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EXHIBIT 99.1
SECOND
AMENDED AND RESTATED LOAN AGREEMENT
This Second Amended and Restated Loan Agreement is made and entered
into as of the 13th day of November, 1997, by and between Bank One, Wisconsin
(the "Bank"), and Tufco, L.P., d/b/a Tufco Division Limited Partnership, in its
own right and as successor in interest of Tufco Industries, Inc., Executive
Converting Corporation and Hamco Industries, Inc. (the "Borrower"). The Bank and
the Borrower agree as follows.
The Bank and the Borrower entered into an Amended and Restated Loan
Agreement dated as of February 7, 1997. The Bank and the Borrower desire to
further amend the Amended and Restated Loan Agreement by the execution and
delivery of this Second Amended and Restated Loan Agreement.
The Bank and Tufco Industries, Inc., Executive Converting Corporation
and Hamco Industries, Inc. entered into an initial loan agreement dated as of
August 22, 1995, amended by amendments dated as of February 1, 1996; June 30,
1996; and December 1, 1996 (the "Initial Loan Agreement"). At the time of
execution and delivery of the Initial Loan Agreement, Tufco Industries, Inc.,
Executive Converting Corporation and Hamco Industries, Inc. were wholly owned
subsidiaries of Tufco Technologies, Inc. Tufco Technologies, Inc. has undertaken
a restructuring (the "Restruc ture") pursuant to which all of the assets and
liabilities of Tufco Industries, Inc., Executive Converting Corporation and
Hamco Industries, Inc. have been respectively transferred to and assumed by
Tufco, L.P., a Delaware limited partnership, d/b/a Tufco Division Limited
Partnership.
The Bank and the Borrower enter into this Second Amended and Restated
Loan Agreement so as to evidence their understanding with respect to the matters
herein contained between themselves and to further evidence the assumption by
the Borrower of all liabilities, duties and obligations of Tufco Industries,
Inc., Executive Converting Corporation and Hamco Industries, Inc. pursuant to
the Initial Loan Agreement and related documents, including but not limited to
the Security Documents.
1. DEFINITIONS. Unless the context otherwise specifies, the
following terms shall have the meaning herein specified, which meaning shall
apply to all documents within this contemplated transaction, and such
definitions to be applicable equally to the singular and plural form of such
terms:
1.1 BANK. Bank One, Wisconsin, a Wisconsin state banking
organization, with an office located at 200 South Adams Street, Green Bay,
Wisconsin 54301.
1.2 BORROWER. Tufco, L.P., a Delaware limited partnership,
d/b/a Tufco Division Limited Partnership, with its principal office located at
4750 Simonton, Dallas, Texas 75244.
1.3 CASH FLOW. The amounts described in Section 4.14 of this
Agreement.
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1.4 COMMITMENT FEE. A fee equal to 0.25%, per annum, of the
unused amount of the revolving loan identified in Section 2.2 of this Agreement,
determined on a daily basis and payable quarterly in arrears.
1.5 CONTINGENCY FEE. A fee equal to the sum of $10,000.00
payable upon maturity of the term loan represented by the Promissory Note,
Exhibit A-4, in the event the Borrower declines to accept the Bank's proposal to
provide the Borrower with long term financing under reasonable terms of the
principal balance of the term loan represented by the Promissory Note, Exhibit
A-4. It is agreed by the Borrower and the Bank that the term loan represented by
the Promissory Note, Exhibit A-4, is a short term bridge loan to provide
financing necessary for Tufco Technologies, Inc. to purchase all of the
outstanding capital stock of Foremost Manufacturing Company, Inc.
1.6 ERISA. The term ERISA means the Employee Retirement
Income Security Act of 1974, as amended.
1.7 EVENT OF DEFAULT. The events defined in Section 7.1 of
this Agreement.
1.8 FACILITY FEE. A fee equal to 0.50% of the amount of
Facility Two paid upon advance of the Facility Two loan proceeds under the
Initial Loan Agreement.
1.9 GUARANTOR. Individually, Tufco Technologies, Inc., Tufco
Tech, Inc., Tufco, Inc., Technologies I, Inc., TFCO, Inc. and Foremost
Manufacturing Company, Inc.
1.10 GUARANTORS. Collectively, Tufco Technologies, Inc.,
Tufco Tech, Inc., Tufco, Inc., Technologies I, Inc., TFCO, Inc. and Foremost
Manufacturing Company, Inc.
1.11 LETTER(S) OF CREDIT FEE. An issuance fee equal to 0.375%
of the amount of any letter of credit payable upon issuance of any letter of
credit except for any letter of credit related to industrial revenue bond
transactions. A negotiation fee equal to 0.25% of any letter of credit amount
negotiated payable upon negotiation of any letter of credit except for any
letter of credit related to industrial revenue bond transactions. Other related
letter of credit expenses incurred by Bank includ ing, but not limited to,
amendment and cable fees, payable upon receipt of billing from Bank.
1.12 LOAN AGREEMENT. This Second Amended and Restated Loan
Agreement and any other documents or materials delivered and/or executed
pursuant thereto or pursuant to the Initial Loan Agreement, which Loan Agreement
is sometimes referred to as this Agreement.
1.13 PERMITTED LIENS. The mortgages, liens, conditional sales
agreements, encumbrances or charges set forth on Exhibit "B" attached hereto and
incorporated herein by this reference.
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1.14 PLAN. Any pension benefit plan subject to Title IV of
ERISA maintained by the Borrower or any such Plan to which the Borrower is
required to contribute on behalf of its employees.
1.15 PREPAYMENT PREMIUM. A prepayment premium payable in
connection with any unscheduled payment of principal made by the Borrower with
respect to a Promissory Note, Exhibits "A-2" and "A-3", prior to the respective
scheduled maturity date during any period while a Promissory Note, Exhibits
"A-2" and "A-3", shall bear interest at a fixed rate. Such prepayment premium
shall be equivalent to the amount, if any, by which (a) the present value of a
flow of interest on the unscheduled principal amount prepaid from the prepayment
date to the scheduled maturity date of said note at the fixed rate then in
effect exceeds (b) the present value of a flow of interest on the unscheduled
principal amount prepaid from the prepayment date to the scheduled maturity date
of the respective Promissory Note, Exhibits "A-2" and "A-3", at the effective
monthly equivalent of the average yield of United States Government Treasury
Securities, on the date of such unscheduled prepayment, having maturities within
forty-five (45) days of the scheduled maturity date of the respective Promissory
Note, Exhibits "A-2" and "A-3", as determined by the Bank. The Prepayment
Premium shall be payable upon receipt of billing from Bank.
1.16 PROMISSORY NOTES. Promissory Notes refer to the
Promissory Notes payable to the Bank in the form as that attached hereto as
Exhibits "A-1" through "A-4," inclusive, and incorporated hereby by this
reference.
The definition of the term "Promissory Notes" shall also
include any Promissory Notes or agreements executed and delivered by the
Borrower to the Bank with respect to additional credit extended by the Bank to
the Borrower pursuant to Section 8.12 of the Loan Agreement.
1.17 REFERENCE RATE. The rate announced and/or published by
Bank One, Wisconsin, as its reference rate adjusted daily and computed on the
basis of a three hundred sixty (360) day year.
1.18 REFERENCE RATE LOANS. Reference Rate Loans are loans made
where the applicable rate of interest is the Reference Rate.
1.19 SECURITY DOCUMENTS.
(a) The Security Documents executed and delivered to
the Bank by Tufco Industries, Inc., Executive Converting Corporation
and Hamco Industries, Inc., pursuant to the Initial Loan Agreement. It
is agreed the Promissory Notes are secured by all Security Documents
executed by Tufco Industries, Inc., Executive Converting Corporation
and Hamco Industries, Inc. and further that the Borrower assumes all
liabilities, duties and obligations of Tufco Industries, Inc.,
Executive Converting Corporation and Hamco Industries, Inc. arising
thereby.
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(b) The Amended and Restated Mortgage and Amended and
Restated Deed of Trust substantially in the form as that attached
hereto as Exhibit "C" and incorporated herein by this reference.
(c) General Business Security Agreements,
substantially in the form as that attached hereto as Exhibit "D" and
incorporated herein by this reference granting Bank a first priority
security interest and related financing statements perfecting the
security interests granted in the General Business Security Agreements
and fixtures disclaimers as the Bank may require.
(d) The Unlimited Continuing Guaranty of the
Guarantors substantially in the form as that attached hereto as Exhibit
"E" and incorporated herein by this reference.
(e) Lease assignments and other documents securing or
providing security for the Promissory Notes which the Bank may require.
1.20 DEFINITIONS APPLICABLE TO LIBOR RATE LOANS.
(a) BORROWING DATE means each date on which a loan is
made by the Bank to the Borrower.
(b) BUSINESS DAY means (i) with respect to the making,
payment or rate determination of a Libor Rate Loan, a day (other than a Saturday
or Sunday) on which banks are open for business in Milwaukee, Wisconsin and on
which dealings in Dollars are carried on in the London Interbank market and (ii)
for all other purposes, a day (other than Saturday or Sunday) on which banks are
open for business in Milwaukee, Wisconsin.
(c) LIBOR RATE shall mean the published national
consensus Libor Rate reported by the Bank with respect to a Libor Rate Loan for
the applicable Loan Period in an amount approximately equal to the requested
Libor Rate Loan established two Business Days prior to the first day of such
Loan Period. The Libor Rate determined by the Bank shall, in the absence of
error, be conclusive.
(d) LIBOR RATE LOAN means a loan hereunder bearing
interest at or by reference to the Libor Rate.
(e) LOAN PERIOD means:
( i) with respect to (a) each Libor Rate Loan with
respect to Facility One, the period commencing on the applicable Borrowing Date
and ending 15 to 90 days thereafter as specified in the related notice of
borrowing pursuant to section 2.2; (b) each Reference Rate Loan
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converted to a Libor Rate Loan or in the case of a continuation of a Libor Rate
Loan for an additional Loan Period, the period commencing on the date of such
conversion or continuation and ending 15 to 90 days thereafter as specified in
the related Conversion/Continuation Notice pursuant to section 2.2; and (c) with
respect to the Libor Rate Loan Facility Four, the period commencing on the
applicable Borrowing Date and ending 30 days but not longer than March 31, 1998
thereafter, provided that:
(a) any Loan Period which would otherwise
end on a day which is not a Business Day shall be extended to the next
succeeding Business Day unless such Business Day falls in another calendar
month, in which case such Loan Period shall end on the next preceding Business
Day;
(b) any Loan Period which begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in a calendar month at the end of such Loan Period) shall,
subject to clause (c) below, end on the last Business Day of a calendar month;
and
(c) any Loan Period which would otherwise
end after the maturity date shall end on the maturity date.
(ii) with respect to each Reference Rate Loan, the
period commencing on the Borrowing Date of such Reference Rate Loan, or in the
case of a Libor Rate Loan converted to a Reference Rate Loan, the period
commencing on the date of such conversion, and ending on the maturity date.
2. LOANS, COLLATERAL-LOAN RATIO AND SECURITY DOCUMENTS.
2.1 MAKING THE LOANS. The Bank agrees to make the
following-described loans to the Borrower upon the terms and conditions and
disbursement procedures set forth in this Agreement, and the Borrower agrees to
execute the Promissory Notes which shall evidence the Borrower's obligation to
repay all of the disbursements made thereunder and under this Agreement.
2.2 FACILITY ONE. The Bank shall extend to the Borrower a
revolving loan, up to an aggregate maximum amount of $6,750,000.00 at any time
outstanding during the period from date hereof to March 31, 1999. The sum of
$750,000.00 shall be allocated to issuance of commercial import letters of
credit. Within such maximum amounts and subject to the allocated limitations,
loans (advances) may be made, repaid and made again. The revolving loan shall be
evidenced by the Borrower's Promissory Note in the form of Exhibit "A-1," the
terms of which are incorporated herein by reference. The revolving note shall
mature on March 31, 1999. The loan proceeds with respect to Facility One shall
be utilized for working capital needs and the issuance of commercial import
letters of credit.
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Facility One loans shall be a Reference Rate Loan or a Libor
Rate Loan. Unless the Borrower requests a Libor Rate Loan pursuant to the
procedures herein stated, all Facility One loans shall be Reference Rate Loans.
The Borrower shall request Libor Rate Loans by written notice, or by telephonic
notice confirmed in writing, to the Bank, not later than 11:00 a.m., Milwaukee
time, on the date which is two Business Days prior to the requested Borrowing
Date (which must be a Business Day). Each such request by the Borrower must
specify the amount of the requested Libor Rate Loan and the applicable Loan
Period. Each Libor Rate Loan shall be in a minimum amount of $500,000.00. In the
event of any inconsistency between the telephonic notice and the written
confirmation thereof, the written confirmation shall control. Each such request
for a Libor Rate Loan shall be irrevocable.
The Borrower may elect from time to time, subject to the terms
and conditions hereof, to convert all or a portion of the outstanding Reference
Rate Loans to Libor Rate Loans (in each case, in a minimum amount of
$500,000.00) or to convert all or a portion of a Libor Rate Loan to a Reference
Rate Loan; provided that any conversion of a Libor Rate Loan shall occur on the
last day of the applicable Loan Period.
A Reference Rate Loan shall continue as a Reference Rate Loan
unless and until converted to a Libor Rate Loan. At the end of the applicable
Loan Period for a Libor Rate Loan, such Libor Rate Loan shall automatically be
converted to a Reference Rate Loan unless the Borrower shall have given the Bank
notice in accordance with this section 2.2 requesting that, at the end of such
Loan Period all or a portion of such Libor Rate Loan be continued as a Libor
Rate Loan.
The Borrower shall give the Bank irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of a Reference Rate Loan or
a continuation of a Libor Rate Loan not later than 11:00 a.m., Milwaukee time,
on the date of the requested conversion, in the case of a conversion to a
Reference Rate Loan, or, in the case of a conversion to or a continuation of a
Libor Rate Loan, two Business Days prior to the date of the requested conversion
or continuation, specifying (i) the requested date (which shall be a Business
Day) of such conversion or continuation, (ii) the amount and type of loan to be
converted or continued and (iii) the amount and type of loan into which such
loan is to be converted or continued, and in the case of a conversion to or
continuation of a Libor Rate Loan, the duration of the Loan Period applicable
thereto. Each such request by the Borrower for a conversion or continuation of a
Libor Rate Loan or Reference Rate Loan shall be irrevocable.
Notwithstanding anything to the contrary contained in this
section, no loan may be converted into or continued as a Libor Rate Loan when
any Event of Default has occurred and is continuing.
Libor Rate Loans may not be pre-paid without the Bank's
consent prior to the end of the applicable Loan Period.
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If the Bank determines that the making or maintaining of a
Libor Rate Loan would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, then the obligation of the Bank to make,
continue, maintain or convert any Libor Rate Loan shall be suspended until the
Bank notifies the Borrower that the circumstances causing such suspension no
longer exist. During any such period, all Libor Rate Loans shall automatically
convert into Reference Rate Loans at the end of the applicable Loan Period or
sooner if required by law.
If the Bank determines that the Bank is unable to determine
the Libor Rate in respect of a requested Loan Period or that the Bank is unable
to obtain deposits of Dollars in the London Interbank market in the applicable
amounts and for the requested Loan Period, then, upon notice from the Bank to
the Borrowers, the obligation of the Bank to make any Libor Rate Loan, or to
convert any Reference Rate Loan into a Libor Rate Loan, shall be suspended until
the Bank notifies the Borrower that the circumstances causing such suspension no
longer exist.
If the Bank shall incur any loss or expense (including any
loss or expense incurred by reason of a liquidation or redeployment of deposits
or other funds acquired by the Bank to make, continue or maintain any portion of
a Libor Rate Loan, or to convert any portion of a Reference Rate Loan into a
Libor Rate Loan) as a result of: (i) any conversion or repayment or prepayment
of the principal amount of a Libor Rate Loan on a date other than the last day
of the Loan Period applicable thereto (whether as a result of acceleration,
prepayment or otherwise); (ii) any loan not being made as a Libor Rate Loan in
accordance with the request therefor; or (iii) any loan not being continued as,
or converted to, a Libor Rate Loan in accordance with the
Continuation/Conversion Notice therefor; then, upon written notice from the Bank
to the Borrower, the Borrower shall, within 10 days of its receipt thereof, pay
to the Bank such amount as will (in a reasonable determination of the Bank)
reimburse the Bank for such loss or expense. Such written notice (which shall
include calcu lations in reasonable detail) shall, in the absence of error, be
conclusive and binding on the Borrower.
During such times as the Borrower achieves and maintains a
National Association of Insurance Commissioners ("NAIC") II, senior, unsecured,
long term debt rating or an equivalent investment grade senior, unsecured, long
term debt rating from other rating agencies; and is in full compliance with all
of the terms and conditions of this Loan Agreement, the Reference Rate pricing
option shall be reduced to Reference Rate less 0.50% and the Libor pricing
option shall be reduced to Libor plus 1.25%.
2.3 FACILITY TWO. Pursuant to the Initial Loan Agreement, the
Bank had extended to Tufco Industries, Inc., Executive Converting Corporation
and Hamco Industries, Inc., certain credit in the form of a term note having a
current outstanding principal balance in the amount of $5,550,000.04. The
Borrower shall execute and deliver to the Bank a replacement note represented by
the Promissory Note annexed hereto in the form of Exhibit "A-2", the terms of
which are incorporated herein by reference.
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2.4 FACILITY THREE. Pursuant to the Initial Loan Agreement,
the Bank had extended to Tufco Industries, Inc., Executive Converting
Corporation and Hamco Industries, Inc., certain credit in the form of a term
note having a current outstanding principal balance in the amount of
$1,383,356.00. The Borrower shall execute and deliver to the Bank a replacement
note represented by the Promissory Note annexed hereto in the form of Exhibit
"A-3", the terms of which are incorporated herein by reference.
2.5 FACILITY FOUR. The Bank shall extend to the Borrower a
term loan in the principal sum of $5,250,000.00 for the purpose of allowing
Tufco Technologies, Inc. to purchase all of the outstanding capital stock of
Foremost Manufacturing Company, Inc. The Borrower shall execute and deliver to
the Bank a Promissory Note in the form annexed hereto as Exhibit "A-4", the
terms of which are incorporated herein by reference.
2.6 SECURITY DOCUMENTS. The Borrower agrees to deliver to the
Bank the Security Documents duly executed to secure the payment of the
Promissory Notes and any other indebtedness owing under this Agreement.
3. REPRESENTATIONS AND WARRANTIES. The Borrower and the
Guarantors, where appropriate, represent and warrant as follows, which
representations and warranties shall survive the closing and the consummation of
the transactions contemplated hereby and continue in full force and effect for
so long as there shall be any indebtedness owing under this Agreement.
3.1 DUE ORGANIZATION. The Borrower and the Guarantors are
organizations existing under all applicable laws and resolutions and have full
power and authority to carry on their respec tive businesses as now conducted
and as proposed to be conducted.
3.2 AUTHORITY. The execution and delivery of this Agreement,
the Security Documents, Promissory Notes and any other documents or materials to
be delivered pursuant to this Agreement are within the respective power of the
Borrower and the Guarantors and do not violate any provision of law or result in
a breach of, or constitute a default under or result in the creation of any
lien, charge or encumbrance upon any property or assets of the Borrower or the
Guarantors pursuant to any indenture or loan or credit agreement or other
agreement or instruments to which the Borrower or the Guarantors are a party or
by which the Borrower or the Guarantors or their property may be bound or
affected and do not require the approval or consent of any governmental body,
agency or authority or any other person or entity.
3.3 ENFORCEABILITY. This Agreement, the Security Documents and
other documents or materials to be delivered pursuant to this Agreement are the
legal, valid and binding obligations of the Borrower and the Guarantors,
respectively, enforceable against the said persons in accordance with their
respective terms. The Promissory Notes, when duly executed and delivered, will
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constitute the legal, valid and binding obligation of the Borrower enforceable
in accordance with their terms.
3.4 LITIGATION. Except as disclosed to the Bank in writing,
there are no actions, suits or proceedings pending or, to the best knowledge of
the Borrower or the Guarantors, threatened against or affecting the Borrower or
the Guarantors or the properties of the Borrower or the Guarantors before any
court or governmental department, commission, board, bureau, agency or
instrumentality, which, if determined adversely to the Borrower or the
Guarantors, would have a material adverse effect on the financial condition,
properties or operations of the Borrower or the Guarantors or on the ability of
the Borrower or the Guarantors to perform this Agreement.
3.5 CERTIFICATES AND STATEMENTS. No certificate or statement
at the time delivered, herewith or heretofore, by the Borrower or the Guarantors
to the Bank in connection herewith, or in connection with any transaction
contemplated hereby, contains or contained any untrue statement of a material
fact or fails or failed to state any material fact necessary to keep the
statements contained therein from being misleading.
3.6 FINANCIAL DATA. The financial data relating to the
Borrower and the Guarantors, together with all financial statements, comments,
footnotes, notes, and schedules furnished by the Borrower and/or the Guarantors
to Bank fairly reflect the financial condition of the indicated entity and the
results of its operations as of the dates and for the periods stated therein.
All financial statements were prepared in conformity with generally accepted
accounting practices applied on a basis consistent with that of previous
statements. No material adverse change has since occurred with respect to the
financial data provided to the Bank.
3.7 INVESTMENTS IN AND GUARANTIES OF OTHERS. The Borrower and
the Guarantors have made no investments in, or advances to or guaranties of the
obligations of any individual, corporation or other entity, except those
disclosed in the financial data referred to above, the acquisition by Tufco
Technologies, Inc. of all of the outstanding capital stock of Foremost
Manufacturing Company, Inc. or as set forth herein.
3.8 INDEBTEDNESS AND LIABILITIES. The Borrower and the
Guarantors have no indebtedness or liabilities of any kind whether accrued,
absolute, contingent or otherwise, except those disclosed in the financial data
described in Section 3.6 above, or those permitted elsewhere in this Agreement
including, but not limited to, those described in Section 3.4. There exists no
default nor has any act or omission occurred which, with the giving of notice or
the passage of time, would constitute a default under the provisions of any
instrument evidencing such indebtedness or liability or any agreement relating
thereto or any other agreement or instrument to which the Borrower or a
Guarantor is a party.
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3.9 TAX RETURNS. To the best of their knowledge, the Borrower
and the Guarantors have filed all required federal, state, and local tax returns
and have paid all taxes as shown on such returns as they have become due. There
are no claims for unpaid taxes, penalties or interest, state, federal, or local,
which have been asserted by any taxing authority upon audit, except as has been
heretofore disclosed, in writing, to Bank.
3.10 TITLE TO PROPERTIES. The Borrower and the Guarantors have
good and marketable title to all of their respective property, real, personal
and mixed, subject to no lien, security interest, mortgage, encumbrance or
charge of any kind or any agreement not to grant a security interest, mortgage
or lien, except those permitted elsewhere in this Agreement. All owned and
leased buildings and equipment of the Borrower and the Guarantors are in good
condition, repair and working order and to the best of Borrower's and
Guarantors' knowledge and belief, conform to all applicable laws, ordinances and
regulations.
3.11 REGULATION U. Neither the Borrower nor the Guarantors
will use, directly or indirectly, any part of the proceeds of the Promissory
Notes for the purpose of purchasing or carrying any margin stock within the
meaning of Regulation U of the Board of Governors of the Federal Reserve System,
or any amendments thereto.
3.12 ERISA LIABILITY. The Borrower and the Guarantors have no
knowledge of the occurrence of any event with respect to any Plan, which could
result in a liability of the Borrower to the Pension Benefit Guaranty
Corporation, other than the payment of premiums (but not a late payment charge)
pursuant to Section 4007 of ERISA.
3.13 ENVIRONMENTAL REGULATIONS. The Borrower and the
Guarantors have not violated, are not violating, and have not been threatened
with or received a notice or charge asserting any violation of the Federal Solid
Waste Disposal Act, the Federal Clean Air Act, the Federal Clean Water Act, the
Federal Resource Conservancy Recovery Act of 1976 (RCRA), the Federal
Comprehensive Environmental Responsibility, Cleanup and Liability Act of 1980
(CERCLA), the Toxic Substance Control Act of 1976 or any other federal, state,
local or foreign laws, environmental rules and regulations thereunder,
regulating or otherwise affecting the environment as the same may have been
amended prior to the date hereof.
3.14 HAZARDOUS SUBSTANCES AND MATERIALS. There are no
substances or materials which have been, are or will be stored, deposited,
treated, recycled or disposed of on, under or at the Borrower's or a Guarantor's
business locations, which substances or materials, if known to be present on, at
or under such property, would require cleanup, removal or some other remedial
action under any federal, state or local laws, regulations, ordinances, codes or
rules relating to the discharge of air pollutants, water pollutants or processed
waste water or otherwise relating to hazardous or toxic substances or materials,
other than chemicals used in the operation of the Borrower's or a Guarantor's
business in the ordinary course. There are no conditions existing currently or
likely to exist during
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the term of this Agreement which would subject the Borrower or a Guarantor to
damages, penalties, injunctive relief or cleanup costs under such environmental
laws, and the Borrower and the Guarantors are not subject to any judgment,
decree, order or citation relating to or arising out of such environmental laws.
The Borrower and the Guarantors shall not cause or permit any
hazardous or toxic substances or materials to be used, stored, generated or
disposed of on or in the Borrower's or a Guarantor's business locations at any
time owned, occupied or operated by the Borrower, a Guarantor or any tenants,
tenants' agents, employees, contractors or invitees, other than chemicals used
in the operation of the Borrower's or a Guarantor's business in the ordinary
course.
4. AFFIRMATIVE COVENANTS. From and after the date of this
Agreement and so long as the Loan shall remain available for advance to the
Borrower hereunder and until payment in full of all indebtedness evidenced by
the Promissory Notes and/or owing under the terms and conditions of this
Agreement, the Borrower and the Guarantors, where appropriate, agree that they
will:
4.1 INCORPORATION OF DOCUMENTS. The Borrower and the
Guarantors will fully comply in every respect with the respective covenants
contained in the documents executed and/or delivered pursuant to this Agreement
and/or any other document or materials incorporated herein by reference.
4.2 NOTICE OF EVENT OF DEFAULT. The Borrower and the
Guarantors shall furnish to the Bank as soon as possible and, in any event,
within seven (7) days after the Borrower or a Guarantor have obtained knowledge
of the occurrence of each Event of Default or each event which, with the giving
of notice or lapse of time or both, would constitute an Event of Default, which
is continuing on the date of such statement, a statement of an authorized
representative of the Borrower and/or a Guarantor setting forth details of such
Event of Default or event and the action which the Borrower and/or the Guarantor
propose to take with respect to same.
4.3 INSURANCE. The Borrower and the Guarantors, respectively,
shall maintain, at all times and from time to time, at the request of the Bank,
furnish the Bank with proof of the payment of the premiums thereon and
certificates of insurance therefor:
(a) Maintain all-risk coverage insurance for the full
insurable replacement value of all real estate improvements and
tangible personal property upon which the Bank has a lien interest in
form and content acceptable to the Bank.
(b) Business interruption coverage in such form and
amounts as reasonably required by the Bank.
(c) Public liability insurance and fire and extended
coverage insurance on
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all property on which the Bank is given a lien interest, all in such
form and amounts as are reasonably required by the Bank.
(d) The policies of insurance required pursuant to
this section shall be placed with financially sound and reputable
insurers approved by the Bank. The policies of insurance delivered
pursuant to this section shall be satisfactory in form and content to
the Bank and shall contain an agreement of the insurer to give not less
than thirty (30) days' advance written notice to the Bank in the event
of cancellation of such policy or changes affecting the coverage
thereunder. All policies shall contain a loss payable clause naming the
Bank as loss payee or mortgage payee, as the case may be. The Borrower
and the Guarantors will furnish to the Bank such evidence of insurance
as the Bank may require. The Borrower and the Guarantors hereby agree
that, in the event they fail to pay or cause to be paid the premium on
any insurance, the Bank may do so and be reimbursed by the Borrower
therefor.
4.4 TAXES AND ASSESSMENTS. The Borrower and the Guarantors
shall pay all taxes and assessments levied or assessed against the Borrower's or
a Guarantor's assets prior to the date on which a penalty is attached thereto
unless the same is being contested in good faith by appropriate proceedings and
reserves deemed adequate by Bank have been established therefor; provided,
however, that the Borrower or a Guarantor may pay assessments in installments so
long as no fine or penalty is added to any installment for the nonpayment
thereof.
4.5 BOOKS AND RECORDS. The Borrower and the Guarantors shall
keep proper books, records and accounting data in which full, true and correct
entries will be made of all of their respec tive dealings, business and affairs
in accordance with generally accepted accounting principles and all applicable
laws and regulations and permit the Bank, acting by or through its officers or
agents, to examine and obtain copies of books, records and accounting data of
the Borrower and the Guarantors and to make extracts therefrom and copies
thereof.
4.6 COMPLIANCE WITH LAWS. The Borrower and the Guarantors
shall comply with the requirements of all applicable laws, rules, regulations
and orders of any governmental authority, noncompliance with which would have an
adverse effect on the Borrower's or the Guarantors' business, assets or
property, operations or their ability to perform their obligations under this
Agreement.
4.7 MAINTENANCE OF ASSETS AND PROPERTY. The Borrower and the
Guarantors shall keep all of their respective assets and property, whether owned
or leased, in good working order and condition, ordinary wear and tear excepted.
4.8 MERGER AND DISPOSAL OF ASSETS. The Borrower and the
Guarantors shall not directly or indirectly merge, consolidate or reorganize
with or into any other corporation or entity;
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13
the Borrower and the Guarantors shall not sell, lease, transfer or otherwise
dispose of all or a substantial part of their respective assets, other than
sales made in the ordinary course of business.
4.9 PERMITS AND LICENSES. The Borrower and the Guarantors
shall maintain their existence, all permits, licenses, privileges, certificates
and the like necessary for the operation of their respective businesses.
4.10 FINANCIAL STATEMENTS. Tufco Technologies, Inc. shall
deliver to the Bank promptly, and in any event within thirty (30) days, after
the close of each quarterly period of each fiscal year (except the last such
period in each such fiscal year), financial report(s) consisting of Tufco
Technologies, Inc.'s balance sheet as of the end of such period, profit and loss
statement, and reconciliations of surplus from the beginning of such fiscal year
to the end of such period, which financial reports shall be prepared in such
form and detail as the Bank may request and shall be in conformity with
generally accepted accounting principles and other applicable laws and
regulations applied on a basis consistent with that of the preceding fiscal year
and shall be certified to be true and correct by Tufco Technologies, Inc.'s
Chief Financial Officer.
Tufco Technologies, Inc. shall deliver to the Bank promptly,
and in any event within 30 days, after the close of each quarter of each fiscal
year, a certificate signed by Tufco Technologies, Inc.'s Chief Financial Officer
and containing a statement as to whether or not, to the knowledge of such
officer, a Default (as hereinafter defined) has occurred and is continuing (or
any event which might become a Default after the lapse of time or the giving of
notice, or both), and if the certificate shows that a Default has occurred and
is continuing, it shall also specify what steps are being taken by Borrower
and/or the Guarantors to cure the same. The statement shall also provide
evidence that the Borrower and the Guarantors are in compliance with all
financial covenants contained in this Agreement.
Tufco Technologies, Inc. shall deliver to the Bank promptly,
and in any event within 45 days, after the close of each quarter of each fiscal
year of the Guarantor a Securities Exchange Commission 10Q report prepared in
accordance with generally accepted accounting principles consistently applied.
Within Ninety (90) days after the close of each fiscal year of
Tufco Technologies, Inc., deliver to the Bank copies of detailed audit reports,
Securities Exchange Commission 10K report, and management letters prepared on a
consolidated basis by independent accountants in connection with the annual
audit of the books of the Borrower and the Guarantors and a con solidating
financial statement all prepared in conformity with generally accepted
accounting principles consistently applied and other applicable laws and
regulations. Each such annual state ment shall be accompanied by a written
statement from the accountant who prepared the same, certifying that he has
obtained no knowledge of any Default by the Borrower and/or the Guarantors in
the fulfillment of any of the terms, covenants or provisions of this Agreement,
or if such accountant shall have obtained knowledge of any such Default, he
shall disclose in such statement
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the Default or Defaults and the nature thereof, but such accountant shall not be
liable, directly or indirectly, for any failure to obtain knowledge of any
Default.
4.11 LITIGATION OR CLAIMS AFFECTING OPERATIONS. The Borrower
and the Guarantors shall promptly inform the Bank of any litigation, or of any
claim or controversy which might become the subject of litigation against the
Borrower or the Guarantors or affecting any of the Borrower's or the Guarantors'
property, if such litigation, claim or potential litigation might, in the event
of an unfavorable outcome, have material adverse effect upon the Borrower's
and/or the Guarantors' financial condition or might cause a default.
4.12 VISITATION AND INSPECTION. The Borrower and the
Guarantors shall permit its representatives of the Bank to visit and inspect any
of its respective locations and examine any of its books and records at any
reasonable time and as often as may be reasonably desired.
4.13 PAYMENT OF CLAIMS. The Borrower and the Guarantors shall
promptly pay all lawful claims, whether for labor, materials or otherwise, which
might or could, if unpaid, become a lien or charge on any property or assets of
the Borrower or a Guarantor unless and to the extent only that the same are
being contested in good faith by appropriate proceedings and reserves deemed
adequate by the Bank have been established therefor.
4.14 MINIMUM CASH FLOW REQUIREMENT. Tufco Technologies, Inc.
shall maintain a minimum Cash Flow on a consolidated aggregate fiscal quarterly
end basis as follows:
Minimum Aggregate
Fiscal Quarter Cash Flow
-------------- -----------------
December 31, 1997 1,385,000.00
Prior to March 31, 1998, the Bank and the Borrower agree to in
good faith negotiate minimum cash flow requirements to be maintained by Tufco
Technologies, Inc. subsequent to December 31, 1997.
Cash Flow is defined as the sum of net profit stating
inventory at the lower of cost (FIFO) or market, depreciation, amortization,
deferred income tax expense less a deferred income tax credit.
5. NEGATIVE COVENANTS. So long as the Loans shall remain
available to the Borrower and until payment in full of all indebtedness
evidenced by the Promissory Notes and/or owing under the terms and conditions of
this Agreement, the Borrower and the Guarantors, where appropriate, agree that,
without the prior written consent of the Bank, they will not:
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15
5.1 ENCUMBRANCES OR LIENS. Create or permit to be created or
allow to exist any encumbrance or other lien upon the assets of the Borrower or
the Guarantors described in the Secu rity Documents except the Permitted Liens
and other liens for taxes, assessments or governmental charges not delinquent or
being contested in good faith with adequate reserves made therefor.
5.2 STATUS OF BORROWER OR GUARANTORS. Make any substantial
change in the present management of or the conduct of the business of the
Borrower or the Guarantors except that required with respect to the acquisition
of Foremost Manufacturing Company, Inc.
5.3 OTHER ACTIONS. The Borrower and the Guarantors shall not
take any action or permit any event to occur which materially impairs the
Borrower's ability to make payments when due under this Agreement.
5.4 ORGANIZATIONAL DOCUMENTS. The organizational documents of
the Borrower and the Guarantors shall not be amended or modified without the
prior written consent of the Bank except that required with respect to the
acquisition of Foremost Manufacturing Company, Inc.
5.5 OBLIGATIONS OF OTHERS. The Borrower and the Guarantors
will not become liable, directly or indirectly, as guarantor or otherwise for
any obligation of any other person.
5.6 PURCHASE OF SECURITIES. The Borrower and the Guarantors
shall not own, purchase or acquire, directly or indirectly, any stock or
securities of any person, firm or corporation, including its own securities,
other than: (a) securities guaranteed as to principal and interest by the United
States government; (b) bank repurchase agreements; (c) savings accounts or
certificates of deposit in a financial institution of recognized standing; (d)
obligations issued by the United States; (e) prime commercial paper maturing
within 90 days of the date of acquisition; (f) the acquisition of treasury stock
by Tufco Technologies, Inc. to the extent allowed in Section 5.10 of this
Agreement; (g) securities presently owned by a Guarantor in the Borrower or in
another Guarantor; and (h) the acquisition by Tufco Technologies, Inc. of all of
the outstanding capital stock of Foremost Manufacturing Company, Inc.
5.7 LOANS OR ADVANCES. The Borrower and the Guarantors shall
not make any loans or advances or sell any of their accounts receivable with or
without recourse, except extensions of credit to customers in the ordinary care
of business, loans to Borrower's employees for the purpose of purchasing stock
in Tufco Technologies, Inc. in an aggregate maximum amount of $500,000.00 at any
one time outstanding and a loan by the Borrower to Tufco Technologies, Inc. in
the sum of $5,250,000.00 for the purpose of financing the purchase of all of the
capital stock of Foremost Manufacturing Company, Inc.
5.8 CAPITAL EXPENDITURES. The Borrower and the Guarantors
shall not make or commit to make, directly or indirectly, any expenditure for
the purchase or other acquisition,
-15-
16
including but not limited to capitalized leases, of fixed or capital assets,
excluding normal replacements and maintenance which are properly charged to
current operations; and leases with Banc One Corporation or its subsidiaries or
affiliates; if after giving effect thereto, the aggregate amount of all such
capital expenditures by the Borrower and the Guarantors would exceed the sum of
$3,500,000.00 during Borrower's fiscal year 1998.
5.9 INDEBTEDNESS. The Borrower and the Guarantors will not
incur, create, assume or permit to exist any indebtedness except: (a) the
obligations arising hereunder; (b) trade indebtedness incurred in the ordinary
course of business; (c) indebtedness secured by the Permitted Liens; (d) other
indebtedness with the permission of the Bank; (e) obligations incurred with Banc
One Corporation or its subsidiaries or affiliates; and (f) the $5,250,000.00
loan by the Borrower to Tufco Technologies, Inc. described in Section 5.7 above.
5.10 PURCHASE OR REDEMPTION OF STOCK AND/OR PAYMENT OF
DIVIDENDS. The Borrower and the Guarantors shall not: (a) purchase or redeem
capital stock except for the acquisition of treasury stock by Tufco
Technologies, Inc. in an aggregate maximum amount of $250,000.00 during any
fiscal year of Tufco Technologies, Inc.; or (b) declare and/or pay any dividends
except dividends to Tufco Technologies, Inc. to the extent required to allow
Tufco Technologies, Inc. to acquire its treasury stock pursuant to Section
5.10(a).
5.11 PARTNERSHIP DISTRIBUTIONS. The Borrower shall not make
any distributions of any kind or nature to anyone except distributions to its
partners necessary for the payment of income taxes and distributions necessary
to allow Tufco Technologies, Inc. to acquire its treasury stock to the extent
permitted in Section 5.10 of this Agreement.
5.12 MERGER AND CONSOLIDATION. The Borrower and/or the
Guarantors shall not merge or consolidate with or into any other entity.
5.13 TRANSFER OF ASSETS OR BUSINESS. The Borrowers and/or the
Guarantors shall not sell, lease, transfer or otherwise dispose of all or a
substantial part of their assets or business.
6. CONDITIONS PRECEDENT. The obligation of the Bank to fund the
Loans is subject to the following conditions precedent, each of which shall have
been fulfilled to the satisfaction of the Bank:
6.1 PROMISSORY NOTES. The Promissory Notes are duly executed
by the Borrower.
6.2 SECURITY DOCUMENTS. The Security Documents shall be duly
executed and delivered to the Bank by the Borrower and the Guarantors. The liens
granted to the Bank by the
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Security Documents shall constitute perfected first and paramount liens on the
property of the Borrower, subject only to Permitted Liens.
6.3 ORGANIZATIONAL DOCUMENTS. Provision of a true, correct and
complete copy of the limited partnership agreement, articles of incorporation,
bylaws, and amendments thereto, of the Borrower and the Guarantors.
6.4 LIEN RECORD SEARCH. UCC lien searches from the appropriate
offices of the Secretary of the States of Wisconsin, North Carolina, South
Carolina, Virginia, Missouri and Texas and from the offices of the land
recorders, covering the name of the Borrower and the Guarantors evidencing the
personal property assets, including fixtures, of the Borrower and the Guarantors
to be free of all liens except Permitted Liens.
6.5 RESOLUTIONS AND CERTIFICATIONS. Resolutions of the
Guarantors and the Borrower authorizing the transactions described herein
currently certified by an authorized officer or partner.
6.6 TITLE INSURANCE COMMITMENTS. With respect to the real
property subject to the Amended and Restated Mortgage and Amended and Restated
Deed of Trust, Exhibit C, commit ments from title company(s) acceptable to Bank
and policies of title insurance to the Bank which will:
(i) Be free from the "survey" exception and
exceptions for mechanics', materialmen's or construction liens and free
from other exceptions not previously approved by the Bank.
(ii) Name the Bank and/or its assigns as an insured
in such amounts required by Bank.
(iii) Insure the mortgage and Deed of Trust to be
valid first and paramount liens on the Borrower's real property subject
only to Permitted Liens.
(iv) Satisfaction of the "Requirements" included in
the title commitments and execution and delivery of any and all
documents required under the "Requirements" section of the title
commitments.
6.7 OTHER DOCUMENTS AND EXHIBITS. The Bank shall have received
such other agreements, documents and exhibits, without limitation, which may be
required, in Bank's judgment, to assure compliance with the requirements of this
Agreement, together with such other documents as Bank may reasonably require to
evidence and secure the Loan.
-17-
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7. DEFAULTS, RIGHTS AND REMEDIES.
7.1 EVENTS OF DEFAULT. The following shall constitute a
Default or an Event(s) of Default:
(a) The Borrower shall fail to pay, when due,
interest or principal on the Promissory Notes and such default shall
continue uncured for ten (10) days.
(b) The Borrower or a Guarantor shall fail duly to
observe or perform any of the other terms, conditions, covenants or
agreements required to be observed or performed by said persons under
this Agreement and/or any other documents executed and/or delivered
pursuant to this Agreement and/or incorporated by reference herein,
including, without limitation, the Promissory Notes and such default
shall continue uncured for twenty (20) days.
(c) Any representation or warranty made by or on
behalf of the Borrower or a Guarantor to the Bank (whether made in this
Agreement, in any financial statement, certificate, report or schedule
furnished pursuant to this Agreement, or in any written statement
otherwise pertaining to this Agreement) shall prove to be false or
misleading as of the time such representation or warranty was made
unless such matter shall be correctable and corrected to the
satisfaction of the Bank.
(d) The Borrower or a Guarantor shall be in default
under or in breach of any of the terms of any Security Document and
such default or breach shall not be cured or waived by the Bank within
the period or periods of grace, if any, applicable thereto.
(e) The Borrower or a Guarantor shall become
insolvent, however defined; or shall be dissolved; or shall commit an
act of bankruptcy under the United States Bankruptcy Act (as now or
hereafter amended); or shall file or have filed against it, voluntarily
or involuntarily, a petition in bankruptcy or for reorganization or the
adoption of an arrangement under the United States Bankruptcy Act (as
now or hereafter amended); or shall initiate or have initiated against
it, voluntarily or involuntarily, any act, process or proceeding under
any insolvency law or other statute of law providing for the
modification or adjustment of the rights of creditor and any such
proceeding, if brought by a party other than the Borrower, shall not
have been discharged within sixty (60) days of the commencement
thereof.
(f) Execution shall have been levied against any
property subject to the Security Documents or any lien creditor's suit
to enforce a judgment in excess of $100,000.00 against such property
shall have been brought and (in either case) shall continue unstayed
and in effect for a period of more than sixty (60) consecutive days.
-18-
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(g) Any guaranty of the Borrower's obligations under
this Agreement is revoked or becomes unenforceable for any reasons.
(h) Any default or Event of Default under the
Promissory Notes, the Security Documents or any other document executed
and/or delivered in connection with this Agreement.
(i) The Borrower or a Guarantor defaults in the
performance of the terms of any other evidence of indebtedness or lease
issued or assumed by the Borrower or a Guarantor or on the terms of any
agreement under which such indebtedness is secured or issued, and such
default shall continue beyond any applicable grace period.
7.2 RIGHTS AND REMEDIES. Upon the occurrence of an Event of
Default and at any time thereafter until such Event of Default is cured to the
reasonable satisfaction of the Bank, Bank may, at its option, exercise any and
all of the following rights and remedies (and any other rights and remedies
available to it):
(a) Bank may, without notice to the Borrower unless
otherwise specified or required herein by notice to the Borrower,
terminate its obligation to advance funds hereunder.
(b) Bank may declare immediately due and payable all
unpaid principal of and accrued interest on the Promissory Notes, and
the same thereon be immediately due and payable without presentment or
other demand, protest, notice of dishonor or any other notice of any
kind, all of which are hereby expressly waived.
(c) Bank shall have the right, in addition to any
other rights provided by law, to enforce its rights and remedies under
the Security Documents.
8. MISCELLANEOUS.
8.1 FEES AND COSTS. The Borrower agrees to pay the Commitment
Fee, the Contingency Fee, the Letter(s) of Credit Fee, all fees of the Bank,
title insurance premiums, and recording fees and agrees to reimburse the Bank
upon demand for all reasonable out-of-pocket expenses actually incurred by the
Bank in connection with this Agreement or in connection with the transactions
contemplated by this Agreement, including, but not limited to, any and all
reasonable legal expenses and attorneys' fees sustained by the Bank in the
exercise of any right or remedy available to it under this Agreement or
otherwise by law or equity, and further, the services performed by such counsel
in connection with the preparation of this Agreement and the documents and
instruments incidental thereto.
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8.2 ASSIGNABILITY AND SUCCESSORS. This Agreement shall be
binding upon and inure to the benefit of the Borrower the Guarantors and the
Bank and their respective successors and assigns, except that the Borrower and
the Guarantors may not transfer or assign their rights hereunder without the
prior written consent of the Bank.
8.3 WAIVERS. No waiver by the Bank of any default hereunder
shall operate as a waiver of any other default or of the same type of default on
a future occasion. No delay on the part of the Bank in exercising any right or
remedy hereunder shall operate as a waiver thereof, no shall any single or
partial exercise of any right or remedy preclude other or further exercise
thereof or the exercise or any other right or remedy.
8.4 BANK'S REMEDIES AND CUMULATIVE. The rights and remedies
herein specified are cumulative and not exclusive of any rights or remedies
which the Bank would otherwise have. In the event of a conflict in remedies
between this Agreement and the Security Documents, including any notice period
or periods, the specific terms of the Security Documents shall control.
8.5 GOVERNING LAW AND ENTIRE AGREEMENT. This Agreement, the
Security Documents, the Promissory Notes and any other documents executed and/or
delivered pursuant to this Agreement and/or incorporated by reference herein and
all security therefor shall be governed, construed and enforced under the laws
of the State of Wisconsin in courts of the State of Wisconsin or the United
States of America. This Agreement contains the entire agreement of the parties
on the matters covered. No other agreement, statement or promise made by any
party or by any employee, officer or agent of any party that is not in writing
and signed by all parties to this Agreement shall be binding, and in entering
into this Agreement, the Borrower and the Guarantors are not relying on any
statement, representation or warranty not expressly set forth herein.
8.6 SURVIVAL. All agreements, representations and warranties
made herein shall survive the execution of this Agreement, the making of the
disbursements hereunder and the execution and delivery of the Promissory Notes.
8.7 COUNTERPARTS AND HEADINGS. This Agreement may be executed
in any number of counterparts, each of which, when so executed and delivered,
shall be an original, but such counterparts shall together constitute one and
the same instrument. The section headings in this Agreement are inserted for
convenience of reference only and shall not constitute a part hereof.
8.8 NOTICES. All communications or notices required or
permitted by this Agreement shall be in writing and shall be deemed to have been
given at the earlier of the date when actually delivered to an officer of the
other party or when deposited in the United States mail, certified or registered
mail, postage prepaid and addressed as follows, unless and until either of such
parties notifies the other in accordance with this section as a change of
address:
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If to Tufco Technologies, Inc.: If to Tufco Tech, Inc.:
ATTENTION: Louis LeCalsey, III ATTENTION: Louis LeCalsey, III
President President
4750 Simonton 4750 Simonton
Dallas, TX 75244 Dallas, TX 75244
If to Tufco, Inc.: If to TFCO, Inc.:
ATTENTION: Kathy Manos ATTENTION: Kathy Manos
President President
4750 Simonton 4750 Simonton
Dallas, TX 75244 Dallas, TX 75244
If to the Bank: If to Technologies I, Inc.:
Bank One, Wisconsin ATTENTION: Kathy Manos
ATTENTION: Mr. Mark J. Fischer President
Assistant Vice President 4750 Simonton
200 South Adams Street Dallas, TX 75244
P. O. Box 19029
Green Bay, WI 54307-9029
If to Tufco, L.P.: If to Foremost Manufacturing
ATTENTION: Louis LeCalsey, III ATTENTION: Louis LeCalsey, III
President, Tufco Tech, Inc. Company, Inc.:
4750 Simonton President, Foremost Manufacturing
Dallas, TX 75244 Company, Inc.
4750 Simonton
Dallas, TX 75244
8.9 AMENDMENT. No amendment of this Agreement shall be
effective unless in writing and signed by the parties.
8.10 PARTICIPATION. The Bank may, at any time and from time to
time, grant to any person or entity a participation in any part of the
indebtedness described herein. All of the representations, warranties and
covenants of the Borrower or the Guarantors in this Agreement are also made to
any participant with the same force and effect as if expressly so made.
8.11 SEVERABILITY. Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity of
enforceability of such provision in any other jurisdiction.
8.12 OTHER CREDIT. The parties acknowledge the Bank may extend
additional credit to the Borrower in such amounts and upon such terms and
conditions as the Bank in its sole discretion
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may agree. In the event the Bank extends additional credit, it is agreed that
the same is agreed to be issued pursuant to the terms of this Agreement. The
note(s) or agreement(s) represent ing such obligations shall be deemed issued
pursuant to the terms of this Agreement for all intents and purposes, including
but not limited to, the collateral securing such credit and rights of accelera
tion upon default as herein provided.
8.13 ARBITRATION. The undersigned agree that upon the written
demand of either party, whether made before or after the institution of any
legal proceedings, but prior to the rendering of any judgment in that
proceeding, all disputes, claims and controversies between them, whether
individual, joint, or class in nature, arising from this Agreement, any related
document or otherwise, including without limitation contract disputes and tort
claims, shall be resolved by binding arbitration pursuant to the Commercial
Rules of the American Arbitration Association. Any arbitration proceeding held
pursuant to this arbitration provision shall be conducted in the city nearest
the Borrower's address having an AAA regional office, or at any other place
selected by mutual agreement of the parties. No act to take or dispose of any
collateral shall constitute a waiver of this arbitration agreement or be
prohibited by this arbitration agreement. This arbitration provision shall not
limit the right of either party during any dispute, claim or controversy to
seek, use, and employ ancillary, or preliminary rights and/or remedies, judicial
or otherwise, for the purposes of realizing upon, preserving, protecting,
foreclosing upon or proceeding under forcible entry and detainer for possession
of, any real or personal property, and any such action shall not be deemed an
election of remedies. Such remedies include, without limitation, obtaining
injunctive relief or a temporary restraining order, invoking a power of sale
under any deed of trust or mortgage, obtaining a writ of attachment or
imposition of a receivership, or exercising any rights relating to personal
property, including taking or disposing of such property with or without
judicial process pursuant to Article 9 of the Uniform Commercial Code or when
applicable, a judgment by confession of judgment. Any disputes, claims or
controversies concerning the lawfulness or reasonableness of an act, or exercise
of any right or remedy concerning any collateral, including any claim to
rescind, reform, or otherwise modify any agreement relating to the collateral,
shall also be arbitrated; provided, however that no arbitrator shall have the
right or the power to enjoin or restrain any act of either party. Judgment upon
any award rendered by any arbitrator may be entered in any court having
jurisdiction. Nothing in this arbitration provision shall preclude either party
from seeking equitable relief from a court of competent jurisdiction. The
statute of limitations, estoppel, waiver, laches and similar doctrines which
would otherwise be applicable in an action brought by a party shall be
applicable in any arbitration proceeding, and the commencement of an arbitration
proceeding shall be deemed the commencement of any action for these purposes.
The Federal Arbitration Act (Title 9 of the United States Code) shall apply to
the construction, interpretation, and enforcement of this arbitration provision.
8.14 JURY WAIVER. THE UNDERSIGNED HEREBY VOLUNTARILY,
KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON
CONTRACT, TORT OR OTHERWISE) BETWEEN OR AMONG THE UNDERSIGNED
ARISING OUT OF OR IN ANY WAY RELATED TO THIS DOCUMENT OR ANY OTHER
RELATED DOCUMENT. THIS PROVISION IS A MATERIAL INDUCEMENT TO BANK TO
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PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER RELATED
DOCUMENTS.
8.15 CONSENT AND ACKNOWLEDGMENT. The Guarantors, by their
execution of this Loan Agreement, acknowledge the same, consent to the terms and
conditions herein contained and agree to be bound by the same as this Agreement
may relate to a Guarantor.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed on the day and year first above written.
BANK ONE, WISCONSIN
By: /s/ Mark J. Fischer
-----------------------------------------
Mark J. Fischer
Title: Assistant Vice President
TUFCO, L.P.
By: TUFCO TECH, INC., General Partner
By: /s/ Gregory Wilemon
-----------------------------------------
Gregory L. Wilemon
Title: Secretary
TUFCO TECH, INC.
By: /s/ Gregory L. Wilemon
-----------------------------------------
Gregory L. Wilemon
Title: CFO, COO, Secretary and Treasurer
TUFCO, INC.
By: /s/ Kathy Manos
-----------------------------------------
Kathy Manos
Title: President
TFCO, INC.
By: /s/ Kathy Manos
-----------------------------------------
Kathy Manos
Title: President
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TECHNOLOGIES I, INC.
By: /s/ Kathy Manos
-----------------------------------------
Kathy Manos
Title: President
TUFCO TECHNOLOGIES, INC.
By: /s/ Gregory L. Wilemon
-----------------------------------------
Gregory L. Wilemon
Title: CFO, Secretary and Treasurer
FOREMOST MANUFACTURING
COMPANY, INC.
By: /s/ Gregory L. Wilemon
-----------------------------------------
Gregory L. Wilemon
Title: CFO, COO, Secretary and Treasurer
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===============================================================================
SECOND
AMENDED AND RESTATED
LOAN AGREEMENT
Dated as of November 13, 1997
BY AND BETWEEN
Tufco, L.P.
Address: 4750 Simonton
Dallas, TX 75244
AND
Bank One, Wisconsin
Address: 200 South Adams Street
P. O. Box 19029
Green Bay, WI 54307-9029
===============================================================================
26
INDEX
Page
----
1. Definitions 1
-----------
1.1 Bank 1
1.2 Borrower 1
1.3 Cash Flow 1
1.4 Commitment Fee 2
1.5 Contingency Fee 2
1.6 ERISA 2
1.7 Event of Default 2
1.8 Facility Fee 2
1.9 Guarantor 2
1.10 Guarantors 2
1.11 Letter(s) of Credit Fee 2
1.12 Loan Agreement 2
1.13 Permitted Liens 2
1.14 Plan 3
1.15 Prepayment Premium 3
1.16 Promissory Notes 3
1.17 Reference Rate 3
1.18 Reference Rate Loans 3
27
1.19 Security Documents 3
1.20 Definitions Applicable to
Libor Rate Loans 4
2. Loans, Collateral-Loan Ratio and Security
Documents 5
2.1 Making the Loans 5
2.2 Facility One 5
2.3 Facility Two 7
2.4 Facility Three 8
2.5 Facility Four 8
2.6 Security Documents 8
3. Representations and Warranties 8
3.1 Due Organization 8
3.2 Authority 8
3.3 Enforceability 8
3.4 Litigation 9
3.5 Certificates and Statements 9
3.6 Financial Data 9
3.7 Investments in and Guaranties
of Others 9
3.8 Indebtedness and Liabilities 9
3.9 Tax Returns 10
3.10 Title to Properties 10
28
3.11 Regulation U 10
3.12 ERISA Liability 10
3.13 Environmental Regulations 10
3.14 Hazardous Substances and
Materials 10
4. Affirmative Covenants 11
4.1 Incorporation of Documents 11
4.2 Notice of Event of Default 11
4.3 Insurance 11
4.4 Taxes and Assessments 12
4.5 Books and Records 12
4.6 Compliance with Laws 12
4.7 Maintenance of Assets and
Property 12
4.8 Merger and Disposal of Assets 12
4.9 Permits and Licenses 13
4.10 Financial Statements 13
4.11 Litigation or Claims Affecting
Operations 14
4.12 Visitation and Inspection 14
4.13 Payment of Claims 14
4.14 Minimum Cash Flow Requirement 14
29
5. Negative Covenants 14
5.1 Encumbrances or Liens 15
5.2 Status of Borrower or Guarantors 15
5.3 Other Actions 15
5.4 Organizational Documents 15
5.5 Obligations of Others 15
5.6 Purchase of Securities 15
5.7 Loans or Advances 15
5.8 Capital Expenditures 15
5.9 Indebtedness 16
5.10 Purchase or Redemption of Stock
and/or Payment of Dividends 16
5.11 Partnership Distributions 16
5.12 Merger and Consolidation 16
5.13 Transfer of Assets or Business 16
30
6. Conditions Precedent 16
6.1 Promissory Notes 16
6.2 Security Documents 16
6.3 Organizational Documents 17
6.4 Lien Record Search 17
6.5 Resolutions and Certifications 17
6.6 Title Insurance Commitments 17
6.7 Other Documents and Exhibits 17
7. Defaults, Rights and Remedies 18
7.1 Events of Default 18
7.2 Rights and Remedies 19
8. Miscellaneous 19
8.1 Fees and Costs 19
8.2 Assignability and Successors 20
8.3 Waivers 20
8.4 Bank's Remedies and Cumulative 20
8.5 Governing Law and Entire Agreement 20
8.6 Survival 20
8.7 Counterparts and Headings 20
8.8 Notices 20
8.9 Amendment 21
8.10 Participation 21
31
8.11 Severability 21
8.12 Other Credit 21
8.13 Arbitration 22
8.14 Jury Waiver 22
8.15 Consent and Acknowledgment 23
32
INDEX OF EXHIBITS
Exhibit Pages
------- -----
A-1 Master Draw Note 3, 5
A-2 Term Note 3, 7
A-3 Business Note 3, 8
A-4 Term Note 2, 8
B Permitted Liens 2
C Amended and Restated Mortgage/ 4
Amended and Restated Deed of Trust
D General Business Security Agreements 4
E Unlimited Continuing Guaranties 4