EXHIBIT 10.3
May 23, 2005
AMCON Distributing Company
0000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
And
The Beverage Group, Inc.
0 Xxxxx Xxxx Xxxxxx, Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
And
Xxxxxxxxxx Natural Foods, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
And
Hawaiian Natural Water Company, Inc.
00-000 Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxx 00000
And
Health Food Associates, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
And
Trinity Springs, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
RE: REVISED SECOND AMENDMENT TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT
Gentlemen:
AMCON Distributing Company, a Delaware corporation, ("AMCON"), The
Beverage Group, Inc., a Delaware corporation, ("Beverage Group"),
Hawaiian Natural Water Company, Inc., an Oklahoma corporation,
("Hawaiian Natural"), Xxxxxxxxxx Natural Foods, Inc., a Florida
corporation, ("Xxxxxxxxxx Natural"), and Health Food Associates, Inc.,
an Oklahoma corporation, ("Health Food") (AMCON, Beverage Group,
Hawaiian Natural, Xxxxxxxxxx Natural, and Health Food are each
referred to as a "Borrower" and are collectively referred to as
"Borrowers") and LaSalle Bank National Association, a national banking
association (in its individual capacity, "LaSalle"), as agent (in such
capacity as agent, "Agent") for itself, Gold Bank, a Kansas state
bank, and all other lenders from time to time a party hereto
("Lenders"), have entered into that certain Amended and Restated Loan
and Security Agreement dated September 30, 2004 (the "Security
Agreement"). From time to time thereafter, Borrower, Agent and
Lenders may have executed various amendments (each an "Amendment" and
collectively the "Amendments") to the Security Agreement (the Security
Agreement and the Amendments hereinafter are referred to,
collectively, as the "Agreement"). Borrower, Agent and Lenders now
desire to further amend the Agreement as provided herein, subject to
the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(a) Section 1 of the Agreement is hereby amended to add the
following definition in its appropriate alphabetical order:
"Control Agreement" shall mean an agreement among Agent, a Borrower
and a financial institution with respect to a Lock Box, Lock Box
Account or other Deposit Account, which agreement, among other things,
acknowledges Agent's security interest in such account, provides that
such financial institution has no right to setoff against account, and
provides that such financial institution shall, following the
occurrence of an Event of Default, wire, or otherwise transfer in
immediately available funds to Agent in a manner satisfactory to
Agent, funds deposited in such account on a daily basis as such funds
are collected or as otherwise directed by Agent, without requiring any
further consent from any Borrower or Borrower Representative.
(b) Section 8 of the Agreement is hereby amended and restated in its
entirety, as follows:
8. COLLECTIONS.
(a) The Borrowers shall maintain one or more depository accounts with
the Agent or at another financial institution acceptable to Agent (a
"Local Depository Account"). Such financial institutions shall have
executed a Control Agreement. With respect to each Borrower, until
such time as Agent shall, in its sole discretion, after the occurrence
of an Event of Default, notify such Borrower that Agent will require
such Borrower to establish and maintain a Lock Box (as defined below)
and Lock Box Account (as defined below), such Borrower shall collect
and enforce all of its Accounts and shall retain the right to direct
the disposition of the funds from any of the Borrowers accounts. All
costs of enforcement and collection of such Borrower's Accounts shall
be borne solely by such Borrower, whether the same are incurred by
Agent or by such Borrower.
(b) At such time as Agent shall require, following the occurrence of
an Event of Default, each Borrower shall direct all of its Account
Debtors to make all payments on the Accounts directly to a post office
box (the "Lock Box") designated by, and under the exclusive control
of, Agent, at a financial institution acceptable to Agent or as
otherwise directed by Agent. Each Borrower shall establish an account
(the "Lock Box Account") in Agent's name with a financial institution
acceptable to Agent, into which all payments received in the Lock Box
shall be deposited, and into which such Borrower will immediately
deposit all payments received by such Borrower on Accounts in the
identical form in which such payments were received, whether by cash
or check. In addition, Agent may exercise its rights under the
Control Agreements to direct all amounts received in such accounts to
be sent on a daily basis directly to Agent or to the Lock Box Account.
If a Borrower, any Affiliate or Subsidiary, any shareholder, officer,
director, employee or agent of a Borrower or any Affiliate or
Subsidiary, or any other Person acting for or in concert with such
Borrower shall receive any monies, checks, notes, drafts or other
payments relating to or as Proceeds of Accounts or other Collateral,
such Borrower and each such Person shall receive all such items in
trust for, and as the sole and exclusive property of, Agent and,
immediately upon receipt thereof, shall remit the same (or cause the
same to be remitted) in kind to the Lock Box Account. The financial
institution with which the Lock Box Account is established shall
acknowledge and agree, in a manner satisfactory to Agent, that such
financial institution will follow the instructions of Agent with
respect to disposition of funds in the Lock Box and Lock Box Account
without further consent from Borrowers, that the amounts on deposit in
such Lock Box and Lock Box Account are the sole and exclusive property
of Agent, that such financial institution has no right to setoff
against the Lock Box or Lock Box Account or against any other account
maintained by such financial institution into which the contents of
the Lock Box or Lock Box Account are transferred, and that such
financial institution shall wire, or otherwise transfer in immediately
available funds to Lender in a manner satisfactory to Agent, funds
deposited in the Lock Box Account on a daily basis as such funds are
collected. All checks, drafts, instruments and other items of payment
or Proceeds of Collateral received by Agent shall be endorsed by the
applicable Borrower to Agent, and, if that endorsement of any such
item shall not be made for any reason, Agent is hereby irrevocably
authorized to endorse the same on such Borrower's behalf. For the
purpose of this section, each Borrower irrevocably hereby makes,
constitutes and appoints Agent (and all Persons designated by Lender
for that purpose) as such Borrower's true and lawful attorney and
agent-in-fact (i) to endorse such Borrower's name upon said items of
payment and/or Proceeds of Collateral and upon any Chattel Paper,
Document, Instrument, invoice or similar document or agreement
relating to any Account of such Borrower or Goods pertaining thereto;
(ii) to take control in any manner of any item of payment or Proceeds
thereof and (iii) to have access to any lock box or postal box into
which any of such Borrower's mail is deposited, and open and process
all mail addressed to such Borrower and deposited therein.
Each Borrower agrees that, following the occurrence of an Event of
Default, all payments made to such Lock Box Account or otherwise
received by Agent, whether in respect of the Accounts or as Proceeds
of other Collateral or otherwise, will be applied on account of the
Liabilities in accordance with the terms of this Agreement. Each
Borrower agrees to pay all fees, costs and expenses in connection with
opening and maintaining the Local Depository Accounts and/or the Lock
Box and Lock Box Account. All of such fees, costs and expenses if not
paid by such Borrower, may be paid by Agent and in such event all
amounts paid by Agent shall constitute Liabilities hereunder, shall be
payable to Agent by Borrowers upon demand, and, until paid, shall bear
interest at the highest rate then applicable to Loans hereunder.
(c) Agent may, at any time after the occurrence of an Event of
Default, whether before or after notification to any Account Debtor
and whether before or after the maturity of any of the Liabilities,
(i) enforce collection of any of Borrowers' Accounts or other amounts
owed to a Borrower by suit or otherwise; (ii) exercise all of such
Borrower's rights and remedies with respect to proceedings brought to
collect any Accounts or other amounts owed to such Borrower; (iii)
surrender, release or exchange all or any part of any Accounts or
other amounts owed to such Borrower, or compromise or extend or renew
for any period (whether or not longer than the original period) any
indebtedness thereunder; (iv) sell or assign any Account of such
Borrower or other amount owed to such Borrower upon such terms, for
such amount and at such time or times as Agent deems advisable; (v)
prepare, file and sign such Borrower's name on any proof of claim in
bankruptcy or other similar document against any Account Debtor or
other Person obligated to such Borrower; and (vi) do all other acts
and things which are necessary, in Agent's sole discretion, to fulfill
such Borrower's obligations under this Agreement and the Other
Agreements and to allow Agent to collect the Accounts or other amounts
owed to such Borrower. In addition to any other provision hereof,
Agent may at any time, after the occurrence of an Event of Default, at
Borrowers' expense, notify any parties obligated on any of the
Accounts to make payment directly to Agent of any amounts due or to
become due thereunder.
(d) For purposes of calculating interest and fees, Agent shall, on
the same Business Day after receipt by Agent at its office in Chicago,
Illinois of (i) checks and (ii) cash or other immediately available
funds from collections of items of payment and Proceeds of any
Collateral, apply the whole or any part of such collections or
Proceeds against the Liabilities in such order as Agent shall
determine in its sole discretion. For purposes of determining the
amount of Loans available for borrowing purposes, checks and cash or
other immediately available funds from collections of items of payment
and Proceeds of any Collateral shall be applied in whole or in part
against the Liabilities, in such order as Agent shall determine in its
sole discretion, on the day of receipt, subject to actual collection.
(e) On a monthly basis, Agent shall deliver to Borrower Representative
an account statement showing all Loans, charges and payments, which
shall be deemed final, binding and conclusive upon Borrowers unless
Borrower Representative notifies Agent in writing, specifying any
error therein, within thirty (30) days of the date such account
statement is sent to Borrower Representative and any such notice shall
only constitute an objection to the items specifically identified.
(c) Subsection 15(n) of the Agreement is hereby amended and restated
in its entirety, as follows:
(n) Material Adverse Change.
Any material adverse change in the Collateral, business,
property, assets, prospects, operations or condition,
financial or otherwise of any Obligor, as determined by
Requisite Lenders in their reasonable discretion or the
occurrence of any event which, in Requisite Lenders'
reasonable discretion, could have a Material Adverse
Effect.
(d) Subsection 4(c)(vi) of the Agreement is hereby amended in its
entirety to add the following provisions:
(vi) Transaction Fee: Borrower shall pay to Agent for its benefit a
transaction fee of Two Thousand No/100 Dollars ($2,000.00) with
respect to internal costs and expenses (in addition to any
reimbursable out-of-pocket costs and expenses of Agent) related to
this Second Amendment, which fee shall be fully earned by Agent on the
date of this Second Amendment and payable on May 31, 2005.
2. This Amendment shall not become effective until fully executed by
all parties hereto and until Lender is in receipt of an original First
Amendment and related documents.
3. Except as expressly amended hereby and by any other supplemental
documents or instruments executed by either party hereto in order to
effectuate the transactions contemplated hereby, the Agreement thereto
hereby is ratified and confirmed by the parties hereto and remain in
full force and effect in accordance with the terms thereof.
LASALLE BANK NATIONAL ASSOCIATION, a national banking association, as
Agent and a Lender
By /s/ Xxxxxx X. Xxxxxx
-----------------------
Title Senior Vice President
-----------------------
Revolving Loan Commitment: $35,975,757.00
Term Loan A Commitment: $709,243.00
Term Loan B Commitment: $3,333,000.00
GOLD BANK, a Kansas state bank, as a Lender
By /s/ Xxxx Xxxxxxxx
-----------------------
Title Vice President
-----------------------
Revolving Loan Commitment: $17,960,910.00
Term Loan A Commitment: $354,090.00
Term Loan B Commitment $1,667,000.00
ACKNOWLEDGED AND AGREED TO
this 23rd day of May, 2005:
AMCON DISTRIBUTING COMPANY
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Title V.P. and Chief Financial Officer
-----------------------
THE BEVERAGE GROUP, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Title Secretary
-----------------------
HAWAIIAN NATURAL WATER COMPANY, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Title Secretary
-----------------------
XXXXXXXXXX NATURAL FOODS, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Title Secretary
-----------------------
HEALTH FOOD ASSOCIATES, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Title Secretary
-----------------------
TRINITY SPRINGS, INC.
By /s/ Xxxxxxx X. Xxxxx
-----------------------
Title Assistant Secretary
-----------------------
Consented and agreed to by the following
guarantor(s) of the obligations of AMCON
DISTRIBUTING COMPANY, THE BEVERAGE
GROUP, INC., HAWAIIAN NATURAL
WATER COMPANY, INC., XXXXXXXXXX
NATURAL FOODS, INC., and HEALTH FOOD
ASSOCIATES, INC. to LaSalle Bank
National Association, as Agent.
/s/ Xxxxxxx X. Xxxxxx
-----------------------
Xxxxxx X. Xxxxxx
Date: May 23, 2005
