EXHIBIT 4.5
AMCON DISTRIBUTING COMPANY
SECURITIES PURCHASE AGREEMENT
TO THE PURCHASER LISTED IN THE ATTACHED SCHEDULE A WHO IS A SIGNATORY
HERETO:
Ladies and Gentlemen:
AMCON DISTRIBUTING COMPANY, a Delaware corporation (the "Company" or
"AMCON"), agrees with you (sometimes referred to herein as the
"Purchaser") as follows:
SECTION 1. THE SECURITIES.
Section 1.1. Subject to the terms and conditions set forth herein,
the Company will issue and sell 80,000 shares of its Series B
Convertible Preferred Stock with the terms set forth on the
Certificate of Designations attached hereto as Exhibit A (the
"Preferred Stock").
Section 1.2. Certain capitalized terms used in this Agreement are
defined in Schedule B; references to a "Schedule" or an "Exhibit" are,
unless otherwise specified, to a Schedule or an Exhibit attached to
this Agreement. The Preferred Stock and the shares of Company common
stock issuable upon conversion of the Preferred Stock (the "Conversion
Shares") are sometimes referred to collectively herein as the
"Securities."
SECTION 2. SALE AND PURCHASE OF PREFERRED STOCK.
Subject to the terms and conditions of this Agreement, the Company
will issue and sell to you and you will purchase from the Company
concurrently with the execution of this Agreement the number of shares
of Preferred Stock specified opposite your name in Schedule A at a
purchase price equal to the product of such number of shares times $25
per share.
SECTION 3. CLOSING.
(a) Concurrently with the execution of this Agreement and delivery
by you to the Company of immediately available funds in the amount of
the purchase price therefor by wire transfer for the account of the
Company previously furnished to you, the Company will deliver to you a
certificate evidencing your ownership of the number of shares of
Preferred Stock set forth opposite your name in Schedule A, dated the
date hereof (collectively, referred to as the "Closing").
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.
The Company represents and warrants to you that:
Section 4.1. Organization; Power and Authority. The Company is a
corporation duly organized, validly existing and in good standing
under the laws of the State of Delaware. The Company has the
corporate power and authority to conduct its business as it is now
conducted, to execute and deliver this Agreement and the Other
Agreement, and to perform the provisions hereof and thereof.
Section 4.2. Authorization, Etc. This Agreement and the Other
Agreement have been duly authorized by all necessary corporate action
on the part of the Company, and this Agreement constitutes a legal,
valid and binding obligation of the Company enforceable against the
Company in accordance with its terms, except as such enforceability
may be limited by (a) applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the
enforcement of creditors' rights generally and (b) general principles
of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). The issuance and sale of shares of
Preferred Stock and the Conversion Shares have been authorized by all
requisite corporate action, and upon such issuance and sale shall
constitute validly issued, fully paid, nonassessable shares of
outstanding Preferred Stock or Common Stock, as the case may be, of
the Company.
Section 4.3. Capitalization.
(a) The authorized equity securities of the Company consist of
15,000,000 shares of AMCON Common Stock, $0.01 par value per share
("Company Common Stock"), and 1,000,000 shares of preferred stock,
$0.01 par value per share ("AMCON Preferred Stock"). As of the date
hereof, (i) 527,062 shares of Company Common Stock were issued and
outstanding, (ii) 100,000 shares of Company Series A Convertible
Preferred Stock were issued and outstanding; (iii) stock options to
purchase an aggregate of 50,873 shares of Company Common Stock were
issued and outstanding (the "Company Stock Options"), (iv) no shares
of Company Common Stock were held in its treasury. All outstanding
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable.
(b) As of the date hereof, except (i) as set forth in Schedule
4.3, (ii) as set forth in this Section 4.3 there are no outstanding
(x) shares of capital stock or other voting securities of the Company,
(y) securities of the Company convertible into or exchangeable for
shares of capital stock or voting securities of the Company, or (z)
options or other rights to acquire from the Company, and no obligation
of the Company to issue, any capital stock, voting securities or
securities convertible into or exchangeable for capital stock or
voting securities of the Company (the items in clauses (x), (y) and
(z) being referred to collectively as the "AMCON Securities"). There
are no outstanding obligations of the Company or any Subsidiary of the
Company to repurchase, redeem or otherwise acquire any AMCON
Securities. Except as set forth on Schedule 4.3, there are no
outstanding contractual obligations of the Company to provide funds
to, or make any investment (in the form of a loan, capital
contribution or otherwise) in, any other Person other than in the
ordinary course of business consistent with past practice. There are
no stockholder agreements, voting trusts or other agreements or
understandings to which the Company is a party, or of which the
Company is aware, relating to voting, registration or disposition of
any shares of capital stock of the Company or granting to any person
or group of persons the right to elect, or to designate or nominate
for election, a director to the board of directors of the Company.
Section 4.4. AMCON SEC Documents.
(a) AMCON has made available to the Purchasers the AMCON SEC
Documents. AMCON has timely filed all reports, filings, registration
statements and other documents required to be filed by it with the SEC
since October 1, 2002. No Subsidiary of AMCON is required to file any
form, report, registration statement or prospectus or other document
with the SEC.
(b) As of its filing date, each AMCON SEC Document complied as
to form in all material respects with the applicable requirements of
the Securities Act and/or the Exchange Act, as the case may be and the
rules and regulations thereunder.
(c) No AMCON SEC Document contained, as of its filing date, any
untrue statement of a material fact or omitted to state any material
fact necessary in order to make the statements made therein, in the
light of the circumstances under which they were made, not misleading.
No AMCON SEC Document, as amended or supplemented, if applicable,
filed pursuant to the Securities Act contained, as of the date such
document or amendment became effective, any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading.
(d) Each of the consolidated balance sheet of AMCON included in
or incorporated by reference into the AMCON SEC Documents (including
the related notes and schedules) fairly presents the consolidated
financial position of AMCON and its Subsidiaries as of its date
(subject, in the case of unaudited statements, to normal year-end
audit adjustments which are not reasonably expected to be material in
amount or effect), and each of the consolidated statements of income,
retained earnings and cash flows of AMCON included in or incorporated
by reference into AMCON SEC Documents (including any related notes and
schedules) fairly presents the results of operations, retained
earnings or cash flows, as the case may be, of AMCON and its
Subsidiaries for the periods set forth therein (subject, in the case
of unaudited statements, to normal year-end audit adjustments which
are not reasonably expected to be material in amount or effect). The
financial statements of AMCON, including the notes thereto, included
in or incorporated by reference into the AMCON SEC Documents comply as
to form in all material respects with applicable accounting
requirements and with the published rules and regulations of the SEC
with respect thereto, and have been prepared in accordance with GAAP
(except as may be indicated in the notes thereto). Since October 1,
2002, there has been no material change in AMCON's accounting methods
or principles except as described in the notes to such AMCON financial
statements.
Section 4.5. Absence of Certain Changes and Events. Except as set
forth on Schedule 4.5, since December 31, 2003, (a) AMCON has suffered
no Material Adverse Effect; (b) AMCON has conducted its business only
in the Ordinary Course of Business; and (c) AMCON has entered into no
transactions that would be required to be disclosed by AMCON in its
Form 10-K for the year ended September 30, 2004.
Section 4.6. Compliance with Laws, Other Instruments, Etc. The
execution, delivery and performance by the Company of this Agreement
will not (a) contravene, result in any breach of, or constitute a
default under, or result in the creation of any Lien in respect of any
property of the Company or any Subsidiary under, any indenture,
mortgage, deed of trust, loan, purchase or credit agreement, lease,
corporate charter or bylaws, or any other agreement or instrument to
which the Company or any Subsidiary is bound or by which the Company
or any Subsidiary or any of their respective properties may be bound
or affected, (b) conflict with or result in a breach of any of the
terms, conditions or provisions of any order, judgment, decree, or
ruling of any court, arbitrator or Governmental Authority applicable
to the Company or any Subsidiary or (c) violate any provision of any
statute or other rule or regulation of any Governmental Authority
applicable to the Company or any Subsidiary.
Section 4.7. Governmental Authorizations, Etc. No consent,
approval or authorization of, or registration, filing or declaration
with, any Governmental Authority is required in connection with the
execution, delivery or performance by the Company of this Agreement.
Litigation; Observance of Agreements, Statutes and Orders.
(a) There are no actions, suits or proceedings pending or, to
the Knowledge of the Company, threatened against or affecting the
Company or any Subsidiary or any property of the Company or any
Subsidiary in any court or before any arbitrator of any kind or before
or by any Governmental Authority that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
(b) Neither the Company nor any Subsidiary is in default under
any term of any agreement or instrument to which it is a party or by
which it is bound, or any order, judgment, decree or ruling of any
court, arbitrator or Governmental Authority or is in violation of any
applicable law, ordinance, rule or regulation of any Governmental
Authority, which default or violation, individually or in the
aggregate, could reasonably be expected to have a Material Adverse
Effect.
SECTION 5. REPRESENTATIONS AND WARRANTIES OF THE PURCHASER.
You represent and warrant to the Company that:
Section 5.1. Authorization, Etc. This Agreement has been duly
authorized by all necessary action, and this Agreement constitutes a
legal, valid and binding obligation of the Purchaser enforceable
against the Purchaser in accordance with its terms, except as such
enforceability may be limited by (a) applicable bankruptcy,
insolvency, reorganization, moratorium or other similar laws affecting
the enforcement of creditors' rights generally and (b) general
principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
Section 5.2. Purchase Entirely for Own Account. This Agreement is
made with the Purchaser in reliance upon the Purchaser's
representation to the Company, which by the Purchaser's execution of
this Agreement, the Purchaser hereby confirms, that the Securities to
be acquired by the Purchaser will be acquired for investment for the
Purchaser's own account, not as a nominee or agent, and not with a
view to the resale or distribution of any part thereof, and that the
Purchaser has no present intention of selling, granting any
participation in, or otherwise distributing the same, except that
shares of Preferred Stock may be purchased by Xxxxxxx Associates
and/or employees of Xxxxxxx Associates, and if any such purchases
occur, then such purchasers shall be required to execute and be bound
by a Securities Purchase Agreement in the same form as this Agreement.
By executing this Agreement, the Purchaser further represents that the
Purchaser does not presently have any contract, undertaking, agreement
or arrangement with any person to sell, transfer or grant
participations to such person or to any third person, with respect to
any of the Securities. The Purchaser has not been formed for the
specific purpose of acquiring the Securities.
Section 5.3. Disclosure of Information. The Purchaser has had an
opportunity to discuss the Company's business, management, financial
affairs and the terms and conditions of the offering of the Securities
with the Company's management, the Company has responded to such
questions to the full satisfaction of the Purchasers, and the
Purchaser has had an opportunity to review the Company's facilities.
Section 5.4. Restricted Securities. The Purchaser understands
that the Securities have not been, and will not be, registered under
the Securities Act, by reason of a specific exemption from the
registration provisions of the Securities Act which depends upon,
among other things, the bona fide nature of the investment intent and
the accuracy of the Purchaser's representations as expressed herein.
The Purchaser understands that the Securities are "restricted
securities" under applicable U.S. federal and state securities laws
and that, pursuant to these laws, the Purchaser must hold the
Securities indefinitely unless they are registered with the Securities
and Exchange Commission and qualified by state authorities, or an
exemption from such registration and qualification requirements is
available. The Purchaser acknowledges that the Company has no
obligation to register or qualify the Securities for resale except as
set forth in this Agreement. The Purchaser further acknowledges that
if an exemption from registration or qualification is available, it
may be conditioned on various requirements including, but not limited
to, the time and manner of sale, the holding period for the
Securities, and on requirements relating to the Company which are
outside of the Purchaser's control, and which the Company is under no
obligation and may not be able to satisfy.
Section 5.5. Legends. The Purchaser understands that the
Securities and any securities issued in respect of or exchange for the
Securities, may bear one or all of the following legends:
(a) The shares represented by this certificate have not been
registered under the Securities Act of 1933, as amended (the "Act"),
or any state securities laws. These shares have been acquired for
investment and not with a view to distribution or resale, and may not
be sold, pledged, hypothecated, donated or otherwise transferred,
whether or not for consideration, without an effective registration
statement under the Act, and any applicable state securities laws, or
an opinion of counsel satisfactory to the Corporation that such
registration is not required with respect to the proposed disposition
thereof and that such disposition will not cause the loss of the
exemption upon which the Corporation relied in selling such shares to
the original purchaser.
(b) Any legend required by the securities laws of any state to
the extent such laws are applicable to the Securities represented by
the certificate so legended.
Section 5.6. Accredited Investor. The Purchaser is an "accredited
investor" as defined in Rule 501(a) of Regulation D promulgated under
the Securities Act.
Section 5.7 No General Solicitation. Neither the Purchaser, nor,
if applicable, any of its officers, directors, employees, agents,
stockholders or partners, has either directly or indirectly, including
through a broker or finder (a) engaged in any general solicitation, or
(b) published any advertisement in connection with the offer and sale
of the Securities.
Section 5.8 Residence. If the Purchaser is an individual, then
the Purchaser resides in the state or province identified in the
address of the Purchaser set forth on Schedule A; if the Purchaser is
a partnership, corporation, limited liability company or other entity,
then the office or offices of the Purchaser in which its principal
place of business is located at the address or addresses of the
Purchaser set forth on Schedule A.
SECTION 6. AGREEMENTS RESPECTING SECURITIES LAWS.
Section 6.1. Limitations on Resale. You agree that you will not
sell, assign or transfer any of the Securities at any time in
violation of the Securities Act and acknowledge that you are taking
unregistered securities, you must continue to bear the economic risk
of your investment for an indefinite period of time because of the
fact that the Securities have not been registered under the Securities
Act or any applicable state securities laws, and you realize that the
Securities cannot be sold unless subsequently registered under the
Securities Act, and any applicable state securities laws, or an
exemption from such registration is available. You recognize that the
Company is not assuming any obligation to register the Securities,
except to the extent expressly set forth herein. You agree that
appropriate legends reflecting the status of the Securities under the
Securities Act, and any applicable state securities laws, may be
placed on the face of the certificates for such Securities at the time
of their issuance to you and upon any transfer to any assignee of you.
Section 6.2. Transfer of Restrictions. The Securities may not be
transferred except to an Affiliate or in a transaction which is in
compliance with the Securities Act and applicable state securities
laws. Except as hereinafter provided with respect to registration of
the Securities, it shall be a condition to any such transfer that the
Company shall be furnished with an opinion of counsel to the holder of
such Securities, satisfactory to the Company, to the effect that the
proposed transfer would be in compliance with the Securities Act and
applicable state securities laws and that such transfer would not
cause the loss of the exemption from such registration relied upon by
the Company originally selling the securities to you.
Section 6.3. Registration of Conversion Shares.
(a) The Company shall use its commercially reasonable efforts
to prepare and file with the Securities and Exchange Commission (the
"SEC") as soon as practicable, but in no event later than 180 days
following the Closing (the "Filing Date"), a registration statement
(the "Registration Statement") and such other documents as may be
necessary in the opinion of counsel for the Company on such form of
Registration Statement as is then available to effect a registration
respecting the sale by the holders of the Conversion Shares. The
Registration Statement filed hereunder, to the extent allowable under
the Securities Act and the Rules promulgated thereunder (including
Rule 416), shall state that such Registration Statement also covers
such indeterminate number of additional shares of Company Common Stock
as may become issuable upon conversion of the Preferred Stock to
prevent dilution resulting from stock splits, stock dividends or
similar transactions. The Registration Statement (and each amendment
or supplement thereto) shall be provided to (and subject to the
approval of, which shall not be unreasonably withheld) you prior to
its filing or other submission. You and the other holders of
Conversion Shares who are eligible to sell Conversion Shares under
such Registration Statement, together with their affiliates, are
hereafter referred to as "Offering Holders." The Company will include
in such Registration Statement (i) the information required under the
Securities Act to be so included concerning the Offering Holders (and
each Offering Holder hereby agrees to promptly provide any such
information to the Company), including any changes in such information
that may be provided by the Offering Holders in writing to the Company
from time to time, and (ii) a section entitled "Plan of Distribution"
that describes the various procedures that may be used by the Offering
Holders in the sale of their Conversion Shares.
(b) The Company shall use its commercially reasonable efforts
to have the Registration Statement to be declared effective as soon as
reasonably practicable after such filing.
(c) Notwithstanding the foregoing provisions of this Section
6.3, the Company may voluntarily suspend the effectiveness of any such
Registration Statement for a limited time, which in no event shall be
longer than 60 days in any three-month period and no longer than 90
days in any twelve month period, if the Company has been advised in
writing by counsel or underwriters to the Company that the offering
pursuant to the Registration Statement would materially adversely
affect, or would be improper in view of, or improper without
disclosure in a prospectus of a proposed financing, reorganization,
recapitalization, merger, consolidation, or similar transaction
involving the Company or if a required post-effective amendment has
not been declared effective by the SEC or any state securities law
regulator. The Company shall notify all Offering Holders to such
effect, and, upon receipt of such notice, each such Offering Holder
shall immediately discontinue any sales pursuant to such Registration
Statement until such Offering Holder has received copies of a
supplemented or amended prospectus or until such Offering Holder is
advised in writing by the Company that the then current prospectus may
be used and has received copies of any additional or supplemental
filings that are incorporated or deemed incorporated by reference in
such prospectus.
(d) If any event occurs that would cause any such Registration
Statement to contain a material misstatement or omission or not to be
effective and usable during the period that such Registration
Statement is required to be effective and usable, the Company shall
promptly notify the Offering Holders of such event and, if requested,
the Offering Holders shall immediately cease making offers and return
all prospectuses to the Company. The Company shall promptly file an
amendment to the Registration Statement to correct such misstatement
or omission and use its commercially reasonable efforts to cause such
amendment to be declared effective as soon as practicable thereafter.
The Company shall promptly provide the Offering Holders with revised
prospectuses and, following receipt of the revised prospectuses, the
Offering Holders shall be free to resume making offers.
(e) In connection with the registration of the Conversion
Shares pursuant to the Registration Statement, the Company shall have
the following obligations:
(i) The Company shall respond promptly to any and all
comments made by the staff of the SEC to the Registration Statement,
and shall submit to the SEC, before the close of business on the
business day immediately following the business day on which the
Company learns (either by telephone or in writing) that no review of
the Registration Statement will be made by the SEC or that the staff
of the SEC has no further comments on such Registration Statement, as
the case may be, a request for acceleration of the effectiveness of
the Registration Statement to a time and date as soon as practicable.
Subject to Section 6.3(c), the Company shall keep the Registration
Statement effective pursuant to Rule 415 at all times until such date
as is the earlier of (x) two (2) years following the Closing, (y) the
date on which all Conversion Shares covered by the Registration
Statement have been sold and (z) the date on which all of the
Conversion Shares covered by the Registration Statement may be
immediately sold to the public without registration or restriction
pursuant to Rule 144(k) under the Securities Act or any successor
provision (the "Registration Period"), which Registration Statement
(including any amendments or supplements thereto and prospectuses
contained therein and all documents incorporated by reference therein)
(A) shall comply in all material respects with the requirements of the
Securities Act and the rules and regulations of the SEC promulgated
thereunder and (B) shall not contain any untrue statement of a
material fact or omit to state a material fact required to be stated
therein, or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading. The
financial statements of the Company included in the Registration
Statement or incorporated by reference therein (x) shall comply as to
form in all material respects with the applicable accounting
requirements and the published rules and regulations of the SEC
applicable with respect thereto, (y) shall be prepared in accordance
with GAAP (except as may be otherwise indicated in such financial
statements or the notes thereto or, in the case of unaudited interim
statements, to the extent they may not include footnotes or may be
condensed on summary statements) and (z) fairly present in all
material respects the consolidated financial position of the Company
and its consolidated subsidiaries as of the dates thereof and the
consolidated results of their operations and cash flows for the
periods then ended (subject, in the case of unaudited statements, to
year-end adjustments).
(ii) The Company shall (x) prepare and file with the SEC
such amendments (including post-effective amendments) and supplements
to the Registration Statement and the prospectus used in connection
with the Registration Statement as may be necessary to keep the
Registration Statement effective at all times during the Registration
Period (subject to aany suspensions of the effectiveness of the
Registration Statement due to delays in post-effective amendments
being declared effective by the SEC as provided in Section 7.3(c)),
and (y) during the Registration Period, comply with the provisions of
the Securities Act with respect to the disposition of all Securities
covered by the Registration Statement until such time as all of such
Securities have been disposed of in accordance with the intended
methods of disposition by the seller or sellers thereof as set forth
in such Registration Statement.
(iii) Upon your request, the Company shall furnish to you
(if your Securities are included in the Registration Statement) (x)
promptly after the same is prepared and publicly distributed, filed
with the SEC or received by the Company, as applicable, one copy of
the Registration Statement and any amendment thereto, each preliminary
prospectus and prospectus and each amendment or supplement thereto,
and each letter written by or on behalf of the Company to the SEC or
the staff of the SEC (including, without limitation, any request to
accelerate the effectiveness of the Registration Statement or
amendment thereto), and each item of correspondence from the SEC or
the staff of the SEC, in each case relating to the Registration
Statement (other than any portion thereof that contains information
for which the Company has sought confidential treatment), (y) on the
date of effectiveness of the Registration Statement or any amendment
thereto, a notice stating that the Registration Statement or amendment
has been declared effective, and (z) such number of copies of a
prospectus, including a preliminary prospectus, all amendments and
supplements thereto as you may reasonably request.
(iv) The Company shall use its commercially reasonable
efforts to (x) register and qualify the Conversion Shares covered by
the Registration Statement under such other securities or "blue sky"
laws of such jurisdictions in the United States as each Offering
Holder reasonably requests, (y) prepare and file in those
jurisdictions such amendments (including post-effective amendments)
and supplements to such registrations and qualifications and take such
other actions as may be necessary to maintain such registrations and
qualifications in effect at all times during the Registration Period
(subject to Section 6.3(c)), and (z) take all other actions reasonably
necessary or advisable to qualify such Conversion Shares for sale in
such jurisdictions; provided, however, that the Company shall not be
required in connection therewith or as a condition thereto to (A)
qualify to do business in any jurisdiction where it would not
otherwise be required to qualify but for this clause (iv), (B) subject
itself to general taxation in any such jurisdiction, (C) file a
general consent to service of process in any such jurisdiction, (D)
provide any undertakings that cause the Company undue expense or
burden, or (E) make any change in its Certificate of Incorporation or
Bylaws, which in each case the Board of Directors of the Company
determines to be contrary to the best interests of the Company and its
stockholders.
(v) As promptly as practicable after becoming aware of such
event, the Company shall (x) notify you by telephone and facsimile of
the happening of any event, as a result of which the prospectus
included in the Registration Statement, as then in effect, includes an
untrue statement of a material fact or omits to state a material fact
required to be stated therein or necessary to make the statements
therein, in light of the circumstances under which they were made, not
misleading, and (y) promptly prepare a supplement or amendment to such
Registration Statement to correct such untrue statement or omission,
and deliver such number of copies of such supplement or amendment to
you as you may reasonably request.
(vi) The Company shall use its commercially reasonable
efforts (i) to prevent the issuance of any stop order or other
suspension of effectiveness of any Registration Statement and, if such
an order is issued, to obtain the withdrawal of such order at the
earliest practicable moment (including in each case by amending or
supplementing the Registration Statement), and (ii) to notify you if
your Conversion Shares are being sold under such Registration
Statement (or, in the event of an underwritten offering, the managing
underwriters) of the issuance of such order and the resolution thereof
(and if the Registration Statement is supplemented or amended, deliver
such number of copies of such supplement or amendment to you as you
may reasonably request).
(vii) The Company shall hold in confidence and not make any
disclosure of information concerning you that is provided to the
Company unless (v) disclosure of such information is necessary to
comply with federal or state securities laws, (w) the disclosure of
such information is necessary to avoid or correct a misstatement or
omission in the Registration Statement, (x) the release of such
information is ordered pursuant to a subpoena or other order from a
court or governmental body of competent jurisdiction, (y) such
information has been made generally available to the public other than
by disclosure in violation of this or any other agreement, or (z) you
consent to the form and content of any such disclosure. The Company
shall, upon learning that disclosure of any information concerning you
is sought in or by a court or governmental body of competent
jurisdiction or through other means, give prompt notice to you prior
to making such disclosure, and cooperate with you, at your expense, in
taking appropriate action to prevent disclosure of, or to obtain a
protective order for, such information.
(viii) At your request, the Company shall prepare and file
with the SEC at the expense of the Offering Holder making such request
such amendments (including post-effective amendments) and supplements
to the Registration Statement required to be filed hereunder and the
prospectus used in connection with the Registration Statement as may
be necessary in order to change the plan of distribution set forth in
the Registration Statement.
(ix) The Company shall comply with all applicable laws
related to the Registration Statement and offering and sale of
securities and all applicable rules and regulations of Governmental
Authorities in connection therewith (including, without limitation,
the Securities Act and the Exchange Act and the rules and regulations
thereunder promulgated by the SEC).
(f) Except as provided below in this Section 6.3, the expenses
incurred by the Company in connection with action taken by the Company
to comply with this Section 6, including, without limitation, all
registration and filing fees, printing and delivery expenses,
accounting fees, fees and disbursements of counsel to the Company,
consultant and expert fees, premiums for liability insurance, if the
Company chooses to obtain such insurance, obtained in connection with
a registration statement filed to effect such compliance and all
expenses, including counsel fees, of complying with any state
securities laws, shall be paid by the Company. All fees and
disbursements of any underwriter, counsel, experts, or consultants
employed by you shall be borne by you. The Company shall not be
obligated in any way in connection with any registration pursuant to
this Section 6 for any selling commissions or discounts payable by you
to any underwriter or broker of securities to be sold by you. You
agree to pay all expenses required to be borne by you.
(g) In the event of any registration of Conversion Shares
pursuant to this Section 6.3, the Company will indemnify and hold
harmless each Offering Holder, its officers, directors and each
underwriter of such securities, and any person who controls such
Offering Holder or underwriter within the meaning of Section 15 of the
Securities Act or Section 20 of the Exchange Act, against (A) all
claims, actions, losses, damages, liabilities and expenses, joint or
several, to which any of such persons may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages,
liabilities or actions arise out of or are based upon any untrue
statement of any material fact contained in any registration statement
under which such securities were registered under the Securities Act,
any preliminary prospectus or final prospectus contained therein, or
any amendment or supplement thereof, or arise out of or are based upon
the omission to state therein a material fact required to be stated
therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading, or (B) any
violation or alleged violation by the Company of the Securities Act,
the Exchange Act or any other law (including, without limitation, any
state securities law), rule or regulation relating to the offer or
sale of the Offering Shares (the matters in the foregoing clauses (A)
and (B), collectively, "Violations") and will reimburse such Offering
Holder, its officers, directors and each underwriter of such
securities, and each such controlling person or entity for any legal
and any other expenses reasonably incurred by such Offering Holder,
such underwriter, or such controlling person or entity in connection
with investigating or defending any such loss, claim, damage,
liability, or action; provided, however, that the Company will not be
liable in any such case to the extent that any such loss, claim,
damage, liability or action arises directly out of or is based
primarily upon an untrue statement or omission made in said
registration statement, said preliminary prospectus or said
prospectus, or said amendment of supplement in reliance upon and in
conformity with written information furnished to the Company by such
Offering Holder or such underwriter specifically for use in the
preparation thereof; and provided, further however, that the Company
will not be liable in any such case to the extent that any such loss,
claim, damage or liability or action arises directly out of or is
based primarily upon an untrue statement or omission made in any
preliminary prospectus or final prospectus if (i)such Offering Holder
failed to send or deliver a copy of the final prospectus or prospectus
supplement with or prior to the delivery of written confirmation of
the sale of the Offering Shares, and (ii) the final prospectus or
prospectus supplement would have corrected such untrue statement or
omission.
(h) At any time when a prospectus relating to the Offering is
required to be delivered under the Securities Act, the Company will
notify you of the happening of any event, upon the notification or
awareness of such event by an executive officer of the Company, as a
result of which the prospectus included in such registration
statement, as then in effect, includes an untrue statement of material
fact or omits to state a material fact required to be stated therein
or necessary to make the statements therein not misleading in light of
the circumstances then existing.
(i) In the event you are an Offering Holder, you agree to
indemnify and hold harmless the Company, its officers, directors and
any person who controls the Company within the meaning of Section 15
of the Securities Act, against any losses, claims, damages,
liabilities, or actions, joint or several, to which the Company, its
officers, directors, or such controlling person or entity may become
subject under the Securities Act or otherwise, insofar as such losses,
claims, damages, liabilities, or actions (i) arise out of or are based
upon any untrue statement of any material fact contained in any
registration statement under which such securities were registered
under the Securities Act, any preliminary prospectus or final
prospectus contained therein, or any amendment or supplement thereto,
or arise out of or are based upon the omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein not misleading, in each case to the extent and only
to the extent that any such loss, claim, damage, liability, or action
arises out of or is based upon an untrue statement or omission made in
said registration statement, said preliminary prospectus or said
prospectus or said amendment or supplement in reliance upon and in
conformity with written information furnished to the Company by you or
any affiliate (as defined in the Securities Act) of you specifically
for use in the preparation thereof or (ii) result from your failure to
deliver a copy of the final prospectus and any amendment or supplement
thereto to each purchaser.
(j) Any party entitled to indemnification hereunder will (i)
give prompt written notice to the indemnifying party of any claim with
respect to which it seeks indemnification and (ii) unless in such
indemnified party's reasonable judgment a conflict of interest between
such indemnified and indemnifying parties may exist with respect to
such claim, permit such indemnifying party to assume the defense of
such claim with counsel reasonably satisfactory to the indemnified
party. If such defense is assumed, the indemnifying party will not be
subject to any liability for any settlement made by the indemnified
party without its consent (which consent may not be unreasonably
withheld). An indemnifying party who is not entitled to, or elects
not to, assume the defense of a claim will not be obligated to pay the
fees and expenses of more than one counsel for all parties indemnified
by such indemnifying party with respect to such claim, unless in the
reasonable judgment of any indemnified party a conflict of interest
may exist between such indemnified party and any other of such
indemnified parties with respect to such claim.
(k) To the extent any indemnification by an indemnifying party
is prohibited or limited by law, the indemnifying party shall make the
maximum contribution with respect to any amounts for which it would
otherwise be liable to the fullest extent permitted by law as is
appropriate to reflect the relative fault of the indemnifying party,
on the one hand, and the indemnified party, on the other hand, with
respect to the violation giving rise to the applicable claim;
provided, however, that (a) no contribution shall be made under
circumstances where the maker would not have been liable for
indemnification under the fault standards set forth in Section 6(g) or
6(i), as applicable, (b) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any seller of
Conversion Shares who was not guilty of such fraudulent
misrepresentation, and (c) contribution (together with any
indemnification or other obligations under this Agreement) by any
seller of the Securities shall be limited in amount to the amount of
proceeds received by such seller from the sale of such Conversion
Shares.
(l) With a view to making available to you the benefits of Rule
144 promulgated under the Securities Act, the Company agrees that it
will use its commercially reasonable efforts to maintain registration
of its Common Stock under Section 12 or 15 of the Securities and
Exchange Act of 1934, as amended (the "Exchange Act"), and to file
with the SEC in a timely manner all reports and other documents
required to be filed by an issuer of securities registered under the
Exchange Act so as to maintain the availability of Rule 144. Upon
your request, the Company will deliver to you a written statement as
to whether it has complied with the reporting requirements of Rule
144, and such other information in the possession of the Company as
may be reasonably requested to permit you to sell Securities under
Rule 144 without registration.
(m) The Company agrees to cooperate with you to facilitate the
timely preparation and delivery of certificates representing
Conversion Shares to be sold by you pursuant to the Registration
Statement, which certificates shall be free, to the extent permitted
by applicable law and this Agreement, of all restrictive legends, and
to enable such Conversion Shares to be in such denominations and
registered in such names as you may request at least two (2) Business
Days prior to any sale of Conversion Shares. In connection therewith,
the Company shall within three (3) Business Days after the
effectiveness of the Registration Statement cause an opinion of
counsel to be delivered to and maintained with its transfer agent,
together with any other authorizations, certificates and directions
required by the transfer agent, which authorize and direct the
transfer agent to issue such Conversion Shares without legend upon
sale by you of such Conversion Shares under the Registration
Statement.
(n) You agree that you will, and that you will cause your
counsel and other advisors that are provided with such information to,
hold in confidence any non-public information received as a result of
the Company complying with its obligations under this Section 6.3
until such time as the non-public information is publicly disclosed.
(o) The Company agrees to list on the American Stock Exchange
(or such other securities exchange or market on which the Common Stock
may be traded) the Conversion Shares.
SECTION 7. NOMINEE TO BOARD OF DIRECTORS
(a) If, after conversion of all shares of Preferred Stock, the
Purchaser and its respective Affiliates beneficially own (determined
in accordance with Rule 13d-3 under the Exchange Act) shares of
Company Common Stock which represent five percent (5%) or more of the
outstanding shares of Company Common Stock as of the record date for
the applicable meeting at which directors are to be elected, the
Purchaser shall have the right to nominate for election one director
to serve on the Company's Board of Directors.
(b) For so long as the Purchasers are entitled to nominate a
director to serve on the Board of Directors of the Company under the
provisions of Section 7(a), the Company shall, (i) in connection with
any vote or meeting of stockholders of the Company at which directors
are to be elected, nominate the nominees of the Purchaser as set forth
above and (ii) use its reasonable best efforts to cause their election
to the Board of Directors of the Company by the holders of the Common
Stock, including (A) nominating such nominee, (B) including the
nominee in the Company's proxy statement, (C) recommending a vote for
such nominee, (D) casting votes pursuant to proxies given to the
Company in favor of such nominee and (E) taking or causing to be
taken, all other actions and doing, or causing to be done, all other
things necessary (in the reasonable opinion of the Purchaser) to give
effect to the provisions of Section 7(a) above, as applicable. All
persons nominated to the Board of Directors of the Company by the
Purchaser pursuant to this Section 7(a) shall receive the same
compensation and benefits (including equity-based compensation) that
are provided to the other non-executive members of the Board of
Directors of the Company. In addition, for so long as the provisions
of this Section 7(a) remain in effect, the Company shall maintain
policies of directors and officers liability insurance, with
financially sound and reputable insurers, having terms that are
customary for companies similarly situated.
(c) The provisions of this Section 7 are intended to operate in
conjunction with the provisions contained in Section 2(d) and Section
7 of the Series B Preferred Certificate of Designation, such that, if
the holders of Series B Preferred Shares are entitled to elect one or
more directors pursuant to said Section 2(d) or Section 7 of the
Series B Preferred Certificate of Designation, the Purchaser shall not
be entitled to nominate a director pursuant to this Section 7 during
such period that the holders of Series B Preferred Shares are entitled
to do so.
SECTION 8. AMENDMENT AND WAIVER.
This Agreement may be amended, and the observance of any term hereof
may be waived (either retroactively or prospectively), with (and only
with) the written consent of the Company and you and the Other
Purchasers.
SECTION 9. NOTICES.
All notices and communications provided for hereunder shall be in
writing and sent (a)by facsimile if the sender on the same day sends a
confirming copy of such notice by a recognized overnight delivery
service (charges prepaid), or (b) by registered or certified mail with
return receipt requested (postage prepaid), or (c) by a recognized
overnight delivery service (with charges prepaid). Any such notice
must be sent:
(a) If to you or your nominee, to you or it at the address
specified for such communications in Schedule A, or at such other
address as you or it shall have specified to the Company in writing,
with a copy to Xxxxxxx Associates, Inc., 000 Xxxx 00xx Xxxxxx, Xxxxx
0000, Xxx Xxxx, XX 00000, Attention: Xxxxxxxxxxx Xxxxxx,
(b) If to any other holder of any Securities, to such holder
at such address as such other holder shall have specified to the
Company in writing, or
(c) If to the Company, to the Company at 0000 Xxxxxxxxx Xxxx,
Xxxxx, Xxxxxxxx 00000 to the attention of Xxxxxxx X. Xxxxx, or at such
other address as the Company shall have specified to you in writing.
Notices under this Section 9 will be deemed given only when actually
received.
SECTION 10. CONFIDENTIAL INFORMATION.
For the purposes of this Section 10, "Confidential Information" means
information delivered to you by or on behalf of the Company or any
Subsidiary in connection with the transactions contemplated by or
otherwise pursuant to this Agreement that is proprietary in nature;
provided that such term does not include information that (a) was
publicly known or otherwise known to you prior to the time of such
disclosure, (b) subsequently becomes publicly known through no act or
omission by you or any Person acting on your behalf, or (c) otherwise
becomes known to you other than through disclosure by the Company or
any Subsidiary. You will maintain the confidentiality of such
Confidential Information in accordance with procedures adopted by you
in good faith to protect confidential information of third parties
delivered to you; provided that you may deliver or disclose
Confidential Information to (i) your directors, trustees, officers,
employees, agents, attorneys and affiliates (to the extent such
disclosure reasonably relates to the administration of your investment
in the Preferred Stock), (ii) your financial advisors and other
professional advisors who agree to hold confidential the Confidential
Information substantially in accordance with the terms of this Section
9, (iii) any other holder of any Securities, (iv) any Institutional
Investor to which you sell or offer to sell such Securities or any
part thereof or any participation therein (if such Person has agreed
in writing prior to its receipt of such Confidential Information to be
bound by the provisions of this Section 10), (v) any Person from which
you offer to purchase any security of the Company (if such Person has
agreed in writing prior to its receipt of such Confidential
Information to be bound by the provisions of this Section 9), (vi) any
federal or state regulatory authority having jurisdiction over you,
(vii) the National Association of Insurance Commissioners or any
similar organization, or any nationally recognized rating agency that
requires access to information about your investment portfolio or
(viii) any other Person to which such delivery or disclosure may be
necessary or appropriate (w) to effect compliance with any law, rule,
regulation or order applicable to you, (x) in response to any subpoena
or other legal process, or (y) in connection with any litigation to
which you are a party, to the extent you may reasonably determine such
delivery and disclosure to be necessary or appropriate in the
enforcement or for the protection of the rights and remedies under
this Agreement or as a holder of Securities. On reasonable request by
the Company in connection with the delivery to any holder of
Securities of information required to be delivered to such holder
under this Agreement or requested by such holder, such holder will
enter into an agreement with the Company embodying the provisions of
this Section 9.
SECTION 11. OTHER AGREEMENTS
Section 11.1. Use of Proceeds. The proceeds received by the
Company from the sale of the Preferred Stock will be used to pay the
principal on the 8% Convertible Subordinated Note, in the principal
amount of $2,000,000, issued by Food for Health Co., Inc., an Arizona
corporation and a wholly-owned subsidiary of the Company, to Xxxx
Xxxxxxxxx, Xxxx Xxx O'Dell, Xxxxx Xxxxx and Xxx Xxxxxxxx.
Section 11.2. Listing on Securities Exchange. The Company shall
file an additional listing application with the American Stock
Exchange for the listing of the Conversion Shares as soon as
reasonably practicable.
Section 11.3. Execution of Loan Agreement. The Execution of this
Agreement will be timed to coincide with the execution of the Amended
and Restated Loan and Security Agreement (the "Loan Agreement") by and
among the Company, LaSalle Bank, N.A. and Gold Bank, and the purchase
price for the Preferred Stock will be wired to the Company
contemporaneously with a draw down of Term Loan B under the Loan
Agreement.
Section 11.4. Payment of Counsel Fees. The Company agrees to
reimburse the Purchaser at the Closing for all reasonable fees and
out-of-pocket expenses of counsel to the Purchaser in connection with
its representation of Purchaser in the purchase of the Preferred
Stock.
SECTION 12. MISCELLANEOUS.
Section 12.1 Placement Agent Fee. The Purchaser understands that
Xxxxxxx Associates is serving as placement agent for the sale of the
Securities and will receive a fee of $100,000 from the Company for
such services, together with reimbursement by the Company of
reasonable out-of-pocket expenses incurred by Xxxxxxx Associates in
connection therewith, which will be paid at the Closing.
Section 12.2. Successors and Assigns. All covenants and other
agreements contained in this Agreement by or on behalf of any of the
parties hereto bind and inure to the benefit of their respective
successors and assigns (including, without limitation, any subsequent
holder of Preferred Stock or Conversion Shares) whether so expressed
or not.
Section 12.3. Severability. Any provision of this Agreement that
is prohibited or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof,
and any such prohibition or unenforceability in any jurisdiction shall
(to the full extent permitted by law) not invalidate or render
unenforceable such provision in any other jurisdiction.
Section 12.4. Construction. Each covenant contained herein shall
be construed (absent express provision to the contrary) as being
independent of each other covenant contained herein, so that
compliance with any one covenant shall not (absent such an express
contrary provision) be deemed to excuse compliance with any other
covenant. Where any provision herein refers to action to be taken by
any Person, or which such Person is prohibited from taking, such
provision shall be applicable whether such action is taken directly or
indirectly by such Person.
Section 12.5. Counterparts. This Agreement may be executed in any
number of counterparts, each of which shall be an original but all of
which together shall constitute one instrument. Each counterpart may
consist of a number of copies hereof, each signed by less than all,
but together signed by all, of the parties hereto.
Section 12.6. Governing Law. This Agreement shall be construed
and enforced in accordance with, and the rights of the parties shall
be governed by, the law of the State of Delaware, excluding choice-of-
law principles of the law of such State that would require the
application of the laws of a jurisdiction other than such State.
If you are in agreement with the foregoing, please sign where
indicated on Schedule A and return this Agreement to the Company,
whereupon the foregoing shall become a binding agreement between you
and the Company, dated as of 8th day of October, 2004.
Very truly yours,
AMCON DISTRIBUTING COMPANY
By: Xxxxxxxx X. Xxxxx, President
---------------------------------
Xxxxxxxx X. Xxxxx, President
Exhibit A Form of Certificate of Designations regarding
Series B Preferred Stock
Schedule A List of Purchasers
Schedule B Definitions of Capitalized Terms
Schedule 4.3 Outstanding Contractual Obligations
Schedule 4.5 Certain Changes and Events
EXHIBIT A (to Securities Purchase Agreement)
EXHIBIT 4.5
CERTIFICATE OF DESIGNATIONS
SCHEDULE A (to Securities Purchase Agreement)
INFORMATION RELATING TO PURCHASERS
Name and Address of Purchaser Number of Shares of
Series B Preferred Stock
to be Purchased
--------------------------- -------------------------
Xxxxxxx Street Investments
0000 Xxxxx Xxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx,
Vice President 80,000
SCHEDULE B (to Securities Purchase Agreement)
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"Affiliate" means, at any time, and with respect to any Person, (a)
any other Person that at such time directly or indirectly through one
or more intermediaries Controls, or is Controlled by, or is under
common Control with, such first Person, and (b) any Person
beneficially owning or holding, directly or indirectly, 5% or more of
any class of voting or equity interests of the Company or any
Subsidiary or any corporation of which the Company and its
Subsidiaries beneficially own or hold, in the aggregate, directly or
indirectly, 5% or more of any class of voting or equity interests. As
used in this definition, "Control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of
voting securities, by contract or otherwise. Unless the context
otherwise clearly requires, any reference to an "Affiliate" is a
reference to an Affiliate of the Company.
"AMCON SEC Documents" means all documents required to be filed with
the SEC by AMCON, including without limitation, (i) AMCON's annual
report on Form 10-K for its fiscal year ended September 30, 0000 (xxx
"XXXXX 00-X"), (xx) AMCON's quarterly reports on Form 10-Q for its
fiscal quarter ended December 31, 2003, and (iii) all other reports,
filings, registration statements and other documents filed by it with
the SEC since September 30, 2003.
"Business Day" means any day other than a Saturday, a Sunday or a day
on which commercial banks in New York City, New York or Omaha,
Nebraska are required or authorized to be closed.
"Closing" is defined in Section 3.
"Company" means AMCON Distributing Company, a Delaware corporation.
"Confidential Information" is defined in Section 9.
"Conversion Shares " means the shares of Common Stock, par value $.01
per share, of the Company issuable upon conversion of the Preferred
Stock.
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
"GAAP" means generally accepted accounting principles as practiced in
the United States.
"Governmental Authority" means:
(a) the government of
(i) the United States of America or any State or other Political
subdivision thereof, or
(ii) any jurisdiction in which the Company or any Susidiary
conducts all or any part of its business, or which assets jurisdiction
over any properties of the Company or any Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"Guaranty" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable
instruments for deposit or collection) of such Person guaranteeing or
in effect guaranteeing any Indebtedness, dividend or other obligation
of any other Person in any manner, whether directly or indirectly,
including (without limitation) obligations incurred through an
agreement, contingent or otherwise, by such Person:
(a) to purchase such Indebtedness or obligation or any property
constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment of
such Indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make
available funds for the purchase or payment of such Indebtedness or
obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such Indebtedness
or obligation of the ability of any other Person to make payment of
the Indebtedness or obligation; or
(d) otherwise to assure the owner of such Indebtedness or
obligation against loss in respect thereof.
In any computation of the Indebtedness or other liabilities of the
obligor under any Guaranty, the Indebtedness or other obligations that
are the subject of such Guaranty shall be assumed to be direct
obligations of such obligor.
"Indebtedness" with respect to any Person means, at any time, without
duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable preferred stock;
(b) its liabilities for the deferred purchase price of property
acquired by such Person (excluding accounts payable arising in the
ordinary course of business but including all liabilities created or
arising under any conditional sale or other title retention agreement
with respect to any such property);
(c) all liabilities appearing on its balance sheet in accordance
with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien with
respect to any property owned by such Person (whether or not it has
assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other financial institutions (whether or not
representing obligations for borrowed money); and
(f) any Guaranty of such Person with respect to liabilities of a
type described in any of clauses (a) through (e) hereof.
Indebtedness of any Person shall include all obligations of such
Person of the character described in clauses (a) through (f) to the
extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished
under GAAP.
"Knowledge"--an individual will be deemed to have Knowledge of a
particular fact or other matter if that individual is actually aware
of that fact or matter. A Person (other than an individual) will be
deemed to have Knowledge of a particular fact or other matter if any
individual who is serving as an officer of that Person has, or at any
time had, Knowledge of that fact or other matter.
"Lien" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or
title of any vendor, lessor, lender or other secured party to or of
such Person under any conditional sale or other title retention
agreement or Capital Lease, upon or with respect to any property or
asset of such Person (including in the case of stock, stockholder
agreements, voting trust agreements and all similar arrangements).
"Material Adverse Effect" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or
properties of the Company and its Subsidiaries taken as a whole, or
(b) the ability of the Company to perform its obligations under this
Agreement, or (c) the validity or enforceability of this Agreement.
"Other Agreement" is defined in Section 2.
"Other Purchaser" is defined in Section 2.
"Person" means an individual, partnership, corporation, limited
liability company, association, trust, unincorporated organization, or
a government or agency or political subdivision thereof.
"Preferred Stock" is defined in Section 1.
"Property" or "Properties" means, unless otherwise specifically
limited, real or personal property of any kind, tangible or
intangible, xxxxxx or inchoate.
"SEC" means the Securities and Exchange Commission.
"Securities" is defined in Section 1.2.
"Securities Act" means the Securities Act of 1933, as amended from
time to time.
"Subsidiary" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its
Subsidiaries or such Person and one or more of its Subsidiaries owns
sufficient equity or voting interests to enable it or them (as a
group) ordinarily, in the absence of contingencies, to elect a
majority of the directors (or Persons performing similar functions) of
such entity, and any partnership or joint venture if more than a 50%
interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership can and does ordinarily take
major business actions without the prior approval of such Person or
one or more of its Subsidiaries). Unless the context otherwise
clearly requires, any reference to a "Subsidiary" is a reference to a
Subsidiary of the Company.
"Voting Stock" means securities of any class or classes, the holders
of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors (or Persons performing
similar functions).
SCHEDULE 4.3 (to Securities Purchase Agreement)
OUTSTANDING CONTRACTUAL OBLIGATIONS
On June 17, 2004, AMCON completed the acquisition of substantially all
of the assets of Trinity Springs Ltd., which included real estate,
water rights and equipment. AMCON organized a newly formed, wholly-
owned subsidiary, which changed its name to Trinity Springs, Inc., to
acquire the assets from the selling entity. The acquisition
consideration paid by the subsidiary consisted of, among other things,
(i) a royalty by Trinity Springs, Inc. to the selling entity equal to
the greater of 4% of net sales of Trinity Springs, Inc. or $.03 per
liter of water extracted for commercial purposes from the source and
(ii) 15% of the common stock of Trinity Springs, Inc. The selling
entity has the right to elect to have the water royalty paid in up to
41,666 shares of AMCON common stock valued on the basis of the average
closing price for the 30 days preceding the date of issuance. In
addition, the selling entity can convert its 15% of the common stock
in Trinity Springs, Inc. into 16,666 shares of AMCON common stock.
SCHEDULE 4.5 (to Securities Purchase Agreement)
CERTAIN CHANGES AND EVENT
