EXHIBIT 10.26
GUARANTY AND SURETYSHIP AGREEMENT
This Guaranty and Suretyship Agreement (this "Agreement" or the
"Guaranty") is made as of the 17th day of June, 2004 by Xxxxxxx X.
Xxxxxx ("Guarantor") in favor of AMCON Distributing Company, Inc., a
Delaware corporation ("AMCON"). Capitalized terms not elsewhere
defined herein shall have the meanings set forth in that certain Asset
Purchase Agreement (the "Asset Purchase Agreement") dated as of April
24, 2004, as amended among AMCON, TSL Acquisition Corp, a Delaware
corporation and a wholly-owned subsidiary of AMCON (the "Sub").
RECITALS
A. The Sub has purchased substantially all of the assets of Trinity
pursuant to the terms of the Asset Purchase Agreement;
B. In connection with the transactions contemplated by the Asset
Purchase Agreement, the Sub has issued to Trinity (a) a Promissory
Note in the original principal amount of FIVE HUNDRED THOUSAND DOLLARS
($500,000) (the "Three Year Note"); (b) a Promissory Note in the
original principal amount of TWO MILLION EIGHT HUNDRED TWENTY-EIGHT
THOUSAND FOUR HUNDRED FORTY AND 00/100 DOLLARS ($2,828,440.00) (the
"Ten Year Note"); and (c) pursuant to Section 11.1 of the Asset
Purchase Agreement, certain royalty payment obligations with respect
to the sale of water after the date hereof (the "Water Royalty");
C. As a condition to Trinity's obligation to enter into the Asset
Purchase Agreement and perform its obligations thereunder, AMCON
entered into a Guaranty and Suretyship Agreement (the "AMCON
Guaranty") to guaranty the Sub's payment obligations under the Three
Year Note, the Ten Year Note and the Water Royalty, subject to certain
limitations set forth therein;
D. AMCON and LaSalle Bank National Association (in its individual
capacity, "LaSalle"), a national banking association for itself, as a
Lender, and as Agent ("Agent"), for all lenders that are now or
hereafter parties to the Loan Agreement (as defined below) (the
"Lenders"), Gold Bank, a Kansas state bank ("Gold Bank"), as a Lender,
have entered into that certain Loan and Security Agreement dated June
1, 2001 as amended from time to time (the "Loan Agreement");
E. As partial inducement for the Agent to consent to the transactions
contemplated by the Asset Purchase Agreement in order to avoid a
default under the Loan Agreement, Guarantor has entered into this
Agreement to guaranty any and all indebtedness of AMCON to Trinity
under the AMCON Guaranty, subject to certain limitations set forth
therein and herein;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, Guarantor hereby agrees as follows:
AGREEMENT
1. Definitions. Capitalized terms used in this Agreement, unless
otherwise defined in this Agreement, shall have the meanings ascribed
to them in the Asset Purchase Agreement.
2. Representations and Warranties. Guarantor hereby represents and
warrants to AMCON as follows:
(i) The execution and delivery by Guarantor of this Agreement
and the performance by Guarantor of its obligations hereunder do not
and will not contravene or conflict with any law, regulation or rule,
any license, agreement, or instrument to which Guarantor is a party or
by which Guarantor or any of Guarantor's property may be bound or
affected, or any judgment, order or decree of any court of any
federal, state, or local commission, board, or other administrative
agency by which Guarantor or any of Guarantor's property may be bound
or affected.
(ii) This Agreement is the legal, valid, and binding obligation
of Guarantor, enforceable against Guarantor in accordance with its
terms.
3. Guaranty. Guarantor absolutely, irrevocably and unconditionally
guaranties the prompt payment when due of (i) all amounts that AMCON
is legally required to pay and pays to Trinity under the Three Year
Note, the Ten Year Note and the Water Royalty (each in accordance with
their respective terms), including, without limitation, costs and
expenses of collection, which shall include reasonable attorneys fees
and paralegals' fees and all court costs, plus (ii) interest on the
amount of any such payment computed at the highest rate provided in
the Loan Agreement; provided that, Guarantor's total payment
obligations with respect to its guaranty of the Water Royalty shall in
no event exceed $5,000,000 in the aggregate (collectively referred to
herein as the "Obligations"). Notwithstanding anything to the
contrary contained herein, to satisfy the Obligations when due, AMCON
shall be entitled to make a claim against all or any portion of the
assets of Guarantor. Guarantor further agrees that:
(a) This Guaranty is in all respects continuing, absolute, and
unconditional.
(b) This Guaranty is a guaranty of both performance and payment
when due, and not of collection.
(c) AMCON may, from time to time, at AMCON's sole discretion and
without notice to Guarantor, take any or all of the following actions:
(i) Accept a security interest in any property to secure payment
of any or all of the Obligations;
(ii) Obtain the primary or secondary obligation of any third
party in addition to the Guarantor with respect to any or all of the
Obligations;
(iii) Release, compromise, extend, alter, or modify any of the
Obligations or any obligation of any nature of any other obligor with
respect to any of the Obligations;
(iv) Release, compromise, or extend any obligation of Guarantor
hereunder;
(v) Release any security interest in, or surrender, release, or
permit any substitution or exchange for, all or any part of any
property securing any of the Obligations or any obligation hereunder,
or release, compromise, extend, alter, or modify any obligation of any
nature of any obligor with respect to any such property; and
(vi) resort to or proceed against Guarantor for performance or
payment of any of the Obligations whether or not Trinity shall have
proceeded against Sub or any other obligor primarily or secondarily
obligated with respect to any of the Obligations, shall have resorted
to any property securing any of the Obligations or any obligation
hereunder, or shall have pursued any other remedy.
(d) As between AMCON and the Guarantor, any amounts received by
Trinity from whatever source on account of any Obligation (arising by
whatever means) shall be applied by AMCON toward the payment of any
Obligation then due and payable, in the following order:
(i) To Obligations that have matured; provided that if the
payment is insufficient to pay all Obligations that have matured, pro
rata between the matured Obligations according to the relative
principal amounts due thereunder; and
(ii) If no Obligations are matured and unpaid, then pro rata
between the unmatured Obligations according to the relative principal
amounts due thereunder.
Notwithstanding any performance or payments made by or for the account
of Guarantor pursuant to this Guaranty, Guarantor will not be
subrogated to any rights of AMCON until such time as AMCON shall have
received performance and payment in full of all of the Obligations and
performance of all obligations of the Guarantor hereunder. Without
limiting the generality of the foregoing, if Trinity is required at
any time to return all or part of any payment applied by Trinity to
the payment of the Obligations or any costs or expenses covered by
this Guaranty, whether by virtue of the insolvency, bankruptcy, or
reorganization of AMCON or otherwise, the Obligations to which the
returned payment was applied shall be deemed to have continued in
existence and this Guaranty shall continue to be effective or to be
reinstated, as the case may be, as to such Obligations, as though such
payment had not been received and such application by Trinity had not
been made.
(e) Guarantor waives:
(i) Notice of the acceptance by AMCON of this Guaranty;
(ii) Notice of the existence, creation, release, compromise,
extension, alteration, modification, non-performance, or non-payment
of any or all of the Obligations;
(iii) Presentment, demand, notice of dishonor, protest, and all
other notices whatsoever; and
(iv) All diligence in collection of or realization upon any
payments on, or assurance of performance of, any of the Obligations or
any obligation hereunder, or in collection on, realization upon, or
protection of any security for, or guaranty of, any of the Obligations
or any obligation hereunder.
(f) As between the Guarantor and AMCON, AMCON may assign or
otherwise transfer the right to receive performance of or payment upon
any of the Obligations to any third party.
4. Occurrence of Default. Notwithstanding anything in this Agreement
to the contrary, AMCON will not make any demand for payment or
performance hereunder against Guarantor and Guarantor shall not be
obligated to pay or perform any obligation hereunder unless (i) an
"Event of Default" has occurred under the Three Year Note and/or the
Ten Year Note, or (ii) a "Water Royalty Payment Default" has occurred.
For this purpose, a "Water Royalty Payment Default" shall occur if Sub
shall fail to pay any installment when due of the Water Royalty
pursuant to Section 11.1 of the Asset Purchase Agreement, and such
failure shall continue for a period of five (5) days after Trinity
provides written notice of such failure to Sub; provided, however,
that in the event any amount of the Water Royalty is subject to any
bona fide dispute, a Water Royalty Payment Default shall not occur
unless Sub fails to pay the amount of the Water Royalty that is not in
dispute when originally due (and such failure is not cured within five
(5) days after Trinity provides written notice of such failure to Sub)
or fails to pay the disputed amount finally adjudicated to be due by a
court of competent jurisdiction from which no further appeal may be
effected, and such payment is not made within twenty (20) days after
the judgment of such court becomes final and no longer subject to
appeal.
5. Notices. All notices and communications under this Agreement
shall be in writing and shall be deemed to have been duly given when
delivered by messenger, by overnight delivery service, or by facsimile
(receipt confirmed), or mailed by first class certified mail, return
receipt requested; if to the Guarantor, at: X.X. Xxx 0000, Xxxxxx
Xxxxx Xx, XX 00000, and if to AMCON, at: Xxxxxxx X. Xxxxx, Chief
Financial Officer, 0000 Xxxxxxxxx Xxxx, Xxxxx, XX 00000; or in each
case to such other address respectively as the party shall have
specified by notice to the other.
6. Integration, Assignment, Modification, Payment of Expenses and
Construction. This Guaranty constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes
any prior written or oral agreements between the Guarantor and AMCON
with respect to the subject matter herein. This Guaranty may not be
assigned by Guarantor without the prior written consent of AMCON,
which may be withheld for any reason whatsoever. Subject to the
foregoing, this Guaranty will inure to the benefit of AMCON, and be
binding upon Guarantor, and its successors and assigns. This Guaranty
may be amended or modified only by a writing signed by Guarantor and
AMCON, which amendment must be consented to by the Agent. The
Guarantor shall pay all of AMCON's costs and expenses (including,
without limitation, costs and expenses of litigation and reasonable
attorneys' fees and paralegals' fees) in enforcing or endeavoring to
realize upon this Guaranty which is not paid when due. The
unenforceability or invalidity of any provision of this Guaranty shall
not affect the validity of the remainder of this Guaranty.
7. Waiver. The failure of AMCON to insist upon strict performance of
any of the terms, conditions, agreements, or covenants in this
Guaranty in any one or more instances shall not be deemed to be a
waiver by AMCON of its rights to enforce thereafter any of such terms,
conditions, agreements, or covenants. Any waiver by AMCON of any of
the terms, conditions, agreements, or covenants in this Guaranty must
be in writing signed by AMCON.
8. Applicable Law. This Guaranty will be governed by, and construed
and interpreted in accordance with, the laws of state of Nebraska.
9. Section Headings. The section headings used in this Guaranty are
for the convenience of AMCON and the Guarantor only and shall not
affect the construction or interpretation of the provisions of this
Guaranty.
Guarantor has executed this Guaranty as of the date set forth above.
By: /s/ Xxxxxxx X. Xxxxxx
