<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC
Form 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 1999
--------------
Commission file number 0-21018
-------
TUFCO TECHNOLOGIES, INC.
Delaware 39-1723477
------------ ------------
(State of other jurisdiction (IRS Employer ID No.)
of incorporation of organization)
4800 Simonton Road, Dallas, Texas 75244
-----------------------------------------
(Address of principal executive offices)
(972)789-1079
-------------
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 the number of shares outstanding of each or the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding at May 14, 1999
----- ---------------------------
Common Stock, par value $0.01 per share 3,786,223
Non-Voting Common Stock, par value $.01 per share 709,870
Page 1 of 13
<PAGE> 2
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
Number
<S> <C>
PART I: CONDENSED FINANCIAL INFORMATION
Item 1. Condensed Financial Statements
Condensed Consolidated Balance Sheets as of
March 31, 1999 (Unaudited) and September 30, 1998 3
Condensed Consolidated Statements of Income for the three
months and six months ended March 31, 1999 and 1998 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows for the
six months ended March 31, 1999 and 1998 (Unaudited) 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II: OTHER INFORMATION 12
SIGNATURES 13
</TABLE>
2
<PAGE> 3
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
------------ ------------
Assets
CURRENT ASSETS:
<S> <C> <C>
Cash and cash equivalents .............................................. $ 954,881 $ 1,006,110
Restricted cash ........................................................ 20,428 20,328
Accounts receivable, net ............................................... 11,538,495 10,351,740
Inventories ............................................................ 10,430,103 8,956,949
Prepaid expenses and other current assets .............................. 709,892 303,605
Deferred income taxes .................................................. 596,678 596,678
------------ ------------
Total current assets ............................................. 24,250,477 21,235,410
PROPERTY, PLANT AND EQUIPMENT-Net ......................................... 18,348,951 17,360,302
GOODWILL -Net ............................................................. 18,277,287 18,423,999
OTHER ASSETS- Net ......................................................... 1,080,138 1,747,486
------------ ------------
TOTAL ..................................................................... $ 61,956,853 $ 58,767,197
============ ============
Liabilities and Stockholders' Equity
CURRENT LIABILITIES:
Current portion of long-term debt ...................................... $ 1,673,734 $ 1,670,810
Accounts payable ....................................................... 5,320,031 4,559,341
Accrued payroll, vacation and payroll taxes ............................ 1,013,183 681,236
Other current liabilities .............................................. 1,278,203 1,629,519
Income taxes payable ................................................... 41,227 64,367
------------ ------------
Total current liabilities ........................................ 9,326,378 8,605,273
LONG-TERM DEBT- Less current portion ...................................... 17,685,196 16,025,796
DEFERRED INCOME TAXES ..................................................... 1,885,653 1,885,653
STOCKHOLDERS' EQUITY
Voting Common Stock; $.01 par value; 9,000,000 shares authorized;
3,786,223 shares issued ............................................ 37,862 37,862
Nonvoting Common Stock; $.01 par value; 2,000,000 shares authorized;
709,870 shares issued and outstanding .............................. 7,099 7,099
Additional paid-in capital ............................................. 23,961,301 23,961,301
Retained earnings ...................................................... 9,682,604 8,878,453
Treasury stock at cost, 78,497 voting common shares .................... (534,045) (534,045)
Stock purchase plan notes .............................................. (95,195) (100,195)
------------ ------------
Total stockholders' equity ........................................ 33,059,626 32,250,475
------------ ------------
TOTAL .................................................................. $ 61,956,853 $ 58,767,197
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
March 31, March 31,
------------------------------ ------------------------------
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
NET SALES ................................... $ 18,518,941 19,006,312 $ 36,859,794 35,696,528
COST OF SALES ............................... 15,717,631 16,434,185 31,084,391 30,454,463
------------ ------------ ------------ ------------
GROSS PROFIT ................................ 2,801,310 2,572,127 5,775,403 5,242,065
OPERATING EXPENSES:
Selling, general and administrative
.......................................... 1,769,976 1,657,029 3,780,948 3,360,080
Amortization and other post-
acquisition expenses ..................... 244,322 263,148 478,887 468,720
------------ ------------ ------------ ------------
OPERATING INCOME ............................ 787,012 651,950 1,515,568 1,413,265
OTHER INCOME (EXPENSE):
Interest expense ......................... (304,735) (294,982) (561,992) (517,729)
Interest and other income ................ 7,813 1,616 12,127 15,577
Gain (loss) on sale of equipment ......... 25,573 (150) 331,314 473
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES .................. 515,663 358,434 1,297,017 911,586
INCOME TAX EXPENSE .......................... 180,324 124,028 492,866 344,872
------------ ------------ ------------ ------------
NET INCOME .................................. $ 335,339 $ 234,406 $ 804,151 $ 566,714
============ ============ ============ ============
EARNINGS PER SHARE:
Basic ................................... $ 0.08 $ 0.05 $ 0.18 $ 0.13
Diluted ................................. $ 0.08 $ 0.05 $ 0.18 $ 0.12
WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:
Basic ................................... 4,417,596 4,420,596 4,417,596 4,414,865
Diluted ................................. 4,440,767 4,542,690 4,447,169 4,553,461
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
March 31,
1999 1998
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income ........................................................... $ 804,151 $ 566,714
Noncash items net income:
Depreciation and amortization .................................. 1,365,604 1,145,103
Deferred income taxes .......................................... -- --
Increase (decrease) in allowance for doubtful accounts ......... 18,248 (2,246)
Gain on disposition of property and equipment .................. (331,314) (473)
Changes in operating working capital:
Accounts receivable .......................................... (1,205,003) (1,214,986)
Inventories .................................................. (1,473,154) (1,127,025)
Prepaid expenses and other assets ............................ (355,927) (112,205)
Accounts payable ............................................. 760,690 1,244,286
Accrued and other current liabilities ........................ (19,369) (472,818)
Income taxes payable ......................................... (23,140) (874,829)
----------- -----------
Net cash (used in) operations ..................................... (459,214) (848,479)
INVESTING ACTIVITIES
Additions to property, plant and equipment ........................ (1,494,967) (1,766,327)
Proceeds from disposition of property, plant and equipment ........ 409,550 5,513
Increase in advances to shareholders .............................. (31,822) (11,111)
Acquisition of Foremost Manufacturing, Inc. ....................... (142,000) (5,500,000)
Decrease (increase) in restricted cash ............................ (100) 39,900
----------- -----------
Net cash used in investing activities ............................. (1,259,339) (7,232,025)
FINANCING ACTIVITIES
Repayment of long-term debt ....................................... (837,676) (945,347)
Proceeds from issuance of notes payable ........................... 2,500,000 8,242,658
Decrease in stock purchase plan notes ............................. 5,000 314,857
Purchase of treasury stock ........................................ -- (160,962)
Net proceeds from issuance of common stock ........................ -- 422,405
----------- -----------
Net cash provided by financing activities ......................... 1,667,324 7,873,611
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS ............................ (51,229) (206,893)
CASH AND CASH EQUIVALENTS:
Beginning of period ................................................. 1,006,110 747,404
----------- -----------
End of period ....................................................... $ 954,881 $ 540,511
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
TUFCO TECHNOLOGIES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED MARCH 31, 1999 AND 1998
1. INTERIM FINANCIAL STATEMENTS
The unaudited interim financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and Rule 10-01 of Regulation S-X. In the opinion
of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation have been
included. Some adjustments involve estimates which may require
revision in subsequent interim periods or at year end. The unaudited
financial statements and footnotes should be read in conjunction with
the Company's financial statements for the year ended September 30,
1998 that are included in Form 10-K that was filed with the Securities
and Exchange Commission on December 22, 1998. Operating results for
the six month period are not necessarily indicative of results
expected for the remainder of the year.
2. INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
March 31, September 30,
1999 1998
----------- -------------
<S> <C> <C>
Raw materials .................................... $ 5,214,656 $ 4,766,165
Finished products ................................ 5,215,447 4,190,784
----------- -------------
Total ............................................ $10,430,103 $ 8,956,949
=========== =============
</TABLE>
3. ACQUISITION OF FOREMOST MANUFACTURING, INC.:
On November 13, 1997, the Company purchased all of the outstanding
stock of Foremost Manufacturing, Inc. (Foremost) for $5.25 million in
cash and $0.25 million in the Company's common stock (25,907 shares),
plus $642,000 under an earn-out provision. Goodwill of $5.4 million
was recorded as a result of the acquisition. Foremost manufactures and
distributes products similar to those produced and distributed by the
Company in its Paint Sundries market sector. The results of operation
for Foremost have been included since the date of acquisition.
6
<PAGE> 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
GENERAL INFORMATION:
Tufco Technologies, Inc. (formerly Tufco Holding Company, the "Company") was
organized in 1992 to acquire Tufco Industries, Inc. (located in Green Bay, WI)
which was incorporated in Wisconsin in 1974. Executive Converting Corporation
(located in Dallas, TX) was acquired in 1994. Hamco, Industries, Inc. (located
in Newton, NC) was acquired in 1995. Foremost Manufacturing, Inc. (located in
St. Louis, Missouri) was acquired November 13, 1997.
The Company, through its wholly owned subsidiaries, manufactures and
distributes business imaging paper products and Away-From-Home towels and
wipes, provides diversified contract manufacturing and specialty printing
services, and distributes paint sundry products used in home improvement
projects.
The Company normally operates at lower operating levels during the first and
second quarters of its fiscal year which ends September 30. This occurs because
of the seasonal demand for certain printed products displaying a holiday theme
as well as products which are used by customers in conjunction with end-of-year
activities. These products are normally shipped during the Company's third and
fourth fiscal quarters. Demand for its paint sundry products is generally lower
during the first and second fiscal quarters as cold weather restricts the
amount of new construction and remodeling projects that require the Company's
products.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS --CONTINUED
RESULTS OF OPERATIONS:
CONDENSED OPERATING DATA, PERCENTAGES OF NET SALES AND YEAR-TO-YEAR CHANGES IN
THESE ITEMS ARE AS FOLLOWS:
($000s)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, Period-to-Period March 31, Period-to-Period
------------------- Change ----------------- Change
1999 1998 $ % 1999 1998 $ %
----- ---- --- --- ---- ---- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Sales $18,519 $19,006 -487 -3 $36,860 $35,697 1,163 3
Gross Profit 2,801 2,572 229 9 5,775 5,242 533 10
15.1% 13.5% 15.7% 14.7%
Operating Expenses 2,014 1,920 94 5 4,259 3,829 430 11
10.9% 10.1% 11.6% 10.7%
Operating Income 787 652 135 21 1,516 1,413 103 7
4.2% 3.4% 4.1% 4.0%
Interest Expense 305 295 10 3 562 518 44 8
1.6% 1.6% 1.5% 1.5%
Net Income $ 335 $ 234 101 43 804 567 237 42
1.8% 1.2% 2.2% 1.6%
</TABLE>
ANALYSIS OF NET SALES, PERCENTAGES OF TOTAL NET SALES, AND YEAR-TO-YEAR CHANGES
IN THE COMPANY'S PRIMARY MARKET SECTORS ARE AS FOLLOWS:
($000s)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, Period-to-Period March 31, Period-to-Period
------------------- Change ----------------- Change
1999 1998 $ % 1999 1998 $ %
----- ---- --- --- ---- ---- --- ---
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Business Imaging
Products $ 6,398 $ 8,393 -1,995 -24 12,699 16,149 -3,450 -21
35% 44% 35% 45%
Contract
Manufacturing &
Specialty Printing $ 5,245 4,178 1,067 26 10,376 8,085 2,291 28
28% 22% 28% 23%
Paint Sundry
Products $ 4,999 4,585 414 9 10,100 8,332 1,768 21
27% 24% 27% 23%
Away-From-Home
Products $ 1,877 1,850 27 1 3,685 3,131 554 18
10% 10% 10% 9%
Total Net Sales $18,519 $19,006 -487 -3 36,860 35,697 1,163 3
</TABLE>
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS --CONTINUED
NET SALES:
Net sales declined $0.5 million (3%) for the three month period ended March 31,
1999. However, for the six month period, sales increased $1.2 million or 3%,
primarily due to the additive impact of Foremost which was acquired November
13, 1997. Adjusted for the additional Foremost sales in fiscal 1999, net sales
for the six months are virtually even with fiscal 1998. For both the three and
six month periods, sales of the Company's Business Imaging Products have
declined (down $2.0 million and $3.5 million, 24% and 21% respectively) due to
heavy competition in the marketplace. An abundance of inexpensive raw materials
and available used production equipment resulted in several new competitors
entering the Business Imaging market. These new competitors have used low
prices on key high volume products in an effort to win new accounts, and Tufco
has lost several large accounts as a result of these tactics. Tufco has lowered
its own prices to combat the competition, and the Company has been successful
in reacquiring some of the lost business. Tufco remains committed to the
Business Imaging sector, and the Company is working to reduce its costs while
strengthening its relationships with its customers. The Company's strongest
sales growth occurred in the Contract Manufacturing and Specialty Printing
sector where the Company began providing manufacturing services for Procter &
Gamble Manufacturing (P&G). Revenue from this contract manufacturing
relationship helped sector net sales increase $1.1 million (26%) and $2.3
million (28%) for the three and six month periods. Management forecasts
continued growth in this key area as new manufacturing projects begin
operations in the third and fourth fiscal quarters. The Company's Paint Sundry
sector remains strong, with acquisition-adjusted net sales increasing 9% and
10% for the three and six month periods, respectively. Finally, sales in the
Away-From-Home sector (AFH) increased modestly for the quarter (up 1%). The
availability of base raw materials for the AFH sector diminished during the
quarter, limiting the Company's ability to expand its sales base. Management is
negotiating with several potential suppliers to increase the availability of
raw materials.
GROSS PROFIT:
Gross profit increased $0.2 million (9%) and $0.5 million (10%) for the three
and six month periods. For the second quarter, the 9% increase in gross profit
was in spite of lower sales, and was primarily the result of the new P&G
contract manufacturing production line. The revenue derived by Tufco from this
agreement is service revenue and contains very little material cost. As a
result, the margins are higher, helping Tufco to report increases in gross
profit margins (15.1% and 15.7% compared to 13.5% and 14.7%) for the three and
six month periods respectively.
OPERATING EXPENSES:
Operating expenses increased $0.1 million (5%) and $0.4 million (11%) for the
three and six month periods. Adjusted for the Foremost acquisition, operating
expenses increased only $0.3 million (8%) for the six month period. Higher
compensation costs accounted for most of the increase, as well as costs to
attend a major trade show during the first quarter of fiscal 1999.
OPERATING INCOME:
Operating income increased $0.1 million for the three and six month periods.
For the quarter, operating income was up 21% primarily as a result of higher
gross profit.
9
<PAGE> 10
ITEM 2. MANAGEMENT' DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS --CONTINUED
INTEREST EXPENSE:
Interest expense was virtually unchanged for the three month period, and up
$44,000 for the year-to-date. The six month increase is due to one additional
month of interest in fiscal 1999 on the acquisition debt associated with
Foremost.
NET INCOME AND EARNINGS PER SHARE:
Net income increased $0.1 million (43%) and $0.2 million (42%) for the three
and six month periods. During the first quarter of fiscal 1999, the Company
sold certain idle production equipment resulting in an increase of
approximately $184,000 in year-to-date net income. Earnings per share for the
three and six month periods increased to $0.8 and $.18 (basic and diluted)
compared to $.05 (basic and diluted) and $.13 (basic) and $.12 (diluted) in the
prior year.
LIQUIDITY AND CAPITAL RESOURCES:
For the six months ended March 31, 1998, the Company used $459,000 to fund
operations compared to a use of $848,000 one year ago. The primary uses of cash
in fiscal 1999 were to fund investment in inventory and accounts receivable. At
March 31, 1999 the Company had advanced approximately $1.7 million for
manufacturing equipment for which the Company is to be repaid within 30 days
under an agreement with a major customer. The additional debt incurred for
these advances caused the Company to be in violation of a financial covenant
under its credit agreement which limits allowable indebtedness. The Company has
obtained a waiver effective March 31, 1999 from its lenders for this covenant.
Adjusted for this non-customary item, the Company generated approximately $1.3
million in cash from operations during the first six months of fiscal 1999.
Net cash used in investing activities was $1.3 million for the six months ended
March 21, 1999, resulting from the purchase of production equipment.
Net cash provided by financing activities was $1.7 million for the first six
months of fiscal 1999 and was comprised of additional borrowings ($2.5 million)
used to finance inventories and receivables, offset by the repayment of $0.8
million in long-term debt.
The Company anticipates signing a commitment to enter into a 10 year operating
lease for a $4 million printing press to be installed in the Company's Green
Bay, Wisconsin facility. The commitment letter will be signed during the third
fiscal quarter, and the equipment should be operational in the first quarter of
fiscal 2000. The press will enhance the Company's technical printing
capabilities while reducing operating costs.
Company management believes that cash flow from operations will be sufficient
to fund its capital needs for fiscal 1999 and does not anticipate any
significant increase in borrowings during the year.
As of May 10, 1999, the Company had approximately $2.7 million available under
its revolving credit line.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS --CONTINUED
YEAR 2000 SYSTEM ISSUES:
Many existing computer programs use only two digits to identify a year in the
date field, and if not corrected, many computer applications could fail or
create erroneous results by or at the year 2000. Left uncorrected, year 2000
systems issues could have a material negative impact on the Company's
operations and its profitability.
In response to ongoing business needs, Tufco has begun implementing a new
Enterprise Resource Planning system, and the year 2000 issue was one of the
design pre-requisites for this new system. As of March 31, 1999 the Company has
spent $1.7 million for hardware, software and consulting services related to
the project, and management estimates it will spend an additional $0.2 million
for completion of the conversion to the new system which began in fiscal 1998
and is scheduled to be completed in fiscal 1999. While the Company has taken
every precaution to ensure that the new information system will operate
properly in the year 2000, management has relied on assurances and warranties
by its hardware and software vendors. The Company will continue to test its new
systems for year 2000 compliance throughout the implementation process. The
Company is in the process of evaluating the possible negative impact on the
Company of year 2000 issues relating to its significant vendors and customers,
and management is finalizing that analysis. The Company is also nearing
completion on its analysis of the potential impact of embedded date sensitive
programs included in any software used to operate its production equipment.
While management has not uncovered any specific instances where year 2000
issues have not been addressed, the Company cannot rule out the possibility of
difficulties arising from year 2000 issues.
FORWARD LOOKING STATEMENTS:
Management's discussion of the Company's 1999 quarterly periods in comparison
to 1998, contains forward-looking statements regarding current expectations,
risks and uncertainties for future periods. The actual results could differ
materially from those discussed here. As well as those factors discussed in
this report, other factors that could cause or contribute to such differences
include, among other items, significant changes in the cost of base paper
stock, competition in the Company's product areas, or an inability of
management to successfully reduce operating expenses in relation to net sales
without damaging the long-term direction of the Company. Therefore, the
condensed financial data for the periods presented may not be indicative of the
Company's future financial condition or results of operations.
11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The following summarizes the Annual Meeting highlights:
(a) The Annual Meeting of Shareholders of the Company was held in Miami,
Florida on March 16, 1999.
(b) At the Annual Meeting, shareholders elected the following individuals
to the Board of Directors for one-year terms:
<TABLE>
<CAPTION>
Director For Withheld
------------------------------ ---------- ----------
<S> <C> <C>
Robert J. Simon 3,047,529 9,984
Samuel J. Bero 3,055,213 2,300
C. Hamilton Davison, Jr 3,055,213 2,300
Patrick J. Garland 3,054,813 2,700
Louis LeCalsey III 3,055,013 2,500
Edward A. Leinss 3,055,213 2,300
William J. Malooly 3,055,213 2,300
</TABLE>
(c) The shareholders ratified the selection of Deloitte & Touche LLP as
independent auditors for the fiscal year ending September 30, 1999.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
10.1 Assignment and Amendment of Reimbursement Agreement and Other
Transaction documents dated March 4, 1999.
10.2 Assignment and Amendment (Fourth) of Participation Agreement,
Reimbursement Agreement, and Other Transaction Documents dated March
18, 1999.
B. Reports on Form 8-K.
None.
12
<PAGE> 13
SIGNATURES
Pursuant to the requirements 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.
TUFCO TECHNOLOGIES, INC.
Date: May 14, 1999 /s/ Louis LeCalsey, III
--------------------------------------------
Louis LeCalsey, III
President/Chief Executive Officer
Date: May 14, 1999 /s/ Greg Wilemon
--------------------------------------------
Greg Wilemon
Chief Financial Officer/Chief Operating Officer,
Secretary, Treasurer and Vice President - Finance
13
<PAGE> 14
<TABLE>
<CAPTION>
INDEX TO EXHIBITS
Exhibit Description
- ------- -----------
<S> <C>
10.1 Assignment and Amendment of Reimbursement Agreement and Other
Transaction documents dated March 4, 1999.
10.2 Assignment and Amendment (Fourth) of Participation Agreement,
Reimbursement Agreement, and Other Transaction Documents dated March
18, 1999.
27 Financial Data Schedule
</TABLE>
<PAGE> 1
EXHIBIT 10.1
ASSIGNMENT AND AMENDMENT
OF
REIMBURSEMENT AGREEMENT
AND
OTHER TRANSACTION DOCUMENTS
The Reimbursement Agreement and Other Transaction Documents
Originally Dated as of May 1, 1992
among:
TUFCO L.P.,
BANK ONE, WISCONSIN
as Bank One,
and
FIRST UNION NATIONAL BANK,
as assignee
in connection with:
SUBSTITUTION OF LETTER OF CREDIT FOR $2,500,000 VILLAGE OF
ASHWAUBENON, WISCONSIN ADJUSTABLE RATE INDUSTRIAL
DEVELOPMENT REVENUE BONDS, SERIES 1992 (TUFCO PROJECT)
<PAGE> 2
This Assignment and Amendment of Reimbursement Agreement and Other
Transaction Documents (this "Assignment and Amendment") is dated as of March 4,
1999, and is by and among Bank One, Wisconsin, a Wisconsin banking corporation
(f/k/a Bank One, Milwaukee, National Association), as assignor ("Bank One"),
First Union National Bank, a national banking corporation, as assignee ("FUNB")
and Tufco L.P., a Delaware limited partnership (the "Borrower").
PRELIMINARY STATEMENTS:
(1) Pursuant to the Loan Agreement dated as of May 1, 1992 between the
Borrower and the Village of Ashwaubenon, Wisconsin (the "Issuer"), as amended by
the Amendment to Loan Agreement and Indenture dated as of April 1, 1996 (the
"Loan Agreement"), the Issuer has loaned the proceeds of the issuance of
$2,500,000 of the Issuer's Adjustable Rate Industrial Development Revenue Bonds,
Series 1992 (Tufco Project) (the "Bonds") to the Borrower.
(2) The Bonds were issued under an Indenture of Trust (the "Indenture")
dated as of May 1, 1992, as amended by the Amendment to Loan Agreement and
Indenture dated as of April 1, 1996, between the Issuer and Norwest Bank,
Wisconsin, National Association, as trustee (together with any successor trustee
under the Indenture, the "Trustee").
(3) Pursuant to the Loan Agreement, the Borrower has an obligation to cause
to be maintained for the benefit of the Trustee, as trustee under the Indenture,
an irrevocable letter of credit (the "Letter of Credit") in an amount equal to
the principal amount of the Bonds outstanding from time to time plus 45 days'
interest thereon in order to enhance the marketability of the Bonds (the "Letter
of Credit Requirements").
(4) In performance of the Letter of Credit Requirements, the Borrower
caused Bank One to deliver its irrevocable letter of credit dated as of May 6,
1992, as amended to date (the "Original Letter of Credit"), pursuant to the
terms and conditions of the Reimbursement Agreement dated as of May 1, 1992, as
amended by the First Amendment to Reimbursement Agreement dated as of April 1,
1996, the Second Amendment to Reimbursement Agreement dated as of February 7,
1997, the Third Amendment to Reimbursement Agreement dated as of February ___,
1998, 1998 and the Fourth Amendment to Reimbursement Agreement dated as of
August 28, 1998, among Borrower and Bank One (the "Reimbursement Agreement").
(5) In connection with the Reimbursement Agreement, the Borrower executed
and delivered to Bank One, inter alia, that certain Pledge and Security
Agreement dated as of May 1, 1992 (the "Pledge Agreement").
<PAGE> 3
(6) In connection with the Reimbursement Agreement, the Borrower executed
and delivered to Bank One, inter alia, that certain Security Agreement dated as
of May 1, 1992 (the "Bank One Security Agreement").
(7) In connection with the Reimbursement Agreement, the Borrower executed
and delivered to Bank One, inter alia, that certain Mortgage and Security
Agreement dated as of May 1, 1992 (the "Mortgage") respecting the Borrower's
real property described in Exhibit A thereto (the "Property") and that certain
Real Estate Mortgage Subordination Agreement (the "Subordination Agreement")
dated May 6, 1992.
(8) In connection with that certain Credit Agreement (the "Credit
Agreement") dated August 28, 1998, among Tufco, L.P., Tufco Technologies, Inc.,
certain lenders (the "Banks") and FUNB, as agent for such lenders, the security
interests granted by the Borrower to Bank One pursuant to the Bank One Security
Agreement were terminated and the Borrower executed and delivered to FUNB, inter
alia, that certain Security Agreement (Borrower) dated August 28, 1998 (the
"FUNB Security Agreement").
(9) Pursuant to the Indenture, Borrower may provide for the delivery to
Trustee of an Alternate Letter of Credit (as defined therein).
(10) It is the intention of Bank One, the Borrower and FUNB that (i) FUNB
issue an Alternate Letter of Credit in favor of the Trustee, as trustee under
the Indenture, to become effective on the Replacement Date (as defined herein),
(ii) the Original Letter of Credit be surrendered by the Trustee to Bank One as
of the Replacement Date (as defined herein), (iii) Bank One assign all of its
rights, benefits, title and interest in and to the Reimbursement Agreement, the
Pledge Agreement, the Mortgage, the Subordination Agreement and any and all
other documents, instruments and agreements executed in connection therewith, as
such documents have been amended to date (the "Transaction Documents") to FUNB,
(iv) FUNB accept the duties and responsibilities of Bank One, if any, under the
Transaction Documents as amended by this Assignment and Amendment, (v) the
Transaction Documents be amended as provided in this Assignment and Amendment to
reflect the issuance of the Alternate Letter of Credit by FUNB pursuant to the
Reimbursement Agreement as assigned and amended by this Assignment and Amendment
(the "Amended Reimbursement Agreement"), (vi) the obligations of the Borrower to
FUNB be fully secured by the security interests granted pursuant to (A) the
Pledge Agreement as amended hereby, (B) the FUNB Security Agreement, and (C) the
Mortgage, all to the same extent that Bank One was secured; and (vii) Tufco
Technologies, Inc., a Delaware corporation ("Technologies"), Technologies I,
Inc., a Delaware corporation ("Tech I"), TFCO, Inc., a Delaware corporation
("TFCO"), Tufco, Inc., a Delaware corporation ("Tufco"), and Tufco Tech, Inc., a
Delaware corporation ("Tufco Tech") and Foremost Manufacturing Company, Inc. a
Missouri corporation ("Foremost") (collectively, the "Guarantors") guarantee the
obligations of the Borrower to FUNB under the Transaction Documents as amended
hereby, which guarantees are secured by the Collateral as defined in, and as
provided by, the Guarantor Security Agreement between FUNB and each of the
Guarantors dated as of August 28, 1998.
2
<PAGE> 4
(11) In the event the Alternate Letter of Credit is drawn upon to provide
funds to the Trustee or otherwise, the Borrower will be obligated to reimburse
FUNB in full for such drawing, in accordance with the terms and provisions of
the Amended Reimbursement Agreement.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Assignment. Bank One, in consideration of the sum of $1.00 and
other good and lawful consideration paid to Bank One, does hereby sell, assign,
transfer and set over to FUNB, without recourse of any kind whatsoever except
with respect to any representation or warranty of Bank One under Section 5
hereof which shall have been false or misleading in any material respect as of
the date given or the date on which the same is to be effective, all of Bank
One's rights, benefits, title and interest in and to the Transaction Documents
as of the Replacement Date (as hereinafter defined), for FUNB to have and hold
the same absolutely, and the Borrower acknowledges such assignment and agrees
that FUNB shall have all of the rights and benefits against the Borrower under
the Transaction Documents as FUNB would have had if FUNB were the Lender, the
Mortgagee, the Bank or such other party as Bank One may have been designated
under any of the Transaction Documents as amended by this Assignment and
Amendment or by such other documents, instruments and agreements executed or
delivered in connection herewith (the "Collateral Documents"). FUNB accepts the
duties and responsibilities of Bank One set forth in the Transaction Documents
as amended by this Assignment and Amendment and the Collateral Documents.
Section 2. Execution and Delivery of Alternate Letter of Credit. FUNB
agrees, based on the terms and conditions hereinafter set forth to execute and
deliver to the Trustee on or before the day immediately preceding the
Replacement Date, the Alternate Letter of Credit substantially in the form
attached hereto as Exhibit A hereto, in the amount of $1,775,890.41 and with a
stated termination date of May 15, 2000 subject to automatic extension, in
substitution for the Original Letter of Credit, such substitution to be
effective as of the start of business on April 22, 1999 (the "Replacement
Date").
Section 3. Amendments to Transaction Documents. In addition, the parties
hereto agree to the following amendments to the Transaction Documents to become
effective as of the Replacement Date;
(a) The definition of "Bank" in the introductory paragraph of the
Reimbursement shall be amended to mean FUNB and its successors and assigns,
and all references to the "Bank," "Lender," "Mortgagee," or other party as
Bank One may have been designated under any of the Transaction Documents
shall mean FUNB and its successors and assigns.
(b) The following definitions in Section 1 of the Reimbursement
Agreement are hereby amended and restated to read in their entirety as
follows:
"`Reference Rate' means the Bank's Prime Rate."
3
<PAGE> 5
(c) The definitions of the terms "Bank Security Documents," "Loan
Documents," and "Pledge and Security Agreement" set forth in Section 1 of
the Reimbursement Agreement are each hereby amended by deleting the period
at the end of each such definition and adding the following phrase:
", as the same may be amended or otherwise modified from time to
time."
(d) The following new definition is added to Section 1 of the
Reimbursement Agreement:
"`Prime Rate' The Bank's Prime Rate shall be that rate announced by
the Bank from time to time as its prime rate and is one of several
interest rate bases used by the Bank. The Bank lends at rates both
above and below Bank's Prime Rate, and Borrower acknowledges that
Bank's Prime Rate is not represented or intended to be the lowest or
most favorable rate of interest offered by the Bank."
(e) The introductory phrase of Section 2 of the Reimbursement
Agreement is hereby amended and restated to read in its entirety as
follows:
"The Company agrees to pay the Bank, at its office in West Trenton,
New Jersey in immediately available funds:"
(f) Section 3(b) of the Reimbursement Agreement is hereby amended and
restated to read in its entirety as follows:
"On the Closing Date and annually thereafter on the 16th day of May in
each year until the issuance of an Alternate Letter of Credit as
provided in the Indenture, a commission at the rate of 1.25% of the
average amount of the Letter of Credit scheduled to be outstanding
during the next succeeding year; provided that the annual commission
payable on the Closing Date shall be for the period commencing on the
Closing Date and ending May 15, 1993. Upon the issuance of an
Alternate Letter of Credit, the Borrower will pay a letter of credit
fee to the issuer of such Alternate Letter of Credit on the amount
available for drawing under the Alternate Letter of Credit, such
letter of credit fee (i) to be paid in arrears on the last day of
February, May, August and November of each year, commencing with the
first such day after the Replacement Date (as defined in that certain
Assignment and Amendment dated March 4, 1999), with a final payment
due on the date of expiration or termination of such Alternate Letter
of Credit (each such date a `Payment Date') and (ii) to be calculated
for the period from and including one Payment Date (or with respect to
the first such payment,
4
<PAGE> 6
from and including the Replacement Date) to and excluding the earlier
of the next Payment Date or the date of expiration or termination of
the Alternate Letter of Credit at a rate equal to one percent (1%) per
annum. The issuer of the Letter of Credit which is to be replaced by
the Alternate Letter of Credit shall refund to the Borrower promptly
after the Replacement Date any excess commission paid by the Borrower
for the unexpired term of the Letter of Credit."
(g) A copy of any notice or other communication delivered to Bank One
pursuant to any of the Transaction Documents shall (i) until the
Replacement Date, also be delivered to FUNB in the same manner and at the
same time as such communication is delivered to Bank One, and (ii) after
the Replacement Date be delivered to FUNB, in both cases at the address or
the number for facsimile transmission, as the case may be, set forth below:
First Union National Bank
370 Scotch Road
West Trenton, NJ 08628
Attn: Mr. Paul Turko, Senior Underwriter
Fax: 609-538-7406
with a copy to:
Saul, Ewing, Remick & Saul LLP
Centre Square West
1500 Market Street, 38th Floor
Philadelphia, PA 19102
Attn: Patricia A. Gritzan, Esquire
Fax: 215-972-1847
Section 4. Representations and Warranties of Borrower. In order to induce
FUNB to enter into this Agreement, the Borrower hereby reaffirms and confirms
for the benefit of FUNB the representations and warranties set forth in each of
the Transaction Documents, with the same effect as if made on the date of the
execution and delivery of this Assignment and Amendment and as of the
Replacement Date, and as if (i) the references therein to "this Agreement" mean
and include this Assignment and Amendment, (ii) the references therein to the
balance sheets of the Borrower dated September 30, 1989 through September 30,
1991 and January 31, 1992, and to the related statements of income, retained
earnings and cash flows for the periods ending on such dates are references to
the balance sheets of the Borrower dated September 30, 1995 through September
30, 1998 and to the related statements of income, retained earnings and cash
flows for the periods ending on such later dates, and (iii) the references
therein to Schedules 1, 5(k) and 5(p) mean and include the Schedules II-1,
II-5(k) and II-5(p) attached hereto and made a part hereof, respectively.
5
<PAGE> 7
In addition, the Borrower represents and warrants to FUNB:
(a) The Borrower is a limited partnership, duly organized, validly
existing and in good standing under the laws of the state of Delaware, is
duly qualified as a foreign corporation and is in good standing under the
laws of each jurisdiction in which it is required to be qualified because
of the business it conducts or the property it owns, and has full power and
authority to enter into and perform its obligations under this Assignment
and Amendment and all Collateral Documents.
(b) That upon issuance by FUNB of the Alternate Letter of Credit, it
will have satisfied such of the conditions precedent to this Assignment and
Amendment.
(c) No Default or Event of Default as defined in any of the
Transaction Documents and, after giving effect hereto, no such Default or
Event of Default will be in existence or will occur as a result of giving
effect hereto, and no other default or event exists which with the passage
of time or notice to Bank One or FUNB would become such a Default or Event
of Default.
(d) The execution, delivery and performance of this Assignment and
Amendment and each of the Collateral Documents to which the Borrower is a
party will not violate any provision of any law or regulation or of any
writ or decree of any court or governmental instrumentality, or of the
Borrower's partnership agreement or other similar organizational documents.
(e) The Borrower has the power to execute, deliver and perform this
Assignment and Amendment and each of the Collateral Documents to which it
is a party and has taken all necessary action to authorize the execution,
delivery and performance of this Assignment and Amendment and each of the
Collateral Documents and the performance of the Collateral Documents as
amended hereby.
(f) The execution, delivery and performance of this Assignment and
Amendment and each of the Collateral Documents to which the Borrower is a
party does not require the consent of any other party or the consent,
license, approval or authorization of, or registration or declaration with,
any governmental body, authority, bureau or agency and this Assignment and
Amendment, the Transaction Documents and the Collateral Documents
constitute legal, valid and binding obligations of the Borrower,
enforceable in accordance with their respective terms.
(g) The Reimbursement Agreement and other Transaction Documents, and
the obligations of Borrower thereunder, are free from any liens, setoffs,
counterclaims and other defenses of Borrower.
6
<PAGE> 8
Section 5. Representations and Warranties of Bank One. In order to induce
FUNB to enter into this Agreement, Bank One represents and warrants to FUNB as
of the date hereof and as of the Replacement Date:
(a) Bank One is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, has full
corporate power and authority to enter into this Assignment and Amendment
Agreement and to take any action and execute this Assignment and Amendment
Agreement and any Collateral Documents to which it is a party
(collectively, the "Assignment Documents").
(b) The execution, delivery and performance of this Assignment and
Amendment and each of the Collateral Documents to which it is a party have
been duly authorized by all necessary corporate proceedings, and the
Assignment Documents have been duly and validly executed and delivered by
Bank One, and, assuming due authorization, execution and delivery by FUNB,
are legal, valid, and binding obligations of Bank One, enforceable in
accordance with their respective terms, except as limited by bankruptcy,
insolvency or similar laws of general application affecting the enforcement
of creditors' rights and except to the extent that general principals of
equity might affect the specific enforcement of such documents.
(c) Bank One has delivered to FUNB on or prior to the date hereof the
original Reimbursement Agreement, Pledge Agreement, Mortgage and the other
Transaction Documents listed on Schedule I hereto, and each such document
is (i) genuine and (ii) true, correct, and complete, and the terms and
conditions contained in such documents reflect the entire agreement with
respect to the matters therein between the Borrower, Bank One and, to Bank
One's knowledge, any other person, firm or organization having any interest
in the Reimbursement Agreement or other Transaction Document, and there are
no other verbal or written agreements or representations in connection with
the Transaction Documents between the Borrower and Bank One or, to Bank
One's knowledge, any other person, firm or organization. After the
execution hereof, Bank One agrees that it will not agree to any
modification of the Transaction Documents, consent to any waiver of any
provision thereof or waive any Default or Event of Default under any
Transaction Document without FUNB's prior written consent.
(d) Bank One is the owner of the Transaction Documents and conveys all
of its right, title and interest to the Transaction Documents to FUNB on
the date hereof free and clear of all liens and encumbrances arising by,
through or under Bank One.
(e) To its knowledge, the Reimbursement Agreement and other
Transaction Documents, and the obligations of Borrower thereunder, are free
7
<PAGE> 9
from any liens, setoffs, counterclaims and other defenses of Borrower
against Bank One.
(f) Bank One has the right to assign the Transaction Documents and no
consents are required as a condition thereto which have not been obtained.
(g) The Borrower is not delinquent in the payment of any amount due
under the Reimbursement Agreement or other Transaction Document.
(h) No default related to any payment due under the Reimbursement
Agreement or other Transaction Document and, to the best of Bank One's
knowledge, no other default or event which with the passage of time or
notice of Bank One or FUNB would become an Event of Default under the
Reimbursement Agreement or other Transaction Document, has occurred.
(i) There are no claims, suits, or other proceedings or governmental
investigations ("Claims") relating to the Reimbursement Agreement or other
Transaction Documents nor are there any claims by the Borrower, pending, or
to Bank One's knowledge, threatened, relating to the Transaction Documents.
(j) Bank One warrants that it has not heretofore assigned, pledged or
otherwise transferred any interest in the Transaction Documents.
Section 6. Reaffirmation. Except as amended hereby, all of the terms,
covenants and conditions of the Transaction Documents (including, but not
limited to, provisions relating to any waiver of the right to trial by jury) are
ratified, reaffirmed and confirmed and shall continue in full force and effect
as therein written and are not intended to be re-enacted as of the above date,
but rather to be effective as of the original date of such documents.
Section 7. Conditions Precedent. The obligation of FUNB to issue the
Alternate Letter of Credit is subject to the conditions precedent that FUNB
shall have received on or before the date of the issuance of the Alternate
Letter of Credit the following, each dated such date, in form and substance
satisfactory to FUNB and its counsel:
(a) This Assignment and Amendment and the Mortgage Assignment
(substantially in the form set forth as Exhibit B hereto) dated as of the
date of this Assignment and Amendment, duly executed by the Borrower, each
Guarantor and Bank One, as applicable.
(b) Satisfaction of the mortgage dated as of June 1, 1988 granted by
Tufco Industries, Inc. in favor of Peoples Marine Bank of Green Bay.
(c) Copies of the resolutions of the Borrower approving this
Assignment and Amendment and the other matters contemplated hereby and a
8
<PAGE> 10
copy of the Borrower's partnership agreement, both certified by the General
Partner to be true, correct and complete as of the date hereof, and all
other documents evidencing any other action of the Borrower necessary to
authorize the execution, delivery and performance hereof.
(d) [Intentionally left blank.]
(e) A certificate of the Borrower certifying (i) the names and true
signatures of the officers of the Borrower authorized to sign this
Assignment and Amendment and the other documents to be delivered by it
hereunder, (ii) that the representations and warranties contained in
Section 4 of this Assignment and Amendment are true and correct on and as
of the date of issuance of the Alternate Letter of Credit as though made on
and as of such date; and (iii) no event has occurred and is continuing, or
would result from the issuance of the Alternate Letter of Credit which
constitutes a Default or an Event of Default (as defined in any Transaction
Document) or would constitute a Default or an Event of Default but for the
requirement that notice be given or time elapse or both.
(f) A commitment from a title insurance company acceptable to FUNB to
issue an ALTA Lender's Policy in the amount of $1,775,890.41 insuring that
the Borrower is the owner of the real property described therein and the
validity and first priority of FUNB's mortgage lien thereon, subject only
to those exceptions which are acceptable coverages as FUNB may reasonably
request.
(g) Current searches of the appropriate public offices demonstrating
that no security interest, tax lien, judgment lien or other charge or
encumbrance is of record affecting the Borrower or its properties except
those which are acceptable to FUNB.
(h) A Phase I environmental assessment of the Property or such other
evidence as FUNB may require that no uncorrected violation by the Borrower
of any Environmental Laws or condition which would subject the Borrower to
damages, penalties, injunctive relief or cleanup costs under any
Environmental Laws or which require or are likely to require cleanup,
removal, remedial action or other response pursuant to Environmental Laws
by the Borrower exists as of the date hereof.
(i) An opinion of Locke Liddell Sapp LLP in form and substance
satisfactory to FUNB and its counsel, addressed to FUNB, to the effect that
(i) the Borrower is a limited partnership validly existing and in good
standing under the laws of the State of Delaware and has full corporate
power and authority to enter into, execute and deliver this Assignment and
Amendment and the
9
<PAGE> 11
Collateral Documents (the "Closing Documents"), to perform its obligations
thereunder and to consummate the transactions provided for therein, (ii)
the execution and delivery of, and the performance under, the Closing
Documents have been duly authorized by all necessary corporate action and
duly executed and delivered by the Borrower and constitute the legal, valid
and binding agreement of the Borrower enforceable against the Borrower in
accordance with their terms, (iii) the Borrower succeeded to the
obligations of Tufco Industries, Inc. (a dissolved Wisconsin corporation)
under the Transaction Documents upon the acquisition by the Borrower of all
of the assets of Tufco Industries, Inc. and subsequent dissolution of Tufco
Industries, Inc., (iv) the execution and delivery of, and performance
under, the Closing Documents by the Borrower do not violate any provision
of law, the articles of incorporation or by-laws of the Borrower; and (iv)
no consent, approval or authorization of any party or governmental
authority is required in connection with the execution and delivery of, or
performance under, the Closing Documents by Borrower.
(j) An opinion of Locke Liddell Sapp LLP in form and substance
satisfactory to FUNB and its counsel, addressed to FUNB, to the effect that
(i) each of the Guarantors is a corporation validly existing and in good
standing under the laws of its state of incorporation and has full
corporate power and authority to enter into, execute and deliver the
Reaffirmation of Guaranty set forth on page 14 hereof (the
"Reaffirmation"), to perform its obligations thereunder and to consummate
the transactions provided for therein, (ii) the execution and delivery of,
and performance under, the Reaffirmation have been duly authorized by all
necessary corporate action and duly executed and delivered by each of the
Guarantors and constitute the legal, valid and binding agreement of each
Guarantor enforceable against each of them in accordance with their terms,
(iii) the execution and delivery of, and performance under, the
Reaffirmation by each of the Guarantors does not violate any provision of
law, the articles of incorporation or by-laws of any of the Guarantors; and
(iv) no consent, approval or authorization of any party or governmental
authority is required in connection with the execution, delivery of, and
performance under, the Reaffirmation by any Guarantor.
(k) An opinion of Quarles & Brady in form and substance satisfactory
to the Trustee that the replacement of the Letter of Credit with the
Alternate Letter of Credit will not cause interest on the Project Bonds (as
defined in the Indenture) to become includable in gross income for federal
income tax purposes.
(l) A certificate of Bank One certifying the names and true signatures
of the officers of Bank One authorized to sign this Assignment and
Amendment and the other documents to be delivered by it hereunder.
10
<PAGE> 12
(m) Such other documents as FUNB or its counsel may reasonably
request; and all proceedings taken in connection with the transactions
contemplated by this Assignment and Amendment, and all instruments,
authorizations and other documents applicable thereto, are satisfactory to
FUNB.
Section 8. Binding Effect. This Assignment and Amendment shall be binding
upon and inure to the benefit of Bank One, the Borrower and FUNB and their
respective successors and assigns, except that the Borrower shall not have the
right to assign its rights hereunder or any interest herein without the prior
written consent of FUNB. FUNB may assign or otherwise transfer (by participation
or otherwise) all or any part of, or any interest (undivided or divided) in,
FUNB's rights and benefits under this Assignment and Amendment or delegate any
or all of its obligations hereunder. Any assignee of FUNB shall have the same
rights and benefits against the Borrower hereunder as it would have had if such
assignee were FUNB under this Assignment and Amendment. FUNB shall notify the
Borrower and the Trustee of any such assignment.
Section 9. Severability. Any provision of this Assignment and Amendment
which is prohibited, unenforceable or not authorized in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 10. Governing Law. This Assignment and Amendment shall be governed
by, and construed in accordance with, the laws of the State of Wisconsin without
reference to conflict of law principles.
Section 11. Headings. Section headings in this Assignment and Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Assignment and Amendment for any other purpose.
Section 12. Counterparts. This Assignment and Amendment may be signed in
any number of counterparts, each of which shall be an original, and all of which
shall constitute but one and the same instrument.
Section 13. Judicial Proceedings. Each party to this Assignment and
Amendment agrees that any suit, action or proceeding, whether claim or
counterclaim, brought or instituted by any party hereto or any successor or
assign of any party, on or with respect to this Assignment and Amendment, the
Transaction Documents, the Collateral Documents or the dealings of the parties
with respect hereto and thereto, shall be tried only by a court and not by a
jury. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDINGS. Further, each
party waives any right it may have to claim or recover, in any such suit, action
or proceeding, any special, exemplary, punitive or consequential damages or
dames other than, or in addition to, actual damages. THE
11
<PAGE> 13
BORROWER ACKNOWLEDGES AND AGREES THAT THIS SECTION IS A SPECIFIC AND MATERIAL
ASPECT OF THIS AGREEMENT AND THAT FUNB WOULD NOT ENTER INTO THIS AGREEMENT IF
THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
12
<PAGE> 14
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
BANK ONE, WISCONSIN
By:
----------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By:
----------------------------------
Name:
Title:
TUFCO L.P.
By:
----------------------------------
Name:
Title:
13
<PAGE> 15
The undersigned Guarantors, each of whom has guaranteed the obligations of
the Borrower under the Reimbursement Agreement and other Transaction Documents
pursuant to a Guaranty Agreement dated August 28, 1998 (the "Guaranty"), hereby
acknowledge that they have each read and understand the provisions of the
foregoing Assignment and Amendment and do hereby consent and agree to the
Borrower's execution and delivery of said Assignment and Amendment; and each
Guarantor hereby reaffirms, ratifies and confirms all of its respective
obligations under the Guaranty in favor of FUNB (the "Reaffirmed Agreements") as
if such Reaffirmed Agreements had been executed on the date hereof. Without
limitation thereon, the Guarantor expressly acknowledges and agrees that the
Reimbursement Agreement and other Transaction Documents, as amended by said
Assignment and Agreement, are Guaranteed Indebtedness as such term is defined in
the Guaranty.
TUFCO TECHNOLOGIES, INC. TUFCO TECH, INC.
By: By:
---------------------------------- --------------------------------
Name: Name:
Title: Title:
TECHNOLOGIES I, INC. TUFCO, INC.
By: By:
---------------------------------- --------------------------------
Name: Name:
Title: Title:
TFCO, INC. FOREMOST MANUFACTURING COMPANY, INC.
By: By:
---------------------------------- --------------------------------
Name: Name:
Title: Title:
14
<PAGE> 16
SCHEDULE I
List of Transaction Documents
1. Loan Agreement dated as of May 1, 1992 between Tufco L.P. ("Tufco") and the
Village of Ashwaubenon, Wisconsin ("Issuer").
2. Indenture of Trust dated as of May 1, 1992 between Norwest Bank, Wisconsin,
National Association ("Trustee") and Issuer.
3. Amendment to Loan Agreement and Indenture dated as of April 1, 1996 among
Tufco, Issuer and Trustee.
4. Reimbursement Agreement dated as of May 1, 1992 among Bank One, Wisconsin
(f/k/a Bank One, Milwaukee, National Association) ("Bank One") and Tufco.
5. First Amendment to Reimbursement Agreement dated as of April 1, 1996
between Bank One and Tufco.
6. Second Amendment to Reimbursement Agreement dated as of February 7, 1997
between Bank One and Tufco.
7. Third Amendment to Reimbursement Agreement dated as of February ___, 1998
between Bank One and Tufco.
8. Fourth Amendment to Reimbursement Agreement dated as of August 28, 1998
between Bank One and Tufco.
9. Mortgage and Security Agreement from Tufco to Bank One dated as of May 1,
1992.
10. Real Estate Mortgage Subordination Agreement dated May 6, 1992.
11. Pledge and Security Agreement dated as of May 1, 1992.
12. Consent to Transfer of Assets and Obligations dated to be effective
February 7, 1997.
15
<PAGE> 17
SCHEDULE II-1
16
<PAGE> 18
SCHEDULE II-5(k)
17
<PAGE> 19
SCHEDULE II-5(p)
18
<PAGE> 20
EXHIBIT A
FORM OF LETTER OF CREDIT
19
<PAGE> 21
EXHIBIT B
FORM OF MORTGAGE ASSIGNMENT
20
<PAGE> 1
EXHIBIT 10.2
ASSIGNMENT AND AMENDMENT (FOURTH)
OF
PARTICIPATION AGREEMENT,
REIMBURSEMENT AGREEMENT,
AND
OTHER TRANSACTION DOCUMENTS
The Participation Agreement and the Reimbursement Agreement
Originally Dated as of December 17, 1996
This Assignment and Amendment dated as of March 18, 1999
among:
ASSET HOLDINGS CORPORATION IX,
TUFCO, L.P.,
BANK ONE, WISCONSIN,
as assignor,
and
FIRST UNION NATIONAL BANK,
as assignee
in connection with:
SUBSTITUTION OF LETTER OF CREDIT FOR SOUTH CAROLINA JOBS-
ECONOMIC DEVELOPMENT AUTHORITY $1,500,000 ADJUSTABLE
RATE ECONOMIC DEVELOPMENT REVENUE BONDS,
SERIES 1996 (TUFCO INDUSTRIES, INC. PROJECT)
<PAGE> 2
This Assignment and Amendment (Fourth) of Participation Agreement,
Reimbursement Agreement and Other Transaction Documents (this "Assignment and
Amendment") is dated as of March 18, 1999, and is by and among Bank One,
Wisconsin, a Wisconsin banking corporation, as assignor ("Bank One"), First
Union National Bank, a national banking corporation, as assignee ("FUNB"),
Tufco, L.P., a Delaware limited partnership (the "Lessee") and Asset Holdings
Corporation IX, a Delaware corporation (the "Borrower").
PRELIMINARY STATEMENTS:
(1) Pursuant to the Loan Agreement dated as of December 1, 1996 between the
Borrower and the South Carolina Jobs-Economic Development Authority (the
"Issuer") (the "Loan Agreement"), the Issuer has loaned the proceeds of the
issuance of $1,500,000 of the Issuer's Adjustable Rate Economic Development
Revenue Bonds, Series 1996 (Tufco Industries, Inc. Project) (the "Bonds") to the
Borrower.
(2) The Bonds were issued under a Trust Indenture dated as of December 1,
1996 between the Issuer and Bank One Wisconsin Trust Company, National
Association, as trustee (together with any successor trustee under the
Indenture, the "Trustee") (the "Indenture").
(3) Pursuant to the Loan Agreement, the Borrower has an obligation to cause
to be maintained for the benefit of the Trustee, as trustee under the Indenture,
an irrevocable letter of credit (the "Letter of Credit") in an amount equal to
the principal amount of the Bonds outstanding from time to time plus 45 days'
interest thereon (calculated at the maximum rate of 10% per annum) in order to
enhance the marketability of the Bonds (the "Letter of Credit Requirements").
(4) In performance of the Letter of Credit Requirements, the Borrower
caused Bank One to deliver its irrevocable letter of credit dated as of December
17, 1996 (the "Original Letter of Credit") pursuant to the terms and conditions
of (a) the Participation Agreement dated as of December 17, 1996, among the
Borrower, Bank One and Tufco Industries, Inc., a Wisconsin corporation ("Tufco
Industries"), as lessee (as amended by the First Amendment to Participation
Agreement dated February 7, 1997, the Second Amendment to Participation
Agreement dated February ___ 1998 (the "Second Amendment to Participation
Agreement"), the Third Amendment to Participation Agreement dated August 28,
1998 (collectively the "Amendments"), the "Participation Agreement") and (b) the
Reimbursement Agreement dated as of December 17, 1996, between the Borrower and
Bank One (as amended by the Amendments, the "Reimbursement Agreement").
(5) In connection with the Reimbursement Agreement, the Participation
Agreement, the Loan Agreement and the other Operative Documents as defined
therein (as the same have been or may be amended or otherwise modified from time
to time, collectively referred to herein as the "Transaction Documents"), the
Borrower executed and delivered to Bank One, inter alia, that certain Pledge and
Security Agreement dated as of December 17,
<PAGE> 3
1996 (the "Pledge Agreement"), that certain Mortgage and Security Agreement (the
"Mortgage"), that certain Assignment of Lease and Rents (the "Lease
Assignment"), that certain First Amendment to Lease and Development Agreement
(together with the Lease and Development Agreement dated as of June 10, 1996 and
the Second Amendment to Lease and Development Agreement dated February 7, 1997
(the "Second Lease Amendment"), the "Lease"), and that certain Subordination,
Non-Disturbance and Attornment Agreement (the "Subordination Agreement"), each
dated as of December 17, 1996 (the Mortgage, the Lease Assignment, the Lease and
the Subordination Agreement, collectively, the "Real Property Agreements").
(6) In connection with the Transaction Documents, Tufco Technologies, Inc.,
a Delaware corporation ("Technologies"), Executive Converting Corporation, a
Delaware corporation ("Executive") and Hamco Industries, Inc., a Delaware
corporation ("Hamco") executed and delivered to Bank One, inter alia, that
certain Unconditional Corporate Guaranty Agreement dated as of December 17, 1996
(the "December Guaranty").
(7) In connection with the Second Lease Amendment, Technologies,
Technologies I, Inc. (under the name of Technologies I), a Delaware corporation
("Tech I"), TFCO, Inc., a Delaware corporation ("TFCO"), Tufco, Inc., a Delaware
corporation ("Tufco"), and Tufco Tech, Inc. (under the name of Tufco Tech), a
Delaware corporation ("Tufco Tech") executed and delivered to Bank One, inter
alia, that certain Unconditional Corporate Guaranty Agreement dated as of
February 7, 1997 (the "February Guaranty").
(8) In connection with the Second Amendment to Participation Agreement,
Foremost Manufacturing Company, Inc. a Missouri corporation, Technologies, Tech
I, TFCO, Tufco, and Tufco Tech executed and delivered to Bank One, inter alia,
that certain First Amendment to Unconditional Corporate Guaranty Agreement dated
as of February ___, 1998 (the "First Amendment to Guaranty") (the December
Guaranty, the February Guaranty and the First Amendment to Guaranty,
collectively, the "Guaranties").
(9) Pursuant to a Consent to Transfer of Lease dated February 7, 1997, the
Borrower and Bank One consented to the transfer of the obligations of Tufco
Industries under the Lease to Lessee, its successor in interest.
(10) Pursuant to the Indenture, Borrower may provide for the delivery to
Trustee of an Alternate Letter of Credit (as defined therein).
(11) It is the intention of Bank One, the Borrower and FUNB (i) that FUNB
issue its Alternate Letter of Credit, (ii) that the Original Letter of Credit be
surrendered by the Trustee to Bank One upon delivery to Bank One of the
Alternate Letter of Credit, (iii) that Bank One assign all of its rights,
benefits, title and interest in and to the Transaction Documents to FUNB, (iv)
that FUNB accept the duties and responsibilities of Bank One, if any, under the
Transaction Documents as amended by this Assignment and Amendment, (v) that the
Transaction Documents be amended as provided in this Assignment and Amendment to
reflect the issuance of the Alternate Letter of Credit by FUNB pursuant to the
Reimbursement Agreement as assigned and amended by this Assignment and
Amendment, (vi) that the
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<PAGE> 4
obligations of the Borrower to FUNB be fully secured by the security interests
granted pursuant to (A) the Pledge Agreement as amended hereby and (B) the Real
Property Agreements to the same extent that Bank One was secured, (vii) that the
obligations of the Lessee to Lessor and FUNB as successor to Bank One be fully
guaranteed by the Guarantors to the same extent that the obligations of the
Lessee to Lessor and Bank One were guaranteed by the Guaranties, and (viii) that
the obligations of the Lessee under the Participation Agreement and other
Transaction Documents to Bank One shall be obligations of the Lessee to FUNB as
successor to Bank One.
(12) In the event the Alternate Letter of Credit is drawn upon to provide
funds to the Trustee or otherwise, the Borrower will be obligated to reimburse
FUNB in full for such drawing, in accordance with the terms and provisions of
the Reimbursement Agreement as amended hereby.
NOW, THEREFORE, the parties hereto agree as follows:
Section 1. Assignment. Bank One, in consideration of the sum of $1.00 and
other good and lawful consideration paid to Bank One, does hereby sell, assign,
transfer and set over to FUNB, without recourse of any kind whatsoever except
with respect to any representation or warranty of Bank One under section 6
hereof which shall have been false or misleading in any material respect as of
the date given or the date on which the same is to be effective, all of Bank
One's rights, benefits, title and interest in and to the Transaction Documents
as of the Replacement Date (as hereinafter defined), for FUNB to have and hold
the same absolutely, and the Borrower, the Lessee and the Guarantors acknowledge
such assignment and agree that FUNB shall have all of the rights and benefits
against the Borrower, the Lessee and the Guarantors under the Transaction
Documents as FUNB would have had if FUNB were the Lender, the Mortgagee, the
Bank or such other party as Bank One may have been designated under any of the
Transaction Documents as amended by this Assignment and Amendment or by such
other documents, instruments and agreements executed and/or delivered in
connection herewith (the "Collateral Documents"). FUNB accepts the duties and
responsibilities of Bank One set forth in the Transaction Documents as amended
by this Assignment and Amendment and the Collateral Documents.
Section 2. Execution and Delivery of Alternate Letter of Credit. FUNB
agrees, based on the terms and conditions hereinafter set forth, to execute and
deliver to the Trustee the Alternate Letter of Credit substantially in the form
set forth in Exhibit A hereto in the amount of $1,356,520.55 and with a stated
termination date of December 15, 2001, subject to automatic extension, in
substitution for the Original Letter of Credit, such substitution to be
effective as of the start of business on May 6, 1999 (the "Replacement Date").
Section 3. Amendments to Transaction Documents. In addition, the parties
hereto agree to the following amendments to the Transaction Documents to become
effective as of the Replacement Date:
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<PAGE> 5
(a) The definition of "Bank" in the introductory paragraph of the
Reimbursement shall be amended to mean FUNB and its successors and assigns,
and all references to the "Bank," "Lender," "Mortgagee," or other party as
Bank One may have been designated under any of the Transaction Documents
shall mean FUNB and its successors and assigns.
(b) The following definition in Section 1 of the Reimbursement
Agreement is hereby amended and restated to read in their entirety as
follows:
"`Reference Rate' means the Bank's Prime Rate."
(c) The definitions of the terms "Lender Security Documents,"
"Operative Documents," and "Pledge and Security Agreement" set forth in
Section 1 of the Reimbursement Agreement are each hereby amended by
deleting the period at the end of each such definition and adding the
following phrase:
", as the same may be amended or otherwise modified from time to
time."
(d) The following new definition is added to Section 1 of the
Reimbursement Agreement:
"`Prime Rate' The Bank's Prime Rate shall be that rate announced by
the Bank from time to time as its prime rate and is one of several
interest rate bases used by the Bank. The Bank lends at rates both
above and below Bank's Prime Rate, and Borrower acknowledges that
Bank's Prime Rate is not represented or intended to be the lowest or
most favorable rate of interest offered by the Bank."
(e) Section 2 of the Reimbursement Agreement is hereby amended and
restated to read in its entirety as follows:
"The Company agrees to pay the Lender, at its office in West Trenton,
New Jersey, in immediately available funds, in the case of a payment
by the Lender under the Letter of Credit pursuant to a draft
accompanied by a certificate in the form of Annex A to the Letter of
Credit or by a certificate in the form of Annex D to the Letter of
Credit, a sum equal to the amount so paid, payable immediately upon
demand."
(f) Section 3(b) of the Reimbursement Agreement is hereby amended and
restated to read in its entirety as follows:
"On the Closing Date and annually thereafter on December 16 of each
year until the issuance of an Alternate Letter of Credit as provided
in
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<PAGE> 6
the Indenture, a commission at the rate of 1.25% of the average amount
of the Letter of Credit scheduled to be outstanding during the next
succeeding year; provided that the annual commission payable on the
Closing Date shall be for the period commencing on the Closing Date
and ending December 15, 1997. Upon the issuance of an Alternate Letter
of Credit, the Borrower will pay a letter of credit fee to the issuer
of such Alternate Letter of Credit on the amount available for drawing
under the Alternate Letter of Credit, such letter of credit fee (i) to
be paid in arrears on the last day of February, May, August and
November of each year, commencing with the first such day after the
Replacement Date (as defined in that certain Assignment and Amendment
dated March 18, 1999), with a final payment due on the date of
expiration or termination of such Alternate Letter of Credit (each
such date a `Payment Date') and (ii) to be calculated for the period
from and including one Payment Date (or with respect to the first such
payment, from and including the Replacement Date) to and excluding the
earlier of the next Payment Date or the date of expiration or
termination of the Alternate Letter of Credit at a rate equal to one
percent (1%) per annum. The issuer of the Letter of Credit which is to
be replaced by the Alternate Letter of Credit shall refund to the
Borrower promptly after the Replacement Date any excess commission
paid by the Borrower for the unexpired term of the Letter of Credit."
(g) The order of payments set forth in Section 7.8 is restated to
correct and clarify the parties' intentions to read in its entirety as
follows:
"shall be applied by the Lender first, to the payment of all amounts
due and payable to the Lender hereunder or under any Operative
Document, second, to the payment of an amount equal to the then
current Stated Amount of the Letter of Credit to the Lender for
deposit into the Interest Escrow Account or the Principal Escrow
Account, as the case may be, for the payment of amounts which may be
drawn under the Letter of Credit, third, to the extent not paid or
payable by a draw under the Letter of Credit, to the Trustee for the
payment of principal, premium, if any, or interest then due and
payable under the Bonds and any amounts due and payable to the Issuer
by the Borrower under the Loan Agreement, fourth, the remainder, if
any, shall be returned to the Lessee."
(h) The order of payments set forth in Section 7.9 is restated to
correct and clarify the parties' intentions to read in its entirety as
follows:
"shall be applied by the Lender first, to the payment of all amounts
due and payable to the Lender hereunder or under any Operative
Document, second, to the payment of an amount equal to the then
current Stated
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<PAGE> 7
Amount of the Letter of Credit to the Lender for deposit into the
Interest Escrow Account or the Principal Escrow Account, as the case
may be, for the payment of amounts which may be drawn under the Letter
of Credit, third, to the extent not paid or payable by a draw under
the Letter of Credit, to the Trustee for the payment of principal,
premium, if any, or interest then due and payable under the Bonds and
any amounts due and payable to the Issuer by the Borrower under the
Loan Agreement."
(i) The order of payments set forth in Section 7.10 is restated to
correct and clarify the parties' intentions to read in its entirety as
follows:
"shall be applied by the Lender first, to the payment of all amounts
due and payable to the Lender hereunder or under any Operative
Document, second, to the payment of an amount equal to the then
current Stated Amount of the Letter of Credit to the Lender for
deposit into the Interest Escrow Account or the Principal Escrow
Account, as the case may be, for the payment of amounts which may be
drawn under the Letter of Credit, third, to the extent not paid or
payable by a draw under the Letter of Credit, to the Trustee for the
payment of principal, premium, if any, or interest then due and
payable under the Bonds and any amounts due and payable to the Issuer
by the Borrower under the Loan Agreement, fourth, (a) if sold by the
Lessee pursuant to Section 15.6 of the Lease, to the Lessee, the
excess of such proceeds of sale, if any, and (b) otherwise, to the
Lessor."
(j) The introductory phrase of Section 7.11(a) of the Reimbursement
Agreement is restated to correct and clarify the parties' intentions to
read in its entirety as follows:
"(a) Any payments received by the Borrower or the Lender when an Event
of Default under the Lease exists (or has ceased to exist by reason of
a rejection of the Lease in a proceeding with respect to the Lessee
described in Article XIII(g) of the Lease), as:"
(k) Section 7.11(b) of the Reimbursement Agreement is restated to
correct and clarify the parties' intentions to read in its entirety as
follows:
"(b) Any payments received by the Borrower when an Event of Default
under the Lease exists (or has ceased to exist by reason of a
rejection of the Lease in a proceeding with respect to the Lessee
described in Article XIII(g) of the Lease) from the Lessee as a
payment in accordance with the Lease, shall be paid to the Lender as
promptly as possible, and then be applied by the Lender as promptly as
possible in the order of priority set forth in subsection (a) of this
section."
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<PAGE> 8
(l) A new Section 9.1(g) is added to read in its entirety as follows:
"(g) Credit Agreement (i) First Union National Bank shall no longer be
Agent for the Banks as defined in and pursuant to the Credit Agreement
dated as of August 28, 1998 among Tufco, L.P., Tufco Technologies,
Inc., the Banks and First Union National Bank (the "Credit
Agreement"), or (ii) an `Event of Default' (as defined in the Credit
Agreement) shall occur and such default continues beyond any
applicable grace period provided therein."
(m) Article 10.1 of the Participation Agreement is restated to correct
and clarify the parties' intentions to read in its entirety as follows:
"Tufco, L.P. expressly assumes all the liabilities and obligations of
Tufco Industries, Inc., a Wisconsin corporation, under the Lease, this
Participation Agreement, and the other Operative Documents."
(n) Article 10.1 of the Lease and Development Agreement is restated to
correct and clarify the parties' intentions to read in its entirety as
follows:
"Tufco, L.P. expressly assumes all of the liabilities and obligations
of Tufco Industries, Inc., a Wisconsin corporation, under this Lease
and Development Agreement, the Participation Agreement, and the other
Operative Documents."
(o) The dates corresponding to "Closing Date" and "Completion Date"
which should be set forth in Appendix I to Participation Agreement and
First Amendment to Lease and Development Agreement ("Appendix I") are June
18, 1996 and such date prior to December 31, 1996 determined in accordance
with the definition set forth in the earlier Appendix I, respectively.
(p) The definition of "Lease Balance" set forth in Appendix I is
restated to correct and clarify the parties' intentions to read in its
entirety as follows:
"`Lease Balance' means, as of any date of determination, an amount
equal to all amounts then due and payable under the Reimbursement
Agreement, and without duplication, an amount equal to the then
current Stated Amount of the Letter of Credit and any portion of
principal of and premium and interest on the Bonds which shall not be
paid or payable by a draw on the Letter of in accordance with its
terms, and all other amounts owing by the Lessee to Lender or Lessor
under any of the Operative Documents."
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<PAGE> 9
(q) The term "Original Purchaser" (which was not defined in Appendix
I) is not used in the Operative Documents in connection with Lessee's or
Lender's obligations and shall not be defined or construed in any manner
which would affect Lessee's obligation to pay the Lease Balance to Lender.
(r) The definition of "Participation Agreement" set forth in Appendix
I is restated to correct and clarify the parties' intentions to read in its
entirety as follows:
"`Participation Agreement' means the Participation Agreement, dated as
of December 17, 1996, among the Lessee, the Lessor and the Lender,
together with all amendments or supplements thereto."
(s) The definition of "Release Date" set forth in Appendix I is
restated to correct and clarify the parties' intentions to read in its
entirety as follows:
"`Release Date' means the date that is the later of (i) the date the
Bonds shall have been indefeasibly paid in cash in full or (ii) the
date the Obligations shall have been indefeasibly paid in cash in
full."
(t) Section 18.4 of the Lease and Development Agreement is restated to
correct and clarify the parties' intentions to read in its entirety as
follows:
"Notices. Unless Otherwise specified herein, all notices, offers
acceptances, rejections, consents, requests, demands or other
communications to or upon the respective parties hereto shall be made
in accordance with the provisions of Section 8.2 of the Participation
Agreement as if all such communications were notices covered by such
Section 8.2."
(u) Section 15.7(a)(i) of the Lease and Development Agreement is
restated to correct and clarify the parties' intentions to read in its
entirety as follows:
"(i) Lessee shall pay to the Lender the Recourse Deficiency Amount
pursuant to Section 15.6(xi),"
(v) The proviso set forth in Section 2.3(v) of the Participation
Agreement is restated to correct and clarify the parties' intentions to
read in its entirety as follows:
"in the event Lessee effectively exercises the Remarketing Option
pursuant to the provisions of Section 15.6 of the Lease and duly and
timely fulfills the provisions of clauses(i) through (xiii) of Section
15.6 of the Lease, Lessee's obligations shall be limited as provided
in
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<PAGE> 10
Sections 15.6, 15.7 and 15.8 of the Lease, except as provided by
Section 7.6 of this Participation Agreement."
Section 4. Representations and Warranties of the Borrower. In order to
induce FUNB to enter into this Agreement, the Borrower hereby reaffirms and
confirms for the benefit of FUNB the representations and warranties of the
Borrower set forth in each of the Transaction Documents, with the same effect as
if made on the date of the execution and delivery of this Assignment and
Amendment and as of the Replacement Date, and as if the references therein to
"this Agreement" mean and include this Assignment and Amendment.
In addition, the Borrower represents and warrants to FUNB that:
(a) The Borrower is a corporation, duly organized, validly existing
and in good standing under the laws of the state of Delaware, is duly
qualified as a foreign corporation and is in good standing under the laws
of each jurisdiction in which it is required to be qualified because of the
business it is deemed to conduct by virtue of its obligations under the
Lease or other Transaction Document, and has full power and authority to
enter into and perform its obligations under this Assignment and Amendment
and all Collateral Documents.
(b) The execution, delivery and performance by the Borrower of this
Assignment and Amendment and each of the Collateral Documents to which the
Borrower is a party will not violate any provision of any law or regulation
or of any writ or decree of any court or governmental instrumentality, or
of the Borrower's certificate of incorporation or By-laws.
(c) The Borrower has the power to execute, deliver and perform this
Assignment and Amendment and each of the Collateral Documents to which it
is a party and has taken all necessary action to authorize the execution,
delivery and performance of this Assignment and Amendment and each of the
Collateral Documents and the performance of the Collateral Documents as
amended hereby.
(d) The execution, delivery and performance of this Assignment and
Amendment and each of the Collateral Documents to which the Borrower is a
party does not require the consent of any other party or the consent,
license, approval or authorization of, or registration or declaration with,
any governmental body, authority, bureau or agency and this Assignment and
Amendment, the Transaction Documents and the Collateral Documents
constitute legal, valid and binding obligations of the Borrower,
enforceable in accordance with their respective terms.
(e) To its knowledge, the Reimbursement Agreement and other
Transaction Documents, and the obligations of Borrower thereunder, are free
from any liens, setoffs, counterclaims and other defenses of Borrower.
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<PAGE> 11
Section 5. Representations and Warranties of the Lessee. In order to induce
FUNB to enter into this Agreement, the Lessee hereby reaffirms and confirms for
the benefit of FUNB the representations and warranties set forth in each of the
Transaction Documents, with the same effect as if (i) made on the date of the
execution and delivery of this Assignment and Amendment and as of the
Replacement Date, and as if the references therein to "this Agreement" mean and
include this Assignment and Amendment and (ii) the references therein to any
balance sheets or related statements of income, retained earnings and cash flows
of Lessee are references to the balance sheets of the Lessee dated September 30,
1995 through September 30, 1998 and to the related statements of income,
retained earnings and cash flows for the periods ending on such dates.
In addition, the Lessee represents and warrants to FUNB:
(a) The Lessee is a limited partnership, duly organized, validly
existing and in good standing under the laws of the state of Delaware, is
duly qualified as a foreign corporation and is in good standing under the
laws of each jurisdiction in which it is required to be qualified because
of the business it conducts or the property it owns, and has full power and
authority to enter into and perform its obligations under this Assignment
and Amendment and all Collateral Documents.
(b) That upon issuance by FUNB of the Alternate Letter of Credit, it
will have satisfied such of the conditions precedent to this Assignment and
Amendment.
(c) No Default or Event of Default as defined in any of the
Transaction Documents and, after giving effect hereto, no such Default or
Event of Default will be in existence or will occur as a result of giving
effect hereto, and no other default or event exists which with the passage
of time or notice to Bank One or FUNB would become such a Default or Event
of Default.
(d) The execution, delivery and performance of this Assignment and
Amendment and each of the Collateral Documents to which the Lessee is a
party will not violate any provision of any law or regulation or of any
writ or decree of any court or governmental instrumentality, or of the
Lessee's partnership agreement or other similar organizational documents.
(e) The Lessee has the power to execute, deliver and perform this
Assignment and Amendment and each of the Collateral Documents to which it
is a party and has taken all necessary action to authorize the execution,
delivery and performance of this Assignment and Amendment and each of the
Collateral Documents and the performance of the Collateral Documents as
amended hereby.
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<PAGE> 12
(f) The execution, delivery and performance of this Assignment and
Amendment and each of the Collateral Documents to which the Lessee is a
party does not require the consent of any other party or the consent,
license, approval or authorization of, or registration or declaration with,
any governmental body, authority, bureau or agency and this Assignment and
Amendment, the Transaction Documents and the Collateral Documents
constitute legal, valid and binding obligations of the Lessee, enforceable
in accordance with their respective terms.
(g) The Reimbursement Agreement and other Transaction Documents, and
the obligations of Lessee thereunder, are free from any liens, setoffs,
counterclaims and other defenses of Lessee.
Section 6. Representations and Warranties of Bank One. In order to induce
FUNB to enter into this Agreement, Bank One represents and warrants to FUNB as
of the date hereof and as of the Replacement Date:
(a) Bank One is a corporation duly organized, validly existing and in
good standing under the laws of the state of its incorporation, has full
corporate power and authority to enter into this Assignment and Amendment
Agreement and to take any action and execute this Assignment and Amendment
Agreement and any Collateral Documents to which it is a party
(collectively, the "Assignment Documents").
(b) The execution, delivery and performance of this Assignment and
Amendment and each of the Collateral Documents to which it is a party have
been duly authorized by all necessary corporate proceedings, and the
Assignment Documents have been duly and validly executed and delivered by
Bank One, and, assuming due authorization, execution and delivery by FUNB,
are legal, valid, and binding obligations of Bank One, enforceable in
accordance with their respective terms, except as limited by bankruptcy,
insolvency or similar laws of general application affecting the enforcement
of creditors' rights and except to the extent that general principals of
equity might affect the specific enforcement of such documents.
(c) Bank One has delivered to FUNB on or prior to the date hereof the
original Reimbursement Agreement, Pledge Agreement, Mortgage and the other
Transaction Documents listed on Schedule I hereto, and each such document
is (i) genuine and (ii) true, correct, and complete, and the terms and
conditions contained in such documents reflect the entire agreement with
respect to the matters therein between the Borrower, Bank One and, to Bank
One's knowledge, any other person, firm or organization having any interest
in the Reimbursement Agreement or other Transaction Document, and there are
no other verbal or written agreements or representations in connection with
the Transaction Documents between the Borrower and Bank One or, to Bank
One's
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<PAGE> 13
knowledge, any other person, firm or organization. After the execution
hereof, Bank One agrees that it will not agree to any modification of the
Transaction Documents, consent to any waiver of any provision thereof or
waive any Default or Event of Default under any Transaction Document
without FUNB's prior written consent.
(d) Bank One is the owner of the Transaction Documents and conveys all
of its right, title and interest to the Transaction Documents to FUNB on
the date hereof free and clear of all liens and encumbrances arising by,
through or under Bank One.
(e) To its knowledge, the Reimbursement Agreement and other
Transaction Documents, and the obligations of Borrower thereunder, are free
from any liens, setoffs, counterclaims and other defenses of Borrower
against Bank One.
(f) Bank One has the right to assign the Transaction Documents and no
consents are required as a condition thereto which have not been obtained.
(g) The Borrower is not delinquent in the payment of any amount due
under the Reimbursement Agreement or other Transaction Document.
(h) No default related to any payment due under the Reimbursement
Agreement or other Transaction Document and, to the best of Bank One's
knowledge, no other default or event which with the passage of time or
notice of Bank One or FUNB would become an Event of Default under the
Reimbursement Agreement or other Transaction Document, has occurred.
(i) There are no claims, suits, or other proceedings or governmental
investigations ("Claims") relating to the Reimbursement Agreement or other
Transaction Documents nor are there any claims by the Borrower, pending, or
to Bank One's knowledge, threatened, relating to the Transaction Documents.
(j) Bank One warrants that it has not heretofore assigned, pledged or
otherwise transferred any interest in the Transaction Documents.
Section 7. Additional Agreements. The parties hereto further agree that:
(a) All payments of Basic Rent from and after the Replacement Date
shall be paid to FUNB as Lender under the Operative Documents.
(b) On the Replacement Date, Bank One will transfer to FUNB by wire
transfer of immediately available funds, the then current balance of the
Principal Escrow Account and the Interest Escrow Account established
pursuant to Section 2 of the Reimbursement Agreement, and FUNB will deposit
such
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<PAGE> 14
monies into noninterest bearing escrow accounts established with FUNB at
its office in West Trenton, New Jersey for the purpose of complying with
the requirements of Section 2 of the Reimbursement Agreement.
(c) The obligations of the Borrower under this Assignment and
Amendment and each other document delivered in connection herewith are
solely the corporate obligations of the Borrower. No recourse shall be had
for any claims under this Assignment and Amendment against any
incorporator, shareholder, officer, or director, past, present or future,
of the Borrower or of any successor corporation, or against J H Management
Corporation, either directly or through the Borrower or any successor
corporation, whether by virtue of any constitution, statute or rule of law
or by the enforcement of any assessment or penalty or otherwise, all such
liability being, by acceptance hereof and as part of the consideration for
the acceptance hereof, expressly waived and released.
(d) A copy of any notice or other communication delivered to Bank One
pursuant to any of the Transaction Documents shall (i) until the
Replacement Date, also be delivered to FUNB in the same manner and at the
same time as such communication is delivered to Bank One, and (ii) after
the Replacement Date be delivered to FUNB, in both cases at the address or
the number for facsimile transmission, as the case may be, set forth below:
First Union National Bank
370 Scotch Road
West Trenton, NJ 08628
Attn: Mr. Paul Turko, Senior Underwriter
Fax: 609-538-7406
with a copy to:
Saul, Ewing, Remick & Saul LLP
Centre Square West
1500 Market Street, 38th Floor
Philadelphia, PA 19102
Attn: Patricia A. Gritzan, Esquire
Fax: 215-972-1847
Section 8. Reaffirmation. Except as amended hereby, all of the terms,
covenants and conditions of the Transaction Documents and each of the other Loan
Documents (including, but not limited to, provisions relating to any waiver of
the right to trial by jury) are ratified, reaffirmed and confirmed and shall
continue in full force and effect as therein written and are not intended to be
re-enacted as of the above date, but rather to be effective as of the original
date of such documents. Each of the Guarantors hereby reaffirms and ratifies all
of the terms, covenants, and conditions contained in the Guaranties and confirms
that such
13
<PAGE> 15
Guaranties are binding and enforceable against each such Guarantor as if such
Guaranties had been executed as of the date hereof.
Section 9. Conditions Precedent. The obligation of FUNB to issue the
Alternate Letter of Credit is subject to the condition precedent that FUNB shall
have received on or before the date of the issuance of the Alternate Letter of
Credit the following, each dated such date, in form and substance satisfactory
to FUNB and its counsel:
(a) This Assignment and Amendment, a Mortgage Assignment, an Amended
and Restated Assignment of Leases and Rents, an Assignment of Assignment of
Leases and Rents, the Amended and Restated Subordination, Non-Disturbance
and Attornment Agreement, and an Assignment of Subordination,
Non-Disturbance and Attornment Agreement (each in form satisfactory to
FUNB) dated as of the date of this Assignment and Amendment, duly executed
by the Borrower, the Lessee, each Guarantor and Bank One, as applicable.
(b) UCC-3 Amendments identifying Lessee as debtor and UCC-3
Assignments of the UCC-1 Financing Statements filed in favor of Bank One in
connection with the Transaction Documents, duly executed by Bank One
assigning Bank One's interests to FUNB.
(c) Satisfaction of the mortgage recorded in Mortgage Book 278, Page
224 of Clarendon County, S.C. granted by Asset Holding Corporation IX in
favor of Bank One.
(d) Copies of the resolutions of the Borrower approving this
Assignment and Amendment and the other matters contemplated hereby and a
copy of the Borrower's certificate of incorporation and By-laws, both
certified by the Borrower to be true, correct and complete as of the date
hereof, and all other documents evidencing any other action of the Borrower
necessary to authorize the execution, delivery and performance hereof.
(e) A certificate of the Borrower certifying (i) the names and true
signatures of the officers of the Borrower authorized to sign this
Assignment and Amendment and the other documents to be delivered by it
hereunder, (ii) that the representations and warranties contained in
Section 4 of this Assignment and Amendment are true and correct on and as
of the date of issuance of the Alternate Letter of Credit as though made on
and as of such date; and (iii) no event has occurred and is continuing, or
would result from the issuance of the Alternate Letter of Credit which
constitutes a Default or an Event of Default (as defined in any Transaction
Document) or would constitute a Default or an Event of Default but for the
requirement that notice be given or time elapse or both.
(f) A commitment from a title insurance company acceptable to FUNB to
issue an ALTA Lender's Policy in the amount of $1,356,520.55
14
<PAGE> 16
insuring that the Borrower is the owner of the real property described
therein and the validity and first priority of FUNB's mortgage lien
thereon, subject only to those exceptions which are acceptable coverages as
FUNB may reasonably request.
(g) Such evidence as FUNB may require that no environmental hazard or
potential hazard exists other than such hazards or potential hazards
identified in the Report of Phase I Environmental Site Assessment, BPB
Project No. 95009 (February 1995) as updated by B.P. Barber & Associates,
Inc. under letter dated June 14, 1996.
(h) An opinion of Borrower's counsel in form and substance
satisfactory to FUNB and its counsel, addressed to FUNB.
[SPACE INTENTIONALLY LEFT BLANK TO (i)]
(i) An opinion of Lessee's counsel in form and substance satisfactory
to FUNB and its counsel, addressed to FUNB, to the effect that (i) the
Lessee is a limited partnership validly existing and in good standing under
the laws of the State of Delaware and has full corporate power and
authority to enter into, execute and deliver the Closing Documents, to
perform its obligations thereunder and to consummate the transactions
provided for therein, (ii) the execution and delivery of, and the
performance under, the Closing Documents have been duly authorized by all
necessary corporate action and duly executed and delivered by the Lessee
and constitute the legal, valid and binding agreement of the Lessee
enforceable against the Lessee in accordance with their terms, (iii) the
Lessee succeeded to the obligations of Tufco Industries, Inc. (a dissolved
Wisconsin corporation) under the Transaction Documents upon the acquisition
by the Lessee of all of the assets of Tufco Industries, Inc. and subsequent
dissolution of Tufco Industries, Inc., (iv) the execution and delivery of,
and performance under, the Closing Documents by the Lessee do not violate
any provision of law, the articles of incorporation or by-laws of the
Lessee; and
15
<PAGE> 17
(iv) no consent, approval or authorization of any party or governmental
authority is required in connection with the execution and delivery of, or
performance under, the Closing Documents by Lessee.
(j) An opinion of counsel for the Guarantors in form and substance
satisfactory to FUNB and its counsel, addressed to FUNB, to the effect that
(i) each of the Guarantors is a corporation validly existing and in good
standing under the laws of its state of incorporation and has full
corporate power and authority to enter into, execute and deliver the
Reaffirmation of Guaranty set forth on page 19 hereof (the
"Reaffirmation"), to perform its obligations thereunder and to consummate
the transactions provided for therein, (ii) the execution and delivery of,
and performance under, the Reaffirmation have been duly authorized by all
necessary corporate action and duly executed and delivered by each of the
Guarantors and constitute the legal, valid and binding agreement of each
Guarantor enforceable against each of them in accordance with their terms,
(iii) the execution and delivery of, and performance under, the
Reaffirmation by each of the Guarantors does not violate any provision of
law, the articles of incorporation or by-laws of any of the Guarantors; and
(iv) no consent, approval or authorization of any party or governmental
authority is required in connection with the execution, delivery of, and
performance under, the Reaffirmation by any Guarantor.
(k) An opinion of Haynsworth, Marion, McKay & Guerard, L.L.P. in form
and substance satisfactory to the Trustee that the replacement of the
Letter of Credit with the Alternate Letter of Credit will not cause
interest on the Project Bonds (as defined in the Indenture) to become
includable in gross income for federal income tax purposes.
(l) A certificate of Bank One certifying the names and true signatures
of the officers of Bank One authorized to sign this Assignment and
Amendment and the other documents to be delivered by it hereunder.
(m) Such other documents as FUNB or its counsel may reasonably
request; and all proceedings taken in connection with the transactions
contemplated by this Assignment and Amendment, and all instruments,
authorizations and other documents applicable thereto, are satisfactory to
FUNB.
Section 10. Binding Effect. This Assignment and Amendment shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns, except that none of the Borrower, Lessee or Guarantors
shall have the right to assign its rights hereunder or any interest herein
without the prior written consent of FUNB. FUNB may assign or otherwise transfer
(by participation or otherwise) all or any part of, or any interest (undivided
or divided) in, FUNB's rights and benefits under this Assignment and Amendment
or delegate any or all of its obligations hereunder. Any assignee of FUNB shall
have the same
16
<PAGE> 18
rights and benefits against the Borrower, Lessee and Guarantors hereunder as it
would have had if such assignee were FUNB under this Assignment and Amendment.
FUNB shall notify the Borrower and the Trustee of any such assignment.
Section 11. Severability. Any provision of this Assignment and Amendment
which is prohibited, unenforceable or not authorized in any jurisdiction shall,
as to such jurisdiction, be ineffective to the extent of such prohibition,
unenforceability or non-authorization without invalidating the remaining
provisions hereof or affecting the validity, enforceability or legality of such
provision in any other jurisdiction.
Section 12. Governing Law. This Assignment and Amendment shall be governed
by, and construed in accordance with, the laws of the State of Wisconsin without
reference to conflict of law principles.
Section 13. Headings. Section headings in this Assignment and Amendment are
included herein for convenience of reference only and shall not constitute a
part of this Assignment and Amendment for any other purpose.
Section 14. Counterparts. This Assignment and Amendment may be signed in
any number of counterparts, each of which shall be an original, and all of which
shall constitute but one and the same instrument.
Section 15. Judicial Proceedings. Each party to this Assignment and
Amendment agrees that any suit, action or proceeding, whether claim or
counterclaim, brought or instituted by any party hereto or any successor or
assign of any party, on or with respect to this Assignment and Amendment, the
Transaction Documents, the Collateral Documents or the dealings of the parties
with respect hereto and thereto, shall be tried only by a court and not by a
jury. EACH PARTY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES ANY
RIGHT TO A TRIAL BY JURY IN ANY SUCH SUIT, ACTION OR PROCEEDINGS. Further, each
party waives any right it may have to claim or recover, in any such suit, action
or proceeding, any special, exemplary, punitive or consequential damages or
dames other than, or in addition to, actual damages. THE BORROWER, LESSEE AND
GUARANTORS ACKNOWLEDGE AND AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL
ASPECT OF THIS AGREEMENT AND THAT FUNB WOULD NOT ENTER INTO THIS AGREEMENT IF
THE WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
17
<PAGE> 19
IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first above written.
ASSET HOLDINGS CORPORATION IX
By:
-----------------------------------
Name:
Title:
TUFCO, L.P.
By:
-----------------------------------
Name:
Title:
BANK ONE, WISCONSIN
By:
-----------------------------------
Name:
Title:
FIRST UNION NATIONAL BANK
By:
-----------------------------------
Name:
Title:
18
<PAGE> 20
The undersigned Guarantors, each of whom has guaranteed the obligations of
the Lessee under the Lease pursuant to Guaranty Agreements dated December 17,
1996 and February 7, 1997, as amended by the First Amendment to Unconditional
Corporate Guaranty Agreement dated as of February ___, 1998 (the "Guaranty"),
hereby acknowledge that they have each read and understand the provisions of the
foregoing Assignment and Amendment and do hereby consent and agree to the
Lessee's execution and delivery of said Assignment and Amendment; and each
Guarantor hereby reaffirms, ratifies and confirms all of its respective
obligations under the Guaranty in favor of FUNB (the "Reaffirmed Agreements") as
if such Reaffirmed Agreements had been executed on the date hereof. Without
limitation thereon, the Guarantor expressly acknowledges and agrees that the
Lease, as amended by said Assignment and Agreement, constitutes one of the
"Guaranteed Obligations" as such term is defined in the Guaranty.
TUFCO TECHNOLOGIES, INC. TUFCO TECH, INC.
By: By:
---------------------------------- --------------------------------
Name: Name:
Title: Title:
TECHNOLOGIES I, INC. TUFCO, INC.
By: By:
---------------------------------- --------------------------------
Name: Name:
Title: Title:
TFCO, INC. FOREMOST MANUFACTURING COMPANY, INC.
By: By:
---------------------------------- --------------------------------
Name: Name:
Title: Title:
19
<PAGE> 21
SCHEDULE I
List of Transaction Documents
1. Loan Agreement dated as of December 1, 1996 between Asset Holdings
Corporation IX ("Holdings") and the South Carolina Jobs Economic
Development Authority ("Issuer").
2. Trust Indenture dated as of December 1, 1996 between Bank One Wisconsin
Trust Company, National Association ("Trustee") and Issuer.
3. Reimbursement Agreement dated as of December 17, 1996 between Bank One,
Wisconsin ("Bank One") and Holdings.
4. Participation Agreement dated as of December 17, 1996 among Holdings, Bank
One and Tufco Industries, Inc. 5. Lease and Development Agreement dated as
of June 10, 1996, between Holdings, as Lessor, and Tufco, as Lessee.
6. First Amendment to Lease and Development Agreement dated December ___,
1996, between Holdings and Tufco Industries, Inc. ("Tufco")
7. First Amendment to Participation Agreement dated as of February 7, 1997
among Holdings, Bank One and Tufco, L.P. ("Tufco").
8. Second Amendment to Lease and Development Agreement dated February 7, 1997,
between Holdings, Tufco, L.P. ("Tufco LP") and Bank One.
9. Second Amendment to Participation Agreement dated as of February ___, 1998
among Holdings, Bank One and Tufco.
10. Third Amendment to Participation Agreement dated as of August 28, 1998
among Holdings, Bank One and Tufco.
11. Mortgage and Security Agreement dated as of December 17, 1996 from Holdings
to Bank One.
12. Assignment of Leases and Rents dated as of December 17, 1996 from Holdings
to Bank One.
13. Subordination, Non-disturbance and Attornment Agreement dated as of
December 17, 1996 among Holdings, Tufco Industries, Inc. and Bank One.
20
<PAGE> 22
14. Pledge and Security Agreement dated as of December 17, 1996 from Holdings
to Bank One.
15. Unconditional Corporate Guaranty Agreement dated as of December 17, 1996
from Tufco Technologies, Inc., Executive Converting Corporation and Hamco
Industries, Inc. to Bank One.
16. Unconditional Corporate Guaranty Agreement dated as of February 7, 1997
from Tufco Technologies, Inc., Technologies I, Inc., TFCO, Inc., Tufco,
Inc. and Tufco Tech, Inc. to Bank One.
17. First Amendment to Unconditional Corporate Guaranty Agreement dated as of
February ___, 1998 among Foremost Manufacturing Company, Inc., Tufco
Technologies, Inc., Technologies I, Inc., TFCO, Inc., Tufco, Inc., Tufco
Tech, Inc. and Bank One.
18. UCC-1 Financing Statements: Filed with the Secretary of State, SC, Nos.
123914B, 123839B, 160457A, 150436A, 160549A, 123759B.
21
<PAGE> 23
EXHIBIT A
Form of Letter of Credit
22
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