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EXHIBIT 10.1
FIRST AMENDMENT TO CREDIT AGREEMENT
This FIRST AMENDMENT TO CREDIT AGREEMENT (together with all amendments
and modifications, the "Agreement"), dated as of December 18, 1998, is by and
among TUFCO, L.P. a Delaware limited partnership (the "Borrower"), TUFCO
TECHNOLOGIES, INC., a Delaware corporation ("Parent"), CHASE BANK OF TEXAS,
NATIONAL ASSOCIATION, a national banking association ("Chase"), and FIRST UNION
NATIONAL BANK, a national banking association ("FUNB") (Chase and FUNB,
collectively, the "Banks"), individually and in its capacity as agent for the
Banks (the "Agent").
BACKGROUND
A. The Banks, the Borrower and Parent entered into that certain Credit
Agreement, dated as of August 28, 1998 (together with all amendments and
modifications thereto, the "Credit Agreement"), pursuant to which each of the
Banks agreed: (i) to make available to the Borrower a revolving credit facility
in a maximum aggregate principal amount of $4,500,000 (the "Revolver") and (ii)
to make a term loan to the Borrower in the initial aggregate principal amount of
$5,325,000 (the "Term Loan") (the Revolver and the Term Loan, collectively, the
"Loans").
B. In connection with the Credit Agreement and in order to evidence the
Loans, the Borrower executed and delivered to the Banks those certain Revolving
Notes, dated as of August 28, 1998, and those certain Term Notes, dated as of
August 28, 1998 (together with all amendments and modifications thereto, the
"Notes").
C. In connection with the Credit Agreement and the Notes and in order
to secure its obligations thereunder, the Borrower executed and delivered to the
Agent that certain Security Agreement, dated as of August 28, 1998 (together
with all amendments and modifications thereto, collectively, the "Security
Agreement").
D. In connection with the Credit Agreement and the Notes and in order
to secure the Borrower's obligations thereunder, Tufco Technologies, Inc., a
Delaware corporation, Tufco Tech, Inc., a Delaware corporation, Technologies I,
Inc., a Delaware corporation, Tufco, Inc., a Delaware corporation, TFCO, Inc., a
Delaware corporation, and Foremost Manufacturing Company, Inc., a Missouri
corporation (collectively, the "Guarantors") executed and delivered to the Agent
that certain Guaranty Agreement dated August 28, 1998 (the "Guaranty").
E. In connection with the Guaranty and in order to secure the
Guarantor's obligations thereunder, each of the Guarantors executed and
delivered to the Agent that certain Guarantor Security Agreement dated as of
August 28, 1998 (the "Guarantor Security Agreement").
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F. The Credit Agreement, the Notes, the Security Agreement, the
Guaranty, the Guarantor Security Agreement and all of the documents, instruments
and agreements executed and delivered in connection therewith, together with all
amendments and modifications thereto, shall be referred to hereinafter as the
"Loan Documents."
G. The Banks and the Borrower, pursuant to the terms hereof, wish to
amend certain of the terms of the Loan Documents.
NOW, THEREFORE, incorporating the foregoing Background herein by
reference and for other good and valuable consideration, the receipt and legal
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties agree as follows:
1. DEFINED TERMS. Terms used herein which are capitalized but not
defined herein shall have the meanings ascribed to such terms in the Credit
Agreement.
2. AMENDMENTS.
(a) Section 12.1 of the Credit Agreement, is hereby amended and
restated to read in its entirety as follows:
"Consolidated Tangible Net Worth. Parent will at all times maintain
a Consolidated Tangible Net Worth in an amount not less than the sum
of (a) Thirteen Million One Hundred Thousand Dollars ($13,100,000);
plus (b) fifty percent (50%) of Parent's net income determined on a
consolidated basis in accordance with GAAP for each Fiscal Quarter
to have completely elapsed since September 30, 1998; plus (c) one
hundred percent (100%) of the net cash proceeds of any sale of
securities or other cash contributions to the capital of the Parent
received by Parent since September 30, 1998, calculated without
duplication. If Parent's consolidated net income for a Fiscal
Quarter is zero or less, no adjustment to the requisite level of
Consolidated Tangible Net Worth shall be made. "Consolidated
Tangible Net Worth" means, at any particular time, the sum of (a)
all amounts which, in conformity with GAAP, would be included as
stockholders' equity on a consolidated balance sheet of Parent and
the Subsidiaries; minus (b) the amount by which stockholders' equity
has been increased by the write-up of any asset of the Parent and
the Subsidiaries after September 30, 1998; minus (c) the amount of
intangible assets carried on the balance sheet of the Parent and the
Subsidiaries at such date determined in accordance with GAAP on a
consolidated basis, including goodwill, patents,
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trademarks, trade names, organizational expense, deferred financing
charges, debt acquisition cost, computer software development costs,
start-up costs, pre-opening costs, prepaid pension costs, or any
other deferred charges; minus (d) the amount of deferred income tax
assets (less adjustments included in Consolidated Net Income after
September 30, 1998); minus (e) any capital stock or debt security
which is not readily marketable; minus (f) any cash held in a
sinking fund or other analogous fund established for the purpose of
redemption, retirement or prepayment of capital stock or Debt; minus
(g) the cumulative translation adjustments (less adjustments
included in Consolidated Net Income after September 30, 1998); minus
(h) the amount at which shares of capital stock of the Parent is
contained among the assets on the balance sheet of the Parent and
the Subsidiaries; minus (i) to the extent included in clause (a) the
amount properly attributable to the minority interests, if any, of
other Persons in the stock, additional paid-in capital, and retained
earnings of Subsidiaries."
3. CONDITIONS PRECEDENT. The effectiveness of this Agreement and the
Banks' obligations hereunder are conditioned upon the satisfaction of the
following conditions precedent:
(a) Each of the Borrower and Parent shall have delivered to the
Agent this Agreement duly executed by each of them.
(b) Each of the Guarantors shall have delivered to the Agent the
reaffirmation of their obligations set forth following this Agreement duly
executed by each of them.
(c) Chase shall have delivered to the Agent this Agreement duly
executed by it and FUNB shall have duly executed this Agreement, individually
and as Agent.
4. REPRESENTATIONS AND WARRANTIES. In order to induce the Banks to
enter into this Agreement, the Borrower and Parent hereby represent and warrant
to the Banks as follows:
(a) The representations and warranties contained in the Loan
Documents are true and correct on and as of the date of this Agreement and after
giving effect hereto, no Event of Default will be in existence or will occur as
a result of giving effect hereto.
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(b) The Borrower and Parent each have the power to execute,
deliver and perform this Agreement and each of the documents, instruments and
agreements to be executed or delivered in connection herewith and has taken all
necessary action to authorize the execution, delivery and performance of this
Agreement and each of the documents, instruments and agreements executed or
delivered in connection herewith and the performance of the Credit Agreement as
amended hereby.
5. REAFFIRMATION. Except as amended hereby, all of the terms,
covenants and conditions of the Credit Agreement and each of the other Loan
Documents (including, but not limited to, provisions relating to any authority
granted to the Banks to confess judgment against the Borrower and 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.
6. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Borrower and the Banks and their respective successors and
assigns; provided, however, that the Borrower may not assign any of its rights,
nor delegate any of its obligations, under this Agreement without the prior
written consent of the Banks and any purported assignment or delegation absent
such consent shall be void. The Banks may at any time assign or otherwise
transfer (by participation or otherwise) any or all of their rights, or delegate
any or all of its obligations, hereunder, as provided in the Credit Agreement.
7. COUNTERPARTS; EFFECTIVENESS. This Agreement may be executed in
any number of counterparts and by the different parties on separate
counterparts. Each such counterpart shall be deemed to be an original, but all
such counterparts shall together constitute one and the same agreement. This
Agreement shall be deemed to have been executed and delivered when the Agent has
received counterparts hereof executed by all parties listed on the signature
page(s) hereto.
8. AMENDMENT AND WAIVER. No amendment of this Agreement, and no
waiver of any one or more of the provisions hereof shall be effective unless set
forth in a writing and signed by the parties hereto.
9. GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Texas and the applicable laws of the
United States of America.
10. SEVERABILITY. Any provision of this Agreement that is held to be
inoperative, unenforceable, voidable or invalid in any jurisdiction shall, as to
that jurisdiction, be ineffective, unenforceable, void or invalid without
affecting the remaining provisions in that or any other jurisdiction, and to
this end the provisions of this Agreement are declared to be severable.
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11. JUDICIAL PROCEEDINGS. Each party to this Agreement 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 Agreement, the documents, instruments and agreements
executed in connection herewith, the Loan 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
ACKNOWLEDGE AND AGREE THAT THIS SECTION IS A SPECIFIC AND MATERIAL ASPECT OF
THIS AGREEMENT AND THAT THE BANKS WOULD NOT ENTER INTO THIS AGREEMENT IF THE
WAIVERS SET FORTH IN THIS SECTION WERE NOT A PART OF THIS AGREEMENT.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered as of the day and year first above
written.
BORROWER:
TUFCO, L.P.
By: Tufco Tech, Inc.,
its Managing General Partner
By: /s/ XXXX XXXXXXX
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Name: Xxxx Xxxxxxx
Title: CFO/COO
PARENT:
TUFCO TECHNOLOGIES, INC.
By: /s/ XXXX XXXXXXX
-----------------------------------------
Name: Xxxx Xxxxxxx
Title: CFO/COO
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AGENT:
FIRST UNION NATIONAL BANK, individually
as a Bank and as the Agent
By: /s/ XXXXXXX X. XXXXXXX
-----------------------------------------
Name: Xxxxxxx X. Xxxxxxx
Title: Assistant Vice President
OTHER BANK:
CHASE BANK OF TEXAS, NATIONAL
ASSOCIATION
By: /s/ XXXXX X. XXXXXX
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Name: Xxxxx X. Xxxxxx
Title: Vice President
The undersigned Guarantors, each of whom have guaranteed the
obligations of the Borrower under the Credit Agreement pursuant to the Guaranty,
hereby acknowledge that they have read and understand the provisions of this
Amendment, including without limitation the revised financial covenant set forth
in Section 12.1, and do hereby consent and agree to the Borrower's execution and
delivery of the First Amendment to Credit Agreement; and each of the undersigned
Guarantors hereby reaffirms, ratifies and confirms all of their respective
obligations under the Guaranty in favor of the Banks (the "Reaffirmed
Agreements") as if such Reaffirmed Agreements had been executed on the date
hereof.
GUARANTORS:
TUFCO TECHNOLOGIES, INC. TUFCO TECH, INC.
By: /s/ XXXX XXXXXXX By: /s/ XXXX XXXXXXX
-------------------------------- ----------------------------------
Name: Xxxx Xxxxxxx Name: Xxxx Xxxxxxx
Title: CFO/COO Title: CFO/COO
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TECHNOLOGIES I, INC. TUFCO, INC.
By: /s/ XXXXX XXXXX By: /s/ XXXXX XXXXX
-------------------------------- ----------------------------------
Name: Xxxxx Xxxxx Name: Xxxxx Xxxxx
Title: President Title: President
TFCO, INC. FOREMOST MANUFACTURING COMPANY, INC.
By: /s/ XXXXX XXXXX By: /s/ XXXX XXXXXXX
-------------------------------- ----------------------------------
Name: Xxxxx Xxxxx Name: Xxxx Xxxxxxx
Title: President Title: CFO/COO
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STATE OF TEXAS :
: SS
COUNTY OF DALLAS :
On this 18th day of December, A.D., 1998, before me, a Notary Public,
the undersigned officer, personally appeared Xxxx Xxxxxxx, who acknowledged
himself/herself to be CFO/COO of Tufco Tech, Inc., Managing Partner of Tufco,
L.P. and that he/she as such CFO/COO, being authorized to do so, executed the
foregoing Amendment for the purpose therein contained by signing the name of
Tufco Tech, Inc. by himself/herself as CFO/COO thereof.
WITNESS, my hand and Notarial seal, the day and year aforesaid.
/s/ XXXXXXX XXXXXX
[NOTARY STAMP] --------------------------------------
Notary Public
My Commission Expires:
00-00-00
XXXXX XX XXXXX :
: SS
COUNTY OF DALLAS :
On this 18th day of December, A.D., 1998, before me, a Notary Public,
the undersigned officer, personally appeared Xxxx Xxxxxxx, who acknowledged
himself/herself to be CFO/COO of Tufco Tech, Inc. and that he/she as such
CFO/COO, being authorized to do so, executed the foregoing Amendment for the
purpose therein contained by signing the name of the corporation by
himself/herself as CFO/COO thereof.
WITNESS, my hand and Notarial seal, the day and year aforesaid.
/s/ XXXXXXX XXXXXX
[NOTARY STAMP] --------------------------------------
Notary Public
My Commission Expires:
00-00-00
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XXXXX XX XXXXX :
: SS
COUNTY OF DALLAS :
On this 18th day of December, A.D., 1998, before me, a Notary Public,
the undersigned officer, personally appeared Xxxxx Xxxxx, who acknowledged
himself/herself to be President of Technologies I, Inc. and that he/she as such
President, being authorized to do so, executed the foregoing Amendment for the
purpose therein contained by signing the name of the corporation by
himself/herself as President thereof.
WITNESS, my hand and Notarial seal, the day and year aforesaid.
/s/ XXXXXXX XXXXXX
[NOTARY STAMP] --------------------------------------
Notary Public
My Commission Expires:
00-00-00
XXXXX XX XXXXX :
: SS
COUNTY OF DALLAS :
On this 18th day of December, A.D., 1998, before me, a Notary
Public, the undersigned officer, personally appeared Xxxxx Xxxxx, who
acknowledged himself/herself to be President of Tufco, Inc. and that he/she as
such President, being authorized to do so, executed the foregoing Amendment for
the purpose therein contained by signing the name of the corporation by
himself/herself as President thereof.
WITNESS, my hand and Notarial seal, the day and year aforesaid.
/s/ XXXXXXX XXXXXX
--------------------------------------
Notary Public
My Commission Expires:
03-28-00 [NOTARY STAMP]
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STATE OF TEXAS :
: SS
COUNTY OF DALLAS :
On this 18th day of December, A.D., 1998, before me, a Notary
Public, the undersigned officer, personally appeared Xxxxx Xxxxx, who
acknowledged himself/herself to be President of TFCO, Inc. and that he/she as
such President, being authorized to do so, executed the foregoing Amendment for
the purpose therein contained by signing the name of the corporation by
himself/herself as President thereof.
WITNESS, my hand and Notarial seal, the day and year aforesaid.
/s/ XXXXXXX XXXXXX
[NOTARY STAMP] --------------------------------------
Notary Public
My Commission Expires:
00-00-00
XXXXX XX XXXXX :
: SS
COUNTY OF DALLAS :
On this 18th day of December, A.D., 1998, before me, a Notary
Public, the undersigned officer, personally appeared Xxxx Xxxxxxx, who
acknowledged himself/herself to be CFO/COO of Foremost Manufacturing Company,
Inc. and that he/she as such CFO/COO, being authorized to do so, executed the
foregoing Amendment for the purpose therein contained by signing the name of the
corporation by himself/herself as CFO/COO thereof.
WITNESS, my hand and Notarial seal, the day and year aforesaid.
/s/ XXXXXXX XXXXXX
--------------------------------------
Notary Public
My Commission Expires:
03-28-00 [NOTARY STAMP]
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STATE OF TEXAS :
: SS
COUNTY OF DALLAS :
On this 18th day of December, A.D., 1998, before me, a Notary Public,
the undersigned officer, personally appeared Xxxx Xxxxxxx, who acknowledged
himself/herself to be CFO/COO of Tufco Technologies, Inc. and that he/she as
such CFO/COO, being authorized to do so, executed the foregoing Amendment for
the purpose therein contained by signing the name of the corporation by
himself/herself as CFO/COO thereof.
WITNESS, my hand and Notarial seal, the day and year aforesaid.
/s/ XXXXXXX XXXXXX
[NOTARY STAMP] --------------------------------------
Notary Public
My Commission Expires:
03-28-00
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