EXHIBIT 10.1
Amended and Restated
Loan And Security Agreement
Dated As Of September 30, 2004
By And Among
LaSalle Bank National Association, as Agent
The Financial Institutions From Time To Time
A Party Hereto, As Lenders,
AMCON Distributing Company
The Beverage Group, Inc.
Hawaiian Natural Water Company, Inc.
Xxxxxxxxxx Natural Foods, Inc.
And
Health Food Associates, Inc.
The Borrowers
TABLE OF CONTENTS
Page
1. DEFINITIONS.
2
2. LOANS. 12
(a) Revolving Loans. 12
(b) Term Loan A. 16
(c) Term Loan B 16
(d) Repayments 16
(e) Notes 18
(f) Borrower Reprentative 18
3. LETTERS OF CREDIT 19
(a) General Terms 19
(b) Requests for Letters of Credit 19
(c) Obligations Absolute 19
(d) Expiration Dates of Letters of Credit 20
(e) Participation 20
4. INTEREST, FEES AND CHARGES 20
(a) Interest Rate 20
(b) Other LIBOR Provisions 21
(c) Fees And Charges 24
(d) Maximum Interest 25
5. COLLATERAL 25
(a) Grant of Security Interest to Agent 25
(b) Other Security 26
(c) Possessory Collateral 26
(d) Electronic Chattel Paper 26
(e) Release of Subsidiary Borrower Liens 26
6. PRESERVATION OF COLLATERAL AND PERFECTION
OF SECURITY INTERESTS THEREIN. 27
7. POSSESSION OF COLLATERAL AND RELATED MATTERS 28
8. COLLECTIONS 28
9. COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS
AND SCHEDULES 32
(a) Daily Reports 32
(b) Monthly Reports 32
(c) Financial Statements 33
(d) Annual Projections 34
(e) Explanation of Budgets and Projections 34
(f) Public Reporting 34
(g) Other Information 34
10. TERMINATION; AUTOMATIC RENEWAL 34
11. REPRESENTATIONS AND WARRANTIES 35
(a) Financial Statements and Other Information 35
(b) Locations 36
(c) Loans by Borrower 36
(d) Accounts and Inventory 36
(e) Liens 36
(f) Organization, Authority and No Conflict 36
(g) Litigation 37
(h) Compliance with Laws and Maintenance of Permits 37
(i) Affiliate Transactions 38
(j) Names and Trade Names 38
(k) Equipment 38
(l) Enforceability 38
(m) Solvency 38
(n) Indebtedness 39
(o) Margin Security and Use of Proceeds 39
(p) Parent, Subsidiaries and Affiliates 39
(q) No Defaults 39
(r) Employee Matters 39
(s) Intellectual Property 39
(t) Environmental Matters 40
(u) ERISA Matters 40
12. AFFIRMATIVE COVENANTS 40
(a) Maintenance of Records 40
(b) Notices 41
(c) Compliance with Laws and Maintenance of Permits 42
(d) Inspection and Audits 42
(e) Insurance 43
(f) Collateral 44
(g) Use of Proceeds 45
(h) Taxes 45
(i) Intellectual Property 45
(j) Checking Accounts and Cash Management Services 45
(k) Patriot Act, Bank Secrecy Act and Office of
Foreign Assets Control 45
13. NEGATIVE COVENANTS 46
(a) Guaranties 46
(b) Indebtedness 46
(c) Liens 47
(d)Mergers, Sales, Acquisitions, Subsidiaries and
Other Transactions Outside the Ordinary Course of
Business 47
(e) Dividends and Distributions 47
(f) Investments; Loans 48
(g) Fundamental Changes, Line of Business 48
(h) Equipment 48
(i) Affiliate Transactions 49
(j) Settling of Accounts 49
14. FINANCIAL COVENANTS 49
(a) Tangible Net Worth 49
(b) Fixed Charge Coverage 50
(c) Capital Expenditure Limitations 50
15. DEFAULT 50
(a) Payment 50
(b) Breach of this Agreement and the Other
Agreements 50
(c) Breaches of Other Obligations 51
(d) Breach of Representations and Warranties 51
(e) Loss of Collateral 51
(f) Levy, Seizure or Attachment 51
(g) Bankruptcy or Similar Proceedings 51
(h) Appointment of Receiver 52
(i) Judgment 52
(j) Death or Dissolution of Obligor 52
(k) Default or Revocation of Guaranty 52
(l) Criminal Proceedings 52
(m) Change of Control 52
(n) Material Adverse Change 53
16. REMEDIES UPON AN EVENT OF DEFAULT 53
17. CONDITIONS PRECEDENT 54
18. JOINT AND SEVERAL LIABILITY 55
19. SETTLEMENTS, DISTRIBUTIONS AND APPORTIONMENT
OF PAYMENTS 57
20. AGENT 58
(a) Appointment of Agent 58
(b) Nature of Duties of Agent 58
(c) Lack of Reliance on Agent 59
(d) Certain Rights of Agent 59
(e) Reliance by Agent 59
(f) Indemnification of Agent 60
(g) Agent in its Individual Capacity 60
(h) Holders of Notes 61
(i) Successor Agent 61
(j) Collateral Matters 61
(k) Actions with Respect to Defaults 63
(l) Delivery of Information 63
(m) Demand 63
(n) Notice of Default 64
21. ASSIGNABILITY 64
22. AMENDMENTS, ETC 66
23. NONLIABILITY OF AGENT AND LENDERS 67
24. INDEMNIFICATION 68
25. NOTICE 68
26. CHOICE OF GOVERNING LAW; CONSTRUCTION;
FORUM SELECTION 69
27. HEADINGS OF SUBDIVISIONS 70
28. POWER OF ATTORNEY 70
29. CONFIDENTIALITY 70
30. COUNTERPARTS 70
31. ELECTRONIC SUBMISSIONS 71
32. EFFECT OF AMENDMENT AND RESTATEMENT 71
33. WAIVER OF JURY TRIAL; OTHER WAIVERS 71
EXHIBIT A - BUSINESS AND COLLATERAL LOCATIONS
EXHIBIT B - COMPLIANCE CERTIFICATE
EXHIBIT C - COMMERCIAL TORT CLAIMS
EXHIBIT D - FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
SCHEDULE 1 - PERMITTED LIENS
SCHEDULE 11(g) - LITIGATION
SCHEDULE 11(i) - AFFILIATE TRANSACTIONS
SCHEDULE 11(j) - NAMES & TRADE NAMES
SCHEDULE 11(n) - INDEBTEDNESS
SCHEDULE 11(p) - PARENT, SUBSIDIARIES AND AFFILIATES
SCHEDULE 17(a) - CLOSING DOCUMENT CHECKLIST
AMENDED AND RESTATED
LOAN AND SECURITY AGREEMENT
THIS AMENDED AND RESTATED LOAN AND SECURITY AGREEMENT (as
amended, modified or supplemented from time to time, this "Agreement")
made this 30th day of September, 2004 by and among Gold Bank, a Kansas
state bank, as a Lender ("Gold Bank") 000 Xxxx 00xx Xxxxxx, Xxxxxx
Xxxx, Xxxxxxxx 00000, 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 and all
other lenders from time to time a party hereto ("Lenders"), 000 Xxxxx
XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000, all other Lenders and
AMCON Distributing Company, a Delaware corporation, having its
principal place of business at 0000 Xxxxxxxxx Xxxx, Xxxxx, Xxxxxxxx
00000 ("AMCON"), The Beverage Group, Inc., a Delaware corporation,
having its principal place of business at 0 Xxxxx Xxxx Xxxxxx, Xxxxx
000, Xxxxxxxx, Xxxxxxxxxx 00000 ("Beverage Group"), Xxxxxxxxxx Natural
Foods, Inc., a Florida corporation, having its principal place of
business at 000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxx Xxxx, Xxxxxxx 00000
("Xxxxxxxxxx Natural"), Hawaiian Natural Water Company, Inc., a
Delaware corporation, having its principal place of business at 00-000
Xxxxxx Xxxxx, Xxxxx Xxxx, Xxxxxx 00000 ("Hawaiian Natural") and Health
Food Associates, Inc., an Oklahoma corporation, having its principal
place of business at 0000 Xxxx 00xx Xxxxxx, Xxxxx, Xxxxxxxx 00000
("Health Food") (AMCON, Beverage Group, Xxxxxxxxxx Natural, Hawaiian
Natural and Health Food are each referred to as a "Borrower" and are
collectively referred to as "Borrowers").
WITNESSETH:
WHEREAS, AMCON, Agent and Lenders are parties to a certain Loan
and Security Agreement, dated June 1, 2001 as it may be amended (the
"Original Agreement") and various other agreements;
WHEREAS, AMCON has requested that Agent and Lenders amend the
terms and conditions of the Original Agreement in several respects and
Agent and Lenders are willing to do so subject to the terms and
conditions set forth in this Agreement;
WHEREAS, it is the intention of the parties to this Agreement
that upon execution of this Agreement, the Original Agreement (and,
except as otherwise set forth in the following proviso, all
obligations and rights of any party thereunder), shall be amended and
restated by this Agreement; provided, however, the obligations to
repay the loans and advances arising under the Original Agreement
shall continue in full force and effect and the liens and security
interests securing payment thereof shall be continuing but shall now
be governed by the terms of this Agreement and the Other Agreements;
WHEREAS, Borrowers may, from time to time, continue to request
Loans from Agent and Lenders, and the parties wish to provide for the
terms and conditions upon which such Loans or other financial
accommodations, if made by Agent and Lenders, shall be made;
NOW, THEREFORE, in consideration of any Loan (including any Loan
by renewal or extension) hereafter made to Borrowers by Agent and/or
Lenders, and for other good and valuable consideration, the receipt
and sufficiency of which are hereby acknowledged by Borrowers, the
parties agree to amend and restate the Original Agreement as follows:
1.DEFINITIONS.
"Account", "Account Debtor", "Chattel Paper", "Commercial Tort
Claims", "Deposit Accounts", "Documents", "Electronic Chattel Paper",
"Equipment", "Fixtures", "General Intangibles", "Goods",
"Instruments", "Inventory", "Investment Property", "Letter-of-Credit
Right", "Proceeds" and "Tangible Chattel Paper" shall have the
respective meanings assigned to such terms in the Illinois Uniform
Commercial Code, as the same may be in effect from time to time.
"Affiliate" shall mean any Person (i) which directly or
indirectly through one or more intermediaries controls, is controlled
by, or is under common control with, a Borrower, (ii) which
beneficially owns or holds five percent (5%) or more of the voting
control or equity interests of a Borrower, or (iii) five percent (5%)
or more of the voting control or equity interests of which is
beneficially owned or held by a Borrower.
"Assignment and Acceptance" shall have the meaning in Section 20
hereof.
"Borrower Representative" shall mean AMCON.
"Business Day" shall mean any day other than a Saturday, a Sunday
or (i) with respect to all matters, determinations, fundings and
payments in connection with LIBOR Rate Loans, any day on which banks
in London, England or Chicago, Illinois are required or permitted to
close, and (ii) with respect to all other matters, any day that banks
in Chicago, Illinois are required or permitted to close.
"Capital Expenditures" shall mean with respect to any period, the
aggregate of all expenditures (whether paid in cash or accrued as
liabilities and including expenditures for capitalized lease
obligations) by Borrowers and their Subsidiaries during such period
that are required by generally accepted accounting principles,
consistently applied, to be included in or reflected by the property,
plant and equipment or similar fixed asset accounts (or intangible
accounts subject to amortization) on the balance sheet of Borrowers
and their Subsidiaries.
"Cigarette Inventory" shall mean Inventory of AMCON consisting of
cigarettes and cigarette tax stamps.
"Collateral" shall mean all of the property of each Borrower
described in Section 5 hereof, together with all other real or
personal property of any Obligor or any other Person now or hereafter
pledged to Agent, for the benefit of Agent and Lenders to secure,
either directly or indirectly, repayment of any of the Liabilities.
"Defaulting Lender" shall have the meaning set forth in
subsection 2(a) hereof.
"EBITDA" shall mean, with respect to any period, AMCON's net
income after taxes for such period (excluding any after-tax gains or
losses on the sale of assets (other than the sale of Inventory in the
ordinary course of business) and excluding other after-tax
extraordinary gains or losses) plus interest expense, income tax
expense, depreciation and amortization for such period, plus or minus
any other non-cash charges or gains which have been subtracted or
added in calculating net income after taxes for such period.
"Eligible Account" shall mean an Account owing to a Borrower
which is acceptable to Agent in its sole discretion for lending
purposes. Without limiting Agent's discretion, Agent shall, in
general, consider an Account to be an Eligible Account if it meets,
and so long as it continues to meet, all of the following
requirements:
(i) it is genuine and in all respects what it purports to be;
(ii) it is owned by such Borrower, such Borrower has the
right to subject it to a security interest in favor of Agent or assign
it to Agent and it is subject to a first priority perfected security
interest in favor of Agent and to no other claim, lien, security
interest or encumbrance whatsoever, other than Permitted Liens;
(iii) it arises from (A) the performance of services by such
Borrower in the ordinary course of such Borrower's business, and such
services have been fully performed and acknowledged and accepted by
the Account Debtor thereunder; or (B) the sale or lease of Goods by
such Borrower in the ordinary course of such Borrower's business, and
(x) such Goods have been completed in accordance with the Account
Debtor's specifications (if any) and delivered to the Account Debtor,
(y) such Account Debtor has not refused to accept, returned or offered
to return, any of the Goods which are the subject of such Account, and
(z) such Borrower has possession of, or such Borrower has delivered to
Agent (at Agent's request) shipping and delivery receipts evidencing
delivery of such Goods;
(iv) it is evidenced by an invoice rendered to the Account
Debtor thereunder, is due and payable within thirty (30) days after
the date of the invoice and does not remain unpaid more than thirty
(30) days past the invoice date thereof for invoices with seven (7)
day terms or less or sixty (60) days past the invoice date thereof for
all other invoices; provided, however, that if more than twenty-five
percent (25%) of the aggregate dollar amount of invoices owing by a
particular Account Debtor remain unpaid more than thirty (30) days
past the invoice date thereof for invoices with seven (7) day terms or
less or sixty (60) days after the respective invoice dates thereof for
all other invoices, then all Accounts owing by that Account Debtor
shall be deemed ineligible;
(v) it is a valid, legally enforceable and unconditional
obligation of the Account Debtor thereunder, and is not subject to
setoff, counterclaim, credit, allowance or adjustment by such Account
Debtor, or to any claim by such Account Debtor denying liability
thereunder in whole or in part;
(vi) it does not arise out of a contract or order which fails
in any material respect to comply with the requirements of applicable
law;
(vii) the Account Debtor thereunder is not a director,
officer, employee or agent of a Borrower, or a Subsidiary, Parent or
Affiliate;
(viii) it is not an Account with respect to which the Account
Debtor is the United States of America or any state or local
government, or any department, agency or instrumentality thereof,
unless such Borrower assigns its right to payment of such Account to
Agent pursuant to, and in full compliance with, the Assignment of
Claims Act of 1940, as amended, or any comparable state or local law,
as applicable;
(ix) it is not an Account with respect to which the Account
Debtor is located in a state which requires such Borrower, as a
precondition to commencing or maintaining an action in the courts of
that state, either to (A) receive a certificate of authority to do
business and be in good standing in such state; or (B) file a notice
of business activities report or similar report with such state's
taxing authority, unless (x) such Borrower has taken one of the
actions described in clauses (A) or (B); (y) the failure to take one
of the actions described in either clause (A) or (B) may be cured
retroactively by such Borrower at its election; or (z) such Borrower
has proven, to Agent's satisfaction, that it is exempt from any such
requirements under any such state's laws;
(x) the Account Debtor is located within the United States of
America or is located within a foreign country and, in such case, the
Account is payable in U.S. Dollars and with respect to Account Debtors
who are located within a foreign country, the Account is supported by
a letter of credit which is in form and substance satisfactory to
Agent, issued by a financial institution acceptable to Agent and
assigned to Agent in a manner acceptable to Agent;
(xi) it is an Account which arises out of a sale made in the
ordinary course of each Borrower's business;
(xii) it is not an Account with respect to which the Account
Debtor's obligation to pay is conditional upon the Account Debtor's
approval of the Goods or services or is otherwise subject to any
repurchase obligation or return right (other than a right to return
dated Cigarette Inventory which can, in turn, be returned by such
Borrower to the manufacturer thereof for a full refund), as with sales
made on a xxxx-and-hold, guaranteed sale, sale on approval, sale or
return or consignment basis;
(xiii) it is not an Account (A) with respect to which any
representation or warranty contained in this Agreement is untrue; or
(B) which violates any of the covenants of such Borrower contained in
this Agreement;
(xiv) it is not an Account which, when added to a particular
Account Debtor's other indebtedness to such Borrower, exceeds a credit
limit determined by Agent in its sole discretion for that Account
Debtor (except that Accounts excluded from Eligible Accounts solely by
reason of this clause (xiv) shall be Eligible Accounts to the extent
of such credit limit); and
(xv) it is not an Account with respect to which the prospect
of payment or performance by the Account Debtor is or will be
impaired, as determined by Agent in its sole discretion.
"Eligible Cigarette Inventory" shall mean Inventory of AMCON
consisting of Cigarette Inventory which is acceptable to Agent in its
sole discretion for lending purposes. Without limiting Agent's
discretion, Agent shall, in general, consider Cigarette Inventory to
be Eligible Inventory if it meets and so long as it continues to meet
the following requirements:
(i) it consists of cigarettes without tax stamps or
cigarettes which have cigarette tax stamps affixed thereto which have
been issued by any State or political subdivisions thereof where Agent
determines, in its sole discretion, that the affixing of such
jurisdiction's tax stamps thereto does not render such Inventory
ineligible;
(ii) it consists of tax stamps which have been paid in full
with good funds by AMCON to the applicable state or local agency (i.e.
no "post-dated" checks or the posting of bonds in lieu of payment) and
no obligations for payment of the cigarette tax stamps remain
outstanding with the applicable state or local agency, unless such
stamps have been issued by any State or political subdivisions thereof
where Agent determines in its sole discretion that Agent would be
unable to affix or redeem such cigarette tax stamps or otherwise
determines that such Inventory shall be ineligible; and
(iii) such Cigarette Inventory otherwise constitutes Eligible
Inventory.
"Eligible Inventory" shall mean Inventory of a Borrower which is
acceptable to Agent in its sole discretion for lending purposes.
Without limiting Agent's discretion, Agent shall, in general, consider
Inventory to be Eligible Inventory if it meets, and so long as it
continues to meet, the following requirements:
(i) it is owned by such Borrower, such Borrower has the right
to subject it to a security interest in favor of Agent and it is
subject to a first priority perfected security interest in favor of
Agent and to no other claim, lien, security interest or encumbrance
whatsoever, other than Permitted Liens;
(ii) it is located on one of the premises listed on Exhibit A
(or other locations of which Agent has been advised in writing
pursuant to subsection 12(b)(i) hereof), such locations are within the
United States and is not in transit except to the extent that it may
be in transit to another location listed on Exhibit A on vehicles
owned by such Borrower;
(iii) if held for sale or lease or furnishing under contracts
of service, it is (except as Agent may otherwise consent in writing)
new and unused and free from defects which would, in Agent's sole
determination, affect its market value;
(iv) it is not stored with a bailee, consignee, warehouseman,
processor or similar party unless Agent has given its prior written
approval and such Borrower has caused any such bailee, consignee,
warehouseman, processor or similar party to issue and deliver to
Agent, in form and substance acceptable to Agent, such Uniform
Commercial Code financing statements, warehouse receipts, waivers and
other documents as Agent shall require;
(v) it is not Inventory consisting of perishable, non frozen
or refrigerated foods;
(vi) Agent has determined, in accordance with Agent's
customary business practices, that it is not unacceptable due to age,
type, category or quantity; and
(vii) it is not Inventory (A) with respect to which any of
the representations and warranties contained in this Agreement are
untrue; or (B) which violates any of the covenants of such Borrower
contained in this Agreement.
"Environmental Laws" shall mean all federal, state, district,
local and foreign laws, rules, regulations, ordinances, and consent
decrees relating to health, safety, hazardous substances, pollution
and environmental matters, as now or at any time hereafter in effect,
applicable to a Borrower's business or facilities owned or operated by
a Borrower, including laws relating to emissions, discharges, releases
or threatened releases of pollutants, contamination, chemicals, or
hazardous, toxic or dangerous substances, materials or wastes into the
environment (including, without limitation, ambient air, surface
water, ground water, land surface or subsurface strata) or otherwise
relating to the generation, manufacture, processing, distribution,
use, treatment, storage, disposal, transport or handling of Hazardous
Materials.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended, modified or restated from time to time.
"Event of Default" shall have the meaning specified in Section 15
hereof.
"Fiscal Year" shall mean each twelve (12) month accounting period
of Borrowers, which ends on September 30th of each year.
"Fixed Charges" shall mean for any period, without duplication,
scheduled payments of principal during the applicable period with
respect to all indebtedness of AMCON, for borrowed money, plus
scheduled payments of principal during the applicable period with
respect to all capitalized lease obligations of AMCON, plus scheduled
payments of interest during the applicable period with respect to all
indebtedness of AMCON, for borrowed money including capital lease
obligations, plus unfinanced Capital Expenditures of AMCON, during the
applicable period, plus payments during the applicable period in
respect of income or franchise taxes of AMCON, plus any dividends or
distributions made by AMCON, plus any fees paid by AMCON to Xxxxxxx
Xxxxxx in accordance with subsection 13(i) hereof.
"Hazardous Materials" shall mean any hazardous, toxic or
dangerous substance, materials and wastes, including, without
limitation, hydrocarbons (including naturally occurring or man-made
petroleum and hydrocarbons), flammable explosives, asbestos, urea
formaldehyde insulation, radioactive materials, biological substances,
polychlorinated biphenyls, pesticides, herbicides and any other kind
and/or type of pollutants or contaminants (including, without
limitation, materials which include hazardous constituents), sewage,
sludge, industrial slag, solvents and/or any other similar substances,
materials, or wastes and including any other substances, materials or
wastes that are or become regulated under any Environmental Law
(including, without limitation any that are or become classified as
hazardous or toxic under any Environmental Law).
"Indemnified Party" shall have the meaning specified in Section
18 hereof.
"Interest Period" shall have the meaning specified in subsection
4(a)(ii) hereof.
"Letter of Credit" shall mean any Letter of Credit issued on
behalf of a Borrower in accordance with this Agreement.
"Letter of Credit Obligations" shall mean, as of any date of
determination, the sum of (i) the aggregate undrawn face amount of all
Letters of Credit, and (ii) the aggregate unreimbursed amount of all
drawn Letters of Credit not already converted to Loans hereunder.
"Liabilities" shall mean any and all obligations, liabilities and
indebtedness, (including, without limitation, Rate Hedging Obligations
and Letter of Credit Obligations) of Borrowers to Agent and each
Lender or to any parent, affiliate or subsidiary of Agent and each
Lender of any and every kind and nature arising under this Agreement,
or the Other Agreements, including without limitation, any Letters of
Credit, howsoever created, arising or evidenced and howsoever owned,
held or acquired, whether now or hereafter existing, whether now due
or to become due, whether primary, secondary, direct, indirect,
absolute, contingent or otherwise (including, without limitation,
obligations of performance), whether several, joint or joint and
several, and whether arising or existing under written or oral
agreement or by operation of law.
"LIBOR Rate" shall mean, with respect to any LIBOR Rate Loan for
any Interest Period, a rate per annum equal to (a) the offered rate
for deposits in United States dollars for a period equal to such
Interest Period as displayed in the Bloomberg Financial Markets system
(or such other authoritative source as selected by Agent in its sole
discretion) as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period divided by (b) a number equal to
1.0 minus the maximum reserve percentages (expressed as a decimal
fraction) including, without limitation, basic supplemental, marginal
and emergency reserves under any regulations of the Board of Governors
of the Federal Reserve System or other governmental authority having
jurisdiction with respect thereto, as now and from time to time in
effect, for Eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D of such Board) which are
required to be maintained by Agent by the Board of Governors of the
Federal Reserve System. The LIBOR Rate shall be adjusted
automatically on and as of the effective date of any change in such
reserve percentage.
"LIBOR Rate Loans" shall mean the Loans bearing interest with
reference to the LIBOR Rate.
"Loans" shall mean all loans and advances made by Agent and/or
Lenders to or on behalf of Borrowers hereunder.
"Lock Box" and "Lock Box Account" shall have the meanings
specified in subsection 8(a) hereof.
"Material Adverse Effect" shall mean a material adverse effect on
the business, property, assets, prospects, operations or condition,
financial or otherwise, of a Person.
"Maximum Loan Limit" shall mean Sixty Million and No/100 Dollars
($60,000,000.00).
"Maximum Revolving Loan Limit" shall have the meaning specified
in subsection 2(a) hereof.
"Obligor" shall mean Borrowers and each other Person who is or
shall become primarily or secondarily liable for any of the
Liabilities.
"Original Term" shall have the meaning specified in Section 10
hereof.
"Other Agreements" shall mean all agreements, instruments and
documents, other than this Agreement, including, without limitation,
guaranties, mortgages, trust deeds, pledges, powers of attorney,
consents, assignments, contracts, notices, security agreements,
leases, financing statements and all other writings heretofore, now or
from time to time hereafter executed by or on behalf of a Borrower or
any other Person and delivered to Agent and/or any Lender in
connection with the Loans, the Letters of Credit or the other
transactions contemplated hereby, as each of the same may be amended,
modified or supplemented from time to time.
"Parent" shall mean any Person now or at any time or times
hereafter owning or controlling (alone or with any other Person) at
least a majority of the issued and outstanding equity of a Borrower
and, if a Borrower is a partnership, the general partner of such
Borrower.
"PBGC" shall have the meaning specified in subsection 12(b)(v)
hereof.
"Permitted Liens" shall mean (i) statutory liens of landlords,
carriers, warehousemen, processors, mechanics, materialmen or
suppliers incurred in the ordinary course of business and securing
amounts not yet due or declared to be due by the claimant thereunder
or amounts which are being contested in good faith and by appropriate
proceedings and for which such Borrower has maintained adequate
reserves; (ii) liens or security interests in favor of Agent; (iii)
zoning restrictions and easements, licenses, covenants and other
restrictions affecting the use of real property that do not
individually or in the aggregate have a material adverse effect on a
Borrower's ability to use such real property for its intended purpose
in connection with such Borrower's business; (iv) liens in connection
with purchase money indebtedness and capitalized leases otherwise
permitted pursuant to this Agreement, provided, that such liens attach
only to the assets the purchase of which was financed by such purchase
money indebtedness or which is the subject of such capitalized leases;
(v) liens set forth on Schedule 1 hereto; (vi) liens specifically
permitted by Requisite Lenders in writing; (vii) pledges or deposits
in connection with worker's compensation, unemployment insurance and
other social security legislation, or to secure the performance of
bids, tenders, contracts (other than for the repayment of borrowed
money) or leases or to secure statutory obligations or surety, appeal
or stay bonds, or to secure indemnity, performance or other similar
bonds in the ordinary course of business; (viii) liens for taxes not
yet due or for taxes which are being contested in good faith and by
appropriate proceeding provided that (x) the contesting of any such
payment does not give rise to a lien for taxes and (y) such Borrower
keeps on deposit with Agent (such deposit to be held without interest)
an amount of money which, in the sole judgment of Agent, is sufficient
to pay such taxes and any interest or penalties that may accrue
thereon; (ix) mortgage liens on properties commonly known as 0000 Xxxx
Xxxxxx, Xxxxxxxx, Xxxxx Xxxxxx 00000 and 0000 Xxxxxxxxx Xxxx, Xxxxxx,
Xxxxxxxx 00000 in favor of Gold Bank to secure indebtedness permitted
hereunder and (x) subordinated liens on the stock of Hawaiian Natural
and Health Food in favor of Xxxxxxx Xxxxxx.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, limited liability company, institution,
entity, party or foreign or United States government (whether federal,
state, county, city, municipal or otherwise), including, without
limitation, any instrumentality, division, agency, body or department
thereof.
"Plan" shall have the meaning specified in subsection 12(b)(v)
hereof.
"Pre-Settlement Determination Date" shall have the meaning
specified in Section 19 hereof.
"Prime Rate" shall mean LaSalle's publicly announced prime rate
(which is not intended to be LaSalle's lowest or most favorable rate
in effect at any time) in effect from time to time.
"Prime Rate Loans" shall mean the Loans bearing interest with
reference to the Prime Rate.
"Pro Rata Share" shall mean at any time, with respect to any
Lender, a fraction (expressed as a percentage in no more than nine (9)
decimal places), the numerator of which shall be the sum of the
Revolving Loan Commitment and Term Loan Commitment, of such Lender at
such time and the denominator of which shall be the Maximum Loan Limit
at such time.
"Rate Hedging Obligations" shall mean any and all obligations of
Borrowers to the Agent and/or the Lenders, whether absolute or
contingent and howsoever and whensoever created, arising, evidenced or
acquired (including all renewals, extensions and modifications thereof
and substitutions therefor) under (1) any and all agreements designed
to protect Borrowers from the fluctuations of interest rates, exchange
rates or forward rates applicable to such party's assets, liabilities
or exchange transactions, including, but not limited to: interest rate
swap agreements, dollar-denominated or cross-currency interest rate
exchange agreements, forward currency exchange agreements, interest
rate cap, floor or collar agreements, forward rate currency agreements
relating to interest options, puts and warrants, and (2) any and all
agreements relating to cancellations, buy backs, reversals,
terminations or assignments of any of the foregoing.
"Renewal Term" shall have the meaning specified in Section 10
hereof.
"Requisite Lenders" shall mean, at any time, Lenders having Pro
Rata Shares aggregating at least sixty-six and two-thirds percent (66-
2/3rds%) at such time.
"Revolving Loan Commitment" shall mean, with respect to any
Lender, the maximum amount of Revolving Loans which such Lender has
agreed to make to Borrowers, subject to the terms and conditions of
this Agreement, as set forth on the signature page hereto or an
Assignment and Acceptance Agreement executed by such Lender.
"Revolving Loan Limit" shall have the meaning specified in
subsection 2(a) hereof.
"Revolving Loans" shall have the meaning specified in subsection
2(a) hereof.
"Settlement Date" shall have the meaning specified in Section 19
hereof.
"Subsidiary" shall mean any corporation of which more than fifty
percent (50%) of the outstanding capital stock having ordinary voting
power to elect a majority of the board of directors of such
corporation (irrespective of whether at the time stock of any other
class of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time, directly
or indirectly, owned by a Borrower, or any partnership, joint venture
or limited liability company of which more than fifty percent (50%) of
the outstanding equity interests are at the time, directly or
indirectly, owned by a Borrower or any partnership of which a Borrower
is a general partner.
"Subsidiary Accounts Sublimit" shall mean $1,500,000, as such
amount be reduced from time to time pursuant to subsection 2(d)(iv)
hereof.
"Subsidiary Borrower" shall mean each of Beverage Group,
Xxxxxxxxxx Natural, Hawaiian Natural and Health Food.
"Subsidiary Borrower Sale" shall mean a sale of substantially all
of the assets or equity interests of a Subsidiary Borrower consented
to by Agent (which consent shall not be unreasonably withheld).
"Subsidiary Inventory Sublimit" shall mean $4,500,000, as such
amount be reduced from time to time pursuant to subsection 2(d)(iv)
hereof.
"Subsidiary Sublimit" shall mean the sum of the Subsidiary
Accounts Sublimit and the Subsidiary Inventory Sublimit, as such
amount be reduced from time to time pursuant to subsection 2(d)(iv)
hereof.
"Tangible Net Worth" shall have the meaning specified in
subsection 14(a) hereof.
"Tax" shall mean, in relation to any LIBOR Rate Loans and the
applicable LIBOR Rate, any tax, levy, impost, duty, deduction,
withholding or charges of whatever nature required to be paid by Agent
to be withheld or deducted from any payment otherwise required hereby
to be made by a Borrower to Agent; provided, that the term "Tax" shall
not include any taxes imposed upon the net income of Agent.
"Term Loan A" shall have the meaning specified in subsection 2(b)
hereof.
"Term Loan Commitment A" shall mean, with respect to any Lender,
the maximum amount of Term Loan A which such Lender has agreed to
make, subject to the terms and conditions of this Agreement, as set
forth on the signature page hereto or on any Assignment and Acceptance
Agreement executed by such Lender.
"Term Loan B" shall have the meaning specified in subsection 2(c)
hereof.
"Term Loan Commitment B" shall mean, with respect to any Lender,
the maximum amount of Term Loan B which such Lender has agreed to
make, subject to the terms and conditions of this Agreement, as set
forth on the signature page hereto or on any Assignment and Acceptance
Agreement executed by such Lender.
"Term Loans" shall mean, collectively, Term Loan A and Term Loan
B.
2. LOANS.
(a) Revolving Loans.
Subject to the terms and conditions of this Agreement and the
Other Agreements, during the Original Term and any Renewal Term, each
Lender, severally and not jointly, agrees absent the occurrence of an
Event of Default, to make its Pro Rata Share of revolving loans and
advances (the "Revolving Loans") requested by Borrower Representative
on behalf of each Borrower up to such Lender's Revolving Loan
Commitment so long as after giving effect to such Revolving Loans, the
sum of the aggregate unpaid principal balance of the Revolving Loans
and the Letter of Credit Obligations does not exceed an amount up to
the sum of the following sublimits (the "Revolving Loan Limit"):
(i) Up to eighty-five percent (85%) of the face amount (less
maximum discounts, credits and allowances which may be taken by or
granted to Account Debtors in connection therewith in the ordinary
course of AMCON's business) of AMCON's Eligible Accounts; plus
(ii) Up to eighty percent (80%) of the face amount (less maximum
discounts, credits and allowances which may be taken by or granted to
Account Debtors in connection therewith in the ordinary course of such
Borrower's business) of such Borrower's Eligible Accounts (other than
AMCON's Eligible Accounts) or the Subsidiary Accounts Sublimit;
whichever is less, plus
(iii) Up to eighty-five percent (85%) of the lower of cost or
market value of Eligible Cigarette Inventory or Twenty Million and
No/100 Dollars ($20,000,000.00), whichever is less; plus
(iv) Up to seventy percent (70%) of the lower of cost or market
value of AMCON's Eligible Inventory (consisting solely of AMCON's
Eligible Inventory other than Eligible Cigarette Inventory set forth
in clause (iii) above) or Twelve Million and No/100 Dollars
($12,000,000.00), whichever is less; plus
(v) Up to sixty percent (60%) of the lower of cost or market
value of such Borrower's Eligible Inventory (other than AMCON's
Eligible Inventory or Eligible Cigarette Inventory) or the Subsidiary
Inventory Sublimit, whichever is less; minus
(vi) such reserves as Agent elects, in its sole discretion to
establish from time to time, including without limitation, a reserve
with respect to Rate Hedging Obligations; provided, that the Revolving
Loan Limit shall in no event exceed Fifty Five Million and No/100
Dollars ($55,000,000.00) less the then-outstanding principal balance
of Term Loan A (the "Maximum Revolving Loan Limit") except as such
amount may be increased or, following the occurrence of an Event of
Default, decreased by Agent from time to time, in Agent's sole
discretion. The aggregate unpaid principal balance of the Revolving
Loans shall not at any time exceed the lesser of the (i) Revolving
Loan Limit minus the Letter of Credit Obligations and (ii) the Maximum
Revolving Loan Limit minus the Letter of Credit Obligations. If at
any time the outstanding Revolving Loans exceeds either the Revolving
Loan Limit or the Maximum Revolving Loan Limit, in each case minus the
Letter of Credit Obligations, or any portion of the Revolving Loans
and Letter of Credit Obligations exceeds any applicable sublimit
within the Revolving Loan Limit (the "Overadvance"), Borrowers shall
immediately, and without the necessity of demand by Agent, pay to
Agent such amount as may be necessary to eliminate such Overadvance
and Agent shall apply such payment to the Revolving Loans in such
order as Agent shall determine in its sole discretion; provided that
Agent may, in its sole discretion, permit such Overadvance (the
"Interim Advance") to remain outstanding and continue to advance
Revolving Loans to Borrowers on behalf of Lenders without the consent
of any Lender for a period of up to thirty (30) calendar days, so long
as (I) the amount of the Interim Advances does not exceed at any time
Three Million and No/100 Dollars ($3,000,000.00), (ii) the aggregate
outstanding principal balance of the Revolving Loans does not exceed
the Maximum Revolving Loan Limit, and (iii) Agent has not been
notified by Requisite Lenders to cease making such Revolving Loans.
If the Interim Advance is not repaid in full within thirty (30) days
of the initial occurrence of the Interim Advance, no future advances
may be made to Borrowers without the consent of all Lenders until the
Interim Advance is repaid in full.
Neither Agent nor any Lender shall be responsible for any failure
by any other Lender to perform its obligations to make Revolving Loans
hereunder, and the failure of any Lender to make its Pro Rata Share of
any Revolving Loan hereunder shall not relieve any other Lender of its
obligation, if any, to make its Pro Rata Share of any Revolving Loans
hereunder.
If Borrower Representative, on behalf of any Borrower, makes a
request for a Revolving Loan as provided herein Agent, at its option
and in its sole discretion, shall do either of the following:
(i)advance the amount of the proposed Revolving Loan to such
Borrower disproportionately (a "Disproportionate Advance") out of
Agent's own funds on behalf of Lenders, which advance shall be on the
same day as Borrower Representative's request therefor with respect
to Prime Rate Loans if Borrower Representative notifies Agent of such
request by 1:00 P.M., Chicago time on such day, and request settlement
in accordance with Section 19 hereof such that upon such settlement
each Lender's share of the outstanding Revolving Loans (including,
without limitation, the amount of any Disproportionate Advance) equals
its Pro Rata Share; or
(ii) Notify each Lender by telecopy, electronic mail or other
similar form of teletransmission of the proposed advance on the same
day Agent is notified or deemed notified by Borrower Representative of
such Borrower's request for an advance pursuant to this Section 2(a).
Each Lender shall remit, to the demand deposit account designated by a
Borrower (i) with respect to Prime Rate Loans, at or prior to 3:00
P.M., Chicago time, on the date of notification, if such notification
is made before 1:00 P.M., Chicago time, or 10:00 A.M., Chicago time,
on the Business Day immediately succeeding the date of such
notification, if such notification is made after 1:00 P.M., Chicago
time, and (ii) with respect to LIBOR Rate Loans, at or prior to 10:30
A.M., Chicago time, on the date such LIBOR Rate Loans are to be
advanced, immediately available funds in an amount equal to such
Lender's Pro Rata Share of such proposed advance.
If and to the extent that a Lender does not settle with Agent as
required under this Agreement (a "Defaulting Lender") Borrowers and
Defaulting Lender severally agree to repay to Agent forthwith on
demand such amount required to be paid by such Defaulting Lender to
Agent, together with interest thereon, for each day from the date such
amount is made available to a Borrower until the date such amount is
repaid to Agent (x) in the case of a Defaulting Lender at the rate
published by the Federal Reserve Bank of New York on the next
succeeding Business Day as the "Federal Funds Rate" or if no such rate
is published for any Business Day, at the average rate quoted for such
day for such transactions from three (3) federal funds brokers of
recognized standing selected by Agent, and (y) in the case of
Borrowers, at the interest rate applicable at such time for such
Loans; provided, that Borrowers' obligation to repay such advance to
Agent shall not relieve such Defaulting Lender of its liability to
Agent for failure to settle as provided in this Agreement.
Each Borrower hereby authorizes Agent, in its sole discretion, to
charge any of such Borrower's accounts or advance Revolving Loans to
make any payments of principal, interest, fees, costs or expenses
required to be made under this Agreement or the Other Agreements.
A request for a Revolving Loan shall be made or shall be deemed
to be made, each in the following manner: the Borrower Representative,
on behalf of the Borrower requesting such Revolving Loan, shall give
Agent same day notice, no later than 1:00 P.M. (Chicago time) for such
day, of its request for a Revolving Loan as a Prime Rate Loan, and at
least three (3) Business Days prior notice of its request for a
Revolving Loan as a LIBOR Rate Loan, in which notice the Borrower
Representative shall specify the amount of the proposed borrowing and
the proposed borrowing date; provided, however, that no such request
may be made at a time when there exists an Event of Default or an
event which, with the passage of time or giving of notice, will become
an Event of Default. In the event that a Borrower maintains a
controlled disbursement account at LaSalle, each check presented for
payment against such controlled disbursement account and any other
charge or request for payment against such controlled disbursement
account shall constitute a request for a Revolving Loan as a Prime
Rate Loan. As an accommodation to Borrowers, Agent may permit
telephone requests for Revolving Loans and electronic transmittal of
instructions, authorizations, agreements or reports to Agent by
Borrower Representative, on behalf of Borrowers. Unless Borrower
Representative specifically directs Agent in writing not to accept or
act upon telephonic or electronic communications from Borrower
Representative, Agent shall have no liability to Borrowers for any
loss or damage suffered by Borrower Representative or any Borrower as
a result of Agent's honoring of any requests, execution of any
instructions, authorizations or agreements or reliance on any reports
communicated to it telephonically or electronically and purporting to
have been sent to Agent by Borrower Representative and Agent shall
have no duty to verify the origin of any such communication or the
authority of the Person sending it.
Each Borrower hereby irrevocably authorizes Agent to disburse the
proceeds of each Revolving Loan requested by Borrower Representative,
or deemed to be requested by Borrower Representative, as follows: the
proceeds of each Revolving Loan requested under Section 2(a) shall be
disbursed by Agent in lawful money of the United States of America in
immediately available funds, in the case of the initial borrowing, in
accordance with the terms of the written disbursement letter from
Borrower Representative, and in the case of each subsequent borrowing,
by wire transfer or Automated Clearing House (ACH) transfer to such
bank account as may be agreed upon by Borrower Representative and
Agent from time to time, or elsewhere if pursuant to a written
direction from Borrower Representative.
(b) Term Loan A.
Subject to the terms and conditions of this Agreement and the
Other Agreements, on the date that the conditions to the initial Loans
are satisfied, each Lender severally and not jointly agrees to make a
term loan to AMCON in an amount equal to its Pro Rata Share of One
Million One Hundred Sixty Thousand and No/100 Dollars ($1,160,000.00)
against such Borrower's Equipment (the "Term Loan A"), but in any
event not in excess of its Term Loan Commitment A. Amounts repaid with
respect to the Term Loan A may not be reborrowed.
(c) Term Loan B.
Subject to the terms and conditions of this Agreement and the
Other Agreements, on the date that the conditions to the initial Loans
are satisfied, each Lender severally and not jointly agrees to make a
term loan to AMCON in an amount equal to its Pro Rata Share of Five
Million and No/100 Dollars ($5,000,000.00) as a special accommodation
("Term Loan B"), but in any event not in excess of its Term Loan B
Commitment. The proceeds of Term Loan B shall be used in its entirety
to repay AMCON's existing subordinated indebtedness in the outstanding
aggregate principal amount of Six Million Eight Hundred Thousand and
No/100 Dollars ($6,800,000.00). Amounts repaid with respect to the
Term Loan B may not be reborrowed.
(d) Repayments.
The Liabilities shall be repaid as follows:
(i) Repayment of Revolving Loans. The Revolving Loans and all
other Liabilities (other than the Term Loans) shall be repaid on the
last day of the Original Term or any Renewal Term if this Agreement is
renewed pursuant to Section 10 hereof.
(ii) Repayment of Term Loan A. The Term Loan A shall be repaid
in sixty (60) equal monthly installments of Sixteen Thousand Nine
Hundred Thirty-Three and 33/100 Dollars ($16,933.33) payable on
October 31, 2004 and on the corresponding day of each month thereafter
(or if there is no corresponding day, on the last day of the month);
provided, that any remaining outstanding principal balance of the Term
Loan A shall be repaid at the end of the Original Term or any Renewal
Term if this Agreement is renewed pursuant to Section 10 hereof. If
any such payment due date is not a Business Day, then such payment may
be made on the next succeeding Business Day and such extension of time
shall be included in the computation of the amount of interest and
fees due hereunder.
(iii) Repayment of Term Loan B. The Term Loan B shall be repaid
in monthly installments of Two Hundred Seventy-Five Thousand and
No/100 Dollars ($275,000.00) payable on May 1, 2005 and on the
corresponding day of each month thereafter (or if there is no
corresponding day, on the last day of the month); provided that any
remaining outstanding principal balance of Term Loan B shall be repaid
at the end of the Original Term or any Renewal Term if this Agreement
is renewed pursuant to Section 10 hereof. If any such payment due
date is not a Business Day, then such payment may be made on the next
succeeding Business Day and such extension of time shall be included
in the computation of the amount of interest and fees due hereunder.
(iv) Mandatory Prepayments of the Term Loans and Reductions in
Availability.
(A) Sales of Assets and/or Equity Interests. (i) other than with
respect to a Subsidiary Borrower Sale, upon receipt of the proceeds of
the sale or other disposition of any Equipment or real property of a
Borrower which is subject to a mortgage in favor of Agent, or if any
of the Equipment or real property subject to such mortgage is damaged,
destroyed or taken by condemnation in whole or in part, the proceeds
thereof shall be paid by such Borrower to Agent, for the benefit of
Agent and Lenders, as a mandatory prepayment of the Term Loan B, such
payment to be applied against the remaining installments of principal
in the inverse order of their maturities until such Term Loan B is
repaid in full, and then against Term Loan A in the inverse order of
their maturities until such Term Loan A is repaid in full, and then
against the other Liabilities, as determined by Agent, in its sole
discretion and (ii) with respect to a Subsidiary Borrower Sale,
provided that no Event of Default is then in existence, the proceeds
thereof shall be applied to the outstanding principal balance of Loans
to such Subsidiary Borrower and shall result in a mandatory reduction
of the Subsidiary Sublimit (by application to the Subsidiary Accounts
Sublimit and/or the Subsidiary Inventory Sublimit in such order as
Agent shall determine in its sole discretion) and then against the
other Liabilities, as determined by Agent, in its sole discretion,
provided further that upon the existence of an Event of Default, the
proceeds thereof shall be applied to the Liabilities in such order as
Agent shall determine in its sole discretion.
(B) Raising of Equity/Incurrence of Subordinated Debt. In the
event AMCON or any Subsidiary Borrower causes any equity to be
contributed or incurs indebtedness on a subordinated basis and AMCON
elects to have such proceeds applied to the outstanding principal
balance of the Loans to the Subsidiary Borrowers, then provided that
Agent has consented to the contribution of equity or incurrence of
indebtedness (which consent shall not be unreasonably withheld) and no
Event of Default is then in existence, the proceeds thereof shall be
applied, (i) in the case of AMCON, to the outstanding principal
balance of Loans to the Subsidiary Borrowers in such order as Agent
shall determine in its sole discretion and shall result in a mandatory
reduction of the Subsidiary Sublimit (by application to the Subsidiary
Accounts Sublimit and/or the Subsidiary Inventory Sublimit in such
order as Agent shall determine in its sole discretion) and then
against the other Liabilities, as determined by Agent, in its sole
discretion and (ii) in the case of a Subsidiary Borrower, to the
outstanding principal balance of Loans to such Subsidiary Borrower in
such order as Agent shall determine in its sole discretion and shall
result in a mandatory reduction of the Subsidiary Sublimit (by
application to the Subsidiary Accounts Sublimit and/or the Subsidiary
Inventory Sublimit in such order as Agent shall determine in its sole
discretion) and then against the other Liabilities, as determined by
Agent, in its sole discretion.
(C) Payments by Guarantor. Upon receipt of any payments made by
Xxxxxxx Xxxxxx pursuant to his Continuing Unconditional Guaranty of
even date herewith, such proceeds shall be applied by Agent as a
mandatory prepayment of the Term Loan B, such payment to be applied
against the remaining installments of principal in the inverse order
of their maturities until such Term Loan B is repaid in full, and then
shall be applied to the outstanding principal balance of the Loans to
the Subsidiary Borrowers in such order as Agent shall determine in its
sole discretion and shall result in a mandatory reduction of the
Subsidiary Sublimit (by application to the Subsidiary Accounts
Sublimit and/or the Subsidiary Inventory Sublimit in such order as
Agent shall determine in its sole discretion), and then against the
other Liabilities, as determined by Agent, in its sole discretion.
(e) Notes.
The Loans shall, in Agent's and Lenders' sole discretion, be
evidenced by one or more promissory notes in form and substance
satisfactory to each Lender. However, if such Loans are not so
evidenced, such Loans may be evidenced solely by entries upon the
books and records maintained by Agent and each Lender.
(f) Borrower Representative.
Each Borrower hereby designates Borrower Representative as its
representative and agent on its behalf for the purposes of issuing
borrowing requests, giving instructions with respect to the
disbursement of the proceeds of the Loans, selecting interest rate
options, requesting Letters of Credit, giving and receiving all other
notices and consents hereunder or under any of the Other Agreements
and taking all other actions (including in respect of compliance with
covenants) on behalf of any Borrower or Borrowers under this Agreement
and the Other Agreements. Borrower Representative hereby accepts such
appointment. Agent and each Lender may regard any notice or other
communication pursuant to this Agreement or any Other Agreement from
Borrower Representative as a notice or communication from all
Borrowers. Each warranty, covenant, agreement and undertaking made on
a Borrower's behalf by Borrower Representative shall be deemed for all
purposes to have been made by such Borrower and shall be binding upon
and enforceable against such Borrower to the same extent as it if the
same had been made directly by such Borrower.
3. LETTERS OF CREDIT.
(a) General Terms.
Subject to the terms and conditions of this Agreement and the
Other Agreements, during the Original Term or any Renewal Term, Agent
shall, absent the existence of an Event of Default, from time to time
issue, cause to be issued and co-sign for or otherwise guarantee, upon
the request of Borrower Representative, on behalf of a Borrower,
commercial and/or standby Letters of Credit; provided, that the
aggregate undrawn face amount of all such Letters of Credit shall at
no time exceed Five Million and No/100 Dollars ($5,000,000.00).
Payments made by the issuer of a Letter of Credit to any Person on
account of any Letter of Credit shall be immediately payable by such
Borrower without notice, presentment or demand and each Borrower
agrees that each payment made by the issuer of a Letter of Credit in
respect of a Letter of Credit shall constitute a request by Borrower
Representative, on behalf of such Borrower, for a Loan to reimburse
such issuer. In the event such Loan is not advanced by Agent or
Lenders for any reason, such reimbursement obligations (whether owing
to the issuer of the Letter of Credit or Agent or Lenders) shall
become part of the Liabilities hereunder and shall bear interest at
the rate then applicable to Revolving Loans constituting Prime Rate
Loans until repaid. Borrowers shall remit to Agent, for the benefit of
Lenders, a Letter of Credit fee equal to one percent (1%) per annum on
the aggregate undrawn face amount of all Letters of Credit
outstanding, which fee shall be payable monthly in arrears on the last
Business Day of each month. Borrowers shall also pay on demand the
normal and customary administrative charges of the issuer of the
Letter of Credit for issuance, amendment, negotiation, renewal or
extension of any Letter of Credit.
(b) Requests for Letters of Credit.
Borrower Representative, on behalf of each Borrower, shall make
requests for Letters of Credit in writing at least three (3) Business
Days prior to the date such Letter of Credit is to be issued. Each
such request shall specify the date such Letter of Credit is to be
issued, the amount thereof, the name and address of the beneficiary
thereof and a description of the transaction to be supported thereby.
Any such notice shall be accompanied by the form of Letter of Credit
requested and any application or reimbursement agreement required by
the issuer of such Letter of Credit. If any term of such application
or reimbursement agreement is inconsistent with this Agreement, then
the provisions of this Agreement shall control to the extent of such
inconsistency.
(c) Obligations Absolute.
Each Borrower shall be obligated to reimburse the issuer of any
Letter of Credit, or Agent and/or Lenders if Agent and/or Lenders have
reimbursed such issuer on a Borrower's behalf, for any payments made
in respect of any Letter of Credit, which obligation shall be
unconditional and irrevocable and shall be paid regardless of: (i)
any lack of validity or enforceability of any Letter of Credit, (ii)
any amendment or waiver of or consent or departure from all or any
provisions of any Letter of Credit, this Agreement or any Other
Agreement, (iii) the existence of any claim, set off, defense or other
right which a Borrower or any other Person may have against any
beneficiary of any Letter of Credit or Agent, any Lender or issuer of
the Letter of Credit, (iv) any draft or other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid, or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect, (v) any payment under any Letter of Credit
against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, and (vi) any other act or
omission to act or delay of any kind of the issuer of such Letter of
Credit, Agent, any Lender or any other Person or any other event or
circumstance that might otherwise constitute a legal or equitable
discharge of a Borrower's obligations hereunder. It is understood and
agreed by each Borrower that the issuer of any Letter of Credit may
accept documents that appear on their face to be in order without
further investigation or inquiry, regardless of any notice or
information to the contrary.
(d) Expiration Dates of Letters of Credit.
The expiration date of each Letter of Credit shall be no later
than the earlier of (i) one (1) year from the date of issuance and
(ii) the thirtieth (30th) day prior to the end of the Original Term or
any Renewal Term. Notwithstanding the foregoing, a Letter of Credit
may provide for automatic extensions of its expiration date for one or
more one (1) year periods, so long as the issuer thereof has the right
to terminate the Letter of Credit at the end of each one (1) year
period and no extension period extends past the thirtieth (30th) day
prior to the end of the Original Term or any Renewal Term.
(e) Participation.
Immediately upon the issuance of a Letter of Credit in accordance
with this Agreement, each Lender shall be deemed to have irrevocably
and unconditionally purchased and received from Agent, without
recourse or warranty, an undivided interest and participation therein
to the extent of such Lender's Pro Rata Share (including, without
limitation, all obligations of Borrowers with respect thereto). Each
Borrower hereby indemnifies Agent and each Lender against any and all
liability and expense it may incur in connection with any Letter of
Credit and agrees to reimburse Agent and each Lender for any payment
made by Agent or any Lender to the issuer.
4. INTEREST, FEES AND CHARGES.
(a) Interest Rate.
Subject to the terms and conditions set forth below, the Loans
shall bear interest at the per annum rate of interest set forth in
subsection (i), (ii) or (iii) below:
(i) Each Loan that is a Prime Rate Loan, other than Term Loan B,
shall bear interest at the Prime Rate in effect from time to time,
payable on the last Business Day of each month in arrears. Term Loan
B shall bear interest at the rate of two percent (2%) per annum in
excess of the Prime Rate in effect from time to time, payable on the
last Business Day of each month in arrears. Said rates of interest
shall increase or decrease by an amount equal to each increase or
decrease in the Prime Rate effective on the effective date of each
such change in the Prime Rate.
(ii) Each Loan that constitutes a LIBOR Rate Loan as of the date
hereof may continue as a LIBOR Rate Loan until the later to occur of
(a) the last day of such Loan's Interest Period and (b) the
termination date of the interest rate swap contract with LaSalle
related to such Libor Rate Loan in effect as of the date hereof (the
"Libor Termination Date"). Upon such Libor Rate Loan's Libor
Termination Date, such LIBOR Rate Loan shall be converted to a Prime
Rate Loan. Each LIBOR Rate Loan shall bear interest at two hundred
fifty (250) basis points in excess of the LIBOR Rate for the
applicable Interest Period, such rate to remain fixed for such
Interest Period. "Interest Period" shall mean any continuous period
of one (1), two (2), three (3) months or six (6) months, as selected
from time to time by the Borrower Representative requesting such LIBOR
Rate Loan by irrevocable notice (in writing, by telecopy, telex,
electronic mail or cable) given to Agent not less than three (3)
Business Days prior to the first day of each respective Interest
Period; provided, that: (A) each such period occurring after such
initial period shall commence on the day on which the immediately
preceding period expires; (B) the final Interest Period shall be such
that its expiration occurs on or before the end of the Original Term
or any Renewal Term; and (C) if for any reason Borrower
Representative shall fail to timely select a period, then such Loans
shall continue as, or revert to, Prime Rate Loans. Interest shall be
payable on the last Business Day of each month in arrears and on the
last Business Day of such Interest Period.
(iii) Upon the occurrence of an Event of Default and during the
continuance thereof, the Loans shall bear interest at the rate of two
percent (2.0%) per annum in excess of the interest rate otherwise
payable thereon, which interest shall be payable on demand. All
interest shall be calculated on the basis of a 360-day year.
(b) Other LIBOR Provisions.
(i) Subject to the provisions of this Agreement, Borrower
Representative, on behalf of each Borrower, shall have the option (A)
as of any date, to convert all or any part of the Prime Rate Loans to,
or request that new Loans be made as, LIBOR Rate Loans of various
Interest Periods, (B) as of the last day of any Interest Period, to
continue all or any portion of the relevant LIBOR Rate Loans as LIBOR
Rate Loans; (C) as of the last day of any Interest Period, to convert
all or any portion of the LIBOR Rate Loans to Prime Rate Loans; and
(D) at any time, to request new Loans as Prime Rate Loans; provided,
that Loans may not be continued as or converted to LIBOR Rate Loans,
if the continuation or conversion thereof would violate the provisions
of subsections 4(b)(ii) or 4(b)(iii) of this Agreement or if an Event
of Default has occurred. Notwithstanding the foregoing, without the
consent of the Required Lenders, Borrower Representative, on behalf of
each Borrower, shall not be permitted (A) as of any date, to convert
all or any part of the Prime Rate Loans to, or request that new Loans
be made as, LIBOR Rate Loans of various Interest Periods, or (B) as of
the last day of any Interest Period, to continue all or any portion of
any LIBOR Rate Loans as a LIBOR Rate Loan to the extent the expiration
of such continued LIBOR Rate Loan's Interest Period occurs after such
LIBOR Rate Loan's LIBOR Termination Date.
(ii) Agent's determination of the LIBOR Rate as provided
above shall be conclusive, absent manifest error. Furthermore, if
Agent or any Lender determines, in good faith (which determination
shall be conclusive, absent manifest error), prior to the commencement
of any Interest Period that (A) U.S. Dollar deposits of sufficient
amount and maturity for funding the Loans are not available to Agent
or such Lender in the London Interbank Eurodollar market in the
ordinary course of business, or (B) by reason of circumstances
affecting the London Interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the rate of interest to be
applicable to the Loans requested by Borrower Representative to be
LIBOR Rate Loans or the Loans bearing interest at the rates set forth
in subsection 4(a)(ii) of this Agreement shall not represent the
effective pricing to such Lender for U.S. Dollar deposits of a
comparable amount for the relevant period (such as for example, but
not limited to, official reserve requirements required by Regulation D
to the extent not given effect in determining the rate), Agent shall
promptly notify Borrower Representative and (1) all existing LIBOR
Rate Loans shall convert to Prime Rate Loans upon the end of the
applicable Interest Period, and (2) no additional LIBOR Rate Loans
shall be made until such circumstances are cured.
(iii) If, after the date hereof, the introduction of, or any
change in any applicable law, treaty, rule, regulation or guideline or
in the interpretation or administration thereof by any governmental
authority or any central bank or other fiscal, monetary or other
authority having jurisdiction over Agent or any Lender or its lending
offices (a "Regulatory Change"), shall, in the opinion of counsel to
Agent or such Lender, make it unlawful for Agent or such Lender to
make or maintain LIBOR Rate Loans, then Agent shall promptly notify
Borrower Representative and (A) the LIBOR Rate Loans shall immediately
convert to Prime Rate Loans on the last Business Day of the then
existing Interest Period or on such earlier date as required by law
and (B) no additional LIBOR Rate Loans shall be made until such
circumstance is cured.
(iv) If, for any reason, a LIBOR Rate Loan is paid prior to
the last Business Day of any Interest Period or if a LIBOR Rate Loan
does not occur on a date specified by the Borrower Representative in
its request (other than as a result of a default by Agent or a
Lender), each Borrower agrees to indemnify Agent and each Lender
against any loss (including any loss on redeployment of the deposits
or other funds acquired by Agent or such Lender to fund or maintain
such LIBOR Rate Loan) cost or expense incurred by Agent or such Lender
as a result of such prepayment.
(v) If any Regulatory Change (whether or not having the force
of law) shall (A) impose, modify or deem applicable any assessment,
reserve, special deposit or similar requirement against assets held
by, or deposits in or for the account of or loans by, or any other
acquisition of funds or disbursements by, Agent or any Lender; (B)
subject Agent or any Lender or the LIBOR Rate Loans to any Tax or
change the basis of taxation of payments to Agent or any Lender of
principal or interest due from a Borrower to Agent or such Lender
hereunder (other than a change in the taxation of the overall net
income of Agent or such Lender); or (C) impose on Agent or any Lender
any other condition regarding the LIBOR Rate Loans or Agent's or any
Lender's funding thereof, and Agent or any Lender shall determine
(which determination shall be conclusive, absent any manifest error)
that the result of the foregoing is to increase the cost to Agent or
such Lender of making or maintaining the LIBOR Rate Loans or to reduce
the amount of principal or interest received by Agent or such Lender
hereunder, then Borrowers shall pay to such party, on demand, such
additional amounts as such party shall, from time to time, determine
are sufficient to compensate and indemnify such party from such
increased cost or reduced amount.
(vi) Each of Agent and each Lender shall receive payments of
amounts of principal of and interest with respect to the LIBOR Rate
Loans free and clear of, and without deduction for, any Taxes. If (A)
Agent or any Lender shall be subject to any Tax in respect of any
LIBOR Rate Loans or any part thereof or, (B) Borrowers shall be
required to withhold or deduct any Tax from any such amount, the LIBOR
Rate applicable to such LIBOR Rate Loans shall be adjusted by Agent or
such Lender to reflect all additional costs incurred by Agent or such
Lender in connection with the payment by Agent or such Lender or the
withholding by a Borrower of such Tax and Borrower Representative
shall provide Agent or such Lender with a statement detailing the
amount of any such Tax actually paid by Borrowers. Determination by
Agent or any Lender of the amount of such costs shall be conclusive,
absent manifest error. If after any such adjustment any part of any
Tax paid by Agent or any Lender is subsequently recovered by Agent or
such Lender, such party shall reimburse Borrowers to the extent of the
amount so recovered. A certificate of an officer of Agent or any
Lender setting forth the amount of such recovery and the basis
therefor shall be conclusive, absent manifest error.
(vii) Each request for LIBOR Rate Loans shall be in an amount
not less than One Million and No/100 Dollars ($1,000,000.00), and in
integral multiples of, One Million and No/100 Dollars ($1,000,000.00).
(viii) Unless otherwise specified by Borrower Representative,
all Loans shall be Prime Rate Loans.
(ix) No more than five (5) Interest Periods may be in effect
with respect to outstanding LIBOR Rate Loans at any one time.
(c) Fees And Charges.
(i) Closing Fee: Borrower shall pay to Agent, for the
benefit of Lenders, a closing fee of One Hundred Thousand and No/100
Dollars ($100,000.00), which fee shall be fully earned by Lenders and
payable on the date of disbursement of the initial Loans hereunder.
(ii) Unused Line Fee: Borrowers shall jointly and severally
pay to Agent, for the benefit of Lenders, an unused line fee of one-
fourth of one percent (1/4th of 1%) of the difference between the
Maximum Revolving Loan Limit and the average daily balance of the
Revolving Loans plus the Letter of Credit Obligations for each month,
which fee shall be fully earned by Lenders and payable monthly in
arrears on the first Business Day of each month. Said fee shall be
calculated on the basis of a 360 day year.
(iii) Special Accommodation Fee: Borrowers shall pay to
Agent, for the benefit of Lenders, a special accommodation fee equal
to $250,000.00, which fee shall be fully earned by Lenders and payable
on the date of disbursement of the initial Loans hereunder.
(iv) Costs and Expenses: Borrowers shall reimburse Agent for
all costs and expenses, including, without limitation, legal expenses
and reasonable attorneys' fees (whether for internal or outside
counsel, provided that the amount Borrowers shall pay to Agent, for
its own account, with respect to internal attorney's fees in
connection with the documentation and consummation of this transaction
shall be $50,000.00), incurred by Agent in connection with the
(i) documentation and consummation of this transaction and any other
transactions among Borrowers, Agent and Lenders, including, without
limitation, Uniform Commercial Code and other public record searches
and filings, overnight courier or other express or messenger delivery,
appraisal costs, surveys, title insurance and environmental audit or
review costs; (ii) collection, protection or enforcement of any rights
in or to the Collateral; (iii) collection of any Liabilities; and (iv)
administration and enforcement of any of Agent's and/or any Lender's
rights under this Agreement or any Other Agreement (including, without
limitation, any costs and expenses of any third party provider engaged
by Agent for such purposes). Borrowers shall also pay all normal
service charges with respect to all accounts maintained by each
Borrower with LaSalle and any additional services requested by a
Borrower from LaSalle. All such costs, expenses and charges shall, if
owed to LaSalle, be reimbursed by Agent and Lenders and in such event,
or in the event such costs and expenses are owed to Agent or a Lender,
shall constitute Liabilities hereunder, shall be payable by Borrowers
to Agent on demand, and, until paid, shall bear interest at the
highest rate then applicable to Loans hereunder. In addition,
following the occurrence of an Event of Default, Borrowers shall
reimburse each Lender for all costs and expenses, including, without
limitation, legal expenses and reasonable attorneys' fees, incurred by
such Lender in connection with the (i) collection, protection or
enforcement of any rights in or to the Collateral; (ii) collection of
any Liabilities; and (iii) administration and enforcement of any of
Lenders' rights under this Agreement.
(v) Capital Adequacy Charge. If Agent or any Lender shall
have determined that the adoption of any law, rule or regulation
regarding capital adequacy, or any change therein or in the
interpretation or application thereof, or compliance by Agent or such
Lender with any request or directive regarding capital adequacy
(whether or not having the force of law) from any central bank or
governmental authority enacted after the date hereof, does or shall
have the effect of reducing the rate of return on such party's capital
as a consequence of its obligations hereunder to a level below that
which Agent or such Lender could have achieved but for such adoption,
change or compliance (taking into consideration such party's policies
with respect to capital adequacy) by a material amount, then from time
to time, after submission by Agent to Borrower Representative of a
written demand therefor ("Capital Adequacy Demand") together with the
certificate described below, Borrowers shall pay to such party such
additional amount or amounts ("Capital Adequacy Charge") as will
compensate such party for such reduction, such Capital Adequacy Demand
to be made with reasonable promptness following such determination. A
certificate of Agent or such Lender claiming entitlement to payment as
set forth above shall be conclusive in the absence of manifest error.
Such certificate shall set forth the nature of the occurrence giving
rise to such reduction, the amount of the Capital Adequacy Charge to
be paid to Agent or such Lender, and the method by which such amount
was determined. In determining such amount, the applicable party may
use any reasonable averaging and attribution method, applied on a non-
discriminatory basis.
(d) Maximum Interest.
It is the intent of the parties that the rate of interest and
other charges to each Borrower under this Agreement and the Other
Agreements shall be lawful; therefore, if for any reason the interest
or other charges payable under this Agreement are found by a court of
competent jurisdiction, in a final determination, to exceed the limit
which Agent or any Lender may lawfully charge such Borrower, then the
obligation to pay interest and other charges shall automatically be
reduced to such limit and, if any amount in excess of such limit shall
have been paid, then such amount shall be refunded to such Borrower.
5.COLLATERAL.
(a) Grant of Security Interest to Agent.
As security for the payment of all Loans now or in the future
made by Agent and Lenders to Borrowers hereunder and for the payment
or other satisfaction of all other Liabilities, each Borrower hereby
assigns to Agent, for the benefit of Agent and Lenders, and grants to
Agent, for the benefit of Agent and Lenders, a continuing security
interest in the following property of such Borrower, whether now or
hereafter owned, existing, acquired or arising and wherever now or
hereafter located: (a) all Accounts (whether or not Eligible
Accounts) and all Goods whose sale, lease or other disposition by such
Borrower has given rise to Accounts and have been returned to, or
repossessed or stopped in transit by, such Borrower; (b) all Chattel
Paper, Instruments, Documents and General Intangibles (including,
without limitation, all patents, patent applications, trademarks,
trademark applications, trade names, trade secrets, goodwill,
copyrights, copyright applications, registrations, licenses, software,
franchises, customer lists, tax refund claims, claims against carriers
and shippers, guarantee claims, contract rights, payment intangibles,
security interests, security deposits and rights to indemnification);
(c) all Inventory (whether or not Eligible Inventory); (d) all Goods
(other than Inventory), including, without limitation, Equipment,
vehicles and Fixtures; (e) all Investment Property; (f) all Deposit
Accounts, bank accounts, deposits and cash; (g) all Letter-of-Credit
Rights; (h) Commercial Tort Claims listed on Exhibit C hereto, (i) any
other property of such Borrower now or hereafter in the possession,
custody or control of Agent or any Lender or any agent or any parent,
affiliate or subsidiary of Agent or any Lender or any participant with
any Lender in the Loans, for any purpose (whether for safekeeping,
deposit, collection, custody, pledge, transmission or otherwise) and
(j) all additions and accessions to, substitutions for, and
replacements, products and Proceeds of the foregoing property,
including, without limitation, proceeds of all insurance policies
insuring the foregoing property, and all of such Borrower's books and
records relating to any of the foregoing and to such Borrower's
business.
(b) Other Security.
Agent, in its sole discretion, without waiving or releasing any
obligation, liability or duty of a Borrower under this Agreement or
the Other Agreements or any Event of Default, may at any time or times
hereafter, but shall not be obligated to, pay, acquire or accept an
assignment of any security interest, lien, encumbrance or claim
asserted by any Person in, upon or against the Collateral. All sums
paid by Agent in respect thereof and all costs, fees and expenses
including, without limitation, reasonable attorney fees, all court
costs and all other charges relating thereto incurred by Agent shall
constitute Liabilities, payable by Borrowers to Agent on demand and,
until paid, shall bear interest at the highest rate then applicable to
Loans hereunder.
(c) Possessory Collateral.
Immediately upon a Borrower's receipt of any portion of the
Collateral evidenced by an agreement, Instrument or Document,
including, without limitation, any Tangible Chattel Paper and any
Investment Property consisting of certificated securities, such
Borrower shall deliver the original thereof to Agent together with an
appropriate endorsement or other specific evidence of assignment
thereof to Agent (in form and substance acceptable to Agent). If an
endorsement or assignment of any such items shall not be made for any
reason, Agent is hereby irrevocably authorized, as each Borrower's
attorney and agent-in-fact, to endorse or assign the same on such
Borrower's behalf.
(d) Electronic Chattel Paper.
To the extent that a Borrower obtains or maintains any Electronic
Chattel Paper, such Borrower shall create, store and assign the record
or records comprising the Electronic Chattel Paper in such a manner
that (i) a single authoritative copy of the record or records exists
which is unique, identifiable and except as otherwise provided in
clauses (iv), (v) and (vi) below, unalterable, (ii) the authoritative
copy identifies Agent as the assignee of the record or records, (iii)
the authoritative copy is communicated to and maintained by the Agent
or its designated custodian, (iv) copies or revisions that add or
change an identified assignee of the authoritative copy can only be
made with the participation of Agent, (v) each copy of the
authoritative copy and any copy of a copy is readily identifiable as a
copy that is not the authoritative copy and (vi) any revision of the
authoritative copy is readily identifiable as an authorized or
unauthorized revision.
(e) Release of Subsidiary Borrower Liens.
So long as no Event of Default is then in existence, at such time
as (i) all Liabilities of each Subsidiary Borrower shall have been
repaid in full and neither Agent nor any Lender shall have any
commitment to lend or other obligation to such Subsidiary Borrowers
and (ii) Term Loan B has been repaid in full, then (x) Agent shall,
upon request, release its liens on the assets of such Subsidiary
Borrowers and (y) at such time as Agent releases its liens, the
Subsidiary Borrowers shall no longer be considered Borrowers hereunder
and Agent shall have no claims against such Subsidiary Borrowers
except with respect to claims thereafter arising under Section 24
hereunder.
6. PRESERVATION OF COLLATERAL AND PERFECTION OF SECURITY INTERESTS
THEREIN.
Each Borrower shall, at Agent's request, at any time and from
time to time, authenticate, execute and deliver to Agent such
financing statements, documents and other agreements and instruments
(and pay the cost of filing or recording the same in all public
offices deemed necessary or desirable by Agent) and do such other acts
and things or cause third parties to do such other acts and things as
Agent may deem necessary or desirable in its sole discretion in order
to establish and maintain a valid, attached and perfected security
interest in the Collateral in favor of Agent (free and clear of all
other liens, claims, encumbrances and rights of third parties
whatsoever, whether voluntarily or involuntarily created, except
Permitted Liens) to secure payment of the Liabilities, and in order to
facilitate the collection of the Collateral. Each Borrower
irrevocably hereby makes, constitutes and appoints Agent (and all
Persons designated by Agent for that purpose) as such Borrower's true
and lawful attorney and agent-in-fact to execute and file such
financing statements, documents and other agreements and instruments
and do such other acts and things as may be necessary to preserve and
perfect Agent's security interest in the Collateral. Each Borrower
further agrees that a carbon, photographic, photostatic or other
reproduction of this Agreement or of a financing statement shall be
sufficient as a financing statement. Each Borrower further ratifies
and confirms the prior filing by Agent of any and all financing
statements which identify such Borrower as debtor, Agent as secured
party and any or all Collateral as collateral.
7. POSSESSION OF COLLATERAL AND RELATED MATTERS.
Until an Event of Default has occurred, each Borrower shall have
the right, except as otherwise provided in this Agreement, in the
ordinary course of such Borrower's business, to (a) sell, lease or
furnish under contracts of service any of such Borrower's Inventory
normally held by such Borrower for any such purpose; and (b) use and
consume any raw materials, work in process or other materials normally
held by such Borrower for such purpose; provided, however, that a sale
in the ordinary course of business shall not include any transfer or
sale in satisfaction, partial or complete, of a debt owed by such
Borrower.
8. COLLECTIONS.
(a) With respect to AMCON, such 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. Such 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. If
such Borrower, any Affiliate or Subsidiary, any shareholder, officer,
director, employee or agent of such 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 the
amounts on deposit in such Lock Box and Lock Box Account are the sole
and exclusive property of 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 such
Borrower, 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 Agent in a manner satisfactory to Agent, funds
deposited in the Lock Box Account on a daily basis as such funds are
collected. Such Borrower agrees that 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; provided, that so long as no Event of Default has
occurred, payments received by Agent shall not be applied to the
unmatured portion of the LIBOR Rate Loans, but shall be held in a cash
collateral account maintained by Agent, until the earlier of (i) the
last Business Day of the Interest Period applicable to such LIBOR Rate
Loan and (ii) the occurrence of an Event of Default; provided,
further, that so long as no Event of Default has occurred, the
immediately available funds in such cash collateral account may be
disbursed, at Borrower Representative's discretion, to such Borrower
so long as after giving effect to such disbursement, such Borrower's
availability under subsection 2(a) hereof at such time, equals or
exceeds the outstanding Revolving Loans at such time. Such Borrower
agrees to pay all fees, costs and expenses in connection with opening
and maintaining 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 such Borrower upon
demand, and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder. All checks, drafts, instruments and
other items of payment or Proceeds of Collateral shall be endorsed by
such 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, such Borrower irrevocably hereby makes,
constitutes and appoints Agent (and all Persons designated by Agent
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.
(b) With respect to each Borrower other than AMCON, until such time as
Agent shall, in its sole discretion, after the occurrence of an Event
of Default, notify such Borrowers that Agent will require such
Borrowers to establish and maintain a Lock Box and Lock Box Account,
such Borrowers shall collect and enforce all of their Accounts. All
costs of enforcement and collection of such Borrowers' Accounts shall
be borne solely by each such Borrowers, whether the same are incurred
by Agent or by such Borrowers. Such Borrowers agree that, with
respect to all of such Borrowers' Accounts, the collection and
enforcement of such Accounts by such Borrowers shall be as Agent's
agent, and that all collections and proceeds thereof (and of all other
Collateral, including, without limitation, Inventory) received by such
Borrowers, Affiliate or any Subsidiary or any shareholder, officer,
director, employee or agent of such Borrowers or any Affiliate or
Subsidiary, or any other person acting for or in connection with such
Borrowers shall be received in trust for Agent and shall be promptly
turned over to Agent or another financial institution acceptable to
Agent in the precise form in which received, either by mailing the
same or delivering the same to Agent or another financial institution
acceptable to Agent not later than the Business Day following the
receipt thereof. Each such Borrower agrees that it will not
intermingle or permit the intermingling of such collections or
proceeds with any of such Borrower's other funds or property but will
hold such collections and proceeds separate and apart from such other
funds and property and upon an express trust for Agent. Such
collections and proceeds so turned over to Agent may be handled and
administered by Agent in and through a remittance or similar account,
but each Borrower acknowledges that the maintenance of such an account
is solely for the convenience of Agent in facilitating its own
operations and that each such Borrower has not and shall not have any
right, title or interest in any such account or in the amounts at any
time appearing to the credit thereof. If any of such collections and
proceeds are turned over to another financial institution acceptable
to Agent, such financial institution shall acknowledge and agree, in a
manner satisfactory to Agent, that the collections and proceeds so
turned over and the remittance or similar account (a "Local Depository
Account") through which such collections and proceeds may be handled
and administered by said financial institution are the sole and
exclusive property of Agent, that such financial institution will
follow the instructions of Agent with respect to disposition of funds
in the Local Depository Account without further consent from any such
Borrower, that such financial institution has no right to setoff
against the Local Depository Account or against any other account
maintained by such financial institution into which the contents of
the Local Depository Account may be transferred, and that such
financial institution shall wire, or otherwise transfer in immediately
available funds in a manner satisfactory to Agent, funds deposited in
the Local Depository Account on a daily basis as such funds are
collected. At such time as Agent shall require any such Borrower to
maintain a Lock Box and Lock Box Account following the occurrence of
an Event of Default such 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. Each such
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. If such
Borrower, any Affiliate or Subsidiary, any shareholder, officer,
director, employee or agent of such 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 such Borrower, 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. Each such Borrower agrees that 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; provided, that so long as no Event
of Default has occurred, payments received by Agent shall not be
applied to the unmatured portion of the LIBOR Rate Loans, but shall be
held in a cash collateral account maintained by Agent, until the
earlier of (i) the last Business Day of the Interest Period applicable
to such LIBOR Rate Loan and (ii) the occurrence of an Event of
Default; provided further, that so long as no Event of Default has
occurred, the immediately available funds in such cash collateral
account may be disbursed, at Borrower Representative's discretion, to
such Borrower so long as after giving effect to such disbursement,
such Borrower's availability under subsection 2(a) hereof at such
time, equals or exceeds the outstanding Revolving Loans at such time.
Each such Borrower agrees to pay all fees, costs and expenses in
connection with opening and maintaining a Local Depository Account
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 such Borrower upon demand,
and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder. All checks, drafts, instruments and
other items of payment or Proceeds of Collateral shall be endorsed by
such 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 such 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.
(c) Agent may, at any time and from time to 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, whether before or
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.
9. COLLATERAL, AVAILABILITY AND FINANCIAL REPORTS AND SCHEDULES.
(a) Daily Reports.
Borrower Representative shall deliver to Agent an executed daily
loan report and certificate in Agent's then current form on each day
on which such Borrower Representative requests a Revolving Loan on
behalf of a Borrower, and in any event at least once each week, which
shall be accompanied by copies of such Borrower's sales journal, cash
receipts journal and credit memo journal for the relevant period.
Such report shall reflect the activity of such Borrower with respect
to Accounts for the immediately preceding week, and shall be in a form
and with such specificity as is satisfactory to Agent and shall
contain such additional information concerning Accounts and Inventory
as may be requested by Agent including, without limitation, but only
if specifically requested by Agent, copies of all invoices prepared in
connection with such Accounts.
(b) Monthly Reports.
Borrower Representative shall deliver to Agent, in addition to
any other reports, as soon as practicable and in any event: (i) within
ten (10) days after the end of each month, (A) a detailed trial
balance of each Borrower's Accounts aged per invoice date, in form and
substance reasonably satisfactory to Agent including, without
limitation, the names and addresses of all Account Debtors of each
Borrower, and (B) a summary and detail of accounts payable (such
Accounts and accounts payable divided into such time intervals as
Agent may require in its sole discretion), including a listing of any
held checks; and (ii) within ten (10) days after the end of each
month, the general ledger inventory account balance, a perpetual
inventory report and Agent's standard form of Inventory report then in
effect or the form most recently requested from Borrowers by Agent,
for each Borrower by each category of Inventory, together with a
description of the monthly change in each category of Inventory.
(c) Financial Statements.
Borrower Representative shall deliver to Agent and each Lender
the following financial information, all of which shall be prepared in
accordance with generally accepted accounting principles consistently
applied, and shall be accompanied by a compliance certificate in the
form of Exhibit B hereto (except with respect to statements required
pursuant to clause (i) of this subsection), which compliance
certificate shall include a calculation of all financial covenants
contained in this Agreement: (i) no later than thirty (30) days after
each calendar month, copies of internally prepared financial
statements, including, without limitation, balance sheets and
statements of income, retained earnings and cash flow of Borrowers and
their Subsidiaries on a consolidated and consolidating basis,
certified by the Chief Financial Officer of Borrower Representative
and each of Borrowers' Subsidiaries; (ii) no later than forty five
(45) days after the end of each of the first three quarters of each
Borrower's Fiscal Year, copies of internally prepared financial
statements including, without limitation, balance sheets, statements
of income, retained earnings, cash flows and reconciliation of surplus
of Borrowers and their Subsidiaries on a consolidated and
consolidating basis, certified by the Chief Financial Officer of
Borrower Representative and each of Borrowers' Subsidiaries and (iii)
no later than ninety (90) days after the end of each of Borrowers'
Fiscal Years, certified annual financial statements of Borrowers and
their Subsidiaries on a consolidated and consolidating basis with an
unqualified opinion by independent certified public accountants
selected by Borrowers and their Subsidiaries and reasonably
satisfactory to Agent, which financial statements shall be accompanied
by (A) a letter from such accountants acknowledging that they are
aware that a primary intent of Borrowers and their Subsidiaries in
obtaining such financial statements is to influence Agent and Lenders
and that Agent and Lenders are relying upon such financial statements
in connection with the exercise of their rights hereunder, provided,
that Borrowers shall only be required to use their reasonable efforts
exercised in good faith to obtain such letter; and (B) copies of any
management letters sent to a Borrower by such accountants.
(d) Annual Projections.
As soon as practicable and in any event prior to the beginning of
each Fiscal Year, Borrower Representative shall deliver to Agent and
each Lender projected balance sheets, statements of income and cash
flow for Borrowers on a consolidated and consolidating basis, for each
of the twelve (12) months during such Fiscal Year, which shall include
the assumptions used therein, together with appropriate supporting
details as reasonably requested by Agent.
(e) Explanation of Budgets and Projections.
In conjunction with the delivery of the annual presentation of
projections or budgets referred to in subsection 9(d) above, Borrower
Representative shall deliver a letter signed by the President or a
Vice President of Borrower Representative and by the Treasurer or
Chief Financial Officer of Borrower Representative, describing,
comparing and analyzing, in detail, all changes and developments
between the anticipated financial results included in such projections
or budgets and the historical financial statements of Borrowers.
(f) Public Reporting.
Promptly upon the filing thereof, Borrower Representative shall
deliver to Agent and each Lender copies of all registration statements
and annual, quarterly, monthly or other regular reports which any
Borrower or any of such Borrower's Subsidiaries files with the
Securities and Exchange Commission, as well as promptly providing to
Agent and each Lender copies of any reports and proxy statements
delivered to its shareholders.
(g) Other Information.
Promptly following request therefor by Agent, Borrower
Representative shall deliver to Agent such other business or financial
data, reports, appraisals and projections as Agent may reasonably
request.
10. TERMINATION; AUTOMATIC RENEWAL.
THIS AGREEMENT SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL
APRIL 30, 2007 (THE "ORIGINAL TERM") AND SHALL AUTOMATICALLY RENEW
ITSELF FROM YEAR TO YEAR THEREAFTER (EACH SUCH ONE-YEAR RENEWAL BEING
REFERRED TO HEREIN AS A "RENEWAL TERM") UNLESS (A) THE DUE DATE OF
THE LIABILITIES IS ACCELERATED PURSUANT TO SECTION 16 HEREOF; OR (B) A
BORROWER OR ANY LENDER ELECTS TO TERMINATE THIS AGREEMENT AT THE END
OF THE ORIGINAL TERM OR AT THE END OF ANY RENEWAL TERM BY GIVING THE
OTHER PARTIES HERETO WRITTEN NOTICE OF SUCH ELECTION AT LEAST NINETY
(90) DAYS PRIOR TO THE END OF THE ORIGINAL TERM OR THE THEN CURRENT
RENEWAL TERM UPON TERMINATION OF THIS AGREEMENT BORROWERS SHALL PAY
ALL OF THE LIABILITIES IN FULL. If one or more of the events
specified in clauses (A) and (B) occurs, then (i) Agent and Lenders
shall not make any additional Loans on or after the date identified as
the date on which the Liabilities are to be repaid; and (ii) this
Agreement shall terminate on the date thereafter that the Liabilities
are paid in full. At such time as Borrowers have repaid all of the
Liabilities and this Agreement has terminated, each Borrower shall
deliver to Agent and Lenders a release, in form and substance
satisfactory to Agent, of all obligations and liabilities of Agent and
its Lenders and their officers, directors, employees, agents, parents,
subsidiaries and affiliates to such Borrower, and if such Borrower is
obtaining new financing from another lender, such Borrower shall
deliver such lender's indemnification of Agent and Lenders, in form
and substance satisfactory to Agent, for checks which Agent has
credited to such Borrower's account, but which subsequently are
dishonored for any reason or for automatic clearinghouse or wire
transfers not yet posted to such Borrower's account. If, during the
term of this Agreement, Borrowers prepay all of the Liabilities from
any source other than income from the ordinary course operations of
Borrowers' business and this Agreement is terminated, Borrowers shall
be required to pay to Agent, for the benefit of Lenders as a
prepayment fee, in addition to the payment of all other Liabilities,
an amount equal to (i) one percent (1%) of the Maximum Loan Limit if
such prepayment occurs on or before September 30, 2005 and (ii) one-
half of one percent (1/2%) of the Maximum Loan Limit if such
prepayment occurs subsequent to September 30, 2005 but on or before
September 30, 2006. Notwithstanding the foregoing, no prepayment fee
shall be required in the event that (x) any Borrower sells all or
substantially all of its assets or stock to a Person other than an
Affiliate, such sale is consented to by Agent, such sale occurs on or
after September 30, 2005 and the Liabilities are prepaid and the
Agreement is terminated as a result thereof or (y) such prepayment
occurs after September 30, 2006.
11. REPRESENTATIONS AND WARRANTIES.
Each Borrower hereby represents and warrants to Agent and each
Lender, which representations and warranties (whether appearing in
this Section 11 or elsewhere) shall be true at the time of Borrowers'
execution hereof and the closing of the transactions described herein
or related hereto, shall remain true until the repayment in full and
satisfaction of all the Liabilities and termination of this Agreement,
and shall be remade by each Borrower at the time each Loan is made
pursuant to this Agreement.
(a) Financial Statements and Other Information.
The financial statements and other information delivered or to be
delivered by Borrowers to Agent or any Lender at or prior to the date
of this Agreement accurately reflect the financial condition of
Borrowers, and there has been no adverse change in the financial
condition, the operations or any other status of a Borrower since the
date of the financial statements delivered to Agent most recently
prior to the date of this Agreement. All written information now or
heretofore furnished by each Borrower to Agent or any Lender is true
and correct as of the date with respect to which such information was
furnished.
(b) Locations.
The office where each Borrower keeps its books, records and
accounts (or copies thereof) concerning the Collateral, each
Borrower's principal place of business and all of each Borrower's
other places of business, locations of Collateral and post office
boxes and locations of bank accounts are as set forth in Exhibit A and
at other locations within the continental United States of which Agent
has been advised by Borrower Representative in accordance with
subsection 12(b)(i). The Collateral, including, without limitation,
the Equipment (except any part thereof which Borrower Representative
shall have advised Agent in writing consists of Collateral normally
used in more than one state) is kept, or, in the case of vehicles,
based, only at the addresses set forth on Exhibit A, and at other
locations within the continental United States of which Agent has been
advised by Borrower Representative in writing in accordance with
subsection 12(b)(i) hereof.
(c) Loans by Borrower.
No Borrower has made any loans or advances to any Affiliate or
other Person except for (i) advances authorized hereunder to
employees, officers and directors of such Borrower for travel,
salaries or bonuses and other expenses arising in the ordinary course
of such Borrower's business, and (ii) loans by AMCON permitted
pursuant to subsection 13(f) hereof.
(d) Accounts and Inventory.
Each Account or item of Inventory which a Borrower shall,
expressly or by implication, request Agent to classify as an Eligible
Account, Eligible Inventory, or as Eligible Cigarette Inventory,
respectively, shall, as of the time when such request is made, conform
in all respects to the requirements of such classification as set
forth in the respective definitions of "Eligible Account", "Eligible
Inventory" and "Eligible Cigarette Inventory" as set forth herein and
as otherwise established by Agent from time to time.
(e) Liens.
Each Borrower is the lawful owner of all Collateral now
purportedly owned or hereafter purportedly acquired by such Borrower,
free from all liens, claims, security interests and encumbrances
whatsoever, whether voluntarily or involuntarily created and whether
or not perfected, other than the Permitted Liens.
(f) Organization, Authority and No Conflict.
AMCON is a corporation, duly organized, validly existing and in
good standing in the State of Delaware, its state organizational
identification number is 2093842 and such Borrower is duly qualified
and in good standing in all states where the nature and extent of the
business transacted by it or the ownership of its assets makes such
qualification necessary. Xxxxxxxxxx Natural is a corporation, duly
organized, validly existing and in good standing in the State of
Florida, its state organizational identification number is 538536 and
such Borrower is duly qualified and in good standing in all states
where the nature and extent of the business transacted by it or the
ownership of its assets makes such qualification necessary. Hawaiian
Natural is a corporation, duly organized, validly existing and in good
standing in the State of Delaware, its state organizational
identification number is 3293592 and such Borrower is duly qualified
and in good standing in all states where the nature and extent of the
business transacted by it or the ownership of its assets makes such
qualification necessary. Beverage Group is a corporation, duly
organized, validly existing and in good standing in the State of
Delaware, its state organizational identification number is 3607471
and such Borrower is duly qualified and in good standing in all states
where the nature and extent of the business transacted by it or the
ownership of its assets makes such qualification necessary. Health
Food is a corporation, duly organized, validly existing and in good
standing in the State of Oklahoma, its state organizational
identification number is 1900173205 and such Borrower is duly
qualified and in good standing in all states where the nature and
extent of the business transacted by it or the ownership of its assets
makes such qualification necessary. Each Borrower has the right and
power and is duly authorized and empowered to enter into, execute and
deliver this Agreement and the Other Agreements and perform its
obligations hereunder and thereunder. Each Borrower's execution,
delivery and performance of this Agreement and the Other Agreements
does not conflict with the provisions of the organizational documents
of such Borrower, any statute, regulation, ordinance or rule of law,
or any agreement, contract or other document which may now or
hereafter be binding on such Borrower, and each Borrower's execution,
delivery and performance of this Agreement and the Other Agreements
shall not result in the imposition of any lien or other encumbrance
upon any of such Borrower's property under any existing indenture,
mortgage, deed of trust, loan or credit agreement or other agreement
or instrument by which such Borrower or any of its property may be
bound or affected.
(g) Litigation.
There are no actions or proceedings which are pending or
threatened against a Borrower which is, in the determination of Agent,
reasonably likely to have a Material Adverse Effect on such Borrower,
and each Borrower shall, promptly upon becoming aware of any such
pending or threatened action or proceeding, give written notice
thereof to Agent. No Borrower has any Commercial Tort Claims pending
other than those set forth on Exhibit C hereto as Exhibit C may be
amended from time to time.
(h) Compliance with Laws and Maintenance of Permits.
Each Borrower has obtained all governmental consents, franchises,
certificates, licenses, authorizations, approvals and permits, the
lack of which would have a Material Adverse Effect on such Borrower.
Each Borrower is in compliance in all material respects with all
applicable federal, state, local and foreign statutes, orders,
regulations, rules and ordinances (including, without limitation,
Environmental Laws and statutes, orders, regulations, rules and
ordinances relating to taxes, employer and employee contributions and
similar items, securities, ERISA or employee health and safety) the
failure to comply with which would have a Material Adverse Effect on
such Borrower.
(i) Affiliate Transactions.
Except as set forth on Schedule 11(i) hereto or as permitted
pursuant to subsection 11(c) hereof, no Borrower is conducting,
permitting or suffering to be conducted, transactions with any
Affiliate other than transactions with Affiliates for the purchase or
sale of Inventory or services in the ordinary course of business
pursuant to terms that are no less favorable to such Borrower than the
terms upon which such transactions would have been made had they been
made to or with a Person that is not an Affiliate.
(j) Names and Trade Names.
Each Borrower's name has always been as set forth on the first
page of this Agreement and no Borrower uses trade names, assumed
names, fictitious names or division names in the operation of its
business, except as set forth on Schedule 11(j) hereto.
(k)Equipment.
Each Borrower has good and indefeasible and merchantable title to
and ownership of all Equipment. No Equipment is a Fixture to real
property unless such real property is owned by such Borrower and is
subject to a mortgage in favor of Agent, or if such real property is
leased, is subject to a landlord's agreement in favor of Agent on
terms acceptable to Agent, or an accession to other personal property
unless such personal property is subject to a first priority lien in
favor of Agent.
(l) Enforceability.
This Agreement and the Other Agreements to which a Borrower is a
party are the legal, valid and binding obligations of such Borrower
and are enforceable against such Borrower in accordance with their
respective terms.
(m) Solvency.
Each Borrower is, after giving effect to the transactions
contemplated hereby, solvent, able to pay its debts as they become
due, has capital sufficient to carry on its business, now owns
property having a value both at fair valuation and at present fair
saleable value on a going concern basis greater than the amount
required to pay its debts, and will not be rendered insolvent by the
execution and delivery of this Agreement or any of the Other
Agreements or by completion of the transactions contemplated hereunder
or thereunder.
(n) Indebtedness.
Except as set forth on Schedule 11(n) hereto or as permitted
pursuant to subsections 13(a) and 13(f) hereof, no Borrower is
obligated (directly or indirectly), for any loans or other
indebtedness for borrowed money other than the Loans.
(o) Margin Security and Use of Proceeds.
No Borrower owns any margin securities, and none of the proceeds
of the Loans hereunder shall be used for the purpose of purchasing or
carrying any margin securities or for the purpose of reducing or
retiring any indebtedness which was originally incurred to purchase
any margin securities or for any other purpose not permitted by
Regulation U of the Board of Governors of the Federal Reserve System
as in effect from time to time.
(p) Parent, Subsidiaries and Affiliates.
Except as set forth on Schedule 11(p) hereto, no Borrower has any
Parents, Subsidiaries or other Affiliates or divisions, nor is any
Borrower engaged in any joint venture or partnership with any other
Person.
(q) No Defaults.
No Borrower is in default under any material contract, lease or
commitment to which it is a party or by which it is bound, nor does
any Borrower know of any dispute regarding any contract, lease or
commitment which would have a Material Adverse Effect on such
Borrower.
(r) Employee Matters.
There are no controversies pending or threatened between a
Borrower and any of its employees, agents or independent contractors
other than employee grievances arising in the ordinary course of
business which would not, in the aggregate, have a Material Adverse
Effect on such Borrower, and each Borrower is in compliance with all
federal and state laws respecting employment and employment terms,
conditions and practices except for such non-compliance which would
not have a Material Adverse Effect on such Borrower.
(s) Intellectual Property.
Each Borrower possesses adequate licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark
applications, trade styles and trade names to continue to conduct its
business as heretofore conducted by it.
(t) Environmental Matters.
No Borrower has generated, used, stored, treated, transported,
manufactured, handled, produced or disposed of any Hazardous
Materials, on or off its premises (whether or not owned by it) in any
manner which at any time violates in any material respect any
Environmental Law or any license, permit, certificate, approval or
similar authorization thereunder and the operations of each Borrower
comply in all material respects with all Environmental Laws and all
licenses, permits, certificates, approvals and similar authorizations
thereunder. There has been no investigation, proceeding, complaint,
order, directive, claim, citation or notice by any governmental
authority or any other Person, nor is any pending or to the best of
each Borrower's knowledge threatened with respect to any non-
compliance with or violation of the requirements of any Environmental
Law by a Borrower or the release, spill or discharge, threatened or
actual, of any Hazardous Materials or the generation, use, storage,
treatment, transportation, manufacture, handling, production or
disposal of any Hazardous Materials or any other environmental, health
or safety matter, which affects a Borrower or its business, operations
or assets or any properties at which a Borrower has transported,
stored or disposed of any Hazardous Materials. No Borrower has any
material liability (contingent or otherwise) in connection with a
release, spill or discharge, threatened or actual, of any Hazardous
Materials or the generation, use, storage, treatment, transportation,
manufacture, handling, production or disposal of any Hazardous
Materials.
(u) ERISA Matters.
Each Borrower has paid and discharged all obligations and
liabilities arising under ERISA of a character which, if unpaid or
unperformed, might result in the imposition of a lien against any of
its properties or assets.
12. AFFIRMATIVE COVENANTS.
Until payment and satisfaction in full of all Liabilities and
termination of this Agreement, unless Borrowers obtain Requisite
Lenders' prior written consent waiving or modifying any of Borrowers'
covenants hereunder in any specific instance, each Borrower covenants
and agrees as follows:
(a) Maintenance of Records.
Each Borrower shall at all times keep accurate and complete
books, records and accounts with respect to all of such Borrower's
business activities, in accordance with sound accounting practices and
generally accepted accounting principles consistently applied, and
shall keep such books, records and accounts, and any copies thereof,
only at the addresses indicated for such purpose on Exhibit A.
(b) Notices.
Borrower Representative shall:
(i) Locations. Promptly (but in no event less than ten (10)
days prior to the occurrence thereof) notify Agent of the proposed
opening of any new place of business or new location of Collateral,
the closing of any existing place of business or location of
Collateral, any change in the location of any Borrower's books,
records and accounts (or copies thereof), the opening or closing of
any post office box, the opening or closing of any bank account or, if
any of the Collateral consists of Goods of a type normally used in
more than one state, the use of any such Goods in any state other than
a state in which any Borrower has previously advised Agent that such
Goods will be used.
(ii) Eligible Accounts and Inventory. Promptly upon becoming
aware thereof, notify Agent if any Account or Inventory identified by
any Borrower to Agent as an Eligible Account or Eligible Inventory
becomes ineligible for any reason.
(iii) Litigation and Proceedings. Promptly upon becoming
aware thereof, notify Agent of any actions or proceedings which are
pending or threatened against any Borrower which might have a Material
Adverse Effect on such Borrower and of any Commercial Tort Claims of
such Borrower which may arise, which notice shall constitute such
Borrower's authorization to amend Exhibit C to add such Commercial
Tort Claim.
(iv) Names and Trade Names. Notify Agent within ten (10)
days of the change of its name or the use of any trade name, assumed
name, fictitious name or division name not previously disclosed to
Agent in writing.
(v) ERISA Matters. Promptly notify Agent of (x) the
occurrence of any "reportable event" (as defined in ERISA) which might
result in the termination by the Pension Benefit Guaranty Corporation
(the "PBGC") of any employee benefit plan ("Plan") covering any
officers or employees of such Borrower, any benefits of which are, or
are required to be, guaranteed by the PBGC, (y) receipt of any notice
from the PBGC of its intention to seek termination of any Plan or
appointment of a trust therefor or (z) its intention to terminate or
withdraw from any Plan.
(vi) Environmental Matters. Immediately notify Agent upon
becoming aware of any investigation, proceeding, complaint, order,
directive, claim, citation or notice with respect to any non-
compliance with or violation of the requirements of any Environmental
Law by any Borrower or the generation, use, storage, treatment,
transportation, manufacture handling, production or disposal of any
Hazardous Materials or any other environmental, health or safety
matter which affects any Borrower or its business operations or assets
or any properties at which any Borrower has transported, stored or
disposed of any Hazardous Materials.
(vii) Default; Material Adverse Change. Promptly advise
Agent of any material adverse change in the business, property,
assets, prospects, operations or condition, financial or otherwise, of
any Borrower, the occurrence of any Event of Default hereunder or the
occurrence of any event which, if uncured, will become an Event of
Default after notice or lapse of time (or both).
All of the foregoing notices shall be provided by Borrower
Representative to Agent in writing.
(c) Compliance with Laws and Maintenance of Permits.
Each Borrower shall maintain all governmental consents, franchises,
certificates, licenses, authorizations, approvals and permits, the
lack of which would have a Material Adverse Effect on such Borrower
and each Borrower shall remain in compliance with all applicable
federal, state, local and foreign statutes, orders, regulations, rules
and ordinances (including, without limitation, Environmental Laws and
statutes, orders, regulations, rules and ordinances relating to taxes,
employer and employee contributions and similar items, securities,
ERISA or employee health and safety) the failure with which to comply
would have a Material Adverse Effect on such Borrower. Following any
determination by Agent that there is non-compliance, or any condition
which requires any action by or on behalf of a Borrower in order to
avoid non-compliance, with any Environmental Law, in each case where
such non compliance would have a Material Adverse Effect on such
Borrower, at such Borrower's expense cause an independent
environmental engineer acceptable to Agent to conduct such tests of
the relevant site(s) as are appropriate and prepare and deliver a
report setting forth the results of such tests, a proposed plan for
remediation and an estimate of the costs thereof.
(d) Inspection and Audits.
Each Borrower shall permit Agent and Lenders, or any Persons
designated by Agent, to call at such Borrower's places of business at
any reasonable times, and, without hindrance or delay, to inspect the
Collateral and to inspect, audit, check and make extracts from such
Borrower's books, records, journals, orders, receipts and any
correspondence and other data relating to such Borrower's business,
the Collateral or any transactions between the parties hereto, and
shall have the right to make such verification concerning such
Borrower's business as Agent may consider reasonable under the
circumstances. Each Borrower shall furnish to Agent such information
relevant to Agent's and/or any Lender's rights under this Agreement
and the Other Agreements as Agent shall at any time and from time to
time request. Agent, through its officers, employees or agents shall
have the right, at any time and from time to time, in Agent's name, to
verify the validity, amount or any other matter relating to any of
such Borrower's Accounts, by mail, telephone, telecopy, electronic
mail, or otherwise. Each Borrower authorizes Agent and Lenders to
discuss the affairs, finances and business of such Borrower with any
officers, employees or directors of such Borrower or with its Parent
or any Affiliate or the officers, employees or directors of its Parent
or any Affiliate, and to discuss the financial condition of such
Borrower with such Borrower's independent public accountants. Any
such discussions shall be without liability to Agent or any Lender or
to Borrowers' independent public accountants. Borrowers shall pay to
Agent all customary fees and all costs and out-of-pocket expenses
incurred by Agent in the exercise of its rights hereunder, and all of
such fees, costs and expenses shall constitute Liabilities hereunder,
shall be payable on demand and, until paid, shall bear interest at the
highest rate then applicable to Loans hereunder; provided, that,
absent the occurrence and continuance of an Event of Default, the
maximum amount AMCON shall be required to pay Agent with respect to
the foregoing shall be Twenty Thousand and No/100 Dollars ($20,000.00)
during any calendar year.
(e) Insurance.
Each Borrower shall:
(i) Keep the Collateral properly housed and insured for the
full insurable value thereof against loss or damage by fire, theft,
explosion, sprinklers, collision (in the case of motor vehicles) and
such other risks as are customarily insured against by Persons engaged
in businesses similar to that of such Borrower, with such companies,
in such amounts, with such deductibles, and under policies in such
form, as shall be satisfactory to Agent. Original (or certified)
copies of such policies of insurance have been or shall be, within
ninety (90) days of the date hereof, delivered to Agent, together with
evidence of payment of all premiums therefor, and shall contain an
endorsement, in form and substance acceptable to Agent, showing loss
under such insurance policies payable to Agent, for the benefit of
Agent and Lenders. Such endorsement, or an independent instrument
furnished to Agent, shall provide that the insurance company shall
give Agent at least thirty (30) days written notice before any such
policy of insurance is altered or canceled and that no act, whether
willful or negligent, or default of such Borrower or any other Person
shall affect the right of Agent to recover under such policy of
insurance in case of loss or damage. In addition, each Borrower shall
cause to be executed and delivered to Agent an assignment of proceeds
of its business interruption insurance policies. Each Borrower hereby
directs all insurers under all policies of insurance to pay all
proceeds payable thereunder in excess of $100,000.00 for any
occurrence directly to Agent, such proceeds to be applied on account
of the Liabilities in accordance with the terms of this Agreement. Any
proceeds of insurance paid directly to Borrowers shall be used by
Borrowers to repair or restore the damaged or lost property which gave
rise to the insurance claim. Each Borrower irrevocably makes,
constitutes and appoints Agent (and all officers, employees or agents
designated by Agent) as such Borrower's true and lawful attorney (and
agent-in-fact) for the purpose of making, settling and adjusting
claims under such policies of insurance, endorsing the name of such
Borrower on any check, draft, instrument or other item of payment for
the proceeds of such policies of insurance and making all
determinations and decisions with respect to such policies of
insurance.
(ii) Maintain, at its expense, such public liability and
third party property damage insurance as is customary for Persons
engaged in businesses similar to that of such Borrower with such
companies and in such amounts, with such deductibles and under
policies in such form as shall be satisfactory to Agent and original
(or certified) copies of such policies have been or shall be, within
ninety (90) days after the date hereof, delivered to Agent, together
with evidence of payment of all premiums therefor; each such policy
shall contain an endorsement showing Agent and Lenders as additional
insureds thereunder and providing that the insurance company shall
give Agent at least thirty (30) days written notice before any such
policy shall be altered or canceled.
If a Borrower at any time or times hereafter shall fail to obtain or
maintain any of the policies of insurance required above or to pay any
premium relating thereto, then Agent, without waiving or releasing any
obligation or default by Borrowers hereunder, may (but shall be under
no obligation to) obtain and maintain such policies of insurance and
pay such premiums and take such other actions with respect thereto as
Agent deems advisable. Such insurance, if obtained by Agent, may, but
need not, protect such Borrower's interests or pay any claim made by
or against such Borrower with respect to the Collateral. Such
insurance may be more expensive than the cost of insurance such
Borrower may be able to obtain on its own and may be cancelled only
upon Borrower Representative providing evidence that it has obtained
the insurance as required above. All sums disbursed by Agent in
connection with any such actions, including, without limitation, court
costs, expenses, other charges relating thereto and reasonable
attorneys' fees, shall constitute Loans hereunder, shall be payable on
demand by Borrowers to Agent and, until paid, shall bear interest at
the highest rate then applicable to Loans hereunder.
(f) Collateral.
Each Borrower shall keep the Collateral in good condition, repair
and order and shall make all necessary repairs to the Equipment and
replacements thereof so that the operating efficiency and the value
thereof shall at all times be preserved and maintained. Each Borrower
shall permit Agent and Lenders to examine any of the Collateral at any
time and wherever the Collateral may be located and, each Borrower
shall, immediately upon request therefor by Agent, deliver to Agent
any and all evidence of ownership of any of the Equipment including,
without limitation, certificates of title and applications of title.
Each Borrower shall, at the request of Agent, indicate on its records
concerning the Collateral a notation, in form satisfactory to Agent,
of the security interest of Agent hereunder.
(g) Use of Proceeds.
All monies and other property obtained by a Borrower from Agent
and Lenders pursuant to this Agreement shall be used solely for
business purposes of such Borrower.
(h) Taxes.
Each Borrower shall file all required tax returns and pay all of
its taxes when due, including, without limitation, taxes imposed by
federal, state or municipal agencies, and shall cause any liens for
taxes to be promptly released; provided, that such Borrower shall have
the right to contest the payment of such taxes in good faith by
appropriate proceedings so long as (i) the amount so contested is
shown on such Borrower's financial statements; (ii) the contesting of
any such payment does not give rise to a lien for taxes; (iii) such
Borrower keeps on deposit with Agent (such deposit to be held without
interest) an amount of money which, in the sole judgment of Agent, is
sufficient to pay such taxes and any interest or penalties that may
accrue thereon; and (iv) if such Borrower fails to prosecute such
contest with reasonable diligence, Agent may apply the money so
deposited in payment of such taxes. If a Borrower fails to pay any
such taxes and in the absence of any such contest by such Borrower,
Agent may (but shall be under no obligation to) advance and pay any
sums required to pay any such taxes and/or to secure the release of
any lien therefor, and any sums so advanced by Agent shall constitute
Loans hereunder, shall be payable by such Borrower to Agent on demand,
and, until paid, shall bear interest at the highest rate then
applicable to Loans hereunder.
(i) Intellectual Property.
Each Borrower shall maintain adequate licenses, patents, patent
applications, copyrights, service marks, trademarks, trademark
applications, tradestyles and trade names to continue its business as
heretofore conducted by it or as hereafter conducted by it.
(j) Checking Accounts and Cash Management Services.
Borrowers shall maintain their general checking and controlled
disbursement accounts with LaSalle. Normal charges shall be assessed
thereon. Although no compensating balance is required, each Borrower
must keep monthly balances in order to merit earnings credits which
will cover LaSalle's service charges for demand deposit account
activities. In addition, Borrowers shall enter into agreements with
LaSalle for standard cash management services. Borrowers shall be
responsible for all normal charges assessed thereon.
(k) Patriot Act, Bank Secrecy Act and Office of Foreign Assets
Control.
As required by federal law and the Agent's, LaSalle's and each
Lender's policies and practices, the Agent, LaSalle and each Lender
may need to obtain, verify and record certain customer identification
information and documentation in connection with opening or
maintaining accounts, or establishing or continuing to provide
services and each Borrower agrees to provide such information. In
addition, and without limiting the foregoing sentence, each Borrower
shall (a) ensure, and cause each Subsidiary to ensure, that no Person
who owns a controlling interest in or otherwise controls any Borrower
or any Subsidiary is or shall be listed on the Specially Designated
Nationals and Blocked Person List or other similar lists maintained by
the Office of Foreign Assets Control ("OFAC"), the Department of the
Treasury or included in any Executive Orders, (b) not use or permit
the use of the proceeds of the Loans to violate any of the foreign
asset control regulations of OFAC or any enabling statute or Executive
Order relating thereto, and (c) comply, and cause each Subsidiary to
comply, with all applicable Bank Secrecy Act ("BSA") laws and
regulations, as amended.
13. NEGATIVE COVENANTS.
Until payment and satisfaction in full of all, Liabilities and
termination of this Agreement, unless Borrowers obtain Requisite
Lenders' prior written consent waiving or modifying any of Borrowers'
covenants hereunder in any specific instance, each Borrower agrees as
follows:
(a) Guaranties.
No Borrower shall assume, guarantee or endorse, or otherwise
become liable in connection with, the obligations of any Person,
except by endorsement of instruments for deposit or collection or
similar transactions in the ordinary course of business, provided that
AMCON may maintain its existing Guaranty and Suretyship Agreement
dated June 17, 2004 in favor of Trinity Springs Ltd., an Idaho
corporation ("Seller") with respect to the acquisition by TSL
Acquisition Corp., now known as Trinity Springs, Inc. ("Trinity"), of
certain assets of Seller pursuant to that certain Asset Purchase
Agreement dated April 24, 2004, as amended June 17, 2004 (the "Trinity
Purchase Agreement") entered into by and between Seller, Trinity and
AMCON (the "AMCON-Trinity Guaranty").
(b) Indebtedness.
No Borrower shall create, incur, assume or become obligated
(directly or indirectly), for any loans or other indebtedness for
borrowed money other than the Loans, except that a Borrower may (i)
borrow money from a Person other than Agent and Lenders on an
unsecured and subordinated basis if a subordination agreement in favor
of Agent for its benefit and the benefit of the other Lenders and in
form and substance satisfactory to the Agent is executed and delivered
to Agent relative thereto; (ii) maintain its present indebtedness
listed on Schedule 11(n) hereto; (iii) incur unsecured indebtedness to
trade creditors in the ordinary course of business; (iv) incur
purchase money indebtedness or capitalized lease obligations in
connection with Capital Expenditures permitted pursuant to subsection
14(c) hereof; (v) make intercompany loans in accordance with
subsection 13(f) hereof and (vi) together with each other Borrower,
incur operating lease obligations requiring payments not to exceed Six
Million and No/100 Dollars ($6,000,000.00) in the aggregate for all
Borrowers during any Fiscal Year of Borrowers.
(c) Liens.
No Borrower shall grant or permit to exist (voluntarily or
involuntarily) any lien, claim, security interest or other encumbrance
whatsoever on any of its assets, other than Permitted Liens.
(d) Mergers, Sales, Acquisitions, Subsidiaries and Other
Transactions Outside the Ordinary Course of Business.
No Borrower shall (i) enter into any merger or consolidation;
(ii) change its state of organization or enter into any transaction
which has the effect of changing its state of organization (iii) sell,
lease or otherwise dispose of any of its assets other than in the
ordinary course of business, provided that AMCON may sell and dispose
of assets with a value of less than $250,000.00 in any transaction, or
series of related transactions, provided that the proceeds thereof,
net of reasonable out of pocket disposition expenses, are applied to
the Liabilities; (iv) purchase the stock, other equity interests or
all or a material portion of the assets of any Person or division of
such Person; or (v) enter into any other transaction outside the
ordinary course of such Borrower's business, including, without
limitation, any purchase, redemption or retirement of any shares of
any class of its stock or any other equity interest, and any issuance
of any shares of, or warrants or other rights to receive or purchase
any shares of, any class of its stock or any other equity interest
other than such issuances pursuant to the terms of such Borrower's
stock option plan and the issuance by AMCON of Series B Preferred
Stock so long as the entire proceeds thereof are used to repay the
existing subordinated indebtedness of AMCON, provided that AMCON may
redeem odd lot stock in an aggregate amount not to exceed $50,000.00
in any calendar year and other stock up to $100,000.00 in the
aggregate during any calendar year. No Borrower shall form any
Subsidiaries or enter into any joint ventures or partnerships with any
other Person.
(e) Dividends and Distributions.
No Borrower shall declare or pay any dividend or other
distribution (whether in cash or in kind) on any class of its stock
(if such Borrower is a corporation) or on account of any equity
interest in such Borrower (if such Borrower is a partnership, limited
liability company or other type of entity) nor shall such Borrower
redeem, retire, purchase or otherwise acquire all or any portion of
the stock of such Borrower. Notwithstanding the foregoing and
provided that (i) each such dividend payment is permitted under all
applicable laws; and (ii) no Event of Default shall have occurred
prior to, or would occur as a result of, any such dividend payment,
AMCON may pay the regularly scheduled dividends on its (x) Common
Stock in an aggregate amount not to exceed $.72 per share in any
Fiscal Year, (y) Series A Preferred Stock in accordance with the terms
of such stock in an aggregate amount not to exceed $172,000 in any
Fiscal Year and (z) Series B Preferred Stock in accordance with the
terms of such stock in an aggregate amount not to exceed $140,000 in
any Fiscal Year. Without limitation of the foregoing, AMCON hereby
agrees not to accelerate, increase or prepay said dividends with
respect to its Series A and Series B Preferred Stock.
(f) Investments; Loans.
No Borrower shall purchase or otherwise acquire, or contract to
purchase or otherwise acquire, the obligations or stock of any Person,
other than direct obligations of the United States; nor shall a
Borrower lend or otherwise advance funds to any Person except for (x)
advances made to employees, officers and directors for travel and
other expenses arising in the ordinary course of business, (y) loans
to be made by AMCON to (i) the Beverage Group and Trinity in an
aggregate principal amount not to exceed $1,000,000.00 at any time,
(ii) all other Borrowers in an aggregate principal amount not to
exceed (a) $850,000.00 during Fiscal Year 2005 and (b) $100,000.00
during each Fiscal Year thereafter and (iii) Trinity, on a secured
basis, to satisfy any indemnification payments that Trinity may have
to make to specified officers and directors of Seller (collectively,
the "Indemnified Persons") in connection with the Trinity Purchase
Agreement pursuant to that certain Indemnification Agreement dated
June 17, 2004 by and among AMCON, Trinity and the Indemnified Persons,
and (z) loans in existence as of the date hereof from AMCON to Trinity
in an aggregate amount not to exceed $1,552,000.00, as evidenced by
that certain Secured Promissory Note dated June 17, 2004 in the face
amount of $1,000,000.00, provided that such secured indebtedness is
collateral assigned to Agent for the benefit of Agent and Lenders,
provided further, that with respect to all loans from AMCON to
Trinity, whether in existence as of the date hereof or to be made,
Trinity shall execute and deliver to Agent a Continuing Unconditional
Guaranty, Security Agreement and Uniform Commercial Code Financing
Statement.
(g) Fundamental Changes, Line of Business.
Except for the filing by AMCON of a Certificate of Designation
for the Series B Preferred Stock and any restatements and amendments
to AMCON's certificate of incorporation to physically reflect the
Certificates of Designation for the Series A Preferred Stock and the
Series B Preferred Stock, no Borrower shall amend its organizational
documents or change its Fiscal Year or enter into a new line of
business materially different from such Borrower's current business.
(h) Equipment.
No Borrower shall (i) permit any Equipment to become a Fixture to
real property unless such real property is owned by such Borrower and
is subject to a mortgage in favor of Agent, or if such real property
is leased, is subject to a landlord's agreement in favor of Agent on
terms acceptable to Agent, or (ii) permit any Equipment to become an
accession to any other personal property unless such personal property
is subject to a first priority lien in favor of Agent.
(i) Affiliate Transactions.
Except as set forth on Schedule 11(i) hereto or as permitted
pursuant to subsection 11(c) hereof, no Borrower shall conduct, permit
or suffer to be conducted, transactions with Affiliates other than
transactions for the purchase or sale of Inventory or services in the
ordinary course of business pursuant to terms that are no less
favorable to such Borrower than the terms upon which such transactions
would have been made had they been made to or with a Person that is
not an Affiliate, provided that AMCON may pay an annual fee to Xxxxxxx
Xxxxxx in an amount not to exceed two percent (2%) per annum of the
average principal amount guaranteed by Xxxxxxx Xxxxxx to Agent
pursuant to that certain Continuing Unconditional Guaranty executed by
Xxxxxxx Xxxxxx in favor of Agent of even date herewith so long as no
Event of Default has occurred or would occur as a result of such
payment.
(j) Settling of Accounts.
Each Borrower shall not settle or adjust any Account identified
by such Borrower as an Eligible Account or with respect to which the
Account Debtor is an Affiliate without the consent of Agent, provided
that such consent shall not be required to the extent that the
aggregate amount settled or adjusted by all Borrowers is less than
$100,000.00, provided further that following the occurrence of an
Event of Default, no Borrower shall settle or adjust any Account
without the consent of Agent.
14. FINANCIAL COVENANTS.
Each Borrower shall maintain and keep in full force and effect
each of the financial covenants set forth below:
(a) Tangible Net Worth.
Borrowers' Tangible Net Worth shall not at any time be less than
the Minimum Tangible Net Worth; "Minimum Tangible Net Worth" being
defined for purposes of this subsection as (i) Three Million and
No/100 Dollars ($3,000,000.00) at all times from the date hereof
through September 29, 2005 and (ii) thereafter, from the last day of
each Fiscal Year of Borrowers through the day prior to the last day of
each immediately succeeding Fiscal Year of Borrowers, the Minimum
Tangible Net Worth during the immediately preceding period plus the
greater of Five Hundred Thousand and No/100 Dollars ($500,000.00) and
seventy percent (70%) of Borrowers' net income (but without reduction
for any net loss ) for the Fiscal Year ending on the first day of such
period as reflected on Borrowers' audited year end financial
statements; and "Tangible Net Worth" being defined for purposes of
this subsection as Borrowers' shareholders' equity (including retained
earnings) less the book value of all intangible assets (excluding the
Trinity Springs, Inc. water rights ) as determined solely by Agent on
a consistent basis plus the amount of any LIFO reserve plus the amount
of any debt subordinated to Agent and Lenders, all as determined under
generally accepted accounting principles applied on a basis consistent
with the financial statements dated June 30, 2004 except as set forth
herein;
(b) Fixed Charge Coverage.
For the three (3) month period ending December 31, 2004, AMCON
shall not permit the ratio of its EBITDA to Fixed Charges to be less
than 0.8 to 1.0. For the six (6) month period ending March 31, 2005,
AMCON shall not permit the ratio of its EBITDA to Fixed Charges to be
less than 0.8 to 1.0. For the nine (9) month period ending June 30,
2005, AMCON shall not permit the ratio of its EBITDA to Fixed Charges
to be less than 0.8 to 1.0. Thereafter, as of the last day of each
fiscal quarter, for the twelve (12) month period ending on such date,
AMCON shall not permit the ratio of its EBITDA to Fixed Charges to be
less than 1.0 to 1.0, provided that the failure to comply with such
covenant shall not constitute an Event of Default so long as AMCON has
sufficient aggregate availability under subsection 2(a) hereof to
institute a reserve in an amount equal to an amount which, when added
to the EBITDA for the respective three (3), six (6) or nine (9) month
period or when added to the trailing twelve (12) month EBITDA, would
cause the ratio of EBITDA to Fixed Charges for such three (3), six (6)
or nine (9) month period to equal 0.8 to 1.0 or such trailing twelve
(12) month period to equal 1.0 to 1.0.
(c) Capital Expenditure Limitations.
Borrowers shall not make any Capital Expenditures if, after
giving effect to such Capital Expenditure, the aggregate cost of all
Capital Expenditures would exceed Four Million Five Hundred Thousand
and No/100 Dollars ($4,500,000.00) during Fiscal Year 2005 and Three
Million and No/100 Dollars ($3,000,000.00) during each Fiscal Year
thereafter.
15. DEFAULT.
The occurrence of any one or more of the following events shall
constitute an "Event of Default" by Borrowers hereunder:
(a) Payment.
The failure of any Obligor to pay when due, declared due, or
demanded by Agent, at the request of the Requisite Lenders, any of the
Liabilities.
(b) Breach of this Agreement and the Other Agreements.
The failure of any Obligor to perform, keep or observe any of the
covenants, conditions, promises, agreements or obligations of such
Obligor under this Agreement or any of the Other Agreements; provided
that any such failure by a Borrower under subsections 12(b)(i), (iv),
(v), (vi), 12(c) and 12(i) of this Agreement shall not constitute an
Event of Default hereunder until the fifteenth (15th) day following
notice thereof by Agent to such Borrower.
(c) Breaches of Other Obligations.
The failure of any Obligor to perform, keep or observe any of the
covenants, conditions, promises, agreements or obligations of such
Obligor under any other agreement with any Person if such failure
might have a Material Adverse Effect on such Obligor.
(d) Breach of Representations and Warranties.
The making or furnishing by any Obligor, Agent or any Lender of
any representation, warranty, certificate, schedule, report or other
communication within or in connection with this Agreement or the Other
Agreements or in connection with any other agreement between such
Obligor and Agent or any Lender, which is untrue or misleading in any
respect.
(e) Loss of Collateral.
The loss, theft, damage or destruction of any of the Collateral
in an amount in excess of $100,000.00 in the aggregate for all such
events during any year of the Original Term or any Renewal Term as
determined by Agent in its sole discretion, or (except as permitted
hereby) sale, lease or furnishing under a contract of service of, any
of the Collateral.
(f) Levy, Seizure or Attachment.
The making or any attempt by any Person to make any levy, seizure
or attachment upon any of the Collateral.
(g) Bankruptcy or Similar Proceedings.
The commencement of any proceedings in bankruptcy by or against
any Obligor or for the liquidation or reorganization of any Obligor,
or alleging that such Obligor is insolvent or unable to pay its debts
as they mature, or for the readjustment or arrangement of any
Obligor's debts, whether under the United States Bankruptcy Code or
under any other law, whether state or federal, now or hereafter
existing, for the relief of debtors, or the commencement of any
analogous statutory or non-statutory proceedings involving any
Obligor; provided, however, that if such commencement of proceedings
against such Obligor is involuntary, such action shall not constitute
an Event of Default unless such proceedings are not dismissed within
sixty (60) days after the commencement of such proceedings, though
Agent and Lenders shall have no obligation to make Loans or issue, or
cause to be issued, Letters of Credit on behalf of Borrowers during
such sixty (60) day period or, if earlier, until such proceedings are
dismissed.
(h) Appointment of Receiver.
The appointment of a receiver or trustee for any Obligor, for any
of the Collateral or for any substantial part of any Obligor's assets
or the institution of any proceedings for the dissolution, or the full
or partial liquidation, or the merger or consolidation, of any Obligor
which is a corporation, limited liability company or a partnership;
provided, however, that if such appointment or commencement of
proceedings against such Obligor is involuntary, such action shall not
constitute an Event of Default unless such appointment is not revoked
or such proceedings are not dismissed within sixty (60) days after the
commencement of such proceedings, though Agent and Lenders shall have
no obligation to make Loans or issue, or cause to be issued, Letters
of Credit on behalf of Borrowers during such sixty (60) day period or,
if earlier, until such appointment is revoked or such proceedings are
dismissed.
(i) Judgment.
The entry of any judgment or orders aggregating in excess of
$100,000.00 against any Obligor which remains unsatisfied or
undischarged and in effect for thirty (30) days after such entry
without a stay of enforcement or execution.
(j) Death or Dissolution of Obligor.
The death of any Obligor who is a natural Person, or of any
general partner who is a natural Person of any Obligor which is a
partnership, or any member who is a natural Person of any Obligor
which is a limited liability company or the dissolution of any Obligor
which is a partnership, limited liability company, corporation or
other entity.
(k) Default or Revocation of Guaranty.
The occurrence of an event of default under, or the revocation or
termination of, any agreement, instrument or document executed and
delivered by any Person to Agent or any Lender pursuant to which such
Person has guaranteed to Agent and Lenders the payment of all or any
of the Liabilities or has granted Agent a security interest in or lien
upon some or all of such Person's real and/or personal property to
secure the payment of all or any of the Liabilities.
(l) Criminal Proceedings.
The institution in any court of a criminal proceeding against any
Obligor, or the indictment of any Obligor for any crime.
(m) Change of Control.
The failure of (i) Xxxxxxx X. Xxxxxx to own directly or
indirectly (including without limitation, through a trust) and have
voting control, directly or indirectly (including without limitation,
through a trust), of at least twenty percent (20%) of the issued and
outstanding voting equity interest of AMCON, (ii) AMCON to own and
have voting control of at least one hundred percent (100%) of the
issued and outstanding voting equity interest of The Healthy Edge,
Inc. ("Healthy Edge"), Hawaiian Natural and Beverage Group, and (iii)
Healthy Edge to own and have voting control of at least one hundred
percent (100%) of the issued and outstanding voting equity interest of
Xxxxxxxxxx Natural and Health Food.
(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 its
sole judgment or the occurrence of any event which, in Requisite
Lenders' sole judgment, could have a Material Adverse Effect.
16. REMEDIES UPON AN EVENT OF DEFAULT.
(a) Upon the occurrence of an Event of Default described in
subsection 15(g) hereof, all of the Liabilities shall immediately and
automatically become due and payable, without notice of any kind.
Upon the occurrence of any other Event of Default, all Liabilities
may, at the option of Requisite Lenders, and without demand, notice or
legal process of any kind, be declared, and immediately shall become,
due and payable.
(b) Upon the occurrence of an Event of Default, Agent may
exercise from time to time any rights and remedies available to it
under the Uniform Commercial Code and any other applicable law in
addition to, and not in lieu of, any rights and remedies expressly
granted in this Agreement or in any of the Other Agreements and all of
Agent's rights and remedies shall be cumulative and non-exclusive to
the extent permitted by law. In particular, but not by way of
limitation of the foregoing, Agent may, without notice, demand or
legal process of any kind, take possession of any or all of the
Collateral (in addition to Collateral of which it already has
possession), wherever it may be found, and for that purpose may pursue
the same wherever it may be found, and may enter onto any of
Borrowers' premises where any of the Collateral may be, and search
for, take possession of, remove, keep and store any of the Collateral
until the same shall be sold or otherwise disposed of, and Agent shall
have the right to store the same at any of Borrowers' premises without
cost to Agent or Lenders. At Agent's request, each Borrower shall, at
Borrowers' expense, assemble the Collateral and make it available to
Agent at one or more places to be designated by Agent and reasonably
convenient to Agent and such Borrower. Each Borrower recognizes that
if a Borrower fails to perform, observe or discharge any of its
Liabilities under this Agreement or the Other Agreements, no remedy at
law will provide adequate relief to Agent and Lenders, and agrees that
Agent and Lenders shall be entitled to temporary and permanent
injunctive relief in any such case without the necessity of proving
actual damages. Any notification of intended disposition of any of
the Collateral required by law will be deemed to be a reasonable
authenticated notification of disposition if given at least ten (10)
days prior to such disposition and such notice shall (i) describe
Agent and the applicable Borrower(s), (ii) describe the Collateral
that is the subject to the intended disposition, (iii) state the
method of the intended disposition, (iv) state that the applicable
Borrower(s) is entitled to an accounting of the Liabilities and state
the charge, if any, for an accounting and (v) state the time and place
of any public disposition or the time after which any private sale is
to be made. Agent and Lenders may disclaim any warranties that might
arise in connection with the sale, lease or other disposition of the
Collateral and has no obligation to provide any warranties at such
time. Any Proceeds of any disposition by Agent of any of the
Collateral may be applied by Agent to the payment of expenses in
connection with the Collateral, including, without limitation, legal
expenses and reasonable attorneys' fees, and any balance of such
Proceeds may be applied by Agent toward the payment of such of the
Liabilities, and in such order of application, as Agent may from time
to time elect; provided, however, principal and interest on the
Revolving Loans and the Term Loans shall be fully satisfied prior to
applying such proceeds to Borrowers' Rate Hedging Obligations owed to
LaSalle.
17. CONDITIONS PRECEDENT.
The obligation of Agent and Lenders to fund the Term Loans, to
fund the initial Revolving Loan, and to issue or cause to be issued
the initial Letter of Credit, is subject to the satisfaction or waiver
on or before the date hereof of the following conditions precedent:
(a) Agent shall have received each of the agreements, opinions,
reports, approvals, consents, certificates and other documents set
forth on the closing document list attached hereto as Schedule 17(a)
(the "Closing Document List") in each case in form and substance
satisfactory to Agent;
(b) Since June 30, 2004, no event shall have occurred which has
had or could reasonably be expected to have a Material Adverse Effect
on any Obligor, as determined by Agent or Requisite Lenders in its
sole discretion;
(c) Agent shall have received payment in full of all fees and
expenses payable to it by Borrowers or any other Person in connection
herewith, on or before disbursement of the initial Loans hereunder;
(d) The Obligors shall have executed and delivered to Agent all
such other documents, instruments and agreements which Agent
determines are reasonably necessary to consummate the transactions
contemplated hereby, without limitation, a Continuing Unconditional
Guarantee from Xxxxxxx X. Xxxxxx, which shall be limited as set forth
therein; and a Secured Continuing Unconditional Guarantee from Trinity
Springs, Inc.
(e) Merchants Wholesale Inc. shall have executed and delivered
to Agent a Reaffirmation with respect to its existing Subordination
Agreement and Mortgagee Waiver;
(f) The infusion of equity into AMCON resulting from the
issuance of Series B Preferred Stock of at least $2,000,000.00 which
shall be used in its entirety, to repay, in part, AMCON's existing
subordinated indebtedness in the principal aggregate amount of
$6,800,000.00;
(g) The revolving loan indebtedness of Hawaiian Natural to Gold
Bank (which shall not exceed $2,750,000.00) shall be paid in full;
(h) Gold Bank shall have executed and delivered to Agent a
Reaffirmation with respect to its existing Mortgagee's Waiver;
(i) The revolving loan indebtedness of Healthy Edge, Parent of
Health Food, to Gold Bank (which shall not exceed $2,000,000.00) shall
be paid in full; and
(j) Evidence of repayment in full of AMCON's existing
subordinated indebtedness in the aggregate principal amount of
$6,800,000.00.
18. JOINT AND SEVERAL LIABILITY.
(a) Notwithstanding anything to the contrary contained herein,
all Liabilities of each Borrower hereunder shall be joint and several
obligations of Borrowers.
(b) Notwithstanding any provisions of this Agreement to the
contrary, it is intended that the joint and several nature of the
Liabilities of Borrowers and the liens and security interests granted
by Borrowers to secure the Liabilities, not constitute a "Fraudulent
Conveyance" (as defined below). Consequently, Agent and Borrowers
agree that if the Liabilities of a Borrower, or any liens or security
interests granted by such Borrower securing the Liabilities would, but
for the application of this sentence, constitute a Fraudulent
Conveyance, the Liabilities of such Borrower and the liens and
security interests securing such Liabilities shall be valid and
enforceable only to the maximum extent that would not cause such
Liabilities or such lien or security interest to constitute a
Fraudulent Conveyance, and the Liabilities of such Borrower and this
Agreement shall automatically be deemed to have been amended
accordingly. For purposes hereof, "Fraudulent Conveyance" means a
fraudulent conveyance under Section 548 of Chapter 11 of Title II of
the United States Code (11 U.S.C. Subsection 101, et seq.), as amended
(the "Bankruptcy Code") or a fraudulent conveyance or fraudulent
transfer under the applicable provisions of any fraudulent conveyance
or fraudulent transfer law or similar law of any state, nation or
other governmental unit, as in effect from time to time.
(c) Each Borrower assumes responsibility for keeping itself
informed of the financial condition of the each other Borrower, and
any and all endorsers and/or guarantors of any instrument or document
evidencing all or any part of such other Borrower's Liabilities and of
all other circumstances bearing upon the risk of nonpayment by such
other Borrowers of their Liabilities and each Borrower agrees that
Agent or Lenders shall not have any duty to advise such Borrower of
information known to Agent or Lenders regarding such condition or any
such circumstances or to undertake any investigation not a part of its
regular business routine. If Agent or any Lender, in their sole
discretion, undertakes at any time or from time to time to provide any
such information to a Borrower, Agent or such Lender, as applicable,
shall not be under any obligation to update any such information or to
provide any such information to such Borrower on any subsequent
occasion.
(d) Agent and the Lenders are hereby authorized, without notice
or demand and without affecting the liability of a Borrower hereunder,
to, at any time and from time to time, (i) renew, extend, accelerate
or otherwise change the time for payment of, or other terms relating
to a Borrower's Liabilities or otherwise modify, amend or change the
terms of any promissory note or other agreement, document or
instrument now or hereafter executed by a Borrower and delivered to
Agent or the Lenders; (ii) accept partial payments on a Borrower's
Liabilities; (iii) take and hold security or collateral for the
payment of a Borrower's Liabilities hereunder or for the payment of
any guaranties of a Borrower's Liabilities or other liabilities of a
Borrower and exchange, enforce, waive and release any such security or
collateral; (iv) apply such security or collateral and direct the
order or manner of sale thereof as Agent, in its sole discretion, may
determine; and (v) settle, release, compromise, collect or otherwise
liquidate a Borrower's Liabilities and any security or collateral
therefor in any manner, without affecting or impairing the obligations
of the other Borrowers. Agent shall have the exclusive right to
determine the time and manner of application of any payments or
credits, whether received from a Borrower or any other source, and
such determination shall be binding on such Borrower. All such
payments and credits may be applied, reversed and reapplied, in whole
or in part, to any of a Borrower's Liabilities as Agent shall
determine in its sole discretion without affecting the validity or
enforceability of the Liabilities of the other Borrowers.
(e) Each Borrower hereby agrees that, except as hereinafter
provided, its obligations hereunder shall be unconditional,
irrespective of (i) the absence of any attempt to collect a Borrower's
Liabilities from any Borrower or any guarantor or other action to
enforce the same; (ii) the waiver or consent by Agent or any Lender
with respect to any provision of any instrument evidencing Borrowers'
Liabilities, or any part thereof, or any other agreement heretofore,
now or hereafter executed by a Borrower and delivered to Agent or any
Lender; (iii) failure by Agent to take any steps to perfect and
maintain its security interest in, or to preserve its rights to, any
security or collateral for Borrowers' Liabilities; (iv) the
institution of any proceeding under the Bankruptcy Code, or any
similar proceeding, by or against a Borrower or Agent's election in
any such proceeding of the application of Section 1111(b)(2) of the
Bankruptcy Code; (v) any borrowing or grant of a security interest by
any Borrower as debtor-in-possession, under Section 364 of the
Bankruptcy Code; (vi) the disallowance, under Section 502 of the
Bankruptcy Code, of all or any portion of Agent's or any Lender's
claim(s) for repayment of any of Borrowers' Liabilities; or (vii) any
other circumstance which might otherwise constitute a legal or
equitable discharge or defense of a guarantor.
(f) No payment made by or for the account of a Borrower
including, without limitations, (i) a payment made by such Borrower on
behalf of another Borrower's Liabilities or (ii) a payment made by any
other person under any guaranty, shall entitle such Borrower, by
subrogation or otherwise, to any payment from such other Borrower or
from or out of such other Borrower's property and such Borrower shall
not exercise any right or remedy against such other Borrower or any
property of such other Borrower by reason of any performance of such
Borrower of its joint and several obligations hereunder.
19. SETTLEMENTS, DISTRIBUTIONS AND APPORTIONMENT OF PAYMENTS.
On a weekly basis (or more frequently if requested by Agent (a
"Settlement Date"), Agent shall provide each Lender with a statement
of the outstanding balance of the Liabilities as of the end of the
Business Day immediately preceding the Settlement Date"(the "Pre-
Settlement Determination Date") and the current balance of the Loans
funded by each Lender (whether made directly by such Lender to
Borrowers or constituting a settlement by such Lender of a previous
Disproportionate Advance made by Agent on behalf of such Lender to
Borrowers). If such statement discloses that such Lender's current
balance of the Loans as of the Pre-Settlement Determination Date
exceeds such Lender's Pro Rata Share of the Liabilities outstanding as
of the Pre-Settlement Determination Date, then Agent shall, on the
Settlement Date, transfer, by wire transfer, the net amount due to
such Lender in accordance with such Lender's instructions, and if such
statement discloses that such Lender's current balance of the Loans as
of the Pre-Settlement Determination Date is less than such Lender's
Pro Rata Share of the Liabilities outstanding as of the Pre-Settlement
Determination Date, then such Lender shall, on the Settlement Date,
transfer, by wire transfer the net amount due to Agent in accordance
with Agent's instructions. In addition, payments actually received by
Agent with respect to the following items shall be distributed by
Agent to Lenders as follows:
(a) Within one (1) Business Day of receipt thereof by Agent,
payments to be applied to interest on the Loans shall be paid to each
Lender in proportion to its Pro Rata Share, subject to any adjustments
for any Disproportionate Advances as provided in subsection 2(a)(i),
so that Agent shall receive interest on the Disproportion Advances and
each Lender shall only receive interest on the amount of funds
actually advanced by such Lender;
(b) Within one (1) Business Day of receipt thereof by Agent,
payments to be applied to the Letter of Credit fee set as provided in
Section 3(a) hereof shall be paid to each Lender in proportion to its
Pro Rata Share;
(c) Within one (1) Business Day of receipt thereof by Agent,
payments to be applied to the closing fee set forth subsection 4(c)(i)
hereof shall be paid to each Lender as follows: (72.7273%) to LaSalle
and (27.2727%) to Gold Bank; and
(d) Within one (1) Business Day of receipt thereof by Agent,
payments to be applied to the unused line fee set forth subsection
4(c)(ii) hereof shall be paid to each Lender in proportion to its Pro
Rata Share;
(e) Within one (1) Business Day of receipt thereof by Agent,
payments to be applied to the special accommodation fee as provided in
section 4(c)(iii) shall be paid to each Lender in proportion to its
Pro Rata Share and
(f) Within one (1) Business Day of receipt thereof by Agent,
payments to be applied to the prepayment fee set forth in Section 10
hereof shall be paid to each Lender in proportion to its Pro Rata
Share.
Notwithstanding the foregoing, Agent shall not be obligated to
transfer to any Defaulting Lender any payment made by Borrowers to
Agent, nor shall such Defaulting Lender be entitled to share any
interest, fees or other payment hereunder, until payment is made by
such Defaulting Lender to Agent as required in this Agreement.
20. AGENT.
(a) Appointment of Agent.
(i) Each Lender hereby designates LaSalle as Agent to act as
herein specified. Each Lender hereby irrevocably authorizes Agent to
take such action on its behalf under the provisions of this Agreement
and the notes and any other instruments and agreements referred to
herein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required
of Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. Except as otherwise provided herein,
Agent shall hold all Collateral and all payments of principal,
interest, fees, charges and expenses received pursuant to this
Agreement or any of the Other Agreements for the benefit of Lenders.
Agent may perform any of its duties hereunder by or through its agents
or employees.
(ii) The provisions of this Section 20 are solely for the
benefit of Agent and Lenders, and neither Borrowers nor any other
Obligor shall have any rights as a third party beneficiary of any of
the provisions hereof. In performing its functions and duties under
this Agreement, Agent shall act solely as agent of Lenders and does
not assume and shall not be deemed to have assumed any obligation
toward or relationship of agency or trust with or for any Obligor.
(b) Nature of Duties of Agent.
Agent shall not have duties, obligations or responsibilities except
those expressly set forth in this Agreement and the Other Agreements.
Neither Agent nor any of its officers, directors, employees or agents
shall be liable for any action taken or omitted by it as such hereunder
or in connection herewith, unless caused by its or their gross negligence
or willful misconduct. The duties of Agent shall be mechanical and
administrative in nature; Agent shall not have by reason of this
Agreement or the Other Agreements a fiduciary relationship in respect of
any Lender; and nothing in this Agreement or the Other Agreements,
expressed or implied, is intended to or shall be so construed as to
impose upon Agent any obligations in respect of this Agreement or the
Other Agreements except as expressly set forth herein.
(c) Lack of Reliance on Agent.
(i) Independently and without reliance upon Agent, each Lender, to
the extent it deems appropriate, has made and shall continue to make (A)
its own independent investigation of the financial or other condition and
affairs of Agent, each Obligor and any other Lender in connection with
the taking or not taking of any action in connection herewith and (B) its
own appraisal of the creditworthiness of Agent, each Obligor and any
other Lender, and, except as expressly provided in this Agreement, Agent
shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession
before the making of the Loans or at any time or times thereafter.
(ii) Agent shall not be responsible to any Lender for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith
or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility, priority or sufficiency of this Agreement
or the Other Agreements or any notes or the financial or other condition
of any Obligor. Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or the Other Agreements, or
the financial condition of any Obligor, or the existence or possible
existence of any Event of Default.
(d) Certain Rights of Agent.
Agent shall have the right to request instructions from Requisite
Lenders or all Lenders, as applicable, pursuant to this Agreement, by
notice to each Lender. If Agent shall request instructions from
Requisite Lenders or all Lenders, as applicable, with respect to any act
or action (including the failure to act) in connection with this
Agreement, Agent shall be entitled to refrain from such act or taking
such action unless and until Agent shall have received instructions from
Requisite Lenders or all Lenders, as applicable, and Agent shall not
incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from
acting hereunder in accordance with the instructions of Requisite Lenders
or all Lenders, as applicable.
(e) Reliance by Agent.
Agent shall be under no duty to examine, inquire into, or pass upon
the validity, effectiveness or genuineness of this Agreement, any of the
Other Agreements or any instrument, document or communication furnished
pursuant hereto or thereto or in connection herewith or therewith. Agent
shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, statement, certificate, telex,
teletype or telecopier message, cablegram, radiogram, order, electronic
mail or other documentary, teletransmission or telephone message believed
by it to be genuine and correct and to have been signed, sent or made by
the proper person. Agent may consult with legal counsel (including
counsel for any Obligor with respect to matters concerning any Obligor),
independent public accountants and other experts selected by it and shall
not be liable for any action taken or omitted to be taken by it in good
faith in accordance with the advice of such counsel, accountants or
experts.
(f) Indemnification of Agent.
To the extent Agent is not promptly reimbursed and indemnified by
Borrowers, each Lender will reimburse and indemnify Agent, in proportion
to its Pro Rata Share, for and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including counsel fees and disbursements) or
disbursements of any kind or nature whatsoever which may be imposed on,
incurred by or asserted against Agent in performing its duties hereunder,
in any way relating to or arising out of this Agreement; provided, that
no Lender shall be liable for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from Agent's gross negligence
or willful misconduct. If any indemnity furnished to Agent for any
purpose shall, in the opinion of Agent, be insufficient or become
impaired, Agent may call for additional indemnities and cease to do, or
not commence, the acts to be indemnified against, even if so directed by
Requisite Lenders or all Lenders, as applicable, until such additional
indemnification is provided. The obligations of Lenders under this
subsection 20(f) shall survive the payment in full of the Liabilities and
the termination of this Agreement.
(g) Agent in its Individual Capacity.
With respect to the Loans made by it pursuant hereto, Agent shall
have the same rights and powers hereunder as any other Lender or holder
of a note or participation interest and may exercise the same as though
it was not performing the duties specified herein; and the terms
"Lenders," "Requisite Lenders" or any similar terms shall, unless the
context clearly otherwise indicates, include Agent in its individual
capacity. Agent may accept deposits from, lend money to, acquire equity
interests in, and generally engage in any kind of banking, trust,
financial advisor or other business with Borrowers or any Affiliate of
Borrowers as if it were not performing the duties specified herein, and
may accept fees and other consideration from Borrowers for services in
connection with this Agreement and otherwise without having to account
for the same to Lenders, to the extent such activities are not in
contravention of the terms of this Agreement.
(h) Holders of Notes.
Agent may deem and treat the payee of any promissory note as the
owner thereof for all purposes hereof unless and until a written notice
of the assignment or transfer thereof shall have been filed with Agent.
Any request, authority or consent of any Person who, at the time of
making such request or giving such authority or consent, is the holder of
any promissory note, shall be conclusive and binding on any subsequent
holder, transferee or assignee of such promissory note or of any
promissory note or notes issued in exchange therefor.
(i) Successor Agent.
Agent may, upon five (5) Business Days' notice to Lenders and
Borrower Representative, resign at any time (effective upon the
appointment of a successor Agent pursuant to the provisions of this
subsection 20(i)) by giving written notice thereof to Lenders and
Borrower Representative. Upon any such resignation, Requisite Lenders
shall have the right, upon five (5) days' notice, to appoint a successor
Agent. If no successor Agent shall have been so appointed by Requisite
Lenders and accepted such appointment, within thirty (30) days after the
retiring Agent's giving of notice of resignation, then, upon five (5)
days' notice, the retiring Agent may, on behalf of Lenders, appoint a
successor Agent, which shall be a bank or a trust company or other
financial institution which maintains an office in the United States, or
a commercial bank organized under the laws of the United States of
America or of any State thereof, or any affiliate of such bank or trust
company or
(i) other financial institution which is engaged in the banking
business, having a combined capital and surplus of at least Fifty Million
and No/100 Dollars ($50,000,000.00).
(ii) Upon the acceptance of any appointment as an Agent hereunder
by a successor Agent, such successor Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Agent's
resignation hereunder as Agent, the provisions of this Section 20 shall
inure to its benefit as to any actions taken or omitted to be taken by it
while it was an Agent under this Agreement.
(b)Collateral Matters.
(i) Each Lender authorizes and directs Agent to enter into the
Other Agreements for the benefit of Lenders. Each Lender hereby agrees
that, except as otherwise set forth herein, any action taken by Requisite
Lenders in accordance with the provisions of this Agreement or the Other
Agreements, and the exercise by the Requisite Lenders of the powers set
forth herein or therein, together with such other powers as are
reasonably incidental thereto, shall be authorized and binding upon all
Lenders. Agent is hereby authorized on behalf of all Lenders, without
the necessity of any notice to or further consent from any Lender to take
any action with respect to any Collateral or Other Agreements which may
be necessary to perfect and maintain perfected the security interest in
and liens upon the Collateral granted pursuant to this Agreement and the
Other Agreements.
(ii) Agent will not, without the verbal consent of all Lenders,
which consent shall (a) be confirmed promptly thereafter in writing and
(b) not be unreasonably withheld or delayed, execute any release of
Agent's security interest in any Collateral except for releases relating
to dispositions of Collateral (x) permitted by this Agreement and (y) in
connection with the repayment in full of all of the Liabilities by
Borrowers and the termination of all obligations of Agent and Lenders
under this Agreement and the Other Agreements; provided, that with the
consent of Requisite Lenders, Agent may release its liens on Collateral
having a book value not greater than ten percent (10%) of the total book
value of all Collateral, as determined by Agent, either in a single
transaction or series of related transactions, not to exceed twenty
percent (20%) of the book value of all Collateral in any Fiscal Year.
Agent shall not be required to execute any such release on terms which,
in Agent's opinion, would expose Agent to liability or create any
obligation or entail any consequence other than the release of such liens
without recourse or warranty. In the event of any sale or transfer of
any of the Collateral, Agent shall be authorized to deduct all of the
expenses reasonably incurred by Agent from the proceeds of any such sale
or transfer.
(iii) Lenders hereby agree that the lien granted to Agent in any
property sold or disposed of in accordance with the provisions of the
Agreement shall be automatically released; provided, however that Agent's
lien shall attach to and continue for the benefit of Agent and Lenders in
the proceeds and products of such property arising from any such sale or
disposition.
(iv) To the extent, pursuant to the provisions of this subsection
20(j), Agent's execution of a release is required to release its lien
upon any sale and transfer of Collateral which is consented to in writing
by Requisite Lenders or all Lenders, as applicable, and upon at least
five (5) business days' prior written request by Borrower Representative,
Agent shall (and is hereby irrevocably authorized by Lenders to) execute
such documents as may be necessary to evidence the release of the liens
granted to Agent for the benefit of Lenders herein or pursuant hereto
upon the Collateral that was sold or transferred.
(v) Agent shall not have any obligation whatsoever to Lenders or to
any other Person to assure that the Collateral exists or is owned by
Borrowers or any other Obligor or is cared for, protected or insured or
that the liens granted to Agent herein or pursuant hereto have been
properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise or to
continue exercising at all or in any manner or under any duty of care,
disclosure or fidelity any of the rights, authorities and powers granted
or available to Agent in this Section 20 or in any of the Other
Agreements, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, Agent may act
in any manner it may deem appropriate, in its sole discretion, given
Agent's own interest in the Collateral as one of Lenders and that Agent
shall have no duty or liability whatsoever to Lenders, except for its
gross negligence or willful misconduct.
(vi) In the event that any Lender receives any Proceeds of any
Collateral by setoff, exercise of any banker's lien or otherwise, in an
amount in excess of such Lender's Pro Rata Share of such Proceeds, such
Lender shall purchase for cash (and other Lenders shall sell) interests
in each of such other Lender's Pro Rata Share of the Liabilities as would
be necessary to cause all Lenders to share the amount so set off or
otherwise received with each other Lender in accordance with their
respective Pro Rata Shares. No Lender shall exercise any right of set
off or banker's lien without the prior written consent of Agent.
(c) Actions with Respect to Defaults.
In addition to Agent's right to take actions on its own accord as
permitted under this Agreement, Agent shall take such action with respect
to an Event of Default as shall be directed by Requisite Lenders or all
Lenders, as applicable, under this Agreement; provided, that until Agent
shall have received such directions, Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with
respect to such Event of Default as it shall deem advisable and in the
best interests of Lenders. No Lender shall have any right individually
to enforce or seek to enforce this Agreement or any Other Agreement or to
realize upon any Collateral, unless instructed to do so by Agent.
(d) Delivery of Information.
Agent shall not be required to deliver to any Lender originals or
copies of any documents, instruments, notices, communications or other
information received by Agent from any Borrower or any other Obligor,
Requisite Lenders, any Lender or any other Person under or in connection
with this Agreement or any Other Agreement except (i) as specifically
provided in this Agreement or any Other Agreement and (ii) as
specifically requested from time to time in writing by any Lender with
respect to a specific document, instrument, notice or other written
communication received by and in the possession of Agent at the time of
receipt of such request and then only in accordance with such specific
request.
(e) Demand.
Subject to the terms of this Agreement, Agent shall make demand for
repayment by Borrowers of all Liabilities owing by Borrowers hereunder,
after the occurrence of an Event of Default, upon the written request of
Requisite Lenders. Agent shall make such demand in such manner as it
deems appropriate, in its sole discretion, to effectuate the request of
the Requisite Lenders. Nothing contained herein shall limit the
discretion of Agent to take reserves, to deem certain Accounts and
Inventory ineligible, or to exercise any other discretion granted to
Agent in this Agreement.
(f) Notice of Default.
Agent shall not be deemed to have knowledge or notice of the
occurrence of any Event of Default or any event which, with passage of
time or giving of notice, could become an Event of Default, except with
respect to Events of Default arising as a result of any Borrower failure
to pay principal, interest or fees required to be paid to Agent for the
benefit of Lenders, unless Agent shall have received written notice from
a Lender or Borrower Representative describing such Event of Default or
event which, with the passage of time or giving of notice, could become
an Event of Default, and which identifies such event as a "notice of
default". Upon receipt of any such notice or Agent becoming aware of
Borrower's failure to pay principal, interest or fees required to be paid
to Agent for the benefit of Lenders, Agent will notify each Lender of
such receipt.
21. ASSIGNABILITY.
(a) Borrowers shall not have the right to assign this Agreement or
any interest therein except with the prior written consent of Agent and
all Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an Affiliate of
such Lender except to the extent such transfer would result in increased
costs to Borrowers.
(c) Each Lender may, with the consent of Agent which consent shall
not be unreasonably withheld, but without the consent of any other Lender
nor Borrower Representative, assign to one or more banks or other
financial institutions all or a portion of its rights and obligations
under this Agreement and the Other Agreements; provided, that (i) for
each such assignment, the parties thereto shall execute and deliver to
Agent, for its acceptance and recording in the Register (as defined
below), an Assignment and Acceptance Agreement in the form attached
hereto as Exhibit D (the "Assignment and Acceptance"), and a processing
and recordation fee of Three Thousand Five Hundred and No/100 Dollars
($3,500.00) to be paid by the assignee, and (ii) no such assignment shall
be for less than Five Million and No/100 Dollars ($5,000,000.00). Upon
such execution and delivery of the Assignment and Acceptance to Agent,
from and after the date specified as the effective date in the Assignment
and Acceptance, (x) the assignee thereunder shall be a party hereto, and,
to the extent that rights and obligations hereunder have been assigned to
it pursuant to such Assignment and Acceptance, such assignee shall have
the rights and obligations of a Lender hereunder and (y) the assignor
thereunder shall, to the extent that rights and obligations hereunder
have been assigned by it pursuant to such Assignment and Acceptance,
relinquish its rights (other than any rights it may have pursuant to
Section 23 of this Agreement which will survive) and be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to
be a party hereto).
(d) By executing and delivering an Assignment and Acceptance, the
assignee thereunder confirms and agrees as follows: (i) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection
with this Agreement and the Other Agreements or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this
Agreement or any of the Other Agreements, (ii) such assigning Lender
makes no representation or warranty and assumes no responsibility with
respect to the financial condition of Borrowers or any other Obligor or
the performance or observance by Borrowers or any other Obligor of its
obligations under this Agreement and the Other Agreement, (iii) such
assignee confirms that it has received a copy of this Agreement and the
Other Agreements, together with copies of the financial statements
referred to in Section 9 of this Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis
and decision to enter into such Assignment and Acceptance, (iv) such
assignee will, independently and without reliance upon Agent, such
assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make
its own credit decisions in taking or not taking action under this
Agreement, (v) such assignee appoints and authorizes Agent to take such
action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to Agent by the terms hereof, together with
such powers as are reasonably incidental thereto and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be
performed by it as a Lender.
(e) Agent shall, maintain at its address referred to in Section 24
of the Agreement a copy of each Assignment and Acceptance delivered to
and accepted by it and a register for the recordation of the names and
addresses of Lenders and the Revolving Loan Commitments and Term Loan
Commitments of, and principal amount of the Loans owing to, each Lender
from time to time (the "Register"). The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and
Borrowers, Agent and Lenders may treat each Person whose name is recorded
in the Register as a Lender hereunder for all purposes of this Agreement.
The Register and copies of each Assignment and Acceptance shall be
available for inspection by Borrowers, Agent or any Lender at any
reasonable time and from time to time upon reasonable prior notice.
(f) Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender, Agent shall, if such Assignment and Acceptance has been
completed and is in substantially the form of Exhibit D hereto, (i)
accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to
Borrower Representative. Within five (5) Business Days after Borrower
Representative's receipt of such notice, Borrowers shall execute and
deliver to Agent in exchange for the surrendered promissory note or
notes, a new promissory note or notes to the order of the assignee in
amounts equal to such assignee's commitments and outstanding Loans
hereunder and, if the assigning Lender has retained a portion of the
Loans, a new promissory note or notes to the order of the assigning
Lender in an amount equal to the remaining commitments and outstanding
Loans hereunder of such assigning Lender under the terms of this
Agreement. Such new promissory note or notes shall re-evidence the
indebtedness outstanding under the old promissory note or notes and shall
be in the aggregate principal amount of such surrendered promissory note
or notes, shall be dated of even date herewith and shall otherwise be in
substantially the form of the promissory note or notes subject to such
assignment.
(g) Each Lender may sell participations (without the consent of
Agent, Borrowers or any other Lender) to one or more parties, in or to
all (or a portion) of its rights and obligations under this Agreement
(including, without limitation, all or a portion of its Revolving Loan
Commitment and Term Loan Commitment, or the Loans owing to it); provided,
that (i) such Lender's obligations under this Agreement shall remain
unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) Borrowers,
Agent, and the other Lenders shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations
under this Agreement and (iv) such Lender shall not transfer, grant,
assign or sell any participation under which the participant shall have
rights to approve any amendment or waiver of this Agreement.
(h) Each Lender agrees that, without the prior written consent of
Borrowers and Agent, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan or other Liabilities
under the securities laws of the United States of America or of any
jurisdiction.
(i) In connection with the efforts of any Lender to assign its
rights or obligations or to participate interests, such Lender may
disclose any information in its possession regarding Borrowers.
22. AMENDMENTS, ETC.
No amendment or waiver of any provision of this Agreement or any of
the Other Agreements, nor consent to any departure by any Obligor
therefrom, shall in any event be effective unless the same shall be in
writing and signed by Requisite Lenders, or if Lenders shall not be
parties thereto, by the parties thereto and consented to by Requisite
Lenders, and each such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which
given; provided, that no amendment, waiver or consent shall, unless in
writing and signed by all Lenders, do any of the following: (i) increase
the Revolving Loan Commitments and Term Loan Commitments of Lenders or
subject Lenders to any additional obligations to extend credit to
Borrowers, (ii) reduce the principal of, or interest on, the Loans (other
than as expressly permitted herein) or any fees hereunder, (iii) postpone
any date fixed for any payment in respect of principal of, or interest
on, the Loan or any fees hereunder, (iv) change the Pro Rata Shares of
Lenders, or any minimum requirement necessary for Lenders or Requisite
Lenders to take any action hereunder, (v) amend or waive this Section 22,
or change the definition of Requisite Lenders, (vi) increase the advance
rates set forth in subsection 2(a) hereof or (vii) except in connection
with the financing, refinancing, sale or other disposition of any asset
of Borrowers permitted under this Agreement (or to the extent Requisite
Lender approval only is required with any such release pursuant to
subsection 20(j) hereof), release or subordinate any liens in favor of
Agent, for the benefit of Agent and Lenders, on any of the Collateral and
provided further, that no amendment, waiver or consent affecting the
rights or duties of Agent under this Agreement or any Other Agreement
shall in any event be effective, unless in writing and signed by Agent in
addition to Lenders required hereinabove to take such action.
Notwithstanding any of the foregoing to the contrary, (a) for purposes of
voting or consenting to matters with respect to this Agreement and the
Other Agreements, a Defaulting Lender shall not be considered a Lender
and such Defaulting Lender's Revolving Loan Commitment and Term Loan
Commitment shall each be deemed to be $0 until such Defaulting Lender
makes the payments required in this Agreement and (b) the consent of
Borrowers shall not be required for any amendment, modification or waiver
of the provisions of this Section 22.
In the event that any consent, waiver or amendment requiring the
agreement of all Lenders as set forth above is agreed to by the Requisite
Lenders, but not all Lenders, Agent may, in its sole discretion, cause
any non-consenting Lender to assign its rights and obligations under this
Agreement and the Other Agreements to one or more new Lenders or existing
Lenders in the manner and according to the terms set forth in Section 21
of this Agreement; provided, that (i) no Lender may be required to assign
its rights and obligations to a new Lender because such lender is
unwilling to increase its own loan commitments, (ii) such new Lender must
be willing to consent to the proposed amendment, waiver or consent and
(iii) in connection with such assignment the new Lender pays the
assigning Lender an amount equal to the Liabilities owing to such
assigning Lender, including all principal, accrued and unpaid interest
and accrued and an unpaid fees to the date of assignment. Such
assignment shall occur within thirty (30) days of notice by Agent to such
non-consenting Lender of Agent's intent to cause such non-consenting
Lender to assign its interests hereunder.
23. NONLIABILITY OF AGENT AND LENDERS.
The relationship between Borrowers, Agent and Lenders shall be
solely that of borrowers and lender. Neither Agent nor any Lender shall
have any fiduciary responsibilities to Borrowers. Neither Agent nor any
Lender undertakes any responsibility to Borrowers to review or inform
Borrowers of any matter in connection with any phase of Borrowers'
business or operations.
24. INDEMNIFICATION.
Borrowers agrees to defend (with counsel satisfactory to Agent),
protect, indemnify and hold harmless Agent and each Lender, each
affiliate or subsidiary of Agent and each Lender, and each of their
respective officers, directors, employees, attorneys and agents (each an
"Indemnified Party") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature
(including, without limitation, the disbursements and the reasonable fees
of counsel for each Indemnified Party in connection with any
investigative, administrative or judicial proceeding, whether or not the
Indemnified Party shall be designated a party thereto), which may be
imposed on, incurred by, or asserted against, any Indemnified Party
(whether direct, indirect or consequential and whether based on any
federal, state or local laws or regulations, including, without
limitation, securities laws and regulations, Environmental Laws and
commercial laws and regulations, under common law or in equity, or based
on contract or otherwise) in any manner relating to or arising out of
this Agreement or any Other Agreement, or any act, event or transaction
related or attendant thereto, the making or issuance and the management
of the Loans or any Letters of Credit or the use or intended use of the
proceeds of the Loans or any Letters of Credit; provided, however, that
Borrowers shall not have any obligation hereunder to any Indemnified
Party with respect to matters caused by or resulting from the willful
misconduct or gross negligence of such Indemnified Party. To the extent
that the undertaking to indemnify set forth in the preceding sentence may
be unenforceable because it is violative of any law or public policy,
Borrowers shall satisfy such undertaking to the maximum extent permitted
by applicable law. Any liability, obligation, loss, damage, penalty,
cost or expense covered by this indemnity shall be paid to each
Indemnified Party on demand, and, failing prompt payment, shall, together
with interest thereon at the highest rate then applicable to Loans
hereunder from the date incurred by each Indemnified Party until paid by
Borrowers, be added to the Liabilities of Borrowers and be secured by the
Collateral. The provisions of this Section 24 shall survive the
satisfaction and payment of the other Liabilities and the termination of
this Agreement.
25. NOTICE.
All written notices and other written communications with respect to
this Agreement shall be sent by ordinary, certified or overnight mail, by
telecopy or delivered in person, and in the case of Lender shall be sent
to it at 000 Xxxxx XxXxxxx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000-0000,
attention: Xxx Xxxxxx, facsimile number: (000) 000-0000, and in the case
of Lender shall be sent to it at the address set forth below its name on
the signature page hereto or in the Assignment and Acceptance Agreement
and in the case of Borrower Representative or any Borrower shall be sent
to it at its principal place of business set forth on Exhibit A hereto or
as otherwise directed by such Borrower in writing. All notices shall be
deemed received upon actual receipt thereof or refusal of delivery.
26. CHOICE OF GOVERNING LAW; CONSTRUCTION; FORUM SELECTION.
This Agreement and the Other Agreements are submitted by Borrowers
to Agent and Lenders for their acceptance or rejection at Agent's
principal place of business as an offer by Borrowers to borrow monies
from Agent and Lenders now and from time to time hereafter, and shall not
be binding upon Agent or any Lender or become effective until accepted by
Agent and Lenders, in writing, at said place of business. If so accepted
by Agent and Lenders, this Agreement and the Other Agreements shall be
deemed to have been made at said place of business. THIS AGREEMENT AND
THE OTHER AGREEMENTS SHALL BE GOVERNED AND CONTROLLED BY THE INTERNAL
LAWS OF THE STATE OF ILLINOIS AS TO INTERPRETATION, ENFORCEMENT,
VALIDITY, CONSTRUCTION, EFFECT, AND IN ALL OTHER RESPECTS, INCLUDING,
WITHOUT LIMITATION, THE LEGALITY OF THE INTEREST RATE AND OTHER CHARGES,
BUT EXCLUDING PERFECTION OF THE SECURITY INTERESTS IN COLLATERAL LOCATED
OUTSIDE OF THE STATE OF ILLINOIS, WHICH SHALL BE GOVERNED AND CONTROLLED
BY THE LAWS OF THE RELEVANT JURISDICTION IN WHICH SUCH COLLATERAL IS
LOCATED. If any provision of this Agreement shall be held to be
prohibited by or invalid under applicable law, such provision shall be
ineffective only to the extent of such prohibition or invalidity, without
invalidating the remainder of such provision or remaining provisions of
this Agreement.
To induce Agent and Lenders to accept this Agreement, each Borrower
irrevocably agrees that, subject to Agent's sole and absolute election,
ALL ACTIONS OR PROCEEDINGS IN ANY WAY, MANNER OR RESPECT, ARISING OUT OF
OR FROM OR RELATED TO THIS AGREEMENT, THE OTHER AGREEMENTS OR THE
COLLATERAL SHALL BE LITIGATED IN COURTS HAVING SITUS WITHIN THE CITY OF
CHICAGO, STATE OF ILLINOIS. EACH BORROWER HEREBY CONSENTS AND SUBMITS TO
THE JURISDICTION OF ANY LOCAL, STATE OR FEDERAL COURTS LOCATED WITHIN
SAID CITY AND STATE. EACH BORROWER HEREBY WAIVES PERSONAL SERVICE OF ANY
AND ALL PROCESS AND AGREES THAT ALL SUCH SERVICE OF PROCESS MAY BE MADE
UPON SUCH BORROWER BY CERTIFIED OR REGISTERED MAIL, RETURN RECEIPT
REQUESTED, ADDRESSED TO SUCH BORROWER, AT THE ADDRESS SET FORTH FOR
NOTICE IN THIS AGREEMENT AND SERVICE SO MADE SHALL BE COMPLETE TEN (10)
DAYS AFTER THE SAME HAS BEEN POSTED. Agent agrees to endeavor to provide
a copy of such process to the law firm of Xxxxx Xxxx by mail at the
address of 0000 Xxxxxx Xxxxxx, Xxxxx, Xxxxxxxx 00000 or by facsimile
transmission at facsimile number (000) 000-0000. Failure of Agent to
provide a copy of such process shall not impair Agent's rights hereunder,
create a cause of action against Agent or create any claim or right on
behalf of Borrower or any third party. EACH BORROWER HEREBY WAIVES ANY
RIGHT IT MAY HAVE TO TRANSFER OR CHANGE THE VENUE OF ANY LITIGATION
BROUGHT AGAINST SUCH BORROWER BY AGENT OR LENDERS IN ACCORDANCE WITH THIS
SECTION.
27. INTENTIONALLY OMITTED.
28. HEADINGS OF SUBDIVISIONS.
The headings of subdivisions in this Agreement are for convenience
of reference only, and shall not govern the interpretation of any of the
provisions of this Agreement.
29. POWER OF ATTORNEY.
Each Borrower acknowledges and agrees that its appointment of Agent
as its attorney and agent-in-fact for the purposes specified in this
Agreement is an appointment coupled with an interest and shall be
irrevocable until all of the Liabilities are satisfied and paid in full
and this Agreement is terminated.
30. CONFIDENTIALITY.
Borrowers, Agent and each Lender hereby agree to use commercially
reasonable efforts to assure that any and all information relating to
Borrowers which are (i) furnished by Borrowers to Agent or any Lender (or
to any affiliate of Agent or any Lender); and (ii) non-public,
confidential or proprietary in nature, shall be kept confidential by
Agent and such Lender or such affiliate in accordance with applicable
law; provided, however, that such information and other credit
information relating to Borrowers may be distributed by such party to
such party's directors, officers, employees, attorneys, affiliates,
assignees, participants, auditors, agents and regulators, to Agent and
any other Lender and upon the order of a court or other governmental
agency having jurisdiction over Agent or such Lender or such affiliate,
to any other party. In addition such information and other credit
information may be distributed by Agent or any Lender to potential
participants or assignees of any portion of the Liabilities, provided,
that such potential participant or assignee agrees to follow the
confidentiality requirements set forth herein. Borrowers, Agent and each
Lender further agree that this provision shall survive the termination of
this Agreement. Notwithstanding the foregoing, Borrowers hereby consent
to Agent publishing a tombstone or similar advertising material relating
to the financing transaction contemplated by this Agreement.
31. COUNTERPARTS.
This Agreement, any of the Other Agreements and any amendments,
waivers, consents or supplements may be executed in any number of
counterparts and by different parties hereto in separate counterparts,
each of which, when so executed and delivered, shall be deemed an
original, but all of which counterparts together shall constitute but one
agreement.
32. ELECTRONIC SUBMISSIONS.
Upon not less than thirty (30) days' prior written notice (the
"Approved Electronic Form Notice"), Agent may permit or require that any
of the documents, certificates, forms, deliveries or other
communications, authorized, required or contemplated by this Agreement or
the Other Agreements, be submitted to Agent in "Approved Electronic Form"
(as hereafter defined), subject to any reasonable terms, conditions and
requirements in the applicable Approved Electronic Forms Notice. For
purposes hereof "Electronic Form" means e-mail, e-mail attachments, data
submitted on web-based forms or any other communication method that
delivers machine readable data or information to Agent, and "Approved
Electronic Form" means an Electronic Form that has been approved in
writing by Agent (which approval has not been revoked or modified by
Agent) and sent to Borrower Representative in an Approved Electronic Form
Notice. Except as otherwise specifically provided in the applicable
Approved Electronic Form Notice, any submissions made in an applicable
Approved Electronic Form shall have the same force and effect that the
same submissions would have had if they had been submitted in any other
applicable form authorized, required or contemplated by this Agreement or
the Other Agreements.
33. EFFECT OF AMENDMENT AND RESTATEMENT.
Upon the date of this Agreement, the Original Agreement (and, except
as otherwise set forth in the following proviso, all obligations and
rights of any party thereunder), shall be amended and restated by this
Agreement; provided, however, that the obligation to repay the loans and
advances arising under the Original Agreement shall continue in full
force and effect and the liens and security interests securing payment
thereof shall be continuing but shall now be governed by the terms of
this Agreement and the Other Agreements. No action or inaction by Agent
or LaSalle prior to the date of this Agreement shall be deemed to have
established a course of conduct between the parties hereto. All rights
and obligations of Borrowers, Agent and any Lender shall be solely as set
forth in this Agreement and the Other Agreements.
34. WAIVER OF JURY TRIAL; OTHER WAIVERS.
(a) EACH BORROWER, AGENT AND EACH LENDER EACH HEREBY WAIVES ALL
RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING WHICH PERTAINS
DIRECTLY OR INDIRECTLY TO THIS AGREEMENT, ANY OF THE OTHER AGREEMENTS,
THE LIABILITIES, THE COLLATERAL, ANY ALLEGED TORTIOUS CONDUCT BY A
BORROWER, AGENT OR SUCH LENDER OR WHICH, IN ANY WAY, DIRECTLY OR
INDIRECTLY, ARISES OUT OF OR RELATES TO THE RELATIONSHIP AMONG BORROWER,
AGENT AND LENDERS. IN NO EVENT SHALL AGENT OR ANY LENDER BE LIABLE FOR
LOST PROFITS OR OTHER SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL
DAMAGES.
(b) Each Borrower hereby waives demand, presentment, protest and
notice of nonpayment, and further waives the benefit of all valuation,
appraisal and exemption laws.
(c) Each Borrower hereby waives the benefit of any law that would
otherwise restrict or limit Agent or any Lender or any affiliate of Agent
or any Lender in the exercise of its right, which is hereby acknowledged
and agreed to, to set-off against the Liabilities, without notice at any
time hereafter, any indebtedness, matured or unmatured, owing by Agent or
any Lender or such affiliate of Agent or any Lender to such Borrower,
including, without limitation any Deposit Account at Agent or any Lender
or such affiliate.
(d) EACH BORROWER HEREBY WAIVES ALL RIGHTS TO NOTICE AND HEARING OF
ANY KIND PRIOR TO THE EXERCISE BY LENDER OF ITS RIGHTS TO REPOSSESS THE
COLLATERAL OF SUCH BORROWER WITHOUT JUDICIAL PROCESS OR TO REPLEVY,
ATTACH OR LEVY UPON SUCH COLLATERAL.
(e) Agent's and/or Lenders' failure, at any time or times
hereafter, to require strict performance by a Borrower of any provision
of this Agreement or any of the Other Agreements shall not waive, affect
or diminish any right of Agent or any Lender thereafter to demand strict
compliance and performance therewith. Any suspension or waiver by Agent
or any Lender of an Event of Default under this Agreement or any default
under any of the Other Agreements shall not suspend, waive or affect any
other Event of Default under this Agreement or any other default under
any of the Other Agreements, whether the same is prior or subsequent
thereto and whether of the same or of a different kind or character. No
delay on the part of Agent or any Lender in the exercise of any right or
remedy under this Agreement or any Other Agreement shall preclude other
or further exercise thereof or the exercise of any right or remedy. None
of the undertakings, agreements, warranties, covenants and
representations of Borrowers contained in this Agreement or any of the
Other Agreements and no Event of Default under this Agreement or default
under any of the Other Agreements shall be deemed to have been suspended
or waived by Agent and/or Lenders unless such suspension or waiver is in
writing, signed by a duly authorized officer of Agent, Requisite Lenders
or all Lenders, as required herein, and directed to Borrower
Representative specifying such suspension or waiver.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the date first written above.
AMCON DISTRIBUTING COMPANY
By: /s/ Xxxxxxx X. Xxxxx
-----------------------
Xxxxxxx X. Xxxxx
Title: Vice President and Chief Financial Officer
XXXXXXXXXX NATURAL FOODS, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx
Title: Secretary
HAWAIIAN NATURAL WATER COMPANY, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx
Title: Secretary
THE BEVERAGE GROUP, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx
Title: Secretary
THE HEALTH FOOD ASSOCIATES, INC.
By: /s/ Xxxxxxx X. Xxxxx
---------------------
Xxxxxxx X. Xxxxx
Title: Secretary
LASALLE BANK NATIONAL ASSOCIATION, as Agent and a Lender
By: /s/ Xxxxxx X. Xxxxxx
--------------------
Xxxxxx X. Xxxxxx
Title: Senior Vice President
Revolving Loan Commitment: $36,667,000.00
Term Loan A Commitment: $773,720.00
Term Loan B Commitment: $3,333,000.00
GOLD BANK, as a Lender
By: /s/ Xxxx Xxxxxxxx
------------------
Xxxx Jannman
Title: Vice President
Revolving Loan Commitment: $18,333,000.00
Term Loan A Commitment: $386,280.00
Term Loan B Commitment $1,667,000.00
EXHIBIT A - BUSINESS AND COLLATERAL LOCATIONS
Attached to and made a part of that certain Amended and Restated
Loan and Security Agreement of even date herewith among AMCON
Distributing Company ("AMCON"), Xxxxxxxxxx Natural Foods, Inc.
("Xxxxxxxxxx Natural"), Hawaiian Natural Water Company, Inc. ("Hawaiian
Natural"),The Beverage Group, Inc. ("Beverage Group"), The Health Food
Associates, Inc. ("Health Food") (collectively, "Borrowers") and LASALLE
BANK NATIONAL ASSOCIATION, as Agent and all Lenders from time and time a
party hereto.
A. (1) AMCON's business locations (please indicate which location
is the principal place of business and at which locations originals and
all copies of AMCON's books, records and accounts are kept).
a. 0000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
[principal place of business/leased property]
(2) Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment locations) and all
post office boxes of AMCON. Please indicate the relationship of such
location to AMCON (i.e., public warehouse, processor, etc.).
a. 0000 X. Xxxxxx
Xxxxxxxx, XX 00000
[owned property subject to a mortgage in favor of Gold Bank]
b. 0000 Xxxxxxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
[owned property subject to a mortgage in favor of Gold Bank]
c. 0000 Xxxx X Xxxxxx
Xxxxxx, XX 00000
[leased property]
d. 0000 Xxxx 00xx
Xxxxxxxxxx, XX 00000
[leased property]
e. 0000 X Xxxxxx
Xxxxxxx, XX 00000
[leased property]
f. 000 X Xxxxxxxxxxxx
Xxxxx Xxxx, XX 00000
[leased property]
g. 000 X. Xxxxxxxxxx
Xxxxxxxxxxx, XX 00000
[leased property]
h. 0000-X XX 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
[leased property]
(3) Bank Accounts of AMCON (other than those at Agent):
Bank (with address) Account Number Type of Account
a. US Bank 53910011458 Depository/Blocked Account
b. Bank of Oklahoma 818090129 Depository/Blocked Account
(B) (1) Beverage Group's Business Locations (please indicate which
location is the principal place of business and at which locations
originals and all copies of Beverage Group's books, records and accounts
are kept).
a. 0 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
[principal place of business/leased property]
(2) Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment locations) and all
post office boxes of Beverage Group. Please indicate the relationship of
such location to Beverage Group (i.e., public warehouse, processor,
etc.).
a. c/o State Logistices
6570 Altura X0
Xxxxx Xxxx, Xxxxxxxxxx 00000
[bailee/warehouse location]
b. c/o Distribution Services of Atlanta
0000 Xxx Xxxxx Xxxxxxx
Xxxxxxx, Xxxxxxx 00000
[bailee/warehouse location]
c. c/o Xxxx-Xxxxxxx Corporation
00 Xxxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000
[bailee/warehouse location]
d. c/o Ameripec, Inc.
0000 Xxxxxx Xxxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
[processor' location]
e. c/o Bloomfield Bakers
00000 Xxxxxxxxxx Xxxxxx
Xxx Xxxxxxxx, Xxxxxxxxxx 00000
[processor' location]
f. c/o Gluek Brewing Inc.
000 Xxxxx Xxx Xxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxxx 00000
[processor' location]
g. c/o Initiative Foods, Inc.
0000 X Xxxxxx
Xxxxxx, Xxxxxxxxxx 00000
[processor' location]
h. c/o Xxxxxx X Food Processors, Inc.
0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
[processor' location]
(3) Bank Accounts of Beverage Group (other than those at Agent):
Bank (with address) Account Number Type of Account
a. Bank of America 14590-26080 Checking
(c) (1) Health Food's Business Locations (please indicate which
location is the principal place of business and at which locations originals
and all copies of Health Food's books, records and accounts are kept).
a. 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
[principal place of business/leased property]
(2) Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment locations) and all
post office boxes of Health Food. Please indicate the relationship of such
location to Health Food (i.e., public warehouse, processor, etc.).
a. 0000 "X' Xxxxxx
Xxxxx 000
Xxxxxxx, Xxxxxxxx 00000
[leased property]
b. 0000 X.X. 00xx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
[leased property]
c. 1344 and 0000 Xxxx Xxxxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxx 00000
[leased property]
d. 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
[leased property]
e. Quail Springs MarketPlace Shopping Place
0000 Xxxx Xxxxxxxx Xxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
[leased property]
f. 2911A and 0000 Xxxx 00xx Xxxxxx
Xxxxxx, Xxxxxx
[leased property]
g. 0000 Xxxxx 000xx Xxxx Xxxxxx
Xxxxx, Xxxxxxxx 00000
[leased property]
(3) Bank Accounts of Health Food (other than those at Agent):
Bank (with address) Account Number Type of Account
a. BancFirst 055-1072471 Depository/
Disbursement-Blocked
Account
b. 055-1072570 Disbursement/Blocked
Account
c. 055-1072482 Depository/Blocked
Account
d. 055-1072493 Depository/Blocked
Account
e. 055-1072504 Depository/Blocked
Account
f. 057-1002313 Depository/Blocked
Account
g. Bank of America 40110760151 Depository/Blocked
Account
h. Columbian Bank 00000000 Depository/Blocked
Account
x. Xxxxx Fargo Bank 261-0000000 Depository/Blocked
Account
(D) (1) Xxxxxxxxxx Natural's Business Locations (please indicate which
location is the principal place of business and at which locations originals
and all copies of Xxxxxxxxxx Natural's books, records and accounts are
kept).
a. 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
[principal place of business/leased property]
(2) Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment locations) and all
post office boxes of Xxxxxxxxxx Natural. Please indicate the relationship
of such location to Xxxxxxxxxx Natural (i.e., public warehouse, processor,
etc.).
a. 0000-0000 Xxxxxxx 00 Xxxxx
Xxxxxxxx, Xxxxxxx 00000
[leased property]
b. 0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxx 00000
[leased property]
c. 0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
[leased property]
d. 0000 Xxxx Xxxxxxxx Xxxxx
Xxxxx 0000-0000
Xxxxxxx, Xxxxxxx
[leased property]
e. 1086 and 0000 Xxxxxxxxxx Xxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxx 00000
[leased property]
f. MarketPlace Store
7600 Xx. Xxxxxxxx Boulevard
Orlando, Florida
[leased property]
g. 0000 Xxxxxx Xxxxxxxxxxx
Xxxxxx, Xxxxxxx
[leased property]
(3) Bank Accounts of Xxxxxxxxxx Natural (other than those at Agent):
Bank (with address) Account Number Type of Account
a. B B & T 140362484 Depository/Blocked
Account
b. BancFirst 055-1080875 Depository/
Disbursement/Blocked Account
c. 055-1080930 Disbursement/Blocked Account
d. 055-1080039 Depository/Blocked Account
e. 055-1080886 Depository/Blocked Account
f. 055-1080897 Depository/Blocked Account
g. 055-1080908 Depository/Blocked Account
h. 055-1080017 Depository/Blocked Account
i. 055-1080919 Depository/Blocked Account
j. 055-1080028 Depository/Blocked Account
k. Citizens Bank
of Oviedo 300000510 Depository/Blocked Account
l. SunTrust 1609600509 Depository/Blocked
Account
(E) (1) Hawaiian Natural's Business Locations (please indicate which
location is the principal place of business and at which locations originals
and all copies of Hawaiian Natural's books, records and accounts are kept).
a. 00-000 Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxx 00000
[leased property/principal place of business/leased property]
(2) Other locations of Collateral (including, without limitation,
warehouse locations, processing locations, consignment locations) and all
post office boxes of Hawaiian Natural. Please indicate the relationship of
such location to Hawaiian Natural (i.e., public warehouse, processor, etc.).
a. 00-000 Xxx Xxxxxxx Xxxx
Xxxxx, Xxxxxx 00000
[leased property]
b. 00-000 Xxxxxxxx Xxxxxxxxx
X0
Xxxxxxx, Xxxxxx 00000
[leased property]
(3) Bank Accounts of Hawaiian Natural (other than those at Agent):
Bank (with address) Account Number Type of Account
a. Bank of Hawaii 1-679538 Business Checking
EXHIBIT B COMPLIANCE CERTIFICATE
Attached to and made a part of that certain Amended and Restated Loan
and Security Agreement, as it may be amended in accordance with its terms
from time to time, including all exhibits attached thereto (the "Agreement")
of even date herewith among AMCON Distributing Company ("AMCON"), Xxxxxxxxxx
Natural Foods, Inc. ("Xxxxxxxxxx Natural"), Hawaiian Natural Water Company,
Inc. ("Hawaiian Natural"), The Beverage Group, Inc. ("Beverage Group") and
The Health Food Associates, Inc. ("Health Food") (AMCON, Xxxxxxxxxx Natural,
Hawaiian Natural, Beverage Group and Health Food are collectively referred
to as "Borrowers") and LASALLE BANK NATIONAL ASSOCIATION, as agent ("Agent")
and each lender from time to time a party thereto ("Lenders").
This Certificate is submitted pursuant to subsection 9(c) of the Agreement.
The undersigned hereby certifies to Agent and Lenders that as of the date
of this Certificate:
Manually Numbered
1. The undersigned is the ___________________________ of Borrower
Representative.
2. There exists no event or circumstance which is or which with the
passage of time, the giving of notice, or both would constitute an Event of
Default, as that term is defined in the Agreement, or, if such an event of
circumstance exists, a writing attached hereto specifies the nature thereof,
the period of existence thereof and the action that Borrower has taken or
proposes to take with respect thereto.
3. No material adverse change in the condition, financial or otherwise,
business, property, or results of operations of Borrowers has occurred since
[date of last Compliance Certificate/last financial statements delivered
prior to closing], or, if such a change has occurred, a writing attached
hereto specifies the nature thereof and the action that Borrowers have taken
or proposes to take with respect thereto.
4. Borrowers are in compliance with the representations, warranties and
covenants in the Agreement, or, if Borrowers are not in compliance with any
representations, warranties or covenants in the Agreement, a writing
attached hereto specifies the nature thereof, the period of existence
thereof and the action that Borrowers have taken or proposes to take with
respect thereto.
5. The financial statements of each Borrower being concurrently
delivered herewith have been prepared in accordance with generally accepted
accounting principles consistently applied and there have been no material
changes in accounting policies or financial reporting practices of such
Borrower since [date of the last Compliance Certificate/date of last
financial statements delivered prior to closing] or, if any such change has
occurred, such changes are set forth in a writing attached hereto.
6. Attached hereto is a true and correct calculation of the financial
covenants contained in the Agreement.
AMCON Distributing Company, as Borrower
Representative
By __________________________________
Title _______________________________
EXHIBIT C COMMERCIAL TORT CLAIMS
None
EXHIBIT D FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
This Assignment and Acceptance (the "Assignment and Acceptance") is executed
as of _______________, _____, between ____________________________
("Assignee") and _______________________________ ("Assignor").
W I T N E S S E T H:
WHEREAS, Assignor is party to a Loan and Security Agreement dated as of
________, 200_ (as amended from time to time, the "Loan Agreement") among
LaSalle Bank National Association, as agent and a lender, all other lenders
from time to time a party to the Loan Agreement, and ________________
("Borrower").
WHEREAS, Assignor has agreed to assign a portion of its loans and other
financial accommodations to Borrower pursuant to the Loan Agreement to
Assignee and Assignee has agreed to accept such assignment;
NOW, THEREFORE, in consideration of the mutual agreements herein
contained, the parties hereto agree as follows:
1. Defined Terms
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to such terms in the Loan Agreement.
2. Assignment and Assumption
Assignor hereby assigns to Assignee, without recourse, representation
or warranty (other than as expressly provided herein), and Assignee hereby
assumes, all of Assignor's right, title and interest arising under the Loan
Agreement and the Other Agreements with respect to a portion of the
outstanding Loans to Borrower equal to Assignee's Pro Rata Share (as set
forth under Assignee's signature hereto) of the outstanding Loans to
Borrower; provided, that Assignee's obligations to Assignor, Borrower or any
Lender are strictly limited to those obligations under the Loan Agreement
unless otherwise explicitly provided for herein. Upon the Assignment
Effective Date (as defined below), Assignee's Revolving Loan Commitment [,
outstanding Term Loan [A] balance, outstanding Term Loan B balance, Capital
Expenditures Loan Commitment] and Pro Rata Share shall be as set forth below
Assignee's signature hereto. After giving effect to the assignment
hereunder, Assignor's remaining Revolving Loan Commitment [, outstanding
Term Loan [A] balance, outstanding Term Loan B balance, Capital Expenditures
Loan Commitment] and Pro Rata Share shall be as set forth below Assignor's
signature hereto.
3. Payments on Assignment Effective Date
In consideration of the assignment by Assignor to Assignee pursuant to
this Assignment and Acceptance, Assignee agrees to pay to Assignor on or
prior to the Assignment Effective Date an amount specified by Assignor in
writing on or prior to the Assignment Effective Date which represents
Assignee's Pro Rata Share of the Loans to Borrower and outstanding on the
Assignment Effective Date.
4. Effectiveness
This Assignment and Acceptance shall become effective upon the full
execution and delivery of this Assignment and Acceptance (the "Assignment
Effective Date).
5. Representations and Warranties
(a) Each of Assignor and Assignee represents and warrants to the other
party as follows:
(i) it has full power and authority, and has taken all action
necessary, to execute and deliver this Assignment and Acceptance and to
fulfill its obligations under, and to consummate the transactions
contemplated by, this Assignment and Acceptance;
(ii) the making and performance by it of this Assignment and
Acceptance and all documents required to be executed and delivered by it
hereunder do not and will not violate any law or regulation of the
jurisdiction of its incorporation or any other law or regulation applicable
to it;
(iii) this Assignment and Acceptance has been duly executed and
delivered by it and constitutes its legal, valid and binding obligation,
enforceable in accordance with its terms, except as limited by applicable
bankruptcy, reorganization, insolvency or similar laws affecting the
enforcement of creditors' rights generally and by general equity principles;
and
(iv) all approvals, authorizations, or other actions by, or filing
with, any governmental authority necessary for the validity or
enforceability of its obligations under this Assignment and Acceptance have
been obtained.
(v) Assignor represents and warrants to Assignee that Assignee's Pro
Rata Share of the Maximum Loan Limit and the outstanding Loans being
assigned hereunder are not subject to any liens or security interests
created by or known to Assignor.
6. Miscellaneous
(b) Assignor shall not be responsible to Assignee for the execution
(by any party other than Assignor), effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of the Loan Agreement, the
Other Agreements or any of the agreements, documents or instruments executed
and/or delivered in connection therewith (collectively, the "Loan
Documents") or for any representations, warranties, recitals or statements
made therein or in any written or oral statement or in any financial or
other statements, instruments, reports, certificates or any other documents
made or furnished or made available by Assignor to Assignee or by or on
behalf of Borrower or any other person obligated under the Loan Documents
(collectively, the "Credit Parties") to Assignor or Assignee in connection
with the Loan Documents and the transactions contemplated thereby. Except
as otherwise set forth in the Loan Agreement, Assignor shall not be required
to ascertain or inquire as to the performance or observance of any of the
terms, conditions, provisions, covenants or agreements contained in any of
the Loan Documents or as to the use of the proceeds of the Loans or as to
the existence or possible existence of any default (matured or unmatured)
under the Loan Documents.
(c) Assignee represents and warrants that it has made its own
independent investigation of the financial condition and affairs of the
Credit Parties in connection with the making of the Loans and the assignment
by Assignor to Assignee hereunder and has made and shall continue to make
its own appraisal of the creditworthiness of the Credit Parties. Assignor
shall have no duty or responsibility (except as expressly provided in the
Loan Agreement) either initially or on a continuing basis to make any such
investigation or any such appraisal on behalf of Assignee or to provide
Assignee with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter and shall further have no responsibility with respect to
the accuracy of, or the completeness of, any information provided to
Assignee, whether by Assignor or by or on behalf of any Credit Party.
(d) Assignee (x) agrees that it will perform all of the obligations
which by the terms of the Loan Agreement are required to be performed by it
as a Lender and (y) represents that it is either (i) a corporation organized
under the laws of the United States or a state thereof or (ii) entitled to
complete exemption from United States withholding tax imposed on or with
respect to any payments to be made to it pursuant to the Loan Agreement.
(e) ANY DISPUTE BETWEEN ASSIGNOR AND ASSIGNEE ARISING OUT OF,
CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED
BETWEEN THEM IN CONNECTION WITH THIS ASSIGNMENT AND ACCEPTANCE AND WHETHER
ARISING IN CONTRACT, TORT, EQUITY, OR OTHERWISE, SHALL BE RESOLVED IN
ACCORDANCE WITH THE INTERNAL LAWS AND NOT THE CONFLICTS OF LAW PROVISIONS
OF THE STATE OF ILLINOIS.
(f) No term or provision of this Assignment and Acceptance may be
changed, waived, discharged or terminated orally, but only by an instrument
in writing signed by the parties to this Assignment and Acceptance.
(g) This Assignment and Acceptance may be executed in one or more
counterparts, each of which shall be an original but all of which, taken
together, shall constitute one and the same instrument.
(h) All payments hereunder or in connection herewith shall be made in
U.S. dollars and in immediately available funds, payable to the account of
Assignor at its office as designated in the Loan Agreement.
(i) This Assignment and Acceptance shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and
assigns. Neither of the parties hereto may assign or transfer any of its
rights or obligations under this Assignment and Acceptance without the prior
consent of the other party. The preceding sentence shall not limit the
right of Assignee to assign all or part of its Pro Rata Share of the Maximum
Loan Limit and any outstanding Loans assigned under this Assignment and
Acceptance in the manner contemplated by the Loan Agreement.
(j) All representations and warranties made herein and indemnities
provided for herein shall survive the consummation of the transactions
contemplated hereby.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment and
Acceptance as the date first above written.
__________________________________,
as Assignor
By _______________________________
Its ______________________________
Pro Rata Share: ______%
Revolving Loan Commitment: $_______________
Outstanding Term Loan [A] balance $___________
[Outstanding Term Loan B balance $____________]
[Capital Expenditures Loan Commitment $_______]
__________________________________,
as Assignee
By ________________________________
Its _______________________________
Pro Rata Share: _______%
Revolving Loan Commitment: $_______________
Outstanding Term Loan [A] balance $___________
[Outstanding Term Loan B balance $____________]
[Capital Expenditures Loan Commitment $_______]
SCHEDULE 1 PERMITTED LIENS
SCHEDULE 11(g) - LITIGATION
Xxxxxxx Xxx v. Health Food Association Inc, Case No. CS 2003-9415,
District Court of Oklahoma County, Oklahoma SCHEDULE 11(i) AFFILIATE
TRANSACTIONS
Limited to insurance allocations
Hawaiian Natural Water Company, Inc. sells bottled water to The
Beverage
Group, Inc. Trinity Springs, Inc. and to AMCON Distributing Company
The Beverage Group, Inc. purchases inventory from Hawaiian Natural
Water Company, Inc.
SCHEDULE 11(j) NAMES & TRADE NAMES
AMCON Distributing Company [Legal Name]
Genco Marketing [Trade Name of AMCON]
Xxxxxxxxxx Natural Foods, Inc. [Legal Name]
Xxxxxxxxxx'x Market & Cafe [Trade Name of Xxxxxxxxxx
Natural]
Health Food Associates, Inc. [Legal Name]
Akin's Natural Foods Market & Cafe [Trade Name of Health Food]
Hawaiian Natural Water Company, Inc. [Legal Name]
The Beverage Group, Inc. [Legal Name]
Bahia [Trade Name of Hawaiian Natural]
Nesco Water [Trade Name of Hawaiian Natural]
SCHEDULE 11(n) INDEBTEDNESS
(i) AMCON indebtedness to Gold Bank in an amount not to exceed
$6,438,683.00 secured only by real property.
SCHEDULE 11(p) PARENT, SUBSIDIARIES AND AFFILIATES
AMCON:
The Healthy Edge, Inc. [Subsidiary]
Hawaiian Natural Water Company, Inc. [Subsidiary]
The Beverage Group, Inc. [Subsidiary]
Trinity Springs, Inc. [Subsidiary (85%)]
XXXXXXXXXX:
The Healthy Edge, Inc. [Parent]
HEALTH FOOD:
The Healthy Edge, Inc. [Parent]
HAWAIIAN NATURAL:
AMCON Distributing Company [Parent]
Beverage Group:
AMCON Distributing Company [Parent]
SCHEDULE 17(a) CLOSING DOCUMENT CHECKLIST
