EXHIBIT 10.9
December 28, 2006
AMCON Distributing Company
0000 Xxxxxxxxx Xxxx
Xxxxx, Xxxxxxxx 00000
And
Xxxxxxxxxx Natural Foods, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxxxxxx 00000
And
Hawaiian Natural Water Company, Inc.
00-000 Xxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxx 00000
And
Health Food Associates, Inc.
0000 Xxxx 00xx Xxxxxx
Xxxxx, Xxxxxxxx 00000
And
Trinity Springs, Inc.
0000 Xxxx Xxxxx Xxxxxx
Xxxxx 000
Xxxxx, Xxxxx 00000
RE: EIGHTH AMENDMENT AND WAIVER TO AMENDED AND RESTATED LOAN AND
SECURITY AGREEMENT (THIS "AMENDMENT")
Ladies and Gentlemen:
AMCON Distributing Company, a Delaware corporation, ("AMCON"),
Xxxxxxxxxx Natural Foods, Inc., a Florida corporation, ("Xxxxxxxxxx
Natural"), Hawaiian Natural Water Company, Inc., a Delaware
corporation, ("Hawaiian Natural"), Health Food Associates, Inc., an
Oklahoma corporation, ("Health Food"), and Trinity Springs, Inc., a
Delaware corporation, ("Trinity Springs"), (AMCON, Xxxxxxxxxx Natural,
Hawaiian Natural, Health Food, and Trinity Springs are each referred
to as a "Borrower" and are collectively referred to as "Borrowers")
and LaSalle Bank National Association, a national banking association
(in its individual capacity, "LaSalle"), as agent (in such capacity as
agent, "Agent") for itself, M&I Xxxxxxxx & Xxxxxx Bank (successor by
merger to Gold Bank), and all other lenders from time to time party to
the Loan Agreement referred to below ("Lenders"), have entered into
that certain Amended and Restated Loan and Security Agreement dated
September 30, 2004 (the "Loan Agreement"). From time to time
thereafter, Borrowers, Agent and Lenders may have executed various
amendments (each an "Amendment" and collectively the "Amendments") to
the Loan Agreement (the Loan Agreement and the Amendments hereinafter
are referred to, collectively, as the "Agreement"). Borrowers, Agent
and Lenders now desire to further amend the Agreement as provided
herein, subject to the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing recitals, the mutual
covenants and agreements set forth herein and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto hereby agree as follows:
1. The Agreement hereby is amended as follows:
(a) The definitions of "Beverage Accounts Sublimit", "Beverage
Inventory Sublimit" and "Beverage Subsidiary" as set forth in Section
1 of the Agreement are amended and restated in their entirety, to read
as follows:
"Beverage Accounts Sublimit" shall mean Two Hundred Thousand and
No/100 Dollars ($200,000.00), as such amount is reduced from time to
time pursuant to subsection 2(d)(iv) hereof.
"Beverage Inventory Sublimit" shall mean Two Hundred Thousand and
No/100 Dollars ($200,000.00), as such amount is reduced from time to
time pursuant to subsection 2(d)(iv) hereof.
"Beverage Subsidiary" shall mean Trinity.
(b) Section 1 of the Agreement is amended by adding thereto the
following definitions of "Debt Service Coverage Ratio", "Prepayment
Loan Limit" and "Term B Loan Maturity Date" in alphabetical order:
"Debt Service Coverage Ratio" shall mean, with respect to any
period, the ratio of (a) the sum for such period of (i) EBITDA (on a
consolidated basis for all Borrowers), plus (ii) cash proceeds
received by the Borrowers pursuant to a sale of substantially all of
the assets of Hawaiian Natural but not to exceed $2,454,000.00, plus
(iii) cash proceeds received by the Borrowers pursuant to a sale of
substantially all of the assets or equity interests of Trinity, to (b)
the sum for such period of (i) cash interest paid by Borrowers, plus
(ii) scheduled payments of Borrowers' current principal maturities of
long term debt and capitalized leases, plus (iii) Capital Expenditures
paid in cash, plus (iv) income and franchise taxes paid in cash by the
Borrowers, plus (v) any cash dividends or cash distributions made by
AMCON. Nothing in this definition shall be construed to constitute
Agent's or any Lender's consent to any transaction that is not
permitted by other provisions of this Agreement or the Other
Agreements.
"Prepayment Loan Limit" shall mean Fifty-Five Million and No/100
Dollars ($55,000,000.00).
"Term Loan B Maturity Date" shall mean March 30, 2008.
(c) The first sentence of Subsection 2(a) of the Agreement is amended
and restated in its entirety, to read as follows:
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 or
Fifty-Five Million and No/100 Dollars ($55,000,000.00), whichever is
less; plus
(ii) 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
(iii) 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 (ii) above) or Fifteen Million and No/100 Dollars
($15,000,000.00), whichever is less; plus
(iv) Up to sixty percent (60%) of the lower of cost or market
value of the Retail Subsidiaries' Eligible Inventory or the Retail
Inventory Sublimit, whichever is less; plus
(v) Up to sixty percent (60%) of the lower of cost or market
value of the Beverage Subsidiaries' Eligible Inventory or the Beverage
Inventory Sublimit, whichever is less; plus
(vi) 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 the
Beverage Subsidiaries' business) of the Beverage Subsidiaries'
Eligible Accounts or the Beverage Accounts Sublimit, whichever is
less; plus
(vii) up to One Million Five Hundred Thousand and No/100 Dollars
($1,500,000.00) as a special accommodation ("Special Accommodation
Overadvance") to be made available each Monday of every week and to be
reduced to Zero and No/100 Dollars ($0.00) by each Thursday of the
same week, provided, however, that Special Accommodation Overadvances
shall not be made available after April 30, 2007; minus
(iix) 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) (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.
(d) The proviso set forth in the first sentence of Subsection
2(d)(iii) of the Agreement is amended and restated in its entirety, to
read as follows:
; provided that any remaining outstanding principal balance of
Term Loan B shall be repaid on the Term Loan B Maturity Date.
(e) Section 10 of the Agreement is amended and restated in its
entirety, to read as follows:
10. TERMINATION; AUTOMATIC RENEWAL.
THIS AGREEMENT SHALL BE IN EFFECT FROM THE DATE HEREOF UNTIL APRIL 30,
2009 (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. 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 and this Agreement is
terminated, Borrowers jointly and severally agree to pay to Agent, for
the benefit of the Lenders, as a prepayment fee, in addition to the
payment of all other Liabilities, an amount equal to (i) two percent
(2%) of the Prepayment Loan Limit if such prepayment occurs on or
before April 30, 2007, and (ii) one percent (1%) of the Prepayment
Loan Limit if such prepayment occurs after April 30, 2007 but on or
before April 30, 2008.
(f) Subsection 14(a) of the Agreement is amended and restated in its
entirety, to read as follow:
(a) DEBT SERVICE COVERAGE RATIO.
Borrowers shall not permit the Debt Service Coverage Ratio, as of the
last day of each fiscal quarter, beginning with the fiscal quarter
ending September 30, 2007, for the twelve-month period then ending, to
be less than 1.00 to 1.00.
(g) Subsection 14(d) of the Agreement is amended and restated in its
entirety, to read as follows:
(d) EBITDA.
Borrowers shall not permit EBITDA (on a consolidated basis for all
Borrowers, excluding Hawaiian Natural and Trinity) to be less than (i)
One Million and No/100 Dollars ($1,000,000.00) as of each of December
31, 2006, December 31, 2007 and December 31, 2008, in each case for
the three-month period then ending, (ii) Two Million and No/100
Dollars ($2,000,000.00) as of each of March 31, 2007, March 31, 2008
and March 31, 2009, in each case for the six-month period then ending,
(iii) Four Million Five Hundred Thousand and No/100 Dollars
($4,500,000.00) as of each of June 30, 2007 and June 30, 2008, in each
case for the nine-month period then ending, and (iv) Seven Million and
No/100 Dollars ($7,000,000.00) as of each of September 30, 2007 and
September 30, 2008, in each case for the twelve-month period then
ending.
2. Agent and Lenders hereby waive any Event of Default existing under
Subsection 15(b) of the Agreement as a result of the Borrowers
permitting EBITDA (on a consolidated basis for all Borrowers,
excluding Hawaiian Natural and Trinity) to be less than One Hundred
Thousand and No/100 Dollars ($100,000.00) as of September 30, 2006 for
the one-month period then ending, as prohibited under Subsection 14(d)
of the Agreement. The waiver set forth in this Section 2 is a waiver
of the specific Event of Default enumerated herein and is not, nor
should it be construed to be, a waiver of any other existing or future
Event of Default, whether or not similar to the Event of Default
enumerated herein.
3. This Amendment shall not become effective until each of the
following conditions precedent has been satisfied:
(a) Agent shall have received this Amendment, duly executed by the
parties hereto; and
(b) Borrowers shall have paid to Agent, for the benefit of the
Lenders, an amendment fee in an amount equal to $100,000, which fee
shall be deemed fully earned by the Lenders as of the date hereof and
shall be nonrefundable.
4. The representations and warranties set forth in Section 11 of the
Agreement shall be deemed remade as of the date hereof by each
Borrower, except that any and all references to the Agreement in such
representations and warranties shall be deemed to include this
Amendment. Except as expressly set forth in Section 2 of this
Amendment, no Event of Default has occurred and is continuing and no
event has occurred and is continuing which, with the lapse of time,
the giving of notice, or both, would constitute an Event of Default
under the Agreement.
5. Borrowers agree to pay on demand all costs and expenses of or
incurred by Agent (including, but not limited to, legal fees and
expenses) in connection with the negotiation, preparation, execution
and delivery of this Amendment.
6. This Amendment may be executed in two or more counterparts, each
of which shall be deemed an original, and all of which together shall
constitute one and the same instrument.
7. Except as expressly amended hereby, the Agreement and the Other
Agreements are hereby ratified and confirmed by the parties hereto and
remain in full force and effect in accordance with the terms thereof.
Each Borrower hereby reaffirms its grant of the security interest in
the Collateral.
8. This Amendment shall be governed by and construed under the laws
of the State of Illinois, without regard to conflict of laws
principles of such State.
[Signatures appear on following pages.]
LASALLE BANK NATIONAL ASSOCIATION,
a national banking association, as Agent and a Lender
By: /s/ Xxxxxxx Xxxxxxx
Title: Vice President
M&I XXXXXXXX & ILSLEY BANK, as a Lender
By: /s/ Xxxx X. Xxxxxxxx
Title: Vice President
By: /s/ Xxxxxxx X. Xxxxxx
Title: Executive Vice President
ACKNOWLEDGED AND AGREED TO this 28th day of December 2006:
AMCON DISTRIBUTING COMPANY
By: /s/ Xxxxxx X. Xxxxxxx
Title: Vice President and Acting CFO
HAWAIIAN NATURAL WATER COMPANY, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Title: Assistant Secretary
XXXXXXXXXX NATURAL FOODS, INC.
By: /s/ Xxxxxxxx X. Xxxx
Title: Vice President
HEALTH FOOD ASSOCIATES, INC.
By: /s/ Xxxxxxxx X. Xxxx
Title: Vice President
TRINITY SPRINGS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
Title: Assistant Secretary
Consented and agreed to by the following guarantor(s) of the
obligations of AMCON DISTRIBUTING COMPANY, HAWAIIAN NATURAL WATER
COMPANY, INC., XXXXXXXXXX NATURAL FOODS, INC., and HEALTH FOOD
ASSOCIATES, INC. to LaSalle Bank National Association, as Agent.
/s/ Xxxxxxx X. Xxxxxx
Date: December 28, 2006
