such
Additional Costs.
(d) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof agrees that it will deliver to the
Borrowers and the Agent, at the time of its entering into this Agreement and, in
any event, prior to any Person making any payment to such Lender hereunder, (1)
two duly completed copies of United States Internal Revenue Service Form 1001 or
4224 or successor applicable form, as the case may be, or other manner of
certification, establishing that payments of interest, fees and other amounts
hereunder are either not subject to or totally exempt from United States Federal
withholding tax and (2) an Internal
33
<PAGE> 42
Revenue Service Form W-8 or W-9 or successor applicable form. Each such Lender
also agrees to deliver to the Borrowers and the Agent two further copies of the
said Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or
other manner of certification, as the case may be, on or before the date that
any such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrowers, unless in any such case a Regulatory Change has occurred prior to the
date on which any such delivery would otherwise be required and such Regulatory
Change in and of itself (that is, not as a result of a change in Lending Office
or other action on the part of the Lender) prevents such Lender from duly
completing and delivering any such form with respect to it and such Lender so
advises each of the Borrowers and the Agent. Such Lender shall certify (1) in
the case of a Form 1001 or 4224, that it is entitled to receive payments under
this Agreement without deduction or withholding of any United States federal
income taxes and (2) in the case of a Form W-8 or W-9, that it is entitled to an
exemption from United States backup withholding tax. Any failure by the Lender
to comply with this Section 3.1(d) or Section 11.1(f) shall, without limitation,
preclude such Lender from obtaining payment from the Borrowers of any additional
costs under Section 3.1(a) to the extent such additional costs are proximately
caused by such failure to comply.
3.2. SUSPENSION OF LOANS. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any interest rate for
any LIBOR Loan for any Interest Period therefor, the Agent determines (which
determination shall be conclusive absent manifest error) that:
(a) quotations of interest rates for the relevant deposits
referred to in the definition of "Base Rate" in Section 1.1 hereof are not being
provided in the relevant amounts or for the relevant maturities for purposes of
determining the rate of interest for such LIBOR Loan as provided in this
Agreement; or
(b) the relevant rates of interest referred to in the
definition of "Base Rate" in Section 1.1 hereof upon the basis of which the
LIBOR Rate for such Interest Period is to be determined do not adequately
reflect the cost to the Lenders of making or maintaining such LIBOR Loan for
such Interest Period;
then the Agent shall give the Borrowers prompt notice thereof, and so long as
such condition remains in effect, the Lenders shall be under no obligation to
make LIBOR Loans or to convert Prime Loans into LIBOR Loans, and the Borrowers
shall, on the last day(s) of the then current Interest Period(s) for outstanding
LIBOR Loans convert such LIBOR Loans into Prime Loans, if available hereunder,
in accordance with Section 2.11 hereof. The Agent shall give the Borrowers
notice describing in reasonable detail any event or condition described in this
Section 3.2 promptly following the
34
<PAGE> 43
Agent's determination that the availability of LIBOR Loans is, or is to be,
suspended as a result thereof.
3.3. ILLEGALITY. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender to honor its obligation to
make or maintain LIBOR Loans hereunder, then such Lender shall promptly notify
the Borrowers thereof (with a copy to the Agent) and such Lender's obligation to
make or continue LIBOR Loans, or convert Prime Loans into LIBOR Loans, shall be
suspended until such time as such Lender may again make and maintain LIBOR
Loans, and such Lender's outstanding LIBOR Loans shall be converted into Prime
Loans in accordance with Section 2.11 hereof or, in the event such Lender's
outstanding LIBOR Loans must be converted into Prime Loans prior to the end of
the current Interest Period therefor, such Lender's outstanding LIBOR Loans
shall be so converted at such time, provided that each Borrower, jointly and
severally, shall be obligated to pay such Lender such amounts as may otherwise
be required pursuant to Section 3.4 hereof in such instance.
3.4. COMPENSATION. Each Borrower, jointly and severally, shall promptly
pay to the Agent for the account of each Lender, upon the request of such Lender
through the Agent, such amount or amounts as shall be sufficient (in the
reasonable determination of Lender) to compensate it for any loss, cost or
out-of-pocket expense incurred by it as a result of:
(a) any payment, prepayment or conversion of a LIBOR Loan,
including without limitation in connection with any reduction in the Total
Commitment pursuant to Sections 2.9, 2.14 or 2.15 hereof, on a date other than
the last day of the Interest Period for such LIBOR Loan; or
(b) any failure by the Borrowers to borrow a LIBOR Loan
on the date for such borrowing specified in the relevant Borrowing Notice under
Section 2.3 hereof;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (1) the amount of interest which would have accrued on the principal
amount so paid, prepaid, converted, not borrowed or reduced for the period from
the date of such payment, prepayment, conversion, failure to borrow or reduction
to the last day of the then current Interest Period for such Loan (or, in the
case of a failure to borrow, the Interest Period for such Loan which would have
commenced on the date scheduled for such borrowing) at the applicable rate of
interest for such LIBOR Loan provided for herein minus the LIBOR Interest
Addition for such Loan over (2) the interest component of the amount such Lender
would have bid in the London interbank market for Dollar deposits (or Applicable
Currency deposits, as the case may be) of leading banks of amounts comparable to
such principal amount and maturities comparable to such period (as reasonably
determined by such Lender). A determination of a Lender as to the amounts
payable
35
<PAGE> 44
pursuant to this Section 3.4 shall be conclusive absent demonstrable error. The
Lender requesting compensation under this Section 3.4 shall furnish to the
Borrowers upon written request written calculations in reasonable detail setting
forth such Lender's determination of the amount of such compensation.
3.5. SUBSTITUTION OF LOANS. If (a) the obligation of any Lender to
make, continue or convert a Prime Loan into a LIBOR Loan has been suspended
pursuant to Section 3.1(b), 3.2 or 3.3 hereof, or (b) any Lender has required
payment of compensation under Section 3.1(a) and the Borrowers have elected upon
five LIBOR Business Days prior written notice signed by all of the Borrowers to
the Agent that this Section 3.5 shall be applicable, then in either event,
unless and until the Borrowers have been notified that the circumstances
resulting in such suspension or compensation no longer exist or are no longer
applicable, all Loans which otherwise would have been so made, continued or
converted shall be made or continued as Prime Loans by such Lender, and all
payments of interest and principal thereon shall be made by the Borrowers on
such dates as if such Prime Loans had been made as, remained or converted into
LIBOR Loans.
ARTICLE IV
CONDITIONS TO MAKING LOANS
4.1. CONDITIONS OF INITIAL ADVANCE. The obligation of NationsBank to
make the initial Advance is subject to the condition precedent that NationsBank
shall have received, on or before the Closing Date, in form and substance
satisfactory to it, the following:
(a) executed originals of each of this Agreement, the
Notes, [the Intercreditor Agreement,] the Guaranties, the Pledge Agreements and
the other Loan Documents, together with all schedules and exhibits thereto;
(b) copies of the executed Senior Note Documents;]
(c) certificates of insurance evidencing compliance with
the insurance requirements contained herein and in the Security Instruments;
(d) the Pledged Borrower Stock, the Pledged Sector
Subsidiary Stock, the Pledged BAM Subsidiary Stock, the Pledged Baldwin
Technology Subsidiary Stock, and the Pledged Enkel Subsidiary Stock, with such
stock powers duly executed in blank as NationsBank shall require;
(e) written evidence of Baldwin's Consolidated Net Worth
in an amount not less than (i) $80,000,000, plus (ii) an amount equal to 50% of
the aggregate of the Consolidated Net Income
36
<PAGE> 45
(without deduction for quarterly losses) in each of the Fiscal Quarter ended
September 30, 1995 and the Fiscal Quarter ended December 31, 1995;
(f) a certificate of the Chief Financial Officer of BAM
and aldwin, respectively, and the Vice President and Treasurer of BTL,
certifying that each Borrower is Solvent, and that Baldwin and its Subsidiaries
on a consolidated basis are Solvent, in each case as of the Closing Date after
giving effect to the transactions contemplated hereby on such date, such
certificates being in the form attached hereto as Exhibit F and incorporated
herein by reference;
(g) financial statements of Baldwin and its Subsidiaries,
BAM and BTL, all as described in Section 6.2;
(h) organizational chart of Baldwin, each Borrower, each
Sector Subsidiary and certain Affiliates, as selected by and in detail
acceptable to the Agent;
(i) notice of appointment of additional Authorized
Officers, if any;
(j) work papers of BAM relating to Accounts of BAM and
its consolidated Subsidiaries, which work papers were prepared in connection
with the consolidated financial statements of Baldwin and its Subsidiaries
described in Section 6.2 that are dated as of June 30, 1995;
(k) favorable written opinions of counsel and certain
local counsel to the Borrowers and the Guarantors dated the Closing Date,
addressed to the Agent and the Lenders and satisfactory to Smith Helms Mulliss &
Moore, L.L.P., special counsel to the Agent, with regard collectively to the
matters set forth in Exhibit G-1 and Exhibit G-2 attached hereto and
incorporated herein by reference;
(l) resolutions of the board of directors (or of the
appropriate committee thereof) of each Borrower certified by its Secretary or
Assistant Secretary as of the Closing Date, appointing the initial Authorized
Officers and approving and adopting the Loan Documents to be executed by such
Borrower on the Closing Date, and authorizing the execution, delivery and
performance thereof; and specimen signatures of officers of each Borrower
executing the Loan Documents, certified by the Secretary or Assistant Secretary
of each Borrower;
(m) resolutions of the board of directors (or the
appropriate committee thereof) of Baldwin certified by its Secretary or
Assistant Secretary as of the Closing Date, approving and adopting the Loan
Documents to be executed by Baldwin on the Closing Date, and authorizing the
execution, delivery and performance thereof; and specimen signatures of officers
of Baldwin
37
<PAGE> 46
executing the Loan Documents, certified by the Secretary or Assistant Secretary
thereof;
(n) resolutions of the board of directors of each Sector
Subsidiary (or the appropriate committee thereof), certified by its Secretary or
Assistant Secretary as of the Closing Date, approving and adopting the Loan
Documents to be executed by such Sector Subsidiary and authorizing the
execution, delivery and performance thereof; and specimen signatures of officers
of each Sector Subsidiary executing the Loan Documents, certified by the
Secretary or Assistant Secretary thereof;
(o) resolutions of the board of directors of Baldwin
Technology (or appropriate committee thereof), certified by its Secretary or
Assistant Secretary as of the Closing Date, approving and adopting the Loan
Documents to be executed by Baldwin Technology on the Closing Date, and
authorizing the execution, delivery and performance thereof; and specimen
signatures of officers of Baldwin Technology executing the Loan Documents,
certified by the Secretary or Assistant Secretary thereof;
(p) with respect to each Borrower Subsidiary, resolutions
of the board of directors (or the appropriate committee thereof) of such
Borrower Subsidiary certified by its Secretary or Assistant Secretary as of the
Closing Date, approving and adopting the Loan Documents to be executed by such
Borrower Subsidiary on the Closing Date, and authorizing the execution, delivery
and performance thereof; and specimen signatures of officers of such Borrower
Subsidiary executing the Loan Documents, certified by the Secretary or Assistant
Secretary thereof;
(q) (i) the charter documents of each of the Borrowers,
Baldwin, and the Sector Subsidiaries certified as of a recent date by the
Secretary of State of such corporation's state of incorporation, and (ii) the
charter documents of each Borrower Subsidiary certified as of the Closing Date
as true, correct and complete by such corporation's Secretary or Assistant
Secretary;
(r) the bylaws of each of the Borrowers, Baldwin, the
Sector Subsidiaries, Baldwin Technology and each Borrower Subsidiary certified
as of the Closing Date as true, correct and complete by such corporation's
Secretary or Assistant Secretary;
(s) for each of the Borrowers, Baldwin, the Sector
Subsidiaries, Baldwin Technology and each Borrower Subsidiary, certificates
issued as of a recent date by the Secretary of State of the state of its
incorporation as to its corporate good standing therein;
(t) certificates of the Secretary or Assistant Secretary
of each of the Borrowers, Baldwin, the Sector Subsidiaries, Baldwin Technology
and each Borrower Subsidiary as to the qualification of each such corporation to
do business and corporate good standing in
38
<PAGE> 47
each jurisdiction in which the failure to qualify to do business would
reasonably be expected to have a Material Adverse Effect on Baldwin, any
Significant Subsidiary or the Consolidated Group;
(u) certificates of the Secretary or Assistant Secretary
of each Borrower and each Guarantor, certifying that each of the Borrowers and
each of the Guarantors has filed all necessary tax returns and paid all taxes
due and owing with respect to each jurisdiction referred to in clause (s) above;
(v) executed Letter Agreement of even date herewith
regarding the structuring fee and evidence of payment thereof;
(w) all fees payable by the Borrower on or before the
Closing Date to the Agent and the Lenders (which may be paid from the proceeds
of the initial Advance); and
(x) Available Commitment Certificate;
(y) such other documents, instruments, certificates and
opinions as the Agent or any Lender may reasonably request on or prior to the
Closing Date in connection with the consummation of the transactions
contemplated hereby.
4.2. CONDITIONS OF LOANS. The obligations of the Lenders to make any
Advance hereunder on or subsequent to the Closing Date are subject to the
satisfaction of the following conditions:
(a) the Agent shall have received a notice of such
borrowing or request as required by Section 2.3 hereof;
(b) the representations and warranties of Baldwin, the
Borrowers, the Guarantors and the Baldwin Subsidiaries set forth in Article VI
hereof and in each of the other Loan Documents shall be true and correct in all
material respects on and as of the date of such Advance, with the same effect as
though such representations and warranties had been made on and as of such date,
except to the extent that such representations and warranties expressly relate
to an earlier date; and
(c) at the time of each such Advance, (1) no Default or
Event of Default shall have occurred and be continuing, (2) the Agent shall not
have accelerated the maturity of the Notes as a result of an Event of Default,
(3) no Material Adverse Effect with respect to Baldwin, any Significant
Subsidiary or the Consolidated Group shall have occurred since the date of the
most recent financial statements delivered to the Agent pursuant to Section 7.1,
and (4) all of the Security Instruments shall have remained in full force and
effect, and the perfection and priority of the Liens granted thereunder shall
have remained unchanged.
In the case of each Advance hereunder (other than the initial Advance if such
initial Advance is made on the Closing Date) the
39
<PAGE> 48
Borrower's notice to the Agent with respect to the making of such Advance shall
be deemed to be a representation and warranty by the Borrower on the date of
such Advance as to the satisfaction of the conditions referred to in (b) and (c)
of this Section 4.2.
ARTICLE V
SECURITY; GUARANTIES
5.1. SECURITY. As security for the full and timely payment and
performance of all Obligations now existing or hereafter arising, the Borrowers
and Baldwin shall on or before the Closing Date cause to be delivered to the
Agent, in form and substance acceptable to the Agent, each of the Pledge
Agreements together with certificates representing the Pledged Sector Subsidiary
Stock, the Pledged Borrower Stock, the Pledged BAM Subsidiary Stock, the Pledged
Baldwin Technology Subsidiary Stock and such stock powers duly executed in blank
as may be required by the Agent.
5.2. GUARANTY. To guarantee the full and timely payment and performance
of all Obligations now existing or hereafter arising, the Borrowers and Baldwin
shall cause to be delivered to the Agent, in form and substance acceptable to
the Agent, on or before the Closing Date: (1) the Baldwin Guaranty, (2) the
Sector Subsidiary Guaranty and (3) the BAM Subsidiary Guaranty.
5.3. NEW SUBSIDIARIES. (a) If any Borrower acquires or forms a new
Subsidiary (or if Enkel International ever owns any assets), the Borrowers shall
immediately cause such Subsidiary (including Enkel International) to execute a
guaranty of the Obligations in substantially the form of the BAM Subsidiary
Guaranty (with appropriate changes to reflect such Subsidiary's name and
relationship to the respective Borrower), unless such Subsidiary is a BAM
Foreign Subsidiary or a BTL Foreign Subsidiary. The Borrowers shall also
immediately pledge and deliver to the Agent, and shall promptly cause any other
relevant stockholder to pledge and deliver to the Agent, all issued and
outstanding stock of such Subsidiary (or, if such Subsidiary is a BAM Foreign
Subsidiary or BTL Foreign Subsidiary, 65% of the issued and outstanding stock of
such Subsidiary) (in each case, pursuant to a pledge agreement substantially
similar to the form of the Baldwin Technology Pledge Agreement, to be executed
by such stockholder at such time) together with stock powers executed in blank.
(b) If Baldwin acquires or forms a new direct Subsidiary, Baldwin shall
immediately cause such Subsidiary to execute a guaranty of the Obligations in
substantially the form of the Sector Subsidiary Guaranty, unless such Subsidiary
is a Baldwin Foreign Subsidiary. Baldwin shall also immediately pledge and
deliver to the Agent, all issued and outstanding stock of such Subsidiary (or,
if such Subsidiary is a Baldwin Foreign Subsidiary, 65% of the issued and
outstanding stock of such Subsidiary) (in each case, pursuant to a pledge
agreement substantially similar to the form of
40
<PAGE> 49
the Baldwin Pledge Agreement, to be executed by Baldwin at such time) together
with stock powers executed in blank.
(c) The Lenders are and will be unwilling to make any Advances to any
Borrower after the date of acquisition or formation of any such Subsidiary (or
after Enkel International owns any assets) unless and until the respective
guaranty and pledge agreement required by subsection (a) or (b) above have been
executed and delivered to the Agent, together with the respective shares and
stock powers.
5.4. CERTAIN STOCK OWNED BY SECTOR SUBSIDIARIES AND OTHER BALDWIN
SUBSIDIARIES. The Borrower and Baldwin shall promptly deliver to the Agent any
guaranty or pledge agreement executed by a Sector Subsidiary or any other
Baldwin Subsidiary pursuant to Section 8.3(b)(i) or 8.3(c) together with the
shares of stock pledged thereunder and stock powers executed in blank. The
Lenders are, and will be, unwilling to make any Advance to any Borrower after
the date of any loan, advance, issuance, sale or other disposition of any shares
giving rise to the obligation of a Sector Subsidiary or other Baldwin Subsidiary
to execute such a guaranty or pledge agreement, unless and until such guaranty
or pledge agreement has been executed and delivered to the Agent, together with
such shares and stock powers executed in blank.
5.5. FILING AND RECORDING INSTRUMENTS. The Borrowers shall at their
expense execute, deliver and file and re-file and record and re-record or cause
to be filed and re-filed and recorded and re-recorded all instruments deemed
necessary or advisable by the Agent to be filed and re-filed and recorded or
re-recorded and shall continue or cause to be continued the Liens in the
Collateral under the Loan Documents for so long as any of the Obligations shall
be outstanding and until the Revolving Credit Termination Date.
5.6. FURTHER ASSURANCES. At the request of the Agent, the Borrowers
will execute by their duly authorized officers, alone or with the Agent, any
certificate, instrument, statement or document and will procure any such
certificate, instrument, statement or document (and pay all connected costs)
which the Agent reasonably deems necessary to create or preserve the Liens (and
the perfection and priority thereof) of the Agent for the benefit of the Lenders
contemplated hereby and by the other Loan Documents.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Each Borrower and Baldwin represents and warrants (which
representations and warranties shall survive the delivery of the documents
mentioned herein and the making of the Loan) that:
41
<PAGE> 50
6.1. ORGANIZATION, ETC. Baldwin and BAM are corporations duly
organized, validly existing and in good standing under the laws of the State of
Delaware, BTL is a corporation duly organized, validly existing and in good
standing under the laws of Bermuda, each of the Baldwin Subsidiaries and each of
the BAM Subsidiaries is duly organized, validly existing and in good standing
under the laws of the jurisdiction in which it is incorporated as set forth in
Schedule 6.1, and Baldwin, each Borrower and each of their Subsidiaries has the
corporate power and authority to own, operate and lease its respective property
and to carry on its respective business as now being conducted. Baldwin, each
Borrower and each of their Subsidiaries is duly qualified and in good standing
as a foreign corporation authorized to do business in each jurisdiction in which
the failure to do so would have a Material Adverse Effect on Baldwin, any
Significant Subsidiary or the Consolidated Group. Each of the Borrowers, BEC and
BAP are wholly-owned Subsidiaries of Baldwin. Schedule 6.1 sets forth the
jurisdiction of incorporation of the Baldwin Subsidiaries and each jurisdiction
in which Baldwin, each Borrower or any of their Subsidiaries is authorized to do
business as a foreign corporation. This Agreement, the Notes, the Borrowers
Pledge Agreement and any other Loan Agreement to which any Borrower is a party
have been duly authorized by all necessary corporate action on the part of such
Borrower and, when executed and delivered by such Borrower, will constitute
legal, valid and binding obligations of such Borrower, and, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement or priority of creditors' rights generally, now or hereafter in
effect, and subject to the provision that equitable remedies shall be within the
discretion of the court having jurisdiction to exercise the same, are
enforceable in accordance with their respective terms. The Guaranties, the
Pledge Agreements and any other Loan Document to which Baldwin, any Sector
Subsidiary, any BAM Subsidiary or any BTL Subsidiary, as the case may be, and
when executed and delivered by Baldwin, such Sector Subsidiary, such BAM
Subsidiary, or such BTL Subsidiary, as the case may be, will constitute legal,
valid and binding obligations of Baldwin, such Sector Subsidiary, such BAM
Subsidiary, or such BTL Subsidiary, as the case may be, and, subject to
bankruptcy, insolvency, reorganization, moratorium and other laws affecting the
enforcement or priority of creditors' rights generally, now or hereafter in
effect, and subject to the provision that equitable remedies shall be within the
discretion of the court having jurisdiction to exercise the same, are
enforceable in accordance with their respective terms. There are no Subsidiaries
of Baldwin or any Borrower in existence as of the Closing Date other than those
listed in Schedule 6.1. As of the Closing Date, neither Baldwin nor any Borrower
owns any equity interest in any Person other than the Persons set out in
Schedule 6.1. All of the outstanding capital stock of Baldwin is validly issued,
fully paid and non-assessable.
6.2. BUSINESS; FINANCIAL STATEMENTS. Baldwin has furnished the Agent
and each Lender with (i) audited consolidated balance
42
<PAGE> 51
sheets of Baldwin and its Subsidiaries as of June 30 in each of the years 1988
through 1995 and the related consolidated statements of income, of changes in
shareholders' equity and of cash flows and, as applicable, changes in financial
position or cash flows for the periods of twelve months ended on each such date;
(ii) the unaudited consolidating balance sheets of Baldwin and its Subsidiaries,
as of June 30 in each of the years 1994 and 1995, and related consolidating
statements of income and shareholders' equity for the twelve months ended on
each such date; (iii) the balance sheets of BAM and BTL as of June 30 in each of
the years 1994 and 1995 (and related statements of income and of changes in
shareholders' equity) together with the related accountants' review reports;
(iv) the unaudited consolidated (and consolidating) balance sheet of Baldwin and
its Subsidiaries as of September 30, 1995, and the related consolidated (and,
with respect to statements of income and changes in shareholders' equity,
consolidating) statements of income, of changes in shareholders' equity and of
cash flows of Baldwin and its Subsidiaries for the period then ended; and (v)
the unaudited balance sheets of BAM and BTL, as of September 30, 1995, and the
related statements of income and of changes in shareholders' equity for the
period then ended. The financial statements referred to in this paragraph 6.2
including any related schedules and/or notes (the "Financial Statements"), are
true and correct in all material respects, have been prepared in accordance with
GAAP and show all liabilities of Baldwin and its consolidated Subsidiaries (and
in the case of the balance sheets of BAM and BTL, all liabilities of BAM and
BTL) required to be shown therein accordance with GAAP. The balance sheets
included in the Financial Statements fairly present the condition of Baldwin and
its consolidated Subsidiaries (including BAM), of BAM and of BTL, as the case
may be, as at the dates thereof, and the statements of income, of changes in
shareholders' equity and of cash flows included in the Financial Statements
fairly present the results of the operations, the changes in shareholders'
equity and the cash flows of Baldwin and its consolidated Subsidiaries
(including BAM) for the periods indicated. Baldwin has furnished the Agent and
each Lender with each filing or report filed with the SEC under Section 13 or
15(d) of the Exchange Act in respect of the fiscal year ended June 30, 1995.
There has been no change or event which has had a Material Adverse Effect on
Baldwin, any Significant Subsidiary or the Consolidated Group since June 30,
1995.
6.3. ACTIONS PENDING. Except as disclosed in Schedule 6.3, there is no
action, suit, investigation or proceeding pending or, to the knowledge of any
Borrower or any Borrower Subsidiary, threatened against Baldwin, any Borrower or
any of their Subsidiaries, or any properties or rights of Baldwin, any Borrower
or any of their Subsidiaries, by or before any court, arbitrator or
administrative or governmental body which might have a Material Adverse Effect
on Baldwin, any Significant Subsidiary or the Consolidated Group, or impair any
Borrower's ability to perform this Agreement, the Notes, the Borrowers Pledge
Agreement or any other Loan Document to which it is a party, Baldwin's ability
to
43
<PAGE> 52
perform the Baldwin Guaranty or any other Loan Document Agreement to which it is
a party or any Guarantor's ability to perform any Guaranty, Pledge Agreement or
other Loan Documents to which it is a party. There are no actions or proceedings
filed or pending or (to the best knowledge of each Borrower) investigations
pending or threatened against Baldwin, any Borrower or any of their Subsidiaries
which questions the validity or legality or seeks damages in connection with
this Agreement, the Notes or any other Loan Document or any action taken or to
be taken with respect to any of the foregoing or any of the transactions
contemplated hereby or thereby.
6.4. TITLE TO PROPERTIES. Each of Baldwin, the Borrowers and their
Subsidiaries has good title to its respective real properties (other than
properties which it leases) and good title to all of its other respective
properties and assets, including the properties and assets reflected in the
balance sheets as of June 30, 1993 included in the Financial Statements (other
than properties and assets disposed of in the ordinary course of business),
subject to no Lien of any kind except Liens permitted by Section 8.3(a). All
leases necessary in any material respect for the conduct of the respective
businesses of Baldwin, the Borrowers and their Subsidiaries are valid and
subsisting and are in full force and effect. As of the date of this Agreement,
all of the outstanding capital stock of the Borrowers, each of the Sector
Subsidiaries, each of the BAM Subsidiaries, and each of the other Baldwin
Subsidiaries listed in Schedule 6.1 is validly issued, fully paid and
non-assessable, is owned by the Persons and in the amounts listed on Schedule
6.1, which Persons collectively own 100% of the issued and outstanding shares of
capital stock of such Borrower and each such Subsidiary, and all such capital
stock owned by Baldwin, any Borrower or their Subsidiaries is owned free and
clear of any Lien of any kind and Baldwin, such Borrower or such other
Subsidiary has the right, subject only to limitations imposed by applicable law
to receive dividends and distributions on such capital stock.
6.5. TAX RETURNS AND PAYMENTS. Each of Baldwin, the Borrowers and their
Subsidiaries has filed all Federal, State, local and foreign income tax returns,
franchise tax returns, real and personal property tax returns and other tax
returns required by law to be filed by or on behalf of them or with respect to
their respective properties or assets other than those which the failure to file
in the aggregate do not and will not have a Material Adverse Effect on Baldwin,
any Significant Subsidiary or the Consolidated Group, and all taxes, assessments
and other governmental charges imposed upon any of Baldwin, the Borrowers or
their Subsidiaries or any of their respective properties, assets, income or
franchises which are due and payable have been paid, other than those presently
payable without penalty or interest, those presently being contested in good
faith by appropriate proceedings diligently conducted and for which such
reserves or other appropriate provisions, if any, as may be required by GAAP
44
<PAGE> 53
have been made and those which in the aggregate with all other unpaid taxes,
assessments and governmental charges do not and will not have a Material Adverse
Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
6.6. CONFLICTING AGREEMENTS AND OTHER MATTERS. None of Baldwin, the
Borrowers or any of their Subsidiaries is in violation of any term of its
charter or by-laws, or in breach of any term of any agreement (including any
agreement with stockholders), instrument, indenture, order, judgment, decree,
statute, law, rule or regulation to which it is subject, the consequences of
which violation or breach are reasonably likely to have a Material Adverse
Effect on Baldwin, any Significant Subsidiary or the Consolidated Group or
impair any Borrower's ability to perform this Agreement, the Notes, the
Borrowers Pledge Agreement or any other Loan Document to which it is a party,
Baldwin's ability to perform the Baldwin Guaranty or the other Loan Documents to
which it is a party or any Guarantor's ability to perform any Guaranty, Pledge
Agreement or other Loan Document to which it is a party. None of Baldwin, the
Borrowers or any of their Subsidiaries is a party to any contract or agreement
or subject to any charter or other corporate restriction which has a Material
Adverse Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
Neither the execution and delivery of this Agreement, the Notes and the Loan
Documents, nor fulfillment of nor compliance with the terms and provisions of
this Agreement, the Notes and the Loan Documents, will conflict with the
provisions of, or constitute a default under, or result in any violation of, or
result in the creation of any Lien upon any of the properties or assets of
Baldwin, any Borrower or any of their Subsidiaries pursuant to, its charter or
bylaws, any award of any arbitrator or any agreement (including any agreement
with stockholders), instrument, order, judgment, decree, statute, law, rule or
regulation to which it is subject. None of Baldwin, the Borrowers or any of
their Subsidiaries is a party to, or otherwise subject to any provision
contained in, any instrument evidencing Indebtedness, any agreement relating
thereto or any other contract or agreement (including its charter) which limits
the amount of, or otherwise imposes restrictions on the incurring of, the Funded
Debt to be evidenced by the Notes.
6.7. ERISA.
(a) To the best of each Borrower's knowledge, neither
Baldwin nor any Borrower nor any Related Person has breached any of the
fiduciary rules of ERISA or engaged in any prohibited transaction in connection
with which Baldwin, any Borrower or any Related Person could be subjected to (in
the case of any such breach) a suit for damages or (in the case of any such
prohibited transaction), either a civil penalty assessed pursuant to section
502(i) of ERISA, a tax imposed under such section 4975 of the Code or a lien
imposed under section 412(n) of the Code, in any such
45
<PAGE> 54
case which would have a Material Adverse Effect on Baldwin, any Significant
Subsidiary or the Consolidated Group.
(b) No Plan subject to Title IV of ERISA or any trust
created under any such Plan has been terminated since September 2, 1974 which
termination may reasonably be expected to have a Material Adverse Effect on
Baldwin, any Significant Subsidiary or the Consolidated Group. Neither Baldwin
nor any Borrower nor any Related Person has within the past six years
contributed, or had any obligation to contribute, to a single employer plan that
has at least two contributing sponsors not under common control or ceased
operations at a facility under circumstances which could result in liability
under the Code or ERISA that may reasonably be expected to have a Material
Adverse Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
No liability to the PBGC has been or is expected by Baldwin, any Borrower or any
Related Person to be incurred with respect to any Plan by Baldwin, any Borrower
or any Related Person which may reasonably be expected to have a Material
Adverse Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
There has been no reportable event (within the meaning of section 4043(b) of
ERISA) or any other event or condition with respect to any Plan which presents a
risk of termination of any such Plan by the PBGC under circumstances which in
any case could result in liability which may reasonably be expected to have a
Material Adverse Effect on Baldwin, any Significant Subsidiary or the
Consolidated Group.
(c) Except to the extent failure to do so would not
result in liability which may reasonably be expected to have a Material Adverse
Effect on Baldwin, any Significant Subsidiary or the Consolidated Group, (i)
full payment has been made (or will be made within the period described in
section 412 of the Code) of all amounts which Baldwin, any Borrower or any
Related Person is required under the terms of each Plan to have paid as
contributions to such Plan as of the last day of the most recent fiscal year of
such Plan ended prior to the date hereof (or will be made within the period
described in section 404 of the Code), (ii) no accumulated funding deficiency
(as defined in section 302 of ERISA and section 412 of the Code), whether or not
waived, exists with respect to any Plan, and (iii) each Plan satisfies the
minimum funding standard of section 412 of the Code.
(d) (i) neither Baldwin nor any Borrower nor any Related
Person has been obligated to contribute to any Multiemployer Plan the withdrawal
from which has given rise or could give rise to liability that may reasonably be
expected to have a Material Adverse Effect on Baldwin, any Significant
Subsidiary or the Consolidated Group, and (iii) neither Baldwin nor any Borrower
nor any Related Person has been notified by the sponsor of a Multiemployer Plan
to which Baldwin, any Borrower or any Related Person is obligated or has been
obligated to contribute that such Multiemployer Plan has been terminated or is
in reorganization and no Multiemployer Plan is reasonably expected to be in
46
<PAGE> 55
reorganization or to be terminated if such reorganization or termination could
result in liability which may reasonably be expected to have a Material Adverse
Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
(e) Neither Baldwin nor any Borrower nor any Related
Person has, or is expected to incur, any liability for post retirement benefits
under any and all welfare benefit plans (as defined in section 3(1) of ERISA),
whether written or unwritten, which are or have been established or maintained,
or to which contributions are or have been made, by Baldwin, any Borrower or any
Related Person which may reasonably be expected to have a Material Adverse
Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
(f) Neither Baldwin nor any Borrower nor any Related
Person has engaged in any transaction that could result in the incurrence of any
liabilities under section 4069 or section 4212 of ERISA which may reasonably be
expected to have a Material Adverse Effect on Baldwin, any Significant
Subsidiary or the Consolidated Group.
(g) The execution and delivery of this Agreement and the
making of the Loans will not involve any transaction which is subject to the
prohibitions of section 406 of ERISA or in connection with which a tax could be
imposed pursuant to section 4975 of the Code. The foregoing representation in
this paragraph (g) is made in reliance upon the representation and warranty of
the Lenders set forth in section 11.10 hereof.
6.8. ENVIRONMENTAL MATTERS. Each of Baldwin, the Borrowers and their
Subsidiaries has obtained all permits, licenses and other authorizations that
are required and is in compliance with all terms and conditions of all permits,
licenses, and other authorizations required to be obtained by it under all
applicable Environmental Laws, and is also in compliance with all other
applicable limitations, restrictions, conditions, standards, prohibitions,
requirements, obligations, schedules, and timetables contained in any
Environmental Laws or in any regulation, ordinance, code, plan, order, decree,
judgment, injunction, notice, or demand letter issued, entered, promulgated, or
approved thereunder, except to the extent that failure so to comply does not
have a Material Adverse Effect on Baldwin, any Borrower or any of their
Subsidiaries. The Borrowers and Baldwin are not aware of any prior use of any of
the owned or leased properties of Baldwin, the Borrowers or any of their
Subsidiaries by any Person, that constitutes a violation of any Environmental
Laws, except to the extent that such violation does not have a Material Adverse
Effect on Baldwin, any Borrower, or any of their Subsidiaries. Neither any
Borrower nor Baldwin is aware of any event, condition, or activity which may
interfere with or prevent continued compliance by Baldwin, the Borrowers and
their Subsidiaries with all Environmental Laws, except to the extent that
failure so to
47
<PAGE> 56
continue to comply would not have a Material Adverse Effective on Baldwin,
Borrower or any of their Subsidiaries.
6.9. LABOR RELATIONS. There is not now pending, nor to the knowledge of
any Borrower or any Borrower Subsidiary threatened, any strike, work stoppage,
work slow-down, or material grievance or other dispute between Baldwin, any
Borrower or any of their Subsidiaries and any bargaining unit or significant
number of its respective employees.
6.10. DISCLOSURE. Neither this Agreement, the Notes, the other Loan
Documents nor any other document, certificate or statement furnished to the
Agent or any Lender by or on behalf of Baldwin, any Borrower or any Guarantor in
connection herewith contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained herein
and therein, in light of the circumstances under which they were made, not
misleading. There is no fact peculiar to Baldwin, any Borrower or any of their
Subsidiaries which has a Material Adverse Effect on Baldwin, any Significant
Subsidiary or the Consolidated Group and which has not been set forth in this
Agreement, the Notes, the other Loan Documents or in other documents,
certificates and statements furnished to the Agent and the Lenders by or on
behalf of Baldwin, any Borrower or any Guarantor prior to the date hereof in
connection with the transactions contemplated by this Agreement.
6.11. STATUS UNDER CERTAIN FEDERAL STATUTES. Neither Baldwin nor any
Borrower nor any of their Subsidiaries is (a) an "investment company" or a
company "controlled" by an "investment company" or an "open-end investment
company" or a "unit investment trust" or a "face-amount certificate company",
within the meaning of the Investment Company Act of 1940, as amended, (b) a
"holding company" or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", as such terms are defined in the Public Utility Holding Company Act of
1935, as amended, or (c) a "carrier", as defined in section 11,301(a)(1) of
Title 49 of the United States Code and subject to the provision of such Title.
Neither Baldwin nor any Borrower nor any of their Subsidiaries is a "national of
any designated foreign country", within the meaning of the Foreign Assets
Control Regulations or the Cuban Assets Control Regulations of the United States
Treasury Department, 31 C.F.R., Subtitle B, Chapter V, as amended, or any
regulations or rulings issued thereunder. Neither the making of the Loans nor
the use of such proceeds by the Borrowers as required by this Agreement will
violate the Foreign Assets Control Regulations, the Foreign Funds Control
Regulations, the Transaction Control Regulations, the Cuban Assets Control
Regulations, the Iranian Assets Control Regulations, the Libyan Sanctions
Regulations, the Iranian Transactions Regulations, the Iraqi Sanctions
Regulations, the Haitian Transactions Regulations, or any other regulations of
the U.S. Treasury Department (as set forth in 31 C.F.R., Subtitle B,
48
<PAGE> 57
Chapter V, as amended), or any of Executive Orders 12,722, 12,724, 12,808 and
12,810 of the President of the United States.
6.12. MARGIN STOCK. Neither Baldwin nor any Borrower nor any of their
respective Subsidiaries is engaged principally in, or has as one of its
important activities, the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as such terms is defined in Regulation
U, as amended (12 C.F.R. Part 221), of the Board. The proceeds of the borrowings
made pursuant to Section 2.1 hereof will be used by the Borrowers only for the
purposes set forth in Section 2.6 hereof. None of such proceeds will be used by
any Borrower or any Borrower Subsidiary, directly or indirectly, for the purpose
of purchasing or carrying any margin stock or for the purpose of reducing or
retiring any Indebtedness which was originally incurred to purchase or carry
margin stock or for any other purpose which might constitute any of the Loans
under this Agreement a "purpose credit" within the meaning of said Regulation U
or Regulation X (12 C.F.R. Part 224) of the Board. Neither any Borrower nor any
agent authorized to act, and acting, in its behalf (other than the other parties
to this Agreement) has taken or will take any action which would cause this
Agreement or any of the Loan Documents to violate any regulation of the Board or
to violate the Exchange Act or any state securities laws, in each case as in
effect on the date hereof.
6.13. NO CONSENTS, ETC. Neither the respective businesses or properties
of Baldwin, any Borrower, any Borrower Subsidiary, any Sector Subsidiary or any
Baldwin Subsidiary nor any relationship between Baldwin, any Borrower, any
Borrower Subsidiary, any Sector Subsidiary or any of Baldwin Subsidiary and any
other Person, nor any circumstance in connection with the execution, delivery
and performance of the Loan Documents and the transactions contemplated thereby
is such as to require a consent, approval or authorization of, or filing,
registration or qualification with, any governmental or other authority or any
other Person on the part of Baldwin, any Borrower, any Borrower Subsidiary, any
Sector Subsidiary or any Baldwin Subsidiary as a condition to the execution,
delivery and performance of, or consummation of the transactions contemplated
by, this Agreement or the other Loan Documents, except where such consent,
approval, authorization, filing, registration or qualification has been obtained
or effected, or will be obtained or effected in the ordinary course or where the
failure to obtain or effect the same could not reasonably be expected to have a
Material Adverse Effect on Baldwin, any Significant Subsidiary or the
Consolidated Group.
6.14. SOLVENCY. Baldwin, each Borrower, each Guarantor, and each of
their Subsidiaries is Solvent after giving effect to the transactions
contemplated by this Agreement and the other Loan Documents.
49
<PAGE> 58
6.15. RESTRICTIONS ON DIVIDENDS. Except as set forth in this Agreement,
there are no restrictions on the ability of any Subsidiary to pay dividends to
Baldwin or any Borrower.
6.16. NO SENIOR OR EQUAL DEBT. Neither Baldwin nor any Borrower, nor
any Borrower Subsidiary nor any Sector Subsidiary is directly or indirectly
liable with respect to (i) any Indebtedness that is senior to the Obligations,
or (ii) any Indebtedness for Money Borrowed (other than the Existing Capitalized
Leases and other than the Indebtedness under the Senior Note Documents) that
ranks equal to or pari passus with the Obligations.
6.17. SURVIVAL OF WARRANTIES AND REPRESENTATIONS. Each Borrower
covenants, warrants and represents to the Agent that all representations and
warranties of the Borrowers contained in this Agreement and the other Loan
Documents shall survive the execution, delivery and acceptance hereof and
thereof by the parties hereto and thereto and the closing of the transactions
described herein or related hereto and any investigation at any time made by or
on behalf of the Agent shall not diminish the Agent's right to reply thereon.
ARTICLE VII
AFFIRMATIVE COVENANTS
Until all principal and interest on the Loans are paid in full, all
fees, charges and other expenses then due and owing are paid in full and the
Total Commitment has been terminated in accordance with the terms hereof, unless
the Required Lenders shall otherwise consent in writing, each Borrower and
Baldwin will:
7.1. FINANCIAL REPORTING. Deliver or cause to be delivered to the Agent
and each Lender:
(a) as soon as practicable and in any event not more than
45 days after the end of each Fiscal Quarter of Baldwin (except the fourth
quarter), (i) a consolidated (and upon the request of the Agent or any Lender,
consolidating) balance sheet of Baldwin and its Subsidiaries, and a balance
sheet of each of BAM and BTL, in each case as at the end of such Fiscal Quarter
and for the Fiscal Year to date, and (ii) the related consolidated (and, with
respect to statements of income and changes in shareholders' equity, upon the
request of the Agent or any Lender, consolidating) statements of income, of
changes in shareholders' equity and of cash flows of Baldwin and its
Subsidiaries, and the respective statements of income and of changes in
shareholders' equity of each of BAM and BTL, in each case for such period(s)
setting forth, in each case in comparative form, figures for the corresponding
period(s) in the preceding Fiscal Year of Baldwin, all in reasonable detail and
in accordance with GAAP and certified by the chief accounting officer or chief
financial officer of Baldwin, BAM and BTL as fairly presenting the consolidated
(and, if requested,
50
<PAGE> 59
consolidating) financial condition of Baldwin and its Subsidiaries, and the
financial condition of each of BAM and BTL, as at the dates indicated and the
consolidated results of their operations and cash flows, in each case for the
periods indicated, in conformity with GAAP (except as disclosed in the
certificate of such chief accounting officer or chief financial officer with any
changes in accounting policies discussed in reasonable detail), subject to
changes resulting from year-end adjustments not material in scope or amount;
(b) as soon as practicable and in any event not more than
90 days after the end of each Fiscal Year of Baldwin, (i) a consolidated and
consolidating balance sheet of Baldwin and its Subsidiaries, and a balance sheet
of each of BAM and BTL, in each case as of the end of such Fiscal Year and (ii)
the related consolidated (and with respect to statements of income and changes
in shareholders' equity, upon the request of the Agent or any Lender,
consolidating) statements of income, of cash flows and of changes in
shareholders' equity of Baldwin and its Subsidiaries, and the respective
statements of income and of changes in shareholders' equity of each of BAM and
BTL, for such Fiscal Year, and setting forth in each case, in comparative form,
corresponding figures for the preceding Fiscal Year of Baldwin, all in
reasonable detail and in accordance with GAAP and (i) in the case of such
consolidated financial statements accompanied by a report thereon of Price
Waterhouse or other independent certified public accountants of recognized
national standing selected by Baldwin, which report shall be without limitations
to the scope of the audit and shall state that such consolidated financial
statements present fairly the financial condition of Baldwin and its
Subsidiaries as at the dates indicated and the consolidated results of their
operations and cash flows for the periods indicated in conformity with GAAP
(except as otherwise specified in such report) and that the audit by such
accountants in connection with such consolidated financial statements has been
made in accordance with generally accepted auditing standards and (ii) in the
case of the financial statement of each of BAM and BTL, accompanied by a review
report with respect to such financial statements prepared by the same
independent certified public accountants that prepared the report referred to in
clause (i) above for such Fiscal Year;
(c) together with each delivery of financial statements
of Baldwin and its Subsidiaries pursuant to subparagraphs (a) and (b) of this
Section 7.1, a certificate of the chief financial officer of Baldwin and each
Borrower (i) stating that (A) the signer has reviewed the terms of this
Agreement and the Notes and has made, or caused to be made under his
supervision, a review in reasonable detail of the transactions and condition of
Baldwin and its Subsidiaries during the fiscal period covered by such financial
statements and that such review has not disclosed the existence during or at the
end of such fiscal period, and that to the best of his knowledge after
reasonable investigation the signer has no knowledge of the existence as at the
date of such certificate, of
51
<PAGE> 60
any condition or event which constitutes a Default or Event of Default or, if
any such condition or event existed or exists, specifying the nature and period
of existence thereof and what action Baldwin and the Borrowers have taken, are
taking or propose to take with respect thereto and (ii) Baldwin, the Borrowers
and their Subsidiaries are in compliance with the provisions of Sections 8.1,
8.2, 8.3 and 8.4 hereof and (B) demonstrating (with computations in reasonable
detail) compliance by Baldwin, the Borrowers and their Subsidiaries with the
provisions of Sections 8.1, 8.2, 8.3 and 8.4;
(d) together with each delivery of financial statements
of Baldwin and its Subsidiaries pursuant to subparagraph (b) of this Section
7.1, a certificate by Baldwin's independent public accountants stating (i) that
their audit examination has included a review of the terms of this Agreement and
the Notes as they relate to accounting matters and that such review is
sufficient to enable them to make the statement referred to in clause (iii) of
this subparagraph (d), (ii) whether, in the course of their audit examination,
there has been disclosed the existence during the Fiscal Year covered by such
financial statements (and whether they have knowledge of the existence as of the
date of such accountants' certificate) of any condition or event which
constitutes a Default or Event of Default under Sections 8.1, 8.2, 8.3 (other
than 8.3(a) or 8.3(g)) and 8.4 hereof, and if during their audit examination
there has been disclosed (or if they have knowledge of) such a condition or
event, specifying the nature and period of existence thereof (it being
understood, however, that such accountants shall not be liable to any Person by
reason of their failure to obtain knowledge of any Default or Event of Default
which would not be disclosed in the course of an audit conducted in accordance
with generally accepted auditing standards), and (iii) that based on their
annual examination nothing came to their attention which causes them to believe
that the information contained in the certificate of Baldwin's and each
Borrower's chief financial officer delivered pursuant to subparagraph (c) of
this Section 7.1 insofar as it relates to accounting or auditing matters is not
correct or that the matters set forth in such certificate are not stated in
accordance with the terms of this Agreement (it being understood that such
independent public accountants' examination was not primarily directed toward
determining the accuracy of such information);
(e) promptly after receipt thereof by Baldwin or any
Borrower, copies of all material reports submitted to Baldwin or such Borrower
by independent public accountants and consultants in connection with each
annual, interim or special audit of the books of Baldwin or any Significant
Subsidiary made by such accountants;
(f) promptly after any officer of Baldwin, any Borrower
or any of their Subsidiaries obtains knowledge (i) that a condition or event
exists that constitutes a Default or Event of Default, (ii) that the Agent or
any Lender has given any notice or taken any
52
<PAGE> 61
other action with respect to a claimed Default or Event of Default under this
Agreement, (iii) of any condition or event peculiar to Baldwin, any Borrower or
any of their Subsidiaries which could reasonably be expected to have a Material
Adverse Effect on Baldwin, any Significant Subsidiary or the Consolidated Group,
(iv) that any Person has given any notice to Baldwin, any Borrower or any of
their Subsidiaries or taken any other action with respect to a claimed default
or event or condition of the type referred to in Section 9.1(j), (v) of the
institution of any litigation involving claims against Baldwin, any Borrower or
any of their Subsidiaries equal to or greater than $500,000 with respect to any
single cause of action or $1,000,000 in the aggregate, (vi) of the assertion by
any Person of a claim for breach or violation of any Environmental Law or for
damages resulting from such breach or violation against Baldwin, any Borrower or
any of their Subsidiaries which if adversely determined against Baldwin or such
Borrower or Subsidiary would have a Material Adverse Effect on Baldwin or such
Borrower or Subsidiary or on the Consolidated Group, (vii) of the assertion of
any claim by any Person seeking injunctive relief against Baldwin, any Borrower
or any of their Subsidiaries which would impair the conduct by Baldwin, any
Borrower or any of their Subsidiaries of its business in the ordinary course or
the performance of this Agreement, the Notes or any Loan Document or (viii) the
occurrence of any default or any event of default under any Senior Note Document
or any other agreement, instrument or note evidencing or pursuant to which any
other Indebtedness, the outstanding principal amount of which exceeds
$1,000,000, has been issued by Baldwin, any Borrower or any of their
Subsidiaries, specifying the nature and period of existence of any such
condition or event, or specifying the notice given or action taken by the Agent
or such Lender or Person and the nature of such claimed Default, Event of
Default, event or condition, and what action the Borrowers have taken, are
taking or propose to take with respect thereto;
(g) promptly after any officer of Baldwin, any Borrower
or any of their Subsidiaries obtains knowledge of the occurrence of any (i)
"reportable event", as such term is defined in section 4043 of ERISA, with
respect to any Plan, (ii) "prohibited transaction" as such term is defined in
section 4975 of the Code, in connection with any Plan or any trust created
thereunder which is not otherwise exempt under a statutory, class or
administrative exemption, (iii) event described in Section 8.5, (iv)
reorganization or termination of any Multiemployer Plan to which Baldwin, any
Borrower or any Related Person is obligated or has been obligated to contribute,
(v) termination of any Plan, or proceedings to terminate any Plan which are
pending or threatened, (vi) liability to or on account of any Plan under section
4062, 4063 or 4064 of ERISA which will or may be incurred by Baldwin, any
Borrower or a Related Person, a written notice specifying the nature thereof,
what action Baldwin, such Borrower or any Related Person has taken, is taking or
proposes to take with respect
53
<PAGE> 62
thereto, and, when known, any action taken or threatened by the Internal Revenue
Service or the PBGC with respect thereto;
(h) promptly after the transmission thereof, copies of
all such financial statements, proxy statements, notices and reports as Baldwin,
any Borrower or any of their Subsidiaries shall send to its public debtholders
or public stockholders and copies of all registration statements (without
exhibits) and all reports which Baldwin, any Borrower or any of their
Subsidiaries files with the SEC;
(i) promptly after the transmission thereof, copies of
all such financial statements, notices, certificates and reports as Baldwin, any
Borrower or any of their Subsidiaries shall send to any holder under the Senior
Note Documents or to any other lender, or group of lenders, if the aggregate
Debt outstanding to such lender, or group of lenders, (x) from Baldwin, the
Borrowers and their Subsidiaries (other than the Sector Subsidiaries and their
Subsidiaries) exceeds $1,000,000 or (y) from the Sector Subsidiaries and their
Subsidiaries exceeds $3,000,000;
(j) promptly after receipt thereof, copies of all
reports, statements and notices Baldwin, any Borrower or any of their
Subsidiaries may receive in accordance with Section 13(d) or 14(d) of the
Exchange Act and the rules and regulations promulgated thereunder by the SEC;
(k) promptly upon any such occurrence, written notice of
any event resulting in a mandatory reduction in the Total Commitment, an
increase in the Unavailable Commitment Amount, or prepayment of the Loans, and
of the net proceeds, if any, realized by any Borrower in connection therewith or
as a result thereof;
(l) as soon as practicable and in any event not more than
60 days after the end of each Fiscal Year (each, a "Prior Fiscal Year") of
Baldwin, a copy of consolidating financial projections (including consolidating
projected balance sheets and income statements) and consolidated projected cash
flow statements, for Baldwin, each Borrower, each Sector Subsidiary and any
other direct Subsidiary of Baldwin, in each case with respect to the Fiscal Year
immediately following such Prior Fiscal Year;
(m) as soon as practicable and in any event within thirty
(30) days of the end of each calendar quarter, an Available Commitment
Certificate as at the end of such calendar quarter, accompanied by a certificate
of an Authorized Officer that, at no time since the delivery of the previous
Available Commitment Certificate to the Agent, was the principal amount of Loans
outstanding greater than the Total Commitment less the Unavailable Commitment
Amount (without duplication);
(n) with reasonable promptness, such other information
and data with respect to Baldwin, any Borrower or any of their
54
<PAGE> 63
Subsidiaries as from time to time may be reasonably requested by the Agent or
any Lender.
7.2. INSPECTION OF PROPERTY. Permit any Person designated by the Agent
or any Lender, at the Agent's or such Lender's expense (unless such inspection
shall be made during the continuance of a Default or after the occurrence of an
Event of Default, in which event the reasonable expense of such inspection shall
be borne by the Borrowers, jointly and severally), to visit and inspect any of
the properties of itself or any of its Subsidiaries, to examine the corporate
books and financial records of itself or any of its Subsidiaries and make copies
thereof or extracts therefrom and to discuss the affairs, finances and accounts
of itself or any of its Subsidiaries with the principal officers of it or such
Subsidiary, and (prior to the occurrence and continuance of a Default or Event
of Default), upon consent of any Borrower (which consent shall not be
unreasonably withheld) and at the expense of the Agent or such Lender (and
during the continuance of a Default or after the occurrence of an Event of
Default without the consent of Baldwin or any Borrower and at the expense of the
Borrowers) Baldwin's and each Borrower's independent public accountants (and by
this provision the Borrowers authorize such accountants to discuss with any
Person so designated the affairs, finances and accounts of Baldwin, the
Borrowers and their Subsidiaries), all at such reasonable times and as often as
the Agent or such Lender may reasonably request.
7.3. CORPORATE EXISTENCE, ETC. At all times preserve and keep in full
force and effect its, and their Subsidiaries', corporate existence, and rights
and franchises material to the business of Baldwin, any Significant Subsidiary
or the Consolidated Group except as otherwise specifically permitted by Section
8.3(d), and qualify, and cause each of its Subsidiaries to qualify, to do
business in any jurisdiction where the failure to do so would have a Material
Adverse Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
7.4. PAYMENT OF TAXES AND CLAIMS. Pay, and cause each of their
Subsidiaries to pay, (i) all income taxes before the same shall become
delinquent, except where such income taxes are contested in good faith by
appropriate proceedings promptly instituted and diligently conducted, and only
if adequate reserves therefor have been established on its books of account in
accordance with GAAP, and (ii) all other taxes, assessments and other
governmental charges imposed upon it or any of its properties or assets or with
respect to any of its franchises, business, income or profits before any penalty
or interest accrues thereon, and all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums which have become
due and payable, except where such tax, assessment, charge or claim is being
contested in good faith by appropriate proceedings promptly instituted and
diligently conducted and only if such reserves or other appropriate provisions,
if any, as shall be required by GAAP
55
<PAGE> 64
shall have been made therefor, and except, in either case, for income taxes,
other taxes, assessments, and other charges which in the aggregate with all
other unpaid taxes, assessments and governmental charges do not and will not
have a Material Adverse Effect on Baldwin, any Significant Subsidiary or the
Consolidated Group.
7.5. COMPLIANCE WITH LAWS, ETC. Comply, and cause each of their
Subsidiaries to comply, with the requirements of all applicable laws, rules,
regulations and orders of any governmental authority (including, without
limitation, the Occupational Safety and Health Act of 1970, as amended, ERISA
and all Environmental Laws), the violation of which would have a Material
Adverse Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
7.6. MAINTENANCE OF PROPERTIES. Maintain or make adequate arrangements
for the maintenance of, and cause each of their Subsidiaries to maintain or make
adequate arrangements for the maintenance of, in good repair and working order
and condition, subject to reasonable wear and tear and obsolescence, all
properties used or useful in its or their business, and from time to time make
or cause to be made all appropriate repairs, renewals and replacements thereof.
7.7. INSURANCE. Maintain, and cause each of their Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to its properties and business and the properties and business of Baldwin and
such Subsidiaries in such forms and amounts and against such risks customarily
insured against by corporations of established reputation engaged in the same or
similar business and similarly situated, and notify the Agent promptly of any
event or occurrence causing a material loss thereof and the estimated (or
actual, if available) amount of such loss.
7.8. SCOPE OF BUSINESS. Engage, and cause each of their Subsidiaries to
engage, only in Businesses in substantially the same fields as the businesses
conducted on the date of this Agreement.
7.9. ENVIRONMENTAL COMPLIANCE. (i) Obtain and maintain, and cause each
of their Subsidiaries to obtain and maintain, all permits, licenses, and other
authorizations that are required under all Environmental Laws, (ii) comply, and
cause each of their Subsidiaries to comply, with all terms and conditions of all
such permits, licenses, and authorizations and with all other applicable
limitations, restrictions, conditions, standards, prohibitions, requirements,
obligations, schedules, and timetables contained in all Environmental Laws or in
any regulation, ordinance, code, plan, order, decree, judgment, injunction,
notice, or demand letter issued, entered, promulgated, or approved thereunder,
except to the extent that failure to do so does not have a Material Adverse
Effect on Baldwin, any Borrower, or any of their Subsidiaries, and
56
<PAGE> 65
(iii) operate, and cause each of their Subsidiaries to operate, all property
owned or leased by it such that no claim or obligation, including a clean-up
obligation, which could have a Material Adverse Effect on Baldwin, any Borrower
or any of their Subsidiaries, shall arise under any Environmental Law, and if
any claim is made against Baldwin, any Borrower or any of their Subsidiaries or
any such obligation of Baldwin, any Borrower or any of their Subsidiaries, which
would have a Material Adverse Effect on Baldwin, any Borrower, any of their
Subsidiaries or the Consolidated Group, arises under any Environmental Law, the
party against whom such claim is made shall timely satisfy such claim or
obligation.
7.10. MAINTENANCE OF BOOKS AND RECORDS. Do, and cause each of their
Subsidiaries to do, the following: (i) keep proper records and books of account
with respect to its business activities in which proper entries are made in the
ordinary course of all dealings or transactions of or in relation to its
business and affairs; (ii) set up on its books adequate reserves with respect to
all taxes, assessments, charges, levies and claims; and (iii) set up on its
books reserves against doubtful accounts receivable, advances and all other
proper reserves (including reserves for depreciation, obsolescence or
amortization of its property). All determinations pursuant to this Section 7.10
shall be made in accordance with, or as required by, GAAP. Notwithstanding the
foregoing, Baldwin, any Borrower or any of their Subsidiaries may make
adjustments and changes in the manner in which their books and records are kept;
provided, that:
(a) all such adjustments and changes shall be required or
permitted by GAAP but need not conform with its prior accounting practice;
(b) the Agent and each Lender shall be given (i) written
notice from Baldwin and each Borrower of all such changes or adjustments with
the delivery of the financial statements required by Section 7.1(a) or 7.1(b),
as the case may be, for the fiscal period in which such adjustment or change was
first put into effect, and (ii) with the delivery of the financial statements
required by Section 7.1(b) a description by the independent certified public
accountants who audited such financial statements of the effect of all such
changes and adjustments put into effect in the preceding Fiscal Year on such
financial statements (i) which are required by GAAP to be referred to in such
financial statements or such independent certified public accountants' opinions
thereon, or (ii) if not required by GAAP, with respect to which the Agent has
reasonably requested a description;
(c) the financial covenants and ratios set forth in
Section 8.1 and the ratios set forth in Section 8.4(a) shall continue to be
calculated without regard to such adjustments or changes unless and until the
Agent and each Lender has consented thereto.
57
<PAGE> 66
7.11. PAYMENT OF TRADE PAYABLES. Pay, and cause each of its
Subsidiaries to pay, all trade payables promptly (i) in accordance with their
terms or (ii) in accordance with prior practice, if paying trade payables in
accordance with such prior practice (and not in accordance with their terms)
would not, in each circumstance or in the aggregate, have a Material Adverse
Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
7.12. PAY INDEBTEDNESS TO LENDERS AND PERFORM OTHER COVENANTS. (a) Make
full and timely payment of the principal of and interest on the Notes and all
other Obligations whether now existing or hereafter arising; and (b) duly comply
with all terms and covenants contained in all other Loan Documents.
7.13. ENVIRONMENTAL REPORTS. Promptly provide to the Agent true,
accurate and complete copies of any and all material documents, including
reports, submissions, notices, orders, directives, findings and correspondence
made or received by Baldwin, any Borrower or any Subsidiary to or from the
United States Environmental Protection Agency ("EPA") or any other federal,
state or local authority pursuant to any federal, state or local law, code or
ordinance and all rules and regulations promulgated thereunder which require
informational submissions pursuant to Environmental Laws regarding or in
connection with any matter or situation that would reasonably be likely to
result in a Material Adverse Effect on Baldwin, any Significant Subsidiary or
the Consolidated Group.
7.14. NOTICE OF DISCHARGE OF HAZARDOUS MATERIAL OR ENVIRONMENTAL
COMPLAINT. Give to the Agent immediate written notice of any complaint, order,
directive, claim, citation or notice by any governmental authority or any other
Person to Baldwin, any Borrower or any of their Subsidiaries regarding or in
connection with any matter that is reasonably likely to result in a Material
Adverse Effect on Baldwin, any Significant Subsidiary or the Consolidated Group,
with respect to (a) air emissions, (b) spills, releases or discharges to soils
or improvements located thereon, surface water, groundwater or the sewer, septic
system or waste treatment, storage or disposal systems servicing property owned
or leased by Baldwin, any Borrower or any of their Subsidiaries, (c) noise
emissions, (d) solid or liquid waste disposal, or (e) the use, generation,
storage, transportation or disposal of Hazardous Material. Such notices shall
include, among other information, the name of the party who filed the claim, the
nature of the claim and the actual or potential amount of the claim. Each
Borrower shall, and shall cause Baldwin and each of their Subsidiaries to,
promptly comply in all material respects with its obligations under law with
regard to such matters. However, no Borrower shall be obligated to give such
notice to the Agent or any Lender of any use, generation, storage,
transportation, disposal, discharge or existence of any Hazardous Material which
occurs legally.
58
<PAGE> 67
7.15. INDEMNIFICATION. Each Borrower and Baldwin hereby agrees, jointly
and severally, to defend, indemnify and hold the Agent and the Lenders harmless
from and against any and all claims, losses, liabilities, damages and
out-of-pocket expenses (including, without limitation, cleanup costs and
reasonable attorneys' fees including those arising by reason of any of the
aforesaid or an action against Baldwin, any Borrower or any of their
Subsidiaries under this indemnity) of or against the Agent or any Lender arising
directly or indirectly from, out of or by reason of the handling, storage,
treatment, emission, leakage, spillage, discharge, release or disposal of any
Hazardous Material by or in respect of Baldwin, any Borrower or any Subsidiary
or on property owned or leased by Baldwin, any Borrower or any Subsidiary. This
indemnity shall apply notwithstanding any negligent or other contributory
conduct by or on the part of the Agent or any Lender or any one or more other
Persons (excluding the gross negligence or willful misconduct of the Agent or
any Lender). The provisions of this Section 7.15 shall survive repayment of the
Obligations, occurrence of the Revolving Credit Termination Date and expiration
or termination of this Agreement.
7.16. FURTHER ASSURANCES. At its cost and expense, upon request of the
Agent, duly execute and deliver or cause to be duly executed and delivered, to
the Agent such further instruments, documents, certificates, financing and
continuation statements, and do and cause to be done such further acts as may be
reasonably necessary to carry out more effectively the provisions and purposes
of this Agreement and the other Loan Documents.
7.17. USE OF PROCEEDS. Use the proceeds of the Loans solely for the
purposes set forth in Section 2.6 of this Agreement.
7.18. NEW SUBSIDIARIES. Promptly following the formation or acquisition
of any Subsidiary of any Borrower or any direct Subsidiary of Baldwin (other
than a BAM Foreign Subsidiary, a BTL Foreign Subsidiary or a Baldwin Foreign
Subsidiary) subsequent to the Closing Date, cause to be delivered to the Agent
for the benefit of the Lenders each of the following, each in form reasonably
acceptable to the Agent:
(a) a guaranty agreement pursuant to which such
Subsidiary guarantees all of the Obligations;
(b) an opinion of counsel to each Borrower and such
Subsidiary dated as of the date of delivery of the guaranty agreement provided
in the foregoing clause (a) and addressed to the Agent and the Lenders, in form
and substance reasonably acceptable to the Agent, substantially to the effect
that:
(1) such Subsidiary is duly organized, validly
existing and in good standing in the jurisdiction of its incorporation and has
the requisite corporate power and authority
59
<PAGE> 68
to execute and deliver the guaranty agreement described in clause (a) of this
Section 7.18; and
(2) with respect to such Subsidiary, its
execution, delivery and performance of the guaranty agreement delivered pursuant
to clause (a) of this Section 7.18 to which such Subsidiary is a signatory has
been duly authorized by all requisite corporate action (including any required
shareholder approval), such document has been duly executed and delivered by it
and constitutes its valid and binding obligation, enforceable against such
Subsidiary in accordance with its terms, subject to the effect of any applicable
bankruptcy, moratorium, insolvency, reorganization, fraudulent transfer or
conveyance or other similar laws affecting the enforceability of creditors'
rights generally and to the effect of general principles of equity which may
limit the availability of equitable remedies (whether in a proceeding at law or
in equity); and
(c) current copies of the charter and bylaws of such
Subsidiary and resolutions of the Board of Directors (and, if required by such
charter, bylaws or by applicable laws, of the shareholders) of such Subsidiary
authorizing the actions and the execution, delivery and performance of this
guaranty agreement described in clause (a) of this Section 7.18 and a
certificate or certificates of the Secretary of State, Department of Revenue or
appropriate government authority certifying that such Subsidiary is duly
qualified to transact business as a foreign corporation in such jurisdiction
from each jurisdiction in which the failure to be so qualified would have a
Material Adverse Effect on Baldwin, any Significant Subsidiary or the
Consolidated Group.
ARTICLE VIII
NEGATIVE COVENANTS
Until all principal and interest on the Loans are paid in full, all
fees, charges and other expenses then due and owing are paid in full and the
Total Commitment has been terminated in accordance with the terms hereof, unless
the Required Lenders shall otherwise consent in writing, each Borrower and
Baldwin covenants and agrees that:
8.1. FINANCIAL COVENANTS. It will not:
(a) Consolidated Net Worth. Permit Consolidated Net Worth,
calculated as of the last day of any Fiscal Quarter of Baldwin after
June 30, 1995, to be less than (i) $80,000,000, plus (ii) an amount
equal to 50% of the aggregate of the Consolidated Net Income (without
deduction for quarterly losses) in each Fiscal Quarter thereafter.
60
<PAGE> 69
(b) Current Ratio. Permit the Current Ratio, calculated
as of the last day of any Fiscal Quarter after June 30, 1993, to be
less than 1.3 to 1.0.
(c) Funded Debt to Cash Flow. Permit, as of the last
day of any Fiscal Quarter of Baldwin, the ratio of
Consolidated Funded Debt to Consolidated Cash Flow for the
period indicated below ending as of such Fiscal Quarter end to
be greater than the ratio set forth opposite such period below:
<TABLE>
<CAPTION>
Required Ratio of
Consolidated Funded
Period Debt to Consolidated Cash Flow
<S> <C>
Each period of four 2.75 to 1.00
consecutive Fiscal
Quarters ended
December 31, 1995,
March 31, 1996,
June 30, 1996,
September 30, 1996 and
December 31, 1996
Each period of four 2.50 to 1.00
consecutive Fiscal
Quarters ended
March 31, 1997,
June 30, 1997,
September 30, 1997 and
December 31, 1997
Each period of four 2.10 to 1.00
consecutive Fiscal
Quarters ended
March 31, 1998,
June 30, 1998,
September 30, 1998,
December 31, 1998 and
each March 31, June 30
September 30 and December 31
thereafter.
</TABLE>
(d) Fixed Charge Ratio. Permit the Consolidated Fixed
Charge Ratio for the period indicated below to be less than
the ratio set forth below opposite such period below:
61
<PAGE> 70
<TABLE>
<CAPTION>
Required Consolidated
Period Fixed Charge Ratio
<S> <C>
The period of four 2.50 to 1.00
consecutive Fiscal
Quarters ended
December 31, 1995
The period of four 2.25 to 1.00
consecutive Fiscal
Quarters ended
March 31, 1996
Each period of four 2.50 to 1.00
consecutive Fiscal
Quarters ended
June 30, 1996,
September 30, 1996 and
December 31, 1996
Each period of four 2.10 to 1.00
consecutive Fiscal
Quarters ended
March 31, 1997,
June 30, 1997,
September 30, 1997,
December 31, 1997 and
each March 31, June 30,
September 30 and December 31
thereafter
</TABLE>
The foregoing notwithstanding, if at any time after December 31, 1996,
any current maturities of Funded Debt related to the Senior Note Documents are
prepaid, extended or altered in any respect such that they no longer qualify or
are no longer categorized, as current maturities of Funded Debt, then the
required minimum Consolidated Fixed Charge Ratio shall thereafter be 2.50 to
1.00, provided that if all current maturities with respect to the Senior Note
Documents subsequently qualify, and are categorized, as current maturities of
Funded Debt, then the required minimum Consolidated Fixed Charge Ratio shall
revert to the levels set forth in the preceding columns.
8.2. RESTRICTED PAYMENTS. (a) Baldwin will not make, and the Borrowers
will not permit Baldwin to make, any Restricted Payments, unless the aggregate
of all such Restricted Payments made by Baldwin does not exceed the sum of (x)
$5,500,000; plus (y) the net cash proceeds received by Baldwin from the issuance
of shares of Eligible Capital Stock; plus (z)(i) 50% of the Consolidated Net
Income from June 30, 1995 through Baldwin's Fiscal Quarter most recently ended
for which financial statements have been (or are required to have been)
furnished to the Agent or any Lender in
62
<PAGE> 71
accordance with Section 7.1(a) or 7.1(b), as the case may be, taken as a single
accounting period or, (ii) in the event Consolidated Net Income for such period
shall be a negative number, 100% of such amount (expressed as a negative
number); provided, further, however, that no Restricted Payment shall be
permitted by Baldwin if an Event of Default or Default exists immediately before
or immediately after such payment or would otherwise reasonably be anticipated
to result therefrom.
(b) No Borrower will make, and neither Borrower nor
Baldwin will permit any Baldwin Subsidiary or any Borrower Subsidiary to make,
any Restricted Payments (other than dividends by any Baldwin Subsidiary or
distributions on any other securities of any Baldwin Subsidiary held by either
Borrower or Baldwin) if an Event of Default or Default exists immediately before
or immediately after such payment or would otherwise reasonably be anticipated
to result therefrom.
8.3. LIENS AND OTHER RESTRICTIONS. It will not, and will not permit any
Borrower Subsidiary or any Baldwin Subsidiary to:
(a) Liens. Create, assume or suffer to exist any Lien on
its or any Borrower Subsidiary's or Baldwin Subsidiary's property or assets,
whether now owned or hereafter acquired or upon any income or profits therefrom,
or transfer any property for the purpose of subjecting the same to the payment
of obligations in priority to the payment of its general creditors except for:
(i) Liens on fixed assets incurred by Baldwin,
any Borrower or any of their Subsidiaries in the ordinary course of
business in connection with the acquisition or construction thereof,
which secure all or part of the purchase price thereof (including
Capitalized Leases) and Liens existing on property at the time of its
purchase or construction thereof; provided, however, that (A) each such
Lien is confined solely to the property so purchased or constructed,
improvements thereto and proceeds thereof, (B) such Liens secure only
the purchase price for such property and the amount of the Debt secured
by such Lien does not exceed 80% of the cost of such property, (C) the
Indebtedness secured by such Lien is incurred at the time of the
acquisition, or within one hundred twenty (120) days following the date
of acquisition, of the fixed assets subject thereto, and (D) the
Indebtedness secured thereby would otherwise be permitted by Section
8.4;
(ii) Liens representing any renewal, refunding or
extension of any Lien permitted by clause (i) of this Section 8.3(a)
provided that the principal amount secured and then outstanding is not
increased, the Lien is not
63
<PAGE> 72
extended to other property and the Indebtedness secured thereby would
be permitted under Section 8.4;
(iii) Liens, and other charges incidental to the
conduct of its business, or the ownership of its property (including
charges for taxes or otherwise arising by operation of law, mechanics',
carriers', workers', repairmen's, warehousers' or other similar liens),
which are not incurred in connection with the borrowing of money or the
securing of Indebtedness, provided in each case the obligation secured
is not overdue or is being contested in good faith by appropriate
actions or proceedings promptly instituted and diligently conducted and
such reserves as shall be required by GAAP shall have been made
therefor and which in the aggregate do not materially diminish the
value of the property or assets of Baldwin, any Significant Subsidiary
or the Consolidated Group;
(iv) Liens existing as of this date securing
Indebtedness listed on Schedule 8.3(a);
(v) deposits or pledges to secure worker's
compensation, unemployment insurance, old age benefits or other social
security obligations or retirement benefits;
(vi) Liens arising out of deposits in connection
with, or to secure the performance of, bids, tenders, trade contracts
not for the payment of money or leases, or to secure statutory
obligations or surety or appeal bonds, performance bonds or other
pledges or deposits for purposes of like nature in the ordinary course
of business;
(vii) Liens arising under Title IV of ERISA which
would not have a Material Adverse Effect on Baldwin, any Significant
Subsidiary or the Consolidated Group;
(viii) survey exceptions or encumbrances, easements
or reservations, or rights of others for rights-of-way, utilities and
other similar purposes, or zoning or other restrictions as to the use
of real properties, which are necessary for the conduct of the
activities of Baldwin and its Subsidiaries or which customarily exist
on properties of Persons engaged in similar activities and similarly
situated and which do not in any event have a Material Adverse Effect
on, or materially impair their use in the operation of the business of,
Baldwin, any Significant Subsidiary or the Consolidated Group;
(ix) Liens arising from judgments or decrees not
constituting a Default or Event of Default unless such lien remains
undischarged, unstayed on appeal, unbonded
64
<PAGE> 73
and undismissed for a period of sixty (60) consecutive days;
(x) Liens on other assets of Baldwin, the
Borrowers and their Subsidiaries if (i) the aggregate principal amount
of the Indebtedness (exclusive of any Indebtedness set forth on
Schedule 8.3(a)), secured by all such Liens does not at any time exceed
$15,000,000, provided, however, that the aggregate principal amount of
Indebtedness secured by Liens on Fixed Assets under this clause shall
not at any time exceed $7,500,000; and (ii) the aggregate fair market
value of all assets subject to Liens under the clause (x) shall not
exceed $20,000,000; and
(xi) Liens on any capital stock of the Borrowers,
the Borrower Subsidiaries and the Sector Subsidiaries securing the
Indebtedness under the Senior Note Documents, provided that the
aggregate principal amount of such Indebtedness secured by all such
Liens does not at any time exceed $25,000,000 and provided further that
the Notes hereunder are secured by all such Liens at least equally and
ratably with such Indebtedness under the Senior Note Documents,
pursuant to a written agreement in form and substance satisfactory to
the Agent and the Lenders and their counsel, the enforceability of
which has been confirmed to the satisfaction of the Agent and the
Lenders and their counsel.
(b) Loans, Advances and Investments. Make or permit to remain
outstanding any loan or advance to, or extend credit to, or own, purchase or
acquire any stock (including that of Baldwin), obligations or securities of, or
any other interest in, or make any capital contribution to any Person (other
than the present investment of Baldwin and its Subsidiaries in their respective
Subsidiaries), except that Baldwin and (except as set forth below) any of its
Subsidiaries may:
(i) make or permit to remain outstanding loans
or advances to any wholly-owned Subsidiary of Baldwin provided that any
such loans to a Borrower are subordinated to the payment of the
Obligations and any such loans to a Guarantor are subordinated to such
Guarantor's obligations under its Guaranty, in each case pursuant to a
subordination agreement in a form satisfactory to the Agent and the
Lenders and the enforceability of which has been confirmed to the
reasonable satisfaction of the Agent and the Lenders and their counsel
(a "Subordination Agreement"), provided, however, that no Borrower may
make or permit to remain outstanding any such loan or advance, except
(A) a loan by a Borrower to one of its Subsidiaries or (B) a loan by
BAM to Baldwin or a Sector Subsidiary, or (C) a loan by
65
<PAGE> 74
BTL to a Subsidiary of a Sector Subsidiary if and only if such loan is
reflected by a promissory note that (i) is signed by such Subsidiary of
a Sector Subsidiary, (ii) has a term of not more than one year, (iii)
is payable in United States dollars (or as to which arrangements for
currency conversion that are reasonably acceptable to the Agent have
been made), (iv) is governed by New York law, (v) is otherwise
reasonably acceptable to the Agent, and (vi) has been (prior to or on
the same day as the making of such loan) pledged and delivered by BTL
to the Agent (and BTL has executed and delivered to the Agent a pledge
agreement in substantially the form attached hereto as Exhibit H) as
additional Collateral securing the Obligations, or (D) the loan in the
original principal amount of $16,750,000 from BTL to Baldwin German
Capital Holding GmbH existing on the date thereof;
(ii) acquire and own stock, obligations or
securities received in settlement of debts (created in the ordinary
course of business) owing to Baldwin or such Subsidiary;
(iii) own, purchase or acquire: (A) securities
issued or directly and fully and unconditionally guaranteed or insured
by the United States of America, Japan or any country which is a member
of the European Economic Community or any agency thereof backed by the
full faith and credit of the United States of America, Japan or any
country which is a member of the European Economic Community and
maturing within one (1) year from the date of acquisition; (B) demand
deposits in banks in the ordinary course of business (not for
investment purposes); (C) time deposits, or certificates of deposit
maturing within one (1) year from the date of acquisition issued by
commercial banks which are members of the Federal Reserve System and
chartered under the laws of the United States of America or any state
or the District of Columbia or Japan or any country which is a member
of the European Economic Community whose short-term securities are
rated at least A-1 (or then existing equivalent) by Standard & Poor's
Corporation and at least P-1 (or then existing equivalent) by Moody's
Investors Service, Inc.; (D) prime commercial paper maturing not more
than 270 days from the date of acquisition, having as at any date a
rating of at least A-1 (or the existing equivalent) from Standard &
Poor's Corporation or at least P-1 (or then existing equivalent) from
Moody's Investors Service, Inc. and issued by a corporation organized
in any state of the United States of America or the District of
Columbia or Japan or any country which is a member of the European
Economic Community; and (E) securities of the type described in clause
(A) of this subparagraph but issued or directly and fully and
66
<PAGE> 75
unconditionally guaranteed or insured by any country (or agency backed
by the full faith and credit thereof) other than the United States of
America, Japan or a member of the European Economic Community and
investments of the type described in clauses (C) and (D) of this
subparagraph of a bank chartered or a corporation organized in any
jurisdiction other than the United States of America, any state thereof
or the District of Columbia, Japan or a member of the European Economic
Community, provided that the aggregate of all such securities and
investments, together with the aggregate amount of demand deposits in
banks located in all countries other than the United States of America,
Japan or a member of the European Economic Community does not exceed at
any time $5,000,000, provided, however, that BAM may not own, purchase
or acquire any securities, investments or demand deposits described in
this subparagraph (E);
(iv) endorse negotiable instruments for
collection in the ordinary course of business;
(v) purchase or acquire stock of any Person if
immediately after such purchase or acquisition such Person will be an
80% Subsidiary of Baldwin, provided that if, after giving pro forma
effect to such purchase or acquisition as if it had occurred as of the
first day of the most recently completed Fiscal Quarter for which
financial statements were delivered pursuant to Section 6.1, such 80%
Subsidiary would have been a Significant Subsidiary as of such date,
then such 80% Subsidiary shall have become a Guarantor;
(vi) make or permit to remain outstanding loans
or advances to their employees other than advances to employees for
expenses incurred in the ordinary course of business and loans to
employees provided the aggregate principal amount of all such loans by
Baldwin and its Subsidiaries does not at any time exceed $2,500,000
less the principal amount of any such loans which has been repaid as of
the date of determination and provided further (i) the proceeds of such
loans are used solely by such employees to acquire common stock of
Baldwin; (ii) such loans are secured by a pledge by the employee of the
stock so acquired; and (iii) such loans are otherwise made on terms no
less favorable to the Person making such loan than those which might be
obtained at arm's length between unaffiliated parties;
(vii) make capital contributions to any Borrower ,
Borrower Subsidiary, any Guarantor or any Subsidiary of a Sector
Subsidiary; and
67
<PAGE> 76
(viii) make Restricted Payments to the extent
permitted by Section 8.2.
(c) Sale of Stock and Indebtedness of Subsidiaries. Either directly or
indirectly by the issuance of rights, options for or securities convertible into
such shares, issue, sell or otherwise dispose of, or part with control of, any
shares of capital stock (other than directors' qualifying shares) or
Indebtedness of any Borrower, any Borrower Subsidiary or any Baldwin Subsidiary,
except for (i) the issuance, sale or other disposition of (A) shares of the
capital stock of any Borrower or any Sector Subsidiary to Baldwin or any Sector
Subsidiary, provided, that in the case of such an issuance, sale or disposition
of shares to a Sector Subsidiary, the Borrowers and Baldwin shall immediately
cause such Sector Subsidiary to pledge and deliver such shares to the Agent
(pursuant to a pledge agreement substantially similar to the form of the Baldwin
Pledge Agreement to be executed by such Sector Subsidiary at such time) together
with stock powers executed in blank, as Collateral securing payment and
performance of the Obligations, (B) shares of the capital stock of any Borrower
Subsidiary to the respective Borrower, or (C) shares of the capital stock of any
other Baldwin Subsidiary to Baldwin, or (ii) sales of shares of then issued
capital stock of a Baldwin Subsidiary (other than the capital stock of any
Borrower or any Guarantor, and other than any Subsidiary of a Sector Subsidiary
to whom any capital contribution has been made pursuant to Section 8.3(b)(vii),
and other than any stock pledged, or required to be pledged, to the Agent
pursuant to this Agreement or any other Loan Document), if immediately after
such sale the issuer of such capital stock is no longer a Baldwin Subsidiary and
the sale would otherwise be permitted under Section 8.3(d).
(d) Merger and Sale of Assets. Merge or consolidate with any other
Person or sell, lease or transfer or otherwise dispose of its assets to any
Person or Persons, except, that:
(i) any wholly-owned Subsidiary of Baldwin (other
than a Borrower) may merge with Baldwin (provided that Baldwin
shall be the continuing or surviving corporation) or merge or
consolidate with any one or more other wholly-owned
Subsidiaries of Baldwin (provided if any Borrower or any
Guarantor is a party to such merger or consolidation it shall
be the continuing or surviving corporation except in the case
of a merger or consolidation involving any Borrower and any
Guarantor, in which case such Borrower shall be the
controlling or surviving corporation);
(ii) any wholly-owned Subsidiary of Baldwin (other
than any Borrower or any Guarantor) may sell, lease, transfer
or otherwise dispose of any of its assets to
68
<PAGE> 77
Baldwin or another wholly-owned Subsidiary of Baldwin provided
that immediately after giving effect to such transaction, no
Default or Event of Default would result therefrom or
otherwise exist immediately before or immediately after such
transaction;
(iii) Baldwin may merge or consolidate with any other
corporation, provided that (A) Baldwin shall be the continuing
or surviving corporation; (B) immediately after giving effect
to such transaction, were Baldwin or any of its Subsidiaries
to incur additional Debt of $1.00, no Default or Event of
Default would result therefrom; (C) no Default or Event of
Default would otherwise exist immediately before or
immediately after such merger or consolidation; and (D) the
aggregate book value of the assets acquired by Baldwin and its
Subsidiaries as a result of mergers or consolidations
permitted by Sections 8.3(d)(iii) and 8.3(d)(iv) shall not
exceed $15,000,000 in any one year;
(iv) a wholly-owned Subsidiary of Baldwin (other than
a Borrower) may merge or consolidate with any other
corporation (other than a Borrower ), provided that (A) such
Subsidiary shall be the continuing or surviving corporation,
except that if either such Subsidiary or the other corporation
is a Guarantor, the continuing or surviving corporation shall
be a Guarantor; (B) subject to the exception in clause (A),
such Subsidiary shall continue to be a wholly-owned Subsidiary
of the Company; (C) immediately after giving effect to such
transaction, were Baldwin or any of its Subsidiaries to incur
additional Debt of $1.00, no Default or Event of Default would
result therefrom; (D) no Default or Event of Default would
otherwise exist immediately before or immediately after such
merger or consolidation; and (E) the aggregate book value of
the assets acquired by Baldwin and its Subsidiaries as a
result of mergers or consolidations permitted by Section
8.3(d)(iii) and 8.3(d)(iv) shall not exceed $15,000,000 in any
one year;
(v) Baldwin, any Borrower or any of their
Subsidiaries may sell, transfer or otherwise dispose of some
or all of its properties or assets for such consideration as
may be determined to be fair and adequate by the Board of
Directors of Baldwin, such Borrower or such Subsidiary (a
"Disposition"); provided, however, that (A) no Default or
Event of Default exists immediately before or immediately
after and giving effect to such Disposition or would otherwise
reasonably be anticipated to result therefrom, and (B)
immediately after and giving effect to any such Disposition,
the aggregate book value, as reflected on the most recent
balance sheet of Baldwin furnished to the Agent and the
69
<PAGE> 78
Lenders pursuant to Section 7.1(a) or 7.1(b), as the case may
be, of all such properties and assets so sold by Baldwin, the
Borrowers and their Subsidiaries (which, in the case of a sale
of capital stock of a Subsidiary, shall equal the seller's
share of the aggregate book value of the properties and assets
of such Subsidiary and its Subsidiaries, calculated on a
consolidated basis) ("Assets Sold") during the then current
Fiscal Year, (less the aggregate amount of Qualifying
Reinvestments then made by Baldwin, the Borrowers and their
Subsidiaries during such Fiscal Year,) does not exceed 10% of
Consolidated Net Tangible Assets at the end of the Fiscal Year
immediately preceding such Disposition; and
(vi) Baldwin, any Borrower or any of their
Subsidiaries may sell inventory in the ordinary course of
business and Baldwin Japan Limited, a wholly-owned Subsidiary
of Baldwin Asia Pacific Corporation, may sell receivables in
the ordinary course of its business in accordance with its
past practices.
For purposes of subparagraph (v) of this Section 8.3(d), a "Qualifying
Reinvestment" is the use of proceeds of Assets Sold to (A) purchase not more
than ninety (90) days prior to nor more than three hundred sixty-five (365) days
after the date of such Disposition (x) tangible, depreciable assets or equipment
or real property or depreciable improvements thereon usable in the same business
as the Assets Sold, or (y) either (1) purchase all of the outstanding capital
stock or other equity interests of such business, or (2) purchase all or
substantially all of the assets and business of a Person which is engaged in any
such business, or (B) permanently repay Consolidated Indebtedness, if such
repayment is made within 90 days after the date of such Disposition.
(e) Subsidiary Dividend and Other Restrictions. Except as set
forth in this Agreement, enter into, or be otherwise subject to, any
contract or agreement (including its charter) which limits the amount
of, or otherwise imposes restrictions on the payment of, dividends by
any of the Baldwin Subsidiaries or Borrower Subsidiaries or
distributions on any other securities of any of the Baldwin
Subsidiaries or Borrower Subsidiaries held by any Borrower, any
Guarantor or Baldwin.
(f) Transactions with Affiliates. Except as set forth on
Schedule 8.3(f), directly or indirectly engage in any transaction
(including, without limitation, the purchase, sale or exchange of
assets or the payment of salary, bonuses and other compensation for
services rendered) with any present or former stockholder (other than
Persons who do not own and have not owned, directly or indirectly, any
shares of stock of any Subsidiary of Baldwin and who do not own and
have not owned, directly or indirectly, at any time more than ten (10)
shares
70
<PAGE> 79
of common stock of Baldwin and any shares of any other class of capital
stock of Baldwin), officer or Affiliate or to any successor, assign,
Affiliate or transferee thereof, except in the ordinary course of
business pursuant to the reasonable requirements of Baldwin's, the
Borrower's or their Subsidiaries' business and upon terms which might
be obtained at arms' length between unaffiliated parties.
(g) Sale and Leaseback. Enter into any sale and leaseback
transaction, unless the obligation incurred and evidenced by such
leasing arrangement would be a Capitalized Lease Obligation and the
Indebtedness incurred would be permitted to be incurred by Section 8.4.
8.4. INDEBTEDNESS.
(a) Baldwin Indebtedness. Baldwin will not create, incur,
assume, suffer to exist, or otherwise become or remain directly or indirectly
liable with respect to any Indebtedness, other than:
(i) its guaranty of the Obligations;
(ii) its guaranty of the Funded Debt from time to
time outstanding under the Senior Note Documents in an
aggregate principal amount not at any time to exceed
$25,000,000, which guaranty and Indebtedness shall at all
times rank equal to and pari passus with (or junior to) the
Obligations;
(iii) Indebtedness outstanding as of the Closing Date
that is set forth on Schedule 8.4(a), and all of which
Indebtedness shall at all times be junior and subordinate to
the Obligations;
(iv) other Funded Debt of Baldwin if, at the time of
incurrence thereof and after giving effect thereto, (A) no
Default or Event of Default exists or would otherwise
reasonably be anticipated to result from such transaction, (B)
the ratio of Consolidated Funded Debt to Consolidated Total
Capitalization, in each case calculated on the basis of the
most recently available financial information and giving pro
forma effect to the incurrence of such Funded Debt and the
application of the net proceeds therefrom, would not exceed
0.55 to 1.00, (C) the financial tests set forth in Section
8.1, calculated on the basis of the most recently available
financial information, would be satisfied on a pro forma
basis; (D) all such Indebtedness is and shall at all times be
junior and subordinate to the Obligations; and
(v) other Indebtedness of Baldwin if, at the time
of incurrence thereof and after giving effect thereto,
71
<PAGE> 80
(A) no Default or Event of Default exists or would otherwise
reasonably be anticipated to result from such transaction, (B)
the ratio of Consolidated Indebtedness to Consolidated Total
Capitalization, in each case calculated on the basis of the
most recently available financial information and giving pro
forma effect to the incurrence of such Indebtedness and the
application of the net proceeds therefrom, would not exceed
0.60 to 1.00, and (C) the financial tests set forth in Section
8.1, calculated on the basis of the most recently available
financial information, would be satisfied on a pro forma
basis; (D) no such Indebtedness shall rank senior to the
Obligations; and (E) all such Indebtedness that constitutes
Indebtedness for Money Borrowed (other than Existing
Capitalized Leases) is and shall at all times be junior and
subordinate to the Obligations.
(b) Subsidiary Debt. The Borrowers will not, and the Borrowers
and Baldwin will not permit any of their Subsidiaries to, create, incur, assume
or otherwise become or remain directly or indirectly liable with respect to
Indebtedness other than:
(i) the Funded Debt represented by the Notes and
the Guaranties;
(ii) the Funded Debt of the Borrowers and the
guarantees of the Sector Subsidiaries and any other Guarantors
(as defined herein) from time to time outstanding under the
Senior Note Documents in an aggregate principal amount not at
any time to exceed $25,000,000, which Indebtedness shall at
all times rank equal to and pari passus with (or junior to) to
the Obligations;
(iii) Indebtedness of wholly-owned Subsidiaries of
Baldwin for loans permitted under Section 8.3(b)(i);
(iv) any other Indebtedness of the Borrowers, any
Borrower Subsidiary, any Sector Subsidiary or any Subsidiary
of a Sector Subsidiary; provided, however, (A) at the time of
the incurrence of such Indebtedness and after giving effect
thereto, Baldwin would be able to incur an additional $1.00 of
Indebtedness without breach of Section 8.4(a)(v); (B) that the
aggregate principal amount of all such Indebtedness shall not
at any time exceed $15,000,000; (C) no such Indebtedness shall
rank senior to the Obligations; and (D) all such Indebtedness
of any Borrower, Borrower Subsidiary or Sector Subsidiary that
constitutes Indebtedness for Money Borrowed (other than
Existing Capitalized Leases) is and shall at all times be
junior and subordinate to the Obligations;
72
<PAGE> 81
(v) any other Indebtedness for Money Borrowed of any
Subsidiary of a Sector Subsidiary; provided, however, (A) at
the time of the incurrence of such Indebtedness and after
giving effect thereto, Baldwin would be able to incur an
additional $1.00 of Indebtedness without breach of Section
8.4(a)(v); (B) that the aggregate principal amount of all such
Indebtedness shall not at any time exceed the lesser of (1)
$5,000,000 or (2) the difference between the Total Commitment
(excluding any reduction of the Total Commitment pursuant to
Section 2.14 caused by Indebtedness permitted by Section
8.4(b)(iii) or 8.4(b)(iv)); and the principal amount of
outstanding Loans hereunder; and (C) no such Indebtedness
shall rank senior to the Obligations.
(c) Priority of Obligations. The foregoing notwithstanding,
the Borrowers and Baldwin will not, and will not permit any Borrower Subsidiary,
any Sector Subsidiary or any Guarantor, to create, incur, assume, suffer to
exist, or otherwise become or remain directly or indirectly liable with respect
to any Indebtedness that (i) is or would be senior to the Obligations, or (ii)
to the extent that it constitutes or would constitute Indebtedness for Money
Borrowed of Baldwin, any Borrower, any Borrower Subsidiary or any Sector
Subsidiary (other than Existing Capitalized Leases and other than the
Indebtedness under the Senior Note Documents), ranks or would rank equal to or
pari passus with the Obligations.
(d) Indebtedness Affecting Unavailable Commitment Amount. The
foregoing notwithstanding, the Borrowers and Baldwin will not, and will not
permit any Borrower Subsidiary, Sector Subsidiary or Subsidiary of a Sector
Subsidiary to, create, incur, assume, suffer to exist, or otherwise become
directly or indirectly liable with respect to any Indebtedness that would, after
giving effect to such Indebtedness in calculating the Unavailable Commitment
Amount pursuant to Section 2.14 hereof, reduce the Total Commitment to an amount
less than the then aggregate principal amount of outstanding Loans.
8.5. COMPLIANCE WITH ERISA. It will not and will not permit any
Borrower Subsidiary or Baldwin Subsidiary or any Related person, if it will have
a Material Adverse Effect on Baldwin, any Significant Subsidiary or the
Consolidated Group to:
(a) engage in any transaction in connection with which Baldwin
or any Borrower or Related Person could be subject to either a civil
penalty assessed pursuant to section 502(i) of ERISA or a tax imposed
by section 4975 of the Code, terminate or withdraw from any Plan in a
manner, or take any other action with respect to any such Plan
(including, without limitation, a substantial cessation of business
operations or an amendment of a Plan within the meaning of section
4041(e) or ERISA), which could result in any liability of Baldwin or
73
<PAGE> 82
any Borrower or any Related Person to the PBGC, to a Plan, to a Plan
participant, to the Department of Labor or to a trustee appointed under
section 4042(b) or (c) or ERISA), incur any liability to the PBGC or a
Plan on account of a withdrawal from or a termination of a Plan under
section 4063 or 4064 of ERISA, incur any liability for post-retirement
benefits under any and all welfare benefit plans (as defined in section
3(1) of ERISA), fail to make full payment when due of all amounts
which, under the provisions of any Plan or applicable law, Baldwin, any
Borrower or any Related Person is required to pay as contributions
thereto, or permit to exist any accumulated funding deficiency, whether
or not waive, with respect to any Plan (other than a Multiemployer
Plan);
(b) at any time permit the termination of any Single Employer
Plan intended to be qualified under Section 401(a) and Section 501(a)
of the Code unless such Plan is funded so that the value of all benefit
liabilities upon the termination date does not exceed the then current
value of all assets in such Plan;
(c) if Baldwin, any Borrower or any Related Person becomes
obligated under a Multiemployer Plan, permit the aggregate complete or
partial withdrawal liability under Title IV of ERISA with respect to
Multiemployer Plans incurred by Baldwin, any Borrower or any of their
Subsidiaries or any Related Person to exceed any amount the payment of
which would have a Material Adverse Effect on Baldwin, any Significant
Subsidiary or the Consolidated Group.
For the purposes of subparagraph (iii) of this Section 8.5, the amount of the
withdrawal liability of Baldwin, any Borrower, or any Related Person at any date
shall be the aggregate present value of the amount claimed to have been incurred
less any portion thereof as to which Baldwin and each Borrower reasonably
believes, after appropriate consideration of possible adjustments arising under
subtitle E of Title IV of ERISA, neither Baldwin, nor any Borrower, nor any of
their Subsidiaries nor any Related Person will have any liability, provided that
Baldwin and the Borrowers shall obtain promptly written advice from independent
actuarial consultants supporting such determination. Each Borrower and Baldwin
will (x) once in each calendar year, beginning in 1993, request and obtain a
current statement of withdrawal liability from each MultiEmployer Plan to which
Baldwin, any Borrower or any Related Person is or has been obligated to
contribute and (y) transmit a copy of such statement to the Agent and each
Lender within 15 days after Baldwin or such Borrower receives the same.
As used in this Section 8.5, the term "accumulated funding deficiency"
has the meaning specified in section 302 of ERISA and section 412 of the Code,
the terms "present value" and "current value" have the meanings specified in
section 3 of ERISA, the term "benefit liabilities" has the meaning specified in
section
74
<PAGE> 83
4001(a)(16) of ERISA and the term "amount of unfunded liabilities" has the
meaning specified in section 4001(18) of ERISA.
8.6. TAX SHARING. It will not, and will not permit any Borrower
Subsidiary or Baldwin Subsidiary to, consent to or permit the filing of or be a
party to any consolidated income tax return with any Person (other than a
consolidated return of Baldwin and its Subsidiaries).
8.7. FISCAL YEAR. It will not, and will not permit any Borrower
Subsidiary or Baldwin Subsidiary to, change its Fiscal Year without the prior
written consent of the Agent (which consent will not be unreasonably withheld),
provided that, notwithstanding the foregoing, the fiscal year of any Baldwin
Subsidiary organized under the laws of the Kingdom of Sweden may be changed to
end on May 31 of each year and the last days of its first three fiscal quarters
to end on the last day of the immediately preceding August, November and
February.
8.8. AMENDMENTS TO AGREEMENTS. It will not, and will not permit any
Borrower Subsidiary or Baldwin Subsidiary to, to amend, modify or supplement (i)
any of the Senior Note Documents, (ii) any other agreement if such amendment,
modification or supplement would have a Material Adverse Effect on Baldwin, any
Significant Subsidiary or the Consolidated Group.
8.9. OWNERSHIP OF BORROWER AND GUARANTOR STOCK. The foregoing
notwithstanding, none of the capital stock of any Borrower or any Guarantor
shall be owned by any Person other than a Borrower or Guarantor, except pursuant
to a foreclosure on or sale of such stock pursuant to a Pledge Agreement or
other pledge agreement expressly contemplated by a Loan Document.
ARTICLE IX
EVENTS OF DEFAULT AND ACCELERATION
9.1. EVENTS OF DEFAULT. If any one or more of the following events
(herein called "Events of Default") shall occur for any reason whatsoever (and
whether such occurrence shall be voluntary or involuntary or come about or be
effected by operation of law or pursuant to or in compliance with any judgment,
decree or order of any court or any order, rule or regulation of any
administrative or governmental body), that is to say:
(a) if default shall be made in the due and punctual
payment of the principal of any Loan when and as the same shall be
due and payable whether at maturity, by acceleration or otherwise;
or
(b) if default shall be made in the due and punctual
payment of any amount of interest on any Loan or of any fees
payable under this Agreement or amounts requested by the Agent
75
<PAGE> 84
pursuant to Section 3.4 hereof on the date on which the same shall be due and
payable and such default shall continue for more than five days; or
(c) if default shall be made in the performance or
observance of any covenant set forth in Section 7.1(f), 7.14, 7.18,
8.1, 8.2, 8.3(d) or 8.3(e) hereof; or
(d) if a default shall be made in the performance or
observance of, or shall occur under, any covenant or agreement contained in this
Agreement, the Notes, the Guaranties, the Pledge Agreements, or any other Loan
Document (other than as described in clauses (a), (b) or (c) above) and such
default shall continue for 30 or more days after the earlier of: (i) any
Borrower's knowledge of such default and (ii) receipt by any Borrower of notice
of such default from the Agent; or
(e) (i) if an event of default shall occur under any of the
Senior Note Documents; or (ii) if a default shall occur, which is not waived,
(A) in the payment of any principal, interest or premium with respect to any
Indebtedness (other than the Loans) of Baldwin, any Guarantor, any Borrower or
any Baldwin Subsidiary or (B) in the performance or observance of any covenant
contained in any agreement or instrument under or pursuant to which any such
Indebtedness may have been issued, created, assumed, guaranteed or secured by
Baldwin, any Guarantor, any Borrower or any Baldwin Subsidiary, and such default
shall continue for more than the period of grace, if any, therein specified, and
such default shall then permit the holder of any such Indebtedness to accelerate
the maturity thereof, provided that, in the case of this subparagraph (ii), the
aggregate unpaid principal amount of all such Indebtedness as to which such
default shall occur and be continuing exceeds at any time $1,000,000; or
(f) if any representation or warranty of Baldwin, any
Borrower, any Guarantor or any other Baldwin Subsidiary contained herein or in
other Loan Document shall be false in any material respect on the date as of
which made or given; or
(g) (1) if Baldwin, any Guarantor, any Borrower or any Baldwin
Subsidiary shall be unable to pay its debts generally as they become due; (2)
file a petition to take advantage of any insolvency statute; (3) make an
assignment for the benefit of its creditors; (4) commence a proceeding for the
appointment of a receiver, trustee, liquidator or conservator of itself or of
the whole or substantially all of its property; (5) file a petition or answer
seeking reorganization or arrangement or similar relief under the federal
bankruptcy laws or any other applicable law or statute of the United States of
America or any state or similar law of any other country; or
(h) (1) if a court of competent jurisdiction shall enter an
order, judgment or decree appointing a custodian, receiver,
76
<PAGE> 85
trustee, or conservator of Baldwin, any Guarantor, any Borrower or any Baldwin
Subsidiary or of the whole or substantially all of its properties, or a
liquidation of Baldwin, any Guarantor, any Borrower or any Significant
Subsidiary or of the whole or substantially all of its properties, or approve a
petition filed against Baldwin, any Guarantor, any Borrower or any Baldwin
Subsidiary seeking reorganization or arrangement or similar relief under the
federal bankruptcy laws or any other applicable law or statute of the United
States of America or any state or similar law of any other country, or if, under
the provisions of any other law for the relief or aid of debtors, a court of
competent jurisdiction shall assume custody or control of Baldwin, any
Guarantor, any Borrower or any Baldwin Subsidiary or of the whole or
substantially all of its properties and such order, judgment, decree, approval
or assumption remains unstayed or undismissed for a period of thirty (30)
consecutive days; or (2) if there is commenced against Baldwin, any Guarantor,
any Borrower or any Baldwin Subsidiary any proceeding or petition seeking
reorganization, arrangement or similar relief under the federal bankruptcy laws
or any other applicable law or statute of the United States of America or any
state which proceeding or petition remains unstayed and undismissed for a period
of sixty (60) consecutive days; or (3) if Baldwin, any Guarantor, any Borrower
or any Baldwin Subsidiary takes any action to indicate its consent to or
approval of any such proceeding or petition; or
(i) if (1) any one or more judgments where the amount not
covered by insurance (or the amount as to which the insurer denies liability) is
in excess of $1,000,000 in aggregate amount is rendered against Baldwin, any
Guarantor, any Borrower or any Baldwin Subsidiary, or (2) there is any
attachment, injunction or execution against any of Baldwin, any Guarantor, any
Borrower's or any Baldwin Subsidiary's properties for any aggregate amount in
excess of $1,000,000; and in each event there shall be any period of thirty (30)
consecutive days during which a stay of enforcement of such judgment,
attachment, injunction or execution, by reason of a pending appeal or otherwise,
shall not be in effect unless such judgment, attachment, injunction or execution
shall have been vacated, satisfied or dismissed or bonded pending appeal;
(j) if (1) Baldwin, any Guarantor, any Borrower or any Baldwin
Subsidiary shall engage in any prohibited transaction (as described in Section
6.7(a) hereof) involving any employee pension benefit plan of Baldwin, any
Guarantor, any Borrower or any Baldwin Subsidiary, (2) any accumulated funding
deficiency (as referred to in Section 6.7(c) hereof), whether or not waived,
shall exist with respect to any Single Employer Plan, (3) a reportable event (as
referred to in Section 7.1(g)(i) hereof) shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed to administer or to terminate, any Single Employer Plan, which
reportable event or institution or proceedings is likely to result in the
termination of such Single Employer Plan for purposes of Title IV of ERISA, and
in the case of
77
<PAGE> 86
such a reportable event, the continuance of such reportable event shall be
unremedied for thirty (30) days after notice of such reportable event is given,
as the case may be, (4) any Single Employer Plan shall terminate for purposes of
Title IV of ERISA, or (5) Baldwin, any Guarantor, any Borrower or any Baldwin
Subsidiary shall withdraw from a Multi-employer Plan for purposes of Title IV of
ERISA, and, as a result of any such withdrawal, Baldwin, any Guarantor, any
Borrower or any Baldwin Subsidiary shall incur withdrawal liability to such
Multi-employer Plan; and in each case in clauses (1) through (5) of this Section
10.1(k), such event or condition, together with all other such events or
conditions, if any, is reasonably likely to result in a Material Adverse Effect;
or
(k) if any Person, or group of related Persons or group of
Persons acting in concert (other than the Persons specified by name and title in
Schedule 9.1(k)), that does not hold (as of the Closing Date) at least 50% of
the outstanding voting control (as measured by the total number of votes able to
be cast by all common stock holders) (the "Voting Control") of Baldwin, acquires
more than 49% of the Voting Control of Baldwin, unless, at the option of the
Agent and the Lenders (which option may be exercised in their sole discretion
within thirty (30) days after the Agent and each Lender receives written notice
from an Authorized Officer of such change in Voting Control, such notice to
expressly identify the Agent's and Lenders' rights under this Section 9.1(k)),
(i) the Notes and all Obligations are prepaid in full and the Revolving Credit
Facility is terminated, or (ii) the Agent and the Lenders expressly consent to
such change in the Voting Control of Baldwin;
then, and in any such event and at any time thereafter, if such Event of Default
or any other Event of Default shall then be continuing, (A) the Agent, with the
consent of the Required Lenders, may, and at the direction of the Required
Lenders shall, declare any obligation of the Lenders to make further Loans
terminated, whereupon the obligation of each Lender to make further Loans
hereunder shall terminate immediately; and (B) the Agent shall at the direction
of the Required Lenders, at their option, declare by notice to any Borrower any
or all of the Obligations to be immediately due and payable, and the same,
including all interest accrued thereon and all other Obligations of any Borrower
to the Lenders, shall forthwith become immediately due and payable without
presentment, demand, protest, further notice or other formality of any kind, all
of which are hereby expressly waived, anything contained herein or in any
instrument evidencing the Obligations to the contrary notwithstanding; provided,
however, that notwithstanding the above, if there shall occur an Event of
Default under clause (g)(2), (3), (4) or (5) or (h)(1) or (2) above, then the
obligation of the Lenders described in clause (A) above shall automatically
terminate and any and all of the Obligations shall be immediately due and
payable without the necessity of any action by the Agent or the Required Lenders
or notice by the Agent or the Lenders.
78
<PAGE> 87
9.2. AGENT TO ACT. In case any one or more Events of Default shall
occur and be continuing, the Agent may, and at the direction of the Required
Lenders shall (subject to any applicable terms of the Intercreditor Agreement),
proceed to protect and enforce their rights or remedies either by suit in equity
or by action at law, or both, whether for the specific performance of any
covenant, agreement or other provision contained herein or in any other Loan
Document, or to enforce the payment of the Obligations or any other legal or
equitable right or remedy.
9.3. CUMULATIVE RIGHTS. No right or remedy herein conferred upon the
Lenders or the Agent is intended to be exclusive of any other rights or remedies
contained herein or in any other Loan Document, and every such right or remedy
shall be cumulative and shall be in addition to every other such right or remedy
contained herein and therein or now or hereafter existing at law or in equity or
by statute, or otherwise.
9.4. NO WAIVER. No course of dealing between any Borrower and any
Lender or the Agent or any failure or delay on the part of any Lender or the
Agent in exercising any rights or remedies hereunder shall operate as a waiver
of any rights or remedies hereunder and no single or partial exercise of any
rights or remedies hereunder shall operate as a waiver or preclude the exercise
of any other rights or remedies hereunder or of the same right or remedy on a
future occasion.
9.5. ALLOCATION OF PROCEEDS. If an Event of Default has occurred and is
continuing, and the maturity of the Notes has been accelerated pursuant to
Article IX hereof, all payments received by the Agent hereunder in respect of
any principal of or interest on the Obligations or any other amounts payable by
any Borrower hereunder shall be applied by the Agent in the following order:
(a) amounts due to the Agent and the Lenders, or any one
of them, pursuant to Sections 2.12, 3.1, 3.4, 7.15 and 11.5 hereof;
(b) amounts due to the Agent pursuant to Section 10.11
hereof;
(c) payments of interest, to be applied in accordance
with Section 2.8 hereof;
(d) payments of principal, to be applied in accordance
with Section 2.8 hereof; and
(e) payments of all other amounts due under this
Agreement, if any, to be applied to the Lenders to whom such amounts are due,
pro rata in the proportion that the amount due to each Lender bears to the
amount due to all Lenders.
79
<PAGE> 88
ARTICLE X
THE AGENT
10.1. APPOINTMENT. Each Lender (including NationsBank in its capacity
as Lender) hereby irrevocably designates and appoints NationsBank as the Agent
of the Lenders under this Agreement, and each of the Lenders hereby irrevocably
authorizes NationsBank as the Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers as are expressly delegated to the Agent by the terms of
this Agreement, together with such other powers as are reasonably incidental
thereto. The Agent shall not have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any of the
Lenders, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Agent.
10.2. ATTORNEYS-IN-FACT. The Agent may execute any of its duties under
this Agreement by or through agents or attorneys-in-fact and shall be entitled
to advice of counsel concerning all matters pertaining to such duties. The Agent
shall not be responsible to the Lenders for the gross negligence or willful
misconduct of any agents or attorneys-in-fact selected by it with reasonable
care.
10.3. LIMITATION ON LIABILITY. Neither the Agent nor any of its
officers, directors, employees, agents or attorneys-in-fact shall be liable to
the Lenders for any action lawfully taken or omitted to be taken by it or them
under or in connection with this Agreement except for its or their own gross
negligence or willful misconduct. Neither the Agent nor any of its affiliates
shall be responsible in any manner to any of the Lenders for any recitals,
statements, representations or warranties made by Baldwin, any Borrower, any
Guarantor or any Baldwin Subsidiary, or any officer thereof contained in this
Agreement or in any of the other Loan Documents, or in any certificate, report,
statement or other document referred to or provided for in or received by the
Agent under or in connection with this Agreement or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any of the other Loan Documents, or for any failure of Baldwin, any Borrower,
any Guarantor or any Baldwin Subsidiary to perform its obligations thereunder.
The Agent shall not be under any obligation to any of the Lenders to ascertain
or to inquire as to the observance or performance of any of the terms, covenants
or conditions of this Agreement or any of the other Loan Documents on the part
of Baldwin, any Borrower, or any Guarantor or to inspect the properties, books
or records of Baldwin, any Borrower, any Guarantor or any Baldwin Subsidiary.
10.4. RELIANCE. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any Note, writing,
80
<PAGE> 89
resolution, notice, consent certificate, affidavit, letter, cablegram, telegram,
telecopy or telex message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to any Borrower), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless an
Assignment and Acceptance shall have been filed with and accepted by the Agent.
The Agent shall be fully justified in failing or refusing to take any action
under this Agreement unless it shall first receive advice or concurrence of the
Lenders or the Required Lenders as provided in this Agreement or it shall first
be indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action. The Agent shall in all cases be fully protected in acting,
or in refraining from acting, under this Agreement in accordance with a request
of the Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all present and
future holders of the Notes.
10.5. NOTICE OF DEFAULT. The Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Agent has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default." In the event that the Agent
receives such a notice, the Agent shall promptly give notice thereof to the
Lenders and the Borrowers. The Agent shall take such action with respect to such
Default or Event of Default as shall be reasonably directed by the Required
Lenders; provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Event of Default as it
shall deem advisable in the best interests of the Lenders.
10.6. NO REPRESENTATIONS. Each Lender expressly acknowledges that
neither the Agent nor any of its affiliates has made any representations or
warranties to it and that no act by the Agent hereafter taken, including any
review of the affairs of Baldwin, any Borrower, any Guarantor or any Baldwin
Subsidiary, shall be deemed to constitute any representation or warranty by the
Agent to any Lender. Each Lender represents to the Agent that it has,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it has deemed appropriate, made its own
appraisal of and investigation into the financial condition, creditworthiness,
affairs, status and nature of Baldwin, the Borrowers, any Guarantor and the
Baldwin Subsidiaries and made its own decision to enter into this Agreement.
Each Lender also represents that it will, independently and without reliance
upon the Agent or any other Lender, and based
81
<PAGE> 90
on such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and to make such investigation as it
deems necessary to inform itself as to the status and affairs, financial or
otherwise, of Baldwin, any Borrower, any Guarantor and any Baldwin Subsidiary.
Except for notices, reports and other documents expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of Baldwin,
any Borrower, any Guarantor or any Baldwin Subsidiary which may come into the
possession of the Agent or any of its affiliates.
10.7. INDEMNIFICATION. The Lenders agree to indemnify the Agent in its
capacity as such (to the extent not reimbursed by the Borrowers and without
limiting any obligations of the Borrowers so to do), ratably according to the
respective principal amount of the Loans held by them (or, if no Loans are
outstanding, ratably in accordance with their respective Applicable Commitment
Percentages as then in effect) from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever which may at any time
(including without limitation at any time following the payment of the Notes) be
imposed on, incurred by or asserted against the Agent in any way relating to or
arising out of this Agreement or any other document contemplated by or referred
to herein or the transactions contemplated hereby or any action taken or omitted
by the Agent under or in connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the Agent's gross negligence or willful
misconduct. The agreements in this Section 10.7 shall survive the payment of the
Obligations and the termination of this Agreement.
10.8. LENDER. NationsBank and its affiliates may make loans to, accept
deposits from and generally engage in any kind of business with Baldwin, the
Borrowers, the Guarantors and the Baldwin Subsidiaries as though it were not the
Agent hereunder. With respect to its Loans made or renewed by it and any Note
issued to it, NationsBank shall have the same rights and powers under this
Agreement as any Lender and may exercise the same as though it were not the
Agent, and the terms "Lender" and "Lenders" shall, unless the context otherwise
indicates, include NationsBank in its individual capacity.
10.9. RESIGNATION. If the Agent shall resign as Agent under this
Agreement, then the Required Lenders may appoint a successor Agent for the
Lenders, which shall be a commercial bank organized under the laws of the United
States or any state thereof, having a combined surplus and capital of not less
than $500,000,000, which
82
<PAGE> 91
is acceptable to the Borrowers and as to which the Borrowers will not
unreasonably withhold their approval, whereupon such successor Agent shall
succeed to the rights, powers and duties of the former Agent and the obligations
of the former Agent shall be terminated and canceled, without any other or
further act or deed on the part of such former Agent or any of the parties to
this Agreement; provided, however, if the Required Lenders cannot agree as to a
successor Agent within ninety (90) days after such resignation, the Agent shall
appoint a successor Agent meeting the qualifications set forth above, which is
acceptable to the Borrowers and as to which the Borrowers will not unreasonably
withhold their approval and the parties hereto agree to execute whatever
documents are necessary to effect such action under this Agreement or any other
document executed pursuant to this Agreement; provided, however, in such event,
all provisions of this Agreement and the Loan Documents shall remain in full
force and effect. After any retiring Agent's resignation hereunder as Agent, the
provisions of this Article X shall inure to its benefit as to any actions taken
or omitted to be taken by it while it was Agent under this Agreement.
10.10. SHARING OF PAYMENTS, ETC. Each Lender agrees that if it shall,
through the exercise of a right of banker's lien, set-off, counterclaim or
otherwise, obtain payment with respect to the Obligations (other than any
payment pursuant to Section 2.14 or Article III) which results in its receiving
more than its pro rata share of the aggregate payments with respect to all of
the Obligations (other than any payment pursuant to Section 2.14 or Article
III), then (A) such Lender shall be deemed to have simultaneously purchased from
the other Lenders a share in their Obligations so that the amount of the
Obligations held by each of the Lenders shall be pro rata and (B) such other
adjustments shall be made from time to time as shall be equitable to insure that
the Lenders share such payments ratably; provided, however, that for purposes of
this Section 10.10 the term "pro rata" shall be determined with respect to both
the Revolving Loan Commitment of each Lender and to the Total Commitments after
subtraction in each case of amounts, if any, by which any such Lender has not
funded its share of the outstanding Loans. If all or any portion of any such
excess payment is thereafter recovered from the Lender which received the same,
the purchase provided in this Section 10.10 shall be rescinded to the extent of
such recovery, without interest. The Borrowers expressly consent to the
foregoing arrangements and agree that each Lender so purchasing a portion of the
other Lenders' Obligations may exercise all rights of payment (including,
without limitation, all rights of set-off, banker's lien or counterclaim) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
10.11. FEES. Each Borrower agrees, jointly and severally, to pay to the
Agent, for its individual account, in the event a financial institution other
than NationsBank becomes a Lender hereunder at any time, an Agent's fee in such
amount as shall be agreed to from time to time by the Borrowers and the Agent,
such
83
<PAGE> 92
fee to be paid in quarterly installments in arrears on each March 31, June 30,
September 30 and December 31 with respect to the period commencing with the
Closing Date and continuing until and including the Revolving Credit Termination
Date.
ARTICLE XI
MISCELLANEOUS
11.1. ASSIGNMENTS AND PARTICIPATIONS.
(a) At any time after the Closing Date each Lender may,
with the prior consent of the Agent and the Borrowers (whose consent shall not
be unreasonably withheld), assign to one or more banks or financial institutions
all or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of the Note payable to its order);
provided, that (1) each such assignment shall be of a constant, and not a
varying, percentage of all of the assigning Lender's rights and obligations
under this Agreement, (2) the assigning Lender shall execute an Assignment and
Acceptance and the Borrowers hereby agree to execute replacement Notes to give
effect to the assignment if it shall have consented to such assignment, (3) the
minimum Revolving Loan Commitment which shall be assigned is $5,000,000, (4)
after giving effect to such assignment the assignor shall retain a Revolving
Loan Commitment of not less than $5,000,000, (5) such assignee shall have an
office located in the United States and (6) such assigning Lender, such
assignee, the Agent and the Borrowers shall have executed and delivered an
Assignment and Acceptance. Upon such execution, delivery, approval and
acceptance, from and after the effective date specified in each Assignment and
Acceptance, (x) the assignee thereunder shall be a party hereto and, to the
extent that rights and obligations hereunder or under such Note have been
assigned or negotiated to it pursuant to such Assignment and Acceptance, have
the rights and obligations of a Lender hereunder as fully as if such assignee
had been named as a Lender in this Agreement and a holder of such Note and (y)
the assignor thereunder shall, to the extent that rights and obligations
hereunder or under such Note have been assigned or negotiated by it pursuant to
such Assignment and Acceptance, relinquish its rights and be released from its
obligations under this Agreement. No assignee shall have the right to further
assign its rights and obligations pursuant to this Section 11.1. Any Lender who
makes an assignment shall pay to the Agent a one-time administrative fee of
$5,000.00 which fee shall not be reimbursed by the Borrowers.
(b) By executing and delivering an Assignment and
Acceptance, the Lender assignor thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (1) the
assignment made under such Assignment and Acceptance is made under such
Assignment and Acceptance without recourse to the assigning Lender; (2) such
assigning Lender makes no representation or warranty and assumes no
84
<PAGE> 93
responsibility with respect to the financial condition of Baldwin, any Borrower,
any Guarantor or any Baldwin Subsidiary or the performance or observance by
Baldwin, any Borrower, any Guarantor or any Baldwin Subsidiary of any of its
obligations under any Loan Document or any other instrument or document
furnished pursuant hereto; (3) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
delivered pursuant to Section 6.2 hereof and such other Loan Documents and other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (4) such
assignee will, independently and without reliance upon the Agent, such assigning
Lender or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (5) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf and to exercise
such powers under this Agreement, the Note, any Letter of Credit and the other
Loan Documents as are delegated to the Agent by the terms hereof and thereof,
together with such powers as are reasonably incidental thereto; and (6) such
assignee agrees that it assumes, and will be bound by and will perform in
accordance with their terms all of the obligations which by the terms of this
Agreement are required to be performed by it as a Lender and a holder of such
Note.
(c) The Agent shall maintain at its address referred to
herein a copy of each Assignment and Acceptance delivered to and accepted by it.
(d) Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender, the Agent shall give prompt notice thereof to
the Borrowers.
(e) No assignee Lender shall be entitled to receive any
greater payment under Article III than the assigning Lender would have been
entitled to receive in respect of the rights hereunder transferred to the
assignee Lender. The consent of the Borrowers to such transfer shall not affect
the preceding sentence.
(f) If, pursuant to this Section 11.1, any interest in
this Agreement or any Note is transferred to any assignee Lender which is
organized under the laws of any jurisdiction other than the United States or any
state thereof, the assigning Lender shall cause such assignee Lender,
concurrently with the effectiveness of such transfer, (1) to represent to the
assigning Lender (for the benefit of the assigning Lender, the Agent and the
Borrowers) that under applicable law and treaties no taxes will be required to
be withheld by the Agent, the Borrowers or the assigning Lender with respect to
any payments to be made to such assignee Lender in respect of the Loans, (2) to
furnish to the assigning Lender, the Agent and the Borrowers (x) either United
States Internal Revenue Service Form 4224 or United States Internal Revenue
Service Form
85
<PAGE> 94
1001 or successor applicable form or other manner of certification wherein such
assignee Lender claims entitlement to complete exemption from United States
Federal withholding tax on all payments hereunder and (y) either United States
Internal Revenue Service Form W-8 or United States Internal Revenue Service Form
W-9 wherein such assignee Lender claims entitlement to exemptions from United
States information reporting and back up withholding and (3) to agree (for the
benefit of the assigning Lender, the Agent and the Borrowers) to provide the
assigning Lender, the Agent and the Borrowers further or successor forms in
accordance with Section 3.1(d), and to comply from time to time with all
applicable United States laws and regulations with regard to such withholding
tax exemption.
(g) Nothing herein shall prohibit any Lender from
pledging or assigning any Note to any Federal Reserve Bank in accordance with
applicable law.
(h) Each Lender may sell participations to one or more
banks or other entities as to all or a portion of its rights and obligations
under this Agreement; provided, that (1) such Lender's obligations under this
Agreement shall remain unchanged, (2) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and shall be solely responsible for any withholding tax or other tax
consequences caused by such participation, (3) such Lender shall remain the
holder of any Note issued to it for the purpose of this Agreement, (4) such
participations shall be in a minimum amount of $1,000,000 and shall include an
allocable portion of such Lender's Participation, and (5) the Borrowers, the
Agent and the other Lenders shall continue to deal solely and directly with such
Lender in connection with such Lender's rights and obligations under this
Agreement and with regard to any and all payments to be made under this
Agreement; provided, that the participation agreement between a Lender and its
participants may provide that such Lender will obtain the approval of such
participant prior to such Lender's agreeing to any amendment or waiver of any
provisions of this Agreement which would (A) extend the maturity of the Note,
(B) reduce the interest rate hereunder, (C) increase the Revolving Loan
Commitment of the Lender granting the participation or (D) release all or any
substantial part of the Collateral other than in accordance with the terms of
the Loan Documents, and (6) the sale of any such participations which require
any Borrower to file a registration statement with the United States Securities
and Exchange Commission or under the securities regulations or laws of any state
shall not be permitted.
11.2. NOTICES. Any notice shall be conclusively deemed to have been
received by any party hereto and be effective on the day on which delivered to
such party (against receipt therefor) at the address set forth below or such
other address as such party shall specify to the other parties in writing (or,
in the case of telephonic notice or notice by telecopy (where the receipt of
such
86
<PAGE> 95
message is verified by return) expressly provided for hereunder, when received
at such telephone or telecopy number as may from time to time be specified in
written notice to the other parties hereto or otherwise received), or if sent
prepaid by certified or registered mail return receipt requested on the third
Business Day after the day on which mailed, or if sent prepaid by a national
overnight courier service, on the first Business Day after the day on which
delivered to such service against receipt therefor, addressed to such party at
said address:
(a) If to BAM:
Baldwin Americas Corporation
c/o Baldwin Technology Company, Inc.
65 Rowayton Avenue
Rowayton, CT 06853
Attention: William J. Lauricella
Telephone: 203-838-7470
Telefacsimile: 203-852-7040
(b) if to BTL:
Baldwin Technology Limited
c/o Baldwin Technology Company, Inc.
65 Rowayton Avenue
Rowayton, CT 06853
Attention: William J. Lauricella
Telephone: 203-838-7470
Telefacsimile: 203-852-7040
(c) If to Baldwin:
Baldwin Technology Company, Inc.
65 Rowayton Avenue
Rowayton, CT 06853
Attention: William J. Lauricella
Telephone: 203-838-7470
Telefacsimile: 203-852-7040
(d) if to NationsBank or the Agent:
NationsBank, National Association
One Independence Center
101 North Tryon Street
Charlotte, North Carolina 28255-0001
Attention: Dana Weir
Telephone: 704-388-3917
Telecopy: 704-386-9923
87
<PAGE> 96
with a copy to:
NationsBank, National Association
Corporate Banking
767 Fifth Avenue
5th Floor
New York, New York 10153-0083
Attention: Barbara Agostini
Telephone: 212-407-5433
Telefacsimile: 212-593-1083
(e) if to the Lenders:
At the addresses set forth on the signature pages
hereof and on the signature page of each Assignment
and Acceptance.
11.3. SETOFF. Each Borrower agrees that all of the Borrower's deposits
or deposit accounts, of any kind, or any of the Borrower's interest in any
deposits or deposit accounts thereof, now or hereafter pledged, mortgaged,
transferred or assigned to the Agent or a Lender or otherwise in the possession
or control of the Agent or such Lender (other than any of the foregoing held in
trust) for any purpose for the account or benefit of the Borrower and including
any balance of any deposit account or of any credit of the Borrower with the
Agent or such Lender, whether now existing or hereafter established, shall be
subject to the right of setoff of the Agent and each Lender at any time or times
during the continuance of an Event of Default with or, to the extent permitted
by applicable law, without prior notice, to apply such deposits or any part
thereof to such of the Obligations of the Borrower to the Agent or such Lender
then past due and in such amounts as they may elect, and whether or not the
Collateral or the responsibility of other Persons primarily, secondarily or
otherwise liable may be deemed adequate. For the purposes of this paragraph, all
remittances and property shall be deemed to be in the possession of the Agent or
such Lender as soon as the same may be put in transit to it by mail or carrier
or by other bailee. All Lenders receiving any proceeds hereunder or applied to
any Obligations are subject to Section 10.10 hereof.
11.4. SURVIVAL. All covenants, agreements, representations and
warranties made herein shall survive the making by the Lenders of the Loans and
the execution and delivery to the Lenders of this Agreement, the Notes and the
Loan Documents and shall continue in full force and effect until all principal
and interest on the Loans are paid in full and all fees, charges and other
expenses then due and owing are paid in full and no Lender has any Revolving
Loan Commitment hereunder. Whenever in this Agreement, any of the parties hereto
is referred to, such reference shall be deemed to include the successors and
permitted assigns of such party and all covenants, provisions and agreements by
or on behalf of any Borrower which are contained in this Agreement and the Notes
shall
88
<PAGE> 97
inure to the benefit of the successors and permitted assigns of the Lenders or
any of them.
11.5. EXPENSES. Each Borrower agrees, jointly and severally, (a) to pay
or reimburse the Agent for all its out-of-pocket costs and expenses incurred in
connection with the preparation, negotiation and execution of, and any
amendment, supplement or modification to, this Agreement or any of the other
Loan Documents, including, without limitation, the reasonable fees and
disbursements of counsel to the Agent, (b) to pay or reimburse the Agent and the
Lenders for all their out-of-pocket costs and expenses incurred in connection
with the enforcement or preservation of any rights under this Agreement
(including without limitation any costs and expenses occurred in connection with
any workout, enforcement or bankruptcy proceeding), and including without
limitation, the reasonable fees and disbursements of counsel to the Agent, (c)
to pay, indemnify and hold the Agent and the Lenders harmless from any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any failure of any Borrower to pay or delay by any Borrower in
paying, documentary, stamp, excise and other similar taxes, if any, which may be
payable or determined to be payable in connection with the execution and
delivery of, or consummation of any amendment, supplement or modification of, or
any waiver or consent under or in respect of, this Agreement, (d) to pay,
indemnify, and hold the Agent and the Lenders harmless from and against any and
all other out-of-pocket liabilities, costs, expenses or disbursements of any
kind or nature whatsoever arising in connection with any claim or litigation by
any Person (other than a party hereto) resulting from the execution, delivery,
enforcement, performance and administration of this Agreement or the
transactions contemplated hereby or in any respect relating to any transaction
financed or to be financed in whole or in part, directly or indirectly, with the
proceeds of any Loan (all the foregoing, collectively, the "indemnified
liabilities"); provided, however, that the Borrowers shall have no obligation
hereunder with respect to indemnified liabilities arising from the willful
misconduct or gross negligence of any Lender or the Agent. The agreements in
this Section 11.5 shall survive repayment of the Notes and all other Obligations
hereunder.
11.6. AMENDMENTS. No amendment, modification or waiver of any provision
of this Agreement or any of the Loan Documents and no consent by the Lenders to
any departure therefrom by any Borrower shall be effective unless such
amendment, modification or waiver shall be in writing and signed by the Agent,
but only upon having received the written consent of the Required Lenders, and
(with respect to amendments, modifications and waivers) by the Borrowers, and
the same shall then be effective only for the period and on the conditions and
for the specific instances and purposes specified in such writing; provided,
however, that, no such amendment, modification or waiver
89
<PAGE> 98
(a) which changes, extends or waives any provision of
Section 10.10 or this Section 11.6, the amount of or the due date of any
scheduled installment of or the rate of interest payable on any Obligation,
changes the definition of Required Lenders, which increases or extends the
Revolving Loan Commitment of any Lender or which waives any Event of Default
under Section 9.1(h) or (i) shall be effective unless in writing and signed by
each of the Lenders affected thereby; or
(b) which affects the rights, privileges, immunities or
indemnities of the Agent, shall be effective unless in writing and signed by
the Agent.
No notice to or demand on any Borrower in any case shall entitle any Borrower to
any other or further notice or demand in similar or other circumstances, except
as otherwise expressly provided herein.
11.7. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall be deemed an
original, and it shall not be necessary in making proof of this Agreement to
produce or account for more than one such fully-executed counterpart. All
signatures need not be on one counterpart.
11.8. TERMINATION. The termination of this Agreement shall not affect
any rights of any Borrower, the Lenders or the Agent or any obligation of any
Borrower, the Lenders or the Agent, arising prior to the effective date of such
termination, and the Obligations arising prior to termination have been
irrevocably Fully Satisfied. The rights granted to the Agent for the benefit of
the Lenders hereunder and under the other Loan Documents shall continue in full
force and effect, notwithstanding the termination of this Agreement, until all
of the Obligations have been Fully Satisfied after the termination hereof or the
Borrowers have furnished the Lenders and the Agent with an indemnification
satisfactory to the Agent and each Lender with respect thereto. All
representations, warranties, covenants, waivers and agreements contained herein
shall survive termination hereof until the Obligations have been Fully Satisfied
unless otherwise provided herein. "Fully Satisfied" means, with respect to the
Obligations as of any date, that, on or before such date, (a) all amounts then
due and payable with respect to the Loan Documents on or before such date shall
have been paid in full in cash, (b) all principal, interest, fees, expenses and
other amounts then due and payable by any Borrower to the Agent and the Lenders
shall have been paid in full in cash, and (c) the Revolving Loan Commitments of
each Lender shall have expired or been terminated. Notwithstanding the
foregoing, if after receipt of any payment of all or any part of the
Obligations, any Lender is for any reason compelled to surrender such payment to
any Person because such payment is determined to be void or voidable as a
preference, impermissible setoff, a diversion of trust funds or for any other
reason, this Agreement shall continue in full force and each Borrower, jointly
90
<PAGE> 99
and severally, shall be liable to, and shall indemnify and hold such Lender
harmless for, the amount of such payment surrendered until such Lender shall
have been finally and irrevocably paid in full. The provisions of the foregoing
sentence shall be and remain effective notwithstanding any contrary action which
may have been taken by the Lenders in reliance upon such payment, and any such
contrary action so taken shall be without prejudice to the Lenders' rights under
this Agreement and shall be deemed to have been conditioned upon such payment
having become final and irrevocable.
11.9. GOVERNING LAW. ALL DOCUMENTS EXECUTED PURSUANT TO THE
TRANSACTIONS CONTEMPLATED HEREIN, INCLUDING, WITHOUT LIMITATION, THIS AGREEMENT
AND EACH OF THE LOAN DOCUMENTS SHALL BE DEEMED TO BE CONTRACTS MADE UNDER, AND
FOR ALL PURPOSES SHALL BE CONSTRUED IN ACCORDANCE WITH, THE INTERNAL LAWS AND
JUDICIAL DECISIONS OF THE STATE OF NEW YORK, WITHOUT REGARD TO ANY OTHERWISE
APPLICABLE PRINCIPLES OF CONFLICT OF LAWS.
11.10. REPRESENTATION AND WARRANTY OF THE LENDERS. Each Lender hereby
represents, and upon the request of a Borrower, each assignee and participant
pursuant to Section 11.1 will represent, that no part of any funds used by such
Lender to fund any Loan or other extension of credit to any Borrower made by it
constitutes or will constitute assets of any Plan.
11.11. AGREEMENT CONTROLS. In the event that any term of any of the
Loan Documents other than this Agreement conflicts with any term of this
Agreement, the terms and provisions of this Agreement shall control.
11.12. CONSENT TO JURISDICTION; OTHER WAIVERS. (A) IN THE EVENT THAT
ANY ACTION, SUIT OR OTHER PROCEEDING IS BROUGHT AGAINST ANY BORROWER BY OR ON
BEHALF OF THE AGENT OR ANY OF THE LENDERS TO ENFORCE THE OBSERVANCE OR
PERFORMANCE OF ANY OF THE PROVISIONS OF THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS, INCLUDING WITHOUT LIMITATION THE COLLECTION OF ANY AMOUNTS OWING
HEREUNDER, EACH BORROWER HEREBY IRREVOCABLY (I) CONSENTS TO THE EXERCISE OF
JURISDICTION OVER SUCH BORROWER AND ITS PROPERTY BY THE UNITED STATES DISTRICT
COURT, WESTERN DISTRICT OF NORTH CAROLINA, AND BY THE NORTH CAROLINA GENERAL
COURT OF JUSTICE, SUPERIOR COURT DIVISION, TWENTY-SIXTH JUDICIAL DISTRICT, AND
(II) WAIVES ANY OBJECTION SUCH BORROWER MIGHT NOW OR HEREAFTER HAVE OR ASSERT TO
THE VENUE OF ANY SUCH PROCEEDING IN ANY COURT DESCRIBED IN CLAUSE (I) ABOVE.
(B) IN ANY LITIGATION IN ANY COURT WITH RESPECT TO, IN
CONNECTION WITH, OR ARISING OUT OF THIS AGREEMENT, ANY OF THE OTHER LOAN
DOCUMENTS OR ANY INSTRUMENT OR DOCUMENT DELIVERED PURSUANT TO THIS AGREEMENT, OR
THE VALIDITY, PROTECTION, INTERPRETATION, COLLECTION OR ENFORCEMENT THEREOF, OR
ANY OTHER CLAIM OR DISPUTE HOWSOEVER ARISING BETWEEN ANY BORROWER AND THE AGENT
OR ANY OF THE LENDERS, EACH BORROWER, THE AGENT AND THE LENDERS HEREBY WAIVE
TRIAL BY JURY IN CONNECTION WITH ANY SUCH LITIGATION.
91
<PAGE> 100
(C) EXCEPT AS PROHIBITED BY LAW, EACH PARTY HERETO HEREBY
WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY LITIGATION REFERRED TO
IN SUBSECTION (B) OF THIS SECTION 11.12 ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY OTHER DAMAGES THAN, OR IN ADDITION TO, ACTUAL
DAMAGES.
(D) EACH PARTY HERETO (I) CERTIFIES THAT NEITHER ANY
REPRESENTATIVE, AGENT OR ATTORNEY OF THE AGENT OR ANY OF THE LENDERS HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT THE AGENT OR ANY LENDER WOULD NOT, IN
THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (II)
ACKNOWLEDGES THAT THE AGENT AND EACH OF THE LENDERS HAS BEEN INDUCED TO ENTER
INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND
CERTIFICATIONS HEREIN.
[SIGNATURES ON FOLLOWING PAGE]
92
<PAGE> 101
IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be made, executed and delivered by their duly authorized officers as of the day
and year first above written.
BALDWIN AMERICAS CORPORATION
By: /s/ Gerald A. Nathe
------------------------------
Name: Gerald A. Nathe
------------------------------
Title: President
------------------------------
BALDWIN TECHNOLOGY LIMITED
By: /s/ William J. Lauricella
------------------------------
Name: William J. Lauricella
------------------------------
Title: Vice President & Treasurer
------------------------------
BALDWIN TECHNOLOGY COMPANY, INC.
By: /s/ William J. Lauricella
------------------------------
Name: William J. Lauricella
------------------------------
Title: CEO & Treasurer
------------------------------
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent for the Lenders
By: /s/ Thomas E. McCaskill
------------------------------
Name: Thomas E. McCaskill
------------------------------
Title: Senior Vice President
----------------------------
Page 1 of 3
<PAGE> 102
NATIONSBANK, NATIONAL ASSOCIATION,
as Lender
By: /s/ Thomas E. McCaskill
------------------------------
Name: Thomas E. McCaskill
------------------------------
Title: Senior Vice President
------------------------------
Lending Office:
NationsBank, National
Association
One Independence Center
101 North Tryon Street
Charlotte, North Carolina 28255-0001
Attention: Dana Weir
Telephone: 704-388-3917
Telefacsimile: 704-386-9923
Wire Transfer Instructions:
NationsBank, National Association
Charlotte, North Carolina
ABA# 053000196
Reference: Baldwin
Account No. 1366210022506
Attention: Corporate Credit Support
Signature Page 2 of 3
<PAGE> 103
BANK OF BOSTON CONNECTICUT,
as Lender
By: /s/ W. Lincoln Schoff Jr.
------------------------------
Name: W. Lincoln Schoff Jr.
------------------------------
Title: Director
------------------------------
Lending Office:
Bank of Boston Connecticut
100 Rustcraft Road
Dedham, Massachusetts 02026
Attention: Jeff Seabron
Telephone: 617-467-2275
Telefacsimile: 617-467-2152
Wire Transfer Instructions:
Bank of Boston Connecticut
Hartford, Connecticut
ABA # 0111-00-805
Reference: Baldwin Technology
Zero Balance Account
Account No. 55174538
Attention: Jeff Seabron
Telephone: 617-467-2275
Signature Page 3 of 3
<PAGE> 104
EXHIBIT A
Applicable Commitment Percentages
<TABLE>
<CAPTION>
Applicable
Committed Commitment
Lender Amount Percentage
- ------ --------- ----------
<S> <C> <C>
NationsBank, National Association $13,000,000 65.00%
Bank of Boston Connecticut $ 7,000,000 35.00%
</TABLE>
A-1
<PAGE> 105
EXHIBIT B
Form of Assignment and Acceptance
DATED____________________, 19__
Reference is made to the Amended and Restated Revolving Credit
Agreement dated as of December 31, 1995 (the "Agreement") among Baldwin Americas
Corporation, a Delaware corporation ("BAM"), Baldwin Technology Limited, a
Bermuda corporation ("BTL") (BAM and BTL being referred to collectively as the
"Borrowers"), Baldwin Technology Company, Inc. ("Baldwin"), the Lenders (as
defined in the Agreement) and NationsBank of North Carolina, National
Association, as Agent for the Lenders ("Agent"). Unless otherwise defined
herein, capitalized terms defined in the Agreement are used herein with the same
meanings.
______________________________(the "Assignor") and __________________
_______________(the "Assignee") agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, WITHOUT
RECOURSE, and the Assignee hereby purchases and assumes from the Assignor, a
_______%(1) interest in and to the Lenders' rights and obligations under the
Agreement as of the Effective Date (as defined below), including, without
limitation, the respective interest in the Loan, and the Note held by the
Assignor.
2. The Assignor (i) represents and warrants that, as of the date
hereof, its Revolving Loan Commitment under the Agreement (without giving effect
to assignments thereof which have not yet become effective) is $___________, and
the aggregate outstanding principal amount of the Loan owing to it (without
giving effect to assignments thereof which have not yet become effective) is
$________ (including without limitation the Equivalent Dollar Amount of
outstanding Alternative Currency Advances based on the respective rates of
exchange used at the time of such Advances); (ii) represents and warrants that
it is the legal and beneficial owner of the interest being assigned by it
hereunder and that such interest is free and clear of any adverse claim; (iii)
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
the Agreement or any of the Loan Documents or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Agreement or any of the
Loan Documents or any other instrument or document furnished pursuant thereto;
(iv) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Baldwin, any Borrower, any Guarantor or
any Baldwin Subsidiary or the performance or observance by Baldwin, any
Borrower, any Guarantor
- -------------------------
(1) Specify percentage in no more than 4 decimal points.
B-1
<PAGE> 106
or any Baldwin Subsidiary of any of its obligations under the Agreement or any
of the Loan Documents or any other instrument or document furnished pursuant
thereto and (v) attaches the Note referred to in paragraph 1 above and requests
that the Agent exchange such Note for new Note(s) as follows: A Note, dated
_____________, 19__ in the principal amount of $________________, payable to the
order of the Assignor, and a Note, dated ____________________________ 19__, in
the principal amount of $_________________ payable to the order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the
Agreement, together with copies of the financial statements referred to in
Section 6.2(c) thereof or most recently delivered pursuant to Section 7.1(a) and
(b) of the Agreement and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into this
Assignment and Acceptance; (ii) agrees that it will, independently and without
reliance upon the Agent, the Assignor, or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the
Agreement; (iii) appoints and authorizes the Agent to take such actions on its
behalf and to exercise such powers under the Loan Documents as are delegated to
the Agent by the terms thereof, together with such powers as are reasonably
incidental thereto; (iv) agrees that it hereby assumes, and will be bound by and
will perform in accordance with their terms all of the obligations which by the
terms of the Agreement are required to be performed by the Lender; and (v)
specifies as its address for notices the office set forth beneath its name on
the signature pages hereof.
4. The effective date for this Assignment and Acceptance shall be
_____________________________ (the "Effective Date"). Following the execution of
this Assignment and Acceptance, it will be delivered to the Agent for acceptance
and recording by the Agent and consent by the Borrowers.
5. Upon such acceptance and recording and consent, as of the Effective
Date, (i) the Assignee shall be a party to the Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder and under the Loan Documents and (ii) the Assignor shall, to
the extent assumed by the Assignee as provided in this Assignment and
Acceptance, relinquish its rights and be released from its obligations under the
Agreement arising after the Effective Date.
6. Upon such acceptance and recording, from and after the Effective
Date, the Agent shall make all payments under the Agreement and Notes in respect
of the interest assigned hereby (including, without limitation, all payments of
principal, interest and commitment fees with respect thereto) to the Assignee.
The Assignor and Assignee shall make all appropriate adjustments in
B-2
<PAGE> 107
payments under the Agreement and the Notes for periods prior to the Effective
Date directly between themselves.
7. This Assignment and Acceptance shall be governed by and construed in
accordance with, the laws of the State of North Carolina.
[NAME OF ASSIGNOR]
By:
Name:___________________________
Title:__________________________
After the Effective Date
Outstanding Revolving Loans:$______
[NAME OF ASSIGNEE]
By:
Name:___________________________
Title:__________________________
Lending Office:___________________
_____________________
_____________________
Telephone:
Telefacsimile:
After the Effective Date
Outstanding Revolving Loans:$______
Accepted this ____ day of _______, 19___
NATIONSBANK, NATIONAL ASSOCIATION,
as Agent
By:_________________________________________
Name:________________________________
Title:_______________________________
Consented to:
BALDWIN AMERICAS CORPORATION
By:____________________________________
Name:_______________________
Title:______________________
B-3
<PAGE> 108
BALDWIN TECHNOLOGY LIMITED
By:____________________________________
Name:_______________________
Title:______________________
B-4
<PAGE> 109
EXHIBIT C
Form of Available Commitment Certificate
Reference is hereby made to the Amended and Restated Revolving Credit
Agreement, dated as of December 31, 1995 (as amended or modified from time to
time, the "Credit Agreement") among BALDWIN AMERICAS CORPORATION ("BAM"),
BALDWIN TECHNOLOGY LIMITED ("BTL") (BAM and BTL being referred to collectively
as the "Borrowers"), BALDWIN TECHNOLOGY COMPANY, INC. ("Baldwin"), the Lenders
(as defined in the Credit Agreement) and NATIONSBANK, NATIONAL ASSOCIATION, as
Agent (the "Agent"). Capitalized terms used but not defined herein shall have
the respective meanings assigned thereto in the Credit Agreement.
This Certificate is furnished to the Agent by the Borrowers in
accordance with the provisions of the Credit Agreement. Each Borrower certifies
that the computation of the Unavailable Commitment Amount (and each component
thereof) and the amount available set forth below complies with all applicable
provisions of the Credit Agreement and have been prepared from the books of
account and records of the Borrowers, the Borrower Subsidiaries, the Sector
Subsidiaries, the Subsidiaries of Sector Subsidiaries and any other Baldwin
Subsidiaries, which represent fairly and accurately the status and value of each
component of the Unavailable Commitment Amount as at the last day of the month
immediately preceding the date hereof.
A. Total Commitment as of $__________________________
the date hereof.
B. outstanding Indebtedness for
Money Borrowed (other than
Existing Capitalized Leases)
of Borrowers $__________________________
C. outstanding Indebtedness for
Money Borrowed (other than
Existing Capitalized Leases)
of Borrower Subsidiaries $__________________________
D. outstanding Indebtedness for
Money Borrowed (other than
Existing Capitalized Leases)
of Sector Subsidiaries $__________________________
E. outstanding Indebtedness for
Money Borrowed (other than
Existing Capitalized Leases)
of Subsidiaries of
Sector Subsidiaries $__________________________
C-1
<PAGE> 110
F. outstanding Indebtedness for
Money Borrowed (other than
Existing Capitalized Leases)
of other Baldwin Subsidiaries $__________________________
G. sum of Item B plus Item
C plus Item D plus Item E
plus Item F = $__________________________
H. Unavailable Commitment
Amount is Item G minus
$15,000,000 (but Unavailable
Commitment may not be less
than $0) $__________________________
I. Available Commitment is
Item A minus Item H = $__________________________
J. principal amount of
outstanding Loans $__________________________
K. remaining available
Commitment is Item I minus
Item J = $__________________________
NOTE: IF (K) IS NEGATIVE, SUCH
AMOUNT SHALL BE REPAID IMMEDIATELY.
This the ___ day of __________________, 19___.
BALDWIN AMERICAS CORPORATION
By:__________________________
Name:__________________________
Title:__________________________
BALDWIN TECHNOLOGY LIMITED
By:__________________________
Name:__________________________
Title:__________________________
C-2
<PAGE> 111
EXHIBIT D-1
Notice of Dollar Borrowing
To: NationsBank, National Association,
as Agent
One Independence Center
101 North Tryon Street
Charlotte, North Carolina 28255-0001
Attention: Dana Weir
Reference is hereby made to the Amended and Restated Revolving Credit
Agreement (the "Agreement"), dated as of December 31, 1995, (the "Agreement")
among Baldwin Americas Corporation ("BAM"), Baldwin Technology Limited ("BTL")
(BAM and BTL being referred to collectively as the "Borrowers"), Baldwin
Technology Company, Inc. ("Baldwin"), the Lenders (as defined in the Agreement)
and NationsBank, National Association, as Agent for the Lenders. Capitalized
terms used but not defined herein shall have the respective meanings therefor
set forth in the Agreement.
The Borrowers through their Authorized Officer hereby confirm their
prior notice of borrowing given to the Agent by telephone on ____________, 19__
to the effect that Loans of the type and amount set forth below be made on the
date indicated by deposit of such amount to the Borrowers Account:
<TABLE>
<CAPTION>
Type of Loan Interest Aggregate
(check one) Period(1) Amount(2) Date of Loan(3)
- ------------ --------- --------- ---------------
<S> <C> <C> <C>
Prime Loan
------
LIBOR Loan
------
</TABLE>
- -----------------------
(1) For any LIBOR Loan, one, two, three or six months.
(2) In an amount equal to $750,000 and $250,000 multiples in excess
thereof.
(3) At least three (3) LIBOR Business Days following telephonic notice if a
LIBOR Loan; may be same Business Day as Notice in the case of Prime
Loans.
The undersigned hereby certifies that:
1. No Default or Event of Default has occurred and is continuing;
2. All the representations and warranties set forth in the
Agreement (other than those expressly stated to refer to a
D-1
<PAGE> 112
particular date) are true and correct in all material respects as of the date
hereof;
3. All of the Security Instruments remain in full force and
effect;
4. Neither Baldwin nor any Borrower has suffered any Material
Adverse Effect since the date of the most recent financial statements delivered
to the Agent pursuant to Section 7.1 of the Agreement; and
5. After giving effect to Loans requested hereby, the principal
amount of outstanding Loans will not exceed the Total Commitment.
This the ___ day of ____________, 19__.
BALDWIN AMERICAS CORPORATION
and BALDWIN TECHNOLOGY LIMITED,
Jointly and Severally
By: _______________________________
Authorized Officer for Baldwin
Americas Corporation and
Baldwin Technology Limited
D-2
<PAGE> 113
EXHIBIT D-2
Notice of Alternative Currency Borrowing
To: NationsBank, National Association,
as Agent
One Independence Center
101 North Tryon Street
Charlotte, North Carolina 28255-0001
Attention: Dana Weir
Reference is hereby made to the Amended and Restated Revolving Credit
Agreement (the "Agreement"), dated as of December 31, 1995, (the "Agreement")
among Baldwin Americas Corporation ("BAM"), Baldwin Technology Limited ("BTL")
(BAM and BTL being referred to collectively as the "Borrowers"), Baldwin
Technology Company, Inc. ("Baldwin"), the Lenders (as defined in the Agreement)
and NationsBank of North Carolina, National Association, as Agent for the
Lenders. Capitalized terms used but not defined herein shall have the respective
meanings therefor set forth in the Agreement.
The Borrowers through their Authorized Officer hereby confirm their
prior notice of borrowing given to the Agent by telephone on ____________, 19__
to the effect that Loans of the type and amount set forth below be made on the
date indicated by deposit of such amount to the Borrowers Account:
<TABLE>
<CAPTION>
Applicable
Interest Alternative Aggregate
Type of Loan Period(1) Currency Amount(2) Date of Loan(3)
- ------------- --------- ------------ --------- ---------------
<S> <C> <C> <C> <C>
</TABLE>
LIBOR Loan
- -----------------------
(1) One, two, three or six months.
(2) In an amount equal to Equivalent Alternative Currency Amount of
$750,000, and multiples of the Equivalent Alternative Currency Amount
of $250,000 in excess thereof.
(3) At least three (3) LIBOR Business Days following telephonic notice if a
LIBOR Loan; may be same Business Day as Notice in the case of Prime
Loans.
The undersigned hereby certifies that:
1. No Default or Event of Default has occurred and is
continuing;
2. All the representations and warranties set forth in the
Agreement (other than those expressly stated to refer to a
D-3
<PAGE> 114
particular date) are true and correct in all material respects as of the date
hereof;
3. All of the Security Instruments remain in full force and
effect;
4. Neither Baldwin nor any Borrower has suffered any
Material Adverse Effect since the date of the most recent financial
statements delivered to the Agent pursuant to Section 7.1 of the
Agreement; and
5. After giving effect to Loans requested hereby, the
principal amount of outstanding Loans will not exceed the Total
Commitment.
This the ___ day of ____________, 19__.
BALDWIN AMERICAS CORPORATION
and BALDWIN TECHNOLOGY LIMITED,
Jointly and Severally
By: _______________________________
Authorized Officer for Baldwin
Americas Corporation and
Baldwin Technology Limited
D-4
<PAGE> 115
EXHIBIT E
Form of Revolving Credit
Promissory Note
_______________(1) [____________, ___________](2)
December 31, 1995
FOR VALUE RECEIVED, each of BALDWIN AMERICAS CORPORATION, a Delaware
corporation ("BAM") and BALDWIN TECHNOLOGY LIMITED, a Bermuda corporation
("BTL") (BAM and BTL being referred to collectively as the "Borrowers"), hereby
promises, jointly and severally, to pay to the order of
_________________________________(3) (the "Lender"), in its individual
capacity, at the office of NationsBank, National Association, as agent for the
Lenders (defined below) (the "Agent"), located at One Independence Center, 101
North Tryon Street, Charlotte, North Carolina 28255-0001 (or at such other place
or places within the United States as the Agent may designate) at the times set
forth in the Amended and Restated Revolving Credit Agreement dated as of
December 31, 1995 among the Borrowers, Baldwin Technology Company, Inc.
("Baldwin"), the Lenders (as defined in the Agreement) and the Agent (all
capitalized terms not otherwise defined herein shall have the respective
meanings set forth in the Agreement), in lawful money of the United States of
America, in immediately available funds, the principal amount of
[________________](4) DOLLARS ($__________)1 (or the Equivalent Alternative
Currency Amount thereof in the case of Alternative Currency Advances, based on
the respective exchange rates used at the time of such Advances) or, if less
than such principal amount, the aggregate unpaid principal amount of all Loans
made by the Lender to the Borrowers pursuant to the Agreement and to pay
interest from the date hereof on the unpaid principal amount hereof, in like
money, at said office, on the dates and at the rates provided in Article II of
the Agreement. The holder of this Note is authorized to record the date and
amount of each Loan made by the Lender pursuant to Section 2.7 of the Agreement,
and the date and amount of each payment or prepayment of principal on such
Lender's internal books and records and then attach such information as a
schedule to this Note, provided that the failure of the Lender to make such
recordation (or any error in such recordation) shall not affect the obligations
of any Borrower hereunder or under the Agreement.
- -------------------------------
(1) Insert Lender's Pro Rata Share of Total Revolving Commitment in arabic
numerals.
(2) Insert name of city of Agent's Principal Office.
(3) Insert name of Lender in capital letters
(4) Insert Lender's Pro Rata Share of Total Commitment in words.
E-1
<PAGE> 116
If payment of all sums due hereunder is accelerated under the terms of
the Agreement, the then remaining principal amount and accrued but unpaid
interest shall bear interest which shall be payable on demand (i) in the case of
a LIBOR Loan, until the end of the Interest Period with respect to such LIBOR
Loan, at a rate of two percent (2%) per annum above such LIBOR Rate, and (ii)
thereafter, and with respect to Prime Loans, at a rate two percent (2%) per
annum in excess of the Prime Rate or the maximum rate permitted under applicable
law, if lower, until such principal and interest have been paid in full.
Further, in the event of such acceleration, this Note shall become immediately
due and payable, without presentation, demand, protest or other notice of any
kind, all of which are hereby waived by each Borrower.
In the event this Note is not paid when due at any stated or
accelerated maturity, each Borrower, jointly and severally, agrees to pay, in
addition to the principal and interest, the reasonable out-of-pocket costs of
collection, including reasonable attorneys' fees, as provided in Section 11.5 of
the Agreement.
Interest hereunder shall be computed on the basis of a 365-day year in
the case of a Prime Loan and a 360-day year in the case of a LIBOR Loan, each
for the actual number of days in the interest period.
This Note is secured by the Borrowers Pledge Agreement, the Baldwin
Pledge Agreement, the Baldwin Technology Pledge Agreement and the Enkel Pledge
Agreement, pursuant to which each Borrower, Baldwin, Baldwin Technology and
Enkel Corporation has assigned, transferred, pledged and set over unto the Agent
for the benefit of the Lenders the Pledged Stock, together with all dividends
paid upon, all securities received in addition to and in exchange for, and all
rights to subscribe for securities incident to, the Pledged Stock.
This Note is guaranteed by the Baldwin Guaranty, the Sector Subsidiary
Guaranty, and the BAM Subsidiary Guaranty , pursuant to which each of Baldwin,
each Sector Subsidiary, and each BAM Subsidiary has guaranteed the payment and
performance of the Obligations.
All Persons bound on this obligation, whether primarily or secondarily
liable as principals, sureties, guarantors, endorsers or otherwise, hereby waive
to the full extent permitted by law the benefits of all provisions of law for
stay or delay of execution or sale of property or other satisfaction of judgment
against any of them on account of liability hereon until judgment be obtained
and execution issued against any other of them and returned satisfied or until
it can be shown that the maker or any other party hereto had no property
available for the satisfaction of the debt evidenced by this instrument, or
until any other proceedings can be had against any of them, also their right, if
any, to require the holder hereof to hold as security for this Note any
Collateral
E-2
<PAGE> 117
deposited by any of said Persons as security. Protest, notice of protest, notice
of dishonor or diligence are hereby waived by all parties bound hereon.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK.]
E-3
<PAGE> 118
IN WITNESS WHEREOF, the Borrower has caused this Note to be made,
executed and delivered by its duly authorized officer as of the date and year
first above written, all pursuant to authority duly granted.
BALDWIN AMERICAS CORPORATION
By:_______________________________
Name:_____________________________
Title: ____________________
BALDWIN TECHNOLOGY LIMITED
By:_______________________________
Name:_____________________________
Title: ____________________
E-4
<PAGE> 119
EXHIBIT F
Form of Solvency Certificates
F-1
<PAGE> 120
EXHIBIT G-1
Form of Opinions of Counsel
for the Borrowers and the Guarantors
G-1
<PAGE> 121
[MORGAN LEWIS & BOCKIUS LLP LETTERHEAD]
February 2, 1996
NationsBank, National Association
Individually and as Agent
NationsBank Corporate Center
Charlotte, North Carolina 28255-0065
RE: Revolving Credit Facility
Ladies and Gentlemen:
We have acted as counsel to Baldwin Technology Company, Inc., a Delaware
corporation ("Baldwin"), Baldwin Americas Corporation, a Delaware corporation
("BAM"), Baldwin Europe Consolidated Inc., a Delaware corporation ("BEC"),
Baldwin Asia Pacific Corporation, a Delaware corporation ("BAP"), Baldwin
Technology Limited, a Bermuda corporation ("BTL"), Baldwin Technology
Corporation, a Connecticut corporation ("BTC"), Kansa Corporation, a Kansas
corporation ("Kansa"), Enkel Corporation, a Delaware corporation ("Enkel"),
Misomex of North America, Inc., a Delaware corporation ("Misomex"), and Baldwin
Graphic Systems, Inc., a Delaware corporation ("BGS", and together with BTC,
Kansa, Enkel and Misomex, the "BAM Subsidiaries"), in connection with the
transactions contemplated by the Amended and Restated Revolving Credit
Agreement, dated as of December 31, 1995 (the "Credit Agreement"), among BAM,
BTL, Baldwin and NationsBank, National Association ("NationsBank") and Bank of
Boston Connecticut, as lenders, and NationsBank, as agent (the "Agent") on
behalf of the lenders ("Lenders") now or hereafter party to the Credit
Agreement, amending and restating the Credit Agreement, dated as of November 23,
1993. All capitalized terms used herein and not otherwise defined shall have the
meanings set forth in the Credit Agreement.
In connection with this opinion, we have examined originals, or copies
certified or otherwise identified to our satisfaction, of such documents,
corporate records and other instruments as we have deemed necessary or
appropriate for purposes of this opinion, including (i) the Credit Agreement,
(ii) the Notes, (iii) the Amended and Restated Guaranty Agreement, dated as of
December 31, 1995 (the "Baldwin Guaranty"), between Baldwin and the Agent, (iv)
the Amended and Restated Guaranty Agreement, dated as of December 31, 1995 (the
<PAGE> 122
[MORGAN LEWIS & BOCKIUS LLP LETTERHEAD]
NationsBank, National Association
February 2, 1996
Page 2
"Sector Subsidiary Guaranty"), between each of BEC and BAP and the Agent, (v)
the Amended and Restated Guaranty Agreement, dated as of December 31, 1995 (the
"BAM Subsidiary Guaranty" and together with the Baldwin Guaranty and the Sector
Subsidiary Guaranty, the "Guaranty Agreements"), between each of BTC, Kansa,
Enkel, Misomex and BGS and the Agent, (vi) the Amended and Restated Pledge
Agreement, dated as of December 31, 1995 (the "Baldwin Pledge Agreement"),
between Baldwin and the Agent, (vii) the Amended and Restated Pledge Agreement,
dated as of December 31, 1995 (the "BAM Pledge Agreement"), between each of BAM
and BTL and the Agent, (viii) the Amended and Restated Pledge Agreement, dated
as of December 31, 1995 (the "BTC Pledge Agreement"), between BTC and the Agent,
(ix) the Amended and Restated Pledge Agreement, dated as of December 31, 1995
(the "Enkel Pledge Agreement", and together with the Baldwin Pledge Agreement,
the BAM Pledge Agreement and the BTC Pledge Agreement, the "Pledge Agreements"),
dated as of November 23, 1993 (the "Intercreditor Agreement"), among the Agent,
John Hancock Mutual Life Insurance Company, John Hancock Variable Life Insurance
Company and John Hancock Life Insurance Company of America and NationsBank, as
collateral agent, and acknowledged and agreed to by BAM and BTL.
Each of Baldwin, BAM, BEC, BAP and the BAM Subsidiaries is referred to
herein as an "Obligor" and the Credit Agreement, the Notes, the Guaranty
Agreements and the Pledge Agreements are referred to herein as the "Transaction
Documents."
As to various factual matters relevant to our opinion, we have relied
upon certificates provided by public officials and by officers of the Obligors
and BTL, copies of which have been provided to you, and upon the representations
and warranties included in the Transaction Documents, and have made no
independent investigation thereof. We have assumed the genuineness of all
signatures, the authenticity of all documents submitted to us as originals, the
conformity to original documents of all documents submitted to us as photostatic
or certified copies and the authenticity of the originals of the latter
documents. We have further assumed that the Transaction Documents have been duly
authorized, executed and delivered by the other parties thereto (other than the
Obligors) and that such documents constitute the legal, valid and binding
obligations of the parties thereto (other than the Obligors and BTL) enforceable
<PAGE> 123
[MORGAN LEWIS & BOCKIUS LLP LETTERHEAD]
NationsBank, National Association
February 2, 1996
Page 3
against the parties thereto (other than the Obligors and BTL) in accordance
with the terms thereof.
Based upon the foregoing, we are of the opinion that:
1. Baldwin, BAM, BEC and BAP are corporations duly incorporated
and (i) each Obligor is a corporation validly existing and in good
standing under the laws of its jurisdiction of incorporation; and (ii)
each Obligor has all requisite corporate power and authority necessary
to own its assets and carry on its business as now being conducted.
2. Each Obligor has all necessary corporate power and authority
to execute, deliver and perform the Transaction Documents to which it is
a party.
3. The execution, delivery and performance by each of the
Obligors of the Transaction Documents to which it is a party have been
duly authorized by all necessary corporate action by such Obligor. Each
of the Transaction Documents has been duly and validly executed and
delivered on behalf of each of the Obligors party thereto and BTL, as
the case may be.
4. Each of the Transaction Documents and the Intercreditor
Agreement constitutes the legal, valid and binding obligation of each
Obligor that is a party thereto and, with respect to the Credit
Agreement, the Notes, the BAM Pledge Agreement and Intercreditor
Agreement, enforceable against such Obligor and BTL, as the case may be,
in accordance with its terms, except that (i) such enforcement may be
subject to applicable bankruptcy, moratorium, insolvency,
reorganization, fraudulent conveyance and other similar laws affecting
creditors' rights generally, (ii) such enforcement may be subject to
general equitable principles, whether such enforceability is considered
in a proceeding in equity or at law, and (iii) with respect to the
Guaranty Agreements and the Pledge Agreements, certain of the waivers,
remedies and enforcement rights provided for in such documents may be
limited or rendered unenforceable by applicable laws or judicial
decisions, which laws or judicial decisions do not in our opinion make
such documents, taken as a whole, legally
<PAGE> 124
[MORGAN LEWIS & BOCKIUS LLP LETTERHEAD]
NationsBank, National Association
February 2, 1996
Page 4
inadequate for the practical realization of the benefits intended to be
provided thereby.
5. None of the execution or delivery by any of the Obligors or
BTL of any Transaction Document to which it is a party, the consummation
by any of such parties of any of the transactions contemplated by any of
the Transaction Documents or the compliance by any of such parties with
any of the terms and provisions thereof (i) will violate or conflict
with any provision of the charter or by-laws of any Obligor, (ii) will
result in any material breach of or material default under a provision
of any contract, agreement, indenture, mortgage, deed of trust or other
instrument known to us to which any Obligor or BTL is party or by which
any of its properties or assets are bound, (iii) is prohibited by,
violates or requires any Obligor or BTL to obtain or make any consent,
authorization, approval, registration or filing under, any United States
federal or New York state statute, law, ordinance, regulation or rule,
or, to the best of our knowledge, any judgment, decree or order of any
court or governmental agency, board, bureau, body, department or
authority or any other Person under any contract, agreement, indenture,
mortgage, deed of trust or other instrument known to us to which any
Obligor or BTL is a party, or (iv) to the best of our knowledge, will
result in, or require, the creation or imposition of any Lien upon or
with respect to any of the properties or assets of the Obligors or BTL,
except as expressly contemplated by the Transaction Documents.
6. None of the provisions of the Transaction Documents violate
any laws of the State of New York relating to interest or usury.
7. None of the transactions contemplated by the Credit
Agreement, including, without limitation, the use of the proceeds of the
Loans made to the Borrowers, will violate or result in a violation of
Section 7 of the Securities Act of 1934, as amended, any regulations
issued pursuant thereto, or regulations G, T, U or X of the Board of
Governors of the Federal Reserve System, and, to the best of our
knowledge, Baldwin does not own or intend to purchase or carry any
"margin securities" as defined in said regulations.
<PAGE> 125
[MORGAN LEWIS & BOCKIUS LLP LETTERHEAD]
NationsBank, National Association
February 2, 1996
Page 5
8. To the best of our knowledge without independent
investigation, there are no actions, suits, proceedings or
investigations, either at law or in equity, or before any commission or
other administrative authority of any kind now pending or threatened
involving any Obligor or BTL or any of its properties or assets (i) with
respect to the transactions contemplated by the Transaction Documents or
(ii) which, if adversely determined, would have a Material Adverse
Effect on Baldwin, any Significant Subsidiary or the Consolidated Group.
9. Baldwin, BAM, BTC and Enkel have delivered to the Agent in
accordance with the terms of the Baldwin Pledge Agreement, the BAM
Pledge Agreement, the BTC Pledge Agreement and the Enkel Pledge
Agreement, respectively, the stock certificates representing the Pledged
Borrower Stock and the Pledged Sector Subsidiary Stock, the Pledged BAM
Subsidiary Stock, the Pledged Baldwin Technology Subsidiary Stock and
the Pledged Enkel Subsidiary Stock, respectively, being pledged by them,
together with stock powers executed in blank, for the purpose of
transferring the same. The execution and delivery of the stock powers in
blank with respect thereto have been duly authorized by Baldwin, BAM,
BTC and Enkel, respectively. Such delivery of such stock certificates
and stock powers has created a valid and perfected security interest in
the Pledged Borrower Stock and the Pledged Sector Subsidiary Stock, the
Pledged BAM Subsidiary Stock, the Pledged Baldwin Technology Subsidiary
Stock and the Pledged Enkel Subsidiary Stock, respectively, in favor of
the Agent and the Lenders.
With respect to our opinions in paragraphs 3, 4, 5, 8 and 9 regarding
matters relating to BTL we have, with your permission and without independent
investigation, relied on the opinion of Conyers Dill & Pearman, counsel to BTL,
a copy of which is attached hereto, and our opinion is subject to the
qualifications, exceptions and assumptions contained therein.
We render this opinion as members of the Bar of the State of New York
and we express no opinion as to the laws of any jurisdiction other than the
laws of the State of New York, the Delaware General Corporation Law and the
federal laws of the United States of America. To the extent that the opinions
expressed above involve conclusions as to the laws of the States
<PAGE> 126
[MORGAN LEWIS & BOCKIUS LLP LETTERHEAD]
NationsBank, National Association
February 2, 1996
Page 6
of Connecticut and Kansas, we have assumed, with your permission, that the laws
of the States of Connecticut and Kansas are the same as the laws of the State
of New York in all respects material to this opinion.
The opinions expressed above may be relied upon as of the date hereof
by any successor of the Agent or the Lenders or assignee of the Note held by
the Lenders.
Very truly yours,
/s/ MORGAN LEWIS & BOCKIUS LLP
<PAGE> 127
EXHIBIT G-2
Form of Opinion of Bermuda Counsel for BTL
G-2
<PAGE> 128
CONYERS, DILL & PEARMAN
BARRISTERS & ATTORNEYS
[LETTERHEAD]
2nd February, 1996
NationsBank National Association
Individually and as Agent
NationsBank Corporate Center
Charlotte, North Carolina 28255-0065
USA
Bank of Boston Connecticut
One Landmark Square
Suite 2002
Stamford, Connecticut 06901
USA
Dear Sirs,
RE: BALDWIN TECHNOLOGY LIMITED ("BTL")
- --------------------------------------
We have acted as special legal counsel in Bermuda to BTL, a Bermuda company, in
connection with an amended and restated revolving credit agreement dated as of
December 31, 1995 (the "Credit Agreement") among Baldwin Americas Corporation
("BAM"), BTL, Baldwin Technology Company, Inc. ("Baldwin"), the lenders party
thereto and NationsBank, National Association ("NationsBank") as agent on
behalf of the lenders now or hereafter party to the Credit Agreement.
For the purposes of giving this opinion we have examined and relied upon the
following documents:
(a) a facsimile copy of the Credit Agreement;
(b) a facsimile copy of a promissory note from BTL and BAM in favour of
NationsBank in
<PAGE> 129
NationsBank National Association
Individually and as Agent, et al.
Page 2
2nd February, 1996
the face amount of US$13,000,000 and dated as of the December 31, 1995
(the "NationsBank Note");
(c) a facsimile copy of a promissory note from BTL and BAM in favour of
Bank of Boston Connecticut in the face amount of US$7,000,000 and
dated as of December 31, 1995 (the "Bank of Boston Note");
(d) a facsimile copy of a pledge agreement among BAM, BTL and NationsBank
dated as of the December 31, 1995 (the "BTL Pledge").
The Credit Agreement, the NationsBank Note, the Bank of Boston Note and the BTL
Pledge are herein collectively referred to as the "Transaction Documents".
Any reference herein to the Transaction Documents does not include any other
instrument or agreement whether or not specifically referred to in any of the
Transaction Documents or attached as an exhibit or schedule to any of the
Transaction Documents or BTL.
We have also examined and relied upon the Memorandum of Association and the
Bye-laws of BTL, a facsimile copy of resolutions in writing of the board of
directors of BTL and such other documents and made such enquiries as to
questions of Bermuda law as we have deemed necessary in order to render the
opinion set forth below.
In our examination of the Transaction Documents and in giving of this opinion
we have assumed: (a) the genuineness and authenticity of all signatures and
the conformity to the originals of all copies (whether or not certified) and
the authenticity and completeness of the originals from which such copies were
taken, (b) the capacity, power and authority of each of the parties to the
Transaction Documents, other than BTL, (c) the due execution and delivery of
the Transaction Documents by each of the parties thereto, (d) the due execution
and delivery of the Transaction Documents under the law of the jurisdiction in
which they were executed and delivered on the basis that under Bermuda
conflicts of law principles due execution and delivery is a question for the
law of the jurisdiction in which the documents were executed, (e) the
correctness, accuracy and completeness of all factual representations made in,
and in respect of, the Transaction Documents and all other documents examined
by us (f) there is no provision of the law of any jurisdiction, other than
Bermuda, which would have any implication in relation to the opinions
expressed herein, (g) the validity and binding effect under the laws of the
State of New York (the "Foreign Laws") of the Transaction Documents and of the
Pledges which are expressed to be subject to such Foreign Laws in accordance
with their respective terms, (h) the validity under the Foreign Laws of the
submission by BTL pursuant to the Transaction Documents to the jurisdiction of
the United States District Court, Western District of North Carolina and of
the
<PAGE> 130
NationsBank National Association
Individually and as Agent, et al.
Page 3
2nd February, 1996
North Carolina General Court of Justice, Superior Court Division, Twenty-Sixth
Judicial District and the courts of the Commonwealth of Massachusetts and any
United States District Court in the Commonwealth of Massachusetts (the
"Foreign Courts"), (i) the proceeds of the borrowing will be used in
furtherance of the objects of BTL and BAM.
The obligations of BTL under the Transaction Documents (a) will be subject to
the laws from time to time in effect relating to bankruptcy, insolvency,
liquidation, possessory liens, rights of set off, reorganisation, amalgamation,
moratorium or any other laws or legal procedures, whether of a similar nature
or otherwise, generally affecting the rights of creditors, (b) will be subject
to statutory limitation of the time within which proceedings may be brought,
(c) will be subject to general principles of equity and, as such, specific
performance and injunctive relief, being equitable remedies may not be
available, (d) may not be given effect to by a Bermuda Court (whether or not it
was applying the Foreign Laws) if and to the extent they constitute the payment
of a penalty and are not in the name of liquidated damages, and (e) may not be
given effect to by a Bermuda Court (whether or not it was applying the Foreign
Laws) if and to the extent they constitute a fetter on the statutory powers of
BTL which, however, would not prevent the lenders from obtaining the
substantial benefit of the security interests provided by and payment
obligations under such Transaction Documents.
We express no opinion as to the effectiveness of any provision which refers to
the deletion or severance of any other provision in any of the Transaction
Documents if any such other provision in the Transaction Documents is
determined by a Court to be illegal, invalid or otherwise unenforceable.
Section 9 of the Interest and Credit Charges (Regulation) Act 1975 provides
that the Bermuda courts have discretion as to the amount of interest payable on
a judgement after the date of judgement. If the court does not exercise that
discretion, the interest will accrue at the statutory rate which is currently
seven per cent per annum.
Any provisions providing that a person's statement or certificate will be
conclusive and binding may not be effective if such statement or certificate is
incorrect on its face or fraudulent and will not necessarily prevent judicial
enquiry into the merits of a claim by an aggrieved party.
We have made no investigation of and express no opinion in relation to the laws
of any country or jurisdiction other than Bermuda. This opinion is to be
governed by and construed in accordance with the laws of Bermuda and is limited
to and is given on the basis of the current law and practice in Bermuda.
This opinion is issued solely for your benefit and that of your counsel, Smith
Helms Mullis &
<PAGE> 131
NationsBank National Association
Individually and as Agent, et al.
Page 4
2nd February, 1996
Moore, L.L.P., and of New York counsel to BTL, Morgan, Lewis & Bockius LLP and
is not to be relied upon by any other person, firm or entity, nor is it to be
quoted or referred to in any public document or filed with any governmental
agency or other body or person without our written consent; Provided that this
opinion may be relied upon by your assignees under the Credit Agreement but
only to the same extent as it could have been relied upon by you.
On the basis of and subject to the foregoing we are of the opinion that:
1. BTL has been duly incorporated, is in good standing and is validly
existing under the laws of Bermuda. For the purpose of this opinion the
term "good standing" means that BTL has not failed to make any filing
with any Bermuda governmental authority or to pay any Bermuda
governmental fee or tax which would make them liable to be struck
off the Registrar of Companies and thereby cease to exist under the laws
of Bermuda.
2. BTL has the necessary corporate power and authority to enter into and
deliver and to perform its obligations under the Transaction Documents.
The execution and delivery of the Transaction Documents by BTL and the
performance thereof by BTL in accordance with their respective terms
will not violate the Memorandum of Association or bye-laws of BTL nor
any applicable law, regulation, order or decree in Bermuda.
3. BTL has taken all corporate and other action required to authorise the
execution, delivery and performance of the Transaction Documents. When
duly executed and delivered by or on behalf of BTL, the Transaction
Documents will constitute the legal, valid and binding obligations of
BTL enforceable in accordance with the terms thereof. Signing of each of
the Transaction Documents by the Chairman of the Board, the President or
any Vice-President of BTL constitutes due execution of each such
Transaction Document.
4. No order, consent, approval, licence, authorisation or validation of or
exemption by any government or public body or authority of Bermuda or
any sub-division thereof is required to authorise or is required in
connection with the execution, delivery, performance and enforcement of
the Transaction Documents except such as have been duly obtained in
accordance with Bermuda law.
5. It is not necessary or desirable to ensure the enforceability in
Bermuda of the Transaction Documents that they be registered in any
register kept by, or filed with, any governmental authority or
regulatory body in Bermuda. However it may be desirable to ensure
priority in Bermuda of the BTL Pledge and of any other Transaction
Document which creates a charge over assets of BTL under the laws
governing it that it be registered in the Register of Charges in
accordance with Section 55 of the Companies Act 1981, as amended. On
<PAGE> 132
NationsBank National Association
Individually and as Agent, et al.
Page 5
2nd February, 1996
registration the BTL Pledge and any such other charge will have priority
in Bermuda over any unregistered charge and over any subsequently
registered charge in respect of the assets which are the subject of the
BTL Pledge or such other charge. A registration fee of $405 will be
payable in respect of each such registration.
6. The Transaction Documents will not be subject to ad valorem stamp duty
in Bermuda.
7. The choice of Foreign Laws to govern the Transaction Documents is a
valid choice of law and the submission therein by BTL to the
non-exclusive jurisdiction of the Foreign Courts is valid and binding
upon BTL.
8. Based solely upon a search of the Cause Book at the Supreme Court of
Bermuda conducted on 2nd February, 1996, at 11:25 a.m. there are no
legal or governmental proceedings pending in Bermuda to which BTL is a
party or to which the property of BTL may be subject which might
adversely affect BTL's ability to perform its obligations under the
Transaction Documents.
9. The Courts of Bermuda would recognise as a valid judgement, a final and
conclusive judgement in person obtained in the Foreign Courts against
BTL based upon the Transaction Documents under which a sum of money is
payable (other thana sum of money payable in respect of multiple
damages, taxes or other charges of a like nature or in respect of a fine
or other penalty) and would give a judgement based thereon provided that
(a) such courts had proper jurisdiction over the parties subject to such
judgement, (b) such courts did not contravene the rules of natural
justice in Bermuda, (c) such judgement was not obtained by fraud, (d)
the enforcement of the judgement would not be contrary to the public
policy of Bermuda, (e) no new admissible evidence relevant to the action
is submitted prior to the rendering of the judgement by the courts of
Bermuda and (f) the due compliance with the correct procedures under the
laws of Bermuda. In the circumstances contemplated in (e) above, the
Company would have to satisfy the Bermuda Court (1) that the evidence
could not have been obtained with reasonable diligence for use at the
trial (2) that the further evidence is such that, if given, it would
have an important influence on the result of the trial, although it need
not be decisive and (3) that the evidence is such as is presumably to be
believed.
<PAGE> 133
NationsBank National Association
Individually and as Agent, et al.
Page 6
2nd February, 1996
10. The mere execution and delivery by BTL of the Transaction Documents
alone will not give rise to any lien or encumbrance on the assets of BTL
under any Bermuda statue.
Yours faithfully,
/s/ Conyers, Dill & Pearman
CONYERS, DILL & PEARMAN
<PAGE> 134
EXHIBIT H
Form of BTL Note Pledge Agreement
[See attached]
H-1
<PAGE> 135
PLEDGE AND SECURITY AGREEMENT
THIS PLEDGE AND SECURITY AGREEMENT (the "Agreement") is executed as of
December 31, 1995, by BALDWIN TECHNOLOGY LIMITED, a Bermuda corporation
("Pledgor"), in favor of NATIONSBANK, N.A. (formerly known as NationsBank of
North Carolina, National Association), a national banking association, as
Agent (the "Agent") and each of the Lenders (defined below).
Recitals
A. Baldwin Americas Corporation and the Pledgor (collectively, the
"Borrowers"), Baldwin Technology Company, Inc., the Agent, the Lenders party
thereto (collectively, the "Lenders") and the Agent have entered into that
certain Amended and Restated Revolving Credit Agreement dated as of November 23,
1993 (as amended, modified or supplemented from time to time, the "Credit
Agreement"), pursuant to which the Lenders have agreed to make certain loans
and advances to the Borrowers. Capitalized terms not otherwise defined herein
shall have the meanings assigned in the Credit Agreement.
B. The Pledgor has made in the past, and intends to make in the
future, one or more loans (collectively, the "Subsidiary Loans") to one or more
Subsidiaries of Sector Subsidiaries (collectively, the "Borrowing
Subsidiaries"). Pursuant to Section 8.3(b) of the Credit Agreement, each such
Subsidiary Loan has been, or will be, evidenced by a promissory note
(individually, a Pledged Note" and collectively, the "Pledged Notes") signed by
the respective Borrowing Subsidiary.
C. Pursuant to Section 8.3(b) of the Credit Agreement, the Pledgor is
required to execute and deliver this Agreement, and to pledge and deliver each
of the Pledged Notes, to the Agent.
Agreement
NOW THEREFORE, in consideration of the foregoing recitals, Pledgor
agrees as follows:
1. Granting Clause. As security for the following (hereinafter
referred to as the "Liabilities"):
(a) the payment of all sums now or hereafter payable pursuant to
or with respect to the Credit Agreement, the Notes or any other
Loan Document, (including without limitation principal, interest,
charges and expenses), and any and every extension and renewal thereof,
(b) the payment and performance of all other Obligations and (c) the
compliance with all of the stipulations, covenants, agreements,
representations and conditions contained in this Agreement and in the
other Loan Documents;
<PAGE> 136
Pledgor hereby delivers, pledges and grants to Agent (for itself and on
behalf of the Lenders) a security interest in, all of Pledgor's right,
title and interest in and to the following collateral (collectively, the
"Collateral"):
(i) each Pledged Note (whether now existing or hereafter created
or acquired) and all amounts payable thereunder, and
(ii) all proceeds of the Collateral or of any part thereof.
2. Representations. Pledgor represents and warrants that Pledgor, at
the time of delivery of this Agreement, has good and marketable title to the
Collateral, free of all Liens and adverse claims of any kind whatsoever, except
for Liens in favor of the Agent (for itself and on behalf of the Lenders).
3. Restrictions on Disposition of Collateral by Pledgor. Pledgor will
not, directly or indirectly, sell, assign, transfer, mortgage, pledge,
hypothecate or otherwise dispose of any of the Collateral, or any interest
therein, or create, assume or permit any Lien of any kind whatsoever to exist
with respect thereto, without the express written consent of the Agent and the
Lenders.
4. Records. Whether or not an Event of Default has occurred, the
Pledgor shall maintain complete, true and accurate records with respect to all
of the Collateral.
5. Remedies in Case of Event of Default. If an Event of Default shall
occur, the Agent (for itself and on behalf of the Lenders) shall be entitled to
exercise all of the rights, powers and remedies vested in it by this Agreement,
and now or hereafter existing at law or in equity or by statute (including,
without limitation, the Uniform Commercial Code of New York or North Carolina)
or otherwise for the protection and enforcement of its rights with respect to
the Collateral; and Pledgor hereby irrevocably appoints and constitutes the
Agent as Pledgor's attorney-in-fact, coupled with an interest and with full
power of substitution, to exercise any or all of the following rights, powers
and remedies:
(a) to receive - directly all payments payable or deliverable
with respect to the Collateral otherwise payable or deliverable to
Pledgor;
(b) to endorse and transfer all or any part of the Collateral
into the Agent's name or the name of its nominee (for themselves and on
behalf of the Lenders); and
(c) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale, to
the fullest extent permitted by law, without demand
2
<PAGE> 137
of performance, advertisement or notice of intention to sell or of the
time or place of sale or adjournment thereof or otherwise (all of which
are hereby waived by Pledgor to the fullest extent permitted by law),
for cash, on credit or for other property, for immediate or future
delivery without any assumption of credit risk, and for such price or
prices and on such terms as the Agent in its absolute discretion may
determine.
Pledgor hereby waives and releases to the fullest extent permitted by law all
rights, if any, of marshalling the Collateral and any other security for the
Liabilities or otherwise. At any sale of the Collateral, the Agent or any Lender
may bid for and purchase all or any part of the Collateral, so long as such
sale is a public sale or is conducted in a commercially reasonable manner.
6. Application of Moneys by the Agent. All moneys collected upon
any sale of the Collateral hereunder, together with all other moneys received
by the Agent hereunder, shall be first applied to the payment of all costs and
expenses incurred by the Agent and referred to in Section 8 or otherwise in
connection with the disposition of the Collateral or the collection of the
Liabilities (including, without limitation, all attorneys' fees as herein
provided) and then to the Liabilities in such order and manner as the Agent
shall consider appropriate, subject to the terms of the Credit Agreement.
7. Pledgor's Obligations Absolute. The obligations of Pledgor
under this Agreement shall be absolute and unconditional and shall remain in
full force and effect without regard to, and shall not be released, suspended,
discharged, terminated or otherwise affected by, any circumstance or occurrence
whatsoever, including, without limitation: (a) any renewal, extension, amendment
or modification of or addition or supplement to any Loan Document, or any
assignment or transfer thereof; (b) any waiver, consent, extension, indulgence
or other action or inaction under or with respect to the Loan Documents or any
exercise or non-exercise of any right, remedy, power or privilege under or with
respect to any Loan Document or this Agreement; (c) any furnishings of any
additional security to the Agent or any Lender or any acceptance thereof or any
release of any security or guaranty by the Agent or any Lender; (d) any
limitation on any party's liability or obligations under the Loan Documents or
the invalidity or unenforceability, in whole or in part, of any Loan Document or
any term thereof; or (e) any bankruptcy, insolvency, reorganization,
composition, adjustment, dissolution, liquidation or other like proceeding
relating to Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding; whether or not
Pledgor shall have notice or knowledge of any of the foregoing.
8. Costs and Expenses. Pledgor will pay or reimburse the Agent or
any Lender for all reasonable costs and expenses
3
<PAGE> 138
(including, without limitation, attorney's fees) incurred by or on behalf of
the Agent or such Lender (as the case may be) in exercising and protecting the
Agent or any Lender's rights and remedies hereunder, or enforcing the
obligations of Pledgor hereunder in connection therewith.
9. Remedies Cumulative; Non-Waiver. Each right, power and remedy of
the Agent or any Lender provided for in this Agreement or the Loan Documents,
or now or hereafter existing at law or in equity or by statute or otherwise,
shall be cumulative and shall be in addition to every other such right, power
or remedy. The exercise by the Agent or any Lender of any one or more of such
rights, powers or remedies shall not preclude the simultaneous or later
exercise of all such other rights, powers or remedies. No failure or delay on
the part of the Agent or any Lender to exercise any such right, power or remedy
shall operate as a waiver thereof.
10. Additional Security, etc. Without notice to or consent of Pledgor,
and without impairment of the lien and rights created by this Agreement, the
Agent (for itself and on behalf of the Lenders) may accept from Pledgor, or from
any other person or persons, additional security for the Liabilities. Neither
the giving of this Agreement nor the acceptance of any such additional security
shall prevent the Agent (for itself and on behalf of the Lenders) from resorting
first to any such additional security, or first to the security created by this
Agreement, in any case without affecting the security interest and rights of the
Agent or any Lender under this Agreement.
11. Further Assurances. Pledgor, at Pledgor's sole cost and expense,
will duly execute, acknowledge and deliver all such instruments and take all
such actions as the Agent from time to time may reasonably request in order to
effectuate further the purposes of this Agreement and to carry out the terms
hereof. Without limiting the generality of the foregoing, the Pledgor shall
immediately deliver to the Agent any Pledged Note that the Pledgor may obtain
or possess at any time.
12. Termination. This Agreement shall remain in full force and effect
so long as any Liabilities are outstanding or the Agent or any Lender has any
obligation to make Advances under the Credit Agreement; and this Agreement
shall secure all Liabilities (as defined herein), whether now existing or
hereafter incurred, contracted for or arising.
13. Notices. All notices and other communications required under this
Agreement shall be in writing and shall be either hand-delivered, together with
a receipt acknowledging such delivery, or mailed by first-class registered or
certified mail, postage prepaid, addressed to Pledgor, the Agent or any Lender
at their respective addresses indicated in the Credit Agreement. Any
requirement of the Uniform Commercial Code of reasonable notice shall be met if
given as provided in the Credit Agreement at least
4
<PAGE> 139
five days before the time of the sale, disposition or other event or thing
giving rise to the required notice.
14. Default. As used in this Agreement, the terms "default" and
"Event of Default" shall mean the occurrence or happening of any one or more of
the following events, circumstances or conditions:
(a) Pledgor shall violate or default in the observance or
performance of any term, agreement, covenant, condition or stipulation
contained or referred to in this Agreement and such violation or default shall
continue unremedied for a period of ten days after the first to occur of (i)
the date the Agent gives Pledgor written or telephonic notice thereof or (ii)
the date Pledgor otherwise has notice thereof; or
(b) if the security interest in the Collateral is declared null
and void, or terminates, or ceases, by operation of law or otherwise, to be an
enforceable obligation of the Pledgor; or
(c) an Event of Default, as therein defined, shall occur under the
Credit Agreement.
15. Provisions Subject to Applicable Law. All rights, powers and
remedies provided herein may be exercised only to the extent that the exercise
thereof does not violate any applicable provisions of law and are intended to
be limited to the extent necessary so that they will not render this Agreement
invalid, unenforceable or not entitled to be recorded, registered or filed
under any applicable law. If any term of this Agreement shall be held to be
invalid, illegal or unenforceable, the remainder of this Agreement and the
validity of the other terms of this Agreement shall in no way be affected
thereby.
16. Miscellaneous. All warranties, covenants and agreements herein
made by Pledgor shall survive the execution and delivery of this Agreement and
any note or other instrument secured hereby, and shall bind the successors and
assigns of Pledgor, and every option, right and privilege herein reserved or
secured to the Agent or any Lender shall inure to the benefit of, and may be
exercised by, its successors and assigns. The Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if the Agent takes such reasonable actions for that purpose as
Pledgor shall request in writing, but the Agent shall have no liability with
respect thereto so long as the Agent acts in good faith. The Agent shall have no
duty to do any act not requested by Pledgor or that the Agent deems
unreasonable with respect to the Collateral. The Agent shall not be liable,
absent gross negligence or willful misconduct on the part of the Agent, for any
failure to realize upon, or to exercise any right or power with respect to, any
Collateral, or for any delay in so doing. No modification, amendment or waiver
of any
5
<PAGE> 140
provision of this Agreement, or of any Loan Document, or consent to any
departure by Pledgor therefrom, shall in any event be effective unless the same
shall be in writing and signed by the Agent (but only upon having received the
written consent of the Required Lenders, as set forth in the Credit Agreement),
and such waiver or consent shall be effective only in the specific instance and
for the particular purpose for which given. No notice to or demand on Pledgor in
any case shall entitle Pledgor to any other or further notice or demand in the
same, similar or other circumstances. The headings and captions in this
Agreement are for convenience of reference only and shall in no way restrict or
modify any of the terms hereof. This Agreement may be executed in any number of
counterparts, each of which shall constitute an original, but all of which
together shall constitute one and the same instrument. THIS AGREEMENT IS TO BE
DELIVERED AND PERFORMED IN THE STATE OF NORTH CAROLINA AND SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
[Remainder of page intentionally left blank.]
6
<PAGE> 141
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, has executed this Agreement as of the date first above written.
BALDWIN TECHNOLOGY LIMITED
By:
-------------------------------------
Name:
--------------------------------
Title:
-------------------------------
7
<PAGE> 142
EXHIBIT I
Form of Notice of Appointment (or
Revocation) of Authorized Officer
Reference is hereby made to the Amended and Restated Revolving Credit
Agreement, dated as of December 31, 1995 (as amended or modified from time to
time, the "Credit Agreement') among BALDWIN AMERICAS CORPORATION ("BAM"),
BALDWIN TECHNOLOGY LIMITED ("BTL") (BAM and BLT being referred to collectively
as the "Borrowers"), BALDWIN TECHNOLOGY COMPANY, INC. ("Baldwin"), the Lenders
(as defined in the Credit Agreement) and NATIONSBANK, NATIONAL ASSOCIATION, as
Agent (the "Agent"). Capitalized terms used but not defined herein shall have
the respective meanings assigned thereto in the Credit Agreement.
Each Borrower hereby nominates, constitutes and appoints each
individual named below as an Authorized Officer for all Borrowers under the Loan
Documents, and hereby represents and warrants that (i) set forth opposite each
such individual's name is a true and correct statement of the corporation in
which such individual holds office, such individual's corporate office (to which
such individual has been duly elected or appointed), a genuine specimen
signature of such individual and an address for the giving of notice, and (ii)
each such individual has been duly authorized by each Borrower to act as
Authorized Office on behalf of all of the Borrowers under the Loan Documents:
<TABLE>
<CAPTION>
Name and Employer Corporate Specimen of
Address Office Signature
<S> <C> <C> <C>
_____________________ ____________________ ______________________ __________________________
_____________________ ____________________ ______________________ __________________________
_____________________ ____________________ ______________________ __________________________
_____________________ ____________________ ______________________ __________________________
</TABLE>
Each Borrower hereby revokes (effective upon receipt hereof by the Agent) the
prior appointment of as an Authorized Officer.
This the ___ day of _____________________, 19 .
BALDWIN AMERICAS CORPORATION
and
BALDWIN TECHNOLOGY LIMITED
By:___________________________
Name:_________________________
Title: Authorized Officer
I-1
<PAGE> 143
SCHEDULE 1.1-A
Alternative Currencies
1. Deutschmarks
2. Pounds Sterling
3. Japanese Yen
4. Dutch Gilder
5. Swedish Krone
<PAGE> 144
SCHEDULE 6.1
Incorporation, Foreign Qualification and Ownership of
Borrowers, Borrower Subsidiaries and Baldwin Subsidiaries
<PAGE> 145
SCHEDULE 6.1
<TABLE>
<CAPTION>
JURISDICTION JURISDICTION
OF INCORPORATION WHERE QUALIFIED
---------------- ---------------
<S> <C> <C>
BALDWIN TECHNOLOGY COMPANY INC. Delaware Connecticut
A. BALDWIN AMERICAS CORPORATION Delaware Virginia
1. BALDWIN TECHNOLOGY CORPORATION Connecticut California; Illinois
a. Kansa Corporation Kansas --
2. ENKEL CORPORATION Delaware Illinois
a. Enkel International Sales Corporation Illinois --
b. Enkel Foreign Sales Corporation U.S. Virgin Islands --
3. MISOMEX OF NORTH AMERICA, INC. Delaware Illinois
4. BALDWIN GRAPHIC SYSTEMS, INC. Delaware California;
Illinois;
Connecticut
B. BALDWIN EUROPE CONSOLIDATED INC. Delaware --
1. BALDWIN EUROPE CONSOLIDATED B.V. The Netherlands N.A.
a. Baldwin Graphic Equipment BV The Netherlands N.A.
b. Baldwin German Capital Holding GmbH Germany N.A.
(1) Baldwin-Gegenheimer GmbH West Germany/Frankfurt N.A.
(a) Baldwin Gegenheimer Ltd. United Kingdom N.A.
(2) Baldwin Auslandsbetelligungs Holding GmbH Germany N.A.
(a) Baldwin Hungaria Ltd. Hungary N.A.
(b) Graphics Financing Ireland Ireland N.A.
i) Altosle Ireland Ireland --
(3) Misomax GmbH Germany N.A.
(4) Acrotec Betelligungsgellschaft GmbH Germany N.A.
(a) Jimek Gralotec GmbH Germany N.A.
(b) Acrotec GmbH Germany N.A.
c. Baldwin U.K, Holding Limited United Kingdom N.A.
(1) Misomax U.K. Limited United Kingdom N.A.
(a) Dale Graphics U.K. Ltd. United Kingdom N.A.
(2) Misomex Engineering Limited United Kingdom N.A.
(3) Acrotec U.K. Limited United Kingdom N.A.
(4) IVT Graphics U.K. Limited United Kingdom N.A.
</TABLE>
<PAGE> 146
SCHEDULE 6.1
B. BALDWIN EUROPE CONSOLIDATED INC., 1 BALDWIN EUROPE CONSOLIDATED B.V. --
CONTINUED
d. B S Holding AB Sweden N.A.
(1) Amal AB Sweden N.A.
(2) Misomex AB Sweden N.A.
(a) AB Eslomatic Sweden N.A.
(b) Misomex Marketing AB Sweden N.A.
(c) Opme Oy Finland N.A.
(3) Acrotec AB Sweden N.A.
(a) Jimek International AB Sweden N.A.
e. Misomex Italia Italy N.A.
f. Acrotec Sarl France N.A.
2. BALDWIN TECHNOLOGY FRANCE S.A. France N.A.
C. BALDWIN ASIA PACIFIC CORPORATION Delaware --
1. BALDWIN-JAPAN LTD. Japan N.A.
a. Baldwin Japan Trading Ltd. Japan N.A.
b. Kansai Baldwin Sales Ltd. Japan N.A.
2. BALDWIN PRINTING CONTROL EQUIPMENT
(BEIJING) COMPANY, LTD. China N.A.
3. BALDWIN ASIA PACIFIC LTD. Hong Kong N.A.
a. Baldwin Graphic Equipment Pty. Ltd. Australia N.A.
b. Baldwin Printing Controls Ltd. Hong Kong N.A.
4. BALDWIN ASIA PACIFIC VC LIMITED British Virgin Islands N.A.
D. BALDWIN TECHNOLOGY LIMITED Bermuda --
NOTE: Subsidiaries (as defined in the Note Agreement) are listed under their
respective parent and are wholly owned subsidiaries of such parent
companies.)
<PAGE> 147
SCHEDULE 6.3
Actions Pending
None.
<PAGE> 148
LOAN LIENS BALDWIN TECHNOLOGY COMPANY, INC. SCHEDULE 8.3(a)
SCHEDULE OF LIENS
<TABLE>
<CAPTION>
RELATED
BORROWER LENDER OBLIGATION SECURITY
- -------- ------ ---------- --------
<S> <C> <C> <C>
LIENS RELATED TO CAPITAL LEASE ASSETS:
STOBB DIVISION IBM $37,235 AS400 SYSTEM W/ATTCH.
ENKEL CORP. VEXEL CORP. $954,761 LAND AND BUILDING
ACROTEC UK VARIOUS* GBP52,075 THREE AUTOMOBILES
IVT GRAPHICS UK VARIOUS* GBP39,513 FIVE AUTOMOBILES
BALDWIN GEGENHEIMER GMBH VARIOUS* DM350,832 UNDERLYING LEASED ASSETS
*PER ATTACHED LISTINGS
LIENS RELATED TO OWNED ASSETS:
KANSA CORPORATION CITY OF EMPORIA $336,416 LAND AND BUILDING (IRB)
AMAL AB INDUSTRIKREDIT SEK1,698,800 FIRST PRIORITY CHARGE OVER LAND AND
BUILDING (SEK2,600,000)
AMAL AB NUTEK SEK160,800 CHARGE OVER LAND AND BUILDING (SEK300,000)
AND FLOATING CHARGE OVER OTHER ASSETS
(SEK900,000)
AMAL AB SE BANKEN CHECK OVERDRAFT CHARGE OVER LAND AND BUILDING (SEK1,600,000)
MISOMEX AB SE BANKEN SEK17,900,000 FIRST PRIORITY CHARGE OVER LAND AND
BUILDING (SEK13,800,000) AND FIRST
PRIORITY FLOATING CHARGE ON OTHER ASSETS
(SEK5,000,000)
ACROTEC AB NORDBANKEN SEK9,000,000 FIRST PRIORITY FLOATING CHARGE OVER ASSETS
EXCL. LAND AND BUILDING (SEK11,000,000)
ACROTEC GMBH BEYERISCHE
VEREINSBANK AG DM195,000 CERTAIN FURNITURE AND EQUIPMENT
ACROTEC SARL BANQUE DE PICARDIE FFR367,000 ONE AUTOMOBILE
IVT GRAPHICS UK SCOTTISH AMICABLE
LIFE GBP18,000 RETIREMENT PLAN ASSETS
MISOMEX AB SWEDISH GOVERNMENT SEK100,000 FLOATING CHARGE OVER OTHER ASSETS
LIENS RELATED TO GENERAL DEBT OBLIGATIONS:
MISOMEX ENGINEERING AND MISOMEX UK BARCLAYS BANK GBP30,000 DEBENTURE OVER INVENTORY AND RECEIVABLES --
BARCLAYCARD
GBP60,000 DEBENTURE OVER INVENTORY AND RECEIVABLES --
CUSTOMS GUARANTEE
GBP60,000 DEBENTURE OVER INVENTORY AND RECEIVABLES --
LINE OF CREDIT
MISOMEX AB SE BANKEN SEK8,000,000 FLOATING CHARGE OVER OTHER ASSETS (SEK
8,000,000) -- OVERDRAFT FACILITY
ACROTEC AB SE BANKEN SEK8,000,000 FLOATING CHARGE OVER OTHER ASSETS (SEK
8,000,000 -- OVERDRAFT FACILITY
AMAL AB SE BANKEN SEK8,911,000 FLOATING CHARGE OVER OTHER ASSETS (SEK
7,100,000) -- OVERDRAFT FACILITY
DM178,665 (INCL. IN ABOVE)
ACROTEC GMBH BEYERISCHE
VEREINSBANK AG DM2,200,000 CERTAIN MACHINERY AND EQUIPMENT --
OVERDRAFT FACILITY
ACROTEC GMBH DEUTSCHEBANK DM3,750,000 RECEIVABLES -- OVERDRAFT/GUARANTEE FACILITY
ACROTEC AB NORDBANKEN SEK4,500,000 FIRST PRIORITY CHARGE OVER LAND AND
BUILDING (SEK5,681,700) -- OVERDRAFT
FACILITY
</TABLE>
<PAGE> 149
BALDWIN-GEGENHEIMER GMBH SCHEDULE 8.3(a)
GROSS INCL. INTEREST
LEASE OBLIGATIONS PER NOV - 30 - 95
in DM
DEPRECIATION DEPRECIATION DEPRECIATION
<TABLE>
<CAPTION>
TOTAL TOTAL TOTAL
Object 1.rate TO JUN 95 TO NOV 95 TO FY 96
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Maho Millngm. 01.03.86 245.924 245.924 245.724
Yamazaki CNC - Vert. 15.01.87 203.439 204.719 205.231
Deckel CNC 102 - Vert. 01.04.87 147.711 148.656 149.412
Deckel Millm. 502 - Vert. 01.04.87 77.211 77.706 78.102
Promecan Shears 15.11.87 137.679 138.516 138.516
Deckel Millngm. FP 4 M 15.11.87 90.366 90.981 31.104
Deckel Millngm. FP4A/T 01.01.89 239.589 241.524 241.911
Kern Lathe 15.03.89 101.496 102.176 102.584
Amada CNC Punch 01.02.89 508.244 520.732 520.732
CAD-System 1 15.01.89 392.358 394.993 393.520
Mazak Lathe 15.04.89 256.162 257.882 253.258
Kunz Shears 01.05.89 21.694 21.839 21.984
Saw Kasto 15.05.89 58.463 58.853 58.243
CAD-System 2-Plotter-CATIA 15.04.89 69.074 68.539 69.679
CAD-System 3-Plotter- 01.03.89 123.735 123.750 123.750
Electronic CAD 1 15.11.89 73.053 73.543 73.690
Cleaning System 15.11.89 722.552 223.906 223.906
Electronic CAD 2 15.02.90 5.634 5.674 5.666
Infra Red Gas Analyzer 01.05.89 105.098 105.808 105.518
Milling Machine MAHO 15.06.90 313.842 315.962 318.506
Lathe WEILER 15.06.90 93.719 94.354 95.116
CAD Sysem CATIA expens. 15.06.90 53.137 53.502 53.611
Ext. Deckel Mill. FP4A/T 01.07.90 49.224 49.224 49.224
EOP Hewlett Packard 15.05.90 974.734 981.334 987.934
Electronic CAD Oracle 15.05.90 19.732 19.867 19.884
Excentric Press ATP 63 01.10.90 175.635 176.825 178.491
Electronic Lift-Truck 01.10.90 57.156 57.546 56.092
CNC-Bending Machine 01.10.90 561.933 565.748 571.089
Furniture new building 01.10.90 148.554 149.564 150.978
Erw. EDP Hewlett Packard 15.03.91 2.361 2.376 2.301
Deckel FP 4 M 01.01.91 100.752 101.447 102.420
Software Infoplan S u. S. 01.06.91 124.040 124.885 125.998
Software UNC 01.06.91 160.085 161.175 162.483
Transformator 01.07.91 110.487 116.200 124.197
Installations new building 01.07.91 1.261.708 1.345.398 1.462.563
2 CNC Machines 01.06.91 748.005 753.090 759.192
2 Maho MH 500 M 01.06.91 315.692 317.837 320.411
Office furniture 15.07.91 123.885 124.745 125.949
Software Infoplan/Furniture 04.11.91 412.504 426.730 430.832
Furniture new building 15.10.90 435.012 437.967 437.104
Hardware HP-Disks 01.01.92 45.798 47.723 48.108
Expansion HW HP Disk 01.08.92 132.245 137.620 138.695
Expansion SW INDUS 01.08.92 171.689 177.460 179.189
Truck 01.07.92 15.198 15.198 15.198
Measuring device Balec 01.07.92 80.544 80.169 81.044
Office furniture 01.07.92 16.956 17.651 18.624
Sun protection 01.07.92 15.780 16.425 17.328
Measuring device Micro MS 454 01.09.92 58.420 60.780 61.034
Mora 3 O 15.10.92 43.563 44.682 45.123
Electronic lift truck 15.11.92 62.792 65.167 65.167
11 HP screens 15.01.93 13.248 13.798 14.568
Office furniture 15.03.93 11.622 12.122 12.822
SW Fibu/KStre 15.06.93 52.862 54.792 57.494
Umrollschneidmaschine 01.08.93 91.803 97.904 102.643
HW Upgrade/Memory exp. 15.01.94 108.456 127.856 131.736
Fifo. Kalkulation 15.01.94 34.272 42.042 45.894
HP Disk expension 2 GB 15.05.94 17.610 17.745 17.880
2 IBM Risk systems
Model 6000/: 01.08.94 37.301 50.232 56.927
Workstation for profit
center 01.06.95 3.590 21.540 45.605
CAD CATIA Update 15.09.95 8.733 29.110
----------------------------------------------------------
TOTAL Lease Obligation 10.344.628 10.602.135 10.461.365
==========================================================
</TABLE>
<TABLE>
<CAPTION>
Object FY 97 FY 98 FY 99 FY 2000 FY 2001
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Maho Millngm.
Yamazak CNC - Vert.
Deckel CNC 102 - Vert.
Deckel Millm. 502 - Vert.
Promecan Shears
Deckel Millngm. FP 4 M
Deckel Millngm. FP4A/T
Kern Lathe
Amada CNC Punch
CAD-System 1
Mazak Lathe
Kunz Shears
Saw Kasto
CAD-System 2-Plotter-CATIA
CAD-System 3-Plotter-
Electronic CAD 1
Cleaning System
Electronic CAD 2
Infra Red Gas Analyzer
Milling Machine MAHO
Lathe WEILER
CAD Sysem CATIA expens.
Ext. Deckel Mill. FP4A/T
EOP Hewlett Packard
Electronic CAD Oracle
Excentric Press ATP 63 238 238 238
Electronic Lift-Truck 78 78 78
CNC-Bending Machine 763 763 763
Furniture new building 202 202 202
Erw. EDP Hewlett Packard
Deckel FP 4 M
Software Infoplan S u. S.
Software UNC
Transformator 13.710 13.710 13.710 13.710 13.710
Installations new building
2 CNC Machines
2 Maho MH 500 M
Office furniture 172 172 172
Software Infoplan/Furniture 586 586 586 586
Furniture new building 591 591 591
Hardware HP-Disks
Expansion HW HP Disk
Expansion SW INDUS 247 247 247 247
Truck
Measuring device Balec
Office furniture
Sun protection
Measuring device Micro MS 4S4 944
Mora 3 O 63 63 63
Electronic lift truck
11 HP screens 110
Office furniture 250
SW Fibu/KStre 4.246
Umrollschneidmaschine 8.124 677
HW Upgrade/Memory exp.
Fifo. Kalkulation 4.123
HP Disk expension 2 GB
2 IBM Risk systems
Model 6000/: 8.512 6.684 557
Workstation for profit
center 28.345 6.840 6.270
CAD CATIA Update 26.292 8.724 5.556 926
----------------------------------------------------------------------
TOTAL Lease Obligation 97.886 39.575 29.033 15.469 13.710
======================================================================
</TABLE>
<PAGE> 150
SCHEDULE 8.3(a)
LIENS
Acrotec SARL
Lien on one automobile owned by the company securing the company's obligations
under a loan dated 08/26/94 with Banque de Picardie, as lender.
IVT Graphics UK Ltd
Lien on five automobiles (Volvo, Rover, Jaguar, Volvo and Renault) owned by
the company securing the company's obligations under a loan agreement dated
12/28/93 with VOCS Finance (Volvo), 02/21/93 with Rover Finance Ltd (Rover),
07/04/94 with Jaguar Cars Finance Ltd (Jaguar), 12/08/93 with VOCS Finance
(Volvo) and 01/23/95 with Roy Scot Trust (Renault), respectively, as lender.
Acrotec UK Ltd
Lien on three automobiles (Jaguar, BMW and Ford) owned by the company securing
the company's obligations under a loan agreement dated 10/24/94 with Jaguar
Cars Finance Ltd (Jaguar), 04/15/94 with BMW Finance (BMW), 07/03/95 with Ford
Credit (Ford) respectively, as lender.
<PAGE> 151
SCHEDULE 8.3(f)
1. Consulting Agreements, dated as of January 1, 1990, between each of
Baldwin Europe Consolidated, Inc. ("BEC"), Baldwin Americas
Corporation ("BAM") and Baldwin Asia Pacific Corporation ("BAP") and
Polestar Ltd.
2. Employment Agreement dated as of July 1, 1990 between BTI and Wendell
M. Smith.
3. Amendment to Employment Agreement dated August 21, 1995 between BTI and
Wendell M. Smith.
4. Consulting Agreement dated as of July 1, 1989 between BAP and A-Plus
Ltd.
5. Employment Agreement dated as of November 16, 1988 between
Baldwin-Japan Limited and Akira Hara.
6. Amendment to Employment Agreement dated August 15, 1995 between
Baldwin-Japan Limited and Akira Hara.
7. Employment Agreement dated as of August 5, 1993 between BTI and Gerald
A. Nathe.
8. Loan and Pledge Agreement dated November 30, 1993 between BTI and
Gerald A. Nathe.
9. Loan and Pledge Agreement dated March 11, 1994 between BTI and William
J. Lauricella.
10. Consulting Agreement dated as of July 1, 1991 between BTI and Judith G.
Hyers, as amended on June 1, 1993 and March 2, 1994.
11. Letter Agreement among Judith G. Hyers, Wendell M. Smith, Akira Hara,
William J. Lauricella, D. John Youngman and the Company dated February
18, 1994.
12. Agreement dated as of July 1, 1994 between BTI and Judith G. Hyers.
<PAGE> 152
SCHEDULE 8.4(a)
Existing Junior Indebtedness
None.
<PAGE> 153
LOAN/CL BALDWIN TECHNOLOGY COMPANY, INC. SCHEDULE 8.4(b)
SCHEDULE OF CAPITAL LEASES
<TABLE>
<CAPTION>
RELATED
BORROWER LENDER OBLIGATION SECURITY
- -------- ------ ---------- --------
<S> <C> <C> <C>
STOBB DIVISION IBM $37,235 AS400 SYSTEM W/ATTCH.
ENKEL CORP. VEXEL CORP. $954,781 LAND AND BUILDING
ACROTEC UK VARIOUS* GBP52,075 THREE AUTOMOBILES
IVT GRAPHICS UK VARIOUS* GBP39,513 FIVE AUTOMOBILES
BALDWIN GEGENHEIMER
GMBH VARIOUS* DM350,832 UNDERLYING LEASED ASSETS
</TABLE>
*PER ATTACHED LISTINGS
<PAGE> 154
SCHEDULE 9.1(k)
Permitted Holders of More than 49%
Voting Control of Baldwin
<TABLE>
<CAPTION>
Name Title
---- -----
<S> <C>
Wendell M. Smith Chairman
Gerald A. Nathe President and Chief Executive Officer
Akira Hara Vice-President
William J. Lauricella Chief Financial Officer and Treasurer
</TABLE>
<PAGE> 1
EXHIBIT 10.24
[BALDWIN LOGO]
August 21, 1995
Mr. Wendell M. Smith
Manor House Apt. 10
3 Manor House Drive
Smith's FL07 Bermuda
Dear Mr. Smith:
This letter amends Section 3.C. of your July 1, 1990 employment agreement (the
"Agreement") with Baldwin Technology Company, Inc., which, effective as of July
1, 1995, shall read as follows:
C. Deferred Compensation. You shall be paid, at such times as are
set forth in this Agreement, deferred compensation in an amount equal to forty
percent (40%) of your Final Average Pay (such payment being referred to herein
as the "Deferred Compensation Amount"). For purposes of this Agreement, the
term "Final Average Pay" shall mean an amount equal to (i) the compensation
paid to you during the two (2) fiscal years immediately preceding the fiscal
year in which you become entitled to the Deferred Compensation Amount
(including any incentive compensation relating to fiscal years ending prior to
June 30, 1990, and any incentive compensation under Paragraph 3B hereof
relating to fiscal years ending after June 30, 1989), plus (ii) the
compensation payable to you at the time that you become entitled to the
Deferred Compensation Amount, which compensation shall include any incentive
compensation under Paragraph 3B hereof with respect to the fiscal year in which
you become entitled to the Deferred Compensation Amount (annualized to twelve
(12) months), (iii) divided by three (3). The annual amount of Deferred
Compensation payable to you under this Agreement shall not exceed two hundred
twenty thousand dollars ($220,000). The Deferred Compensation Amount, when
calculated, shall then be restated to a monthly amount by dividing the Deferred
Compensation Amount by twelve (12) months (the "Monthly Amount"), and the
Monthly Amount shall be paid to you or your estate, as the case may be, for a
period of one hundred eighty (180) months or the period ending with the month
of your death, whichever is longer, on the first day of each month beginning
with the month immediately succeeding the month in which you become entitled to
the Deferred Compensation Amount. If you die after the date on which you first
become entitled to payment of the Deferred Compensation Amount under Paragraph
8A(iii), 8C(ii), 8D(ii) or 8E hereof, whether or not the first payment of the
Monthly Amount has been made, and prior to the payment of the Deferred
Compensation Amount for one hundred eighty (180) months, the Monthly Amount
shall be paid monthly for the balance of such one hundred eighty (180) month
period to the beneficiary or beneficiaries designated by you in writing, or, if
none are designated, to your estate.
AGREED TO AND ACCEPTED: BALDWIN TECHNOLOGY COMPANY, INC.
/s/ Wendell M. Smith /s/ Gerald A. Nathe
- --------------------------------- ---------------------------------
Wendell M. Smith Gerald A. Nathe, President
<PAGE> 1
EXHIBIT 10.25
AMENDMENT TO EMPLOYMENT AGREEMENT
This Amendment to Agreement is made this 15 day of August, 1995 between
Baldwin-Japan Limited, a Japanese corporation ("BJL") and Akira Hara, a
Japanese citizen ("HARA").
WHEREAS BJL and HARA are parties to an Employment Agreement dated as of
November 16, 1988 (the "Employment Agreement") which provided for HARA to
receive, among other things, benefits under a Retirement Allowance Plan (the
"RAP"), attached to the Employment Agreement as Exhibit I; and
WHEREAS the RAP has been amended (a copy of which amended version is
attached hereto) and the parties wish such amendment to be subjected to the
Employment Agreement;
NOW, THEREFORE, the parties agree as follows;
1. Amendment.
(1) The seventh recital of the Employment Agreement be deleted and
replaced with the following;
"WHEREAS, BJL and BTI, as the indirect sole shareholder of BJL, through
its 100% ownership of Baldwin Asia Pacific Corporation ("BAP") which in turn
owns 100% of BJL, desire to extend to HARA certain company benefit plans,
including without limitation, the Retirement Allowance Plan, as amended from
time to time (the "RAP"), a current copy of which is attached hereto as
Exhibit I."
(2) The words "that would have an adverse effect on Hara" in paragraph
3(b) be deleted.
(3) The words "and BAP" be added after "BTI" on the first line in
Paragraph 3(c).
(4) The words "including the supplemental retirement allowance provided for
in Article 5.02 of the RAP" be added after the words "retirement
allowance" on the next to last line in Paragraph 3(c).
2. Greater Certainty. For greater certainty, the parties agree that all
references to the RAP within the Employment Agreement are to the RAP as amended
from time to time, subject only to the provisions of subsection 3(b) of the
Employment Agreement regarding adverse amendments, etc. to the RAP.
3. No Other Amendment. The parties agree that, except as set forth above,
the Employment Agreement remains unamended and in full force and effect.
<PAGE> 2
-2-
IN WITNESS WHEREOF, the parties have entered into this agreement as of
the date first above written.
BALDWIN-JAPAN LIMITED
By: /s/ Wendell M. Smith
-------------------------------
Wendell M. Smith
Representative Director
/s/ Akira Hara
-------------------------------
Akira Hara
ACKNOWLEDGED AND AGREED TO ON
___________, 1995 BY BALDWIN
TECHNOLOGY COMPANY, INC. IN ITS
CAPACITY AS THE MAJORITY
SHAREHOLDER OF BALDWIN-JAPAN
LIMITED.
BY: /s/ Wendell M. Smith
------------------------------
Wendell M. Smith
President and Chief
Executive Officer
<PAGE> 3
Retirement Allowance Plan
for
Representative Directors and Directors
of
Baldwin-Japan Ltd.
Article 1. Purpose.
The purpose of this Retirement Allowance Plan is to govern, and provide
for, the retirement allowance of eligible Representative Directors and
Directors (reference herein to a "Director" shall include a Representative
Director unless the context requires otherwise) of the Company who are not
otherwise covered by the Company's work rules and retirement allowance program
which apply to regular employees (the "Employee Plan").
Article 2. Eligibility.
A Director of the Company who is appointed and works for the Company on
a full-time basis and who is not otherwise covered by the Employee Plan shall
be automatically eligible to participate in this Retirement Allowance Plan. A
Director of the Company who is not a full-time officer of the Company or who is
covered by the Employee Plan shall be ineligible to participate.
Article 3. Retirement Age.
<PAGE> 4
- 2 -
The retirement age for a Director of the Company shall be determined as
follows:
Position Retirement Age
-------- --------------
President and
Representative Director 68
Vice President and
Representative Director 66
Senior Managing Director 64
Managing Director 64
Director (without any of the
above job titles) 62
A Director shall retire from the Company effective as of the next
Ordinary General Meeting of Shareholders held following the date such Director
reaches the indicated retirement age, provided however, that nothing herein
shall be construed as requiring a Director to retire if the Shareholders
request such Director to extend his retirement age and he is willing and able
to do so, and provided further, that nothing herein shall be construed to
prevent a Director from electing to retire at any time prior to reaching the
indicated retirement age.
Article 4. Senior Advisers.
A Director who has actually retired shall be eligible for appointment
by the Board of Directors to the position of Senior Adviser of the Company. A
Director, if so appointed,
<PAGE> 5
- 3 -
shall serve as a Senior Adviser for a fixed term, as determined in each
instance at the time of appointment. The fixed term may be renewed or
extended. A Senior Adviser shall receive as compensation a monthly payment equal
to 60% of his base monthly remuneration at the time of retirement (the
"Senior Adviser Fee") for so long as he shall serve as a Senior Adviser.
Additionally, a Senior Adviser shall receive reasonable compensation and
reimbursement of expenses for any specified assignments he may be requested to
carry out on behalf of the Company. A Senior Adviser who assumes any office
with, and/or is employed by, any other person, company or legal entity without
the prior written consent of the Company shall cease to be a Senior Adviser and
shall receive no further payments hereunder.
Article 5. Retirement Allowance.
5.01 The retirement allowance of a Director for time served in each of
the following positions shall be computed by multiplying: (i) the Director's
base monthly remuneration at the date of retirement by (ii) the number of
years served in the respective position set forth below, and then further
multiplied by (iii) the respective multiplication factor(s) pertaining to the
highest position(s) held by the Director during the last ten (10) years prior
to retirement; provided, however, that the retirement allowance for years of
service in any, or a
<PAGE> 6
- 4 -
combination, of the following positions which are in excess of the last ten
years (10) of service shall be computed by multiplying item (i) above by the
number of excess years, and then further multiplied by the multiplication
factor for a Director (1.25):
<TABLE>
<CAPTION>
Position Factor
-------- ------
<S> <C>
President and
Representative Director 3.2
Vice President and
Representative Director 2.5
Senior Managing Director 2.0
Managing Director 1.5
Director (without any of the
above job titles) 1.25
</TABLE>
In the event that the Director has held more than one of the above
positions, the total retirement allowance shall be computed by adding the
retirement allowance for each position held as calculated above, subject to
the proviso of the first paragraph of this Article 5.
For purposes of the above calculations, the unit of length of service
shall be 180 days. A period of more than 180 days making up part of the length
of service shall be considered as a full year, and any period of service less
than 180 days and more than one month shall be considered as one half of a
year.
<PAGE> 7
- 5 -
In addition to the above, a Director who has rendered service of
particular merit to the Company may be granted a meritorious retirement award
of up to 50% of the retirement allowance calculated above.
5.02 In addition to the retirement allowance calculated in accordance
with Article 5.01 above, any Director who has served as a Director of the
Company for a period of 20 years or more, of which at least 16 years have been
in the capacity as the President and Representative Director of the Company,
shall be entitled to receive an annual supplemental retirement allowance equal
to 40% of the average of the three highest gross annual base remuneration
received from the Company, including all entities affiliated with the Company,
subject to the following:
A. For purposes of this calculation, amounts considered as bonuses
or incentives shall not be counted as part of the Director's annual
base remuneration.
B. The supplemental retirement allowance shall be paid annually in
twelve equal installments beginning in the month following the
month in which the Director retires from active service with the
Company, provided however, that in the
<PAGE> 8
- 6 -
event the Director retires before reaching the age of 65 the
supplemental retirement allowance will not begin until the month
following the month in which the Director turns 65 years of age.
C. In the event the Director meets the minimum requirement of having
served for a period of 16 years as the President and Representative
Director of the Company but is required to retire from the Company
before satisfying the requirement of having served as a Director of
the Company for 20 years either as a result of a permanent disability
or at the request of the Company or its shareholder for any reason, the
supplemental retirement allowance shall vest immediately and payment
shall begin as of the date of separation from the Company.
D. The supplemental retirement allowance shall be paid monthly to the
Director (or the Director's legal heirs) for a period of 180 months or
until the death of the Director, whichever comes later.
E. In the event the Director dies after serving for 16 years as the
President and Representative Director of the Company but before
retirement, the
<PAGE> 9
- 7 -
supplemental retirement allowance shall be paid to the Director's spouse
for up to a maximum of 180 months, provided that if at the time of the
Director's death, the Director is not survived by a spouse or if the
surviving spouse dies before the expiration of the 180-month term, then
the remaining months of supplemental retirement allowance payments
shall be paid to the Director's legal heirs.
Article 6. Death or Permanent Disability.
In the event a Director dies or becomes permanently disabled prior to his
retirement, his years of service as Director and his retirement allowance shall
be calculated as if he had finished his then current term as a Director. In the
event that a Director dies-prior to his retirement, his retirement allowance
as calculated herein, subject to approval by the Shareholders of the Company,
and subject to Article 5.02, E above, shall be paid to his legal heirs. A
Director who dies or becomes permanently disabled while serving as a Special
Adviser shall receive the Special Advisers Fee (in the case of death it shall
be paid to his legal heirs) for a period of six months after the date of death
or permanent disability.
Article 7. Payment.
<PAGE> 10
-8-
Retirement allowance shall be paid within 60 days of the date of the
Shareholders' Meeting at which the Director's term expires. In the case of
death or permanent disability prior to retirement, retirement allowance shall
be paid within 120 days of the date of death or permanent disability.
Article 8. Amendment or Modification.
This Retirement Allowance Plan may be amended or modified at any time
by the Shareholders of the Company at a duly convened Shareholders' Meeting.
<PAGE> 1
EXHIBIT 21
<TABLE>
<CAPTION>
SUBSIDIARIES OF THE REGISTRANT Jurisdiction
- ------------------------------ ------------
<S> <C>
Baldwin Americas Corporation Delaware
Baldwin Europe Consolidated Inc. Delaware
Baldwin Asia Pacific Corporation Delaware
Baldwin Technology Limited Bermuda
SUBSIDIARIES OF BALDWIN AMERICAS CORPORATION
Baldwin Technology Corporation Connecticut
Misomex of North America, Inc. Delaware
Enkel Corporation Delaware
Baldwin Graphic Systems, Inc. Delaware
SUBSIDIARIES OF BALDWIN TECHNOLOGY CORPORATION
Kansa Corporation Kansas
SUBSIDIARIES OF ENKEL CORPORATION
Enkel International Sales Corporation Illinois
Enkel Foreign Sales Corporation US Virgin Island
SUBSIDIARIES OF BALDWIN EUROPE CONSOLIDATED INC.
Baldwin Europe Consolidated BV Netherlands
Baldwin Technology France SA France
SUBSIDIARIES OF BALDWIN EUROPE CONSOLIDATED BV
Baldwin Graphic Equipment BV Netherlands
Baldwin German Capital Holding GmbH Germany
Baldwin U.K. Holding Limited United Kingdom
BS Holding AB Sweden
Misomex Italia Italy
Graphics Financing Ireland Limited Ireland
Baldwin France Sarl France
SUBSIDIARIES OF BALDWIN GERMAN CAPITAL HOLDING GMBH
Baldwin Gegenheimer GmbH Germany
Misomex GmbH Germany
Baldwin Auslandsbeteiligungs Holding GmbH Germany
Acrotec Beteiligungsgesellschaft GmbH Germany
SUBSIDIARIES OF BALDWIN U.K. HOLDING LIMITED
Misomex U.K. Limited United Kingdom
Misomex Engineering Limited United Kingdom
Baldwin (UK) Ltd. United Kingdom
Acrotec UK Ltd. United Kingdom
SUBSIDIARIES OF BS HOLDING AB
Amal AB Sweden
Misomex AB Sweden
Acrotec AB Sweden
</TABLE>
<PAGE> 2
<TABLE>
<S> <C>
SUBSIDIARIES OF GRAPHICS FINANCING IRELAND
Altoste Limited Ireland
SUBSIDIARIES OF BALDWIN GEGENHEIMER GMBH
Baldwin Gegenheimer Ltd. United Kingdom
SUBSIDIARIES OF BALDWIN AUSLANDSBETEILIGUNGS HOLDING GMBH
Baldwin Hungaria Ltd. Hungary
Graphics Financing Ireland Ireland
SUBSIDIARIES OF ACROTEC BETEILIGUNGSGESELLSCHAFT GMBH
Grafotec GmbH Germany
Jimek Grafotec GmbH Germany
SUBSIDIARIES OF MISOMEX U.K. LIMITED
Dale Graphics U.K. Ltd. United Kingdom
SUBSIDIARIES OF MISOMEX AB
AB Estomatic Sweden
Misomex Marketing AB Sweden
Opme Oy Finland
SUBSIDIARIES OF ACROTEC AB
Jimek International AB Sweden
SUBSIDIARIES OF BALDWIN ASIA PACIFIC CORPORATION
Baldwin Asia Pacific Ltd. Hong Kong
Baldwin-Japan Ltd. Japan
Baldwin Printing Control Equipment (Beijing)
Company, Ltd. China
BAP VC Limited British Virgin
Islands
SUBSIDIARIES OF BALDWIN ASIA PACIFIC LTD
Baldwin Graphic Equipment Pty. Ltd. Australia
Baldwin Printing Controls Ltd. Hong Kong
SUBSIDIARIES OF BALDWIN JAPAN LTD.
Baldwin-Japan Trading Ltd. Japan
</TABLE>
<PAGE> 1
EXHIBIT 23
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectuses
constituting part of the Registration Statements on Form S-8 (No. 33-20611 and
No. 33-30455) and the Registration Statements on Form S-3 (No. 33-33104, No.
33-42265 and No. 33-41586) of Baldwin Technology Company, Inc. of our report
dated August 9, 1996 appearing on page 17 of this Annual Report on Form 10-K. We
also consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 43 of this Form 10-K.
PRICE WATERHOUSE LLP
Stamford, Connecticut
September 27, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET, CONSOLIDATED STATEMENT OF INCOME AND CONSOLIDATED
STATEMENT OF CASH FLOWS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS IN THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR
ENDED JUNE 30, 1996.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 9,781
<SECURITIES> 13
<RECEIVABLES> 66,224
<ALLOWANCES> 2,503
<INVENTORY> 42,049
<CURRENT-ASSETS> 124,288
<PP&E> 32,389
<DEPRECIATION> 19,075
<TOTAL-ASSETS> 217,340
<CURRENT-LIABILITIES> 78,238
<BONDS> 0
0
0
<COMMON> 184
<OTHER-SE> 96,872
<TOTAL-LIABILITY-AND-EQUITY> 217,340
<SALES> 259,301
<TOTAL-REVENUES> 259,301
<CGS> 173,271
<TOTAL-COSTS> 173,271
<OTHER-EXPENSES> 74,684
<LOSS-PROVISION> 95
<INTEREST-EXPENSE> 4,032
<INCOME-PRETAX> 7,219
<INCOME-TAX> 4,701
<INCOME-CONTINUING> 2,518
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,518
<EPS-PRIMARY> 0.14
<EPS-DILUTED> 0.14
</TABLE>
<PAGE> 1
EXHIBIT 99
CAUTIONARY STATEMENTS PURSUANT TO "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Except for historical information, the report on Form 10-K for fiscal year ended
June 30, 1996, to which this exhibit is appended, the Company's quarterly
reports to the Securities and Exchange Commission on Form 10-Q and periodic
press releases, as well as other public documents and statements, contain
"forward- looking statements" within the meaning of the federal securities laws.
Forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or implied by the
statements, including, among others:
- - Significant price reductions or improvements in competing
imaging technologies.
- - The rate of growth of the installed base of printing press
units and the timing of new press orders.
- - Some dependence on a small number of large OEM customers.
- - Competitive product offerings and pricing actions.
- - The availability and pricing of key raw materials.
- - Productivity improvements in manufacturing.
- - Dependence on key members of management.
- - Changes in the mix of products and services comprising
revenues.
Readers are cautioned not to place undue reliance on forward-looking statements.
The Company undertakes no obligation to republish revised forward-looking
statements to reflect events or circumstances after the date hereof or to
reflect the occurrences of unanticipated events.
