EXHIBIT 10.1

WAIVER AND AMENDMENT NO. 1

WAIVER AND AMENDMENT NO. 1, dated as of September 29, 2009 (this “Waiver”) to
the Amended and Restated Credit and Guaranty Agreement, dated as of May 30, 2008
(the “Credit Agreement”) by and among Xerium Technologies, Inc. (“Xerium”), a
Delaware corporation, XTI LLC (“XTI”), a Delaware limited liability company,
Xerium Italia S.p.A. (“Italia SpA”), an Italian società per azioni, Xerium
Canada Inc. (“Xerium Canada”), a New Brunswick (Canada) corporation resulting
from the amalgamation of Stowe-Woodward/Mount Hope Inc. and Weavexx Corporation,
Huyck Wangner Austria GmbH (“Huyck Austria”), an Austrian limited liability
company (formerly known as Huyck Austria GmbH), and Xerium Germany Holding GmbH
(“Germany Holdings”), a German limited liability company (each of Xerium, XTI,
Italia SpA, Xerium Canada, Huyck Austria and Germany Holdings, individually, a
“Borrower” and, collectively, the “Borrowers”), certain Subsidiaries (such
capitalized terms and all other capitalized terms used herein and not otherwise
defined herein have the meanings provided for in the Credit Agreement (as
defined below)) of the Borrowers as Guarantors, the Banks party hereto, Citicorp
North America, Inc., as Administrative Agent (together with its permitted
successors, in such capacity, “Administrative Agent”) and Citicorp North
America, Inc., as Collateral Agent.

W I T N E S S E T H:

WHEREAS, the Banks have made Loans to the Borrowers pursuant to the Credit
Agreement;

WHEREAS, each Borrower and Guarantor expressly reaffirms all of the Credit
Documents and the indebtedness and other obligations thereunder, each Borrower
and Guarantor agrees that nothing contained herein shall operate to release the
Borrowers and the Guarantors or any other Person or Persons from their liability
to keep and perform the provisions, conditions, obligations and agreements
contained in the Credit Documents, except as they may be herein waived or
modified, and each Borrower and Guarantor hereby reaffirms that each provision,
condition, obligation and agreement in such documents shall continue in full
force and effect, except as herein waived or modified;

WHEREAS, the validity, priority and perfection of all mortgages, security
interests and other liens granted or created by the Collateral Documents are
hereby acknowledged and confirmed by each Borrower and Guarantor, and each
Borrower and Guarantor agrees that such documents shall continue to secure the
Loans and the other Obligations pursuant to the terms of the Collateral
Documents, without any change, loss or impairment of the priority of such
mortgages, security interests or other liens as a result of this Waiver; and

WHEREAS, each Borrower and Guarantor understands, acknowledges and agrees that a
Default or Event of Default may occur as set forth in Section 1 of this Waiver,
which event would, if continuing, relieve each of the Banks from their
respective obligations to extend credit under the Credit Agreement and which
event would, if continuing, permit the Requisite Banks to, among other things,
cause the Administrative Agent to declare all Obligations to be immediately due
and payable;

NOW, THEREFORE, in consideration of the mutual covenants made herein and other
good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties to this Waiver agree as follows:

Section 1. Waiver. Each Borrower and Guarantor acknowledges that a Default or an
Event of Default may occur under Sections 6.8(a), 6.8(b) and 6.8(c) of the
Credit Agreement with respect to the fiscal period ending September 30, 2009
(the “Financial Covenant Defaults”). Subject to the terms of this Waiver, the
Banks party hereto agree to temporarily waive the Financial Covenant Defaults,
solely for the period commencing on the date the conditions precedent contained
in Section 3 of this Waiver are satisfied (the “Effective Date”) through and
until the earlier of (i) the occurrence of any Default or Event of Default under
any Credit Document other than the Financial Covenant Defaults, (ii) the
occurrence of a Waiver Termination Event (as defined below) and
(iii) December 15, 2009 (such period the “Waiver Period”). It is understood and
agreed that during the Waiver Period, no Financial Covenant Default will be
deemed to have occurred and be continuing and after the expiration of the Waiver
Period, the

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Administrative Agent and the Banks may exercise the remedies set forth under the
Credit Documents in respect of any Financial Covenant Default that is
continuing. The term “Waiver Termination Event” means the failure by Xerium to
perform or comply with any term or provision contained in this Waiver and such
failure or non-performance shall not have been remedied within five (5) Business
Days after the earlier of (i) an officer of Xerium becoming aware of such
failure or non-performance or (ii) receipt by Xerium of notice from the
Administrative Agent or any Bank of such failure or non-performance.

Section 2. Certain Covenants and Agreements of the Borrowers; Amendments to
Credit Agreement.

(a) Xerium agrees to deliver to the Administrative Agent the following, in forms
substantially similar to the forms previously delivered to the Administrative
Agent and its advisors:

(i) On or before the fourth Business Day after the last Monday of each calendar
month, a forecast of projected cash receipts and disbursements and cash
position, on a consolidating and consolidated basis, of the Borrowers and their
Subsidiaries for the period of thirteen consecutive weeks commencing with the
last Monday of such calendar month;

(ii) On or before the fifth Business Day after each week, a schedule of weekly
net cash flow, on a consolidating and consolidated basis, of the Borrowers and
their Subsidiaries as compared to the most recent thirteen week cash flow
projection;

(iii) On or before the fifth Business Day after each week, a schedule that
details the ending cash balances in the bank accounts of each of the Borrowers
and their Subsidiaries; and

(iv) On the 15th Business Day following each month (with the exception of the
end of each calendar quarter when it will be on the 30th calendar day),
(i) consolidated statements of income, balance sheets and cash flows of Xerium
and its Subsidiaries for the previous month and (ii) income statements and
balance sheets for each of the Roll Covers division and Paper Machine Clothing
division on a regional basis (defined as North America, South America, Europe
and Asia), setting forth in each case in comparative form the corresponding
figures for the corresponding periods of the previous Fiscal Year, together with
a Financial Officer Certification with respect thereto.

(b) Notwithstanding anything to the contrary in the Credit Agreement, from the
Effective Date through December 15, 2009, the principal balance of all Loans due
and payable shall bear interest at a rate that is 1.00% per annum in excess of
the non-default interest rate otherwise payable during such period under the
Credit Agreement with respect to the applicable Loans.

(c) Notwithstanding anything to the contrary in the Credit Agreement, as of the
Effective Date and during the Waiver Period, in no event shall new Revolving
Loans be available to the Borrowers and each Borrower acknowledges and agrees
that no Bank shall be obligated to make any Loans to any Borrower; provided that
Xerium may, in accordance with the terms of the Credit Agreement, request that
(i) the Issuing Bank extend the expiration date in accordance with the terms of
the Credit Agreement for any of the Letters of Credit set forth on Schedule I
hereto and (ii) the Issuing Bank issue new Letters of Credit in accordance with
the terms of the Credit Agreement in an outstanding amount of up to $3,500,000,
which new Letters of Credit shall be requested and issued solely for the purpose
of equipment purchases.

(d) Section 4.16 of the Credit Agreement shall be amended to add the word
“except” immediately prior to the phrase “any such default or failure to be in
force and effect which could not reasonably be expected to result in the
exercise of remedies or acceleration of indebtedness created thereunder,”
contained therein.

 

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Section 3. Conditions Precedent. The Effective Date shall be that date when, to
the satisfaction of the Administrative Agent, the following conditions shall
been satisfied or waived:

(a) The Borrowers, the Guarantors and the Requisite Banks shall have executed
this Waiver and the Administrative Agent shall have received executed
counterparts hereto from the Borrowers, the Guarantors and the Requisite Banks;
and the Borrowers and the Guarantors shall have performed its obligations under
all covenants and agreements required to have been performed as of the Effective
Date;

(b) The Administrative Agent shall have received a certificate, dated the date
hereof and signed by an Authorized Officer of Xerium, confirming that all
conditions precedent to the effectiveness of this Waiver have been met, that all
representations and warranties set forth herein are true, accurate and correct
and as to the absence of any Defaults or Events of Default (other than the
Financial Covenant Defaults), in each case as provided for herein; and

(c) The Administrative Agent shall have received payment in full of all fees and
expenses due to the Administrative Agent and the Banks (including the reasonable
fees and expenses due of its legal counsel and financial advisors invoiced prior
to the Effective Date) under the Credit Agreement and in connection with this
Waiver.

Section 4. Fees. Xerium agrees to pay to each Bank executing and delivering (by
telecopy or otherwise) this Waiver (such Banks, the “Consenting Banks”), on or
before 5:00 P.M., New York time, September 25, 2009, a fee equal to 0.50% (the
“Waiver Fee”) of the outstanding principal amount of all Loans (other than
Tranche 1 Revolving Loans) and the Tranche 1 Revolving Commitments of such Bank.
The Waiver Fee shall be fully earned and nonrefundable on the Effective Date.
One half of the Waiver Fee shall be paid in cash and in US Dollars by Xerium to
the Administrative Agent (for the benefit of the Consenting Banks) on such date.
The other half of the Waiver Fee (such portion, the “Deferred Portion”), plus
accrued interest thereon, shall be payable in cash and in US Dollars by Xerium
to the Administrative Agent (for the benefit of the Consenting Banks) on the
Xerium B Term Loan Maturity Date. The Deferred Portion shall accrue interest
from the Effective Date through the date of payment at the annual interest rate
equal to the applicable interest rate under the Credit Agreement with respect to
the Xerium B Term Loans during such period.

Section 5. Guarantor Assent. Each Guarantor assents to each and every term and
provision of this Waiver.

Section 6. Effect on the Credit Agreement and the Other Credit Documents. Except
to the extent expressly provided herein, this Waiver does not constitute, and
shall not be deemed to constitute a waiver of (i) any Agent’s or Bank’s remedies
under the Credit Documents or (ii) any Default or Event of Default. Except as
expressly provided in this Waiver, no action taken by any Bank or Agent prior
to, on or after the date hereof shall constitute a waiver or modification of any
term or condition of any of the Credit Documents or of any instruments or
agreements referred to therein, or prejudice any rights which any Agent or any
of the Banks may now have as of the date hereof or may have in the future under
or in connection with the Credit Documents or any of the instruments referred to
therein, including without limitation all rights and remedies in connection with
Defaults, Events of Default and failures of conditions precedent to the making
of Loans and the issuance of Letters of Credit that have occurred and are
continuing, all of which rights and remedies each Bank and each Agent hereby
expressly reserves.

Section 7. Representations and Warranties. Each Borrower and each Guarantor
represents and warrants to the Banks and the Agents that (i) as of the date
hereof, no Default or Event of Default exists other than the Financial Covenant
Defaults, (ii) all representations and warranties contained in the Credit
Agreement and the other Credit Documents (other than, to the extent of the
Financial Covenant Defaults only, any representation and warranty that no
Default or Event of Default exists) are true and correct in all material
respects on and as of the date hereof except to the extent such representations
and warranties specifically relate to an earlier date, in which case they were
true and correct in all material respects on and as of such earlier date,
(iii) the execution, delivery and performance by each Borrower and Guarantor of
this Waiver are within the powers of such Borrower and Guarantor, have been duly
authorized by all necessary action and do not contravene the respective
Organizational Documents of such Borrower and Guarantor, (iv) no authorization
or approval or other action by, and no notice to or filing with, any
Governmental Authority or other Person is required for the due execution,
delivery or performance by the Borrowers or the Guarantors of this Waiver,
(v) this Waiver

 

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constitutes the legal, valid and binding obligations of each Borrower and
Guarantor enforceable in accordance with its terms except as such enforceability
may be limited by applicable bankruptcy, insolvency or similar laws affecting
the enforcement of creditors’ rights generally and by general principles of
equity and (vi) except as heretofore disclosed in writing by Xerium to the
Banks, as of the date hereof, there is no pending or to the knowledge of the
Borrowers and the Guarantors, threatened action, suit, proceeding, governmental
investigation or arbitration against or affecting Xerium or any of its
Subsidiaries that could reasonably be expect to have a Material Adverse Effect.
Each Borrower and Guarantor acknowledges and agrees that each of the Credit
Documents shall continue in full force and effect and is hereby ratified and
confirmed, and that the Credit Parties’ Obligations thereunder shall be valid
and enforceable and shall not be impaired or limited by the execution or
effectiveness of this Waiver.

Section 8. Setoffs and Defenses. The Borrowers have no setoffs or defenses to
their respective obligations under the Credit Documents and no claims or
counterclaims against any of the Agents or the Banks.

Section 9. Releases by the Borrowers and the Guarantors. As an inducement to the
Administrative Agent and the Banks to enter into this Waiver, each Borrower and
Guarantor hereby releases and discharges the Banks and the Agents, and their
respective successors and assignees, and all officers, directors, employees,
agents, representatives, insurers and attorneys of each of them from all
actions, counterclaims, causes of actions, suits, debts, dues, sums of money,
accounts, reckonings, bonds, bills, specialties, covenants, contracts,
controversies, agreements, promises, variances, trespasses, damages, judgments,
executions, claims, and demands whatsoever, in law, admiralty or equity, against
the Banks, the Agents and/or their successors and assigns which such Borrower or
Guarantor ever had, now has or hereafter can, shall or may, have for, upon, or
by reason of any matter, cause or thing whatsoever arising out of or in
connection with the Credit Documents, from the time prior to the date of the
Credit Agreement to the date hereof.

Section 10. Headings. The various headings of this Waiver are inserted for
convenience only and shall not affect the meaning or interpretation of this
Waiver or any provisions hereof.

Section 11. Execution in Counterparts. This Waiver may be executed by the
parties hereto in several counterparts, each of which shall be deemed to be an
original and all of which shall constitute together but one and the same
agreement. Delivery of an executed counterpart of this Waiver by facsimile or by
“PDF” shall be equally effective as delivery of an original executed counterpart
of this Waiver. Xerium will use its commercially reasonable efforts to cause
Huyck Wangner Vietnam Co Ltd (“HWV”) to become a party to this Waiver as soon as
commercially practicable; however, notwithstanding anything to the contrary
contained in Sections 3 and 7 of this Waiver, the due authorization, execution
and delivery of this Waiver by HWV is not a condition precedent to the
effectiveness of the Waiver, and the representations and warranties contained in
Section 7 do not apply to HWV until it becomes a party hereto.

Section 12. No Waiver. No failure or delay on the part of the Agents or any Bank
in the exercise of any power, right or privilege hereunder or under any other
Credit Document shall impair such power, right or privilege or be construed to
be a waiver of any default or acquiescence therein, nor shall any single or
partial exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power. All rights and remedies existing under
this Waiver and the other Credit Documents are cumulative to, and not exclusive
of, any rights or remedies otherwise available.

Section 13. Successors and Assigns. This Waiver shall be binding upon and inure
to the benefit of the parties hereto and their respective successors and
assigns.

Section 14. Credit Document. This Waiver is a Credit Document executed pursuant
to the Credit Agreement and shall (unless otherwise expressly indicated therein)
be construed, administered and applied in accordance with the terms and
provisions of the Credit Agreement.

Section 15. GOVERNING LAW. THIS WAIVER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

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[Signature Pages Follow]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Waiver to be duly
executed as of the date first above written.

 

XERIUM TECHNOLOGIES, INC. By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: Chairman, CEO, and President XTI LLC By:  

/s/ David G. Maffucci

  Name: David Maffucci   Title: Executive Vice President XERIUM ITALIA S.P.A.
By:  

/s/ Peter Williamson

  Name: Peter Williamson   Title: Chairman XERIUM CANADA INC. By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: President and CEO HUYCK WANGNER AUSTRIA GMBH
By:  

/s/ Peter Williamson

  Name: Peter Williamson   Title: Managing Director XERIUM GERMANY HOLDING GMBH
By:  

/s/ David G. Maffucci

  Name: David Maffucci   Title: Managing Director HUYCK WANGNER GERMANY GMBH By:
 

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: Managing Director

 

[Signature Page to Waiver No. 1]

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HUYCK WANGNER AUSTRALIA PTY. LIMITED By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: CEO By:  

/s/ Tom Johnson

  Name: Tom Johnson   Title: Managing Director ROBEC WALZEN GMBH By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Managing Director WANGNER ITELPA
PARTICIPAÇÕES LTDA. By:  

/s/ Eduardo Fracasso

  Name: Eduardo Fracasso   Title: President

XERIUM TECHNOLOGIES DO BRASIL INDÚSTRIA E COMÉRCIO S.A.

By:  

/s/ Eduardo Fracasso

  Name: Eduardo Fracasso   Title: Director and President XERIUM DO BRASIL LTDA.
By:  

/s/ Eduardo Fracasso

  Name: Eduardo Fracasso   Title: Director XERIUM (FRANCE) SAS By:  

/s/ Peter Williamson

  Name: Peter Williamson   Title: President STOWE WOODWARD FRANCE SAS By:  

/s/ Peter Williamson

  Name: Peter Williamson   Title: President

 

[Signature Page to Waiver No. 1]

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STOWE WOODWARD AG By:  

/s/ Peter Williamson

  Name: Peter Williamson   Title: President HUYCK. WANGNER JAPAN LIMITED By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: Chairman STOWE WOODWARD MÉXICO, S.A. DE C.V.
By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: Chairman TIAG TRANSWORLD INTERWEAVING GMBH in
Liquidation By:  

/s/ Walter Schürch

  Name: Walter Schürch   Title: Managing Director HUYCK. WANGNER (UK) LIMITED
By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: CEO STOWE-WOODWARD (UK) LIMITED By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: CEO XERIUM TECHNOLOGIES LIMITED By:  

/s/ Stephen R. Light

  Name: Stephen R. Light   Title: Director

 

[Signature Page to Waiver No. 1]

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HUYCK LICENSCO INC. By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President and CFO STOWE WOODWARD LLC By:
 

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President and CFO STOWE WOODWARD
LICENSCO LLC By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President and CFO WEAVEXX LLC By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President XERIUM III (US) LIMITED By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President XERIUM IV (US) LIMITED By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President and CFO XERIUM V (US) LIMITED
By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President and CFO

 

[Signature Page to Waiver No. 1]

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WANGNER ITELPA I LLC By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Executive Vice President and CFO WANGNER
ITELPA II LLC By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Executive Vice President and CFO XERIUM ASIA
LLC By:  

/s/ David G. Maffucci

  Name: David G. Maffucci   Title: Vice President and CFO HUYCK WANGNER VIETNAM
CO LTD By:  

/s/ Michael Praetzel

  Name: Michael Praetzel   Title: General Director HUYCK WANGNER SCANDINAVIA AB
By:  

/s/ Peter Williamson

  Name: Peter Williamson   Title: Director STOWE WOODWARD SWEDEN AB By:  

/s/ Peter Williamson

  Name: Peter Williamson   Title: Chairman

 

[Signature Page to Waiver No. 1]

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CITICORP NORTH AMERICA, INC.

as Administrative Agent, Issuing Bank, Collateral Agent and a Bank

By:  

/s/ Nancy Rochford

  Name: NANCY ROCHFORD   Title: Managing Director

 

 

 

/s/ [Signed by the requisite interest of the debtholders]

 

 

 

 

[Signature Page to Waiver No. 1]

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Schedule I

List of Letters of Credit to be Extended

 

TRANCHE REF
NUMBER    FACILITY    BORROWER
NAME    LC ISSUING
BANK   

CONTRACT REF

NO.

   LC EXPIRY 
DATE    LC ISSUING 
BANK REF
NO.   

ORIGINAL

ISSUE

AMOUNT

031BTPR071030087    

  

XERIUM

TECH(01)

  

XERIUM

TECHNOLOGIES,    

INC.

   CITIBANK N.A        031LCFS091560004        10/31/2009    63651067   
EUR703,648.80                

031BTPR071030087

  

XERIUM

TECH(01)

  

XERIUM TECHNOLOGIES,

INC.

   CITIBANK, N.A.    031LCFS071980009    12/1/2009    61645971   
AUD4,000,000.00                

031BTPR071030087

  

XERIUM

TECH(01)

  

XERIUM TECHNOLOGIES,

INC.

   CITIBANK, N.A.    031LCFS071980010    12/29/2009    61646240   
CAD2,000,000.00                

031BTPR071030087

  

XERIUM

TECH(01)

  

XERIUM TECHNOLOGIES,

INC.

   CITIBANK, N.A.    031LCFS080560001    10/31/2009    61670611   
EUR5,000,000.00