Exhibit 10.1

COMMERCIAL SECURITY AGREEMENT

THIS COMMERCIAL SECURITY AGREEMENT is entered into by Tufco, L.P., 3161 S. Ridge
Road, Green Bay, Wisconsin 54313 (referred to below as “Grantor”) for the
benefit of JPMorgan Chase Bank, N.A., 200 W. College Avenue, Appleton, Wisconsin
54911 (referred to below as “Lender”). For valuable consideration, Grantor
grants to Lender a security interest in the Collateral to secure the Obligations
and agrees that Lender shall have the rights stated in this Agreement with
respect to the Collateral, in addition to all other rights which Lender may have
by law.

DEFINITIONS. The following words shall have the following meanings when used in
this Agreement. Terms not otherwise defined in this Agreement shall have the
meanings attributed to such terms in the Uniform Commercial Code as adopted in
the State of Wisconsin (“Code”). All references to dollar amounts shall mean
amounts in lawful money of the United States of America.

Agreement. The word “Agreement” means this Commercial Security Agreement, as
this Commercial Security Agreement may be amended or modified from time to time,
together with all exhibits and schedules attached to this Commercial Security
Agreement from time to time.

Borrower. The word “Borrower” means Tufco, L.P.

Collateral. The word “Collateral” means the following described property of
Grantor, whether now owned or hereafter acquired, whether now existing or
hereafter arising, and wherever located:

All inventory and accounts, whether any of the foregoing is owned now or
acquired later, all accessions, additions, replacements and substitutions
relating to any of the foregoing, all proceeds relating to any of the foregoing
(including insurance, general intangibles and account proceeds). All records and
data relating to any of the property herein described, whether in the form of a
writing, photograph, microfilm, microfiche, or electronic media, together with
all of Grantor’s right, title, and interest in and to all computer software
required to utilize, create, maintain, and process any such records or data on
electronic media.

Event of Default. The words “Event of Default” mean and include any of the
Events of Default set forth in the Loan Agreement.

Grantor. The word “Grantor” means Tufco, L.P., its successors and assigns (which
is a debtor under the Code).

Guarantor. The word “Guarantor” means and includes without limitation, each and
all of the guarantors, sureties, and accommodation parties in connection with
the Obligations.

Lender. The word “Lender” means JPMorgan Chase Bank, N.A., its successors and
assigns (which is a secured party under the Code).

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Loan Agreement. The words “Loan Agreement” mean that certain First Amended and
Restated Credit Agreement between the Borrower, Tufco Technologies, Inc., as
Parent, and Lender dated as of March 15, 2010 as amended and restated.

Note. The word “Note” means the Revolving Note dated March 15, 2010 in the total
aggregate original principal amount of $8,000,000.00 from the Borrower to Lender
described in the Loan Agreement, together with all renewals, extensions,
amendments, restatements and modifications, refinancings, and substitutions for
such Note.

Obligations. The word “Obligations” means all obligations, indebtedness and
liabilities of every kind and nature of the Borrower to any one or more of the
Bank, or any of its subsidiaries, affiliates or successors, now existing or
later arising, including, without limitation, obligations arising under the
Related documents, all loans, leases, advances, interest, costs, overdraft
indebtedness, all monetary obligations incurred or accrued during the pendency
of any bankruptcy, insolvency, receivership or other similar proceedings, and
all renewals, extensions, modifications, consolidations or substitutions of any
of the foregoing.

Related Documents. The words “Related Documents” mean and include without
limitation the Note and all credit agreements, loan agreements, guaranties,
security agreements, pledge agreements, assignments, mortgages, deeds of trust,
and all other instruments, agreements and documents, whether now or hereafter
existing, executed in connection with the Note or Loan Agreement.

OBLIGATIONS OF GRANTOR. Grantor represents, warrants and covenants to Lender as
follows:

Perfection of Security Interest. Grantor agrees to execute such financing
statements and to take whatever other actions are requested by Lender to perfect
and continue Lender’s security interest in the Collateral. Upon the reasonable
requests of Lender, Grantor will deliver to Lender copies of any and all of the
documents evidencing or constituting the Collateral. Grantor hereby irrevocably
appoints Lender as its attorney-in-fact for the purpose of executing any
documents necessary to perfect or to continue the security interest granted in
this Agreement. Lender may at any time, and without further authorization from
Grantor, file a carbon, photographic or other reproduction of any financing
statement or of this Agreement for use as a financing statement. Grantor will
reimburse Lender for all expenses for the perfection and the continuation of the
perfection of Lender’s security interest in the Collateral. Grantor has
disclosed to Lender all trade names and assumed names currently used by Grantor,
all trade names and assumed names used by Grantor within the previous six
(6) years and all of Grantor’s current business locations. Grantor will notify
Lender in writing of least thirty (30) days prior to the occurrence of any of
the following: (i) any changes in Grantor’s name, trade name(s) or assumed
name(s), or (ii) any change in Grantor’s business location(s) or the location of
any of the Collateral.

 

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No Violation. The execution and delivery of this Agreement will not violate any
law or agreement, governing Grantor or to which Grantor is a party, and its
organizational documents do not prohibit any term or condition of this
Agreement.

Enforceability of Collateral. To the extent the Collateral consists of accounts,
the Collateral is enforceable in accordance with its terms, is genuine, and
complies with applicable laws concerning form, content and manner of preparation
and execution, and all persons appearing to be obligated on the Collateral have
authority and capacity to contract and are in fact obligated as they appear to
be on the Collateral.

Location of the Collateral. Grantor, upon request of Lender, will deliver to
Lender in form satisfactory to Lender a schedule of real properties and
Collateral locations relating to Grantor’s operations, including without
limitation the following: (a) all real property owned or being purchased by
Grantor; (b) all real property being rented or leased by Grantor; (c) all
storage facilities owned, rented, leased, or being used by Grantor; and (d) all
other properties where Collateral is or may be located. Except in the ordinary
course of its business, Grantor shall not remove the Collateral from its
existing locations without the prior written consent of Lender.

Removal of Collateral. Grantor shall keep the Collateral (or to the extent the
Collateral consists of intangible property such as accounts, the records
concerning the Collateral) at Grantor’s address shown above, or at such other
locations as are acceptable to Lender. Some or all of the Collateral may be
located at the real property described above. Except in the ordinary course of
its business, including the sales of inventory, Grantor shall not remove the
Collateral from its existing locations without the prior written consent of
Lender.

Transactions Involving Collateral. Except for inventory sold or accounts
collected in the ordinary course of Grantor’s business, Grantor shall not sell,
offer to sell, or otherwise transfer or dispose of the Collateral. While Grantor
is not in default under this Agreement, Grantor may sell inventory, but only in
the ordinary course of its business and only to buyers who qualify as a buyer in
the ordinary course of business. A sale in the ordinary course of Grantor’s
business does not include a transfer in partial or total satisfaction of a debt
or any bulk sale. Except for existing liens, Grantor shall not pledge, mortgage,
encumber or otherwise permit the Collateral to be subject to any lien, security
interest, encumbrance, or charge, other than the security interest provided for
in this Agreement, without the prior written consent of Lender. This includes
security interests even if junior in right to the security interests granted
under this Agreement. Unless waived by Lender, all proceeds from any disposition
of the Collateral (for whatever reason) shall be held in trust for Lender and
shall not be commingled with any other funds; provided however, this requirement
shall not constitute consent by Lender to any sale or other disposition. Upon
receipt, Grantor shall immediately deliver any such proceeds to Lender.

 

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Title. Grantor represents and warrants to Lender that it is the owner of the
Collateral and holds good and marketable title to the Collateral, free and clear
of all liens and encumbrances except for the lien of this Agreement and liens
permitted by the Related Documents. No financing statement covering any of the
Collateral is on file in any public office other than those which reflect the
security interest created by this Agreement and liens permitted by the Related
Documents.

Collateral Schedules and Locations. Insofar as the Collateral consists of
inventory, Grantor shall deliver to Lender, as often as Lender shall reasonably
require, such lists, descriptions, and designations of such Collateral as Lender
may require to identify the nature, extent, and location of such Collateral.
Such information shall be submitted for Grantor and each of its subsidiaries or
related companies.

Maintenance and Inspection of Collateral. Grantor shall maintain all tangible
Collateral in good condition and repair. Grantor will not commit or permit
damage to or destruction of the Collateral or any part of the Collateral. Lender
and its designated representatives and agents shall have the right at all
reasonable times to examine, inspect, and audit the Collateral wherever located.
Grantor shall immediately notify Lender of all cases of loss or damage to any
Collateral in excess of $25,000.00.

Taxes, Assessments and Liens. Grantor will pay when due all taxes, assessments
and governmental charges or levies upon the Collateral and provide Lender
evidence of such payment upon its request. Grantor may withhold any such payment
or may elect to contest any lien if Grantor is in good faith conducting an
appropriate proceeding to contest the obligation to pay and so long as Lender’s
interest in the Collateral is not jeopardized in Lender’s sole opinion. If the
Collateral is subjected to a lien which is not discharged within fifteen
(15) days, Grantor shall deposit with Lender cash, a sufficient corporate surety
bond or other security satisfactory to Lender in an amount adequate to provide
for the discharge of the lien plus any interest, costs, attorneys’ fees or other
charges that could accrue as a result of foreclosure or sale of the Collateral.
In any contest Grantor shall defend itself and Lender and shall satisfy any
final adverse judgment before enforcement against the Collateral. Grantor shall
name Lender as an additional obligee under any surety bond furnished in the
contest proceedings.

 

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Compliance With Governmental Requirements. Grantor is conducting and will
continue to conduct Grantor’s businesses in material compliance with all
federal, state and local laws, statutes, ordinances, rules, regulations, orders,
determinations and court decisions applicable to Grantor’s businesses and to the
production, disposition or use of the Collateral, including without limitation,
those pertaining to health and environmental matters such as the Comprehensive
Environmental Response, Compensation, and Liability Act of 1980, as amended by
the Superfund Amendments and Reauthorization Act of 1986 (collectively, together
with any subsequent amendments, hereinafter called “CERCLA”), the Resource
Conservation and Recovery Act of 1976, as amended by the Used Oil Recycling Act
of 1980, the Solid Waste Disposal Act Amendments of 1980, and the Hazardous
Substance Waste Amendments of 1984 (collectively, together with any subsequent
amendments, hereinafter called “RCRA”). Grantor represents and warrants that
(i) none of the operations of Grantor is the subject of a federal, state or
local investigation evaluating whether any material remedial action is needed to
respond to a release or disposal of any toxic or hazardous substance or solid
waste into the environment; (ii) Grantor has not filed any notice under any
federal, state or local law indicating that Grantor is responsible for the
release into the environment, the disposal on any premises in which Grantor is
conducting its businesses or the improper storage, of any material amount of any
toxic or hazardous substance or solid waste or that any such toxic or hazardous
substance or solid waste has been released, disposed of or is improperly stored,
upon any premises on which Grantor is conducting its businesses; and
(iii) Grantor otherwise does not have any known material contingent liability in
connection with the release into the environment, disposal or the improper
storage, of any such toxic or hazardous substance or solid waste. The terms
“hazardous substance” and “release”, as used herein, shall have the meanings
specified in CERCLA, and the terms “solid waste” and “disposal,” as used herein,
shall have the meanings specified in RCRA; provided, however, that to the extent
that the laws of the State of Wisconsin establish meanings for such terms which
are broader than that specified in either CERCLA or RCRA, such broader meanings
shall apply. The representations and warranties contained herein are based on
Grantor’s due diligence in investigating the Collateral for hazardous wastes and
substances. Grantor hereby (a) releases and waives any future claims against
Lender for indemnity or contribution in the event Grantor becomes liable for
cleanup or other costs under any such laws; and (b) agrees to indemnify and hold
harmless Lender against any and all claims and losses resulting from a breach of
this provision of this Agreement. This obligation to indemnify shall survive the
payment of the Obligations and the termination of this Agreement.

Maintenance of Casualty Insurance. Grantor shall procure and maintain all risk
insurance, including without limitation fire, theft and liability coverage
together with such other insurance as Lender may require with respect to the
Collateral, in form, amounts, coverages and basis reasonably acceptable to
Lender and issued by a company or companies reasonably acceptable to Lender.
Grantor, upon request of Lender, will deliver to Lender from time to time the
policies or certificates of insurance in form satisfactory to Lender, including
stipulations that coverages will not be cancelled or diminished without at least
thirty (30) days prior written notice to Lender and not including any disclaimer
of the insurer’s liability for failure to give such a notice. Each insurance
policy also shall include an endorsement providing that coverage in favor of
Lender will not be impaired in any way by any act, omission or default of
Grantor or any other person. In connection with all policies covering assets in
which Lender holds or is offered a security interest, Grantor will provide
Lender with such loss payable or other endorsements as Lender may require. If
Grantor at any time fails to obtain or maintain any insurance as required under
this Agreement, Lender may (but shall not be obligated to) obtain such insurance
as Lender deems appropriate, including if it so chooses “single interest
insurance,” which will cover only Lender’s interest in the Collateral.

 

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Application of Insurance Proceeds. Grantor shall promptly notify Lender of any
loss or damage to the Collateral in excess of $25,000.00. At any time when
Grantor is in default of its obligations to Lender, Lender may make proof of
loss if Grantor fails to do so within fifteen (15) days of the casualty. All
proceeds of any insurance on the Collateral, including accrued proceeds thereon,
shall be held by Lender as part of the Collateral. Lender shall not unreasonably
delay or withhold its consent to the repair or replacement of any damaged or
destroyed Collateral, report of damage to which Grantor is required to give
hereunder. If Lender consents to repair or replacement of the damaged or
destroyed Collateral, Lender shall, upon satisfactory proof of expenditure, pay
or reimburse Grantor from the proceeds for the reasonable cost of repair or
restoration. If Lender does not consent to repair or replacement of the
Collateral, Lender shall retain a sufficient amount of the proceeds to pay all
of the Obligations, and shall pay the balance to Grantor, Any proceeds which
have not been disbursed within six (6) months after their receipt and which
Grantor has not committed to the repair or restoration of the Collateral shall
be used to prepay the Obligations. Application of insurance proceeds to the
payment of the Obligations will not extend, postpone or waive any payments
otherwise due, or change the amount of such payments to be made and proceeds may
be applied in such order and such amounts as Lender may elect.

Solvency of Grantor. As of the date hereof, and after giving effect to this
Agreement and the completion of all other transactions contemplated by Grantor
at the time of the execution of this Agreement, (i) Grantor is and will be
solvent, (ii) the fair salable value of Grantor’s assets exceeds and will
continue to exceed Grantor’s liabilities both fixed and contingent,
(iii) Grantor is paying and will continue to be able to pay its debts as they
mature, and (iv) Grantor has and will have sufficient capital to carry on
Grantor’s businesses and all businesses in which Grantor is about to engage.

GRANTOR’S RIGHT TO POSSESSION. Until default, Grantor may have possession of and
beneficial use of all the Collateral and may use it in any lawful manner not
inconsistent with this Agreement or the Related Documents, provided that
Grantor’s right to possession and beneficial use shall not apply to any
Collateral where possession of the Collateral by Lender is required by law to
perfect Lender’s security interest in such Collateral. If Lender at any time has
possession of any Collateral, whether before or after an Event of Default,
Lender shall be deemed to have exercised reasonable care in the custody and
preservation of the Collateral if Lender takes such action for that purpose as
Grantor shall request or as Lender, in Lender’s reasonable discretion, shall
deem appropriate under the circumstances, but failure to honor any request by
Grantor shall not of itself be deemed to be a failure to exercise reasonable
care, Lender shall not be required to take any steps necessary to preserve any
rights in the Collateral against prior parties, nor to protect, preserve or
maintain any security interest given to secure the Obligations.

 

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EXPENDITURES BY LENDER. If not discharged or paid when due, Lender may (but
shall not be obligated to) discharge or pay any amounts required to be
discharged or paid by Grantor under this Agreement, including without limitation
all taxes, liens, security interests, encumbrances, and other claims, at any
time levied or placed on the Collateral. Lender also may (but shall not be
obligated to) pay all costs for insuring, maintaining and preserving the
Collateral. All such expenditures incurred or paid by Lender for such purposes
will then bear interest at the rate charged under the Note from the date
incurred or paid by Lender to the date of repayment by Grantor. All such
expenses shall become a part of the Obligations and be payable on demand by
Lender. Such right shall be in addition to all other rights and remedies to
which Lender may be entitled upon the occurrence of an Event of Default.

RIGHTS AND REMEDIES ON DEFAULT. If an Event of Default occurs under this
Agreement, at any time thereafter, Lender shall have all the rights of a secured
party under the Code. In addition and without limitation, Lender may exercise
any one or more of the following rights and remedies:

Accelerate Obligations. Lender may declare the entire Obligations, including any
fees which Grantor would be required to pay, immediately due and payable,
without notice.

Assemble Collateral. Lender may require Grantor to deliver to Lender all or any
portion of the Collateral and any and all certificates of title and other
documents relating to the Collateral. Lender may require Grantor to assemble the
Collateral and make it available to Lender at a place to be designated by
Lender. Lender also shall have full power to enter upon the property of Grantor
to take possession of and remove the Collateral. If the Collateral contains
other goods not covered by this Agreement at the time of repossession, Grantor
agrees Lender may take such other goods, provided that Lender makes reasonable
efforts to return them to Grantor after repossession.

Sell the Collateral. Lender shall have full power to sell, lease, transfer, or
otherwise dispose of the Collateral or the proceeds thereof in its own name or
that of Grantor. Lender may sell the Collateral (as a unit or in parcels) at
public auction or private sale. Lender may buy the Collateral, or any portion
thereof, (i) at any public sale, and (ii) at any private sale if the Collateral
is of a type customarily sold in a recognized market or is of a type which is
the subject of widely distributed standard price quotations. Lender shall not be
obligated to make any sale of Collateral regardless of a notice of sale having
been given. Lender may adjourn any public or private sale from time to time by
announcement at the time and place fixed therefor and such sale may, without
further notice, be made at the time and place to which it was so adjourned.
Unless the Collateral is perishable or threatens to decline speedily in value or
is of a type customarily sold on a recognized market, Lender will give Grantor
reasonable notice of the time and place of any public sale thereof or of the
time after which any private sale or any other intended disposition of the
Collateral is to be made. The requirements of reasonable notice shall be met if
such notice is given at least ten (10) days prior to the date any public sale,
or after which a private sale, of any of such Collateral is to be held. All
reasonable expenses relating to the disposition of the Collateral, including
without limitation the expenses of retaking, holding, insuring, preparing for
sale and selling the Collateral, shall become a part of the Obligations secured
by this Agreement and shall be payable on demand, with interest at the Note rate
from date of expenditure until repaid.

 

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Appoint Receiver. To the extent permitted by applicable law, Lender shall have
the following rights and remedies regarding the appointment of a receiver:
(a) Lender may have a receiver appointed as a matter of right, (b) the receiver
may be an employee of Lender and may serve without bond, and (c) all reasonable
fees of the receiver and his or her attorney shall become part of the
Obligations secured by this Agreement and shall be payable on demand, with
interest at the Note rate from date of expenditure until repaid.

Collect Revenues, Apply Accounts. Lender, either itself or through a receiver,
may collect any proceeds and all other payments, rents, income, and revenues
from the Collateral. Lender may transfer any Collateral into its own name or
that of its nominee and receive the proceeds and all other payments, rents,
income, and revenues therefrom and hold the same as security for the Obligations
or apply it to payment of the Obligations in such order of preference as Lender
may determine. Insofar as the Collateral consists of accounts, general
intangibles, insurance policies, instruments, chattel paper, choses in action,
or similar property. Lender may demand, collect, receipt for, settle,
compromise, adjust, sue for, foreclose, or realize on the Collateral as Lender
may reasonably determine. For these purposes, Lender may, on behalf of and in
the name of Grantor, receive, open and dispose of mail addressed to Grantor;
change any address to which mail and payments are to be sent; and endorse notes,
checks, drafts, money orders, documents of title, instruments and items
pertaining to payment, shipment, or storage of any Collateral. To facilitate
collection, Lender may notify account debtors and obligors on any Collateral to
make payments directly to Lender.

Obtain Deficiency. If Lender chooses to sell any or all of the Collateral,
Lender may obtain a judgment against Grantor for any deficiency remaining on the
Obligations due to Lender after application of all amounts received from the
exercise of the rights provided in this Agreement. Grantor shall be liable for a
deficiency even if the transaction described in this subsection is a sale of
accounts.

Other Rights and Remedies. Lender shall have all the rights and remedies of a
secured creditor under the provisions of the Code, as may be amended from time
to time. In addition, Lender shall have and may exercise any or all other rights
and remedies it may have available at law, in equity, or otherwise. Grantor
waives any right to require Lender to proceed against any third party, exhaust
any other security for the Obligations or pursue any other right or remedy
available to Lender.

Cumulative Remedies. All of Lender’s rights and remedies, whether evidenced by
this Agreement or the Related Documents or by any other writing, shall be
cumulative and may be exercised singularly or concurrently. Election by Lender
to pursue any remedy shall not exclude pursuit of any other remedy, and an
election to make expenditures or to take action to perform an obligation of
Grantor under this Agreement, after Grantor’s failure to perform, shall not
affect Lender’s right to declare a default and to exercise its remedies.

MISCELLANEOUS PROVISIONS.

Amendments. This Agreement, together with any Related Documents, constitutes the
entire understanding and agreement of the parties as to the matters set forth in
this Agreement and supercedes all prior written and oral agreements and
understandings, if any, regarding same. No alteration of or amendment to this
Agreement shall be effective unless given in writing and signed by the party or
parties sought to be charged or bound by the alteration or amendment.

 

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Applicable Law. This Agreement has been delivered to Lender and accepted by
Lender in the State of Wisconsin. Subject to the provisions on arbitration in
any Related Document, this Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin without regard to any
conflict of laws or provisions thereof.

JURY WAIVER. THE GRANTOR AND LENDER (BY ITS ACCEPTANCE HEREOF), HEREBY
VOLUNTARILY, KNOWINGLY, IRREVOCABLY AND UNCONDITIONALLY WAIVE ANY RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE (WHETHER BASED UPON CONTRACT, TORT
OR OTHERWISE) BETWEEN OR AMONG THE GRANTOR AND LENDER ARISING OUT OF OR IN WAY
ANY RELATED TO THIS DOCUMENT, AND ANY OTHER RELATED DOCUMENT, OR ANY
RELATIONSHIP BETWEEN LENDER AND THE GRANTOR. THIS PROVISION IS A MATERIAL
INDUCEMENT TO LENDER TO PROVIDE THE FINANCING DESCRIBED HEREIN OR IN THE OTHER
RELATED DOCUMENTS. GRANTOR OR LENDER MAY FILE AN ORIGINAL COUNTERPART OR COPY OF
THIS DOCUMENT WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE GRANTOR
AND LENDER TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.

Attorneys’ Fees; Expenses. Grantor will upon demand pay to Lender the amount of
any and all necessary and reasonable costs and expenses (including without
limitation, reasonable attorneys’ fees and expenses) which Lender may incur in
connection with (i) the perfection and preservation of the collateral assignment
and security interests created under this Agreement, (ii) the custody,
preservation, use or operation of, or the sale of, collection from, or other
realization upon, the Collateral, (iii) the exercise or enforcement of any of
the rights of Lender under this Agreement, or (iv) the failure by Grantor to
perform or observe any of the provisions hereof.

Termination. Upon (i) the satisfaction in full of the Obligations and all
obligations hereunder and (ii) the termination or expiration of any commitment
of Lender to extend credit that would become Obligations hereunder, this
Agreement and the security interests created hereby shall terminate. Upon
termination of this Agreement, Lender will, at Grantor’s sole cost and expense,
return to Grantor such of the Collateral as shall not have been sold or
otherwise disposed of or applied pursuant to the terms hereof and execute and
deliver to Grantor such documents as Grantor shall reasonably request to
evidence such termination.

 

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Indemnity. Grantor hereby agrees to indemnify, defend and hold harmless Lender,
and its officers, directors, shareholders, employees, agents and representatives
(each an “Indemnified Person”) from and against any and all liabilities,
obligations, claims, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature (collectively, the
“Claims”) which may be imposed on, incurred by or asserted against, any
Indemnified Person arising in connection with the Related Documents, the
Obligations or the Collateral including, without limitation, the enforcement of
the Related Documents and the defense of any Indemnified Person’s action and/or
inactions in connection with the Related Documents), except to the limited
extent that the Claims against the Indemnified Person are proximately caused by
such Indemnified Person’s negligence or willful misconduct. The indemnification
provided for in this Section shall survive the termination of this Agreement and
shall extend and continue to benefit each individual or entity who is or has at
any time been an Indemnified Person hereunder.

Caption Headings. Caption headings in this Agreement are for convenience
purposes only and are not to be used to interpret or define the provisions of
this Agreement.

Notices. All notices required to be given under this Agreement shall be given in
writing, and shall be effective when actually delivered or when deposited with a
nationally recognized overnight courier or deposited in the United States mail,
first class, postage prepaid, addressed to the party to whom the notice is to be
given at the address shown above. Any party may change its address for notices
under this Agreement by giving formal written notice to the other parties,
specifying that the purpose of the notice is to change the party’s address. To
the extent permitted by applicable law, if there is more than one Grantor,
notice to any Grantor will constitute notice to all Grantors. For notice
purposes, Grantor will keep lender informed at all times of Grantor’s current
address (es).

Power of Attorney. Upon an Event of Default, Grantor hereby irrevocably appoints
Lender as its true and lawful attorney-in-fact, such power of attorney being
coupled with an interest, with full power of substitution to do the following in
the place and stead of Grantor and in the name of Grantor: (a) to demand,
collect, receive, receipt for, sue and recover all sums of money or other
property which may now or hereafter become due, owing or payable from the
Collateral; (b) to execute, sign and endorse any and all claims, instruments,
receipts, checks, drafts or warrants issued in payment for the Collateral;
(c) to settle or compromise any and all claims arising under the Collateral,
and, in the place and stead of Grantor, to execute and deliver its release and
settlement for the claim; and (d) to file any claim or claims or to take any
action or institute or take part in any proceedings, either in its own name or
in the name of Grantor, or otherwise, which in the discretion of Lender may seem
to be necessary or advisable. This power is given as security for the
Obligations, and the authority hereby conferred is and shall be irrevocable and
shall remain in full force and effect until renounced by Lender.

Severability. If a court of competent jurisdiction finds any provision of this
Agreement to be invalid or unenforceable as to any person or circumstance, such
finding shall not render that provision invalid or unenforceable as to any other
persons or circumstances. If feasible, any such offending provision shall be
deemed to be modified to be within the limits of enforceability or validity;
however, if the offending provision cannot be so modified, it shall be stricken
and all other provisions of this Agreement in all other respects shall remain
valid and enforceable.

Successor Interests. Subject to the limitations set forth above on transfer of
the Collateral, this Agreement shall be binding upon and inure to the benefit of
the parties, their successors and assigns; provided, however, Grantor’s rights
and obligations hereunder may not be assigned or otherwise transferred without
the prior written consent of Lender.

 

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Waiver. Lender shall not be deemed to have waived any rights under this
Agreement unless such waiver is given in writing and signed by Lender. No delay
or omission on the part of Lender in exercising any right shall operate as a
waiver of such right or any other right. A waiver by Lender of a provision of
this Agreement shall not prejudice or constitute a waiver of Lender’s right to
thereafter demand strict compliance with that provision or any other provision
of this Agreement. No prior waiver by Lender, nor any course of dealing between
Lender and Grantor, shall constitute a waiver of any of Lender’s rights or of
any of Grantor’s obligations as to any future transactions. Whenever the consent
of Lender is required under this Agreement, the granting of such consent by
Lender in any instance shall not constitute continuing consent to subsequent
instances where such consent is required and in all cases such consent may be
granted or withheld in the sole discretion of Lender.

GRANTOR ACKNOWLEDGES HAVING READ ALL THE PROVISIONS OF THIS COMMERCIAL SECURITY
AGREEMENT, AND GRANTOR AGREES TO ITS TERMS. THIS AGREEMENT IS DATED April 3,
2012.

 

BORROWER:

 

Tufco, L.P.

By:   Tufco LLC,

its Managing General Partner

  By:  

Tufco Technologies, Inc.,

its Sole Managing Member

  By:   /s/ Michael B. Wheeler    

Michael B. Wheeler,

Authorized Officer for the

Managing Member

 

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